Dubai construction recovery puts Canon in big picture

The return of construction to Dubai has helped the Japanese electronics manufacturer Canon grow its large format printing (LFP) business by almost 20 per cent in the past year across the region. Its business in Dubai grew by 17 per cent alone.

"Growth has come from architecture firms, construction firms and others," said Hendrik Verbrugghe, the marketing director of Canon Middle East. "The graphic cards and Cad (computer-aided design) markets are evolving rapidly in terms of their printing needs, with indications of sustained growth for the coming few years."

Overall, there has been a decline in the printing business worldwide, particularly in Europe, but the Middle East has bucked this trend as it continues to be a growing emerging market for Canon.

The company currently has a 15 per cent share of the LFP market in the Middle East. It is now focusing on LFP business, which accounts for almost 45 per cent of Canon's revenues to grow its business in the region by a third this year.

The biggest markets for Canon LFP are the UAE and Saudi Arabia according to Mr Verbrugghe.

Dubai's property market grew by 8 per cent last year and the emirate is expecting US$1.08 billion (Dh3.97bn) in construction projects over the coming few years. Up to 18 new hotels are set to be opened in Dubai this year.

thamid@thenational.ae

'The Ice Road'

Director: Jonathan Hensleigh
Stars: Liam Neeson, Amber Midthunder, Laurence Fishburne

2/5

How to play the stock market recovery in 2021?

If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.

Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.

Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.

Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).

Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.

Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.

By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.

As demand for energy fell, the oil and gas industry had a tough year, too.

Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.

He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”

This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”

Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.