The UAE partially lifted some lockdown measures across the Emirates from 24th April: this includes the opening of shopping malls (no more than 30% of total capacity) while following social distancing guidelines; entertainment venues (cinemas) and tourist attractions will remain closed; offices have to limit employees on its premises to 30% of the workforce; metro will be re-opened in phases, buses will run limited services and all such services reassessed within a week based on demand. Public gatherings are still not allowed though move permits are not required to travel outside from 6 am to 10 pm.
UAE banks’ reserve requirements grew by 7.7% YoY to AED132.6bn during Q1 2020, according to the Central Bank. Money supply (M2) in the UAE increased by 2% YoY to AED 1454.9bn (USD 396.2bn) in March.
The UAE Central Bank has extended the duration of the Targeted Economic Support Scheme (TESS) for affected retail and corporate customers until end-December 2020. It was also disclosed that UAE banks have tapped 60% of the TESS facility (AED 30bn of the AED 50bn allocation), and utilisation had doubled within a week.
The UAE has extended the deadline for submitting VAT returns to 28th May 2020 for the tax period ending March 2020. This does not affect any other tax periods where the deadline for filing tax returns and settling of payable taxes does not fall in April 2020.
Inflation in the UAE decreased to 1.6% YoY in March, driven down by prices of recreation and culture (-9.89%) as well as housing and utilities (-4.08%). Meanwhile, food and beverage prices were up by 3.95% and tobacco prices by 6.43%.
The BIE Executive Committee recommends postponing Expo 2020 in Dubai to 1st October 2021. Since changing of dates needs the support of the 2/3-rds majority of member states, voting will be carried out remotely between 24th April to 29th May. The name “Expo 2020 Dubai” will be retained.
Emirates airlines are planning to keep its passenger flights grounded until July at the earliest (reservations currently reopen from July 1st). Etihad airlines, however, are planning to resume regular passenger flights from 16th May, though a spokesperson has clarified that “this situation may change”.
Dubai Airports unveiled measures to support its tenants, concessionaires and aviation partners during the impacted period 1st March - 31st May, including a waiver of 100% of minimum guarantees or equivalent fees.
DP World announced that it had handled 17.2mn TEU (twenty-foot equivalent units) shipping containers in Q1 this year, with gross container volume falling by 1.7% YoY on a reported basis but up 0.3% on a like-for-like basis. The chief executive warned that the real impact of COVID-19 would be visible only from Q2.
Bahrain will reduce government agencies spending by 30% amid the COVID-19 outbreak. The government also plans to reschedule some construction and consulting projects to keep spending in check.
Egypt approved new income tax facilities for 10 sectors affected by the COVID-19 outbreak (including aviation, tourism, hospitality and export companies): payment of 2019 income taxes can be done in instalments till 30th June without any charges for payment delays.
Jordan eased lockdown measures in three southern governorates with no COVID-19 confirmed cases, allowing for some commercial establishments to reopen alongside construction works. Plans are also underway to restart investment sectors in free zones after getting the required approvals.
Kuwait has extended partial curfew for 16 hours a day, given the ongoing COVID-19 outbreak, and a national holiday has been declared until 28th May.
Kuwait’s foreign reserves grew by 8.57% YoY and 1.22% MoM to KWD 12.42bn (USD 39.96bn) in February 2020. Additionally, the book value of gold reserve amounted to KWD 31.7mn.
It is estimated that the financial support needed by SMEs in Kuwait is about KWD 500mn. The National Fund for Small and Medium Enterprise Development will provide 80% of SMEs’ funding needs at no interest for up to three years, while banks will finance 20% at a maximum 2.5% interest rate, with the state supporting companies in paying the interest for 3 years.
The Saudi King approved performing shortened Tarawih prayers without public attendance in the two holy mosques.
Saudi Arabia’s crude oil exports fell to 7.278mn barrels per day (BPD) in February from January’s 7.294mn BPD. Production, however, inched up to 9.784mn BPD in February from January’s 9.748mn BPD.
The head of PIF disclosed that the fund was looking into investment opportunities in aviation, oil and gas as well as entertainment once the COVID outbreak passes.
Saudi Arabia’s finance ministry disclosed raising SAR 5.55bn (USD 1.48bn) in Sukuk.
The Saudi real estate price index inched up by 1.2% YoY in Q1, driven mainly by prices of residential properties (+2.1%), while the prices of commercial and agricultural real estate decreased by 0.5% and 0.2%.
Saudi Arabia’s tourism sector is estimated to witness a 35-45% dip in revenues, according to the tourism minister; also depends on how fast the nation will be able to reopen post-COVID.
Colliers projects that the MENA hotel sector will benefit from tourism initiatives once recovery begins in Q4 this year. Faster recovery is forecast for UAE and Saudi Arabia.
IATA warns that 1.2m aviation jobs are at risk across the region (up from estimates of 900k), with revenue losses at USD 24bn and USD 66bn loss in GDP, given COVID-19 related disruptions. More than 378k employees in UAE’s aviation industry are at risk of unemployment or income losses while Saudi Arabia is looking at an estimated 287k jobs.
Stock markets declined last week: the MSCI All country world index posted its worst weekly performance since March; the S&P ended the week down 12.2% for the year. While there has been a disconnect (for some time) between macro data releases and stock market movements, this week’s news dashed hopes of an early vaccine or treatment of COVID-19 (that Gilead’s antiviral drug Remdesivir had failed in its first clinical trial) affected markets negatively. Regional markets remained in the red for the week though recovering towards the end of the week thanks to some better-than-expected Q1 earnings. The dollar rallied and closed about 0.5% higher vis-à-vis the euro – the biggest weekly rise in 3 weeks. Oil prices had a troublesome week – with WTI going below zero due to storage bottlenecks and Brent remaining volatile – while the gold price touched a fresh 7.5-year highs.
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