UAE business outlook for 2019: What to expect in real estate, jobs, IT, banking, stocks and jewellery sectors

“Investor interest is growing – especially from China. They (Chinese investors) seem to be coming with a huge appetite. In terms of capital appreciation, it will be a bit slow next year (2019) but with regards to leasable properties there will be some attractive options,” said Niraj Masand, director, Banke International.

The good news for the owners: prices – whether sales or lease – are not sliding next year. Growth will be steady, similar to what you see in established markets.

“A slight capital appreciation can be expected in newer, well done properties in key locales. As regards to return on investments (RoI), one can expect a number between five and eight per cent,” he said.

The residential sector is definitely the flavour for next year, although there is a fair amount of supply in the market giving tenants a lot of options to choose.

The biggest challenge in 2019 will be for investors look to make quick entry and exit with the market. It is not a year for sellers, so yes it will continue to be a buyer’s market.

Recruitment

The job scene is looking brighter next year. According to Karuna Agarwal, founder, Future Tense, employers are increasing their budget for hiring.

“People have realised the cost of a “wrong hire” and they want to rectify this in 2019,” she said.

Industries which are likely to see more hiring than others are real estate, finance, banking, IT and education. “The education sector especially will be hiring many people. I am not talking about just schools – but investment firms investing in education as well,” said Agarwal.

Worldwide, the economy seems to be looking better and this is expected to reflect positively for the recruitment industry in the UAE. “The fear of VAT has stabilized and we are seeing a migration of people into the country. Housing has become more affordable, consumer spending is on the rise and this means more people will come looking for jobs here in the UAE,” said Agarwal.

Other trends for next year will be a rise in hiring within SME sectors. There will be a lot of jobs available in the digital marketing industry. A lot of companies are focusing on setting up their very own in-house digital marketing team instead of hiring agencies to do the job.

Information Technology (IT)

The IT industry is moving very rapidly in the UAE and in the region. In 2019, we will no more see traditional ways of technology. Companies will be looking at optimizing their businesses and technology is expected to play a big role. Needless to say, the outlook for the IT sector is looking very positive.

Kundan Shekhawat, ceo of Ascent Technologies said: “A key trend we will see next year is from a cloud perspective. Having said that, “cloud adoption” will be the biggest challenge as it is an expensive affair. All it requires is a mind-set change for these companies to see the long-term benefits of having a cloud solution.”

Another big opportunity next year will be in cyber security, closely followed by mobile technologies and applications.

Banking and stocks

There’s a new kind of promise in the banking industry—and possibly no better time than now for transformation. The economic fundamentals in the UAE are looking better, the regulatory climate is also looking favorable. “We definitely expect a phase of consolidation,” said TK Raman, Group Chief Financial Officer, Finance House PJSC.

“From a challenge perspective we see an under provisioning for impairment losses to be the biggest issue for UAE banks. The UAE Central Bank is going to come down heavily on banks who have not implemented the IFRS 9 rules,” he added.

According to Raman, as for UAE stocks, the current market prices of most ADX & DFM stocks do not reflect the true intrinsic value of these stocks. “At current levels, the market is very attractive for value investors with a two-to-three-year investment horizon-both from a dividend yield as well as capital appreciation perspectives. Market valuations today do not reflect the true state of the economy.”

The absence of significant local institutions that can step in to provide meaningful support to a market in free fall, is felt today more than at any time in the past.

Public Relations

The growth in the PR industry in 2019 will come from the region especially Saudi Arabia, Bahrain and Kuwait. The UAE PR industry will look for economies of scale and it is very likely that multi-national companies will align themselves with companies that offer greater return-on-investments and more effectiveness in the digital space. “It is highly likely that salary levels at the entry level go down because of available expertise at mid and senior levels with additional capacities,” said Elizabeth Sen, Chief Client Officer, APPCO-Worldwide.

“Junior level people cannot expect to get higher salaries. There will be consolidations especially agencies with digital services to integrate into the PR business. There will be a few buy-outs in that respect.”

Jewellery retail

Abdul Salam KP, Group Executive Director for Malabar Gold and Diamonds said: “We have seen an upsurge in the jewellery business after the UAE government knocked off VAT for visitors. During the last week of 2017, we saw a surge in jewellery business as people wanted to invest in gold just before the VAT introduction. The first three months of 2018, sales was a bit low as people were still not comfortable with the VAT factor. However that sentiment has slowly settled and we have consistently seen jewellery purchases. Going forward in 2019 we will see more interest as 2020 gets closer and more jobs will be created in the market. VAT refund for visitors will become very smooth and we are likely to see a good amount of interest from visitors too.”