UAE to suspend inbound flights from Liberia, Sierra Leon and Namibia starting June 21
Aviation|: Dubai: UAE on Saturday announced the suspension of all inbound flights for national and international carriers coming from Liberia, Sierra Leon, and Namibia, effective 23:59 on Monday, June 21. The travel suspension includes inbound transit passengers with the exception of transit flights coming to the UAE and heading to these countries, the GCAA said. The GCAA indicated that it is required for those coming from Liberia, Sierra Leon, and Namibia through other countries that the period of their stay in the latter countries is not less than 14 days to be allowed access to the UAE. Cargo flights between these countries and the UAE will continue, as usual. UAE nationals, their first-degree relatives, diplomatic missions between the UAE and the three countries, official delegations, businessmen's planes -after getting prior approvals- and golden and silver residency permit holders, in addition to the holders of essential jobs according to the classification of the Federal Authority for Identity and Citizenship (ICA) and the staffs of UAE embassies in the three countries are excluded from this decision, provided that they should take preventive measures. This includes a mandatory 10-day quarantine and a PCR test at the airport as well as another test on the fourth and eighth days of entering the country. The period of the required PCR test is reduced from 72 hours to 48 hours, provided that the tests are issued by accredited laboratories and carrying the QR Code. The authority called on all travellers affected by the decision to follow up and communicate with the airlines to amend and schedule their flights and to ensure their safe return to their final destinations without any delay or other obligations.
Emirates to resume flights from India to Dubai from June 23
Aviation|UAE|: Dubai: Dubai’s Emirates airline will resume flights connecting India, South Africa and Nigeria to Dubai from June 23. "Emirates welcomes the latest protocols and measures announced by Dubai's Supreme Committee of Crisis and Disaster Management to allow the safe resumption of passenger travel from South Africa, Nigeria and India to Dubai and onwards," said the airline's spokesperson in a statement. Read more UAE: Dubai eases travel restrictions from certain countries including India On Saturday, the Supreme Committee of Crisis and Disaster Management in Dubai said passengers from India with a valid residence visa who have received two doses of a UAE-approved vaccine, will be allowed to travel to Dubai. They should also present a negative test certificate from a PCR test taken 48 hours before departure. "We will resume carrying passengers from South Africa, Nigeria and India in accordance with these protocols from 23rd June," said Emirates. "We thank the Supreme Committee for their continuous efforts in monitoring the development of the situation and announcing the appropriate guidelines and protocols to protect the community and safeguard travel sector." UAE-approved vaccines There are four vaccines in the UAE for use on eligible individuals against the COVID-19 infection: Sinopharm, Pfizer-BioNTech, Sputnik V, and Oxford-AstraZeneca. As per the airline’s last update, Emirates had suspended passenger flights from India effective until July 6, 2021. However, UAE Nationals, holders of UAE Golden Visas, and members of diplomatic missions who comply with the revised published COVID 19 protocols were exempted from these travel restrictions. This is the rule that now has been amended by Dubai authorities. "We look forward to facilitating travel from these countries and supporting various travellers’ categories," said Emirates.
Apple releases updates for iMovie, Final Cut Pro
Technology|Business|: San Francisco: Apple has released a series of updates to its consumer and professional video editing apps for the Mac to bring a range of workflow improvements and new features. Each update comes in at around 2.3GB and are available via the App Store now. The most visual change is iMovie, which has now been updated to version 10.2.4. It now adds 16 new backgrounds, a mixture of solid and textured images, which can be used within videos, AppleInsider reported. The 2.4GB iMovie 10.2.4 update fixes an issue that means the Mac app can now import videos from iMovie 2.3 for iOS. Apple only said that the 2.3GB Motion 5.5.2 update contains "stability improvements." From first user reports, these appear to address rendering issues causing crashes on M1 Macs. Final Cut Pro 10.5.3 is the largest update at 3.1GB, and adds stability improvements plus a handful of new features. It's now possible to create and edit column views, plus there are improved options for sorting clips. The updated Final Cut Pro also expands on ways of searching for media within the browser, using notes, clip names and markers. Then Compressor is updated to version 4.5.3, again with stability improvements. Apple's encoding app now also has notifications for the progress of encoding batches, plus new embedded audio descriptions.
UAE chairs meeting with ITU councillors
Business|: Dubai: The UAE, represented by the Telecommunications Regulatory Authority (TRA), chaired the virtual consultation session of the Council members of the International Telecommunication Union (ITU), which started on June 9 and lasts for four days. The session discusses the most important measures need to be taken by the ITU to ensure work continuity until the next meeting of the Council is held at the ITU HQ in Geneva. Eng. Saif Bin Ghelaita, Executive Director of the Technology Development Affairs Department at TRA, Chairman of the ITU Consultation of Councillors virtual session, said: “The significance of this session comes from its timing as it coincides with the unprecedented challenge of the Covid-19 pandemic, which put the world and organisations in a critical position in terms of the continuity of their work. Global organisation “The ITU is a global organisation that depends on the participation of Member States in its business and has been affected by the pandemic due to the inability of its members to attend the scheduled events, hence the importance of this virtual meeting, which will enable dealing with important matters that cannot be postponed for the continuity of the ITU work.” The UAE is a Member State of the ITU Council and contributes to its work actively by being elected to a number of the ITU councils and committees. The UAE has hosted many international meetings of the ITU since 2007. Regulations board The UAE joined the ITU Council in 2006, which includes 48 countries, including 7 Arab countries. Countries are nominated for membership in the ITU Council during the Plenipotentiary Conference, which is held once every four years, during which the door for nominations for the Council membership is opened, in addition to the five leadership positions in the ITU and the nomination of members of the Radio Regulations Board.
