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Bitcoin is often referred to as ‘digital gold’ to indicate its utility as a store of value. However, rapid price swings in its brief decade-long history have concerned would-be investors keen on exploring it as a stable form of investment.

This is why the concept of gold-backed cryptocurrencies became popular. To put it simply, gold-backed cryptocurrencies are simply defined as a monetary system where a currency is directly linked to physical precious metals.

“Digital coins or cryptocurrency tokens issued with its value correlated to gold gives these cryptocurrencies extra stability compared to other digital assets, which lack inherent value and have high price volatility,” explained Brian Deshell, a UAE-based cryptocurrency trader and analyst.

“What this means is that the price of gold-backed cryptocurrencies will never drop below that of the precious metal that backs them, which in this case is gold. This greater price predictability and stability means they’re sometimes referred to as ‘stablecoins’.”

Why are gold-backed cryptocurrencies getting popular now?
While cryptocurrencies such as Bitcoin and Ether offer benefits such as not requiring an intermediary institution to send payments anywhere and to anyone, one key drawback is that cryptocurrencies’ prices are unpredictable and have a tendency to fluctuate, often wildly.

“The volatility of cryptocurrencies makes them hard for everyday people to use. Generally, people expect to be able to know how much their money will be worth a week from now, both for their security and their livelihood,” added Deshell. “This is why gold-backed crypto is more popular now.

“Cryptocurrency’s unpredictability comes in contrast to the generally stable prices of government-issued currencies or other assets, such as gold. Currency values do change over time, but the day-to-day changes are often more drastic for cryptocurrencies, which rise and fall in value regularly.”

But this is not the first instance of gold-backed money. In 1861, such currencies were created to help stabilise economies given gold’s importance for central banks and governments as a resource. This ended after governments couldn’t keep track when people started to hoard gold during recessions.

Success of gold-backed crypto rides on recent boom in gold prices
“When considering investing in gold-backed cryptocurrency, it’s important to look at the value of precious metals in recent times and how the success of such cryptocurrencies are highly dependent on the rise and fall in costs,” explained Zubair Shakeel, a UAE-based investment manager.

In early 2022, gold prices increased to near-record levels exceeding $2,000 (Dh7,346) per ounce. However, by the end of 2022, the value had dropped by more than 20 per cent. In the beginning of 2023, there was a trend reversal of gold as it endured a series of highs and lows.

In contrast to the price fluctuations of gold, the price of Bitcoin swung much more dramatically. For instance, prices were once down by 50 per cent in mid-2021, but prices doubled just two weeks later. Late 2021, Bitcoin reached an all-time high, but a month later, prices crashed 30 per cent.

“As crypto price swings are more extreme, it generates unreliable investment returns. Investors can still get excited by the growth in the value of the precious metal, so gold-backed crypto offers better returns. The higher the value of gold, the stronger and more stable the asset is,” added Shakeel.

“Gold is a safe investment as it has very low price volatility. It is also not linked with other assets, so it is less susceptible to market flux during times of economic uncertainty. These attributes have made gold-backed cryptocurrencies an incredibly attractive investment option in recent years.”

Gold-backed cryptocurrencies offer stability, but not without risks
While there are numerous benefits of crypto backed by gold, these are largely linked to its stability compared to other options like Bitcoin or other cryptocurrencies. Also, the price fluctuations of gold-backed crypto, as a whole, are easier to understand as opposed to extreme swings of Bitcoin prices.

“Although digitalised precious metals are typically superior compared to traditional physical bullion assets, in most cases, they do not offer any benefits that are unique to what crypto or precious metals are already offering,” explained Deshell.

“Historically, they have off late recorded lackluster growth and therefore offer limited earning opportunities on the vast majority of digital currency backed by gold. This results in other assets, like stocks, bonds, or rental properties, appearing as a more attractive prospect for investors.”

While investors don’t need to worry about physical gold getting stolen or tampered with, Deshell added that there are cybersecurity risks to investing in cryptocurrency. “Investors should take caution to avoid fraudulent trading platforms. This could leave their accounts compromised.”

