DIFC added 661 New Firms and a Record 3,057 New Jobs in H1 2023…

UAE News:
UAE’s PMI slipped to 56 in July (June: 56.9): output eased (62.8 from 64.1), new export orders were stagnant, with firms reporting an easing of cost pressures. Though backed by strong customer demand, new orders declined by 3.6 points to 57.4, the largest drop in the series history. Slower sales growth stemmed from greater competition.
UAE GDP grew by 3.8% YoY in Q1 2023, following an estimated 7.9% growth in 2022, with growth in the non-oil sector remaining resilient (up by 4.5% in Q1). The fastest-growing sectors in Q1 2023 were transportation & storage (+11%), construction (9.2%) and accommodation & food services activities (7.8%).
Bank deposits in the UAE posted an increase of 2.3% MoM in May, driven by resident deposits (1.5%) and non-residents deposits (11.1%). Gross credit expanded by 1.6% MoM to AED 1.897trn, thanks to a 1.7% and 0.7% rise in domestic and foreign credit respectively. Private sector loans grew by 3.3% YoY in May and 4.8% year-to-date. UAE Central Bank’s foreign assets surged further to a record AED 590bn in May. 
DIFC added 661 new firms and a record 3,057 new jobs in H1 2023, bringing the total number of firms in the financial freezone to 4,949 and employees to 39,140 (+20% YoY). DIFC was home to 632 regulated firms at end-June 2023.
Electricity accounts in Dubai grew by 5.5% YoY to over 1.4mn at end-June 2023, according to DEWA. DEWA’s total capacity increased to 14,917MW of electricity and 490 million imperial gallons of water per day.
Dubai welcomed a record 8.55mn international visitors in H1 2023, up 20% YoY and surpassing the 8.36mn tourists recorded in H1 2019. Western Europe’s share of international visitors stood at 20%, while the GCC and MENA together accounted for 28% alongside South Asia at 17%.
Dubai rents have increased by 19% YoY in Q2 2023, according to Property Finder’s Market Watch Q2 2023: one- and three-bedroom apartment rents were higher by 20.5% and 22.2% respectively, while villa rents were up by 25.5%.
The crypto arm of Nomura, Laser Digital, received an operating license from Dubai’s Virtual Asset Regulatory Authority. The firm is set to launch their Trading and Asset Management businesses in the coming months, offering institutional investors OTC trading services and a comprehensive range of digital asset investment products and solutions.

Regional News:
Saudi Arabia extended its 1mn barrel per day (bpd) cut into September, while also stating the possibility that it could be “extended, or extended and deepened” beyond that period. Production in Saudi will be around 9mn bpd in September. Shortly after this announcement, Russia announced it would reduce oil exports by 300k bpd in September. Later, the OPEC+ kept its current oil output policy unchanged: the group’s output cuts (excluding additional voluntary cuts) amount to 3.66mn bpd or 3.6% of global demand.
The Arab Monetary Fund extended a new loan of USD 615.8mn to Egypt to support banking sector reforms including improving the efficiency of the payment system, enhancing economic inclusion, and strengthening the regulatory framework.
Iran’s President officially invited UAE’s President to visit Tehran, reported Tasnim agency. Iran appointed an ambassador to the UAE in April 2023 for the first time since 2016.
Bilateral trade between Iraq and Saudi Arabia increased to SAR 913mn (USD 243mn) in H1 2023, jumping from SAR 381mn in March.
Passenger traffic in Oman surged by 30.3% YoY to 1.98mn travellers in H1 2023 while air traffic jumped by 28.4% to 9,784 flights. Airport operations have recovered by 70% compared to 2019 levels.
The CEO of India’s Petronet revealed that the company is “seriously engaged” with Qatar to extend its long-term deal to beyond 2028, hopefully at lower prices than those offered in recent deals with China and Bangladesh.
Most investible sectors in India are open for 100% investment from the Gulf region via “automatic route” (i.e. without needing prior approval of the government), according to the Minister of State for External Affairs.
Startups in the Middle East clinched 31 deals valued at a total of USD 95mn in July (+167% MoM), with UAE leading the rounds (USD 64.7mn raised, largely due to One Moto’s USD 40mn lease financing round) followed by Saudi Arabia (USD 18mn from 5 deals), Egypt (USD 7mn) and Morocco (USD 2mn).
Student population in the GCC is expected to increase to 14.2mn by 2027 from an estimated 13.1mn in 2022, according to a report from Alpen Capital. Students in private schools are expected to grow at a CAGR of 1.7% since 2022 to reach 3.1mn by 2027. Saudi Arabia allocated the highest expenditure to education at 17% of its total budget, or USD 50.4bn, in 2023, followed by Oman at 16.7% (USD 1.9bn) while it stood at 15.5% in the UAE.
A free trade agreement between the UK and GCC could boost commerce by 16%, according to a UK government press release. GCC is the UK’s seventh-largest export market, with total trade valued at GBP 61.3bn.
The meeting held in Jeddah for Ukraine crisis talks were hailed as “productive” by Ukrainian officials: the meeting was attended by more than 40 nations including India, China and European nations though Russia did not attend. Notable was China’s participation, as it had stayed away from earlier rounds of talks. 
Talks are underway between China and Saudi Arabia’s stock exchanges to allow exchange-traded funds (ETFs) to list on each other’s bourses, reported Reuters. For China, an ‘ETF Connect’ tie-up with Saudi Arabia will be the first such beyond East Asia.
Saudi PIF established a new sports investment company (SRJ Sports Investments Co) to acquire and develop new events intellectual property, commercializing notable competitions and organizing major global events in the country.
Saudi Central Bank approved insurance fintech rules: aims to regulate the underlying business and its operations, assure client protection, and promote fair competition in solution provision while incorporating rules such as practitioners’ obligations and clients’ information accuracy among others.
Saudi Arabia plans to grant USD 1.2bn to Yemen in economic aid, reported Reuters: the donation would be used to pay government wages, fuel for power plants and food imports.

Global News:
Global equities markets were in the doldrums last week, with China’s CSI 300 eking out a 0.7% gain. Regional markets were mostly down on profit taking, while the UAE exchanges posted a weekly gain on stronger oil prices and corporate earnings (Dubai had touched an 8-year high earlier in the week). The dollar fell against a basket of currencies after 2 weeks of gains while Sterling hit its weakest level vs the USD since late June after the BoE’s rate hike. Oil prices gained for a sixth consecutive week while gold price inched lower.

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SOURCE:
Nasser Saidi & Associates