Brexit: win-win game for UAE-GCC and UK
Trade between the UK and GCC will increase in post-Brexit era as the European nation will be able to negotiate deals with the Gulf countries that are more liberal.
In addition, pound will strengthen in post-Brexit period which will greatly benefit Dubai’s tourism and real estate sectors due to increased inflow of tourists from the UK as well as more British citizens investing in Dubai’s property market, say analysts.
Data showed that trade between the UAE and the UK jumped 7.4 percent to Dh24.45 billion during the first half of 2019, up from Dh22.76 billion in the same period last year. The UAE’s exports to the UK fell 16 percent to Dh6.1 billion in H1 2019, down from Dh7.26 billion in the same period last year. While the UAE’s imports from the UK grew by around 18.4 percent to Dh18.35 billion, up from Dh15.5 billion.
On June 23, 2016, the British citizens had voted in favour of leaving the European Union in a referendum. British prime minister Boris Johnson had announced that Britain will leave EU on January 31, 2020.
“UK’s exit from European Union after more than 3 years since the initial Brexit referendum is a welcome relief even for the GCC region. The ties between UK and EU seem stable at this point of time and this should support a rally in pound. On the other hand, GCC trade with UK is bound to increase as the country will be able to negotiate a new trade deal with the Middle Eastern nations that is more liberal,” said Vijay Valecha, chief investment officer, Century Financial.
David Abood, partner at Core, expects the UK buyers to continue investing in Dubai as they have historically been one of the major investors in the UAE. “With the introduction of five-year tourism visa, we expect higher interest for secondary and holiday homes by this demographic. Furthermore, a stronger pound compared to the dollar and continued price softening in Dubai is expected to keep interest levels steady for UK based buyers,” he said.
Capital preservation and UK’s inherent appeal is perceived deeply by UAE based buyers who have historically shown a keen interest in properties within the UK, particularly in prime central London districts.
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Boeing swings to annual loss as 737 max
Boeing Co on Wednesday swung to its first annual loss since 1997 on mounting 737 MAX costs and indicated it would again cut production of its bigger 787 Dreamliner aircraft, currently its main source of cash.
Costs related to the global grounding of Boeing’s once fast-selling 737 MAX reached $14.6 billion in 2019 and the planemaker warned of another $4 billion in charges in 2020 due to the expense of freezing and slowly restarting the jets’ production.
Boeing, facing the biggest crisis in its history, had previously estimated an around $8 billion price tag for the MAX fallout.
The aircraft was grounded in March after two crashes that killed 346 people. Boeing has since frozen production of the aircraft as deliveries, the moment when the planemaker receives most of its cash, remain halted.
“We recognize we have a lot of work to do,” Boeing President and CEO David Calhoun said in a statement. His predecessor, Dennis Muilenburg, was ousted last year.
Boeing shares opened 3% higher, as some analysts had expected an even larger charge for 737 MAX costs. The stock has lost about a quarter of its value since early March 2019.
“Boeing faces some considerable challenges in the near-term, but we expect the market to focus on the level of free cash flow that the company can generate in the early-2020s on a sustainable basis, once the MAX returns to service,” Redburn analyst Jeremy Bragg said.
The Chicago-based planemaker has been updating the 737 MAX flight control system and software to address issues believed to have played a role in both crashes.
The U.S. Federal Aviation Administration has suggested that it could approve the MAX to fly again before mid-year, longer than Boeing had initially expected.
Calhoun told CNBC on Wednesday he believes the company can meet the certification timeline.
Boeing’s core operating loss was $2.53 billion, or $2.33 per share, compared with a profit of $3.87 billion, or $5.48 per share, a year earlier.
Analysts on average expected Boeing to post earnings per share of $1.47 in the quarter, though several had predicted a loss amid a wide range of forecasts due to uncertainties over the cost of the 737 MAX crisis.
The company also booked more charges on its military tanker and space programs.
Adding to Boeing’s pain, demand for its bigger and more profitable jet – the 787 Dreamliner – has waned in the face of the U.S.-China trade war, prompting the company to cut production, hurting cash flow at a time when its debt is mounting.
Boeing, which is producing the 787 Dreamliner at 14 aircraft per month, said in October it expects to lower the production in late 2020 to 12 per month, amid a drought of orders from China.
The company now expects to further lower 787 Dreamliner production to 10 per month in early 2021.
Boeing reported negative free cash flow of $2.67 billion for the fourth quarter ended Dec. 31, compared with a positive free cash flow of $2.45 billion a year earlier.
The MAX charges include $8.3 billion to compensate airline customers that are canceling flights and scaling back growth plans in a hit to profits while their MAX jets remain grounded.
U.S. airlines have taken the MAX off their schedules until early June and have said they need at least 30 days after FAA approval to prepare their jets and train pilots.
