Equity Markets Cheered Trump’s Re-election as President...

UAE News:

The UAE launched its National Investment Strategy, to double cumulative FDI to AED 1.3bn (30% of national investment volume) and triple cumulative FDI balance to AED 2.2trn by 2031. The main target sectors will include advanced manufacturing and renewable energy among others. While UAE’s previous target was to attract AED 550bn in foreign investment by 2031 and AED 1trn by 2051, the country had attracted AED 112.6bn in 2023, up 35% YoY.

PMI in the UAE rose to 54.1 in October (September: 53.8), thanks to an increase in output levels (61.3 vs 57.9) while new orders softened (55.9, the lowest level since February 2023, from 56.7), and employment fell to a 30-month low. Input cost inflation eased to the lowest in six months and output charges were lowered after six consecutive months of increases. Dubai's PMI, in contrast, slipped to 53.2 from September’s 54.1.

Dubai's GDP grew by 3.3% YoY to AED 116bn in Q2, thanks to strong performance from transportation & storage (+7.8% yoy), information & communication (+5.6% YoY) and accommodation & food services activities sectors among others. GDP in H1 this year grew by 3.2% to AED 231bn.

Lulu Retail Holdings raised AED 6.32bn from its IPO, making it the biggest UAE listing this year, with the final share price set at AED 2.04. High investor demand led the firm to raise the size of the IPO to 30% from the announced 25%.

UAE and Australia signed a Comprehensive Economic Partnership Agreement (CEPA) last week, making it the 14th CEPA signed since the program was launched in September 2021. The agreement is projected to triple bilateral trade to USD 15bn by 2032 (2023: USD 4.2bn and H1 2024: USD 2.3bn).

Ahead of the COP29 summit, the UAE pledged to cut emissions by 47% by 2035 as per its new climate plan. The UAE Minister of Energy and Infrastructure revealed that up to AED 200bn would be invested to meet sustainable energy demand over the next 6 years. 

Berlin-based food delivery firm Delivery Hero will list Talabat on the Dubai Stock Exchange in mid-December: floating 15% of its issued shares, the firm plans to pay a minimum dividend of USD 100mn in April 2025 after the IPO.

MENA News:

Most GCC central banks lowered interest rates in line with the Fed cut. While Bahrain, Oman, Saudi Arabia and UAE reduced rates by 25bps, Qatar opted to cut its 3 main interest rates by 30bps.

Bahrain received investment commitments of over USD 100mn from Singapore-based companies since November 2023, covering financial services, ICT and tourism sectors. Bahrain EDB disclosed this milestone on the sidelines of the Singapore Fintech Festival 2024.

Bahrain launched a BHD 100mn Private Credit SME Growth Fund, to provide financial support to SMEs thereby boosting job creation and GDP. The fund will be managed by the Bahrain Development Bank and capital pooled from local and regional financial institutions.

Domestic credit disbursed in Kuwait increased by 2.5% till the end of September. Business credit grew by 1.1% QoQ in Q3, taking year-to-date gain to 3.4%. Resident deposits grew at a strong pace of 2.5% QoQ and 3.7% YTD while public institutions deposits remained volatile. 

During an annual media briefing, the Chairman of Majlis A’Shura’s Economic and Financial Committee revealed that under the legislation being considered by the State Council, those earning more than OMR 30k annually (or OMR 2,500 monthly) in Oman will be subject to personal income tax. With the Saudi fiscal deficit clocking in at SAR 30.2bn in Q3, the overall deficit this year increased to SAR 57.96bn (vs SAR 44bn in January-September 2023). Recent projections placed a full-year deficit for 2024 at SAR 118bn. Overall revenues grew by 11.9% YoY to SAR 956.2bn in January-September 2024, with oil revenues the fastest growing component, rising by 15.9% (to SAR 585.8bn) while non-oil revenues grew by 6.2% to SAR 370.5bn. Spending rose by 12.9% YoY to SAR 1.014trn in January-September with capex posting one of the largest increases – up 33.4% to SAR 147.6bn – not surprising given the spending on infrastructure. Total debt rose to SAR 1.16trn as of the end of September, up from SAR 1.1trn at the beginning of the year.

Eleven mining exploration permits – covering a total area of 850 sq km across Riyadh, Makkah, and Asir – were granted by Saudi Arabia under its Accelerated Exploration Program to a mix of local and international companies.

An SME-focused event organised by Monsha’at in Saudi Arabia, Biban 24, welcomed over 1,350 startups and 182k visitors and signed agreements worth over SAR 35.4bn.

Saudi Arabia reported a 107% YoY surge in hotel rooms to 214,600 in Q3, with room licenses rising to over 3,950 in Q3 (Q3 2023: 2,000). The country aims to add 250k hotel rooms by 2030.

Saudi Arabia’s Roads General Authority disclosed that road infrastructure projects worth SAR 3bn were underway in the country – this includes new roads, preventive maintenance projects and enhancing road safety.

Axios reported that the US and Saudi Arabia were discussing a security agreement (not a full defence treaty) that excludes a deal with Israel, according to unidentified sources. The plan is to reach the agreement before the Biden term ends.  

Global News:

Equity markets cheered Trump’s re-election as President with the S&P500 crossing 6,000 points to a new record. Though Stoxx600 and FTSE were down from a week before, expectations of the stimulus package in China led to gains in CSI300 and MSCI’s global index touched a record high on Friday. Regional markets mostly gained as company earnings were released. Among currencies, dollar strength continued with the currency up 1.53% on Wednesday (the most in over 2 years) while the euro lost ground after Germany’s coalition government collapsed. Oil prices inched up by 1%+ (on expectations of sanctions on oil producers such as Iran and Venezuela) while gold prices fell 1.8% (after touching an all-time high the week ending the 1st November). Bitcoin is seeing a surge, rising above USD 80,000 in hopes that the Trump administration would be supportive of digital assets.

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SOURCE:
Nasser Saidi & Associates