Economy

India/UAE Trade: $115 billion Bet

There are only few pockets of growth available post-Covid. India and UAE can count themselves among these pockets. Both countries have hitherto restricted their trade and investments to normal levels. However, in recent meetings the trade ministers of both countries have set up ambitious targets to take this engagement to next level. For example, the total trade (meaning exports +Imports) dropped by 30% in 2020 due to Covid and is now placed at $42 billion. The aim is to take...

Dubai World 2010 to China Evergrande Group 2021; Looking Beyond Leverage

From a bird’s eye view, the Evergrande debt crisis of 2021 and the Dubai world real estate crisis of 2010 would seem very close. In both the debacles, the supply outstripped the demand and leverage, being the double-edged sword, hampered the company finances with timely contractual obligations due in a period marked with high volatility and liquidity crunch. Evergrande group has debt worth USD 88.8 billion in 2021 relative to Dubai World’s debt of roughly USD 59 billion in 2010....

Saudi Arabia eases regulation to support SMEs and Entrepreneurs

Saudi Arabia will exempt small and medium enterprises (SMEs) from commerce fees register for three years as the country plans to boost the number of start-ups in the economy. Fees will start in the fourth and fifth year, but at a reduced rate of SAR 500 (USD 133) for entrepreneurs and SAR 200 for entrepreneurs with a capital of less than SAR 375,000 and whose employees do not exceed five in number. This initiative was taken to support and reduce...

Following a year of distress, Saudi Arabia economy back on growth path

Saudi Arabia economic growth as evidenced by its real GDP grew by 1.5% in Q2 2021 as compared with the same period last year, registering its first quarterly economic expansion since the start of COVID-19 pandemic early last year. Economic growth in Saudi Arabia was led by 10% increase in the non-oil sector (Q2, 2021 yoy basis), according to data from the General Authority for Statistics. While the government sector saw 0.7% growth, the oil sector recorded a decline of...

UAE’s 100% foreign ownership will boost investor confidence, cut cost of operations

The UAE’s announcement of 100 per cent foreign ownership across the board effective June 1, is touted as game changing and a master stroke. This was the biggest demand from various business councils for decades. The current system requires 51 per cent local sponsorship along with majority representation in the board with the Chair being Emirati. In a country where more than 80 per cent of the population are expats and where the economy is fairly better diversified than their...

Defensive sectors in GCC-A great bet in today’s times

The 2020 stock market crash due to Covid-19 has been fast and short, if the markets do not fall to the lows of March 2020 again. The Oil price crash and social distancing measures to prevent the spread of Covid-19 has impacted sectors in the GCC in different ways.This can be observed in the current level of GCC Sector Indices. We make a comparison of the current levels of GCC sector indices with that of 52-week high and 52-week lowto...

COVID-19 brings to the fore GCC’s Fiscal Vulnerability

Revenue from oil forms significant portion of overall revenue for GCC countries, with 20-year(2000-2019) average at 74%. This dependence on oil as revenue source has long been a pain point for GCC’s fiscal position, surfacing during periods of low oil prices and receding during periods of high oil price.In the backdrop of fall in oil prices due to COVID-19, building a sustainable fiscal policy in GCC has resumed higher importance. Ascend to Prosperity Referred to as black gold, oil has...

COVID-19: GCC has mostly resorted to monetary measures

The COVID-19 led health and economic crisis has pushed many governments around the world to respond with a wide armor of fiscal and monetary actions that far exceed the measures taken in the past when the Global Financial Crisis happened in 2009. The measures were announced in a quick and concerted manner across the developed countries, emerging countries, and less developed countries. GCC countries also acted with alacrity in providing stimulus measures: to meet the COVID-19 Impact that hit them...

10 million and counting: COVID -19 breaches a grim milestone

As 2020 began with new hopes, little did the world know about an emerging threat coming out of the most populous country on Earth, a virus which spread like a wildfire in no time. The contagious nature of the virus made it more so difficult to contain it. The World Health Organization (WHO) declared the outbreak a Public Health Emergency of International Concern on 30 January 2020, and a pandemic on 11 March. On 28th June 2020, the global confirmed...

Fund houses revise their long-term capital market expectations – What has changed?

The unprecedented turn of events in recent times has drastically changed the outlook of the global economy in the near term. The economic disruption caused by COVID-19 has triggered global central banks and governments to act, changing the whole landscape for financial and real assets both in the short and long term. Things look much different now as compared to the end of 2019. Several asset classes witnessed a sharp sell-off and a subsequent recovery in recent months. Everything from...