GULF STATES: ECONOMICS & FINANCE
UAE startup finalist in ‘Billion Ruble Pitch’ at GMIS
A UAE startup company is among the 15 finalists that pitched ideas to international investors with the aim of securing up to one billion rubles in investment at the Global Manufacturing and Industrialisation Summit (GMIS), which was inaugurated by Russian President Vladimir Putin on Tuesday in Yekaterinburg, Russia.
The Concept, a UAE company, was shortlisted from one hundred startups that were invited to participate in the “Billion Ruble Pitch” session aimed to create a platform for accelerated growth, investment attraction and scaling industrial development projects to new markets around the world.
In his key note speech, Putin told delegates his country was open for broad and equal cooperation as the world grapples with grave challenges related to climate change.
Addressing an audience of more than 2,500 government officials, business leaders, scientists and non-for-profit entities, the Russian president highlighted the hope that technology, which has changed the core principles of production, will save the planet from man’s footprint is an illusion. “If nothing is done, technology will not allay but aggravate the ecological challenges as by the mid-2020s 30 per cent of global energy output will be consumed by communication devices and data storage and processing systems,” said Putin.
He urged that the digital and technological revolution and the Internet of Things must not be allowed to drive the world into a resource and environmental dead-end, but at the same time human progress should not be stopped in its tracks. The solution is to develop new technologies and devices that are more efficient and less resource intensive, he said.
Dubai realty to remain buyers, tenants’ market for foreseeable future
Property prices and rentals in Dubai continued to decline in the first half of 2019 and this trend will continue in the second half as oversupply will keep the emirate a buyer-friendly market for a few more quarters – if not years.
In the sales market, prices for both apartments and villas witnessed a decrease of 4 per cent in the last quarter. In the rental sector, there was a more marked weakening compared to the previous period, with average apartment rates declining by 5 per cent and villas by 8 per cent quarter-on-quarter. As a result, many tenants have seen an increase in potential property options, latest research from real estate services firm Chestertons said on Wednesday.
The emirate is projected to see delivery of 47,500 apartments, villas and townhouses in 2019, which is nearly double of what was delivered last year.
“With the continuing oversupply, we would expect further declines in both the sales and rental markets of circa 5 per cent in H2 2019,” said Nick Witty, managing director of Chestertons Mena.
Dubai sees increase in delegate impact from business event bid wins
Dubai Business Events (DBE) has recorded exceptional results during the first half of 2019, securing 118 successful bid wins for events to be hosted in Dubai over the coming years.
These events won in H1 2019, including conferences, meetings and incentives, are set to attract 75,288 delegates from around the globe to Dubai over the coming years, representing growth of 17 per cent on the delegate impact of bid wins from the same period in 2018.
Issam Kazim, CEO of Dubai Corporation for Tourism and Commerce Marketing, said: “Dubai continues to consolidate its position as a leading destination for global travel and business events, and the recent bid wins are a testimony to the strides we have made as a city to attract and host large scale business events. With the DBE team working closely with stakeholders to ensure that the city has the robust capabilities to cater to a wide range of business events, we are seeing meetings planners and decision makers are finding the city to be an increasingly compelling option. We would like to thank our partners and stakeholders for their ongoing support in driving the contribution of business events to achieving our overall tourism strategy.”
Abu Dhabi showcases achievements at 2019 Esri user conference
In line with global efforts to promote Abu Dhabi as an international technology and innovation hub, an official delegation composed of 18 government entities are participating at the 2019 Esri User Conference, which will run until July 12, 2019 in San Diego.
The delegation’s presence at the event is aimed at increasing the capacity and skills of Abu Dhabi government employees in geographic information systems (GIS), as well as promote the emirate’s leading developments and innovation in this field.
Under the theme ‘From data to intelligence,’ the Abu Dhabi Government is hosting a dedicated pavilion showcasing key achievements and sharing the knowledge and experiences of the latest technologies, standards and innovative global ideas to support the development of GIS solutions. In addition, there will be active participation in discussion panels aimed at promoting the adoption of global best practices for human capacity building, skills development, and encouraging knowledge exchange.
Dr. Rauda Al Saadi, director general at ADDA, said that the Abu Dhabi Government is witnessing a strong presence in global events due to its future trends and innovative contributions across all sectors especially in advanced technologies, including GIS. The Esri Conference provides the ideal platform for the sector to share best practices and promote the use of GIS to develop services and enhance decision-making processes, leading to efficiency and high-quality services based on accurate geospatial data.
FlyDubai marks 10th anniversary
Flydubai is celebrating 10 years of operations, carrying more than 70 million passengers since starting in 2009, more than five million of which were carried on its African routes. Flydubai passenger traffic between the UAE and its African routes grew by 108 per cent since 2015.
Ten years ago, flydubai’s first flight took off from Dubai International bound for Beirut Rafic Hariri International Airport, on June 1, 2009, marking the beginning of a new chapter in the history of aviation in the UAE.
Will Brexit Pound Sterling? And how will it affect UAE?
Britain’s pound is expected to trade in a narrow range until the final decision on Brexit is announced in October, but the currency will depreciate in coming months if Boris Johnson wins the elections to become the UK’s prime minister, analysts and experts said.
Industry executives believe that the pound will not see a big spike in the second half of 2019 and may trade in the range of 1 to 4 per cent.
“We do not expect any significant spike in respect of pound in the next few months and believe that the range would be between 4.55 to 4.78 against the UAE dirham over the next six months,” said Adeeb Ahamed, managing director of Lulu Financial Group.
