The Federal Reserve is no longer patient when it comes to normalising monetary policy, but neither is it showing itself to be particularly impatient about raising interest rates.

The Federal Open Market Committee (FOMC) downgraded its assessment of the US economy at its March meeting, noting that “economic growth has moderated somewhat”, and the Fed also did not seem as confident that soft inflation pressures were so transitory, citing the strong dollar as a further depressant on prices. The Fed’s interest-rate forecasts were also lowered significantly to imply a much more gradual pace of tightening once it actually begins, and more consistent with market estimates.

It also added that rates would rise when the Fed sees “further improvement in the labour market and is reasonably confident that inflation will move back to its 2 per cent objective”.

A rate increase was virtually ruled out at the FOMC meeting this month, but its options were left open for subsequent meetings allowing the Fed to achieve broadly what it wanted – more flexibility about the timing of rate increases, with a greater emphasis on being data-dependent. So no more calendars, thresholds, or coded expressions about being “patient” or keeping rates steady for a “considerable time”. Just watch the numbers.

Markets subsequently boiled down the Fed’s recent comments to imply that rates were either going up in June or September, with a majority taking the wording to suggest that the latter was more likely.

The distinction between expectations of a June increase and a September one is largely driven by relative optimism about growth.

Those looking for an early step up believe that US GDP growth will recover its momentum after a disappointing first quarter caused by bad weather, sufficient for the unemployment rate to fall further and for inflation to rise.

Those looking for a September increase clearly see the outlook as less rosy, with the recovery likely to be more drawn out, while the view that there will be no change in rates at all this year reflects an altogether darker perspective.

Consistent with this approach of simply watching the data, the release of the latest March jobs data will have sounded alarm bells in policy circles about the viability of raising interest rates in June.

And effectively it will have raised the bar in terms of what will be needed to be seen in the economic data in coming months if a rate increase in either September or June is to be at all likely.

After a small 126,000 increase in non-farm payrolls in March, combined with 69,000 of net downwards revisions to the two previous months, the average monthly increase in employment over the first quarter is now 197,000, as opposed to close to 300,000 in the three months before the March release and an average 269,000 over the previous 12 months. Furthermore, although average earnings rose by 0.3 per cent on the month, the average work week fell by 0.1 hours, taking it back to the level last seen in September of last year. That the unemployment rate stayed steady at 5.5 per cent can largely be put down to the participation rate falling by a tenth of a percentage point to 62.7 per cent.

This was the first truly weak labour market report for some time, breaking a run of 12 consecutive monthly gains above 200,000, something not seen since the 1990s.

And although it is always dangerous to overinterpret one single release, it is consistent with the drop-off in activity seen in other data over the quarter. This reinforces expectations that growth in the first quarter will decelerate further from its largely disappointing 2.2 per cent annualised pace in the fourth quarter of 2014.

This slowdown may well have been related to special factors, such as bad weather, a West Coast port strike and reduced oil drilling, but it still leaves the economy needing to make up even more ground this quarter and next if expectations of a September tightening are going to be grounded, let alone one in June.

The US economy probably can pull itself back up in the coming months, sufficient to see the unemployment rate to fall to about 5 per cent by September, in time for a rate increase then.

But it is now a tall order to expect this to happen a lot sooner, and the debate about September itself may now become a lot more fierce.

Tim Fox is the head of research and the chief economist at Emirates NBD

The Federal Reserve is no longer patient when it comes to normalising monetary policy, but neither is it showing itself to be particularly impatient about raising interest rates.

The Federal Open Market Committee (FOMC) downgraded its assessment of the US economy at its March meeting, noting that “economic growth has moderated somewhat”, and the Fed also did not seem as confident that soft inflation pressures were so transitory, citing the strong dollar as a further depressant on prices. The Fed’s interest-rate forecasts were also lowered significantly to imply a much more gradual pace of tightening once it actually begins, and more consistent with market estimates.

It also added that rates would rise when the Fed sees “further improvement in the labour market and is reasonably confident that inflation will move back to its 2 per cent objective”.

A rate increase was virtually ruled out at the FOMC meeting this month, but its options were left open for subsequent meetings allowing the Fed to achieve broadly what it wanted – more flexibility about the timing of rate increases, with a greater emphasis on being data-dependent. So no more calendars, thresholds, or coded expressions about being “patient” or keeping rates steady for a “considerable time”. Just watch the numbers.