Source:https://gulfnews.com/your-money/cryptocurrency/cryptocurrencies-are-behaving-more-like-gold-as-volatility-eases-heres-why-1.1666963840252

Egypt is emerging as a real estate investment hotspot, according to analysis by Knight Frank MENA.

With Middle East Sovereign Wealth Funds looking to invest up to $120bn in Egypt, the real estate sector in Cairo, in particular, could flourish.

Amid the post-pandemic landscape, a revitalised global interest in Africa has emerged, underscored by significant investment commitments from major players.

Egypt real estate investment
The UK’s $2bn commitment to sustainable projects spanning the continent, alongside engagements from other global powers, highlights the renewed allure of key hub cities such as Lagos, Nairobi, Cairo, Johannesburg, and Accra.

The report spotlights Egypt’s real estate market, particularly Cairo, as an outstanding prospect for investment.

Recently added to Knight Frank’s Africa network, Egypt’s market shines as North Africa’s rising star.

Middle East Sovereign Wealth Funds have articulated plans to infuse up to $120bn into the country, indicating their strong confidence in the region’s market growth.

Zeinab Adel, Partner – Head of Egypt Office, said: “With a population exceeding 109.3m, Egypt stands as an alluring prospect that beckons us. In the heart of this historic land lies an extraordinary opportunity, one that resonates strongly with the GCC market and Middle Eastern buyers alike.

“Egypt’s magnetic blend of rich heritage, strategic geographical location, and burgeoning economy propels it to the forefront of investment destinations.”

Cairo alone is home to more than 20 million people, making it a bustling metropolis. The country’s impressive portfolio of approximately 2 billion square feet of active real estate, , offers immense potential for growth.

Cairo’s real estate landscape centres on a thriving residential sector.

In 2022, total real estate investments in Cairo soared to $20bn, with $16bn dedicated to the residential sector, attesting to heightened demand for housing.

Simultaneously, average residential property prices increased around 10 per cent during the same year, affirming the sector’s burgeoning interest.

During 2021 alone, the UAE invested in 71 projects worth $5.6bn, with the most significant being The Agtech Park in Egypt, where UAE’s Abu Dhabi Fund for Development (ADFD) supported the establishment of an agricultural technology (agtech) park to enhance agricultural productivity and promote innovation in the sector.

The country’s North Coast captures attention as a second homes market, projecting sustained demand.

Capital appreciation potential, attractive rental yields in foreign currencies, and surging GCC buyer interest fuel this demand.

Faisal Durrani, Partner – Head of Middle East Research at Knight Frank, said: “Egypt has always held a special place in the minds of GCC investors and we are starting to see a demand renaissance of sorts, with GCC buyers increasingly looking at the Egyptian second homes market, particularly on the north coast of the country.

“Clearly, the weakness of the Egyptian pound, the relatively affordable home values when compared to major cities in the Gulf and the pleasant summer climate on the Mediterranean coast are adding to the country’s attractiveness.

“This renewed demand comes hot on the heels of the $78bn in investments committed by public and private sector entities from the GCC over the last 18-months or so.”

Source:https://www.arabianbusiness.com/industries/real-estate/egypt-eyes-120bn-investment-boom-as-middle-east-drives-real-estate-investment

Dubai’s ultra-luxury property sector saw 176 high-end homes sold for AED3.1bn ($845m) in the first half of the year, according to Unique Properties analysis.

The Dubai real estate agency also reported that 219 homes sold in the premium price range in the past year.

This places Dubai as the fourth most active city in the world for ultra-luxury real estate, according to data from global real estate consultancy Knight Frank.

Ultra-luxury Dubai property
The city continues to solidify its position and attract investors from around the world.

Dubai has the largest population of wealth residing in the Middle East.

Recent data indicates that there are 68,400 millionaires, 206 centi-millionaires – individuals with a net worth of at least AED367m ($100m).

Unique Properties also said Dubai has 15 billionaires.

Combined, this highlights a 62 per cent increase in the number of UHNWIs (ultra-high-net-worth individuals) from 2012 to 2022.

Across the Middle East, UNHWI growth is expected to surge 24 per cent over the next five years.

In turn, the supply and delivery of luxury residential units will also see a notable uptick.

