Tensions generated by stolid protectionist tactics show no sign of abating…

Global Markets update:
Last week US equity markets started sluggishly due to the 4th of July long weekend, but when traders came back to work they set aside the trade war worries and focused on strong macro data (above all the US non-farm payroll) pushing the main indices firmly in positive territory. In Europe the main indices gained throughout the week thanks in part to a rebound in the automotive sector. However, in Asia the mood was verging on panic with the Shanghai bourse (the world’s worst performer in 2018) at a minimum since January 2017 and losing 4% during the week. Even the Japanese Topix despite a rebound on Friday, recorded heavy losses. The broader emerging markets suffered contagion from the Chinese syndrome and the contagion extended to regional markets (where oil prices also depressed the mood) with the exception of Qatar and Bahrain (the latter still benefiting from the announced rescue package). In currency markets, the euro made a comeback vis à vis the dollar, in the wake of strong data from Germany for the first time this year; the yuan suffered its largest ever monthly fall against the dollar in June, but the Chinese central bank last week intervened successfully to support the exchange rate. Oil prices dropped as US crude inventories unexpectedly increased by 1.245 mn barrel, but after a 9.9 mn barrel decline in the previous week (the deepest plunge since September 2016); also talks of larger Saudi output (strongly advocated by Trump) contributed to the fall. Gold prices remained essentially stable at the lower end of the trading range.

MENA News:
The European Investment Bank (EIB) is currently studying 15 projects in Jordan, and has allocated investments worth EUR 850mn towards a few sectors including water, sewage, public transport, and renewable energy.
Kuwait’s cabinet rejected the proposal to tax expats’ remittances. The government has included the value-added tax (VAT) bill on its priorities’ list during the parliamentary term, which begins in October.
Saudi Arabia pumped 10.488mn barrels per day (bpd) of crude oil in June, an increase of 458k bpd from May’s reported level, and supplied 10.579mn.
Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF), announced taking up a 15.2% direct stake in ACWA Power, a developer and operator of power and water plants.
Local tourism trips in Saudi Arabia reached 44.5mn in 2017, with total spend of around SAR 47.9bn (USD 12.7bn), according to the Saudi Commission for Tourism and National Heritage.
 
UAE News:
UAE’s Federal Tax Authority added three new free zones – Al Ain International Airport Free Zone, Al Bateen Executive Airport Free Zone in Abu Dhabi, and International Humanitarian City – Jebel Ali in Dubai – to the list of designated zones that will be exempt from the 5% VAT.
Over 12 million cheques worth AED 592bn were passed through the UAE cheque clearing system in H1 2018; nearly 4.3% of the cheques, worth AED 26.2bn, bounced during this period.
UAE-China bilateral trade grew by 15.1% YoY to USD 53.3bn in 2017: re-exports were up 37.4% to USD 3.5bn while imports grew by 14.7% to USD 48.3bn.
Dubai approved the new Human Resource Law, which introduces a new “working from afar” option to work remotely, as well as more days off for certain grades, and ticket allowances for children up to the age of 21 (as opposed to 18 before).
New businesses and companies can be setup in the UAE in just 15 minutes now through the ‘Bashr’ online platform: the service is currently available only in Ras Al Khaimah, Fujairah and Ajman for registering onshore companies.
The Ruler of Ajman issued a decree to reduce tourism fee to 7% from 10% previously, effective 1 July 2018 to 31 December 2018.
Real estate transactions in Dubai touched AED 111bn in H12018 from a total of 27,642 transactions: this includes 18,191 sales worth about AED 40bn, 7,668 mortgage transactions worth over AED 57.6bn, and 1,783 other transactions valued at AED 13.4bn.
Passenger traffic through the Dubai International Airport fell for the second month in May, down 3.8% YoY to 6.6mn persons; the number of flights at the airport also fell 5.6% to 32,620. Passenger traffic is down 0.1% to 36.9mn during the January-May period.
 
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SOURCES:
Nasser Saidi & Associates