GULF STATES| ECONOMICS & FINANCE
UAE is the fastest growing region: Zoho
Zoho, a global provider of cloud-based business software, today announced its plans for expanding and reinforcing its presence in the UAE and GCC region. The announcement was made on the sidelines of the company’s annual user conference, Zoholics Dubai. The initiatives include launch of Zoho’s Arabic website zoho.com/ar, and alliance with PayTabs that will help businesses with payment processing.
Zoho has seen over 100 percent growth in the UAE last year, and 71 percent growth in the GCC region. In the last one year, Zoho has opened an office in Dubai to function as its regional headquarters, significantly expanded its partner network to support local businesses and participated in local events to improve engagement with its customers. The company also launched VAT-compliant local versions of its accounting software, Zoho Books in KSA and Bahrain. Zoho Books has been accredited by Federal Tax Authority (FTA) and General Authority of Zakat and Tax (GAZT).
“The UAE is the fastest growing region for us, and we are investing more to strengthen our position,” said Hyther Nizam, President MEA, Zoho Corp. “The Arabic website would make software accessible and approachable for more people, while PayTabs integration will provide businesses a seamless payment gateway to make transactions without any hassles. This is a first-of-its-kind integration in the GCC region where an accounting software and a payment gateway software have come together to streamline payment acceptance and accounting.”
Despite oversupply, UAE education sector offers opportunities
The UAE education is experiencing oversupply of schools which will force the low-performing institutions out of the market while the medium and high-end schools will see consolidation, industry executives and experts said during a panel discussion on Wednesday.
Despite the oversupply in the market, they believe opportunities still existing for new players who can offer quality education at competitive prices.
“There is certainly oversupply in the market. Hence, there will be competition among new entrants,” said Dino Varkey, CEO, Gems Education.
He noted that the local market is more mature and growing at normal rate despite some global softening and macro headwinds on the local market. “We had seen up to 11 percent growth in previous years, but now we are growing at 3.5 percent, which is more mature rate and it is faster than the growth in population,” said Varkey during a panel discussion hosted by HSBC Bank Middle East in Dubai.
Raza Khan, CEO, Al Najah Education; George Ghantous, COO, Nord Anglia Education and Ross Barfoot, partner, Clyde & Co.; participated in the panel discussion which was moderated by Daniel Howlett, ?regional head of commercial banking at HSBC MENAT.
The UAE and other Gulf countries have heavily focused on improving the quality of education with Dubai setting examples for other countries to follow. The UAE allocated Dh10.3 billion for education in 2019 budget. Boston Consulting Group estimated that the UAE’s private K-12 education will increase from $4.4 billion (Dh16.15 billion) in 2017 to $7.1 billion (Dh26 billion) by 2023 with $11,000 (Dh40,370 ) per student per annum, private school spending which is higher than OECD countries.
Dubai refreshment unveils solar power project
Dubai Refreshment has announced the inauguration of a large solar power plant at its manufacturing facility in Dubai Investment Park 2.
A ceremony was held at the company’s facilities to mark the occasion under the patronage of Dr Thani bin Ahmed Al Zeyoudi, Minister of Climate Change and Environment, and in the presence of Ahmad bin Eisa Alserkal, chairman of Dubai Refreshment.
The 45,000sqm plant has a production capacity of 3.7 megawatts, making it one of the largest private solar power plants in the UAE. The project is expected to generate 5.6 million kWh throughout the year, which will reduce the emissions of carbon dioxide – a greenhouse gas causing global warming – by 4 million kg per year.
Dr Al Zeyoudi commended the role of the private sector, with Dubai Refreshment at the forefront, in supporting the country’s swift transition to renewable energy and green economy.
“The UAE embraces innovative environment-friendly solutions to drive sustainable development across all sectors. As part of this priority, the country is advancing the deployment of renewable energy in a bid to drastically reduce carbon emissions,” he said.
Dr Al Zeyoudi referred to the UAE Energy Strategy 2050, the country’s first unified energy strategy based on supply and demand. Its objectives include increasing the contribution of clean energy to the total energy mix to 25 percent by 2030 and to 44 percent by 2050, as well as boosting the energy consumption efficiency of individuals and corporates by 40 percent.
ADCB and UNB shareholders greenlight mega-merger
Shareholders of Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB) have given their approval for a merger of the two banks and then to acquire Al Hilal Bank, creating an entity with Dh6.1 billion in net profit.
At the separate ADCB and UNB annual general meetings on Thursday, shareholders approved the terms of the transaction, under which ADCB will issue convertible bonds to Al Hilal’s shareholders as the acquisition price paid by ADCB for the privately-held bank.
