NL/13.11.2017

/ / 2017, Newsletters, November 2017

 

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NOV 2017 ISSUE

CGI. 95

Country Risk Update – Oman

The ports of Sohar and Salalah are emerging as regionally competitive infrastructure facilities, soon to be joined by Al Duqm. The government is targeting high-end tourism as an area for growth.The deal with Singapore is a real boost for Oman, but it pales into insignificance with the level of investment that Oman has managed to secure from China for its other port, Duqm. Much of the initial development of Duqm was funded by Kuwaiti investors, but in May of this year, a Chinese state-backed consortium, Oman Wanfang committed to invest up to USD10.7bn in the site.

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Market Overview
UAE’s Mubadala and French groups in $1.2bn investment plan
Abu Dhabi state fund Mubadala Investment said on Thursday 9th November 2017 it planned to invest millions of euros in businesses and other organisations in France under a deal signed with French state-backed investment vehicles CDC International Capital and Bpifrance.The agreement, signed during a visit of French President Emmanuel Macron to the emirate, aims to invest up to 1bn euros ($1.2bn) in the French economy.The first part of the plan involves raising the size and scope of an existing co-investment partnership, known as FEF, which was launched in 2014 by Mubadala and CDC International Capital, a subsidiary of French state-owned Caisse des Dépôts Group aimed at investing alongside sovereign wealth funds.The second part of the agreement, is dedicated to technology and innovation in France.The programme will focus on information and communication technologies, biotech, green technology and other technology sectors.
Kuwait’s GIC invests $100m in UAE-based logistics firm Tristar
UAE-based logistics company Tristar Group has announced on 8th November 2017 that they have sold an equity stake to Kuwait-based Gulf Investment Corporation (GIC) by issuing $100m worth of new shares to GIC. The proceeds will be used by Tristar to expand its business .Following the latest investment, Tristar will be jointly owned by Kuwait’s Agility, GIC and the founder and CEO of the Tristar Group, Eugene Mayne. It will be operated under a new company structure in DIFC with the name Tristar Holdings Limited. All Tristar activities will be held under DIFC holding. Under the terms of the agreement, Mayne will continue to serve as group CEO. A liquid logistics solutions provider, Tristar offers services to the downstream petroleum industry, both in the region and globally.
UAE to apply VAT to all food items, utility bills
The UAE will apply an upcoming value added tax to all food items and utility bills, according to officials.Upon first announcing the 5 per cent tax in 2015, the country had said that 100 food items would be zero-rated.This measure has now been scrapped by the Federal Tax Authority’s director general, Khalif Al Bustani, confirmed to Gulf News.“The law in the GCC agreement said that any food items would be under the sovereign right of the government to include it [as a zero-rated item]. The law that has been issued did not include it,” he was quoted as saying.Public transport, commercial airlines, investment-grade precious metals, the supply of crude and natural gas and education and healthcare will be zero-rated.
BP sends in big guns as majors jostle for Abu Dhabi oil riches
When BP goes to Abu Dhabi this week, where big oil companies will be jostling for access to the Emirate’s offshore riches, the British behemoth won’t be leaving anything up to chance.An all-star cast is slated to attend the annual Abu Dhabi International Petroleum Exhibition & Conference, including BP Chief Executive Officer Bob Dudley and Chief Financial Officer Brian Gilvary. The company is sending more speakers than any of the other majors – almost twice as many as its nearest rival Total SA and seven times as many as Exxon Mobil Corp., according to the conference website.BP’s attendance underscores the importance of the state, which is already the fifth-biggest contributor to the company’s global crude oil output and has been in “ advanced discussions with potential partners” for an additional offshore oil concession.
Saudi, UAE VAT tax may squeeze gold jewellery demand even more
Gold jewellery demand in Saudi Arabia and the UAE is “likely to falter” after rising briefly in the next few weeks before the countries impose a value added tax in January, the World Gold Council said.Weak oil prices and rising costs caused gold jewellery demand in Saudi Arabia to slump 9 percent in the third quarter from a year earlier while the UAE showed a 10 percent decline, the producer-funded World Gold Council said Thursday 9th November 2017 in a report. Saudi Arabia’s demand was 9.8 metric tons while the UAE consumed 7 tons, the council said. Overall Middle East gold jewellery demand dropped 4 percent to 40.9 tons, the lowest since at least 2014, the report showed.The planned 5 percent VAT in Saudi Arabia and UAE “may boost demand before the end of the year, although we believe the effect will be temporary,” the council said in the statement. “Demand is likely to falter once the new tax is in place.”
UAE’s tax authority urges businesses to pay excise tax by November 15
The Federal Tax Authority (FTA) has warned businesses to file their excise tax returns before the deadline, or face hefty fines.Last month, the UAE introduced an excise tax which saw the price of tobacco products and energy drinks rise by 100 per cent, and sugary carbonated drinks by 50 per cent.Businesses must file their returns for the previous tax period before the 15th of every month, with the first collection due to take place on Wednesday 15th November 2017.Those who fail to submit their returns on time will be subject to an automatic Dhs1,000 penalty for the first offence, and Dhs2,000 if this is repeated within 24 months.They must also pay a late payment penalty of two per cent of the unpaid tax, which increases to four per cent after seven days.
Muscat airport expansion pushed back to mid-2018
The opening of a long-delayed expansion to Muscat International Airport has been pushed to the middle of 2018, an aviation executive has said.Authorities had announced in February that the new passenger terminal would open by the end of this year.However, the CEO of Dubai-based executive aviation firm Jetex said he had been informed that Oman Airports Management Company was now aiming to open the terminal by June 2018.“I just had a chat with the CEO and chairman and he mentioned they will open before June next year. This is the plan,” Mardini said.Jetex Flight Support has been selected as the exclusive fixed-base operator for executive jet flights from Muscat and Salalah. Under an agreement announced 12 November 2017 that it will operate FBOs from both facilities’ new terminals when they are finished.
More than $331bn of oil and gas projects in GCC, says report
The combined total of active oil and gas projects in the GCC region has exceeded $331.4bn, according to a report by BNC Network.The project researcher and intelligence provider’ Oil and Gas Construction Analysis Report found that 361 such projects are currently underway as of November this year, helping the hydrocarbon sector to make up 30 per cent of the GCC’s economy, and 60 per cent of the total exports value.The study also found that construction projects in the region’s oil and gas sector made up 2 per cent of all active projects in dollar terms, but account for 14 per cent of the total estimated value; placing a high value on energy projects compared to other sectors.Oil prices have recovered this year to around $60 following a dramatic crash that sent the average price per barrel to under $28 at the start of 2016 – a far cry from the near $112 recorded in 2012.
UAE approves $13.9bn budget for 2018 with no deficit

