Dubai’s high-end property sales rise on overseas demand

Dubai’s high-end property sales rise on overseas demand
A total of 105 homes worth an overall $1.73 billion were sold from January to March. Shutterstock
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Updated 16 April 2024
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Dubai’s high-end property sales rise on overseas demand

Dubai’s high-end property sales rise on overseas demand

DUBAI: Sales of homes in Dubai worth $10 million or more rose 6 percent in the first quarter versus last year, an industry report showed on Tuesday, as demand from the international ultra-rich for homes in the emirate showed little sign of abating, according to Reuters. 

A total of 105 homes worth an overall $1.73 billion were sold from January to March, up from around $1.6 billion a year earlier, according to property consultancy Knight Frank.

Activity was dominated by cash buyers, with palm tree-shaped artificial island Palm Jumeirah the most sought-after area, accounting for 36.3 percent of sales by total value, followed by Jumeirah Bay Island and Dubai Hills Estate.

Home to the world’s tallest tower, the UAE’s Dubai is seeking to grow its economy through tourism, building a local financial center and by attracting foreign capital, including into property.

The recent property boom has shown signs of fizzling out, however, with developers, investors and brokers worrying whether a painful correction akin to the slump that rocked the emirate in 2008 can be avoided.

Last year, Dubai ranked first globally for number of home sales above $10 million, selling nearly 80 percent more such properties than second-placed London, according to Knight Frank.

The city also bucked the trend of falling luxury prices seen in cities like London and New York last year, posting double-digit gains, Knight Frank said in February.

“The level of deal activity in Dubai continues to strengthen, particularly at the top end of the market, where the near constant stream of international high-net-worth-individuals vying for the city’s most expensive homes persists,” said Faisal Durrani, Knight Frank’s head of research for Middle East and Africa.

Durrani told Reuters Dubai was aided by the relative affordability of its luxury homes, where well-heeled buyers can purchase about 980 sq. feet of residential space for $1 million, “about three or four times more than you would get in most major global gateway cities.”

The strong demand suggests many international investors are acquiring Dubai property for second homes rather than “constant buying to flip,” he said, referring to the past practice of buying in order to sell to others quickly for more money. 


Lebanon’s reforms insufficient for recovery, IMF says 

Lebanon’s reforms insufficient for recovery, IMF says 
Updated 23 May 2024
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Lebanon’s reforms insufficient for recovery, IMF says 

Lebanon’s reforms insufficient for recovery, IMF says 

Lebanon’s economic reforms are insufficient to help lift the country out of its economic crisis, the International Monetary Fund said on Thursday. 

Ernesto Ramirez Rigo, the head of the IMF mission visiting Lebanon, said in a statement that Lebanon’s ongoing refugee crisis, fighting with Israel at its Southern border and the spillover from the war in Gaza are exacerbating an already dire economic situation. 

Israeli forces and Lebanon’s Hezbollah have traded fire across Lebanon’s southern border since the war in Gaza broke out in October last year. 

Israel launched its assault on Gaza following a Hamas-led attack on southern Israeli communities on Oct. 7 in which fighters killed 1,200 people and captured more than 250 hostages. 

Since then, Israel’s assault has killed more than 35,000 people, with thousands more feared buried under the rubble, according to Gaza health authorities. 

The conflict “has internally displaced a significant number of people and caused damage to infrastructure, agriculture, and trade in southern Lebanon. Together with a decline in tourism, the high risks associated with the conflict create significant uncertainty to the economic outlook,” Rigo said. 

Fiscal and monetary reforms carried out by Lebanon’s finance ministry and the central bank, including steps to unify multiple exchange rates for the Lebanese pound and contain a currency slump, have helped reduce inflationary pressure, according to Rigo. 

However, he said more needs to be done if Lebanon is to alleviate its financial crisis. 

“These policy measures fall short of what is needed to enable a recovery from the crisis. Bank deposits remain frozen, and the banking sector is unable to provide credit to the economy, as the government and parliament have been unable to find a solution to the banking crisis,” he added. 

