Dubai PMI fell to 50.9 in August, from July’s 51.7: while output expanded for a 3rd consecutive month, it was at the slowest pace during the period (52.7 from July’s 56.1); employment fell for the 6th straight month (46 in August from July’s 46.8).
The recently passed UAE law “Securing Interest with Movable Property” allows companies to use its assets (ranging from tools and raw materials to receivables and collaterals) against loans, thereby supporting SMEs and also making it easier for banks to expand their lending operations.
Etihad Airways will extend the period of reduced pay for its staff until the end of this year. Salaries will be cut 10% from September (vs an earlier reduction of between 25-50%), reported Bloomberg though staff allowances had been reintroduced. In contrast, Emirates will be paying its full salaries starting October, as it flies to more destinations and after receiving support from the Dubai government as well as cutting spending (by also laying off its staff).
Abu Dhabi launched a new open data platform “Abu Dhabi Open Data” that offers more than 550 data sets on various sectors including agriculture, tourism, education, energy and technology.
UAE and South Korea have inked agreements to cooperate in 10 new sectors ranging from investments in SMEs to IT, AI, 5G technology as well as education, tourism and financial services (among others). The UAE is home to about 13k South Korean expats, and bilateral non-oil trade stood at USD 5bn last year.
The newly launched Abu Dhabi Youth Council initiative allows for young Emiratis to provide services as freelancers to projects announced on the Abu Dhabi Government Services website TAMM (and before a public tendering process is initiated).
Bahrain became the second Arab nation to normalize relations with Israel within a month, following a similar move by the UAE. Both UAE and Bahrain will sign and formalize the deal at a 15th September ceremony at the White House. 4 Arab nations have now full diplomatic ties with Israel: Bahrain, Egypt, Jordan and the UAE.
Bahrain resumed issuing visa on arrivals: for now, entry is restricted to citizens and for citizens of nationalities that are eligible for it. Separately, Bahrain and India entered an “air bubble” accord to permit bilateral travel of specific categories.
Investments into Egypt increased by 26% YoY in the fiscal year 2019-20, according to a Cabinet State. The planning minister disclosed that this year’s plan includes the implementation of 691 green projects at a total cost of EGP 447.3bn.
The recently approved electronic payment law in Egypt will support the nation’s move to a non-cash economy, while also enabling financial inclusion, according to the finance minister. Entities to implement these regulations – schools and universities to communication services to transportation services – have been given a 6-month period to rollout non-cash payment methods at all outlets.
Egypt’s 2020-21 academic year will start on 17th October, with the biggest challenge ensuring adherence to social distancing measures.
Unemployment rate in Jordan rose to 23% in Q2 this year, up 3.8% YoY; more than half of the unemployed individuals (51.6%) held a secondary school certificate or more. Unemployment rates were higher among women (28.5%) versus male unemployment rate at 21.5%.
Jordan resumed international flights from last Tuesday, handling a total of six flights a day to start with.
Jordan is rolling out a compulsory 1-year military service for persons aged 25-29 (who are unemployed, and with no social security subscriptions in the last year prior to conscription) as “part of the plan to address poverty and unemployment while investing in our youth”. The plan includes three months of military training, with the other nine devoted to professional and technical training in the private sector. The women will be exempt from the 3-month military training phase. A monthly payment of JOD 100 will be offered during the service period.
The Arab Monetary Fund extended a loan of USD 41mn to Jordan, to provide financial support to the Kingdom and meet its emergency needs.
A second stimulus package has been announced in Oman to support economic recovery: this includes an extension of the existing loan deferment scheme, enhancing the tenor and limit of the forex swap facility, revising the loan-to-value ratio for housing loans and a potential relaxation of the liquidity coverage ratio for banks (on a case-by-case basis).
The total number of SMEs registered in Oman increased by 11.8% YoY to 45,094 at end-July 2020. Muscat accounts for just above 1/3-rd of the total registered SMEs in the country.
Citizens in Oman will be prioritized for sub-contracted roles across sectors including banking and finance, reported national daily Times of Oman.
Oman will restart international flights from 1st October, with flights scheduled according to the health data for specific destinations.
Saudi Arabia’s Central Bank Governor disclosed that the outlook for the economy remains uncertain given current circumstances (low oil prices and the spread of the pandemic), while assuring the bank’s commitment to the dollar peg (an “overriding anchor”). He also cautioned against a deterioration in asset quality as Central Bank withdrew extraordinary support meted out to banks. Earlier in the week, the finance minister aired his view that the IMF’s growth forecast (-6.8%) this year is more pessimistic than their own.
UAE’s ADIA ranked third among the top 89 global sovereign wealth funds, with USD 579.6bn in assets, according to the SWF Institute. ADIA was closely followed by the Kuwait Investment Authority (USD 533.7bn), Saudi PIF (USD 390bn) and the Investment Corporation of Dubai (USD 305.2bn).
The Airport Council International expects passenger traffic in the Middle East to slump to 170mn this year (-59.5% YoY), as a result of which regional airports will lose revenues (forecast to touch USD 5bn from a pre-COVID-19 estimate of USD 13.2bn).
Global Markets were down in the US after a relief package was voted down. In Europe, the FTSE finished 4% above compared to a week ago (partly thanks to the weaker pound and the UK-Japan trade deal) and Stoxx closed higher supported by a rebound in the tech and telecom sectors. In Asia, Chinese shares posted the biggest weekly drop in 8 weeks as US tensions rise. Regionally markets were down, given weak oil prices and losses in financial shares, with the exception of Saudi Arabia. Among currencies, the sterling tumbled by 3.7% vis-à-vis the dollar given Brexit worries while the euro strengthened after comments from the European Central Bank. Oil prices had a volatile week, with concerns about weak demand and crude futures falling below USD 40 a barrel for the first time since June.
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