Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
Saudi Arabia’s King Opens Border For Qatari Pilgrims.
King Salman of Saudi Arabia has authorized the opening of the Kingdom’s land border with Qatar in order for pilgrims there to attend Haj, and also reportedly ordered that private Saudi owned jets be sent to Doha to bring over such pilgrims at his expense. According to a Gulf News report the decision came following a meeting between the Saudi Crown Prince, Mohammad bin Salman, and an envoy from Qatar. A statement published by the Kingdom’s state news agency highlighted the “historical relations between Saudi and Qatari people, and between the Saudi leadership and the royal family in Qatar.”
US To Participate In Joint Military Exercise With Egypt.
The US is set to resume its participation in the biannual “Bright Star” military exercise with Egypt this year for the first time since 2009. This joint conventional training event had been conducted regularly since the 1980s, but was suspended in 2011 due to the revolution and then cancelled in 2014 by the Obama administration. This year’s exercises will reportedly see a specific focus on counterterrorism, detecting and eliminating roadside bombs, and border security operations.
Backwardation & Inventory Drawdown Providing Support For Oil Prices.
Despite the increase in US production to 9.5 mio bpd last week, brent oil futures are for the first time in a number of years beginning to show signs of backwardation which may in turn encourage a further draw-down of inventories. This technical signal added to yesterday’s EIA report which confirmed another sharp weekly drop in US oil crude stocks to their lowest level since January last year, will likely keep prices from straying below their recent range. Meanwhile the IEA has revised its expected growth in global oil demand for this year from 1.4 mio bpd to 1.50 mio bpd.
Saudi Arabia Prepares For 2nd SAR SUKUK Issue – Egypt Eyes Eurobond Sale.
Saudi Arabia’s Ministry of Finance announced via its website yesterday that it plans to conduct a second SAR denominated Islamic bond issuance next week. “The Ministry of Finance, represented by the Debt Management Office announces that, subject to market conditions, it may offer the second issuance under SAR Government Sukuk Program during the week beginning Sunday 20th August, 2017,” the statement read. There are no details yet on the expected size of the issue but the country raised SAR 17 bio via its first local currency SUKUK last month. Meanwhile Egypt is currently planning to hold a US$2-4 bio Eurobond sale in early 2018 according to an unnamed Finance Ministry official quoted by Bloomberg.
Egypt’s Tourism Related Revenue Jumps.
Egypt’s tourism revenues in the financial quarter ending June 2017 jumped to US$1.5 bio from US$510 mio over the same period last year, while the full fiscal year receipts from this important sector increased by 16% to US$4.4 bio. Meanwhile the chairman of the Egyptian Investment Group in China and the President of the Federation of Chinese Chambers of Commerce signed a cooperation agreement yesterday to try and attract one million Chinese tourists to the country by the end of 2018. Egyptian Treasury officials will also have been heartened by the rise of inward remittances which totaled US$17.4 bio for the fiscal year according to Bloomberg data.
SABIC Buys Shell’s Stake In Petrochemical JV For US$820 Mio.
Saudi Basic Industries Corporation has purchased Royal Dutch Shell’s 50% stake in the SADAF petrochemical JV for US$820 mio according to a statement released by the firm. SADAF which was established in 1980 and is situated in Al Jubail, produced Saudi Arabia’s first ethylene and has become one of the largest petrochemical complexes in the Middle East.
Nigeria Announces US$40 Bio Rail Project.
Nigeria’s Transportation Minister, Rotimi Amaechi, announced further plans for the complete overhaul and expansion of his country’s long neglected railway network in order to help diversify the economy away from its heavy reliance on oil-generated revenues. Funding for this massive project will reportedly come from China’s EXIM bank and via public-private partnerships. “There’s no economic development or growth without logistics, and for logistics to be efficient, you have to deal with the issue of railways,” Amaechi stated.
QIA Reduces Stake In Credit Suisse.
According to data published by the SIX Swiss Exchange, Qatar’s sovereign wealth fund (QIA) recently reduced its overall stake (including purchasing rights) in Credit Suisse to 15.91% from 17.98%.
Yemeni Riyal Floated.
Yemen’s Central Bank office in Aden announced earlier this week that it was abandoning the country’s “managed” peg to the US dollar and allowing the local currency to float. An official CB circular reportedly instructed banks to "use the exchange rate prevalent in the market for the US Dollar and other foreign currencies in accordance with the exchange rate lists issued by the central bank", adding that a floating rate was to be adopted from August 15th 2017. Abdulrahman Al-Eryani, the chief economic officer at Yemen's embassy in Washington, was quoted by Reuters describing the decision as an "economic reform step which addresses the wide divergence between the former official rate and unofficial rate". USD/YER was fixed at 250.00 before the announcement.
Did you know that the word "petroleum" literally translates as "rock oil”? It stems from the Greek word "petra," meaning rock, and the Latin word "oleum," meaning oil.
To the fullest extent allowed by applicable laws and regulations, National Bank of Abu Dhabi PJSC (the “Bank”) and any other affiliate or subsidiary of the Bank, expressly disclaim all warranties and representations in respect of this communication. The content is confidential and is provided for your information purposes only on an “as is” and “as available” basis and no liability is accepted for or representation is made by the Bank in respect of the quality, completeness or accuracy of the information and the Bank has undertaken no independent verification in relation thereto nor is it under any duty to do so whether prepared in part or in full by the Bank or any third party. Furthermore, the Bank shall be under no obligation to provide you with any change or update in relation to said content. It is not intended for distribution to private investors or private clients and is not intended to be relied upon as advice; whether financial, legal, tax or otherwise. To the extent that you deem necessary to obtain such advice, you should consult with your independent advisors. Any content has been prepared by personnel of the Global Markets division at the Bank and does not reflect the views of the Bank as a whole or other personnel of the Bank.