The British pound is on the ropes again. It has taken a battering since the UK voted to leave the European Union in June 2016, and the blows continue to rain down.
Less than two weeks before the country leaves the EU for good on December 31, Prime Minister Boris Johnson still hasn’t struck a trade deal with the bloc.
Both sides have been digging their heels in, with fishing rights said to be the final and most insurmountable obstacle.
Fisheries may contribute only 0.1 per cent of the country’s gross domestic product but they symbolise the UK’s desire to regain sovereignty, while French President Emmanuel Macron wants his country's fishing fleets to retain access to British waters.
As if that wasn’t enough, the country faces another two months of lockdown after being hit by a mutant strain of Covid-19 that is up to 70 per cent more transmissable. Mr Johnson’s worst fears have come true as he becomes the man who cancelled Christmas.
In a cruel irony, Europe has shut its doors on the UK as a string of countries block all flight, ferry and train arrivals to protect themselves.
Sterling is now at a tipping point. At the time of writing, it has dipped below $1.33 and €1.09. From here, it could go anywhere, depending on the outcome of EU talks. We will know in the next few days.
So what should UAE-based expats and residents who want to make remittances or buy assets such as property in the UK be doing right now?
Brexit may be a mess for the UK, but it has been an opportunity for anybody earning US dollar-linked dirhams.
On January 1, 2016, when currency markets assumed the UK would reject the “Leave” campaign and stay in the EU, sterling traded at $1.47 and €1.36.
Within three months of the shock referendum result on June 23, it had fallen 17 per cent against the US dollar to $1.22. It crashed almost 20 per cent against the euro to €1.10.
In recent days, it picked up and hit $1.35, as much due to US dollar weakness as sterling strength, and many felt the opportunity to send money to the UK had passed. The opportunity may soon be back, though.
Markets have been led to believe that a deal would be reached eventually, so no deal would be the greater surprise
Gaurav Kashyap, head of futures at Equiti Global Markets in Dubai, says a trade deal could drive the pound as high as $1.42, while a hard Brexit could see it crash to $1.27, a fall of 6 per cent from today’s level.
Mr Kashyap says no deal would give dollar earners a fresh opportunity to send money back to the UK. “Over the longer term, I see good value as being any rate below $1.30.”
Fawad Razaqzada, market analyst with ThinkMarkets, also sees the pound climbing to $1.40 on a deal, but he reckons it could collapse to $1.20 on no deal. “Markets have been led to believe that a deal would be reached eventually, so no deal would be the greater surprise.”
John Hardy, head of FX strategy at Saxo Bank, says even if the UK strikes a deal and the pound bounces, the upside will be limited. “The trade deal may be a very weak one that still leaves further negotiations on key issues.”
The UK will also face mighty challenges. “The country runs enormous external current account deficits, despite having had a weak currency for years, and these are set to continue.”
After an initial bump upwards, the pound is likely to stay on “a relatively weak path until structural improvement is seen”, Mr Hardy adds.
Arun Leslie John, chief market analyst at Century Financial, says traders are actively buying any dip in the pound as they believe a deal will be done. “Mr Johnson and other EU political leaders want to be re-elected and blowing up the economy won’t help their cause.”
The pound enjoyed a boost as the UK became the first country to approve the new Pfizer anti-Covid jab. It has already started vaccinations, raising hopes that the UK could shrug off the pandemic faster than other developed economies, lifting the country’s stock markets and currency, Mr Leslie John says.
However, the country now faces a race against time as it battles to vaccinate its population before the new strain of the virus accelerates further.
So what does this mean for UK property buyers? On March 20, £1 was worth just Dh4.19. Today, it buys Dh4.87. Somebody buying a £1 million London bolthole would have paid Dh4.19m in March, but Dh4.87m today. That is Dh680,000 more, a rise of around 15 per cent.
[UK shares] have underperformed substantially over the past few years, look particularly cheap and are already pricing in a fair amount of bad news
The property may also cost more in sterling terms, as the UK is now experiencing yet another house price boom despite its many worries.
Official Land Registry figures, published on December 16, show UK house prices rising 5.4 per cent in the year to October, boosted by a temporary stamp duty holiday that saves buyers a maximum £15,000 on a £500,000 property.
Prime central London properties favoured by wealthy buyers are booming. Nick Barnes, head of research at estate agency Chestertons, reports new sales enquiries are up 40 per cent this year. “We think prices will rise by 2 per cent in prime London locations in 2021.”
