Business

GulfNews Business

PIA plane 'held back' by Malaysian authorities over UK court case

Pakistan|Business|: Islamabad / Kuala Lumpur: A Pakistan International Airlines plane has been held back by Malaysian authorities due to a British court case over the jet's lease, the airline said on Friday, adding it would pursue the matter through diplomatic channels. The Boeing 777 aircraft was seized after a court order, an airline spokesman said, and alternative arrangements were being made for passengers due to fly from Kuala Lumpur back to Pakistan. "A PIA aircraft has been held back by a local court in Malaysia taking a one-sided decision pertaining to a legal dispute between PIA and another party pending in a UK court," a PIA spokesman said in a statement. According to orders passed by the Kuala Lumpur High Court on Thursday seen by Reuters, the plaintiff of the case is Peregrine Aviation Charlie Limited and the matter pertains to two jets leased to PIA by Dublin-based AerCap, the worlds largest aircraft lessor, in 2015. They are part of a portfolio that AerCap sold to Peregrine Aviation Co Ltd, an investment unit of NCB Capital, the brokerage arm of National Commercial Bank SJSC, in 2018. According to the interim injunction, PIA is restrained from moving two aircraft in its fleet " a Boeing 777- 200ER with serial number 32716 and a Boeing 777- 200ER with serial number 32717 " once they have landed or parked at Kuala Lumpur International Airport until a further hearing on the matter later this month. Tracking data from Flightradar24 showed only one of the two Boeing 777s covered by the court order is currently in Kuala Lumpur. The other was last recorded in Karachi last month. AerCap, which continued as part of the agreement to provide lease management services to Peregrine, declined to comment. Malaysia Airports Holdings Berhad, the country's airport operator, and its subsidiary were ordered to make sure the aircraft do not leave Kuala Lumpur International Airport. Malaysia’s Ministry of Transport said in a statement on Friday that the aircraft was being held pending legal proceedings set for Jan. 24. Malaysia Airports Holdings Bhd said the matter was not related to airport operations. PIA in a statement described the situation as "unacceptable" and said it had asked for support from Pakistan's government to raise the matter diplomatically. The office of Malaysia's prime minister and the foreign ministry did not immediately respond to requests for comment. A spokesman for Pakistan’s foreign ministry also did not immediately respond to a request for comment. With more than $4 billion in accumulated losses, PIA was already struggling financially when flights were grounded last year due to the pandemic. After it resumed operations in May, a domestic PIA flight crash in Karachi killed 97 of 99 people on board. Pakistan’s aviation industry was then hit by a scandal in which pilots were found to hold “dubious licences" prompting a number of countries to ban PIA from operating flights in their jurisdictions. The airline was banned from flying to the European Union for six months over safety compliance concerns under a ban still in place.

GulfNews Business

Buy in Bitcoin and cash out is trending with Dubai property

Property|: Dubai: Choose a property in Dubai… and buy with Bitcoin. Once the deal is done, the seller then gets to cash out. This, in a nutshell, is what’s starting to happen more frequently in Dubai’s real estate market as buyers and sellers get more comfortable with using cryptocurrencies to pick up traditional assets. “All the sellers we dealt with received their payments in the form of fiat currency (which is government-issued),” said Firas Al Msaddi, CEO of fam Properties. “As per the rules of Dubai Land Department, there has to be a manager cheque made by the buyer to the seller and handed over to the seller on the date of transfer.” That the sellers have opted to receive their payments immediately in cash rather than hang on to the Bitcoins is interesting. Given the bouts of extreme volatility that these assets are prone to, cashing out seems the safest option. Read More Just 'hodl': What Bitcoin investors should be thinking now Will Bitcoin investors turn winners like those who survived the internet boom in the 2000s? Up cycle When Bitcoin prices were scaling up in 2018-19, there were quite a few local developers willing to complete crypto-backed sales. Al Msaddi was party to a deal that saw an entire building in Dubai being sold for Dh600 million plus entirely using Bitcoins as the medium of exchange. “We engineered the bitcoin gate payment mechanism where the buyer paid in bitcoin and the seller received in fiat,” he said. “Unfortunately, we are not in position to disclose details of the transaction. “This isn’t the only transaction - we do at least one per month of different ticket values based on Bitcoin. In the last three years, we facilitated real estate transactions paid via Bitcoin north of Dh1 billion.” Been there, done that... Firas Al Msaddi of fam Properties was part of a Dh600 million plus deal where the buyer paid in Bitcoins. Image Credit: Virendra Saklani/Gulf News More of the same? There were also efforts by some developers to launch ICOs (initial coin offerings) backed by their ongoing projects. But these efforts did not manage to catch the fancy of investors, even when real assets - the land and the built-up property – was there to back up the value of ICO. Aim for tokens But Khurram Shroff, who heads the IBC Group and has exposures in both real estate and cryptocurrencies, reckons there will be a meeting point. “Gains in the value of the leading cryptocurrencies have certainly created a space for such transactions,” he said. “One can imagine a situation in which sellers preferentially seek out payments in crypto, in the hope that their value will escalate further - and even offering buyers incentives to do so. “However, the bigger change is likely to be in the rise of ‘tokenized digital securities’, which are backed by real estate. Real estate is an established asset class and a favourite among investors looking to park value, in hope of gains while retaining some characteristics of liquid holdings. “I anticipate a rise in alt coins that will be used as a security token, backed by real estate, as a consequence of the meteoric rise in Bitcoin valuation to an all-time high. Institutional investors jumping on board the crypto bandwagon will add to investor confidence. “And applications such as tokenization of real estate will become mainstream in the very near future.” With Bitcoin prices now pushing through to new records each week, that future may be nearer than anyone thinks. Even if each new record setting is followed by a juddering drop… I anticipate a rise in alt coins that will be used as a security token, backed by real estate, as a consequence of the meteoric rise in Bitcoin valuation to an all-time high Khurram Shriff of IBC Group