Knight Frank also reported that 9,717 UHNWIs are currently based in the Middle East and this figure is expected to reach over 12,000 by 2026, with the majority of these individuals heading to Dubai as their primary residential option and contributing to not only the city’s property sector but also its overall economy.

Arash Jalili, Founder and CEO of Unique Properties, said: “Dubai has continued to push the boundaries of what people can expect when they come here from all over the world.

“The city provides expats with both top luxury units and strong investment opportunities for a comfortable and safe lifestyle, while also ensuring a good return on investment for their money.

“As the city continues to cement itself as the top destination in the Middle East and a preferred destination for the world’s highly-affluent, we are no longer looking at millionaires entering the market.

“Our attention has now also shifted to focus on centi-millionaires and billionaires who are looking to invest in luxury villas and penthouses in high-end areas, such as Palm Jumeirah and Emirates Hills.

“The city’s commitment to constant growth and security will continue attracting the world’s richest to come and invest here regardless of the price.”

Source:https://www.arabianbusiness.com/industries/real-estate/dubai-real-estate-specialists-ignoring-millionaires-to-focus-on-billionaires-as-176-homes-sold-for-845m

The Dubai real estate sector recorded transactions valued at AED23.1bn ($6.3bn) in the week ending August 55, according to data from the city Land Department.

In total there were 3,229 transactions.

183 plots were sold for AED1.33bn ($362m) and 2,361 apartments and villas were sold for AED5.77bn ($1.6bn).

Dubai real estate this week
The top three transactions for land were a plot in Madinat Dubai Almelaheyah sold for AED93.37m ($25.4m), followed by land sold for AED76m ($20.7m) in Palm Jumeirah, and a plot sold for AED64.1m ($17.5) in Al Barsha South Second.

Madinat Al Mataar recorded the most transactions for the week, with 51 sales transactions worth AED182.3m ($49.6m).

This was followed by Al Hebiah Fifth with 24 sales transactions worth AED59.3m ($16.1) and Saih Shuaib 1 with 19 sales transactions worth AED33m in third place ($8.9m).

The top three transfers for apartments and villas were all in Palm Jumeirah.

First up was a villa sold for AED65m ($17.7m), followed by other homes sold for AED57m ($15.5m) and AED54m ($14.7m).

The sum of the amount of mortgaged properties for the week was AED15.75bn ($4.3bn), with the highest being a massive AED14bn ($3.8bn) for land in Jebel Ali Industrial First.

121 properties were granted between first-degree relatives worth AED301m ($82m).

Source:https://www.arabianbusiness.com/industries/real-estate/dubai-real-estate-market-records-6-3bn-of-land-and-property-deals-this-week

Saudi Arabia’s franchise sector is set to enhance its contribution to the Kingdom’s gross domestic product with an initiative by the Small and Medium Enterprises General Authority. This initiative aims to unlock multiple opportunities within the sector.

Also known as Monsha’at, the authority has organized the Commercial Franchise Week, a part of a series of business weeks, in collaboration with various government agencies, banks, and sectors dedicated to trademark allocation for small and medium enterprises.

Scheduled from Aug. 20-24, the event is designed to showcase key initiatives and programs that offer support to entrepreneurs, the Saudi Press Agency reported.

Source:https://www.arabnews.com/node/2358171/business-economy

Affirming its commitment to the global fraternity, the Saudi Fund for Development has laid the foundation stone to kick off the construction of the Mangoky Bridge in Madagascar, an island country lying off the southeastern coast of Africa.

The SFD has contributed $20 million as a soft loan to the project, alongside contributions from institutions and development funds in the Arab Coordination Group and the government of Madagascar, the Saudi Press Agency reported.

The Mangoky Bridge will connect the Atsimo-Andrefana and Menabe regions, home to Madagascar’s most vital agricultural and tourism assets.

The bridge is also expected to reduce the travel time between these two regions, thus helping local farmers to get their products to the market much more quickly.

Mohammed Al-Shammari, the SFD’s director general for Africa operations, laid the foundation stone in the presence of Andry Rajoelina, president of Madagascar.

Several high-level officials, including Christian Ntsay, prime minister of Madagascar, were also present during the event.

During his speech at the event, Rajoelina thanked the fund for contributing to constructing the 878-meter bridge and other development projects in his country.

