Global Developments Bottomline: The US economy is already slowing, partly due to the fading of a major fiscal stimulus in 2018; the US-China economic war and recent economic indicators have led the Fed to revise down growth forecasts for the country. The latest PMI data have disappointed: trade tensions have left their mark on the US, Japan and Europe; France joined Germany below the 50-mark (as the latter continues to deal with the “yellow vests” movement). Brexit uncertainty meanwhile drags on as EU leaders agreed on a plan to delay the Article 50 process. US-China trade talks resume this week, and while Europe frets on potential risk of US tariffs on its car imports, it is prudent to look for more guidance from the Chinese PMI data this week. Tasseography (reading the tea leaves) indicates that the global economy is rapidly slowing, led by a lower trade and investment, amid growing economic policy uncertainty.
- Bahrain’s central bank lowered its 1-month deposit rate to 3.1% from 3.25%, while keeping unchanged the overnight and 1-week deposit facilities rates.
- Bahrain announced a new BHD 5k grant for the development of domestic firms – including for grants for machinery and equipment, ICT, quality management, consulting, cloud computing, accounting & auditing services and marketing.
- The Commercial Companies Law in Bahrain was amended to allow representatives of shareholders in joint companies or ventures to appear on their behalf with a written authorization – enabling better monitoring of commercial affairs.
- Egypt is aiming for debt-to-GDP to touch 89% in the 2019-2020 financial year, according to the Presidency. The budget deficit is projected to come down to 7.2% (from 8.3%) and plans are to create 800k-900k jobs “through supporting the industrial and export sectors”.
- Fitch upgraded Egypt’s long-term foreign-currency issuer default rating to ‘B+’ from ‘B’, with a “stable” outlook, thanks to its implementation of economic and fiscal reforms.
- According to the New and Renewable Energy Authority in Egypt, the land usufruct fees for new and renewable power plants will be kept at 2% of the annual energy produced versus each governorate charging different fees between 5-7% at present.
- Inward remittances into Jordan increased by 4% yoy to JOD 425.5mn in Feb (Jan: 3.5%), according to the central bank.
- The Kuwait Banking Association has asked for an extension of the date for raising national employment rate to an estimated 70% in banks to Jan 2020 instead of Jul 2019, reported Al Rai daily. One of the reasons for this request is the current job dropout rate of 35%, of which 90% were Kuwaitis.
- Lebanon’s energy minister plans to ask the Cabinet “soon” to approve the launch of a second licensing round for maritime oil and gas exploration.
- Moody’s maintained its stable outlook for Lebanese banks due to expected flows of customer deposits and economic growth, while highlighting the need for reforms from the new government to restore consumer and business confidence.
- Oman’s electricity generation and water desalination sector received around USD 10bn in total FDI to date, according to a report in the Oman Daily Observer. The sector has 16 privately-owned power and water companies.
- Oman’s Ministry of Tourism has earmarked five tourism sites in four governorates for investment by (private) local companies.
- Tourists from Oman to Dubai declined by 4% yoy to 829k in 2018, according to the latest data released by the Department of Tourism and Commerce Marketing.
- Inflation in Saudi Arabia fell for the second consecutive month, with prices down 2.2% yoy and 0.2% mom as housing and utilities costs dipped by 8.2% yoy.
- Saudi Arabia’s inclusion in FTSE Russell’s emerging market index is expected to attract USD 6-7bn of passive inflows within a year, according to the index provider. Saudi Arabia will also likely become the ninth-largest emerging market out of the 25 markets in the FTSE Emerging Index within a year.
- Ahead of the inclusion in the FTSE Russell/ MSCI / S&P Dow Jones indices, foreign inflows into Saudi Tadawul was SAR 9.51bn (USD 2.54bn) in the first 11 weeks of 2019. Foreign ownership in Tadawul-listed firms increased by 18.7% to SAR 103.1bn by mid-Mar, from SAR 86.84bn in Dec 2018.
- Saudi Arabia’s crude oil exports fell to 7.245mn barrels per day (bpd) in Jan (Dec: 7.687mn bpd). Oil production was down by 0.4mn bpd to 10.243mn bpd in Jan. Separately, the energy minister stated that oil exports in Mar and Apr will be below 7mn bpd.
- Saudi Arabia announced its plan to build Neom’s first city – set to span over 45k kilometers – by 2020.
- Saudi Arabia’s King launched 4 entertainment projects – including a park, sports track and an art centre – worth SAR 86bn (USD 23bn).
- The Middle East, with 160 free zones or roughly 7.3% of global free zones, is the fourth largest host region globally. Dubai alone comprises 30% of the Middle East’s free zones.
- The UAE’s current account surplus increased to AED 139bn (USD 38bn) or 9.6% of GDP in 2018, according to the central bank. The rise was largely supported by the uptick in oil prices: an average of USD 71 in 2018 from 2017’s USD 54.25 a barrel.
- UAE announced a plan to create 30k jobs for its citizens in the private sector this year. This compares to the planned creation of 20,225 jobs for Emiratis last year. An estimated 610k nationals are expected to join the workforce by 2031.
- UAE’senergy minister expects the OPEC to finalise a long-term cooperation charter with its non-OPEC partners in June this year. He also stated that UAE is committed to delivering 100% of oil supply cuts in the coming months.
- The Sharjah Chamber of Commerce and Industry reported a 16% yoy growth in the number of new memberships in Feb (Jan: 28%), bringing the overall membership to 5332 firms (+9%).
- UAE start-ups have secured USD 31.36mn in investments – accounting for 88% of the whole deal value of the region; of this, about 44% went into local services, e-commerce and financial services industries: this was disclosed ahead of the Annual Investment Meeting to be held in Apr.
- Dubai welcomed 15.92mn international overnight visitors in 2018 versus 15.79mn in 2017. India remained the top source market, in spite of a 2% yoy decline to 2.032mn visitors, while Saudi Arabia and UK were close behind at 1.568mn (+3%) and 1.212mn (-4%) respectively. China, which rose to the 4th spot, reported a 12% growth (to 857k) while Russian tourists surged by 28% (to 678k).
- The UAE jumped 7 ranks to become 21st in the latest edition of the global happiness index.