The pound is falling, so what’s the best strategy for sending money to the UK? Send a lump sum, hold for now or send monthly instalments? LH, Dubai

Expert 1:

Gaurav Kashyap, head of futures at Axitrader

It has been a year for tremendous event risk for the British pound and this downward mom­entum is set to continue. Volatility will be high through the end of 2016 and the early parts of 2017 and although we will see some bounces in the pound, it will be as a result of relief rallies as the overall sentiment for the currency and the British eco­nomy as a whole remains anaemic.

The data coming out of the UK is starting to show the hangover from the Brexit vote – in the most recent GDP reading, data showed that the UK economy grew only 0.5 per cent in the third quarter, below the previous 0.7 per cent reading in Q2.

The economic impacts of the vote will strain the UK economy and we can expect further weakness in the pound. The currency is already trading at multi-decade lows, at the time of writing the exchange rate sat at 4.48 against the dirham. And we expect to see more downsides in the months ahead. Along with the overall bearish view of the UK economy, the prospects of the US dollar also will put more downside pressure on the GBP/AED. As the UAE is pegged to the performance of the dollar, an appreciating dollar improves our buying power here in the UAE as well – and with the US central bank set to start hiking US interest rates at the turn of the year, this will support the dollar and ultimately the buying power of our dirhams as well. Having said this we must look for another move towards 4.00-4.300 when discussing the GBP-AED exchange rate.

For UK expats in the UAE, this could mean the time to transfer dirhams back to the motherland might not have come yet. Because of the expected downside move, it would prove prudent to wait until the first quarter of 2017. While many may have already transferred at higher rates it’s not all bad news. There are several tools available to hedge, or protect against the market moving lower than your conversion rate.

Let’s assume you transferred £50,000 following the Brexit vote. That would have cost Dh245,000 at the prevailing rate of Dh4.9 to the pound. Since then the pound has fallen towards the current Dh4.50. Although the transfer is done, your cash asset has essentially depreciated 8 per cent (from Dh4.9 to Dh4.5) and you have lost Dh20,000. However, through using derivatives you could have essentially sold a contract for the same value, so even if the pound falls even further whatever depreciation you experience on your physical transaction is covered by the profit generated through the derivative hedge. This tool isn’t to profit from the falling pound – you are just protecting yourself from further falling pound prices. Such derivative tools are readily available here in the UAE. For example, the Dubai Gold & Commodities Exchange, of which AxiTrader is a member, offers a highly regulated British pound solution. But ensure you ask your broker about any potential risks.

Expert 2:

Sam Instone, chief executive of AES International

Although the current exchange rate in sterling is extremely favourable when compared to historic rates across a number of currencies, remember every piece of economic data and news affects currency markets to create a “fair” current price. Because it is completely impossible to predict the future, any advice on timing is tantamount to fortune telling.

It would be prudent to consider any liabilities both here and in the UK before deciding the frequency of sending back money. A lump sum could be a good way to lock in the current rate, which is highly favourable by his­toric standards. However, you may regret sending it all in one transaction if the pound continues to fall. Typically, sending money back home in tranches mitigates this risk, although you need to be mindful of additional charges for a greater number of transactions.

Next question:

I want to invest in stocks and ETFs but keep hearing about this looming stock market crash. I’ve been holding off for a couple of months, so when is it going to happen? TB, Dubai

Every three weeks The National features a reader’s personal finance problem. If you have an issue or want to suggest a solution for another reader’s concern, write to pf@thenational.ae

Rich, poor or downright broke. Which do you choose?

I ask because I believe the time is ripe for more people to become worse off while trying to create wealth.

Especially those going the get rich quick route. You know the sort of thing – where the people sure to make money are the folks selling the dream.

I bring this up because there’s a congress this month that screams, “Pay to hear me speak because I’m rich. I’ll share what I know. Then you can be like me. Rich. Promise”.

These people are wealthy – in part – because the likes of you and me pay to hear them tell their stories. We do this because we want some of their magic to rub off on us – to learn how to spot a great deal, buy property with no money of our own and start building up passive income.

Or perhaps we’re looking to be motivated by hugely successful entrepreneurs. Fair enough, but it doesn’t make us one of them.

Unfortunately, many buying the (very) expensive tickets are the least able to afford to. They’re spending because they urgently need more money. So desperation clouds the mind.

The event taglines don’t help – headlining moneymaking personalities who are the world’s No 1 wealth coach, online wealth creator, or investor – you get the picture.

Don’t get me wrong. I take my hat off to people who “make it”.

What I’m cautioning against is punters who, in financial flux, think that forking out to be in their presence will make it happen for them.

