• ByCGI Gulf Insights of the Week
  • Sunday, 19 April 2020
  • Published inApril 2020
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Country Risk Update - Bahrain

Risk Indicator  - DB5c
Risk Level        - High

Ratings Trend  Deteriorating

US-Iran tensions pose a risk to Bahrain’s domestic security; their deterioration in 2020 reversed a period of regional de-escalation in late 2019. A giant oil and gas find off the west coast offer the promise of vast wealth if it proves commercially viable to extract. Saudi Arabia's strong support for Bahrain provides a backstop to the economy.

Market Overview
UAE banks banned from firing nationals during COVID-19
Banks in the United Arab Emirates are not permitted to terminate the contracts of citizens due to the implications of the coronavirus pandemic, the central bank said in a statement on Thursday. The order does not include Emirati employees who have resigned or breached job duties that require letting them go, the regulator said. Workers’ salaries cannot be reduced in response to the virus outbreak, either. The Gulf nation earlier allowed private companies to alter employee contracts, allowing them to reduce salaries, and extend leaves. The vast majority of private-sector workers are expatriates. The central bank also encouraged lenders to take advantage of the support provided by the government to stabilize the private sector.
GEMS Education threatens to kick out students in 7 days if fees not paid 
GEMS Education is threatening to remove students from its distance learning programme if payments are not received by the middle of next week, Arabian Business has learned. In a terse e-mail from GEMS sent to parents that have been seen by Arabian Business, GEMS said that “this is a final reminder to settle your child’s school fees. If payment has not been received by 12 PM on Tuesday, 21st April 2020, then we have no choice but to remove your child from access to our remote learning programme from Wednesday, April 22.” 
DIFC announces three-month rent waivers for retailers
NMC Health Plc has bowed to creditor demands to be placed into administration, saying it’s in no position to contest Abu Dhabi Commercial Bank PJSC’s efforts to install new management. The troubled Middle Eastern hospital operator said on the eve of a London court hearing that it expects to be placed into administration “in due course”. NMC’s new executive chairman, Faisal Belhoul, had resisted creditors arguing that such a move would endanger lives as the coronavirus spreads across the United Arab Emirates.
Commodity Tracker
Oil prices continue to decline as gloomy demand outlooks persist due to the coronavirus pandemic. The downward momentum in oil prices was reported this week even after OPEC agreed to a historic production cut in an effort to stabilize the industry. US West Texas Intermediate (WTI) crude plunged by 13.22% to settle at $19.75 on 16 April. The global benchmark Brent crude slumped by 11.63% over the week to settle at $27.82 on Thursday. Gold price decreased by 0.26% to reach $1731.70 per ounce on Thursday.
Stock Market Update
The main index of the Abu Dhabi Securities Exchange declined by 3.50% or 144.17 points to close at 3,969.51 points. The telecom sector plunged by 5.28% followed by real estate and energy, which lost 1.71% and 0.13%, respectively. The DFM’s general index increased by 1.63% to end the week at 1,859.79 points on Thursday. Tadawul (TASI) recorded losses during the week that ended 16 April, after rising for three consecutive weeks. TASI lost 5.35% and closed at 6,631.69 points. Bahrain’s All Share Index marginally increased by 0.97% to close at 1,312.94 points on Thursday. Industries and investment sectors witnessed a decline by 3.25% and 0.46% respectively as compared to last week. MSM30 edged up by 1.93% to close at 3,539.54 points on 16 April. Kuwait’s All Share Market Index increased by 3.27% over the week to close at 4746.44 points.
CRIF D&B Business Update
As covid19 continues its spread around the world, more and more companies are asking their employees to stay away from the office. Most of our 'Field Due Diligence' - CCAM partners needed in-person meetings to establish trust in individuals and entities they do business with. They have, in most part, required real-life meetings with potential borrowers, to process their credit transactions. Luckily, modern technology enables us to conduct due diligence without needing to be in the same room.
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