SMEs , IN GCC PROSPECTIVE

To some they are the catalysts of economic growth, the backbone of the private sector; to others they empower people, drive creativity and encourage specialization.The are the small and medium enterprises (SMSs).SMEs small and medium size enterprises are very heterogeneous group of business usually operating in the service,trade,agribusiness and manufacturing sectors.

They include a wide variety of firms such as handicrafts makers, small machine shops and computer software firms that posses a wide range of sophistication and skills. SMEs usually work in the formal sector of the economy and employ mainly daily wages workers. SMEs often categorized by its number of employee and the value of its assets.As, the globalization proceeds, transition and developing countries and their enterprises face major challenges for the strengthening their human and institutional capacities to take advantage of trade and investment opportunities.While Government make policies in trade and investment area, it is enterprises that trade and invest.SMEs play a key role in transition and developing countries.These small firms actually account for more than 90% of all firms outside the agriculture sector constitute a major source of employment and generate appreciable amount of earnings through local exports.As such SMEs development emerges as a key instrument in poverty reduction efforts.

SIGNIFICEINCE OF SME TO ECONOMY-GCC SPECIFIC

SMEs are a dynamic and vibrant sector of the economy.They contribute prominently to GDP and provide jobs for the majority of private sectors employee, an important asset in the the GCC where most countries have employee nationalization programs like "EMIRATIZATION" in UAE. GCC Governments seeking ways to diversify their economy from oil and gas have opted to boost their important sector. In Bahrain it is estimated that SMEs contribute 25 percent of total nominal GDP and employs around 75 percent of private sector employee.In United Arab Emirates, it is estimated that SMEs contributed 60 percent of GDP in 2011.

Banks in GCC now awake through the mist of financial crisis and increasingly focusing on lending to SMEs opposed to personal or large corporate lending because of SMEs form a booming market and provide an opportunity to diversify from concentrated lending.

CHALLENGES TO SMEs

SMEs has challenges that are general with other entities within the company and outside too. Due to their nature of work and size. Especially in the time of global financial crisis whose effects still present.SMEs mostly involved in trading , service, manufacturing and construction operate in highly competitive market with tight rules and regulation  with thin profit margins. Financial and technical restrictions are notable issues faced by SMEs along with technology and human resource limitations.

GOVERNMENT STANDING

Governments of GCC countries recognized timely the importance of SME sector and its diversity within economy they make bodies and developed regulations and programs to support and nourish them.This support comes from initial creation of SME and expand to providing technical assistance, financial lines, development of human capital and access to local and global market.As, an example Bahraini Government established "Tamkeen" in 2006 to support the private sector and position it as the key driver of economic growth. In 2002 the Mohammad Bin Rashid establishment for SME development (Dubai SME) incorporated into the Department of Economic Development (DED)as an agency with a vision to nurture business leadership through entrepreneurial spirit. Dubai SMEs also launched Dubai SME 100, a premier ranking of Dubai's 100 top performing SMEs. In Qatar, the Qatar Authourity for the development of SMEs was established by an EMIRI decision in 2011.

Thanks,



Muhammad Anas
Business Consultant
muhammad.anas@adamadvisors.com
+971 50 70 45 733

2A, Building 6 |  Gold & Diamond Park
PO Box 183827 | Dubai | United Arab Emirates
Switchboard:  +971 4 341 9701   |  Extension 150
Website: www.adamadvisors.com

 

THE MARKET LIQUIDITY!!!

In business economics or investments, market liquidity is an asset's ability to be sold without causing a major change in the price and with minimum loss of value. Money or cash in hand is the common liquid asset and can be used immediately to perform economic activities like buying, selling or physical debt, make connection between wants & needs.A liquid asset has some or more of the following features. It can be sold quickly with minimum loss of value, any time within market hours.The one prime feature is that willing buyers and sellers all time available.Probability is one of the highlight of liquid that the next trade is perform at a price equal to the last one.

A market may be considered deeply liquid if there are more ready and willing buyers & seller.Liquidity of a product can be measured as how often it is bought and sold this is known as Volume. Often investment in liquid market such as the stock market or future market are considered to be more liquid than investment  like real estate based on their ability to be converted quickly. speculators and market makers are key contributors to the liquidity of a market or assets.Speculators and market makers are the individuals or institutions that seek to profit from anticipated increases or decreases in a particular market price.By doing this, they provide the capital needed to facilitate the liquidity.

