Saudi Crown Prince gave the Green Light for the Aramco IPO …

UAE News:
Total re-exports from the UAE amounted to AED 1.046trn over the past three years, together accounting for 1/4th of the UAE’s total trade volume during the period.
Non-oil exports through Abu Dhabi’s ports touched AED 136.3bn in January-August 2019; total trade declined by 17.5% yoy in August, with exports and imports down by 14.7% and 26.4% respectively. Saudi Arabia, US, Kuwait, Japan and the UK were the top trade partners.
Dubai Economy’s Composite Business Confidence Index of local businesses increased 14.9 points (from Q2) and reached 129.8 in Q3 this year. Large companies are more optimistic than SMEs about their outlook and the main challenges firms face include delays in payments (as cited by 43% of firms), followed by competition (34%) and insufficient demand (17%).
The Foreign Direct Investment Transparency Index in Abu Dhabi touched 73.8 points a 100-point scale in 2019, reflecting the responses to key topics including the efficiency of government policies to attract FDI as well as incentives provided to foreign investors.
Fitch affirmed Abu Dhabi’s rating at AA with a stable outlook, reflecting the emirate’s strong fiscal and external metrics and high GDP per capita.

MENA News:
Saudi Crown Prince gave the green light for the Aramco IPO, and the official intention to float was approved by the Saudi Capital Market Authority. The approval is valid for 6 months, and the shares are likely to start trading in December. The valuation is likely to have been lowered to around USD 1.2-1.5trn, and next year’s dividend likely to be boosted by USD 5bn to USD 80bn to woo investors. Bloomberg reported that IPO investors have been guaranteed that the dividend won’t fall until after 2024, regardless of oil price moves.
The IMF issued the Regional Economic Outlook for the MENA region: oil exporters’ growth is expected to soften to 1.3% this year on lower and more volatile global oil prices, geopolitical tensions, and the global slowdown while oil importers’ growth is higher at 3.6%.
GCC central banks lowered interest rates last week, mirroring the Fed’s 25bps rate cut.
Bahrain’s Economic Development Board set up a fast-track process for global and regional startups to use Bahrain as their launchpad: the process covers residency, visa requirements and business registration as well as access to grants and financial support.
Egypt attracted FDI flows worth USD 3.6bn in H1 this year, according to UNCTAD, and was the largest FDI recipient in Africa (which witnessed inflows of USD 23bn).
Japanese tourists into Egypt increased by 38.2% yoy in January-September this year, according to the latter’s minister of tourism.
Lebanon’s President called for the formation of a new government of technocrats, after Tuesday’s resignation of Saad Hariri and asking the cabinet to continue in a caretaker role. Banks, which were shut for more than 10 days, reopened on Friday. Dollar bonds and CDS spreads recovered on Thursday after being under selling pressure during the anti-government protests.
Saudi Arabia closed 24 investment deals worth a total of USD 20bn at the Future Investment Initiative held last week. The largest deals included the USD 5bn mixed-use real estate Arabian Dream project and USD 11.45bn Air Product Qudra project.
The Public Investment Fund (PIF) in Saudi Arabia has successfully raised a USD 10bn bridging loan to cover its general corporate expenses and investment requirements; the loan will be repaid following the completion of the SABIC-Aramco transaction.
New residential mortgage contracts jumped by 353% to 16,816 in September; the value of residential loans surged by 249% to SAR 7.125bn. Mortgage loans have jumped more than 3 times over this year, according to SAMA.
Saudi Arabia’s construction sector expanded, growing by 3% this year, from a 2.8% contraction last year.
Saudi Arabia and UAE are planning to issue a joint visa enabling visitors to the UAE to visit Saudi and vice versa. The visa is likely to come into force in 2020.

Global News:
S&P 500 touched another record high last week on upbeat US jobs reports but world equity markets dipped after news broke of concerns regarding trade talks and “phase one” pact (Pompeo’s verbal attacks on China, Beijing’s doubts on the ability to reach a comprehensive long-term deal). Regional markets were mostly down towards the end of the week amidst falling oil prices. The dollar fell to a 10-day low after the Fed rate cut, supporting a rise in the gold price while oil prices dipped. A week of mixed news – the temporary trade truce seems to be in trouble following rhetoric from China while in the UK, Brexit uncertainty drags on with elections coming up (again). Jobs growth in the US and China’s PMI numbers provided relief towards the end of the week which saw weak GDP numbers in the US and EU alongside a recession in Hong Kong while the Fed and BOJ meetings sprung no surprises. The trade tensions and its impact continue to be evident.

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SOURCE:
Nasser Saidi & Associates