The thing that especially catches the eye is the opportunity to create passive income – the holy grail of cash generation.

Who wouldn’t want that? No one I know.

And that’s why fortunes are built on selling the secret to it.

One such passive-income deity is the co-author of Rich Dad Poor Dad, Robert Kiyosaki.

I picked up his book years ago. It’s an easy read – but overlooks many issues. Annoying things like risk and the downside of leveraging.

But it’s not all bad. Kiyosaki’s main metric is cash flow. And cash flow with capital growth is even better.

To simplify, Kiyosaki views all consumable goods as liabilities – they take money from your pocket. I like this simplification.

It’s the stuff many people in the UAE fall for: the latest phone, newest car and all the other things that cost a pretty penny to buy, then strip you of more money for the duration that they’re in your life and beyond. How so? Either with monthly payments or by depriving you from opportunity because you no longer have that capital in your life.

But you are saving money because you’ve bought a home and are paying a mortgage, I hear you say. Sorry, Kiyosaki shoots that one down because it’s not paying you anything.

His definition of an asset is any­thing that puts money in your pocket.

This is the sort of thing I guess he’ll be talking about at the congress.

If you are contemplating going, ask yourself what you get out of it.

It could be:

• learning something very valu­able

• meeting like-minded people – aka networking

• hearing a hero of yours speak

• you’re desperate to be rich or at least get out of the mounting debt you’re in and someone at this event will help you sort it out

My take:

• If you don’t have the money to burn, don’t go

• Read the book before buying a ticket

• Research the personality you are most interested in listening to – and read reviews. There are many online. As for the possibility of learning a secret that’ll leapfrog you into the big league, it just won’t happen. There’ll be a carrot dangling, not a steak dinner in your tummy.

Plus, remember, the world order has changed since these people succeeded.

We are up against increasingly difficult and cash-strapped times.

So if you’re looking for inspiration or an expensive time socialising, go for it. Just don’t go for broke.

Nima Abu Wardeh describes herself using three words: Person. Parent. Pupil. Each day she works out which one gets priority, sharing her journey on finding-nima.com

High flying billionaires at the top of their own games

While Bill Gates needs no introduction, lesser known names in the wealth stakes include a Japanese mobile game pioneer, the family behind Red Bull and Miami’s condominium kingpin. Our biweekly look at the world of billionaires is here.

Naruatsu Baba

Naruatsu Baba, the 38-year-old founder of mobile game developer Colopl, is completely immodest about his success.

“Professionally, I’ve never really made any mistakes,” Mr Baba said in an interview at his Tokyo office, which features a life-size R2-D2 and a football jersey signed by the Japan midfielder Keisuke Honda. “No matter how small a matter, I’ve always delivered something decent regardless of the deadline or the circumstances.”

Those words are backed by the company’s valuation of US$1.9 billion on the Tokyo Stock Exchange. Mr Baba still owns half of Colopl and wrote most of the early code for games himself, including one that had players earning points by walking around with their phones, an early precursor of Pokemon Go’s signature egg-hatching feature.

For Mr Baba, detecting opportunities as they come along is a skill he has honed through years of experience. One of his earlier hits came after he noticed Japanese carriers began introducing location tracking for mobile phones. As smartphones took off, he pivoted to making games designed for touchscreens.

Now Mr Baba is setting his sights on what is considered to be the next big leap in computing: virtual reality. He is already one of Japan’s biggest investors in the technology through his $50 million Colopl VR Fund, which has taken stakes in about 30 start-ups this year.

Mr Baba says virtual reality’s most significant feature is its ability to trick users into thinking others are physically present. That will soon let humans communicate in a way that approximates face-to-face conversations, he says. “That’s probably the real essence of what VR is all about,” he says.

Forbes estimates his net worth at $1.13bn.

Bill Gates

Bill Gates has urged the British government to step up investment in science and research as it prepares to leave the European Union.

“The world needs innovative leadership now more than ever,” the Micro­soft co-founder and richest man alive told the Grand Challenges conference in London on October 26, attended by more than 1,000 scientists from around the world.

“The complexity of our most urgent global problems – extreme poverty, the persistence and spread of disease, feeding a growing world – requires that we invest in science and put our best minds to work on finding solutions.”

Mr Gates pledged to continue his own investment in British research and innovation, despite economic uncertainties surrounding Brexit, but said government support was ­vital to fight global pandemics such as the Zika virus.

His comments come amid fears that British science may suffer if projects lose funding after Britain leaves the European Union. Mr Gates’s calls were met with a pledge by Britain’s international development minister Priti Patel to increase spending on research into global challenges such as infectious diseases and climate change.

