American Express Middle East saw its corporate and retail spending surge last year as the worst of the global financial crisis subsided. Mark Lennihan / AP Photo
American Express Middle East saw its corporate and retail spending surge last year as the worst of the global financial crisis subsided. Mark Lennihan / AP Photo

Big spenders flash their cards again



The global financial crisis forced corporations to cut spending on items including business-class flights and corporate entertaining. But signs are emerging that regional companies and their employees are flashing their cards again.

American Express Middle East recorded a surge in corporate and retail spending last year across the region, said William Keliehor, the regional chief executive.

Mr Keliehor said new card issuances had increased by 16 per cent and customer spending had jumped 13 per cent.

Meanwhile, corporate spending had soared by 30 per cent since 2009. The return of business travel, which had declined sharply during the global financial crisis, was a major component of the rebound, Mr Keliehor said.

He added that the value of some individual purchases was lower during the period, however, suggesting a new corporate frugality forged in the financial crisis could be the new norm.

"Instead of taking a Mercedes, they'd take a Lexus - a cheaper ride. Instead of taking a NetJet, they'd take business-class seats," Mr Keliehor said.

New forms of purchases had also opened up to allow customers to use American Express cards for bill payments, including Salik road tolls and utilities payments to the Dubai Electricity and Water Authority, boosting the overall revenue.

Mr Keliehor added that American Express was also pinning its hopes on a revival of the high-net-worth market and the so-called mass affluent market, which includes customers who earn more than US$50,000 (Dh183,650) a year.

"Over the next three years, we'll see more people coming into the American Express target market, from managers up to chairmen," he said.

His optimism contrasts with recent surveys of wealth in the region.

The Capgemini/Merrill Lynch World Wealth Report 2010 found that the UAE had seen a dramatic decline in numbers of super-rich residents during the global financial crisis. "The UAE lost around 19 per cent of its [high-net-worth individual] population in 2009, mainly due to the crisis in Dubai and the significant fall - 48 per cent - in real estate prices," the report said.

The wider region saw wealth increase by 5.1 per cent. However, Mr Keliehor said that Dubai had nevertheless been able to see a significant increase in consumer spending. "The UAE continues to be one of the top spending markets globally," he said.

However, Dr Giyas Gokkent, the chief economist at National Bank of Abu Dhabi, said that such optimism did not necessarily reflect an economy that was bouncing back after the downturn, but rather a change in the services that American Express was able to provide.

"What's happened is probably that type of services which are being used are creating a larger number in terms of total value outstanding for Amex cards.

"That need not necessarily reflect on to the rest of the economy," he said, adding that such high levels of growth might be difficult to sustain over time once governments have overhauled their systems.

However, Mr Keliehor said that American Express had seen an opportunity in the launch of credit bureaus around the Gulf, such as the UAE's Federal credit bureau, which was approved late last year.

"What that does for us as a lender is to better enable us to assess the companies' wherewithal to pay."

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Manchester City 4 (Gundogan 8' (P), Bernardo Silva 19', Jesus 72', 75')

Fulham 0

Red cards: Tim Ream (Fulham)

Man of the Match: Gabriel Jesus (Manchester City)

My Cat Yugoslavia by Pajtim Statovci
Pushkin Press

UAE squad

Rohan Mustafa (captain), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan

Ain Dubai in numbers

126: The length in metres of the legs supporting the structure

1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch

16 A380 Airbuses: The equivalent weight of the wheel rim.

9,000 tonnes: The amount of steel used to construct the project.

5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place

192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.

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FFP EXPLAINED

What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.

What the rules dictate? 
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.

What are the penalties? 
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.

Suggested picnic spots

Abu Dhabi
Umm Al Emarat Park
Yas Gateway Park
Delma Park
Al Bateen beach
Saadiyaat beach
The Corniche
Zayed Sports City
 
Dubai
Kite Beach
Zabeel Park
Al Nahda Pond Park
Mushrif Park
Safa Park
Al Mamzar Beach Park
Al Qudrah Lakes 

Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

Where to buy art books in the UAE

There are a number of speciality art bookshops in the UAE.

In Dubai, The Lighthouse at Dubai Design District has a wonderfully curated selection of art and design books. Alserkal Avenue runs a pop-up shop at their A4 space, and host the art-book fair Fully Booked during Art Week in March. The Third Line, also in Alserkal Avenue, has a strong book-publishing arm and sells copies at its gallery. Kinokuniya, at Dubai Mall, has some good offerings within its broad selection, and you never know what you will find at the House of Prose in Jumeirah. Finally, all of Gulf Photo Plus’s photo books are available for sale at their show. 

In Abu Dhabi, Louvre Abu Dhabi has a beautiful selection of catalogues and art books, and Magrudy’s – across the Emirates, but particularly at their NYU Abu Dhabi site – has a great selection in art, fiction and cultural theory.

In Sharjah, the Sharjah Art Museum sells catalogues and art books at its museum shop, and the Sharjah Art Foundation has a bookshop that offers reads on art, theory and cultural history.

Cryopreservation: A timeline
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