The UAE initiated an indefinite lockdown/ national sterilization drive starting from 5th April. While metro and tram services have been suspended, public buses and taxis will remain available (with the latter slashing rates by 50%). Dubai imposed a 2-week 24-hour lockdown following a shutdown initiated earlier in the densely-populated Al Ras district. UAE also extended schools’ closure until the end of the academic year (June).
The UAE Central Bank announced new measures to ease financial and liquidity requirements: this includes a 50% reduction in reserve requirements for demand deposits to 7% (releasing ~ USD 16.6bn in liquidity) in addition to allowing banks to defer payments of loans until end-2020.
UAE PMI slipped to 45.2 in March (February: 49.1) – the biggest decline ever – and employment in the non-oil private sector contracted at the quickest rate ever.
Dubai Expo organisers have officially proposed 1st October 2021 as the new starting date for the 6-month long event. Bureau International des Expositions is set to decide on it at the next meeting to be held on 21st April.
Dubai government revealed its commitment to inject liquidity into Emirates airlines.
The oil war heats up again: last week saw Trump claim that he had negotiated a ceasefire between Saudi Arabia and Russia, which would lead to a drop in production. This was followed by Saudi Arabia’s state media reporting that an emergency meeting had been called to discuss a fair oil arrangement. However, tempers have since flared with Russia accusing Saudi Arabia of pressuring the US shale industry and Saudi’s foreign minister rejecting this contention – OPEC sources believe that the virtual meeting scheduled for 6th April will likely be delayed.
Bahrain’s judicial system has launched electronic procedures and becomes operational online: this allows for the electronic filing of cases, submission of defence statements, pleadings and applications to the courts during all stages of the case, including the issuance of judgements.
Egypt’s non-oil sector PMI declined to 44.2 in March (February: 47.1) – the quickest fall since January 2017 – as the outbreak affect the tourism and hospitality sectors. Output fell the most in over three years, new orders shrank, and export sales declined at the fastest rate in over seven years.
Nearly 1.7mn SMEs in Egypt employ around 5.8mn persons and operate with EGP 77.1bn (USD 4.9bn) capital, revealed the Chairman of the Central Agency for Public Mobilization and Statistics.
Jordan imported about 310k barrels of oil from Iraq in March, according to the former’s energy minister, with a daily average of 10k barrels a day.
To support businesses impacted by Covid-19 outbreak, the Central Bank of Jordan launched a JOD 500mn (USD 704.5mn) soft financing programme for SMEs, with the Jordan Loan Guarantee Corporation acting as guarantor. With a one-year grace period, the interest rate of the loans is less than 3.5% while the loan guarantee level is 85% (higher than 70% normally).
Jordan observed a 24-hour lockdown on Thursday, with the closure of permitted commercial stores and a ban on movement of people.
Kuwait’s central bank’s stimulus package to support SMEs and key sectors from the Covid-19 outbreak included a cut in capital adequacy requirements by 2.5% and easing the risk weighting for SMEs to 25% from 75%. This is in addition to an earlier move during the week to provide soft long-term loans from local banks and postpone loan repayments by 3 months. Government agencies were also directed to pay obligations to the private sector as soon as possible.
Lebanon will allow deposits of USD 3k or less to be withdrawn in Lebanese pounds at the “market” rate, as per a central bank circular. Though the market rate was not defined initially, another statement detailed that the scheme would run for three months and that the rate would be set daily via an electronic platform including local lenders, the central bank and exchange bureaus.
Qatar government has instructed private sector companies to have 80% of their staff work from home, effective Thursday (2nd April) for an initial 2 weeks. The working day will be reduced to six hours, from 7:00 a.m. to 1:00 p.m., excluding grocery stores, pharmacies and restaurants.
Non-oil sector activity in Saudi Arabia posted the biggest drop in the PMI survey’s history when it fell to 42.4 in March from 52.5 in February; this is also the first time the index is below the 50-mark.
The King ordered Saudi Arabia’s government to pay 60% of salaries of Saudi employees working in the private sector for 3 months, estimated to amount to SAR 9bn (USD 2.39bn).
Saudi Arabia imposed a 24-hour curfew from Thursday (2nd April) in Mecca and Medina “until further notice” while making exceptions for workers to leave their homes for approved jobs. A curfew was imposed also in Dammam, Taif and Qatif starting Friday 3 pm till further notice.
Saudi Arabia’s minister for Hajj and Umrah asked Muslims to put Hajj plans on hold until there is more clarity about the spread of Covid-19. The Hajj, which has been cancelled only 40 times in history, is a major source of non-oil revenue and supports non-oil sector activity.
Another negative week for markets as Covid-19 cases cross the million-mark, with US, Italy and Spain recording the highest number of confirmed cases and deaths. Weak macro data in the US (non-farm payrolls, unemployment) and EU (PMIs/ business activity) led to sharp declines in the stock markets as well. Hopes of an oil ceasefire between Saudi Arabia and Russia led to an increase in the oil price (20%+ on Thursday), ending the week higher after 5 consecutive weeks of declines while also supporting stock market movements (benefiting Saudi’s Tadawul). Other regional markets ended in the red as the impact of Covid-19 became more widespread given lockdowns across many nations (and districts). The dollar gained during the week as evidence became stronger that the global economy was headed for a recession in H1 2020, while the euro declined by close to 3%. Gold prices closed slightly higher versus the week before.
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