UAE eyes flexible approach to banks’ real estate exposure limits

UAE eyes flexible approach to banks' real estate exposure limits
“Flexibility is now with the Central Bank and it may come back and change [the cap limits] from year to year depending on the performance of real estate,” Al Ghurair is quoted as saying by Reuters.

The UAE Central Bank can now set new exposure limits for banks to the real estate sector and amend them to reflect market performance, according to media reports.

Last month, the UAE introduced a law eliminating a cap established in 1980 that restricted bank’s lending to the real estate and construction sectors to a maximum of 20 percent of total deposits.

According to Reuters, UAE Banks Federation chairman Abdul Aziz Al Ghurair has said that the federation is working with the Central Bank to properly define real estate – which may mean that a new cap may be imminent.

“Flexibility is now with the Central Bank and it may come back and change [the cap limits] from year to year depending on the performance of real estate,” Al Ghurair is quoted as saying by Reuters. “Now that [cap] is lifted the Central Bank may say 10 percent or 20 percent or 30 percent.”

According to the Knight Frank Global Residential Cities Index, residential prices in Dubai and Abu Dhabi fell by 6.5 percent and 6.9 percent in Q2, respectively.

Ghurair added that the UAE’s banks have provided the Central Bank with recommendations on what should be defined as real estate under any new restrictions, which will then allow the regulator to decide what limits to impose.


The Cayman Islands Has a Major New Real Estate Project

cayman islands real estate

There’s a major new real estate project coming to Grand Cayman: and it’s being dubbed the most luxurious development in the history of the Cayman Islands.

This is the new $500 million WaterMark, a collection of 54 beachfront units set on Grand Cayman’s world-famous Seven Mile Beach.

The new project “will be far beyond any other property ever developed in the Cayman Islands and very likely the Caribbean,” listing broker Kim Lund tells Caribbean Journal, pointing to the combination of “cutting-edge design, ultra-premium quality, prestigious amenities and facilities and privacy.”

cayman islands real estate

Indeed, the residences will range from a minimum of 3,900 square feet — with a starting price of $5.6 million — to 11,900 square feet for a penthouse, with the latter starting at $24 million.

That’s a pricing echelon unmatched for a development of this size in the Caribbean.

WaterMark will have a broad range of amenities, including 12 swimming pools; a spa; a fitness studio; a screening room; a library; an oceanfront conservatory with a chef’s kitchen; a fine-dining restaurant and even bespoke concierge service, among other offerings.

cayman islands real estate

While the residences themselves will be right on the beach, several amenities will extend across Grand Cayman’s West Bay Road, including the spa, the eatery and a collection of guest suites for owners.

It’s yet another sign of the Cayman Islands’ growing position as a luxury real estate Mecca in the Caribbean, from its new Residences at Seafire (set at Kimpton’s first-ever Caribbean hotel) to the recently-launched Grand Hyatt Grand Cayman Residences.

Lund, owner-broker at RE/MAX Cayman Islands, told Caribbean Journal that the project is already at 65 percent sold after three months.

Construction is slated to launch in the spring of 2019.


How to invest in Britain: From shares that look cheap, to bonds and property funds offering decent returns

On the stock market, it can sometimes pay to be ‘greedy when others are fearful’ – so go the famous words of Warren Buffett, the octogenarian chairman of US conglomerate Berkshire Hathaway and one of the world’s most famous investors.

Fearful is exactly what many investors and business executives are about Brexit and its supposed impact on the UK. Almost every day brings a grim warning about the possible consequences of ‘no deal’.

Could it be that investors are currently too fearful and that there are opportunities for those brave enough to take a different view?

FLAG FLYING : Luxury car maker Aston Martin floated on London Stock Exchange, last month

FLAG FLYING : Luxury car maker Aston Martin floated on London Stock Exchange, last month

The pound famously fell heavily on referendum results day and it remains 20 cents, or 13 per cent, down against the dollar. Less well-known is that the UK stock market has also found it hard going.

For instance, in the past year, the FTSE 100 index has underperformed the US S&P 500 Index by 13 per cent and the MSCI World Index by 7 per cent.

Russ Mould, investment director at broker AJ Bell, sums it up: ‘The UK’s stock market has three things going for it. It is unloved after a period of poor performance relative to its global peers. It is potentially cheap because it is unloved. And its currency is cheap.’

For investors who decide this might be the moment to bag a bargain, where can they find the best of British?


Tucker Carlson broke Fox News’ Twitter blackout that was ordered for him to post a statement about assault allegations

Tucker Carlson AP
  • Tucker Carlson appeared to break a Fox News Twitter blackout to defend himself from assault allegations.
  • The Twitter blackout was reportedly instituted as a form of protest against Twitter’s response to tweets containing Carlson’s address.
  • On Saturday, Juan Manuel Granados accused Carlson of assaulting him at a country club in Virginia.

Fox News has instituted a Twitter blackout across the company, reportedly in response to threats to host Tucker Carlson, but apparently the blackout doesn’t apply to Carlson himself.

Despite orders emailed to the entire Fox News digital team instructing employees not to tweet, previously reported by Business Insider, Carlson took to Twitter Sunday evening to defend himself against blowout allegations of assault from Michael Avenatti’s new client Juan Manuel Granados.

Breaking the blackout, Carlson wrote, “Last month one of my children was attacked by a stranger at dinner. For her sake, I was hoping to keep the incident private. It’s now being politicized by the Left. Here’s what happened.”

Attached to the post was a lengthy statement providing Tucker Carlson’s own account of a dispute at Farmington Country Club in Charlottesville, Virginia. Carlson denied personally assaulting Granados.

Breaking a blackout made for him

Carlson’s tweet notably went against a documented Twitter blackout that has been in place at the network for multiple days, reportedly ordered because Carlson’s own address was leaked.

In the email obtained by Business Insider, Fox News managing editor Greg Wilson told the entire digital team, approximately 140 people, to “please refrain from tweeting out our content from either section accounts or your own accounts until further notice.”

A Fox News source cited by a Tribune Media’s Scott Gustin reportedly said the decision came from “the highest level” of the company and was a form of protest against Twitter’s response to tweets containing Carlson’s address. Gustin said that it’s believed that Twitter advised Fox News to submit ticket request rather than immediately deleting tweets with Carlson’s address.

A Fox News source told Mediaite: “[This] is a conscious decision in light of what was done to Tucker.”

On Wednesday, a group of approximately 20 protesters from Smash Racism DC reportedly showed up at Carlson’s home after his address was leaked on Twitter. According to a report from The Washington Post, protesters blew bull-horns, carried signs with Carlson’s address, and spraypainted an anarchist symbol on Carlson’s driveway (note: a number of details in The Washington Post report have been disputed by an accoun t of a reporter claiming to be there).

Until Sunday, November 11, the last time Tucker Carlson or Fox News had tweeted was November 8. As of Sunday, @FoxNews still remained silent.

Playing defense

The Sunday tweet came as a response to Carlson’s other major controversy from the weekend — assault allegations brought forth by Michael Avenatti’s latest client Juan Manuel Granados.

On Saturday, Avenatti tweeted video that appeared to show Carlson screaming “get the f— out” at another patron of a Virginia country club. Avenatti claimed that “Carlson and/or members of his inner circle” assaulted Granados.

Read more: The man accusing Tucker Carlson of assault previously filed a successful discrimination suit against a Virginia health club

In response to an inquiry from Business Insider Saturday, Fox News sent the same statement that Carlson would eventually post, where Carlson denied personally assaulting Granados. Carlson claims that Granados called his daughter a “f—— whore” among other slurs and that his own son then dumped a glass of wine on Granados’ head.

Since Carlson’s initial response, Granados published his own lengthy response in which he denied any name calling and alleged Carlson made threats of violence.

Granados said he planned to bring charges against Carlson, his son, and another man present at the incident.


Asia markets fall; Xi speech tries to position China as globalization champion

Image result for Asia markets fall; Xi speech tries to position China as globalization championAsia Pacific markets traded mostly lower on Monday as investors remained cautious over global growth prospects while Chinese President Xi Jinping tried to position China as a globalization champion in a major speech.

Xi’s opening speech kicked off the week-long China International Import Expo that seeks to promote the world’s second largest economy as a major consumer of global goods. The event, announced more than a year ago, will stand in contrast to the ongoing trade fight between Beijing and Washington.

During the speech, Xi repeated his rhetoric against protectionism and promoted his country as an advocate for international openness and cooperation. He discussed at length about the benefits of an open international economy and said that China is pursuing “a new round of high-standard opening up” to broaden market access to the rest of the world.

The United States has levied tariffs on an extensive list of Chinese products. Beijing, for its part, unsuccessfully tried to negotiate on tariffs by offering to buy more U.S. goods, but ultimately responded with duties on products from the U.S.

The impact of the ongoing trade war is being felt as companies report higher production costs and trim outlook. On Friday, Chinese tech giant Alibaba lowered its full-year sales forecast, citing concerns about the economic impact of the trade war.

Xi’s speech at the expo comes a day before Americans head to the polls for midterm elections.

Asia Pacific markets

In Japan, the Nikkei 225 fell 344.67 points, or 1.55 percent, to 21,898.99 while the Topix index declined 18.37 points, or 1.11 percent, to 1,640.39. South Korea’s Kospi was down 19.08 points, or 0.91 percent, at 2,076.92.

Chinese shares traded lower. The Shanghai composite declined 11.04 points, or 0.41 percent, to 2,665.43 while the Shenzhen composite closed fractionally lower at 1,351. In Hong Kong, the Hang Seng index fell 2.08 percent in afternoon trade.

The on-shore yuan traded at 6.9203 to the dollar Monday afternoon while the off-shore yuan fetched 6.9161. China’s central bank set the yuan mid-point at 6.8976 against the greenback — the People’s Bank of China allows the exchange rate for the on-shore yuan to rise or fall 2 percent from the official midpoint rate set every morning.

Australia’s ASX 200 struggled for gains, finishing down 31.10 points, or 0.53 percent, at 5,818.10 as most sectors declined. The energy sector fell 1.31 percent as oil stocks mostly sold off. Shares of Santos fell 1.55 percent, Oil Search was down 1.31 percent and Woodside Petroleum declined 2.28 percent.

Iran sanctions and central banks

Oil prices will be closely watched as U.S. on Monday reimposed oil and financial sanctions on Iran, ratcheting up the pressure on Tehran to curb its nuclear, missile and regional activities.

Iran said it plans to defy the newly reimposed U.S. sanctions and continue selling its oil in the international market.

Last week, reports said that President Donald Trump’s administration will grant eight jurisdictions special exceptions to continue importing oil from Tehran, with the idea that they will gradually reduce their purchases over time. Oil prices fell last Friday on the back of that news as investors remained concerned about oversupply in the market.

U.S. crude traded down 0.52 percent at $62.81 a barrel Monday afternoon while global benchmark Brent was down 0.3 percent at $72.61.

Central banks in the United States, Australia and New Zealand are set to meet this week.

“There is not expected to be any change in policy from either central bank. But we continue to expect the Fed to lift interest rates 25 bpts in December to 2.50 (percent),” Richard Grace, chief currency strategist and head of international economics at the Commonwealth Bank, wrote in a morning note.

Slowing global growth remains a concern for investors — last month, the International Monetary Fund cut global growth forecast, citing trade tensions between the U.S. and its trading partners.

There have been other indications of a slowdown in growth momentum, including a decline in Purchasing Managers Indexes, an indicator of economic health in the manufacturing and services sectors, across much of Asia, according to Felicity Emmett from ANZ Research.

“In an environment of cooling growth and declining liquidity, market volatility seems unlikely to decline to the soporific days of old any time soon,” Emmett said in a morning note.

Currency markets

In the currency market, the dollar index, which measures the U.S. currency against a basket of its peers, traded at 96.431, retreating from an earlier high of 96.519.

The British pound traded at $1.3004, up from levels around $1.2800 in the previous week. The gains followed a local newspaper report that suggested Prime Minister Theresa May has secured a Brexit deal with Brussels that will allow Britain to stay in a customs union and avoid a hard border in Northern Ireland.

But Reuters reported that May’s office has dismissed the report as “speculation.”


Brazil must act fast to fix ‘unsustainable’ finances, minister warns

Eduardo Guardia calls for urgent fiscal reforms to avoid return to recession and unrest

Brazil’s new government will have a limited opportunity to enact urgent fiscal reforms or face the risk of a return to recession and social unrest, the outgoing finance minister has told the Financial Times.

“The situation is unsustainable,” Eduardo Guardia said in an interview in London. “It will be a bumpy road and a short one, because they do not have much time.”

But Mr Guardia said he was “realistically optimistic” that changes to Brazil’s deficit-ridden pensions system would be enacted in time to avoid a bad outcome after the far-right president-elect Jair Bolsonaro and a new congress take office on January 1.

“There is execution risk, but the direction is right,” he said. “They have a chance to do well.”

Successive governments have tried but failed to address Brazil’s pensions problem, the main cause of a budget deficit equal to more than 7 per cent of gross domestic product.

The current government of President Michel Temer, in office since the leftwing Dilma Rousseff was impeached in August 2016, has presented two reform proposals to congress.

Mr Guardia said the first would save about R$800bn ($215bn, more than 10 per cent of GDP) over the course of 10 years. A second, watered-down version, already approved by congressional committees, would save R$650bn over that period. Both would require three-fifths majorities in both houses of congress to make the required changes to Brazil’s constitution.

“The first version is better but the second would still have a meaningful impact,” Mr Guardia said.

Future ministers have also proposed making limited changes that would not require constitutional amendments and could be enacted before the Temer administration leaves office or, alternatively, ditching the Temer proposals to come up with a new plan. Mr Guardia said the former would be of little use on its own while the latter carried the risk that, “if we start all over again, one year from now we will be back where we are”.

The danger of delay was that falling investment and rising borrowing costs, as investors lost confidence in the new government, would tip the country back into recession. Output has barely recovered from the recession of 2015-2016 and is expected to grow by less than 1.4 per cent this year.

“The difference last time was that the recession started from full employment,” Mr Guardia said. “Today, there are 12.5m unemployed.”

Failure to deliver reforms and growth would also undermine Mr Bolsonaro’s main campaign promise, of tackling the surge in violent crime that accompanied Brazil’s economic collapse.

Brazil election: captain of industry

Mr Bolsonaro has promised to make it easier for citizens to own and carry guns, to lower the age of criminal responsibility, to put more people in prison for longer, and to give police greater impunity from prosecution if they kill suspects in the line of duty.

Mr Guardia said such policies were unlikely to solve increasing crime, which would best be tackled by growth and rising employment.

Despite the polarisation and truculence that has characterised public and political life before and since last month’s elections, Mr Guardia said Brazil’s centrist political parties, which did particularly badly at the polls, should support the new government’s reform plans.

“We all have to get on side,” Mr Guardia said. “We all know what will happen if the reforms are not done.


Bond Buyers Back Italy on Hope Political Risks Are Just Noise

The euro area’s highest investment-grade bond yields are simply too good to pass for some investors even as another round of dust-up between Italy and European Union looms large this week

M&G Investments is dipping back into Italian short-dated debt, while BlueBay Asset Management LLP has a long position in the securities known as BTPs. The near doubling of yields since the start of the year has also tempted retail investors back into the market, who tend to hold the bonds until maturity, according to the nation’s debt agency head Davide Iacovoni.

That’s despite an ongoing standoff with the EU, which saw the bloc dismiss Rome’s budget targets as overly optimistic. While Italy has until Tuesday to submit a revised version of its spending plans, the government has signaled it won’t bow to pressure from Brussels.

A pullback in Italy’s yield premium over Germany suggests the market is soft-pedaling the risk of populist politics in Rome destabilizing the EU, not least because similar fears have already played out from France to Greece in recent years with little long-term consequence. Past episodes of euro-breakup anxiety were typically resolved by last-minute compromises, and that may be fueling market expectations for a similar outcome to the ongoing Italian imbroglio.

While there’s no sign yet of an end to tensions with the bloc, that still doesn’t justify yields as high as they are, according to BlueBay.

“It’s been quite a rough and at times painful ride, but we still do think that we have the mispricing of Italian EU-exit risk,” David Riley, chief investment office at BlueBay, told Bloomberg TV last week.

‘More Attractive’

Investors are also looking to take advantage of a rare period of stability in Italian bonds, which have been rocked this year after euroskeptic political parties rose to power. S&P Global Ratings and Moody’s Investors Service both stopped short of downgrading the nation to junk last month, supporting investor confidence for the time being.

Wolfgang Bauer, who co-manages the M&G Absolute Return Bond Fund for the U.K. investment house that oversees 286 billion pounds ($368 billion), sold most of his Italian bond holdings in February and March this year and has only just started to re-enter the market. His colleague Richard Woolnough has recently invested 1 percent of his M&G Optimal Income Fund portfolio in short-term BTPs after exiting peripheral euro-area debt in May.

“The risk-reward profile is now more attractive,” Bauer said at a presentation in Milan, Italy. “Even in the worst case scenario — a euro exit — it’s very unlikely that will be done in two years.”

Rising Costs

Italian 10-year bond yields rose one basis point to 3.41 percent Monday, little changed this month. That compares with similar rates of 0.39 percent in Germany, 0.77 percent in France, 0.12 percent in Japan and 1.45 percent in the U.K. The spread over bunds was 302 basis points, down from as wide as 341 basis points on Oct. 19. Still, the gap has almost doubled from the end of last year.

This year’s surge in yields is boosting borrowing costs for Italy, one of euro zone’s most indebted economies. Debt-funding expenses for next year will rise by about 5 billion euros compared with the end of 2017, based on the seven-year weighted average maturity of its debt and the 175 basis point increase in seven-year yields in the secondary market this year.

Italy will auction bonds maturing in 2021, 2025 and 2038 Tuesday as well.

‘Big Problem’

Other investors are still more skeptical. OppenheimerFunds Inc. money manager Alessio de Longis is positioning for European political risk by buying the Japanese yen versus the euro. Alongside Italy, he cited the withdrawal of European Central Bank stimulus and slowing economic growth in the region as other reasons to be bearish.

“This is a way we are expressing euro-specific discomfort with respect to some of the developments that could occur with Italy,” said de Longis, who helps oversee $2 billion in New York. He is targeting 124 yen per euro, from around 130 currently. “Italy is a big problem – that is not going to go away.”

While Italian bonds may seen more volatility due to simmering Rome-Brussels tensions, both sides are eventually likely to reach a compromise in the longer run, according to HSBC Holdings Plc.

Further disagreement between the two sides is already “widely expected” by the market and there is still scope for improvement in sentiment toward Italian bonds, according to Mizuho International Plc.

“We’re not expecting much of a sell-off in BTPs beyond a short term ‘knee-jerk’ reaction,” strategists Peter Chatwell and Antoine Bouvet wrote in a note to clients last week. They recommended buying five-year bonds versus their two- and eight-year peers


UK GDP: growth hits near two-year high, but business investment shrinks – as it happened

Chancellor Philip Hammond being shown around Fuller’s Brewery, in Chiswick, today.


The National Institute of Economic and Social Research’s latest GDP tracker predicts that the UK economy expanded by 0.4% in August-October, down from the 0.6% growth racked up in the third quarter.

NIESR also believes the economy will run at a similar rate until the end of 2018, and cautions not to get carried away by the stronger growth this summer.

It says:

  • In our view, UK economic growth peaked in the third quarter of this year and will settle at a rate that is close to its post-crisis average in the final quarter.
  • According to new ONS statistics published this morning, the UK economy expanded by 0.6 per cent in the third quarter (three months to September) after growing by 0.4 per cent in the second quarter (three months to June). The outturn was slightly lower than the 0.7 per cent monthly GDP forecast that we published last month for the same period and the error is partly because of back data revisions. Building on the official data, our monthly GDP Tracker suggests that the economy will expand by 0.4 in the final quarter of this year.

