Dubai benchmark gained for a third successive session
The Gulf biggest lender Qatar National Bank was the top gainer on the Qatari benchmark, adding 2.4 percent, while Qatar Islamic Bank tacked on 1.8 percent.
Activity in the UAE’s non-oil private sector grew in December as its Purchasing Managers’ Index, which covers manufacturing and services, rose to 51.2 in December from 49.5 in November, a survey showed.
The 50.0-mark separates growth from contraction.
The Dubai benchmark gained for a third successive session, putting on 1.2 percent.
The Dubai gains were led by blue-chip developer Emaar Properties and real estate firm Dubai Investments , which advanced 2.9 percent and 3.9 percent, respectively.
In Abu Dhabi, the benchmark strengthened 0.6 percent with telecoms major Etisalat adding 1.3 percent.
Qatar shares ended 1.4 percent higher on Tuesday, marking the index’s biggest gain in nearly a month, after a breakthrough was reached in the country’s three-year-old dispute with Saudi Arabia and three other Arab countries.
As part of the deal, Saudi Arabia would reopen its airspace and land and sea border to Qatar as Gulf Arab leaders arrived in the Saudi city of al-Ula on Tuesday for a summit focused on ending a long-running dispute with Doha.
Saudi Arabia, the UAE, Bahrain and Egypt severed diplomatic, trade and travel ties with Qatar over allegations that Doha supports terrorism, a charge it denies.
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UAE ranks 16th on henley passport index
The UAE’s agenda to establish itself as a global hub is evident in its remarkable upward trajectory on the Henley Passport Index which released its findings for 2021.
The UAE now has a visa-free/visa-on-arrival score of 173 and holds the 16th spot in the ranking, the country occupied the 18th position in 2020. This is a stunning ascent when compared to the position it held at the Index’s inception in 2006, when the country ranked 62nd, with a visa-free/visa-on-arrival score of just 35.
The country signed several mutually reciprocated visa-waiver agreements last year, including a landmark US-brokered agreement establishing formal ties with Israel and granting citizens of each country visa-free access to the other.
Dr Robert Mogielnicki, Resident Scholar at the Arab Gulf States Institute in Washington, said: “A strong technology focus weaves together the economic agreements and memorandums of understanding that emerged in the wake of the UAE–Israel normalisation agreement. Sudan normalised relations with Israel in October 2020, and other Arab countries may take similar steps over the coming months.”
The advanced technological and social infrastructure UAE possesses enabled it to tide over the Covid-19 crisis successfully, said Bal Krishen, chairman, Century Financial.
“The country has done mass testing and screening of its citizens, which helped put the Coronavirus crisis under control. High-speed internet infrastructure ensured a seamless transition to WFH environment. Advanced technology and its ability to control the pandemic meant UAE was open for business when other countries were going through a rigorous lockdown. The UAE’s recent efforts to normalise relations with neighbouring countries and its recent reforms, including permission for 100 percent investment in almost sectors should make its passport one of the most sought after ones in the world,” added Krishen.
As 2021 commences, the latest results from the Henley Passport Index— the original ranking of all the world’s passports according to the number of destinations their holders can access without a prior visa — provide fascinating insights into the future of travel freedom in a world that has been transformed by the effects of the Covid-19 pandemic.
Without taking temporary restrictions into account, Japan continues to hold the number one position on the index, with passport holders able to access 191 destinations around the world visa-free. This marks the third consecutive year that Japan has held the top spot, either alone or jointly with Singapore. Asia Pacific (APAC) region countries’ dominance of the index — which is based on exclusive data from the International Air Transport Association (IATA) — now seems firmly established.
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UAE roadmap to regulate family-owned businesses
The UAE has put into place a roadmap to regulate operations of family-owned businesses in the country and ensure their continuity over successive generations, the Minister of Economy said on Monday.
Emphasising the importance of developing a legislative structure to streamline the operations of family businesses in accordance with international best practices, Minister Abdulla bin Touq Al Marri said that family businesses are a major focus area in the country’s efforts to build a more flexible and sustainable economic model. “A clear plan has been developed to enhance their leadership and competitiveness.”
In August last year, Dubai issued a law regulating family-owned businesses in the emirate to help protect family wealth and grow their contribution to the country’s economic and social development.
The law allows for new family ownership contracts to be formed setting out the rights and responsibilities of family members. For the family ownership contract to become legally binding, the new law also states that all parties of the contract must be members of the same family and have a single common interest.
In September, Dubai Chamber of Commerce and Industry announced that it has signed a memorandum of understanding with the Family Business Council– Gulf (FBC-Gulf) that will see the two entities cooperate on a research agenda that meets the changing needs of family business in Dubai.
Al Marri said that his ministry is keen to raise the level of coordination with all its partners from federal and local government entities and the private sector to develop several specific initiatives that would enhance the readiness of priority sectors and economic activities, most notably family businesses, to keep pace with the nation’s transformation over the next 50 years.
