A surge in business activity last month in the UAE pushed company output and growth to a four-month high.
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The latest Purchasing Managers' Index (PMI) climbed to 53.8 last month as output increased and more new orders were registered among businesses, according to a report by HSBC and Markit Economics, which compile the index together.
That figure is up from 52.6 in September, when business activity first started to accelerate after a slowdown that had lasted four consecutive months.
"We continue to see a display of steady growth in confidence from talking to our customers, from new economic indices … and through business confidence surveys," said Simon Vaughan Johnson, the head of commercial banking at HSBC Middle East and North Africa.
"Many companies have worked very hard to address the challenges of the economic downturn, and we believe that these efforts are now beginning to pay off, giving rise to a growing confidence," Mr Johnson said.
The monthly data provides a snapshot of the UAE's performance in the non-oil part of the private sector. Dubai has the largest non-oil economy in the UAE, and building up this sector continues to be an area of focus in Abu Dhabi, as the emirate seeks to diversify away from a heavy dependence on crude exports.
Last month, Abu Dhabi officials met with leaders and decision makers in India to highlight investment opportunities in the Khalifa Industrial Zone Abu Dhabi (Kizad), which is expected to be one of the largest industrial zones in the world when it has been completed.
Other Gulf economies have also experienced a recent increase in business activity.
In Saudi Arabia, business activity climbed from 58.4 in September to 59.9 last month on the PMI.
Combined growth in the UAE and Saudi Arabia "clearly show continued economic growth in the Middle East", the HSBC report said.
Qatar led the Gulf in overall business confidence, which is tracked on a separate index that is also compiled by HSBC.
The latest results on this measure for the broader Gulf region show investment budgets were up in the third quarter, while expectations for business turnover and profits remained steady. This suggests businesses "are feeling more secure after a period of steady recovery", the report said.
Companies in the Gulf also remain confident about revenue growth, as well as the health of profit margins, and their ability to meet quarterly budgets and annual targets, the report said.
Employers in the Gulf are generally positive about the hiring trend for the final quarter of the year, with 42 per cent saying they intend to boost employee numbers, up from 39 per cent in the last quarter.
The proportion of companies that expect to lay off workers dropped from 13 per cent to 11 per cent.
[ nparmar@thenational.ae ]
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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.”
Company Profile
Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed
MATCH DETAILS
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WHAT IS THE LICENSING PROCESS FOR VARA?
Vara will cater to three categories of companies in Dubai (except the DIFC):
Category A: Minimum viable product (MVP) applicants that are currently in the process of securing an MVP licence: This is a three-stage process starting with [1] a provisional permit, graduating to [2] preparatory licence and concluding with [3] operational licence. Applicants that are already in the MVP process will be advised by Vara to either continue within the MVP framework or be transitioned to the full market product licensing process.
Category B: Existing legacy virtual asset service providers prior to February 7, 2023, which are required to come under Vara supervision. All operating service proviers in Dubai (excluding the DIFC) fall under Vara’s supervision.
Category C: New applicants seeking a Vara licence or existing applicants adding new activities. All applicants that do not fall under Category A or B can begin the application process through their current or prospective commercial licensor — the DET or Free Zone Authority — or directly through Vara in the instance that they have yet to determine the commercial operating zone in Dubai.
Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
A Cat, A Man, and Two Women
Junichiro Tamizaki
Translated by Paul McCarthy
Daunt Books
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
A Long Way Home by Peter Carey
Faber & Faber
Stamp duty timeline
December 2014: Former UK chancellor of the Exchequer George Osborne reforms stamp duty land tax (SDLT), replacing the slab system with a blended rate scheme, with the top rate increasing to 12 per cent from 10 per cent:
Up to £125,000 – 0%; £125,000 to £250,000 – 2%; £250,000 to £925,000 – 5%; £925,000 to £1.5m: 10%; More than £1.5m – 12%
April 2016: New 3% surcharge applied to any buy-to-let properties or additional homes purchased.
July 2020: Chancellor Rishi Sunak unveils SDLT holiday, with no tax to pay on the first £500,000, with buyers saving up to £15,000.
March 2021: Mr Sunak extends the SDLT holiday at his March 3 budget until the end of June.
April 2021: 2% SDLT surcharge added to property transactions made by overseas buyers.
June 2021: SDLT holiday on transactions up to £500,000 expires on June 30.
July 2021: Tax break on transactions between £125,000 to £250,000 starts on July 1 and runs until September 30.
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COMPANY PROFILE
Company name: Klipit
Started: 2022
Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant
Based: Dubai, UAE
Industry: Digital receipts, finance, blockchain
Funding: $4 million
Investors: Privately/self-funded
UAE currency: the story behind the money in your pockets
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
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Scotland v Russia – Wednesday, 11.15am
Ireland v Samoa – Saturday, 2.45pm
Japan v Scotland – Sunday, 2.45pm
Buy farm-fresh food
The UAE is stepping up its game when it comes to platforms for local farms to show off and sell their produce.
In Dubai, visit Emirati Farmers Souq at The Pointe every Saturday from 8am to 2pm, which has produce from Al Ammar Farm, Omar Al Katri Farm, Hikarivege Vegetables, Rashed Farms and Al Khaleej Honey Trading, among others.
In Sharjah, the Aljada residential community will launch a new outdoor farmers’ market every Friday starting this weekend. Manbat will be held from 3pm to 8pm, and will host 30 farmers, local home-grown entrepreneurs and food stalls from the teams behind Badia Farms; Emirates Hydroponics Farms; Modern Organic Farm; Revolution Real; Astraea Farms; and Al Khaleej Food.
In Abu Dhabi, order farm produce from Food Crowd, an online grocery platform that supplies fresh and organic ingredients directly from farms such as Emirates Bio Farm, TFC, Armela Farms and mother company Al Dahra.
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