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http://www.thenational.ae/business en-US http://www.thenational.ae/article/20150812/ARTICLE/150819676/1005

Dubai Parks and Resorts posted a Dh29 million loss in the second quarter while confirming the start of its Dh10.5 billion project in October next year.

The theme park operator did not give a comparable figure for the second quarter of last year because it was listed only last December. Because the park is under construction, it did not have revenue to report. The park operator posted a first-quarter loss of Dh13m.

“The first revenues are expected towards the end of 2016 following the opening of the parks to the public,” the Dubai-listed company said.

Dubai Parks and Resorts, part of Meraas Holding which is owned by Dubai’s ruler, is forecasting revenue of Dh2.4bn in its first full year of operation.

Its total project expenditure, which includes land acquisition, reached Dh3.8bn at the end of the second quarter, up 27 per cent from Dh3bn in at the end of the previous quarter. Total assets reached Dh7bn at the end of the second quarter.

About 57 per cent of the infrastructure construction at the project is complete, while ride engineering and manufacturing is 52 per cent finished. Construction on the site off Sheikh Zayed Road started in February last year.

The theme park complex comprising attractions such as Legoland, Motiongate and Bollywood Parks expects to attract 5.5 million visitors in 2017.

The park is projected to generate an annual growth in visitor numbers of between 9 and 11 per cent after 2017.

Dubai is counting on its entertainment and theme parks sector to help it maintain its rapid growth in tourist arrivals, which it plans to nearly double to 20 million by 2020.

Dubai Parks and Resorts shares fell 2.3 per cent to Dh1.24 in Dubai.

dalsaadi@thenational.ae

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Wed, 12 Aug 2015 17:08:56 +0200 395527CB-2073-486C-8D46-641635CB8FCC http://www.thenational.ae/article/20150812/ARTICLE/150819734/1005

Property prices in Dubai Marina have dropped by as much as 18 per cent over the past three months, according to the classifieds website Dubizzle.

The company’s second-quarter report shows that sale prices for a studio apartment fell by 18 per cent in the Marina to Dh900,000, while three-bed properties dropped in price by 14 per cent to Dh3.6 million.

Rents in the area, which remains the most searched for community in Dubai, have fallen by 7 per cent for three-bedroom properties to Dh213,000 per year.

Meanwhile, prices in some of Dubai’s older communities such as Deira have increased as renters have sought cheaper options in the city and no new stock has been built in these areas.

Where Dubai rents have risen and fallen, second quarter of this year

The rent for a studio apartment in Deira has increased by 18 per cent to Dh65,000 (the same as in Bur Dubai) and three-bedroom apartments have risen by 5 per cent to Dh158,000.

In Abu Dhabi, rents and prices have increased across the board apart from Al Reem Island, where there was a decline in sales prices for two and three-bedroom apartments. Two-bedroom apartments dropped in price by 2 per cent to Dh1.96 million, and three-bed units fell by 5 per cent to Dh2.8m.

Dubai and Abu Dhabi tenants locked in limbo as landlords seek rent advantage

Rents at Saadiyat Island increased by more than 10 per cent, with a three-bedroom property costing an average Dh210,000 to Dh240,000.

Musaffah East, encompassing Mohammed bin Zayed City and Khalifa City, remains the most affordable area in Abu Dhabi to rent.

However, even here prices increased by up to 13 per cent. A one-bedroom apartment in Khalifa City A costs 11 per cent more at Dh55,500.

“The Dubai property market is softening, while older areas in Dubai showed price increases in reflection to a maintained level of demand,” said Ann Boothello, product marketing manager for dubizzle. “An example of this is that now a studio in Bur Dubai is rented out for Dh65,000 annually and in Dubai Marina at Dh70,000.”

Where Abu Dhabi rents have risen and fallen, Q2 2015

“Prices of properties for sale decreased across Dubai, with the exception of studios and two-bedroom apartments on the Palm Jumeirah increasing up to 6 per cent,” she added.

“Abu Dhabi, on the other hand, experienced price increases in for sale and rent properties.”

The top five areas where people were looking for property to buy in Dubai during the first six months of the year were Dubai Marina (which attracted 20 million searches), followed by International City (16 million), JLT (13 million), Downtown Dubai (7 million) and Arabian Ranches (4 million).

In Abu Dhabi, the most popular areas for buyers were Al Reem Island (2 million searches), Gate District (2 million), Tamouh’s Marina Square (900,000), Al Ghadeer Village (900,000) and Shams Abu Dhabi (500,000).

mfahy@thenational.ae

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Wed, 12 Aug 2015 13:37:06 +0200 FF8EDAAF-A8DB-4245-8C5B-2359C4A5F40A http://www.thenational.ae/article/20150812/ARTICLE/150819686/1005

Hedge fund bets that the worst is yet to come for copper are coming true.

On Wednesday copper slipped to six-year lows as China’s yuan headed for the biggest two-day drop in two decades. It was trading down 3.47 per cent at US$5,125 per tonne in London.

The currency weakened 1.8 per cent to a four-year low of 6.4392 per US dollar in Shanghai after a 1.8 per cent tumble on Tuesday. Policymakers cut the daily fixing yesterday by 1.6 per cent.

Prices for the metal used in everything from homes, cars and appliances are stuck in the worst slump in more than two years. Stockpiles jumped 11 per cent in Shanghai last week. With China’s economy showing little signs of recovery, money managers are increasing wagers that copper will fall further, pushing their net short position to the most bearish since April 2013, US government data show.

China accounts for about 40 per cent of global demand, and consumption is slowing at the same time that supplies are becoming more plentiful. Morgan Stanley predicts that while mine production was stagnant last year, output will rise almost 5 per cent this year and keep growing through 2018.

“Copper is very oversupplied,” said Dan Heckman, a national investment consultant at US Bank Wealth Management, which oversees about US$127 billion in Kansas City, Missouri. “Until you get more balanced supply and demand, I think copper continues to have a very challenging time.”

Dharmesh Bhatia, the manager for commodities market, at Emirates NBD Securities in Dubai, said he did not expect base metal prices to materially improve over the next 12 to 18 months. “The basket of metals including copper, zinc and nickel faced downside risks amid an uncertain global economic recovery.”

Ole Hansen, Saxo Bank’s head of commodity strategy, said the “surprisingly subdued economic activity in China this year combined with the recent slump in stocks, which carries the risk of undermining consumer confidence even further, have put metal prices under pressure”.

Speculators held a net short position in copper of 33,547 futures and options contracts as of August 4, according to Commodity Futures Trading Commission data released last Friday. That compares with 25,746 a week earlier.

Commodity slump

The money managers’ outlook for copper could be a bad omen for commodity bulls, because the metal has historically been used as an indicator for what is to come in raw materials and as a gauge of global expansion. The Bloomberg Commodity Index dropped 1.4 per cent last week, a fifth straight loss and the longest slide since January. Eighteen of the 22 products tracked by the gauge are stuck in bear markets.

