Dubai, Abu Dhabi governments ease burden of private businesses hit by coronavirus

The Dubai International Financial Centre is implementing a series of fiscal easing initiatives over the next three months starting April 1 to help all businesses operating in the financial free zone. (WAM)
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Updated 31 March 2020

Dubai, Abu Dhabi governments ease burden of private businesses hit by coronavirus

DUBAI: The Dubai International Financial Centre (DIFC) in implementing a series of fiscal easing initiatives over the next three months starting April 1 to help all businesses operating in the financial free zone.

Under the conditional scheme, existing DIFC-registered businesses can take advantage of a 10 percent discount of renewal fees for their licenses, while new registrants will have their annual licensing fees waived during the next three months.

The DIFC will also allow deferred payments for all properties owned by DIFC Investments for a period up to six months, while property transfer fees would be discounted from between five percent to four percent for any related transaction during the three-month period.

“The transfer must be registered with the DIFC Registrar of Real Properties within 30 days following the expiry of the three-month period,” the DIFC said.

The free zone will likewise facilitate the free movement of labor in and out of DIFC between other free zones, provided employers have the necessary secondment arrangements in place and employees are recorded with registry services so they can access buildings and offices within the DIFC.

“The well-being of our community is of utmost importance. We are working continually to ensure all health and safety measures are implemented swiftly and effectively as directed by the relevant government authorities,” Arif Amiri, the DIFC Authority Chief Executive Officer, said.

Over in Abu Dhabi, the Abu Dhabi Department of Economic Development (ADDED) on Tuesday issued a circular waiving Dh246 million in penalties levied on private companies, boosting the stimulus package announced by the government earlier this month.

The waiver of penalties for economic licensing violations would benefit 72,242 private companies including SMEs in commercial and industrial sectors, the ADDED said.

The waived violations include fines for delay in license renewal amounting Dh240.98 million and violations related to practicing economic activities valued at Dh5.66 million.

Together with the stimulus package, the latest initiative would boost the “resilience of the commercial and industrial sectors” and enable the “private sector to adjust swiftly to global economic challenges,” the ADDED said.

$8bn blow to Erdogan as investors flee Turkey

Updated 09 July 2020

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.