“Addressing the banks’ losses while protecting depositors to the maximum extent possible and limiting recourse to scarce public resources in a credible and financially viable manner is indispensable to lay the foundation for economic recovery.” 

Since Lebanon’s economy began to unravel in 2019, its currency has lost around 95 percent of its value, banks have locked most depositors out of their savings and more than 80 percent of the population has sunk below the poverty line. 

The crisis erupted after decades of profligate spending and corruption among the ruling elite, some of whom led banks that lent heavily to the state. 

The government estimates losses in the financial system total more than $70 billion, the majority of which were accrued at the central bank. 


 


Oil Updates – prices fall for fourth straight day as US rate hike prospects emerge

Oil Updates – prices fall for fourth straight day as US rate hike prospects emerge
Updated 23 May 2024
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Oil Updates – prices fall for fourth straight day as US rate hike prospects emerge

Oil Updates – prices fall for fourth straight day as US rate hike prospects emerge

LONDON: Oil prices eased for a fourth straight session on Thursday after the minutes of a US Federal Reserve meeting revealed discussions of a further tightening of interest rates if inflation remained sticky, a move that could hurt oil demand, according to Reuters.

Brent crude futures fell 20 cents, or 0.2 percent, to $81.70 a barrel at 9:51 a.m. Saudi time. US West Texas Intermediate crude futures were down 29 cents, or 0.4 percent, at $77.28. Both benchmarks fell more than 1 percent on Wednesday.

Minutes released on Wednesday from the Federal Reserve’s last policy meeting showed the US central bank’s response to sticky inflation would “involve maintaining” its policy rate for now but also reflected discussion of possible further hikes.

“Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate,” minutes of the Fed’s meeting said.

Higher interest rates boost borrowing costs, crunching funds that could boost economic growth and oil demand in the world’s largest oil consuming nation.

Also weighing on the market, US crude stocks rose by 1.8 million barrels last week, according to the Energy Information Administration, compared with an estimate for a 2.5 million-barrel draw.

Globally, physical crude markets have more recently been pressured by soft refinery demand and ample supply.

“Recent market softness has come on the back of weaker data, including rising oil inventories, tepid demand, and refinery margin weakness and the increasing risk of run cuts,” Citi analysts said in a note on Thursday.

Russia said it exceeded its OPEC+ production quota in April for “technical reasons” and will soon present to the Organization of the Petroleum Exporting Countries Secretariat its plan to compensate for the error, the Russian Energy Ministry said late on Wednesday.

Citi said it still expects that OPEC+, which groups together OPEC and allies led by Russia, will hold its production cuts through the third quarter of this year when it meets on June 1.

Citi also said it continues to see Brent averaging $86 a barrel in the second quarter of 2024. 


Saudi EXIM Bank signs 2 agreements with Japan’s SMBC and MUFG banks

Saudi EXIM Bank signs 2 agreements with Japan’s SMBC and MUFG banks
Updated 23 May 2024
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Saudi EXIM Bank signs 2 agreements with Japan’s SMBC and MUFG banks

Saudi EXIM Bank signs 2 agreements with Japan’s SMBC and MUFG banks

TOKYO: On the sidelines of the Saudi-Japan Vision 2030 Business Forum in Tokyo, Saudi EXIM Bank signed two cooperation agreements with SMBC Business Banking and MUFG Bank.

The agreements aimed to foster cooperation and create co-financing opportunities to promote non-oil exports in target markets, according to the Saudi EXIM Bank.

The two agreements were signed separately by Saad bin Abdulaziz Al-Khalab, CEO of Saudi EXIM Bank, along with Akihiro Fukudom, CEO of SMBC Bank and Hironori Kamezawa, CEO of MUFG Bank, a statement confirmed.