But are there any opportunities to profit from the metal? Mr Hansen thinks not. “I primarily follow copper and currently the investment opportunities here are limited. One point of interest is the investment flows,” he said. Money managers are holding a near-record short position, so any additional announcement of Chinese stimulus could trigger buying from short positions being scaled back, according to him.

Warren Kreyzig, a commodities research analyst at Julius Baer, said although prices might have undershot on mounting bearish sentiment in the futures markets, “we do not see lasting upside and advise against bottom-fishing. Prices should remain lower for longer and we maintain our neutral price outlook”.

Disruptions at mines could help to stem the plunge for copper.

Mr Bhatia said low commodity prices should prove a challenge to high-cost producers. “While this suggests to us that commodity prices have room to recover in the long run as supply consolidates, risks in the second half of this year are high. For investors looking for a turning point, we suggest watching four factors over the next three to six months,” he said.

In Chile, the world’s largest source of the metal, protests by employees of companies hired by Codelco stretched into a third week. Workers who stormed the miner’s Salvador operation on July 22 took over its Hales mine last week. The state-owned company estimated damages at $15 million.

Freeport-McMoRan, the biggest publicly traded base metals producer, said last month it would review its mine plans and might cut output of copper and molybdenum to preserve supplies for when market conditions improve.

Supply disruptions

“The base metals producers perhaps have done a lot more than the energy sector in terms of cutting capex to get ahead of the game,” said Frances Hudson, an Edinburgh-based global thematic strategist at Standard Life Investments, which oversees $383bn. “In the copper market, we’ve seen some supply disruptions, which perhaps give an inkling that there’s light at the end of the tunnel.”

Ample inventories can help to cushion supplies even amid mine stoppages. Stockpiles tracked by the London Metal Exchange rose for a sixth week and are now at 354,125 tonnes, the highest since January last year. In warehouses monitored by the Shanghai Futures Exchange, inventories climbed 11 per cent to 114,000 tonnes last week, the biggest gain since February 26.

More production

Production is rising after prices more than quadrupled from 2000 through the end of 2012, as miners struggled to keep up with China’s booming economy. Futures in New York are heading for a third annual loss in a row, with increased output coming to market amid slowing consumption from Asia.

There are more signs of abundant supplies. The costs to treat and refine ore concentrate in China climbed about 5 per cent last month from June, the first gain in 10 months, Bloomberg Intelligence estimates. The fees usually rise when production outstrips demand.

“The pattern of lower prices is likely to continue until we see some signs of stability in the Chinese economy and see some signs of a bottoming,” said Alan Gayle, a senior strategist for Atlanta-based Ridgeworth Investments, which has about $42.5bn in assets. “The bears have a stranglehold on the market.”

* With additional reporting by The National

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Wed, 12 Aug 2015 16:34:33 +0200 F7ADE7F5-1E4D-4852-8A13-A027620B3335 http://www.thenational.ae/article/20150812/ARTICLE/150819687/1005

Egypt’s government in the coming months faces one of its biggest economic challenges since it came to power a year ago: the implementation of the long-planned value-added tax (VAT).

The VAT promises to be hugely unpopular among businesses, which are already suffering from five years of economic stagnation. But the tax is crucial for raising funds and shows that Egypt is committed to long-term reform.

The government says it is relying on the VAT to keep its budget deficit under 9 per cent of GDP in the 2015-16 financial year that began on July 1.

However, over the past few months the government backtracked on a series of other deficit-lowering measures.

It froze a proposed capital gains tax for two years, it cancelled an increase in electricity prices for small consumers, and it delayed an increase in the price of subsidised fuel that had been expected to be put in place last month. Further tightening its revenue streams, it reduced the income tax to a unified 22.5 per cent from the previous 25 per cent for individuals, and 30 per cent for corporations.

Abdel Moneim Matar, the head of the tax authority, said this week that the government would proceed with instituting the VAT, but he did not say when.

On Tuesday, the news site Masr Al Ekhbaria cited him as saying that the timing was political and not the responsibility of the tax authority itself. The new VAT law, he said, was on the desk of the finance minister, Hany Kadry Dimian, waiting to be sent to the cabinet for approval.

Mr Matar said he expected the VAT would bring in an extra 30 billion Egyptian pounds (Dh14.03bn) for the 2015-16 fiscal year.

This is by far the government’s biggest revenue-raising measure. The finance ministry projects spending 865bn pounds in the 2015-16 financial year and getting revenue of 622bn pounds. This would leave a deficit of 243bn pounds, or 8.9 per cent of GDP, down from 10.8 per cent in 2014-15 and 12.8 per cent in 2013-14. This means that the VAT would account for nearly 5 per cent of revenue this year.

The government has repeatedly baulked at introducing a VAT for fear of incurring public wrath.

In 1991, Egypt introduced a 10 per cent sales tax as part of an IMF agreement signed that year. The agreement was part of a grand deal in which Arabian Gulf and Paris Club debtors cancelled US$25bn of its foreign debt. Egypt promised to turn the sales tax into a fully-fledged VAT within four years, but the deadline slipped by with no action.

In 1996, Egypt again promised to introduce VAT within a year as part of a second IMF agreement, and once again the deadline slipped by without action.

Under a VAT, producers and retailers must pay a percentage of the price to the government of any goods or services they sell. But when calculating the tax, they in turn are able to subtract the price of any goods or services they previously bought to make or obtain their products. Thus only the part added at each step of the way is taxed.

Under the current sales tax, which the VAT would replace, only the final product bought by the end consumer is taxed.

One major benefit to the government is that by giving an incentive to the producer to declare previous purchases, it forces the producers they bought their goods from to also declare their sales.

This double reporting system has the effect of encouraging companies operating in the informal economy to join the formal economy, which is good for the government but not particularly pleasing to those small businesses that have long avoided the government’s tax demands.

If the VAT is not introduced within the next two or three months, it will throw off the government’s ability to meet its revenue target this financial year, which is already a month and a half gone.

If the government postpones introducing the VAT altogether, not only will it raise concerns about its ability to adopt long-term and sustainable reforms, but it will also send it scrambling to find new financing to plug the immediate budget gap.

Local banks long ago reached the limit of what they could lend the government through the purchase of treasury bills and bonds, with some two-thirds of all their lending now going to the state. This has crowded out private sector companies, which have been starved of financing for new investments.

The government could attract funds to its money markets from abroad, but this would require lowering the value of the pound, which the government has long resisted doing. Foreign investors do not want to buy Egyptian treasury bills and bonds if they fear a devaluation or that they will face delays in getting their funds back into dollars once they sell.

The government could also turn to Arabian Gulf countries for finance. But over the past year that pipeline has tightened, perhaps as Arabian Gulf countries, facing their own financial problems after the collapse of oil prices, grow weary of the prospect of endless Egyptian deficits.

