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Boom years ahead for middle east

Despite the general economic slowdown, there will be unprecedented growth in the region in eight to 10 years, a Dubai-based businessman said.

RP Group founder and managing director Ravi Pillai said from 2020 onwards there will a big boom in the region, driven especially through gas and petrochemical sectors.

“This growth will be witnessed in the UAE and Saudi Arabia. There will be growth for eight to 10 years, which will exceed all expectations. Gas and petrochemicals will see rise in demand. We are going to bid for a few gas and petrochemicals plants,” he told in an interview.

RP Group is on expansion mode and is eyeing Saudi Arabian markets with its biggest project.

Middle east reits penetration to grow

As a vehicle for investment in property assets, real estate investment trusts (Reits) remains underpenetrated in the Middle East, but is expected to grow as the real estate market in the region matures in terms of quality of and access to assets, financing, governance and regulations, a study has found.

The study, The Emergence of Real Estate Investment Trusts in the Middle East, launched by PwC Middle East, finds that market capitalisation of Reits compared to listed real estate companies in the UAE is around 3 per cent.

In contrast, in more mature markets such as the US and the UK, Reit market capitalisation is at least 80 per cent of the listed market cap for real estate. This indicates Reits are currently underpenetrated in the region, says PwC.

A Reit is a company that owns, operates or finances income-producing real estate.

It is modelled after mutual funds, and historically has provided investors of all types regular income streams, diversification and long term capital appreciation.

The PwC study also foresees a shift in business models with Reit investors moving away from being ‘generalist’ aggregators of real estate assets to becoming ‘specialists’ within a particular real estate asset class. The study highlighted that to enable the sector for institutional investment the focus should shift to sector specialisation in line with global best practices.

In early-2018, Reits in the UAE were offering healthy dividend yields at 6.5 per cent compared to the global average of 5.7 per cent.

“As the Reit sector in the Middle East matures we anticipate there will be an emphasis on sector specialisation – with Reits focusing on a specific asset class within the real estate spectrum such as residential, retail, hospitality or office,” said the report. The study also found that there would be a flight to quality whereby capital transitions to Reits with strong management teams and a good track record. Key factors that will determine the performance of a Reit include acquisition price of assets; focus on reinvestment/maintenance; strength of the underlying lease, and quality of assets, the study further said.

Combined market capitaliaation of Reits in the UAE was $800 million as of early-2018. In comparison, the small island nation of Singapore had greater than $60 billion in aggregate Reit capitalisation over the same time period. “On average, Reits tend to provide a healthy dividend yield; however sufficient diligence needs to be done before allocating capital to Reits to ensure that an investment yields the right returns,” Dr Martin Berlin, Middle East partner and global deals real estate leader at PwC, said.

DU Esims now available for new Iphone XS, XR

Emirates Integrated Telecommunications Company (EITC) on Thursday announced the availability of eSIMs for the latest models of Apple’s iPhone.

In a statement, the Dubai-headquartered telecom operator known as du said: “Users can now activate an additional cellular plan, making it easy to use two different phone numbers or separate voice and data plans on one device.”

eSIMs – embedded SIMs – do not require a physical card and allows users to switch numbers or networks in an easier way.

On November 11, Virgin Mobile, the second brand operating under EITC, launched its own eSIM offering.

Festive season begins at Al Maya supermarkets

There are many ways to celebrate Christmas in the UAE, but it is common for many households to have decorated Christmas trees. Al Maya Supermarkets has made the task easier by offering a large number of products under one roof in the festive season of Christmas.

All Al Maya Supermarkets are dressed up for the festive season with the best range of Christmas-themed offerings, from Christmas drapes to Yule logs, mince pies, festive wrapping paper to an exclusive range of imported confectionery and Christmas chocolates, decorations and the best offers.

“Al Maya Supermarkets understands how important this season is to its valued customers and the significance of making it unique and special for the community by showcasing an impressive range of seasonal products designed to create festive spirits at homes,” said Kamal Vachani, group director of the Al Maya Group. Al Maya Supermarkets have decorated all of its supermarkets across the UAE with Christmas trees, snowflakes, Santa Claus and decorative lights to usher in the festive spirit of Christmas and feel of the festive season, Vachani informed.

Al Maya’s Christmas range includes Christmas trees, ornaments, decoration balls, lights, figurines, flowers, cards, wraps, bags, tags and bows, gift hampers, Santa dress, Christmas chocolate and confectionery, cake, pudding, cookie, cup cake, Christmas ginger bread, sauces and condiments, home baking, fruits and vegetable like sprouts, green peas, green beans, baby carrots, sweet potatoes, parsnips, asparagus, fresh herbs, cranberries, strawberry, blueberry, chestnuts and meat categories like duck, turkey, salmon, etc.

 

Retail chains need to provide more support to local farmers’

There are tens of thousands farms and some 60,000 local products but not many make it to shelves of hypermarkets in the country, experts said at the recently concluded ninth edition of SIAL Middle East.

Food experts mooted an all-out effort from ministry, private-public entities and retail chains to safeguard the interest of the farmers.

Abu Dhabi Food Security Centre Director General Khalifa Ahmed Al Ali highlighted the need for retail sector to offer more support to the local producers.

“It is high time that steps are taken to protect the interests of the local farmers. Investing in food security sectors, including agriculture and food industries, through public-private partnerships is crucial to fast track national growth. It will also support marketing of agricultural products through providing a safe investment environment.”

