Lampuuk Beach in Aceh, Indonesia. Courtesy Misqal Novio Reeza
Lampuuk Beach in Aceh, Indonesia. Courtesy Misqal Novio Reeza
Lampuuk Beach in Aceh, Indonesia. Courtesy Misqal Novio Reeza
Lampuuk Beach in Aceh, Indonesia. Courtesy Misqal Novio Reeza

UAE to build tourism resort in Indonesia's undeveloped Aceh province

The UAE has signed an agreement to develop a number of infrastructure projects in the South-East Asian country

Selina Denman
Selina Denman

March 07, 2021

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The UAE plans to develop a multimillion-dollar tourism resort in Indonesia’s Aceh province.

This is one of a number of large-scale infrastructure projects planned by the UAE in the Asian country, after it signed a Memorandum of Understanding on Friday with the Republic of Indonesia to co-operate in the areas of creative economy, tourism, environmental conservation and logistics.

"The UAE and Indonesia are exemplars of religious and cultural diversity, tolerance and moderation," said Noura Al Kaabi, UAE Minister of Culture and Youth, after the signing in Jakarta.

"These are the values that bind us together and enable us to co-operate for our common interests, especially in the sphere of creative economy, which is a pillar of sustainable economic growth. As the world is going through a challenging time due to the Covid-19 pandemic, we need to turn challenges into opportunities for innovation."

According to Indonesian news agency Antara, the resort project in Aceh is being spearheaded by the UAE’s Murban Energy, which has already been involved in the development of luxury resorts in the Maldives and Seychelles.

The resort would be the first of its kind in Aceh, which is currently home to limited accommodation options, largely in the two, three and four-star categories. Guest houses and homestays are also common.

A regency in the Aceh province of Indonesia, Singkil is predominantly located on the island of Sumatra, but also covers the offshore Banyak Islands, which consists of 99 largely uninhabited islands.

Baiturrahman Grand Mosque in Indonesia's Aceh Province. Courtesy Sangga Rima Roman Selia
Baiturrahman Grand Mosque in Indonesia's Aceh Province. Courtesy Sangga Rima Roman Selia

The semi-autonomous Aceh province is located close to the Andaman and Nicobar Islands in India. It is bordered by Bay of Bengal to the north, Indian Ocean to the west, Straits of Malacca to the east, and North Sumatra to the south-east and south.

It is considered to be the place where Islam began to spread in Indonesia and continues to be home to the biggest population of Muslims in the country. It also adheres to shariah law.

It is the site of abundant natural resources, including oil and natural gas, and is also famous for its natural attractions, including the forests that lie along the Bukit Barisan range. South-east Aceh is home to the Gunung Leuser National Park (TNGL), while Singkil itself is home to conservations areas committed to protecting green and leatherback turtles.

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Sceptre

How Tesla’s price correction has hit fund managers

Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.

It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.

The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.

Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.

Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.

He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.

AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”

A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.

Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.

Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.

Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.

By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.

Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.

In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”

Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.

She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.

Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.

What drives subscription retailing?

Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.

The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.

The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.

The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.

UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.

That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.

Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

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5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

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9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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