Global Markets Update:
The global equity rally cooled at the beginning of the week despite a rise in energy stocks on the back of higher oil prices. But at the end of the week better than expected earnings reports sent US indices again in record territory. European bourses followed Wall Street but were hampered by the euro which jumped to its highest level in 3 years against the dollar in response to hawkish ECB minutes and the prospect of a coalition agreement in Germany. Likewise the yen was supported by the BoJ announcement that it purchased fewer bonds as part of its QE program. Oil prices were again on the rise and Brent exceeded the psychological threshold of USD 70/b as US crude inventories continued to drop. The rally in oil prices pulled up the regional stock markets with the exception of Oman. The uptrend in gold prices that started at the beginning of the year continued last week as US inflation rose at the fastest pace in a year.
A proposal to replace expats in the private sector with 17,000 Kuwaiti citizens has been approved; the new percentage will not exceed 75% of the total workforce in each establishment. The rate of the national workforce in banking sector will be raised from 64 to 70%, 60 to 65% in communications sector, and insurance sector from 18 to 22%, among others.
Lebanon will sign contracts with a consortium of three international oil companies – Total, Italian ENI and Russian Novatek – at the end of Jan to start gas exploration, disclosed the Energy and Water minister.
Saudi Arabia will ease requirements for foreign institutional investors in its stock market from Jan 23, disclosed the Capital Market Authority. The minimum value of assets under management needed for an institution to qualify as an investor will fall to USD 500mn from USD 1bn before. This move, ahead of the proposed Aramco IPO later this year, will not only simplify the qualification process, but also enable institutions to qualify affiliates and their managed funds without submitting a separate application for each of them.
Saudi Arabia raised the maximum loan-to-value rate for mortgages for first-time homebuyers to 90% from 85% in a bid to support real estate financing. Separately, the Housing Minister disclosed that all interest on mortgage loans of first time-buyers who earn less than SAR 14,000 (USD 3,733) would be paid by the ministry.
Saudi Arabia has shortlisted New York, London and Hong Kong for the international portion of the listing of Aramco, reported Reuters, citing sources familiar with the matter. The IPO will also be listed on Tadawul and is still set for later this year, according to the report.
Women aged 25 and above can be granted a tourist visa to go to Saudi Arabia alone, according to a spokesman for the Saudi Commission for Tourism and National Heritage. The start of tourism visa issuance – 65 countries will be permitted to get the visa – will be announced during Q1 2018.
UAE Cabinet issued a decree identifying 20 free zones in the country as “designated zones”: transfer of goods between designated zones will not be subject to the value added tax under two conditions: (a) when goods or parts of them are not released from the designated zone and are only being transferred from one designated zone to another; (b) the transfer process has to be done in accordance with the Common Customs Law implemented in the GCC.
Local governments will receive 70% of the revenues from the value added taxes imposed in the UAE, to provide “better local services, greater community development, and wider support for our citizens”.
Property transactions in Dubai grew by 6% yoy to AED 285bn in 2017 from 69k transactions, according to the Dubai Land Department. UAE citizens remained the largest investors, spending AED 25.307bn, followed by Indians (AED 15.6bn), Saudi citizens (AED 7bn+), British (AED 6bn) and Pakistani (AED 5bn) investors.
A “Good Conduct and Behaviour Certificate” will be needed to obtain a UAE work visa starting from 4th of Feb. The certificate should be issued from the applicant’s home country, or the country of their residency for the last five years.
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Global Markets Update: