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Middle East & African Monitor – 20 November 2017

  • Arab League Accuses Iran Of “Unacceptable Aggression” Within The Middle East.
  • Kenyan Court Validates Presidential Election Outcome.
  • Crude Exports From Kurdistan Region Continues To Dip. 
  • Saudi Arabia’s Budget Deficit Shrinks.
  • Egypt’s CB Keeps Interest Rates Steady.
  • FITCH/S&P Assigns Ratings On Nigeria’s Proposed Eurobond Issuance.
  • S&P Confirms A-/A2 Ratings On Saudi Arabia.
  • Moodys Lowers Omantel Rating.
  • KSA To Introduce VAT On Fuel.
  • Kingdom Holdings Prepares To Sell Hotel Stakes In Lebanon. 
  • PSA Plans New Car Plant In Algeria.

REGIONAL COMMENTARY

Arab League Accuses Iran Of “Unacceptable Aggression” Within The Middle East.
The Arab League held an emergency meeting yesterday, on the back of a call by Saudi Arabia for members of the organization to discuss Iran’s “aggression and meddling” within the region. The Saudi Foreign Minister was quoted by Gulf News stating at the gathering that; “The Arab League needs to take a decision to be ‘non-compromising’ in dealing with Iran, this meeting greatly reflects Arab countries’ sensation of the grave dangers posed to the region’s security and stability as an inevitable consequence of the flagrant violations and interventions of the Iranian regime in the internal affairs of Arab countries, in an attempt to destabilize security and stability and to sow sectarian sedition among our peoples and our nations,” Al Jubeir said, warning that “showing leniency toward Iran will not leave any Arab capital safe from those ballistic missiles. We are obliged today to take a serious and honest stand to counter these belligerent policies so that we can protect our security." His comments were supported by the League’s Secretary-General, Ahmed Aboul Gheit, who said that; “The Iranian missile program poses a dangerous threat to the region and its security. Iranian threats have crossed a line, and they are pushing the region to the brink, Iran is adopting a sectarian strategy to fuel regional conflicts and is seeking to make Yemen a thorn in the side of Saudi Arabia and the Arab world, I hope that the Iranian course of action will change and that Tehran will get the message that there is Arab anger,” he stated adding, “ I do not rule out that the next move will be to go to the Security Council to stop Iranian threats." Meanwhile Bahrain’s Minister for Foreign Affairs, Sheikh Khalid bin Ahmed Al Khalifa, criticized the activities of Hezbollah, claiming that “Iran’s biggest arm in the region at the moment is the terrorist Hezbollah arm,” and that Lebanon was currently under “total control” by the group, according to a report on the meeting by Arab News.

Kenyan Court Validates Presidential Election Outcome.
Kenya’s Supreme Court this morning announced its validation of Uhuru Kenyatta’s victory achieved by the Presidential election re-run which was conducted in October. The court also dismissed a number of legal challenges to the poll’s outcome stating that these were “without merit.” The opposition leader, Raila Odinga had decided not to stand in the re-run, with he and his party claiming that the requested electoral reforms needed for the vote to be considered “free and fair” had not been introduced. Kenyatta won 98% of the votes cast last month although voter turnout was reportedly only 39% compared to the 79% recorded during the original election in August. While this legal decision will now see Kenyatta officially re-appointed as President and return some clarity to policy making, there are concerns that violent protests against the outcome could spike again.

Crude Exports From Kurdistan Region Continues To Dip.
The ongoing dispute over Iraqi Kurdistan’s recent but unofficial independence referendum, and the move by federal forces to reclaim control over oil facilities in that region of the country appears to be continuing to affect its overall output. Exports of Kirkuk crude reportedly dipped to 428,000bpd last month from a previous average of 540,000 bpd, although according to ‘ClipperData’ there has been an increase in loadings from Basrah, which somewhat supports recent claims by Iraq’s Oil Minister, that facilities in the south of the country would try and make up for the recent disruptions in the north. Iraq is OPEC’s second largest producer.