GulfNews Business

Saudi Ministry of Finance inks $3b export financing pact with South Korean entities

Banking|: Dubai: Saudi Arabia's Ministry of Finance has secured a $3 billion export financing facility that would also come in handy in raising South Korea's trade prospects with the Gulf state. Crédit Agricole CIB coordinated and structured the facility, which is supported by Korea Trade Insurance Corporation and the Korean Export Credit Agency - through its Strategic Partnership Programme to promote Korean exports to Saudi Arabia. Read More Saudi Arabia's economy shows gains from lockdown withdrawals Saudi Arabia's businesses are hiring again as economy records small gains What is an ECA? Export credit agencies operate as the via media between governments and exporters to issue export-related guarantees for financing. In this particular deal, the two Korean entities provide the necessary support. This is, incidentally, the second ECA-supported financing entered into by the Kingdom's Ministy of Finance, after the first one in July 2020. (That was also the first 'green' ECA financing in the region.) Crédit Agricole CIB acted as exclusive ECA (export credit agency) co-ordinating bank, structuring and documentation bank, Agent, as well as bookrunner and mandated lead arranger for the transaction. "We are  excited to have led this milestone transaction, providing the Ministry of Finance with its largest ever ECA loan, through the seamless execution by our export finance teams in Seoul, Dubai and Paris," said André Gazal, Global Head of Export Finance at Crédit Agricole CIB.

GulfNews Business

World cannot be fixated on IP rights when it comes to COVID-19 vaccines

Analysis|: A proposal by India, South Africa and eight others calls on World Trade Organisation (WTO) to exempt member countries from enforcing some patents and other Intellectual Property (IP) rights under Trade-Related Aspects of Intellectual Property Rights (TRIPS) for a limited period. It is to ensure that IP rights do not restrict the rapid scaling- up of manufacturing of COVID-19 vaccines and treatments. While a few member- countries have raised concerns about the proposal, a large proportion supports the proposal. It has also received the backing of various multilateral agencies... and the global civil society. Unprecedented times call for unorthodox measures. The situation appears to be grimmer than predicted: we have already lost 7 per cent of economic output from the baseline scenario projected in 2019. It translates to a loss of more than $6 trillion of global GDP. Read More Abu Dhabi's National Corp. for Tourism & Hotels can stay the distance UAE and Gulf's budget airlines could lead short-haul demand recovery 'Fast furniture' shouldn't be coming at nature's cost Here's the math Even a 1 per cent improvement in global GDP from the baseline scenario will add more than $800 billion in global output, offsetting the loss certainly of a much lower order to a sector of economy on account of the waiver. Merely a signal to ensure timely and affordable access to vaccines and treatments will work as a big confidence booster for demand revival in the economy. With the emergence of successful vaccines, there appears to be some hope on the horizon. But how will these be made accessible and affordable to global population? As things stand, even the most optimistic scenarios today cannot assure access to vaccines and therapeutics for the majority of the population, in rich as well as poor countries, by the end of 2021. Too ponderous The existing flexibilities under the TRIPS Agreement are not adequate, as these were not designed keeping pandemics in mind. Compulsory licenses are issued on a country by country, case by case and product by product basis, where every jurisdiction with an IP regime would have to issue separate compulsory licenses, practically making collaboration among countries extremely onerous. Why is there a need to go beyond existing global co-operation initiatives? Global co-operation initiatives such as the COVAX Mechanism and the ACT-Accelerator are inadequate to meet the massive global needs of 7.8 billion people. The ACT-A initiative aims to procure 2 billion doses of vaccines by the end of next year and distribute them fairly around the world. With a two-dose regime, however, this will only cover 1 billion people. That means that even if ACT-A is fully financed and successful, which is not the case presently, there would not be enough vaccines for the majority of the global population. Track record During the initial few months of the pandemic, we have seen that shelves were emptied by those who had access to masks, PPEs, sanitizers, gloves and other essential COVID-19 items even without their immediate need. The same should not happen to vaccines. Eventually, the world was able to ramp up manufacturing of COVID-19 essentials as there were no IP barriers hindering that. At present, we need the same pooling of IP rights and know-how for scaling up the manufacturing of vaccines and treatments, which unfortunately has not been forthcoming, necessitating the need for the waiver. This is the way The TRIPS waiver proposal is a targeted and proportionate response to the exceptional public health emergency that the world faces today and is well-within the provisions of Article IX of the Marrakesh Agreement that established the WTO. It can help in ensuring that human lives are not lost for want of a timely and affordable access to vaccines. The adoption of the waiver will also re-establish WTO’s credibility and show that multilateral trading system continues to be relevant and can deliver in times of a crisis. While making the vaccines available was a test of science, making them accessible and affordable is going to be a test of humanity. History should remember us for the "AAA rating” - for availability, accessibility and affordability - of COVID-19 vaccines and treatments and not for a single “A rating” for availability only. Our future generations deserve nothing less. - Brajendra Navnit is the Permanent Representative of India at WTO.

