DMCC named world's top free zone for 4th year running…

DMCC named world's top free zone for 4th year running…

Global Markets Update:
Last week global equity markets were hit by a selloff which was particularly intense in the tech sector (where careless or reckless investors have inflated a bubble for years). US equities on Wednesday had their sharpest daily drop in months and the Nasdaq entered correction territory having plunged more than 10% since the top on August 29th. Also the other main US indices took a beating and the rout extended to Japan (the Topix lost almost 100 points) and Europe where the Italian budget crisis exacerbated investors’ fears. It is hard to pinpoint a single catalyst for the global equity tumble of the last two weeks: most likely several intertwined factors are at play. a) Some large asset managers have come to realize that around 80% of global trade involves multinational companies which are the backbone of many bourses. In the US almost 50% of the earnings by companies in the S&P500 come from activities outside the US. Hence equities are vulnerable to a prolonged and intensified trade war even though listed companies are only 25% of the US economy.  b) The normalization of the Fed monetary policy has woken up the bond markets numbed by years of ultra loose stance. c) The IMF has reduced its growth forecasts and underlined the geopolitical clash as a downside risk. d) The bull run cannot continue forever: valuations were already stretched before Donald Trump won the elections, and the ensuing rally was hard to justify even in an economy that runs at a healthy pace. Anyway the next sessions with the US mid-term election coming into focus will be volatile. In regional markets the selloff hit Egypt and KSA), while other markets contained the losses. In currency markets the yen strengthened on major crosses, probably due to a safe haven effect, while the euro was stable vis à vis the dollar. Oil prices fell victim of the concerns over global growth (and reserve build-up in the US) but remained close to USD 80/b. Gold was rather volatile, jumping in reaction to the equity slide, but then lost much of the gains.

MENA News:
The IMF has forecast growth to increase to 2.0% this year in the MENA region, edging up from last year’s 1.8%, in its latest edition of the World Economic Outlook. In Saudi Arabia, growth is expected to pick up by 2.2% this year, driven by non-oil economic activity and revisions in the OPEC Plus agreement.
Bahrain will receive up to USD 2bn before end of this year from its Gulf counterparts’ 5-year USD 10bn aid package; this would also support the 2019 budget.
Bahrain’s parliament approved the VAT law; VAT will be implemented from the start of 2019, at the standard rate of 5%.
Saudi Arabia allocated SAR 1.361bn to implement 11 infrastructure projects.
Total funding for MENA startups touched USD 325mn in January-September this year, down 22.6% YoY, according to a MAGNiTT report; in Q3 alone, almost USD 82mn was invested across 62 deals in the region. UAE accounted for the largest of startup transactions (29%), with investments accounting for 61% in 2018 year-to-date.
 
UAE News:
Four major companies are expected to list in UAE equity markets at the beginning of 2019, according to the CEO of UAE’s Securities and Commodities Authority.
UAE’s recently announced law allowing 100% foreign ownership of companies will only apply to some sectors of the economy, according to senior government officials.
UAE plans to introduce initial coin offerings (ICOs) next year to boost capital markets: the board of the Emirates Securities & Commodities Authority approved considering ICOs as securities and will announce and implement regulations in H1 next year.
UAE’s DMCC topped the list of fDi’s Global Free Zones of the Year 2018 for the fourth consecutive year. The free zone is home to 14,805 companies and more than 61,700 employees.
According to HSBC’s Expat Explorer 2018, UAE ranked as the 10th best location in the world for expats. With an average annual expat salary of USD 155,039, 85% of the respondents say that they are able to build up their savings and pay off debt. While 17% own a property in the UAE, a typical expat keeps only a fifth of their wealth in the UAE.
Dubai recorded 39,802 real estate transactions worth AED 162bn in the January-September period this year, according to the Dubai Land Department. UAE citizens invested AED 9.4bn from 4,112 investments while Indians reportedly invested AED 8.6bn from 4676 transactions.
UAE’s brand value grew an impressive 19%, rising to 20th spot in the nation brand ranking.

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SOURCES:
Nasser Saidi & Associates

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