Regional developments

Establishment of a new regional statistics centre, to “provide comprehensive and comparable statistical data”, is the latest initiative being discussed by GCC Ministerial Committee for Planning and Development.
 Inflation in Kuwait was 3.3% yoy in end-April 2012, mainly driven by food prices growth at 10% yoy.
 S&P affirmed Kuwait’s sovereign credit ratings for long- and short term debt in both local and foreign currencies at AA level with a stable outlook, on strong external and fiscal positions, despite internal political and geopolitical risks, and dominance of public sector, which is highly dependent on oil revenues.
 At the last auction of 91-day Sukuk Al-Salam Islamic securities, regularly held by the central bank of Bahrain on behalf of the government, the expected returns reached 1.18%; the issuance for the amount of BHD 18mn was oversubscribed by 178%.
 The central bank of Egypt eased its required reserve ratio for local currency deposits from 12 to 10%, effective from June 26th, to provide additional liquidity. Annual inflation rate remained relatively stable in the range 10-12% during the last 36 month period ending in March 2012.
 Egypt’s Hosni Mubarak was sentenced to life imprisonment yesterday as the country continues without an elected President; more than a year after the turmoil began.
 Jordan hiked both fuel and electricity prices (premium petrol was hiked by almost 25%) in a bid to rein in the burgeoning budget deficit, expected to touch USD four billion this year.
 Inflation in Lebanon increased to 3.5% yoy as of end-April 2012: food and non-alcoholic beverages prices increased 6.3%, while housing prices remained practically unchanged.
 S&P revised the outlook for Lebanon to negative, citing the ongoing conflict in neighbouring Syria and “heightened domestic tensions in Lebanon.”
 At the weekly tender held by the Central Bank of Oman, local commercial banks purchased certificates of deposits for the amount of OMR 98 million; average interest rate for these 28-day securities amounted 0.08%.
 Foreign direct investment into Oman totalled OMR 6.2 billion as of end-2011, of which OMR 800 million was attracted during 2011, according to a Ministry of National Economy official, cited by the local media.
 Qatar plans an expansionary budget this fiscal year, boosting government spending by 27% to USD 48.9 billion though a substantial amount has been set aside for public sector salaries, which are up 48% yoy to more than USD 10bn; budget is based on average crude price of USD 65 per barrel.
 SAMA added USD 11 billion to reserves in April, despite lower oil prices, taking total holdings to USD 580bn.
 IMF, in its concluding statement after the Article IV mission to Saudi Arabia, cautioned that while inflation is likely to remain at around 5% in 2012, monetary authorities have to carefully track developments and detect overheating signs in order to avoid acceleration of inflation. Output growth was estimated at 7.1% in real terms for 2011, with 8% growth in non-oil sector. Strong external and budget positions will be maintained, as measured by current account and fiscal surpluses at 27 and 17% of GDP, respectively.
 Turkey’s exports for Jan-May 2012 increased 10.3% yoy to USD 59.8 billion. These data support government’s plans to meet medium term economic growth target at 4%, according to the Ministry of Economy.
UAE Focus
 Dubai’s GDP recorded an increase of 3.4% yoy to AED 306.2 billion in 2011, propelled by strong performances in the trade and tourism sectors. The non-oil sector grew by 5.8% in the last year, with exports surging by 44.3% and supported by 13.9% rise in the hotels and restaurants sector.
 The UAE Central Bank’s Annual Report for 2011 showed that there was a significant outflow of capital to AED 95 billion, the highest outflow since 2008, from AED ten billion in 2010 – this could be interpreted as debt repayments and/or an increase in investments abroad by UAE entities, including the SWFs.
 The Fujairah oil pipeline, which could serve as an alternative to the Strait of Hormuz, is expected to open in June and will have an initial capacity of about 1.5mn bpd, which can increase upto 1.8 million bpd.
 A study by the Dubai Chamber of Commerce finds that inflation will gradually increase in the second half of 2012, as fall in international food prices and a stronger dollar will help keep prices in check in spite of wage increases putting pressure on demand.
 The UAE government announced that it would be extending food subsidies, usually given during Ramadan to the local population, to the full year. This would enable a savings of close to AED 13k as opposed to AED 1.5k saved previously.
 Jafza announced that its USD 7.5 billion Sukuk, originally set to mature this Nov, will be repaid ahead of time, after consent was received from holders of 89% of the Sukuk.
 Promising disclosure rate of 97.5% in UAE markets: as per the SCA, 80 listed PJSCs issued corporate governance (CG) reports in H1 2012 and 71 companies had submitted the 2011 CG reports in approved formats.

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