GLOBAL Developments Bottomline: Is the phase one trade deal news one to really cheer for? Given the history of “agreements” in the past, it might be worthwhile to wait for more clarity: the amount of agricultural goods Beijing agreed to buy is still unconfirmed (US claiming an agreement of purchases worth USD 40bn, though a Chinese representative said specific numbers are to be released at a later date) and regarding the next steps in the deal (Trump claims “phase two” talks would start immediately while China has conditioned it on the implementation of phase one first. Meanwhile, UK’s Tory victory seems to have reduced the risk of a disorderly Brexit – the BoE meeting this week will be interesting to watch, especially as the ECB and Fed have confirmed low rates through next year. While Germany surprised with its exports data and sentiment readings, Japan seems to be tumbling given its latest IP and machinery orders data amidst Tankan readings at the lowest since 2013 – what will the BoJ move be this Thurs, especially given a potential hit on domestic demand from the sales tax hike?
- Bahrain approved a BHD 100mn ($264mn) Liquidity Support Fund to support working capital requirements (paying suppliers & wages) of firms that face genuine short-term liquidity strains.
- Egypt’s urban annual inflation increased to 3.6% in Nov (Oct: 3.1%) while core inflation fell to 2.1% (Oct: 2.7%).
- Egypt is planning to issue 3 bond offerings in the current fiscal year, disclosed the finance minister.
- The fuel subsidy bill in Egypt plunged by 69% yoy to EGP 7.25bn (USD 451mn) in Jul-Sep, according to the petroleum minister, thanks to the phasing out of subsidies.
- SMEs in Egypt have received EGP 150bn in a financing initiative during the Jan 2016-Sep 2019 period, as per the central bank deputy governor.
- Foreign cash inflows into Egypt recovered to USD 200bn in the last 4 years, divulged the central bank governor.
- Jordan is in talks with IMF over a new program to succeed the 3-year extended fund facility that ends in Mar to support growth, according to the finance minister.
- Industrial exports from Jordan increased by 8.7% yoy to JOD 4.9bn in Jan-Oct 2019.
- Jordan’s tourism revenues surged by 9.9% yoy to USD 5.4bn at end-Nov, thanks to a 8.3% rise in total number of tourists to 4.9mn.
- Non-oil exports from Kuwait declined by 0.9% yoy to KWD 12.1mn ($39.9mn) in Nov. Exports to non-GCC Arab nations amounted to KWD 3.7mn, and exports to non-Arab nations stood at KWD 1.8mn.
- Kuwait’s external debt expanded by 20.2% yoy and 4.7% qoq to KWD 19.348bn (USD 63.87bn) in Q2, revealed the central bank.
- Fitch downgraded Lebanon to CC from CCC, given its view of a probable government debt restructuring or default. It downgraded Lebanon’s banks to RD (restricted default), given BDL measures restricting banks’ operations in foreign currency.
- Lebanon’s caretaker finance minister disclosed that the 2019 budget deficit would be much higher than expected, with revenues down by some 40%. Other ministers also echoed the sentiment: it is estimated that the political and economic crisis is costing the nation up to USD 70mn a day.
- Consumer sentiment in Lebanon regressed 8.3% yoy and 2.7% qoq, averaging 69 in Q3.
- The UN-created International Support Group for Lebanon met in France and called for the “urgent formation of a competent and credible government” and the adoption of “a reliable budget for 2020” as a first step towards a multi-year fiscal program.
- The caretaker PM’s office in Lebanon has discussed possible technical assistance with the World Bank and the IMF: should this go ahead, a plan to rescue the economy could be implemented once a new government was formed.
- Oman’s economy contracted by 1.9% yoy in H1 this year, disclosed the central bank, largely due to a decline in the non-oil sector (-3.4% in nominal terms).
- Tourism revenues in Oman touched OMR 1.4bn at end-2018, with domestic tourism contributing about 50.8%. Direct value added of the tourism sector grew by 6.8% yoy to OMR 788.6mn.
- Remittances from Oman edged up by 1.46% yoy to USD 9.958bn in 2018, in spite of a decline in expat population (possible due to currency depreciation in many top-recipient nations like India).
- Qatar’s PM attended the GCC Summit in Saudi Arabia last week – the highest level of representation at the annual meeting in 2 years.
- Saudi Arabia’s 2020 budget places total expenditure at SAR 1.02trn (USD 272bn) – the second largest ever – while revenues are estimated at SAR 833bn, bringing the budget deficit to SAR 187bn (or 6.4% of GDP). The finance minister stated that no new tax or additional duties would be introduced in 2020.
- Saudi Arabia might issue new international bonds as early as Jan 2020, subject to market conditions, stated a senior finance ministry official.
- Aramco briefly hit the USD 2trn valuation on its second day of trading on Tadawul: only a fraction of Saudi Aramco shares changed hands on the 1st day of trading, roughly 1% of the company’s free float.
- SAMA set minimum capital limits for microfinance companies and also launched draft licensing rules for financing support companies.
- Banks in Saudi Arabia extended 106k mortgage loans since the beginning of the year.
- Saudi Arabia plans to launch PPP transport projects worth multi-billion dollars in 2020, continuing investments of SAR 400bn+ in the last decade.
- Saudi Arabia is ranked 3rd in 5G deployment globally, behind only US and South Korea, stated the Minister of Communications and Information Technology.
- UAE, Qatar and Saudi Arabia were among the top 10 developing economies in the UNCTAD B2C e-commerce index 2019, with global ranks of 28, 47 and 49 respectively.
- The 2019 Human Development Report (which ranks 189 nations) ranked 5 of the 6 GCC nations among the top 50: UAE topped the list at 35, followed by Saudi Arabia (36), Qatar (41), Bahrain (45), Oman (47) and Kuwait (57).
- Abu Dhabi’s inflation decreased by 0.8% in Jan-Nov 2019; prices in the transport, housing and utilities and food and beverages sub-groups declined by 5.8%, 3.6% and 2.1% respectively in this period.
- Dubai PMI fell to 53.5 in Nov (Oct: 54.6), with output growing at the softest rate since Apr 2016 and a slower rise in new orders. Firms were upbeat about future output (with expectations of new projects and increased tourism via the Expo 2020).
- Dubai economic growth is projected at 2.1% this year and expected to rise to 3.2% and 3% in 2020 and 2021 respectively. Tourism sector is expected to grow by 6.6% next year, while manufacturing, transport and logistics and financial services will rise by 3.1%, 3.8% and 2.7% respectively.
- About 99.2% of establishments in Dubai are classified as SMEs and together they account for 51% of the workforce, contributing to around 46% of Dubai’s GDP, according to a Dubai SME report.
- There are 4,792 current active infrastructure projects in Dubai, accounting for 42% of UAE’s total, as per a report from the Dubai Chamber of Commerce and Industry.
- UAE was ranked 26th globally in the UNDP Gender Inequality Index 2019; the country was ranked 49th in 2015.