Lebanon provisions wipe out Bank of Sharjah Group profits in Q1
Banking|: Sharjah: Bank of Sharjah Group has reported a first quarter consolidated net profit of Dh89 million, prior to making hyperinflation provisions for its fully owned Lebanese subsidiary Emirates Lebanon Bank SAL (ELBank). ELBank continues to witness unprecedented events stemming from political and economic turmoil, since 17 October 2019. While reporting the Q1 2020 result, the bank was forced to restate the accounts of its Lebanese subsidiraty accounting for the hyperinflationary conditions prevailing Lebanon. According to the International Monetary Fund’s (IMF) inflation forecasts, Lebanese economy is considered hyperinflationary for the purposes of applying IAS 29 [International Accounting Standards] and for the retranslation of foreign operations in accordance with IAS 21. Complying to the above accounting standards, the bank applied Sh211 million as hyperinflation effect and recognized a consolidated net loss of Dh122 million and a total comprehensive loss of Dh111 million versus a positive equity component of Dh265 million. Resilient UAE operations The bank said despite the challenging environment, the Group’s UAE operations demonstrated resilient performance underpinned by the robust fundamentals of the Bank. The Group’s balance sheet remains strong, with total assets standing at Dh37.09 billion at the close of the first quarter 2021 compared to Dh36.14 billion at the yearend 2020. The Group continues to enjoy a high asset quality and other robust metrics that remain healthy as a result of strict adherence to maintaining a disciplined and focused approach to lending, recovery and funding. The Group continues to also enjoy comfortable liquidity and a solid capital position with a customer deposit base of D 24.05 billion at the end of Q1 2021 compared to Dh 23.67 billion at year-end 2020. Lebanon woes Bank of Shajah Group has fully complied with Banque du Liban’s (BDL) Circular No. 13129, dated 4 November 2019, calling for the increase by 20 per cent of the equity of Lebanese banks prior to 30 June 2020. However, the restating of accounts of ELBank, adjusting for the loss of purchasing power of Lebanese pound has seen substantial erosion in earnings. The non-monetary items of the balance sheet, income statement, statement of other comprehensive income and statement of cash flows ELBank too have been adjusted for inflation.
Germany, Dubai bilateral trade at Dh24.6 billion in 2020
Business|: Dubai: Bilateral trade between Germany and Dubai reached Dh4.6 billion in 2020 and will continue to grow given Dubai's ease of doing business and flexible ecosystem, according to a top official of Dubai Silicon Oasis Authority (DSOA). Dubai Silicon Oasis provides numerous facilities to streamline business set-up and operations, attracting hundreds of international technology companies, Dr Mohammed Al Zarooni, Vice Chairman and CEO of DSOA added, while welcoming Ernst Peter Fischer, Ambassador of Germany to the UAE, at DSOA's headquarter in Dubai. Dr Al Zarooni reiterated DSOA's commitment to provide a conducive environment for German and international companies to establish and expand their businesses in this region. He also emphasised DSOA's commitment to embodying its appointment as a science and technology and knowledge hub – one of the five urban centers under the Dubai 2040 Urban Master Plan – to support entrepreneurial creativity and empower entrepreneurs to establish their innovative technology concepts. The German Ambassador hailed the conducive environment for entrepreneurs and startups at Dubai Silicon Oasis (DSO), a government-owned free zone, which houses regional headquarters for renowned multinational companies from different nationalities among them German companies. During his tour, he was introduced to Dubai Digital Park (DDP), the Dubai Technology Entrepreneur Campus (Dtec), and the new campus of the Rochester Institute of Technology-Dubai (RIT-Dubai), exploring the integrated free zone technology park's advanced infrastructure. He also examined the advanced amenities at DDP that provide smart services to residents and visitors since the first smart city of its kind, built at an investment of more than AED1.5 billion, was inaugurated at the beginning of 2021. The Ambassador also introduced Anas Aljuaidi and Bernhard Randerath, the co-CEO of the Emirati-German Institute for the Emirati-German Fourth Industrial Revolution. Dr. Al Zarooni welcomed the initiative to robust the strategic and economic relationship between the two countries. He was also invited to the upcoming inauguration of the Emirati-German Institute scheduled on 2nd July 2021 in Aachen, Germany. Ambassador Fischer also visited the new state-of-the-art campus of RIT-Dubai, the technology-focused American university in DSO, and toured its innovation labs.
JAFZA witnessed 12 per cent growth in healthcare and pharmaceutical customer base
Business|: Dubai: DP World, UAE Region’s Jebel Ali Free Zone (Jafza) witnessed a 12 per cent growth in its healthcare and pharmaceuticals customer base between 2019-2020. To showcase their commitment to promote the growth of healthcare and pharmaceutical companies, DP World, UAE Region and Jafza will participate in Arab Health 2021, one of the leading medical equipment exhibitions in the Middle East. As one of the most important contributing sectors in the Free Zone, the healthcare and pharmaceuticals segment is one of the key economic pillars in Jafza. Spanning an area of around 170,000 sqm, and currently housing 174 companies from 41 countries, the segment provides jobs to 1,100 employees. In 2019, the volume of trade in the segment stood at 25,000 metric tonnes, valued at Dh900 million. “The boom in the healthcare and pharmaceuticals segment in Jafza has highlighted the core competencies of the sector in the Middle East and the seamless connectivity DP World, UAE Region offers to over 3.5 billion consumers through the highly efficient trade and logistics hub in Jebel Ali, which includes Jafza and the Jebel Ali Port,” said Abdulla Bin Damithan, CEO & Managing Director, DP World - UAE Region and Jafza. Unlocking growth The healthcare sector in the UAE has rapidly expanded to meet the evolving needs of the population, helping the nation in its endeavour to become a regional medical tourism hub. Partnerships and initiatives by the government and private and public sector companies are helping to achieve these goals. DP World, UAE Region and Jafza have been at the forefront, ensuring sustainable growth of this sector. “Our trade and logistics hub has expedited global distribution of COVID-19 equipment and played a key role in the Dubai Vaccine Logistics Alliance, an initiative launched in January 2021. As a smart trade enabler, we have ensured a flawless supply chain throughout 2020, irrespective of the dynamic market conditions,” said Bin Damithan. As the only free zone with the ability to support indigenous manufacturing for the healthcare and pharmaceutical sector, Jafza has facilities dedicated to the storage of ancillary vaccine preparation and administration items. Additionally, Jebel Ali Port has temperature-controlled warehouses and also consists of nearly 10,000 reefer points spread across the terminals to power refrigerated containers and support pharmaceutical trade. Several incentives like on-demand warehouses on short term lease with multi-functional storage options, no VAT or customs duties and cost-effective transport services enhance ease of accessibility and enable speedier deliveries to benefit companies that operate in Jebel Ali. DP World, UAE Region’s and Jafza’s participation at Arab Health 2021 will open new avenues of growth for companies, further adding value to the economy of the country.
