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Middle East Edition
7th May 2024
 
THE HOT STORY
Saudi Arabia rises in global talent rankings
Saudi Arabia has moved up two spots on the list of preferred countries for workforce mobility, according to the "Decoding Global Talent 2024" report by Boston Consulting Group (BCG). The report highlights the success of Saudi Arabia's strategic initiatives in positioning itself as a global hub for professionals. Christopher Daniel, managing director and senior partner at BCG, stated that Saudi Arabia is playing a pivotal role in narrowing the global talent shortage. He said the kingdom offers attractive job opportunities, income, tax benefits, and a secure environment, making it a compelling destination for professionals seeking growth and fulfillment in their careers. The report also notes that younger generations and individuals from rapidly expanding populations are particularly attracted to global mobility.
STRATEGY
Dubai financial centre expects record number of firms to set up in Middle East business hub
Dubai's financial centre is anticipating a surge in new firms setting up in the Middle East business hub this year. The Dubai Financial Services Authority has already issued 112 new financial services licenses - a 50% increase compared to the previous year. The rise in activity in the freezone reflects Dubai's economic resurgence following the Covid pandemic. The city has attracted a range of newcomers, including Russian billionaires, property investors, and crypto firms, and is becoming a favoured destination for hedge fund traders due to its ease of doing business, tax-free status, and global travel hub allure. Meanwhile, the United Arab Emirates' exit from the Financial Action Task Force's "grey list" has made it easier for banks to do business. "Of the 29 globally systemically important banks in the world, we have 27 doing business in DIFC," said Ian Johnston, CEO of the Dubai Financial Services Authority.
Deutsche Bank plans to double assets in Southeast Asia and Middle East
Deutsche Bank plans to double its assets for rich families in Southeast Asia and the Middle East over the next five years. The bank is allocating resources to these regions due to increasing investment interest between prosperous families in Saudi Arabia, the United Arab Emirates, Southeast Asia, and Hong Kong. Deutsche Bank's private banking head, Claudio de Sanctis, stated that the bank has hired significantly more in these regions, primarily from Credit Suisse. The Middle East and Southeast Asia have become more important for private banks due to challenges in China and Hong Kong. Deutsche Bank's strategy puts it in direct competition with UBS Group. Deutsche Bank currently manages €606bn in assets, while UBS oversees almost $4 trillion. Despite recent cuts in Asia, the Southeast Asia, India, and Middle East markets remain strategic drivers for the bank.
WORKFORCE
Saudi Arabia's private sector sees increase in job opportunities
Saudi Arabia's private sector has seen an increase in job opportunities, with the total number of employees reaching 11.27 million workers in April, according to official data. The Saudi National Labor Observatory report shows a net increase in citizen employment, with 18,535 individuals joining the private sector workforce. The report highlights a dynamic workforce of over 9.9 million male workers and more than 1.3 million female workers, representing diverse nationalities. The private sector continues to expand its workforce, creating opportunities for Saudi citizens. The economic diversification efforts in Saudi Arabia, including projects like NEOM, have transformed the country into a hub for employment opportunities.
'Dry promotions' are the latest workplace trend
The Times of India reports that a new workplace trend called "dry promotion" is on the rise. It involves giving employees a raise in terms of designation and responsibilities, but no change in their salaries. Over 13% of employers in India have chosen to give dry promotions instead of increasing compensation, according to a report by Pearl Meyer. The comparable number was 8% in 2018. High-performing employees are left with few options - either accept the dry promotion or look for a job that compensates them fairly. It is suggested that employers can retain their best performing employees by instigating dry promotions in a positive way and showing appreciation through other means such as better learning and training opportunities or flexible working hours.
TECHNOLOGY
AI takes on CPA exam in landmark experiment
In a groundbreaking experiment, researchers have tested the capabilities of artificial intelligence (AI) by subjecting top AI models to the Certified Public Accountant (CPA) exam. The study, titled "Can LLMs Pass the CPA Exam? Evaluating Large Language Model Performance on the Certified Public Accountant test," provides a comprehensive assessment of AI's potential in the accounting profession. The research team evaluated the performance of AI models such as Google Gemini, ChatGPT-4, Claude, Mixtral, and Llama-2b on multiple-choice questions from the Becker CPA exam preparation suite. While some AI models showed promise, human accountants are not likely to be replaced as AI struggles with complex, open-ended questions. ChatGPT-4 excelled in financial reporting and regulation, while Claude Opus performed well in auditing. Llama-2b underperformed, indicating the need for further development. Lead author Will Zacher emphasizes that AI tools may handle routine accounting tasks, but skilled human accountants are still necessary for interpretation and strategic guidance. The AI models were tested on all sections of the CPA exam, with a passing score of 75% as the criterion for success.
