UK retail sales slide in December after Black Friday boost

Above, shoppers pass a promotional sign for 'Black Friday' sales discounts as they exit a retail store on Oxford Street in London. British retail sales jumped by one percent in November, boosted by Black Friday price reductions, but slipped 1.5 percent the next month. (AFP)
Updated 19 January 2018
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UK retail sales slide in December after Black Friday boost

LONDON: British retail sales slid 1.5 percent in December from the previous month after consumers had brought forward their Christmas shopping, official data showed Friday.
Retail sales had jumped by 1.0 percent in November, boosted by Black Friday price reductions, the Office for National Statistics said.
Sales though climbed 1.4 percent in December compared with one year earlier, the ONS added.
“Retail sales continued to grow in the last three months of the year partly due to Black Friday deals boosting spending,” said ONS Senior Statistician Rhian Murphy.
“Consumers continue to move Christmas purchases earlier, with higher spending in November and lower spending in December than seen in previous years.”
Murphy added that “the longer-term picture is one of slowing growth, with increased prices squeezing people’s spending.”
Britons’ wages are being eroded by Brexit-fueled inflation, according to recent official data.
Since Britain voted to leave the EU in June 2016, a drop in sterling — making imported goods more expensive — has pushed inflation upwards.
“The latest retail sales data has shown a larger-than-expected drop in month-on-month terms with a decline of 1.5 percent,” said David Cheetham, chief market analyst at XTB trading group, adding that the pound dropped in response.


Dubai real estate market recovery to be seen as of 2022: S&P

Updated 20 February 2019
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Dubai real estate market recovery to be seen as of 2022: S&P

  • The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate
  • S&P was generally comfortable with the credit ratings of the emirate’s banking system

DUBAI: S&P Global, the ratings agency, painted a grim picture for the real estate sector in Dubai, with a meaningful recovery in property prices expected only after 2022.
At a presentation to journalists in the Dubai International Financial Center, S&P analyst Sapna Jagtiani said that under the firm’s “base case scenario,” the Dubai real estate market would fall by between 5 and 10 percent this year, roughly the same as the fall in 2018, which would bring property prices to the levels seen at the bottom of the last cycle in 2010, in the aftermath of the global financial crisis.
“On the real estate side we continue to have a very grim view of the market. While we expect prices to broadly stabilize in 2020, we don’t see a meaningful recovery in 2021. Relative to the previous recovery cycle, we believe it will take longer time for prices to display a meaningful recovery,” she said.
S&P’s verdict adds to several recent pessimistic assessments of the Dubai real estate market. Jagtiani said that conditions in the other big UAE property market, in Abu Dhabi, were not as negative, because “Abu Dhabi never did ramp up as much in 2014 and 2015 as Dubai.” S&P does not rate developers in the capital.
She added that a “stress scenario” could arise if government and royal family related developers — such as Emaar Properties, Meraas, Dubai Properties and Nakheel — which have attractive land banks and economies of scale, continue to launch new developments.
“In such a scenario, we think residential real estate prices could decline by 10-15 percent in 2019 and a further 5-10 percent in 2020. In this case, we expect no upside for Dubai residential real estate prices in 2021, as we expect it will take a while for the market to absorb oversupply,” she said.
S&P recently downgraded Damac, one of the biggest Dubai-based developers, to BB- rating, on weak market prospects.
However, Jagtiani said that, despite the “significant oversupply” from existing projects, several factors should held stabilize the market: Few, if any, major product launches; improved affordability and “bargain hunting” by bulk buyers; and a resurgence of Asian, especially Chinese, investor interest in the market.
Jagtiani also said that government measures such as new ownership and visa regulations and reduction in government fees could help prevent prices falling more sharply, as well as “increased economic activity related to Dubai Expo 2020, which is expected to attract about 25 million visitors to the emirate.”
The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate. “In our view, credit conditions deteriorated in Dubai in 2018, reducing the government’s ability to provide extraordinary financial support to its government related entities (GREs) if needed,” S&P said in a report. “The negative outlook on Dubai Electricity and Water
Authority (DEWA) partly reflects our concern that a real estate downturn beyond our base case could out increased pressure on government finances,” the report said.
It pointed out that about 70 percent of government revenues come from non-tax sources, including land transfer and mortgage registration fees, as well as charges for housing and municipality liabilities, as well as dividends from real estate developers it controls, like Emaar and Nakheel.
S&P was generally comfortable with the credit ratings of the emirate’s banking system, which has an estimated 20 percent exposure to real estate. “Banks in the UAE tend to generally display a good level of profitability and capitalization, giving them a good margin to absorb a moderate increase in risks,” the report said.