Thanks,


Muhammad Anas
Business Consultant
muhammad.anas@adamadvisors.com
+971 50 70 45 733

2A, Building 6 |  Gold & Diamond Park
PO Box 183827 | Dubai | United Arab Emirates
Switchboard:  +971 4 341 9701   |  Extension 150 Website: www.adamadvisors.com  

WHAT IS INITIAL PUBLIC OFFERINGS i.e (IPO)

An initial public offering (IPO) occurs when a security is sold to the general public for the first time with the expectation that a liquid market will develop. Although an IPO can be of any debt or equity security  most companies start out by raising equity capital from a small number of investors, with no liquid market existing if these investors wish to sell their stock.

If a company prospers and needs additional equity capital, at some point the firm generally finds it desirable to "go public" by selling stock to a large number of diversified investors. Once the stock is publicly traded, this enhanced liquidity allows the company to raise capital on more favorable terms than if it had to compensate the investors for the lack of liquidity associated with a privately-held company. Existing shareholders can sell their shares in open-market transactions.

Thanks,


Muhammad Anas
Business Consultant
muhammad.anas@adamadvisors.com
+971 50 70 45 733







2A, Building 6 |  Gold & Diamond Park
PO Box 183827 | Dubai | United Arab Emirates
Switchboard:  +971 4 341 9701   |  Extension 150 Website: www.adamadvisors.com  

CANADA KEEN INTEREST IN EXPO 2020 DUBAI.

Its been really a matter of great celebration for Dubai Expo 2020.That Canada become a latest power to add its support for hosting the mega event.Foreign affairs minister John Baird and the minister of International trade, Ed, Fast announced that Canada will support the bid to take the World Expo 2020 the middle east for the first time.

"Canada believes it is time for the middle east to host the world at a time of such hope and challenge in the region, and Dubai is best placed to brig together the most diverse group of peoples from around the world, to share ideas, aspirations and concrete solutions for the future", said Baird.

" Canada support for Dubai reflects our commitment to the dynamism, hope and future of emerging economics in the region and beyond"

In the context of the British Prime Minister's David Cameron recent backing to Dubai to win Expo 2020.These comments from Canadian minister glorifying the importance and magnitude of the event.The other cities still in the race to host the prestigious Event are Sao Paulo in Brazil, Yekaterinburg in Russia and izmir in Turkey.

Fast added:" The United Arab Emirates has built a prosperous, open and secure society in roughly one generation and world-class and innovative Canadian Businessman are eager to build stronger trade and investment ties with this strategic, priority market".

"By supporting Dubai Expo 2020, we're showing our UAE partners that Canada is committed to taking relationship to new heights which will create new opportunities for people in both countries." 

Right now there are around 100 major Canadian companies working in different sectors of business in Dubai with approximately 40,000 Canadian's living and working here.According to the recent reports from foreign links that the former US President Bill Clinton and London Mayor Boris Johnson also backed Dubai publicly.In simple words Dubai is once again "BACK IN BUSINESS" under the guidance and VISION of H.H SHEIKH MOHAMMAD,the rode map is clearly defined and hopefully by following his footsteps the future rulers of that Emirate will make Dubai an International hub of business market.   

 
Thanks,                                                                                              



MuhammadAnas                                                                                              
Business Consultant
muhammad.anas@adamadvisors.com
+971 50 70 45 733









2A, Building 6 |  Gold & Diamond Park
PO Box 183827 | Dubai | United Arab Emirates
Switchboard:  +971 4 341 9701   |  Extension 150
Website: www.adamadvisors.com

INTELLECTUAL PROPERTY & ECONOMIC DEVELOPMENT

Intellectual property is a term increasingly use today, but still little understand. To many people it remains an obscure legal concept of little relevance to everybody life.

Intellectual property is a power tool for economic development wealth creation that is not yet being used to optimal affect in all countries, particularly in the developing world.There are two  central economic objective of any system of  Intellectual property protection.The first is to promote investments in knowledge creation and business innovation by establishing exclusive rights to use and sell newly developed technologies, goods, and services.Absent such rights, economically valuable information could be appropriated without compensation by competitive rivals.  Firms would be less willing to incur the costs of investing in research and commercialization activities.In economic terms, weak IPR create a negative dynamic externally.They fail to overcome the problems of uncertainty in R&D and risks in competitive appropriation that are inherent in private markets for information.