Wealthy Middle Eastern buyers are lining up to buy super-prime London property should the pound collapse, according to private wealth law firm Boodle Hatfield.
Lockdown restrictions have prevented them from travelling to the UK but many have either purchased off-plan or without viewings.
Shaima Jillood, joint head of Middle East at Boodle Hatfield, says high-net-worth Middle Eastern investors are watching exchange rates and hope to snap up prime London properties at bargain prices. “Some are prepared to pay over the asking price as they still stand to make substantial savings on foreign exchange.”
Bidding wars have broken out between cash-rich Middle Eastern investors, Ms Jillood says. “Should sterling take a hit from a no-deal Brexit, we expect these to become commonplace.”
Investors should not base their decision entirely on exchange rate movements. Mr Leslie John warns that accurately timing currency markets is a hopeless task because of their volatility. “Those planning to purchase a property in London next year or considering any other UK investments should consider hedging their currency risk via futures and options.”
In a strange quirk, when the pound falls, the UK’s leading stock market index, the FTSE 100, typically rises (and vice versa).
Those planning to purchase a property in London next year or considering any other UK investments should consider hedging their currency risk via futures and options
This happens because blue-chip companies listed on the index generate three quarters of their earnings overseas, which are worth relatively more when converted back into a weaker sterling.
That explains why the FTSE 100 recovered after an initial post-referendum crash, and this could also reduce the negative impact of no deal.
Rupert Thompson, chief investment officer at wealth manager Kingswood, says markets still want a deal, but this would favour domestically oriented small- and mid-cap UK stocks over the FTSE 100.
No deal will not be the end of the world for UK shares, though. “They have underperformed substantially over the past few years, look particularly cheap and are already pricing in a fair amount of bad news,” he says.
Mr Thompson is increasingly optimistic about UK equities. “The recent rotation out of this year’s winners, such as China and the tech sector, into the laggards, such as the UK and the banking and energy sectors, has further to run.”
He adds: “This should be driven by a strong global recovery next year on the back of vaccine rollout and should not be derailed by Brexit.”
The world is waiting to see if the UK can strike some kind of deal with the EU. Many in the UAE will find it is in their best interests for the UK to crash out without any agreement.
If that happens, it could be time to go on a shopping spree. The dollar isn’t strong against many currencies, but the pound would be one of them.
We will know soon enough.
UAE currency: the story behind the money in your pockets
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EEjari%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3ERiyadh%2C%20Saudi%20Arabia%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EYazeed%20Al%20Shamsi%2C%20Fahad%20Albedah%2C%20Mohammed%20Alkhelewy%20and%20Khalid%20Almunif%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EPropTech%3Cbr%3E%3Cstrong%3ETotal%20funding%3A%20%3C%2Fstrong%3E%241%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3ESanabil%20500%20Mena%2C%20Hambro%20Perks'%20Oryx%20Fund%20and%20angel%20investors%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%20%3C%2Fstrong%3E8%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
The years Ramadan fell in May
EXPATS
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Lulu%20Wang%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Nicole%20Kidman%2C%20Sarayu%20Blue%2C%20Ji-young%20Yoo%2C%20Brian%20Tee%2C%20Jack%20Huston%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Asia Cup Qualifier
Venue: Kuala Lumpur
Result: Winners play at Asia Cup in Dubai and Abu Dhabi in September
Fixtures:
Wed Aug 29: Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore
Thu Aug 30: UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman
Sat Sep 1: UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal
Sun Sep 2: Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore
Tue Sep 4: Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong
Thu Sep 6: Final
Asia Cup
Venue: Dubai and Abu Dhabi
Schedule: Sep 15-28
Teams: Afghanistan, Bangladesh, India, Pakistan, Sri Lanka, plus the winner of the Qualifier
LOVE%20AGAIN
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KILLING OF QASSEM SULEIMANI
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%3Cp%3E%0D%3Cstrong%3EDiet%3C%2Fstrong%3E%20%0D%3Cbr%3E7am%20-%20Protein%20shake%20with%20oats%20and%20fruits%0D%3Cbr%3E10am%20-%205-6%20egg%20whites%0D%3Cbr%3E1pm%20-%20White%20rice%20or%20chapati%20(Indian%20bread)%20with%20chicken%0D%3Cbr%3E4pm%20-%20Dry%20fruits%20%0D%3Cbr%3E7.30pm%20-%20Pre%20workout%20meal%20%E2%80%93%20grilled%20fish%20or%20chicken%20with%20veggies%20and%20fruits%0D%3Cbr%3E8.30pm%20to%20midnight%20workout%0D%3Cbr%3E12.30am%20%E2%80%93%20Protein%20shake%20%0D%3Cbr%3E%3Cstrong%3ETotal%20intake%3A%3C%2Fstrong%3E%204000-4500%20calories%20%0D%3Cbr%3E%3Cstrong%3ESaidu%E2%80%99s%20weight%3A%3C%2Fstrong%3E%20110%20kg%0D%3Cbr%3E%3Cstrong%3EStats%3A%3C%2Fstrong%3E%20Biceps%2019%20inches.%20Forearms%2018%20inches%3C%2Fp%3E%0A
Fanney Khan
Producer: T-Series, Anil Kapoor Productions, ROMP, Prerna Arora
Director: Atul Manjrekar
Cast: Anil Kapoor, Aishwarya Rai, Rajkummar Rao, Pihu Sand
Rating: 2/5
'Young girls thinking of big ideas'
Words come easy for aspiring writer Afra Al Muhairb. The business side of books, on the other hand, is entirely foreign to the 16-year-old Emirati. So, she followed her father’s advice and enroled in the Abu Dhabi Education Council’s summer entrepreneurship course at Abu Dhabi University hoping to pick up a few new skills.
“Most of us have this dream of opening a business,” said Afra, referring to her peers are “young girls thinking of big ideas.”
In the three-week class, pupils are challenged to come up with a business and develop an operational and marketing plan to support their idea. But, the learning goes far beyond sales and branding, said teacher Sonia Elhaj.
“It’s not only about starting up a business, it’s all the meta skills that goes with it -- building self confidence, communication,” said Ms Elhaj. “It’s a way to coach them and to harness ideas and to allow them to be creative. They are really hungry to do this and be heard. They are so happy to be actually doing something, to be engaged in creating something new, not only sitting and listening and getting new information and new knowledge. Now they are applying that knowledge.”
Afra’s team decided to focus their business idea on a restaurant modelled after the Leaning Tower of Pisa. Each level would have a different international cuisine and all the meat would be halal. The pupils thought of this after discussing a common problem they face when travelling abroad.
“Sometimes we find the struggle of finding halal food, so we just eat fish and cheese, so it’s hard for us to spend 20 days with fish and cheese,” said Afra. “So we made this tower so every person who comes – from Africa, from America – they will find the right food to eat.”
rpennington@thenational.ae
Mohammed bin Zayed Majlis
Small Victories: The True Story of Faith No More by Adrian Harte
Jawbone Press
Earth under attack: Cosmic impacts throughout history
- 4.5 billion years ago: Mars-sized object smashes into the newly-formed Earth, creating debris that coalesces to form the Moon
- 66 million years ago: 10km-wide asteroid crashes into the Gulf of Mexico, wiping out over 70 per cent of living species – including the dinosaurs.
- 50,000 years ago: 50m-wide iron meteor crashes in Arizona with the violence of 10 megatonne hydrogen bomb, creating the famous 1.2km-wide Barringer Crater
- 1490: Meteor storm over Shansi Province, north-east China when large stones “fell like rain”, reportedly leading to thousands of deaths.
- 1908: 100-metre meteor from the Taurid Complex explodes near the Tunguska river in Siberia with the force of 1,000 Hiroshima-type bombs, devastating 2,000 square kilometres of forest.
- 1998: Comet Shoemaker-Levy 9 breaks apart and crashes into Jupiter in series of impacts that would have annihilated life on Earth.
