Dubai Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum launched late on Thursday a AED1.5 billion economic stimulus package to support businesses over the next three months as the new coronavirus threatens to slow down the local economy.
Stock markets are plummeting, oil prices are plunging, travel is being restricted, events are being scrapped, jobs are being lost, millions are placed under quarantine.
But is it really all doom and gloom for the GCC?
Amidst all this anxiety spurring news, let me provide you with some realistic rays of hope. Today I’m going to share with you about the industries that are negatively and positively impacted by Covid-19.
Airlines in the Gulf region could see passenger numbers slump by 23 percent and revenues by nearly 5 billion due to the global spread of the new coronavirus.
The International Air Transport Association (IATA) said it now sees 2020 global revenue losses for the passenger business of up to $113 billion if it continues to spread at its current rate.
Emirates Group, which runs the world’s biggest airline by international traffic, earlier this week encouraged staff to take leave as the outbreak saps demand for travel.
Apart from sellers of products like N95 respirators, medical facemasks (that don’t really really help) and sanitizers, the pharma and healthcare sector are definitely profiting. We saw this is the US, when drug developer Moderna spiked 30% between Monday and Tuesday's trading sessions, beating out a plunging market by shipping the first coronavirus vaccine for human testing.
Companies in this region have taken the opportunity presented by the epidemic to diversify their portfolio – even if they don’t necessarily intend to make a profit. Regal Global Trading, for example, has announced plans to set up a factory in Dubai to manufacture affordable face masks and medical kits to be shipped to virus-stricken countries all over the world, particularly China.
Dubai’s hotel businesses are clearly hit by the global travel slowdown.
In February, hotel occupancy rates in the UAE were down 6.6% year-on-year, while revenue per available room was down 21.4%
Dubai's Emaar Properties declared force majeure on Monday, announcing it would stop taking bookings at three of its hotels from March 15 to August 31.
The Dubai Media Office announced on Twitter that all events from March 15 until the the end of the month have been suspended.
Abu Dhabi has also announced banning all events and night club operations until the end of March.
Concerts, sporting events and industry conferences have been cancelled or postponed.
Laughter Factory, the Middle East’s longest-running comedy night saw a growth in attendance by 30%. In tough times, many Dubai residents are simply “in need of a laugh”. Despite the cancellation of one of her shows in Abu Dhabi, crowds at Laughter Factory events in Dubai have remained packed, with no decline from the evening’s average nightly crowd of 175 people.
The ongoing coronavirus epidemic may lead to reduced borrowing and lending, impacting banks that work in corporate and personal finance in Dubai and the Middle East.
The UAE’s Targeted Economic Support Scheme includes a 50-billion dirham aid package for banks in the country through collateralised, zero-interest loans. Banks will also be allowed to free up capital buffers, which will make another 50 billion dirhams in liquidity available to lenders.
There is always an uptick in cyberattacks during major news events or even holiday periods.
Although it might be too early to predict the financial impact the coronavirus will have on cybersecurity firms Kaspersky says the company has already seen a significant increase in demand for its security products and advisory services particularly from firms that have asked employees to work from home.
Speaking of which, Chennai-based Zoho, which provides cloud-based business solutions and announced recently that it will offer a remote work toolkit – known as Zoho Remotely – free for all its existing customers through July 1.
Microsoft UAE says demand for remote working platforms is likely to remain long after the end of the epidemic.
Companies that offer "stay-at-home" products and services are also benefiting from the outbreak, or at least not taking as big of a hit. And what’s the one thing you would do when you stay at home? Exactly Netflix!!
Analyst Michael Olson of Piper Sandler, for example, analysed search trends for Netflix on Google and believes that the company’s subscribers from the US and Canada alone could grow by as much as 3.8 percent year-on-year – more than twice that previously forecast. The data also suggests that international subscribers may grow 30.9 percent compared to the same quarter last year, above expectations for growth of 29.9 percent.
(Source: Arabian Business YouTube channel)