Regional developments
  • Gulf bond markets have been very active in H1 2012, with companies of the region selling about USD 20.4bn of bonds, of which USD 12.4 billion were Sukukissues. The Saudi General Authority of Civil Aviation issued the biggest sovereign-linked Sukuk raising USD four billion, followed by Dubai Government at USD 1.9 billion.
  • Qatar government domestic debt was stable at an estimated QAR 121.5 billion in the 2011/2012 fiscal year, while external debt increased to USD 24.1 billion (QAR 87.8bn) after the government’s USD five billion issuance of international bonds in Nov 2011. (Source: Qatar’s daily Peninsula referring to the Qatar Economic Outlook).
  • The government of Kuwait has submitted its resignation amid an escalating corruption scandal, and after the opposition gained majority in the country’s Parliament.
  • The Central Bank of Bahrain has issued 10-year development bonds for the amount of USD 1.5 billion. The securities were issued on behalf of the Bahraini government and received BBB rating with a stable outlook from both S&P and Fitch and the issue was oversubscribed by over 400%.
  • Omani budget revenues demonstrated substantial growth at 39.6% yoy in Apr 2012 to reach OMR 4.6 billion mostly due to the increase in oil revenues from OMR 2.4 billion to OMR 3.3 billion, or by 35.
  • Inflation in Oman increased to 2.9% yoy in Apr 2012 compared to 2.8% yoy in the previous month.
  • Broad money growth in Saudi Arabia was at a 17-month low of 7.7% yoy in May (Apr: 8%). Net foreign assets touched a record high of SAR 2.19 trn while lending to the private sector declined to 13% (13.3%).
  • Saudi Fund for Development will open credit links of USD 210 million to finance non-oil exports to Turkey.
  • Risk adjusted capital ratio – a measure of banks’ capital adequacy developed by S&P – was estimated at 12 to 13% for the GCC banks as of end of 2011. This level was about five percentage points higher than the average projected for the 100 largest banks, according to the rating agency’s recently released report.
  • The IMF stays ready to provide financial assistance to Egypt, according to the local media referring to the conversation between the fund’s chief and the newly elected president of Egypt. During its last visit to Egypt, the IMF mission discussed with authorities a new arrangement for an amount of around USD 3.2 billion.
  • Egyptian stock exchange index surged by 13% in the first four days after the official announcement of the presidential elections results.
  • Overall consumer prices in Lebanon grew 6% yoy in May 2012. The major part of inflation growth was observed in Jan-May 2012, when prices increased by 4.7%.
  • Dubai’s Q1 non-oil foreign trade grew 6.6% yoy to AED 298.1 billion, with imports at AED 175.2 billion (5.4%) and value of exports and re-exports at AED 122.9 billion (8.5%). Top trading partners were India, China and US.
  • UAE personal loans grew 0.8% to AED 255.9 billion in April, the highest level since the crisis hit. For the period Jan-April, personal loans grew by 1.5% compared to the slight 0.1% growth in overall loans.
  • Nasdaq Dubai saw the listing of Jebel Ali Free Zone USD 650 million Sukuk, taking the nominal value of total listings on ND to USD 7.1 billion. The order was oversubscribed by more than three times with ME investors taking up 65% of total allocation, followed by European and Asian investors at 26% and 7% respectively.
  • Adia’s average annual investment return over the last 20 years, at 6.9%, was lower than last year but the 30-year returns remained unchanged at 8.1%. Meanwhile, in the introduction of the annual review, the chief of ADIA warned in connection with Europe that “In the absence of clear guidance from policy makers and central banks, markets are prone to behave in unpredictable and unwelcome ways”.
  • Dubai licences issued registered an increase of 14% yoy to 1542 in May, of which tourism licences topped the list, followed by professional and commercial licences.
  • Net profit of UAE’s corporates increased 11.5% to USD 3.01bn in Q1 – this compares to a rise of 12.9% in GCC companies’ net income to USD 14.5 billion.
  • Abu Dhabi’s Executive Council has sanctioned the construction of a power plant, to be completed by 2015, with the capacity to generate 1,500 megawatts of electricity and desalinate 53 million gallons of water per day.

 

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