CGI Gulf Insights of the Week 05 Feb 2017 (248)

ByCRIF GULF WEEKLY INSIGHTS
Sunday, 05 February 2017
Published inFebruary 2017

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CRIF – Dun & Bradstreet is pleased to bring to you the latest edition of our newsletter ‘CRIF Gulf Insights’ (CGI). CGI will keep you informed about the current trends in the GCC markets and highlight key events in the regional and global economy.

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CRIF Dun & Bradstreet Communications Team

CGI | Issue 55 | February 2017

Country Risk Update - Bahrain

Bahrain has enjoyed a series of strong structural current account surpluses over the past decade, allowing it to build up significant FX reserves and reduce its foreign debt. However, this situation is now in reverse, with the recent sharp drop in the oil price forcing the government to draw down on these reserves and increase its debt levels. Meanwhile, financial sector risk has been given a boost by the October issue of a USD17.5bn international bond. Capital buffers remain at healthy levels and the ratio of non-performing loans to total lending is relatively low - although liquidity has tightened over the past year. According to the IMF, banking supervision is adequate, and as a result we are currently recommending LC terms.

Business, Finance and Commodity News

Kuwait projects $25.9bn budget deficit next fiscal year

Kuwait’s government projects a budget deficit of KD7.9bn ($25.9bn) in the new fiscal year starting on April 1. That forecast is after a contribution of 10 per cent of revenues to the sovereign wealth fund, and conservatively assumes an average oil price during the year of $45 a barrel. Brent crude oil is currently around $55 a barrel. Spending is projected at KD19.9bn next fiscal year and revenues at KD13.3bn.

Saudi Cabinet gives final approval for 5% VAT

The Saudi Cabinet has given its final approval for a region-wide value added tax which will be implemented in the GCC from next year. A VAT of 5 per cent will be imposed across the GCC, following a joint agreement signed in June last year. Certain items like healthcare and food are anticipated to be exempt from the tax. Each member state is expected to issue its own national VAT tax legislation based on the agreed common principles.

UAE’s non-oil foreign trade touches Dhs1.17 trillion between Jan-Sept

The UAE’s non-oil foreign trade stood at AED1.172 trillion during the first nine months of 2016, posting almost flat growth compared to AED1.170 trillion during the same period in 2015. The share of imports in the UAE’s total non-oil trade amounted to AED721.2bn, up 1 per cent year-on-year, while exports grew by 6 per cent to reach AED149.1bn. In terms of imports, native and semi-processed gold topped the list at Dhs89.6bn,12 per cent of the total non-oil imports.

National Bank of Abu Dhabi Q4 profit jumps ahead of FGB merger

Higher lending fees and insurance sales drove a 28 per cent rise in National Bank of Abu Dhabi’s fourth quarter profit.
UAE banks have been hit over the last two years by a rise in soured loans due to slower economic growth and steeper funding costs. NBAD, which is merging with First Gulf Bank (FGB), said it made a net profit of Dhs1.33bn ($362m) in the three months ending Dec. 31. This compared to Dhs1.04bn in the same period a year earlier.

Commodity Tracker

D&B Article of the Week

The Global Risk Matrix

Dun & Bradstreet’s Global Business Impact (GBI) score for Q4 2016 worsened for a third consecutive quarter, to 281 (out of a maximum of 1,000), from 243 in Q3. The Q4 figure is the second highest on record, and is only just below the all-time high of 283 recorded in Q3 2014. The developments in Q4 take the score significantly above the long-term average (254.2) for the first time since Q3 2015. Nevertheless, the average of 247.25 for 2016 is an improvement on the averages seen in 2015 (248.75) and 2014 (261.50). The latest score confirms our view that business conditions are still feeling the after-effects of the global financial crisis, and the risks have been further compounded by political issues. Read more

CRIF D&B Highlights

Dun & Bradstreet acquires Avention
Dun & Bradstreet acquired Avention, which provides company, contact, and market data through its OneSource® solutions.This acquisition combines Dun & Bradstreet’s best-in-class content with Avention’s intuitive, user-friendly platform to provide sales and marketing professionals with actionable market and company information.

CRIF in the 2016 FinTech Forward Top 100 ranking
American Banker BAI ranked CRIF in its prestigious FinTech Forward Top 100 ranking of solution providers that derive more than one-third of their revenue from financial institutions.

CRIF assessments can be used by banks and insurance companies as ECAI ratings
On October 12, the European Commission published the definitive mapping based on which ratings issued by CRIF Ratings from November 1 can be used to fulfill the prudential capital and solvency requirements of banks, financial institutions, and insurance and reinsurance companies.

Upcoming Events this Week

The Refining Petrochemicals Interface: Enhancing Value
Feb 06
Intercontinental Hotel, Dubai

The Indian CEO Awards
Feb 20
Dubai

Reading Recommendation of the Week

Shoe Dog

Nike founder and board chairman Phil Knight shares the inside story of the company’s early days as an intrepid start-up and its evolution into one of the world’s most iconic, game-changing, and profitable brands.

Release Date:
April 26, 2016