The second goal is to promote widespread dissemination of new knowledge by encouraging (or requiring) rights holders to place their inventions and ideas on the market.Information is a form of public good in that it is inherently non-rival and, moreover, developers may find it difficult to exclude others from using it.  In economic terms it is socially efficient to provide wide access to new technologies and products, once they are developed, at marginal production costs.  Such costs could be quite low for they may entail simply copying a blueprint or making another copy of a compact disk or video.There is a fundamental balance of take off between these objectives. An overly protective system of IPRS could limit to social gains from invention by reducing incentives to disseminate its fruits. However, an excessively weak system could reduce innovation by failing to provide an adequate return on investment. Thus, a policy balance needs to be found that is appropriate to market conditions and conductive to growth.Intellectual property rights could play a significant role in encouraging innovation, product development, and technical change.Developing countries tend to have IPRS systems that favor information diffusion through low-cost imitation of foreign products and technologies. Trademarks protect rights to market goods and services under identified names and symbols. Trademarks and brand names must be sufficiently unique to avoid  confusing consumers,these trademarks rights encourage firms to invest in name recognition and product quality. Economists generally believe that the danger of market dominance through abuse of trademarks is slight in competitive economics but such marks could be accompanied by significant market power in countries with the other barriers to entry. 

Thanks,

Muhammad Anas 

Business Consultant
muhammad.anas@adamadvisors.com
+971-507045733


 





2A, Building 6 |  Gold & Diamond Park
PO Box 183827 | Dubai | United Arab Emirates
Switchboard:  +971 4 341 9701   |  Extension 150
Website: www.adamadvisors.com  

 

 

Quadruple of Dubai Market 2013

Dubai flourished after a recession period the market indicators shows healthy signs for business. The report of Dubai Economic Outlook Quarter 2/2013 issued by the secretariat General of the Dubai Economic Council (DEC) indicated second quarter is better than the first quarter of the year. The report estimated the growth rate of real gross domestic product (GDP) to Dubai in the second quarter of 2013 by 4.7 per cent compared to the corresponding quarter of 2012. The four sector played a major role of boosting the GDP. wholesale & Retail, Transportation, Manufacturing and Real Estate.Lower budget deficit decrease from Dh 18billion in 2012 to Dh 1.5 billion in 2013 as a result of higher revenue about 7.2 per cent from about Dh 30.4 billion to Dh 32.6 billion increased government expenditure from about 5.8 per cent  from Dh 32.3 billion to Dh 34.1 billion between 2012-2013. As a percentage of GDP the budget deficit has dropped from 0.6 per cent in 2012 to less than 0.05 per cent. The reports indicates that the real estate sector in Dubai has Witnessed a new wave of growth during the second quarter of the year 2013 in terms of both money value & number of apartment. Dubai marina area ranked first with the value of transactions. With the largest transaction  made by 27% Indians, 17% British and 15% Pakistani. 

Tourism Sector Estimate of 5 million visitors during the first half of 2013. Saudi were the largest group. Hotel guest  during the second quarter of 2013 reach 2.12 million. Hotel occupancy rate is 80 per cent in the second quarter of 2013 as compared to the same quarter in 2012 it was 76 per cent. The value of Dubai foreign trade in the first half of the year achieved new level of records of 679 billion Dirhams as compared to 584 billion Dirhams with the increase rate of trade by 16% in the first half of the year 2013. Imports also touched the record of 406 billion Dirhams as compared with 349 billion for the same period of last year.

All these reports suggests that Dubai once again back on track, with the visionary thinking of H.H Sheikh Mohammad bin Rashid Al Makhtoum the UAE economy's vacuum now starts filling by attracting Foreign Direct Investment (FDI).


Thanks,



Muhammad Anas
Business Consultant
muhammad.anas@adamadvisors.com
+971-507045733








2A, Building 6 |  Gold & Diamond Park
PO Box 183827 | Dubai | United Arab Emirates
Switchboard:  +971 4 341 9701   |  Extension 150
Website: www.adamadvisors.com