Mr Gates was also doing good a day earlier, when the foundation that bears his and his wife’s name donated $210m to a project at the University of Washington in Seattle aimed at improving people’s health around the world. The gift from the Bill & Melinda Gates Foundation is to be used to construct a building at the university to house its Population Health Initiative.

The Bill & Melinda Gates Foundation is one of the largest private charities in the world. In June, Mr Gates announced a donation of 100,000 chickens to sub-Saharan Africans living in extreme poverty.

The Yoovidhya family

The 11 surviving members of the Thai family behind Red Bull have a collection wealth of $22 billion, according to research by Bloomberg.

The world’s largest fortune from energy drinks owes its start to the family’s late patriarch, the reclusive entrepreneur and sometime duck farmer Chaleo Yoovidhya.

The bulk of the fortune sits in Red Bull GmbH, the Fuschl, Austria-based business that owns rights to distribute a carbonated version of Yoovidhya’s original recipe, as well as sports and adventure assets that include an airborne stunt team, “The Flying Bulls,” four professional football teams, two Formula One race teams and units that organise and promote events such as the space jump four years ago by daredevil Felix Baumgartner.

Chaleo Yoovidhya, who died in 2012, established closely held TC Pharmaceutical Industries in 1956 to sell antibiotics. He later pivoted to energy tonics and in 1975 invented a drink made with caffeine, sugar and the amino acid taurine. He called it Krating Daeng, or “red bull” in Thai. It was sold as an inexpensive energy drink in Asia until 1987, when he teamed up with Austrian marketing whizz Dietrich Mateschitz, who discovered the drink while seeking to counteract jet lag on a business trip.

Together, they built fortunes by modifying the recipe and creating a global brand around an adrenalin-fuelled culture of extreme sport. Mr Mateschitz, 72, controls a $12.3bn fortune, ranking him as the 80th-richest person on the Bloom–berg index.

Ten Yoovidhya family members share 49 per cent of Red Bull, while Chalerm Yoovidhya, the patriarch’s eldest son, owns another 2 per cent, according to Orbis, a database of closely held companies published by Bureau van Dijk and corporate filings from the Hong Kong Companies Registry. The remaining 49 per cent is held by Mr Mateschitz.

Robert Bass

A company backed by the Texas billionaire Robert Bass has hit a snag in a plan to build the first business jet able to fly faster than the speed of sound.

The selection of an engine supplier for the Aerion Corp plane, which Mr Bass once said would occur in the first half of this year, is now expected to come in 2017.

Falling short of the engine goal underscores the difficulty of Aerion’s challenge. The aircraft, known as the AS2, would be the first supersonic civ­ilian plane since Concorde flights were halted in 2003. Aerion’s efforts gained momentum when Airbus agreed in 2014 to help design and produce the plane. Aerion has considered two dozen engines from manufacturers.

In 2000 Mr Bass, heir of his family’s oil empire, came across a the­ory of supersonic speed and aircraft wing technology. First, he bought five textbooks used in Stanford University aeronautics classes to bone up on the subject. Then as he delved into the physics of planes, he became convinced that a profitable supersonic business jet was viable.

Forbes estimates Mr Bass’s net worth at $2.8bn.

Jorge Perez

As the billionaire Miami real estate developer Jorge Perez tells it, the city is the closest thing the US has to a modern-day Phoenicia: a hub community perfectly situated between New York and Latin America, sustained above all by a heavy flow of goods and people. Mr Perez – who is supporting Hillary Clinton in the presidential campaign but has called Donald Trump a friend for years – said the latter’s vision on trade and immigration would be a disaster for Miami. That is a big reason he said he thinks Mr Trump will lose the state and, as a result, the election.

“We trade, and that’s what we do,” Mr Perez, 67, said as he gestured from his bay-front office to the city that sprawls before him, much of it built on commerce and immigration from Latin America. “We want a president that is pro-opening up those relations more and more.”

Mr Trump’s campaign has a lot riding on the Sunshine State, where a Bloomberg Politics poll showed the Republican nominee with a 46 per cent to 45 per cent lead over Mrs Clinton. The poll shows Mrs Clinton winning handily in the Miami area.

South Florida exported some $10bn more than it imported last year, and it is on pace for another surplus in 2016, according to US Census Bureau data. Even by conser­vative estimates, trade in Florida supports hundreds of thousands of jobs, from the computer hardware and software that gets exported en masse, to the bundles of flowers that arrive regularly at Miami

International Airport.

