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Thursday 8 - 1 - 2015


 08/01/2015

Khaleej Times

Abu Dhabi — The UAE government would favour a merger of the main Abu Dhabi and Dubai bourses, but the decision is up to the exchanges themselves, Minister of Economy Sultan bin Saeed Al Mansouri said on Wednesday. He was speaking at a session of the Federal National Council, an advisory body to the government, where some members asked the government to work to facilitate a merger and to introduce a timeline for it to take place. A possible merger of the Abu Dhabi Securities Exchange with the Dubai Financial Market has been discussed on and off for years, and at one stage investment banks were hired to advise on a tie-up. But sources familiar with the matter told Reuters last year the idea had been shelved for the foreseeable future as terms for the politically-sensitive move could not be agreed. For one thing, wild swings in stock prices over the past couple of years have made it difficult to value assets. “If at this stage, we as a regulator — if there is a proposition to merge the two markets, we are with it,” Al Mansouri said. “And, if not, we understand.”

The National

ABU DHABI // The Federal National Council called on the stock market regulator to review financing after individual investors in the UAE lost millions of dirhams in the recent turmoil. Members urged Sultan bin Saeed Al Mansouri, chairman at the Securities and Commodities Authority (SCA) and Minister of Economy, to implement regulations requiring banks to comply as brokerages do with regards to lending against shares. Stockbrokers regulated by the authority cannot exceed the one-to-one ratio on margin accounts. Banks regulated by the Central Bank that are not under the umbrella of the SCA provide overdrafts that can provide higher exposure than brokerages. Mr Al Mansouri said a new law was in the works that would increase fines on brokerage firms that exceed the limits allowable. Fines are currently Dh100,000. The proposal would raise them to a maximum of Dh10 million. The regulations would further cover breaches on corporate governance and potentially publicly reveal the identities of investors – individuals or entities – who have broken the law.

The National

Abu Dhabi Global Market, the UAE capital’s proposed financial centre, has thrown its plans open for public consultation in the build up to its launch. The consultation documents – which will form the basis of legislation paving the way for the ADGM’s formal opening – reveal that the market will be based directly on English common law, but influenced by the legal systems applied in two of the world’s biggest financial centres: Singapore and Hong Kong. The documents also contain detailed proposals for how ADGM will structure company law, insolvency practice, employment and property legislation, as well as its own operating regulations. Ahmed Al Sayegh, the chairman on the ADGM, said: “A robust legal system based on a legislative framework that meets international financial services standards is at the core of ADGM’s value proposition.”

The National

Despite the sharp decline in oil prices in December, UAE businesses were increasing production and ordering more goods, a benchmark measure for growth in the country’s non-oil economy showed. The HSBC Purchasing Managers’ Index rose to 58.4 in December, the bank said. While that was little changed from 58.3 in November, readings above 50 indicate an overall improvement in business conditions. “We expect lower oil prices to weigh on the economy into 2015, but for now demand is holding up well,” said Simon Williams, HSBC’s chief economist for the Middle East & North Africa. “That new orders as well as output have remained strong is particularly encouraging.” The price of oil, upon which the economy of the UAE is highly dependent, in December alone dropped 23 per cent while during the whole of 2014 it fell 46 per cent. More than 60 per cent of the UAE’s Federal budget is financed from oilrevenues, but so far there has been no evidence of a cutback in spending. At Dh41 billion, up 9 per cent from last year, Dubai’s budget will be the biggest since 2009 while avoiding a deficit. Oil will account for only 4 per cent of Dubai Government revenues, the budget revealed, down 5 per cent from last year.

Khaleej Times

The UAE economy can withstand with the plunge in international oil prices and it will continue to grow due to the government’s uninterrupted investments in infrastructure and the gains made by non-oil private and public sectors, according to a top banker. Hussain Al Qemzi, chief executive of Noor Bank, said the banking industry will also survive in cyclical bearish oil market era as robust growth in non-oil sector has opened new window of business opportunity for the UAE banks. “The decline of oil prices is in the minds of everyone and questions are being asked on whether there will be a slowdown in government’s infrastructure spending as well as a brake on private sector growth and how it will impact the banking sector. Contrary to such concerns, the 2015 Dubai budget unveiled this week confirms the continuation of government allocation towards infrastructure projects — a solid 13 per cent increase.

The National

The Dubai government budget for 2015 was a long time in the preparation and crept into the new year by a couple of days. Some financial watchers speculated that the delay was down to the fact there was a rethink going on at the Department of Finance and the Supreme Fiscal Committee because of the changing economic landscape brought about by the rapid decline in the oil price. But when the budget appeared, that suspicion was laid to rest. The figures confirmed definitively what we’ve known for a long time: oil revenues are not vital to the government finances of Dubai, as they are to may other governments across the Arabian Gulf. At a mere 4 per cent of revenue, oil is not central to policymakers’ economic planning. The falling price affects the emirate’s economy in other ways, from the “feel-good factor” in the stock markets to investment and consumer spend from other Gulf countries, but as a direct contributor to the Dubai economy it’s only marginal.

Khaleej Times

Dubai: The UAE’s non-oil private business activity witnessed sustained improvement in business conditions in December despite a steady decline in oil price. US oil futures have fallen from above $100 a barrel last June to below $50 a barrel this week that raising concern that oil-producing Gulf countries may be forced to trim public spending and could suffer from weaker economic growth. Last week, Dubai government announced a zero-deficit budget for 2015 at Dh41.2 billion with around nine per cent increase in income and expenditures compared to last year. “We expect lower oil prices to weigh on the economy into 2015, but for now demand is holding up well. That now orders as well as output have remained strong is particularly encouraging,” Simon Williams, HSBC’s chief economist for the Middle East and North Africa, said. The HSBC UAE Purchasing Managers’ Index, which measures the manufacturing and services sector, was 58.4 points last month against 58.3 in November. The 50-point mark separates growth from contraction in the survey of 400 firms.

The National

Standard Chartered, one of the biggest international banks in the UAE, is forecasting a slowdown in the country’s economic growth this year as the price of oil plunges. “We expect the UAE economy to grow 3.8 per cent in 2015, slowing from 4.5 per cent in 2014,” said Shady Shaher, a Dubai-based senior Middle East and North Africa economist at Standard Chartered. “Weaker oil-sector dynamics will directly impact growth in the hydrocarbon sector through lower output. “Growth is set to moderate from a high base. The UAE economy has boomed in 2014 as both Dubai and Abu Dhabi have enjoyed solid growth driven by the non-oil sector. Government investment in infrastructure has driven the Abu Dhabi economy, and Dubai has benefited from its position as a regional trade and services hub.” The bank expects Dubai’s trade sector to grow 4.5 per cent this year, versus 8 per cent in 2014. Meanwhile, the tourism sector is likely to grow 5 per cent versus the 9 per cent it gained in 2014.

Gulf Today

DUBAI: As a precedent, the UAE Central Bank has obligated the banks operating in the UAE to provide it with a package of data about the outsourcing companies they are dealing with, a high-level banking source revealed. In exclusive statements to Al Khaleej, the source said the UAE Central Bank’s questions in its recent circular included the type of banking jobs and services assigned to these companies, the type of information given by banks to these companies and the number of employees working in them. The source clarified that this was the first time the UAE Central Bank inquired about these companies, which remarkably doubled in the recent years. The source believed that the type of data requested by the UAE Central Bank showed it was set to check the control requirements of these companies to which banks assign such banking jobs as call centre, sales and payment.


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