Indians' funds in Swiss banks: Government seeks details from Swiss authorities
Banking|India|: New Delhi: The finance ministry on Saturday asserted that Indian customer deposits in Swiss banks have fallen since 2019, but said it is seeking details from Swiss authorities on the relevant facts along with their view on possible reasons for changes in the funds parked by individuals and entities in 2020. In a statement, the ministry said the deposits have halved but did not give numbers. Quoting data from Switzerland's central bank, PTI had reported on June 17 that funds parked by Indian individuals and firms in Swiss banks, including through India-based branches and other financial institutions, jumped to a 13-year high of 2.55 billion Swiss francs (over Rs 20,700 crore) in 2020 on a sharp surge in holdings via securities and similar instruments, though customer deposits fell. In its statement, the ministry said the figures "do not indicate the quantum of much debated alleged black money held by Indians in Switzerland. Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities." The ministry noted that customer deposits have actually fallen from the end of 2019. The funds held through fiduciaries have also more than halved from 2019-end. "The biggest increase is in 'Other amounts due from customers'. These are in form of bonds, securities and various other financial instruments," the ministry added. It also listed out the reasons that could have led to the increase in deposits, including rising business transactions by Indian companies, rise in deposits owing to the business of Swiss bank branches located in India and increase in inter-bank transactions between Swiss and Indian banks. Besides, capital increase for a subsidiary of a Swiss company in India and increase in the liabilities connected with the outstanding derivative financial instruments could be the other potential reasons for this jump in deposits, the ministry explained. "The Swiss Authorities have been requested to provide the relevant facts along with their view on possible reasons for increase/decrease," the ministry added. An automatic exchange of information in tax matters between Switzerland and India has been in force since 2018. Under this framework, detailed financial information on all Indian residents having accounts with Swiss financial institutions since 2018 was provided for the first time to Indian tax authorities in September 2019 and this is to be followed every year. The ministry said exchanges of financial account information in respect of residents of each country have taken place between both countries in 2019 as well as 2020. "In view of the existing legal arrangement for exchange of information of financial accounts (which has a significant deterrent effect on tax evasion through undisclosed assets abroad), there does not appear to be any significant possibility of the increase of deposits in the Swiss banks which is out of undeclared incomes of Indian residents," it added. As per Swiss National Bank data (SNB), the aggregate funds of Indian clients with Swiss banks stood at 899 million Swiss francs (Rs 6,625 crore) at the end of 2019, and the increase in 2020 reverses a two-year declining trend. The total amount of CHF 2,554.7 million (Rs 20,706 crore), described by the SNB as 'total liabilities' of Swiss banks or 'amounts due to' their Indian clients at the end of 2020, included CHF 503.9 million (over Rs 4,000 crore) in customer deposits, CHF 383 million (over Rs 3,100 crore) held via other banks, CHF 2 million (Rs 16.5 crore) through fiduciaries or trusts and the highest component of CHF 1,664.8 million (nearly Rs 13,500 crore) as 'other amounts due to customers' in form of bonds, securities and various other financial instruments. While the funds classified as 'customer account deposits' have actually declined from CHF 550 million at the end of 2019 and those through fiduciaries also more than halved from CHF 7.4 million, the money held via other banks rose sharply from CHF 88 million in this period.
Indians' funds in Swiss banks, government seeks details from Swiss authorities
Banking|: New Delhi: The finance ministry on Saturday asserted that Indian customer deposits in Swiss banks have fallen since 2019, but said it is seeking details from Swiss authorities on the relevant facts along with their view on possible reasons for changes in the funds parked by individuals and entities in 2020. In a statement, the ministry said the deposits have halved but did not give numbers. Quoting data from Switzerland's central bank, PTI had reported on June 17 that funds parked by Indian individuals and firms in Swiss banks, including through India-based branches and other financial institutions, jumped to a 13-year high of 2.55 billion Swiss francs (over Rs207 billion) in 2020 on a sharp surge in holdings via securities and similar instruments, though customer deposits fell. In its statement, the ministry said the figures "do not indicate the quantum of much debated alleged black money held by Indians in Switzerland. Further, these statistics do not include the money that Indians, NRIs or others might have in Swiss banks in the names of third-country entities." The ministry noted that customer deposits have actually fallen from the end of 2019. The funds held through fiduciaries have also more than halved from 2019-end. "The biggest increase is in 'Other amounts due from customers'. These are in form of bonds, securities and various other financial instruments," the ministry added. It also listed out the reasons that could have led to the increase in deposits, including rising business transactions by Indian companies, rise in deposits owing to the business of Swiss bank branches located in India and increase in inter-bank transactions between Swiss and Indian banks. Besides, capital increase for a subsidiary of a Swiss company in India and increase in the liabilities connected with the outstanding derivative financial instruments could be the other potential reasons for this jump in deposits, the ministry explained. "The Swiss Authorities have been requested to provide the relevant facts along with their view on possible reasons for increase/decrease," the ministry added. An automatic exchange of information in tax matters between Switzerland and India has been in force since 2018. Under this framework, detailed financial information on all Indian residents having accounts with Swiss financial institutions since 2018 was provided for the first time to Indian tax authorities in September 2019 and this is to be followed every year. The ministry said exchanges of financial account information in respect of residents of each country have taken place between both countries in 2019 as well as 2020. "In view of the existing legal arrangement for exchange of information of financial accounts (which has a significant deterrent effect on tax evasion through undisclosed assets abroad), there does not appear to be any significant possibility of the increase of deposits in the Swiss banks which is out of undeclared incomes of Indian residents," it added. As per Swiss National Bank data (SNB), the aggregate funds of Indian clients with Swiss banks stood at 899 million Swiss francs (Rs 6,625 crore) at the end of 2019, and the increase in 2020 reverses a two-year declining trend. The total amount of CHF 2,554.7 million (Rs 20,706 crore), described by the SNB as 'total liabilities' of Swiss banks or 'amounts due to' their Indian clients at the end of 2020, included CHF 503.9 million (over Rs 4,000 crore) in customer deposits, CHF 383 million (over Rs 3,100 crore) held via other banks, CHF 2 million (Rs 16.5 crore) through fiduciaries or trusts and the highest component of CHF 1,664.8 million (nearly Rs 13,500 crore) as 'other amounts due to customers' in form of bonds, securities and various other financial instruments. While the funds classified as 'customer account deposits' have actually declined from CHF 550 million at the end of 2019 and those through fiduciaries also more than halved from CHF 7.4 million, the money held via other banks rose sharply from CHF 88 million in this period.