Patrick Werr has worked as a financial writer in Egypt for 25 years

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Wed, 12 Aug 2015 12:48:00 +0200 5AB7F7C2-A740-44E7-AF8A-9E23D34EDC0B http://www.thenational.ae/article/20150812/GALLERY/150819719/1005

The Trabant is the iconic car of the former communist East Germany. Production of the car soon ceased following the collapse of the communist government in 1989, yet the car continues to enjoy a devoted following.













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Wed, 12 Aug 2015 15:17:46 +0200 FF2FE8EB-732F-4FB8-BA2C-01FA6D12E557 http://www.thenational.ae/article/20150812/ARTICLE/150819725/1005

Family businesses are a pillar of the GCC economies. They have grown exponentially from their humble beginnings to become conglomerates that span an array of sectors from real estate to motoring. Their well-being and dynamism are crucial for the region.

Although a lot of pressure is placed on family businesses to go public via initial private offerings, family businesses could benefit tremendously from issuing debt instruments such as bonds or sukuk. So why consider taking this route?

1. Ambitious growth plans

Family businesses have grown and matured to the extent that some are practically unrecognisable from earlier days. The keys to success have included old-fashioned business acumen, favourable environments, access to bank lending and internally generated cash.

Now many are reaching for new heights by tapping other markets. For that, they will need real funding, probably more than can be generated internally or readily secured from banks. Global debt capital markets, and increasingly regional ones, offer the scale that is needed for businesses to invest and expand geographically. This wider footprint will serve the family businesses and the region well should economies in the GCC or the Middle East and North Africa slow down.

2. Maintaining control and ownership

There is no disputing the value of listing the family companies, but the reality is that many are not ready for that step. Accessing the debt markets allows family businesses to remain private and under the control of the founders or their successors. For entrepreneurs who are not ready to part with full ownership, bonds are a way of raising long-term capital that does not dilute equity. In other words, future returns on equity need not be shared. And many companies with solid cash flows are debt-free, so there is significant scope for further returns on equity.

3. Dealing with risk by diversifying sources and changing the terms

Relationship lending or borrowing has retained an attraction, as it is perceived to offer flexible timing and accommodative terms, all with no need for public disclosure. And bankers have been keen to hold on to those lines, often offering very aggressive pricing. But those bank lines will not remain as open as they have traditionally. Sustained lower oil prices are feeding through to the banks in the form of lower liquidity. And regulatory changes such as exposure limits increasingly constrain the use of bank balance sheets.

Family companies that have established their credentials with the fixed income community will take it in stride. They can also benefit from longer tenors than banks are able to provide and access to larger funding amounts. Bonds also offer chief financial officers and treasurers an opportunity to diversify funding sources to include a mix of global and regional investors.

4. Sound corporate governance

At the same time, companies benefit from subjecting themselves to the rigours of the capital market experience, involving prospectus disclosure, due diligence and investor meetings. For family businesses – we mean the medium and large firms that are prominent in the region – preparing for disclosure may prompt constructive changes in management and governance that promote the long-term interests of the company and its stakeholders.

Credit ratings enable family groups to establish independent financial benchmarks and communicate a positive message around management quality and the corporate governance framework. A high investment grade rating is not an absolute requisite for accessing long-term capital. Lower ratings can help to open the door. At the outset of a process, the credit rating services can give preliminary indications of the outcome, and once the rating is assigned, they can provide it on a confidential basis with no obligation to release.

5. Regulators are getting it

The Gulf Bond and Sukuk Association (GBSA) works closely with regional regulators to improve the debt market’s proposition for issuers and investors. New and upcoming regulations will facilitate private placements, reduce administrative burdens, lower fees, streamline approvals, tailor disclosure requirements and provide more choice of issuance structures.

More efficient local systems will complement the access to international bond markets that is enjoyed by big state-linked enterprises and pioneering family businesses while lowering the threshold for initial issuance size to open the door to more private companies. Long-awaited improvements in bankruptcy legislation are starting to appear. And the value of allowing global investors access to GCC markets via international clearing is increasingly recognised. GBSA also provides consistent advice across the region, thus promoting standardisation.

Finally, the region’s governments are starting to issue bonds. This is a potential game changer in that lively government bond markets will enable yield curves that allow for pricing of corporate bonds. A virtuous circle is beginning to take shape.

Michael Grifferty is the president of the Gulf Bond and Sukuk Association, a regional trade group representing firms committed to the Arabian Gulf debt market

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Wed, 12 Aug 2015 14:39:01 +0200 D62C4B31-93F5-437C-8565-FE0BD3C8B0AD http://www.thenational.ae/article/20150812/ARTICLE/150819727/1005

When the team behind the Dubai-based personal finance app Wally realised that the majority of their users lived in non-English-speaking countries, they knew they had to do something to reach them.

But there was a problem. Professional translation services were out of the start-up’s price range.

“We were getting quotes from professional translation agencies and they were giving us quotes of a few thousand dollars per language and some of the languages like Mandarin were more because it is more difficult to find somebody,” says Nicole Abi-Esber, a Lebanese-American who was in charge of user experience at Wally.

Having previously used Upwork, a freelancing website, Ms Abi-Esber set about putting together a virtual team of translators in 18 countries.

“I ended up paying the least amount for Mandarin. It was about US$4 an hour,” says Ms Abi-Esber, who is now working as entrepreneur in residence at Middle East Internet Group, a joint venture of South Africa’s MTN and Germany’s Rocket Internet (Rocket is known for replicating popular websites, such as Airbnb, and bringing them to emerging markets).

“It was really cool because we got access to all these people all over the world and it was much cheaper. They were also comfortable because they were in their own homes instead of being on salaries with a translation agency. They were all students. There was one in Russia, one in Spain, one in Brazil. It was super cool. I think we saved $10,000 to $15,000.”

And importantly, the quality of work was also good.

“Because we had assembled a ‘team’ of sorts dedicated to our product, it guaranteed continuity between translators, whereas often agencies assign translations to multiple translators,” says Ms Abi-Esber. “Also we were able to hire people who had Android phones, and had the technical knowledge to download the test versions of the app and check the translations actually in the app, in context.”

Companies in the UAE appear, like Wally, to be using freelance websites heavily. Businesses in the UAE, California-based Upwork’s fifth largest market, have spent more than Dh390 million to date on the service – Dh100m of that was last year alone.

Kunal Kapoor turned to the service when he was setting up an online marketplace three years ago, and it became apparent that not all of the expertise he needed was available in the UAE.

Nor did he necessarily want all of his staff to work for the company full-time, for both financial and workload reasons.

So he chose the only option open to him: to consult freelancing websites like Upwork, which had a bank of people with the right kind of skills at the right price. And he hasn’t looked back since.

Today eight of his full-time employees, out of 33 staff in total of The Luxury Closet, an online marketplace for luxury items, live abroad across the Middle East and South East Asia.

“Everything is online so you can do a lot of this stuff remotely. You just need to be connected,” says Mr Kapoor, who is chief executive of the Dubai-based company.

