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Monday, 27 Apr 2020

Saudi Arabia Partially lifts Curfew, but keeps 24-hour Curfew in Mecca


Insights MENA

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Economic Outlook

Economic Outlook

  • The World Bank predicts that global remittances will see their sharpest decline in recent history this year due to the pandemic, with the MENA region expected to see its remittance inflows decrease 6% before rising a modest 1.6% in 2021.
  • The Central Bank of Egypt (CBE) offered treasury bills (T-bills) worth 19 BN EGP (1.2 BN USD) on behalf of the Ministry of Finance. The first tranche of the T-bills amounts to 5 BN EGP (538 MM USD) and will be offered through 91-day notes, while the second tranche will be offered through 266-day notes valued at 10.5 BN EGP (664.9 MM USD).
  • The Egyptian Ministry of Finance (MoF) is allocating 1 BN EGP (1.7 BN USD) to subsidies for petroleum products in 2020/2021, down by nearly half compared to 52.9 BN EGP (3.3 BN USD) in 2019/2020 forecasts.
  • Banque Misr and the National Bank of Egypt (NBE) sold about 100 BN EGP (6.3 BN USD) of the new 15% annual yield savings certificates at the end of last week. The value of 15% savings certificates sold by Banque Misr reached 6 BN EGP (1.9 BN USD) while NBE sold 66 BN EGP (4.1 BN USD) from the date of the launch till last Thursday.
  • The Saudi Real Estate Price Index increased by 2% in Q1-2020 compared to Q1-2019. This was driven mainly by prices of residential properties which increased by 2.1%, while the prices of commercial and agricultural real estate decreased by 0.5% and 0.2%, respectively.
  • S&P Global Ratings has lowered its outlook to negative from stable for Sharjah and Ras Al Khaimah, two of the seven UAE emirates, citing the financial risks of lower oil prices and the coronavirus. The rating agency affirmed its BBB/A-2 long-term rating for Sharjah and its A/A-1 long-term rating for Ras Al Khaimah.
  • There is a surge of optimism in UAE at the start of the holy month of Ramadan with the Dubai Government reopening offices and malls in a phased manner and easing some travel restrictions. The season of fasting, prayer and charity comes as Covid-19 concerns remain, but UAE is confident that businesses can cope under the changed circumstances.
  • The Central Bank of Kuwait stated that banks must provide qualifying Small and Medium Enterprises (SMEs) affected by the coronavirus outbreak with financing at a maximum 5% interest rate.
  • The total value of Kuwait foreign reserves increased by 57% y-o-y to 12.42 BN KWD (39.96 BN USD) in February 2020 compared to 11.44 BN KWD (36.81 BN USD) in February 2019. On a monthly basis, Kuwait witnessed a 1.22% increase in the foreign reserve in February 2020 compared to 12.27 BN KWD (39.44 MM USD) in January 2020.
Political Events

Political Events

  • Saudi Arabia joined nations around the world in gradually loosing restrictions that were put in place to prevent the spread of the coronavirus. The country partially lifted a 24-hour curfew in all regions except Mecca and will allow resumption of some commercial and economic activities. Curfew lifted from April 26 to May 13 from 9 am. to 5 pm.
  • Kuwait will start repatriating Kuwaiti students in the US next Thursday, 30 April, via direct flights to Kuwait through Qatar Airways. The move is part of the grand repatriation operation in light of the coronavirus  outbreak. The flights will take off from Washington, Los Angeles, Miami, Dallas, and Texas. One flight from each destination will fly every day for a couple of days.
Stock Market

Stock Market

  • The Egyptian Exchange’s (EGX) market capitalization stood at 894 BN EGP (35.77 BN USD) at the close of Sunday trading, gaining about 9.5 BN EGP (601.6 MM USD). In the first trading session in the Muslim’s holy month of Ramadan, Egypt’s blue-chip index EGX30 advanced 2.54% to close at 10,377 points, the EGX70 EWI surged 3.39% to close at 1,184 points, and the broader index EGX100 gained 2.29% to close at 1,120 points.
  • The Saudi Stock Exchange (Tadawul) ended Thursday’s trading session on a positive note as the main index increased by 97% to 6,604.90 points, adding 63.43 points. Traded values amounted to 4.14 BN SAR (1.1 BN USD), with 201 million traded shares through about 177,750 transactions.

