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Monday, 23 Jul 2018

Morocco Ministry of Economy and Finance announced a five-year corporate tax exemption for new industrial companies.


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Economic Outlook

Economic Outlook

  • Morocco Ministry of Economy and Finance announced a five-year corporate tax exemption for new industrial companies. This plan seeks to boost investment in 24 sectors including the automotive, aeronautical, textile, manufacturing, food and pharmaceutical industries. Meanwhile, Morocco industrial sector grew 4.1% in the Q1-2018, up from 0.7% at the same period last year, highlighting the path of growth that the government is seeking to secure in the longer-term.
  • Saudi Arabia achieved a surplus in its trade balance with Egypt reaching 33 MM USD (122 MM SAR) in Q1-2018. Saudi non-oil exports to Egypt reached 1.55 BN SAR (7.4 BN EGP) in Q1-2018, against imports of 1.4 BN SAR (6.8 BN EGP) during the same period of last year.
  • Egypt is setting up a sovereign wealth fund with a capital of 11 BN USD (200 BN EGP). The fund will be eligible to participate in all economic and investment activities, including setting up companies, investing in financial instruments, and other debt instruments in Egypt and abroad.
  • Egypt Prime Minister, Mostafa Madbouli, has raised the selling price of natural gas used for homes and commercial activities, which will be effective starting August 1st. The price of the first consumption segment ranging from zero to 30 cubic meters is raised to 1.75 EGP, a 75% increase. The price of the second segment range from 31 cubic meters to 60 cubic meters is raised to 2.50 EGP, increasing by 42.8%. The price of the third segment with usage of over 60 cubic meters is raised to 3 EGP, a 33.3% increase.
  • Abu Dhabi Global Market, ADGM, has announced the establishment of the first Chinese state-owned financial services firm in ADGM to provide strategic investment and financial support to Chinese enterprises as part of the Belt-and-Road initiative.
  • Almost all key areas in Sharjah and Ajman recorded year-on-year declines in average sales and rents across apartments and villas in H1-2018. This is a result of more stock entering the Sharjah market, making it more competitive. The decline in rents could also be attributed to more affordable stock coming to the market in Dubai, making tenants migrate from neighboring emirates.
  • The Consumer Price Index (CPI) in the Emirate of Abu Dhabi is likely to increase by 3.3% y-o-y in Q3-2018. Consumer inflation in H1-2018 increased to 3.6% compared to H1-2017, driven by the increase in the CPI to 111.9%, up from 108.0% in H1-2017.
  • In Dubai, a delegation of the Ministry of Climate Change and Environment, MoCCAE, visited Egypt and Jordan to explore ways to boost bilateral trade of fresh agricultural produce and ensure that traded vegetables and fruits are of high quality and safe for consumption.
Political Events

Political Events

  • Egypt is offering citizenship to foreigners who deposit at least 7 MM EGP (392,000 USD) and then hand it over to the treasury after five years, encouraging the grants incentives for foreigners to invest in the country. Foreigners who acquire citizenship would enjoy no political rights until after five years of citizenship and would need 10 years to be eligible for election or appointment to a representative body.
  • Turkey authorities have arrested the wife of Abu Omar al-Shishani, a top commander in the Islamic State group killed two years ago.
  • President Abdel Fattah al-Sisi expressed that Sudan national security is an integral part of Egypt national security and that the two countries have an opportunity to achieve much for their peoples if they have a good will. He added that Egypt has the firm principle of not interfering in the affairs of others or conspiring against them.
  • Israel has evacuated 800 White Helmets rescuers and their family members threatened by advancing Syrian regime forces to Jordan for resettlement in Britain, Canada and Germany. The Jordanian government had authorized the United Nations to organize the passage of 800 Syrian citizens through Jordan to be resettled in western countries. The government gave the permission after Britain, Germany and Canada to make a legally binding undertaking to resettle them within a specified period of time due to a risk to their lives.
Stock Market

Stock Market

  • .TASI real estate sector decreased led by Saudi Real Estate company (Al Akaria).
  • .QSI telecommunication sector decreased led by Vodafone Qatar. However, banking sector increased led by Qatar National Bank (QNB)
  • .ADI banking sector increased led by First Abu Dhabi Bank (FAB) and Abu Dhabi Commercial Bank (ADCB). However, the real estate sector decreased led by Eshraq Properties and Aldar Properties. Moreover, the telecommunication sector decreased led by Etisalat.
  • .DFMGI banking sector increased led by Emirates NBD, Dubai Islamic Bank (DIB), and Mashreq Bank. Moreover, the real estate sector increased led by Emaar Properties, Emaar Malls and Drake and Scull International (DSI).
Companies Transactions

