• ByCGI Gulf Insights of the Week
  • Monday, 23 March 2020
  • Published inMarch 2020
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Country Risk Update - Kuwait

Risk Indicator  - DB3d
Risk Level        - Slight

Ratings Trend  Deteriorating

Kuwait will suffer a deeper deficit and slower growth as the coronavirus outbreak and the collapse of the OPEC+ agreement depresses oil prices. Business opportunities should increase as the government's national development plan targets a more diverse economy.  The resumption of operations in the Divided Zone will boost oil-production capacity.

Market Overview
Coronavirus: Dubai residents, businesses to get relief from banks
Dubai’s ruler Sheikh Mohammed Bin Rashid Al Maktoum asked local banks to offer companies relief, including refinancing and repayment referrals, as part of measures aimed to limit the impact of the on the economy. Efforts should prioritize key industries contributing to the Gulf nation’s economy and sectors most impacted by the coronavirus such as healthcare, aviation, hospitality, and retail, according to a statement sent by the Dubai Media Office. Measures include “offering refinancing, repayment deferrals or lower repayments where required.” From April 1 until June 30, Dubai-based banks will waive loan repayments for three months for individuals forced to take unpaid leave and for small businesses. The banks will also reduce the minimum monthly balance for business accounts to 10,000 dirhams ($2,700).
Abu Dhabi banking giant appoints Mubadala chief as the new chairman 
Khaldoon Al Mubarak, managing director and group CEO of Mubadala Investment Company, has been appointed chairman of Abu Dhabi Commercial Bank (ADCB), the UAE's third-largest lender. The board of directors also named Hussain J Al Nowais as vice chairman while Ahmed Saeed Al Calily and Mohamed Ali Al Dhaheri also join the board. The appointments come as ADCB continues its integration with Union National Bank and Al Hilal Bank to deliver scale and efficiencies.
Dubai's DGCX sees a trading boost as investors seek safe havens 
The Dubai Gold & Commodities Exchange (DGCX) saw its flagship gold futures product continue its strong start to the year in February, with year-to-date volume growth of 773.6 percent compared to the same period last year, aided by a multi-year record in January. DGCX said the spike in trading is a response to a global backdrop of economic uncertainty, with investors increasingly looking towards safe-haven assets. Total volumes on the DGCX in February hit 1.49 million contracts, while year-to-date Average Open Interest (AOI) was 367,878 contracts, up from 243,409, a growth of 51.1 percent.
Commodity Tracker
Oil prices plummeted on Thursday as the coronavirus outbreak reduces global demand. The global benchmark Brent crude fell by 14.3% for the week. US West Texas Intermediate (WTI) crude plunged by 19.9% as compared to last week to settle at $25.22 on 19 March. Gold price decreased by 6.9% as compared to last week to reach $1479.30 per ounce on Thursday.
Stock Market Update
All the GCC indices ended the third week of March in the red zone due to the negative impact of the coronavirus (COVID-19). The DFM’s general index fell by points or 10.5% to end the week at 1819.24 points. The real estate sector lost 20.7%, while banks plunged by 17.5%. The Abu Dhabi Securities Exchange ended the week on a negative note. The index declined by 6.0% to close at 3685.56 points on Thursday. The banks' sector index dropped by 10.8%, followed by energy with 10.3%, and real estate with 4.9%. TASI declined marginally by 1.4% to close at 6267.56 points at the end of the week. Bahrain’s All Share Index fell by 1.9% primarily due to the decline in the industries and services sectors. MSM30 dipped by 4.5% to close the week ended 19 March at 3567.40 points. Kuwait’s All Share Market Index plunged by 6.1% or 296.54 points as compared to the previous week.
D&B Business Updates
This week’s Power Of Data guest is Bill Winters from Standard Chartered Bank sharing his experiences in financial services.
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