Mr Perez has a lot riding on Miami’s success. He has built many of the soaring condominium towers that have transformed the city’s skyline, and he estimates most of them were sold to immigrants. His largesse has fuelled Miami’s cultural boom. A new art mus­eum bears his name, and its halls are, in part, filled with works from his personal collection.

Forbes estimates Mr Perez’s net worth at $2.8bn.

Peter Thiel

Palantir Technologies is a data

analytics company that compiles disparate data streams and displays the information graphically for non-technical consumers. Its major clients and pat­rons have included the CIA, the FBI and the US air force, marines and navy – but notably, not the army.

So Palantir is suing.

Palantir was founded and is chaired by the litigious billionaire Peter Thiel, who remains its main investor. Mr Thiel was a PayPal co-founder and an early investor in Facebook. More recently he is known for having secretly spent tens of millions to bankroll lawsuits against Gawker Media, a process which ended with Gawker declaring bankruptcy.

In August 2009, Palantir executives were at the Pentagon to pitch their data-parsing technology to the military brass. It did not go well. One theory is that the army types were not impressed at the California-causal dress code of the tech types.

The lawsuit says it went downhill from there, and that the army has neglected its duty to choose a commercially available product over a custom-built one. The suit alleges that army officials cancelled tests of Palantir’s technology then lied about it.

Much is at stake for Palantir It wants a piece of the army’s Distributed Common Ground System, a $6bn hardware and software system that aims to compile intelligence from all over the world.

On Monday, a verdict in the lawsuit came down. A federal judge ruled in favour of Palantir, ordering the army to restart the bidding process and include commercial offerings in its evaluation, which puts Palantir back in the running

Bloomberg estimates Mr Thiel’s net worth at $2.9bn.

* Bloomberg

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Healthpoint hospital keen to expand with medical tourists targeted

The Mubadala-owned multi-speciality hospital Healthpoint expects to expand its capacity and services as it eyes medical tourists next year.

Based in Zayed Sports City in Abu Dhabi, the hospital said it would increase the number of beds to 78 in the first quarter, including five beds for its new paediatrics centre and 10 for treating obese patients. Currently, it has 44 inpatient beds for its 21 clinical departments and services. All of its rooms are single occupancy.

The hospital expects to open the paediatric wing as well as expand its plastic and cosmetics surgery centre and the ear, nose and throat clinic by the second quarter. It would also expand its pharmacy.

While its current focus is to stem the flow of patients travelling outside the UAE to seek advanced medical care, it would also aim to attract more international pat­ients next year.

Healthpoint’s specialist orthopedics centre, the Abu Dhabi Knee and Sports Medicine Centre, and the bariatric and metabolic surgery centre recorded patients from across the Arabian Gulf.

“We will start to look at medical tourism [next year] and are likely to focus on orthopedics, spine and bariatrics as these are the centres [that] offer specialties that would serve the region,” said Dr Ihsan Al Marzouqi, the associate director at Mubadala Healthcare and a member of the board of directors for Healthpoint.

“At the moment our objective is to provide services for patients who were previously traveling overseas for quality care, and fill that gap.”

Mubadala’s healthcare division reported a profit of Dh77.5 million during the first half of the year, up from Dh18.6m in the same period last year. The division also owns the Imperial College London Diabetes Centre and Cleveland Clinic Abu Dhabi.

Treatments and procedures related to orthopaedics, spine, cosmetic surgery, family medicine, gynaecology and dentistry have gained popularity among patients from the UAE at Healthpoint, in line with the trend across the emirate.

To cater to the demand, Healthpoint said it would also hire more physicians next year.

Through August, Healthpoint employed 380 medical personnel, including 65 physicians and 315 nursing, pharmacy and technical staff. It expects to reach 90 physicians by the end of next year.

“Career progression and concise career pathways are given to UAE nationals who join our team,” according to Sarah Staal, Healthpoint’s chief administrative officer.

The hospital provides opportunities such as internships, job shadowing, mentoring, on-the-job coaching, formal classroom training and job rotation, collaborating with its sister facilities.

The three-year-old hospital’s average bed occupancy rate was 90 to 100 per cent during the first half of the year for stays between Sundays and Thursdays, according to Ms Staal.

It expects anywhere between 1,000 and 1,200 patients a day. During the first half, about 146,000 patients registered at the hospital, a 76 per cent increase on a year earlier.

“Offering patients larger, private rooms with five-star amenities in a true boutique-style experience is our objective as we know that a better experience leads to happier patients and better outcomes,” Ms Staal said.

This year, Healthpoint opened its bariatric center, and in September doubled the number of dentistry chairs to 12.

