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Monday, 09 Mar 2020

Curde Oil Prices take biggest daily dive in over a decade as Russia, OPEC split


Insights MENA

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Economic Outlook

Economic Outlook

  • Brent crude oil decreased to its biggest daily loss in more than 11 years last Friday after Russia failed to agree at OPEC meeting on a steep oil production cuts to stabilize prices hit by economic fallout from the coronavirus, and OPEC responded by removing limits on its own production. More than 1 million US crude contracts changed hands during the session. Brent crude oil prices decreased 72 USD, or 9.4%, to settle at 45.27 USD a barrel noting that it was Brent's lowest closing price since June 2017.
  • More than 200 companies had a portion of their debts written off by the Central Bank of Egypt (CBE). CBE had agreed to wipe 4 BN EGP in debt held by 226 companies, which owe a combined 63.6 BN EGP in bank loans.
  • Egypt Central Agency for Organization and Administration (CAOA) has finalized assessing 1,042 of its employees in preparation for their transfer to the New Administrative Capital.
  • The General Authority for Statistics (GASTAT) has issued a special report to mark International Women’s Day under the title “Saudi Women: Partners in Success,” highlighting that Saudi women are an important component of the force contributing to national development in all fields.
  • The Central Bank of UAE cut its interest rates on certificates of deposit in line with US dollar rates, after the U.S. Federal Reserve Board’s emergency decision to cut rates by 50 basis points. The Central Bank of UAE has also cut its repo rate for borrowing short-term liquidity by 50 bps.
  • The number of economic licenses issued in UAE grew to 678,573 in February 2020, compared to 676,256 in January 2020. This increase highlights the ongoing economic growth around the country. The statistics also show that the number of licenses issued in Abu Dhabi and Dubai in February totaled 465,442, with the two emirates accounting for 6% of all licenses issued around the country.
  • The Kuwaiti non-oil exports value shrank by 29% on an annual basis last February 2020. The number of certificates of origin for Kuwaiti non-oil exports to Arab and foreign countries amounted to 1,136 at a value of 64 MM KWD (41.4 MM USD) in February 2020 compared to 1,116 at a value of 17.86 MM KWD (58.5 MM USD) in February 2018.
  • The Central Bank of Kuwait lowered its discount rate to 5% from 2.75%, a day after the US Federal Reserve's emergency rate cut. Saudi Arabia, UAE and other Gulf states have cut key interest rates tracking an emergency move by the Fed to soften the impact of the coronavirus outbreak.
Political Events

Political Events

  • Saudi Arabia is temporarily stopping entry into the Kingdom by land from UAE, Kuwait, and Bahrain, as a precaution against the spread of the COVID-19 coronavirus. Only commercial trucks coming from the three Gulf neighbors would be allowed, but they should undergo health inspection. Moreover, Italy has restricted the movement of more than a quarter of its population (around 16 million people) northern Lombardy province as the government takes extreme measures to contain the spread of the virus.
  • Egypt has announced that the total number of covid-19 cases in Egypt has risen to 55. The latest cases include four foreigners and three Egyptians, one returning from Umrah and two who had been in contact with an Egyptian who picked up the virus after returning from Serbia. The first death resulting from the virus is a 60-year-old German tourist was pronounced dead in Hurghada. The patient had refused to be evacuated to Egypt quarantine facility on the north coast.
Stock Market

Stock Market

  • The EGX ended yesterday’s session more than 4% in the red following news of the coronavirus spread. CIB, which accounts for around a third of the EGX30, decreased 6%. Earlier in the session, the EGX suspended trading for 25 companies in a bid to contain the selloff.
  • MENA equities sharply dropped in reaction to the Saudi moves in the past few days. Kuwait main index decreased 10%, according to Bloomberg. Dubai DFM General Index saw its sharpest drop in a single session since the global financial crisis of 2008 to finish 9% in the red, while Saudi Tadawul lost 8.3%.

Note:  Weekly values are calculated on Thursday of each week.

Companies Transactions

Companies Transactions

  • Al Ahly Capital Holding, the investment arm of the National Bank of Egypt (NBE), is looking to set up a company with the Emirati MBF Group to invest in Egypt healthcare The company will purchase an undisclosed Egyptian hospital as an initial investment and announced ambitions to become one of the biggest healthcare services companies in the country with a presence in all of Egypt governorates.
  • Cairo for Investment and Real Estate Development (CIRA) and Orascom Development Egypt (ODE) have signed a cooperation agreement to establish branches of two international schools in the O West development complex in Sixth of October. The schools are worth a combined 450 MM EGP and are due to open in the 2021/2022 academic year.
  • The European Bank for Reconstruction and Development (EBRD) has joined the Sovereign Fund of Egypt and Abu Dhabi Development Holding as the latest to show interest in Banque du Caire’s planned IPO on the EGX.
  • Saudi Telecom (STC) has begun doing due diligence on Vodafone Egypt ahead of a possible 4 BN USD acquisition of Vodafone Group’s 55% stake in the company. The Saudi firm signed an MoU with Vodafone Group at the end of January to purchase its stake in Vodafone Egypt in a sale that would value the company at 4.4 BN USD.
  • Orascom Development Egypt (ODE), Raya Holding, Obour Land, MM Group, and Egypt Kuwait Holding (EKH) are all lining up to buy back treasury shares in the next few weeks, as several companies are looking to capitalize on new relaxed rules for the purchases.
  • Industry and trade group MM Group is considering launching its non-banking financial services company Ebtikar and an undisclosed e-payment company it recently established on the EGX in
  • Mena Homes Real Estate Company, a subsidiary of United Real Estate Company (URC), signed a contract with Alghanim International General Trading and Contracting Company for the development of the Hessah Towers project. The 25.75 MM KWD (84.4 MM USD) project is set to be completed in 798 days.
  • The board of National Consumer Holding Company (NCHC) has accepted Afkar Holding’s offer to fully acquire Al Watania Paper Products Company (Waper) at a value of 39 MM KWD (7.8 MM USD).
Sports and Culture

Sports and Culture

  • Bahrain Formula One Grand Prix will go ahead on March 22 without fans due to the coronavirus Bahrain, which is hosting the second round of the Formula One season at the Sakhir circuit outside Manama, has reported 83 cases of the virus, mostly linked to people who had travelled to Iran.
  • The first Moroccon female professional golfer Maha Haddioui will be competing for a share of 1 MM USD prize-pool at Saudi Arabia debut Aramco Saudi Ladies International golf tournament, which gets underway in two weeks. Taking place from March 19-22 at Royal Greens Golf & Country Club in King Abdullah Economic City (KAEC), the four-day event will welcome many of the biggest names in the game for what will be Saudi first professional women’s competition.

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