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Trump tariffs: Stocks slump, trade war fears triggered

The US dollar shot to a record peak against the Chinese yuan in offshore trading

Reuters
Reuters

03 February, 2025

Trump tariffs: Stocks slump, trade war fears triggered
Image credit: Getty Images

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Asian stock markets slumped on Monday, February 3, and European and US equity futures pointed sharply lower after President Donald Trump’s tariffs on Canada, Mexico and China triggered fears of a broad trade war and a hit to global growth.

The US dollar shot to a record peak against the Chinese yuan in offshore trading, its highest against Canada’s currency since 2003 and the strongest against the Mexican peso since 2022.

Trump administration: How has it affected crypto markets

Stocks in Hong Kong, which include listings of Chinese companies, fell 1.1 per cent upon reopening from Lunar New Year holidays. Mainland Chinese markets resume trading following the holidays on Wednesday.

Duties imposed on Canada and Mexico

Trump slapped Canada and Mexico with duties of 25 per cent and China with a 10 per cent levy at the weekend, calling them necessary to combat the flow of migrants and fentanyl into the US.

Read: Dollar gains as Trump floats tariffs, threatens ‘taking back’ Panama Canal

Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump’s levies at the World Trade Organization.

The tariffs, outlined in three executive orders, are due to take effect at 12:01 am ET (0501 GMT) on Tuesday.

Ushering of a global trade war

Trump’s move was the first strike in what could usher in a destructive global trade war and drive a surge in US inflation that would “come even faster and be larger than we initially expected,” said Paul Ashworth of Capital Economics.

Important: Trump calls for $1tn Saudi investment, lower oil prices

A model gauging the economic impact of Trump’s tariff plan from EY chief economist Greg Daco suggests it would reduce US economic growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in “stagflation” at home.

Barclays strategists previously estimated that the tariffs could create a 2.8 per cent drag on S&P 500 company earnings, including the projected fallout from retaliatory measures from the targeted countries.

Fluctuations in currencies

The US currency climbed as much as 2.8 per cent to 21.2547 Mexican pesos, the highest since March 2022, and rose 1.4 per cent to a level not seen since 2003.

The euro dropped as much as 2.3 per cent to $1.0125 – the lowest level since November 2022. At the weekend, Trump said tariffs on Europe will “definitely happen”.

US two-year Treasury yields rose as much as 3.6 basis points to 4.274 per cent, a one-week high, on concerns tariffs will stoke US inflation and delay Federal Reserve interest-rate cuts.

Two-year Japanese government bond yields rose in sympathy, reaching their highest levels since October 2008.

Leading cryptocurrency bitcoin tumbled to as low as $91,439.89, a three-week trough.

This GCC country has just approved a draft law on personal income tax

Six other draft laws were jointly issued by the councils

Nida Sohail
Nida Sohail

31 January, 2025

This GCC country has just approved a draft law on personal income tax

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The State Council and Majlis A’Shura in Oman have approved a draft law on personal income tax in the country.

The tax exemption limit has been raised to OMR50,000 to benefit the middle class, and the tax rate has been reduced to 5 per cent.

GCC countries: From tax havens to global business hubs

End-of-service gratuity and other benefits will be exempt from taxes, as they are not considered sources of income.

According to a report in the Oman Observer, the tax will only be imposed under suitable conditions.

Oman’s Minister of Finance also stated that raising VAT (Value Added Tax) will affect all residents, whereas the income tax will impact just 1 per cent of the Sultanate’s population.

Read: UAE set to roll out 15% tax for global corporate giants

Six other draft laws jointly issued by the councils include regulations on electronic transactions, public health, human organ and tissue transplants, individual income tax, special economic zones, and free zones.

Oman raised approximately OMR1.4bn in taxes in 2024, including corporate, selective, and VAT collections revenue.

Dubai’s Sheikh Zayed Road: What the RTA is doing to reduce traffic

These developments aim to enhance both capacity and efficiency on this critical road in Dubai

Nida Sohail
Nida Sohail

31 January, 2025

Dubai’s Sheikh Zayed Road: What the RTA is doing to reduce traffic
Image credit: Dubai Media Office

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The Roads and Transport Authority (RTA) in Dubai will be implementing three major developments on Sheikh Zayed Road.

Important: Dubai increases speed limits on these key roads

According to a Dubai Media Office report, these developments aim to enhance both capacity and efficiency on this critical road in Dubai.

