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GULF STATES – ECONOMICS & FINANCE
UAE offers platform to harness skills

The UAE is known to set trends and today the modern boardrooms offer a unique platform where the businesses offer the diversity mix of the youth and wise leadership from reputed business experts.

Focusing on ‘Boardroom Leadership for an Agile and Innovative Corporate Strategy’ at the IOD conference, Mohammed Al Hashemi, Chairman, UAE Financial Markets and Director- Global Market and Treasury Emirates NBD, UAE, said: “With the UAE being one of the leading countries in innovation, there will undoubtedly be a high amount of pressure on businesses, an excessive burden to achieve business sustainability and offering innovative solutions quite often. The increasing levels of competition amd technological advancement are the key factors which foster businesses to innovate more, achieve resilience and sustainability to successfully compete in the dynamic world.”

The UAE offers today a platform for the youth to harness their entrepreneurial skills, said Anil Pant, managing director & ceo, Aptech Limited. “To see effective changes organisations have to invest in the youth and diversity. The firms need to redefine their competitors and instead of looking at competition from within, redefine your competition in a global perspective.”

The session also had presentation from Hisham Farouk, chief executive officer & board member, Grant Thornton International, UAE and Prof. Colin Coulson-Thomas, President, Institute of Management Services, UK.

Dubai rolls out 5 new initiatives to boost business

The Government of Dubai’s Department of Finance (DOF) has launched a second package of economic growth initiatives aimed at enriching the emirate’s economic incentive package as part of the government’s response to the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. The leadership directives to the government focused on simplifying the procedures of conducting business and reduce the costs for companies by harnessing all the possible resources, in order to facilitate the economic accomplishments. “The new initiatives package includes five initiatives to support small and medium-sized enterprises (SMEs) and public-private partnership (PPP),” said DOF’s Director General, Abdulrahman Saleh Al Saleh.

DIFC aims to join top 10 club by 2024

The Dubai International Financial Centre (DIFC) registered record growth in terms of new companies and is on course to join the league of world’s top 10 financial centres as well as create thousands of jobs by 2024, it was announced on Tuesday.

While launching the DIFC 2018 annual review, Essa Kazim, governor, DIFC, said the region’s largest financial free zone is on track to achieve its 2024 target of tripling the growth.

As per its strategy, the free zone plans to generate over 26,000 new jobs to 50,000 workforce by 2024 from 23,604 in 2018. It also aims to grow assets under management at the DIFC from $99 billion (Dh363.3 billion) in 2018 to $250 billion (Dh917.5 billion) by 2024, expand occupied space from 4.2 million square feet in 2018 to 5.5 million sqft by 2024 and increase financial firms from 625 to 1,000.

“We continue to focus on delivering our 2024 growth strategy and tripling the size of the DIFC by focusing on generating growth in building relevance in global sectors and concentrating on south-south corridor. Our target is to become among top 10 financial centres by 2024 target,” Kazim said.

According to the Global Financial Centre Index released in September 2018, Dubai was ranked 15th worldwide, higher than Paris, Geneva, Los Angeles, Luxembourg and Vienna, among others.

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UAE, India set to enjoy exponential growth

The UAE’s aggressive approach to bolster its trade ties with its top trading partner India seems to have further deepened as both nations have now moved from policy formation to practically implementing in action to see the figures grow many fold by introducing initiatives that cement bilateral ties. The Institute of Directors (IOD) annual conference in Dubai affirmed under the session ‘Global business meet: a spectrum of opportunities’ pitching for greater trade and investment ties that current year will offer investment and trade relations opportunities on both sides to witness exponential growth. “IOD does a great job of corporate governance as 3.3 million Indians are constantly connected to developments in India. The UAE offers a wider platform to the entire Mena region and that has benefitted Indian businesses to tap this gateway,” Vipul, Consul-General of India in Dubai. Held under the patronage of Sheikh Nahyan bin Mubarak Al Nahyan, UAE Minister of State for Tolerance, the event is being held in collaboration with the UAE Ministry of Economy and the Consulate-General of India Dubai. The India economic growth is expected to pick up pace next year while the global economy is forecast to slow, the International Monetary Fund recently said.

New Dubai stimulus to provide billions of Dirhams in liquidity

Businessmen in the UAE on March 6 lauded the newly-announced five initiatives by Dubai government, to support the small and medium enterprises (SMEs) sector and public-private partnerships which will provide ample liquidity for the smaller firms, and also ensure their sustained growth in coming years. It is estimated that liquidity with the SME sector will improve in billions of dirhams through reduced costs of doing business, lower insurance charges, quicker payment for government supplies and increased allocation of government projects to the smaller firms.