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DMCC sets five-year record in new registrations
The Dubai Multi Commodities Centre (DMCC) said on Monday that it registered a record breaking 2025 new companies in 2020 notwithstanding the challenges of the Covid-afflicted business environment.
The free zone said in a statement that 2020 witnessed the highest number of registrations in five years “primarily due to the Business Support Package.”
“Despite an overall business environment shaped by the Covid-19 pandemic, the record-breaking registrations are a testament to Dubai’s continued appeal to investors and the trust they place in the world’s leading free zone.”
“2020 was a year like no other, with the Covid-19 pandemic impacting every society, business and country. Despite the countless challenges at our doorstep, the UAE’s visionary leadership and prompt and decisive actions meant,” said Ahmed bin Sulayem, executive chairman and chief executive officer, DMCC.
He said DMCC’s strong performance, which saw 2,025 companies set up in its free zone during a global crisis, is a clear indication that the UAE and Dubai remain the chosen place to do business. “We know that 2021 will not be without its obstacles, but we are optimistic about our growth trajectory and our continued ability to attract foreign direct investment to the Emirate.”
DMCC’s Business Support Package saw interest from companies in 149 countries. This was the business hub’s largest ever commercial offer, offering a wide range of incentives and value added services to both existing and new companies in the free zone. More than 8,000 member companies availed over 13,000 offers and incentives granted throughout 2020.
DMCC said the record number of new registrations was also the result of significant enhancements to its customer service, its simplified and fully digitalised set up processes and easier onboarding.
Feryal Ahmadi, chief operating officer, DMCC, said both new and existing companies in the free zone received relief and support during the challenging year.
“Our focused market outreach, our emphasis on a digital first customer experience and our unmatched support to the community, yielded record-breaking results – and supported our existing member companies.”
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UAE car sales set to reach 2019 level in 2022-23, say industry executives
The UAE’s automobile sector is steadily shifting gears to pick up speed and is likely to reach 2019 level in 2022 or a year later after slumping 30 percent this year, say industry executives.
Hit by the lockdown, after the outbreak of Covid-19 in the first and second quarter of 2020, new car sales in the UAE started picking up after the summer and has been rising steadily since then.
Axel Dreyer, CEO of Galadari Automobiles, distributor of Mazda vehicles in the UAE, said a shortfall of more than 30 percent in 2020 automotive market cannot be compensated within one year, especially considering that the impact of Covid-19 will continue in 2021.
“We are already witnessing, in the last two months, an increase in business activities. We are looking forward towards this positive trend continuing in 2021, especially considering the big stimulus package that has been released from the government recently. I’m expecting a growth of the automotive market between five to 10 percent in 2021,” he said.
Dreyer noted that a recovery back to 2019 level can be expected in 2022 or 2023.
Vincent Peter Wijnen, senior managing director for UAE at Al-Futtaim Automotive, said the UAE auto market started bouncing back after the summer and is steadily growing every month.
“But it is still below 2019 level, although the gap is closing now. We don’t think the market will get back to 2019 level in 2021. Achieving the 2019 level will take another a year probably, perhaps in 2022. Because 2019 was very high in terms of volumes, the drop was quite steep,” Wijnen said, adding that the car market dropped by about 30 percent this year, mainly because there were a couple of months when there was a complete lockdown.
“When you look at November-December, we might be 10 -15 percent lower than 2019,” Wijnen said on the sidelines of the launch of new Lexus LC Convertibles in the UAE.
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Saudi deepens cuts as OPEC + agrees oil output rollover
Saudi Arabia will make additional, voluntary oil output cuts of one million barrels per day (bpd) in February and March as part of a deal under which most Opec+ producers will hold production steady in the face of new coronavirus lockdowns.
Saudi is going beyond its promised cuts as part of the + group of oil producers to support both its own economy and the oil market, Energy Minister Prince Abdulaziz bin Salman said on Tuesday.
The move follows two days of talks among Opec+ producers that will see most members hold output steady next month.
Two producers— Russia and Kazakhstan — will be allowed to bump up their output by a combined 75,000 bpd in February and a further 75,000 bpd in March, Kazakhstan’s energy minister said.
Benchmark Brent oil was trading up about 5 percent at more than $53 per barrel at 1836 GMT.
Russia and Kazakhstan had pushed for the group to raise production by 500,000 barrels per day (bpd) for February, as it had done for January, while others wanted no increase.
An internal Opec+ document dated Jan. 4 seen by Reuters highlighted bearish risks and stressed that
“the reimplementation of Covid-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021”.
Saudi’s energy minister on Monday urged caution, noting still fragile fuel demand and the unpredictable impact of new variants of the coronavirus.
New variants of the coronavirus first reported in Britain and South Africa have since been found in countries across the world.
Opec+ producers have been curbing output to support prices and reduce oversupply since January 2017.
As Covid-19 hammered demand for gasoline and aviation fuel and slashed Brent oil prices, Opec+ was forced to boost its output cuts to a record 9.7 million bpd in mid-2020.