Author - Truth Consultancy

April 2020

“Corona” prompts listed companies to withhold and reduce their dividends

Reda Mosallam, the partner and general manager of “Truth” for economic and management consultancy, described the dividends as a safe haven for investors with their anticipation throughout the year, indicating that some companies may resort to precautionary measures regarding distributions, which is subject to the approval of the general assemblies. He attributed the withholding of distributions or reducing them by companies’ boards of directors to the current circumstances that require caution and maintaining liquidity to pump them into projects and cover operating expenses, stressing that reducing the distribution may be a lesser measure for shareholders than withholding them permanently.

Expected activity for acquisitions and mergers after Coronavirus

Reda Mosallam, partner and general manager of Truth Economic and Management Consultancy L.L.C, said that the conditions the world is witnessing due to the Coronavirus will create millions of investment opportunities through mergers and acquisitions, especially since many companies suffer from difficult financial conditions.

Mosallam added that Emirati companies with the good financial position and strong solvency will be eligible to seize these opportunities amid expectations of their acquisition and perhaps merger with the aim of strengthening and unifying efforts, indicating that the current time is a good opportunity to study the situation and waiting until the epidemic recedes and eliminates it and then start seizing opportunities.

Mosallam stated that the global economy will not return as it was after the elimination of the Coronavirus, as the mechanisms of the engines of the economy and consequently the regional economies will change, as will the work of the international private funds and organizations specialized in developing the principles of the market mechanism of all kinds.

Mosallam believes that recovery from the effects of corona will take not a little time and that the world will take a long time, in addition to the lessons learned from that grinding crisis that will take a long time to benefit from it and develop solutions for it.

The General Manager of “Truth” company expected a real emergence of specialized funds in the coming period to support and strengthen the economic sectors directed to them, in addition to the expected activity of acquisitions and mergers of local, regional and international economic entities (companies, institutions, and bodies) to restore activity and vitality in those economic entities.

March 2020

»SCA» Lower the maximum limits for the stock’s decline to 5%

Reda Mosallam, partner and general manager of “Truth” Economic and Management Consultancy Company, said that the SCA’s lowering of the maximum levels of stock decline in the current circumstances represents an important and appropriate decision for the current period in which our local markets witness unjustified and exaggerated declines.

 

Mosallam added that the Authority has, over the past years, established regulations and enacted the necessary laws for the markets, but in light of the current emergency conditions, the Authority has the right to amend some rules in order to maintain markets and protect investors from the developments that the world is currently witnessing. He pointed out that the decision will give investors enough time to wait and study the situation before making further sales.

Experts: direct positive effects of the “Tomorrow 21”

“These initiatives constitute a high level of resistance to the current conditions and major support to motivate the private sector to continue with more confidence,” said Reda Mosallam, partner and general manager of Truth Economic Consultancy, expecting the results of these initiatives to be reflected in the economic activity of Abu Dhabi state directly and quickly. , Following the evacuation of the current conditions resulting from the spread of the Coronavirus around the world.

February 2020

National companies overcome global challenges with strong profits

Reda Mosallam, partner and general manager of “Truth” Economic and Management Consultancy Company, said that public shareholding companies represent the backbone of the stock market, as one of the most important elements on which the growth of economic development depends. He indicated that banks are the best performers compared to other public joint-stock companies due to the nature of its activity, the telecommunications sector is also one of the sectors that achieve good results due to the nature of its work and its good results, as well as insurance sector companies like banks and telecommunications with the difference in the size and value of profits achieved.

He pointed out that companies working in the field of construction, building and real estate did not achieve performance according to expectations, but it is expected to see improvement in their performance during the current year 2020.

Mosallam made several recommendations that the listed companies should apply to improve their results, which include commitment to implementing the new corporate governance system and guide issued by the Securities and Commodities Authority, and also applying the internal control system and guide and making sure it is fully and accurately implemented, along with the professional conduct system and guide.

He called for the necessity of tightening control over the work of the boards of the losing companies, which we consider to be the primary cause of the inappropriate results of those companies and to find a formula of understanding with the banking system in tolerating the outstanding debts, assisting the financially troubled companies, and providing more facilities according to binding contracts.

December 2019

The unified clearinghouse supports the promotion of financial markets and enhances their efficiency

Reda Mosallam, partner and general manager of “Truth” Economic and Management Consultancy Company, stressed that establishing a unified clearing company will contribute greatly to the speed and accuracy of executing operations with high efficiency, in addition to transparency, which is very important for our local markets.

Mosallam added that this step, if implemented, would be an important step among the mechanisms required for promotion to developed markets, noting that the Emirates Securities and Commodities Authority is always working to implement best global practices, and will also apply best practices in the field of clearing in the world.

