GulfNews Business

UK Budget: Sunak extends COVID rescue plan but companies to pay more tax from 2023

Business|: London: UK finance minister Rishi Sunak announced a costly extension of his emergency aid programmes to see Britain’s economy through its current coronavirus lockdown, but announced a tax hike for many businesses as he began to focus on fixing the public finances. Delivering an annual budget speech on Wednesday, Sunak said the economy will regain its pre-pandemic size in the middle of 2022, six months earlier than previously forecast, helped by Europe’s fastest COVID-19 vaccination programme. But it will remain 3 per cent smaller in five years’ time than it would have been without the damage wrought by the coronavirus crisis and extra support is needed now as the country remains under coronavirus restrictions, he said. New COVID support Among the new support measures was a five-month extension of his huge jobs rescue plan and more help for the self-employed, the continuation of an emergency increase in welfare payments, and an extension of a VAT cut for the hospitality sector. A tax cut for home-buyers was also extended until the end of June. “First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis,” Sunak told parliament. “Second, once we are on the way to recovery, we will need to begin fixing the public finances “ and I want to be honest today about our plans to do that. And, third, in today’s Budget we begin the work of building our future economy.” Announcing forecasts by the Office for Budgetary Responsibility (OBR), Sunak said the economy was likely to grow by 4 per cent in 2021, slower than a forecast of 5.5 per cent made in November, reflecting the current lockdown which began in January. Looking further ahead, the OBR forecast gross domestic product would grow 7.3 per cent, 1.7 per cent and 1.6 per cent in 2022, 2023 and 2024 respectively. In November, the OBR had forecast growth in those years of 6.6 per cent, 2.3 per cent and 1.7 per cent. Whatever it takes Sunak promised to do “whatever it takes” to steer the economy through what he hopes will be the final months of pandemic restrictions. He has already racked up Britain’s highest borrowing since World War Two, which hit an estimated 17 per cent of GDP in the 2020/21 financial year that is about to end and should fall to a still historically high 10.3 per cent in 2021/22. In a first move to raise taxes, Sunak announced he would raise corporation tax to 25 per cent from 19 per cent from 2023, by which time the economy should be past the pandemic crisis. “Even after this change the UK will still have the lowest corporation tax rate in the G7 “ lower than the United States, Canada, Italy, Japan, Germany and France,” he said. Businesses with profits of 50,000 pounds or less would pay a new Small Profits Rate, maintained at the current rate of 19 per cent. Sunak also said he would freeze the amount of money that people can earn tax-free and the threshold for the higher rate of income tax until 2026.

GulfNews Business

Abu Dhabi fund, CVC, among suitors for $1b NMC hospital business

Business|: Dubai: Abu Dhabi state-owned holding company ADQ and private equity firm CVC Capital Partners are among the suitors that have shown interest in NMC Health's core hospital business, sources told Reuters. Hospital operators in the region have reported higher profits for last year as the COVID-19 pandemic led to higher in-patient occupancy. NMC has hired advisers for the sale of NMC's healthcare business in the United Arab Emirates (UAE) and Oman, which sources said could generate around $1 billion. ADQ is serious about the transaction, which would make sense for the nascent wealth fund, whose portfolio includes Abu Dhabi Health Services Co (Seha), two sources said. They declined to be named as the matter is not public. Saudi Arabian healthcare operator Sulaiman Al Habib Medical Group (HMG) has been invited to the process, said one of the two sources and a third source. Hospital chain operator Mediclinic is also in the running, one of the sources said. An NMC spokesman said: "A process to explore the possibilities of a sale was launched last month and, while it is understandably attracting considerable interest, it is at an early stage". ADQ and HMG were unavailable to comment when contacted by Reuters. CVC declined to comment. Mediclinic said it cannot comment on market speculation. The deal is active and investor talks with management have started, but the candidates have yet to submit non-binding bids and there is no guarantee it will lead to a sale, the sources said. NMC, founded in the 1970s, became the largest private healthcare provider in the UAE, but ran into trouble. Last year, the disclosure of more than $4 billion in hidden debt left some UAE and overseas lenders with heavy losses that prompted legal battles to try to recover money owed. But NMC said in February that gross revenues from its UAE and Oman business was $1.12 billion, 11% ahead of the business plan, while EBITDA of $87.6 million was also significantly ahead of its plan. Banking sources said the transaction was a price discovery exercise to determine whether NMC's business can get the value its creditors seek, or whether the business should keep the assets, complete the restructuring, and sell when they can achieve the value they want.

GulfNews Business

ADX introduces trade at Last session for trading securities at their closing price

Markets|: Abu Dhabi: The Abu Dhabi Securities Exchange (ADX) will introduce on March 4, 2021 a “Trade at Last” session, enabling investors to trade ADX-listed securities at their closing price during a 5-minute period at the end of the trading day. The initiative is part of the exchange’s ‘ADX One’ strategy to widen the range of its services and products and increase market liquidity. The mechanism, which is active between 1.55pm and 2pm, allows market participants to adjust any imbalances they may have following the closing auction. Market makers and liquidity providers may use “Trade at Last” to net their positions and fund managers will benefit from being able to trade at prices used for their end-of-day published NAV (net asset value). ADX Image Credit: Supplied “ADX’s role is to ensure a seamless connection between investors and issuers in a vibrant marketplace. We are rolling out a series of initiatives to enhance liquidity and make trading easy and convenient, in line with global best practice. The closing auction is a significant liquidity event in the trading cycle and Trade at Last will provide market participants with greater flexibility to achieve their tactical aims,” said Abdullah Salem Al Neaimi, Acting Deputy Chief Executive of Abu Dhabi Securities Exchange. In the next three years, ADX plans to grow market capitalisation to more than Dh1.5 billion through its new ‘ADX One’ strategy, which includes introducing new products and services and accelerating digital transformation to enhance the customer journey.