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UAE Freezones Biz News Updates
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Businesses in UAE stay optimistic
Industry leaders adopt cautious approach to sustain growth.
Businesses in the UAE will adopt a cautious approach to sustain a steady
growth trend in 2016 despite a slowdown in the global economy in the wake of
record-low oil prices and the geopolitical situation in the region.
Talking to Khaleej Times, industry experts said the UAE economy will stay
resilient to headwinds posed by volatile oil and equities, tight liquidity
and slowdown in Europe, China and emerging markets. They expressed
confidence in the government's economic diversification policies and said
the state's continued investment in infrastructure projects will keep the
economy on growth trajectory in 2016.
"While the slowdown in the economy cannot be ignored amid a decline in oil
prices, I don't see a need to press the panic button. I see banks continuing
to be profitable, though it will moderate compared with 2015. This belief is
based on the fact that the fundamentals of the economy are strong, with
diversification helping to make it resilient to macroeconomic risks,"
Hussain Al Qemzi, chief executive officer (CEO) of Noor Bank, told Khaleej
Times.
He said liquidity might have tightened compared to 2014, but it's also a
fact that the sector's average capital adequacy ratio is 18.3 per cent,
which is significantly higher than the required 12 per cent. Moreover,
although a portion of SME financing has gone sour, it is less than five per
cent of banks' books.
"Banks have become more risk averse, cooling lending growth. But it is
prudent to take these short-term steps to make sure we do not run into
systemic problems in the long run. Nevertheless, with the guidance and
support of the central bank, UAE financial institutions will continue to
perform steadily in 2016," he said.
To a question about the bank's plan for 2016, he said Noor Bank has grown
steadily over the past eight years by playing to its strengths in the UAE's
competitive banking landscape.
"The corporate and institutional business provides the bulk of our revenues
and will continue to be a key driver for Noor Bank's growth in 2016," he
said.
Over the past few years, he said the bank has significantly grown its retail
footprint - this business will continue to be supported and "we will have a
tailored approach" to target segments and product areas where the bank can
create a leadership position. "We will continue to do business with cautious
optimism and do not foresee any changes in staff," Al Qemzi said.
No panic
Rahail Aslam, chief executive of Select Group, said businesses and
investors' confidence remained stable with no panic despite the softening in
the real estate industry since the fourth quarter of 2014.
He said it's interesting to see the diversity of international investors in
the property market, encouraged by Dubai's infrastructure, strategic
location, political stability and lucrative investment opportunities.
"Business activities for later this year are more promising and we are
expecting a modest economic rebound by the end of 2016. We expect to see
mobilisation of many 2020 related projects later this year," Aslam told
Khaleej Times.
He said some businesses will have to adapt their strategies to ensure
longevity in this changing economic environment.
"We are positive that under the directives and patronage of His Highness
Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of
the UAE and Ruler of Dubai, economic challenges will be conquered and the
healthy business environment should resume later this year," he said.
A year for consolidation
Amit Rupchandani, managing director for Middle East and Africa region at Obi
Worldphone, said that with technology converging more and more in our daily
routines, organisations should map out latest trends. This will give
companies a better position in the market and an ability to adapt mobile
technology instantly to challenging economic factors and to identify new
opportunities.
"Despite some challenging periods, the UAE has developed into one of the
most promising emerging markets, and has always invested heavily in
technology. 2016 will be no different, and we foresee Dubai continuing to be
the gateway for global technology."
Harmeek Singh, owner and founder of Plan b Group, said 2016 is going to be a
year of consolidation and businesses will have to adopt an open approach to
opportunities.
"Businesses should remain open to alternatives and be adaptable. A 'Plan b'
will be essential for entrepreneurs to sail through any global economic
challenges," he said.
"It's how you look at the market, and I strongly believe that every
challenge creates new opportunities for innovators. It's the perfect, in
fact essential time for businesses to invest in improving their position,
operational efficiency and service levels. The key to the success of any
business in 2016 will be to retain existing revenue streams to minimise the
effects of environmental fluctuations."
Sajid Ali, director at Sumansa Exhibitions, said Sumansa Group is expected
to launch its operations in London and Hong Kong this year.
"Our plans for 2016 were set in mid last year and we are excited to see the
teams working on this plan day by day... We are on track to achieve a 70 per
cent growth in 2016 as compared to last year," he said.
To a question about the impact of oil prices and a slowdown in the economy,
he said it's a concern at the back of "your mind, but I believe the oil
price will go up slightly this year".
"But the good thing is that Dubai growth is based majorly on non-oil based
activities - tourism, trade and real estate are the main sectors of the
economy. Dubai continues to invest in all major projects announced and the
government is the most proactive and capable," he said.
Jan 24, 2016 |
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Courtesy Khaleej Times
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