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The UAE plans to shift its weekend to Saturday and Sunday from January 1, a move that business experts say will align the Emirates with global markets and boost the local economy by stimulating more capital flows as well as promoting employee productivity and wellbeing.
The positive impact will include ease of business deals and trade with clients overseas; more foreign investments, property transactions and liquidity at the local stock markets, as well as higher consumer spending, which in turn will boost UAE-based businesses across various sectors.
“The economic impact is directly originated from the connectivity of financial systems such as banks worldwide… The move will ease trade, financial and economic transactions with other countries around the world,” said Ola Lind, Director of FTFT Capital.
The UAE government on Wednesday announced that it will transition to a four-and-a-half-day working week from January 1, 2022, with Friday afternoon, Saturday and Sunday forming the new weekend.
The UAE currently follows a Sunday to Thursday workweek. With the current setup, UAE-based businesses with a global presence encounter operational issues and transaction delays when it comes to dealing with clients and partners overseas, according to industry sources.
Positive changes
“We have a huge flow of clients from Europe and also our head office in the US. We have 41 international offices. Because the weekends are not coinciding, there used to be a three-day gap in communication between us,” Ayman Youssef, Vice President of real estate firm Coldwell Banker, told Zawya.
“This also causes hindrance in the smooth flow of operations.”
However, with the new working week, Youssef pointed out that they will be able to serve their international clients more efficiently, as well as keep their UAE operations aligned with the rest of their offices across the globe.
“This announcement is one more unique value proposition offered by the UAE and will attract more international investors to invest in the UAE. This move will enable them a certain amount of flexibility, smoothness and better connectivity with the rest of the world.”
Better connected
If the UAE is more connected with its international peers, the country will also be able to strengthen its position in the global stage and realise its goal to be the top business hub in the world.
“It will lead to higher productivity. More global corporates will move to the UAE, resulting in higher GDP. It will make the UAE globally more competitive, as loss of operational efficiency due to mismatch in working days between the UAE and other country teams will be eliminated,” added Nitin Agarwal, President of Hundred, a UAE start-up.
“The UAE is an attractive option to set up companies due to ease of settling and doing business. This move provides one more reason to have the office in UAE as there will not be any productivity loss due to different working days.”
As for the working population, there are lifestyle benefits to look forward to, and this will in turn boost productivity levels.
“[This will] create a result-driven society with a lesser focus on hours and more on impact,” said Mareva Koulamallah, Head of Marketing and Communications Middle East and Africa at Acronis, a global technology company.
“Studies show that shorter workweeks will make it easier for companies to attract and retain talent… We would not be surprised if many of the companies adopt this weekend and we think the early adopters will have an edge over the others.”
Local stock markets
As for the local stock markets, trading volumes are likely to go up once trading hours become more aligned with international bourses. Major stock markets around the world, from Europe to Asia and the Americas, trade from Monday to Friday.
“Since UAE begins its trading week on Sunday, a holiday for international markets, the interest in local markets and liquidity is low,” noted Bal Krishen, Chairman and CEO of Century Financial.
He noted that on Fridays, the last trading of the week, the stock markets in the UAE are closed and this deprives the local bourses of “international attention and, as a result, liquidity” during the most volatile day of trading.
“Having a synchronised trading schedule will boost the depth and performance of local markets,” Krishen pointed out.
Dubai announced last month its plans to list 10 government-backed companies on the Dubai Financial Market and set up a 2-billion-dirham market maker fund. Among those already confirmed for public listing are the Dubai Electricity and Water Authority (DEWA), TECOM and the emirate’s road toll system Salik.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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