Middle East faces headache on inflation and higher rates



Deutsche Bank has warned that the Middle East must expect higher inflation or a rise in interest rates as a consequence of trillions of dollars of central bank monetary intervention spilling over from developed markets.

Anshu Jain, the co-chairman of Deutsche Bank's board and executive committee, also told business leaders in Dubai that the next phase of the global economic downturn could hinge upon what triggers central banks to start raising interest rates, currently at historic lows.

"It's an issue that really concerns us. There's never been a period of such unprecedented liquidity injections, and what'll happen when that trigger comes?" he said.

"The slightly worrying answer is nobody really knows. History hasn't given us that chapter yet. We're writing it."

The Federal Reserve in the United States and the European Central Bank have all pledged to step up bond-buying programmes with potentially unlimited sums of capital in an effort to stabilise economies that are still showing signs of fragility after the global financial crisis.

The Bank of England and Bank of Japan have also increased quantitative easing since the start of this year. Deutsche Bank, Germany's biggest lender and one of Europe's largest investment banks, expects interest rates in developed markets to remain low "for some time".

"My concern for the US and this region as well is that this money tends to flow into very specific asset classes," such as real estate, said Mr Jain. "We're seeing some of that in our home market, Germany, as well, but we haven't seen core inflation yet."

If widespread increases in consumer prices materialise, authorities may be unable to contain rising core inflation for a sustained period of time and would have to choose between boosting job creation and containing inflation. This would have an impact on dollar-pegged economies such as the UAE and other Arabian Gulf states.

With the exception of Kuwait, GCC central banks are obliged to import US monetary policy because of their currencies' dollar pegging, giving them limited scope to tighten money supply.

Western policymakers would be faced with a "very pernicious problem", added Mr Jain, because they would "have to choose between two evils", either lower job creation or higher consumer prices.

In the meantime, regulators' response to the financial crisis was doing little to address the issue of global banks becoming "too big to fail" - that is, lenders whose systemic importance is such that taxpayers are in effect forced to rescue them in the event of their collapse.

"Regulators want banks to get smaller and more competitive. The reverse is happening," said Mr Jain. He expected that regulators were forcing a greater degree of consolidation on to the banking sector, partly linked to higher capital requirements brought about by the stringent Basel III rules, which compel banks to build up bigger capital buffers.

UBS has announced layoffs equivalent to almost a sixth of its workforce as the Swiss bank divests from operations such as bond trading that bring increased capital requirements. Credit Suisse also restructured its global investment banking operations this week, in a move said to be "in alignment with the new regulatory reality".

With increased consolidation, the number of global banks could fall, said Mr Jain. "A number of our peers are signalling a desire to step off the world stage. I think by the time we're done, no more than five or six global universal banks will be left standing.

"Clearly Deutsche Bank wants to be one of them. But we're not taking our position for granted."

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Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

COMPANY PROFILE

Company name: ASI (formerly DigestAI)

Started: 2017

Founders: Quddus Pativada

Based: Dubai, UAE

Industry: Artificial intelligence, education technology

Funding: $3 million-plus

Investors: GSV Ventures, Character, Mark Cuban

Founders: Ines Mena, Claudia Ribas, Simona Agolini, Nourhan Hassan and Therese Hundt

Date started: January 2017, app launched November 2017

Based: Dubai, UAE

Sector: Private/Retail/Leisure

Number of Employees: 18 employees, including full-time and flexible workers

Funding stage and size: Seed round completed Q4 2019 - $1m raised

Funders: Oman Technology Fund, 500 Startups, Vision Ventures, Seedstars, Mindshift Capital, Delta Partners Ventures, with support from the OQAL Angel Investor Network and UAE Business Angels

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Director:Guillermo del Toro

Stars:Bradley Cooper, Cate Blanchett, Rooney Mara

Rating: 3/5

Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

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Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★

The specs

Engine: 4.0-litre flat 6-cylinder
Transmission: 7-speed PDK
Power: 500hp
Torque: 450Nm
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Race 3

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Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
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Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5

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Founder: Siddiq Farid and Musfique Ahmed
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Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Tips for newlyweds to better manage finances

All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.

Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.

Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.

Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.

Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.

Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.

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Publisher: And Other Stories
Pages: 240

Biog

Mr Kandhari is legally authorised to conduct marriages in the gurdwara

He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada

Father of two sons, grandfather of six

Plays golf once a week

Enjoys trying new holiday destinations with his wife and family

Walks for an hour every morning

Completed a Bachelor of Commerce degree in Loyola College, Chennai, India

2019 is a milestone because he completes 50 years in business

 

EA Sports FC 24

Developer: EA Vancouver, EA Romania
Publisher: EA Sports
Consoles: Nintendo Switch, PlayStation 4&5, PC and Xbox One
Rating: 3.5/5

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Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside

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Starring: Omar Sy, Jason Beghe, Angeliki Papoulia
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Four scenarios for Ukraine war

1. Protracted but less intense war (60% likelihood)

2. Negotiated end to the conflict (30%)

3. Russia seizes more territory (20%)

4. Ukraine pushes Russia back (10%)

Forecast by Economist Intelligence Unit

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Starring: Nour Al Ghandour, Mahmoud Boushahri

Rating: 3/5

Vikram Vedha

Directors: Gayatri, Pushkar

Stars: Hrithik Roshan, Saif Ali Khan, Radhika Apte

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Things Heard & Seen

Directed by: Shari Springer Berman, Robert Pulcini

Starring: Amanda Seyfried, James Norton

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'The worst thing you can eat'

Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.

Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines: 

Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.

Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.

Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.

Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.

Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.


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