UAE rated most advanced Mena country for online shopping

As the e-commerce market gains momentum regionally and globally, the UAE is making strides and the Emirates is rated the most advanced country for online shopping in the Mena and is ranked fourth among the top 10 developing economies, according to the United Nations Conference on Trade and Development’s (Unctad) B2C E-Commerce Index 2018.

The UAE does well in Internet usage and accounts, with room to improve for secure servers and postal reliability in order to emerge as a top-ranked nation in B2C e-commerce readiness, the Unctad’s latest report on e-commerce said

“The UAE is positioned first in the Gulf and is leveraging this to become a regional hub. One sign is the purchase of the UAE’s online retailer Souq.com by Amazon in May 2017 for $583 million. Another is the $735 million Dubai CommerCity, the first dedicated e-commerce park in Mena,” it said.

Analysts say the online shopping trend among UAE residents is growing due to secured Internet platforms, growing consumer confidence in conducting online transaction, flex-payment solutions by banks, educated consumers, stronger infrastructure such as quick deliveries and more options with the emergence of new players.

According to Euromonitor International figures, the UAE’s e-commerce landscape is worth Dh44.2 billion during 2018, with bill payments, transport and retailing being the key segments for online commerce in the country.

Internet retailing in the UAE is valued at Dh7.4 billion – exclusive of VAT – in 2018, growing by 18.8 per cent over the previous year. The channel is expected to grow by a CAGR 13 per cent over the forecast period to reach Dh15.5billion in value during 2023, experiencing the largest value growth across all business segments, Euromonitor said.

Among the 10 developing economies in the Unctad index Singapore leads followed by Hong Kong, Korea, UAE, Malaysia, Thailand, Turkey, Iran, Chile and Saudi Arabia. The UAE leads the pack in terms of use of internet with 95 per cent, while over 88 per cent of UAE residents aged 15-plus have an account.

In the Mena region, the UAE is followed by Turkey, Saudi Arabia, Iran, Bahrain, Lebanon, Kuwait, Oman, Jordan and Tunisia. Globally, the Netherlands leads followed by Singapore, Switzerland, the UK, Norway, Iceland, Ireland, Sweden, New Zealand and Australia. But globally, the UAE’s ranking dropped 10 places to 33rd in 2018 as compared to last year, according to the report.

Adel Belcaid, senior principal at AT Kearney, said since taking off in 2017, and with annual growth reaching 35 per cent, e-commerce has indeed become the name of the retail game in the UAE and the wider region, and it is to stay.

“It is no surprise that the UAE is leading this game, amongst several others. The UAE has a significant retail sector, accounting for more than 11 per cent of GDP, and historically, even before the e-commerce boom, the UAE has always been a hub through which goods and people transit and exchange,” Belcaid said.

Rabia Yasmeen, senior analyst for services and payments at Euromonitor International, said with 99.6 per cent of the population having access to 4G and having the highest penetration of the mobile internet, the UAE is the highest on mobile connectivity globally. Additionally, city governments are focusing on digitisation and connectivity to have a digital economy in a broader framework.

“Secure Internet servers and payment platforms additionally support the online shopping readiness of the country, which is reflected in increased consumer confidence in conducting transactions and sharing information online. Another key aspect is readiness and active participation from the banking sector which are providing secure payments and flexi-payment solutions online,” she said.

Yasmeen attributed better online shopping experience as compared to other regional countries to early adoption of technologies, educated consumers and stronger infrastructure.

Additionally, with the emergence of new players, the sector has become competitive leading benefits for the consumer. “Still, the online shopping experience has a significant room of improvement in terms of better delivery times and after-sales services which can be tailored through personalised services. Online platforms have a room for loyalty platforms and membership models to provide premium services.”

AT Kearney’s Belcaid advised retailers to enhance their warehousing and distribution footprint, with the aim of locating stock as close as possible to demand to minimise lead times.

He said UAE consumers want an omni-channel shopping experience, combined physical with digital, where they can see a product at the mall and buy it at home, or vice-versa, or of course get it delivered all the way to their door-step in a matter of hours, and not weeks or even days.

DFM briefs firms on second market listing

The Dubai Financial Market (DFM) organised a roundtable about the listing opportunity on its Second Market platform, in cooperation with the Dubai Chamber of Commerce and Industry and the Dubai Entrepreneurs Council.

The discussions focused on how private companies can unlock capital market opportunities through listing on the Second Market platform.

The roundtable attracted 45 private companies from various economic sectors.

Essa Kazim, chairman of the DFM, said: “The Second Market provides private business owners with a platform for trading, settlement and depository of their securities, as well as strengthening companies’ public presence through the DFM’s investor base of 843,000 investors as well as dozens of local and international brokerage firms and analysts.”

“This will reinforce the company’s attractiveness and create value for its owners. The listing may also represent a first step that prepares companies for potential IPOs,” he added

Hamad Buamim, president and chief executive officer of the Dubai Chamber of Commerce and Industry, said: “The event supported the Dubai Chamber’s efforts to facilitate the contribution of the private sector toward Dubai’s economic development and enhance the emirate’s global competitiveness. We are committed to providing businesses of all sizes with access to new opportunities, knowledge and tools that can help them thrive and grow.”

“The DFM endeavours to educate private and family businesses on market developments and the favourable regulations the SCA [Securities and Commodities Authority] has created in order to enhance their presence on the capital market through an accelerated process, enabling them to list within a short period. The regulator and the DFM provide the necessary support during the pre-listing stage. We regularly connect with companies’ management, hold educational events and issue guides to support them in their preparation for the capital market’s environment.”

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