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Off hours: IMA global chairman not the retiring type

Larry White is executive director of the Resource Consumption Accounting Institute and former global chairman of the Institute of Management Accountants (IMA). On a recent regular trip to Dubai as an IMA board member, Mr White, 58, addressed the International Federation of Accountants’ Professional Accountants in Business Committee on improving financial processes. Claiming he is “mostly retired”, he has two grown-up children and lives with his wife Sherry in Florida. During his Middle East visit, the former US Coast Guard captain also spoke to IMA chapters in Abu Dhabi, Dubai, Qatar and Kuwait.

How do you spend your weekend?

My main recreational activity is exercise. I have swim practice and lift weights. Normally I spend two to three hours a day at my computer. I have two main hobbies; management accounting – I’m almost always working on a research project and preparing speeches. The other activity, if I hit a mental block writing, is planning personal trips.

How did you become IMA global chairman?

I went to US Coast Guard Academy out of high school. I graduated in 1980, was on ships for four years and commanded an 82-foot patrol boat. I ran a rescue coordination centre for the Coast Guard, then went to Columbia University to get my MBA, concentrating on managerial and financial accounting. I did budgeting and accounting for the Coast Guard for 21 years and was deputy chief financial officer at one point. One day I stepped on a postcard for the certified management accounting exam and I thought “that’s exactly what I’m going to be doing”. I then started my career with the IMA that eventually led me to be global chairman.

What is your go-to gadget?

My Acer I7 computer. It’s four years old and holding up quite well. I haven’t become smartphone-dependent and am not quite comfortable with a tablet.

What was the lowest point of your career?

In command of the patrol boat, I was sent to tow a fishing boat run aground in a very bad inlet. My crew worked on it a long time. We weren’t making headway and went into dock. They told me to go back and keep towing. I said “we’re going to have something bad happen” and they said go back anyway. So I did and a line fell, a guy slipped, dropped the tow line, it caught in the propeller and I couldn’t manoeuvre the ship. Running a ship aground is generally considered about the worst thing you can do as captain, but due to the circumstances no one mentioned it again. I was pulled off and there was no damage. That was my single worst day in my professional career. We made the cover of National Fisherman magazine in the US.

What advice would you offer others starting out in your business?

My business today really is accounting and financial management. I encourage people to do their best to not just focus on accounting, but to understand what causes businesses to make money; do something that’s not accounting and understand how business really works. Management accounting is about the laws of nature.

What is your most indulgent habit?

My wife and I take three or four major trips a year. This year I’ve had a month in French Polynesia, went to Australia and New Zealand, Russia, Finland and Estonia. In January we’re going to Antarctica and South America.

What do you have on your desk at work?

The computer, a Coast Guard cup holder and mouse pad. I have a box where I stuff papers that would normally go on my desk. I bought a really nice teak desk so I try not to put much on it because I like the feel of the wood.

What can’t you live without?

Exercise. It bothers me when I get a cold and I have to stop. I used to be a runner but my knee gave out. Fortunately I had swimming skills.

How do you achieve a work-life balance?

My wife says I’m the most unretired person she knows. I’ve been working with the IMA since 1994; I’m on the board of directors and do research projects so on my résumé my hobbies are travel, exercise and management accounting. Part of my recreation is activating my brain, which I do by writing and doing projects. I don’t have pressure on me, but I keep plugging away.

If you could swap jobs with anyone who would it be and why?

My feeling is, if I wanted to do something I would do it. I ­haven’t been refused anything I wanted to do. My heroes are by and large IMA leaders or Coast Guard leaders I emulated. I wake up in the morning and say “man, I’m really happy with what I’m doing”.

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Robot invasion puts factory workers' jobs to the sword

For factory workers, there is a stark warning; the robots are here – and they want your job.

While manufacturing is still flourishing in America, factories do not need as many people as they used to because machines now do so much of the work.

America has lost more than 7 million factory jobs since manufacturing employment peaked in 1979. Yet US factory production, minus raw materials and some other costs, more than doubled over the same span to US$1.91 trillion last year, according to the US commerce department, which uses 2009 dollars to adjust for inflation. That is a notch below the record set on the eve of the Great Recession in 2007. And it makes US manufacturers second only to China.

Automation

Critics are right that trade has claimed some American factory jobs, especially after China joined the World Trade Organisation in 2001 and gained easier access to the US market. And industries that have relied heavily on labour – such as textile and furniture manufacturing – have lost jobs and production to low-wage foreign competition. US textile production, for instance, is down 46 per cent since 2000. And over that time, the textile industry has shed 366,000, or 62 per cent, of its jobs in the United States.

