GLOBAL Developments Bottomline: As the year inches to a close, the US and China are approaching a phase one trade deal (China announced a new list of tariff exemptions for US imports), while in the UK, PM Johnson is getting ready to ratify his Brexit deal. Major central banks have entered a “pause” mode in a year dotted by protests across the globe – be it in Hong Kong, Algeria, Chile, Lebanon (continuing even after the announcement of a new PM) or more recently in India (after the Citizenship Amendment Act 2019 was passed) – while CDS spreads continue to skyrocket in Argentina and Lebanon.
- The third phase of VAT roll-out in Bahrain is expected to see close to 25k businesses complete the registration process.
- Egypt plans to reduce its budget deficit to 6.2% in the 2020-2021 fiscal year alongside a growth target of 6.4%, revealed the finance minister.
- Egypt’s balance of payments deficit narrowed by 28.7% yoy to USD 3.49bn in Sep. Exports fell by 2.7% yoy to USD 2.37bn and imports were down by a larger 20.1%.
- Remittances into Egypt increased by 13.6% yoy to USD 6.7bn in Q1 of 2019-20. In Sep alone, inward remittances surged 33.2% mom and 32.8% yoy to USD 2.3bn.
- Net foreign investments in Egypt’s treasury bills have increased by USD 8-9bn since the beginning of 2019, disclosed a board member of the Central Bank of Egypt.
- Mid last-week, the Egyptian pound traded below 16 pounds to the USD for the first time since Feb 2017. It has appreciated around 10.5% against the dollar since Jan.
- Egypt‘s central bank plans to expand ten-fold its financing package to help distressed tourism companies & investors to EGP 50bn ($3.1bn) from current EGP 5bn.
- Egypt plans to increase the local gas production to about 8bn cubic feet per day (scf/ day) by the next fiscal year compared to 7bn scf/ day currently.
- Egypt exported EGP 1bn ($62.27mn) worth electricity to Jordan and Libya in the fiscal year 2018-19, with the largest share paid by Jordan. Egypt expects to export to other neighbouring nations as well, with an aim to touch 2000MW next year.
- Jordan will announce the fourth and final executive package to improve the national economy this week. The focus of this package will be on the services sector.
- Jordan was successful in closing the gender gap by 62.3% in the past 12 months, as per the WEF’s Global Gender Gap report: pay equity jumped up 20 points, while women’s representation in the parliament was boosted by 42 points.
- Kuwait’s inclusion into the MSCI Emerging Market Index (during the May 2020 semi-annual index review) could generate inflows of KWD 1bn (USD 3.3bn), revealed the trade and industry minister.
- Kuwait’s budget deficit touched KWD 1.831bn (USD 6.047bn) in the first 8 months of the fiscal year 2019-2020, and compares to a surplus KWD 2.303bn a year ago.
- Kuwait’s trade surplus declined by 10.6% yoy to KWD 7.25bn ($23.94bn) in Jan-Sep, thanks to an 8.2% decline in exports while imports were down by 5.8% to KWD 7.65bn. Trade surplus with Japan narrowed by 58% yoy to JPY 28.4bn ($259mn) in Nov: exports to Japan plummeted by 43.1% while imports from Japan grew by 19.1% to USD 175mn.
- Kuwait’s holdings of US Treasury bonds declined by 0.68% yoy to USD 43.8bn in Oct. From the region, Kuwait’s holdings are second only to Saudi Arabia (USD 178.9bn), but ahead of UAE (USD 38.4bn).
- Lebanon named Hassan Diab as the new PM; he plans to set up the new cabinet within 4-6 weeks and wants to choose experts to be part of the government. The Sunni bloc, other key Christian and Druze Muslim parties did not endorse his nomination.
- S&P lowered its long-term issuer credit ratings on Bank Audi, Blom Bank and Bankmed to “SD” (Selective Default) and removed them from CreditWatch with negative implications.
- Oman’s budget deficit narrowed by 59% to OMR 309mn in Q1 this year, with revenues rising by 32% to OMR 2.7bn and a 4.3% rise in expenditure.
- Oman’s state-owned Electricity Holding Company (Nama) sold a 49% stake in Oman Electricity Transmission Co. to State Grid Corporation of China, raising around USD 1bn. This is one of the five privatisations being planned by Nama.
- Qatar announced its biggest budget in 5 years: at a planned QAR 210.5bn (USD 58bn) budget, spending higher by 1.9% compared to this year. Revenues are expected to stay unchanged at QAR 211bn, based on an oil price assumption of USD 55 per barrel. The budget surplus is expected at QAR 500mn next year, versus a surplus QAR 4.4bn this year. Major projects, ahead of the FIFA World Cup in 2022, accounts for the largest share of the budget (+0.6% yoy to QAR 90bn). There was no mention of VAT in the budget statement.
- Saudi Aramco joined MSCI Emerging Markets Index on Wed last week and is expected to attract over $1bn in capital flows as well as sustain Aramco’s USD 2trn+ valuation.
- Saudi Arabia’s PIF announced SAR 4bn ($1.07bn) “Jada” initiative to support SMEs, by investing in venture capital and private equity funds geared towards SMEs.
- Saudi Arabia’s trade surplus narrowed in Q3: surplus dipped by 62.55% qoq to SAR 97.85bn. Separately, trade surplus with Japan more than halved to $1.5bn in Nov, from USD 3.3bn in Nov 2018.
- Inflation in Saudi Arabia declined by 0.2% yoy to 106.4 in Nov; costs in housing and utilities fell by 3.8%, while clothing & footwear prices fell by 0.6%.
- Saudi Arabia’s wholesale price index (WPI) increased by 3.3% yoy to 120.7 in Nov, thanks to the rising metal products, machinery and equipment prices.
- Saudi export bank virtually started operations by allocating export financing worth around SAR 5bn, according to the minister of industry and mineral resources; the export bank is in the final phase of its launch with a capital of SAR 30bn.
- Saudi oil exports increased to its highest level in six months in Oct: crude exports rose by 388k barrels per day (bpd) to 7.057mn bpd, according to the Joint Organisations Data Initiative.
- Saudi Arabia is home to more than USD 1.2trn worth of planned and un-awarded projects, as per Meed, with USD 684bn projects in the construction sector alone.
- Unemployment in Saudi Arabia declined to 12% in Q3 this year from 12.3% in Q2. The total employed Saudis edged up to 3.1mn in Q3 (Q2: 3.09mn) and overall economic participation nudged to 45.5% from 45%.
- Investments in the MENA gas sector is expected to witness a decline of USD 70bn in the next 5 years, forecasts Apicorp. The fall is largely due to the high global gas output, slowing regional demand and financing issues.
- Abu Dhabi’s non-oil trade declined by 8.8% yoy to AED 154.4bn (USD 42bn) in Jan-Sep 2019, as a result of a 12.7% decline in imports alongside a 14.8% dip in exports. Reexports however grew by 9% during the period. Saudi Arabia (AED 4.55bn), France (AED 2.28bn) and the US (AED 965.3mn) were top non-oil trade partners.
- UAE’s Tax Refunds for Tourists Scheme has processed a total 2.83mn applications since it was launched in Nov 2018.
- A new report from the World Travel & Tourism Council ranks Dubai the third biggest city in the world for international visitor spending in 2018 with a total of USD 27.9bn, surpassed only by Hong Kong (USD 43.9bn) and Macau (USD 36.1bn).
- Property prices in Dubai fell to AED895 per square feet on average in Nov – the lowest level in seven years – according to Property Monitor’s Dynamic Price Index.