The fund has been contributing to developmental projects across the globe since its inception in 1974.

The SPA report also noted that the fund had provided six loans to finance six development projects in Madagascar worth $69 million.

In January, the fund signed a deal with Pakistan’s Economic Affairs Ministry to finance oil derivatives amounting to $1 billion.

Saudi Arabia’s helping hand to Pakistan came when the Asian nation was battling a tough economic crisis amid dwindling forex reserves and a rapidly depreciating national currency.

In the same month, the fund also forayed into Caribbean countries by signing an $80 million financing agreement for the University of the West Indies expansion project at Five Islands in Antigua and Barbuda.

The financing deal aimed to reach sustainable development goals in the Caribbean, promote scientific innovation and add additional educational facilities to the university.

Source:https://www.arabnews.com/node/2358176/business-economy

The annual inflation rate in the Sultanate of Oman reached 0.69 percent at the end of June 2023, according to the monthly consumer price survey data issued by the National Centre for Statistics and Information (NCSI).

The inflation rate was driven by the increase in most of the main groups that make up the consumer price index. The prices of the food and non-alcoholic beverages group rose by 2.18 percent, due to the increase in the prices of most of the group’s components, led by milk, cheese and eggs by 9.78 percent, fish and seafood by 5.19 percent, oils and fats by 4. 81 percent, fruits by 4.3 percent, other foodstuffs by 3.91 percent, bread and cereals by 2.34 percent, and non-alcoholic beverages by 0.67 percent. Meat prices decreased by 0.12 percent and vegetables by 5.65 percent.

The prices of restaurants and hotels groups increased by 3.68 percent, furniture, fixtures and household equipment, and routine home maintenance work by 2.93 percent, miscellaneous goods and services by 2.33 percent, tobacco by 2.11 percent, culture and entertainment by 1.73 percent, health by 1.28 percent, and clothes and shoes by 0. 56 percent, and education by 0.05 percent, and the housing, water, electricity, gas, and other types of fuel group, which rose by 0.02 percent. The prices of the transportation group decreased by 1.74 percent, and communications by 0.22 percent.

The inflation rate increased by 0.23 percent compared to the previous month as a result of the increase in food and non-alcoholic beverages groups by 0.97 percent, led by tobacco by 0.35 percent, culture and entertainment by 0.28 percent, miscellaneous goods and services by 0.23 percent, and furniture, household equipment and household maintenance by 0.03. percent, compared to a decrease in the prices of transport groups by 0.1 percent, communications by 0.05 percent, restaurants and hotels by 0.04 percent, and the stability of prices for housing, water, electricity, gas, and other types of fuel, clothing, shoes, health, and education.

Al Buraimi Governorate recorded the highest inflation rate among the governorates at 1.3 percent, compared to the lowest inflation rate in the North Al Sharqiyah and South Al Sharqiyah Governorates at 0.2 percent. Muscat Governorate recorded an increase in inflation by 1 percent, while Al Dakhiliyah Governorate recorded 0.7 percent, Dhofar Governorate 0.7 percent, Al Dhahirah Governorate 0.6 percent, and North Governorate. Al Batinah 0.4 percent.

Source:https://timesofoman.com/article/134420-omans-annual-inflation-rate-reaches-069

The total domestic production of natural gas amounted to 26.19 billion cubic metres until the end of June 2023, an increase of 2.3 percent compared to the same period in 2022, when the total amounted to 25.60 billion cubic metres.

Statistics issued by the National Centre for Statistics and Information (NCSI) showed that industrial projects accounted for 58.7 percent of the natural gas uses in the Sultanate of Oman at 15.39 billion cubic metres until the end of June 2023.
The total use of natural gas for oil fields amounted to 6.76 billion cubic meters, power plants at 3.89 billion cubic metres and industrial areas at 131.50 million cubic metres.

It is noteworthy that the non-associated production of natural gas, including imports, amounted to 20.89 billion cubic metres, while the associated production of natural gas amounted to 5.30 billion cubic metres.

Source:https://timesofoman.com/article/134421-omans-natural-gas-production-rises-23

“The agreement aims to address the gas supply crisis for power plants, while tackling payment issues and complications arising from US sanctions,” said the statement from the prime minister’s office.