Markets subsequently boiled down the Fed’s recent comments to imply that rates were either going up in June or September, with a majority taking the wording to suggest that the latter was more likely.

The distinction between expectations of a June increase and a September one is largely driven by relative optimism about growth.

Those looking for an early step up believe that US GDP growth will recover its momentum after a disappointing first quarter caused by bad weather, sufficient for the unemployment rate to fall further and for inflation to rise.

Those looking for a September increase clearly see the outlook as less rosy, with the recovery likely to be more drawn out, while the view that there will be no change in rates at all this year reflects an altogether darker perspective.

Consistent with this new approach of simply watching the data, the release of the latest March jobs data will have sounded alarm bells in policy circles about the viability of raising interest rates in June. And effectively it will have raised the bar in terms of what will be needed to be seen in the economic data in coming months if a rate increase then is going to be at all likely.

After a small 126,000 increase in non-farm payrolls in March, combined with 69,000 of net downwards revisions to the two previous months, the average monthly increase in employment over the first quarter is now 197,000, as opposed to close to 300,000 in the three months before the March release and an average 269,000 over the previous 12 months. Furthermore, although average earnings rose by 0.3 per cent on the month, the average workweek fell by 0.1 hours, taking it back to the level last seen in September of last year. That the unemployment rate stayed steady at 5.5 per cent can largely be put down to the participation rate falling by a tenth of a percentage point to 62.7 per cent.

This was the first truly weak labour market report for some time, breaking a run of 12 consecutive monthly gains above 200,000, something not seen since the 1990s. And although it is always dangerous to overinterpret one single release, it is actually consistent with the drop-off in activity seen in other data over the quarter. This reinforces expectations that growth in the first quarter will decelerate further from its largely disappointing 2.2 per cent annualised pace in the fourth quarter of 2014. This slowdown may well have been related to special factors, such as bad weather, a West Coast port strike and reduced oil drilling, but it still leaves the economy needing to make up even more ground this quarter and next if expectations of a September tightening are going to be grounded, let alone one in June.

The US economy probably can pull itself back up in the coming months, sufficient to see the unemployment rate to fall to about 5.0 per cent by September, in time for a rate increase then. But it is now a tall order to expect this to happen a lot sooner, and the debate about September itself may now become a lot more fierce.

Tim Fox is the head of research and the chief economist at Emirates NBD

Irish dairy farmers are looking to the supermarkets of the Arabian Gulf to help make up for 30 years of lost time.

The removal last week of production quotas first introduced by the European Union in 1984 is expected to trigger a huge increase in Irish dairy production – much of it destined for the Middle East.

Irish dairy exports to the Arabian Gulf could jump by 50 per cent over the next five years, predicts Michael Hussey, the Dubai-based regional manager of Bord Bia, the Irish food board.

Milk quotas were introduced in 1984 to reduce the so-called milk lakes and butter mountains that started to emerge in the 1970s, when European milk production outstripped demand.

Agricultural exporters such as Ireland and the Netherlands stand to be the biggest beneficiaries from the removal of quotas across the European Union last week.

“There will definitely be a big impact here,” said Mr Hussey. “The Middle East will be the target for much of the increased production.”

Total exports of dairy products from Ireland into GCC countries jumped 28 per cent last year to €247 million (Dh988.3m), according to Bord Bia estimates.

Irish dairy products such as Kerrygold butter and Irish Farmhouse cheese are increasingly visible on the region’s supermarket shelves.

The rise in Irish food exports to the Gulf will bring exporters from the country into closer competition with New Zealand, which dominates the regional market.

When milk quotas were introduced in 1984, Irish milk production was roughly the same as it is today – about 5.4 billion litres per year.

Over the same period, annual production in New Zealand surged to 19 billion litres from 7.6 billion litres.

The Irish agriculture minister Simon Coveney has described the removal of the milk quotas as “the most fundamental change to Irish agriculture in a generation”.

GCC markets such as the UAE and Saudi Arabia are drawing increased attention from global food producers as growing populations, rising incomes and improved land and sea freight connections stoke demand for imports.

A regional hotel building boom that has Dubai at its centre is also driving demand for food products.

The rapid growth in air travel to hubs such as Dubai, Doha and Abu Dhabi is making it easier for exporters to bring fresh produce from Europe, North America and Australasia to the dinner tables of the region at affordable prices.

