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UAE, Saudi non-oil sector key to reignite me growth

The non-oil sector of the UAE and Saudi Arabia is expected to a play key role in generating economic growth and employment in the Middle East as the regional economies face a challenging 2019, the Institute for Chartered Accountants for England and Wales (ICAEW) said.

The non-oil sector in the GCC to accelerate from an estimated 2.3 per cent last year to 2.6 per cent in 2019 as several proxy indicators of economic activity paint a positive picture, with the credit to the private sector trending up in most GCC countries, ICAEW said in its latest Economic Insight report produced in partnership with Oxford Economics.

Other bullish indicators include some improvements in the quarterly average of the purchasing manager index, a gauge of the health of the private sector in both Saudi Arabia and the UAE, the two largest economies in the GCC, in first quarter compared to last quarter 2018, the report said.

The non-oil sector resilience in the GCC is supported by various pro-growth government initiatives, expansionary budgets and fiscal stimulus plans, especially in Saudi Arabia and the UAE, ICAEW said.

“In other notable developments, deflationary pressures were evident in several GCC countries in the beginning of 2019, largely reflecting material declines in the ‘housing and utilities’ component of the CPI index, which traditionally has the largest weight in the consumer basket,” ICAEW pointed out in its report.

Michael Armstrong, ICAEW regional director for the Middle East, Africa and South Asia, said the outlook for Middle Eastern economies remains challenging for the rest of 2019 as global developments continue to be of crucial importance to the region.

Planning to remit money back home? here are the forex rates

The rupee opened on a cautious note and fell 10 paise to 69.14 against the US dollar in early trade on Friday amid rising crude oil prices and foreign fund outflows.

At the Interbank Foreign Exchange, the rupee opened weak at 69.12 then fell to 69.14 against the US dollar, showing a decline of 10 paise over its previous closing.

Against the UAE dirham, the rupee was trading at 18.80 at 9:3am (UAE time), according to XE.com.

The local unit however pared some losses and was trading at 69.05 against the American currency at 10:05 hrs.

The Indian rupee on Thursday had closed at 69.04 against the US dollar.

Forex traders said rising brent crude prices, cautious opening in domestic equities and foreign fund inflows weighed on the local unit, while weakening of the greenback vis-a-vis other currencies overseas added support to the local unit and restricted the downfall.


UAE is Arab world’s most innovative nation again

The UAE maintained its top position as the most innovative country in the Arab world in 2019, while also improving its global ranking by two positions to 36th, according to the annual Global Innovation Index (GII) released on Wednesday.

The GCC’s second-largest economy has seen its ranking consistently rising over the past four years, moving 11 spots up from 47th in 2015 to 36th in 2019. It ranked 24th and 58th on the innovation input and output sub-indices, respectively.

The report found the UAE has the lowest cost of redundancy dismissal for the companies.

The GII ranked 129 countries based on their capacity to innovate; human capital and research; infrastructure; market sophistication; business sophistication; knowledge and technology outputs; and creative outputs.

The UAE’s ranking among key sub-indexes increased substantially in 2019. Its creative output index jumped 20 positions to 50th while human capital and research jumped 13 places to 18th this year.

The UAE is taking a number of initiatives such as establishing an intellectual property registration hub, promoting a unified network aimed at encouraging fundamental research collaboration between institutes and identifying, connecting and tracking innovation financing through enhancements in the venture capital ecosystem.

Sultan bin Saeed Al Mansouri, UAE Minister of Economy, said the country’s innovation landscape is driven by strong partnerships between public, private and academic sectors.

“Newer initiatives will be rolled out with the chief goal of further expanding fundamental and applied research conducted in the country and linking it to robust financing mechanisms. In addition, the country is looking to enhance the knowledge economy by amplifying the number of intellectual property applications and registrations made inside the UAE through the attraction of foreign companies and the introduction of licences for IP holding companies.”

Hussain Ebrahim Al Hammadi, UAE Minister of Education, stated that his ministry is aligning its efforts with the future plans of the state to achieve the targets set for innovation indicators.

“This will lead to enhanced competitiveness in an important and vital sector that is capable of both strengthening the UAE’s prosperity and paving the way for its rapid transition towards a sustainable knowledge economy,” he added.

UAE, Indonesia boost ties with $9.7b deals signed

Corporate giants of the UAE and Indonesia sealed agreements worth $9.7 billion on Wednesday as His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, embarked on a historic state visit to the Southeast Asian country.

The UAE corporates include Abu Dhabi National Oil Company (Adnoc), Abu Dhabi investment company Mubadala and Dubai-based global ports operator DP World.

All agreements were signed in the presence of Sheikh Mohamed and Joko Widodo, President of Indonesia. Adnoc’s deal with a potential value of $2.5 billion was with Indonesia’s energy company PT Pertamina to explore opportunities for collaboration across the oil and gas value chain in the UAE, Indonesia and globally.


