Global Markets Update:
Fed officials voted unanimously to leave their benchmark rate in a range between 1% and 1.25%. They raised rates by one quarter percentage point in March and again in June when they penciled in one more quarter-point moves this year. Many analysts expect that to occur in December after the Fed initiates the gradual run-off of more than $4 trillion in mortgage and Treasury securities. US stock markets started the week on a positive note with the Dow Jones touching a new record especially after the Fed signaled in its minutes a dovish stance on future rate hikes. However, subsequently, a tech shares sell-off, weak earnings reports by some large firms and uninspiring US GDP growth cooled the mood. The political setbacks by the Trump administration (the fiasco on the repeal of Obamacare, the dismissal of the White House Chief of Staff and infighting) added a great deal of uncertainty over the medium term outlook. Global stock markets (including most regional markets) followed the wake of Wall Street but ultimately managed to score positive weekly gains (with the exception of Japan). Conversely, the dollar index against a basket of other currencies continued its slide to a nearly 13-month low. Brent crude reached USD 52/b, the highest level in 2 months as the supply glut recedes. Gold prices rebounded strongly after North Korea tested another ballistic missile.
Inflation in Bahrain rose to 1.0% YoY and 0.6% mom in Jun, as housing and utility costs were up 3.1% and food prices 1.7%.
Egypt aims to raise its natural gas production to 6.2bn cubic feet (bcf) per day by end of Jun 2018, from 5.2bcf currently, according to the Petroleum minister.
Egypt’s first electric train project, to be completed within 24 months, is expected to cost USD 1.4bn, of which the government will contribute around USD 500mm.
According to Kuwait’s OPEC governor, oil demand is expected to rise by 2 million barrels per day in H2 this year; he also stated that it is premature to talk about any additional cuts to oil output.
Saudi Aramco plans to complete phase 1 of the expanded gas pipeline by year-end, thereby increasing the capacity of the Master Gas System to 9.6 billion standard cubic feet per day.
Saudi Arabia has closed five sectors to expatriates: only Saudis will be allowed to work in the tourism and health sectors, Al Qaseem markets, malls and temporary stands.
The oil sector accounts for less than 1% of Dubai’s GDP, according to the Chairman of Dubai’s Economic Development Committee. Trade accounted for 28% of Dubai’s GDP in 2016, followed by transportation and storage at 12% and financial services at 11%. He also disclosed that the economy is expected to expand further over the next two years, thanks to the “diversification, resilience and sustainability.. enshrined in every project, policy, and strategy”. Tourism was another major driver for Dubai, with 15mn overnight visitors reported last year: visitors from GCC, India, UK, and Germany together accounted for 40% of total visitors, while the average spending per capita was up to AED 8,658 last year (2015: AED 8,252).
Abu Dhabi’s trade in pearl, gemstones and precious metals increased by 25.6% YoY to AED 4.9bn in Jan-Apr this year. This accounts for 8.4% of the emirate’s total non-oil commodity trade.
Passenger traffic at Dubai International Airport grew by 3.9% YoY to 6.08mn in Jun, bringing the H1 total to 43.05mn (+6.3%). The average number of passengers per flight increased to 218 from 208 a year earlier.
Feeling more confident: about 39% respondents of the Dubai Chambers ‘The Business Leaders’ Outlook Survey’ expect business conditions improve in Q3 2017 while around 43% expect no change. Separately, 82% of UAE’s CEOs are positive about local business conditions, according to a survey by the Oxford Business Group. About 3/4ths of them also expect to make a significant investment within the next 12 months.
Barclays has announced its sponsorship for the Mind Cloud Entrepreneurship Programme, the UAE’s first government accredited initiative for entrepreneurs. The initiative, in collaboration with Dubai Business Women Council, the UAE’s leading platform for the personal and professional development of women in the emirate and beyond, aims to elevate the entrepreneurship skills for participants. The initiative provides support to the UAE’s drive to build a knowledge-based economy, through attracting a wide-ranging audience from students to SME entrepreneurs, corporate employees to start-ups and scale-ups, with a full spectrum of tailor-made theoretical and practical courses led by successful entrepreneurs.
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Global Markets Update: