Richard Branson, founder of Virgin Galactic, on the floor of the New York Stock Exchange to promote the first day of trading of Virgin Galactic Holdings shares. The move may help to create a multi-trillion dollar space sector in the US stock markets. Getty Images
Richard Branson, founder of Virgin Galactic, on the floor of the New York Stock Exchange to promote the first day of trading of Virgin Galactic Holdings shares. The move may help to create a multi-trillion dollar space sector in the US stock markets. Getty Images
Richard Branson, founder of Virgin Galactic, on the floor of the New York Stock Exchange to promote the first day of trading of Virgin Galactic Holdings shares. The move may help to create a multi-trillion dollar space sector in the US stock markets. Getty Images
Richard Branson, founder of Virgin Galactic, on the floor of the New York Stock Exchange to promote the first day of trading of Virgin Galactic Holdings shares. The move may help to create a multi-tri

Real assets resurgent as return on financial holdings now too low and too risky


  • English
  • Arabic

From time to time investors should all watch the launch of a SpaceX rocket and wait for its booster rockets to land safely back on earth.

This is an almost miraculous combination of cutting edge technology and the law of gravity. Seemingly the impossible has become possible. You are also looking at the bigger picture: planet earth, big money and economic returns.

Back on earth investors are facing a more immediate problem, one that could cost them far more than they could ever hope to make in space ventures, at least in the near term.

For learning how to fly into space on a budget will likely result in the creation of a multi-trillion dollar space sector in the US stock markets. Virgin Galactic — Richard Branson’s space craft tourism venture backed by Abu Dhabi’s Mubadala — became the first listed stock in this space last month.

When Mr Branson launched his venture in Dubai at a press conference over a decade ago he asked the assembled journalists: "Who wouldn’t want to go into space?" Only my hand went up.

However, back on earth investors are facing a more immediate problem, one that could cost them far more than they could ever hope to make in space ventures, at least in the near term.

The majority of investors currently have their wealth tied up in financial assets, that is to say stocks, bonds and cash.

While in the short run cash-is-king in a recession, in the longer term it always loses to inflation, devaluation or both, because central banks gradually devalue money to wipe national debts.

US 10-year treasury bonds yield just 1.95 per cent. That is next to zero when adjusted for inflation and taxes, and bonds have a similar devaluation risk to cash.

Share dividends are benchmarked against this low yielding 10-year treasury bond. The S&P 500 index of top US stocks has a paltry average dividend of 1.8 per cent.

Meanwhile, the cyclically adjusted price-to-earnings ratio as created by Nobel Prize winning economist Rober Shiller currently indicates that US stocks are at their most overvalued in history, apart from before the dot-com crash in 2000 and Great Crash of 1929.

Then consider that if the stock market were to fall heavily in value the US Federal Reserve would slash interest rates, and that would bring bond prices crashing down as they move in the opposite direction to yields.

Perhaps then it is no wonder that global asset allocation has shifted away from financial assets and into real assets. Exposure has increased from 5 to 20 per cent since 2000, according to Brookfield Asset Management.

Real assets are a diverse bunch of income-producing fixed assets. By far the most important is real estate — residential, offices, industrial, hotels and retail.

But other subcategories include: energy pipelines, forestry, agricultural land, airports, railways, highways, windmills, solar farms, shipping and mines, and yes space travel.

The crucial point about such real assets is that they are significantly undervalued in comparison to financial assets, and offer a higher income stream.

For example, a well-located US office tower pays around 6 per cent in rental income and increases in value by say 3 per cent annually, and with bank debt leverage that total return could be 12 per cent. Those picking up bargains in the UAE property market may be able to do better than this in a market upturn.

Taking the five-mile-out-view, this is an investment trend for the future. Real assets are already a $50-60 trillion market and analysts say that amount could double in 10 years.

