Global Developments Bottomline: The Fed kept rates unchanged, with its Chair pushing back against interest rate cut pressures saying inflation will rebound; there seems to be an issue of mixed messaging with two other Fed member statements leaving the door open to rate cuts. In Europe GDP surprised on the upside, in spite of the steady disappointing PMI numbers before, while Chinese PMI data dipped following a strong Q1. The ongoing US-China trade wars might be nearing an end (as early as next week, if one goes by the US version, though the South China Morning Post calls it a ploy to “increase tensions and generate pressure” on Chinese negotiators) while we keep fingers crossed for UK’s Brexit compromise, a Norway model or a second referendum?
- The IMF issued its MENA regional outlook: growth for oil exporters is projected to dip slightly in 2019 to 0.4% from 0.6% the previous year while in the GCC growth is to edge up to 2.1% from 2%. Oil prices, geopolitics and challenges of fiscal consolidation will weigh in on the region’s oil exporters, while elevated public debt levels is a key vulnerability for oil-importing nations.
- Bahrain-origin exports increased by 9% yoy to BHD 587mn (USD 1.54mn) in Q1 this year. Saudi Arabia was its top trading partner, importing goods worth BHD 139mn, followed by the UAE (BHD 95mn) and the US (BHD 74mn).
- Bahrain MPs have passed an amendment to ban expats from owning property in areas not designated for tourism or investment zones, following complaints that nationals were being priced out of the market. The amendment will be debated by the Shura Council next.
- Egypt aims to raise economic growth to 8% in the 2021-22 fiscal year from the 5.3% reported in the 2017-18 fiscal year, disclosed the prime minister. He also stated that the nation plans to attract USD 200bn worth investments in the next 4 years.
- Egypt‘s planning ministry has established six new units within ministries (including internal control and digital transformation) as part of its strategic plan 2019-2022.
- Electric car sales in Jordan dropped by 70% in Apr, after a 25% tax hike was imposed on it. Under the new tax amendments, the clearance tax for hybrid cars will reach 40% in 2020 and 45% in 2021.
- Moody’s affirmed Kuwait’s credit rating at AA2, and retained a stable outlook, citing its fiscal strength.
- Kuwait will not table the bill to impose 5% tax on expat remittances for the current parliamentary term, reported Kuwaiti Times citing local sources.
- Lebanon‘s President has called for the approval of the 2019 budget by end of May, in a bid to proceed with the stalled reform plan. However, strikes have begun in protest given the potential negative impact on public sector employees.
- Oman is planning to issue a new banking law this year – with an emphasis on value creation, support to SMEs and digital banking – along with some other by-laws (focused on banks operating electronic payment systems).
- Oman is preparing for a USD bond sale to finance its budget deficit, reported Reuters, with sources stating that the bond issuance is “pretty much ready”. The government had disclosed plans to cover 86% of this year’s expected budget deficit through local and foreign borrowing.
- Oman‘s latest ministerial decree bans expat recruitment in private sector firms in construction and cleaning work, for 6 months.
- Qatar central bank sold QAR 600mn worth of treasury bills at an auction.
- Qatar Petroleum awarded eight drilling contracts for its North Field gas expansion project: the rigs are expected to be ready for drilling from Jan 2020.
- Saudi Arabia will issue USD 3-5bn in new international sukuk in Q3, according to a senior finance ministry official.
- Saudi PIF plans to raise more money via debt this year: it is expected to be around SAR 14bn (USD 3.73bn) and foreign currency borrowings of around USD 8-10bn.
- Saudi Arabian General Investment Authority revealed that 267 new foreign investors were issued licenses in Q1 this year, up 70% yoy. Top sectors were education and healthcare where foreign ownership restrictions were removed.
- Assets of Saudi investment funds grew by 15.2% yoy to SAR 290.14bn (USD 77.37bn) last year. Assets held by private investment funds jumped by 25.9% yoy to SAR 178.28bn.
- Saudi Arabia holds the third largest dollar reserves globally, according to the finance minister.
- Residential mortgage financing contracts for individuals in Saudi Arabia soared in Q1: the number of contracts surged by 221% to 31,462 while value grew by 133% to SAR 15bn.
- Saudi Arabia’s commercial registries for new institutions and companies increased by 27% and 24% qoq respectively to 68130 & 4940 in Q1, disclosed the commerce & investment ministry.
- Saudi Arabia’s oil output is expected to edge up to 10mn barrels per day in May-Jun, higher than Apr reading, but largely to support domestic power generation than to boost exports.
- Saudi Arabia’s health ministry plans to seek proposals for its first ever public-private partnership project valued at more than SAR 250mn ($66.7mn) over 10 years.
- Tourism in Saudi Arabia is expected to contribute USD 70.9bn to GDP this year, as per the World Travel and Tourism Council. More than 6.5mn Umrah visas have been issued since the season began in Oct 2018.
- US State department approved an almost USD 6bn worth of weapons sales to Bahrain and the UAE. This follows a missile defense system sale to Saudi Arabia in Apr.
- The Sharjah non-oil GDP touched AED 89bn in 2018, accounting for 91.9% of overall GDP (AED 97.5bn).
- UAE banks invested up to AED 35bn (USD 9.53bn) in Q1 this year, up 10.5% from end-2018, with debt bonds accounting for the about 72.6% of banking investments.
- UAE’s gold reserves grew by 2.5% mom to AED 1.14bn at end-March.
- Bilateral non-oil trade between UAE and China exceeded USD 50bn in 2018, according to the ministry of economy.
- Dubai is planning a 3-year rent cap within a new rental law, according to the Dubai Land Department. The draft law is being studied, and no final decision has yet been made.
- Japan imported 21.817mn barrels of crude oil from UAE in Mar 2019: this accounts for 21.9% of Japan’s total crude imports.
- A record 11.25mn passengers used Smart Gates at the terminals of the Dubai International Airport last year.