Bord Bia last week hosted a group of buyers of food ingredients from Saudi Arabia and Kuwait, and plans to take another group of UAE companies to Ireland this year.

scronin@thenational.ae

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On a late June day in 1962, a young Swiss-Brazilian man named Jorge Paulo Lemann stepped on to a tennis court at Wimbledon for his first-round match.

A champion in his native Brazil, the 19-year-old would be trounced 6-2, 6-4, 6-1 by the American Donald Dell.

If Mr Lemann learnt a lesson that day, it might have been this: cut your losses. He was not going to be a great tennis player, so another future would have to do.

“Concentrating on his goals is something he has always persistently sought to do since ending his tennis days on realising he would not become a top star,” is how the journalist Cristiane Correa described Mr Lemann in the 2013 biography Sonho grande – Dream Big.

Half a century later, Mr Lemann is a top star of global business. He is a billionaire (net worth is about US$27 billion and counting) whose 3G Capital investment group is blazing a trail of globe-girdling takeovers, most recently teaming up with Warren Buffett’s Berkshire Hathaway to orchestrate the merger of their Heinz with Kraft Foods, creating a culinary colossus with annual revenue of $28bn.

Mr Buffett rates Mr Lemann “one of the world’s best businessmen”.

Last month, in his annual letter to Berkshire shareholders, Mr Buffett said that with the Heinz deal in the books, he expects to join with 3G and Mr Lemann on more takeovers.

“Whatever the structure, we feel good when working with Jorge Paulo,” Mr Buffett wrote.

Praising the Brazilian’s “competence and integrity”, he added that “3G is a perfect partner”.

Over the years Mr Lemann has applied the lesson from his tennis career – cut your losses – but this time, ruthlessly, at the companies that he and his partners acquire. At Heinz, for instance, the new owners limited employees’ use of company printers to 200 pages per month and required staff to print on both sides of a page.

The Brazilians, now applying cost cuts vigorously to American companies, say it is a practice they learnt by studying American thinking on management.

“We are copiers, actually. Most of the stuff we’ve learnt has been from Jack Welch, Jim Collins, from GE, from Wal-Mart. We’ve sort of put it all together,” Mr Lehmann told Fortune magazine in 2013.

Mr Welch, who ran General Electric for 20 years, was nicknamed Neutron Jack for his mass layoffs of employees, particularly managers, at companies under GE’s purview.

Mr Collins is an American consultant best known for his book Built to Last, which studied 18 “visionary” companies, including GE and Hewlett Packard, to find what made them special. Among its conclusions, the author said the best companies stuck to their core mission with an unwavering and almost cultish devotion. Published 21 years ago, the book remains influential but is also criticised as lacking in rigour.

Ms Correa confirms that Mr Lemann and the 3G team have never veered from their dedication to cost cutting – and also to meritocracy, usually through the cultivation of in-house talent.

“They always had those principles. Some companies change their culture over the years. They never have,” she told The New York Times this year.

This idea of business being about having a singular focus over a long run comes through in Mr Lemann’s words from the Fortune interview: “You’re running, you’re always close to a limit, you’re working very hard and being evaluated all the time.”

His choice of sports nowadays is also a case of playing the long game. His diversion is not tennis but deep sea fishing, along with his 3G partners Marcel Telles and Carlos Alberto Sicupira, who are each worth more than $10bn.

The three men founded 3G in 2004. Over the ensuing decade they expanded at a breakneck pace. They combined Latin American brewers, then engineered an $11bn merger with Belgium’s Interbrew in 2004. They followed that up in 2008 with the $52bn union with Anheuser-Busch to form the world’s largest brewer. Last year, 3G-owned Burger King Worldwide purchased the Canadian coffee-and-doughnut chain Tim Hortons.

While Mr Lemann might now seem a stunning success, he also learnt from his mistakes – and again, the lesson was to cut his losses.

The Harvard graduate cut his teeth in the Brazilian business world at Garantia, an investment bank which he cofounded in 1971. But after the bank lost $100 million in the Asian financial crisis of the late 1990s, the partners put it up for auction. It went to Credit Suisse for $675m.

The money attracted unwanted attention in a country of deep inequality. In March 1999, in an apparent kidnap attempt, two armed men unleashed a hail of 20 bullets at the car carrying Mr Lemann’s three children in Sao Paulo. The car’s armour stopped 19 of the bullets and the driver raced to safety. The incident might explain why Mr Lemann has avoided publicity.