November 2019

10 advantages of the law of insolvency cases .. and the executive regulation soon

Reda Mosallam, partner and general manager of Truth Economic and Management Consultancy, said that the issuance of the law came at an important time to contribute to create a state of legislative integration to attract investments and to achieve a safe environment for capital.

He added that the law will apply to the natural person who does not engage in economic activity and is not considered in the merchant category, and thus will protect the debtor from any legal prosecution, and denies the criminal status of financial obligations of the insolvent person, and gives them an opportunity to work and productivity.

And regarding those who have been sentenced in cases of default, Muslim said that this order will depend on what will be stipulated in the executive regulations of the law, If issued retroactively, those who have been sentenced will be reconsidered, but he expected the law to be enforced as of January, with the majority of state courts postponing these cases and not adjudicating them until the law is officially passed.

«Truth» Rental values are a factor in lower commodity prices

Reda Musallam, general manager of Truth Economic & Management Consultancy, said that the decline in rental values for shops is an important factor in the decline in commodity prices as a major factor in operating costs.

He pointed out that the decline in the purchasing power of some individuals working in private companies has led traders to revitalize the market by offering discounts and reduce their profit margin to reasonable limits, through which they can entice consumers to increase sales.

He explained that the rate of 7.1%, according to the report of statistics, is on average, which indicates that the decline is greater than that.

He called for revitalizing the cycle of economic activity and reconsidering the cost of industrial activity services, especially land, water and electricity, as well as reducing the rental values of warehouses and warehouses, which helps reduce the cost of production.

 

7 Recommendations to overcome the challenges facing listed companies

A seminar organized by the Abu Dhabi Chamber of Commerce and Industry (ADCCI) yesterday issued 7 recommendations and solutions to overcome the challenges facing public and private shareholding companies in the capital markets, according to the circumstances of each company and the nature of its activities.

Reda Mosallam, Partner and General Manager of Truth Economic and Administrative Consultancy, said that the legislator singled out the listed joint stock companies with strict frameworks of the legal articles governing them and surrounded them with strict control systems to ensure and ensure that these companies are managed in accordance with the provisions of legislation and governing laws, where these companies are subject to legislative and regulatory bodies These include the Ministry of Economy, the Securities and Commodities Authority, the Department of Economic Development of Abu Dhabi & Dubai, the Abu Dhabi Markets & Dubai and the UAE Central Bank.

He pointed out that there are seven main recommendations, the first of which is to abide by the institutional discipline of the board of directors of the public shareholding companies and its executive management. Also, He pointed out that the Securities and Commodities Authority issued binding decisions during the past years to ensure that corporate departments do not deviate from corporate discipline and abide by the rules of professional conduct.

He drew that the second recommendation focuses on the need to activate the role of standing committees emanating from the Board of Directors, where the law obliged companies to form at least two committees of the Board of Directors, namely, the Audit Committee and the Nomination and Remuneration Committee, He pointed out the need for the Commission to develop a mechanism to follow up the work of those committees by requesting a detailed copy of its periodic meetings supported by supporting documents.

The Partner Manager of Truth Economic and Management Consultancy said that the third recommendation refers to the necessity of obliging public shareholding companies to find professional competencies in their management through the adoption of a draft resolution requiring the members of the General Assembly of the shareholding companies to be among the following expertise: Legal, economic, financial and technical consultant.

The fourth recommendation is to strictly select the executive management of public shareholding companies under the supervision of the Authority, Where the Department has a legal agency relationship with the Board of Directors of the company authorizes the management of the company according to the purposes set out in the statute and adhere to the objectives set out in the strategic work plan and follow-up annual performance and measure the comparative achievement of what is intended to be implemented for the year, provided that under the supervision and care of the Authority .

Mosallam called in the fifth recommendation to the need to increase the technical cadres to increase the effectiveness of periodic and sudden inspection by the Authority to follow up the work of public shareholding companies and identify closely about those problems and solutions developed by the administration to solve those problems, and then give an opinion on whether they will lead to the elimination of those And then ask the executive management to offer other solutions to solve those problems other than the previous one.

He pointed out that the sixth recommendation is to form a technical team of the Authority to be allocated to each company or some companies (depending on the size of each) and give him the necessary time to be exposed to the situations and problems facing them, which is supervised and monitored, and the team to make periodic visits to subsidiaries At least every four months, increase or decrease depending on the discipline of those companies and the compliance of their employees with the rules of professional conduct, The team also reports to the Board of Directors for information and holds it responsible for the good or whether the company’s executive management of its business.

Mosallam pointed out that the seventh and final recommendation is to activate the role of the representative of the Authority when attending the general assembly of the joint stock company.