GLOBAL Developments Bottomline: Global economy continues to lose momentum –JPMorgan Global PMI fell to 51.3 in Aug, near a 3-year low, largely driven by the decline in global trade (which dropped for a 12th consecutive month; goods exports fell at the sharpest rate since Oct 2012). Data from the EU indicate a weak Q3 and support the case for ECB to unveil its stimulus package at the Sep 12 meeting while in the UK, Brexit uncertainty (PM Johnson plans a 2nd bid to trigger snap elections) and risk of recession continues (the Bank of England predicts a one-in-three chance the economy will shrink in yoy terms by early-2020). Political drama continued in Italy (its 67th government in power since World War II) as well while Argentina imposed capital controls.
- Bahrain’s National Bureau for Revenue called for the VAT registration of entities generating/ expecting to generate between BHD 18,750-500k in taxable supplies annually. More than 4,500 entities have registered since VAT launched on Jan 1.
- Bilateral trade between Bahrain and UK touched GBP 1.1bn as of end-Mar 2019, up 9% from the previous year, according to the British Ambassador to the country.
- Egypt’s non-oil private sector activity slips back into contractionary territory – the PMI dipped to 49.4 in Aug (Jul: 50.3), as a result of “mild declines in output and new orders”. Optimism about future activity, however, touched an 18-month high.
- Non-oil exports from Egypt grew by 2% yoy to USD 2.021bn in Jul, with industrial exports accounting for 83.8% of the total.
- Gold reserves at Egypt’s reached a record high of USD 3.32bn in Aug (+8.6% mom). Net foreign reserves grew by 0.12% mom to USD 44.969bn by end-Aug.
- According to its Executive Chairman, Egypt’s stock market plans two more listings before year-end, in addition to introducing short-selling.
- Egypt’s second phase of state privatisation has been postponed to Jan 2020, from the planned date of Sep this year, revealed the public enterprise minister.
- Egypt’s fuel subsidies fell to EGP 85bn ($5.15bn) in 2018-19 from EGP 120.8bn a year ago. Fuel prices were raised by 50% in Jun 2018, and again by 30% in Jul 2019.
- Egypt expects a budget deficit of 7.2% in fiscal year 2019-2020 versus last year’s 8.2%, as per the finance minister.
- Public debt to GDP ratio fell in Egypt to 90.5% at end-Jun 2019, from 108% in Jun 2017, revealed the finance minister. Aim is to reduce this further to 82.5% in 2020 and to 77.5% in 2022.
- Egyptian banks’ local deposits increased by 0.9% mom to a record-high EGP 2.68trn in Jul. Foreign-currency deposits fell to EGP 708.63bn from Jun’s EGP 714.6bn.
- Starting Sep 1, Egypt’s ministry of finance replaced the monthly customs rate with one set on a daily basis as per exchange rates announced by the central bank. The monthly system was set in Jan 2017 to stabilize the rate following floating of EGP.
- Egypt’s natural gas production increased to 7bn cubic feet (bcf) per day from a level of 6.8 bcf per day at the end of Jun, reported Reuters.
- Crude oil exports from Iraq increased to 3.603mn barrels per day (bpd) in Aug from 3.566mn bpd the month before, as per the oil ministry.
- Jordan’s trade deficit narrowed by 8.8% yoy in H1 this year, thanks to a 4.5% rise in exports (to JOD 2.257bn) alongside a 3.8% dip in imports (to JOD 6.597bn).
- Unemployment in Jordan increased to 19.2% in Q2: high youth unemployment continues at 46% and 40% respectively for the 15-19 and 20-24 age groups.
- Kuwait’s trade surplus edged up by 1.3% yoy to KWD 5.05bn (USD 16.7bn) in H1 this year. Imports were down 3.9% to KWD 5.11bn & exports declined 1.3% to KWD 10.16bn.
- The Boursa Kuwait IPO received an approval from the CMA: the listing, expected to happen in Q4 2019, will see CMA’s 50% stake in the company distributed to citizens.
- Kuwait’s airport welcomed 1.7m passengers in Aug, up 3% yoy, versus Jul’s 1.36mn.
- Lebanon’s PMI inched up to 47.8 in Aug (Jul: 47.7), thanks to a softer decline in total new orders, but remained in contractionary territory.
- Lebanon declared a “state of economic emergency” last week, with the PM stating that emergency measures would be taken to speed up economic reforms. S&P warned that the central bank had enough foreign currency reserves to last only for a year, and the reserves’ continued depletion could test the currency peg and also trigger a downgrade to CCC rating.
- Oman’s GDP fell by 1.6% yoy in Q1 2019, totaling OMR 7.066bn (USD 18.4bn); oil GDP also fell by 0.5% yoy to OMR 2.412bn due to lower oil prices.
- Saudi Arabia’s PMI rose to 57.0 in Aug from Jul’s 5-month low of 56.6, supported by output growth (60.7 from Jul’s 59.2) and new orders (63.5 from 63.4). New export orders declined to 52.7 (53.2) & employment levels remained subdued (50.1 vs 50.4).
- Saudi Arabian bond market increased by 29% in volume to USD 25.6bn from 8 deals in H1 this year, according to a report by Debtwire Par. Loan market meanwhile witnessed a 53% yoy drop in volume (to USD 9.8bn) from 13 deals.
- Saudi banks’ holdings of government bonds surged by 25.08% yoy to SAR 358.53bn in Jul, according to SAMA data.
- Remittances from Saudi Arabia declined by 5.86% yoy to SAR 11.46bn (USD 3.06bn) in Jul. On a monthly basis, remittances were up by 31.5%.
- Saudi Arabia will launch a new tourist visa on Sep 27 – with a fee of SAR 300 (USD 80 or EUR 70) plus SAR 140 for medical insurance – allowing citizens of 51 countries to visit. With a validity of 1 year, the visa can be applied via an electronic platform or visa on arrival.
- According to Mastercard’s Global Destination Cities Index, Dubai topped the visitor spending list (total spend of USD 30.82bn & an average spend of $553), followed by Makkah ($20.09bn) and Bangkok ($20.03bn). Bangkok remained the most visited city (22.78mn international overnight visitors) followed by Paris (19.1mn), London (19.09mn), Dubai (15.93mn) and Singapore (14.67mn).
- UAE’s non-oil private sector growth falls: PMI fell to an 8-year low of 51.6 in Aug (Jul: 55.1). Output growth rate was at its weakest in over six years, while employment slipped to 49.9 (50.5).
- The manufacturing sector’s contribution to the UAE’s non-oil GDP grew 2.5% yoy to AED122bn in real prices in 2018.
- Dubai announced the formation of a higher committee for real estate planning, to rebalance the industry. Sheikh Mohammed also tweeted that he wants committee to ensure that “semi-government real estate companies in Dubai won’t compete with private sector investors” and draw up a 10-year strategic plan for the sector.
- Dubai’s Emirates airline will stay and maintain operations at its Dubai International airport hub for another 10 years, as the completion of the Dubai World Central airport gets pushed back to 2030.
- Dubai welcomed more than 1.4mn passengers in the last two weeks of Aug, according to an official in the General Directorate of Residency and Foreign Affairs.