Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
OPEC/NOPEC Agree To Extend Output Agreement But With A Caveat.
Signatories to the existing OPEC/NOPEC crude output cap accord, agreed last week to extend this deal past its March 2018 expiry for a further 9 month period as had been hoped. However it’s worth noting that this decision did appear to come with one caveat, and that is that all sides will reportedly review this latest extension again in June next year. “It is intended that in June 2018 the opportunity of further adjustment actions will be considered based on prevailing market conditions and the progress achieved towards re-balancing of the oil market at that time,” Saudi Arabia’s Energy Minister, Khalid al Falih was quoted as saying, adding that; "We as a grouping will be agile, on our toes, and react and respond depending how events may unfold.” This morning the minister further clarified these comments stating that he believes OPEC will not alter course during the second-half of 2018, and that members of the organization had more than enough supply capabilities to respond to any potential and unexpected disruption.
Yemen’s Saleh Breaks Away From Houthis.
As fighting around the Yemeni capital of Sanaa intensified last week, initial hopes for a possible end to the conflict were raised on Saturday after the country’s former President, Ali Abdullah Saleh, announced that he and his supporters had ended their alliance with the Houthi militant group, and indicated that he was open to talks with the Saudi-led coalition. "I call on our brothers in neighbouring countries to stop their aggression and lift the blockade and we will turn the page," Saleh was quoted by the UAE’s National newspaper as saying. He also called for a joint ceasefire and urged for an end to "militia rule on Yemeni land." Meanwhile the UAE’s centre for Crises and Disaster Management has denied claims made by the Houthis over the weekend, that they had managed to fire a missile towards the UAE. In a statement published by WAM and Gulf News yesterday, the authority asked the public “not to pay attention to misleading rumours being circulated by the anti-UAE media, which are aimed at spreading false news” and added that in any case “the UAE’s air defence system is capable of dealing with threats of any kind.”
GCC Annual Summit Looks Set To Proceed Despite Qatar Dispute.
Although the final level of representation from each Gulf state is still to be officially confirmed, a senior Kuwaiti minister was quoted over the weekend stating that the annual regional summit would take place in his country’s capital city as scheduled this week, this despite an ongoing diplomatic crises between Qatar and the Arab quartet. Kuwait’s Foreign Minister, Sheikh Sabah al Khaled al Sabah, was quoted by the Kuwait Times newspaper as saying that his country was preparing to “Welcome GCC leaders on Tuesday and Wednesday.” Meanwhile, according to a Reuters news article published this morning, Qatar’s Foreign Minister has confirmed that his country’s Emir intends to take part in the gathering.
Important Egyptian Gas Field To Begin Operations Soon.
The first flow of gas from Egypt’s huge Zohr offshore gas block is reportedly due to begin later this month. Once fully operational Zohr will boost significantly the Egyptian government’s aim to make the country self-sufficient in gas by 2019 and an exporter of such energy by 2020. Zohr which was discovered back in 2015, has an estimated 30 trillion cubic-feet of reserves and will be jointly operated by ENI, Rosneft and BP. Meanwhile Egypt’s Energy Minister, Tarek El Molla, has suggested that ExxonMobil was also considering pursuing potential offshore gas opportunities in Egypt.
S&P Lowers Bahrain Ratings.
Standard & Poors announced at the end of last week that it has cut its long-term local and foreign currency ratings on Bahrain from BB- to B+. The agency’s decision was driven by what it saw as a “weaker external liquidity” situation for the country, but it also issued Bahrain with a stable outlook a point which has been taken as underlining the fact that other GCC states would provide Manama with assistance if required, a view which we currently share. In response to the move the country’s Central Bank was quoted by Reuters as stating that the Kingdom; “remains committed to maintaining a fixed rate regime with the US dollar,” and that “despite the current low oil price, the economy continues to grow with low inflation reflecting the Government’s ongoing initiatives to foster sound fiscal and economic policies.”
Zambia’s Inflation Rate Eases – Turkey’s Jumps.
Zambia’s CPI rate dipped to 6.30% y/y last month from 6.40% in October driven by lower transport costs. In Turkey however inflation hit its highest level in many years with the country’s statistics office reporting a CPI rate of 12.98% y/y in November. The Central Bank is yet to hike its benchmark rate in response to inflationary pressures and a weaker currency, although its delay in doing so is more a reflection of domestic political discourse than its monetary policy decisions.
Ghana Conducts Multiple Bond Issuances.
Ghana raised GHS 5.29 bio last week, via a fresh 5 year issuance and the reopening of some existing paper with varied tenors of 7, 10 and 15 years. The new 5 year bond’s yield was set at 17.60%.
Saudi Arabia’s Bourse Signs Infrastructure Deal With NASDAQ.
Saudi Arabia’s stock exchange has signed an agreement with the US based markets firm NASDAQ, which will see the Tadawul’s systems infrastructure undergo a significant upgrade. “We are very keen on investing in cutting-edge technologies to offer a fast and efficient ‘post trade’ platform. This crucial step goes hand in hand with all the market enhancements we have undertaken to integrate securities trading in Saudi Arabia with global equity markets and enhance post trade infrastructure and efficiency for local and foreign investors." The stock exchange’s CEO, Khalid Abdullah Al Hussan, was quoted as saying by the Arabian Business magazine in an article published today.The upgrade is due to be completed by 2020.
DP World Ups Stake In Brazil’s Embraport.
The UAE’s DP World has acquired an additional 66.67% stake in Brazil’s largest private multi-model port terminal Embraport and now has 100% ownership of the terminal, which will reportedly be renamed DP World Santos. The operation is based in Santos which is also recognized as the busiest container port in South America.
Metito Wins Contract In Rwanda.
The UAE based water-management firm Metito, has been awarded a Rwandan government contract to help develop a sustainable bulk water project in Kigali.
Did you know that NEOM, a new US$500 bio economic hub recently proposed by Saudi Arabia, will be the world’s first independent multi-purpose zone to be spread across three countries?
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