flydubai says will only fly MAX with regulatory approval after reports of India denying airspace
Aviation|: Dubai: flydubai said it will operate its Boeing 737 MAX aircraft in airspace where the regulator has approved it for passenger service. The Dubai-based budget carrier’s statement came in response to reports that India's aviation regulator had denied permission to Flydubai to operate the MAX to India or fly it across the country’s airspace. “It is for each regulatory body to set the requirements and timelines for return to service for the MAX aircraft,” said an airline spokesperson. “flydubai will only operate the aircraft where it has been approved to do so.” Last week, flydubai operated its first MAX aircraft from Dubai International Airport (DXB) to Sialkot International Airport (SKT) in Pakistan, after the airline met all the requirements outlined in the Safety Decision issued by UAE’s General Civil Aviation Authority (GCAA). flydubai has a fleet of 14 Boeing 737 MAX aircraft, and four of its MAX 8s and one of its MAX 9s have now received regulatory approval to rejoin its fleet. The remaining nine MAX aircraft will return to passenger service over the coming months.
Suhail Al Mazrouei unveils roadmap for managing energy, housing, infrastructure and transportation sector
Business|: Abu Dhabi: Suhail bin Mohammed Al Mazrouei, the UAE Minister of Energy and Infrastructure, has revealed a comprehensive development roadmap for the sectors supervised by the ministry, which includes the energy, housing, transportation, and infrastructure. Al Mazrouei said that the ministry has designed clear work directions that guarantee the country's global leadership – espically in the four sectors – over the next 50 years. Ambitious housing plans In an interview with the Emirates News Agency (WAM), Al Mazrouei affirmed that the ministry has ambitious plans for citizens' housing in line with the directives of the UAE’s leadership to provide citizens with decent living conditions and ensure their prosperity and happiness. The UAE minister also announced the completion of a study to explore the need for housing across the country, based on the availability of lands and supply of housing until 2040, with the aim of determining the demand and supply in each emirate. He emphasised that the ministry is monitoring to assess the financing requirements for housing projects in accordance with the UAE vision. Al Mazrouei explained that the ministry’s objectives in the energy sector include strengthening cooperation with relevant entities for the sustainability of the energy sector and petrochemical industries. Energy efficiency This will be achieved by introducing energy efficient systems in industrial and mining facilities, enacting laws and legislation that encourage everyone to produce clean energy, and empowering and developing national cadres working in the sector through cooperation with specialised institutes and centres for geological research and development, he noted. Al Mazrouei reaffirmed that the ministry’s plans include strengthening the country’s orientation towards renewable energy or clean alternative energy, "like the nuclear energy, which uses safe, environmentally friendly and reliable technology, has become an ideal choice for the country." As for the infrastructure sector, he said that the ministry designed the four-pronged infrastructure plan for the next 50 years. The first includes studying the current infrastructure situation, while the second focuses on risks and future trends, the third deals with policies and enablers, and the fourth aims at integration and partnership. Digital identity The official highlighted that the ministry is working to promote digital identity in infrastructure, demographic changes and urbanisation, development, investment and the economy, as well as interactive smart cities, and resilient infrastructure. He explained that the ministry aims to design safe, integrated and sustainable transport networks that use advanced technology, contribute to ensuring social and economic development, facilitate commercial movement, and achieve sustainable development goals, happiness and quality of life for all.
The Year of 50: Etihad launches one-year programme to celebrate UAE’s 50th anniversary
Aviation|UAE|: Dubai: Etihad airways has launched a year-long programme in celebration of the 50 years since UAE was established. The airline has launched a dedicated platform at etihad.com/uae50, and aims to engage the local community in its participative programme which will be revealed in detail throughout the year. UAE nationals, residents and guests will have the chance to participate and win one of 50,000 prizes that will be given away throughout the course of the year. The rewards range from free flights and bonus Etihad Guest Miles, to discount vouchers for experiences across Abu Dhabi, and will be awarded throughout the year. “This year-long initiative demonstrates Etihad’s celebration of the past, and commitment to the next 50 years of this incredible country,” said Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group. The first project in this series of celebrations is the ‘legacy of a nation’ which charts the untold stories of the nation from the past 50 years. Etihad will be seeking out and curating personal accounts of life in the UAE, both past and present. The second pillar of the programme is ‘values that unite’, where Etihad will collaborate with expressionists from different walks of life, to co-create work that commemorates this auspicious occasion. The final phase of this campaign is headlined ‘hosting the world’. Etihad will encourage, support and facilitate individuals with hosting special visitors from around the world to experience the UAE’s warm welcome for themselves. The series of activities will run until December 31, 2021.
