For the past decade, the US tech giants have become the biggest, richest and most powerful corporates on the planet.
They have made early-stage investors rich, as the market capitalisations of Amazon, Apple, Google-owner Alphabet and Microsoft surged past $1 trillion (Dh3.67tn), while Facebook and Netflix have also flown.
Even the coronavirus pandemic has worked in their favour. While other companies saw revenue collapse as populations were ordered to stay at home, the tech giants enjoyed a rush of demand.
In a development many believed impossible, Facebook, Apple, Amazon, Microsoft and Google market leaders are dramatically lagging the lower quality, old economy stocks.
What do you do, if you are locked down at home? Go shopping on Amazon, play with your iPhone, Google stuff, contact friends on Facebook, stream movies on Netflix or hold meetings with co-workers on Microsoft Teams.
The tech titans were starting to look unstoppable, until last week. As the stock market recovery continued, they fell behind. Was this just a blip, or sign that the sector has finally overreached itself?
Matt Weller, global head of market research at Gain Capital, says less fashionable sectors are now playing catch up. “In a development many believed impossible, Facebook, Apple, Amazon, Microsoft and Google market leaders are dramatically lagging the lower quality, old economy stocks.”
May’s top S&P 500 performers include what he calls “two stodgy, traditionally brick-and-mortar apparel companies”, L Brands and Gap.
Mr Weller expressed astonishment to see these “highly-indebted retailers, which cannot conduct business at most of their locations, outperform highly-profitable, internet-enabled behemoths” at the top of the tree.
The big five have “fortress balance sheets, generate massive cash flows, and offer sustainably high returns on equity” but there is one major worry: they cannot justify today's sky-high valuations any longer.
Apple and Microsoft are vying for the title of world's biggest company, each with a market cap of around $1.37tn. Amazon is close behind, at $1.19tn; Alphabet is worth $967 billion and Facebook $642bn, with Netflix a relative minnow at $181bn.
Sheer size makes it hard to grow at speed. Even if they could, Mr Weller says anti-monopoly regulators would have to step in.
Mr Weller suggests investors look past the tech giants to go "dumpster diving”, buying sold-off stocks with greater upside potential. “These can be found in sectors such as energy, airlines, consumer discretionary, cruise liners and everyone’s favourite embattled manufacturer, Boeing,” he says.
History shows that distressed “value” stocks like these typically see the most explosive short-term upside as the global economy returns to a semblance of business as usual, Mr Weller adds.
Moukarram Atassi, head of investment management at National Bank of Fujairah, believes the tech titans will prove hard to dislodge. “Their presence in our daily lives and the speed at which they achieved that is unprecedented.”
He says understanding how to manage and monetise data is the key to their success: “Google and Facebook know more about your habits, preferences, lifestyle, buying behaviour and risk profile than your own bank or insurer.”
This data is a “gold mine” and will further enhance their dominant position, he says, "especially in the emerging field of artificial intelligence, with many applications in healthcare, autonomous cars, consumption, banking, insurance and so on".
Mr Atassi acknowledges that no company is too big to fail, pointing to General Electric, the oil majors, car manufacturers, financial companies and banks as dominant oligopolistic companies now trading at a fraction of their peak valuations. The same could happen with big tech, although for now, it does not seem likely.
Peter Garnry, head of equity strategy at Saxo Bank, also sees echoes of earlier overhyped investment themes, such as the “Nifty 50” – US large caps that were seen as solid buy-and-holds in the 1960s and 1970s.
Yet he also thinks the tech titans will justify their continuing popularity. “We are more concerned about the mid-cap technology segment just below them, where valuations have been inflated most," he adds. "This could lead to disappointing future returns as expected growth cannot be delivered."
Russ Mould, investment director at UK wealth platform AJ Bell, would still buy Amazon. “Even the firm’s $1 trillion-plus market cap is not preventing its stock from hitting fresh all-time highs,” he says.
Microsoft's cloud computing capabilities, Skype acquisition, and its successful Teams workplace chat, video and storage operation also make a strong investment case.
Facebook’s shares have been resilient too. “Consumers are still happy to pay the price of privacy in exchange for not paying with money to use its service,” he says.
Mr Mould is more wary of Apple, as iPhone and tablet sales were hit by store closures. “Its shares had a phenomenal run last year, even though sales and profits barely grew, and were already looking fully priced. However, sales should lift as China reopens, with Europe to follow.”
Alphabet looks weakest right now, he says: “This reflects concerns over global advertising spend, as corporations rationalise costs and cut marketing budgets.”
With the exception of Netflix, the tech stars boast strong balance sheets, with a combined net cash pile of $212bn, the same level as in 2014, Mr Mould says. “That is despite lavishing $290bn on capital expenditure and $450bn in dividends and share buy-backs over the period.”
Last year, profit margins averaged 17.7 per cent. Free cash flow has totalled a whopping $485bn in the last five years, "even though Netflix has only contributed outflows over the period”, Mr Mould says.
Last year, profit margins for the big six averaged 17.7 per cent. Free cash flow has totalled a whopping $485bn in the last five years.
They trade on an average valuation of 38 times forward earnings for 2020, but Mr Mould says they can still justify that pricey figure. “Their earnings are forecast to grow 34 per cent next year and 19 per cent in 2022, which would cut that valuation to just 24 times earnings. If those forecasts are accurate, they could remain all-conquering.”
