"What Not to Miss" is a report highlighting the most important news that took place over a month within 4 main countries (Egypt, UAE, Saudi Arabia and Qatar) covering economic, financial and political aspects that may shape your decisions.
  • The International Monetary Fund and the World Bank declared that the growth rate of the Egyptian economy reached 5.2% for the current fiscal year ending in June 2018, with expectations to reach 5.8% for the next fiscal year ending in June 2019, which meets the target rates achieved by the Egyptian government.
  • The highest annual figure of  inflation  was  35% in July 2017 , but gradually began to decline with the stability of prices until in March 2018 reaching  13.1%  
  • The unemployment rate has decreased from 13.5% to 11.3% from December 2017, reflecting that there are major national projects and many seasonal and temporary employment opportunities without the need for insurance. The country is targeting an unemployment rate of 9.7% by the end of the next fiscal year ending in June 2019 which can be achieved by targeting a growth rate of 5.8%.
  • For the  third year in a row :   Ministry of Finance issues   the preliminary statement for the financial year 2018/2019 Objectives of the new budget:
    • Achieve an economic growth rate of 5.8% and reduce the unemployment rate to less than 11%.
    • Reduce the total deficit to 8.4% of GDP compared to 10.9% in fiscal year 2016/2017 and achieve a first surplus of 2% of output.
    • Target the reduction of budget debt to 91-92% of the output
    • Increase allocations of Treasury-funded budget investments to 100 BN EGP to improve infrastructure and services
    • Develop social protection programs and improve targeting policies and expand monetary support
  • The Egyptian government and the World Bank signed an agreement of 500 MM USD supporting Egypt Education Reform project, which aims to improve teaching and learning tools and conditions in Egypt. Egypt is focusing on expanding the use of digital resources by using modern technology for teaching and learning, assessing students and collecting data.
  • Egypt, the world's largest wheat importer, looks to import wheat at average price of 220 USD per ton and freight in 2018/2019 financial year. The purchase price of local wheat equals the wheat imported price to ensure that there isn't a parallel market and to shut down any manipulations that could lead to a cost increase on the state.
  • Egypt crude oil output increased to 657,000 barrels per day (bpd) from 630,000 a year ago. The Egyptian government aims to speed up production from recently discovered fields, with an eye to stop imports by 2019 and achieve self-sufficiency.
  • Egypt Budget highlights:
  • Egypt aims to increase its revenues from taxes imposed on tobacco by 7.072 BN EGP (402 MM USD) in the 2018/2019 draft budget. The country is targeting around 58.524 BN EGP (3.33 BN USD) in revenues from tobacco taxes.
  • The government is expecting revenues of 51.452 BN EGP (2.93 BN USD) from the tobacco taxes this financial year, which ends in June 2018.
  • Egypt has been increasing taxes and cutting subsidies to narrow its budget deficit as part of economic reforms tied to a 12 BN USD International Monetary Fund progrpam aimed at boosting the economy.
  • The Egyptian government aims to reduce the budget deficit to 4% of GDP in 2022 compared to 9.7% during the current fiscal year .
  • The expected price of oil barrel in the next budget is 67 USD , which is an average price compared to the current level.
  • Egypt is to extend its nationwide state of emergency for three months starting from April 14th. It is worthy to mention that Egypt first imposed the current state of emergency in April 2017. It was extended in July and again in October then January.
  • The Egyptian government approved a draft law to establish a sovereign wealth fund to manage state assets and achieve sustainable development. The fund aims to manage and make use of the state assets with an authorized capital of 200 BN EGP and issued capital of 5 BN EGP.
  • Following Egypt's investment law passed in May last year, the government has introduced two new counterparts, bankruptcy laws and a revised capital markets regulation. Both new regulations will likely improve the health of the banking sector and indirectly, the overall Egyptian economy.
    • The new law is credit positive for banks because it will provide them with more options to deal with viable troubled companies, making loan workouts more flexible and faster. Additionally, the new bankruptcy law will speed up the liquidation of non-viable companies, which will increase recovery amounts.

  • A Memorandum of Understanding (MoU) was signed between Crown Prince Muhammad Bin Salman, deputy prime minister and minister of defense and Softbank to create the world's largest solar energy project with a production capacity of 200 GW which is considered another important shift to diversify sources of income as some areas in the Kingdom receive 2500 GW of solar radiation per one square meter
      • The project will also reduce solar power production costs and create employment opportunities, with up to 100,000 jobs in solar power schemes alone.
      • The Kingdom will be transformed into a leading exporter of sustainable energy, thanks to its natural resources.
      • Solar power will be the world's largest energy source by 2050, according to the International Energy Agency.