UAE investors trade cautiously ahead of results
Markets|: Dubai: Abu Dhabi and Dubai stocks moved little in early Sunday trades with investors looking for greater clarity as the first-quarter results are set to get rolling in later this week. Dubai Financial Market traded marginally higher at 2,584 points with real estate and banking stocks pulling the index in opposite directions. Emaar Properties advanced 1.1 per cent as it was trading in its first session after the firm's managing director said the first-quarter sales more than doubled to Dh6 billion, which compares with Dh2.5 billion it reported for the corresponding period last year. Turnaround The numbers from the emirate's largest developer look promising and come in line with recent reports that Dubai property market has buyers returning to it in greater numbers for the last few months, particularly for villas, townhouses and homes with sea views. This marks a major turnaround from 58 per cent plunge in 2020 profits as the already struggling market came under added pressure from COVID-19 pandemic. The sales figures from Emaar appear to have given investors an insight into how its sectoral peers might have performed in the first three months of the year, leading to a 2.5 per cent jump in Damac Properties stock and a 0.8 per cent rise in Emaar Development. However, gains in property shares were countered by losses in financial stocks with Emirates NBD shedding 1.3 per cent and Ajman Bank and Amlak Finance joining the selloff. Air Arabia also dropped 0.8 per cent as a resurgence of the pandemic in parts of the world stocked investor worries that the aviation sector is likely to have a longer road ahead before it gets back to flying relatively normally. Abu Dhabi Securities flatlined at 6,059 points with International Holding Company edging back 0.4 per cent, taking a pause after a run of gains that lasted 13 days on the back of investor optimism about its growth model. Abu Dhabi Ship Building and Abu Dhabi Aviation also traded in red, but the index won some support from Waha Capital, Abu Dhabi Islamic Bank and ADNOC Distribution. Earnings boost Oman's 30-company index notched 0.5 per cent with the biggest boost coming from the telecom firm Omantel and Bank Muscat thanks to their heavy weight on the index. Al Anwar Ceramic Tiles moved upward by 1.8 per cent after the first-quarter profits shooting up to OR2 million, more than double the amount reported for the same period a year earlier. While banking stocks provided impetus to Kuwait premier idex, they slipped into negative territory in Qatar bringing the index down. Bahrain traded roughly unchanged with investors trading cautiously in the absence of big clues.
UAE cable giant Ducab winds in 36% profit gain for 2020
Business|: Dubai: Demand from projects in the UAE ensured the cables and metals manufacturer Ducab Group did not have to cut down on production at any point during 2020. This in turn helped full-year profits to rise 36 per cent for the group, which is equal-owned by Dubai and Abu Dhabi government entities. (Actual breakdown of the financials has not been given.) “We continued to be fully operational during the rather difficult year,” said Mohammed Al Mutawa, Group CEO. “Production rates vary throughout any given year - we feel our current capacity is the right mix for now. “This will serve the projects we have across sectors, as well as landmark projects such as Mohammed Bin Rashid Al Maktoum Solar Park, Dubai Metro Route2020, Abu Dhabi Airport, and others.” Keeping it steady Owned by Investment Corporation of Dubai and Abu Dhabi’s ADQ, Ducab Group’s manufacturing capacity stands at more than 115,000 MT of high-, medium-, and low-voltage cable solutions, as well as 180,000 tonnes of copper rod and wire per annum. In addition, there is the 55,000 tonnes per annum of aluminium rod and overhead conductor. The group exports 60 per cent of its overall production. Not much of disruptions Through the pandemic months, it kept those supplies going. “Fortunately for us, the majority of our customers were still operating and accepting deliveries from our plants,” the CEO said. “We filled market gaps globally through our distribution network, and this helped strengthen our position during the pandemic.” All 3 make gains Of the business units, there were double-digit profit gains for the core cables and metals operations. * Ducab Cable Business (DCB), the largest unit, delivered a profit increase of 13 per cent, with a product sales volume of close to 80,000 conductor tonnes. * Ducab Metals Business (DMB) had a 33 per cent profit increase year-on-year. The metals operation includes Ducab Aluminium Company (DAC) and Ducab’s Copper Rod Factory. It sold close to 190,000 tonnes of products in 2020. * Ducab High Voltage (DHV) saw overall margins up by 42 per cent compared to the previous year. DHV, which is the first dedicated high voltage and extra-high voltage power cable manufacturing facility in the Middle East, sold nearly 6,000 tonnes of specialized high voltage cables. “In 2020, in particular, we have seen increased interest from markets such as Australia, the UK, India, and China,” the CEO said. “In addition, Ethiopia and Somalia, Maldives and Mauritius, and Philippines were we saw increased interest. “We export approximately 60 per cent of our overall production, which has grown over the years with both the cables and metals businesses expanding their footprint. In the past, it used to be around 50% each, but our exports have grown, with significant contributions from the copper rod and aluminum rod category.” And for this year, much of the same themes will again be focussed on, namely that of “business continuity”. “We continue to invest in upgrading our plants and equipment around the year - and capex (capital expenditure) as such has the full support of our shareholders as and when needed,” he added “Ducab is also keen to explore new markets and opportunities. We will continue to do this, especially as economies begin to rebound from the effects of COVID-19.” Change at the top At its last Board meeting, Ducab confirmed Jamal Salem Al Dhaheri as the new Chairman, in place of Dr. Ahmad Bin Hassan Al Shaikh, who served from 2019-2021. The chairmanship is rotated biannually between Ducab’s equal shareholders ADQ (through Senaat) and Investment Corporation of Dubai (ICD). According to Al Shaikh, “The past year has offered us a lot of lessons. I am proud that we have remained resilient and determined to achieve our objectives, and delivered an exceptional performance last year."
Dubai’s economic recovery picked up pace in March, PMI data shows
Business|: Dubai: The positive momentum in Dubai’s economic recovery continued gain traction in March with gains in output and new orders according to the latest Purchasing Managers’ Index. The Dubai non-oil economy saw a surge in input price inflation at the end of the opening quarter of the year, driven by mounting input shortages, restocking efforts by companies and an intensification of global supply delays. “Global supply difficulties washed up on Dubai's shores in March, as the reduction in input availability led to the sharpest rise in prices for 28 months. This will constrain profit margins as competitive pressures and efforts to aid the recovery in demand led firms to lower output charges,” said David Owen, Economist at IHS Markit. Output expansion Despite the rising input costs and supply constraints, output continued to expand solidly, while new work picked up after a slight decrease in February. Overall, firms also remained confident of a rise in business activity in the coming year as the economy recovers from the coronavirus disease (COVID-19) pandemic. The PMI posted 51.0 in March, up fractionally from 50.9 in February. Positive contributions relative to the previous month came from the new orders and stocks of purchases indices, while the output, employment and uuppliers' delivery times sub-components provided slight negative directional influences. At the sector level, construction and travel & tourism saw improvements to their headline readings in March, with the former recording by far the strongest growth across the three monitored industries. Construction firms saw the second-sharpest increase in output since the middle of 2019, as some respondents commented that easing COVID-19 restrictions allowed for project work to restart. Across the whole non-oil private sector in Dubai, latest data signalled a rise in output for the fourth month running during March. This was supported by a renewed pick up in new orders. Rising optimism The outlook for future business activity among non-oil firms remained positive in March, despite ticking down from February's five-month high. Panellists linked hopes of an improvement in output to the reopening of the economy from the COVID-19 pandemic and strengthening client demand. Businesses raised their stocks of purchases again in March, after a five-month period of decline up to January. However, a number of firms reported facing shortages of inputs linked to wider global supply problems, which contributed to a further lengthening of suppliers’ delivery times. With raw materials in short supply, input prices spiked higher at the end of the first quarter. The rate of input cost inflation accelerated to the quickest since November 2018. Despite this, firms continued to lower their selling charges in an effort to stimulate demand, and at the most marked pace for five months. Efforts to contain costs meant that staff levels were reduced for the first time in 2021-to-date. That said, the fall in employment was only slight.
Egypt will release ship that blocked Suez Canal once compensation deal reached
Business|: Cairo: Egypt will release the giant container ship that had blocked the Suez Canal for nearly a week once a deal is reached on compensation for related losses, the head of the canal's authority said. "The ship is ready," Osama Rabie said in an interview on Egyptian television. Once "we agree on compensation, the ship departs and the matter is closed." The Ever Given blocked the canal for six days, roiling global markets and c in lost revenue, according to its calculation. Rabie said Egypt wants compensation for the losses, as well as the cost of freeing the vessel. The ship and its cargo are currently in the Great Bitter Lake, roughly halfway along the canal.
Korean battery companies agree to settle US trade dispute
Business|: Washington: South Korean battery makers LG Chem and rival SK Innovation Co have agreed to settle a trade secrets dispute that has threatened a key Georgia plant and the electric vehicle plans of Ford Motor Co and Volkswagen AG, three sources briefed on the matter said. The Biden Administration through the US Trade Representative's Office (USTR) faces a Sunday night deadline on whether to take the rare step of reversing a US International Trade Commission (ITC) decision. An announcement of the settlement is expected soon. The ITC in February sided with LG Chem after the company accused SK of misappropriating trade secrets related to EV battery technology and issued a 10-year-import ban, but it allowed SK to import components for batteries for Ford's EV F-150 program for four years, and Volkswagen's North American EVs for two years. Cancellaton of project SK vowed to walk away from its $2.6 billion Georgia battery plant under construction if the ITC decision was not overturned. Ford, VW, LG and SK declined to comment. The office of the USTR did not immediately respond to a request for comment. Volkswagen of America CEO Scott Keogh wrote in a LinkedIn post on Wednesday that if the ITC decision were left in place, it could "reduce U.S. battery capacity and delay the transition to electric vehicles." The administration has been pushing the two companies in recent days to try to reach a settlement, as have VW and Ford, the sources said. Settlement SK in March received proposed terms from LG, including financial reparations to address LG's trade secrets misappropriaton claims, Reuters reported earlier citing a person familiar with the situation. The global auto industry is racing to develop EVs, and Biden has proposed spending $174 billion on boosting EV sales and developing charging infrastructure. LG's battery unit LG Energy Solution is nearing completion of an Ohio cell manufacturing plant with General Motors and is close to announcing plans to build a $2.3 billion second facility in Tennessee, sources told Reuters. LG has said it can handle the battery needs of automakers if SK abandons its Georgia plant. SK has said LG could not handle the VW and Ford contracts, and that Chinese manufacturers could step in to meet demand.
Pakistan hopes to get $1bn debt relief from G-20
Pakistan|Business|: Islamabad: Pakistan is hoping to get around $1 billion relief from G-20, the economic affairs ministry said. It will include $785 million worth of pause on principal loan repayments and the remaining on account of interest repayments. The G-20 finance ministers and central bank governors in a joint communiqué recently announced a final 6-month extension through December 2021 in Debt Service Suspension Initiative (DSSI) to help developing countries deal with the coronavirus pandemic. The debt relief will provide much needed fiscal space to mitigate the socio-economic impact of the COVID-19 pandemic and meet the urgent economic needs of the country, said Federal Minister for Economic Affairs Khusro Bakhtiar. Formal request Pakistani officials are looking for debt suspension of about $900 million to $1 billion from bilateral creditors under DSSI Phase-III and would submit a formal request for relief after discussion within the relevant ministries. Pakistan along with other developing countries had qualified for the G-20 debt relief initiative, announced in April last year to combat the adverse impacts of the pandemic. The global debt payments suspension initiative has provided temporary relief of around $3.5 billion to Pakistan, according to local media reports. On March 30, Pakistan received nearly $500 million from the International Monetary Fund (IMF) after the $6 billion IMF loan programme resumed.
