Dubai has achieved the top ranking in the world in attracting foreign direct investment (FDI) in 2021, with a record number of 418 greenfield FDI projects. The number one ranking was revealed by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai. Sheikh Hamdan unveiled the annual Dubai FDI Results & Rankings Highlights Report 2021, which is published by Dubai Investment Development Agency, an agency of the Department of Economy and Tourism (DET). He credited the “visionary leadership” of Vice President and Prime Minister of the UAE and Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum for the top ranking.
The Dubai Crown Prince added that over the years, Dubai has also demonstrated its resilience to global economic fluctuations, earning the confidence of global investors, and enhancing its reputation as one of the world’s leading lifestyle and business destinations.
Dubai PMI eased to 54.7 in April (March: 55.5), with both output index and new orders remaining strong. Though costs burdens increased (fuel and material prices), firms shied away from passing on these costs to consumers in a bid to remain competitive. Employment dropped for the first time in 5 months and though optimism for future activity inched up in April, it remained below the historical trend.
Investing in Abu Dhabi bourse became simpler with a new streamlined process that allows investors registered with other UAE stock markets (licensed by the Securities and Commodities Authority) to trade on Abu Dhabi Securities Exchange (ADX) without going through a complicated process. However, corporate entities still need to provide articles of incorporation along with a list of authorised signatories.
Borouge, a speciality plastics firm that produces polyolefins, plans to list on Abu Dhabi Securities Exchange. The firm is a JV between ADNOC and its Austrian chemicals partner Borealis. The firm plans to list 10% of the company: an offer price of AED 2.45 (USD 0.66) has been set for its IPO, implying a valuation of USD 20bn. The offer, which began on 23 May will run till 28 May.
ADNOC announced three oil discoveries: discovery in Bu Hasa includes 500mn barrels of oil from an exploration well in the field; the discovery in Abu Dhabi’s Onshore Block 3 stand at around 100mn barrels of oil; the third discovery is around 50mn barrels found in the Al Dhafra Petroleum Concession.
UAE’s unemployment insurance scheme, effective from early 2023, will be applicable for both expats and citizens. By paying a minimum of AED 40 to a maximum of AED 100 per year into an insurance scheme, those who lose jobs will be eligible to receive 60% of their basic salary or up to AED 20k each month.
UAE’s start-up culture is improving: according to the UAE’s Minister of State for Entrepreneurship and SMEs, around 5% of all graduates are starting their own business soon after graduating (compared to just 1.5% a few years back).
Tourism in Dubai surged in Q1 2022: visitors more than doubled to 3.97mn in the quarter compared to 2021, with Oman and Saudi accounting for 1/5th of visitors during the quarter. Revenue per available room surged in Q1 2022 (to USD 534) as occupancy inched closer to pre-covid levels (82% in Q1 2022 compared to 84% in Q1 2019 and 86% in January 2020). Dubai Tourism CEO expects tourist numbers to be closer to 2019 levels by end of 2022.
Dubai reported 6,983 real estate sales transactions worth AED 18.2bn in April, the highest ever for the month since 2009. In line with the improved performance in the last few quarters, new real estate project announcements in Q1 grew: more than 20 projects were announced comprising upwards of 6,500 residential units.
Dubai Airport announced its busiest quarter since 2020 in Q1 2022, receiving 13.6mn passengers (+140% YoY and 15.7% QoQ). The Dubai Airports CEO was quoted stating that traffic may reach pre-pandemic levels in 2014.
Egypt expects to reach a new agreement with the IMF “within months”, disclosed the PM.
Egypt’s government has identified USD 9bn in assets that would be privatised and another USD 15bn that would begin preparations to be monetised. He also stated that the plan is to raise private investment to 65% of the total within 3 years, from 30% currently. He also disclosed that the government would publish details of the sectors from which it would withdraw completely / partially by end of the month.
IMF forecasts Iraq GDP to rise to 10% in 2022, supported by a boost in oil output. Non-oil GDP is expected to expand by 5% this year, following a 20% uptick in 2021 (a result of an accommodative fiscal stance and the Central Bank’s stimulus measures). Headline inflation is projected to rise to 6.9% in 2022 given higher food prices.
Iraq aims to increase its oil production to 6 million barrels per day by end of 2027, according to the Oil Minister.
Current wheat reserves in Iraq are sufficient for four months, according to a spokesperson from the Trade Ministry, as 800,000 tonnes were bought from local farmers.
Kuwait’s trade surplus with Japan surged by 82.7% YoY to JPY 82bn (USD 638mn) in April, rising for the 13th consecutive month.
According to a financial recovery plan passed by Lebanon’s Cabinet on Friday, the government foresees cancelling “a large part” of its Central Bank’s foreign currency obligations to commercial banks, to reduce the deficit in BDL’s capital. In addition, the plan also includes unifying the official exchange rate, a full audit of the BDL’s forex financial standing by July and dissolving non-viable banks by November among others. The Parliament, which will convene in the coming weeks, need to pass multiple laws for the IMF bailout discussions to progress.
Lebanon’s telecommunications sector will begin using the Central Bank’s Sayrafa exchange platform for phone services, including calls and mobile data. This implies a surge in prices in the coming months: it has been charged till now at LBP 1,500 and will switch to LBP 23,900 to the dollar.
Bloomberg reported that Saudi Aramco plans to offer a 30% stake in its trading arm, Aramco Trading Co., in an initial public offering.
The Public Investment Fund launched the Saudi Coffee Company: an investment of nearly SAR 1.2bn is expected to grow the national coffee industry and enable the Saudi coffee bean to become a global product.
In addition to owning companies that are developing hydrogen, PIF plans to establish a new hydrogen company, revealed the fund’s governor at a regional forum on ESG.
Saudi PIF took a 5.01% stake in Nintendo: this investment adds to stakes acquired previously in other video game companies like Nexon, Capcom and Koei Tecmo.
PIF reduced its ownership of US equities by 22% QoQ to USD 43.6bn at the end of Q1 2022. PIF cut its stake in three companies: Visa Inc., Plug Power, and Walmart during this period.
Prince Alwaleed bin Talal signed an agreement to sell 16.87% of his investment firm Kingdom Holding to the PIF.
Real estate e-transactions in Saudi Arabia touched 79,000 since the service was launched in March 2020, with the value exceeding SAR 11bn (USD 2.9bn). The operation can be completed within 60 minutes, as the electronic agreement on sale terms does not require a notary’s certification.
The value of virtual asset transactions in Saudi Arabia was worth around USD 20bn in 2021 with over 800,000 Saudis using digital currencies, according to the MD of BitOasis. About 45% of trading activity was done by 25-34-year-olds while 35-44-year-olds account for another 30%.
Equity markets had a mixed week: fears of inflation and potential recession are swaying equity market performance. Asian markets performed better than their US and European counterparts, thanks to China’s key lending rate cut to support its economic recovery. S&P 500 recovered slightly after moving into bear market territory on Friday. Among regional markets, most declined during the week, with Abu Dhabi the shining star (supported by gains in International Holding Inc, news of the Borouge IPO and streamlined access for investors). The dollar slipped to a 2-week low last week, posting sharp declines against the JPY and CHF as volatility increased across markets. Oil prices hit an 8-week high early in the week before pulling back later, while closing slightly higher. Gold price gained after 4 consecutive weeks of ending in the red.
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