UAE Government announced additional stimulus to the tune of AED 16bn (USD 4.36bn) to support the economy, thereby bringing the total amount to AED 126bn so far. These measures will include support for SMEs and to ensure delivery of infrastructure projects.
Dubai Free Zones have announced measures to support the economy during the Covid19 outbreak: this includes the postponement of rent payments up to 6 months, easy instalments for financial payments, refunding insurance and guarantees claims, cancellation of penalties, as well as temporary contracts allowing for free movement of labour between companies without penalties during 2020.
In a major decision, UAE has suspended all passenger and transit flights for two weeks.
Banks in both Dubai and Abu Dhabi and a few other banks in other emirates have announced measures to support the economies: some of the common measures include rescheduling or deferring of loan payments for affected companies as well as interest-free instalment plans for individual customers. (More: Abu Dhabi’s 17 financial initiatives: https://bit.ly/2WXwHDc; Dubai’s financial initiatives: https://bit.ly/3bzqS2W)
Gold reserves at the UAE central bank accelerated by 38.8% to AED 5.615bn in February from end-December.
Dubai Economy has directed private sector companies to implement a remote working system for 80% of their staff till April 9th 2020.
Bahrain announced a BHD 4.3bn stimulus package to support the economy: this includes a waiver on utility bills (for both individuals and commercial) for 3 months, a delay of bank loan instalments for 6 months, doubling the Liquidity Fund to BHD 200mn and exemption from tourism fees for 3 months among others.
All non-essential businesses in Bahrain will remain closed till 7 pm on April 9th. Bahrain’s parliament backed a 6 pm-5 am nationwide curfew to combat the spread of the coronavirus outbreak.
Egypt’s EGP 100bn emergency fund to support the economy during the Covid19 outbreak includes EGP 50bn for the tourism industry, EGP 20bn for the Central Bank to facilitate direct share purchases in the stock exchange, a 2-year freeze on the implementation of the tax on agricultural land as well as EGP 27.6bn to disburse to 2.4mn families.
To tackle the spread of Covid-19, Egypt has imposed a partial curfew from 7 pm to 6 am for two weeks (from last Wednesday). Schools and universities will be suspended for an additional two weeks till mid-April. Suspension of flights at Egypt’s airports will be extended for two weeks from April 1. An additional EGP 1bn was allocated to the health ministry to provide preventive supplies. The Egyptian Exchange also reduced trading hours (till 1:30 pm).
Iraq is extending the flight and travel ban – which started on March 17 – until April 11.
Jordan eased restrictions, allowing small shops/ markets to resume work from 10 am to 6 pm from Wednesday last week – with a warning that any crowding would lead to closure again.
Kuwait extended the suspension of work in all ministries, state agencies and private companies by 2 additional weeks, with work to resume on April 12. All shops and central markets remain closed while partial curfews are operational from 5 pm to 4 am.
Kuwait’s exports plunged by 90% YoY to KWD 143.8mn in February; no oil exports were recorded in the month.
Kuwait’s imports from China declined by 12.93% YoY to KWD 253.81mn during January-February this year. Total imports into Kuwait slipped by 7.4% to KWD 1.5bn during this period.
Kuwait Petroleum Corporation called on all subsidiaries to rationalize spending, reduce capital expenditure and operating costs this year given the slide in oil prices.
S&P lowered Kuwait’s long-term foreign and local-currency sovereign credit ratings to AA- from AA, with a stable outlook. Though the recent drop in oil prices and slow reform momentum will negatively affect the economy, “sizable fiscal and balance-of-payments buffers” will provide support.
Earlier in the week, Lebanon suspended payments on all USD 31.3bn of its international Eurobonds declaring that it could no longer repay them as pressure mounts on “access to foreign currency”.
Lebanon started imposing a 7 pm-5 am curfew from last Thursday.
Oman will suspend all internal and international flights as of March 29, except cargo operations and flights to Musandam. In addition, the country last week banned public gatherings, limited staffing at state entities and also shut currency exchange bureaus.
The value of real estate transactions in Oman declined by 30.6% YoY to OMR 167.3mn in January 2020 while the number of plots issued also declined by 14.7% to 17494.
Qatar central bank approved the deferral of loan instalments and interest for 6 months in sectors affected by the Covid-19 outbreak. Fees on points of sale transactions and ATM withdrawals have also been cancelled. Parks and public beaches were closed until further notice.
Tadawul temporarily reduced trading hours till 1 pm (from 3 pm before) in a bid to slow the spread of Covid-19 in Saudi Arabia. An evening curfew from 7 pm to 6 am began last Monday for 21 days, to slow the spread of the virus. Separately, local banks announced the postponement of 3 months’ instalments for all public and private health personnel who have credit facilities without changing the cost.
A group of Saudi banks announced their support for the Health Endowment Fund with a contribution of SAR 155.1mn (USD 41.3mn).
Construction deals in Saudi Arabia surged by 95% YoY to AED 197.1bn (USD 52.6bn) last year – the highest since 2015. Real estate firms and oil and gas firms were clear leaders.
Sovereign wealth funds in the region could witness a decline in assets over USD 300bn this year, according to IIF estimates, with Abu Dhabi, Kuwait and Qatar accounting for the bulk of the declines.
Stocks were on yet-another rollercoaster ride last week: with a historic three-day run-up followed by a fall on Friday. Stimulus measures were announced across many nations, but there is still a great deal of uncertainty related to the Covid-19 outbreak. MSCI’s gauge of global stocks posted both its largest weekly percentage gain since 2008 and its largest monthly and quarterly drops since 2008. In the region, some markets continue to be battered by the double whammy of the Covid-19 outbreak and lower oil prices. Among currencies, the dollar posted its biggest weekly drop in more than a decade after central banks tapped the Fed’s swap lines. Oil prices continued to fall for the 5th straight week on demand concerns; gold posted its biggest weekly gain since 2008.
As the Covid-19 outbreak continues to spread relentlessly across Europe and in the US, stimulus measures have been introduced from almost all affected nations. What has been missing so far is global solidarity and cooperation. Calling for “strengthening global preparedness to counter infectious diseases”, the G20 pledged to inject USD 5trn to the global economy in an effort to combat the virus, but more has to be done to support the developing and poorer nations of the world, ill-equipped to handle such crisis domestically. There has been a lack of action in helping emerging markets.
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