Companies Transactions

  • EFG Hermes, a leading financial services company in frontier and emerging markets (FEM), has entered into a definitive sale and purchase agreement (SPA) to acquire 100% of Primera Africa, a top-ranked brokerage house in Nigeria. EFG Hermes will utilize its presence in Nigeria to serve both global and domestic investor appetite for opportunities in Africa largest economy. Nigeria will also serve as a hub for expansion into West Africa, as EFG Hermes' office in Kenya now does for the other side of the continent.
  • Riyad BankSaudi Arabia fourth-largest lender by assets, posted a 25.2% rise in Q2-2018 net profit reaching 1.06 BN SAR (282.6 MM USD), in line with the rise of fees and commission income compared to 848 MM SAR in Q2-2017. The bank cited 7.8% rise in operation income and 8.7% rise in special commission income for the stronger performance. Moreover, loans and advances reached 144.3 BN SAR, up 2.2% compared to a year earlier.
  • Saudi-based Mulkia Investment Company has announced distribution of dividends worth 10.2 MM SAR (2.7 MM USD) to the shareholders of its real estate investment trust (REIT) fund, Mulkia Gulf Real Estate REIT, in Q2-2018. The distributed dividends worth 0.17 SAR (17 halala per unit) which represents 1.7% of the unit price at initial offering.
  • Saudi Aramco is looking to acquire a strategic stake in Saudi petrochemical maker SABIC, a move that could boost the state oil giant's market valuation ahead of a planned initial public offering. Aramco wants to develop its downstream business as the government prepares to sell up to 5% of the world's largest oil producer, possibly by 2019. Boosting its petrochemicals portfolio further could help attract investors for the IPO.
  • Dubai Islamic Bank (DIB), the United Arab Emirates largest sharia-compliant lender, posted a 14.6% increase in Q2-2018 net profit as income from Islamic financing. It is the third Dubai-based bank to report double-digit profit growth for the quarter after Commercial Bank of Dubai and Emirates NBD, Dubai largest lender, which posted a 30% rise in net profit. DIB made 1.21 BN AED (329.5 MM USD) in Q2-2018, up from 1.06 BN AED (288.8 MM USD) in Q2-2017.
  • Johannesburg-South Africa-based mobile telecommunications company MTN Group Ltd announced that its Dubai subsidiary sold its Cyprus business to Monaco Telecom S.A for 260 MM EUR (304 MM USD). Africa's biggest mobile telecoms group added that it would allow the use of the MTN brand in Cyprus for up to three years for a fee.
  • Qatar Islamic Bank (QIB), the Gulf state largest sharia-compliant lender by assets, reported a 14.8% jump in Q2-2018 net profit. It made a net profit of 700.1 MM QAR (192.3 MM USD) in Q2-2018, compared to 609.7 MM QAR (167.5 MM USD) in Q2-2017.
  • Commercial Bank of Qatar, the Gulf Arab state third-largest lender by assets, reached 450.4 MM QAR (123.7 MM USD) net profit in Q2-2018 compared to 88.4 MM QAR (24.5 MM USD) in Q2-2017. Net interest income rose 6.3% to 669.2 MM QAR (182.3 MM USD) and net fee and commission income rose 5.6% to 187.9 MM QAR (51.2 MM USD) in Q2-2018.
  • Noor Financial Investment announced selling 27.23 million shares or 2.56% of its equity in Meezan Bank, Pakistan's first and largest Islamic bank. The equity deal is valued at 15.76 MM USD or 4.77 MM KWD. Following this deal, Noor currently owns 40.38% in Meezan Bank.
  • Kuwait Finance House (KFH) invited Bahrain Ahli United Bank (AUB) to begin a due diligence process for a potential merger. KFH also asked AUB to sign a non-disclosure agreement. The scope of the agreement includes valuation studies and work to assess the feasibility of establishing a new banking entity.
Sports and Culture

Sports and Culture

  • Egyptian superstar footballer Mohamed Salah has become the only sports star to make it to Forbes new list "Arab Stars on the Global Stage", which ranks for the first time the world's most influential Arab stars. As for the ranking mechanism, the list ranks the stars according to their international influence as well as their popularity increase during the past two years.
  • Egyptian billionaire Nassef Sawiris and American businessman Wes Edens will pump huge investments into English football club. Sawiris is estimated to have a net worth of 6.8 BN USD (5.2 BN EUR), while Edens has had previous investments in sports teams, as well as being one of the Milwaukee Bucks, an American professional basketball team that competes in the National Basketball Association (NBA).
  • The general assembly of the Saudi Arabian Football Federation (SAFF) has ended its contract with MBC Group, and approved a new deal with Saudi Telecom Company (STC). SAFF aims at increasing the revenues of both the professional clubs and the federation in order to assure financial sustainability and reduce debts.

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