GulfNews Business

In last act, Trump is extracting a price on China's Xiaomi

Markets|: The Trump administration's surprising blacklisting of Xiaomi Corp. is costing its top executives big bucks. Lei Jun, who co-founded the smartphone maker about a decade ago, lost about $3.6 billion as the stock tumbled as much as 13 per cent, according to the Bloomberg Billionaires Index. Lin Bin, the company's vice-chairman, is down $1.7 billion, and the fortune of at least five other billionaire shareholders has also dropped. While China's tech sector has been hit by the nation's increased government scrutiny and other Trump blacklistings, Xiaomi was thriving. The Beijing-based company surpassed Apple Inc.'s smartphone sales in the third quarter and grabbed market share from Huawei Technologies Co., which got marred by US. sanctions. Xiaomi's shares closed at a record high just last week, and in December the the firm's market value surpassed $100 billion, finally reaching the goal it had for its 2018 listing. Read More Huawei to use liquid lens in its flagship phones UK bans new Huawei 5G kit installation from September 2021 Surprise attack But the latest attack by Trump's administration in its final days quickly took it back below that level. The move startled investors because previous bans focused on Chinese companies with military ties and strategic value to the tech industry's growth. Xiaomi said it's not owned or controlled by the nation's military. Lei, who owns more than one-quarter of Xiaomi, is now worth $27.5 billion, down from $33.2 billion when the shares reached a peak last week, while Lin's wealth stands at $9.9 billion. Lei started the year as China's fourth-richest tech tycoon, just behind Jack Ma, whose fortune lost about $10 billion since the end of October amid increased government scrutiny of his empire.

GulfNews Business

Don't be surprised if Tesla's stock zooms to $1,250

Markets|auto|: New York: Tesla Inc.'s stock could touch $1,250 in a bull-case scenario as consumer demand for greener cars surges in China, Wedbush analyst Dan Ives wrote in a Jan. 14 note. Wedbush analyst Dan Ives has raised his price target for Tesla to $950 a share from $751 to reflect the stronger demand for electric vehicles. Shares in the world's leading maker of EVs soared 743 per cent last year and are currently trading at $845. CEO Elon Musk is now the richest person on Earth. "The hearts and lungs of the Tesla bull thesis is centered around China as we have seen consumer demand skyrocket into 2021 not just for Model 3s, but for impressive domestic competitors such as Nio, Xpeng, Li Auto and others," Ives said. "As such, we have significantly raised our forecasts with our expectations that Tesla now exceeds the 1 million delivery threshold in 2022 and could start to approach 5 million deliveries annually by the end of the decade." Read More US regulator asks Tesla to recall 158,000 cars over safety-related defect Twitter in splits as Musk confirms Tesla's entry in India Supreme in China Tesla regularly topped monthly premium electric-car sales tallies in 2020 in China, helped by the vehicles coming out of its multi-billion dollar Shanghai plant that was launched about a year ago. It's just started selling its locally-made Model Y sports-utility vehicle, starting from 339,900 yuan ($52,500). Tesla has also launched a modified Model 3 sedan at a post-subsidy price of 249,900 yuan for the basic version. The Model 3 qualifies for China's national subsidy for EVs, while the Model Y doesn't. Ives also forecasts that EVs - which make up around 3 per cent of global auto sales today - could reach 5 per cent by the end of this year and 10 per cent by 2025. By 2022, around 40 per cent or more of Tesla's sales could come from China, followed by Europe then the US. A little push at home Another boon for Tesla is a Biden presidency, with Ives predicting a "Blue Senate" will have wide reaching ramifications across all sectors. Reducing the domestic carbon footprint could have a dramatic impact for EVs in the near-term, he said. "While there are 150-plus automakers aggressively going after the EV opportunity globally, right now we believe it's Tesla's world and everyone else is paying rent," Ives said.

