UAE Increases Fuel Prices for the Fifth Time this Year...

UAE News:
UAE approved 22 policies to support the transition to a circular economy, with the focus on four main sectors manufacturing, food, infrastructure and transport. Eight relevant trends were highlighted including waste-to-resource, reuse, artificial intelligence, remanufacturing, bio-based materials and repair work.
Indonesia and the UAE signed a free trade agreement: removing or reducing duties on most goods traded between the two nations. The deal could increase bilateral non-oil trade to USD 10bn within five years (up from around USD 3bn last year) and is estimated to create 55,000 highly skilled jobs in the UAE by 2030. The UAE Minister of State for Foreign Trade disclosed that a deal with Colombia is “almost done” and that one with Turkey could be reached before the end of the year.
The Abu Dhabi government plans to invest AED 10bn (USD 2.72bn) to double the size of its manufacturing sector (to AED172bn) by 2031. This investment is expected to increase non-oil exports by 148% to AED 178.8bn and create 13,600 jobs, particularly for UAE nationals, by 2031. This will also be supported by a new circular economy regulatory framework, being developed to ensure that the industry is operating on a sustainable basis.
Abu Dhabi Exports Office (Adex) signed a trade finance agreement with the Ecowas Bank for Investment and Development (EBID) to enhance the volume of trade between the UAE and the lender’s member states in West Africa. Adex will open a USD 20mn line of credit to EBID.
The UAE Energy Minister disclosed that oil production in the country is near to maximum capacity based on current OPEC+ production baseline, which is 3.168mn barrels per day. Separately, speaking at a conference, he highlighted that hydrogen would play a critical role in UAE’s transition to net-zero by 2050.
UAE increased fuel prices in July, for the fifth time this year: diesel price ticked up by 15% MoM to AED 4.76 while Super 98 and 95 were up by 11.5% and 12.1% to AED 4.63 and AED 4.52 respectively. Fuel costs three times more than in Kuwait and is more than double the average in GCC members. As a result of the increase in fuel prices, taxi rides in Sharjah and Dubai as well as Uber rides in UAE have announced fare hikes.
Union Coop, a supermarket chain in the UAE, plans to list on DFM on 18th July 2022. It was revealed that its existing shareholders would be offered ten shares in the listing for each share held, with the share price to be determined on the first day of trading.
The DIFC generates more than 12% of Dubai’s GDP, disclosed the governor. He stated that “over 20% of the UAE’s financial services balance sheet is held by DIFC-based entities and the market size of DIFC activities totals more than USD 700bn”. Of the 3650 firms in the free zone, over 500 are innovation firms (+67% YoY) employing over 2,000 persons.
Dubai Multi Commodities Centre (DMCC) disclosed a 19% increase in new businesses in H1, with at least 1469 new companies registering in the free zone. About 40% of new companies are from Europe and South America, with another 20% from India and China.

