GLOBAL Developments Bottomline: Flash PMI readings in Europe showed slowing services activity although manufacturing edged up, pointing towards stabilization (though still under-50), while in the US numbers were more optimistic. Trade tensions drag on with mixed messages, and concerns remain as Trump is expected to sign legislation backing pro-democracy protestors in Hong Kong. Meanwhile, the ten-year US government borrowing costs are just 15bps away from tumbling below two-year yields i.e. curve inversion or a dependable predictor of recession.
Regional Developments
- Bahrain central bank issued New Government Development Bonds – with a duration of five years to Nov 10, 2024 – can now be traded on the Bahrain Bourse. This brings the total bonds and sukuk value on the bourse to USD 6.321bn from 13 listings.
- Expatriates in Bahrain with a minimum BHD 50k (USD 132,629) stake in any financial, trade, tourism, industrial projects or other businesses can apply for self-sponsorship residence visas. This is half the previous requirement of BHD 100k.
- Egypt’s recent dollar-denominated bond issue recorded the highest oversubscription rate compared to the nation’s previous Eurobond issuances: the $2bn triple-tranche bond issue was oversubscribed by more than 7 times attracting bids worth $14.5bn.
- Egypt’s exports to Africa grew by 27.4% yoy to USD 4.73bn in 2018; Algeria topped African importers from Egypt in 2018, with imports value at USD 979.2mn. Bilateral trade with US increased to $7.6bn in 2018; this is up 322% from $1.8bn in 1987.
- Egypt aims to increase oil exports to USD 8.5bn by the end of the current fiscal year compared to USD 7.7bn a year ago. Crude oil production in Egypt declined by 2.97% yoy to 170.9mn barrels in Jan-Sep 2019, as per data from the Joint Organisations Data Initiative.
- Egypt’s government debt to GDP ratio declined to 88.4% in Q2 2019, down from 97.3% in the same period a year ago, according to the Institute of International Finance.
- Egypt plans to lower the prices of subsidized food staples from Dec, stated the supply minister. No reasons were given for the price cuts.
- Jordan will not impose new taxes in its proposed 2020 budget, revealed the finance minister; measures would be put in place to reduce tax evasion and boost revenues.
- Jordan launched the second incentive package of its recently unveiled comprehensive programme.
- Kuwait’s budget recorded a deficit of KWD 1.7bn (USD 5.6bn) in Apr-Oct 2019 compared to a surplus of KWD 1.9bn during the same period a year ago. Revenues dropped by 16.4% yoy to KWD 10.13bn while spending surged by 21% to KWD 10.878bn.
- Kuwait withdrew KWD 42.788bn (USD 141bn) from the general reserve during the last five years. The highest withdrawal rate of KWD 12.793bn was registered in the fiscal year 2015-16.
- Kuwait’s non-oil exports grew by 11% yoy to KWD 16.9mn (USD 55mn) in Oct. Iraq topped the list of Kuwaiti exports, followed by Jordan and Algeria.
- Kuwait’s trade surplus with Japan narrowed by 13.5% yoy to JPY 41.38bn (USD 381mn) in Oct. Middle East’s trade surplus with Japan declined by 37.8% to JPY 434.24bn.
- Remittances to Philippines from Kuwait increased by 16% yoy to $562mn in Jan-Sep.
- China’s Sinopec, which plans to launch a new USD 5.7bn refining and petrochemical complex in Q2 2020, is seeking to finalise a crude oil supply deal with Kuwait to use it as key feedstock.
- Lebanon’s House Speaker scheduled a session of parliament for this Wednesday to discuss draft legislation on banking secrecy and returning stolen state funds. Nov 28 will be critical for the country: Eurobonds worth USD 1.5bn are set to mature with questions around whether it would be paid on schedule this time.
- An advisor to Oman’s Capital Market Authority disclosed that several new initiatives, products and instruments are being designed to boost liquidity in the market: this includes ETFs, sukuk issuances based on a blockchain platform as well as crowdfunding platform for small investors.
- The Central Bank of Oman, in its 2019 Financial Stability report, revealed that it does not endorse crypto-currencies or other fintech-based assets that have weak governance or are speculative in nature and given this approach crypto-currencies lack the volume to pose any risk to the Omani financial sector.
- Saudi Aramco’s order book has reached SAR 73bn (USD 19.5bn) during the first 5 days of the offering, divulged Samba (one of the banks managing the deal): some 1.8mn retail subscribers injected more than SAR 14bn riyals into the IPO while institutional subscriptions amounted to SAR 58.4bn. It was reported that banks were permitted to give leverage to retail customers at a ratio of 2 to 1 for every riyal they put toward buying Aramco shares, up from the normal limit of 1 to 1. Meetings are being planned in Dubai and Abu Dhabi this week though roadshows in London and New York were shelved with offering focus being largely domestic. Aramco plans to sell 1.5% of its shares or about 3bn shares, at an indicative price range of SAR 30-32, and implying the value of the company at up to 1.7trn.
- Saudi Arabia plans to launch an instant work-visa service next month to support small businesses.
- Wholesale prices in Saudi Arabia increased by 3.25% yoy in Oct. CPI declined by 0.3% yoy in Oct while it picked up by 0.2% mom. The yoy decline was due to a 4.2% decline in housing and utilities, 0.8% fall in clothing and footwear as well as a 0.5% dip in communication prices.
- Employees in Saudi Arabia’s private sector declined by 1.8% qoq to 247,096 in Q2 while average compensation paid and productivity of workers increased by 0.5% and 3% respectively.
- Saudi Arabia’s crude oil exports declined by 3% to 6.67mn barrels per day (bpd) in Sep, according to official data, while crude output fell by 660k bpd to 9.129mn bpd and crude stocks fell by 20.27mn bpd to 152.48mn bpd.
- Oil production across the GCC increased in Oct, according to OPEC’s monthly report. Saudi Arabia’s production grew by 1.174mn bpd to 10.303mn, while UAE pumped 23k bpd more to 3.106mn bpd and Kuwait increased its output by 16k bpd to 2.674mn bpd.
- Saudi Arabia and Kuwait rank top among the Arab holders of US Treasury bonds: Saudi Arabia’s holdings grew by 3% to USD 181.5bn worth bills as of Sep, while Kuwait’s holdings increased to USD 44.1bn (Aug: USD 43.8bn) and UAE’s holdings declined to USD 37.3bn.
UAE Focus
GLOBAL Developments Bottomline: Flash PMI readings in Europe showed slowing services activity although manufacturing edged up, pointing towards stabilization (though still under-50), while in the US numbers were more optimistic. Trade tensions drag on with mixed messages, and concerns remain as Trump is expected to sign legislation backing pro-democracy protestors in Hong Kong. Meanwhile, the ten-year US government borrowing costs are just 15bps away from tumbling below two-year yields i.e. curve inversion or a dependable predictor of recession.
Regional Developments
- Bahrain central bank issued New Government Development Bonds – with a duration of five years to Nov 10, 2024 – can now be traded on the Bahrain Bourse. This brings the total bonds and sukuk value on the bourse to USD 6.321bn from 13 listings.
- Expatriates in Bahrain with a minimum BHD 50k (USD 132,629) stake in any financial, trade, tourism, industrial projects or other businesses can apply for self-sponsorship residence visas. This is half the previous requirement of BHD 100k.
- Egypt’s recent dollar-denominated bond issue recorded the highest oversubscription rate compared to the nation’s previous Eurobond issuances: the $2bn triple-tranche bond issue was oversubscribed by more than 7 times attracting bids worth $14.5bn.
- Egypt’s exports to Africa grew by 27.4% yoy to USD 4.73bn in 2018; Algeria topped African importers from Egypt in 2018, with imports value at USD 979.2mn. Bilateral trade with US increased to $7.6bn in 2018; this is up 322% from $1.8bn in 1987.
- Egypt aims to increase oil exports to USD 8.5bn by the end of the current fiscal year compared to USD 7.7bn a year ago. Crude oil production in Egypt declined by 2.97% yoy to 170.9mn barrels in Jan-Sep 2019, as per data from the Joint Organisations Data Initiative.
- Egypt’s government debt to GDP ratio declined to 88.4% in Q2 2019, down from 97.3% in the same period a year ago, according to the Institute of International Finance.
- Egypt plans to lower the prices of subsidized food staples from Dec, stated the supply minister. No reasons were given for the price cuts.
- Jordan will not impose new taxes in its proposed 2020 budget, revealed the finance minister; measures would be put in place to reduce tax evasion and boost revenues.
- Jordan launched the second incentive package of its recently unveiled comprehensive programme.
- Kuwait’s budget recorded a deficit of KWD 1.7bn (USD 5.6bn) in Apr-Oct 2019 compared to a surplus of KWD 1.9bn during the same period a year ago. Revenues dropped by 16.4% yoy to KWD 10.13bn while spending surged by 21% to KWD 10.878bn.
- Kuwait withdrew KWD 42.788bn (USD 141bn) from the general reserve during the last five years. The highest withdrawal rate of KWD 12.793bn was registered in the fiscal year 2015-16.
- Kuwait’s non-oil exports grew by 11% yoy to KWD 16.9mn (USD 55mn) in Oct. Iraq topped the list of Kuwaiti exports, followed by Jordan and Algeria.
- Kuwait’s trade surplus with Japan narrowed by 13.5% yoy to JPY 41.38bn (USD 381mn) in Oct. Middle East’s trade surplus with Japan declined by 37.8% to JPY 434.24bn.
- Remittances to Philippines from Kuwait increased by 16% yoy to $562mn in Jan-Sep.
- China’s Sinopec, which plans to launch a new USD 5.7bn refining and petrochemical complex in Q2 2020, is seeking to finalise a crude oil supply deal with Kuwait to use it as key feedstock.