A footnote: Mr Lemann was not the only man from that 1962 first-round match at Wimbledon who would go on to greater things. His opponent that day, Donald Dell, became one of the first sports agents and later co-founded the Association of Tennis Professionals (ATP), which represents the sport’s male players. The top-level sponsor of the ATP is Corona, a Mexican beverage brand that, through Anheuser-Busch InBev, is part of Mr Lemann’s 3G empire.

* The National, with additional reporting by agencies

rmckenzie@thenational.ae

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Sports need to be awarded industry status by the government to allow related businesses in the country to grow, according to experts. “For sports to sustain in India as a business, it is imperative that the nature of its ecosystem moves from a non-profit to a for-profit one,” according to a recent report published by KPMG and the Federation of Indian Chambers of Commerce and Industry (Ficci).

It said this would increase investor confidence and availability of capital for the sector, as well as generate more revenue streams to help leagues to become commercially successful.

Having industry status will allow companies operating in the sector to easily secure bank loans and this will lead to greater involvement from the private sector, as well as tax concessions, all under a proper regulatory framework.

Bollywood, for example, was granted industry status by the government only in 2001.

New sports leagues are being launched as the country starts to branch out beyond cricket. The Indian Super League (ISL) for football and the Pro Kabaddi League were launched last year. Such leagues could generate greater sports revenues for the country’s economy.

But the report stated that the “lack of an organised sports sector has inhibited for-profit ventures in sport”. These include franchisee training academies, merchandising, sports infrastructure, and sports careers.

Industry status could, for example, incentivise professionals to associate themselves with sports, because the greater availability of capital is likely to lead to higher renumeration, while policies on labour rights will help attract people into the sector too, the report said. At present, few graduates pursue a career in sports and sports-related businesses because of the lack of opportunities in the unorganised sector.

“Granting industry status could lend acknowledgement to the sector’s potential and also clearly define the components comprising the sports industry,” according to the report. “This, coupled with policy initiatives and regulations, could drive greater professionalism and hence increase investor confidence.”

business@thenational.ae

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When the Kolkata Knight Riders and the Mumbai Indians take to the pitch on Wednesday in Kolkata for the first match of this year’s Indian Premier League (IPL) cricket tournament, it is not just the crowd and television viewers who will be hoping for an exciting game. Advertisers, who have collectively invested billions of rupees into promoting their brands through the event, will also be cheering the teams on.

The glitzy IPL, the world’s richest cricket tournament, will be played over 47 days with a total of 60 rapid-fire matches. With the actor Shah Rukh Khan partly owning the Kolkata Knight Riders team and reports that the actress Anushka Sharma will perform at the IPL opening ceremony, there is a lot of Bollywood glamour associated with the tournament.

In a cricket-mad country, the IPL has mass appeal, meaning advertisers are eager to get a share of the action on the pitch. Adverts appear everywhere, from logos emblazoned onto the cricket ground to branding on the stumps.

“In India, the single largest sport is cricket, and within cricket the IPL is more than just a sporting event,” says Samar Shekhawat, the senior vice president of marketing at United Breweries, a major Indian beverages company that owns the Kingfisher brand. It has associated with the IPL since the tournament’s launch in 2008.

The IPL offers “the most appropriate mix of glamour, entertainment, sport, celebrity and style”, adds Mr Shekhawat. “I am very fond of saying that it is India’s biggest reality show. For India, it is bigger than the Fifa World Cup, it’s bigger than the Cricket World Cup, it’s bigger than Formula One and the Olympics.”

Advertising spending on the IPL this year is expected to reach 10 billion rupees (Dh589 million) compared to 8bn rupees last year and 3.1bn rupees when the tournament launched in 2008, according to figures from Impact, an advertising and marketing publication.

The official broadcaster for the IPL, Multi Screen Media (MSM), which owns Sony Entertainment Television, has said that it has sold the vast majority of its advertising inventory for the tournament this year, with slots selling at rates up to 15 per cent higher compared to last year, at 500,000 rupees per 10 seconds.

Amazon, Vodafone and Hero MotoCorp are among the advertisers. Pepsi is the title sponsor of the IPL.

Despite being plagued by controversies, including a spot-fixing scandal, the value and popularity of the IPL does not seem to have been dented.