Commenting on the partnerships, Al-Khalab stated: “This collaboration with Japanese entities is part of our joint efforts to strengthen economic relations between both countries and achieve the Saudi-Japan Vision 2030. The acceleration of commercial projects between our nations toward broader horizons comes as a result of the strength, advanced economic status, and promising investment opportunities.”

During the roundtable meeting, which brought together several ministers from both sides, Al-Khalab reviewed Saudi EXIM Bank’s activities with Japanese financial institutions and commercial companies to enhance economic and trade relations and identify projects of mutual interest.

During the financial sector’s roundtable meeting, Al-Khalab emphasized the critical importance of collaborative efforts between all financial institutions and business sectors. This is to ensure the provision of comprehensive, incentivizing credit solutions that can accelerate the pace of trade and mutual and global investment activities.

The Saudi EXIM Bank aims to empower the Kingdom’s non-oil national economy in accordance with Vision 2030. The bank is focused on enabling Saudi non-oil exports to expand and penetrate global markets by bridging financing gaps and reducing export risks.


Saudi Arabia’s non-oil exports up 3.3%: GASTAT 

Saudi Arabia’s non-oil exports up 3.3%: GASTAT 
Updated 24 min 33 sec ago
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Saudi Arabia’s non-oil exports up 3.3%: GASTAT 

Saudi Arabia’s non-oil exports up 3.3%: GASTAT 

RIYADH: Saudi Arabia’s non-oil exports, including re-exports, saw an annual increase of 3.3 percent in the first quarter of this year, official data showed.    

According to the latest report released by the General Authority for Statistics, the value of re-exported goods increased by 31.5 percent during the same period, while national non-oil exports, excluding re-exports, decreased by 5.2 percent.    

The value of merchandise exports in March increased by 4.9 percent compared to the previous month. 

However, it declined by 5.7 percent in the first three months of 2024 compared to the same period in 2023, primarily due to an 8.3 percent decrease in oil exports. 

Chemical products constituted 25.1 percent of the total non-oil exports, recording an 18.3 percent decrease compared to the first quarter of 2023. Plastics, rubber, and their products followed, making up 22.8 percent of total non-oil exports, with a 0.6 percent decrease compared to the same period. 

Machinery, electrical equipment, and parts, constituted 22.7 percent of total imports, falling by 5.4 percent compared to the first quarter of 2023. This was followed by transportation equipment and parts, which represented 13 percent of total imports, with a 21.7 percent decrease. 

In a separate bulletin, GASTAT highlighted that non-oil exports and re-exports in March rose by 2.9 percent compared to February, and slipped by 0.8 percent compared to March 2023. 

While national non-oil exports, excluding re-exports, saw an annual decrease of 6.3 percent in March, the value of re-exported goods increased by 17.6 percent during the same period. 

During the first quarter of 2024, the proportion of oil exports out of total value declined from 78.2 percent to 76.1 percent. Imports, on the other hand, increased by 6.4 percent. 

In the first quarter, compared to the same period in 2023, both merchandise exports and non-oil exports, including re-exports, decreased by 1.4 percent and 0.2 percent respectively. Meanwhile imports saw a 0.3 percent decline, resulting in a 3.8 percent decrease in the merchandise trade balance surplus. 

In March, merchandise exports declined by 5.9 percent, largely driven by a 7.3 percent decrease in oil exports, leading to a drop in the proportion of oil exports from 78.1 percent to 76.9 percent compared to March 2023.

Conversely, imports increased by 1 percent, while the surplus of the merchandise trade balance decreased by 17.2 percent compared to March 2023. 

This period also witnessed a slight decrease in the ratio of non-oil exports, including re-exports, to imports, which fell to 34.7 percent from 35.8 percent in the previous year, attributed to a significant increase in imports by 6.4 percent, compared to a 3.3 percent rise in non-oil exports. 

In the first three months of this year, China was the main destination for the Kingdom’s exports, accounting for 14.9 percent of the total. South Korea and India followed with 9.8 percent and 9.5 percent, respectively. Exports to these and other top destinations made up 67.1 percent of the total. 

