UAE economy estimated to grow at a slower rate this year - IMF | ZAWYA MENA Edition:
"The economy of the United Arab Emirates will grow at a lower rate this year due to the continuation of lower oil prices, a top official in the International Monetary Fund (IMF) said in Dubai on Tuesday, estimating oil prices to average $53 per barrel in the coming two-to-three years.
The economies of the six Gulf Cooperation Council (GCC) countries that include Saudi Arabia and the UAE, the Middle East’s two biggest economies, have been badly impacted by the steep decline in oil prices which began in 2014.
The prices of the important commodity almost halved between June and December 2014, but have been on a slow recovery path since the start of last year."
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Wednesday 1 November 2017
Breakingviews - Dubai demonstrates the distance ahead of Saudi
Breakingviews - Dubai demonstrates the distance ahead of Saudi:
"The bustling metropolis of Dubai should not, by rights, exist. The most populous of the seven absolute monarchies that constitute the United Arab Emirates has only modest oil reserves. To generate electricity it relies on importing natural gas - especially from Qatar, with which it severed diplomatic ties in June. And it has virtually no natural fresh water. Yet Dubai and its population of 2.7 million people now boast GDP of around $40,000 a head, according to the government of Dubai’s Statistics Center.
The near 33 million people living in neighboring Saudi Arabia, by contrast, account for an average GDP of less than $22,000 a head, according to the International Monetary Fund. Crown Prince Mohammed bin Salman wants to improve on that, judging by a goal unveiled at last week’s Davos-in-the-desert conference, entitled the Future Investment Initiative, to create a regional financial powerhouse – an event which drained Dubai of many of its business and financial elite for several days.
Saudi Arabia can learn much from Dubai, which the Banker magazine just last month anointed the world’s 10th-biggest financial center. That feat is now splashed across twin thin electronic message boards outside the Gate Building, the heart of Dubai’s financial markets. Around the corner Nasdaq is building its new regional headquarters. Riyadh doesn’t even make the publication’s ranking of 57 cities."
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"The bustling metropolis of Dubai should not, by rights, exist. The most populous of the seven absolute monarchies that constitute the United Arab Emirates has only modest oil reserves. To generate electricity it relies on importing natural gas - especially from Qatar, with which it severed diplomatic ties in June. And it has virtually no natural fresh water. Yet Dubai and its population of 2.7 million people now boast GDP of around $40,000 a head, according to the government of Dubai’s Statistics Center.
The near 33 million people living in neighboring Saudi Arabia, by contrast, account for an average GDP of less than $22,000 a head, according to the International Monetary Fund. Crown Prince Mohammed bin Salman wants to improve on that, judging by a goal unveiled at last week’s Davos-in-the-desert conference, entitled the Future Investment Initiative, to create a regional financial powerhouse – an event which drained Dubai of many of its business and financial elite for several days.
Saudi Arabia can learn much from Dubai, which the Banker magazine just last month anointed the world’s 10th-biggest financial center. That feat is now splashed across twin thin electronic message boards outside the Gate Building, the heart of Dubai’s financial markets. Around the corner Nasdaq is building its new regional headquarters. Riyadh doesn’t even make the publication’s ranking of 57 cities."
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Bahrain Asks Gulf Allies for Aid to Stave Off Crisis - Bloomberg
Bahrain Asks Gulf Allies for Aid to Stave Off Crisis - Bloomberg:
"Bahrain has asked Gulf Arab allies for financial assistance as it seeks to replenish its foreign-exchange reserves and avert a currency devaluation that could reverberate across the region, according to people with knowledge of the talks. The request was made to Saudi Arabia and the United Arab Emirates, two of the people said. A third person said Kuwait was also asked. The countries responded by requesting the island kingdom do more to bring its finances under control in return for the money, the people said on condition of anonymity because the discussions were private. The talks are at an early stage, one person said. The slump in oil prices has battered the six-member Gulf Cooperation Council, at times raising questions over whether a dollar peg seen as a bedrock for economic stability for more than three decades was sustainable. And while bets against the region’s currencies have subsided this year, a devaluation of a GCC member would risk shifting the attention to others. Gulf central banks, including Bahrain’s, have repeatedly brushed aside talk of abandoning their exchange-rate regimes."