But research shows that the automation of US factories is a much bigger factor than foreign trade in the loss of factory jobs. A study at Ball State University’s Centre for Business and Economic Research last year found that trade accounted for just 13 percent of America’s lost factory jobs. The vast majority of the lost jobs – 88 per cent – were taken by robots and other homegrown factors that reduce factories’ need for human labour.

“We’re making more with fewer people,” says Howard Shatz, a senior economist at the Rand think tank.

General Motors, for instance, now employs barely a third of the 600,000 workers it had in the 1970s. Yet it churns out more vehicles than ever.

The electric car maker Tesla, meanwhile, is at the forefront of robotics with two giants dubbed Wolverine and Iceman working at its production line.

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Or look at production of steel and other primary metals. Since 1997, the United States has lost 265,000 jobs in the production of primary metals – a 42 per cent plunge – at a time when such production in the U.S. has surged 38 per cent.

Allan Collard-Wexler of Duke University and Jan De Loecker of Princeton University found last year that America did not lose most steel jobs to foreign competition or faltering sales. Steel jobs vanished because of the rise of a new technology: super-efficient mini-mills that make steel largely from scrap metal.

The robot revolution is just beginning.

The Boston Consulting Group predicts that investment in industrial robots will grow 10 per cent a year in the 25-biggest export nations through 2025, up from 2 or 3 per cent growth in recent years.

The economics of robotics are hard to argue with. When products are replaced or updated, robots can be reprogrammed far faster and more easily than people can be retrained.

Robotic spot welder

And the costs are dropping: owning and operating a robotic spot welder cost an average $182,000 in 2005 and $133,000 in 2014 and will probably run $103,000 by 2025, Boston Consulting says. Robots will shrink labour costs 22 per cent in the United States, 25 per cent in Japan and 33 per cent in South Korea, the firm estimates.

The chief executive Ronald De Feo is overseeing a turnaround at Kennametal, a Pittsburgh industrial materials company. The effort includes investing $200 million to $300m to modernise Kennametal’s factories while cutting 1,000 of 12,000 jobs. Automation is claiming some of those jobs and will claim more in the future, Mr De Feo says.

“What we want to do is automate and let attrition” reduce the workforce, he says.

Rise of the machines

Visiting a Kennametal plant in Germany, Mr De Feo found workers packing items by hand. He ordered $10 million in machinery to automate the process in Germany and North America.

That move, he says, will produce “better quality at lower cost” and “likely result in a combination of job cuts and reassignments.”

But the rise of the machines offers an upside to some American workers: the increased use of robots – combined with higher labour costs in China and other developing countries – has reduced the incentive for companies to chase low-wage labour around the world.

Multinational companies are also rethinking how they spread production across the globe in the 1990s and 2000s, when they tended to manufacture components in different countries and then assemble a product at a plant in China or other low-wage country. The 2011 earthquake and tsunami in Japan, which disrupted shipments of car parts, and the bankruptcy of the South Korean shipping line Hanjin Shipping, which stranded cargo in ports, exposed the risk of relying on far-flung supply lines.

Savings

“If your supply chain gets interrupted and your raw materials are coming from offshore, all of a sudden shelves are empty and you can’t sell product,” says Thomas Caudle, the president of the North Carolina textile company Unifi.

So companies have been returning to the US, capitalising on the savings provided by robots, cheap energy and the chance to be closer to customers.

“They don’t have all their eggs in that Asian basket anymore,” Mr Caudle says.

Over the past six years, Unifi has added about 200 jobs, bringing the total to over 1,100, at its automated factory in Yadkinville, North Carolina, where recycled plastic bottles are converted into yarn. Unmanned carts crisscross the factory floor, retrieving packages of yarn with mechanical arms – work once done by people.

Cheap labour

In a survey by the consulting firm Deloitte, global manufacturing executives predicted that that the US will overtake China as the most competitive country in manufacturing by 2020. Competitiveness is measured by such factors as costs, productivity and the protection of intellectual property.

The Reshoring Initiative, a non-profit that lobbies manufacturers to return jobs to the United States, says America was losing an average of 220,000 net jobs a year to other countries a decade ago. Now, the number being moved abroad is aboutoffset by the number that are coming back or being created by foreign investment.

Harold Sirkin, senior partner at Boston Consulting, says the global scramble by companies for cheap labour is ending and its not, as Donald Trump espouses, because illegal immigrants are taking jobs.

“When I hear that [foreigners] are taking all our jobs – the answer is, they’re not,” he says.

* Bloomberg

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Abu Dhabi apartments come with all the perks, for Dh17,000 a month – in pictures

Rent at the complex includes access to a rooftop swimming pool. Ravindranath K / The National

The complex also includes office towers in addition to residences. Ravindranath K / The National

The serviced apartments come fully furnished for long-term stays – though more conventional ones are also available for rent. Ravindranath K / The National

The serviced apartments are leased long-term but come with service such as maids, room service, laundry and grocery shopping. Ravindranath K / The National

Some of the serviced apartments come with lounges – though they carry an eye-watering price ticket that starts at Dh17,000 a month. Ravindranath K / The National

A one-bedroom serviced apartment at the Marriott hotel at Bloom Central, a new residential and commercial development on Airport Road in Abu Dhabi. Ravindranath K / The National

The JW Steakhouse at the Marriott at Bloom Central. Ravindranath K / The National

The complex is located on Airport Road across the street from Al Wahda Mall. Ravindranath K / The National

The lobby at Bloom Central. Ravindranath K / The National

The Velocity lounge at the Marriott is one of the amenities that come with living in the complex. Ravindranath K / The National

The Lounge at the Marriott Executive apartment at Bloom Central. Ravindranath K / The National

China targets Boeing 787s and Airbus A350s as it plans widebody jetliner with Russia

Even before China’s domestically made C919 single-aisle jet takes flight, the nation already has its sights set on producing a much larger aircraft within a decade.

Executives of the state-owned Comac have unveiled plans to make a twin-aisle jet that can fly as far as 12,000 kilometres – about the distance between Beijing and New York. The company is forming a joint venture with Russia’s United Aircraft to research on and manufacture the aircraft.

The announcement at a biennial airshow in southern Zhuhai city marks the first time China has given details of the widebody aircraft since the planned Russian partnership was flagged two years ago and comes amid delays to the maiden flight of the C919. The new plane would be able to seat 280 people, posing a direct challenge to jetliners from Boeing and Airbus such as their current B777, B787, A330 and A350 models.

Comac is targeting the maiden flight of the new aircraft to take place about seven years from now, and the first delivery three years after that. An assembly line will be set up in Shanghai, with an eye to exporting the plane to other markets in the future, said Guo Bozhi, an assistant president at Comac who is in charge of the widebody-jet project.

“Developing an aircraft is an arduous journey and we have to overcome a lot of technical difficulties,” Mr Guo said. But the timeframe “is a definite target”, he said.

He declined to provide financial figures on the joint venture and development of the twin-engine plane.

Comac said this week that China Eastern Airlines will be the first carrier to take delivery of the locally made C919, a day after Wu Guanghui, Comac’s chief designer, said the narrowbody jet’s test flight would take place later this year or in early 2017. The plane’s maiden flight has been pushed back at least twice since 2014.

* Bloomberg

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Ryanair has Lufthansa in a flap as Irish budget carrier plans routes from Frankfurt

Ryanair’s plans for its first-ever flights from Frankfurt sparked a bitter response from Lufthansa, which has vowed to fight back against the surprise incursion at Germany’s biggest hub.

While Ryanair will begin Frankfurt services with just two jets and four routes, Europe’s top discount airline sees potential for a bigger operation there, said David O’Brien, its chief commercial officer.

“We doubled our presence in Germany within three years,” Mr O’Brien said. “There is no reason why that pace shouldn’t continue. There is great potential for cheap flights from Frankfurt.”

Lufthansa hit back by pledging to “react as appropriate” to the intrusion. The chief executive Carsten Spohr said his company’s own low-cost Eurowings arm could be drafted in to defend the hub “if there is a need”, while warning the airport operator Fraport that he expects to pay the same fees secured by the discount giant. Fraport said it is entitled to the saving if it adds new routes.

Ryanair’s plans for Frankfurt may have blindsided Lufthansa after Michael O’Leary, the Irish company’s chief executive, ruled out operations from the airport only last year. “Our boss famously said, ‘We won’t fly to Frankfurt,”’ Mr O’Brien said. “He was wrong.”

The looming clash pits Europe’s biggest no-frills carrier against one of the world’s strongest travel brands. Lufthansa’s reputation, though, has proved little defence against a squeeze from low-cost carriers at home and fast-expanding Arabian Gulf operators on lucrative long-haul routes.

Lufthansa has responded by setting up Eurowings as an in-house discounter, although the unit has so far been limited to taking over routes away from Frankfurt, where short-haul flights feed passengers onto longer trips. Services from Munich, the group’s second German hub, will start next year.

Ryanair will start flying from Frankfurt in March using two Boeing 737-800 jets, according to a joint statement from the Dublin airline and Fraport. Initial flights will serve Alicante, Malaga and Palma de Mallorca in Spain and Faro in Portugal on a daily basis, attracting an estimated 400,000 passengers a year. The schedule could be “much bigger” next winter, Mr O’Brien said.