GulfNews Business

Dubai's F&B businesses are getting a taste of 'home' meals

Retail|: Dubai: Finding less time to cook that favourite dish? Let a restaurant or F&B business do that for you… And in Dubai, that’s just what is happening as F&B brands provide the taste of “home cooked” food delivered to your door. “We’ve just launched our e-commerce site - Abela Online - for the purpose of providing homey food to those who crave it,” said Nassim Basma, Senior Production Manager. “The platform allows for the delivery home-cooked meals straight to the customer. We can deliver a lunch or dinner order for a day… or week.” The frozen food range customers have to heat up include dishes like Kebbeh Bil Sanieh, Daoud Basha meatballs and Chicken Mouloukieh. These are typically dishes synonymous with cooking at home rather than what you would  expect at a restaurant. “Our prices are well thought out, ensuring that for a spend of Dh100, you’ll be able to fill up your entire online basket without emptying your wallet,” Basma said. A typical dish offering 600g of food costs an average Dh30 to Dh35. Read More UAE's Agthia completes acquisition of Al Foah to create top 10 F&B company in the region 2021 F&B outlook: UAE restaurants rework business models and menus to recover from last year Sign of the times An employee puts in between 40 to 45 hours a week at the workplace (on in work-from-home routines). With another 10 hours a week going into the commuting, it’s easy to avoid spending time in the kitchen. “These days I find it impossible to make time to cook,” Selena Matthews, a Dubai resident said. “And I don’t want to be that person that spends all of their money on eating out. It all adds up.” F&B businesses now pushing the home-cooked concept is thus aiming to hit the sweet spots on the pricing, and thus convincing potential customers that ordering in wouldn’t be a drain on income. That comfort factor “Because the UAE has a [sizeable] expat community, there is always a demand for home-cooked meals,” said Dima Sharif, founder of Mooneh Foodstuff. “Home-cooked meals offer the comfort of home and make it feel slightly closer. A home-cooked meal allows people to serve food made to their preference while omitting the parts or ingredients they do not wish to have. The control aspect is huge.” On the customer base, Sharif explained that it is not so much a demographic, rather a psychographic that they cater to. “People that order from Mooneh are health-conscious, prefer natural ingredients and geared to support local because they know that we work directly with local farmers.” Generally, commercially prepared foods tend to be higher in fat, salt, sugar and processed ingredients. The ‘home-food’ strategy for F&B companies is to try and prepare it with as little extra ingredients as possible and focus more on what a customer would cook in their home. Essentially, a category of foods rarely found at restaurants is higher quality versions of rice and vegetables, scrambled eggs, pot roasts and meals your mother would make. These companies are filling those gaps and many more could join the mix. Right-sizing... Pricing will be central to how far F&B businesses can push ahead with their home-cooked concepts. Image Credit: Antonin Kelian-Kallouche/Gulf News Go diverse “The food we produce does not focus on a particular cuisine or item but rather on a diverse nationality mix the UAE offers,” said Basma. “We serve an average of 45 million meals each year and the sales mix of different types of food products tells us that consumers are opening up to trying different cuisines. “We have seen a Middle Eastern Kibbeh, an Indian butter chicken and an Australian chicken and mushroom pie all being ordered - by the same household.” After all, there's never an accounting of tastes...

GulfNews Business

It is Fleetwood Mac's turn to rock and roll in latest big-ticket catalog deal

Markets|: Frankfurt: Bertelsmann SE's BMG snapped up rights to most of Fleetwood Mac's music after the band's hit song "Dreams" went viral on social media. BMG acquired drummer Mick Fleetwood's royalty interests in more than 300 recordings including "Landslide" and "Go Your Own Way", according to a statement. Terms of the deal weren't disclosed. "Dreams" shot back into the charts last year after a video of a man skateboarding along a highway while drinking raspberry juice and lip-syncing to the 1977 soft rock song became a social media sensation. In about eight weeks, "Dreams" generated 2.8 billion views on TikTok, was streamed 182 million times and helped sell 86,000 Fleetwood Mac albums in the US, BMG said. Fleetwood Mac have sold more than 120 million records and were inducted into the Rock 'n' Roll Hall Of Fame in 1998. BMG represents artists including The Rolling Stones and Kylie Minogue. The value of songs and recordings has soared in recent years after streaming dragged the music industry out of a deep slump. A lot of the recent signups to platforms like Spotify and Amazon Music are older users who want to listen to the hits of their youth. Read More Bob Dylan papers, including unpublished lyrics, sell for $495K Shuaa Capital picks up stake in music streaming platform Anghami in big tech push Rocking times The BMG deal is the latest in a flurry of music rights acquisitions as artists cut off from touring look to raise cash. "This acquisition highlights the value of timeless recordings in a streaming market which is increasingly benefiting established rather than newer artists," Justus Haerder, an M&A executive at BMG, said in the statement. Private equity firm KKR & Co. said this week it bought a majority stake in the music catalog of OneRepublic and songs its lead singer wrote with artists including Beyonce, Adele and U2. Hipgnosis Songs Fund Ltd. earlier this month acquired rights to the discographies of folk and rock songwriter Neil Young and pop star Shakira. Late last year, fellow '60s icon Bob Dylan sold his music rights to Universal Music Group.

