A day of reckoning for fuel prices in the Gulf | The Economist:
"QUEUES at the pumps were only a few minutes longer than usual. There was little evidence of stockpiling. Aside from minor grumbling, July 31st passed like any other Friday in the United Arab Emirates. But the following day, petrol prices rose by almost 30%, to something close to their market value.
The relaxing of fuel subsidies—which in 2013 cost the government some $7 billion—puts the UAE at the vanguard of a long delayed reckoning in the Gulf. With falling global oil prices, the Arab Gulf states will miss out on an estimated $380 billion in export earnings this year, the International Monetary Fund estimates. Only Kuwait and Qatar will scrape by without a budget deficit, and all the region’s petrol states are being forced to look at cost-cutting.
What makes the UAE unique is its audacity in tackling the commodity many residents in oil-rich states see as their birth right: cheap petrol. The reforms, announced a week ahead of time, have pushed the price of their petrol to the highest level in the Gulf. In the next-highest, Oman, it is only about half as dear. The UAE's prices are not completely deregulated; they will be set monthly by a committee based on international prices. But August’s price is only 13 cents below the American retail price."
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Thursday 6 August 2015
Crisis? What crisis? Reports of ‘looming’ Dubai crunch greatly exaggerated | The National
Crisis? What crisis? Reports of ‘looming’ Dubai crunch greatly exaggerated | The National:
"The British media’s “silly season” has obviously arrived. Over the weekend one newspaper rustled up some six-year-old photos of dusty cars abandoned at Dubai airport and slapped a headline on it: “Another Dubai debt crunch is looming as oil slump hits the Gulf”.
Forget the cheap imagery, notice the word “looming”. In my book that implies an ominous, close threat, with more than a hint of inevitability. If something looms, it normally arrives, with bad results.
But there was nothing in the article that followed that persuaded me there was any such inevitability about a threat of 2009 proportions to the economic and financial well-being of the emirate."
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"The British media’s “silly season” has obviously arrived. Over the weekend one newspaper rustled up some six-year-old photos of dusty cars abandoned at Dubai airport and slapped a headline on it: “Another Dubai debt crunch is looming as oil slump hits the Gulf”.
Forget the cheap imagery, notice the word “looming”. In my book that implies an ominous, close threat, with more than a hint of inevitability. If something looms, it normally arrives, with bad results.
But there was nothing in the article that followed that persuaded me there was any such inevitability about a threat of 2009 proportions to the economic and financial well-being of the emirate."
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Majid Al Futtaim posts flat earnings on higher costs and lower hotels profit | The National
Majid Al Futtaim posts flat earnings on higher costs and lower hotels profit | The National:
"Majid Al Futtaim (MAF) has reported flat first-half earnings, citing higher costs and weaker hospitality industry profits.
It said earnings before interest, taxes, depreciation and amortisation remained stable at Dh1.8 billion despite a 7 per cent rise in revenue to Dh13.7bn from the same period last year.
The result reflects “higher promotional activities, costs associated with new market entries, product mix impact and a softer market in the hospitality industry”, according to the conglomerate, which operates malls, retail and leisure businesses."
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"Majid Al Futtaim (MAF) has reported flat first-half earnings, citing higher costs and weaker hospitality industry profits.
It said earnings before interest, taxes, depreciation and amortisation remained stable at Dh1.8 billion despite a 7 per cent rise in revenue to Dh13.7bn from the same period last year.
The result reflects “higher promotional activities, costs associated with new market entries, product mix impact and a softer market in the hospitality industry”, according to the conglomerate, which operates malls, retail and leisure businesses."
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Redefining EM: Country clusters offer new matrix - FT.com
Redefining EM: Country clusters offer new matrix - FT.com:
"The question of what constitutes an emerging market has haunted me for decades. Since 1989, the World Bank has defined an emerging market as a country with a GDP per capita ceiling of $13,000 or less. But gross domestic product is simply a “wealth” statistic. A country with $12,999 in GDP per capita is very different from one with $1,500.
Thus a new, multi-dimensional method of classifying emerging markets is called for, one that takes into account a cluster of different indicators to produce a ranking of countries’ socio-economic maturation.
Having traded in and taught about these countries for more than 20 years, I have witnessed immense progress among many emerging markets, but often this progress has not been fully appreciated by either the providers of financial indices or investors."
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"The question of what constitutes an emerging market has haunted me for decades. Since 1989, the World Bank has defined an emerging market as a country with a GDP per capita ceiling of $13,000 or less. But gross domestic product is simply a “wealth” statistic. A country with $12,999 in GDP per capita is very different from one with $1,500.
