1 CONSULATE GENERAL OF THE REPUBLIC OF KOREA IN DUBAI
Dubai and Northern Emirates Economy
Weekly Report ≠ 07/2017
Period covered: 09-Feb-2017 to 16-Feb-2017
2 Contents
I. PROJECTS ... 3
A. EXPO 2020 ... 3
B. Dubai Hyperloop ... 3
C. Ajman’s Port ... 4
D. Sharjah’s airport expansion ... 4
II. OIL SECTOR ... 6
III. NON-OIL SECTOR ... 7
A. CONSTRUCTION ... 7
B. TOURISM ... 7
Ras Al Khaimah ... 7
Sharjah ... 8
Ras Al Khaimah ... 9
IV. MARKET TRENDS ... 10
A. Oil prices: ... 10
B. Gold Price in Dubai (updated on February 16, at 11:29 Dubai time). ... 11
C. Dubai Financial Market General Index (DFMGI) ... 11
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I. PROJECTS
A. EXPO 2020
SAP, a global leader in innovative software solutions, has become Expo 2020 Dubai’s first international Premier Partner and will support the delivery of personalized experiences to millions of visitors from around the world.
As Expo 2020 Dubai’s newly appointed Innovative Enterprise Software Partner, SAP will co- innovate on real-time technology platforms that enable organizers and exhibitors to instantaneously analyze data to identify visitor trends. These insights will be used to help tailor each visitor’s experience to their preferences.
This could enable visitors arriving at Expo 2020 Dubai to be informed of the quickest route to their preferred pavilions with suggested stops on the way, or being directed to see the latest virtual reality advances because they are technology enthusiasts.
"SAP has a long track record of providing trusted, best-in-class enterprise solutions that are essential to the planning and operations of Expo 2020 Dubai," Sheikh Ahmed said.
Expo 2020 Dubai is expected to run more than 20 real-time solutions on the SAP HANA in- memory platform and the SAP S/4HANA real-time business suite.
B. Dubai Hyperloop
Dubai’s Roads and Transport Authority (RTA) has begun studies to test the feasibility of introducing the hyperloop technology in the emirate in partnership with US company Hyperloop One.
Over the past three months, Hyperloop One and the RTA have carried out provisional studies focusing on the suggested routes in Dubai; the economic, financial and environmental impact;
the rate of resulting reduced traffic congestion; and carbon emissions.
Studies have also been carried out to examine the standards of issuing safety certificates.
Several workshops were held to discuss details relating to passenger safety, impact of potential obstacles and risks, provisional plans to counter gravity, and other technical issues.
“Following the completion of the provisional feasibility study, Hyperloop One will submit final reports for assessment of deliverables by RTA experts, and recommendations will be raised to the steering committee to assess the feasibility of implementing the hyperloop technology,” said Mattar Al Tayer, director general and chairman of RTA.
The system is still fairly new and has yet to be experimented or tested on the ground and its safety certifications have not been issued.
“So it has been agreed to explore the feasibility of providing this technology in Dubai in future without setting a timeline for the time being,” he added.
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C. Ajman’s Port
Sheikh Ammar Bin Humaid Al Nuaimi, Crown Prince of Ajman, reviewed the designs and feasibility studies for the new Dhs2 billion Ajman port, located north of the current port in Zawara district, during a visit of the Ajman Port and Customs Department (APCD).
The plan features a new deeper port with state-of-the-art infrastructure and more capacity to handle larger vessels to make it a major regional container terminal, contributing to the economic growth and development of the emirate of Ajman.
The 12-metre deep port will have a three-kilometre long bridge and a quay 500 metres long that can handle large vessels with the capacity for 5,000 containers, almost five times more than that of the current port. The port also includes a 500,000 square metres warehouse for containers, in addition to other logistic services. It will also be equipped with remote-controlled Post-Panamax container gantry cranes.
The port will have access to the federal transport network, including the Mohamed bin Zayed Road. Sheikh Ammar was also informed about the APCD’s strategic plans and projects that are part of the Ajman Vision 2021.
D. Sharjah’s airport expansion
The Government of Sharjah has approved the US$400 million (AED 1.46b) budget for the expansion of Sharjah International Airport, according to MEED (Middle East Economic Digest).
The expansion project is expected to begin this summer and will increase airport capacity from 8 to 18 million passengers a year.
A master plan for the expansion of the airport was submitted by American engineering firm Bechtel in 2013, recommending a new terminal, construction of new roads around the airport, plus additional services such as a new hotel and a shopping mall.
In 2014, Sharjah International Airport opened a new AED 500 million (US$ 136m) airport runway, significantly expanding the airport’s aircraft capacity. The new runway allows large and new- generation ICAO Code F aircraft such as the Airbus A380 and Boeings B747-8 Intercontinental and B747-8 freighter. The old runway now serves as a taxiway.
