Regional developments
  • An economic advisor to Egyptian President Mohammed Mursi has stated that the country is not opposed to resuming talks with the IMF once the president’s economic team is in place for USD 3.2 billion in  funding.
  • Egypt will spend around USD 850 million on infrastructure projects in the new cities, according to the country’s New Urban Communities Authority referring to the 2012-2013 fiscal year budget.
  • Three Bahraini financial institutions, Capivest, Elaf Bank and Capital Management House, are expected to merge conditional on the approval of the Central Bank and Ministry of Industry and Commerce. Total assets of the new entity may exceed USD 400 million, while shareholders’ equity is estimated at almost USD 350 million, according to the statements made by the institutions’ executives.
  • Re-offer yield on the recent ten-year Bahraini government bonds for USD 1.5 billion was 6.14% – 4.4ppts higher than the US ten-year mid-swap rate. Majority of investors were asset managers and hedge funds (38%), with local banks comprising 35%. By geographical breakdown, 29% of investors were Middle Eastern, 16% each from the UK and Europe, followed by US (14%), Asia (11%) and local Bahraini investors (14%).
  • Kuwait is expected to provide USD 1.25 billion financial assistance to Jordan within the next two months, according to Jordan’s Finance Minister. Part of the USD five billion Gulf Fund package agreed to by KSA, UAE, Qatar and Kuwait, the resources will be spent in five years on development projects.
  • Fitch has affirmed Lebanon’s ratings at ‘B’ level, pointing to adequate foreign exchange reserves, lower debt levels, and positive trends in financial and budgetary sectors.
  • Libya went to elections after four decades yesterday to elect a 200-seat interim legislature that will appoint the PM. Almost 142 parties and 3700 individual candidates were running for these seats and the preliminary results are expected on Mon or Tues.
  • Oman’s social security and welfare government expenditure surged by 123.7% yoy to OMR 702.8mn in 2011. Subsidies and other current transfers more than tripled to OMR 666.7 million, while total wage expenditure (including Pension Fund contributions), rose 12.3% to OMR 1.9 billion.
  • Qatar’s GDP growth was 6.9% yoy in Q1, unchanged on Q4, but down sharply from an overall rate of 12% for 2011 reflecting the expected levelling off in the expansion of LNG production.
  • Foreign assets at the Saudi Arabian Monetary Agency increased to SAR 2239.9 billion (USD 597 billion) as of end of May 2012 to set another record, while profits of Saudi commercial banks reached SAR 15.4 billion in Jan-May 2012, according to official statistics.
  • The Saudi Ministry of Housing and Ministry of Finance are drafting a law to reform the real estate finance based on four pillars (1) Create real estate financing market; (2) Promote house ownership among Saudis; (3) Ensure transparency of real estate financing; (4) Creation of a Real Estate Development Fund in support of mortgage financing.
  • Saudi Arabia has issued a package of new financial laws, comprising of the Execution/Enforcement Law, the Finance Lease Law, the Real Estate Mortgage Law, the Real Estate Finance Law, and the Law on Supervision of Finance Companies. The new regulations will enter in force 90 days after publication in the Official Gazette; the copies of the laws are not yet available.
  • Algerian foreign currency reserves, comprising mostly of USD and European sovereign bonds, reached USD 182 billion as of end of the last year.
  • Turkey’s public debt is expected to decrease to 37% of GDP from 40% of GDP currently by end-2012, as per the Central Bank governor.
  • Consumer prices in Turkey declined by 0.9% in Jun’12, more than market expectations at 0.4%, while annual inflation reached 8.9% yoy.
  • Turkey’s real GDP increased by 3.2% yoy in Q1 2012, demonstrating economic growth slowdown, according to official data from the Statistical Institute; seasonally adjusted data indicate 2.3% yoy growth.
  • The GCC region witnessed a strong quarter for IPOs, with four IPOs raising about USD 1.1 billion in regional exchanges; average IPO value, at USD 276 million, was higher than Q1’s USD 39 million and Q2 2011’s USD 113 million.
  • S&P, in a recent report, stated that it does not expect a strong adverse effect of the Euro zone turmoil on banks in the Gulf region, which remain adequately capitalised with positive trends in asset quality as measured by loan loss provisions.
  • UAE non-oil foreign trade grew by almost 23% to AED 927.6 billion in 2011, as per National Bureau of Statistics, with Dubai accounting for the majority share of non-oil trade: AED 7004.4 billion or 76% followed by Abu Dhabi (AED 139.4 billion, 15%) and Sharjah (AED 68.3 billion, 7%).
  • UAE PMI, compiled by HSBC, fell to a three-month low of 53.2 in June (May: 53.8) but numbers on the employment front were encouraging – expansion was the steepest since last July as companies hired more workers to meet the increasing workload.
  • Abu Dhabi’s nominal GDP grew almost 30% yoy to AED 806 billion in 2011, helped by higher oil prices, while non-oil GDP grew by about 7%.
  • In a year when there was a “freeze” on school fees, cost of education was up by an average 4.5%, according to Dubai’s Knowledge and Human Development Authority. This implies a further spike in inflation this year, when schools were permitted to raise fees. Meanwhile, the Ministry of Economy announced that the price of 27 staple food items would be made cheaper by almost 30% in the month of Ramadan.
  • The Habshan-Fujairah pipeline, which was expected to be commissioned by June, is only “approaching the phase of continuous operation” and will be operational (“have regular flow of oil”) by Aug, as announced by a senior ADNOC official.
  • The World Travel and Tourism Council estimates that UAE tourism will grow by 6.5% annually until 2021, with the report highlighting that almost three-quarters of the spending was on leisure activities. Furthermore, the news that India and UAE are progressing towards the signing of a MoU for tourism only adds to this forecast, with one of the aims of the MoU being to double tourist flows by 2015.
  • About 4.4 million passengers passed through Dubai airports in May, taking year-to-date number to about 23.2 million (+13.2% yoy). Etihad, operating out of Abu Dhabi, posted record Q2 revenues (+30% yoy to USD 1.25 bilion) on higher passenger growth (Q2: +34% yoy to 2.55mn; H1: 4.89).
  • A TRA official was quoted stating that UAE might get new telecom operators after 2015 as per the official commitment by the government to the WTO.

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