This swing will likely be driven by a continuation of low interest rates for longer than expected, perhaps after a major stock market event. And as more money moves into real assets the percentage return that they offer will decline and their value increase, just as happened with financial assets over the past two decades.

The most difficult thing is to decide what, when and where to buy. This is a very diverse array of investment opportunities, and not everything that glitters will turn out to be gold.

In addition, it will almost certainly be better to buy these assets after a stock market correction rather than before it. A falling tide will sink all boats. So how can the average punter invest?

The creation of more than 200 Real Estate Investment Trusts has made it easy to be a passive investor. Three real estate exchange traded funds tipped by Forbes recently are: National Health Investors (NHI), Crown Castle International (CCI) and Duke Realty (DRE).

For windmills there are speciality funds like Brookfield Renewable Partners (BEP) and Hannon Armstrong (HASI). You can buy into energy pipelines with listed vehicles such as Energy Transfer (ET) and Magellan Midstream Partners (MMP) or buy shares in quoted airports and highway operators.

Timber and Farmland Reits like Farmland Partners (FPI) and Weyerhaeuser (WY) offer exposure in this sector; and the VanEck Vectors Gold Miners ETF (GDX) is a popular risk diversifier.

Peter Cooper has been writing about Gulf finance for two decades

Country-size land deals

US interest in purchasing territory is not as outlandish as it sounds. Here's a look at some big land transactions between nations:

Louisiana Purchase

If Donald Trump is one who aims to broker "a deal of the century", then this was the "deal of the 19th Century". In 1803, the US nearly doubled in size when it bought 2,140,000 square kilometres from France for $15 million.

Florida Purchase Treaty

The US courted Spain for Florida for years. Spain eventually realised its burden in holding on to the territory and in 1819 effectively ceded it to America in a wider border treaty. 

Alaska purchase

America's spending spree continued in 1867 when it acquired 1,518,800 km2 of  Alaskan land from Russia for $7.2m. Critics panned the government for buying "useless land".

The Philippines

At the end of the Spanish-American War, a provision in the 1898 Treaty of Paris saw Spain surrender the Philippines for a payment of $20 million. 

US Virgin Islands

It's not like a US president has never reached a deal with Denmark before. In 1917 the US purchased the Danish West Indies for $25m and renamed them the US Virgin Islands.

Gwadar

The most recent sovereign land purchase was in 1958 when Pakistan bought the southwestern port of Gwadar from Oman for 5.5bn Pakistan rupees. 

From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5

SERIE A FIXTURES

All times UAE ( 4 GMT)

Saturday
Roma v Udinese (5pm) 
SPAL v Napoli (8pm)
Juventus v Torino (10.45pm)

Sunday
Sampdoria v AC Milan (2.30pm)
Inter Milan v Genoa (5pm)
Crotone v Benevento (5pm)
Verona v Lazio (5pm)
Cagliari v Chievo (5pm)
Sassuolo v Bologna (8pm)
Fiorentina v Atalanta (10.45pm)

Brief scoreline:

Al Wahda 2

Al Menhali 27', Tagliabue 79'

Al Nassr 3

Hamdallah 41', Giuliano 45 1', 62'

UAE currency: the story behind the money in your pockets

Everton 1 Stoke City 0
Everton (Rooney 45 1')
Man of the Match Phil Jagielka (Everton)

Greatest Royal Rumble results

John Cena pinned Triple H in a singles match

Cedric Alexander retained the WWE Cruiserweight title against Kalisto

Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus

Jeff Hardy retained the United States title against Jinder Mahal

Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos

Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe

AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out

The Undertaker beats Rusev in a casket match

Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match

Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last

What are the influencer academy modules?
  1. Mastery of audio-visual content creation. 
  2. Cinematography, shots and movement.
  3. All aspects of post-production.
  4. Emerging technologies and VFX with AI and CGI.
  5. Understanding of marketing objectives and audience engagement.
  6. Tourism industry knowledge.
  7. Professional ethics.
Specs

