February 2019

Experts call on banks to ease their tightening on lending

“The majority of the economic sectors in the country are in dire need of lending. The unprecedented increase in deposits in banks confirms the existence of unutilized funds. Consequently, lending mechanisms should be reconsidered because lending at present is the main driver of the economy, Especially as the region around us is experiencing an economic slowdown that seems to be going on indefinitely” Reda Mosallam said, Managing Partner of Truth Economic & Management Consultancy.

Therefore, the majority of the banks in tightening of lending, as currently, is unjustified, especially for small and medium-sized companies that represent the mainstay of the economy. These projects provide sufficient guarantees for banks. Today, small and medium-sized companies and projects have already been suspended for lack of adequate funding which harm the economy and stimulus plans.

January 2019

December 2018

Experts demand cuts in “unnecessary” consumer imports, industry support and exports

The general manager of Truth Economic Consultancy, Reda Mosallam, called for a review of unnecessary or recreational consumer imports to Abu Dhabi, which does not provide added value to the emirate’s economy at present, especially after it achieved a large and unjustified increase in a short time.

He said that the increase in consumer imports had a negative effect on the national currency and the national reserve of foreign currencies. He expected that part of the consumer imports were not directed to domestic consumption, but were necessarily used in re-exports, which are an important and required part.

He pointed out that there was no significant population increase justifying the substantial increase in consumer goods. “The increase in value may partly be due to higher prices, not necessarily in imported quantities,” he said.

He stressed that reducing the consumption of recreational imports will support the reduction of the current account deficit, and reflected on the improved balance of payments, especially as there is a trade deficit in favor of Abu Dhabi partners.

He called to pay attention to the imports of production in the industry and export-oriented, as well as provide more incentives and facilities to increase industrial activity, the number of existing factories, and expansion in it to support domestic production and export.

He stressed that the increase of exports by 10% is a very positive element, and provides great value added to the economy in terms of attracting difficult currencies, opening up new markets for the state, and achieve a reputation for a large commercial abroad.

He added that Abu Dhabi’s success in increasing the value of re-exports by 16.6% contributes to making the emirate a major re-export hub in the region and Dubai, which has taken very important steps in this field, pointing out that there is high infrastructure and facilities in the logistics, transportation and aviation.

November 2018

Experts: «Freezing» real estate units disable the wheel and damage the economy

Reda Mosallam, General Manager of Truth Economic & Management Consultancy said, “The continued closure of residential or commercial units for more than a year is detrimental to the national economy because it disrupts high-cost economic resources and leads to” intervention “in the market, And the establishment of an unrealistic “upset” balance between supply and demand, which is reflected in the continued increase in rents in relative terms.”

He suggested imposing a fee on closed real estate units up to 20% of the average rental value in the building or area, which would encourage the landlord to put it up for rent, because in this case he would compare between his fees due to closure and the rental yield expected to be put on the market, calling for the use of the proposed fee, if approved, in the development of the real estate sector, and the establishment of real estate projects of economic feasibility.

He stressed the importance of relying on the mechanism of supply and demand for the benefit of all parties in the medium and long term, so that the rental value reflects the real relationship between supply and demand.

Truth: 7.6 billion capital invested in listed commodity companies

Total capital invested by companies operating in the domestic consumer goods sector increased by 3 per cent to 7.6 billion dirhams at the end of last year, compared to 7.4 billion dirhams by the end of 2016, according to a recent study by Truth Economic & Management Consultancy.


Reda Mosallam, general manager of Truth, said: “The increase in the capital invested in the consumer goods sector, amounting to about 256.4 million dirhams, comes with the support of several key items, foremost of which is the rise in the value of current assets in companies operating in the sector of AED 343.8 million to reach 3.6 billion By the end of last year, an increase of 11% compared to about 3.2 billion dirhams by the end of 2016.”


The value of non-current assets (fixed assets) reached AED 4 billion at the end of last year, down AED 87.3 million compared to AED 4.1 billion at the end of 2016. The current liabilities of the companies increased by AED 465.2 million At the end of 2017 compared to the fiscal year 2016, where it was 1.6 billion dirhams and rose by 29% to 2 billion dirhams due to the increase in accounts payable during 2017.


Consumer goods companies posted total revenues of AED 4.6 billion at the end of 2016, up AED 106.4 million or 2 per cent to AED 4.7 billion by the end of 2017. Total direct costs increased to 3.2 billion at the end of last year Compared to 3.1% at the end of 2016.

As well as general, administrative and sales expenses increased by the end of 2017 to reach AED 1.2 billion, an increase of AED 98.1 million compared to the end of 2016, which amounted to AED 1.1 billion.


The study included 10 companies listed on the DFM: Dubai Refreshments, United Foods, Gulfa Water, Unicai, Emirates Refreshments and Marka, and 4 companies from the Abu Dhabi Securities Exchange : “Agthia Group”, “Foodco”, “Global Holding” and “Ras Al Khaimah Poultry and Feeding”.

October 2018

Qatar Airways will suffer from US sanctions on Iran

Economic expert Dr. Reda Mosallam said that Qatar will suffer greatly from the sanctions imposed by the United States of America on Iran, which will enter the second phase of its implementation next month. Dr. Reda Mosallam said in an exclusive statement to Al-Ittihad that among those who will be strongly affected by these sanctions is Qatar Airways, pointing out that the successive statements from Qatar Airways officials and the latest on Monday evening about Qatar Airways being not affected by these sanctions, But an attempt to send messages of reassurance only until the search for airspace other than the Iranian sphere after it was the last resort.

He pointed out in this regard that the Iranian airspace will also be subject to sanctions, and that they (i.e. sanctions) are clear and will affect all forms of dealing with Iran in the area of goods, services and economic transactions, citing the withdrawal of European companies from Iran despite the loss of contracts, but its withdrawal was a flight from sanctions and Will not be borne by any entity. “The next step for Qatar Airways is to look for and rely on other airfields that will be very expensive,” Mosallam said.

Qatar Airways chief executive Officer said on Monday that US sanctions on Iran would not affect Qatar Airways’ flights to Iran in any way. Qatar Airways flies to the cities of Mashhad, Shiraz and Tehran, according to its website.

Qatar Airways is facing financial difficulties as the boycott of Qatar by the four anti-terrorism countries, Saudi Arabia, the UAE, Bahrain and Egypt, continues on June 5, 2017, due to the support of the Qatari terror system and closer ties with Iran. Qatar Airways has already announced a loss of 252 million riyals ($ 69 million) for the year ended March 31, recognizing that the loss was the result of the Arab boycott, stressing that the last year was the most difficult for the past 20 years.

September 2018

54.2 billion dirhams of capital invested in listed transport companies

Total capital invested by companies operating in the transport sector and services listed in the local capital markets increased by 2% to 54.2 billion dirhams at the end of last year compared to 52.9 billion dirhams by the end of 2016 , According to a recent study by the company «Truth» economic consulting.

Reda Mosallam, Managing Partner of “Truth” said, The companies of transport and services sector listed in the Dubai and Abu Dhabi Stock Exchanges accounts for 39% of the total non-oil GDP of the transport sector and services in the country. The transport and services sector accounts for about 12.5% of the total. Non-oil GDP for fiscal year 2017.

He pointed out that the GDP of the transport and services sector is one of the most important sectors of the non-oil GDP in the country for the fiscal year 2017, amounting to about 138.8 billion dirhams compared to about 131.4 billion dirhams for the fiscal year 2016, an increase of 7.4 billion dirhams representing an average growth rate of To about 5.6%.

Recall that, the country’s non-oil GDP for the fiscal year 2017 is about 1.1 trillion dirhams compared to about one trillion dirhams for the fiscal year 2016, an increase of about 58.3 billion dirhams.

The value of non-current assets (fixed assets) reached AED 16.3 billion at the end of last year, an increase of AED 604.3 million compared to AED 15.7 billion at the end of 2016, an increase of 4%.

The value of non-current assets (fixed assets) reached AED 16.3 billion at the end of last year, an increase of AED 604.3 million compared to AED 15.7 billion at the end of 2016, an increase of 4%.

The current liabilities of all listed transport companies decreased by AED 715.8 million at the end of 2017 compared to the year 2016 to AED 7.7 billion and decreased by 9% to AED 7 billion due to a decrease in accounts payable during 2017.

According to the study, shareholders’ equity (capital + reserves + profits) in the transport and service companies amounted to AED 35.7 billion by the end of 2017, an increase of AED 2.5 billion from the end of 2016. This increase is due to the increase in reserves in various forms and the accumulated profits as well as the capital of these companies during 2017 compared to 2016.

The transport & services companies listed in Abu Dhabi and Dubai Securities and Exchange markets recorded steady growth in their total revenues from the current activity at the end of 2017 compared to 2016 with a slight decrease of AED 70.7 million, reaching AED 16.1 billion at the end of 2016 and reaching AED 16 billion by the end of 2017.

The study clarified that in light of the decline in revenues, Transport and services companies witnessed a decline in total direct costs at the end of December 2017 compared to 2016 at AED 10.9 billion and decreased by AED 100.9 million to AED 10.8 billion by the end of 2017.

As well as general, administrative and sales expenses decreased by the end of 2017 to reach 2.2 billion dirhams, a decrease of 22.2 million dirhams compared with the end of 2016, amounting to 2.2 billion dirhams.

On the net profit of listed companies, Abu Dhabi and Dubai Financial Services posted net profits of AED 3.9 billion at the end of 2017, an increase of AED 1.4 billion compared to AED 2.5 billion at the end of 2016.

The study showed that the average rate of trading for transport and service companies in the country reached 1:2.18. This means that the companies operating in the transport and services sector have increased liquidity. This indicates that the typical ratio of trading in this type of activity is 1: 1.5. Means that these companies have the ability to face the risks of paying off sudden obligations without having to liquidate fixed assets or obtain new loans.

The study showed that the ratio of return on capital in companies operating in the transport and services sector reached 20% on average. The study also affirmed that the ratio of return on shareholder’s equity (capital + reserves + profits) in the transport and services companies registered in Abu Dhabi and Dubai markets averaged 9% The percentage of return on the total money invested by the transport and service companies in the country was 6% on average. The ratio of operating costs to total revenues from the current activity of transport and service companies was 68%. The ratio of general, administrative and sales expenses to the revenues of the listed transport and services companies was 14%.

The expressed ratio of net profit margin of companies operating in the transport sector and services registered in the Abu Dhabi and Dubai markets was about 20%, indicating the lower costs associated with the revenues of these companies in general.

The study included 13 listed companies on the country markets. six companies in the DFM, and they are: Aramex, Gulf Navigation Holding, Amanat Holding, Air Arabia, AL Firdous Holdings & Tabreed. And seven companies from the Abu Dhabi Securities Exchange : Abu Dhabi Aviation, Emirates Driving Company, Gulf Medical Projects Company, Abu Dhabi National Hotels, Fujairah Building Industries, National Corporation for Tourism & Hotels and National Marine Dredging Company.

Manufacturing industries are latent energies waiting for stimulus

A specialized study prepared by Truth Economic & Management Consultancy in Abu Dhabi called for the introduction and implementation of integrated incentive programs for industrial establishments that are in the establishment stage up to five years from the date of commencement of construction, in view of the unfavorable economic conditions and the difficulty of financing and lending, And the need for permanent comparison with neighboring countries (GCC) in all laws and procedures related to the industry and its costs, especially in terms of energy prices, rents, labor wages and accessibility of products to world markets.

The study also called for the protection of local markets through training, qualification and strict control of imports in accordance with international standards and the activation of all procedures allowed by the laws of free trade between countries to combat dumping, temporary protection and reciprocity.