The airport handled 11 million passengers from January to December 2016, registering a 10 percent year-on-year increase on 2015. In January 2017, the airport handled 969,633 passengers, showing a 4 percent increase on January last year.
The Waste Management Centre in Sharjah
The £4 billion turnover British contractor Carillion Plc has confirmed that it was awarded the contract to build the new eco-friendly headquarters for Bee’ah sometime last year. Carillion collaborated with UK-based Zaha Hadid Architects to win the contract and will manage the
5 project via its UAE venture Al Futtaim Carillion. The construction deal is said to be worth tens of millions of pounds.
Both Carillion and Zaha Hadid Architects contracts have been supported by UK Export Finance, Britain’s Export Credits Guarantee Department (ECGD), under the department’s Direct Lending Facility. HSBC Bank Middle East will act as arranger on the transaction, while HSBC Bank Plc is the agent.
Bee’ah revealed the futuristic design of its new 7,000 square metre headquarters in 2015.
Designed by the late Prtizker prize-winning British-Iraqi architect Zaha Hadid, the building design takes its inspiration from desert sand dunes and reflects the organisation’s passion for leading environmental change.
To be located on a 90,000 square metre site adjacent to the Waste Management Centre in Saj’ah industrial city in Sharjah, the new headquarters is expected to be operational by the end of 2018, while Bee’ah expects the complex to being powered 100 percent by renewable energy by the year 2021.
In 2014, Bee’ah awarded British firm Chinook Sciences with a GBP 300 million (AED 1.8 billion) contract for the construction of an advanced 400,000 tonne per annum thermal energy-from- waste facility and earlier this year announced that Abu Dhabi’s renewable energy company, Masdar, will build a new 300,000 tonne waste-to-energy plant in Sharjah.
Established by royal decree in 2007, Bee’ah’s goal is to transform Sharjah into the environmental capital of the Middle East, diverting 100 percent of emirate’s waste from landfill to recycling, energy production and other resources. The emirate currently diverts some 67 percent of waste destined for landfill to recycling, energy production and other resources.
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II. OIL SECTOR
Ras Al Khaimah’s economy was only partially affected by the drop in international oil prices in recent years because the oil and gas sector contributes just 4.8 per cent of its gross domestic product, according to a report by S&P.
The emirate relies mostly on nearby countries for its exports, so demand and investments were affected by lower regional growth.
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III. NON-OIL SECTOR
A. CONSTRUCTION
The outlook for Dubai’s construction industry looks positive for 2017 as 4,000 active construction projects worth $313bn are currently underway, a new report revealed.
With more than 3,200 active projects amounting to a combined estimated value of over $245bn, the city is expecting 187 projects valued at $32.4bn in the transport sector alone, according to data from BNC’s Construction Analytics report.
As for the utilities industry, 203 projects valued at $24.3bn are expected, with 377 industrial projects valued at $5.8bn, and 12 projects in the oil and gas sector totalling $4.6bn, Arabian Business reported.
Some of Dubai’s current multi-billion-dollar projects include Dubai Metro Red Line Extension, which is a part of the Expo 2020 initiative, Container Terminal 4 of the Jebel Ali Port Expansion project and the Royal Atlantis Resort and Residences located in Palm Jumeirah.
B. TOURISM
Ras Al Khaimah
Ras Al Khaimah Tourism Development Authority (RAKTDA) has outlined its strategy for the remainder of this year following 10.9 per cent year-on-year growth of visitors to the emirate in 2016.
Hotels across the region’s fastest emerging tourism destination recorded a 10 per cent increase in occupancy throughout 2016, reporting an average of 71 per cent from January to December.
Similar growth was posted across all key performance indicators with RevPAR increasing by 5.5 per cent year-on-year 2015, while Room Revenue grew 10 per cent.
Meanwhile, the emirate’s accommodation portfolio registered four per cent growth in Average Length of Stay, rising from 3.19 days in 2015 to 3.32 days last year.
Year-on-year, the UAE continues to remain the most significant source market in terms of visitor numbers, accounting for 41.2 per cent of total visitors to Ras Al Khaimah last year.
Internationally, Ras Al Khaimah’s four largest source markets each recorded double digit year- on-year growth in 2016, with German visitors up 24.6 per cent last year and now contributing one in 10 of all visitors to the emirate. The UK, Russia and India also reported similar visitor increases of 35 per cent, 19.5 per cent and 28 per cent, respectively.
8 Emerging destinations that showed significant growth last year include Kazakhstan, Egypt, the Philippines, and Czech Republic. Compared to 2015, these numbers increased by 205 per cent, 22.5 per cent, six per cent and 85 per cent, respectively. Other international source markets where RAKTDA is eyeing further growth in 2017 following significant increases in 2016 include Poland, the USA, Saudi Arabia, Finland, Switzerland, France and Denmark.
