The Dow Jones Sinks in Huge Market Rout...

Global Markets Update:
The Dow Jones Industrial Average index sank by a record 1,175 points, erasing ALL 2018 gains as US equities fell at their most dramatic rate in over 6 years, as the equity market was rocked amid rising concern that inflation will force interest rates higher. 10-year US Treasury yields rose to 2.8% for the first time in 4 years. The sell-off, preceded by weeks of turmoil in the fixed income markets, as inflation fear mounted, was triggered by the FOMC minutes which seemed to signal a rate hike in March. On Friday the rout intensified recording the biggest daily loss of the Trump presidency after the payroll report confirmed a robust rise in wages. Major bourses in developed and emerging markets felt the contagion, although the Topix contained the losses and several regional markets, including Oman had positive performances. After weeks of steady gains oil prices lost ground, especially after data on US oil inventories showed an unexpected increase by 6.8 m/b and the EIA estimated that US output was just under 10.04mn barrels per day in November, a whisker below the all-time record set in November 1970. Counterintuitively, given the higher inflation expectations, even the price of gold fell amid the global market turmoil. Bitcoin slumps below $7,000 as cryptos hit by risk-asset rout. Bitcoin has now wiped out about two-thirds of its value since reaching a record in December. Alternative coins Ripple, Ether and Litecoin also tumbled at least 6%.

MENA News:
Egypt passed the country’s first bankruptcy law aimed at encouraging investments: the law abolishes imprisonment in cases of bankruptcy, and also simplifies post-bankruptcy procedures. Moody’s reported that this move would be “credit positive for banks”
Standard & Poor’s affirmed its AA/A-1+ ratings for Kuwait, with a “stable” outlook, citing strong public and external balance sheets backed by a significant stock of financial assets.
A six-month ban has been imposed on hiring of expatriate professionals in 10 sectors in Oman, including information technology, finance, human resources and administration, marketing, insurance, media, medical field, aviation sector, engineering and technical fields.
Saudi Arabia’s Aramco and Google’s parent company Alphabet Inc. are in early talks to create a new technology hub in the country. As part of the plan, data centres would be built around Saudi Arabia – though whose data the centres would house or who would control them is not clear.
Around USD 560mn of investments were made in 260 MENA startups last year, as revealed by Magnitt’s annual State of MENA Funding. UAE was the dominant market, accounting for 70% of all investment amounts and 37% of transaction (excluding Careem’s investment of USD 150mn).

UAE News:
About AED 93bn of loans were given to SMEs in the UAE (almost 41k loans), revealed the central bank governor at the Federal National Council. This amounted to 6% of total credit disbursed in the country.
UAE passed a draft law regulating lease financing: companies who practice lease financing without a license from the Central bank will face a fine of between AED 200,000-10mn, and/or a jail sentence.
UAE fuel prices reached an all-time high in February, since the deregulation of prices since August 2015. Petrol prices – which are now inclusive of VAT- increased by 5-6% in February, while diesel prices were up 6.9%.
Ras Al Khaimah’s Chamber of Commerce disclosed a 6% YoY increase in registration of new firms to a total 33,652 last year. Around 19,680 licenses were renewed while around 1821 new firms were registered (247 in the free trade zone).

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SOURCES:
Nasser Saidi & Associates