GLOBAL Developments Bottomline: US-Iran tensions flared up in the New Year, with the killing of Iran’s top military leader – the Eurasia Group estimates a 28% likelihood of a short, limited conflict. Any such conflict will act as a further dampener on global growth – not that there is any dearth of uncertainty already, with geopolitics and trade being major head winds in the year ahead! Global manufacturing PMI fell to 50.1 in Dec (Nov: 50.3), dragged down by weak international trade flows. This week sees the return of the Brexit drama, with Parliament back to vote on the bill Thurs. Jan 15th will be the next date of importance when, according to Trump, the US-China phase 1 deal will get inked – the details of the deal are still unknown.
- Bahrain’s Parliament passed a proposal to hike civil servants’ pay by 3%, in spite of objections from the government; the next step is a review by the Shura Council.
- Imports into Bahrain declined by 17% yoy to BHD 379mn in Nov 2019. China (BHD 55mn), Saudi Arabia (BHD 34mn) and US (BHD 33mn) were the top three source nations.
- Bahrain reduced the fees imposed on pre-entry visas to promote tourism: fee on 1-year entry visa was lowered to BHD 40 from BHD 85 before while the fees on five-year valid entry visas were slashed by almost two thirds to BHD60 (from BHD170).
- Egypt’s stock exchange plans to have 3-4 IPOs of private sector companies in 2020, according to the Chairman.
- The Egyptian Financial Regulatory Authority is set to finalise procedures for the issuance of Green Bonds, and a local company is expected to issue in early 2020.
- FDI into Egypt surged by 71.4% yoy to $2.4bn in Apr-Jun 2019 – highest since 2017 – thanks to the rise in net inflows for greenfield investments to $1.5bn.
- Money supply in Egypt increased by 13.16% yoy to EGP 4.05trn ($253.13bn) as of end-Nov. Total deposits at Egypt’s banks touched EGP 4.16trn at end-Oct: non-government deposits touched EGP 3.54trn while government deposits were EGP 623.7bn. Non-government foreign currency deposits slipped by 2.5% mom to EGP 677.32bn in Oct.
- Egypt’s tourism revenues rose by 6.7% yoy to $4.2bn in Q3 2019 – only the 4th time that quarterly revenues exceeded $4bn – according to the central bank.
- Egypt’s Suez Canal revenues inched up to $5.8bn in 2019 from $ 5.7bn the year. The transit toll for bulk vessels and LPG carriers has been increased by 5% this year.
- Egypt and Sudan will operate a joint electricity grid (capacity of 50 megawatts) from Jan 12. The project’s cost touched EGP 509mn ($31.74mn) and spans 1000 kms.
- Iraqi oil exports fell to 3.428mn barrels per day in Dec from Nov’s 3.5mn bpd.
- Jordan announced higher fuel prices in Jan: gasoline prices were up by 0.5-1.3% mom depending on grade of fuel, while diesel prices were up 3.4%.
- Jordan will extend real estate exemptions and lower the registration and purchase fees of apartments and lands until end of 2020.
- Kuwait’s fiscal deficit touched KWD 2.5bn ($8.33bn) in Apr-Nov 2019, prior to deducting the share of the future generations’ fund (est at 10% of state revenue). Revenues and expenditure were KWD 11.5bn and KWD 14bn respectively in this period.
- FDI into Kuwait amounted to KWD 960mn ($3.2bn) during the period Jan 2015-Mar 2019, according to the commerce and industry minister.
- Bank deposits at Kuwait’s banks grew by 1.2% yoy and 0.5% mom to KWD 43.6bn in Oct (supported by a 9.9% yoy and 1.3% mom rise in government sector deposits) while credit disbursed increased by 4.7% yoy to KWD 38.3bn.
- Oman increased spending by 2% yoy to OMR 13.2bn ($ 34.4bn) in its 2020 budget. The deficit, estimated at OMR 2.5bn (8% of GDP), is lower than the 2019 projection of OMR 2.8bn and around 80% is expected to be funded through borrowing. Revenues will be up 6% to OMR 10.7bn, assuming an average oil price of $ 58 per barrel.