Similarly, China was the leading source of the Kingdom’s imports at 20.9 percent, followed by the US at 8.1 percent and the UAE at 6.8 percent. Imports from these and other top sources accounted for 63.4 percent of the total. 

King Abdulaziz Sea Port in Dammam was the major entry point for goods into the Kingdom, accounting for 27.4 percent of total imports. 

Other key ports included Jeddah Islamic Port with 18.8 percent, King Khalid International Airport in Riyadh with 14.2 percent, King Abdulaziz International Airport in Jeddah with 8.1 percent, and King Fahad International Airport in Dammam with 6.1 percent. 

Together, these five ports handled 74.6 percent of the Kingdom’s total merchandise imports. 

In March, key non-oil exports include chemical products, comprising 28.1 percent of total non-oil exports, marking a 12.9 percent decrease from March 2023. 

In contrast, primary imported goods include machinery, electrical equipment, and parts, constituting 24.1 percent of total imports, rising by 21.4 percent from March 2023. 

China also emerged as the Kingdom’s top destination for exports where they comprised 16.4 percent of Saudi Arabia’s total exports. 

Similarly, China ranked first for the Kingdom’s imports in March, constituting 21.2 percent of the total imports, followed by the US with 8.7 percent and the UAE with 6.9 percent. 

King Abdulaziz Sea Port in Dammam played a vital role as one of the primary ports for goods entering the Kingdom, comprising 28.9 percent of total imports. 

Other significant entry points included Jeddah Islamic Port, King Khalid International Airport in Riyadh, King Abdulaziz International Airport, and King Fahad International Airport in Dammam. 

Together, these five ports accounted for 76.3 percent of the Kingdom’s total merchandise imports in March. 


Pakistan to enhance production of indigenous petroleum products— minister

Pakistan to enhance production of indigenous petroleum products— minister
Updated 22 May 2024
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Pakistan to enhance production of indigenous petroleum products— minister

Pakistan to enhance production of indigenous petroleum products— minister
  • Cash-starved Pakistan spends over $20 billion each year on petroleum imports to meet energy demand
  • Pakistan welcomes foreign companies to invest in its oil and gas sector, says Petroleum Minister Musadik Malik

KARACHI: Pakistan wants to enhance the production of its indigenous petroleum products, Petroleum Minister Musadik Malik said on Wednesday, citing the financial burden that expensive crude oil imports have on the country’s fragile economy. 

Cash-strapped Pakistan relies heavily on imported petroleum products as its energy demands grow. Struggling with a balance of payments crisis, high inflation and steep currency devaluation, Pakistan is looking to secure cheaper energy imports and find alternate ways to lessen the cost of power generation. 

According to the Trade Development Authority of Pakistan (TDAP), the country’s indigenous oil production meets only about one-fifth of Pakistan’s current oil needs. The rest is met through high-cost imports.

Prime Minister Shehbaz Sharif has urged the government to turn toward renewable energy resources. Last month, he said the country currently imports oil worth $27 billion to meet its power and transportation needs, which puts a strain on the cash-strapped nation. 

Speaking at the Pakistan Energy Symposium, Malik said it would be difficult to manage the country with such a huge energy import bill when Pakistan’s exports were around $30 billion. 

“We want to first of all, produce as much of the petroleum products, including gas and crude, indigenously as much as possible,” the minister said, adding that the government has put blocks for bidding and is actively trying to attract global players in exploration activities.

Malik said the government is expediting oil and gas exploration within the country, adding that it welcomes foreign companies to invest in the sector.

“So, we are telling the world that Pakistan is open for business, our regulatory process, particularly the petroleum concession process is very dense and opaque,” he said. 

He said investment processes and information about oil and gas exploration have been digitized and simplified to facilitate the government’s aims to enhance indigenous production of energy resources. 

Malik advocated for increasing the utilization of Pakistan’s abundant renewable energy resources, pointing out that the country’s solar energy costs have significantly decreased.