This is a PDF report.

This is a PDF report.

The Q112 BMI UAE Retail report forecasts that the country?s retail sales will grow from an estimatedAED113.37bn (US$30.87bn) in 2011 to AED156.53bn (US$42.62bn) by 2015. Key factors behind theforecast are strong underlying economic growth (especially if the debt overhang in Dubai is resolved),increasing household consumption, growing acceptance of modern retailing concepts and expatriatewealth.The UAE?s nominal GDP in 2011 is estimated to be US$342.78bn. BMI predicts average annual GDPgrowth of 3.9% between 2011 and 2015. With the population increasing from an expected 7.9mn in 2011to an estimated 8.4mn by 2015, GDP per capita is forecast to rise to US$53,646 by the end of the forecastperiod.Discrepancies in wealth across the country are evident in GDP per capita statistics (which BMI estimatedthrough 2005 census population and 2008 GDP data), ranging from as high as US$110,251 in Abu Dhabito as low as US$15,451 and US$20,861 in Ajman and Ras al-Khaimah respectively.Average household spending power in the UAE stood at US$14,400 per annum in 2008, according toproperty consultant Colliers International. Emirati households accounted for the majority of thisspending with an average of US$23,000, while Western, other Arab and Asian households had annualspending power of US$19,500, US$13,500 and US$10,000 respectively.While Emiratis contribute to retail sales, the buying power of the country?s expatriate residents is themajor source of success, according to a study by Indian research firm RNCOS. Tourism is also a massivefactor in stimulating retail growth, with the UAE expecting the number of tourists to have totalled morethan 11mn in 2010.Growing urbanisation is another factor in the buoyancy of the retail sector. Abu Dhabi in particular ishighly urbanised, with the Urban Planning Council (UPC) projecting that Abu Dhabi City?s populationwill rise to 1.3mn by 2013. In 2005, 85.5% of the UAE?s population was classified by the UN

BMI View: Clean coal, nuclear and renewables all form part of the long-term energy plan, although itwould be a surprise to see the UAE having operational reactors during the current decade. The emiratesappreciate the need to cap oil and gas use in power generation, so new clean coal technology is to beused over the medium term. There is growing momentum behind the use of renewables, with internationalbacking being sought for ambitious programmes.It has been estimated that the UAE?s electricity sector will require at least US$8bn in investment over thenext six to eight years in order to meet growing demand, and the government has plans to expandinstalled capacity by more than 50% during the current decade.Key trends and recent developments in the UAE electricity market include:During the 2011-2021 period, the UAE?s overall power generation is expected to increase by an annualaverage of 5.03%, reaching 138.5TWh. Driving this growth is an annual 4.67% gain in gas-fired and a0.90% rise in oil-fired generation, accompanied by rapid growth in renewables-based electricity supply,albeit from a very low base. It is assumed that nuclear generation will be available from 2021.The UAE has reconfirmed its renewable energy aspirations, revealing that the government aims to boostinvestment in clean energy technology over the next five years and attract AED367bn (US$100bn) ofinvestment in alternative and sustainable energy projects by 2020.Following an increase in 2011 real GDP of an estimated 3.3%, BMI forecasts average annual growth of3.8% between 2011 and 2021. The population is expected to rise from the current level of 7.9mn to 9.3mnduring the 2011-2021 period, and net power consumption looks set to increase from 73.4TWh to96.3TWh by 2016, rising further to 119.6TWh by 2021. During the 2011-2016 period, the average annualgrowth rate for electricity demand is forecast at 5.44%, but slowing later in the decade to an average4.71% in 2016-

The UAE ranks as one of the larger and more dynamic of the insurance markets of the Middle East andNorth Africa. Over the long-term, there has been very steady growth in premiums ? thanks in part to thegrowth and diversification of the economy, and in part to developments such as the 2008 introduction ofcompulsory health insurance for expatriates resident in the country. The UAE is also one of the mostimportant markets for takaful (ie shari?a- compliant insurance), which has been expanding even fasterthan the overall insurance sector.Relative to its peers in the region, the UAE?s insurance sector is also unusual in that there are twoseparate regulatory regimes. Offshore business is undertaken by companies that are established in theDubai International Finance Centre (DIFC) and regulated by the Dubai Financial Services Authority(DFSA). Onshore business is regulated by the Insurance Authority. Although the two regulators signed amemorandum of understanding (MoU) at the end of April 2011, an organisation that is regulated by theDFSA does not automatically have the right to undertake onshore business in the rest of the UAE.The latest figures, published by the UAE?s listed insurance companies in relation to H111 and the firstthree quarters of 2011, indicate that the sector as a whole is expanding at only single-digit rates. Growthwould be minimal but for the explosive growth of family takaful contributions and motor contributionswritten by the Islamic Arab Insurance Co (Salama). Salama also stands out as one of the largest takafuloperators globally.The stagnation of gross written premiums is not a bad thing. Many of the insurance companies areresponding to highly competitive conditions in an overly fragmented industry. Retention ratios have beenrising ? and quite sharply ? relative to 2010: the companies have become a lot more choosy about therisks that they will underwrite and the price at which they shall do so. In short, net wri