Masdar-led consortium reaches financial close and starts construction on 300 MW solar project in Saudi Arabia
Business|: Abu Dhabi: The consortium led by Masdar and EDF Renewables, both global leaders in renewable energy, and Nesma Company, announced today it has reached financial close on a 300-megawatt (MW) utility-scale photovoltaic (PV) solar power plant in Jeddah and is starting construction. The Renewable Energy Project Development Office (REPDO) of Saudi Arabia's Ministry of Energy awarded the consortium the 300 MW Jeddah project, after it had submitted the most cost-competitive bid of SAR60.9042 (US$16.24) per megawatt hour. The consortium signed a 25-year Power Purchase Agreement (PPA) with Saudi Power Procurement Company (SPPC) this January for the project. Under the terms of the PPA, the consortium will design, finance, build and operate the plant, which will be located in Third Jeddah Industrial City, 50km south-east of Jeddah. The plant will begin operation in 2022. "This project demonstrates Masdar's commitment to Saudi Arabia's Vision 2030 objectives and its climate goals. Through its National Renewable Energy Programme, Saudi Arabia is fast developing into a global renewable energy player, and Masdar will continue to work closely with the Saudi government and our partners here to help the Kingdom achieve its clean energy transition, while reducing environmental impacts in line with the Saudi Green Initiative," said Mohamed Jameel Al Ramahi, Chief Executive Officer, Masdar. The Jeddah solar plant will utilise the latest technology in the PV market, combining bifacial PV modules with mounting structures that utilise single-axis tracking technology to maximise energy generation by following the sun's position throughout the day. State-of-the-art robots will also be used to clean the modules. "We would like to thank the Saudi Arabia's authorities for the official award of the 300 MW-Jeddah project today. We are delighted to pursue our commitment to contribute to the energy transition of the Middle East with this new solar plant project alongside our partners Masdar and Nesma, said Bruno Bensasson, EDF Group Senior Executive Vice-President Renewable Energies.
India has finalised air bubble pact with Sri Lanka Aviation Ministry
Aviation|: New Delhi: India has established a bilateral air bubble arrangement with Sri Lanka for operation of special international passenger flights between the two countries, the Civil Aviation Ministry said on Saturday. With this, India now has such pacts with 28 countries, including Afghanistan, Bahrain, Canada, France, Germany, Iraq, Japan, the Maldives, Nigeria, Qatar, the UAE, the UK and the USA. Under an air bubble pact between two countries, special international passenger flights can be operated by their airlines into each other's territories under restrictive conditions. "India has finalized an air bubble agreement with Sri Lanka, making it the 6th such arrangement in SAARC region and the 28th in total," the Civil Aviation Ministry said on Twitter. "All the eligible passengers will be able to travel between the 2 countries in the near future," it noted. Scheduled international flights have been suspended in India since March 23, 2020 due to the coronavirus pandemic. However, special international passenger flights have been operating under the Vande Bharat Mission since May last year and under bilateral air bubble arrangements since July.
Dubai discusses strategies to make the city a top family destination in the summer
Tourism|: Dubai: Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) hosted a virtual town hall meeting for industry stakeholders. The event provided an overview of the tourism sector and global travel updates and trends, as well as insights into source markets, initiatives, campaigns and events designed to highlight Dubai’s position as the destination of choice for families in the summer. The Summer 2021 Virtual Town Hall, presided by Issam Kazim, CEO of Dubai Corporation for Tourism and Commerce Marketing (Dubai Tourism), is part of the regular top-level industry engagements initiated by Dubai Tourism to ensure the entire industry is seamlessly aligned with the marketing communications and campaigns dedicated to tourism growth. The meeting, attended by over 600 key executives from the hospitality, travel and attractions sectors, reviewed the progress made by the industry since the reopening of the city to domestic tourism in May 2020 and international tourists in July 2020. It also reviewed the strong measures in place to safeguard the health and well-being of residents and visitors. During the meeting, it was noted that the wide ranging steps taken by Dubai to successfully manage the pandemic resulted in the World Travel and Tourism Council (WTTC) awarding the emirate the ‘Safe Travels’ stamp. Dubai also launched its own compliance programme, the DUBAI ASSURED stamp to certify and recognise establishments across the tourism ecosystem that have complied with all safety protocols. An ongoing countrywide vaccination campaign has also placed the UAE among the top five nations globally in terms of overall vaccine rollout. Summer deals The Town Hall provided an insight into Dubai Tourism’s direction and plans for Summer 2021, to enable stakeholders to leverage and benefit from the various marketing initiatives and ensure the whole city is aligned and able to collectively showcase Dubai as a multi-faceted must-visit family destination. The new global marketing campaign, which will be launched in May, is aimed at promoting Dubai as an attractive summer destination that offers families a diversity of offerings and experiences to choose from. The campaign will join the series of activations launched by Dubai Tourism across broadcast and digital platforms in key markets since the start of the pandemic to keep Dubai top of mind among global travellers when they plan their next vacation and position it as one of the safest cities in the world to visit. Participants at the Town Hall were also provided an outline of Dubai’s summer calendar of events including the much-awaited Dubai Summer Surprises, the region’s biggest summer festival and the Eid in Dubai – Eid Al Adha celebrations. Value-for money Innovative promotions, incentives and value-for-money deals that await families during the summer season in Dubai include discounted rates on hotel stays or airline tickets, vouchers or bonus points to encourage repeat visitation, flexible and unique offers and inclusions within the summer period for family conveniences and added value. Dubai offers more value than any comparable destination with its world class infrastructure, the vast scope of its events and entertainment centres and hassle free entry process, making it the most preferred city for families. In fact, children below the age of 18 are allowed visa free access to the city, when accompanied by their parents. It was pointed out that the continued collaboration between Dubai Tourism and its stakeholders and partners has greatly enhanced the quality and diversity of the destination’s offerings and events, paving the way for Dubai to offer an unbeatable summer holiday package. While the pace of the global industry revival in 2021 will be highly dependent on the evolving COVID-19 situation, and the easing of travel restrictions in several countries, it was emphasised that Dubai as a destination will be guided by its diversified market strategy with the industry’s ability to quickly react to changes market by market, helping Dubai to maintain its position at the forefront of the world’s leading travel destinations.