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

Companies Transactions

Companies Transactions

  • Beltone Financial Holding has completed the sale of its 60% stake in New York-based brokerage Auerbach Grayson to an unnamed group of investors. The move is part of Beltone’s strategy to restructure with a focus on investment banking and expanding its non-banking financial services in Egypt and neighboring markets.
  • Sarwa Capital Holding for Financial Investments announced that its subsidiary Contact Credit received the first consumer financing license from the Financial Regulatory Authority (FRA) in line with the new Consumer Credit Act. The value of consumer financing provided by Contact, excluding mortgage financing, reached 20 BN EGP (1.26 BN USD) with an outstanding portfolio of more than 5 BN EGP (348 MM USD) in 2019.
  • The Egyptian Company for International Tourism Projects (Americana Egypt) has selected an unnamed financial adviser to conduct a fair valuation of the company ahead of Adeptio’s mandatory tender offer (MTO) for minority shares in the company.
  • Standard & Poor’s (S&P) has reaffirmed its 2019 ‘-AA’ rating on The Arab Investment & Export Credit Guarantee Corporation (Dhaman) and maintained the ‘Stable’ The S&P agency attributed the reaffirmed rating to Dhaman’s strong financial position, which is supported by its strong capitalization and high liquidity position that enables it to meet its obligations.
  • The Saudi British Bank (SABB) plans early redemption of its 5 BN SAR (398.9 MM USD) Tier 2 Sukuk on 31 May 2020 at face value. The original maturity date for the Sukuk was 28 May 2025.
  • Saudi Kayan Petrochemical Company reported an increase in net losses by 67% in Q1-2020. The net loss after Zakat and tax amounted to 516.78 MM SAR (137.43 MM USD) in Q1-2020 compared to 197.49 MM SAR (52.52 MM USD) in Q1-2019.
  • The extraordinary general assembly meeting (EGM) of Saudi Enaya Cooperative Insurance Company has approved the board’s recommendation to reduce the company’s capital to 150 M SAR (39.89 MM USD) from 300 MM SAR (79.78 MM USD) by reducing the number of shares from 30 million to 15 million shares.
  • Air Arabia Abu Dhabi, a joint venture between Etihad Airways and Air Arabia, has obtained its Air Operating Certificate (AOC), becoming the fifth UAE national operating airline.
  • Al Babtain Power and Telecommunication Company has extended the Memorandum of Understanding (MoU) signed with Portugal’s Metalogalva to acquire a 49% stake in Al Babtain France. The binding agreement signed between the two firms on 23 February 2020 at a value of 3 MM EUR, has been extended for two more months to 23 June 2020.
  • Sahara International Petrochemical Company (Sipchem) and Linde PLC have agreed to extend the initial terms for the establishment of a strategic partnership until the end of Q3-2020. The deal involves supplying industrial gases to meet the growing demand from the refining and chemical industries in Saudi Arabia.
Sports and Culture

Sports and Culture

  • Saudi Arabia Olympic Committee (SAOC) has submitted an official bid to host the 21st Asian Games in 2030 in Riyadh. The SAOC illustrated the Kingdom’s ambitious vision to organize an "unprecedented version" of the sporting event stressing that Saudi capital is ready to a unique, cultural and technological experience.
  • Soccer-UEFA has released nearly 70 MM EUR (75 MM USD) of compensation payments to clubs ahead of schedule to help deal with the impact of soccer's COVID-19 related stoppage. Around 50 MM EUR will go to clubs who released players for the 39 national teams not involved in the playoffs with 7 MM EUR going to those clubs who provided players during the group phase to the 16 teams who have made the playoffs. A further 2.7 MM EUR will be sent later upon completion of those games.

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