GulfNews Business

Amazon's closing one of its earliest moves into food retailing

Retail|: Seattle: Amazon.com Inc. has shuttered Prime Pantry, a grocery and household essentials delivery service that was one of the retailer's early forays into selling food online. Thousands of products previously available under the Prime Pantry banner were folded into the company's main retail site. Launched in 2014, Prime Pantry featured a selection of shelf-stable food and snacks, as well as cleaning products, and was designed to get shoppers to stock up on the bulky, often expensive-to-ship products in orders that could fit into a single large box. Initially the service was offered only to members of the Prime free shipping programme, but Amazon added a $5 a month subscription option in 2018. Those who were still paying the monthly fee were notified of the shutdown in December and received refunds, the spokeswoman said. Read More Amazon launches its digital payment services for businesses in UAE and region Amazon buys 11 jets for 1st time to ship orders faster Best option "As part of our commitment to delivering the best possible customer experience, we have decided to transfer Amazon Pantry selection to the main Amazon.com store so customers can get everyday household products faster, without an extra subscription or purchase requirement," the spokeswoman said in an email. In addition to shelf-stable food offered on Amazon's main retail site, members of the $119-a-year Prime programme in many cities can also order fresh food from Amazon Fresh and the company's Whole Foods Market chain.

GulfNews Business

UAE and Gulf's budget airlines could lead short-haul demand recovery

Aviation|Analysis|: The emergence of low-cost carriers (LCC) has been a global phenomenon for some time. Through the years, such airlines in Europe and the US have had tremendous growth, and yet in the Gulf they have only begun that growth path more recently. The GCC is situated within eight hours of two-thirds of the world’s population. This region has limited to no domestic air market, except in Saudi Arabia. The geography thus makes it the perfect location to set up LCCs that can attract passengers regionally and across most of the eastern hemisphere. Perfect timing According to data, LCCs in the Middle East are now driving a 9.3 per cent growth in seat capacity. As government restrictions ease and markets open up again after COVID-19, the initial recovery will be led by VFR (visting friends and relatives) travel. Low-cost carriers are best positioned to benefit from the recovery process, which will be led by domestic/international short-haul flights. International markets will face the slowest recovery, creating potential growth for LCCs and with the operational backing of full-service carrier partners. This could potentially help LCCs grow as VFR travel demand soars. Slow return Inevitably, demand is going to exceed capacity available, which means there will be a rise in fares. Low-cost carriers will still be the most attractive market option, due to their low operating cost model based on having a standardized fleet, no frills, and rapid turnaround times to raise fleet efficiency. Also, airlines that relied heavily on transferring passengers as their key to growth will struggle as point-to-point options will become more attractive. Low-cost carriers in the Gulf operate are therefore less exposed to the dynamics of long-haul markets with transfer connectivity, which were the first to be grounded in the first quarter of 2020 after the pandemic broke. A large portion of that has remained inactive to date due to government restrictions and high levels of complexity. Considering that, the biggest issue for passengers at the moment is the amount of personal space they can maintain at airports... and even on the plane. More mindset adjustments Passengers in the GCC are just as price-driven as other consumers in Europe. LCCs’ cheaper prices will attract leisure passengers to shift from other carriers. Cultural perception may lead individuals to associate LCCs with poor quality and hesitate to use them. LCCs may in due time get them to change those views, which in return would increase demand for airlines such as Air Arabia and Flynas. They have shown that LCCs in the GCC remain a buoyant alternative. Flydubai has quickly adapted to consumer needs and cultural perceptions by moving towards a more hybrid model, with business class seats. Although the shocking figures of 2020 affect the whole industry, LCCs in the Gulf have proven more adaptable. Change has become a necessity for survival of an airline. - Rania Bisher Hanbali is a Consultant at Bauer Aviation Advisory.