The UAE Cabinet on 7 November 2017 approved the federal budget of AED201.1 billion ($54.7 billion) for the years 2018-2021, of which AED51.4 billion ($13.9 billion) is for next year, with no deficit forecast.Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, said: “All strategies and budget plans are invested in the service of the UAE society in the first place, and we will spare no efforts in providing all the requirements for our people’s happiness and well-being. The UAE people are our most valuable asset.”The largest portion of the 2018 budget has been earmarked for ‎social development and social benefits (AED26.3 billion or 43.5 percent of the total budget), state news agency WAM reported. Of this, ‎AED10.4 billion has been allocated for general education and higher education and AED4.5 billion allocated to the health sector. ‎
Hedge funds pile on bullish oil bets as Mideast tension heats up
The Middle East is kicking things up a notch in the oil market.Hedge fund bets on rising brent crude prices hit a fresh record as  tension in the oil-rich region reached a whole new level, sending prices to their highest in more than two years. Disruptions in exporting countries such as Libya, Nigeria and Venezuela in past months hadn’t fazed investors enough to trigger strong rallies, but Saudi Arabia and Iran? That’s another story. “Most of the political risk has been smaller-scale,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone. “But when you start talking Saudi Arabia and Iran, that gets people’s animal spirits flowing.”Saudi Arabia and Iran not only churn almost 14 million barrels a day of crude, or more than 40 percent of production from the Organization of Petroleum Exporting Countries, but they are also rival regional powers behind major Middle Eastern conflicts.
Commodity Tracker
Commodity 6 Nov 13 Nov Chg.%
Brent 62.45 63.57 1.79
WTI 55.87 56.82 1.70
Natural Gas 3.05 3.17 3.93
Gold 1270.2 1277.1 0.54
Business Events this week In UAE

 

 

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11th CFO Strategies Forum MENA

15 November 2017 To 16 November 2017

JW Marriott Marquis Hotel Dubai

Business Updates
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CRIF GULF DWC LLC
Level 15, ’48 Burj Gate’, Downtown Burj, Shaikh Zayed Road, Dubai, UAE
Tel. +971 4 406 9900
www,crif.ae  /  www.dnbuae.com

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CRIF GULF DWC LLC · 48 BURJ GATE, DOWNTOWN BURJ AREA, SHEIKH ZAYED ROAD · Dubai · United Arab Emirates