Iraq is reliant on Iranian gas for a third of its energy needs, but is unable to directly pay for it as a result of US sanctions on Iran, forcing the country to resort to a complicated mechanism for transferring funds.

According to the mechanism, payments were to be held in a bank account and – following approval from Washington – be used by Tehran to fund imports of food and medicines, a method which left Iraq in heavy arrears.

Earlier this month, Iran halved its supply of gas to Iraq because of unpaid bills of more than $12 billion, according to Sudani.

Speaking in a televised address on Tuesday, he stated that “as the American side did not give the necessary permission for the transfer of funds… the supply of Iranian gas was stopped.”

“Because of the transfer mechanism and its complexity, we were unable to obtain authorisation to transfer these outstanding payments so our Iranian neighbour could continue to supply us” with gas, he continued.

He added, however, that a recent payment to Iran of around $1.9 billion had been made and that as a result of Tuesday’s agreement “we will be able to guarantee that the gas will continue to flow.”

In recent years, Iraq has seen widespread unrest and demonstrations, triggered in large part by failing energy supplies during intensely hot summers.

Corruption, crumbling infrastructure and continuing instability after decades of conflict and sanctions have left the country’s energy sector in a dire state, despite having some of the world’s largest oil reserves.

Baghdad has recently also been exploring several possibilities for reducing reliance on Iranian gas, such as imports Qatar and recovering flared gas from oilfields.

There has also been criticism of Washington for its refusal to allow the release of funds to Iran.

On Sunday, The Coordination Framework – a coalition of Iran-linked Shia parties that form the largest bloc in parliament – called on the government in a “to contact the US side and urge the immediate unlocking of the unpaid bills related to Iranian gas imports”.

Source:https://ifpnews.com/iraq-iranian-gas-crude-oil/

While Iraq was teetering on the edge of a full-fledged internal conflict last summer, today, the country seems to enjoy a level of stability not seen in the past two decades.

This is due to a shared desire across the political spectrum, particularly within the Shia community, to stabilise the country. After last year’s intense power struggle among Shia factions, efforts were made to minimise conflicts between armed groups, suppress critical voices, and reduce public dissent. As a result, the government of Mohammed Shia al-Sudani is enjoying relative peace and calm which has given it a chance to push through its agenda.

On June 12, it passed a generous budget through the parliament – the biggest in Iraq’s history – which is supposed to fund its plan to expand essential services, such as electricity and water provision and build new infrastructure and housing in major cities. But these initiatives are by far not enough to address the severe political, socioeconomic and climate challenges the country is facing.

Those necessitate major reforms in the political and economic sectors, which the government does not have the mandate to undertake. Sooner or later, the suppressed political crisis will resurface.

Big budget, little legitimacy
Last year, the Western sanctions imposed on Russia over its invasion of Ukraine, combined with oil supply shortages, caused a surge in oil prices, with the average price per barrel reaching $100.

This resulted in handsome profits for energy exporters, including Iraq, which saw its oil revenues jump from $75.5bn in 2021 to $115bn in 2022.

This extra income flow allowed the Iraqi government to put together the largest budget in the country’s history, allocating $153bn for the year 2023, which the parliament approved on June 12. This is a 72 percent increase compared with the 2021 budget – the last one to be passed by the Iraqi legislature.

The biggest chunk of this money – about $58bn – will go to paying the wages of public employees and pensions. The government has said that it plans to hire more than half a million Iraqis into the already over-inflated public sector to help resolve the problem with unemployment.

A large sum – about $23bn – has also been allocated to the security sector, which has traditionally been well-funded. Some $2.8bn of it is dedicated specifically to the Popular Mobilisation Units (PMUs) militia.

By comparison, five ministries concerned with providing public services, including health and environment, social affairs, education, higher education and water resources were given $24bn in total. This amount is by far not enough to address urgent problems such as pervasive power cuts across the country, declining access to clean water, pollution and land degradation, crumbling education infrastructure, severe shortages of medical staff, inadequate health service provision, etc.

The public works and infrastructure projects al-Sudani’s government has announced are unlikely to make much of a difference.