GulfNews Business

Just 'hodl' is what Bitcoin investors should be thinking now

Markets|: Dubai: Just Hold. Or ‘Hodl’, as anyone even remotely connected with the world of Bitcoins – or any other cryptocurrency – would say in their lingo. This is the as-direct-as-it-gets advise Khurram Shroff, Chairman of IBC Group and a big-time player in alternate currencies, has for any Bitcoin investor looking at the wild swings the asset has been showing in recent days. Hitting a new high of a near $42,000? Bitcoin’s done that. Dropping 10 per cent or more in value in a day? Yes, it’s been through that as well. And to think Bitcoin prices were at $23,000 just a month ago. In these circumstances, it takes quite a bit of inner strength for most investors to think of holding on. But Shroff says: “Relax and Hodl – and if investors don’t want to ride the Bitcoin waves, they can get refuge from price volatility in any stablecoin.” Peg 'em Now, for the uninitiated, stablecoins are cryptocurrencies – but pegged any other ‘real’ asset such as currencies or traded commodities such as gold. What this does is reduce the volatility of the crypto currency. “I anticipate the current bull run to continue given the massive inflationary pressures at play in the global economy,” said Shroff. “Much like more traditional investments, cryptocurrencies can also be approached with a diverse set of strategies. “For instance, investor priorities depend on whether they intend to hold on to a cryptocurrency, as a sort of ‘digital gold’, much like bullion holdings, or as a great savings mechanism. “If the seller has volatility related concerns about their transactions, they can easily transfer their crypto to a stablecoin of their choice, or immediately trade their holdings for currency that they prefer. “Ultimately, the seller can take a best-of-both-worlds approach, leveraging the strengths of cryptocurrencies to act on a strategy that they prefer.” I anticipate the current bull run to continue given the massive inflationary pressures at play in the global economy Khurram Shroff of IBC Group is one steadfast believer in Bitcoin and crypto She’s no fan But Bitcoin has its critics, and Christine Lagarde, who heads the European Central Bank, is the latest high-profile one to wade into the debate. Calling it a “funny business”, Lagarde wants cryptocurrencies to come under heavy government regulation. And stop being the free-wheeling currency that it has been so far. Christine Lagarde of European Central Bank has joined the chorus of those demanding urgent government intervention into crypto assets. Bitcoin "is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity... is what she told a Reuters event this week." Image Credit: Reuters No option but regulate “Blockchain is a superior technology undoubtedly - but it’s equally clear that no monetary system will survive in private sector hands,” said Sameer Lakhani, Managing Director at Global Capital Partners. “This will then relegate Bitcoin to the status of a speculative asset until the inevitable launch of currencies based on blockchain by governments. “More than 75 per cent of ICOs (initial coin offerings) have failed over the last 3-4 years. Another 5-10 per cent trade at less than 10 per cent of their launch price.” Wild swings in Bitcoin along with the bid-ask differential means even if the price falls by 12-13%, if investors are trying to exit, they may have had to accept another 10% hit. This volatility is not something that investors can stomach Sameer Lakhani of Global Capital Partners An asset for the few? Bitcoin’s 330 per cent surge in the last 12 months was what convinced more investors they shouldn’t keep away from playing this market. Even those who had reservations are starting to get convinced this is too good an opportunity to miss out. But at what price are they getting in? Anyone who bought after Bitcoin went past $28,000 or even $30,000 had paid a high risk premium. “My view is that Bitcoin is still a pretty illiquid asset,” said Roberto d’Ambrosio , CEO of, Axiory Global. “The vast majority is still in the hands of few players, who are not participating – or doing so marginally - in the market. “Thus, a relatively low amount of the market cap is being moved, so that an increase in demand or offer, even if not sizable, can produce huge movements of the price.” “Once again, the extreme volatility of cryptocurrencies is confirmed - caution must be exercised in trading such instruments. Investors must carefully size their position and avoid being blinded by excessive greed.” Will existing investors follow that bit of advice? And just keep 'hodling'? How did other cryptos fare? Ethereum (ETH) has experienced a very similar path to Bitcoin - it hit a high of around $1,300 after a very sharp upside run from $250 in mid-July. It then dropped to around $1,104. But there is different story for Ripple (XRP). It started its run on November 4, and from $0.2389 went up to $0.6843 on November 25, to fall back to $0.2187 at the end of 2020. During January, it bounced to $0.33 area, and it’s now retracing following its bigger competitors' path. "Once again, the extreme volatility of cryptocurrencies is confirmed and therefore caution must be exercised in trading such instruments," said Roberto d’Ambrosio of Axiory Global.

GulfNews Business

Twitter in splits as Musk confirms Tesla's entry in India

As Elon Musk confirmed the news of electric car giant Tesla's entry in India, Twitter on Thursday erupted in jokes and memes, mostly focused on the condition of Indian roads. Breaking his silence after the news broke that Tesla has finally entered India by registering it as a company in Bengaluru, Musk said he is on the way to fulfil his promise to let electric cars run on the roads of the country. "I think Tesla is here to test their FSD Beta version in severe chaos of traffic and unlawful land," a user said in a tweet. Another posted: "Tesla India will come with all local slur words in its auto-pilot by default," cracking a joke on the state of mind of drivers on the local roads. "Not kidding. I read the news of Tesla registering in India while walking on a road inside a pothole," another user posted. Heavy traffic in Mumbai. Twitter users shared jokes on how Tesla cars will fare in India's chaotic traffic and potholed roads. Photo used for illustrative purposes only Image Credit: ANI Reacting to his 41.2 million followers, Musk on Wednesday tweeted on making India his next destination: "As promised". Musk, who communicates on all-important company issues via Twitter, however, did not divulge any further details on his India plans. "Seriously make an electric tuk-tuk, easily the most efficient way around Indian cities with multiple seating capacity. Much smaller battery requirement and affordable to the masses. This will make the greatest impact. Cars are only affordable for the rich," posted another user.

