Daily Personal Finance Insights – Trade growth
The impact of electronic payments on economic growth in the UAE
A new study by Visa and Moody’s has revealed that increased debit or credit card penetration lifted GDP in the UAE by US $4.2 billion (Dh15.4 billion) over the period between 2008 and 2012. This represents 0.53% cumulative contribution to consumption through electronic fees incurred on card transactions.
The study does not include the contribution which the interest payments accrued on credit cards contribute to GDP. The full study can be downloaded here.
Female investors spend Dh13.3 billion on property
Female investors spent Dh13.3 billion on property in Dubai last year, representing 23% of the emirate’s real estate market.
According to data from the Dubai Land Department (DLD), 5,434 women invested in property. This was an increase from last year when 4,704 female investors poured Dh10.5 billion into the real estate market, making up 22% of the total investments, according to Gulf News.
Mashreq fund provides high returns
Mashreq's conventional regional bond fund Makaseb Income Fund announced the payment of 4% cash dividend for 2012 to its investors.
The fund returned circa 20% in 2012 versus the benchmark return (HSBC NASDAQ DUBAI ME Investment Grade Index) of 12.0% and said it outperformed all its peer funds. The fund’s focus is on investments originating from countries in the GCC, MENA, South Asia and other emerging economies.
UAE Banks in good health
UAE banks are healthier than western counterparts as they ‘do not trade or invest in sophisticated financial products,’ according to H E Sultan Bin Nasser Al-Suwaidi, Governor of the UAE Central Bank. UAE banks recorded net assets of AED 1,750,160 (US $476,558 bn) to end of October 2012 and profits of AED 24,689 billion (US $6,723 billion) to the end of October 2012.
Banks in the UAE also have high capital allocation ratios. The Governor has indicated: “In the UAE we impose the following capital ratios:
– Tier 1 core capital: a minimum of 8% (actual is: 14.5%)
– Other tiers: a minimum of 12% (actual is: 20.5%)”
Dubai Trade surges by 13% year on year
Dubai non-oil foreign trade surged by 13% in 2012 to Dh1.235 trillion compared with Dh1.089 trillion in 2011 as result of an increase in exports with a total value of Dh163bn. The rise in imports increased 12% to Dh737bn while re-export trade registered a growth of 5% to Dh334bn.
China has topped the list of major trading partners of Dubai with respect to imports, with a share of 15% valued at Dh111 bn, followed by the USA with imports reaching Dh69bn representing 9.33% of the total Imports of Dubai, then India with imports amounting to Dh68bn, representing a share of 9.28%.
Switzerland came first among Dubai trade partners with respect to exports, representing 34% of the total, amounting to Dh56bn. India came second with exports amounting to Dh32bn or 20% of the total Dubai exports. In the third place was Turkey with goods worth Dh10bn, or 6%.
In re-export, India tops the list with products valued at Dh51bn, representing 15% of the total, followed by the Kingdom of Saudi Arabia with Dh33bn or 10% of this trade. Iraq is in the third place with a share of 7.3%, amounting to Dh24bn.