UAE President issues Federal Decree restructuring Central Bank of UAE's Board
Banking|: Abu Dhabi: President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued a Federal Decree restructuring the Board of Directors of the Central Bank of the UAE (CBUAE) under the chairmanship of Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs. Pursuant to the Decree, the Board of Directors of the CBUAE shall be reconstituted by the following members; Abdulrahman Saleh Al Saleh as the Vice Chairman; Jassem Mohammad Buatabah Al Zaabi as Vice Chairman; and Khalid Mohammed Salem Balama as Governor of CBUAE. The Board of Directors includes Younis Haji Al Khoori; Sami Dhaen Al Qamzi, and Dr. Ali Mohammed Bakheet Al Rumaithi. Established under the Federal Law No. 10 of 1980 as a public institution, the CBUAE promotes financial and monetary stability, efficiency and resilience in the financial system, and the protection of consumers through effective supervision that supports economic growth that contribute to supporting sustainable economic system.
Yemen: Riyan International Airport reopens after 5 years
Yemen|Aviation|: Cairo: Yemeni authorities have reopened the country’s third biggest airport after a halt of nearly five years. A domestic flight from the state carrier Yemen Airways (Yemenia) Friday marked the reopening of the Riyan International Airport in the governorate of Hadhramaut. Dima Abdul Qawi, the air transport official at the Yemeni Transport Ministry, said that the airport reopening and the airline’s launch of domestic flights at the facility marked an important step in developing the country’s transport sector including the upgrade of the Aden International Airport in the provisional Yemeni capital under an agreement between the Yemeni Transport Minister and the Saudi Development and Reconstruction Programme for Yemen. Devastated by war Marking the occasion, Governor of Hadhramaut Faraj Salamin expressed appreciation to the UAE and Saudi Arabia for support to the reopening of the Riyan airport. Yemen has been devastated by a war that erupted after the Iran-aligned Al Houthi militia toppled the legitimate government and seized swathes of the impoverished country including Sana’a in late 2014.
India needs to grow faster to make up for contraction during COVID-19 pandemic: IMF
Business|: Washington: India, which is projected to grow at an impressive rate of 12.5 per cent this year, needs to grow at a much faster pace to make up for the unprecedented contraction of eight per cent that it clocked during the COVID-19 pandemic in 2020, according to a senior IMF official. The International Monetary Fund Deputy Chief Economist, Petya Koeva Brooks, in an interview to PTI on Friday also made a strong case for an additional economic stimulus to address the impact of the pandemic on the country's economy. "When it comes to India there was a major collapse of output last fiscal year and the number as you mentioned is eight. "So, we are very glad to see the strong rebound this year with projected growth of 12.5 for fiscal year 21-22 and we are seeing also high frequency indicators including PMI (Purchasing Managers' Index), and trade and more mobility indicators which give us a sense that there is continued recovery in the first quarter of this year," she said. That said, there are some recent emergencies of the new variants in the localised lockdowns that are seen as one of the threats to this recovery, Brooks noted. “On the recovery itself, when it comes to level in terms of the level of output, we are expecting that level to return to the pre-crisis one from 2019 to this fiscal year. That is what we have in our projections. Output gap "However, if you look at a concept of scarring, which just compares what the level of output would have been hadn't there not been a crisis in 2024, which is the measure which we are using. Then at and compare where our current growth trajectory is for India that gap is much larger,” Brooks said. The gap, she said, which is eight per cent of GDP is significantly larger than what it is for the world as a whole. "For the world as a whole it’s about three (per cent), which is another way of saying that even though in the near term we have this real rebound, there's still scope in the coming years to see higher growth which would reduce and hopefully, eliminate that scarring, which we are currently expecting,” the top IMF official said in response to a question. "If we were to just think about the level of output that it was prior to being a pandemic then that catch happens this year, which is not surprising also given the very high level of the underlying high level of growth which India has. But again, if we compare it to the path of what it would have been without the pandemic then we are getting too many larger gaps there,” she said. Noting that the Indian government took several steps to address the COVID-19 crisis, Brooks said, “We have seen policy responses, which have been coordinated and in several areas. We have seen that the fiscal support, the monetary easing as well as the liquidity and regulatory measures that were taken." What makes sense is to maintain the focus on having that coordinated policy response because this is what's going to prevent the long-term damage to the economy. Providing that support to small and medium-sized firms as well as vulnerable houses would be particularly important, she said. Case for more stimulus Brooks said the IMF very much welcomes the measures that were announced by India during its budget. It is particularly supportive of maintaining the accommodative fiscal stance and also emphasising expenditures on health and infrastructure. “We estimate that the positive impact of the measures for this fiscal year is going to be of the order of point six percentage points on growth,” she said, adding that several measures announced in the budget were in line of the IMF’s advice. Prominent among them are that there would not be a withdrawal of fiscal stimulus at the general government level and also that state governments would be given the temporary flexibility to go over their budget