GulfNews Business

Abu Dhabi's National Corp. for Tourism & Hotels can stay the distance

Markets|Analysis|: This week DFM rallied by 2.92 per cent and ADX gained 1.99, with the biggest gainers Emirates Refreshments Co. (31.98 per cent), Ras Al Khaimah Ceramics (14.57 per cent), National Corporation for Tourism & Hotels (14.29 per cent), RAK Properties (11.55 per cent) and Agthia (10.11 per cent). On the health front, all manufacturers have announced more than 12 billion vaccine doses for release this year, in case all vaccine options succeed in clinical trials. There is an unprecedented vaccination campaign happening across the world, and this is visible in UAE also. Serpentine queues can be witnessed at a lot of health centres. Thanks to UNICEF and WHO, low- to mid-income countries will see a fast vaccine rollout. This should provide a lot of optimism for economy watchers and investors. Read More Vaccines and any new US stimulus should shape UAE stock market performance in 2021 UAE's banking stocks show ample resilience to COVID-19's impact Back in contention As is pretty obvious, the hospitality sector will be one of the biggest beneficiaries of normalization returning. The National Corporation for Tourism & Hotels, with a Dh1.57 billion market cap, owns and manages some of the best Abu Dhabi hotels and resorts, such as the InterContinental in Abu Dhabi, Danat Al Ain Resort, Danat Jebel Dhanna Resort and Dhafra Beach Hotel. Tourism is one of the priority areas in the emirate's Economic Vision 2030. Despite many economic uncertainties, the Middle East can be considered as a fast-growing tourism destination. A wave of development projects happening across Abu Dhabi will improve visitor experience, and National Corporation for Tourism & Hotels is well-positioned to capitalize on this. Impressive despite COVID-19 Aggregate revenues have actually risen in the first nine months of 2020, totalling Dh568.53 million against Dh557.97 million in 2019. The company has three divisions - hotel, retail and catering. In 2020, hotel-related revenues fell 45 per cent to Dh95.98 million from Dh139.21 million. Retail fell marginally by 4 per cent to Dh54.47 million. What pulled up the company's performance was the catering division, where sales rose 13 per cent to Dh422.71 million from Dh368.80 million. For National Corporation, hotel division accounts for 17 per cent, retail was nearly 10 per cent, and catering contributes the rest. The share of catering was 65 per cent in 2019, and hotels were at 25 per cent. More coming The InterContinental Grand Marina Residences, Saadiyat Island Resort and ADNEC mixed-use project are the expansion projects planned by National Corporation. Among them, InterContinental Grand Marina Residences and ADNEC mixed-use project are to be completed this year. The expansion and expected economic recovery should enable it to post strong revenue growth. Another aspect is the presence of strong stakeholders - Al Nahyan Hamdan Bin Mubarak owns 312.48 million shares, Al Mheiri Shaheen Mohammed Abdul Aziz has 108.92 million shares, and Sheikh Mohammed Bin Sultan owns 61 million shares. National Corporation is a good bet on Abu Dhabi's Vision 2030... - Vijay Valecha is Chief Investment Officer at Century Financial.

GulfNews Business

'Fast furniture' shouldn't be coming at nature's cost

Analysis|Retail|: Sustainable. Ethically sourced. Authentically handmade. Empowering artisans.... Are these just catchphrases? In a world where consumerism is the norm, and insatiable trendies are searching for validation in the next interior design trends, people are changing cheap furniture as quickly as they’re changing their fashion wardrobes. But at what cost? This should be an invitation to pause and think generationally and longitudinally... and becoming more aware of the footprints we’re leaving behind for those who walk after us. Read More Find out what the new UAE Consumer Protection Law means for your data Pandemic's robot 'heroes' highlight their value at CES 2021 Give a thought It is clear that most home interior shops are fast-furniture outlets. However, have we ever taken into consideration the fight against child labour, deforestation and head-in-sand “solutions” many corporations seem to negate in their attempt to turn over a quick profit and pump out products that seemingly has an expiration date secretly attached to it. The value of long-lasting pieces appears to be diminished by consumers’ need for the “next best thing”. It is time furniture and home décor shops feel the call to action - and call consumers to action as each individual is powerful in making a difference to the world we live in. Empower It’s time these glitzy shops give shape to creations fashioned from sustainable natural materials that are reusable or biodegradable and handcrafted by artisans through community-based production incorporating skills passed on from generation to generation. Empower artisans to work directly with the artist instead of sourcing through third-parties. No factories should be involved in the production of their pieces, and let each piece tell or narrate a story. Stop endorsing 'fast-furniture' and opt for pieces that are 100 per cent biodegradable. Stay away from plastic and choose bamboo that “gives back” to the earth. A handy element Bamboo forests are capable of absorbing 50 tons of carbon dioxide per hectare per year (more than other plants) and releasing 35 per cent more oxygen than other plants. This is the ultimate sustainable material being a powerful water reservoir of the topsoil that sustains the living ecosystem. It is lightweight, yet stronger than steel and three times harder than hardwood. Reaching maturity before five years, it is the fastest growing plant on the planet, combatting the heavy-handed industry of wooden furniture where you have to wait upwards of 20 years for trees to regrow. Tackling deforestation, bamboo helps to preserve and repair the local ecosystem. Bamboo empowers local communities with the global bamboo industry developing rapidly, offering opportunities for rural communities in bamboo-producing countries. Change the narrative Sustainability is about looking after the environment as well as the communities who populate it. Awareness empowers us to make better choices and helps us understand that it just takes one conscious shift together to find something richer and more valuable than satiating a dying trend of consumerism and microwave mindsets. - Jo England is the founder of tribe, a bespokehome decor studio.