- Oman’s budget deficit fell by 5.6% to OMR 1.92bn in Jan-Oct 2019 – a 5-year low. During the period, revenues dipped by 1.1% to OMR 8.6bn (7.6% decline in net oil revenue) while expenditure fell by 1.9% to OMR 10.53bn.
- Oman’s new Foreign Investment Law became applicable from Jan 2. The law simplifies procedures and permits necessary to initiate foreign investment, and also expands the investment sectors and projects available for investors.
- Saudi Arabia’s credit default swap (CDS) – cost of insuring against a Saudi bond default, spiked to 65 bps on Friday following the killing of Qassem Soleimani.
- Saudi Arabia’s GDP contracted by 0.46% yoy and 0.19% qoq in Q3, as the oil sector output declined by 6.43% yoy. Non-oil sector GDP grew by 4.3% yoy and 2.9% qoq in Q3 2019, supported by the wholesale and retail trade (+8% yoy) and finance, insurance, real estate and business services (+6.28%).
- Banks in Saudi Arabia increased their investments in government-issued bonds by 25.2% yoy to SAR 379.95bn in Nov 2019.
- Revenues of SMEs in Saudi Arabia touched SAR 879.32bn in Q2 2019, according to the General Authority for Statistics. Small enterprises operating in the private sector (i.e. workforce of 6-49 persons) accounted for 18.6% of total revenue generated.
- Credit card transactions in foreign currencies declined by 25% yoy to SAR 1.27bn ($ 338.5mn) in Nov 2019, disclosed SAMA. This follows declines of 18.7% and 28.3% respectively in Sep and Oct.
- About 155,893 mortgage loans worth SAR 69bn were offered by financing institutions in Saudi Arabia during Jan-Nov 2019. The number of loans were up by 254% yoy and volumes were up by 167% in year on year terms.
- Remittances from Saudi Arabia fell by 8.9% yoy to SAR 113.97bn ($30.39bn) during Jan-Nov 2019.
- Saudi Arabia’s foreign reserve assets increased by 2.2% mm to SAR 1.876trn ($ 500.15bn) in Nov. On an annual basis, foreign reserves declined by 0.8%.
- Saudi Arabia issued $ 32.01bn worth debt instruments in 2019: of this, local sukuk issuances were up by 44.36% yoy to SAR 69.84bn while international sukuk issuances were up 25% to SAR 9.38bn.
- Dubai 2020 budget estimates record spending of AED 66.4bn ($18.1bn), up 17% yoy; infrastructure spending is set to decline for a 2nd consecutive year. Salary and wage allowances account for 30% of total expenditure in the year’s budget while grants and support account for 24%. State revenues are expected to surge by 25% to AED 64bn, with non-tax revenue at 60% of the total. Overall deficit, projected at AED 2.4bn, is lower than the budgeted AED 5.8bn last year.
- Net investments of non-Arab foreign investors in UAE’s financial markets surged to AED 12.5bn in 2019 – the highest in 5 years. Non-Arab foreign investors trade amounted to AED 100.5bn, or 46.1% of the total trades of foreigners in 2019.
- Dubai’s non-oil foreign trade increased by 6% yoy to AED 1.02trn ($272bn) in Jan-Sep 2019: exports grew by 23% to AED 118bn, re-exports by 4% to AED 312bn and imports by 3% to AED 589bn. Top trade partners remained China (AED 109bn, 6% yoy), India (AED 100bn, 16%) and US (AED 57bn).
- Value of banks’ financing to retail companies increased by 5.4% yoy to AED 50.4bn ($13.7bn) in Jan-Sep 2019.
- UAE ranks 5th globally in the World Competitiveness Ranking 2019 published by the IMD Business School, from 15th in 2016.
- Dubai Duty Free clocked in record annual sales of AED 7.406bn ($3.029bn) in 2019. There were an average 66,500 sales transactions on average per day and perfume sales (+2% to AED 1.124bn) accounted for 15% of total sales.