Global Developments Bottomline: The IMF revised downwards its global growth projection to 3.2% this year and 3.5% in 2020, in its latest update of the World Economic Outlook. The PMI readings continue to reinforce the diverging trends between the manufacturing and services sector; policy uncertainty and resulting delays in business investments expedites the downhill move in manufacturing (e.g. auto sector). Meanwhile, the no-deal Brexit rhetoric has been ramped up the new UK PM, while the European leaders have insisted that they will not reopen the Withdrawal Agreement. A busy central bank meetings week: the BoJ meets as does the Fed (likely to announce the first rate cut in more than a decade), while the BoE will likely hold off rate decisions till a clear way forward on Brexit.
- Bahrain’s ban of the use of single-use plastics came into effect from 25th July; next phases will witness a blanket ban on the use of plastic bags at malls and supermarkets.
- The IMF board completed the final review of Egypt’s USD 12bn loan program; the country can now draw the last tranche of USD 2bn in funds.
- Bank deposit growth in Egypt slowed to 11.46% in Apr (Mar: 11.85%), with households accounting for 79.5% of total bank deposits till end-Apr. Net foreign assets of the banking sector decreased by EGP 33.2bn during Jul 2018-Apr 2019.
- Egypt’s index of manufacturing and extractive industries, excluding crude oil and petroleum products, increased by 4.7% mom to 138.6 points in May.
- Egypt-UAE bilateral trade grew by 14% yoy to USD 5.48bn in 2018, reported the Al Ittihad newspaper.
- Twenty-seven solar power plants in Egypt, with a total capacity of 1.2GW, started operations and were connected to the national electricity grid. The capacity will rise to 1.46GW in Sep when all 32 plants are completed.
- Kuwait’s crude oil exports declined by 5% mom and 1.68% yoy to 1.986mn bpd in May.
- Kuwait Investment Authority reported a net profit of USD 19bn from 2012 till now, with current value of investments at USD 31.8bn, reported Al Anba newspaper.
- S&P affirmed Kuwait’s credit rating at AA with a stable outlook, also stating that a broad political and economic reforms could raise the current rating.
- Consumer confidence in Lebanon declined in Q2: the index averaged 70.9 in Q2, down 6.1% qoq from Q1’s 75.5 and 4.3% yoy.
- Lebanon’s central bank approved and processed LBP 380bn($253mn) worth of subsidized housing loans in 2019, out of an allocated amount of LBP 790bn this year.
- Oman received orders worth nearly USD 14bn, given strong investor demand for its dollar bonds. Oman issued USD 750mn in 5-1/2 year and USD 2.25bn in 10-year bonds.
- Fitch affirmed Oman’s BB+ rating with a stable outlook, highlighting that the nation’s “external asset position remains for now stronger than other ‘BB’ category sovereigns”.
- Traded value of property in Oman touched OMR 1.249bn in H1 this year; properties issued to Omani and GCC citizens dropped by 5% yoy (to 109,742) and 39.7% (to 490).
- Credit to the private sector in Oman grew by 2.1% to OMR 18.9bn as of end-Apr while aggregate deposits held with conventional banks increased by 4.7% to OMR 19.8bn.
- Inflation in Saudi Arabia fell 1.4% yoy in Jun; in mom terms, prices were up 0.2%.
- Saudi NEOM is set to announce its second phase strategy – which will include detailed plans for NEOM’s 16 economic sectors and region – by the end of 2019.
- It was reported by Okaz/Saudi Gazette that the fee to be levied to keep stores in Saudi Arabia open 24/7 will not exceed SAR 100k (USD 26,665). The deregulation of business hours could add an estimated 45k direct jobs in the restaurant and retail sectors and create a further 20k indirect jobs over the short to medium term.
- Saudi Arabia sold SAR 5.2bn in sukuk in its local monthly issuance for Jul.
- Saudi Tadawul approved the listing of debt instruments worth SAR 5.216bn($ 1.38bn).
- Reuters reported that Saudi Arabia’s Public Investment Fund was in advanced talks to borrow USD 10bn (in addition to the USD 11bn raised through a 5-year loan last year) and it plans to offer lenders an initial interest rate of around 30bps over the Libor for the 1-year loan (vs. 75bps over Libor offered last year).
- Saudi Arabia’s energy minister disclosed aims to expand the capacity of its east-west pipeline by 40% (to 7mn barrels per day) in two years, in a bid to avoid passing via the Strait of Hormuz.
- The ministry of labour in Saudi Arabia has announced a 100% Saudization of 20 hospitality jobs as of next year.
- Saudi Arabia will cover the VAT costs of buying new houses for its citizens, including those that previously owned houses but sold without benefiting from the tax exemption.
- UAE, ranked 36th globally, is the Arab world’s most innovative nation as per the latest Global Innovation Index. It ranked 24th and 58th on the innovation input and output sub-indices, respectively. Switzerland was ranked as the most innovative nation followed by Sweden, US, Netherlands and UK.
- MENA’s M&A announced deal value increased by 220.8% yoy to USD 115.5bn in H1 this year, according to EY. Announced deal volume however declined by 10.7% to 216.
- Money supply in the UAE increased by 2.2% yoy to AED 1.351trn in Jun; gross credit edged up by 0.7% to AED 1.692trn.
- Foreign assets of the UAE central bank grew by 3.5% yoy to AED 364bn ($99.1bn) in Jun. The value of foreign securities held to maturity fell by 53% to AED 25.87bn.
- Private sector employment in the UAE rebounded, rising by 1.2% in Q1 vs a 0.6% drop in the previous quarter, supported by an acceleration in real estate sector jobs (+4.4% yoy), according to the UAE central bank.
- Abu Dhabi’s GDP grew by 5.7% yoy to AED 207bn (USD 56.4bn) in Q1, supported by the oil sector which reported a 12.8% growth to AED 106.8bn.
- With inflation in Abu Dhabi declining by 0.2% mom in Jun, H1 this year posted a dip in CPI by 0.6%. Housing and utilities costs dropped by 3.5% in H1 while transport costs were down 5.8%.
- Bilateral trade between Dubai and China touched AED 36bn($9.8bn) in Q1 this year, according to Dubai Customs. China has been Dubai’s top trade partner since 2014.
- Abu Dhabi will introduce road toll charges from Oct 15: the charge will be AED 4 during peak hours at 4 tollgates while at off-peak times the toll will be AED 2.
- Occupancy rates at Dubai hotels fell by 0.9% to 67.1 in Q2 – the lowest since 2009 – on supply outgrowing demand. According to STR, the absolute average daily rate (down 12.3% to AED 513.73) and revenue per available room (-13.1% to AED 344.65) were the lowest since 2003.
- Personal financial wealth in the UAE grew by 5% to USD 400bn between 2013 and 2018, according to the Boston Consulting Group. This is expected to accelerate by a further 8% per year to USD 600bn by 2023.