Central bank stress test shows UAE banking sector remains solid
Banking|: Dubai: The UAE banking system remains resilient despite challenging operating environment from the repercussions of the COVID-19 pandemic, according to results of the latest Financial Stability Report (FSR) of the Central Bank of UAE. Core banking indicators pointed towards adequate funding and liquidity positions and sustained lending capacity. However, vulnerability of the banking sector remained as the economic slowdown weighed on asset quality. The surge in impairment charges and lower operating income reduced profitability. However, aggregate capital buffers remained adequate and well above regulatory requirements. Strong fundamentals The UAE banking system entered the pandemic from a strong position, enabling banks to provide targeted relief measures to affected clients. “Financial soundness indicators reflected the overall resilient position of the UAE banking system, underpinned by adequate capital and liquidity buffers, which were sustained during the pandemic. Nevertheless, uncertainty remains with regards to the pace of the economic recovery and related asset quality pressures,” said the FSR. The UAE banking system assets expanded 3.4 per cent in 2020, to Dh3.2 trillion. Aggregate loan growth remained positive in 2020 at 1.2 per cent year-on-year, despite the economic contraction. The lending growth moderated at yearend due to loan portfolio rebalancing and corporaten loan repayments. UAE banks’ funding profile continued to be conventional, primarily through deposits accounting for 68.6 per cent of total liabilities. The deposit base of the UAE banks was mainly composed of resident deposits denominated in the local currency. Reliance on interbank funding remained low, accounting for 5.4 per cent of total liabilities. Further, on aggregate, the UAE banking system remained a net lender in the non-resident interbank market Asset quality risks The economic contraction during the pandemic has had an impact on the pace of growth in the overall non- performing loans (NPL). The higher headline NPL ratios in the UAE were also affected by legacy non-performing loans that were already provisioned and the restructuring of few large borrowers during the year. Consequently, the Net NPL ratio and NPL ratio increased to 3.5 per cent and 8.1 per cent year on year by the end of 2020. “While the asset quality pressures due to the global pandemic remained, the likely economic recovery is expected to gradually alleviate credit quality concerns albeit with a lagged effect,” the FSB report noted. Forward-looking loan loss provision increased in 2020 amid the sharp contraction in economic activity. On aggregate, total provisions increased 18.4 per cent year-on-year. Out of the total increase in provisions, specific provisions grew 18.2 per cent while general provisions by 19 per cent year-on-year. Solvency stress test The CBUAE said in 2020 bottom-up stress test was postponed to 2021 to ease the operational burden of the UAE banks. Instead, the CBUAE conducted frequent top-down solvency and liquidity stress tests by using a number of hypothetical adverse scenarios at different stages of the COVID-19 crisis. Solvency stress tests combine impacts of the baseline and adverse scenarios on banks’ balance sheets and income statements, focusing on projected capital adequacy. In the latest top-down solvency stress test, banks remained adequately capitalised with the average CET-1 ratio above 14.4 per cent under the baseline scenario. Average banking system CET-1 ratio fell by 243 bps from 14 per cent to a trough of 11.6 per cent in 2021 under the adverse scenario. Sensitivity test The CBUAE conducted quarterly sensitivity stress tests based on its analysis of the most vulnerable economic sectors under the COVID-19 pandemic. Based on international evidence and UAE data analysis, hospitality, wholesale and retail trade, transport and storage, and construction sectors were identified as the most vulnerable. Under the most severe assumptions, 50 per cent additional stress was applied to the risk parameters of the worst historical values for the vulnerable sectors. The results showed that significant share of credit risk losses was attributed to the vulnerable sectors hypothetical adverse scenario. Liquidity stress test The UAE banking system continued to have adequate levels of liquid assets and a stable deposit base during the year. Strong liquidity buffers enabled banks to accommodate drawdowns when businesses relied heavily on banks’ funding as the COVID-19 shock hit. In response to the stress situation arising from the pandemic, CBUAE took action to maintain financial stability through the TESS [Targeted Economic Support Scheme]. It provided the banks liquidity at a scale which was necessary and effective in supporting market functioning. The CBUAE uses liquidity stress tests to assess the resilience of the banking sector to liquidity shocks. Liquidity stress tests were performed monthly as one of the heightened risk monitoring measures taken by the CBUAE to ensure that liquidity risks could be detected early and promptly addressed. The latest liquidity stress testing results showed that banking system has the capacity to withstand sudden shifts in deposit base without encountering liquidity challenges. However, some banks relying on wholesale funding and having higher depositor concentration would be more vulnerable under stress conditions.
