UAE financing conditions lift business sentiment





UAE financing conditions lift business sentiment

04/08/2013

Businesses in the UAE are reinvesting earnings and showing increased dynamism in the second quarter of 2013 despite tighter demand and cash-flow conditions, a new study revealed.

The latest survey showed that the current conditions in the UAE have given a boost to business confidence in the region, with 40 per cent of businesses taking part in the survey reporting an increase confidence in the prospects of their organisations, up from 33 per cent in the previous quarter.

The Global Economic Conditions Survey, or GECS — from the Association of Chartered Certified Accountants, or Acca, and the Institute of Management Accountants, or IMA — shows that only 18 per cent of the respondents reported a loss of confidence.

The Gecs, the largest quarterly economic survey of accountants in the world, gauges the views of Acca and IMA finance professionals.

Emmanouil Schizas, the Acca's senior economic analyst and editor of the Gecs, said across the globe, the survey shows the highest level of optimism about the national and global economies in two years, and the strongest year-on-year improvement in three years.

"Businesses in the UAE reflect that confidence. Right now, they are experiencing the best financing conditions in the world as a result, in part, of a greater supply of growth capital over the last 12 months and a significant amount of monetary stimulus at the global level.”

Schizas pointed out that despite continued positive news about the global and national economies, the Gecs business confidence index has just about inched in the right direction."After a surge in business confidence in the first quarter that was perhaps a little premature, confidence levels are now in line with fundamentals.”

"What is encouraging is that the marginal improvement in global business dynamism in early 2013 has now accelerated across all measures of investment, orders and employment. Employment in particular is recovering quickly and is now stronger than at any point in the last two years,” said Schizas.

"UAE finance teams are looking at the numbers and telling us that the businesses they work for are demonstrating greater dynamism and funding is going more into organic growth. The knock-on effect is a boost to capacity building — investment in both capital and employees — for the businesses in UAE. Better access to growth capital is adding to these trends, which are reflected in the high confidence levels of the business community,” said Susie Isaacson, the Acca's head of the UAE.

"Respondents in the UAE have traditionally expected government spending to rise substantially in the medium term, but are now beginning to revise their expectations further upwards. A loosening of fiscal policy in the medium term is bound to have an impact on confidence and economic performance.”

The survey revealed that despite rising confidence, faith in the global recovery has fallen marginally, even though it is still higher in the UAE than any other major Acca or IMA market. More than two-thirds, or 68 per cent, of the Emirates' sample are optimistic about the recovery, down from 70 per cent in the first quarter 2013.

However, the survey shows that it is a different story across the wider Middle East region, with business confidence taking a hit, despite a rise in business capacity and improving access to growth capital. One-third of Middle East-based respondents taking part in the survey reported a loss of confidence in the prospects of their organisations, due mostly to rising cash flow and demand pressures.

Another finding of the survey is that faith in the global economic recovery has never been stronger in the last 18 months, with 59 per cent of finance professionals in Middle East sample reporting a more positive outlook.

On a global scale, the Gecs found both business confidence and optimism about the economy continued to rise during the second quarter of the year.

Nearly half of the Gecs sample, or 47 per cent, felt that the state of the economy was improving or about to do so, up from 43 per cent in early 2013, while just under 50 per cent were pessimistic, predicting deterioration or stagnation, down from 54 per cent in the first quarter.

This is the highest level of optimism about the national and global economies in two years, and the strongest year-on-year improvement in three years.

The survey also revealed that there was improved availability of growth capital on a global scale in the second quarter of this year, which was driving confidence upwards.

UAE to enhance economic ties with China

 04/08/2013

China is an exciting development experience for many countries of the world and has been able to boil down decades to turn into the second largest economy in the world, and the locomotive of world trade.

China stands today at the forefront of the strategic partners of the UAE and Dubai, and there are broad prospects for strengthening this partnership which serve the development programmes in the both countries, said Hani Al Hamli Secretary-General of the Dubai Economic Council (DEC).

Hamli stressed that the DEC seeks to deepen the partnership between Dubai and China by proposing mechanisms and policies and communicating with the various economic departments in China.

Hani Al Hamli's remarks were made during a meeting with a Chinese delegation from the China Council for the Promotion of International Trade (CCPIT), Linyi Branch Office and Linyi Chamber accompanied by a number of Chinese leading businessmen, who are specialised in the field of retail, glass industry and recycling.

The Chinese delegation included Yue Lijuan, President Party Secretary, CCPIT Linyi Branch, CCOIC Linyi Chamber, Xu Tiecheng, General Manager of the Shandong area, China Recycling Development Corporation, Zhang Hongzi, Xukun Lighting Appliances Shandong, Cao Jilian, Chairman of Shandong Lanhua Group, and the former Chinese Vice Consul in Dubai.

At the meeting which took place at the DEC office both parties discussed means of boosting bilateral economic and investment relations.

At the beginning of the meeting, Hani demonstrated a detailed explanation about the most important economic developments in Dubai. He pointed out that Dubai has managed over the years to prove itself as a regional, global trade hub providing state of the art logistics, thanks to its modern infrastructure and extensive network, including shipping lines and transport with the highest international standards, making it an attractive environment for investors from all over the world.

UAE-CHINA TRADE

Trade between the UAE and China has increased fivefold over the past 10 years with a growth rate of 395 per cent at Dhs57.3 billion (US$15.6 billion) in 2012 from US$3.12 billion in 2002.

During this period, both countries achieved steady economic growth that was capable of overcoming the ramifications of the slowing global economy. Trade between the two countries is expected to grow faster in the future.

In a study released by the Ministry of Foreign Trade (MOFT) on trade relations between the UAE and China stated that the People's Republic of China maintained its status as the UAE's second largest trade partner, revealing that trade between the two countries grew to US$15.6 billion in 2012, in comparison with US$14.2 billion in 2011 (with a 10 per cent growth rate).

The main imports from China were electronic appliances, radio audio recording devices, cameras, mechanical tools and devices, and articles of iron and steel. As to the main exports to China, those were plastics and their products, copper and its products, as well as iron and its products.

HALAL FOOD
Hani Al Hamli added that Dubai also has strong bilateral business relationships with a number of countries, from the east and the west, but the relationship with China is of special strategic significance beyond the tradition to affect vital areas such as energy, industry and infrastructure, in addition to a number of strategic projects in the pipeline by major Chinese companies. Al Hamli also pointed out that the DEC has been always present in several activities which took place in China.

Yue Lijuan, President Party Secretary, CCPIT Linyi Branch, CCOIC Linyi Chamber, expressed admiration for the urban and cultural development witnessed in Dubai.


 














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