ceilings. And last, but not least, the fact that some of the other budget items on food subsidies were actually brought into the budget. Overall, the IMF is very supportive of this focus on growth. At the same time, Brooks made a strong case for an additional economic stimulus. “We do think that additional fiscal stimulus would be helpful. Focusing that stimulus again on the most vulnerable is something that makes sense to us. We note that some of the income support schemes were not extended beyond November 2020 and such,” she said. Taking measures in that area would be particularly helpful as well as making sure that there's priority spending on education, the economist noted. “Last, but not the least, also ensuring that there is a very concrete medium-term fiscal framework is an area where we can see some room for more work in that area,” she said. “Now when it comes to monetary policy, we think that given the underlying slack in the economy, maintaining the accommodative monetary policy stance makes sense. This is what we understand is being planned at the moment. “This has been our long-standing recommendation that we see scope for additional policy measures to address the weaknesses in the financial sector, in the banking part in the non-bank part of the financial sector. We think that this is going to be particularly important as we come out of the crisis to have that efficient credit intermediation, which is going to allow the economy to grow,” the IMF official said. Responding to a question on the stimulus package, Brooks underscored the need to essentially have targeted support for households and for the firms that have been most affected is the most efficient and sensible way to provide that support.
Dubai’s non-oil external trade reaches Dh1.182 trillion in 2020
Business|: Dubai: Dubai’s non-oil foreign trade strongly rebounded from the challenges posed by the global economic repercussions of COVID-19 and the suspension of business activity by countries across the world in the first half of last year to record high growth in 2020. Dubai’s foreign trade in 2020 touched Dh1.182 trillion. Total trade volume in 2020 reached 100 million tonnes, driven by a 6 per cent year-on-year volume growth in the second half of the year. Overall value of exports in 2020 grew 8 per cent to Dh167 billion while imports accounted for Dh686 billion and re-exports totalled Dh329 billion. “The exceptional growth performance of Dubai’s external trade sector reflects the emirate’s impressive resilience and its ability to recover and grow amidst international crises. Dubai has set an example for the world in dealing with both the economic and health repercussions of the pandemic. We were able to quickly renew our momentum of growth and reestablish our global leadership in various sectors,” said Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of The Executive Council of Dubai. Five-year plan “The external trade sector’s distinctive growth in 2020 will boost the implementation of Dubai’s five-year plan to expand its external trade to Dh2 trillion, consolidating the emirate’s position as a leading regional and global trade and investment hib. Dubai’s new international trade map will see an expansion in air and sea navigation routes, with 200 new cities set to be added to the emirate’s existing network of 400 cities,” said Sheikh Hamdan. Impressive growth Dubai’s direct trade in 2020 totalled Dh711 billion, while trade through free zones reached Dh464 billion and customs warehouse trade weighed in at Dh7 billion. Airborne trade accounted for Dh559 billion. Sea trade reached Dh421 billion while land trade touched Dh203 billion. Dubai’s external trade sector impressively overcame the impact of a global trade downturn in 2020. With the gradual opening of borders, Dubai’s trade volumes started recovering and growing quickly in the second half of 2020. In the third quarter, Dubai’s trade surged 34 per cent compared to Q2, and in Q4, trade grew by 7 per cent to Dh326 billion compared to Q3. Trade volumes in the second half of 2020 expanded by 6 per cent compared to the corresponding period in 2019. Overall, 100 million tonnes of goods were traded in 2020, which reflects the rapid recovery of this sector. This rebound is now spurring greater growth in 2021. Dubai's trading partners Image Credit: Dubai Media Office The resumption of trade with Qatar, the start of trade engagement with Israel, the positive spin-offs from hosting EXPO 2020 and the launch of the Dubai 2040 Urban Master Plan will all contribute to accelerating the emirate’s growth momentum. “To develop the external trade sector and play a greater role in maintaining Dubai’s leading position in global trade, the Dubai Chamber has been restructured by creating three new chambers of commerce. The new chambers will enhance support for the trade sector by creating new solutions for the needs of investors and companies as part of a strategy to grow the emirate’s global trade in line with the vision of Dubai’s leadership for the next 50 years,” said Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation. Dubai Customs has launched its five-year strategy for the period 2021-2026, which outlines nine goals and four main objectives in developing customs operations. Dubai Customs received the Agile Organization Certification from the American Business Agility Institute (BAI), thereby becoming the first agile government organisation in the world. Key trading partners China maintained its position as Dubai’s largest trading partner in 2020 with Dh142 billion worth of trade. India came in second with Dh89 billion, followed by the USA in third place with Dh61 billion. Saudi Arabia continued to be Dubai’s largest Gulf and Arab trade partner and its fourth largest global trade partner with Dh54 billion worth of trade, followed by Iraq in the fifth place with Dh41 billion. Gold topped the list of commodities in Dubai's 2020 external trade at Dh213 billion, followed by telecoms at Dh153 billion. Diamonds came third with Dh64 billion, followed by petroleum oils with Dh57 billion and jewellery with Dh47 billion.
