DMCC Reported that a Record Breaking Number of 665 Firms Registered in Q1...

UAE News:
UAE Cabinet approved a Digital Economy Strategy, with an aim to double the sector’s contribution to 19.4% of GDP (from 9.7%) in the next decade. The Strategy includes more than 30 initiatives, targeting 6 sectors and 5 new areas of growth.
The UAE adopted an agreement to link payment systems across the GCC, as part of the recent Cabinet resolutions. No details were provided about the agreement.
Dubai PMI increased to a 33-month high of 55.5 in March (February: 54.1), supported by output growth in the travel and tourism as well as the construction sectors (to the highest since June 2019). Input and output costs continue to diverge with input costs rising for the 14th consecutive month even as selling prices were reduced (lower charges, promotions) to support sales recovery.
Abu Dhabi Exchange rebranded and relaunched its Second Market into a Growth Market (with a market cap of AED 62bn or USD 7bn). The Market will target startups, family businesses and early growth companies.
DEWA IPO: Bloomberg reported that UAE-based investors covered half the total order book, and around 30% were international investors; BlackRock, Vanguard Group and Fidelity Investments were among key investors in DEWA’s USD 6.1bn IPO. DEWA gained almost 18% on the first day of its trading.
ADQ and Chimera Investments have partnered to set up the UAE’s first SPAC: the SPAC plans to raise AED 367mn (USD 100mn) through an IPO of 36.7mn shares.
Dubai’s Department of Economy and Tourism issued a total of 24,662 new business licenses in Q1 2022, up 58% YoY. The share of professional licenses was 57%.
The Dubai Multi-Commodities Centre (DMCC) reported that a record-breaking number of 665 firms joined the Freezone in Q1 2022 (+13% YoY and 25% rise vs the 5-year average). Specific outreach programs have seen a 34% increase in Chinese firms while quarterly company registrations from Israel and Turkey surged 350% and 100% during Q1. Separately, 16% of company registrations in Q1 were for crypto-related activities.
Registered members of the Sharjah Chamber of Commerce and Industry grew by 8% to 17,568 in Q1 2022: 1996 new companies joined and more than 15k memberships were renewed, marking the highest since 2018.
Dubai International Airport remained the busiest for international travellers in 2021, welcoming 29.1mn passengers (+12.7% YoY). Top 10 busiest airports (including domestic travel) globally included 8 from the US and 2 from China.
Hotel occupancy in Dubai reached a 15-year high of 91.7% in March; average daily rates touched AED 891.46 and revenue per available room (RevPAR) stood at AED 817.9.
Dubai Chamber of Commerce announced that its paperless strategy had resulted in cost savings to the tune of AED 11mn and having saved 1 mn sheets of paper last year.