There has been rapid growth of sports advertising in India in recent years, of which the IPL has been a major driver. The value of the market for advertising in sports in India was about 41bn rupees in 2013 compared to 21bn in 2008, according to a report by SportzPower, a provider of sports business news and knowledge, and GroupM ESP, the sports and entertainment arm of GroupM Media. This is made up of on-ground advertising, athlete and team sponsorship, and media advertising spending. Cricket accounts for between 80 and 85 per cent of television sports media revenue in India.

The launch of the IPL in 2008 “will be recorded as the start line from where the country’s nascent sports business took off”, the report stated.

The IPL is loosely based on the United Kingdom’s Premier League football championship and the National Basketball Association in the United States. It is a Twenty20 tournament, which means that the matches are fast-paced and last about three hours each, giving the sport more popular appeal.

“This should be a great season for the Indian Premier League, with renewed interest around cricket and positive advertiser sentiment,” Rohit Gupta, the president of MSM, told The Financial Express, an Indian newspaper. He said he expected to sell the last few matches at 1.5m to 2m rupees for 10 seconds.

United Breweries plans to promote Kingfisher through the IPL this year with a new television commercial featuring cricketers from the tournament, as well as through social media and digital initiatives. The IPL accounts for its biggest marketing spending on any event.

Mr Shekhawat says United Breweries spends between 17 and 20 per cent of its annual advertising budget on the IPL. The company is increasing its overall advertising budget by about 10 per cent this year, so it will put a larger sum of money into the IPL in 2015, he says.

With the tournament expected to attract 220 million viewers, it gives the brand huge exposure across the country, including in smaller towns, he says.

The IPL follows hot on the heels of the ICC World Cup, which was held in Australia and New Zealand, but that does not seem to have eaten into the IPL’s revenue.

“It’s a longer game and the IPL is quicker, tighter, more glamorous and more in keeping with the brand,” said Mr Shekhawat, explaining that United Breweries did not do any marketing with the ICC World Cup. “Because it was in Australia, the match timings were not really conducive to running a lot of promotions.”

Vodafone has also associated with the IPL since its inception.

“Cricket resonates with Indian audiences, and no other cricketing platform packages sport, talent, chutzpah and entertainment together on one platform as successfully as the IPL,” says Ronita Mitra, the senior vice president of brand and consumer insights at Vodafone India. While Vodafone does not comment on its advertising spending, Ms Mitra says that “the effect multiplier effect and bang for the buck is unmatchable”, if a company does the right campaigns during the IPL.

In November 2012 Pepsi bought the title sponsorship rights to the IPL for five years for US$71m – almost double the amount the Indian property company DLF paid for the title rights for the first five years of the tournament.

Homi Battiwalla, who was the executive vice president of PepsiCo India at the time before becoming the senior director of beverage marketing for the Middle East and Africa, last year said that Pepsi expected to derive five to six times the investment the company had made in the IPL.

“No large-scale association with cricket is possible in India without a sizeable IPL presence,” Mr Battiwalla said. “The title association of Pepsi IPL and other benefits will allow brand Pepsi and other PepsiCo brands to gain more than conventional sponsorship benefits and generate immense universality across the country.”

It also falls in the right season for the brand to be promoting its drink products, given the heat of the months of April and May, when the IPL takes place.

“The timing of the tournament is ideal given that packaged beverages is an impulse category and nearly 50 per cent of consumption happens in these months,” he said.

business@thenational.ae

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Jason Bryan, a 40-year-old Irish national, is the man bringing Boardman Bikes to the UAE. For those not familiar with the brand, the British cyclist Chris Boardman was a gold medallist at the 1992 Summer Olympics. In 2000, he also broke Eddy Merckx’s 28-year-old record for the longest distance raced in one hour, riding 49.441 kilometres, just 10 metres further than the legendary Belgian.

Athletes including the UK’s Brownlee brothers, who won triathlon gold and bronze at the 2012 London Olympics, use his top-of-the-range Elite Platinum bike, which has a frame made from carbon fibre and coated in platinum – “perfect” for this market, says Mr Bryan. The bike retails at about US$4,000 just for the frame.

Mr Bryan was a financial controller and a keen cyclist when he arrived in the UAE four years ago. However, his passion became more of a holiday pastime for any time he was away from Dubai. Then, the lack of cycle lanes and cycle spaces, the poor observance of other road users and the relatively high cost of the bikes in the country, meant it wasn’t a viable hobby for him any more.

