GULF STATES – ECONOMICS & FINANCE
Top gold, jewellery, fashion brands offer up to 90pc discount in Dubai
As shoppers across the GCC count down to the anticipated 3-Day Super Sale running from October 31 to November 2, 2019, organiser Dubai Festivals and Retail Establishment (DFRE) has announced the brands participating in its seventh edition. With over 500 brands and 2,000 retail outlets confirmed, the sale will offer huge savings of up to 90 percent off on merchandise from the fashion, beauty and health, homeware, electronics, footwear, accessories, gold and jewellery and kids’ categories.
4,000 more products to be added to UAE’S excise tax list
The Federal Tax Authority has said that the prices of 4,000 more products will be affected by the new excise tax, set to be implemented on December 1, 2019. Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, said that the total number of products included in the selective tax will reach 13,000, including the previous 9,000 products added before, Arabic daily Emarat Al Youm said. Additionally, he reiterated that the minimum cost for tobacco products is 40 fils per cigarette, which makes it Dh8 for a pack of 20. He added that for shisha tobacco, the excise cost will be10 fils for one gram, which makes it Dh25 for a 250g pack. He added that the authority is developing an app that allows consumer to check the cigarettes’ barcode to see if the product is genuine or counterfeit, and it will be launched by the end of next year.
Damac chairman buys Italian firm Roberto Cavalli
Vision Investment Company (VIC), the private investment vehicle of Dubai-based billionaire Hussain Sajwani, chairman of Damac Properties, has acquired the Italian fashion house Roberto Cavalli.
VIC is part of Dico Group, which is a private investment vehicle of the Damac chairman.
“Vision Investment Company, part of the Dico Group, which is the private investment vehicle of Sajwani, has made the purchase. We will make further comments in due course,” Niall McLoughlin, senior vice president of Damac Properties, confirmed to on Wednesday.
The Italian court on Tuesday approved the debt restructuring agreement, which was essential to sell Roberto Cavalli to the Dubai-based firm.
In July, Dubai-based firm had signed an agreement to fully acquire the company.
Italian private equity firm Clessidra acquired 90 percent of Roberto Ravalli in 2015 for reportedly 390 million euros ($433.10 million). But the new owner couldn’t turn around the Italian brand and it started looking for an investor over a year ago. Clessidra and the board of Cavalli chose the Dubai-based company among five other offers. Roberto Cavalli had filed for bankruptcy in Italy and the US and shut down all of its outlets in the US.
Though VIC refused to disclose the value of the acquisition, Italian media quoted the transaction value at 160 million euros ($177.7 million; Dh652 million).
Damac Properties had also signed an agreement with Roberto Cavalli a couple of years back to build “Just Cavalli” villas in Dubai.
UAE takes leadership role in digital transformation
When it comes to digital transformation, the UAE has taken a leadership role in the Middle East region with the government sector leading the charge in technology adoption, experts at The Digital Transformation Forum (Digitrans 2019).
“We are trying to navigate a very vague future,” said Ghaith Rahman, head of ecosystem development and partnerships and co-head of Area 2071. “Anyone that claims to be an expert on the Fourth Industrial Revolution is wrong as we are still at the stage where we are trying to grasp the full impact of the technologies of the Fourth Industrial Revolution.”
He noted that a lot of the future will revolve not just around technology, but how technology is influencing our interactions and daily lives. Towards this end, he noted that the government of Dubai has largely been responsible for changing the mindset when it comes to adopting new technologies.
“Dubai has become a testbed for new technology,” he added.
Similarly, Faisal Mohammad Ali Alshimmari, internal consultant at the Mohammed bin Rashid School of Government, highlighted how the government has taken a very active role in ensuring that the latest technologies are carefully studied before being adopted to improve the quality of services being offered. This, he said, is usually in the form of forward-facing initiatives such as the Dubai Innovation Strategy, the Dubai AI strategy and the Dubai Blockchain Strategy.
Industrial strategy seeks to position UAE as a global 4IR hub
The UAE is reviewing a new strategy that seeks to raise the industrial sector’s contribution to GDP and boost economic growth, said Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Industry.
Speaking at a recent media briefing on the 18th general conference of the United Nations Industrial Development Organisation (Unido), which will take place in Abu Dhabi from November 3-7, Al Mazrouei said the goal is to build a diversified and sustainable knowledge-based economy in which the industrial sector plays a pivotal role led by qualified national cadres.
“The new strategy aims to achieve sustainable development through several pillars, including supporting innovation, efforts to reduce carbon emissions, stress on small and medium enterprises, adoption of Fourth Industrial Revolution [4IR] technologies, sustainable manufacturing, developing advanced skills and establishing partnerships to integrate local businesses into global value chains in order to increase our export prospects,” the minister said.
He said the UAE’s economy is already moving towards greater diversification and a future-based on leadership in non-oil sectors. Currently, the contribution of the industrial sector to the UAE’s GDP is around 9 percent and is poised to grow further.
“Industrial activity, which increased by 4.8 percent during 2017 alone, is certainly one of the main engines of our economic development and plays a pivotal role in boosting the country’s GDP. The steady growth witnessed over the past five years demonstrates the success of the state in establishing a strong manufacturing base and its contribution to economic diversification,” he said.
Loans may get cheaper in UAE as central bank cuts interest rates
The central banks of the UAE, Kuwait, Bahrain and Saudi Arabia late on Wednesday cut interest rates following the US Federal Reserve’s decision to reduce rates by 25 basis points earlier on Wednesday.
The cut in interest rates will reduce borrowing cost for personal loans, auto loans and home loans etc.
All these GCC countries’ currencies are pegged to the US dollar, hence, they follow the Fed’s monetary policy for interest rates.
The Central Bank of the UAE (CBUAE) will lower interest rates applied to the issuance of its Certificates of Deposits from Thursday, October 31, 2019, in line with the decrease in interest rates on US dollar, following the Federal Reserve Board’s decision to decrease the Federal Funds Rate by 25 basis points at its meeting.
The Repo Rate applicable to borrowing short- term liquidity from CBUAE against Certificates of Deposits has also been decreased by 25 basis points.
Certificates of Deposit, which CBUAE issues to banks operating in the country, are the monetary policy instrument through which changes in interest rates are transmitted to the UAE banking system. The Federal Reserve on Wednesday cut interest rates for the third time this year in a move to ensure the US economy weathers a global trade war without slipping into a recession, but signaled its rate-cut cycle might be at a pause.
Kuwait cut its discount rate by 25 basis points to 2.75 percent from 3 percent after staying pat in July and September when other major Gulf central banks followed the Federal Reserve.