“The reason we started doing all of this was because we started saying we should build a work culture and policies that make sense. So if there is something that doesn’t make sense, for example, if someone says why do I have to be here? Can you give me a good reason?” says Mr Kapoor.

“If I can’t give you a reason then why should you be here? The reason is, yes, you should do your work and you should deliver if you have a meeting and if someone needs you to be available here, [then yes you should] but if not, then not.”

Working more online is not the only way the workplace is expected to change.

A study in late 2014 for the commercial real estate services firm CBRE and Genesis, a Chinese developer and operator, found that young people expect the office to be very different in 2030. Workplaces will offer a “wide variety of quiet retreat and collaborative settings”, each of which will suit a specific job or task.

Respondents also said they would move from thinking about workplaces towards places of work, including outside the office.

So how will increased home working affect the quality of our work? Surely we will become more creative working in a space we feel more comfortable in?

“The answer is not as simple as a clear yes or no,” says Alan Iny, senior specialist for creativity and scenario planning at Boston Consulting Group.

“From my perspective I have seen places like BCG, where there are sometimes people who work from home, and sometimes not, be very empowering and be very creative and innovative places. And I have seen it fail in other places as well because people are very hierarchical and domineering and it just doesn’t work out,” he adds.

It has certainly worked out for companies like Wally and The Luxury Closet. Mr Kapoor thinks it could work for others too.

“Once you start allowing the flexibility and once you start trusting people they trust you. If we are falling behind, people automatically recognise that and then they put in extra hours. A lot of them because they have the flexibility to work from home also means if something has to be done at 10pm or 11pm or 12am, they do it at home as well,” he says.

“I think that having the flexibility makes you deliver better. You can choose your timing and deliver more.”

business@thenational.ae

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Wed, 12 Aug 2015 14:36:11 +0200 25DE64DA-CDE2-4F62-8BDD-91204C7F940A http://www.thenational.ae/article/20150812/ARTICLE/150819745/1005

Emirates airline said that Arabian Gulf airlines were not to blame for overcapacity on services between the United States and Dubai, rejecting criticism by US carrier Delta Air Lines.

Delta said on Sunday that it had reduced flights between Atlanta and Dubai this winter, blaming overcapacity on US routes to the Middle East by state-owned airlines, underscoring a trade row.

Delta’s attempt to pin the blame on Gulf carriers is “plainly a political play, or a thin excuse to prop up fares at a higher level by limiting capacity”, an Emirates spokesperson said in a statement.

The Partnership for Open & Fair Skies, a US airline-union group including Delta, alleges Emirates, Etihad Airways and Qatar Airways received $42 billion in subsidies from their governments in the past decade. They say this allowed the Gulf airlines to start dumping capacity into the US, driving down prices and pushing out competitors.

Gulf carriers deny they are subsidised and say poor customer service has caused US airlines to lose market share.

Emirates, citing US Transportation Department data, said average seat loads during 2013-2014 on the Atlanta-Dubai route had been consistently above 85 per cent, showing consumer demand or overcapacity was not the issue.

A Partnership spokeswoman, however, said full planes do not necessarily indicate a route’s profitability because airlines discount seats and let frequent fliers travel free.

Delta is the only airline offering direct flights between Atlanta and Dubai. It will reduce that service to four or five times a week from October 1 instead of daily. That will leave rival United Continental’s Washington-Dubai service as the only daily non-stop flight between the US and Dubai on a US carrier.

Emirates flies to nine US cities and said its average seat loads on these services was above 80 per cent.

The accusations of government subsidies are part of a campaign by the US airlines to persuade the Obama administration to start talks on Open Skies treaties with the Gulf countries. This is currently under review.

Gulf airlines have said it would be protectionist of the US government to tighten trade policies that have in the past benefited US airlines in the absence of large rivals.

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Wed, 12 Aug 2015 12:54:23 +0200 BE65DDBE-1C30-4644-B548-380359B495CE http://www.thenational.ae/article/20150812/ARTICLE/150819746/1005

My landlord gave me less that one year to vacate on the grounds that he wanted to use the apartment for “his own personal use”. The notice was stuck to my door one day. I assume by “his own personal use” he meant to take back the property for his own use or that of his immediate next of kin. I moved out and moved into a more expensive apartment. I subsequently met my old neighbours who told me that a Chinese family had moved into my old apartment for much more that I was paying. I petitioned the Rental Committee to clarify who was staying in the apartment and they have confirmed that the Chinese family is staying there i.e. not my old landlord or his immediate next of kin. Since I have moved into a new apartment based on the illegal notice from the landlord (I did not know it was illegal at the time) can I claim the difference in rent between the old apartment and the new apartment from my old landlord? MH, Dubai

You are quite within your rights to file a case against your landlord for evicting you in favour of reletting the subject property to another tenant at a higher rent. He was deceitful in giving the reason of your eviction as requiring the property for own use. The fact that he gave less than one year’s notice and the manner of the delivery of such notice also breaks the law. I advise you to go to the rent dispute settlement centre.

You must have supporting documents including any correspondence emails between yourself and the landlord plus copies of passports, both yours and his, your Emirates ID, Ejari certificate, original tenancy contract, title deed, Dewa bill and copies of cheques that were issued.

The rent committee form must be typed and non-Arabic documents must be legally translated into Arabic. The fee is 3.5 per cent of the rent capped at Dh20,000. Most cases are concluded within 75 days.

I hope this has helped.

My landlord has sent me a legal eviction notice which says he wants to sell his property. But I have not seen any change of landlord happening or anyone coming and visiting it for buying purposes. What action can we take if the property remains unsold up to the end of the 12-month notice? TS, Dubai

Firstly your landlord can only serve you the 12 months’ notice to vacate upon expiry of your tenancy agreement not before, so please double check the date when the notice was given otherwise the notice is not legal. Assuming he has sent you the 12 months vacating notice at the correct time and at the end of the notice period the property still remains unsold, the law is silent as to exactly what happens.

You would think that if after 12 months the landlord has still has not sold the property that you should be able to renegotiate terms to stay at least until it is actually sold. But, as stated, the law is silent on this point. My advice would be to try to negotiate with the landlord upon this point, to try and get an understanding as to his real intentions. If you feel you are not getting a fair deal then by all means speak to the rental committee but ultimately you will only find out what will happen if you or your landlord actually opens a case.

I rented my property to a tenant and give him notice on the day of issuing the contract to leave the flat in one year’s time. I handed the document over by hand and received his signature. Is this OK or does it have to be sent by registered mail? HO, Dubai

You cannot give a 12 months’ notice to vacate at the same time of signing a first tenancy contract. The 12 months eviction notice can only be served upon expiry of the tenancy agreement as per Law 33 of 2008. This notification can only be delivered in one of two ways, either via registered mail or notary public. The way you have done it is not recognised as being legal so therefore cannot be upheld.

Mario Volpi has worked in the real estate industry in Dubai and in London for the past 30 years. Send any questions to mariovolpi@aol.com

The advice provided in our columns does not constitute legal advice and is provided for information only.