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"Bahrain has asked Gulf Arab allies for financial assistance as it seeks to replenish its foreign-exchange reserves and avert a currency devaluation that could reverberate across the region, according to people with knowledge of the talks. The request was made to Saudi Arabia and the United Arab Emirates, two of the people said. A third person said Kuwait was also asked. The countries responded by requesting the island kingdom do more to bring its finances under control in return for the money, the people said on condition of anonymity because the discussions were private. The talks are at an early stage, one person said. The slump in oil prices has battered the six-member Gulf Cooperation Council, at times raising questions over whether a dollar peg seen as a bedrock for economic stability for more than three decades was sustainable. And while bets against the region’s currencies have subsided this year, a devaluation of a GCC member would risk shifting the attention to others. Gulf central banks, including Bahrain’s, have repeatedly brushed aside talk of abandoning their exchange-rate regimes."
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MIDEAST STOCKS-Gulf barely moves as weak growth prospects offset rising oil
MIDEAST STOCKS-Gulf barely moves as weak growth prospects offset rising oil:
"Gulf stock markets mostly moved sideways on Wednesday, drawing little strength from rising oil prices, while Egypt pulled back after closing at record highs for three straight days.
Brent oil futures rose to $61.70 per barrel, their highest since July 2015, while global equity markets continued climbing. The failure of Gulf bourses to rise on the back of these trends showed how gloomy investors have become about economic growth in the region.
Governments’ budget deficits will shrink substantially if oil stays above $60, but authorities are expected to continue austerity policies such as the introduction of a 5 percent value-added tax as soon as January. These are expected to keep growth modest in 2018 and weigh on companies’ profit margins."
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"Gulf stock markets mostly moved sideways on Wednesday, drawing little strength from rising oil prices, while Egypt pulled back after closing at record highs for three straight days.
Brent oil futures rose to $61.70 per barrel, their highest since July 2015, while global equity markets continued climbing. The failure of Gulf bourses to rise on the back of these trends showed how gloomy investors have become about economic growth in the region.
Governments’ budget deficits will shrink substantially if oil stays above $60, but authorities are expected to continue austerity policies such as the introduction of a 5 percent value-added tax as soon as January. These are expected to keep growth modest in 2018 and weigh on companies’ profit margins."
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MOVES-Saudi sovereign fund PIF hires BofA banker for senior role-source
MOVES-Saudi sovereign fund PIF hires BofA banker for senior role-source:
"Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has hired Bank of America Merrill Lynch (BofA) banker Alireza Zaimi for a senior role at the fund, a source familiar with the matter said. Zaimi is leaving his post as managing director EMEA (Europe, the Middle East and Africa) in the equities division at BofA, the source said. Zaimi joined BofA in late 2014 and has also previously worked for Goldman Sachs and Deutsche Bank, according to his linkedin profile."
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"Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has hired Bank of America Merrill Lynch (BofA) banker Alireza Zaimi for a senior role at the fund, a source familiar with the matter said. Zaimi is leaving his post as managing director EMEA (Europe, the Middle East and Africa) in the equities division at BofA, the source said. Zaimi joined BofA in late 2014 and has also previously worked for Goldman Sachs and Deutsche Bank, according to his linkedin profile."
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Diamond Looks to Work With Saudi Wealth Fund as Kingdom Opens Up - Bloomberg
Diamond Looks to Work With Saudi Wealth Fund as Kingdom Opens Up - Bloomberg:
"Bob Diamond’s Atlas Merchant Capital is weighing investment opportunities in Saudi Arabia, including working with the kingdom’s wealth fund, as the country seeks to transform its economy.
“Saudi Arabia as a domestic financial services industry has become investible again,” Diamond said in an interview with Bloomberg TV on Wednesday. “One most striking thing to me is the opportunity to be an investor in Saudi Arabia. Our team is looking at opportunities there.”"
