Talks between Washington and Beijing continue, Markets anxious…

Global Markets update:
As the US-China trade negotiations progress and given the possibility of an extension of the deadline, equity markets edged higher across the globe including the Asia-Pacific (driven by China). However, last week saw the first outflows from emerging market debt and equity funds since October 2018. Among regional equity markets, it was a mixed picture as major markets closed higher (on the global rally) except Oman, Saudi Arabia and Egypt. Brent crude oil price hit 2019 high, supported by OPEC’s ongoing supply cuts and in spite of higher US output, while gold prices were flat.

MENA News:
Egypt’s transport minister disclosed plans to invest over EGP 71bn (USD 4.05bn) to develop its ports to become an international transport and logistics hub.
A total of 3500 Omanis were employed in the logistics sector last year, according to the minister of transport and communications. Plans are underway to create a further 2500 jobs in the sector.
Saudi Arabia’s crown prince visited Pakistan, India and China last week, signing multiple agreements and investment deals.

• In Pakistan, USD 20bn worth investments were pledged, with most of the agreements focused on energy projects including a USD10bn refinery and petrochemicals complex. Ahead of the visit, Saudi’s energy minister disclosed that an agreement had been signed to supply Pakistan with crude oil to secure its fuel needs
• In India, the Crown Prince signed agreements on investment infrastructure, housing sector and tourism; he expects investment opportunities worth more than USD 100bn over the next two years
• In China, Aramco agreed to a joint venture with Norinco to develop a USD 10bn+ refining and petrochemical complex; an MoU with the PIF will enable it to support and develop manufacturing, power generation and emerging technologies over the next ten years; an agreement was reached to teach the Chinese language as a curriculum at all stages of education in schools and universities across Saudi Arabia.

Saudi Arabia launched work on the expansion of the King Khalid international airport, expected to cost SAR 2.21bn (USD 589mn). The airport will be able to accommodate 11mn passengers annually after completion of this work.
The MENA region witnessed 26 IPOs in 2018, raising a total of USD 2.946bn, according to EY. The GCC recorded 18 IPOs valued at USD 2.5646bn. Saudi Arabia led in both IPO volume and value: 12 IPOs valued at USD 1.4724bn.
Saudi Arabia’s holdings of US Treasury bills grew by 16.4% YoY and 1% MoM to USD 171.6bn in December while the UAE also raised its holdings by 0.88% MoM to USD 56.8bn in December 2018. Globally, China ranked the top holder of US debt instruments with USD 123trn, followed by Japan with USD 1.042trn.

UAE News:
Assets of UAE’s banks increased by 1.2% MoM to AED 2.913trn in January, as per Central Bank statistics. Bank lending picked up by 0.3% MoM to AED 1.662trn.
UAE will keep water and electricity tariffs unchanged, according to the energy minister. He also disclosed that the UAE plans to introduce “soon” a law allowing the installation of solar panels on roofs of UAE buildings.
Employees in the UAE banking sector rose to 40,159 in 2018 – the highest since 2015 employees at the 22 national banks account for almost 98% of the total.
The DIFC Courts reported a 29% YoY uptick in cases to 670 last year; the volume of cases of the main Court of First Instance also ticked up by 50%. Two transnational disputes saw the value of cases rising to AED 10.2bn last year from just AED 400mn in 2017.
Hotel supply in Dubai increased by 9.3% in January, according to STR Inc., while demand rose by 3.9%. Occupancy rates fell by 4.9% to 82.2% in January, while the average daily rates fell 11.4% YoY to AED 714.01 bringing down the revenue per available room to AED 586.79 (-15.8%).
Apart from Emirati investors who invested AED11.5bn in Dubai’s real estate sector during January-November 2018, the major expat investors were Indians (AED10.8bn), British (AED 4.3bn), Pakistanis (AED 2.8bn) and Jordanians (AED 1.5bn). Together the 4 expat communities accounted for nearly one-third of the total AED 62bn investments recorded in January-November 2018.

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SOURCES:
Nasser Saidi & Associates