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Middle East & African Monitor – 25 July 2017

  • Arab Quartet Extends Terror List.
  • Oil Prices Maintain Recent Gains Following OPEC/NOPEC Meeting.
  • Nigeria’s Ailing President “Expected Back Within 2 Weeks” – Governor.
  • Saudi Arabia Launches SAR SUKUK Program.
  • MENA GDP Rate Set To Rebound In 2018 – IMF.
  • Dubai Airports Eyes Funding To Expand Second Airport.
  • Ghana Lowers Interest Rates.
  • Morocco’s Trade Deficit Widens.

REGIONAL COMMENTARY

Arab Quartet Extends Terror List.
Earlier this morning Saudi Arabia, the UAE, Bahrain and Egypt released the names of another 18 individuals and groups which they accuse of having extremist ties, and suspected of being directly or indirectly linked to Qatar, according to a joint-statement made by the group and published by the UAE’s state news agency. You can read their statement in full via this link: : https://www.thenational.ae/world/gcc/uae-saudi-adds-18-charities-and-individuals-to-terror-list-1.613903 Meanwhile the Egyptian President, Abdel Fattah al Sisi said yesterday that his country would continue to maintain the quartet’s current measures against Qatar."Egypt will stand by its decision and will not backtrack on this matter, our persistence on its own, our stance, and this block, is pressure in itself," Sisi was quoted as saying during a conference in Alexandria.

Oil Prices Maintain Recent Gains Following OPEC/NOPEC Meeting.
Oil prices held onto their recent minor gains yesterday, supported in part by a Saudi promise to curb its crude exports, but also due to a warning from the oilfield services company, Halliburton, that the US shale industry’s rig count was “showing signs of plateauing.” During a global oil ministers gathering in St Petersburg yesterday, Saudi Arabia’s Khalid al Falih, claimed that the signatories to the OPEC/NOPEC output agreement were committed to extending the existing deal beyond March 2018 if it became necessary, and that the Kingdom would export a maximum of 6.6 mio bpd next month, a 1 mio bpd cut compared to last year. He and his Russian counterpart, Alexander Novak also stressed the importance of all relevant parties keeping to their production limit pledges. “We are going to forcefully demand participation of all,” Falih stated, adding that this issue would be raised to the “leadership beyond oil ministers if we do not see a response.” His comments were echoed by Novak who said; “We insist and demand that all of the countries have 100% conformity.” Kuwait's oil minister Essam al-Marzouq announced that the next meeting of a technical committee of OPEC/NOPEC producers was scheduled for the 21st of August where compliance levels will be checked. Meanwhile Nigeria has reportedly agreed to join the output cut agreement and cap its production at 1.8 mio bpd once it reaches that level.

Nigeria’s Ailing President “Expected Back Within 2 Weeks” – Governor.
The Governor of Nigeria’s Imo state, Rochas Okorocha, has claimed that President Buhari, whom he visited at his London bedside this past weekend, may return to Nigeria by early August according to a BBC report. A photograph of the Buhari having lunch with Okorocha as well as a number of other officials was released on Sunday, and is the first public picture of the President in 77 days, after he returned to the UK for treatment on an as yet unspecified illness. The President Office did not however commit to an exact date for his potential return saying only that Buhari “will be back to Nigeria as soon as his doctors give the go-ahead.

Saudi Arabia Launches SAR SUKUK Program.
Saudi Arabia conducted its first Islamic local currency bond auction yesterday attracting over SAR 51 bio in bids for the SAR 17 bio on offer. The issue had 5,7 and 10 year maturities although the bulk of interest lay in the shorter end as reflected by the resulting allocations; SAR 12 bio in 5Y,SAR 2.9 bio in 7Y and SAR 2.10 bio in 10Y. In terms of yield the tenors were offered in ranges as follows: 5Y (2.90 to 3.00%), 7Y (3.25-3.35%), and 10Y at (3.55-3.65%). The Kingdom’s debt management office last week confirmed the list of 13 local banks who had qualified to participate in its domestic Sukuk program. They are; Alinma Bank, National Commercial Bank, Saudi Hollandi Bank, Al Bilad Bank, Bank AlJazira, Gulf International Bank B.S.C., Al-Rajhi Bank, Riyad Bank, Saudi British Bank, Banque Saudi Fransi, Saudi Investment Bank, Arab National Bank and Samba Financial Group.

MENA GDP Rate Set To Rebound In 2018 – IMF.
In its recently updated regional economic forecast, the IMF has said that it expects growth within the Middle East and North African region to average 3.30% next year after slowing to 2.60% in 2017. The UAE’s GDP in particular is expected to rebound to 3.40% in 2018 from an anticipated 1.30% this year. “UAE Growth is projected to recover over the next few years, as the pace of the necessary fiscal consolidation eases, global trade regains momentum, and investment, including for Expo 2020, accelerates. This outlook is subject to downside risks, stemming mainly from a further sustained decline in oil prices, tighter financial conditions, a rise in protectionism and an intensification of regional conflicts,” a statement by the IMF read. Meanwhile the S&P ratings agency affirmed Abu Dhabi’s sovereign credit ratings at AA/A-1+ with a stable outlook earlier this week. “These ratings are supported by Abu Dhabi's strong fiscal and external positions, while the exceptional strength of the government's net asset position provides a buffer to counteract the negative impact of lower oil prices on economic growth, government revenues, the external account, and increased geopolitical uncertainty in the region," S&P said.

Dubai Airports Eyes Funding To Expand Second Airport.
A Bloomberg article published yesterday, has claimed that the Dubai Airports company is looking to raise up to US$1 bio, in order to fund the purchase of some of the equipment needed for its planned expansion of the Emirate’s second airport Al Maktoum International. The state-owned firm is apparently talking to banks about export-credit agency-backed fundraising, which is likely to have a maturity of more than 10 years, Bloomberg quoted unnamed sources as saying. The Dubai International and Al Maktoum airports are expected to serve 146 million passengers by 2025, compared to 83.6 million last year, according to recent official estimates.

Ghana Lowers Interest Rates.
Ghana’s Central Bank lowered its benchmark rate by 150bp to 21.00% yesterday in line with expectations. The move comes as inflation continues to ease and the Cedi remains relatively stable.

Morocco’s Trade Deficit Widens.
Morocco’s trade deficit widened by 8.20% to MAD 93.98 bio during the first half on this year compared to the same period in 2016. The increase has been primarily attributed to greater energy and equipment related imports. Meanwhile the Economic Community of West African States is reportedly considering a recent application by Morocco to join the grouping.

25-07-2017

AND FINALLY…
Did you know that camels’ milk has ten times more iron and three times more vitamin C than cows’ milk ?

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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