CORPORATE
Consumer goods and banking sectors drive Q1 profits in Qatar
The net profits of listed companies in Qatar reached QR13.1bn ($13.59bn) in the first quarter, with the consumer goods and banking sectors driving considerable growth. The consumer goods and services sector reported a 29.51% year-on-year increase in net profit, contributing 3.66% to the overall net profitability. The banks and financial services sector contributed 57.63% of the total net profits, with a 9.42% annual increase. 
INTERNATIONAL
Peloton CEO steps down amid fresh round of layoffs
Peloton has announced the departure of chief executive Barry McCarthy, along with a restructuring that will see around 15% of its global workforce, or 400 employees, lose their jobs. The company plans to continue to close retail showrooms and make changes to its international sales plan, with the aim of reducing annual run-rate expenses by more than $200m by the end of fiscal 2025. Mr McCarthy, meanwhile, will be replaced on an interim basis by chair Karen Boone and director Chris Bruzzo. “This restructuring will position Peloton for sustained, positive free cash flow, while enabling the company to continue to invest in software, hardware and content innovation, improvements to its member support experience, and optimisations to marketing efforts to scale the business," the company said. The announcements came as Peloton announced third-quarter results. Sales in the three months to March 31st fell 4% to $718m, and it reported a net loss of $167.3m, or 45 cents per share, compared with a loss of $275.9m a year earlier.
Queensland parliament passes historic legislation decriminalising sex work
Queensland parliament has passed historic legislation decriminalising sex work in the Australian state, after decades of campaigning. However, advocates are concerned the hard-won reform could be overturned if the Liberal National Party (LNP) opposition wins government in October. The attorney general, Yvette D'Ath, who sponsored the bill, stated that "discrimination and stigma" were common in the industry. The new law regulates sex work the same way as all other businesses, imposing planning and workplace health and safety rules. The Queensland Council of Unions general secretary, Jacqueline King, warned that the LNP would face opposition from the united union movement and the sex work industry if it campaigns to criminalise the industry again. The legislation also establishes anti-discrimination protections for sex workers, providing an avenue for redress and sending a message that discrimination against sex workers is not acceptable.
Visa curbs bring fall in UK immigration
UK visas issued to skilled workers, health and care staff, and students have fallen by a quarter compared with last year, leading to a decline in Britain's record levels of immigration. The number of visas granted to these groups decreased from 184,000 to 139,100 in the first three months of this year. The tightening of rules on foreign students bringing family members has led to an 80% fall in dependant visas while the number of study visas issued also decreased significantly. The decline in visas for health and care workers is attributed to measures to strengthen the rules for companies sponsoring visas in the sector. Experts suggest that most of the decline would have happened even without the new policies. Labour said the policy changes had come too late and that they lacked accompanying measures to boost skills in the domestic workforce to fill labour shortages.
Brazil to increase income tax exemptions for individuals
Brazil's President Luiz Inacio Lula da Silva has announced plans to substantially increase income tax exemptions for individuals by the end of his term. The exemptions will apply to those earning up to 5,000 reais ($963) monthly and will be implemented by 2026. Lula emphasized that the tax breaks are intended to benefit those who work and depend on their salaries, rather than the wealthy. The move comes after a Brazilian Supreme Court justice extended payroll tax exemptions for 17 sectors of the economy. Lula's administration aims to provide tax relief for the poor while ensuring companies commit to creating jobs. The president has already approved a change that expands the income tax exemption cap to those earning up to two minimum wages per month. However, further increasing the exemption ceiling may pose challenges as the government strives to balance the public accounts. The Finance Ministry estimates a fiscal impact of 3 billion reais ($577.6m) for this year.
OTHER
Teenage girls' popularity linked to lack of sleep
Scientists have found that popular teenage girls are more likely to experience insomnia symptoms and sleep less than their peers, according to a study published in the journal Frontiers in Sleep. The study, which investigated a sample of over 1,300 Swedish teenagers aged 14 to 18, found that popular girls reported shorter sleep duration and more difficulties falling asleep and staying asleep. Interestingly, the negative impact on sleep was observed both before and after the advent of smartphones. The researchers suggest that the gender disparities in sleep patterns might be related to the types of friendships girls and boys tend to have at that age. These findings add to the growing body of evidence that school schedules are not accommodating teenagers' sleep needs. "Teenagers are arguably the most sleep deprived population throughout the lifespan," said Serena Bauducco, a sleep researcher at Örebro University. The study highlights the importance of adequate sleep for teenage girls' mental health and school performance.
 


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