UAE Cabinet approved amendments to the “Agency Law” (which regulates commercial agency and distribution agreements): it aims to enhance capabilities and continuity of family businesses, as well as to establish rules of governance and protection from defaulting; it will also provide for the transformation of family-owned businesses to list on the financial markets.
Government employees in Dubai will receive an average salary increase of 10% – effective January 1, 2020 – with professional employees receiving an increase between 9-16%. While the decision also includes features to support a work-life balance, this move would widen the gap between public and private sector salaries thereby making the latter less attractive to local talent, eventually leading to a more fragmented labour market.
Dubai attracted a record-high 16.73mn international overnight visitors in 2019, rising by 5.1% YoY. Dubai’s top six source markets were India, Saudi Arabia, UK, Oman, China and Russia, together accounting for over 7mn visitors.
Dubai announced a global logistics platform to boost South-South trade: the World Logistics Passport, which links Customs World, DP World and Emirates Group to enhance connectivity through Dubai, has been operational since July 2019 and has increased trade among participants by 10%.
The Dubai Multi Commodities Centre (DMCC) announced that 1969 new companies had registered in the free zone last year. Q4 reported a 20% increase in new firms (559).
The Abu Dhabi Investment Office, through its Ventures Fund, invested AED 60mn (USD 16.3mn) in a batch of startups and fund managers.
Egypt posted a primary budget surplus of EGP 30bn (USD 1.91bn) or 0.5% of GDP in H1 of 2019-2020 fiscal year, supported by the reduction in fuel subsidies. Overall H1 budget deficit increased to 3.8% from 3.6% a year ago. The finance minister stated that the country is on track to reduce its total debt to a lower-than-expected 83% of GDP by the end of this fiscal year in June.
UAE is currently the largest investor in Egypt with total investments exceeding AED 26.5bn (USD 7.2bn), stated the Secretary-General of the UAE International Investors Council.
Egypt has spent EGP 60bn out of total EGP 195bn required for the construction of 1 million social housing units, disclosed the housing minister. Total direct subsidies to the project amounted to EGP 4.6bn, while bank funding accounted for another EGP 29bn.
Egypt allocated EGP 27.5bn in investments to the healthcare sector in 2019-2020, up 26.1% YoY, revealed the planning minister.
Jordan’s Senate endorsed the 2020 state budget draft law; separately, the Cabinet approved the reduction of the sales tax on 76 basic commodities as of Feb 1: under this decision, goods subject to 10% tax will be lowered to 5% and those at 4% will become 2%.
As protests continued over the weekend, Arab News reported that Lebanon’s government is expected to propose a five-month contingency plan to reform the judiciary, fight illicit enrichment, corruption and economic crime, and modernize public institutions.
Oman will impose 5% value-added tax (VAT) from early next year, revealed Oman’s minister of commerce and industry.
Saudi Arabia reported a 54% surge in the number of new international companies (1131) that set up operations in the country. About 100 UK companies and 82 US companies set up in 2019 compared to 24 for both countries in 2018. India, Egypt, Jordan and China were also among the top countries represented.
Saudi Arabia issued 350k tourist visas during the last three months of 2019, driven by new regulations to ease tourism (e.g. allowing Schengen, UK and US visa holders to enter).
Small businesses in Saudi Arabia dominate the private sector, with its 1.5mn firms accounting for 97.6% of the total; medium-sized enterprises were 31,330 in number, or 2% of total private sector firms. By sector, wholesale and retail sector represented 34.3% of the small businesses, while 21.2% were in the building and construction field.
Foreign direct investment to Saudi Arabia expanded to USD 3.5bn in Jan-Sep 2019 from USD 3.18bn a year ago, according to SAMA data.
The coronavirus outbreak left a negative impact across all equity markets last week – the S&P 500 had the worst week since August. European stock markets recovered last Friday after the latest PMI readings (towards end of the week) brought along a shimmer of hope for recovery. Regional markets were mixed, with Saudi Arabia, Egypt and Qatar markets down. The euro fell to a 7-week low vis-a-vis the dollar, the yen lost ground and sterling fell on a possible rate cut at this week’s meeting (traders are pricing in a 48% chance of a rate cut to 0.5%). Oil prices fell by more than 6% compared to last week while gold price closed near an earlier 2020 peak.
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