Global Developments Bottomline: Geopolitical tensions are on the rise with the seizing of British vessels in the Strait of Hormuz, resulting in statements about “serious consequences”. Meanwhile, the IIF reported an increase in global debt to USD 246.5trn in Q1 this year, almost 320% of global economic output. China’s debt, at over USD 40trn, topped 300% of GDP and accounts for some 15% of all global debt. This is surpassed by US’s record-high USD 69trn debt in Q1. Lower growth prospects, rising geopolitical tensions, and rising debt levels amidst more loose monetary policy seems like a perfect ‘economic’ storm is brewing. To look forward to this week are also the new British PM, the ECB meeting on Jul 25 and initial PMI readings.
- Bahrain-origin exports grew by 6% yoy to BHD 595mn (USD 1.56bn) in Q2 this year. Saudi Arabia (BHD 145mn), US (BHD 84mn) and UAE (BHD 65mn) were the top three importing nations. Value of imports declined by 11% to BHD 1.266bn.
- Egypt’s GDP grew by 5.6% yoy in the fiscal year 2018-19, according to the PM. He also disclosed a primary budget surplus of EGP 104bn (or 2% of GDP) and a narrowing of budget deficit to 8.2% of GDP (from the previous year’s 9.8% and below the official forecast of 8.4%).
- Egypt’s revenues from taxes on foreign trade increased by 16.7% yoy to EGP 35.516bn during Jul 2018-May 2019. Overall tax revenues grew by 18.1% to EGP 613.38bn and tax revenues accounted for 80.2% of total revenues.
- The IMF is set to vote on the final tranche of the USD 12bn loan to Egypt on Jul 24, according to the PM.
- Credit disbursed by banks in Egypt increased to EGP 1.8723trn in Jul 2018-Apr 2019, according to the central bank. Foreign holdings of Egypt’s treasury bills increased by 4.08% mom to EGP 276.46bn in May.
- The Suez Canal Economic Zone plans to invest USD 55bn in 15 years, according to the Chairman of the authority.
- Iraq’s oil exports from its southern ports reached 3.42mn barrels per day till mid-Jul; this compares to exports to the tune of 3.39mn bpd in Jun and 3.41mn bpd the month before.
- Inflation in Jordan picked up to 0.5% yoy in H1 this year, thanks to a rise in prices of beans and vegetables (0.37%), as well as rent and education costs
- Jordan’s tourism revenues increased by 8.3% yoy to USD 2.6bn in H1 this year, driven by a 5.6% uptick in the number of tourists.
- Kuwait’s real GDP growth reached 2.6% yoy in Q1, with the oil sector growing at 1.3% and a non-oil sector expansion at 4.1%.
- The central bank of Kuwait issued bonds and related Islamic tawarruq worth KWD 240mn ($791mn), with a 3% rate of return; issue was oversubscribed 10.89 times.
- Kuwait’s foreign reserves grew by 1.61% yoy and 0.42% mom to USD 39.37bn in May.
- Lebanon’s lawmakers ratified an austerity 2019 budget on Fri, with 83 MPs voting in favour of endorsing the budget which aims to reduce the budget deficit to about 7% down from 2018’s 11.1%.
- Fiscal deficit in Lebanon narrowed by 28% yoy to USD 1.38bn in Jan-Apr 2019, thanks to a 15.4% decline in expenditures during the period, likely due to non-payment of dues and payables. On the revenues side, tax receipts fell by 3.3% yoy to USD 2.73bn during the period: 29.4% were VAT receipts that decreased by 17% annually.
- Lebanon’s gross public debt edged up by 0.3% yoy to USD 85.4bn in Jan-May 2019.
- Three ex-PMs of Lebanon, after their meeting with the Saudi King, indicated that Saudi Arabia planned to support Lebanon; this news lifted Lebanon’s dollar bonds.
- Oman’s nominal GDP grew by 12% yoy in 2018, according to the central bank, supported by a 37.1% and 2.9% rise in the oil and non-oil sectors respectively.
- Oman’s capital market raised OMR 1.8bn ($4.67bn) funds in 2018, according to the Capital Market Authority; total value of issued corporate bonds and Sukuk was OMR 277.4mn.
- Over 65k expatriates have left Oman between May 2018 and May 2019: number of expats declined to 2.02mn by end-May 2019 and the expat workforce declined to 1.79mn.
- Businesses in Saudi Arabia will be given the option to remain open 24 hours a day (for a fee).
- Saudi Arabia approved a new Government Tendering and Procurement law which “seeks to allocate and manage financial resources effectively, provides more transparency in all tenders and procurement procedures”.
- Saudi Arabia is studying regulations to license new stock market operators, reported the Maaal financial website.
- Saudi crude oil exports dropped to 6.94mn barrels per day in May (Apr: 7.18mn bpd).
- Saudi Arabia’s holdings of US treasuries ticked up by 10.36% yoy and 1.36% mom to USD 179bn in May. This is the 4th consecutive month of Saudi raising its treasuries holdings.
- Funding in MENA startups surged by 66% to USD 471mn in H1 this year, according to Magnitt. The UAE remained the most active ecosystem accounting for 26% of all deals, followed by Egypt (21%) and Lebanon (13%).
- Inflation in Dubai fell to a 7-month low of 2.68% yoy in Jun, as housing and utilities costs fell by 6.4% as did transport (-0.99%) and healthcare (-0.3%).
- UAE changes sponsorship rules: the new resolution allows expats to bring family members into the country so long as the total monthly family income is AED 3000 (including housing) or AED 4000 (excluding housing), moving away from the job title criteria.
- Exports through Abu Dhabi ports increased by 14.8% yoy to AED 27.6bn (USD 7.5bn) in Q1 while the value of imports declined by 7.7% to AED 24.2bn.
- Abu Dhabi’s Industrial Production Index expanded by 16.6% yoy to 142.5 in Q1, supported by the 16.3% increase in the “manufacture of unclassified machinery & equipment”.
- The Abu Dhabi Global Markets issued new Fintech regulations:a regulatory framework for digital investment managers, or robo-advisers, and a guide on the establishment of digital banks earlier this month.
- Nasdaq Dubai listed a USD 1bn Sukuk and a USD 300mn conventional bond from DP World last week. DP World is the largest UAE debt issuer by value on the exchange, with sukuk and conventional bond listings now totaling USD 8.09bn.
- A UAE citizen should be paid a minimum wage of AED 5000 (USD 1361) in private sector jobs, reported Emarat Al Youm, citing the Ministry of Human Resources and Emiratisation.
- The UAE is gearing up to issue a new space law, which will promote investment in the space sector, including space tourism and exploration, according to the director General of the UAE Space Agency.