Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
Saudi Arabia’s Stock Market Could Soon Receive A US$145 Bio Boost – State Street.
According to a research piece recently published by State Street Global Advisors, the ongoing capital markets reform process in Saudi Arabia, privatization, the pending Aramco IPO and the increased likelihood that the Kingdom’s bourse will be included on high profile indexes such as MSCI and FTSE Russel next year, could attract as much as US$ 145 bio of investment linked inflows into the country over the next three years. “You shouldn’t underestimate how important the index inclusion is,” the head of State Street’s strategy and research for EMEA was quoted as saying by the Quartz website.
Hariri Returns To Lebanon.
Saad Hariri arrived back in Beirut yesterday 2.5 weeks after he resigned from his post as Prime Minister during a visit to Saudi Arabia, and is expected to join in Lebanon’s independence day celebrations. Lebanon’s President, Michel Aoun, has up to now refused to accept Hariri’s resignation unless he presented it in person and the two men are due to meet later today.
Decline Of US Inventories Helps Keep Oil Prices Firm.
Oil prices firmed slightly overnight following an API report which suggests that US inventories declined by 6.4 mio barrels last week. While we await confirmation of this data by the EIA later today, the market’s near-term focus continues to be on next week’s OPEC gathering, when we should see if the signatories to the output reduction accord, agree to extend this deal past its March 2018 expiry. However as mentioned in our previous commentaries we still believe that this will indeed be the case.
US Issues Travel Warning On KSA.
The US State Department has warned its citizens to “consider the risks” before planning to travel to Saudi Arabia at this time, due to what it claims are potential militant threats within the country and possible further missile attacks from Yemen carried out by Houthi rebels. "Terrorist threats persist throughout Saudi Arabia, including in major cities such as Riyadh, Jeddah, and Dhahran, and attacks can occur without warning anywhere in the country," an updated statement by the State Department read according to the UAE’s ‘National’ newspaper today.
MSCI Ponders Amending FX Rate Valuation Method For Qatari Stocks.
According to a Bloomberg article published this morning, MSCI is allegedly considering switching its spot exchange rate calculation method currently applied to Qatari stock prices and dividends, to one that utilizes the offshore rather than the onshore FX rate. This analysis was started after investors apparently complained that the ongoing diplomatic crises between Doha and some of its neighbours has made access to the onshore pegged USD/QAR rate too difficult.
Nigeria Conducts Successful Eurobond Issuance.
Nigeria issued a US$ 3 bio Eurobond yesterday with overall demand for the paper reported to be around US$11 bio. The bond consisted of 15 and 30 year tranches at a rate of 6.50% and 7.38% respectively. Meanwhile the Central Bank kept its main policy rate unchanged at 14.00% on Tuesday as expected. The CB Governor, Godwin Emefiele said the MPC’s decision to stay put was because any loosening at this stage could create “an upward trend” for inflation and “generate exchange rate pressures.” USD/NGN ended yesterday’s session via its various FX windows as follows : 359.87 (Interbank), 362.00 (BDC), 305.90 (Official) and at 362.50 in the grey market.
Moodys Sees Financing Stress Ahead For Sub-Saharan Region.
Moody’s said in a report published yesterday that it sees a growing risk of financing stress occurring amongst a number of countries in the Sub-Saharan region, as maturing external debt peaks over the next decade. Those states highlighted by Moody’s as being at most risk due to these maturities include; Gabon, Ghana and Zambia.
Kuwait Needs To Diversify Its Revenues – IMF.
The IMF recently completed its latest review of Kuwait’s economy saying in a statement that; “While Kuwait is facing ‘lower-for-longer’ oil prices from a position of strength, owing to its large financial buffers, low debt, and a sound financial sector,” it warned that “lower oil prices have weakened fiscal and external positions and generated large fiscal financing needs.” You can read the entire IMF summary on Kuwait here.
Hilton Group Looks To Expand In Egypt.
The US based hotel group, Hilton Worldwide, announced recently that it was planning to increase the number of hotel rooms it currently manages in Egypt by 2,500. This highlights the ongoing recovery of the country’s important tourism sector, whose revenues have climbed by more than 200% during the first 9 months of this year compared to the same period in 2016, according to official data.
L&T To Begin Construction Of Mauritius Metro System.
India’s Larsen & Toubro are the first Indian engineering firm to have been awarded a metro-rail project outside of their home country. This contract which is worth around US$572 mio involves both the design and construction of a 26km light rail line which will be linked via 19 stations situated between Port Louis and Curepipe in Mauritius. The company will also be responsible for building the related bridges, signaling and electrification network.
Chinese Firm Signs US$390 Mio Development Deal In Zambia.
The China Railways Seventh Group has reportedly signed a US$393 mio infrastructure development contract with the Zambian government according to the Chinese media outlet, Xinhua. The agreement would see the firm construct roads, bridges, dams, canals and power lines within 200,000 hectares of the Kalungwishi Farm Block in Zambia.
Did you know that the city of Shibam, in Yemen, is also known as "the Manhattan of the desert?” This settlement consists of more than 500 mud-built tower houses resembling skyscrapers, some of them as many as 11 stories high. It is also the oldest metropolis in the world to have used vertical construction.
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