Rising risks of crypto assets to banks call for robust regulation
Dubai: Global banking regulators are seriously evaluating the risks and rewards associated with banks’ exposure to fast growing crypto asset class. The recent consultation on the prudential treatment of banks' crypto asset exposures from the Basel Committee on Banking Supervision (BCBS) provide a much needed regulatory framework as banks globally are exploring the potential risks and rewards from their exposure in this rapidly evolving asset class, according to Fitch Ratings. The BCBS proposal recommends a differentiation in the prudential treatment of crypto assets. Tokenised traditional assets would be eligible for the same capital requirements as the underlying assets if they confer similar legal rights. The prudential treatment of fully reserved crypto assets with stabilisation mechanisms such as stablecoin would aim to capture the risks of the underlying assets and of the unsecured commitment of the entity that exchanges the crypto asset for its underlying assets or cash. Higher risk weightage Crypto assets that cannot be classified as tokenised traditional assets or that have no stabilization mechanism would attract a much higher risk-weight of 1,250 per cent to reflect their significantly higher risks to banks, owing to their volatility and opacity. This treatment would be applied to cryptocurrencies such as bitcoin and Ethereum, which would also not be considered as redeemable within 30 days for the calculation of the regulatory liquidity coverage ratio. To avoid higher capital requirements, banks holding stablecoin would be required to monitor daily the difference in value to the underlying pool of assets and to perform a detailed assessment of the stabilization mechanism, which would exclude newly established crypto assets. What is a stablecoin? A stablecoin is a new class of cryptocurrencies that attempts to offer price stability and are backed by a reserve assets. Stablecoins have gained traction as they attempt to offer the best of both worlds—the instant processing and security or privacy of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies. In short, stablecoins are cryptocurrencies that attempt to peg their market value to some external reference. Stablecoins may be pegged to a currency like the US dollar or to a commodity's price such as gold. The key here is the value of stablecoins are collateralised. Banks would also be required to verify ownership rights of the underlying pool of traditional assets, with classification requiring formal approval from supervisors. The associated regulatory burdens of this exposure are likely to discourage banks from holding stablecoins, especially those issued by third parties as the bank has little control over the underlying reserve pool and stabilisation mechanism. Low exposure levels Currently banks' exposure to crypto assets remains small according to the BCBS. However, the rapid development of the asset class and the fast growth of crypto currencies that are not stabilized increases material risks for banks with cryptocurrency exposure. The extreme price volatility of some of these assets and an unproven track record of liquidity will make it challenging to hedge positions when providing derivative instruments to institutional clients or when manufacturing investment products that reference crypto assets. Allowing less sophisticated retail and private customers access to this asset class also entails substantial reputation and legal risk. The higher capital and operational requirements related to cryptocurrency could hinder wide-scale adoption by banks, which would most likely hold these assets as custodians and not on balance sheets. The punitive treatment of cryptocurrencies and their derivatives will likely discourage trading of cryptocurrency, or at least restrict banks to client transactions where exposure is kept neutral. The recent notable exception is El Salvador, the first country to introduce bitcoin as legal tender. In a communique following the G7 meeting earlier this month, finance ministers and central bank governors stressed that global stablecoins should adhere to strict standards and should not begin operation until relevant legal, regulatory and oversight requirements are adequately addressed. A new era of central bank digital currencies Governments around the world are increasingly focused on issues surrounding cryptocurrencies, with some central banks exploring central bank digital currencies CBDCs. The BCBS's proposals exclude treatment of central bank digital currencies, which, if introduced, would likely have similar risk profiles to central bank cash. A number of countries have begun to experiment with a general-purpose central bank digital currency (CBDC), with others likely to launch pilot schemes in the next two years. The authorities will face trade-offs between the risks and benefits associated with a widely used CBDC as they take this work forward. “The deployment of CBDCs will create opportunities to strengthen financial system inclusion, innovation, resilience and efficiency, but may also give rise to new risks,” said Monsur Hussain, an analyst at Fitch Ratings. Fitch sees the advantages of CBDCs lie in their potential to enhance cashless payments backed by an authority, with innovations in step with the wider digitalisation of day-to-day lives. For central banks in some emerging markets (EMs), a key driver for researching CBDCs is the opportunity to bring underbanked communities into the financial system, and improve the cost, speed and resilience of payments. While the rise of digital payment systems, which have strong network effects have the risk of creating oligopolies in the payment space, Fitch expects widespread use of CBDCs could erode private providers’ monopoly over payments-related data and improve the central banks’ capacity to track and trace financial transaction data for money laundering and prevention of financial crime. Key risks Introduction of CBDCs will come with the risks of decline in the role of banks in day-to-day financial transactions and significant loss of privacy. “We believe the introduction of CBDCs will inevitably involve households and businesses converting some of their commercial bank deposits into CBDCs. All other things being equal, this would require banks to shrink their balance sheets – a process known as disintermediation,” said Such risks would be likely to rise if CBDC wallets were managed directly by central banks, rather than being administered by authorised financial institutions. Even in the latter case, funds may still flow from deposit accounts into CBDC wallets if fears rise over financial instability. Another challenge faced by CBDCs is how to replicate the anonymity of cash. Users may be reluctant to accept a digital cash substitute if it does not grant a sufficient degree of privacy.
