• ByCGI Gulf Insights of the Week
  • Sunday, 03 May 2020
  • Published inMay 2020
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Country Risk Update - Kuwait

Risk Indicator  - DB3d
Risk Level        - Slight

Ratings Trend  Deteriorating

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

Market Overview
Dubai Gold and Commodities Exchange records 'extraordinarily busy' April
The Dubai Gold and Commodities Exchange (DGCX) witnessed a 653.45 percent year-on-year growth in trading of its G6 currency portfolio in April, as activity overall surged despite the economic uncertainty caused by the coronavirus. Among the G6 currency pairs, Euro and British Pound Futures contracts were the most prominent, recording y-o-y ADV growth of 405.56 percent and 318.48 percent respectively. Meanwhile, the DGCX’s Gold Futures product continues to perform strongly and has now recorded year-to-date volume growth of 547.31 percent compared to the same period last year.
Abu Dhabi said to shelve sale of $2bn private equity book due to coronavirus
The Abu Dhabi Investment Authority is delaying the sale of $2 billion in private-equity fund stakes after the outbreak of the deadly coronavirus. The sovereign wealth fund, which is estimated to have about $580bn under management, was in talks with several investors including money manager Ardian about selling chunks of the portfolio, according to people familiar with the discussions. The market turmoil triggered by the crisis made it difficult for them to agree on how much the stakes were worth, said the people, who asked not to be identified because the talks are private.
Saudi Arabia grants $2.4bn to help small businesses amid Covid-19 crisis
Saudi Arabia’s Social Development Bank has introduced new initiatives to support small businesses and self-employed entrepreneurs hit by the coronavirus pandemic. The bank announced an overall package of 9 billion riyals ($2.4bn), according to Saudi Arabia’s state news agency (SPA) – 8bn riyals of which ($2.1bn) will be used to help 6,000 businesses with financing and a newly created portfolio will focus on companies in the health-care sector. As well as the funding, the back has offered a six-month grace period to repay installments, starting from the beginning of April 2020.
Commodity Tracker
Oil prices rose on Thursday as the major producers began output cuts to offset a slump in fuel demand triggered by the coronavirus pandemic. The global benchmark Brent crude gained by 18.47% for the week. US West Texas Intermediate (WTI) crude increased by 14.18% as compared to last week to settle at $18.84 on 30 April. Gold price decreased by 2.93% as compared to last week to reach $1,694.20 per ounce on Thursday.
Stock Market Update
GCC bourses have ended the week in the positive territory. The Abu Dhabi Securities Exchange (ADXGI) gained 167.38 points or 4.12% to reach 4,230.37 points on Thursday. The benchmark index of the Dubai Financial Market (DFM) increased by 7.17% over the week to close Thursday's session at 2,026.61 points. Tadawul (TASI) increased by 7.69% as compared to the week earlier to close at 7,112.90 points on 30 April. Bahrain’s All Share Index marginally increased by 0.24% to close at 1310.73 points on Thursday. The investment and services sectors improved by 1.76% and 0.27% respectively whereas the industries sector dipped by 2.81%. MSM30 Index gained by 1.65% to close the week at 3,539.46 points. Kuwait’s All Share Market Index grew by 6.19% or 289.96 points to close at 4,975.39 points on 30 April.
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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