UK Pound plummets as May under increasing pressure…

The British pound (GBP) dropped 0.6% as pressure mounts on UK Prime Minister Theresa May after a raft of political scandals and scant progress on Brexit talks.

UK Pound plummets as May under increasing pressure…

Global Markets Update:
The British pound (GBP) dropped 0.6% to $1.3121 as pressure mounts on UK Prime Minister Theresa May after a raft of political scandals and scant progress on Brexit talks. This follows a report that 40 Conservative MPs have agreed to sign a letter of no confidence in May, almost enough to trigger a leadership challenge. US equity markets hit another record at the beginning of the week and pulled up other major bourses (notably the Nikkei225 which touched its highest level since 1991). However, by mid-week, the tide had turned, due to mounting skepticism about fiscal reform in the US and disappointing earnings results. European stocks recorded their sharpest weekly drop in nearly 3 months, although Japanese indices remained buoyant. Emerging markets also posted a weekly gain, unlike regional markets, where investors worried about the repercussions of the Saudi anti-corruption campaign on major corporations and continuous tensions with Iran (this time involving Lebanon). The possible delays to the Republican tax overhaul affected also the dollar which lost on major crosses. Despite an increase in US crude inventories, oil traded near two years highs, as the situation in KSA spread anxiety in a market where supply is rapidly tightening. This is the 5th week in a row that oil prices post a gain, the longest streak since Oct 2016. Gold prices on the other side were supported by the geopolitical uncertainty and rose for the first time in four weeks. In summary, Economic growth is strong around the world.A move to monetary tightening from global central banks could provide the kindling for higher market volatility. Investors should stay diversified as the business cycle matures. In this environment, energy stocks may be worth exploring.

MENA News:
’s Suez Canal Economic Zone Authority signed contracts for projects worth USD 40bn, including a USD 3.5mn contract for the industrial development of 5.5mn square meters of land in Ain Sokhna and the USD 500mn financing of a liquid bulk terminal at Port Ain Sokhna among others.
Kuwait announced a ban on issuing work permits to expat graduates younger than 30 in the private and oil sectors – effective from Jan 1, 2018. Separately, the National Assembly’s financial and economic affairs committee is studying various proposals to adjust the demographic composition in the country, including a percentage cap or quotas for individual expatriate nationalities.
Oman’s government has allocated OMR 100 mn to compensate disadvantaged citizens for the removal of fuel subsidies.
The arrest of princes, ministers and former ministers in Saudi Arabia continued to dominate news from Saudi Arabia, with stock markets in both Saudi and UAE dropping after the announcements. Money and assets of the detained will also be confiscated: Bloomberg reported that a total net worth of USD 33bn is at risk of being frozen, Reuters reported that more than 1,700 domestic bank accounts were already frozen at the request of the central bank.

UAE News:
All food items will be included under VAT
in the UAE, according to the Federal Tax Authority; it was widely expected that certain food staples would either be zero-rated or exempt from VAT. Water and electricity bills, petrol, diesel, cars, clothes, and electronics will also be subject to VAT. The executive regulation, which includes the list of goods on which VAT would be applied, has been approved by the UAE Cabinet and will be issued soon. Other digital businesses such as “social influencers” are also subject to VAT, according to the authority.
Dubai attracted 11.58mn international overnight visitors during Jan-Sep this year, up 7.5% YoY, according to the Department of Tourism and Commerce Marketing. India was the top source market, with visitors up 20% to 1.478mn, followed by Saudi Arabia and the UK, while China stayed 5th with 573k visitors (49% YoY).

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