      • To boost the domestic output, the ministry ofEnergy, Industry and Mineral Resources also announced lifting the terms of use of the GDP in the construction of stations to 60%, which will lead to an industrial renaissance in the field of investment in solar power plants and services.
    • During the official visit to Paris by Crown Prince of Saudi Arabia, Mohammed bin Salman, Saudi Aramco and Total signed a 5 BN USD MoU to build a giant petrochemical complex in Jubail, Saudi Arabia.
      • The complex will be integrated downstream of the SATORP refinery, a joint venture between Saudi Aramco(62.5%) and Total (37.5%) in Jubail, in a move designed to fully exploit operational synergies. This world-class refinery, whose capacity increased to 440,000-barrel-per-day, is recognized as being one of the most efficient in the world.
      • The complex will comprise a huge mixed-feed steam cracker(50% ethane and refinery off-gas) with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units.
      • The cracker will feed other petrochemical and specialty chemical plants representing an overall amount of 4 BN USD investment by third party investors.
      • In total, 9 BN USD will be invested, creating 8,000 local direct and indirect jobs. The project will produce more than 2.7 million metric tons of high value chemicals.
    • The Kingdom will buy five small warships from the Spanish state-owned ship builder Navantia, Spain army will train Saudi military personnel and contractors will build a naval construction center in Saudi Arabia.
      • Spain is a leader in sectors such as renewable energy and infrastructure, which are key to Saudi Vision 2030.
      • Spanish companies have already won two major infrastructure contracts in Saudi Arabia. A Spanish consortium, Al-Shoula, is building the high-speed railway linking Makkah and Madinah, and the Spanish construction group FCC leads one of three consortia building Riyadh's rapid transit system.
    • Saudi Arabia is set to raise 11 BN USD with a triple-tranche dollar bond, while Qatar is meeting global investors ahead of its first appearance in the debt markets since the beginning of a diplomatic crisis last year.
      • Saudi Arabia has marketed 7 years, 12 years and 31 years notes. It set the size of the 7 years notes at 4.5 BN USD, and the spreads at 140 basis points over US Treasuries. The size of its planned 12 years notes has been set at 3 BN USD, with spreads at 175 basis points over US Treasuries, while it plans to raise 3.5 BN USD in 31 years notes at 210 basis points over the US treasuries benchmark.
      • The kingdom has established itself as one of the top global debt issuers after it began selling international sovereign bonds in 2016 with a 17.5 BN USD debut sale, the largest bond issued across emerging markets.
    • Saudi Arabia is aiming to develop more investments in the entertainment sector by signing an agreement with Six Flags to develop recreational parks, as well to announce the project "Al Qadeya", the largest cultural, sporting and entertainment city in Saudi Arabia, as well as allowing women to attend concerts and setting up 5,000 recreational events in 2018.
    • In 2018, King Fahd University of Petroleum & Minerals (KFUPM) is ranked 7th among the top 10 universities in the world in terms of the number of patents granted. The university has been granted more than 800 patents so far, and this number is over 60% of the total number of patents registered by all Arab countries' universities, which number about 300.
    • Allianz Group, a leading European financial services company based in Munich, has reached an agreement with Banque Saudi Fransi (BSF) for a significant stake in the Saudi-listed Allianz Saudi Fransi Cooperative Insurance Company (AzSF).
      • This is the first time that a foreign strategic investor has been allowed to acquire shares in a company that is already listed on the Saudi Stock Exchange (Tadawul)
      • Allianz Group acquired an additional 18.5% of the share capital of AzSF, a major provider of insurance products for corporate and individual clients in the kingdom, at a price of 22 SAR (5.8 USD) per share.
      • With this move, Allianz Group now holds 51% of the share capital of AzSF and aims to increase its commitment to Saudi Arabia, while BSF, continues to hold 14% of shares and will remain a strategic partner of AzSF.
  • Since the implementation of new taxation from January 1, 2018, almost 275,000 companies and individuals have registered for the value-added tax (VAT) with the Federal Tax Authority upon the completion of 100 days. While 14,402 applications are under process and another 2,160 applications are pending with the tax authority, the VAT compliance ratio reached 98.8%, which was one of the highest in the world.
    • International Monetary Fund (IMF) predicts that the UAE economy will grow to 3% by 2019 but has revised their forecast for the real GDP, which will decrease by 1.4%, from 3.4% to 2% in 2018.
      • Data in the IMF Global Prospects and Policies report predicts that inflation in the UAE will highlyrise by 2.2% up to 4.2% compared to 2% last year; however, it will ease to 2.5% in 2019. One of the key reasons for the spike in inflation in the UAE and the Saudi Arabia this year is the recently-introduced 5% value-added tax (VAT).