Fed update weighs down Wall Street, adds fuel to the dollar
Markets|: New York: All three main indices on Wall Street dropped Friday with investors wary of a more hawkish stance from the US Federal Reserve, while the dollar posted the strongest gains in over a year and oil prices continued a steady climb. After starting the week near record highs, U.S. stocks have steadily dropped since Fed officials projected Wednesday that interest rates may rise sooner than previously expected. The Dow Jones Industrial Average fell 533.37 points, or 1.58%, marking the worst week for the blue-chip index since January. The S&P 500 lost 55.41 points, or 1.31%, and the Nasdaq Composite dropped 130.97 points, or 0.92%. The MSCI world equity index, which tracks shares in 45 nations, fell 8.87 points or 1.24%. Fear of early rate hike Stocks were trending downward after the Wednesday policy update from the Fed, but that decline became sharper after Friday morning comments from St. Louis Fed President James Bullard, who said he thought the Fed could raise rates as soon as next year. Those comments were offset somewhat later in the day by Minneapolis Federal Reserve President Neel Kashkari, who said he didn't see interest rate hikes until 2024. The Fed maintained it planned to keep up unprecedented monetary support until the jobs market had fully recovered, and that any acceleration of a stimulus exit is due to the strong gains expected from the U.S. economy coming out of the pandemic. But the prospect of earlier interest rate hikes helped nudge investors away from a stock market that had been near record highs at the start of the week. "I'm not surprised to see the market sell off a little bit. I'm never surprised, given the strong run we've had for such a long period of time, when you see some periods of profit-taking," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. Surging dollar The Fed stance provided fuel to the US dollar, as the dollar index, which tracks the greenback against six major currencies, jumped 0.43% on Friday to 92.314, its highest price since mid-April. The index is on pace for its strongest weekly gain in roughly 14 months, as investors seek some safety in the dollar from other currencies after a light surprise from the Fed. Oil shook off earlier losses to add to its recent gains following reports OPEC expected limited U.S. oil output growth this year. Brent crude futures rose 43 cents, or 0.6%, to settle at $73.51 a barrel. U.S. West Texas Intermediate (WTI) crude rose 60 cents, or 0.8%, to $71.64 a barrel. Both benchmarks were headed for a weekly gain of about 1.1%. "Despite a complete return to pre-pandemic life in the US, energy companies are cautious over keeping their balance sheets in order and will remain disciplined over making commitments over new wells," wrote Edward Moya, senior market analyst at OANDA. "The oil market does not have to worry about oversupply concerns anytime soon and that is keeping crude prices supported despite a broad selloff with commodities." Long-dated U.S. Treasury yields fell Friday as the bond market absorbed the Fed news, with the yield curve flattening on the bet the Fed will move more quickly to tackle persistent inflation pressures. The benchmark 10-year notes were last at 1.445%. The Fed took its toll on safe-haven gold this week. Spot gold was down 0.61% to $1,762.63 per ounce, with prices down roughly 5.7% on the week. U.S. gold futures settled 0.3% down at $1,769 an ounce.
US-based EIG-led consortium closes $12.4 billion Aramco pipelines deal
Energy|: Dubai: US based EIG Global Energy Partners said a consortium it led has closed a deal to buy 49 per cent of Saudi oil producer Aramco's pipelines business for $12.4 billion. EIG said the co-investment process for the deal attracted a global group of investors from China, Saudi Arabia, Korea, the United Arab Emirates and the United States. It included Abu Dhabi's Mubadala Investment Company, Silk Road Fund, Hassana and Samsung Asset Management, the company said
Explainer: Mystery behind slump in India's Adani Group company shares
Markets|: Chennai: Shares of companies controlled by Indian billionaire Gautam Adani recorded their biggest weekly losses ever. The six stocks cumulatively lost 1.91 trillion Indian rupees ($25.83 billion) of value over five days through Friday. Indian newspaper Economic Times reported on Monday the accounts of three Mauritius-based funds, which are among the top foreign investors in Adani group companies, had been frozen by the National Securities Depository Ltd (NSDL). The NSDL website showed accounts held by the three funds frozen as of May 31, among thousands of others, without citing a reason, according to a review by Reuters. The exact date of the freeze is unknown and the accounts remained frozen on Friday, according to the website. Denials, contradictions The Adani Group firms, in identical statements issued to stock exchanges, rejected media reports, including in the Economic Times, as "blatantly erroneous." The companies, which are in the businesses of operating airports and ports, power generation and transmission, coal and gas trading, said the accounts in which the funds hold Adani shares were not frozen. NSDL and India's securities regulator SEBI did not respond to requests for comment from Reuters. But a senior NSDL official, who declined to be identified, told Reuters on Monday the funds have multiple accounts and that the Adani shares were held in other accounts that were not frozen, adding that freeze was "not new". The shares of the Adani companies however have continued to fall. The funds The three foreign funds - Albula Investment Fund, Cresta Fund and APMS Investment Fund - are all registered at the same address, according to the Mauritius financial regulator. The funds cumulatively control 2.7% of all shares in the Adani Group companies as on June 11, calculations based on an e-mail sent by Adani executive to NSDL and reviewed by Reuters showed. Two other Mauritius-based funds that are also investors in Adani companies - LTS Investment Fund and Asia Investment Corp - are also registered at the same address. Reuters was unable to find a website for all five funds, and calls to the phone numbers provided to Mauritius regulators went unanswered. The five funds deployed 94.4%-97.9% of their total capital in Adani companies' shares, data by Indian stocks analysis firm Trendlyne showed. Reuters could not independently verify Trendlyne data. Four of the six Adani stocks have a public shareholding of about 25% - the minimum level mandated by regulators for companies listed on Indian exchanges. Indian stock exchange data shows most shares of Adani Group companies are held by trusts controlled by Adani. Foreign portfolio investors are the next largest shareholders, while retail and domestic investors typically control about 5%. The impact After falling 0.4-8.5% on Monday, the day of the Economic Times report, Adani group stocks fell between 7.1%-22.6% over the week compared with last Friday's close, wiping out nearly 22% of the gains in the year preceding this week. The decline saw the firms' cumulative market capitalisation decline by over a sixth. Flagship Adani Enterprises rose 8.76% and Adani Ports rose 7.33% on Friday, but the four other Adani stocks each closed 5% lower. Jimeet Modi, founder of Mumbai-based Samco Securities, said the jump in the two stocks was due to some investors buying the shares after the steep fall in prices this week, but added that the stocks were "still in a bear market". "I don't think the market is convinced with the quality of the clarification from the Adani group," Modi told Reuters.
