Markets move to diversify as tensions rise…

Global Markets Update:
The S&P500 ended up slightly on Friday, to close down 1.45% on a week affected by the escalating war of words between President Trump and North Korea. Mounting tensions with North Korea induced investors to cut risk exposure. The US small company stocks, in particular, had their biggest weekly loss since Feb 2016. All other bourses felt the contagion from Wall Street, with European indices displaying their worst weekly loss in 9 months and the emerging markets sunk by the flight to safety effect. Regional markets contained the losses (and KSA actually gained) thanks to resilient oil prices. In FX markets, the dollar weakened across the board (except against the Korean won) also as a consequence of mild inflation data, while the safe haven effect benefitted the yen (despite its exposure to a conflict across the Sea of Japan). Gold prices gained substantially but did not break the range that has prevailed for over 4 years, despite the “fire and fury” rhetoric. These sudden moves off the back of data announcements, go to show for the time being, despite the geo political tensions between the US and North Korea, the markets seem to be more concerned with data releases.
 
MENA Update:
As the Qatar row moves into a third month, Moody’s revised the outlook on the country’s banking system to negative from stable, also citing the weakening capacity of the government to support banks given the decline in oil-related revenues.
Saudi Arabia favors listing Aramco in New York, for “political considerations”, though advisers are recommending London as the less problematic and risky option. Separately, a senior NYSE official was in the region to try and persuade regional companies to consider New York as a listing option. 
Saudi Arabia will allow full foreign ownership of engineering firms, but foreign firms need to have existed for at least 10 years to qualify, with operations in at least 4 countries.
A new government company would be set up to develop 24 parks across Saudi Arabia to generate an estimated SAR 130bn from 5.6mn visitors annually.
 
UAE News:
Personal loans issued by UAE banks grew by 4.7% YoY to AED 349bn in Jun, according to central bank data, while loans to businesses dropped by 16.6% to AED 83bn.
Value of real estate transactions in Dubai crossed AED 390bn from 95k transactions during the period Jan 2016-Jul 2017, according to the Dubai Land Department.
Mobile phone subscribers in the UAE grew by 2.4% yoy to 18.7mn in H1 this year; Etisalat accounted for 10.5mn subscribers (3% yoy) while du’s customers were up by 1.5% in Q2 to 8.2mn. Total revenues of both operators touched AED 31.7bn during H1 this year with Etisalat accounting for the lion’s share (AED 25.3bn).
Persons using public transport in Dubai touched 275mn in H1 this year, with daily ridership at 1.507mn riders and Dubai Metro accounting for 36.4% of the total rides followed closely by taxis (31.7%).
 
 
SME News:
Dubai ranked amongst the 30 Best Cities in the World to work in a start-up. Furnished apartment platform, Nestpick, have produced a ranking comparing 85 cities worldwide to discover which offer the best quality of life for those employed in the start-up industry. With an interest in the relocation patterns of young professionals across the world, Nestpick combined their professional knowledge with this insightful research project, examining the cities via 13 factors synonymous with start-up professionals.

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SOURCES:
Nasser Saidi & Associates
CPI Financial