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Middle East & African Monitor - 19 December 2016

  • Saudi Arabia has no plans to liquidate its US investments
  • Recovery in Libyan oil production stalls
  • Nigerian oil workers plan strike action
  • “We will not blindly follow the FED” – Oman Central Bank
  • Saudi Telecom buys stake in Careem
  • Abu Dhabi takes 2% stake in BP
  • Banque Misr signs US$500 mio loan agreement with ICBC
  • Rotem wins train contract in Tunisia

REGIONAL COMMENTARY

Saudi Arabia has no plans to liquidate its US investments
Saudi Arabia’s Foreign Minister, Adel al Jubeir, has stated that his government was not reconsidering its investments in the US following the election of Donald Trump, or due to the passing of the JASTA bill earlier this year. "The Kingdom of Saudi Arabia has tremendous investments in the United States and we review those investments on a regular basis. There are issues associated with risk, but our objective is to increase those investments, we won't decrease them," Al Jubeir was quoted as saying yesterday by Reuters. He also made reference to the impending IPO of Saudi Aramco and suggested that officials were considering various international venues for the potentially largest stock launch in history including Hong Kong and New York, but that a final decision was still “work in progress.”

Recovery in Libyan oil production stalls
Plans by the Libyan National Oil Company to re-start production at its fields in the west of the country has been put on hold after an earlier agreement with the “Petroleum Facilities Guard” reportedly broke-down. Complicating talks between the company and those responsible for security at the sites, is the fact that the PFS is not a single entity and thus various militia groups in the area want to be included in any agreement. The Wall Street Journal quoted the head of one of these local militias as saying yesterday that unless his group was brought into these latest negotiations they would attack the facilities and their related pipelines.

Nigerian oil workers plan strike action
The chairman of the Nigerian Union of Petroleum and Natural Gas Workers has issued a warning that its members will initiate a 3-day national strike from the 9th of January in protest over the recent sacking of hundreds of workers and some of the “anti-labour” policies allegedly conducted by international oil companies in the country, unless the government intervenes to end such practices. “By next year, if our grievances are not addressed within this period, we will proceed on a three-day warning strike. If the government and people concerned are not able to apprehend and resolve it, we may then be forced to turn the strike into an indefinite one,” Tokunbo Korodo was quoted as saying in the local media.

“We will not blindly follow the FED” – Oman Central Bank
Hamood Sangour al Zadjali, the Executive President of Oman’s Central Bank, announced yesterday that the bank would not automatically follow the US Federal Reserve and raise its own benchmark interest rates by 25bp despite the local currency’s peg against the US dollar. “We will not blindly follow the Federal Reserve’s decision, even though the Omani Rial is pegged to the US dollar, the economic cycle in the US is different from the local economic cycle,” Zadjali said, adding “Oman has its independent policies with regards to this issue. The situation needs to be deeply and carefully studied before any decisions, keeping the national economy’s interest in mind.” Meanwhile Oman’s CPI dipped to 1.90% y/y in November against 2.0% the previous month, despite a rise in fuel and utility prices.

Saudi Telecom buys stake in Careem
Saudi Telecom has agreed to buy a 10% stake in Careem for US$100 mio. This investment forms a part of the US$500 mio raised by the UAE based cab-hailing company during a funding program which also saw the Japanese e-commerce firm Rakuten participate.

Abu Dhabi takes 2% stake in BP
As a part of a recent agreement in which ADNOC agreed to allow BP to take a 10% stake in Abu Dhabi’s onshore oil concession, the Emirate will in turn own 2% of the international oil company. The latter’s holding will be controlled by the Mubadala Development Company according to an article in the National newspaper.

Banque Misr signs US$500 mio loan agreement with ICBC
Egypt’s state-owned Banque Misr has signed an MOU with China’s ICBC for a US$500 mio loan which will used to assist in the financing of joint Egyptian-Chinese commercial projects.

Rotem wins train contract in Tunisia
South Korea’s Hyundai Rotem has finalized a US$185 mio contract to supply Tunisian Railways with locomotives and rolling stick which will be used on an inter-city railway network currently under construction.

Middle-East-African-Monitor-19-12-2016

AND FINALLY…
Did you know that the word “crossword” in Kiswahili, which is a language spoken mainly by people in eastern and central Africa is “chemshebongo” which, roughly translated, means to “boil brains”.

Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
MarketInsights&Strategy@nbad.com
Tel: +971 2 6110 127

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NBAD Middle East & African Monitor - 19 December 2016

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