The initiatives align with the RTA’s plan to:

  • Improve the road network and mobility systems
  • Ensure smooth traffic flow
  • Keep pace with Dubai’s rapid urban growth and expansion

The addition of an extra lane

The first development involves extending the merging distances between Umm Al Sheif Street and Al Manara Street, heading toward Abu Dhabi. An additional lane will also be added for traffic headed toward Al Manara, increasing vehicle space by 30 per cent. This will improve the entry and exit flow on the road.

Modifications to service road exit

The second development includes remodelling the service road exit in front of the Shangri-La Hotel, leading to the first interchange on Sheikh Zayed Road, near Dubai Mall. The RTA plans to extend the merging distances between the service road and the exit toward Al Safa Street and Dubai Mall, which should significantly reduce congestion at this key point.

Watch: RTA unveils AI-powered detection system for Dubai’s roads

Extension of merging distances

The third initiative involves extending the merging distance between Al Marabi Street and Al Manara Street in the direction of Abu Dhabi. This reconstruction will reduce waiting times, ease traffic at the merge point, and increase traffic flow during peak hours.

Why these developments are necessary

Sheikh Zayed Road is a vital traffic corridor, connecting major commercial and financial hubs like the Dubai International Financial Centre, Burj Khalifa, and Dubai Mall. It also serves as a key route for global corporations, banks, and investment institutions in the area.

For this reason, the RTA places significant emphasis on its maintenance and development, as noted by Abdullah Lootah, Director of Road and Facilities Maintenance at the Traffic and Roads Agency.

Ajman Bank achieves record-breaking profits in 2024

Ajman Bank’s strong performance in 2024 is highlighted by its total operating income of Dhs1.5bn and net operating income of Dhs736m

Gulf Business
Gulf Business

31 January, 2025

Ajman Bank achieves record-breaking profits in 2024
Image: Supplied

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Ajman Bank has achieved its highest annual profits in history, reporting an impressive Dhs440m in profit before tax for 2024, marking a remarkable growth of 213 per cent compared to the previous year’s net loss of Dhs390m.

This landmark achievement reflects the strength of the bank’s strategic vision and successful transformation initiatives, positioning it as a leading player in the UAE’s banking sector.

The announcement was made during a board meeting held at Ajman Bank‘s headquarters, presided over by Sheikh Ammar Bin Humaid Al Nuaimi, Crown Prince of Ajman, Chairman of the Executive Council, and Chairman of the Board of Directors of Ajman Bank.

Robust financial performance

Ajman Bank’s strong performance in 2024 is highlighted by its total operating income of Dhs1.5bn and net operating income of Dhs736m.

Additionally, the bank reported a remarkable increase in return on equity (ROE), rising by 2745 basis points to 12.9 per cent, and return on assets (ROA), which increased by 332 basis points to 1.8 per cent.

The financial results also reflect a solid balance sheet, with total assets reaching Dhs23bn and customer deposits of Dhs19bn.

In line with its commitment to rewarding shareholders, Ajman Bank’s board has proposed a cash dividend of 7.25 per cent, subject to approval at the upcoming General Assembly meeting.

Capital strength and asset quality

Ajman Bank’s capital position and asset quality have shown significant improvement from the previous year. The bank’s equity increased to Dhs3.1bn, and the non-performing loan (NPL) ratio decreased from 13.8 per cent to 9.9 per cent, largely due to the successful resolution of 31 per cent of nonperforming exposures. This initiative also resulted in the recovery of 19.6 per cent of specific provisions.

The bank’s expected credit loss (ECL) coverage ratio doubled from 1 per cent to 2.1 per cent, further strengthening its financial position well above the industry average.

The bank has continued to diversify its portfolio, reducing its real estate exposure by 7.3 per cent and increasing investments in high-quality assets across various sectors, ensuring that it remains resilient in an evolving market.

Ajman Bank: Strategic vision for long-term growth

Sheikh Ammar commented on the bank’s outstanding performance, saying: “These record-breaking financial results are a testament to the strength of Ajman Bank’s strategic vision and its commitment to delivering sustainable value for its shareholders.

“Ajman Bank continues to play a pivotal role in supporting the growth of the UAE’s economy, and its remarkable turnaround underscores our resilience and ability to adapt in an ever-changing financial landscape.”

CEO’s focus on transformation and customer-centric solutions

Mustafa Al Khalfawi, CEO of Ajman Bank, attributed the bank’s success to its transformation strategy, which focuses on speed, service, and specialisation. He emphasised the role of innovation and customer-centric solutions in achieving efficiency, with general and administrative expenses reduced by 5 per cent despite investments in technology.