By focusing financial resources on public employment and security structures, his cabinet is perpetuating the status quo, keeping various vested interests satisfied. It is ensuring short-term stability by consolidating the patronage networks that dominate Iraqi society, granting various political parties and figures the opportunity to employ their loyal supporters. Armed groups are also pacified not only by being granted direct funding but also by being given room to infiltrate various institutions and benefit from public works projects through kickbacks.

This is hardly surprising given that al-Sudani’s government does not really have the mandate to push through reforms. The prime minister operates as a consensus leader, supported by the Coordination Framework, a coalition of mostly Shia parties, some with pro-Iran leaning.

The interests they represent were challenged by the major protests in 2019-2020, which rejected the entrenched political elites and foreign interference in the affairs of the country. Some of these parties, like the Fatah Alliance, are linked to armed groups, which were accused of using brutal violence to suppress the demonstrations.

For that, they were punished at the national polls in 2021. Specifically, the Fatah Alliance saw a significant decrease in their parliamentary seats, dropping from 48 in 2018 to a mere 17.

Despite losing the elections, they managed to gain power by thwarting the formation of a national majority government by the Sadr Movement, the Kurdistan Democratic Party, and the Sunni “Sovereignty Alliance”, which performed well in the elections.

Backed by forces that lack legitimacy in the eyes of the majority of Iraqis, the government is making no significant effort to address the grievances of the Iraqi people. It is simply presiding over the redistribution of the windfall oil profits among the elites who are maintaining peace in exchange.

Short-term stability, long-term disaster
While stability is important, the current Iraqi system – dominated by patronage networks and armed groups – cannot sustain it for long, as it is inherently dysfunctional. Such systems tend to operate smoothly only so long as there is sufficient revenue that satisfies the interests of the elites and sustains basic state functions. However, when financial resources dwindle, the elites no longer perceive short-term stability as beneficial to their interests.

It is crucial to note that Iraq’s financial stability is heavily dependent on the price of oil, which is an unstable factor. The country also has a significant budget deficit, estimated at $49bn in the 2023 budget. In the event of a decline in the price of oil, the country would face significant financial difficulties which could quickly translate into political instability.

Furthermore, the current state of affairs – while appearing positive to some observers – is exacerbating Iraq’s major problems. Pouring money into armed groups only strengthens them and further weakens the state. It makes it that much more difficult – if not impossible – for the government to get back monopoly over the use of force in the country.

Throwing money at the state security sector without reforming it also contributes to fragmentation and susceptibility to politicisation, which enables its exploitation by domestic and foreign actors.

Expanding public sector employment does little to resolve the problems that cause joblessness, including a weak private sector and economic inefficiency.

The absence of reform in the public sector combined with big public spending also feed into patronage networks and strengthen parties and individuals that have little popular legitimacy.

All of this is incredibly damaging to Iraq and its future. It comes at a time when the country faces frightening levels of climate-change-related devastation: rising temperatures, soil erosion, intensified droughts, water scarcity, and relentless sand and dust storms. Iraq is ranked the fifth-most vulnerable country to climate change worldwide and it faces temperatures that increase seven times faster than the global average.

Severe climate change impacts are combined with other pressing challenges that trouble the lives of Iraqis, including limited access to safe and clean drinking water, pervasive pollution, energy insecurity, declining health care and education services, etc.

To tackle these problems, the Iraqi government needs to overhaul the public sector, fight corruption, restructure and reform state structures to increase transparency and efficiency and most importantly, redirect funds towards the key sectors: environment, health care, education and water works. Regrettably, its backers have no interest in engaging in the systemic change that is urgently needed in Iraq.

The windfall profits derived from oil are a missed opportunity to diversify Iraq’s revenue streams and build climate resilience within the country. Iraq urgently needs its population and infrastructure to be prepared for the escalating impacts of climate change.

The Iraqi political elite may be enjoying the oil revenues and the peace and quiet of its status quo but those will not last long. The protests of 2019 were the harbinger of what is to come. It is not a question of if Iraq will face severe turmoil, but when.

Source:https://www.aljazeera.com/opinions/2023/7/8/windfall-oil-revenue-is-buying-illusory-stability-in-iraq