UAE: New debt policy to stimulate financial sector
The introduction of the securities should begin the development of a secondary market for local currency debt.
The public debt strategy unveiled by the UAE on Sunday will have a significant impact on elevating the nation’s global competitiveness standing and improving macroeconomic management, said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, and Minister of Finance.
Sheikh Hamdan said on Monday that the debt strategy, which seeks to develop the UAE’s market for local currency bonds, would stimulate the country’s financial and banking sector; provide financing alternatives for government development projects; and establish a bond market in the local currency.
“The strategy supports the UAE’s efforts to attain a competitive economy, and enhance financial planning for the federal government,” said Sheikh Hamdan.
He said the move also helps lay the foundations for public debt operations management, and achieve financial sustainability – by enhancing investor confidence in the national economy.
“This contributes to strengthening the country’s standing in global competitiveness indices to be the best country in the world by the UAE Centennial 2071,” Sheikh Hamdan said.
The UAE government does not currently issue debt, but individual emirates do tap bond markets. Over the past two years, the federal government has been putting the infrastructure in place to issue debt denominated in dirhams.
A Public Debt Law allowing the issuance of federal bonds was passed in 2018. In December, the Central Bank of the UAE said it would begin issuing dirham-denominated securities known as M-Bills in January.
Global ratings agency S&P Global said that the introduction of the securities should begin the development of a secondary market for local currency debt, which could result in the creation of a risk-free pricing benchmark for dirham-denominated debt over the longer term.
According to debt market experts, a local currency bond market goes a long way in strengthening the UAE’s financial markets, increasing monetary policy options and attracting longer term portfolio flows, all of which support the very important efforts to mobilise private capital and build a more resilient and diversified economy.
Asian stocks set for strong start after day of gains on Wall Street
The Biden administration is expected to push through a nearly $2 trillion US fiscal stimulus plan.
Asian markets were set to rise on Thursday after US stocks closed at record highs on hopes that newly inaugurated US President Joe Biden would put in place further economic stimulus to offset damage wreaked by the Covid-19 pandemic.
“Asian stocks are primed to follow their US peers higher on optimism that US federal spending will revive growth and corporate earnings,” said Ryan Felsman, a senior economist at CommSec in Sydney. “That’s all pointing to a positive day in Asia.”
The Biden administration is expected to push through a nearly $2 trillion US fiscal stimulus plan.
Felsman said tech stocks in Asia may also rise in response to positive news from Netflix Inc, whose shares surged 16.85 per cent after the company said it would no longer need to borrow billions of dollars to finance its TV shows and movies.
MSCI’s gauge of stocks across the globe gained 0.07 per cent.
Australia’s ASX 200 jumped more than 0.80 per cent in early trade Thursday.
Hong Kong’s Hang Seng index futures rose 0.23 per cent.
The Nikkei 225 index closed down 0.38 per cent on Wednesday, and the futures contract is up 0.74 per cent from that close.
Along with Netflix, the rest of the FAANG group, scheduled to report results in the coming weeks, jumped. Google parent Alphabet Inc rose 5.36 per cent.
The dollar fell against most currencies on Wednesday, as investors’ risk appetite held up.
Oil prices rose on the hopes that Biden delivers on the economic stimulus, a move that will increase demand for oil.
US Treasuries did not move much on Wednesday, with the market looking past the inauguration at this point.
Consumer Confidence Index at highest level since 2017, says Dubai Economy
The Q4 2020 Index of 142 points was way above the 133 points in the same period last year and 132 points recorded in Q3 2020
Consumers in Dubai are turning increasingly confident as the emirate started showing signs of a bounce-back in business activity, according to an official survey released on Tuesday.
Dubai Economy said the emirate, a much sought-after global business hub, saw its “Consumer Confidence Index” rising during the last quarter of 2020 to the highest level since the third quarter of 2017.
“The fourth quarter of 2020 Index of 142 points was way above the 133 points in the same period last year and 132 points recorded in the third quarter of 2020,” it said.
The rising consumer confidence was primarily due to expected improvements in personal finance conditions of Dubai residents. “During the last quarter of 2020 as many as 82 per cent of consumers were positive on the state of their personal finances over the next 12 months, compared to 79 per cent in the same period last year, and optimism was particularly high among 84 per cent of UAE citizens,” said Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection Sector in Dubai Economy.
Expectations of an improvement in economic conditions in Dubai over the next 12 months also remain high among consumers as 83 per cent in general and 97 per cent among UAE nationals expressed such optimism, according to the index that captures a consumer’s perceptions on the economy as well as intentions and expectations of buying and saving.
“The positive sentiment is further reflected in 85 per cent consumers looking forward to new job opportunities over the next 12 months. Economic initiatives and growth in economic activity that followed the reopening of the markets have strengthened the optimism on jobs,” Dubai economy said in a statement.
