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Monday, 17 Aug 2020

Abu Dhabi Investment ranked as world’s third largest sovereign wealth fund

Insights MENA

Economic Outlook

Economic Outlook

  • Abu Dhabi Investment Authority was placed in the 3rd position among the world's top 88 largest sovereign wealth funds in July 2020 and the first in the Arab region, with total assets worth 6 BN USD.
  • President Abdel Fattah El Sisi has signed into law the “corona tax” bill that requires companies to deduct 1% from all employees’ gross monthly salaries until the end of the current fiscal year. Anyone with a salary is subject to the 1% levy, whether they’re private or public sector.
  • The Central Bank of Egypt (CBE) left interest rates unchanged for the fourth consecutive meeting last Thursday. The CBE’s overnight deposit rate is at 25% and the lending rate is at 10.25%. The main operation and discount rates are both at 9.75%.
  • The Egyptian government will implement a new cotton trading system in four governorates: Fayoum, Beni Sueif, Beheira, and Sharqia for the 2020/2021 season that will rely on a public auction mechanism for the sale of the crop.
  • Egypt has launched an EU-funded program designed to promote “slow tourism” and encourage travelers to spend longer stretches of time in “less-known areas,”. The three-year Med Pearls program covers Egypt, Greece, Jordan, Italy, Palestine, and Spain. Egypt will focus on Alexandria’s Al Montazah and Al Alamein, where the program will invest 3 MM EUR to develop and advertise cultural, culinary, and family tourism.
  • Saudi Arabia Consumer Price Index (CPI) witnessed 1% annual growth in July 2020, well above the previous month’s rate of 0.5% after the value-added tax (VAT) was tripled to 15% from 5% at the beginning of the month.
  • Around 20,000 to 30,000 persons are expected to join the Saudi flexible work system during the upcoming months. In 2021, several industries are predicted to benefit from flexible working after it succeeds to become the labor market’s main norm. Moreover, the restaurant, recreation, retail, and information technology sectors are expected to be the most used categories
  • Saudi Arabia output of crude oil bounced back in July 2020 to increase by 866,000 barrels per day (b/d) or 5% on a monthly basis. Overall oil output by the world’s largest oil exporter, Saudi Arabia, amounted to 8.406 million b/d in July 2020, compared with 7.540 million b/d in June 2020. Production by OPEC member countries surged by 980,000 b/d monthly in July 2020, of which Saudi Arabia contributed 88.37%.
  • S&P Global Ratings revised Kuwait outlook to 'negative' from 'stable', saying it expects that the country's main liquidity buffer, the General Reserve Fund, will be insufficient to cover central government deficit.
Political Events

Political Events

  • The US has reached an agreement with biotech company Moderna Inc to purchase 100 million doses of its potential coronavirus (COVID-19) vaccine for about 5 BN USD. Moderna’s vaccine candidate, mRNA-1273, is priced at about 30.50 USD per person for a two-dose course of treatment and is one of the few that advanced to the final stage of testing, expected to be completed in September 2020.
  • Cairo and Khartoum stressed the importance of negotiating to reach a binding agreement on filling and operating the Grand Ethiopian Renaissance Dam (GERD) in a way that preserves the rights and interests of the three countries.
Stock Market

Stock Market

  • The EGX30 ended Thursday’s session up 2%. CIB, the index’s heaviest constituent, ended up 1.0%. EGX30’s top performing constituents were TMG Holding up 1.3%, ElSewedy Electric up 1.3%, and GB Auto up 1.2%. Thursday’s worst performing stocks were Juhayna down 2.9%, Ibnsina Pharma down 2.3% and Eastern Company down 2.3%. The market turnover was 1.2 BN EGP (75.32 MM USD), and domestic investors were the sole net buyers.
  • Dubai stock market (DFMGI) hit a two-month high last Thursday, led by top lender Emirates NBD (ENBD), while other major bourses in the region also ended higher. Dubai main share index advanced 9% to its highest since June 9, with ENBD up 2.5%. The bank is in preliminary discussions with Lebanon Blom Bank regarding the possibility of a potential acquisition of its shareholding in Blom Bank Egypt.

Note: All values are calculated by last Thursday.

Companies Transactions

Companies Transactions

  • Banque Misr is now the largest shareholder in EGX-listed CI Capital after acquiring another 9% stake in the investment bank last Thursday, raising its total holdings to 7%. This came a day after the bank purchased 14 million shares in the financial services firm, which gave it a position of more than 15% at the time.
  • Blackstone Group’s energy developer, Zarou, will invest 1 BN USD in energy infrastructure in 2020. The company didn’t announce which projects in specific is planning to invest in, but Zarou last year reported to purchase 70% stake in the first of the three Siemens-built combined-cycle power plants.
  • Laundry and dry-cleaning services startup Makwa has secured a six-figure investment from an unnamed angel investor. Makwa is a mobile app that allows customers to schedule pickup and delivery time slots for their laundry, ironing, and dry cleaning while adding instructions and paying online. The startup graduated from Flat6Labs and pitched their product in Rise Up’s Pitch by the Pyramids event.
  • Egyptians for Healthcare Services Company (EHSC) signed a cooperation protocol with Huawei in order to design and set up the technological infrastructure for EHSC’s 18 BN EGP (1.12 BN USD) integrated medical park in Badr City,
  • Savola Group registered 6 MM SAR (109.2 MM USD) worth of net profits in Q2-2020, a leap of 271.69% compared to 110.2 MM SAR (29.38 MM USD) in Q2-2019. Revenues recorded 6 BN SAR (1.59 BN USD) in Q2-2020, posting 3.34% annual growth.
  • National Industries Group Holding incurred 145 MM KWD (213 MM USD) net losses in H1-2020, against net profits of 43.205 MM KWD (141.32 MM USD) in H1-2019. The net losses are caused by a decline in sales amounting to 22.536 MM KWD (73.71 MM USD) due to the coronavirus pandemic.
  • The net losses of Invest Bank decreased by 24% to 12 MM AED (37 MM USD) in H1-2020 compared to 179.65 MM AED (48.9 MM USD) in H1-2019. The bank's net interest income decreased to 62.54 MM AED (17 MM USD) in H1-2020 compared to 115.39 MM AED (31.4 MM USD) in H1-2019.
  • Bahrain Kuwait Insurance Company gained 301 MM KWD (6.06 MM USD) in net profits in H1-2020, 11% higher compared to 2.073 MM KWD (5.45 MM USD) in H1-2019. The annual INCREASE in H1 profits is attributed to the significant improvement in underwriting profit, which is the company’s core business.
Sports and Culture

Sports and Culture

  • Dubai popular desert safari has been ranked the world’s top tourism experience with leading travel company OceanAir’s camel riding and desert BBQ offering winning the top global award for Experiences in Tripadvisor’s 2020 Travellers' Choice Awards.
  • World number one Novak Djokovic will compete at the Aug 31-Sept 13 U.S. Open and the Western & Southern Open curtain-raiser, the winner of 17 Grand Slam titles. Djokovic and three other players contracted the coronavirus at the Serb's Adria Tour event in June, with the first leg being held at his tennis center in Belgrade and the second in Croatia's coastal city Zadar.


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