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Saudi chemical giant records rare loss as prices sag
Saudi petrochemicals giant Sabic said on Wednesday it posted a rare loss in the fourth quarter of last year, due to low prices and the allocation of a huge emergency provision.
Sabic, the second-largest listed firm in the kingdom after oil giant Aramco, said it posted a loss of $192 million in the last three months of 2019 after its revenues fell by 18.5 percent.
The company, in which Aramco acquired a 70 percent stake for $69 billion last year, said it has also made a $747 million impairment provision in support of one of its affiliates which is undergoing restructuring.
Sabic posted a profit of $859 million in the fourth quarter of 2018.
“Despite an uptick in Brent oil prices in the fourth quarter, the results were negatively impacted by a further decline in petrochemical prices driven by oversupply in the key products and slowing global growth coupled with seasonal impacts,” the company said in a statement.
For the whole of 2019, Sabic net profit dropped a massive 74 percent, the company said, also citing lower prices and allocation of emergency provisions.
The company said it posted a net profit of $1.5 billion in 2019 compared to $5.74 billion in the previous year.
Its revenues dropped almost 19 percent to $32.5 billion last year from $40.1 billion in 2018.
“The petrochemical industry was negatively impacted in 2019 by additional new supply in key products coming on-stream coupled with a moderation in global growth compared to 2018,” Sabic CEO Yousef Abdullah al-Benyan said in a statement.
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Luxembourg invests dh129m in expo 2020 pavilion
Luxembourg is investing ?32 million (Dh129 million) for the development of Expo 2020 pavilion, as the European nation looks to boost ties in a number of sectors.
Carlo Thelen, director-general at Chamber of Commerce in Luxembourg, said work on the Expo 2020 pavilion – located in Opportunity District – is progressing well and the European country will showcase its culture, cuisines among others.
“We will also showcase our products, tourism opportunities, new technologies and space sector. There are a lot of similarities between Luxembourg and the Emirates. We are small and open hubs. Emirates is hub for Asia, Central Asia and Africa while Luxembourg is hub for Europe,” Thele said as Luxembourg’s economic mission on Wednesday concluded its UAE visit on Wednesday.
Luxembourg is the first country to express interest in Dubai Expo 2020 and the firs to start construction works. Its pavilion is located in the vicinity to Al Wasl Plaza and the UAE Pavilion.
Dubai will host six-month long Expo 2020 from October 20, 2020 to April 20, 2021, with 25 million people expected to visit the mega event.
Maggy Nagel, Commissioner General of Luxembourg at Expo 2020 Dubai, said Expo 2020 fits perfectly with the promotion efforts of Luxembourg and will make it possible to assert many skills of ‘Made in Luxembourg’. ”
On Wednesday, three partnership agreements were signed between Luxembourg and UAE companies – Jumeirah Group, RAK Porcelain Europe and Emirates Academy of Hospitality Management, in order to allow the Luxembourg pavilion to function properly during the exhibition.
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UAE mobile network changes name: why
UAE network provider Etisalat on Thursday changed its network name to ‘NTD DAY ETISALAT’.
The move is to celebrate first annual World NTD Day, an awareness day for addressing neglected tropical diseases (NTDs).
More than 250 global civil society advocates, community leaders, health experts and policymakers will unite today in Abu Dhab to kick off a decisive year in the fight against neglected tropical diseases (NTDs) for the World NTD Day.
NTDs are a diverse group of communicable diseases that prevail in tropical and subtropical conditions in 149 countries, according to the World Health Organisation (WHO).
These affect more than 1.5 billion of the world’s most impoverished people and cost developing economies billions of dollars every year.
Despite their prevalence, NTDs have not always been at the top of public health priorities.
World NTD Day will broaden the conversation beyond the traditional global health community, engaging the general public in the effort to ensure people at risk for NTDs no longer remain “neglected”.
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DP World suspends staff travel to China
DP World, one of the world’s largest port operators, has suspended all staff travel to China until further notice due to the coronavirus outbreak there.
Companies including Facebook, LG Electronics and Standard Chartered are among those restricting travel for employees to China, where the death toll from a flu-like virus rose above 100 on Tuesday.
“All travel to China is suspended until further notice, unless for emergency purposes. We continue to monitor WHO and Government advice,” a spokesman at Dubai state-controlled DP World said on Tuesday.
Chinese nationals would be permitted to travel to China if they needed to go home, the spokesman added.
“All our ports are complying with the official government health ministry directive for operations, staff health precautions and risk mitigation plans,” he said, adding that ports need to continue to operate for welfare and health purposes, including the import of food and medicine.
Emirates airline has advised its flight crew to stay in their hotels when on a layover in China due to the coronavirus, an internal notice seen by Reuters showed.
The United States has warned against travel to China, where the coronavirus outbreak has left millions of Chinese stranded during the country’s biggest holiday of the year.