The bullish consumer sentiments resonate with the optimism voiced by business in the aftermath of the Covid-19 vaccine rollout and the reopening of the borders with Qatar.
The latest IHS Markit Dubai Purchasing Managers’ Index survey also reflects the upbeat mood among businesses hoping for a faster rebound in activities.
The PMI index, which is derived from individual diffusion indices that measure changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods, rose above the 50.0 no-change mark in December, posting 51.0 (from 49.0 in November) to indicate a modest expansion in the non-oil economy, and the first seen for three months.
David Owen, economist at IHS Markit, has said an increase in output and new orders led to a renewed improvement in the health of the Dubai non-oil sector in December.
According to a recent forecast by Dubai Economy, the emirate is expected to grow by four per cent in 2021 following a quick recovery due to effective policy measures introduced by the government to contain the pandemic.
The survey by Dubai Economy shows that overall, 74 per cent consumers feel the time is right to buy the things they need or want to buy, while the feeling is shared by 91 per cent of UAE nationals.
Among those consumers who expect to have money left after basic expenses 43 per cent said they would spend the balance on vacations while 36 per cent plan to save it for the future. Reducing outdoor entertainment to balance expenses and income is part of the plan for 54 per cent of consumers while 53 per cent intend to cut down on buying new clothes, 48 per cent would delay technology upgrades, and 39 per cent would reduce ordering food from outside.
Dubai Economy records 132% increase in DED Trader licences issued during 2020
Through the DED Trader licence, Dubai Economy seeks to regulate and enhance the ease of doing business electronically
Dubai Economy on Sunday said that it recorded a strong 132 per cent growth in DED Trader Licences last year despite the challenges posed by the Covid-19 pandemic.
In a statement, Dubai Economy said that the DED Trader licence registered strong interest with online business and e-commerce gaining momentum as it issued 5,799 licences last year compared to 2,500 in 2019.
The DED Trader licence, launched by the Business Registration & Licensing (BRL) sector of Dubai Economy (DED) to licence freelancers at their place of residence in Dubai and enable start-ups to conduct business activities online and across social networking accounts, has seen overwhelming response with 9,949 licences issued since its launch in 2017 till end of 2020. Of these, 57 per cent have been issued to women (5,704).
“This reflects Dubai Economy’s focus on promoting e-commerce and the competitiveness of Dubai’s economy, as well as its commitment to realising the vision of the government to drive digital transformation and build awareness about e-platforms that facilitate commercial activities,” according to the Dubai Economy statement.
The report issued by the BRL sector showed that ‘Marketing Services Via Social Media’ topped the list of activities of licences until the end of 2020 followed by Perfumes & Cosmetics Trading; Portal; Sweets & Candies Preparing; Cafeteria; Marketing Management; Social Media Applications Development & Management; Readymade Garments Trading and Ladies’ Garments Trading. The total number of DED Trader licence groups is 86.
Shailesh Dash, financier and entrepreneur, said the DED Trader Licence is one of the key initiatives launched by Dubai Economy to help promote small and medium entrepreneurs, freelancers and start-up owners to establish their base in one of the safest and economically stable cities of the world.
“This is a very good initiative of Dubai Economy to promote e-commerce and the competitiveness of the economy. It will help drive digital transformation and build awareness about e-platforms that facilitate commercial activities in the emirate,” he said.
Nazim Munshi, director at Enterprise House, said DED and Dubai government has always tried to recognise the pulse of business and the entrepreneurs in UAE.
“DED Trader licence was one such initiate made by DED to promote e-commerce and SME businesses. The results of this initiative have been fantastic which can be witnessed by the 132 per cent growth,” Munshi told Khaleej Times.
Through DED Trader licence, Dubai Economy seeks to regulate and enhance the ease of doing business electronically, find a platform that supports and develops trade as well as connect customers with traders. The licensee cannot open a shop/store but can avail of three visas if the ownership is 100 per cent Emirati and legal liability falls under the licence holder.
“Ease of doing business and low cost of setup and maintenance are the key factors which are expected by the startup investors and DED has come up their expectations,” Munshi said.
The DED Trader licence is issued electronically by visiting dedtrader.ae and following simple steps; create username and password; enter address details, and social media accounts for the project/business; select the activity and trade name and finally pay and receive the licence electronically.
The benefits of getting a DED Trader licence include getting Dubai Chamber membership for commercial activities, benefitting from bank facilities; getting Customs Client Code, which facilitates import and export via dubaitrade.ae; temporary employment services; participation in exhibitions & conferences and training workshop; displaying of products in consumer points of sale and providing work space.
Last year, the BRL sector organised several virtual awareness workshops on how to conduct businesses and other related subjects, to a great number of freelancers and startups.