Today, the landscape has changed markedly. While there are still few cycle lanes, and the lack of observance from road users is arguably worse, the growing number of cycle spaces and attitudes to the activity have improved beyond recognition. The National, for example, ran its own cycle to work campaign in January.

Now cyclists have dedicated sessions every Tuesday evening at the Yas Marina Formula One circuit, each Wednesday at Dubai Autodrome and can also ride the mountain bike trails of Showka and Hatta, as well as the cycle tracks of Nad Al Sheba, Al Qudra and Al Wathba.

There are at least 13 different cycle clubs catering to all levels, from novices to know-it-alls.

“I love cycling but the prices asked for average bikes in the shops here in the UAE were way beyond acceptable,” says Mr Bryan. “I knew Boardman was always reasonably priced in the UK and knew they weren’t sold here, so I looked into buying one back home and bringing it out.”

When Mr Bryan found out that Boardman had begun international expansion but that the Middle East wasn’t on its radar, he put a business plan together and contacted the company.

“I won’t say it’s been easy since then but for a brand that was only known in the UK it’s been incredibly successful so far,” he says.

Mr Bryan signed the exclusive distributorship for Boardman Bikes in January covering the GCC for nine years. His original plan was to create a stand-alone, top of the range, Boardman boutique that shows off the bikes in the best light with the best equipment and the broadest range but that strategy has changed.

He opened a Boardman Bikes showroom in Dubai in February but, in the short term, he sees online sales as a huge opportunity for keeping overheads low and his prices below all competitors.

“I’ve been selling through a horrible website I designed myself, but there is a professional one on the way,” he says.

Local bike retailers have been paid too much, for too little, for too long, he says.

Mr Bryan claims he is able to offer professional standard bikes at amateur prices and amateur bikes at second-hand prices because the deal he agreed with Boardman was to buy the bikes for 10 per cent less per bike than UK prices.

But still the cost of setting up a business in the UAE “is quite shocking, not to mention the rents, which all goes on to the [retail price of the] bikes”, he says.

Mr Bryan spent Dh50,000 on the correct trading licence for his company Frontier Adventures at the beginning of the year, a large sum that instead could have been better used for stock.

“I had to put money into a piece of paper rather than the bikes, which means I do not have a full inventory,” he says. “I have a showroom with limited capacity but I am mostly selling through Dubizzle and I am now in talks with souq.com to sell the Performance range.”

This range of bikes is priced slightly below high-end offerings at between Dh3,000 to Dh9,500.

He has tried marketing his product at sporting events but these efforts did not translate into significant sales.

“I’ve been at triathlons and cycling events but they cost money to show my bikes and the return is far from immediate, if at all,” he says. Mr Bryan has also set up a loyalty scheme that encourages referrals in return for merchandise from the shop.

Creating a loyalty scheme is time-consuming and costly, he says, but it is worth it to build up the profile of the brand.

Mr Bryan forecasts he can eventually sell up to 2,500 bikes a year in the GCC, which would make him the most successful international distributor.

The next stage for the business will be to introduce other “high-end but affordable” sports brands to the region.

“I’m a cyclist not a retailer, but even in this short time I can see the potential of these bikes and other brands,” says Mr Bryan. “Equinox Wheels, a very high-end Czech brand, contacted me because of the work I was doing with Boardman and asked if I was willing to become their distributor. They can go to Dh12,000 per set, but you can’t get them here.”

The company

Frontier Adventures, the company behind Boardman Bikes Middle East, plans to become a distributor for high-end sports brands that are too niche for general sports and recreational retailers yet are looking to build a presence in the Middle East. Boardman Bikes is the first, with the bicycle wheel maker Equinox Wheels under consideration as the next. Through a comprehensive loyalty scheme coupled with expert mechanical and technical support, the company intends to build a stable of brands with a similar ethos and specification. While e-commerce in the region is still in its infancy, Mr Bryan believes the availability of previously unobtainable sports equipment, delivered to your door, will be a key determinant to shopping online for the serious sports enthusiast.

The manager

Jason Bryan will have been in the UAE four years this June after moving from London working as a financial controller for a military logistics firm. He relocated with his wife Michelle and their three children. The distribution of Boardman bikes is his second attempt at establishing a business in the UAE. His first venture taught him many lessons on the problems and pitfalls of creating a viable business from scratch and he now feels far more secure with what decisions need to be made and what can wait.

ascott@thenational.ae

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Mubadala Petroleum, a unit of Mubadala Development, has served a notice of default on one of its partners in an offshore Thailand oil development for about US$27 million in back payments, a company spokesman said on Thursday.