GulfNews Business

Only alliances can ease utility industry's green transformation

Analysis|: Current climate targets are insufficient and don’t fully account for the higher electricity consumption the electrification of economies from renewable energy sources will result in. While electrification provides an opportunity for economic growth, the huge transition of industries on the demand, generation and transmission and storage sides will need government guidance and support. The global economy is facing a deep recession with the impact of COVID-19. People have seen profound changes in their lives with recession, unemployment and climate change. The World Bank stated that COVID-19 has triggered the deepest recession in decades. Read More Gulf's buyer-supplier alliances need to get a whole lot deeper Here's why UAE's construction industry needs to pick up pace of change Commission cuts are too hard to absorb for UAE's insurance brokers High cost of exposure The response is stunning and unparalleled: around 20 per cent of global GDP is being made available in various forms of economic and financial stimulus programmes, helping economies and industries to cope. We - countries, companies, and people - need to design and effectively utilize the worldwide stimulus programmes to accelerate the energy transition. We must realize a world where circular economies, decarbonized energy systems and industries alike are the norm. But worth it This can be daunting, given the scale and cost of the required changes. It can also be challenging, given the difficulty in effective capital allocation, balancing risk and reward, and scaling new technologies. But it certainly will be rewarding in terms of environmental, societal and governance impact, economic stimulus, and profitable private investments at the same time. Financing is an indispensable element of the energy transition and the main challenge for many projects. And in politically unstable, economically fragile geographies, even more so if they have accumulated disproportional sovereign debt. Full on decarbonisation Governments of developed countries, and some of the developing countries, are more keenly aware than ever of the urgent need to decarbonize and establish regulatory frameworks and reforms. There are certainly green shoots emerging, with a rising tide of countries signaling serious intent to pursue major renewables programmes and adopt significant decarbonization strategies. Institutional investors are increasingly re-evaluating their investment strategies and reallocating funds from carbon-intensive investments to carbon-neutral and decarbonizing ventures. Green signals September proved to be a landmark moment, not only with the spin-off and listing of Siemens Energy on the Frankfurt stock exchange, as a standalone company focused on the energy transition. Germany issued its inaugural sovereign green bond in September, valued at $7.7 billion. Egypt also entered the green bond market, with a debut $750 million bond. State-controlled Saudi Electricity Company raised $1.3 billion with a green sukuk, the first of its kind in the Kingdom. These issuances highlight the growing commitment from sovereign nations and their entities to pursue and fund renewable and green projects, they highlight capital market growing appetite to support such projects and highlight the business potential for the corporate sector. But having the appropriate regulatory frameworks in place, to make new technologies commercially viable, bankable and attractive to private capital must stand at the beginning of the energy transition. To facilitate investment, environmental, social, and corporate governance (ESG) must clearly reflect in the core values of projects and corporates. There is a growing focus by equity investors and lenders on ESG-related topics. Consequently, companies and projects with strong sustainability elements potentially have access to a much broader funding basis, given an acceptable risk profile on the commercial side. Make money available However, the energy transition and the achievement of global decarbonization targets can only be successful if sustainable financing is available to developing economies. While developing countries account for approximately 60 per cent of CO2 emissions, only 10 per cent of them could advance as planned on their path to meet the climate targets 2030 of the Paris Climate Agreement. Moreover, more than 800 million people are still without access to any electricity, many more are suffering repeating power outages or unaffordable price levels. Strong partnerships will be the decisive success factor in creating ecosystems with a significant pipeline of projects in new technology fields and in building basic infrastructure for developing countries. In this increasingly complex world, no player will be able to cover the intricacies, risks, and capital requirements of the energy transformation alone. We have found that collaboration with strong partners and governments helps solve the financing challenges for the energy transition. That is one of our Top 10 priorities for a successful energy transformation. - Michael Bueker, Senior Vice-President for Finance Middle East, Siemens Energy.