Fitch has upgraded its default rating for Jebel Ali Free Zone (JAFZ), saying that its new parent, DP World, will help to improve its operations in Dubai’s largest trade district.
However, the credit ratings agency warned that profit margins could decline to “historical levels” this year.
Last December, shareholders of DP World approved the US$2.6 billion acquisition of Economic Zones World, which owned JAFZ.
Fitch said JAFZ would benefit from its "strong ties" with DP World, a primary ratings driver, especially when it came to "having strong legal, operational and strategic links with DP World".
DP World owns and operates the port at Jebel Ali.
“DP World’s ownership of JAFZ will enable the group to improve the layout of the port access, allow it to expand its logistic capacity and access to support the ongoing growth of Jebel Ali port,” said Fitch.
“[It will also] improve integration of the port area with the new Al Maktoum International Airport.”
JAFZ could not be reached for comment yesterday.
Fitch also highlighted the importance of JAFZ to Dubai’s economy, saying that companies and business activities in the free zone accounted for 20 per cent of the emirate’s GDP.
It also said that JAFZ and its parent DP World would benefit strongly when preparations for and development of Expo 2020 commence.
Nevertheless, Fitch said more moderate growth levels would weigh on the free zone’s profit margins this year despite cost controls and JAFZ’s profits last year.
Its revenue last year rose 10 per cent year-on-year to Dh1.68 billion thanks to higher occupancy and fee income.
Fitch also warned of JAFZ’s “high concentration risk” in Dubai.
“The company’s performance is correlated with the general level of activity in Dubai as well as the economic strength and political stability of regional GCC members in particular,” it said.
Fitch stressed that any downgrade or negative revision of its outlook for DP World would affect DP World’s subsidiaries such as JAFZ.
selgazzar@thenational.ae
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A Cat, A Man, and Two Women
Junichiro Tamizaki
Translated by Paul McCarthy
Daunt Books
Generational responses to the pandemic
Devesh Mamtani from Century Financial believes the cash-hoarding tendency of each generation is influenced by what stage of the employment cycle they are in. He offers the following insights:
Baby boomers (those born before 1964): Owing to market uncertainty and the need to survive amid competition, many in this generation are looking for options to hoard more cash and increase their overall savings/investments towards risk-free assets.
Generation X (born between 1965 and 1980): Gen X is currently in its prime working years. With their personal and family finances taking a hit, Generation X is looking at multiple options, including taking out short-term loan facilities with competitive interest rates instead of dipping into their savings account.
Millennials (born between 1981 and 1996): This market situation is giving them a valuable lesson about investing early. Many millennials who had previously not saved or invested are looking to start doing so now.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
Torque: 881Nm at 4,800rpm
Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
Ten10 Cricket League
Venue and schedule Sharjah Cricket Stadium, December 14 to 17
Teams
Maratha Arabians Leading player: Virender Sehwag; Top picks: Mohammed Amir, Imad Wasim; UAE players: Shaiman Anwar, Zahoor Khan
Bengal Lions Leading player: Sarfraz Ahmed; Top picks: Sunil Narine, Mustafizur Rahman; UAE players: Mohammed Naveed, Rameez Shahzad
Kerala Kings Leading player: Eoin Morgan; Top picks: Kieron Pollard, Sohail Tanvir; UAE players: Rohan Mustafa, Imran Haider
Pakhtoons Leading player: Shahid Afridi; Top picks: Fakhar Zaman, Tamim Iqbal; UAE players: Amjad Javed, Saqlain Haider
Punjabi Legends Leading player: Shoaib Malik; Top picks: Hasan Ali, Chris Jordan; UAE players: Ghulam Shabber, Shareef Asadullah
Team Sri Lanka Cricket Will be made up of Colombo players who won island’s domestic limited-overs competition
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
Killing of Qassem Suleimani
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The biog
Favourite colour: Brown
Favourite Movie: Resident Evil
Hobbies: Painting, Cooking, Imitating Voices
Favourite food: Pizza
Trivia: Was the voice of three characters in the Emirati animation, Shaabiyat Al Cartoon