Saudi Aramco issues its IPO Prospectus …

UAE News:
UAE announced the discovery of new hydrocarbon reserves estimated at 7bn barrels of crude oil and 58trn standard cubic feet of conventional gas. This would raise UAE to 6th globally in terms of oil and gas reserves (from 7th currently).
A senior government official announced that the UAE has no plans to introduce income tax and will not hike VAT in the next three years. Passenger traffic to Dubai International Airport declined by 2.4% yoy to 23.2mn in Q3; this brings the year-to-date figure to 64.5 passengers, down 4.5% yoy. India remained the top destination country during January-September (8.8mn customers), followed by Saudi Arabia (4.8mn) and UK (4.6mn).
Dubai has issued 64,360 active business licenses to 246,737 Indian business persons, according to a Dubai Economy report. These companies have added 854,234 jobs to the labour market.
UAE Central Bank Governor disclosed at a conference that plans are underway to allocate about 40% of banking jobs to citizens within 3 years, from 26.1% currently.
Commercial operations of hyperloop transportation in the UAE is likely to begin only by 2023 though trial runs are expected as early as 2020, stated the chairman of HyperloopTT.

MENA News:
The Central Bank of Egypt disclosed that banks disbursed EGP 144.2bn to finance 556,000 projects of micro, small, and medium-sized enterprises from December 2015-June 2019. Furthermore, the Credit Guarantee Company issued EGP 17bn worth loan guarantees to banks to cover EGP 25.4bn funds granted to SMEs.
Jordan’s Cabinet further expanded real estate exemption measures last week (effective till December 31), including lowering the registration and purchase fees of apartments and lands. The prior incentives had already resulted in an increase in the number of real estate transactions by 9% (sale of lands and apartments grew by 10% and 7% respectively) in October.
Kuwait’s spending on tourism abroad surged by 31.38% yoy to KWD 2.818bn (USD 9.304bn) in H1 this year. Last year, spending on tourism grew by 17.6% to KWD 4.03bn.
Oman is ranked the second country in the world for private homeownership, with 89% of Omanis owning homes, disclosed the Minister of Housing.
Saudi Arabia’s PMI reached a 4-year high of 57.8 in October (September: 57.3), thanks to output growth (fastest rate of expansion in 22 months) and new businesses (highest pace in 45 months).
The Aramco prospectus was issued: while details of the number of shares on offer or a price range were missing, it was disclosed that up to 0.5% of its shares would be offered to individual retail investors. The final offer price would be disclosed on December 5th, with book building taking place from November 17-December 4 for institutional investors while individual investors will have till the 28th of this month to request shares. Aramco cannot list additional shares for a period of six months after trading starts and will also be restricted from issuing additional shares for 12 months. Also, in spite of promising high dividends (of at least USD 75bn), Aramco warned that it may change its dividend policy without prior notice to its minority shareholders.
China – through the Silk Road Fund, oil producer Sinopec Corp and SWF China Investment Corp –is reportedly in discussions to invest between USD 5-10bn in the Aramco IPO, reported Bloomberg.
Saudi Aramco has signed crude sales deals for 2020 with five Chinese customers, increasing total volume by 151,000 barrels per day compared to 2019 oil supply contracts.
Capital flows into the Middle East and North Africa (MENA) region are forecast to accelerate by 21% to USD 200bn in 2019, according to the IIF. While nearly two-thirds of additional inflows in 2019 are associated with Saudi Arabia’s MSCI upgrade, debt issuances also support the rise in inflows.
IPOs in the MENA region dropped by 45.3% yoy to USD 190mn in Q3 this year, according to EY. Only two deals were recorded in Saudi Arabia and Egypt in Q3 versus four deals in the same period last year.

Global News:
US equity markets –S&P 500, DJIA and Nasdaq Composite – hit record highs, Stoxx logged its 5th consecutive week of gains in spite of dipping after Trump’s comments that tariffs roll-back had not been agreed upon with China; in Asia, shares retreated from 6-month highs. Most regional markets remained subdued last week. The dollar rose to a three-week high, while safe-haven assets were down including gold price which reported the largest weekly drop since May 2017. Brent price posted a weekly rise of 1.3% even after dipping around 1% after Trump’s comments. Global concerns continue to centre around the still unresolved US-China trade uncertainty – with internal White House reports and Trump contradicting statements from China regarding a tariff rollback, the phase one “deal” no longer seems anywhere near agreed. As Brexit unfolds in the UK with a new deadline (and elections in December), Moody’s became the latest ratings agency to lower the UK’s credit outlook to negative while the Bank of England has slashed growth rates (basing its forecasts on the government sealing a Canada-style trade agreement with the EU i.e. it would involve no tariffs but customs checks, some loss of market access for financial and legal services, and some regulatory divergence).

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SOURCE:
Nasser Saidi & Associates