-2013: 10,000-tonne meteor burns up over the southern Urals region of Russia, releasing a pressure blast and flash that left over 1600 people injured.
more from Janine di Giovanni
The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
Zayed Sustainability Prize
Indoor cricket in a nutshell
Indoor Cricket World Cup - Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
UAE's final round of matches
- Sep 1, 2016 Beat Japan 2-1 (away)
- Sep 6, 2016 Lost to Australia 1-0 (home)
- Oct 6, 2016 Beat Thailand 3-1 (home)
- Oct 11, 2016 Lost to Saudi Arabia 3-0 (away)
- Nov 15, 2016 Beat Iraq 2-0 (home)
- Mar 23, 2017 Lost to Japan 2-0 (home)
- Mar 28, 2017 Lost to Australia 2-0 (away)
- June 13, 2017 Drew 1-1 with Thailand (away)
- Aug 29, 2017 v Saudi Arabia (home)
- Sep 5, 2017 v Iraq (away)
More coverage from the Future Forum
PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
RACECARD
4.30pm Jebel Jais – Maiden (PA) Dh60,000 (Turf) 1,000m
5pm: Jabel Faya – Maiden (PA) Dh60,000 (T) 1,000m
5.30pm: Al Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 2,200m
6pm: The President’s Cup Prep – Conditions (PA) Dh100,000 (T) 2,200m
6.30pm: Abu Dhabi Equestrian Club – Prestige (PA) Dh125,000 (T) 1,600m
7pm: Al Ruwais – Group 3 (PA) Dh300,000 (T) 1,200m
7.30pm: Jebel Hafeet – Maiden (TB) Dh80,000 (T) 1,400m
The%C2%A0specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3Etwo%20permanent%20magnet%20synchronous%20motors%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3Etwo-speed%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E625hp%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E850Nm%3Cbr%3E%3Cstrong%3ERange%3A%20%3C%2Fstrong%3E456km%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3Efrom%20Dh737%2C480%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
UK%20record%20temperature
%3Cp%3E38.7C%20(101.7F)%20set%20in%20Cambridge%20in%202019%3C%2Fp%3E%0A
The specs: 2018 Ducati SuperSport S
Price, base / as tested: Dh74,900 / Dh85,900
Engine: 937cc
Transmission: Six-speed gearbox
Power: 110hp @ 9,000rpm
Torque: 93Nm @ 6,500rpm
Fuel economy, combined: 5.9L / 100km
'Ghostbusters: From Beyond'
Director: Jason Reitman
Starring: Paul Rudd, Carrie Coon, Finn Wolfhard, Mckenna Grace
Rating: 2/5
Australia tour of Pakistan
March 4-8: First Test, Rawalpindi
March 12-16: Second Test, Karachi
March 21-25: Third Test, Lahore
March 29: First ODI, Rawalpindi
March 31: Second ODI, Rawalpindi
April 2: Third ODI, Rawalpindi
April 5: T20I, Rawalpindi
JUDAS AND THE BLACK MESSIAH
Directed by: Shaka King
Starring: Daniel Kaluuya, Lakeith Stanfield, Jesse Plemons
Four stars
About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
More from Rashmee Roshan Lall
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%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ERobert%20Lorenz%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Liam%20Neeson%2C%20Kerry%20Condon%2C%20Jack%20Gleeson%2C%20Ciaran%20Hinds%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E2%2F5%3C%2Fp%3E%0A
Results
6.30pm: The Madjani Stakes (PA) Group 3 Dh175,000 (Dirt) 1,900m
Winner: Aatebat Al Khalediah, Fernando Jara (jockey), Ali Rashid Al Raihe (trainer).
7.05pm: Maiden (TB) Dh165,000 (D) 1,400m
Winner: Down On Da Bayou, Royston Ffrench, Salem bin Ghadayer.
7.40pm: Maiden (TB) Dh165,000 (D) 1,600m
Winner: Dubai Avenue, Fernando Jara, Ali Rashid Al Raihe.
8.15pm: Handicap (TB) Dh190,000 (D) 1,200m
Winner: My Catch, Pat Dobbs, Doug Watson.
8.50pm: Dubai Creek Mile (TB) Listed Dh265,000 (D) 1,600m
Winner: Secret Ambition, Tadhg O’Shea, Satish Seemar.
9.25pm: Handicap (TB) Dh190,000 (D) 1,600m
Winner: Golden Goal, Pat Dobbs, Doug Watson.
Killing of Qassem Suleimani
Itcan profile
Founders: Mansour Althani and Abdullah Althani
Based: Business Bay, with offices in Saudi Arabia, Egypt and India
Sector: Technology, digital marketing and e-commerce
Size: 70 employees
Revenue: On track to make Dh100 million in revenue this year since its 2015 launch
Funding: Self-funded to date
Related
MORE ON IRAN'S PROXY WARS
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
Killing of Qassem Suleimani
Three ways to limit your social media use
Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.
1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.
2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.
3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.
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
