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DEC 2017 ISSUE

CGI. 98

Country Risk Update – UAE

The UAE will continue to strengthen its position as a regional safe haven and business hub. Access to global markets from Dubai will be among the best in the world.Abu Dhabi, the largest emirate, experiences slowing growth due to lower oil prices, resulting in a
downgrade to the UAE’s growth forecast for 2017.The royal families of the emirates have recycled the oil wealth to significantly improve the living standards of local people; consequently, no political opposition has developed to their continued benign authoritarian rule.

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Market Overview
Most GCC economies set to transition to ‘new normal’ in 2018
Several economies in the Middle East, particularly those in the GCC, are transitioning towards a “new normal” in 2018, allowing spending to start recovering gradually, according to a new report.The Institute of Chartered Accountants in England and Wales (ICAEW)’s Economic Insight: Middle East Q4 2017 said that GDP across Gulf countries is expected to grow from just 0.3 percent in 2017 to 2.8 percent next year.The wider Middle East is set to see an acceleration from 1.4 percent this year to 3.2 percent in 2018, it noted.However, the accountancy and finance body said several risks remain to growth in the region, including those from politics and security.The report added that public finances now look to be on a more sustainable path in most economies in the GCC thanks to three main factors – the upcoming Value-Added Tax; social change in Saudi Arabia and the period of emergency austerity which saw public spending cut by almost 20 percent from 2015-2017.
Dubai Investments raises foreign ownership limit to 49%
Dubai Investments said on 29 November 2017,that it has raised foreign ownership limit in the company from 35 percent to 49 percent.A proposal was approved by shareholders at the General Assembly Meeting, the company said in a statement.It said raising the limit to 49 percent is part of a wider move by Dubai Investments to open up to international investors. Sohail Faris Ghanim Al Mazrui, chairman of Dubai Investments, said: “The proposal to raise the cap to 49 percent of the capital was aimed at encouraging share ownership to more foreign investors. The company feels that there is an appetite among foreign investors to invest – which is restricted by keeping the cap at 35 percent.”The foreign ownership cap on Dubai Investments shares was initially 20 percent when it listed on Dubai Financial Market in 2000. It was raised to 35 percent in 2014.
Dubai wealth fund posts $2.8bn net profit for H1
Investment Corporation of Dubai (ICD), the emirate’s sovereign wealth fund, on 29 November 2017 announced revenues of AED93.2 billion and net profit of AED10.3 billion ($2.8 billion) for the first half of 2017.The company said in a statement that revenues increased by 13.1 percent from the prior year period with the largest growth seen in oil and gas and transport services.Net profit rose marginally by 0.3 percent from the prior year period and benefited from higher commodity prices in oil and gas and industrial operations and continued strength in banking and financial services, it added.Assets  increased to AED786.8 billion, rising 2.2 percent  from year-end 2016, primarily resulting from an increase in loans and receivables in banking and financial services and the acquisition of ALEC Engineering & Contracting.Liabilities increased to AED572.1 billion, rising 2.1 percent, the company said.
Dubai to hold London roadshows to boost UK real estate investments
Dubai Land Department (DLD) has announced plans to hold roadshows in London as it seeks to increase the number of UK investors in the Dubai real estate market.With a mandate to promote Dubai around the world as a preferred real-estate investment destination, DLD will be holding events in the English capital on December 3 and 4.The event comes as figures for January 2016 to July 2017 show that UK citizens took pole position among the European nationalities with 4,188 transactions worth AED9 billion in Dubai’s property market.They follow similar roadshows held in Moscow last week, DLD said in a statement.It said the initiative is aimed at familiarising residents of Russia and the UK with the Dubai property market and its real estate developers. DLD added that Russian nationals have traditionally been attracted to Dubai’s premium real estate offering, which features relatively lower prices compared with New York, Paris, Hong Kong or Singapore.
Dubai’s Emirates REIT picks Standard Chartered for debut dollar sukuk, say sources
Emirates REIT, a Dubai-based sharia-compliant real estate investment trust, has appointed Standard Chartered to lead its planned debut US dollar-denominated sukuk, sources familiar with the matter said.The sukuk transaction, which according to a company’s presentation could range between $350m and $425m in size, will be issued before the end of the year or in the first quarter of next year at the latest.Emirates REIT’s sukuk will be the latest corporate addition to the Gulf debt capital markets, which are in their second consecutive record-breaking year in terms of volume of issuance as corporates and sovereigns borrow funds internationally to mitigate the impact of lower oil prices.Debt issuance in the Gulf totalled $63.5bn last year and it exceeded $80bn so far this year. Emirates REIT plans to issue the sukuk, or Islamic bond, to fully replace its existing debt and lengthen the debt repayment profile of the company.
Shuaa no longer seeking stake in Kuwait’s Global Investment House
Dubai’s Shuaa Capital is no longer pursuing a stake in the Kuwait-headquartered Global Investment House, according to the company.No reason was given in a statement on the Dubai Financial Market by Shuaa Capital General Manager Fawad Tariq Khan.“As per Shuaa’s usual pursuit of expansion and opportunities, such discussions are regularly sought and Shuaa will keep the market and regulators of any activities as and when required,” the statement read.In October, Shuaa said it was interested in a deal with Global Investment House and noted that they were currently in talks for a controlling stake in 2018.Earlier this week, Shuaa announced it has re-launched its securities brokerage business in Egypt after obtaining approval from the Egyptian Financial Supervisory Authority (EFSA), after having suspended brokerage operations in Egypt in 2008.
Saudi banks prepare for riyal coins
Saudi banks have been advised to make the gradual transition from one riyal notes to one and two riyal coins by depositing them within the banks.The Saudi Arabian Monetary Agency (SAMA) told the banks in a letter that they should stop dealing with the single riyal paper currency until the notes have completely disappeared from all branches, according to local media. SAMA has revealed the design of the new coins, which include the one riyal and two riyal coins, as well as the 50 halala, 25 halala, 10 halala and one halala denominations. At the launch of the annual release of monetary currency, SAMA said procedures were in place for the handling of the coins in all commercial banks, and that high speed checking machines had been installed.Local newspaper Al Eqtisadiah said that Saudi banks are preparing for the transition to riyal coins in stages and that this process may take up to six months, overseen by specialist global companies.
Yemen’s Saleh says ready for ‘new page’ with Saudi-led coalition
Former Yemeni president Ali Abdullah Saleh said on 2 December 2017 that he was ready for a “new page” in ties with the Saudi-led coalition fighting in Yemen if it stopped attacks on his country, in a move that could pave the way to end nearly three years of war.The apparent shift in position came as Saleh’s supporters battled Houthi fighters for a fourth day in the capital Sanaa, in fighting which the International Committee of the Red Cross (ICRC) said has killed dozens of people and prompted calls to protect civilians.The fighting was the most serious since the Houthis and Saleh’s General People’s Congress (GPC) made common cause against the Saudi-led coalition which joined the Yemen war in 2015 to try to restore the internationally recognised government of President Abd-Rabbu Mansour Hadi to power. The clashes between Saleh’s supporters and the Houthis underscore the complex situation in Yemen, one of the poorest countries in the Middle East, where a proxy war between the Iran-aligned Houthis and the Saudi-backed Hadi has caused one of the worst humanitarian catastrophes in recent times.
The rise of waste-to-energy in the GCC