As part of the tourism authority’s overseas developments, RAKTDA has recently launched a new Chinese representation office in Shanghai, which formally opened in the first week of January.
The office will support RAKTDA’s goal of attracting one million visitors to the emirate annually by the end of 2019 by promoting the destination among the country’s FITs (frequent individual travellers), who are continually looking for new tourism experiences. This follows the China National Tourism Administration’s plans to send 150 million travellers to countries along the
‘One Belt, One Road’.
RAKTDA has outlined plans to enhance its sporting events portfolio and tourism products to leverage the emirate’s natural attributes. A key focus of this strategy includes rolling out policies and initiatives to support a recent partnership with UNWTO, which sees Ras Al Khaimah serve as a sponsor of the United Nation’s Year of Sustainable Tourism for Development.
Other product developments in 2017 include the opening of the world’s longest zip line, which was announced last year, and the launch of official cycling and hiking routes across the emirate, with a focus on Jebel Jais, the UAE’s highest mountain peak.
Sharjah
The total number of passengers passed by Sharjah airport in January 2017 is 970,000, an increase by 4.3% compare to in the same period of the last year where the airport received 930,000 passengers.
Also, Data published by the airport shows that, the volume of Cargo handling in January 2017 was 6,500 tonnes compare to 6,100 tonnes in January 2016 (an increase by 4.8%).
The volume of the Air Freight was 13,000 tonnes. The volume of the Sea freight air was 966,000 tonnes compare to 938 tonnes in the same period of the last year.
TRADE
Dubai
9 A report in light of the United Nations Conference on Trade and Development expects that the total investment in Dubai Economy will achieve 82.5 billion dirhams in 2017 and 86.5 billion dirhams in 2018.
Ras Al Khaimah
RAK Ceramics expects to close a deal to acquire an unnamed ceramics manufacturer in India in the second quarter as it ramps up its sales efforts there and in the UAE, Bangladesh and Europe to help offset the soft business environment in Saudi Arabia.
Yesterday, the tile and ceramic ware manufacturer reported it had swung to a loss in 2016 as a result of slower construction activity in Saudi Arabia, demonetisation in India and provisions and write-offs of Dh185 million.
Sales in Saudi Arabia dropped by 41 per cent last year amid low oil prices, lack of liquidity in the market during the second half and a slowdown in imports, Mr Massaad said.
About 48 per cent of last year’s provisions and writeoffs was "the impact of lower market prices for ceramic tiles sold in the [Arabian Gulf], as a result of the build-up of excess inventory at the local producer level", RAK Ceramics said in a statement to the ADX, where it is listed.
Its net loss attributable to owners of the company was Dh4.9m compared to a profit of Dh281.3m in 2015.
The group’s total revenues dropped by 9.3 per cent last year to Dh2.79 billion from Dh3.07bn a year earlier. Fourth-quarter revenues were Dh650m, up from Dh645.7m in the third quarter.
The decision by India’s government in November to remove the largest banknotes from circulation as part of its crackdown on "black money" led to a sales drop of 25 per cent for RAK Ceramics.
"The scale and speed of government spending in Saudi Arabia, the UK vote to leave the European Union, the drive by the Modi government in India to remove larger bills from circulation are all significant in the arc of history and have impacted the company unfavourably to various degrees," the company said.
The Ras Al Khaimah-based company consolidated its Germany, UK, Italy and Australia businesses last year. At the same time it increased its tiles capacity in Bangladesh by 42 per cent and sanitary ware capacity in the UAE by 20 per cent.
Last month, it sold its majority share in the electromechanical and plumbing company Electro RAK, which is based in the UAE, for Dh45m.
Its shares closed at Dh2.15, down by 5.3 per cent from Tuesday’s close. The share price is down from a peak of Dh3.76 in March 2015.
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MARKET TRENDS
A.
Oil prices:
Brent Crude Oil over the last week, The prices are in USD/bbl
WTI Crude Oil over the last week; The prices are in USD/bbl
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B. Gold Price in Dubai (updated on February 16, at 11:29 Dubai time).
C. Dubai Financial Market General Index (DFMGI) Daily closing value:
12 3,682.81
3,702.16
3,637.55
3,652.82
3,645.01
3,600.00 3,620.00 3,640.00 3,660.00 3,680.00 3,700.00 3,720.00
09-Feb 10-Feb 11-Feb 12-Feb 13-Feb 14-Feb 15-Feb
DFM Index Chart
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IV. REFERENCES
www.wam.ae www.thenational.ae www.arabianbusiness.com www.gulfnews.com
www.emirates247.com www.khaleejtimes.com
www.dfm.ae/market-data/historical-data www.nasdaq.com/markets
www.goldprice.org www.wam.ae www.platts.com
www.sharjahupdate.com www.investingroup.org Al Bayan Newspaper Al Khaleej Newspaper
