The Republic of Somaliland has hit back against the Somalian prime minister's statement on Friday that a tripartite port deal involving UAE ports operator DP World to grant Ethiopia a stake in the Port of Berbera was "null and void".
“The present agreement is nothing new,” a statement from the office of the president of Somaliland, Muse Bihi Abdi, said on Saturday. “It is an extension of the agreement entered into between the Republic of Somaliland and DP World and approved by the Parliament."
Somaliland's parliament approved the partnership with DP World in 2016, paving the way for the world's foruth biggest port operator to invest $442 million to rebuild the Port of Berbera and manage it through a 30-year concession.
According to deal announced on Thursday, Ethiopia will become a 19 per cent shareholder in the Port of Berbera, with DP World controlling 51 per cent stake in the project. Somaliland will hold the remaining 30 per cent.
The Ethiopian government will also invest in infrastructure to develop the Berbera Corridor as a trade gateway for the landlocked nation, which is one of the fastest growing countries in the world with forecast GDP growth of 8.2 per cent in 2018, according to the World Bank.
However, the Somalian Ministry of Ports and Marine Transport dismissed the agreement as "defective" in a statement on Friday, saying the terms of the deal "contravene procedure and are in blatant breach of the Provisional Constitution [of] Somalia. "The Ministry therefore, considering the above factors, declares this deal as non-existent, null and void."
The ministry said that the Somalian government was not party to the agreement, which it termed as "detrimental to the sovereignty of the Federal Republic of Somalia and the unity of the country."
In its response, Somaliland said Somalia’s oppositional stance is “not helpful in creating a conducive environment for dialogue between Somaliland and Somalia, and has no bearing, whatsoever, on the commercial and investment agreement between the Republic of Somaliland, the Federal Democratic Republic of Ethiopia and DP World, which we expect the international community and the neighbouring countries to support,” its statement said.
Development of the Berbera corridor is expected to address some of the region’s most pressing employment and investment issues, Saad Al Shire, Somaliland’s minister of foreign affairs said in a statement announcing the deal last week.
"The economies of the region are growing at a pace that necessitates the development of multiple ports and outlets…to accommodate the increase in trade," he said.
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Read more:
DP World says no material effects from Djibouti terminal seizure as UAE expresses support
DP World launches legal action over Djibouti terminal seizure
DP World says to build economic free zone in Somaliland
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DP World plans to build an additional berth in line with the Berbera masterplan as part of its concession agreement, and said on Sunday it had signed the final agreement with the Government of Dubai to develop a 12 square kilometre greenfield economic free zone in Somaliland to complement growth of the port.
“Our vision for Berbera is to make it a regional maritime hub in the Horn of Africa and its development will encourage growth for the region’s economy,” DP World chairman Sultan bin Sulayem said.
The ports operator declined to comment on Somalia’s rejection of the Ethiopia deal or Somaliland’s defence. The latter’s statement on Saturday said Article 90 of its constitution gives it “every right to sign treaties and agreements with third parties that advance its development aspirations”.
“This is a development initiative which creates jobs, meets the fast-growing demand for logistics and infrastructure corridors in the region and facilitates economic integration,” the statement said.
DP World is embroiled in a separate dispute over its operations at the Port of Djibouti, west of Somalia. The company said last month Djiboutian authorities took control of the Doraleh Container Terminal from a DP World-owned entity that designed, built and operated the terminal after winning the concession in 2006.
DP World has commenced arbitration proceedings in the UK to protect its rights, or to secure damages and compensation for breach or expropriation.
The illegal move will have "no material impact" on its finances, DP World, which recorded 10.1 per cent growth in gross container volumes on a reported basis in 2017, said in a bourse filing in February.
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The biog
Age: 46
Number of Children: Four
Hobby: Reading history books
Loves: Sports
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The specs
Engine: 4 liquid-cooled permanent magnet synchronous electric motors placed at each wheel
Battery: Rimac 120kWh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry
Power: 1877bhp
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The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
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How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
WRESTLING HIGHLIGHTS
The%20Boy%20and%20the%20Heron
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Company%20Profile
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The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
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The%20specs
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SPECS
Engine: Two-litre four-cylinder turbo
Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
On sale: Now
COMPANY%20PROFILE
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Pearls on a Branch: Oral Tales
Najlaa Khoury, Archipelago Books
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The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
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Tickets
Tickets start at Dh100 for adults, while children can enter free on the opening day. For more information, visit www.mubadalawtc.com.
More from Aya Iskandarani
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.