UAE PMI slipped by a point to a 6-month low of 55 in August, with the output index slowing to 61.9 (July: 62.8) while new orders remained stable at 57.6 as domestic demand supported growth. In contrast to Saudi, business confidence in the UAE was strong with the index at its highest since March 2020.
Trade between the UAE and G20 nations touched USD 341bn in 2022, up 21% YoY and 34% from 2019. According to the minister of state for foreign trade, G20 nations account for 43% of UAE’s non-oil exports, 39% of re-exports, and 67% of imports. In H1 this year, non-oil exports were up 10.6% YoY to USD 23.4bn.
UAE revealed the setup of a federal gaming regulator, the General Commercial Gaming Regulatory Authority, to establish “a robust regulatory body and framework for the UAE’s lottery and gaming industry”. According to WAM, the authority will “will coordinate regulatory activities, manage licensing nationally and facilitate unlocking the economic potential of commercial gaming responsibly”.
About 30,146 new businesses registered with the Dubai Chamber of Commerce in H1 2023, up from around 21k a year ago. Indian businesses account for more than 1/5th of the total (22%), followed by the UAE (4,445 firms) and Pakistan (3,395).
UAE announced an end-of-service benefits scheme for private sector employees, including in free zones. This will be optional for companies but will provide 3 investment options – risk-free investment, risk-based investment and Sharia-compliant investment.
UAE’s Mubadala Investment Company officially opened its Beijing office, with the 10-person team focusing on direct and fund investments in the country.
At the G20 Summit, the India-Middle East-Europe Economic Corridor (IMEC) was launched by the EU, India, Saudi Arabia, the UAE, the US and other G20 partners. The project aims to link Middle East nations by rail, and connect them to India by seaport, thereby facilitating the flow of energy supply and trade from the Gulf to Europe. Plans are also to lay along the route cable for power and data lines, as well as for a pipeline for hydrogen.
Lebanon's PMI slipped below 50 back again to contractionary territory 48.7 (July: 50.3), a 7-month low, with deteriorating output and new orders alongside rising input costs (given exchange rate movements). A faint ray of optimism was seen as the future output index touched its highest point since March 2020.
Lebanon’s central bank plans to establish a new international currency exchange platform through Bloomberg, according to the acting central bank governor, phasing out the Sayrafa platform.
Oman’s OQ Gas Network plans to float up to 49% of its shares, reckoned to be the largest IPO offering in almost 20 years. The listing will be on the Muscat Stock Exchange, potentially in Oct, and the IPO could raise between USD 700-800mn, reported Reuters.
The tourism industry in Oman grew by 47.3% YoY to OMR 1.9bn (USD 4.93bn) in 2022. Direct value added from the sector stood at OMR 1.1bn, contributing 2.4% to GDP. Domestic tourism accounted for 68% of earnings while international visitors reached 2.9mn (348% yoy).
The Saudi Fund for Development signed a USD 150mn agreement to support SMEs in Oman, disclosed Saudi state TV Al-Ekhbariya.
Saudi Arabia extended the voluntary oil output cut of 1mn barrel per day (bpd) until the end of this year: this (along with Russia’s extension of 300k bpd cuts) sent oil prices higher than USD 90 last week and will lower growth for the full year. We expect strong domestic demand and a strong pipeline of megaprojects to support non-oil activity. The latest IMF report projects overall growth of 1.9% for this year, given lower oil output & prices.
The number of fintech firms in Saudi Arabia rose to over 200 as of August 2023, according to the central bank governor, from 89 in 2022 and just 51 in 2021. Fintech firms generated a total revenue of SAR 2.8bn (USD 746.4mn) in 2022, up from SAR 2bn in 2021. SAMA is targeting 525 fintech firms by 2030, with 18k new specialised jobs. Separately, a senior central bank official disclosed that the share of digital payments in Saudi Arabia stands at 62% currently and is on track to meet the target of 70% by end-2025.
Saudi Arabia’s General Authority for Competition approved a total of 13 merger and acquisition requests in August (Jul: 16), with acquisitions accounting for 84.6% of approvals. The authority has approved 120 deals this year (without conditions).
SMEs in Saudi Arabia’s entertainment sector have been provided SAR 70mn (USD 18.6mn) in support, by the General Entertainment Authority since the inception of the Financing Guarantee Program in July 2022. As of end-Jun, 16 SMEs had been backed by the initiative.
Knight Frank’s Saudi giga projects report revealed that the combined value of commissioned infrastructure and real estate developments reached USD 250bn while including projects yet to be fully approved or given a construction date would take a total of over USD 1.25trn. Around USD 70bn worth of NEOM projects have been commissioned, nearly half (45%) of which have been completed.
Global equity markets were mostly lower for the week: with strong economic data in the US, including in the labour markets, expectations are that interest rates will remain high for longer; this contrasts with the weak demand outlook in China where concerns are growing about dwindling growth and European indicators in contractionary territory. Regional markets were mostly down, with Saudi easing on IMF’s expectations of lower growth this year while Egypt posted the largest gains (+2.7% weekly). The dollar gained for the eighth week in a row (longest streak since 2014), the Japanese yen stood at its lowest this year, the yuan sank to a 16-year low which is likely to boost exports, and India’s rupee posted a record closing low last Thursday. Extension of cuts from Saudi Arabia and Russia saw oil prices jump to a 9-month high, with the Brent posting a 2.4% weekly gain.
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