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Luxury buyers drive up Dubai property prices in runup to 50th National Day: Report

Luxury home buyers drove up Dubai’s home prices as the property market grew by 21 percent in the runup to the United Arab Emirates’ 50th National Day on December 2, according to a report by property consultant Knight Frank.

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September saw the value of home sales reaching a monthly record of $3.3 billion (AED12.2 billion). Sales declined slightly in October, however, to $3 billion (AED11.2 billion).

The overall value of villas rose 14 percent since the beginning of the COVID-19 pandemic.

Knight Frank’s report highlighted a disparity between luxury homes and more affordable properties – as apartment prices rose in high-end areas, such as The Palm Jumeirah (14 percent) and Downtown Dubai (eight percent).

Average apartment prices, however, were down by 3.1 percent.

“There are very early signs to suggest that 2021 may… end up marking the peak of Dubai’s third property cycle,” Faisal Durrani, Head of Middle East Research at Knight Frank said in a statement.

“While values are still creeping up, anecdotal evidence points to an emerging delta between seller and buyer expectations, a classic sign of a rising market that may soon stall.”

Home values overall were down by 29 percent from the 2014 peak.

Durrani went on to say: “Average transacted prices are up 21 percent so far this year but remain 20 percent below the pre-global financial crisis [2008] peak.

“Dubai’s relative affordability compared to other global gateway cities has been instrumental in driving its popularity and it wouldn’t be in the interest of market stability for prices to race past the 2008, or indeed 2014 peaks over such a short period of time.”

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Russia allows gas flows to Gazprom Marketing & Trading for 90 days

Russia gave permission for natural gas supplies to Gazprom Marketing & Trading Singapore Ltd, part of Gazprom Germania, from Yamal LNG project for 90 days, a government decree showed on Wednesday.
The move comes less than two weeks after the Kremlin said that Russian sanctions imposed on state gas company Gazprom’s former German unit and other entities meant they could not receive gas supplies from Russia.
Germany, Russia’s top client in Europe, in early April transferred Gazprom Germania, an energy trading, storage and transmission business ditched by Russia’s Gazprom, to its energy regulator to ensure energy security.
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Energy ties between Russia and Europe plunged into crisis after Moscow started what it calls “a special military operation” in Ukraine on February 24 and the West responded with sweeping sanctions that put Russia on the brink of recession and a default on external public debt.
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Dieselgate: Volkswagen settles UK emissions class action for £193 million

Volkswagen settled its UK class action lawsuit for £193 million ($242 million) with more than 90,000 drivers impacted by the emissions scandal.

No admissions of liability have been made by Volkswagen and the terms and conditions are confidential, according to a statement from the auto giant.

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A separate contribution toward the claimants’ legal costs and other fees will be made by the company.

Volkswagen alongside law firms Slater & Gordon, Leigh Day and PGMBM, who were representing the claimants in the case, said Wednesday that both sides had come to the out of court settlement and as many as 91,000 claims had been resolved.

The automaker has faced numerous lawsuits in what’s been dubbed the ‘dieselgate litigation’ after the use of the software designed to lower emissions when being tested was exposed as fraudulent by a US investigation in 2015.

That led to a recall throughout Europe that cost the company billions of euros and massive fines from European regulators.

“The settlement is another important milestone as the Volkswagen Group continues to move beyond the deeply regrettable events leading up to September 2015,” Philip Haarmann, chief legal officer of Volkswagen, said.

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Turkey’s lira falls beyond 16.3 vs dollar as FX need grows

Turkey’s lira slid beyond 16.35 against the dollar on Wednesday to its weakest level since the depths of a December crisis, as analysts questioned authorities’ ability to continue steadying it without new sources of foreign currency.

The lira has weakened 9 percent this month and 19 percent this year, despite months of costly interventions in which the central bank has sold dollars to soften the blow and the state has backed an FX-protected deposit scheme.

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The currency dipped as far as 16.3515 and stood at 16.3300 at 1257 GMT, after a 1 percent fall against the greenback.

On Dec. 20, the emerging market currency hit a record low of 18.4 after a series of unorthodox interest rate cuts which pushed it down 44 percent on the year as a whole. In response, inflation has since leapt to 70 percent in April.

The lira held mostly steady early this year due to the government’s scheme, known as KKM, that protects some depositors against lira depreciation. The central bank has also sought to meet the market’s foreign-currency needs since the December crisis.

But those efforts to keep the currency steady have taken their toll on the Central Bank of the Republic of Turkey’s (CBRT) already depleted reserves, according to bankers.

“We estimate that the CBRT’s FX sales exceeded $30 billion in the January-April period,” said economist Haluk Burumcekci, adding that balance sheet data showed sales were more intense in May.

Adjusted for swaps, the bank’s net international reserves fell by another $7.7 billion after the first 20 days of May, he said.

Data last Friday showed the central bank’s net international reserves dropped some $3.5 billion to $11.53 billion in the week to May 13. Bankers calculate that they fell to $10 billion or less in the following week.

Economists say rate hikes could help relieve both the lira and reserves. But President Tayyip Erdogan’s opposition to policy tightening has left few expecting a turnaround any time soon, including when the bank meets on Thursday.

Robin Brooks, chief international economist at the Institute of International Finance, said “intense depreciation pressures” are rising. “We think risk of a severe overshoot – much like in 2021 – is high, given rising global recession risk and the big credit expansion in Turkey,” he said on Twitter.

The war in Ukraine began harming the lira in March as Western sanctions on Russia sent energy prices soaring, pushing up Turkey’s already hefty import bill and fueling inflation.

On Tuesday, the cost of insuring Turkey’s debt against default shot to its highest since the 2008 global financial crisis. IHS Markit data showed 5-year credit default swaps (CDS) had risen to 730 basis points from 704 points.

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