UAE records world’s 2nd highest hotel occupancy rate in 2020
Tourism|: Abu Dhabi: The UAE tourism sector performed outstandingly in 2020 despite the impact of the COVID-19 pandemic, revealed by the Ministry of Economy, noting that the sector was among the least affected and fastest to recover around the world. The UAE recorded a 54.7 per cent hotel occupancy rate in 2020 – the second highest in the world behind only China – while the global rate dropped to 37 per cent under the weight of the pandemic, and hotels in the Middle East region recorded just 43 per cent occupancy. This is in parallel to the significant decline in tourist activity, which fell by 74 per cent around the world and 76 per cent in the region. Hospitality establishments welcomed 14.8 million guests in 2020, who spent 54.2 million nights in 1,089 different establishments that provided approximately 180,000 rooms, according to official statistics issued by the World Tourism Organisation and the Emirates Tourism Council – established by the Council of Ministers in January 2021 and chaired by Dr Ahmad Belhoul Al Falasi, Minister of State for Entrepreneurship and Small and Medium Enterprises. The average stay was 3.7 nights per guest, with returns of Dh318.5 per room. Meanwhile, domestic tourism contributed Dh41 billion to the national economy last year – a figure that is expected to double in the upcoming few years. “The global tourism industry bore the brunt of the COVID-19 pandemic,” said Al Falasi. “Guided by the directives of its wise leadership, the UAE was able to quickly contain the outbreak’s impact on the local tourism sector, relying on innovation and agility in its efforts to provide incentives, launch initiatives, and create opportunities to accelerate the recovery of the tourism sector and boost its contribution to GDP.” More initiatives Al Falasi asserted that the next stage will include further initiatives aiming to maintain the sector’s outstanding performance and boost chances for recovery: “The tourism sector’s accomplishments over the past year are a result of the notable efforts made by all relevant parties to promote the sector at the federal and local levels. This is in addition to the proactive measures the UAE implemented to deal with the outbreak and minimise its impact on public health,” he said. According to global statistics on tourism, China ranked first in the world in occupancy rates at hotel establishments with a rate of 58 per cent, followed by the UAE in second place with 54.7 per cent, and the United States in third with 37 per cent. The top three were followed by Mexico (32 per cent), Turkey (30 per cent), Thailand (27 per cent), the United Kingdom (26 per cent), Spain (23 per cent), Italy (16 per cent), and Germany (12 per cent). Statistics also revealed that the UAE suffered the least in terms of tourist traffic in 2020, where activity fell by just 45.2 per cent – the lowest drop in the world.
Norway's $1.3 trillion sovereign wealth fund says climate to dominate next decades
Banking|: Oslo: Norway's government, which oversees the world's biggest sovereign-wealth fund, expects climate and social issues to dominate investment decisions in the coming decades. "There is a growing expectation, not only in Norway, but internationally that there will be a high level of ethical awareness," Finance Minister Jan Tore Sanner said in an interview Friday. "We must have the highest possible return on our money, but we also want to know that it is invested in a responsible way." He spoke shortly after unveiling a new set of guidelines that could force the fund to cut about 2,200, or roughly a quarter, of the companies in its portfolio. Norway's government also wants the fund to stop adding emerging markets. ESG going mainstream It's the latest sign that institutional investors can't afford to ignore environmental, social and governance goals. The agenda is going mainstream as investors and politicians realize they're running out of time to prevent a dangerous rise in temperatures that will make large parts of the planet uninhabitable for future generations. The goal is "to increase the competence related to climate risk, investment opportunities, the consequences associated with the transition to the low-emission society," Sanner said. "This is because this will be perhaps the most important framework condition for large investors in the next 10-20 years." Western Europe's biggest oil nation is now trying to use its giant wealth fund to steer the planet toward a greener future. Its chief executive, Nicolai Tangen, has said he will use his clout to try to force companies to act more responsibly. Under Sanner's proposal, which still needs parliamentary approval, about 25-30% of portfolio companies will be cut. Though that sounds like a lot, it only represents about 2% of the fund's total market value. Sanner says he wants to avoid investments in new emerging markets because they tend to have "weaker institutions, weaker protection of minority shareholders, less openness." The changes will make it easier to manage the vast portfolio, and reduce complexity and risk, Sanner said. The fund, which returned 10.9%, or $123 billion, on its total investments last year, has followed strict ethical guidelines, including bans on certain weapons, tobacco and most exposure to coal, since 2004. Review of standards The Norwegian government decided in 2019 to review those standards, which include human rights conduct and climate change. Under the fund's mandate, the central bank needs to approve all markets in which it's invested, including those in the benchmark index set by the finance ministry. The wealth fund's ethics council said last month it would start an investigation into questionable labor practices, covering a broad geographical area stretching from the Gulf states to Southeast Asia. The investigation, to be carried out by VeritA(c), may lead to recommendations for the fund to pull investments from companies. In February, the fund said it wants the companies in which it invests to start living up to explicit gender diversity goals. Boards on which women make up less than 30% of the total should consider setting targets for gender diversity, according to a position paper published Feb. 15. The idea is to try to end the "persistent underrepresentation" of women on corporate boards. "It's a further development of all strategy for the fund, where it's fundamental that there's the highest possible return at an acceptable risk, and that there should be a high ethical awareness and openness about the management," Sanner said.
