Global Developments Bottomline: The OECD became the latest to lower growth forecasts to 3.2% this year (the slowest pace in 3 years), with a staunch warning on “clear and present dangers” from trade war measures. Concerns remain whether the trade war between the US and China will escalate further, and more trouble is likely to brew on Trump’s current trip to Japan which started with a provocative tweet about North Korea. Meanwhile, in the midst of the latest disappointing PMI numbers from the US and Europe, developing countries pulled ahead with their manufacturing index at 50.5 in Apr vs developed nations’ 50.3. Two major political moves last week: the resignation of Theresa May (raising questions of what next for Brexit) and re-election of India’s PM Modi (raising questions on policy direction in his second term).
- Egypt’s central bank left interest rates unchanged: it held the overnight deposit rate at 15.75% and overnight lending rate at 16.75%.
- Egypt plans to phase out all subsidies on electricity by 2022. An average 14.9% hike in electricity tariffs was announced for 2019-2020 fiscal year, effective Jul.
- Egypt’s new banking bill will be referred to the House of Representatives before end-May.
- Industrial production in Egypt grew by 27.6% yoy to EGP 185.3bn in Q3 2018; iron, steel, and precious metals industry accounted for 20.8%, followed by food production (16.1%).
- Development projects worth EGP 149mn (USD 8.7mn) were approved by Egypt’s planning minister; road projects and electricity grid extensions account for 40.9% and 28.2% of the total.
- UAE’s direct investments in Egypt exceeded USD 6.6bn in 2018, according to the UAE ambassador. As of Mar 2019, about 1065 UAE companies were operating in Egypt (2017: 923).
- Jordan eased visa regulations with an aim to encourage medical tourism: according to the Cabinet decision, patients of restricted nationalities can apply for permit entry visas and patients in the Kingdom can submit permits for permanent residency.
- Kuwait’s trade surplus with Japan widened by 44.4% yoy to JPY 70.87bn (USD 642.12mn), thanks to a 31.8% uptick in Kuwait’s exports to Japan (JPY 84.45bn).
- Kuwait’s oil production declined by 10k barrels per day to 2.697mn bpd in Apr.
- Lebanon’s Cabinet approved all articles in the 2019 draft budget Friday, after 19 Cabinet meetings (which began on Apr 30) dedicated to examining the draft budget. The President will likely chair a session on Mon to endorse the budget before it is sent to Parliament for ratification.
- Oman hired banks for a planned bond issue -expected to raise USD 2bn- and which would be the nation’s first international issuance this year.
- Revenue from hotels in Oman increased by 10.4% yoy to OMR 71mn (USD 183.8mn) in Q1 this year; however, occupancy rates fell by 2.3% to 68.4 at end-Mar.
- Oman’s water sector will be restructured by end-2019: 3 companies will be formed, each providing potable water & wastewater services within specific geographical area, allowing increased competition and delivery of sustainable services.
- Qatar’s stock exchange is developing two new Exchange Traded Funds, one focused on gold and another for sharia-compliant assets outside of Qatar, according to its CEO. He also revealed that foreigners held about 11% of the companies listed on the exchange but make up about 30-40% of daily turnover.
- Saudi Arabian Monetary Authority fined 16 financial institutions for “violating lending principles to individuals” i.e. exceeding debt burdens imposed in proportion to monthly income.
- Inflation in Saudi Arabia fell for a fourth consecutive month, falling 1.9% yoy in Apr. While the sub-index for housing, water, electricity, gas and fuel prices declined 7.8% yoy, food and education costs were up 1% and 1.3% respectively.
- Saudi Arabia’s special tax on electronic cigarettes and sugary drinks came into effect last week, extending similar taxes introduced in 2017: a 100% tax would be levied on e-cigarettes and products used in them, and a 50% tax on sugared drinks.
- Saudi Arabia becomes top oil supplier to China again: China’s crude oil imports from Saudi Arabia increased by 43% yoy to 6.3mn tonnes or 1.53mn barrels per day (bpd) in Apr. Russian supplies were 6.12mn tonnes, or 1.49mn bpd.
- Saudi Arabia’s trade surplus with Japan narrowed by 7.2% yoy to USD 2.293bn in Apr; exports declined 6.0% to USD 2.604bn while imports were up 4.3% to USD 311.165mn.
- The value of joint Saudi-US contracts rose to USD 13bn in Q1 2019, according to the US-Saudi Arabian Business Council, with energy top sector (USD 3.1bn in contracts).
- Saudi Arabia sold SAR 2.84bn (USD 757mn) in monthly Sukuk issuances in May.
- Saudi Tadawul approved the listing of SAR 2.84bn worth government debt instruments.
- A Saudi commercial court has accepted a filing by conglomerate Ahmad Hamad Algosaibi and Brothers to have its decade-long dispute with creditors resolved under the new bankruptcy law, while rejecting a demand to liquidate the company.
- Both Oman and Iraq are trying to avert a confrontation between US and Iran, by reducing tensions via meetings and delegation visits.
- GCC bond and sukuk issuance increased by USD 32bn in Q1 2019, bringing the total outstanding debt in the region to USD 478bn, according to a National Bank of Kuwait report.
- Inflation in Abu Dhabi declined by 8% during the second week of Ramadan, with food and beverages costs falling 3%. Transport and utilities costs were down by 8.3% and 3.5% yoy during the 4-month period, thereby contributing to the decline.
- Total foreign assets of the UAE central bank increased by 12% yoy in Apr to AED 365.5bn (USD 99.5bn). In mom terms, foreign assets fell by 3%. M2 increased by 0.5% mom to AED 1.335trn in Apr, while gross credit was up 0.1% mom to AED 1.6769trn.
- The Dubai Financial Market attracted 654 new investors (including 64 institutions) in Q1, bringing the total investor base up to 843,778 investors. Institutional investors’ share of trading activity touched 53.2% in Q1 and their ownership reached 83.4% of market cap.
- The Dubai Department of Economic Development issued 9514 new licenses in Jan-Apr, up 38.3% yoy, with Apr alone seeing the issuance of 2805 new licenses (+60% yoy).
- The Jebel Ali Free Zone (JAFZ) announced that it will waive an estimated AED 35mn (USD 9.5mn) in fines owed by its businesses. The free zone had earlier announced plans to return cash and bank guarantees to businesses in a push to protect wages of its employees.
- Hotel revenues in Abu Dhabi increased by 36.8% yoy in Feb, according to the Statistics Centre Abu Dhabi.
- Dubai expatriates’ disposable income slipped by 19% yoy to USD 2068 per month (after paying rents) – 11th position globally – according to Deutsche Bank’s Mapping the World’s Prices 2019 survey. Average rents (based on a 2-bed apartment) dropped by 12% to USD 1576 per month while monthly salaries dropped by 17% to USD 2856 per month.