Global Markets update:
The US S&P 500 posted its first weekly loss in more than a month, after trade tensions between the US and China intensified, at a time when the Fed is contemplating a faster monetary tightening. Wall Street pulled down all major bourses in developed and emerging countries including our regional markets. In currency markets the dollar lost on almost all crosses, as confidence in the Greenback was hit by the Trump administration’s confrontational stance. The oil price rallied after OPEC decided to increase output by 1 mn barrel (less than some investors had anticipated) in accord with non-OPEC members. Another positive element was the 5.9 mn barrel drop in the US oil inventories well above analyst predictions of 2.4 mn barrel. Gold continued its decline towards the lower bottom of the multi-month trading range.
The move approving Saudi women to drive went into effect on Sunday 24th, could help the Kingdom reap as much income as selling shares in Saudi Aramco. The move could add as much as $90 billion to economic output by 2030, with the benefits extending beyond that date.
Saudi Arabia agreed to supply Egyptian refineries with crude oil – 500k to one million barrels per month – for another six months from July, according to Egypt’s petroleum minister.
The cost of Egypt’s campaign for the 2018 FIFA World Cup amounts to USD 7mn, and is expected to promote Egypt as a global investment destination and attract tourists.
Saudi Arabia, UAE and Kuwait will provide an economic aid package worth USD 2.5bn to Jordan over the next five years to help moderate the social impact of economic reforms.
MSCI announced that Kuwait would be included in its 2019 Annual Market Classification Review for a potential reclassification from Frontier Markets to Emerging Markets status. The decision will be announced in June 2019, after consultation with market participants.
MSCI reclassified Saudi Arabia to emerging market: this could attract USD 40bn from foreign funds, according to the Saudi CMA chairman, and also boost prospects for the upcoming Aramco IPO. Passive investors tracking the MSCI index will only get access to the Saudi market next year, although active investors can participate in IPOs now. The MSCI Saudi Arabia Index will have a weighting of approximately 2.6% in the emerging markets index, with 32 securities, following a two-step inclusion process in May and August next year.
The multiple reforms announced in the UAE over the past weeks will likely support growth recovery: it has relaxed visa rules for jobseekers and tourists, reduced municipality fees, and removed the mandatory AED 3,000 deposits for foreign workers paid by private firms. Last week, the Cabinet also announced that widows, divorced women and their children living in the UAE will have the option to apply for a one-year residency visa without the need for a sponsor.
Total value of Abu Dhabi’s exports touched AED 116bn in Q1 this year: China, Saudi Arabia, Kuwait, Bahrain, and India accounted for 52.9% of the total.
Anecdotal evidence from auto companies’ officials point to a 20-40% increase in car sales in the UAE during the month of Ramadan, given special promotions offered then.
Private schools in Dubai earned AED 7.5bn in tuition fees in the current 2017-18 academic year, up 10.3% from the previous academic year; about 53% of students pay less than AED 20,000 in annual tuition fees, 4.5% fewer than last school year.
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Global Markets update: