Business

Another outlook on Dubai’s Economy

Imran Farooq, CEO of Dubai based Samana developers, shared his insights regarding the return of the realtors and buyers in the year 2021 for the purchase of properties. International buyers seems to have lost interest in buying property from Dubai in the year of pandemic but the CEO is sure that they will return in the year 2021 as Dubai made necessary changes in its health and trade sectors.

His company saw a decline of international buyers previous year. The numbers used to somewhere from 60 to 65 per cent of international buyers. But this year it was 80 per cent of buyers who were the residents of Dubai and not international buyers. The complete change is ratio suggested that there was a decrease in international buyers.

The first quarter was a challenge given to all sectors world wide and the strategies on how to overcome the crisis declared the winners. Not just to Dubai but to the whole of United Arab Emirates too. Dubai being the hub of the lavish properties it took a turn in the first few months. “By the second or third quarter, strong participation from UAE residents combined with normalization of flights, and the fact that the Expo is starting in October 2021 … we are very bullish about 2021.” Said the CEO of Samana developers.

Dubai having a beautiful lifestyle and community , safety keeps getting better and better might convert visitors into buyers. The explore option that the people of Europe , America and Asia have given them the availability of having Dubai as their second home. This is only possible after the flights start to fly regularly.

There will be two launches in the month of May 2021, a whoopinh 155 million Dirham ( $42 million ) project in the Jumeriah Village Circle and the second project Is being valued at 100 million Dirhams ( $27 million ) in Dubai Studio City. Being in the approval stage with planning authority and complying with RERA’s ( Real Estate Regulatory Agency ) escrow requirements they are set to taken on the market again.

RERA has passed new rules of depositing 50 per cent of the project’s construction cost upfront which was only 20 per cent last year. Which is believed to be beneficial for Dubai’s real estate sector.

“It will weed out non-performing developers since motivation will be extremely high for developers to focus on construction. They will be pushed to complete the project sooner to close the escrow account and release the equity.” Commented on RERA’s new rules initiative by Imraan Farooq.

He believes to that the forte has always been to build and deliver on time. Always running on a conservative model and the rule set by RERA goes well with their model.

Adding to this , due to the off-plan supply being reduced the investors will be looking at ready properties and this will put the brand Dubai in much demand! The rule of %) per cent deposition will help reduce over supply in the market as it slows down the off-plan launches. “A developer (has) to come up with 250 percent additional cash flow, so automatically, the number of developments he can push should reduce by half. That’s how I expect the supply of off-plan projects to come down.”

In the previous month , CORE – a real estate consultancy said that their off-plan market activity had decreased by 32 per cent year on year in 2020 due to the buyers preferring the units which were already ready in order to avoid the uncertainty of future. The project costing might raise by 75 per cent because of the new rule and to have the escrow amount, the land has to be fully paid. So that will be 50 per cent of the constructing cost and the amount of the land purchase which will sum up to 70 per cent of the total cost of the entire project being paid upfront. The builders should abide by it as RERA has its mandates.

Business

LexisNexis risk solutions study reveals sharp rise of financial crime compliance costs

Decision makers inside banks, investment firms, asset managers and insurance firms identify the drivers impacting financial crime compliance. LexisNexis® Risk Solutions revealed that the results of its annual True Cost of Financial Crime Compliance Study for the U.S. and Canada. The total projected cost of financial crime compliance for the region is approximately $49.9 billion. The survey illustrates the sharp increase in financial crime compliance costs.

The study projects the average annual cost of financial crime compliance for U.S. financial institutions with $10 billion. Pandemic Continues to Spur Growth. The pandemic continues to negatively impact compliance operations. Sixty eight percent of U.S. respondents report longer times required to complete due diligence. Fifty five percent of U.S. respondents report reduced productivity compared.

More U.S. financial institutions now rank real estate and hospitality as top money laundering risk segments. Crime involving digital payments, trade-based money laundering and money mule schemes are on the rise. Digital currency is a growing problem for Canadian firms. Crimes involving digital payments have the greatest impact on compliance costs. Cryptocurrency crimes have the greatest impact on compliance costs for Canadian firms. The survey results demonstrate that financial institutions are battling a broader set of issues.

Survey respondents indicate that a lack of current and extensive data tops the list of Know Your Customer (KYC). Leslie Bailey, vice president of financial crime compliance strategy for LexisNexis Risk Solutions stated that the study shows clear linkages between the pandemic, digital crime and increasing regulations. Hence, financial institutions need to prepare for expanded compliance obligations and risks from emerging financial crime. Bailey added that digital transformation is a game-changer for financial crime compliance operations.

This will require a sophisticated approach that incorporates insight into digital behaviors. This study surveyed 145 decision-makers in the U.S. and Canada. Responses were collected in June 2019, August 2020 and June 2021. Organizations such as banks, investment firms, asset management firms and insurance firms. The total annual cost of compliance across firms was calculated using survey data. The spend amount was generated by multiplying the average percent allocated to financial crime costs.

Business

COP26 delegates agree on need to deliver on $100 BLN climate finance pledge

Delegates heading to the COP26 U.N. climate summit in Glasgow. These delegates agreed that they must deliver on the $100 billion per year pledge. COP26 president Alok Sharma said that, it is to help most vulnerable nations for tackling the climate change.

After many days of meetings at the pre-COP26 climate event, which happened in Italy, Sharma said that there was a consensus to do more. Which is to keep the 1.5 degrees Celsius target within reach, adding more needed to be done collectively in terms of national climate plans.

The COP26 conference in Glasgow aims to secure more ambitious climate action. This is from nearly 200 countries, those all that have signed the 2015 Paris Agreement for limiting the global warming, well below 2.0 degrees Celsius. And to 1.5 degrees, above pre-industrial levels.

Business

City’s exposure to Evergrande is very minimal-Hong Kong finance Chief

Hong Kong’s exposure to debt-laden developer China Evergrande Group is very minimal at 0.05%. This is of banking assets, South China Morning Post reported, citing the city’s finance minister. Financial Secretary Paul Chan told the newspaper that it is very minimal and won’t cause them any systemic risks. He added that he had arrived at the conclusion after a recent audit of the local banking sector’s exposure to the company.

Chan also said that the Hong Kong’s stock market was inevitably subject to some volatility. This is amidst a recent mainland crackdown on some industries. But still he believed any setback would be temporary. With liabilities of $305 billion, Evergrande has sparked concerns its cash crunch could spread through China’s financial system. This may reverberate globally and that is a worry that has eased with the Chinese central bank’s vow, to protect homebuyers’ interests. Evergrande has missed two bond interest payments. Bondholders have said this and its offshore debt, amounting to about $20 billion, trades at distressed levels.