A growing range of economic indicators point to a strengthening recovery in Dubai.
The number of new trade licences issued jumped in the first quarter over the same period last year. Business confidence is picking up. And one free zone attracted companies at the rate of five a day.
"You can certainly feel that in the first quarter of 2012 there is an increase in economic activity," said Sean Evers, the founder of Gulf Intelligence in Dubai. "Dubai is experiencing an economic recovery it hasn't seen in the last three to four years."
The number of new trade licences the Dubai Department of Economic Development (DED) issued in the first quarter increased by 27 per cent over the same period last year.
A DED survey showed the composite Business Confidence Index for Dubai was at 120.5 points for the first quarter this year. The index crossing 100 points is a sign of investor confidence, according to the Dubai DED. The manufacturing sector is particularly upbeat about sales revenues in the second quarter, followed by services and trading sectors.
And the Dubai Multi Commodities Centre attracted 612 companies to Jumeirah Lakes Towers free zone between January and last month, including 100 companies from India alone.
"The DED indicators are quite new but they back up quantitively what we are seeing," said the HSBC economist Liz Martins.
Anecdotal indicators such as an increase in traffic on Sheikh Zayed Road, or a rise in rents in some parts of Dubai, also indicate a resurgent economy, she said.
Dubai has also benefited from its haven status compared with more volatile countries of the region, and in particular those involved in the upheaval of the Arab Spring.
The number of visitors to Dubai increased by 10 per cent last year over the previous year partly because of unrest in other Middle East countries, according to HSBC's report on Dubai's economic outlook released this month.
The DED's report on the rise in new trade licences shows "the growing investor interest in engaging in diverse business activities in Dubai," said Mohammed Shael Al Saadi, the chief executive of business registration and licensing at Dubai DED. Commercial trading licences comprised the majority of the new licences issued, followed by professional, industrial and tourism licences. General trade remains the busiest among 10 licensed commercial activities.
This week, the Abu Dhabi Government is expected to release the figures on new trade licences issued in the emirate for the first quarter of this year.
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Five expert hiking tips
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.”
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6.30pm: Mazrat Al Ruwayah Group Two (PA) US$55,000 (Dirt) 1,600m
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How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
The biog
Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.
His advice to anyone starting out in business is to have no fear as life is about taking on challenges.
“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.
"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”
Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.
He relaxes by spending time with his family at home, and enjoying his wife’s India cooking.
Emergency
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Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
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What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
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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)
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