The study covered in detail all the challenges faced by the sector, including the challenges of energy prices, the high cost of labor recruitment, the increase in rents of industrial lands as well as their scarcity, the difficulty of financing industrial projects, the absence of the federal strategy for the industrial sector, the failure of the new industrial law to meet current economic conditions, non-protection of national products , Weak control over markets and entry of non-conforming foreign goods and dumping of the market.

The study focused on the settlement of the strategic industries, which is characterized by the state of international competition, the most important petrochemical industries and all related to the complementary industries, as well as the industry of aluminum and iron and other heavy industries, which is the backbone of all other industries, and is the basis of success in any desired industrial boom in which The highest value added, and provides the state treasury with a lot of financial resources that can be directed to other economic sectors, and establish for the self-sufficiency of the industrial and high-value technical exports of high value.

The study called for the need to speed up the issuance of the new industry law as the source of legislation for the industrial sector, and the subsequent regulations and decisions of the regulatory and strategic authority, whether issued by the federal government or issued by the official authorities of local governments.

The study pointed to the need to establish an independent ministry for industry or at the very least the establishment of an independent federal body for industry, which means this important sector, which contributes more than 10% of the country’s GDP.

The study stressed that the demand for the establishment of a ministry or a federal body of industry is based on the need to assign the task of restructuring and regulating the industrial sector and the formulation of policies and the development of strategic plans for this important sector, at the state level.

The recommendations of the study pointed to the need to prepare a specialized comparative study on the industrial sector in the GCC countries in partnership with the General Secretariat of the GCC countries in terms of fees, costs and procedures for the foundation and establishment of companies and institutions that deal with the industrial sector and to reflect the current and real competitive situation of the state compared to other GCC countries. It must develop appropriate solutions to the problems and obstacles faced by industrialists in the State.

The study called on the proposed federal authority, which is concerned with the industrial sector, to formulate its visions in front the political and economic leadership to issue the appropriate decisions to support and boost the industrial sector and put it at the top of competitiveness with the rest of the GCC countries.

The study pointed to the need to prepare a map for industrial investment in the country and identify the most important activities that should guide the local, regional and global investments and attract foreign investment to enter the various industrial activities and technology transfer and then localize it.

It also called for the establishment, encouragement and support of specialized financing bodies to provide services to this sector, unlike Emirates Industrial Bank. She pointed to the need to establish an independent body to support and develop industrial exports and raise the slogan made in the UAE and build a name for the state associated with quality and efficiency, similar to German and Japanese industrial products.

The study recommended in its recommendations the great efforts of the Office of Industry Organization in Abu Dhabi, and recommended the preparation of an annual conference entitled “Developing solutions and strategic solutions to the problems and obstacles facing the industrial sector”. The conference will result in a standing committee with broad powers to develop appropriate solutions in accordance with legislation and laws.

A new banking giant in Abu Dhabi

“Integration into the banking sector is good for creating giant banking entities that are capable of meeting the economic challenges that the region is currently experiencing,” said Reda Mosallam, Managing Partner of Truth economic and management consultancy.

He added that there are a large number of banks, representative offices, payment offices, finance and investment companies and investment portfolios operating within the banking and financial sector in the country, expressing his belief that the number is greater than what the market needs. “The market needs strong financial and banking entities able to finance according to For modern financing tools, and can take risks”.

He also said that giant institutions were also required to reduce costs, as a result of their financial strength on the one hand, as well as the result of cost reductions on the other.

He noted that the expected integration process could reduce the current workforce; it would replace redundant labor with automated work systems, sophisticated electronic systems and technical services, and new, more efficient, productive and cost-effective new mechanisms.

He added: “We expect the birth of a big banking giant, able to bear the burdens and able to lend in accordance with the foundations of banking studied, and able to assume its responsibilities in the return of the investment map and the rotation of economic wheel in the Emirate of Abu Dhabi and the UAE. He stressed that banks must support the economy; therefore, giant banking entities, are economic necessity and important vital requirement”.