Mr O’Leary has been reviewing Ryanair’s strategy in the wake of Britain’s June 23 vote to quit the European Union, downgrading expansion plans for its biggest market and looking to countries on the mainland for growth. Germany had already gained flights, with the airline opening a base this week in Hamburg, where it has located two planes and added seven routes to take its total to 14.

Route cuts at the unprofitable Air Berlin, Germany’s second-biggest carrier, have encouraged Ryanair to expand, while Mr O’Leary has made it a priority to target major airports as the company seeks to appeal more to business people, who tend to book later and pay more. Frankfurt ranks with London Heathrow and Paris Charles de Gaulle as one of western Europe’s three big hubs.

Ryanair’s previous foothold in the Frankfurt area has been at the low-fee Hahn airport, a converted US military airfield about 100 kilometres from the city. While derided for the distance involved, the airline won the right to advertise its flights as serving Frankfurt-Hahn after a series of court cases.

Fraport failed to raise fees this year for carriers using Frankfurt airport after regulators objected in late 2015. It has refiled the application, which includes incentives for airlines starting new routes. Lufthansa has meanwhile curbed capacity growth at Frankfurt, pledging not to add pilots before the Vereinigung Cockpit union agrees productivity improvements.

New routes attract a discount of as much as 50 per cent in the first year, said the Fraport chief executive Stefan Schulte. That would amount to €300 million (Dh1.22 billion) next year if applied to Lufthansa’s planned schedule, according to Mr Spohr.

Fraport said it expected Frankfurt traffic to stabilise next summer after it upgraded its earnings forecast for 2016 thanks to payments received from projects in St Petersburg and Manila.

The airport operator confirmed on Thursday it expects passenger numbers at Frankfurt airport to fall slightly this year, which would be the first fall in annual numbers since 2009. Passenger numbers are down 1.1 per cent for the year up until the end of October, it added.

Fraport has been in talks with low-cost carriers and said it expected the 2017 summer season at Frankfurt to show a “stabilising trend to slightly positive”.

It now sees 2016 earnings before interest, tax, depreciation and amortisation of between €1.04bn to €1.08bn, up from a previous forecast for €850m to €880.

Payments from a lawsuit over Manila airport will add around €120m to the net result, while the sale of part of its stake in St Petersburg airport will boost the result by some €35m.

Fraport reported third quarter ebitda of €298.3 million, in line with analyst expectations.

* Agencies

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Egypt’s blue-chip stock index soared in early trading on Thursday after the central bank said it was floating the Egyptian pound in an effort to end a hard-currency shortage that has plagued the economy for several years.

The EGX 30 index jumped 8.3 per cent with many stocks rising their 10 per cent daily limits. The broader EGX 100 gained only 3.6 per cent, however. The central bank said it had floated the pound and hiked interest rates by 300 basis points to rebalance currency markets. Bankers said they had been informed that the central bank would set an initial guidance rate of 13 pounds to the dollar at a sale at 1pm local time, compared to the previous official rate of 8.88 pounds.

The central bank also said in a statement that it would abolish the priority list for imports and phase out monetary financing of the budget deficit over coming months.

“This is very encouraging news. The stock market would love this news because the bottleneck has finally been relieved,” said a Dubai-based analyst.

An equities trader in Cairo said before markets opened: “There is a wave of buy orders we are receiving at the moment. I think this will outdo the rally in March.”

In mid-March, the central bank devalued the pound to 8.85 per dollar from 7.73 and simultaneously pumped nearly US$200 million into the dollar-starved banking system. The stock market rallied 6.7 per cent in very heavy trade that day.

Economists believe a more flexible exchange rate mechanism could help unlock billions of dollars in foreign investment.

The Dubai analyst, however, said that some foreign investors were likely to remain cautious about putting money into Egypt for now until they saw how well Egyptian authorities managed the float, and because of uncertainties overhanging emerging markets such as the US presidential election.

Egypt is seeking a $12 billion loan from the IMF, which has said publicly that the government should act on the exchange rate and subsidies. Egypt’s pound has repeatedly weakened to a record in the black market in the past month, as pressure increased on the government to devalue. The currency depreciated to 17.98 per dollar in Bloomberg’s most recent survey of currency dealers, taking its decline this year to 52 per cent in unofficial trading.

The exchange rate will now be set by “supply and demand”, said the governor Tarek Amer. In a statement on its website, the central bank said the measures would help end a black market.

* Agencies

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