Engine: 51.5kW electric motor

Range: 400km

Power: 134bhp

Torque: 175Nm

Price: From Dh98,800

Available: Now

Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Stage result

1. Pascal Ackermann (GER) Bora-Hansgrohe, in 3:29.09

2. Caleb Ewan (AUS) Lotto-Soudal

3. Rudy Barbier (FRA) Israel Start-Up Nation

4. Dylan Groenewegen (NED) Jumbo-Visma

5. Luka Mezgec (SLO) Mitchelton-Scott

6. Alberto Dainese (ITA) Sunweb

7. Jakub Mareczko (ITA) CCC

8. Max Walscheid (GER) NTT

9. José Rojas (ESP) Movistar

10. Andrea Vendrame (ITA) Ag2r La Mondiale, all at same time

ANDROID%20VERSION%20NAMES%2C%20IN%20ORDER
%3Cp%3EAndroid%20Alpha%3C%2Fp%3E%0A%3Cp%3EAndroid%20Beta%3C%2Fp%3E%0A%3Cp%3EAndroid%20Cupcake%3C%2Fp%3E%0A%3Cp%3EAndroid%20Donut%3C%2Fp%3E%0A%3Cp%3EAndroid%20Eclair%3C%2Fp%3E%0A%3Cp%3EAndroid%20Froyo%3C%2Fp%3E%0A%3Cp%3EAndroid%20Gingerbread%3C%2Fp%3E%0A%3Cp%3EAndroid%20Honeycomb%3C%2Fp%3E%0A%3Cp%3EAndroid%20Ice%20Cream%20Sandwich%3C%2Fp%3E%0A%3Cp%3EAndroid%20Jelly%20Bean%3C%2Fp%3E%0A%3Cp%3EAndroid%20KitKat%3C%2Fp%3E%0A%3Cp%3EAndroid%20Lollipop%3C%2Fp%3E%0A%3Cp%3EAndroid%20Marshmallow%3C%2Fp%3E%0A%3Cp%3EAndroid%20Nougat%3C%2Fp%3E%0A%3Cp%3EAndroid%20Oreo%3C%2Fp%3E%0A%3Cp%3EAndroid%20Pie%3C%2Fp%3E%0A%3Cp%3EAndroid%2010%20(Quince%20Tart*)%3C%2Fp%3E%0A%3Cp%3EAndroid%2011%20(Red%20Velvet%20Cake*)%3C%2Fp%3E%0A%3Cp%3EAndroid%2012%20(Snow%20Cone*)%3C%2Fp%3E%0A%3Cp%3EAndroid%2013%20(Tiramisu*)%3C%2Fp%3E%0A%3Cp%3EAndroid%2014%20(Upside%20Down%20Cake*)%3C%2Fp%3E%0A%3Cp%3EAndroid%2015%20(Vanilla%20Ice%20Cream*)%3C%2Fp%3E%0A%3Cp%3E%3Cem%3E*%20internal%20codenames%3C%2Fem%3E%3C%2Fp%3E%0A
The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

Russia's Muslim Heartlands

Dominic Rubin, Oxford

UAE currency: the story behind the money in your pockets
Business Insights
  • As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses. 
  • SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income. 
  • Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
Ultra processed foods

- Carbonated drinks, sweet or savoury packaged snacks, confectionery, mass-produced packaged breads and buns 

- margarines and spreads; cookies, biscuits, pastries, cakes, and cake mixes, breakfast cereals, cereal and energy bars;

- energy drinks, milk drinks, fruit yoghurts and fruit drinks, cocoa drinks, meat and chicken extracts and instant sauces

- infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes,

- many ready-to-heat products including pre-prepared pies and pasta and pizza dishes, poultry and fish nuggets and sticks, sausages, burgers, hot dogs, and other reconstituted meat products, powdered and packaged instant soups, noodles and desserts.

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