GLOBAL Developments Bottomline: The world awaits the impact from Sep 1 US tariffs – to be imposed on Chinese exports worth USD 125bn – and China’s retaliatory tariffs while the Japan-South Korea trade dispute drags on, and the US and Japan agree “in principle” to a trade deal “worth billions” to be signed in Sep (wishful thinking (?) as details are still pending). Into the 9th month of the year, and the greatest policy uncertainty still remains trade: but with reverberations of breakdown of trade talks affecting countries from Germany to India to South East Asia, there is growing consensus on the need to accelerate talks and reach an agreement – though, for now, it seems a pipe dream. In the UK, meanwhile, the PM announced that in the run-up to Brexit, its Parliament would be suspended altogether. In Latin America, Brazil and Mexico narrowly escape recession as Argentina prepares to tackle the debt crisis; a critical question now is whether Lebanon will follow in its path soon.
- Egypt’s money supply (M2) increased by 12.1% yoy to EGP 3.885trn (USD 235bn) as of end-Jul, according to central bank data.
- Egypt’s finance ministry is considering the issuance of EGP-denominated bonds by early-2020 (though the size and timing are not finalized yet), reported Enterprise.
- Egypt’s exports to the G7 accelerated by 8.6% yoy to USD 3.8bn in H1 this year; of the G7 nations, US topped the list receiving USD 1bn worth imports from the country, followed by Italy and UK at USD 951.7mn and USD 719.1mn respectively.
- Loans and credit facilities offered by banks to micro- and SMEs in Egypt amounted to EGP 144.2bn during the period Jan 2016-Jun 2019, revealed the central bank.
- Remittances into Egypt grew by 43% mom and 15.4% yoy to USD 3bn in May.
- Egypt’s petroleum sector has attracted investments worth EGP 1trn (USD 60bn), disclosed the petroleum minister; maximum investments went into projects in operation (USD 32.6bn).
- Iraq crude oil exports from its southern ports was around 3.482mn barrels per day (bpd) as of end-Aug, reported Reuters; exports from the southern Basra region touched 3.435mn bpd in Jul, following a 3.39mn bpd reading in Jun.
- Jordan aims to have clean energy sources contribute 20% of Jordan’s electricity needs by 2022, compared with just 1% in 2014, disclosed the energy minister. He also revealed that the value of renewable energy investments had crossed the USD 4bn mark.
- Revenues collected by Kuwait’s electricity and water ministry amounted to KWD 381.621mn (USD 287mn) during a full year ended in Apr 2019, reported Al Anba newspaper. This compares to revenues of KWD 294.3mn in the 2017-18 budget (+29.7%).
- Lebanon’s foreign exchange reserves (excluding gold) increased by USD 1.4bn in the last 2 weeks of Aug to USD 38.66bn, according to the central bank. A statement attributed this surge to “the influx of deposits from the non-resident private sector, directly to BDL (and not due to sovereign or state deposits)”.
- Lebanon’s CDS spreads increased to a fresh record high of 1250 last Wed, on increased tensions with Israel and potential debt default worries.
- Credit extended by Oman’s conventional banks increased by 4.5% yoy as of end-Jun. Credit to the private sector grew by 1.9% to OMR 18.9bn during the year. Private sector deposits – which was up by 3.1% to OMR 12.9bn – accounted for 65.4% of total deposits.
- Oman’s budget deficit narrowed by 53% yoy to OMR 660.6mn (USD 1.72bn) in H1 this year. Deficit was at OMR 358.4mn during the Jan-May period.
- Oman announced a 20% surcharge for services (fees will range between OMR 20-500) provided by ministry of commerce & industry via the electronic system Invest Easy.
- Oman’s natural gas production surged by 12.5% to 43,750mn cubic metres last year, according to the central bank – from an estimated total reserve of natural gas at 25tn cubic feet (with 22 gas production fields).
- SAMA’s assets declined by 0.66% yoy and 1.5% mom to SAR 1.93trn (USD 515.28bn) by end-Jul. Separately, Saudi Arabia’s general public reserves dipped by 13.25% yoy to SAR 497.6bn by end-Jul while the current account surged by 166.35% to SAR 64.32bn.
- Saudi Arabia’s exports dropped by 18.9% yoy and 12.5% mom to SAR 77.08bn in Jun. Oil exports were down by 22.2% yoy (to SAR 60.03bn) while non-oil exports edged down by 4.7% in Jun. Oil exports were down by 3.96% yoy to SAR 391.83bn in H1.
- Saudi Arabia’s non-oil trade with its Arab counterparts declined by 4.7% yoy to SAR 71.67bn (USD 19.11bn) during H1 this year. Bilateral trade with the UAE touched SAR 32.78bn during this period, making it the largest trade partner among these nations.
- According to the IIF, thanks to its capital market reforms and MSCI inclusion, Saudi Arabia received more than USD 4.5bn in foreign equity inflows in May and a further USD 2bn in the first three weeks of Aug, making it the top equity investment destination among emerging markets. Tadawul is estimated to attract an additional USD 5bn in equity inflows.
- Remittances from Saudi Arabia dropped by 12.5% yoy to SAR 72.82bn (USD 19.42bn) in Jan-Jul 2019, as per SAMA data. In Jul alone, remittances were down by 5.86% yoy to SAR 11.46bn.
- The Wall Street Journal reported that Saudi Aramco is considering Tokyo as the international destination for its IPO listing, given political uncertainties in the UK and Hong Kong.
- OPEC posted the first oil-output rise this year in Aug: in spite of cuts from Saudi Arabia, OPEC pumped an estimated 29.61mn barrels per day (bpd) last month, up 80k bpd from Jul. Supply boosts came from Nigeria (80k bpd) and Iraq (60k bpd) while Saudi production remained at 9.63mn bpd (vs quota of 10.311bpd).
- UAE’s gross domestic savings increased by 6.6% yoy to AED 516.1bn ($140.5bn) in 2018 (prev high: 2015’s AED 491.8bn) according to the Federal Competitiveness & Statistics Authority.
- Money supply in the UAE (M2) edged up by 0.9% mom to AED 1.364trn at end-Jul. Gross credit was up 0.7% mom to AED 1.705trn while gross bank assets rose by 0.6% to AED 2.976trn.
- UAE’s Federal Tax Authority disclosed the exemptions for the new “sin tax”, introduced for sweetened beverages, sugary drinks and electronic smoking devices. This will include ready-to-drink beverages containing at least 75% milk, 75% milk substitutes, baby formula or baby food as well as beverages consumed for special dietary needs and for medical uses.
- Average room rates in Dubai fell by 10.7% yoy to AED 486 in Jun 2019, according to EY’s Hotel Benchmark Survey report. Occupancy rates during the month picked up by 11.8% to 66.7% while revenue per available room was AED 324 (+8.4%).
- UAE leads the Middle East hotel construction pipeline in Jul: according to STR, pipeline data shows 427 projects in construction accounting for 123,742 rooms, of which UAE leads (31.8% or 54,438 rooms) followed by Saudi Arabia (41,207 rooms).