Egyptian banks face further pressure from COVID-19 fallout
Banking|: Dubai: Egyptian banks face asset-quality deterioration and continued pressure on profitability through 2021 amid the economic fallout of the pandemic according to Fitch Ratings. The economic impact of the pandemic is weakening Egypt’s growth momentum. Fitch Ratings expects real GDP growth to slow to 3 per cent in the fiscal year to end-June 2021 from 5.6 per cent in 2019 given the negative impact on key sectors, including tourism, trade, transportation and the Suez Canal, which represent around 23 per cent of GDP. Rising loan impairments amid the difficult economic environment and low interest rates have resulted in declining profitability of banks. “We expect continued pressure on operating profitability due to lower interest rates and higher loan impairment charges as borrower support measures end. We do not expect this to lead to capital erosion, but capitalisation remains a credit weakness given banks’ high exposure to the sovereign and large individual obligors,” said Zeinab Abdalla, Director at Fitch in a note/ Regulatory capital ratios are inflated by the zero risk-weighting on local-currency sovereign debt. Asset quality Fitch said the Central Bank of Egypt’s (CBE) forbearance (loan deferrals and restructurings) measures are masking the underlying asset quality problems. Support measures included six months’ deferrals of interest and principal payments for borrowers between March and September 2020. Unlike other jurisdictions, the CBE’s credit moratorium was extended to all obligors unless they opted out of the scheme. Significant portions (up to 80 per cent) of the loan books of some banks were under the credit moratorium but some corporates have started opting out due to high interest expense accruals. The Central Bank of Egypt’s (CBE) forbearance (loan deferrals and restructurings) measures are masking the underlying asset quality problems. Image Credit: Fitch ratings The impact on banks’ asset-quality metrics will not be fully visible before mid-year as some exposures were restructured beyond the expiry of the CBE’s credit extension in September due to borrowers’ still constrained cash-flows and debt service capacity. The IMF Article IV report (February 2021) on Egypt quotes the CBE as saying that loan restructuring after the end of the six-month moratorium has been limited. However, Fitch believes that demand for restructuring could increase, especially from smaller corporates given challenging business conditions. The rating agency believes that the CBE’s support measures could understate the real level of problem (particularly stage 3) loans in the sector. Inflated credit growth Credit growth reported in Egypt’s banking sector hugely inflated because of the credit deferrals. The CBE expanded its EGP100 billion lending programme at subsidised rates of 5 per cent to 8 per cent to corporates in the manufacturing, agriculture and tourism sectors. Combined with the six months’ deferrals of loan repayments, this contributed to the 26 per cent loan growth in during the first nine months of 2020, up from only 4 per cent in 2019. The recently announced CBE circular requesting banks to increase their SME lending to 25 per cent of their loan portfolios from 20 per cent may support credit growth but could compromise banks’ underwriting standards and increase their exposure to volatile sectors in a weaker operating environment. “We expect loan growth in the high single digits in 2021, supported by a lower interest rate environment, but credit demand is likely to be driven by short-term working capital facilities. Capex financing is expected to pick up in 2022 on the back of recovering economic growth, potentially higher foreign investment and reduced uncertainty regarding the pandemic,” said Abdalla. Vulnerable forex liquidity Although foreign currency liquidity has been improving, Fitch expects vulnerabilities to persist A significant part of foreign investments in Egyptian sovereign local currency T-bills and bonds (portfolio inflow) is done through the banks, notably public-sector banks. Typically, foreign investors would provide foreign currency to banks and banks would in turn buy government bonds in local currency. Banks tend to park the largest part of this foreign currency inflow in (liquid) offshore inter-bank placements but some would also use a small portion to grant (less liquid) foreign currency domestic lending. This inflates the banks’ foreign liquidity ratios as the vast majority of the FC inflow is invested in liquid assets. When foreign investors exit (i.e. portfolio outflows), the positive impact on the banks’ FC liquidity ratios can reverse sharply and quickly. The banking sector’s foreign currency liquidity came under pressure in March and April 2020 due to $17 billion portfolio outflows from Egypt as foreign portfolio investors withdrew from local currency government debt at the start of the pandemic. These withdrawals resulted in Egypt’s foreign currency reserves dropping by $9.5 billion to USD36 billion between February and end-May and in the depletion of banks’ net foreign assets. Further consolidation Fitch expects Egypt’s banking sector will witness further consolidation. The remaining domestic banks (excluding subsidiaries of international banks) have very fragmented market shares and weak franchises. “We expect to see further mergers and acquisitions (M&A) in the banking sector. There is a strong appetite from Gulf Cooperation Council (GCC) banks to expand in Egypt given the sector’s attractive profitability even for those with small market shares,” said Abdalla.