Global Developments Bottomline: Some glimmer of hope amidst glum data – China’s latest PMI readings point towards the impact from stimulus measures introduced earlier this year; though it looks like difficult times ahead for Europe given the latest woeful set of German data (which pushed German bund yields back to negative territory), IP data surprised to the upside. Trump – looking ahead to his 2020 re-election bid – has called for rate cuts and quantitative easing to allow for ‘rocket ship’ growth, while it looks increasingly likely that a decision to cut bank reserve requirements may be announced by the PBoC by mid-April. Meanwhile, as US-China trade negotiations continue, the World Trade Organisation reported that world trade shrank by 0.3% in Q4 2018 and is likely to grow by 2.6% this year, slower than the 3% growth in 2018, mainly due to new tariffs and retaliatory measures, weaker economic growth and volatility in financial markets.
- The volume of FDI into Bahrain grew by 5.5% yoy to over BHD 11bn at end-2018, as per the initial foreign investment survey for 2018. The banking and manufacturing sectors attracted more than half the inflows (nearly BHD 570mn).
- In a bid to reduce expenditure, Bahrain plans to review and prioritize 66 new projects estimated to cost BHD 1.3bn under the 2019-2020 budget.
- Kuwait signed a formal financial aid agreement to support Bahrain’s economy, as part of the previously agreed package with Saudi Arabia and the UAE.
- Egypt aims to raise EUR 2bn in 6-year and 12-year euro-denominated bonds on the London Stock Exchange, reported Reuters, citing related bank documents. The sale attracted orders worth nearly EUR 9bn (USD 10.1bn).
- Net foreign reserves at Egypt’s central bank stood USD 44.11bn at end-Mar, and compares to USD 44.06bn in the month before.
- Egypt’s current account deficit widened to USD 2.1bn in Oct-Dec 2018 from USD 1.78bn deficit a year ago. Egypt’s net FDI declined by 38% yoy to USD 1.74bn.
- Egypt disclosed to the IMF, as part of the review of the 3-year USD 12bn loan programme, that it would remove subsidies on most energy products by June 15th.
- Tourists into Egypt from the Middle East are expected to rise by 50% to 2.23mn in 2022; Saudi Arabia will drive this growth.
- Saudi Arabia will provide USD 1bn to Iraq to build a sports city, it was announced during the start of a 2-day visit by high-level Saudi officials.
- World Bank estimates Jordan to grow by 2.2% this year and slightly higher at 2.4% next year: this is a slight drop from the Bank’s previous projections.
- Passenger traffic at Jordan’s airport increased by 9.2% yoy to 593,427 passengers in Feb: this is the highest ever number recorded in Feb.
- The IMF concluded its 2019 Article IV consultation with Kuwait: non-oil growth of 2.5% last year was supported by an increase in government spending and rebound in confidence.
- Kuwait’s exports grew almost 10 times to KWD 125.1mn (USD 413mn) in Mar, with value of exports to Arab states (excluding GCC) stood at KWD 115.5mn.
- Kuwait National Assembly’s financial and economic affairs committee reaffirmed that imposing a 5% tax on expat money transfers does not violate the constitution.
- Lebanon‘s energy minister stated that a second offshore energy licensing round has been approved, with bids due on Jan 31, 2020.
- PMI in Lebanon declined further to 46.3 in Mar, after rising to 46.9 the month before, given faster declines in output and exports amidst lower output prices.
- Lebanon’s trade deficit narrowed by 17.7% yoy to USD 1.2bn in Jan, due to dips in both exports (-16.6%) and imports (-17.5% to USD 1.4bn).
- The electricity sector in Lebanon incurred over USD 40bn in losses largely due to “political spitefulness”, according to the President. A new electricity plan is in the works, with aims to improve power supply and reduce subsidies to the state-run Electricite du Liban.
- Qatar’s central bank sold QAR 600mn of treasury bills at an auction last week.
- Saudi Arabia grew by 3.59% yoy in Q4 last year, up from Q3’s 2.5%, thanks to a stronger production boost in the oil sector (+6% yoy). Growth in the non-oil sector remained muted rising by only 1.8% in Q4, down from Q3’s 2.1%.
- Banks in Saudi Arabia increased its government bond holdings by 22.9% yoy or 3.4% mom to SAR 331.16bn (USD 88.31bn) in Feb.
- Saudi Arabia plans to issue SAR 118bn (USD 31.5bn) in debt this year, according to the Debt Management Office.
- Saudi Aramco‘s bond prospectus revealed its Ghawar field (largest oilfield in the world) had 58bn barrels of oil equivalent in combined reserves at end-2018, and 48.3bn in liquid reserves.
- Saudi Aramco – whose revenues touched USD 315.24bn in 2018 also reported core earnings of USD 224bn and a net income of USD 111bn – disclosed its plans to complete the SABIC acquisition in 2020.
- Saudi Aramco will offer 140 contracts worth SAR 60bn ($16bn) to small and medium-sized enterprises in the country, stated a senior official on Al Arabiya TV.
- Unemployment rate in Saudi Arabia dropped to 12.7% in Q4 last year, down slightly from Q3’s 12.8%. Unemployment rate among Saudi males was 6.6% while female unemployment was substantially high at 32.5% in Q4.
- Saudi Arabia’s government unveiled plans to invest around SAR 130bn (USD 35bn) into the culture and leisure industry by 2020.
- Fintech startups in the Middle East are expected to expand from 96 this year to 465 by 2020, according to Accenture. Investments are forecast to rise to USD 2.28bn by 2022 from USD 287mn this year. According to Bloomberg Intelligence, UAE has the highest number of fintech startups at 67, followed by Turkey (44), and Jordan & Lebanon at 30 each.
- UAE GDP growth touched 1.7% in 2018, much slower than the previously predicted 2.5-3% growth, according to official preliminary data; non-oil sector grew by 1.3% to AED 1bn.
- Abu Dhabi’s GDP grew by 3.7% yoy to AED 203.2bn in Q4 2018, with value added of non-oil activities plunging by 1.1% yoy.
- UAE banking sector’s total assets declined by 0.13% mom to AED 2.909trn in Feb 2019; bank lending increased by 6% to AED 1.671trn. Money supply (M2) increased 1.23% to AED 1.321trn.
- The UAE government’s FDI law will likely lead to a 20% increase in FDI flows this year, from the 8% average growth rate, according to Ministry of Economy estimates.
- The value of total sukuk listed on Nasdaq Dubai touched USD 3.45bn, with the latest listing of Sharjah’s USD 1bn sukuk. Total value of sukuk listed in Dubai reached USD 61.34bn.
- UAE maintained its position as the largest exporter and importer of goods and services last year in the region, according to WTO data.
- Tourists from Japan into Dubai crossed the 100k mark for the first time in 2018, with a total 104,843 overnight visitors.