MENA News:
Bahrain’s Central Bank has announced that the COVID-related bank loan deferrals will be discontinued by 30th June.
Tourism surged in Bahrain in Q1, with the country welcoming 1.7mn visitors (vs 152k in Q1 2021), and revenues from tourism grew by 875% YoY to BHD 292mn (USD 774mn).
Egypt’s Finance Minister emphasized that boosting FDI was the way forward as compared to foreign purchases of treasuries to finance budget, given the multiple episodes of hot money flows. He also disclosed that the nation was in talks with investors in the Gulf (negotiations are underway for Qatar’s new investment of up to USD 3bn in Egypt), in addition to exploring concessional borrowing from international banks and also look to non-traditional funding (panda bonds are being considered, with an issuance likely in H1 of the 2022-23 fiscal year).
Bloomberg reported that Egypt’s General Authority for Supply Commodities bought 815,000 tonnes during the slump in the price of wheat: this is the single largest acquisition of wheat since 2012. Earlier in the week, it also contracted to buy 180,000 tonnes of wheat from India. Separately, the World Bank announced it was providing USD 500mn in development funding to support food security.
Bilateral trade between Egypt and Oman increased by 7.2% YoY to USD 586.2mn in 2021. Exports from Egypt into Oman fell by 4.1% to USD 163.3mn. Meanwhile, Omani investments in Egypt surged by 334.8% in the fiscal year 2020-2021 to USD 68.8mn.
About 35 fintech and e-commerce startups in Egypt raised USD 269.1mn in funding in H1 2022, reported Daily News Egypt.
The CEO of the Qatar Investment Authority disclosed that the sovereign wealth fund was not interested in crypto investments, but is exploring blockchain opportunities.
MEED reported a 42% YoY increase in GCC real estate sales in 2021 to USD 137.4bn, driven by Dubai (where sales surged by 86%) and Saudi Arabia (+25%).
The real estate sector in Dubai is the most transparent in the MENA region, according to JLL’s Global Real Estate Transparency Index. Dubai is ranked 31st in the global list while Abu Dhabi and Saudi Arabia are ranked as 45th and 49th respectively (semi-transparent markets).
Saudi Arabia approved a new Companies Law which allows the formation of a Simplified Joint Stock Company (that promotes entrepreneurship and venture capital growth), reduces legal requirements for SMEs and simplifies procedures for establishing companies among others.
Two new IPOs approved: Saudi-based Arabian Drilling Co. received approval for an IPO of 26.7mn shares (or 30% of the firm’s capital) on Tadawul; Arabian Plastic Industrial Co. received approval for an IPO of 1mn shares (20% of share capital) on Nomu. Separately, mall operator Abdullah Al Othaim Markets Company revealed that their IPO plans had been scrapped (no reason was provided).
The ministry of industry and mineral resources issued 79 new factory licenses in May, with their investments exceeding SAR 1bn (USD 266.5mn). About 62 industrial facilities began actual production in May, with investments of SAR 1.3bn.
The PIF launched an aircraft leasing company called AviLease: it plans to initially focus on scaling through purchase-and-lease-back transactions with airlines, portfolio acquisitions and direct orders from aircraft manufacturers.
Saudi Arabia has identified 50 mining sites to offer to investors, according to the minister of industry and mineral resources. With spending on exploration of metals expected to triple over the next 3 years, mineral wealth is likely to cross previous estimates of USD 1.3trn.
Saudia plans to meet the rising demand for travel during the summer season by providing 6.5mn seats on 30k flights in July-August. As of end-June, the airline carrier is offering 765,600 seats weekly, a 30% increase from the summer of 2021.
Travel bookings in Saudi Arabia exceed pre-pandemic levels: it was higher by 28% in June (compared to June 2019), according to Almosafer (an omnichannel travel brand). Domestic tourism bookings rose by 7%, with bookings in Abha (capital of the Asir region) witnessing a 125% rise.
Saudi Arabia is in early talks to take a stake in Aston Martin, potentially worth GBP 200mn, reported FT.
Riyadh has fallen out of the top 100 most expensive cities for expats, to 103 dropping from 29 last year, according to Mercer’s Cost of Living Index. Dubai and Abu Dhabi are the most expensive among Arab cities, ranked at 31 and 61 respectively.

Global News:
Most global equity markets ended the week lower: the S&P 500 and MSCI’s world stocks index posted the worst H1 performance since 1970 and 1990 respectively. Regional markets gained in week-on-week terms (except for Egypt), but closed lower towards the end of the week on worries about slowing growth. Saudi Tadawul lost almost 12% in Q2, clocking in its worst performance since the pandemic. Among currencies, the dollar posted its best quarter since 2016 while the yen hit a 24-year low to the dollar on Wednesday and sterling touched a 2-week low. Oil markets are grappling with tight supply amid outages on one hand and worries of recession leading to lower demand on the other. Oil prices declined in June, for the first time since November; but, compared to a week ago, Brent lost ground while WTI gained. Gold price slipped last week while major other metal prices also tumbled including copper price which fell to the weakest in almost 18 months.

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SOURCE:
Nasser Saidi & Associates