Cheques were used for transactions worth Dh1.1 trillion, a decline of 4 per cent compared with a year earlier.
Cheques were used for transactions worth Dh1.1 trillion, a decline of 4 per cent compared with a year earlier.

Cheque defaults in UAE fall as economy brightens



The number of cheques returned as invalid fell last year, as the economy recovered and UAE residents found it easier to pay down debts.

Payments worth Dh46.8 billion (US$12bn) were returned as invalid last year, representing a decline of 15.3 per cent compared with a year earlier, according to data published yesterday by the Central Bank.

A total of 1.4 million cheques failed during 2012, a fall of 8.5 per cent compared with the previous year. The figure includes bounced cheques as well as torn, undated or illegible ones.

Cheques were used for transactions worth Dh1.1 trillion, a decline of 4 per cent compared with a year earlier.

Bankers and economists said the declining rate of cheque default pointed to a more sophisticated market than the one that existed before the financial crisis, as well as improved macroeconomic conditions.

"People, banks and regulatory authorities are still more circumspect about the decisions they make and what they do now than they did prior to 2008," said Tom Smith, the head of retail banking at United Arab Bank. "The trick is to make sure that we keep that."

A "solid and consistent" job market was also helping consumer finances to recover, said Liz Martins, an economist at HSBC Middle East.

At the same time, the financial sector was better positioned to increase lending to consumers, having rebuilt balance sheets throughout the past year.

"Banks have been a bit risk-averse for the past four years, but 2013 is the year when they get back to lending," she said.

Failed cheques represented one in every 20 presented for payment, the data shows, although the proportion of money lost fell to four fils out of every Dh1 paid via cheque.

The Central Bank's figures do not distinguish between cheques that fail because of rips, tears or missing information, and those that fail because they bounce. Cheques must be used by law to back certain transactions, such as mortgage-interest payments.

Bouncing a cheque is a criminal offence in the Emirates, although UAE nationals were immunised from prosecution for security cheques last October as the result of a presidential decree. More than 1,000 Emiratis have since been freed from prison as a result.

Tonight's Chat on The National

Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.

Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster with a decades-long career in TV. He has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others. Karam is also the founder of Takreem.

Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.

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The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
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%3Cp%3E%3Cstrong%3EDirector%3C%2Fstrong%3E%3A%20Quentin%20Tarantino%3Cbr%3E%3Cstrong%3EStars%3C%2Fstrong%3E%3A%20Uma%20Thurman%2C%20David%20Carradine%20and%20Michael%20Madsen%3Cbr%3E%3Cstrong%3ERating%3C%2Fstrong%3E%3A%204.5%2F5%3C%2Fp%3E%0A
Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
Brief scores:

Toss: Northern Warriors, elected to field first

Bengal Tigers 130-1 (10 ov)

Roy 60 not out, Rutherford 47 not out

Northern Warriors 94-7 (10 ov)

Simmons 44; Yamin 4-4

Coffee: black death or elixir of life?

It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?

Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.

The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.

The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.

Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver. 

The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.

But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.

Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.

It also raises blood pressure, which is largely problematic for people with existing conditions.

So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.

Rory Reynolds

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

A State of Passion

Directors: Carol Mansour and Muna Khalidi

Stars: Dr Ghassan Abu-Sittah

Rating: 4/5

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
LA LIGA FIXTURES

Thursday (All UAE kick-off times)

Sevilla v Real Betis (midnight)

Friday

Granada v Real Betis (9.30pm)

Valencia v Levante (midnight)

Saturday

Espanyol v Alaves (4pm)

Celta Vigo v Villarreal (7pm)

Leganes v Real Valladolid (9.30pm)

Mallorca v Barcelona (midnight)

Sunday

Atletic Bilbao v Atletico Madrid (4pm)

Real Madrid v Eibar (9.30pm)

Real Sociedad v Osasuna (midnight)

Sheer grandeur

The Owo building is 14 storeys high, seven of which are below ground, with the 30,000 square feet of amenities located subterranean, including a 16-seat private cinema, seven lounges, a gym, games room, treatment suites and bicycle storage.

A clear distinction between the residences and the Raffles hotel with the amenities operated separately.

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UAE currency: the story behind the money in your pockets
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