Mustafa Alrawi, Business Editor:A chance to take a breath mid-way through 2016 and it feels like it has been an unprecedented six months. The second half of this year will likely also offer more volatility and changes in the wake of the UK’s decision to exit the European Union and Saudi Arabia’s efforts to ramp up the diversification of its economy away from a reliance on oil. Financial markets and regional economies will also be led by the potential for interest rate rises in the United States. Whether the Federal Reserve pulls the trigger or not hinges on how the global economy is performing. Amid all the uncertainty what is likely to happen is that we will see more deals like the merger between National Bank of Abu Dhabi and its rival FGB as businesses across sectors look for growth. Beyond doubt will be the ongoing development of solar power, which in the UAE is becoming a critical part of the energy mix, as technological advances help reduce the cost of producing electricity from its various applications. Over the remainder of the year and into 2017, as always, The National will stay across events and bring you the highest quality news and analysis to help you steer your business through turbulent times. Click through to see what The National’s business correspondents have to say on what are likely to be stories dominating the rest of the year.newslideImplementation the key for Saudi diversificationThe 270 billion Saudi riyal (Dh264.3bn) National Transformation Plan unveiled in April will face an uphill struggle to implement its detailed steps in the short-term.Small steps in the 2020 programme are obvious: boosting savings in water and electricity subsidy to 200bn riyals and decreasing non-oil subsidies by 20 per cent.Unpopular as they may be, these changes have already started with shavings to some subsidies earlier this year.Increasing the debt to GDP to 30 per cent from 7.7 per cent is likely to be a piece of cake, with expectations that the Saudi government will head to international bond markets this year.But some of the plan’s grand ambitions may be harder to achieve such as lowering public sector wages to 40 per cent from 45 per cent and more than doubling non-oil revenues to 530bn riyals. Investors and governments around the region and beyond will be watching to see how the Saudis perform over the next few months.* Dania SaadinewslideBrexit fallout must be containedAfter winning the first round of voting in the contest to replace David Cameron as the leader of the Conservative Party, home secretary Theresa May is the front runner to become the next British prime minister and the woman responsible for implementing Britain’s controversial departure from the European Union.The world will be watching as Ms May faces another poll of MPs with the final outcome to be decided on September 9 by a ballot of 150,000 party members.If she is elected, Ms May will have to act quickly to deal with a country in turmoil and the pound down 12 per cent since the eve of the referendum on fears of a recession. Once the political situation is steadied then it will be up to the new leadership to put in place longer term policies to support key sectors including property and financial services which have been most affected by those fears. The City of London will also be looking to assure banks and investors that it can retain its global preeminence outside of the EU. * Lucy BarnardnewslideOn the mergers and acquisitions trail”It’s always better when we’re together,” Hawaiian troubadour Jack Johnson crooned about 11 years ago. It’s a message Abu Dhabi economic policy makers are taking to heart, with mergers announced in the past weeks between banking giants FGB and NBAD, and investment titans International Petroleum Investment Company (Ipic) and Mubadala. While the merger outlook for the remainder of the country looks uncertain, other tie ups between large enterprises in the capital are likely to be announced during the coming months, as Abu Dhabi continues to streamline its economy to achieve cost savings in the wake of lower state oil revenues. * John EveringtonnewslideDubai construction activity to pick up One of the biggest areas of activity for UAE construction in the next six months is going to be Dubai Creek Harbour. The 6.5 million square metre project was first announced by Emaar Properties three years ago, but activity has ramped up in recent months – most notably, since the unveiling of its flagship tower in April. A tender for the mall – set to be 30 per cent bigger than Dubai Mall – is already out, tenders for the tower are likely to follow and there are scores of retail and residential towers that Emaar will want to deliver before Expo 2020 rolls around, meaning work will need to start soon.* Michael FahynewslideSolar powers on as big two dominate After Abu Dhabi’s Masdar and partner FRV stole the show winning Dubai’s 800 megawatt solar photovoltaic tender at a record low bid of 2.99 US cents per kilowatt hour, all eyes have now turned to Abu Dhabi. The emirate will soon award the tender the 350MW Sweihan solar plant – setting the stage for new players and expectations for a new solar pricing record.Dubai will once again take centre stage with yet another solar project to be awarded by yearend totalling 200MW – this time deploying concentrated solar power. But only a handful of participants will be qualified to take part and the top firm, Abengoa from Spain, just bowed out of the industry entirely after a slew of financial troubles. So expect to see another showdown between Masdar and Saudi Arabia’s Acwa Power.* LeAnne GravesnewslideFed cautious amid volatilityFor years now, the US Federal Reserve has tiptoed cautiously on the delicate issue of rate rises amid lacklustre global economic growth. Back in December 2015, following seven years of record low rates in the aftermath of the financial crisis, the world’s most important central bank raised rates for the first time in nine years. But since then the Fed, led by Janet Yellen, has been even more circumspect amid volatility in global financial markets, especially when it comes to oil and wobbly emerging markets. And with Britain now looking like it could leave the European Union, Ms Yellen may become even more hesitant to raise rates. More clues might (or might not) come after the Fed chiefs’ next meeting, scheduled for July 26-27.* Mahmoud Kassembusiness@thenational.aeFollow The National’s Business section on Twitter
Source : thenational.ae
Read more…Six UAE and global business stories to keep an eye on this year