Regulation is one potential threat. “Amazon is set to be hauled before Congress to explain how it uses data, while Apple, Alphabet and Facebook have all had disputes with the taxman, antitrust regulators or privacy campaigners," he says.
Inflation is the other danger, Mr Mould adds. "Investors have been willing to pay high multiples because there are few reliable growth stocks around. That could change if government and central bank stimulus boosts markets, and undervalued stocks play catch up.”
Vijay Valecha, chief investment officer at Century Financial in Dubai, also backs big tech as the pandemic acts as an advertisement for cloud services, online retailing, gaming and streaming. “New users are unlikely to abandon the technology when the pandemic is over.”
It will also force more businesses to complete their digital transformation, accelerating a trend that was already under way. “Companies will continue to use Microsoft Teams, especially if working from home becomes a permanent solution to safeguarding employees in an age of pandemics,” Mr Valecha says.
Amazon should continue to benefit from the shift to e-commerce, while Netflix subscriber numbers should rise as cinemas in some parts of the world remain closed.
He also highlights a less obvious tech play: online fitness specialist Peloton Interactive, which now has one million collective fitness subscribers as more people exercise at home.
Mr Valecha says payment specialist PayPal is well-positioned to capitalise on rising cash and mobile payments, while e-commerce specialists Shopify and ETSY offer platforms for online retailers. “Machine data analytics specialist Splunk is another tech stock worth investigation,” he says.
Mr Valecha adds that many investors will prefer to play the technology theme through exchange-traded funds, and recommends iShares Global Tech ETF, Technology Select Sector SPDR Fund and the Invesco QQQ Trust.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Plan to boost public schools
A major shake-up of government-run schools was rolled out across the country in 2017. Known as the Emirati School Model, it placed more emphasis on maths and science while also adding practical skills to the curriculum.
It was accompanied by the promise of a Dh5 billion investment, over six years, to pay for state-of-the-art infrastructure improvements.
Aspects of the school model will be extended to international private schools, the education minister has previously suggested.
Recent developments have also included the introduction of moral education - which public and private schools both must teach - along with reform of the exams system and tougher teacher licensing requirements.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
On sale: now
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
Brief scores:
Toss: Sindhis, elected to field first
Kerala Knights 103-7 (10 ov)
Parnell 59 not out; Tambe 5-15
Sindhis 104-1 (7.4 ov)
Watson 50 not out, Devcich 49
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Dual%20electric%20motors%20with%20102kW%20battery%20pack%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E570hp%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20890Nm%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERange%3A%3C%2Fstrong%3E%20Up%20to%20428km%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C700%2C000%3C%2Fp%3E%0A
Five%20calorie-packed%20Ramadan%20drinks
%3Cp%3E%3Cstrong%3ERooh%20Afza%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20contains%20414%20calories%0D%3Cbr%3E%3Cstrong%3ETang%20orange%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20300%20calories%0D%3Cbr%3E%3Cstrong%3ECarob%20beverage%20mix%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20about%20300%20calories%0D%3Cbr%3E%3Cstrong%3EQamar%20Al%20Din%20apricot%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20saving%20contains%2061%20calories%0D%3Cbr%3E%3Cstrong%3EVimto%20fruit%20squash%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%2030%20calories%3C%2Fp%3E%0A
MATCH INFO
Burnley 0
Man City 3
Raheem Sterling 35', 49'
Ferran Torres 65'
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
Bib%20Gourmand%20restaurants
%3Cp%3EAl%20Khayma%0D%3Cbr%3EBait%20Maryam%0D%3Cbr%3EBrasserie%20Boulud%0D%3Cbr%3EFi'lia%0D%3Cbr%3Efolly%0D%3Cbr%3EGoldfish%0D%3Cbr%3EIbn%20AlBahr%0D%3Cbr%3EIndya%20by%20Vineet%0D%3Cbr%3EKinoya%0D%3Cbr%3ENinive%0D%3Cbr%3EOrfali%20Bros%0D%3Cbr%3EReif%20Japanese%20Kushiyaki%0D%3Cbr%3EShabestan%0D%3Cbr%3ETeible%3C%2Fp%3E%0A
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
Killing of Qassem Suleimani
Hili 2: Unesco World Heritage site
The site is part of the Hili archaeological park in Al Ain. Excavations there have proved the existence of the earliest known agricultural communities in modern-day UAE. Some date to the Bronze Age but Hili 2 is an Iron Age site. The Iron Age witnessed the development of the falaj, a network of channels that funnelled water from natural springs in the area. Wells allowed settlements to be established, but falaj meant they could grow and thrive. Unesco, the UN's cultural body, awarded Al Ain's sites - including Hili 2 - world heritage status in 2011. Now the most recent dig at the site has revealed even more about the skilled people that lived and worked there.
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
UAE currency: the story behind the money in your pockets
More coverage from the Future Forum
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%204.4-litre%20twin-turbo%20V8%20with%2048V%20mild%20hybrid%20system%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E544hp%20at%205%2C500rpm%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E750Nm%20at%201%2C800-5%2C000rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E8-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3Efrom%20Dh700%2C000%20(estimate)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Elate%20November%3C%2Fp%3E%0A
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
More from Rashmee Roshan Lall
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
UAE currency: the story behind the money in your pockets