MENA News:
The World Bank forecasts MENA to grow by 5.2% this year, adding a caveat that it “could end up being optimistic, as has been the pattern over the past decade”. The GCC is expected to grow by 5.9%, supported by the uptick in oil prices, and oil importers by 4%; nations that are net importers of oil and goods remain vulnerable, especially so if burdened by high debt-to-GDP ratios.
Signs of recovery in Bahrain’s economy in Q1 2022, as disclosed by the Finance and National Economy Ministry: value of exports grew by 64.7% YoY; new commercial licenses issued increased by 35.4%; real estate sector transactions grew by 19.6%; average occupancy in 4- and 5-star hotels increased to 55% (vs 43.5% a year ago); mall visitors increased by 26.9%; Bahrain’s equity market reported a 33.3% rise.
Exports from Egypt increased by 34.5% YoY to USD 3.99bn in January while imports declined by 2.2% to USD 6.43bn. This narrowed the trade deficit to USD 2.44bn (-32.3% YoY).
Cars accounted for 47% of Egypt’s durable goods imports in 2021, reported Al Arabiya. Overall, durable consumer goods imports expanded by 26.6% YoY to USD 7.87bn in 2021.
Egypt sealed deals to purchase 350,000 tons of wheat last week, the majority of which will come from Europe (240,000 tons from France, 50,000 tons from Bulgaria and 60,000 tons from Russia) and are scheduled for arrival before June 15th. This followed a tender launched on Monday by the General Authority for Supply Commodities. Separately, Egypt has added India to its list of countries from which it imports wheat.
Despite the increase in Russian crude oil imports into India, Iraq still maintains its position in the Indian market given existing contracts with the government and private refineries, reported the state news agency citing the head of Iraq’s State Oil Marketing Organization.
Visitors into Oman surged to 122,000 in February 2022 (vs 23,000 in February 2021), bringing the year-to-date total to 230k persons. Arrivals from GCC accounted for 36.9% of the total while visitors from India, France and UK had a share of 12.7%, 4.2% and 4% respectively. Hotel occupancy increased to 52.5% in February this year, up from 39.1% a year ago.
The Oman Investment Authority (OIA) is targeting the privatisation of more than 30 affiliated companies by 2025, according to the Chairman. He also disclosed that the OIA supported the state budget providing more than OMR 1bn, which come from profits of its companies (and not sale of assets).
Saudi PIF advanced to 5th among global sovereign wealth funds, ranked by assets (Source: SWF Institute). It follows Kuwait Investment Authority (3rd) and Abu Dhabi Investment Authority (4th) from the region, in a list topped by the Norway Government Pension Fund and the China Investment Corporation.
Saudi Competition Authority approved 49 applications for mergers and acquisitions in Q1 2022 (+88% YoY); it also received 101 applications for economic concentration (includes JVs in addition to M&As) during the quarter (+42% YoY).
Compared to January 2022, Saudi holdings of US treasuries declined by USD 2.7bn to USD 116.7bn in February. Saudi is the 18th largest holder of US debt.
The share of payment transactions in Saudi Arabia using near-field communication increased to 35% in 2021 (2020: 22%). Such payments accounted for 95% of all point-of-sale transactions last year, up from 88% in 2020.
SAMA issued a license for consumer microfinance operations to Sulfah – this is the third such license issued. Such firms target individuals and small businesses.
Fitch revised its outlook to “positive” for Saudi Arabia from “stable” previously. The firm forecasts government debt to GDP ratio to remain below 30% until 2025 and expects budget surpluses to the tune of 6.7% and 3.5% of GDP in 2022 and 2023 respectively.
A Saudi Advanced Manufacturing Hub (Saudi AMHUB) strategy was launched in coordination with the World Economic Forum to promote industrial innovation and advanced manufacturing. Consisting of 24 core members, the hub aims to provide practical solutions to the industrial sector in addition to improving operational and financial efficiency.
Saudi Arabia’s National Housing Co. launched 5,000 new residential villas in Riyadh as part of the Sakani program (launched in 2017 to facilitate home ownership, with a goal to reach 70% home ownership by 2030).
Health specialities in Saudi Arabia will be localised by 60% while engineering and technical professions related to the health sector will be localised by 30%.

Global News:
Major global equity markets ended in the red last week, with mixed earnings results and economic data (rising inflation). In the region, Saudi Tadawul and UAE’s DFM gained, the latter supported by DEWA’s IPO; UAE’s ADX fell after news that First Abu Dhabi Bank withdrew its offer for a controlling stake in Egypt’s EFG Hermes (Thursday saw EFG Hermes plunge by nearly 20% – its biggest % decline in more than 5 years). The euro hit a nearly two-year low vis-à-vis the dollar as the ECB decided to leave rates unchanged but cautioned about inflation risks while the yen tumbled to a two-decade low vis-à-vis the dollar given the BoJ’s pledge to continue stimulus measures to support economic recovery (in contrast to tightening signals elsewhere). Oil prices surged by more than 8% from a week ago while gold inched up by around 1.5%.

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SOURCE:
Nasser Saidi & Associates