Krishnan Ramachandran, CEO, Barjeel Geojit Financial Services, said SME’s have been given another lifeline by way of an economic package which is focused on providing the much-needed liquidity into their business, lowering their cost for doing business (primary / performance insurance) and above all a preferential allocation of 5 per cent of the project size for SME’s in government projects. “All these measures are expected to vastly improve the business sentiments and growth of the SME’s in Dubai. These timely initiatives announced by the Department of Finance is likely to have a positive multiplier effect across of sectors of the economy,” said Ramachandran. SME in Dubai constitute nearly 95 per cent of businesses, contributing to nearly 40 per cent of the GDP with a significant workforce of around 43-45 per cent. Nimish Makvana, senior partner, Crowe MAK and Past Chairman ICAI – Dubai Chapter, said SMEs sector plays a significant role for growth of UAE economy and in particular the Dubai economy.

 

Dubai unveils second stimulus to lift SMEs and public-private partnership

The Government of Dubai’s Department of Finance (DoF) has launched a second package of economic growth initiatives aimed at enriching the emirate’s economic incentive package as part of the government’s response to the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

The leadership directives to the government focused on simplifying the procedures of conducting business and reduce the costs for companies by harnessing all the possible resources, in order to facilitate the economic accomplishments.

“The new initiatives package includes five initiatives to support small and medium-sized enterprises and public-private partnership,” said DoF director-general Abdulrahman Saleh Al Saleh said.

“We are keen to work in accordance with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum and implement a range of economic and financial incentives and facilities aimed at reducing the cost of conducting business, supporting the registered companies in the emirate and attracting new investments,” Al Saleh said in a statement on Tuesday.

The first incentive initiative is to pay the dues of SMEs that supply services and goods to government agencies within 30 days instead of 90 days, provided that the payment period is only within 10 days for the members of Dubai SME. According to the initiative, the government will set a classification of the SMEs entitled to receive their dues within 30 days. The initiative is expected to provide SMEs with additional liquidity of Dh1.6 billion per annum.

The second initiative involves reducing the value of primary insurance for SMEs to the range of 1-3 per cent instead of 2-5 per cent, in order to encourage them to continue supplying to government agencies. Under this initiative, the minimum primary insurance was reduced from Dh40 million to Dh20 million, which involves 80 per cent of SMEs, while the maximum primary insurance was reduced from Dh100 million to Dh60 million, which involves 20 per cent of the establishments.

This initiative too aims to provide greater liquidity for SMEs, while ensuring greater opportunities for them to participate in procurement to government agencies.

Why UAE markets are looking good in 2019

The year 2018 witnessed mixed sentiments on the back of unexpected global events but 2019 is likely to be an exciting year for capital markets. The year gone by can be characterised into two halves: the first was aligned with market expectations of another year of solid returns, while the second witnessed a more drastic turnaround in outlook across the global markets.

Moreover, the last quarter of 2018 was particularly interesting as it witnessed more bearish sentiments due to growth uncertainties in China, an ongoing trade war and aggressive pace of monetary tightening by the Fed.

In general, 2018 was a highly-volatile year for capital markets, especially equities and bonds as they have largely underperformed cash, something the markets have not seen in a long time. These events have played a role in influencing the sentiments of regional markets, but were outweighed by expected recovery in regional economies and stability in oil prices. As a result, regional markets have broadly outperformed global peers, both in equities and bonds during 2018.

Strong investor appetite for Emirates development bank’s Dh2.75b bond

Emirates Development Bank (EDB) on Saturday announced that it raised $750 million (Dh2.75 billion) through five-year bonds at 3.516 per cent coupon rate and was strongly oversubscribed.

The UAE government-owned lender, which has been rated AA- by Fitch, is the first federal entity in the UAE to tap capital markets after the introduction of new debt law issued last year.

The bond was issued under the bank’s $3 billion Euro Medium Term Note programme to provide the bank accessibility to capital markets and further strengthen its funding profile.

The lender had met institutional investors in Abu Dhabi, Dubai, London, Hong Kong, Singapore, Kuala Lumpur and Taipei for the raising of the funds.

Investors showed a strong appetite for EDB’s credit offering, resulting in the order book reaching $3.5 billion – close to 4.7 times oversubscription – with demand from over 130 investors.

The investor base was diverse with 36 per cent representing the Middle East, 22 per cent from European markets, and 42 per cent representing Asian markets, it said in a statement.

The UAE had issued a federal law in 2018 allowing the federal government to issue sovereign bonds for the first time in order to improve banking liquidity. This will also give benefit to each emirate of the UAE from higher federal ratings than they could achieve on their own.

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