How much more of a defence can companies put up against ransomware?
Analysis|Trends|: The trade in cyberattacks is now so advanced that Darkside, the Russia-based group responsible for the Colonial Pipeline attack that shutdown a 5,500-metre-long pipeline in the US, sells its own ransomware software. And even has a tech support service in place should you need additional help in using it. Some cyber-experts have even suggested that this latest attack is essentially a marketing campaign to show just how effective its software is at extorting cash from victims. Colonial were reported to have paid $5 million to take back control of its systems. Not a scattershot approach It has become clear that these attacks are becoming more widespread. In 2020, the UAE recorded a 183 per cent increase in cases where the cyber criminals breach a system and make it impossible for a service to be delivered – known as a Distributed Denial of Service (DDoS) attack. As the Colonial attack has proven, it is no longer small and often defenceless companies that are targets for cyber criminals. Instead of targeting several companies for smaller ransoms, hackers can identify one larger company that has weaker protection or has perhaps neglected its responsibilities towards cyber security. Those millions only help to a point Nevertheless, even organisations that have spent vast sums on cyber security are not immune from attack. We believe there is no ‘one-size-fits-all’ solution to cyber-crime. As it is constantly evolving, ransomware is capable of evading even the most advanced of defences, meaning industry standard security can become obsolete and inadequate very quickly. It is important to have security systems implemented throughout the entirety of a utility network, as hackers often target cloud-based or managed data centres that are remote enough from the grid to be more easily breached. Internal and external communication channels must also be secure. If there are many levels of security, where components of the whole system are divided into separate branches, it will prove much more difficult to break. A major concern regionally is that now our systems are so digitally advanced and reliant on each other, that if one system becomes compromised others will follow. Rail systems, power plants, water treatment plants all use the same technologies, so it is critical that all, not just one of these systems, are fully protected. Most exposed Cybercriminals have taken advantage of the pandemic by attacking at a time when many organisations are at their weakest. Tightened budgetary controls and home working has diverted attention away from IT and info-security concerns, leaving vulnerabilities throughout networks. Despite it being inconvenient to users, multi-authentication practices should be introduced in certain circumstances where sensitive information could be breached. One-time passwords and verification codes are examples. Regular security audits are recommended to help identify areas of susceptibility, too. Outside of a tightened regulatory environment, there are practices that companies can adopt to limit their exposure. Resilient and hard to breach sensors combined with highly secure communication and analytics systems are a strong pillar to the entire security system. Regardless, if resources are not devoted to the problem in sufficient measures, problems will remain. If the pandemic has taught us one valuable lesson, there were warning signs that were ignored, which resulted in catastrophic repercussions. Have we now done enough to be truly confident that our IT systems are safe and secure? Maybe, but what is protected today may not be tomorrow… Francois Frigaux, Special to Gulf News The writer is Director at Sensus, a Xylem brand.
Bahrain telecom Batelco could be first stock to be dual listed on Saudi Tadawul
Markets|Saudi|Bahrain|: Manama: Bahrain's biggest telecommunications firm is planning to become the first company to have a dual listing of shares on Saudi Arabia's stock exchange. Bahrain Telecommunications Co., also known as Batelco, has hired the investment arm of Samba Financial Group as an adviser on the deal. Saudi Arabia's bourse has been trying to encourage Middle Eastern firms to dual list for years, without success. Aluminium Bahrain had considered a dual listing in 2014, but it never occurred. The Saudi exchange is the largest and most actively traded in the Gulf region. Trading volumes on other exchanges have languished, leading several firms to delist from bourses in Dubai and Bahrain. Saudi Tadawul Group CEO Khalid Al Hussan said in April that the exchange is reviewing cross-listings from companies in Bahrain and Abu Dhabi and two agreements were signed - with the Abu Dhabi Securities Exchange and Bahrain Bourse. "There are companies that applied and hired financial advisers to be dual listed," Saudi Exchange CEO Mohammed Al-Rumaih had said in April. "I expect this year we'll witness the first dual-listed company."
Spread of new skills within organisations cannot be done with a silo mindset
Analysis|Companies|: After all the upheaval we’ve faced in the last year, we hardly need more workplace disruption. But World Economic Forum’s latest Future of Jobs report predicts that machines and AI technologies will take over half of all work tasks by 2025. Where does that leave us ? A pessimist might say that our role in business is coming to an end and that more sophisticated automation and AI had put paid to that. It’s difficult to take that view seriously following the pandemic, though. Where machine learning models struggled to adapt to sudden market changes - and algorithms failed to predict school grades - humans stepped in and saved the day. What businesses needed more than ever was common sense and humanity – that only humans could deliver. True, we’ve only scratched the surface of what AI is capable of. But nothing can beat the adaptability and creativity of human minds. It is thus the HR leaders who are charged with unleashing and harnessing that potential, nurturing it and giving it space in the business to grow. What new skills pay the bills? Every business and industry is changing in its own way, and each requires its own new competencies. In supply chain, the focus is on resiliency and the integration of self-healing capabilities to guard against future shocks. For customer experience, the emphasis is on embedding data-driven customer understanding that creates more tailored ‘human’ experiences digitally. However, despite the supposed chaos, there are strong similarities beneath the surface. Organisations are rapidly embracing an enormous depth of business applications. These cloud apps rely on AI to help people integrate, orchestrate and automate, helping organisations adapt and transform when they need to. We’re at the point where AI not only automates mundane and repetitive tasks, but can also perform highly complex tasks - like business forecasting - accurately and reliably. This doesn’t mean AI is about to replace us – in fact, the inverse is true. Almost every worker, whatever their role, could benefit from the use of a cobot or ‘digital twin’. Resetting workplace culture If many workers are denied access to the latest cloud and AI tools, meaning businesses can’t reap the rewards either. To level up this learning across a business, HR leaders must think differently – but they’ll also need to be more targeted in their approach. They not only need an understanding of what skills are lacking right now, but what talents will be commodities in the future. How does a company know what skills to teach, and which employees are best able to take the business forward? These decisions have to be guided by HR data from all lines of business. Everything from payroll information to messaging and sentiment analysis should be considered to understand where employees may be struggling, and what they need to improve. The larger the organization, the more complex it becomes to maintain a programme of constant learning. That said, during the pandemic, low-carbon energy leader Engie extended its cloud-based HCM platform to maintain business transformation across its global 170,000- strong workforce. By integrating data from across the business and using AI tools, Engie was able to streamline and standardise a global policy of continuous improvement, career development and best practice sharing across the business. Humans make a company’s culture – but helping them learn and grow with the right tech can make it even better. HR plays a crucial role, and when aided by the right AI tools and data-driven insight, they can make the best decisions for the business and its people. No matter what shape the next great disruption takes, HR leaders can lay the groundwork work now to ensure employees can meet the challenge head on. Yazad Dalal The writer is Oracle's HCM Strategy Leader for EMEA territory.