Thus a new, multi-dimensional method of classifying emerging markets is called for, one that takes into account a cluster of different indicators to produce a ranking of countries’ socio-economic maturation.
Having traded in and taught about these countries for more than 20 years, I have witnessed immense progress among many emerging markets, but often this progress has not been fully appreciated by either the providers of financial indices or investors."
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Saudi Arabia plans $27bn in bond issues - FT.com
Saudi Arabia plans $27bn in bond issues - FT.com:
"Saudi Arabia is returning to the bond market with a plan to raise $27bn by the end of the year, in the starkest sign yet of the strain lower oil prices are putting on the finances of the world’s largest oil exporter.
Bankers say the kingdom’s central bank has been sounding out demand for an issuance of about SR20bn ($5.3bn) a month in bonds — in tranches of five, seven and 10 years — for the rest of the year.
Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said in July that Riyadh had already issued its first $4bn in local bonds, the first sovereign issuance since 2007."
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"Saudi Arabia is returning to the bond market with a plan to raise $27bn by the end of the year, in the starkest sign yet of the strain lower oil prices are putting on the finances of the world’s largest oil exporter.
Bankers say the kingdom’s central bank has been sounding out demand for an issuance of about SR20bn ($5.3bn) a month in bonds — in tranches of five, seven and 10 years — for the rest of the year.
Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said in July that Riyadh had already issued its first $4bn in local bonds, the first sovereign issuance since 2007."
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MIDEAST STOCKS-Gulf markets edge down after short-lived rally on oil | Reuters
MIDEAST STOCKS-Gulf markets edge down after short-lived rally on oil | Reuters:
"Major Gulf stock markets slipped back in early trade on Thursday after Brent oil fell below $50 per barrel again and Abu Dhabi heavyweight Etisalat dropped on news that it would face tougher competition.
Etisalat fell 3.2 percent and was the main drag on the Abu Dhabi index, which edged down 0.5 percent. Its competitor, Dubai-listed du, said on Wednesday the United Arab Emirates had started to open its fixed-line consumer telecommunications market to competition.
Du, whose shares rose 0.7 percent early on Thursday, had been largely confined to the newer areas of Dubai until the two companies quietly launched nationwide competition in fixed-line consumer services last month, du chief executive Osman Sultan told a conference call."
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"Major Gulf stock markets slipped back in early trade on Thursday after Brent oil fell below $50 per barrel again and Abu Dhabi heavyweight Etisalat dropped on news that it would face tougher competition.
Etisalat fell 3.2 percent and was the main drag on the Abu Dhabi index, which edged down 0.5 percent. Its competitor, Dubai-listed du, said on Wednesday the United Arab Emirates had started to open its fixed-line consumer telecommunications market to competition.
Du, whose shares rose 0.7 percent early on Thursday, had been largely confined to the newer areas of Dubai until the two companies quietly launched nationwide competition in fixed-line consumer services last month, du chief executive Osman Sultan told a conference call."
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Boom to Busted Glass as Dubai’s Brokers Chase Ebbing Sales - Bloomberg Business
Boom to Busted Glass as Dubai’s Brokers Chase Ebbing Sales - Bloomberg Business:
"The jagged hole that used to be the glass front door of Dubai’s S&K Estates Agents sums up the state of the city’s home-selling business.
Someone smashed the entrance after the company known as Smith and Ken shut down its offices overnight, citing a “drastic” drop in first-half revenue. The dearth of deals that sparked S&K’s collapse and the loss of 80 jobs is likely to cause more pain in the Middle East’s biggest and most volatile property market.
Dubai’s property brokers, some of whom earned more than $50,000 a month when real estate was booming a couple of years ago, are struggling as prices fall and deals dry up. With more than 5,500 real estate agents closing 7,400 deals in the first half, there’s not enough business to go around."
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"The jagged hole that used to be the glass front door of Dubai’s S&K Estates Agents sums up the state of the city’s home-selling business.
Someone smashed the entrance after the company known as Smith and Ken shut down its offices overnight, citing a “drastic” drop in first-half revenue. The dearth of deals that sparked S&K’s collapse and the loss of 80 jobs is likely to cause more pain in the Middle East’s biggest and most volatile property market.
Dubai’s property brokers, some of whom earned more than $50,000 a month when real estate was booming a couple of years ago, are struggling as prices fall and deals dry up. With more than 5,500 real estate agents closing 7,400 deals in the first half, there’s not enough business to go around."
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