The Mubadala Petroleum official said that Northern Gulf Petroleum (NGP) was formally served on March 20 that it was in default on the payments, which were due for its share of expenses on the Manora development in the Gulf of Thailand, one of seven oil and gas concessions Mubadala has in Thailand.

The overdue payments first came to light in an announcement to the Australian stock exchange by Tap Oil, the management of which is in a bitter dispute with the company’s largest shareholder, Chatchai Yenbamroong, the chairman of TPP Group.

Mr Yenbamroong, who controls NGP, recently increased his shareholding in Tap Oil and has been trying to replace to top managers with ones of his choosing, having accused Tap’s managers of wasting millions of dollars on drilling dry holes while exiting prospects that later turned out to be productive.

Mubadala would not normally publicly state that a partner had defaulted, but the company spokesman confirmed all of the details put out in statement by Tap Oil, which owns 30 per cent of the Manora concession.

NGP owns 10 per cent of Manora, and Mubadala operates the field and owns the remaining 60 per cent.

“We can confirm that what Tap Oil has said is correct, and we are operating exactly in line with the joint operating agreement,” the Mubadala spokesman said.

That agreement stipulates that NGP has already lost its entitlement to attend and vote at operating committee meetings for Manora and is prevented from receiving any information on the its operation.

This month, NGP’s share of Manora crude will be shared among Mubadala and Tap Oil to cover the defaulted payments.

If NGP has not paid its expenses by 60 days after the default notice was served, its interest in Manora will be transferred to Mubadala and Tap Oil.

Mubadala Petroleum has an interest in seven blocks in Thailand and is the operator for four of them. Manora started producing last November at 2,000 barrels per day and is expected to peak at 15,000 bpd and run for about 10 years. It has estimated reserves of up to 20 million barrels.

The South East Asia region is one of the most important for Mubadala, and the company also has offshore interests in maritime territory of Vietnam, Malaysia and Indonesia.

Although the company does not report financial results, its parent reported in its annual results on Thursday that Mubadala Petroleum took a Dh1.9 billion charge for impairment of assets in South East Asia and the Middle East, reflecting the lower income expected from those oil and gasfields because of the 50 per cent drop in oil prices since last June.

amcauley@thenational.ae

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If the world economy is set to grow faster this year, then why are economists wearing such long faces? There are several reasons.

Europe’s growth rebound is one of the main contributors to the global recovery, but it is nowhere near high enough to pull the euro zone out of trouble, nor to mask the dysfunctional nature of its economics and politics.

The drop in the currency’s value has been one of the main developments in the past three months, creating uncertainty and dividing observers.

Quantitative easing by the European Central Bank at a time when the Federal Reserve is expected to hike interest rates in the US has certainly played a part in the euro’s weakness.

Optimists believe that monetary easing will boost demand and imports in the euro area, meaning Europe’s increased competitiveness from a weaker currency will not be detrimental to other economies.

We are not too sure.

The euro zone was already running a €236 billion (Dh944.34bn) current-account surplus last year. And with the euro falling so sharply now, the surplus could widen further as European exports become cheaper and imports more expensive.

If the world had only two countries, the current-account surplus of one country would be mirrored by an identical deficit in the other – and such a deficit detracts from growth. The surplus has to be balanced by something, so we could end up in a situation where the euro zone’s gain could be someone else’s loss.

How emerging markets respond to this scenario will be key to their growth prospects this year.

Countries could shield growth rates from external shocks by cutting interest rates, especially if inflation is low and interest rates are not close to zero per cent, as they are in the United States, Japan and the euro zone.

In fact, this is already happening. Twenty-four countries have eased monetary policy so far this year, and there is room for further easing, especially in China and South East Asia.

However, things could get more complicated. The monetary policy of small, open economies is not completely independent from that of much larger economies such as the US.

For example, if the Fed hiked interest rates aggressively and an emerging economy cut rates, the latter’s currency would likely weaken significantly against the US dollar. This could lead to problems, especially for countries with high levels of dollar-denominated liabilities.

What the Fed does will therefore be crucial. The market’s focus is on the timing of the first interest rate hike, but we think the speed of rate hikes and the anticipated peak of US interest rates are more important. And we expect the Fed’s hiking cycle to peak at 2 per cent, below the market consensus and Fed projections.

