Foreign assets ratchet up to Dhs392.4 billion by end of Q1: CBUAE

Business Bureau, Gulf Today

The foreign assets held by the Central Bank of the UAE increased to Dhs392.4 billion by the end of the first quarter this year, a growth of 1.1%, a CBUAE report shows.

The apex bank ascribed the growth mainly to Dhs85.9 billion quarterly increases in foreign securities and other foreign assets by 25.7 per cent (Dhs9.2 billion), overshadowing a reduction in current account balances and deposits with banks abroad by 26.1% (Dhs90.7 billion).

From March 2020 to March 2021, Central Bank Foreign Assets increased by 0.4%, YoY, added the report.

With regards to the country’s twin bourses, the report said Abu Dhabi’s quarterly average Financial Market Index rose by 17% during the first quarter of 2021. The quarterly average Market Capitalisation of companies listed at the Abu Dhabi Securities Exchange (ADX) surged by Dhs101 billion reaching Dhs826.7 billion at the end of the first quarter of 2021.

The Quarterly Traded Value also rose by 74.7% during the first quarter of 2021 reaching Dhs50.3 billion. However, on an annual basis, the Abu Dhabi Financial Market Index fell by 3.3%.

Dubai’s quarterly average Financial Market Index showed a growth of 9.2% during the first quarter of 2021. The quarterly average Market Capitalisation of companies listed on the Dubai Financial Market (DFM) increased by Dhs25.2 billion reaching Dhs 353.9 billion by the end of the first quarter of 2021. Quarterly Traded Value rose by 4.8% during the first quarter of 2021 reaching Dhs 15.4 billion. On an annual basis, the Dubai Financial Market Index decreased by 14.1%.

In the meantime, Money Supply M1, which comprises Currency in Circulation outside Banks (Currency Issued - Cash at banks) plus Monetary Deposits, increased by 7.1% QoQ during the first quarter of 2021. On an annual basis, there was a 18.4% YoY climb in the monetary aggregate M1, reaching Dhs642.3 billion at the end of March 2021.

Money Supply M2 (M1 plus Quasi Monetary Deposits (Resident Time and Savings Deposits in Dirham, plus Resident Deposits in Foreign Currencies)), also increased by 0.6% QoQ during the first quarter of 2021.

On an annual basis, there was a 2.2% YoY increase in Money Supply M2, reaching Dhs1,487.5 billion at the end of the first quarter of 2021. Money Supply M3 (M2 plus government deposits at banks and at the Central Bank) fell by 0.2% QoQ during the first quarter of 2021.

On an annual basis, there was a 3.1% YoY growth in Money Supply M3, reaching Dhs1,766.4 billion at the end of March 2021.

Typically, the money supply M2 is considered the best indicator for the availability of liquidity in the economy, as it comprises currency in circulation outside banks, in addition to various deposits of all the resident sectors in dirham denomination, except for the deposits of the government sector in the UAE.

Statistical data show that at the end of the first quarter of 2021, there was a QoQ increase in M2. The rise in M2 during the first quarter of 2021 was mainly due to a 0.6% quarterly increase in the non-government resident deposits standing at Dhs1,391.6 bn by the end of March 2021.

Meanwhile, Abu Dhabi Islamic Bank (ADIB), a leading financial institution, has provided structured Islamic financing to Rasmala Long Income Fund to support its acquisition of a supermarket investment in Hattersley, Greater Manchester.  

The property, which was constructed in 2012, extends to 100,365 sqft and is leased to Tesco Stores Limited (the UK’s largest supermarket chain) on a 25-year full repairing and insuring lease with 15.8 years remaining (with no tenant break options), at a rent of £1.46m (Dhs 7.59m) per annum which is subject to 5 yearly index linked upwards only rent reviews.

Paul Maisfield, Head of UK Real Estate at ADIB, said: “We are delighted to have supported Rasmala on their latest transaction.  There are clear synergies with our financing product and the objectives of the Long Income Fund to generate income and capital growth by investing in a Sharia compliant manner into a diversified portfolio of real estate assets benefitting from secure income derived from long leases.

The UK grocery market has demonstrated strong resilience during the pandemic providing a secure investment alternative for our clients looking for long-term income security, particularly at a time when appetite for risk has faded in the face of an economic downturn. We are looking forward to continuing to support Rasmala in the execution of their UK commercial real estate investment strategy”.

Eric Swats, Senior Executive Officer of Rasmala, commented, “Tesco superstore is an excellent addition to Rasmala’s European real estate portfolio, taking our real estate AUMs to over USD 1 billion. We are delighted to partner with ADIB and look forward to working with them on expanding our international real estate portfolio.”

ADIB has strong track record in offering bespoke and competitive Sharia-compliant property financing solutions for its clients having built up a portfolio of financing assets in the UK of over AED 2 Billion (£400M) over the last three years.

Rasmala Long Income Fund was established in 2018 and has a diversified portfolio of real estate assets covering the UK, Europe and North America with a current Net Asset Value in excess of $250M.