It’s no secret that the region’s energy sector is in the midst of a major transformation.The oil price drop of 2014 has left a lasting legacy, with diversification plans across the GCC reshaping not just energy industries, but entire economies, societies, and business landscapes.Yet it is the energy industry that has perhaps felt the tremors of these seismic changes in the most profound way, as governments try to break what Saudi Arabia’s Crown Prince Mohammed bin Salman describes as an “addiction to oil”.As a result, a wider range of energy sources than ever before have come to prominence, with solar, wind, hydro and other types of energy emerging across the region. One of the most promising avenues is waste-to-energy (WTE) – a process that not only generates significant levels of energy, but also tackles a major problem for the region.“Across the GCC, governments are actively pursuing strategies to achieve zero waste,” says Khaled Al Huraimel, group CEO of Sharjah-based environmental and waste management company Bee’ah.

Gold and jewellery shops in Saudi face $5k fines

Gold and jewellery shops in Saudi Arabia will be fined SAR20,000 ($5,330) per expat worker when 100 per cent Saudisation of the sector comes into force on December 3.The kingdom’s Ministry of Labour and Social Development also plans to install permanent inspectors at every market and mall, allowing them to conduct surprise inspections and punish Saudisation violations.There are more than 6,000 gold and jewellery shops in Saudi Arabia, hiring around 25,000 workers, including expatriates.Members of the precious metal and stone committee at the Council of Saudi Chambers have appealed to officials for more time to ensure Saudisation is properly in place before issuing fines.Committee member Abdul Mohsen Al-Namir, told local news outlet Saudi Gazette that Saudisation rates in the sector do not currently exceed 50 per cent. He appealed to the Ministry of Labour and Social Development to study the reasons behind the slow progress of Saudisation and allow shops enough time to deal with the issue.

Commodity Tracker
Commodity 27 Nov 4 Dec Chg.%
Brent 63.85 63.39 -0.72
WTI 58.72 57.97 -1.28
Natural Gas 2.91 3.11 6.87
Gold 1289.5 1277.1 -0.96
Business Events this week In UAE

 

 

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Dubai Shopping Festival 2018

26 December 2017 to 27 January 2018

Dubai

Business Updates
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CRIF GULF DWC LLC
Level 15, ’48 Burj Gate’, Downtown Burj, Shaikh Zayed Road, Dubai, UAE
Tel. +971 4 406 9900
www,crif.ae  /  www.dnbuae.com

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CRIF GULF DWC LLC · 48 BURJ GATE, DOWNTOWN BURJ AREA, SHEIKH ZAYED ROAD · Dubai · United Arab Emirates