- Lebanon’s House Speaker scheduled a session of parliament for this Wednesday to discuss draft legislation on banking secrecy and returning stolen state funds. Nov 28 will be critical for the country: Eurobonds worth USD 1.5bn are set to mature with questions around whether it would be paid on schedule this time.
- An advisor to Oman’s Capital Market Authority disclosed that several new initiatives, products and instruments are being designed to boost liquidity in the market: this includes ETFs, sukuk issuances based on a blockchain platform as well as crowdfunding platform for small investors.
- The Central Bank of Oman, in its 2019 Financial Stability report, revealed that it does not endorse crypto-currencies or other fintech-based assets that have weak governance or are speculative in nature and given this approach crypto-currencies lack the volume to pose any risk to the Omani financial sector.
- Saudi Aramco’s order book has reached SAR 73bn (USD 19.5bn) during the first 5 days of the offering, divulged Samba (one of the banks managing the deal): some 1.8mn retail subscribers injected more than SAR 14bn riyals into the IPO while institutional subscriptions amounted to SAR 58.4bn. It was reported that banks were permitted to give leverage to retail customers at a ratio of 2 to 1 for every riyal they put toward buying Aramco shares, up from the normal limit of 1 to 1. Meetings are being planned in Dubai and Abu Dhabi this week though roadshows in London and New York were shelved with offering focus being largely domestic. Aramco plans to sell 1.5% of its shares or about 3bn shares, at an indicative price range of SAR 30-32, and implying the value of the company at up to 1.7trn.
- Saudi Arabia plans to launch an instant work-visa service next month to support small businesses.
- Wholesale prices in Saudi Arabia increased by 3.25% yoy in Oct. CPI declined by 0.3% yoy in Oct while it picked up by 0.2% mom. The yoy decline was due to a 4.2% decline in housing and utilities, 0.8% fall in clothing and footwear as well as a 0.5% dip in communication prices.
- Employees in Saudi Arabia’s private sector declined by 1.8% qoq to 247,096 in Q2 while average compensation paid and productivity of workers increased by 0.5% and 3% respectively.
- Saudi Arabia’s crude oil exports declined by 3% to 6.67mn barrels per day (bpd) in Sep, according to official data, while crude output fell by 660k bpd to 9.129mn bpd and crude stocks fell by 20.27mn bpd to 152.48mn bpd.
- Oil production across the GCC increased in Oct, according to OPEC’s monthly report. Saudi Arabia’s production grew by 1.174mn bpd to 10.303mn, while UAE pumped 23k bpd more to 3.106mn bpd and Kuwait increased its output by 16k bpd to 2.674mn bpd.
- Saudi Arabia and Kuwait rank top among the Arab holders of US Treasury bonds: Saudi Arabia’s holdings grew by 3% to USD 181.5bn worth bills as of Sep, while Kuwait’s holdings increased to USD 44.1bn (Aug: USD 43.8bn) and UAE’s holdings declined to USD 37.3bn.
UAE Focus
- UAE approved a federal law on the insolvency of natural persons, to allow debtors to either settle their financial obligations through a court-approved payment plan or insolvency and the liquidation of their assets.
- Money supply (M2) in the UAE increased by 0.8% mom to AED 1.373trn in Oct; bank deposits added AED 17.8bn last month while total foreign assets of the central bank rose by 13.45% yoy to AED 370.73bn.
- Dubai’s non-oil trade with Africa from 2011 until end-2019 will cross AED 1trn (USD 272.3bn), according to the Chairman of Dubai Chamber. In the 2011-18 period, cumulative non-oil trade touched AED 926bn.
- Tourists into Dubai grew by 4.2% yoy to 12.08mn international overnight visitors in Jan-Oct 2019. In Sep, the emirate welcomed 1.23mn visitors, up 7.3% yoy. India (1.39mn visitors in Jan-Oct), Saudi Arabia (1.25mn, 2% yoy), UK (851k), Oman (778k, 28% yoy) and China (14% rise to 729k) remained the largest source markets.
- UAE approved a federal law on the insolvency of natural persons, to allow debtors to either settle their financial obligations through a court-approved payment plan or insolvency and the liquidation of their assets.
- Money supply (M2) in the UAE increased by 0.8% mom to AED 1.373trn in Oct; bank deposits added AED 17.8bn last month while total foreign assets of the central bank rose by 13.45% yoy to AED 370.73bn.
- Dubai’s non-oil trade with Africa from 2011 until end-2019 will cross AED 1trn (USD 272.3bn), according to the Chairman of Dubai Chamber. In the 2011-18 period, cumulative non-oil trade touched AED 926bn.
- Tourists into Dubai grew by 4.2% yoy to 12.08mn international overnight visitors in Jan-Oct 2019. In Sep, the emirate welcomed 1.23mn visitors, up 7.3% yoy. India (1.39mn visitors in Jan-Oct), Saudi Arabia (1.25mn, 2% yoy), UK (851k), Oman (778k, 28% yoy) and China (14% rise to 729k) remained the largest source markets.
For further details, contact: nsaidi@nassersaidi.com/ aathira@nassersaidi.com
Website: www.nassersaidi.com