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Wed, 12 Aug 2015 12:53:42 +0200 0FBA6B36-58C3-45EC-90EC-D6F4F58F7056 http://www.thenational.ae/article/20150812/ARTICLE/150819748/1005

Dubai-based contractor Drake & Scull’s profit dropped by 76 per cent year-on-year for the second quarter of 2015 to Dh6 million, despite the fact that its revenue increased by 16 per cent to Dh1.3 billion.

Figures for the first six months of the year show a 52 per cent decline in net profit to Dh34m from Dh71m a year earlier, although revenue grew by 2 per cent to Dh2.4bn.

The company said the drop in profit was due to “delays and cost overruns on projects across several markets”.

“We have met our top line target for the first half of the year; however, we continue to face pressure on our margins as a result of the delays on several projects,” said Khaldoun Tabari, chief executive and vice-chairman of Drake & Scull International.

“Despite the bearish business sentiment across the sector, we’ve started Q3 on a positive note with Dh305m worth of new projects in Kuwait and we remain focused on improving our operation efficiency and increased focus on collections across all markets.”

The company said that Saudi Arabia was its biggest market during the first six months of the year, responsible for 37 per cent of its revenue, followed by the UAE at 28 per cent and Qatar at 16 per cent.

Its engineering division, which carries out mechanical, electrical and plumbing work, brought in 60 per cent of group revenues, and its general contracting arm 35 per cent.

It also secured Dh1.4bn of new projects during the first six months of the year, bringing the total size of its backlog to Dh13.2bn – a slight decline on the Dh14.3bn at the same period last year.

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Wed, 12 Aug 2015 12:30:52 +0200 E683ECCF-CA60-4B4C-B504-86D6B7335055 http://www.thenational.ae/article/20150811/ARTICLE/150819819/1005

Samsung is to launch its Galaxy Note 5 smartphone in the UAE next week.

The South Korean electronics maker said in its press invite that the new device is “more powerful than ever”, and will be unveiled in Dubai next Tuesday.

“The smartphone that ushered in the phablet phenomenon and transformed the mobile industry is now in its fifth iteration,” it said. “Designed to support creators, doers, and achievers around the world, the Galaxy Note 5 is more dynamic, portable and powerful than ever.”

The Galaxy Note 5 is being unveiled in New York on Thursday. Samsung has not confirmed the specifications or features of the new device.

Samsung has come under increased competition in the “phablet” market since Apple launched its iPhone 6 Plus last year, plus the introduction of cheaper devices made in China.

The company reported a seventh straight profit drop with its second quarter results released last month, as sales of its flagship Galaxy S6 fell below expectations.

It remained the leader in the world smartphone market in the second quarter, however, with 21.7 per cent share, according to data from IDC. Apple was in second place with a market share of 14.1 per cent.

“The new Galaxy S6 and S6 edge arrived with mixed results as a limited supply of the edge models did not keep pace with the demand for the new curved handset. Older Galaxy models, however, sold briskly thanks to deep discounts and promotions throughout the quarter,” said IDC in a report.

The Galaxy Note 4, and Note Edge received favourable reviews when released in October, with a much improved S-pen a particular highlight.

Samsung last week unveiled its new flagship tablet, the Galaxy Tab S2, in Dubai, labelling it the thinnest and lightest on the market.

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Tue, 11 Aug 2015 16:22:12 +0200 7B43B24C-8A5C-432D-91BA-C01112A8908E http://www.thenational.ae/article/20150811/ARTICLE/150819791/1005

Nakheel’s aggressive push into Dubai’s retail market shows no sign of abating as it presses on with community malls, with another planned at Al Furjan.

The developer plans to announce the project imminently, according to people with knowledge of the matter.

The second mall at Al Furjan – a development with plans for 2,200 villas near Jebel Ali, built by Nakheel and third parties – follows the first, which is fully leased and set to open next year.

Nakheel’s new mall will sit alongside a growing number of smaller offerings and 10 new large scale developments ranging from the 3 million square feet Deira Mall to the 432,000 sq ft Circle Mall in Jumeirah Village Circle. All the projects are due for completion in the next five years.

The developer of Dubai’s Palm islands plans to more than quadruple its leasable retail space to more than 11 million sq ft from the existing 2.5 million sq ft at its Dragon Mart and Ibn Battuta Mall developments.

“Our chairman told us we must have an income stream of Dh7.5 billion from retail leasing over the next three to five years,” said Omar Khoory, a director of Nakheel Retail. “When our 11 million sq ft of developments are complete, we will be moving close to that figure. Right now our income stream is 80 per cent development versus 20 per cent non-development.”

The non-development part of Nakheel’s business includes its malls and hotels operations.

Experts say that UAE developers offer a host of retail options because the retail environment offers returns beyond most mature markets, but they warn that the amount of future supply could become burdensome.

“The community malls are a great idea because they have captive markets that need fulfilling,” said Craig Plumb, the head of research at the property consultants JLL. “A possible problem with the amount of space coming on stream is the amount of choice for retailers. Retailers will not be able to be present in all of them, meaning there will be winners and losers.”

Property consultants say rent increases are not likely, but are equally sanguine about the likelihood of a dramatic falls in rates because of new developments. A likely impediment to retail rates are global economic conditions.

“Dubai hasn’t had a major mall delivered in five years and the timeline for delivery of these new malls is over a five-year period,” said Matthew Green, the head of research for CBRE.

“That means that the new malls can dry up some of the waiting lists of prime retail space. The economic headwinds that Dubai is facing is more likely to slow rents.

“The weakness of the Russian tourist market and the strength of the dollar, making the UAE an expensive place to visit, means that demand is dropping and we are already seeing a flattening of retail rents.”

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Tue, 11 Aug 2015 18:41:15 +0200 42B1297B-B4D0-4D63-A59C-EBE02B1726BD http://www.thenational.ae/article/20150811/ARTICLE/150819794/1005

Will China’s record level of crude oil stockpiling run out of steam after the country’s historic currency devaluation?

That is a question that will hang over the oil market in coming weeks following the move by China’s central bank on Tuesday to set the official value of the yuan nearly 2 per cent lower against the US dollar.

It was the biggest decline since the modern Chinese currency regime was established in 1994, with the devaluation aimed mainly at reviving an economy that policymakers are worried will fall short of official forecasts of about 7 per cent annual economic growth this year. The devaluation was also intended to alleviate turmoil in China’s financial markets, which have been shaken by a sharp decline in prices of shares and other assets.

The currency move will potentially weigh on already weak worldwide commodity markets, many of which have been driven primarily by Chinese buying.

Chinese oil demand held up well this year, even as growth in the economy slowed.

A sharp rise in the second-quarter resulted in oil demand growth of 6 per cent annually in the first six months of the year.