He said the upcoming fifth and final round of voting for the next PM of UK will play a major role in drawing up the roadmap for the country. The UK foreign policy, implication of no-deal Brexit, the growing divide between the cities and rural areas will determine the fate of the British currency.
“As of now, the pound will would move sideways until the voting is over and a decision is taken in respect of Brexit,” he said.
Jeremy Hunt and Johnson will battle it out to be the next leader of the Conservative Party and also replace Theresa May as prime minister.
With Johnson expected to become the next UK prime minister, Nigel Green, CEO of deVere Group, warned that Johnson will drive down the pound even further should he win the leadership contest.
GCC gold market to benefit as India set to hike import duty
The shine of gold and jewellery markets in the GCC is to get added sparkle in the form of increased demand from Indian expatriates going on summer vacation following a proposal in the Indian budget to increase custom duty on gold and other precious metals from 10 per cent to 12.5 per cent.
“The proposal to increase the custom duty on gold and precious metals will spike gold prices in India, where prices are already at multi-year highs on the back of a weak rupee and higher international prices. However for Gold markets in the GCC, it will prove to be an unexpected boon during the holiday season,” said Joy Alukka, Chairman of Joyallukkas Jewellery Group.
Alukka said in India gold attracts a GST of three per cent. The proposal to hike the impart duty from 10 per cent to 12.5 per cent will there bode bad for India’s jewellery trade and buyers alike.
Fujairah oil product stockpiles at 2019 low on higher demand
Oil product stockpiles at the Fujairah trading hub on the UAE’s east coast fell to the lowest level this year, led by double-digit declines in medium and heavy distillates amid reports of increasing demand, according to data from the Fujairah Oil Industry Zone.
Total inventories declined 7.2 per cent over the past week to 18.58 million barrels as of July 1, the lowest since December 31. It was the fifth consecutive week-on-week drop, the longest stretch of declines since May 2017.
Stockpiles of heavy distillates and residues, including marine fuel, dropped 10 per cent for the week. Stocks for middle distillates – which include gasoil, diesel, marine bunker gasoil, jet fuel and kerosene – plunged 24 per cent on the week.
The Port of Fujairah, outside the Strait of Hormuz, is close to the site where four vessels were attacked in May. While bunker traders had recently told S&P Global Platts that some shippers were avoiding the port, traders in Fujairah last week were cited by Platts as saying that buying inquiries were picking up.
Traders in Singapore, the world’s biggest bunkering hub, also pointed to a slight recovery in their delivered bunker demand against a backdrop of a tighter fuel oil supply outlook for July and August, Platts reported earlier.
Inventories of heavy distillates dropped to 9.835 million barrels, the lowest since March 11. Middle distillates stockpiles declined to 1.545 million barrels, the lowest since January 28.
Stockpiles of light distillates bucked the trend, and rose 1.9 per cent for the week to 7.196 million barrels. The category includes products such as gasoline, naphtha and condensates.
Why Gulf investors should look to Southeast Asia
Strong growth in recent years has enhanced the profitability of blue-chip companies in the Philippines. Closely controlled family corporations and conglomerates have thrived on the back of robust spending by a 100 million plus consumer market, fuelled by remittances, business process outsourcing and economic growth expansion with a reach well beyond traditional urban areas.
With the easing of monetary policy, Philippine companies continue to march toward expansion and growth aided by domestic liquidity. Catalysed by retained profits and access to capital, they continue to reinforce their position in the market and are actively pursuing international expansion opportunities, primarily in Southeast Asia.
As the country’s business landscape evolves to become more global, digital and knowledge centric, companies in the Philippines have realised that adapting to this shift will require them to be more agile and innovative, to successfully compete both nationally and internationally. This provides an unrivalled opportunity for Gulf investors, in particular, to capitalise on the changing economic landscape
With Asia being an emerging haven for foreign direct investment (FDI), the Philippines faces healthy competition amongst other neighbouring countries like Vietnam and Indonesia that rank significantly higher in attracting investment, according to the World Bank Doing Business report, with the Philippines ranking 124th out 190 countries.
Recognising the challenges that foreign investors face, President Rodrigo Duterte has taken ‘ease of doing business’ as a top priority, offering strong domestic policies and regulations to enhance the competitiveness of new enterprises and industries.
Nevertheless, as with any emerging economy, it will take time for significant improvements to materialise. Gulf investors interested in pursuing opportunities in the Philippines would therefore benefit from teaming up with a Filipino partner, who will be able to help them navigate the risks and challenges involved in entering, identifying and harvesting investment opportunities and create successful synergies between the two countries.
While Gulf investors are not entirely new to the Philippines – Saudi Aramco and Kingdom Holding were once invested in the country, with DP World operating one of Manila’s major ports – the potential for enhanced engagement will likely be more compelling this time around, given what Gulf investors can bring to the table.
This approach is best illustrated by two compelling narratives of success that have emanated from here in the region. The first is the story of Emirates Airlines, which His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President & Prime Minister and Ruler of Dubai, wonderfully elucidates in the 37th chapter of his book, Qissati.
His Highness writes: “We had six months to launch the new airline. We rented two planes from Pakistan International Airlines and worked on them. The working team asked me to give them special privileges to protect the airline from competition, but I said the policy of open sky would remain. Today, Emirates Airlines has been recognised as the best airline several times and continues to make profits.”