COVID-19: First fully vaccinated Air India crew flies from Delhi to Dubai
UAE|Aviation|: Dubai: Air India Express operated India’s first international flight with fully vaccinated crew from Delhi to Dubai on Friday. The airline said in a statement: “The pilots and the cabin crew of IX 191, which took off from Delhi at 10.40am, had received both doses of their COVID-19 vaccine. Capt. D R Gupta and Capt. Alok Kumar Nayak, captained the flight with cabin crew members Venkat Kella, Praveen Chandra, Pravin Chougle and Manisha Kamble. The same crew operated the return flight IX 196, on Dubai — Jaipur — Delhi sector.” Vande Bharat Mission Air India Express said: “As we operate the country’s first international flight with fully-vaccinated crew, it may be recalled that it was Air India Express that operated India’s first-ever Vande Bharat Mission (VBM) flight which touched down Indian soil on 7 May 2020 carrying passengers from Abu Dhabi. We are happy that now our teams are shielded with the protection of the vaccines.” India’s budget carrier has been part of the Vande Bharat Mission, the largest civilian evacuation exercise in the world undertaken by the government of India in the wake of the COVID-19 outbreak last year. Air India Express alone operated 7,005 VBM flights carrying a total of 1.63 million passengers till last month. Air India Express said: “We have vaccinated almost all eligible crew members and front-line staff not only to ensure their safety and health but also to make our passengers feel safe and reassured as they fly with us.”
Movie theatres should try and build a working relationship with streaming platforms
Analysis|Trends|: The way we consume content has transformed significantly and is happening at multiple levels. We now consume content on more screens and the amount of content produced has also increased exponentially as new digital mediums make the economics of niche content viable. Currently there are four dominant channels to consume paid content: Movie theaters: This is the one of the oldest modes of content consumption. Consumers generally go there for the immersive experience and pay on a per-view basis. Cable TV: This is largely streaming for sitcoms and live TV driven content. The most common model is the monthly subscription plan. Many of us would have this as they are typically bundled with telephone and internet connectivity. Over-the-top (OTT) bundles: These are on-demand content providers - typically through an app on a smart device. The pricing model is generally monthly subscriptions that allow users to watch all of the content on the platform. Netflix, Amazon Prime and Shahid are some dominant players in this category. Pay per-view (PPV) OTT: This mode is generally for live events and to watch content on a pay-as-you-go basis. Apple’ iTunes, GooglePlay, Zee5 and Mxplayer are some OTT players who have pay-per-view options. Taking them inhouse Recently, the biggest OTT platforms such as Netflix and Amazon have started producing movies for their own platform. In this model, they pay a bulk fee for an already produced movie or produce it themselves. Over-the-top players are now the dominant entertainment channels with consumers spending almost 20 hours per week in Middle East. This is twice the time consumers spent on OTT platforms just two years ago - and many times more than spent in movie theatres. Such large-scale OTT usage presents an opportunity for the movie ecosystem to reinvent and provide more choices to consumers. Link up on OTT For example, new movies can be released on a per-view model on OTT platforms, thus providing more choices to movie studios and also to consumers. It can make economics of niche movies viable and can drive Arabic content production in the region. Even movie theatres can reimagine themselves and create a pay-per-view revenue sharing channel that complements the existing physical movie business. That way they will be able to ride the OTT wave and make it more efficient for all stakeholders in the process. Movie theatres will continue to be relevant for the immersive and social experience they provide. For this to really take off, privacy concerns will need to be addressed. But OTT does open up more possibilities for new movies. We are already seeing in this in some form – it is only a matter of time for it become mainstream. Sandeep Ganediwalla The writer is regional Partner at RedSeer Consulting.
Indian rupee touches lowest point in year-to-date - at 20.20 for Dh1
Markets|: Dubai: The dirham to Indian rupee rate has reached its lowest point – at 20.20 for one dirham - so far this year, setting off a rush among expat Indians to send out remittances. The rupee softness could continue over the weekend and even extend into next week. “Thursday’s selling rate for the rupee was 20.10 to the dirham and which has now come to 20.20 on Friday,” said Antony Jos, Executive Director at Joyalukkas Exchange. “It’s quite a drop from the Dh19.96 levels that was there before the US Federal Reserve move to raise base rates.” The rush to remit by NRIs here is quite a departure from the extremely low volumes seen in recent weeks. Remittances to India dropped drastically during the second lockdown phase to control the COVID-19 spread. “Even the start of summer, which is usually a good time, for outward remittances, didn’t pick up until Thursday noon,” said Jos. “The way these Fed-created currency drops happen, it’s effect lasts about a week or so and then they stabilise.” In comparison, the Pakistan exchange rate has been more or less stable over the last 48 hours, and is at 42.63 to the dirham.