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Monday, 09 Nov 2020

Saudi Arabia eases ‘kafala’ system restrictions on migrant workers

Insights MENA

Economic Outlook

Economic Outlook

  • Saudi Arabia is reforming its “kafala” sponsorship system. The Human Resources and Social Development Ministry’s Labor Reform Initiative will allow private sector migrant workers to change jobs without the permission of their employers but only when their contracts end and enable them leave and re-enter the country without their employers’ approval.
  • Saudi Arabia Ministry of Industry and Mineral Resources announced that almost 8,967 factories, or 95% of total facilities, have benefited from the government's decision to pay foreign worker fees till the end of September 2020. The initiative has helped boost the Saudization, as well as the participation of the private industrial sector.
  • Under the leadership of the Saudi Arabia G20 Presidency, energy ministers endorsed an important new approach to carbon management, the circular carbon economy (CCE). The CCE is an integrated and inclusive approach toward more comprehensive, resilient, sustainable, and climate-friendly energy systems that support and enable sustainable development.
  • S&P Global Ratings has affirmed Egypt’s B sovereign credit rating with a stable outlook, despite elevated external risks from covid-19. S&P’s outlook rests on the expectation that “the weakening of external and government debt metrics will be temporary, and gradually improve from 2022, supported by higher GDP and current account receipts (CARs).”
  • The Central Bank of Egypt (CBE) will likely keep interest rates on hold when its Monetary Policy Committee (MPC) meets this Thursday. The CBE’s overnight deposit rate is now at 8.75% and the lending rate is 9.75%. The main operation and discount rates are now at 9.25%.
  • Net foreign assets in Egypt banking sector surged by 32% m-o-m in September 2020, as foreigners continue to return to government treasuries after selling out of global emerging markets in the early weeks of the pandemic. The CBE shows reported that assets increased to 03 BN USD compared to 10.65 BN USD in August 2020 which is the highest monthly increase since February 2019.
  • UAE Net investment by the federal government and local governments in non-financial assets increased to 2 BN AED (8.76 BN USD) in H1-2020, an increase of 40% as compared to H1-2019, according to UAE Ministry of Finance.
  • UAE trade balance recorded around 37 BN AED (1.46 BN USD) surplus with four Gulf countries in Q1-2020, according to the Federal Competitiveness and Statistics Authority (FCSA).
Political Events

Political Events

[caption id="attachment_5052" align="aligncenter" width="1200"] TOPSHOT - Former vice-president and Democratic presidential nominee Joe Biden (L) and Senator from California and Democratic vice presidential nominee Kamala Harris greet supporters outside the Chase Center in Wilmington, Delaware, at the conclusion of the Democratic National Convention, held virtually amid the novel coronavirus pandemic, on August 20, 2020. (Photo by Olivier DOULIERY / AFP) (Photo by OLIVIER DOULIERY/AFP via Getty Images)[/caption]
  • Joe Biden won the state of Pennsylvania becoming the next president of the United States. Biden’s win in the critical state put him over the threshold of 270 electoral votes. As his vice president, Kamala Harris will make history in myriad ways, becoming the first woman and the first woman of color to occupy the office. Harris, a California senator and the state’s former attorney general, built a career in the tech industry’s front yard.
  • The Egyptian, Ethiopian and Sudanese irrigation ministers were unable to reach an agreement on how to proceed with negotiations over the Grand Ethiopian Renaissance Dam following a week of talks. Each country will now submit a report detailing their position to the AU chairperson and South African International Cooperation Ministry, which will advise on how the AU-brokered talks should proceed.
Stock Market

Stock Market

  • The fourth tranche of Al Taamir’s 10 BN EGP (637.37 MM USD) securitized bond issuance has been listed on the EGX. Al Taamir is a special purpose vehicle set up by the New Urban Communities Authority (NUCA), and proceeds from the issuance will be put towards financing the development of new urban areas including the new administrative capital and New El Alamein.
  • UAE stock markets ended Sunday's trading sessions on a varied note. The benchmark index of the Dubai Financial Market (DFM) inched up 98% or 21.21 points to settle at 2,181.65 points by the end of Sunday's trading session. A total of 94.15 million shares had been traded through 1,848 transactions valued at 95.93 MM AED (26.11 MM USD). The market cap value reached 310.82 BN AED (84.62 BN USD).

Note: All values are calculated by last Thursday.

Companies Transactions

Companies Transactions

  • Al Ahly Capital has completed its acquisition of 5% of El Nada Hospital. Al Ahly which is the investment arm of the National Bank of Egypt purchased the company from a group of doctors and individual investors in an OTC transaction on the EGX. Founding partner and chairman of the hospital, Omar Abdel Aziz, will retain his position as chairman of the board.
  • Sarwa Capital will take 5 BN EGP (159.34 MM USD) sukuk issuance to market over the coming two weeks on behalf of its subsidiary Contact. The single-tranche issuance is awaiting final approval by the Financial Regulatory Authority and is part of Sarwa Capital’s strategy to diversify its sources of funding. The sukuk will carry a seven-year tenor.
  • Coldwell Banker Egypt aims to generate more than 10 BN EGP (637.37 MM USD) in third-part sales during 2021. The company is dealing with about 80 property developers and promoting 300 projects in Egypt.
  • Abu Dhabi National Insurance Company (ADNIC) registered 5% increase in net profits to 282.8 MM AED (76.83 MM USD) in the first nine months of 2020 compared to 194.4 MM AED (52.92 MM USD) during the corresponding period of 2019.
  • Nasdaq Dubai has welcomed the listing of 600 MM USD Sukuk by the Islamic Corporation for the Development of the Private Sector (ICD). The raised capital from the five-year Sukuk will fund ICD’s development activities in its 55 member countries, including entrepreneurship, employment opportunities, and export potential.
  • The net profits attributable to the equity holders of Aramex plunged by 59% to 2 MM AED (12.57 MM USD) in Q3-2020 compared to 113.8 MM AED (30.98 MM USD) in Q3-2019.
  • National Bank of Kuwait (NBK) posted a net profit of 168.7 MM KWD (550.9 MM USD) for the first nine months of 2020 compared to 302.2 MM KWD (986.8 MM USD) for the same period last year; dropping by 2% y-o-y.
  • Corplease is planning to issue 5 BN EGP (159.54 MM USD) of securitized bonds in an offering that will set a new record as the largest private sector issuance in Egypt. There is no timeline decided for the transaction, but Banque Misr said that the investment arm Misr Capital is on board to act as lead manager.
Sports and Culture

Sports and Culture

  • Egyptian Tennis player Mayar Sherif has made a historic leap in her classification among professional tennis players worldwide, after she was crowned the Charleston US Open on Sunday. Egypt Golden girl ranked 164 globally, before the tournament, succeeded in claiming the title after beating Polish Katarzyna Kawa by two consecutive sets.
  • Sweden is going cashless whether their central bank is ready or not. In a country where even children’s pocket money is digital, the hidden risks of going completely cashless are at the forefront of lawmakers’ minds. Digital networks failing or cyberattacks could lead to serious problems in the country’s monetary system, meaning that enough physical cash must be printed as a failsafe.


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