“Chinese implied oil demand has actually responded well to the [oil] price plunge”, even while demand for other commodities has fallen, according to Sabine Schels, a commodities strategist at Bank of America Merrill Lynch. But that growth in demand has been driven by a number of factors, including the strong yuan itself, which has meant commodity prices have fallen relatively for Chinese buyers. Plus the fact the Chinese authorities have passed on lower crude oil prices in the form of lower retail fuel prices as part of the effort to encourage more domestic consumption and less reliance on exports for economic growth.

Oil demand growth, however, has been flattered this year by a splurge in buying to fill up China’s strategic petroleum reserve tanks.

China has another large expansion planned this year for strategic oil storage, from 100 million barrels at the end of last year to nearly 140 million barrels, then to 300 million barrels by the end of the decade to cover an estimated 48 days of imports.

In July, the country recorded a new monthly record for crude oil imports of 30.71 million barrels, according to the General Administration of Customs in Beijing. This was driven partly by state oil companies buying to fill a new strategic storage facility in the port city of Qingdao.

Private sector refiners also bought more oil after the government relaxed restrictions allowing them to import crude. However, strategic inventories of processed oil products – petrol, diesel, etc – also have been rising sharply, which may have exaggerated the country’s apparent demand.

In fact, according to Ms Schels, “adjusted for stock-building, demand growth is likely to have been a lot lower”, perhaps half of the 6 per cent this year.

Big questions for the market now are whether the stock building was done with foreknowledge that the yuan would be devalued, and whether that means it will slow down significantly in months ahead.

“I don’t think [the strategic buying] was coordinated well like that,” said Tom James, head of the energy consultants Navitas Resources. Rather, the buying was probably opportunistic. “The overall sell-off in crude was a great opportunity and many people now feel we are at, or close to the bottom, in oil prices,” he said.

Oil prices are still historically low, so that may be more important for Chinese buyers than the rise from a weaker yuan, said Amrita Sen, an analyst at Energy Aspects, a research firm.

“Given crude prices at $50, less than half of what it was a year ago, even with the devaluation crude remains incredibly cheap by historic standards,” she said.

China’s state oil companies “are fairly agnostic to prices when it comes to filling their [strategic petroleum reserve], in that once there is a mandate to fill it, they tend to go ahead with it regardless of price”, said Ms Sen. “Lower prices accelerate the pace of buying but China has even filled at $100 a barrel in the past, so it doesn’t put them off entirely.”

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Tue, 11 Aug 2015 18:33:32 +0200 5860CEAA-120D-4BF1-9286-1E3411D27B83 http://www.thenational.ae/article/20150811/ARTICLE/150819799/1005

India recaptured its position as the top tourist source market for Abu Dhabi, even as overall visitor numbers climbed 17 per cent in the first half of the year.

Visitors from India grew by 18 per cent to 127,312, staying an average of 3.71 nights, above the overall average of 2.89 nights.

The Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi) said yesterday that visitor arrivals reached 1.98 million.

The authority in June increased its target for annual tourist visitors by 11 per cent to 3.9 million after a sharp rise in the number of Chinese arrivals and “staycationers” from other emirates.

Guest nights at the emirate’s 163 hotels and hotel apartments rose by 11 per cent to 5.72 million nights from the year-earlier period.

The number of guests in June increased by 2 per cent compared with a year-earlier period, with guest nights rising by 13 per cent.

TCA Abu Dhabi is also planning to beef up the events calendar in the capital to encourage tourists to stay longer.

“We remain committed to actively improve the average length of stay of our guests, which has fallen by 5 per cent over the comparable period in 2014,” said the acting director general Jasem Al Darmaki.

Domestic tourism accounted for a third of all guest arrivals in the first half of the year, growing 14 per cent year on year, particularly through stays in hotels in the Western Region.

Hotel and apartments revenue rose 8 per cent to Dh3.34 billion, while room revenue increased by 11 per cent, and food and beverage revenue grew by 1 per cent. Other revenue, which includes business events, jumped 22 per cent to Dh402 million.

The other source markets were the United Kingdom, China, Germany and the United States.

Visitors from the Philippines rose 24 per cent, while the number of Chinese guests soared 72 per cent to 102,217, although their length of stay dropped by 18 per cent to 1.46 nights.

The number of Russian visitors declined 10 per cent as the economic woes of Russia and the declining rouble continued to affect tourist arrivals.

Separately, Dubai Cruise Tourism has concluded a roadshow aimed at increasing Indian cruise travellers, who are the second biggest source market for the emirate.

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Tue, 11 Aug 2015 17:48:22 +0200 37786ABB-218F-40C8-9B56-99A9718A7801 http://www.thenational.ae/article/20150811/ARTICLE/150819792/1005

There is no doubt that the onset of summer visibly slows down general activity in the UAE, but the same also applies to business.

A majority of leading finance executives found that the summer months affect business and productivity. Forty-six per cent blamed annual leave and the absence of managers as major reasons for decreased business activity, according to a survey by Robert Half the recruitment firm.

Such evidence can be found in Emirates NBD’s economic tracker for Dubai, with the headline reading falling to 53.8 last month from 55.5 in June. Any reading above 50.0 indicates an expanding economy.

The high temperatures (between 40°C and 50°C) and planned summer holidays all affected productivity in the economy’s service sectors.

Only 7 per cent of the 75 senior finance executives surveyed said the summer months had no effect on business.

Fathi Ben Grira, the chief executive of MenaCorp, an Abu Dhabi-based investment bank, said it was important to differentiate between the month of Ramadan and the rest of the summer.

“[MenaCorp’s] business during Ramadan has a general increase, with trading volume about 20 per cent higher [compared to other months],” he said. With about 70 per cent of Menacorp’s clients GCC nationals, Ramadan is a time when top decision-makers are in town, according to Mr Grira. “But what you have that is most important isn’t the number of transactions, but also the new leads that you make because everyone is in town,” he said.

However, he noted that the periods preceding and after Ramadan were slow for business. “Most of the GCC investors, especially in Abu Dhabi, are travelling before or after Ramadan, so the market is quiet with low volumes,” he said.

Gareth El Mettouri, an associate director of Robert Half, said companies should focus on completing projects during these slower months and encourage staff to take advantage of the downtime.

“Encouraging your employees to take advantage of the summer months to relax and recharge will see them return to work with higher morale and increased productivity,” he said.

Robert Half also conducted a similar study on UK businesses last month, which produced similar conclusions.

According to its research, lost productivity and less managerial direction because of annual leave was a concern for nearly half of the 200 finance leaders surveyed.

It said that many businesses that were trying to maintain productivity levels during this period relied on temporary workers to help alleviate the effects of summer breaks. ​

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Tue, 11 Aug 2015 18:40:13 +0200 5BF84FA6-D32D-4F39-98AD-B7A5D0E7BD05 http://www.thenational.ae/article/20150811/ARTICLE/150819784/1005

Chinese goods will become a little cheaper for UAE consumers after the People’s Bank of China devalued the yuan by the largest single-day percentage in two decades.