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"Bob Diamond’s Atlas Merchant Capital is weighing investment opportunities in Saudi Arabia, including working with the kingdom’s wealth fund, as the country seeks to transform its economy.
“Saudi Arabia as a domestic financial services industry has become investible again,” Diamond said in an interview with Bloomberg TV on Wednesday. “One most striking thing to me is the opportunity to be an investor in Saudi Arabia. Our team is looking at opportunities there.”"
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UAE's FAB Wealth Sentiment Index remains stable at 1052.78 in October 2017 | ZAWYA MENA Edition
UAE's FAB Wealth Sentiment Index remains stable at 1052.78 in October 2017 | ZAWYA MENA Edition:
"First Abu Dhabi Bank, FAB, has announced the latest score of its Wealth Sentiment Index, WSI, which remained stable at 1052.78 in October, compared to 1,052.94 in September 2017.
The October score reflects a range of factors, including an increase in oil prices, a fall in inflation, which reached its lowest level since August 2016, and an increase in occupied room nights. The market factors which negatively affected the score included the fall in loan rate and the Purchasing Managers’ Index, PMI, which dipped by around 4 percent.
The Wealth Sentiment Index, the first-of-its-kind for the UAE and MENA region, was launched in partnership with research agency, IPSOS, and insurance provider, Generali, in January 2017, and established to measure the prevailing mood of affluent investors in the UAE market, from a personal and business point of view. It is an indicator of the overall sentiment of the market, based on existing fundamental and economic factors."
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"First Abu Dhabi Bank, FAB, has announced the latest score of its Wealth Sentiment Index, WSI, which remained stable at 1052.78 in October, compared to 1,052.94 in September 2017.
The October score reflects a range of factors, including an increase in oil prices, a fall in inflation, which reached its lowest level since August 2016, and an increase in occupied room nights. The market factors which negatively affected the score included the fall in loan rate and the Purchasing Managers’ Index, PMI, which dipped by around 4 percent.
The Wealth Sentiment Index, the first-of-its-kind for the UAE and MENA region, was launched in partnership with research agency, IPSOS, and insurance provider, Generali, in January 2017, and established to measure the prevailing mood of affluent investors in the UAE market, from a personal and business point of view. It is an indicator of the overall sentiment of the market, based on existing fundamental and economic factors."
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MIDEAST STOCKS-Gulf moves little, strong oil fails to boost Saudi petchems | ZAWYA MENA Edition
MIDEAST STOCKS-Gulf moves little, strong oil fails to boost Saudi petchems | ZAWYA MENA Edition:
"Gulf stock markets moved sideways in narrow ranges early on Wednesday as rising oil prices again failed to boost Saudi Arabia's petrochemical sector, a sign of investors' concern about upcoming austerity policies. Brent oil hit a two-year high of $61.41 per barrel overnight and was at $61.27 early on Wednesday. But top Saudi petrochemical producer Saudi Basic Industries was flat and National Petrochemical fell 1.0 percent after reporting a marginal rise in quarterly net profit to 196.9 million riyals ($52.5 million) from 191.6 million riyals. Higher oil prices tend to be positive for profit margins at Saudi petrochemical firms but the industry faces the prospect of more austerity steps as the government cuts its budget deficit: domestic electricity and fuel price hikes could come within months and higher gas feedstock prices as soon as 2019. "
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"Gulf stock markets moved sideways in narrow ranges early on Wednesday as rising oil prices again failed to boost Saudi Arabia's petrochemical sector, a sign of investors' concern about upcoming austerity policies. Brent oil hit a two-year high of $61.41 per barrel overnight and was at $61.27 early on Wednesday. But top Saudi petrochemical producer Saudi Basic Industries was flat and National Petrochemical fell 1.0 percent after reporting a marginal rise in quarterly net profit to 196.9 million riyals ($52.5 million) from 191.6 million riyals. Higher oil prices tend to be positive for profit margins at Saudi petrochemical firms but the industry faces the prospect of more austerity steps as the government cuts its budget deficit: domestic electricity and fuel price hikes could come within months and higher gas feedstock prices as soon as 2019. "
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