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CRIF GULF WEEKLY INSIGHTS


Country Risk Update 
United Arab Emirates
Risk Indicator – DB3c
Risk Level – Slight
Ratings Trend – Stable

The impact of the introduction of VAT in UAE at the start of January had an impact on the Purchasing Managers’ Index (PMI) causing it to slightly slow down. Nevertheless, the index still reflects the strengthening of the non-oil private sector with inflows of new business remaining strong, although firms are now more cautious about growth prospects over the 12 months than they were in January 2018. Confidence remains above the long-term average.

Market Overview

Bahrain’s Biggest Oil Find Since 1932 Dwarfs Reserves
Bahrain, the smallest energy producer in the Persian Gulf, discovered its biggest oil field since it started producing crude in 1932, according to the country’s official news agency.The shale oil and natural gas discovered in a deposit off the island state’s west coast “is understood to dwarf Bahrain’s current reserves,” Bahrain News Agency reported, without giving figures. The country currently pumps about 45,000 barrels of oil a day from its Bahrain Field, and it shares income from a deposit with Saudi Arabia that produces about 300,000 barrels a day, according to figures from the U.S. Energy Information Administration.​Bahrain discovered the offshore Khaleej Al Bahrain Basin as it seeks to expand output capacity at its wholly owned Bahrain Field to 100,000 barrels a day by the end of the decade. The island kingdom is now bound by the global agreement among major oil producers to limit production to reduce global inventories.​

Abu Dhabi, Greek funds agree new $350m investment platform
Greece’s New Economy Development Fund (Taneo) has signed a memorandum of understanding with Abu Dhabi’s Mubadala Investment Company to create a EUR400 million ($350.4 million) co-investment platform. The platform will target compelling investment opportunities found in key sectors of Greece’s economy, a statement said. Under the terms of the MoU, Taneo and Mubadala will each contribute EUR200 million to the platform, which will capitalise on resilient businesses with growth potential across key sectors of Greece’s economy.The two organisations will also share knowledge, further enhancing Greece’s strong diplomatic and trade relations with the UAE.

Nadec Buys Danone’s Saudi Joint Venture
Saudi Arabia’s National Agricultural Development Co., better known as Nadec, has acquired a majority stake in Al Safi Danone (ASD), which is a joint venture between Groupe Danone of France and Saudi based Al Faisaliah Group. Nadec has acquired a 62.2% of ASD and the existing Al Safi Danone shareholders will own the remaining 38.8% in the company.Global law firm Baker McKenzie has acted on behalf of Saudi Arabia’s of Al Faisaliah Group for the sale of their shareThe deal will help consolidate Nadec’s and ASD’s business in the dairy industry in Saudi Arabia by reinforcing their position to create a leading regional dairy and beverage player, and will extend their geographic reach.The acquisition will give Nadec an opportunity to utilize Danone’s global expertise and also increase their scale, both within the kingdom and regionally.

Saudi’s Inclusion In The FTSE Russell EM Index Fails To Buoy Tadawul
Saudi Arabia’s inclusion in the FTSE Russell’s emerging market index failed to move local markets as Tadawul—the local stock market—fell by 0.37% on March 29, 2018.Earlier that day, it was announced that the Kingdom would be upgraded from its previous status as ‘Unspecified’ to emerging markets by March 2019. The move is expected to attract billions of dollars of fresh foreign investment to the Kingdom—ranking it among the 10 largest emerging stock markets.In September 2015, Saudi Arabia was added into the FTSE Russell Watch List soon after the Qualified Foreign Investor (QFI) program was introduced in the Kingdom. The country continued to maintain its status in the Watch List through the FTSE’s 2016 country classification.

UAE banks performing well despite lower profits 
UAE banks are continuing to perform well, albeit with lower levels of profitability, largely the result of costs growing at a faster rate than operating income, according to a new report. Professional services firm Alvarez & Marsal released its latest UAE Banking Pulse covering the final quarter of 2017 said another trend has been an increase in liquidity, as deposits grew at a faster rate than loan advances. The report compares the quarterly data of the 10 largest listed UAE banks – First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Mashreq Bank, Abu Dhabi Islamic Bank, Union National Bank, Commercial Bank of Dubai, National Bank of Ras Al Khaimah, and the National Bank of Fujairah.The report said loans and advances for the top 10 banks grew at a significantly slower rate (0.22 percent) than deposits (2.47 percent).

 

Commodity Tracker

Business Events this Week In UAE

Annual Investment Meeting (AIM) Conference 2018
Dubai World Trade Centre
09 April 2018 to 11 April 2018
 
Business Updates


Introducing you to our latest offering; D&B’s Industry Insider
This report will be of significant interest to individuals and organizations who would like to identify opportunities, evaluate partnerships and investment decisions in these sectors.

 

 
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