Beijing depreciated the yuan by 1.9 per cent before the start of trading on Tuesday, in what it said was a one-off move to keep the yuan stable at a “reasonable” exchange rate. Analysts said the move should boost the country’s flagging economy. Economists said the devaluation could ease inflation in the UAE as Chinese import prices fall, and would be good news for trading and logistics companies in Dubai.

“The fall in the yuan could, in principle, provide a boost to UAE imports of now cheaper Chinese goods,” said Daniel Kaye, Oxford Economics’ lead economist for the Middle East. “This would benefit firms that work in the trading sector, including suppliers and re-export companies. Ultimately, cheaper prices could also be passed on to local businesses and consumers.” China is Dubai’s biggest trading partner, with a bilateral exchange of Dh175 billion of non-oil goods and services last year. About 80 per cent of that involved imported textiles, clothes, machinery and products made from gold, silver, copper and iron, according to the UAE Government.

But the economic impact of the yuan’s devaluation on the UAE depends on how the devaluation affects commodity prices – including oil prices – and regional economic growth.

“A weaker regional economy would imply reduced trade and cross-border capital flows, which could affect the UAE, given Dubai’s status as a regional business hub,” said Mr Kaye.

China, the world’s fastest-growing economy, has powered global growth for close to a decade as the ruling Communist Party sought to lift the country’s population of 1.3 billion out of poverty. Over the past decade, China’s economy has grown at an average pace of 9 per cent a year.

But China’s rapid growth might be coming to an end, given the recent Chinese stock market rout, slowdowns in a host of informal economic indicators, and official data showing that the economy grew at a six-year low of just 7 per cent in the first half of the year.

Cement production, power generation, steel output and car sales have all been slowing, indicating that Chinese demand for manufactured and intermediate goods is falling. That is evidence a broader slowdown in the Chinese economy is likely, economists say.

The currency devaluation aims to rekindle Chinese growth by spurring exports, which could prove positive for the UAE if it helps to encourage regional economic growth.

“The devaluation of the yuan will hopefully boost economic growth,” said Anita Yadav, the head of fixed income at Emirates NBD.

“China is an export-led economy. If its exports become cheaper, Chinese companies will get more cash. And if the Chinese economy gets support, that’s mildly positive for the UAE economy.”

Higher Chinese growth could also lift global oil prices, which have fallen by about half since the middle of last year. That could boost the UAE’s economic fortunes. Declining oil prices have hit the UAE government’s energy revenues as well as spending in the non-oil economy.

“If the Chinese authorities are successful in reinvigorating the Chinese economy, this would support global oil demand, boost oil prices and – ultimately – lift the value of the UAE’s oil revenues in the longer term,” said Mr Kaye. “But, needless to say, any currency-driven impact will be just one of many factors [affecting the oil price].”

However, Ms Yadav warned that the impact on the UAE’s economic growth was likely to be limited. “China doesn’t make it into the top five sources of investment into the UAE, or even its top five source markets for tourists,” she said. “But it is rapidly increasing its presence in both segments.”

Although most emerging financial markets fell on the news of the yuan’s devaluation, UAE share markets were little moved. The Dubai Financial Market General Index rose 0.11 per cent, while the Abu Dhabi Securities Market General Index closed down 0.15 per cent.

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Tue, 11 Aug 2015 19:16:20 +0200 D69E037E-ED5F-4685-82DE-547BC9311080 http://www.thenational.ae/article/20150811/ARTICLE/150819802/1005

Emirates Foundation has launched the Esref Sah Shabaab Club for Emirati youths to educate their peers about financial literacy.

It will select and train more than 100 Emiratis between 25 and 35 years of age to conduct programmes to educate youths across the UAE. Baizat, a UAE financial awareness organisation, will facilitate the three-month training and mentoring of Shabaab Club members.“Empowering youths with the tools to become financially self-sufficient cannot be underestimated,” said Maytha Al Habsi, the chief programmes officer at Emirates Foundation.

About 70 per cent of young Emiratis are in debt, according to statistics from the Emirates Foundation.

The organisation said that youths spent three times more on fashion than their expatriate Arab and Asian peers.For every Dh100 that they spent, about 40 per cent was spent on clothes and 35 per cent on mobile phones.

The workshops and educational events will be conducted in workplaces, schools and universities. They aim to promote discussion and educate Emiratis about the fundamentals of personal finance.

The first trial workshops are set to take place in Abu Dhabi in November.

“This initiative will tackle a major challenge we have when financially empowering the UAE population, which is communicating the message to a large audience in an effective, personal and sustainable manner,” said Salah Al Halyan, the founder of Baizat.

“With a major focus on reaching youth in educational institutions, we can guide the next generation to be financially secure.”​

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Tue, 11 Aug 2015 17:35:42 +0200 EAD8BE5D-7639-4D70-8CDC-E5B92FAF2B13 http://www.thenational.ae/article/20150811/ARTICLE/150819789/1005

The slump in world oil prices was a headline agenda topic in talks between Saudi Arabia’s and Russia’s top diplomats in Moscow on Tuesday, although comments after the meeting were dominated by the conflicts in Syria and Iraq.

The Saudi foreign minister Adel Al Jubeir met his Russian counterpart Sergei Lavrov in the Russian capital to resume talks that began last week in Doha, when the two were joined by the US secretary of state John Kerry in an unsuccessful effort to find common ground on ways to deal with the chaos caused by the Iraqi conflict and Syrian civil war.

The Russian foreign ministry said that Mr Lavrov and Mr Al Jubeir also discussed “closer coordination on global energy markets”, although it was not clear what that might have entailed.

Indeed, the two countries are fierce competitors for markets, especially China, where Russia supplanted Saudi Arabia as the largest crude oil supplier in June when its exports jumped 20 per cent and Saudi’s fell 42 per cent.

“As producing countries their economies are already heavily impacted and might suffer more,” said Arno Berins, the head of energy at the Centre for European Policy Studies in Brussels. “I would guess that they would talk about the low oil prices and the impact of the Iran deal.”

With the lifting of nuclear-related sanctions on Iran expected to take effect at the end of the year, a significant amount of new crude is expected to hit the markets next year and beyond. The estimates, however, vary widely depending on Iran’s ability to attract new investment and repair its hydrocarbon sector’s infrastructure.

Saudi Arabia has steadfastly refused to limit its production – or to coordinate lower output within Opec – to hold on to market share and put the onus on higher-cost producers to cut back.

According to Opec’s monthly bulletin yesterday, Saudi Arabia was pumping at a rate of more than 10.3 million barrels per day last month, the same as the previous month. Russia’s output was near a record, at just under 10.7 million bpd.

Any discussion of energy issues are likely to be linked to political discussions, with Russia an ally of the current leaderships in both Damascus and Tehran.

Russia also has been jockeying for a share in Saudi Arabia’s plans to build its own peaceful nuclear power industry.

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Tue, 11 Aug 2015 18:49:22 +0200 DB59F117-2A9E-4F3B-BD9E-2144459601E8 http://www.thenational.ae/article/20150811/ARTICLE/150819823/1005

Al Baraka Banking Group says it plans to almost double its assets to US$46 billion in the next five years by expanding its network and entering countries such as Morocco, Indonesia and China.