The apparent strength in third quarter growth masks a loss in momentum in industrial production as well as services output in the latter part of the third quarter. There are a number of factors at play, including Brexit-related uncertainty.


EU regulators monitor big tech’s financial services foray

Olli Rehn, governor of Finland’s central bank, says the issue of big tech’s encroachment into the financial sector has prompted ‘a very lively discussion’ © Reuters

European financial regulators are discussing whether to supervise big technology companies more closely in response to recent moves into financial services by groups such as Amazon and Google, according to one of Europe’s most senior central bankers.

Olli Rehn, governor of Finland’s central bank and a member of the European Central Bank’s governing council, said the issue of big tech’s encroachment into the financial sector had prompted “a very lively discussion by financial supervisors and central banks in Europe”.

His comments on Sunday at the Financial Times Middle East Banking Forum in Dubai will be welcomed by many senior bankers who have been complaining about the uneven playing field as they worry about competing head-on with big tech groups.

They could also signal a new front in the tussle between European authorities and US tech groups, which are already being subjected to intense scrutiny by EU competition authorities and moves to extract more tax from their European operations.

When asked whether the ECB was considering regulating big tech groups that have moved into financial services, Mr Rehn said: “We see big tech is moving in there,” adding that it was “currently a matter for discussion among financial supervisors”.

The Finnish central banker, who was previously vice-president of the EU commission with responsibility for economic and monetary affairs, also warned that banks would have to overhaul their balance sheets to adjust for the risks of climate change.

Describing climate change as “the biggest market failure of all time” he said banks would have to take account of factors such as rising sea levels, extreme weather events, changing rainfall patterns and mass migrations in assessing the risks on their balance sheets.

“For a banker or any financial institution, climate change poses physical risks, such as extreme weather . . . and the debt servicing ability of a borrower or their credit quality may be affected,” he said.

But Mr Rehn’s comments on the potential for regulating big tech groups are likely to grab most attention in the banking sector.

The introduction this year of “open banking” regulation, forcing EU lenders to provide access to accounts of customers who authorise it, has left many top bankers worrying that large US and Chinese tech groups will cherry-pick the best parts of their business while escaping the burden of regulation.

Big US tech companies such as Amazon, Google, Facebook and Apple have been expanding into payments and other financial services. Chinese tech groups Alibaba and Tencent have already taken a dominant share of their country’s retail payments market.

Financial regulators on both sides of the Atlantic have already turned their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks. Cloud services are used by banks to store customer-account data and their banking systems on servers hosted by big tech groups.

As well as cyber risk, regulators ‎are worried about concentrating so much information in the hands of Amazon, Google and Microsoft — the three big companies that dominate cloud provision — without the same level of supervisory oversight as banks.

The Bank of England is considering whether to test banks’ resilience, analysing what would happen if access to the cloud were disrupted. The BoE’s Prudential Regulation Authority is also expected to publish more detailed thinking on the subject as a prelude to possible regulation.

Meanwhile in the US, the Office of the Comptroller of the Currency is reviewing banks’ relationships with third-party vendors, including cloud providers. EU watchdogs have also had discussions with tech groups and asked to see commercial agreements with banks


Budget 2018: Premium Bond minimum to be lowered to £25

The minimum amount you can save in Premium Bonds will be cut to £25, and people other than parents and grandparents will be able to gift bonds to children, the Chancellor has announced.

Currently the minimum amount you can save is £100 (or £50 by standing order), but this will be cut to £25 by the end of March 2019 – for both one-off purchases and regular savings.

The maximum Premium Bond holding will remain at £50,000.

Additionally, adults other than parents and grandparents will be able to purchase bonds for children under 16, though National Savings & Investments (NS&I) hasn’t given a timescale for this yet.

The person purchasing the bonds for children will have to be over 16, and must nominate one of the child’s parents or guardians to look after the bonds until the child turns 16.

NS&I will also launch a new Premium Bonds app in the new year ‘to make saving easier