Mubadala and Austrian energy firm OMV sealed a deal with a potential value of $6 billion with Indonesia’s Chandra Asri Petrochemical to explore opportunities in petrochemicals, while DP World and Indonesia’s Maspion Group signed an agreement to develop a container terminal in Gresik in East Java in a deal valued at $1.2 billion.

Describing the UAE leader’s visit as a “dream come true”, Husin Bagis, Ambassador of Indonesia to the UAE, said he expected to see an estimated $10-15 billion in deals and partnerships formed during the visit that “will not only improve the diplomatic ties between the two countries, but also will expand trade and investment relations across multiple sectors including energy, petrochemicals, retail, ports and customs, tourism and finance”.

Dr Sultan bin Ahmad Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO, said as part of the comprehensive strategic framework, Adnoc and Pertamina would evaluate collaboration opportunities across the upstream, midstream and downstream sectors.

DLD, Property finder launch Dubai house price index

Dubai Land Department (DLD) and Property Finder have signed a memorandum of understanding (MoU) for the launch of Dubai’s first official sales and rental price index.

The collaboration will create an index called ‘Mo’asher,’ which translates to index in Arabic. The first edition of the index will be unveiled during the third week of September and will be available on DLD’s and Property Finder’s websites. The MoU was signed by Sultan Butti bin Mejren, director general of DLD, and Michael Lahyani, founder and chief executive officer of Property Finder.

“Signing a partnership with Property Finder aligns us with an entity that enjoys an established reputation for leading people to property, especially as we are collectively aiming to enhance and increase real estate investment in Dubai. Mo’asher is the official real estate index for Dubai that provides consumers with better insights to help them when taking property-buying and -renting decisions,” said Bin Mejren.

DLD will provide data for Mo’asher on a monthly basis. This will then be coupled with Property Finder’s proprietary asking-price data and expert analysis from the team at Data Finder, a real estate insights and data platform under the Property Finder Group.

Traditional security investments failing

The cost of security breaches is far outpacing the increase in traditional security investments that are being made by companies across the UAE and the Europe, Middle East and Africa (Emea) region, experts said.

Highlighting the results of a new study commissioned by VMware, in partnership with Forbes Insights, security experts pointed out that a large number of businesses are failing to recognise and properly prioritise the nature of their security investments. The study revealed that 76 per cent of business leaders and IT security practitioners across the Emea region believed that their security solutions are outdated, even though 42 per cent said that they have acquired new security tools over the past year to address potential security issues. In the UAE, 90 per cent of business leaders and IT security practitioners believe their security solutions are outdated; while 50 per cent said that they had acquired new security tools over the past year.

It was found that 33 per cent of UAE respondents planned to spend more on detecting and identifying attacks, while 93 per cent said that they planned to increase the purchase or installation of new security products in the next three years.

Ahmed Auda, managing director for the Middle East, Turkey and North Africa at VMware, noted that investments in traditional security solutions continue to be dwarfed by the economic repercussions of breaches. “We now live in a world of greater complexity, with more complex interactions, more connected devices and sensors, dispersed workers and the cloud, all of which have created an exponentially larger attack surface. This has changed the rules. Modern-day security requires an investment shift away from trying to prevent breaches at all costs and towards building intrinsic security into everything – the application, the network, essentially everything that connects and carries data. Breaches are inevitable but how fast and how effectively you can mitigate that threat is what matters.”

Rasheed Al-Omari, principal business solutions strategists, SEMEA, VMware, also noted that businesses across the region are battling increasingly sophisticated security threats in a digital age with the same old tools. This has resulted in slow and inefficient practices, with businesses losing confidence in their ability to combat the latest cyber attacks.

16,700 millionaires to transfer Dh2.1t in Middle East

Around 16,700 millionaires will pass on their wealth to the next generation in the Middle East, which is estimated to be $572 billion (Dh2.1 trillion) over the next 10 years.

According to the recent Wealth-X Family Wealth Transfer Report 2019, 14,390 millionaires with an asset range of $5 million to $30 million will transfer $152 billion to the next generation while 1,460 millionaires controlling $30 million to $100 million will transfer $77 billion. The highest wealth transfer will materialise from 850 ultra-high net worth individuals (UHNWIs) with over $100 million wealth in the Middle East, which is estimated to be $352 billion.

This amounts to a 26.6 per cent wealth transfer by millionaires controlling $5 million to $30 million of wealth, 13.6 per cent by UHNWIs with $30 million to $100 million and 59.8 per cent by those with over $100 million.

“In the Middle East, for example, where patriarchy is the norm, many such individuals find it hard to cede control. It’s only in the past two generations that they have accumulated this wealth, so they are used to having that control,” said Tim Denton, vice-president and head of trust and wealth structuring at Emirates NBD bank.

“On one hand, you have to make clients aware [of wealth transfer’s importance] but on the other you need to do this from a place of trust – it will only resonate with mutual trust and understanding,” said Russell Hunter, head of the Middle East and UK at Schroder & Co Banque.

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