If we are correct, then the uncomfortable scenario for emerging markets, in which the Fed hikes while the euro zone’s current-account surplus widens further, might just be avoided.

Risks aside, there are also some positive developments in key emerging markets, such as India and China, that are worth noting.

According to our estimates, India is running a small current-account surplus, making it much more resilient to shocks in market sentiment. Our view is that India’s growth could be one of the positive surprises this year.

India’s growth has been mainly consumption-driven, and its infrastructure requires improvement. This year we expect investment to outpace consumption. China, on the other hand, needs – and is trying – to do the reverse.

The world is full of negative China stories, and the economy is slowing. Rebalancing such a large and complex economy is not easy, but despite the challenges we note two positive developments:

First, our data suggests that the housing market is bottoming. Although calling a rebound seems premature, our survey has detected an improved sentiment in the sector.

Second, China’s debt-to-GDP is levelling off at 251%. Although still high, this is good news, as it means credit growth is no longer faster than GDP growth, which is crucial for China’s rebalancing.

Our main case is for the world economy to improve this year, with India looking particularly attractive and China making progress on its rebalancing. This will be a long and challenging process, but it will lead to more sustainable growth.

European growth is picking up despite the mess in the euro zone and the US looks stronger. But yes, it’s complicated, and there is plenty out there for the worriers among us.

What we worry the most about is the risk of a policy mistake.

Marios Maratheftis is global head of macro research at Standard Chartered

A couple of years ago I would often take the time to get online and visit some of my favourite style blogs and read about the latest restaurants and fashion trends.

But that was then. Now these websites are hardly ever updated and some have been abandoned. Where did the bloggers all go? The writers did not abandon blogging altogether, but evolved with the markets and took blogging to another level. They are now heavily active on the social media front, mostly on Instagram, Facebook and Twitter, and their posts are in real time. Now I do not have to wait till the next day to find out about the latest and newest trends, but can know instantly as bloggers report live from an event.

These bloggers seem to have more followers on social media than they did through their websites, with some reaching as many as 1 or 2 million.

The food and beverage industry has followed suit. Food trucks have become popular at events and parties. Some customers opt for having a food truck parked at an event, rather than the traditional option of waiters making their way among the party guests with a tray of canapés over their shoulders. Food trucks are considered cool and hip.

I visited Mushrif Central Park after it reopened in Abu Dhabi two weeks ago. There were two food trucks parked there, with customers lined up to get their orders. It was sunny, and the weather was not exactly pleasant for people to stand in the heat and queue in line for a hot meal, but they did. What is great about food trucks is that owners could take them anywhere, to any popular event, and be there with the crowd. It is also more cost-effective than paying rent for a number of restaurant spaces around town. It is a good marketing technique to raise awareness about a brand.

If those bloggers and food truck owners have anything in common, it is that they go with the flow and evolve with the market. They do not wait for customers to come to them; they go to where they are. They are available at their local events and alter their businesses to fit their customers’ needs.

“No one goes to websites any more. You should have a business page on Facebook and more updated posts on Instagram,” advised a friend when I was setting up my community talks page. She had a point. We are on Instagram and Twitter because that is where most of our attendees are, and that is how they found out about our latest events.

How could you adapt these case studies to your business? It does not matter what your business is, you can always go to where your customers are. And social media is one channel to help you do this.

If you have a website or a physical product to promote, the way you talk about it and distribute it to your clients through social media has to be configured in certain way. The National provides a good example of how it goes to where its readers are. Not only is it available on Twitter, as most media outlets are, but it is also active on Instagram. It has reconfigured how to deliver a story by using strong graphics instead of quoting the article, which would be more applicable to Facebook and Twitter.

We live in a fast-paced world, and more specifically in a country that changes and develops quickly, and where marketing techniques are evolving all the time. As an entrepreneur, you have to make your online posts, products, and the way you offer services, easy, timely and on the go, just like your clients.

In a social media and food truck world, you have to make your business stand out, whether it’s a restaurant, a publication or an event. Competitions, interesting graphics, and working with social influencers to raise awareness about your brand are all good ways to achieve this.

As a starter, tune in to what your target audience is into right now, how are they influenced, where are they going, and where are they getting their news from. That is where you should be.

Manar Al Hinai is an award-winning Emirati writer and communications consultant based in Abu Dhabi. Twitter: @manar_alhinai