The Bahrain-based Islamic lender, which had assets of $24bn at the end of June, is forecasting an 8 per cent increase in assets this year.

“Morocco is a very good country as far as banking and I think there is a good demand to expand in that market,” said Adnan Ahmed Yousif, the bank’s chief executive.

“Indonesia is the largest Islamic country and we believe they are still behind in the number of Islamic banks. The Chinese are also open to Islamic banking.”

Al Baraka is also forecasting a net profit increase of 10 to 12 per cent this year as it grows its businesses across geographies.

The bank’s net profit last year rose 7 per cent to $275 million from a year earlier. Second-quarter net profit attributable to equity holders rose 2.3 per cent year on year to $44.84m.

According to the credit ratings agency Standard & Poor’s, the assets of Islamic financial institutions, presently worth $1.8 trillion, are forecast to reach $3tn in the next couple of years.

Growth in the Islamic financial industry is driven by demand in Malaysia and Arabian Gulf countries.

Al Baraka – which is present in 15 countries in the Middle East, Africa and Asia – aims to tap the growth as it seeks to expand its branch network by 75 per cent to about 1,000 branches by the end of this decade.

Its entry into Morocco, which could happen by the first quarter of next year, with 25 branches possible there in five years’ time, said Mr Yousif.

Al Baraka is also expecting to venture into Indonesia by next year, and it might enter the Chinese market by 2018.

Additionally the bank is focusing on expanding its branches in countries such as Tunisia, Turkey, and Pakistan.

Islamic banking has picked up in the Middle East and North Africa, with countries such as Morocco introducing Sharia-compliant banking to tap growth in the sector, and improved sentiment towards Islamic finance since the Arab Spring.

In January, Morocco introduced a law that will open the doors to Islamic lenders for the first time.

Al Baraka’s various business units are also in the process of issuing Islamic bonds that comply with Basel III banking standards that are being phased in up to 2019.

Its Turkish unit could issue up to $300m in Tier 1 sukuk this year after launching a Tier 2 sukuk last year.

Next year, the bank’s Jordanian unit could issue $100m in Tier 1 sukuk and the South African unit could issue $50m in Tier 1 sukuk. The Egyptian unit could issue up to $100m in Tier 1 sukuk next year, depending on regulatory changes in the country.

Al Baraka, which is listed on the Bahrain Bourse and Nasdaq Dubai, is also expanding its product offering to help boost profitability and expand its balance sheet.

The bank is focusing on shoring up its Musharaka business, which has been eclipsed by the dominance of Murabaha business.

Musharaka is an Islamic finance structure that allows parties to share the profit and loss of a business, versus conventional banking reliance on interest payments.

Murabaha, a cost plus financing technique, is the more popular form of Islamic financing.

“Our focus in the past was always on the Murabaha, but now that Islamic banks are able to contribute to the economy, I think they should refocus on the Musharaka business,” said Mr Yousif.

“We should be part of the risk- taking.”

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Tue, 11 Aug 2015 15:59:14 +0200 7FA27D88-AA4E-4BF9-906A-785E253714E8 http://www.thenational.ae/article/20150811/ARTICLE/150819846/1005

It didn’t take Disha Dadlani, who has just finished her second year of studying for a bachelor’s degree in media and communication at Manipal University in Dubai, long to realise that there is quite a jump between classroom learning and putting what you learn into practice.

Ms Dadlani, 19, started a month-long paid internship at the Dubai PR firm Cicero & Bernay in July. When we caught up with her, she was being put through her paces: rotating between departments – getting a feel for the various nuances of doing public relations for automotive, food and beverage, and real estate clients – as well as writing press releases, conducting research and compiling media lists.

C&B has taken on interns for the past few years but this is the first year a structured programme of learning has been put in place.

“Rather than just having the interns come in on an ad hoc basis, we thought it was more beneficial for students to come into a programme that had specific rotation structures [where they can] learn a lot of the basics of PR and get a broad range of exposure,” says Ross Bethell, C&B’s director of strategy. “This really maximises what they get out of it and, for us, they are able to contribute rather than just sit there and hopefully get some work.”

Mr Bethell drew on his own experiences as in intern in Canada 20 years ago to create the scheme, and focuses on mentoring and feedback. Ms Dadlani receives a daily review of her performance from the mentor assigned to her. She also knows she can approach other senior members of staff.

“Agencies and companies have a duty … to give [students] some real world experience and see if that’s a career they want to continue,” he says.

It’s not all a one-way street. Interns also bring fresh ideas to the workplace with them, according to Mr Bethell.

“These students are really familiar with social media brands, what’s hot, what’s cool and celebrities,” he says. “So it opens your eyes to a lot of what’s hip and current right now.”

Of course, internships also allow businesses to make a thorough assessment of their temporary employee, with a view to perhaps hiring them on a full-time basis when they have completed their studies.

Internships give “us the time to observe the performance of the individuals, says Sameer Sultan Al Maskari, the head of nationalisation and business communication at Emirates NBD. “That’s a very great advantage. With the recruitment process there is only the interview and a psychometric test; there is still a high risk of taking the individual in. This is a proper assessment and it’s cost-effective for the organisation.”

Under government guidelines, banks are to increase the Emirati rate on their staff by four percentage points a year, until they reach a target of 40-45 per cent. Internships are a useful way to promote banking (not traditionally a popular career choice among young nationals) as an exciting and challenging profession and to develop a pipeline of potential future employees.

Mr Al Maskari reckons that Emirates NBD takes on between 250 and 300 trainees per year, and 15 per cent of these are former interns.

Likewise at the law firm Clyde & Co, students must demonstrate that they have ties to the Middle East or are willing to work in the region after they finish their studies to be taken on as interns. Top performers this summer will be invited to join the Clyde and Co trainee programme when they have graduated in 2017.

One trend that has emerged recently in the UAE is internships offered by tech firms specifically to boost the future employability of young Emiratis and to create a pool of qualified future employees, according to Ali Mater, the head of talent solutions at LinkedIn Mena.

“We are seeing a trend, particularly in the technology sector, for which internships can create a strong pipeline of talent,” he says. “Another approach is offering UAE nationals structured and quality internships to strengthen their competitive positioning in the job market. Some of them combine these, like the SAP Academy in Dubai, which trains both UAE nationals and other interns on ERP solutions.”

(ERP stands for enterprise resource planning, a business management software that organisations use to collect, store, manage and interpret data from a variety of activities.)

As for Ms Dadlani at C&B, her internship will help inform her choices for the area in which she will specialise next year.

“This internship is a great opportunity to decide and test the water and it’s definitely going to help me make that critical decision,” she says. “It’s been a rewarding experience on the whole – I learn something new every day and I see myself hopefully in the future working in a PR agency.”

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Tue, 11 Aug 2015 14:17:34 +0200 0F862778-06D8-4498-B6DE-9A45323C63A8

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