Saudi Arabia’s Budget Deficit Shrinks.
Saudi Arabia’s budget deficit shrank by 9.40% to SAR 48.7 bio during Q3 this year compared to the same period last year. Referring to this latest data release, the country’s Finance Minister, Mohammed Al Jadaan was quoted as saying; “Whilst economic challenges remain, the economic reforms and measures that are set in the ‘Fiscal Balance Program’ within Saudi Vision 2030 have proved effective, contributing to an increase in non-oil revenues, and we are making progress in creating a stronger and more diversified economy,” adding that the government was committed towards delivering a balanced budget.

Egypt’s CB Keeps Interest Rates Steady.
Egypt’s Central Bank kept its benchmark o/n deposit and lending rates unchanged at 18.75 and 19.75% respectively following last week’s regular MPC meeting as expected. In a later statement the bank said that current rates remained “appropriate” although it would continue to closely monitor inflation levels.

FITCH/S&P Assigns Ratings On Nigeria’s Proposed Eurobond Issuance.
Nigeria’s upcoming US$2.5 bio denominated Eurobond has received a rating by two agencies, with FITCH assigning the paper at B+ and S&P announcing it will classify it with a B rating. Nigeria is currently undertaking an investor roadshow ahead of the issuance which is expected to have a 10 and 30 year duration. Meanwhile Nigeria’s economy expanded by 1.40% in the 3rd quarter of this year, according to the latest official data released this morning, against expectations of 1.50%. The country’s CB will hold its regular MPC meeting tomorrow although it is expected to keep its benchmark rate steady at 14.00%.

S&P Confirms A-/A2 Ratings On Saudi Arabia.
Standard and Poors last night affirmed its A-/A2 long and short-term, foreign and local currency ratings on Saudi Arabia with a stable outlook. The agency explained its decision by saying it reflected their view that the government would be able to maintain its liquid assets at close to 100% of GDP over the next few years, and continue to consolidate public finances.

Moodys Lowers Omantel Rating.
Moodys last week downgraded Oman Telecommunications long-term issuer rating from Baa2 to Baa3 following the company’s decision to purchase a further 12.10% stake in Zain, on top of its previous 9.80% share acquisition which was completed earlier this year. In a statement explaining its move the ratings agency said; “Omantel’s initial 9.80% acquisition in Zain was accommodated within the rating guidance which had been set for its prior rating at Baa2. However, the additional debt and EBITDA from the further 12.10% stake in Zain means that its debt/EBITDA would remain above the limits set for its Baa2 rating guidance over an 18 month horizon,” although Moodys added that “The transaction would not change the likelihood of strong support for Omantel by the government of Oman. The transaction is likely to pave the path for further diversification by government owned corporates in Oman and thus its success is pivotal to broader strategic initiatives and imperatives.”

KSA To Introduce VAT On Fuel.
Saudi Arabia will implement a 5% VAT on petrol from the beginning of January next year, according to a tweet made by Saudi Arabia’s General Authority of Zakat and Tax yesterday.

Kingdom Holdings Prepares To Sell Hotel Stakes In Lebanon.
According to the Daily Star newspaper, Kingdom Holdings has initiated negotiations to offload its current stakes in both the Four Seasons and Movenpick hotel in Beirut.

PSA Plans New Car Plant In Algeria.
France’s PSA Group says that it has signed an agreement with three local Algerian partners to begin building vehicles in the North African country. The facility is set to become operational by 2019 and would "enable PSA brands to serve demand from Algerian customers," according to a statement issued by the firm yesterday, adding that it would have a 49% stake in the joint-venture. The plant will be situated in Oran where PSA’s French competitor, Renault, already has a factory.

20-11-2017

AND FINALLY…
Nigeria’s female bobsledding team have qualified for next year’s Winter Olympics which are due to be held in South Korea in February. Their qualification means the country will be represented at the winter games for the first time in its history.

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