    • As oil production capacity is expected to increase and the strength of the non-oil economy will boost prospects, the World Bank has projected 2.5% GDP growth for the UAE in 2018 marking an increase compared to 2017.
      • The Middle East and North African (MENA) countries will be slightly affected, especially commodity-exporting countries according to the forecast of the IMF. Overall, MENA is forecasted to grow by 3.2% and 3.6% in 2018 and 2019 respectively.
      • Inflation in MENA averaged around 6.6% last year and is expected to reach 8.7% this year but will ease by 2019 to 7.1%.
    • Dubai is among the top four most visited cities in the world and was recently named the "Rising Giant" in the global hospitality industry. According to World Travel and Tourism Council statistics, Dubai hospitality sector is forecasted to experience strong, sustained growth over the coming years, with occupied room nights set to reach 35.5 million annually in 2019, representing a robust 10.2% compound annual growth rate (CAGR) over the next 20 months.
      • Expo 2020 has given a great boost for the development of tourism infrastructure and attractions in the emirate. The city is rapidly emerging as a world-class leisure and entertainment destination.
    • The Ministry of Economy expects that the gold reserves of the Central Bank of the UAE will increase to 9million ton in 2018, a growth of 19.5%, compared to 7.53% in 2017.
      • The majority of Central Bank holdings are usually in various foreign currencies, as they can be used for trading.
      • In 2015, the Central Bank has already sold all its gold, but it began to re-constitute its gold reserves during the same year, as well as its basket of foreign currencies, including the US dollars.
      • The reserves of gold only make up a small percentage of its total balance of foreign currencies, but it is positive in terms of the diversification of its reserves.
    • Digital Economy Solutions (DES), a joint venture between emaratech and the Department of Economic Development of Dubai (DED), will launch DubaiStore, the first local online marketplace to focus on SMEs and home-based businesses (e-traders).
      • DubaiStore, is an online marketplace for all licensed businesses in the emirate of Dubai It focuses primarily on promoting businesses with zero possibility of direct competition with the sellers, since it does not own or sell any products of its own.
      • Using the latest ecommerce technologies, the platform will have all the capabilities of creating and managing online stores and orders, which caters the needs of all business segments. Analytics and advisory services will also be available to support business retention and growth.
    • His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, issued Law No. 03 of 2018, which partially amends Law No. 12 of 2016 pertaining to the regulation of the security industry in Dubai through:
      • Clear policies and procedures, establish a framework for standards and specifications for preventive security systems, oversee security service providers and support Dubai official security bodies.
      • Any violation of Law No. 12 of 2016 or its executive rules can invite fines of up to 500 K AED and if the violation is repeated within a year, the fine can be doubled up to a maximum of 1 MM AED.
  • Qatar National Bank Group (QNB):
      • QNB announced that its Net Profit has reached 3.4 BN QAR in Q1-2018, up by 7% compared to last year. Since 50% of QNB is owned by sovereign wealth fund Qatar Investment Authority, QNB succeeded in finding alternative sources of funding from the international markets during Q1-2018, including mainly capital market issuances, Australian Dollar Bonds and Formosa Bonds.
      • QNB aims to increase its profit by 5 to 8 % this year. In addition to an increase in the loans and investments by 10 to 12%, which helped expanding into faster-growing Southeast Asia markets.
    • Qatar Airways and Boeing have signed a letter of intent (LOI) to purchase five 777 Freighters valued at 1.7 BN USD. The LOI was signed by Qatari Minister of Finance and Qatar Airways chairman.
    • Qatargas and Electricity Generating Authority of Thailand (EGAT) signed a memorandum of understanding (MoU) for World-Class Liquefied Natural Gas (LNG) solutions. The parties will jointly identify and evaluate best practices in the LNG industry, and share knowledge in LNG procurement, transportation, and floating storage and regasification units (FSRU), under the terms of the MoU. The MoU also includes a scope for the possible supply of LNG to Thailand.
    • Saudi Arabia plans to dig a 60-kilometer-long maritime channel along its border with Qatar, effectively turning the small Gulf peninsula into an island. The project will reportedly be carried out by a consortium of nine local investors at a total cost of 2.8 BN SAR (750 MM USD).
Cairo Office:
Z epter Office Building  S5-6 ,  Area 5, District 1, 5th Settlement,  New Cairo, Egypt.  P.O. Box:  1147
Dubai Office:
Office No. N 415, North Tower, Emirates Financial Towers, DIFC, P.O Box 506726, Dubai, UAE.
Tel:  +97142820301

     Like us on Facebook  View our profile on LinkedIn  Follow us on Twitter View our videos on YouTube