The bonds will be converted into over 117 million new shares in ADCB, increasing the share capital of the bank to up to Dh6.9 billion on conversion of the bonds. ADCB said at the meeting the acquisition of Al Hilal Bank is expected to close in the second quarter, having earlier said that the merger with UNB alone is likely to be effective only by May 1.
At ADCB’s meeting, executives from the bank told shareholders that the merged entity will have Dh423 billion in total assets.
The entity — which will retain the ADCB brand name — will have around one million customers, and on the balance sheet side, Dh285 billion in customer deposits and Dh260 billion in net loans and advances.
Shareholders also approved the appointment of 11 members to the merged entity’s board of directors, each with a term of three years. In terms of capital, shareholders approved the issuance of tier capital instruments with an amount up to $2 billion “for the purpose of strengthening ADCB’s capital adequacy ratio”, the details from the meeting show.
ADCB shareholders and board members agreed the bank will distribute cash dividends equal to 46 percent of ADCB’s capital, and amounting to Dh2.39 billion.
At UNB’s annual general meeting, shareholders approved the merger and approved terms that will see 0.596 new ADCB shares issued for each UNB share. The merger between the two Abu Dhabi mega-banks will see UNB delisted from the bourse, and its assets and liabilities assumed by ADCB.
Qatar bars Fab from adding clients amid riyal manipulation probe
Qatar banned the United Arab Emirates’ biggest bank from growing its business in the country amid an investigation into the potential manipulation of its currency.
First Abu Dhabi Bank PJSC ‘failed to comply with an order of the QFC Civil and Commercial Court to produce an affidavit demonstrating its preservation of documents relevant to an ongoing regulatory investigation into potential manipulation of the Qatari riyal,’ the Qatar Financial Centre Regulatory Authority said on its website.
The lender won’t be able to add new customers and engage in any regulated activities including deposit taking, providing credit facilities and arranging deals in investments, it said. The restriction doesn’t stop First Abu Dhabi Bank, which operates one wholesale banking branch in Doha, from continuing to provide services to existing customers.
Qatar’s central bank is investigating suspected attempts to devalue the riyal at the height of a diplomatic standoff with Gulf neighbours in 2017. The nation keeps the currency pegged to the dollar. But after Saudi Arabia, the UAE, Bahrain and Egypt accused it of backing terrorism — a charge Qatar denies — and imposed an economic boycott, the riyal came under pressure in the offshore market.
Oman to enforce new ‘sin tax’ in June
Cigarettes, alcohol, energy and soft drinks are going to be more expensive from June, when a new national tax is applied in Oman.
The ‘selective tax’ — or sin tax, will be enforced in 90-days time after His Majesty Sultan Qaboos bin Said issued a Royal Decree that approves the new levy.
The Royal Decree stated: “By the first Royal Decree, His Majesty Sultan Qaboos bin Said approves the Selective Tax Law. The Tax Law will come into effect after 90 days.”
“The Selective Goods Tax Law comes as a result of the GCC Standard Agreement on Selective Tax, issued in 2016 by Saudi Arabia, the United Arab Emirates, the Kingdom of Bahrain and the State of Qatar. This tax shall be levied on goods that have damage to public health or the environment in varying proportions,” a statement from Government Communication Centre said on Wednesday.
UAE starting to reap dividends of new bankruptcy law
The UAE is beginning to see the positive effects of its new bankruptcy law, a top official of the Ministry of Finance told Gulf News.
“The law is being used through requests to the competent courts to save businesses, prevent them from reaching bankruptcy and selling their assets at the lowest prices,” said Younis Haji Al Khouri, Undersecretary in the Ministry of Finance.
“The courts are working on the application of clear and transparent legal rules that balance the interests of the creditor and the debtor, taking into account the priority of creditors with collateral over any other debts,” he added.
The comments come after the case of a UAE company that successfully restructured its debt to resume business under Chapter 4 of Federal Law No 9 of 2016 — a first for the country.
The firm, which was not named, is a limited liability company founded in 2008 to carry out contracting work. With debt more than 18 times its available capital, the company sought the restructuring, a WAM statement revealed last week.
Under the provisions of the law, the court appointed a secretary and relevant experts to oversee the company during the bankruptcy proceedings.
According to the statement: “The secretary conducted his duties until the restructuring process was successfully completed, by paying off the company’s debts, renewing its commercial licence, and achieving liquidity at a level of five times the company’s capital, enabling it to resume its business.”
Al Khouri said the law relies on a methodology and a plan of action that enable financial defaulters to reorganise their financial and commercial affairs, overcome difficulties and increase their ability to repay debts and obligations without disrupting production.
“The Ministry of Finance put in place all the necessary resources to establish legislation that is accurate and balanced between the interests of both debtors and creditors of all types.”
“The goal of Decree Law No. (9) of 2016 is to raise the level of credit and financial security as a legislative priority, which enhances confidence among investors and boosts the economy.”