“Our robust performance in 2024 reflects the success of our transformation strategy, driven by speed, service, and specialisation. By focusing on remediating distressed assets, we have achieved strong recoveries, further strengthening our financial position,” said Al Khalfawi. “This success would not have been possible without the dedication and hard work of our entire team, whose efforts continue to drive our achievements.”

Ajman Bank’s capital adequacy ratio increased to 19.1 per cent, up by 348 basis points, and the Tier 1 Capital Ratio reached 18 per cent, also up by 348 basis points.

These ratios remain well above regulatory requirements, highlighting the bank’s solid liquidity and capital strength for future growth.

Looking ahead

With a strong financial standing and a clear focus on sustainable growth, Ajman Bank is well-positioned to continue its success in the coming years. The bank’s commitment to innovation, strategic diversification, and operational efficiency provides a solid foundation for consistent profitability and long-term value creation for shareholders.

“Looking ahead, we remain committed to building long-term value for our shareholders while reinforcing our position as a key player in the UAE’s Islamic banking sector. Our strategic initiatives will continue to prioritise sustainable growth and advanced financial services that meet the evolving needs of our customers,” added Al Khalfawi.

As Ajman Bank continues to navigate both regional and global banking challenges, its remarkable achievements in 2024 are a clear indication of the bank’s resilience and ability to thrive in a rapidly changing financial landscape.

UAE: Petrol, diesel prices for February 2025 announced

From February 1, 2025, Super 98 petrol will cost Dhs2.74 a litre, up from Dhs2.61 a litre in January, while Special 95 will cost Dhs2.63 a litre

Gulf Business
Gulf Business

31 January, 2025

UAE: Petrol, diesel prices for February 2025 announced
Image credit: Supachai Panyaviwat/ Getty Images

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The UAE announced the retail fuel prices for February 2025 on Friday, raising the rates by as much as 0.13 fils per litre compared to the previous month.

From February 1, 2025, Super 98 petrol will cost Dhs2.74 a litre, up from Dhs2.61 a litre in January, while Special 95 will cost Dhs2.63 a litre, compared to Dhs2.50 a litre a month earlier. Petrol prices in January 2025 remained unchanged from December 2024 and were the lowest in the past year.

Meanwhile, global oil prices surged at the beginning of 2025 due to US sanctions on Russia. However, concerns about trade wars and weak economic data from China largely offset these initial gains. Market volatility is anticipated as policies are implemented, with President Donald Trump urging OPEC+ to contribute to lower crude prices.

Saudi Arabia’s energy minister and several of his OPEC+ counterparts have held talks following the US President’s call for lower oil prices and ahead of a meeting next week of OPEC+ oil-producing countries.

OPEC+ has yet to respond, but five OPEC+ delegates said a meeting of the group’s top ministers on February 3 is unlikely to adjust its current plan to start raising output from April. OPEC+ groups members of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia.

Brent crude futures for March, which expires on Friday, gained 4 cents at $76.91 a barrel by 12:32 p.m. GST on January 31. The more active April contract was at $76.19 a barrel, up 30 cents, while US West Texas Intermediate crude futures rose by $0.13 or 0.22 per cent to $72.91 a barrel.

Read: UAE petrol, diesel prices remain unchanged for January 2025

Revealed: Number of people who relocated to Dubai in 2024

This reinforced the ongoing increase in the demand for residential units

Gulf Business
Gulf Business

31 January, 2025

Revealed: Number of people who relocated to Dubai in 2024
Image credit: Dubai Media Office

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The first half of 2024 saw more than 220,000 people relocating to Dubai.

This reinforced the ongoing increase in the demand for residential units, Amira Sajwani, Managing Director of DAMAC Properties.

Important: Everything you need to know about Dubai’s population registry

“The real estate market in Dubai is experiencing exceptional momentum, with strong demand continuing from both investors and end-users,” she reitarated on the sidelines of the launch of “Riverside Views,” the company’s first project for 2025.

According to a Wam report, Amira Sajwani emphasised that Dubai has positioned itself as a global attraction, due to its strategic location between Asia and Europe.

Read: DAMAC Properties unveils its Riverside Views project

It has also attained that position because of its investor-friendly policies.

The real estate demand in Dubai is unlike any other market and DAMAC has received billions of dollars in sales within a few hours of it’s launching certain projects, Amira Sajwani revealed.

She also shed light on the fact that the investment value of DAMAC’s new project in Miami exceeds $1bn and is being designed by the Zaha Hadid Architects.

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