GLOBAL Developments Bottomline: The focus has shifted slightly from trade uncertainty (still unresolved, with the latest being the Chinese delegation’s abrupt departure without visiting few US farms, as was expected before) to geopolitics in the region, following the attacks on Saudi oil fields. The attack on Saudi Aramco facilities has raised uncertainty about Saudi oil production as well as reserves (oil fields) that may be subject to other attacks leading to supply disruption. As the Aramco IPO plans continue, a quick turnaround on restoring oil production will work in its favour. However, more problematic and a much higher source of risk and determining factor on the future course of oil prices is whether the attacks could become a casus belli for military confrontation and war with Iran.
- After Fed cut policy rates by 25bps, Saudi Arabia, UAE and Qatar followed suit while Bahrain (pegged to $) and Kuwait (pegged to a currency basket) stayed put.
- Bahrain is planning to issue 7-year Islamic bonds and 12-year conventional bonds, reported Reuters, and has accordingly mandated banks for the dual-tranche dollar-denominated issue.
- Egypt expects to grow by an annual rate of 8% by 2022, supported by a better investment climate, disclosed the nation’s PM.
- Banks in Egypt have lent EGP 146bn (USD 8.93bn) to SMEs since the central bank directive for banks to allocate 20% of their loan portfolios to SMEs. Under the initiative, banks offer SMEs soft loans with interest rates of 5% and 7%.
- Egypt’s household sector accounts for 80.4% of total bank deposits in Jun 2019, as per the central bank. Government deposits grew by 3.1% mom to EGP 610. 45bn in Jun. Banks have reduced their NPL allocations by 2.3% mom to EGP 122.27bn (Jun 2019).
- Egypt plans to establish 7 new free zones in the country – bringing the total up to 16- with an estimated 1000+ projects and creating about 120k jobs.
- At least two state companies and one private pharmaceuticals firm (worth EGP 1bn+) are expected to make share offerings in the Egyptian stock exchange this year.
- Egypt-US bilateral trade increased by 19.7% yoy to USD 5.35bn during Jan-Jul 2019, with exports to the US up 37.5% to USD 1.9bn.
- Jordan’s tourism revenues increased by 9.2% yoy to USD 3.9bn in Jan-Aug 2019, according to the central bank, driven by a 7% uptick in number of tourists.
- About 153k Syrians (including 33k registered refugees) left Jordan after the Jaber-Nasib border crossing was reopened on Oct 15, as per the interior ministry.
- Kuwait’s oil revenues declined by 16.09% yoy to KWD 6.78bn (USD 22.37bn) in Apr-Aug this year, after the price of Kuwaiti crude averaged USD 60 per barrel during this period. Budget surplus narrowed by 90.49% to KWD 247.65mn during this period (after deducting the future generations’ reserve) after expenses grew by 20.71% yoy to KWD 7.11bn and revenues declined by 13.31% to KWD 8.49bn.
- Kuwait’s bank deposits edged up by 1.2% yoy to KWD 43.6bn in Jul, while credit grew by 4.2% to KWD 37.8bn.
- Kuwait’s trade surplus with Japan narrowed by 18.3% yoy to USD 552mn in Aug; exports to Japan fell 18.2% to USD 649mn and imports dipped by 18.2% to USD 97mn.
- Saudi Arabia was in discussions with Lebanon about providing financial support, revealed the former’s finance minister, though no details were provided. According to Lebanon’s PM, a new bilateral council was being set up, with work expected to start in Oct.
- Oman’s August oil output touched 30.08mn barrels, recording a daily average production of 970,305 barrels. While oil exports during the month was 29.74mn barrels, exports to China tumbled by 22.5% mom.
- Oman reported real estate transactions worth OMR 155.22mn (USD 402mn) in Aug while collected fees was reported at OMR 2.367mn.
- Hotel revenues in Oman crossed USD 300mn in H1 this year, welcoming 115k guests in Jun alone when occupancy rates increased to 37.6% (Jun 2018: 36.1%).
- Saudi Aramco will resume full oil production from its attacked sites by end-Sep. The attacks halved the crude output, by shutting down 5.7mn barrels per day (bpd) though it was later disclosed that about 2mn bpd were brought back in Abqaiq (of 4.5mn bpd before) and 30% of Khurais’s output (1.2mn bpd before). Separately, the finance minister stated that the attacks had “zero impact” on revenue though the OPEC cuts would lower economic growth.
- Saudi Arabia’s foreign reserve assets grew by 2.7% qoq and 1.5% yoy to SAR 1.913trn in Q2. Total reserve assets picked up by 2.7% qoq and 1.2% yoy to SAR 1.9233trn.
- In a bid to support industrial investment, Saudi government announced that it would bear the expat fees in industrial installations (holding industrial licenses) for 5 years, reported Okaz. The required criteria will be laid down by the ministry of industry and mineral resources.
- Saudi Arabia’s crude oil exports rose to 6.88mn barrels per day (bpd) in Jul from 6.72mn bpd in Jun, as per data from the Joint Organizations Data Initiative.
- Saudi Arabia increased its US Treasury bills ownership by 8.4% yoy and 0.67% mom to USD 180.8bn at end-Jul.
- Saudi Arabia raised SAR 8.834bn in sukuk issuances, as per the finance ministry last week.
- Saudi Arabia’s civil aviation sector will create about 100k direct jobs and almost 427k indirect jobs in aviation and related sectors including tourism, according to a study by the International Air Transport Association (IATA).
- UAE’s monetary base grew by 1.7% from end-2018 to AED 386.3bn by end-Aug.
- CPI in Abu Dhabi declined by 0.8% yoy in Jan-Aug, with the housing and utilities as well as transport prices down by 3.6% and 6% respectively during the period.
- The logistics sector in UAE is expected to contribute 8% of GDP by 2021; last year, the sector’s gross output touched AED 219bn (USD 59.67bn).
- The contribution of Dubai’s construction sector to GDP grew to 6.4% in 2018 versus 6.2% in the two years prior. In its Annual Report, the Dubai Land Department disclosed that the value of real estate transactions grew by 12% yoy to AED 106bn ($ 28.8bn) in Jan-May 2019.
- Dubai Economy’s Business Confidence Index improved in Q2, rising by 2.2 points from Q1 to 114.9 points, supported by potential expansion to new export markets and Expo-related projects.
- DIFC reported a three-fold growth in registered FinTech firms to more than 100 since the end of 2018.
- Dubai moved up to 8th ranking in the Global Financial Centres Index (GFCI), rising from 12th last year.