CGI Gulf Insights of the Week (86)

ByCGI Gulf Insights of the Week
Monday, 18 February 2019
Published inFebruary 2019

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CRIF GULF WEEKLY INSIGHTS

Country Risk Update - Saudi Arabia

Risk Indicator - DB3c
Risk Level - Slight

Ratings Trend - Deteriorating

The majority of the latest oil production cuts are likely to be borne by Saudi Arabia, curtailing its short-term growth prospects. Saudi Arabia’s oil reserves, which have allowed it to build up huge financial buffers, will support short-term government spending.

Market Overview

UAE gold jewelry prices hit a new high in weeks; 24K now at Dh160.25 per gram in Dubai
Gold jewelry prices in Dubai on Monday broke out to a new high in weeks, and precious metal fans can expect to spend a few dirhams more per gram if they hit the shops today. The price of 24-karat gold climbed to Dh160.25 per gram as of 11 am, up by more than Dh4 compared to the prices about two months ago. Other jewelry pieces have likewise gotten pricier, with the 22K now priced at Dh150.50 per gram and the 21K and 18K selling for Dh143.75 and Dh123.25, respectively, according to the Dubai Gold and Jewellery Group. The bullion’s latest rally has been due to a weaker US dollar and expectations that the United States and China are about to enter an agreement. The two countries are scheduled to meet in Washington this week to agree on a deal that could end their trade conflict. As of 9:14 am, spot gold gained 0.1 percent to $1,326.1 an ounce, just below a nine-month peak of $1,326.30 an ounce on January 31, according to sources. The latest price is the highest the precious metal has achieved in more than two weeks. Analysts had earlier predicted the bullion to increase in value this year, hitting the $1,400 level by the end of 2019.

Emiratis exempted from pre-entry visa to Russia
Russia has exempted Emiratis from pre-entry visas as of February 17, it was announced on Sunday. The Ministry of Foreign Affairs and International Cooperation announced that Emiratis would no longer need a pre-entry visa to travel to Russia. The decision is effective from 17 February 2019. The exemption decision by Russia follows the agreement signed on July 6, 2018, in the presence of Shaikh Abdullah Bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation, and Dennis Manturov, Russian Minister of Trade and Industry. As per the agreement, UAE nationals carrying ordinary passports are exempt from obtaining pre-entry visas to travel to Russia, and Russians are exempted from obtaining pre-entry visas to visit the UAE. Ahmad Sari Al Mazroui, Undersecretary at the Ministry of Foreign Affairs and international cooperation, said the Russian government's decision is a fruition of a combination of factors that encouraged Russia to take the initiative, which undoubtedly reflects the UAE’s strong position and reputation at the international level, as well as its strong and durable network of international contacts. The exemption is an important accomplishment to be added to the achievements attained by the UAE diplomacy led by Shaikh Abdullah. The move also reflects the strong historical ties binding the two countries.

Saudi Arabia announces $20b investment in Pakistan
Crown Prince Mohammad Bin Salman on 17 February 2019 said Saudi Arabia has signed investment agreements worth $20 billion during his high-profile visit to Pakistan, where tensions were flaring up with nuclear-armed rival India. Kicking off his tour of South Asia and China with a far higher Pakistan investment than expected, the crown prince said the $20 billion figure represents only the start of an economic tie-up that would bring the historic Muslim allies even closer. “It’s big for phase 1, and definitely it will grow every month and every year, and it will be beneficial to both countries,” said the crown prince. “We have been a brotherly country, a friendly country to Pakistan. We’ve walked together in tough and good times, and we (will) continue.” But Prince Mohammad’s visit is at risk of being overshadowed by Pakistan’s growing tensions with India. Earlier this week a suicide bomber killed 44 Indian paramilitary police in the disputed Kashmir region. New Delhi has accused Pakistan of having a hand in the bombing and vowed to punish Islamabad, which denies involvement. Cash-strapped and in need of friends, Pakistan welcomed the crown prince with open arms and in grandiose fashion, including sending fighter jets to guide his incoming plane once it entered Pakistani airspace.

UAE's FTA unveils plans to regulate shisha tobacco products, ensure excise taxes are paid
Tobacco products used in shisha will soon bear tax marks later this year, as the UAE government expands coverage of excise tax. The Federal Tax Authority (FTA) said on 17 February 2019 it will launch phase two of the “Marking Tobacco and Tobacco Products Scheme” starting from the fourth quarter of 2019, expanding it to cover tobacco products used in shisha, be they imported or produced and distributed locally. The scheme is already in force on cigarettes, allowing for electronically tracking them from production and until they reach the end consumer, in order to ensure full compliance with Excise Tax laws on tobacco and tobacco products, according to the FTA. The scheme intends to combat tax evasion and manipulation, they added. The scheme’s first phase came into effect on January 1, 2019, covering all types of imported and domestically produced and distributed cigarettes.The digital marks were made available to producers and importers of all kinds of cigarettes to place on cigarette packs before they leave the factory to local markets, which allows them to ensure due Excise Tax has been paid. As of May 1, 2019, the import of any type of cigarettes into the UAE not bearing the digital marks will be prohibited; meanwhile, the sale of cigarettes packs not bearing the marks will be prohibited across UAE markets as of August 2019.

Apple legend Steve Wozniak to join FinTech celebration in Bahrain
Bahrain’s central role in the rapidly developing world of FinTech will be celebrated later this month with a series of conferences and seminars for experts from the global financial and technology communities. Fintastic Week will be held in Bahrain between February 24-29 and is set to attract over 1,000 delegates from the worlds of business, government, and academia. Events will also include best practice workshops for start-ups and fireside conversations with respected FinTech pioneers and leaders. Fintastic Week will see Bahrain hosting the eighth GCC Financial Forum between February 26-27, when global tech innovator and Apple co-founder Steve Wozniak will take center stage and share his thoughts and predictions on the current and future state of the global financial technology industry. Other notable speakers at the event include Sheikh Salman bin Khalifa Al Khalifa, Minister of Finance and National Economy, and Louise Beaumont, co-chair of the Open Banking & Payments Working group, at Tech UK. Victoria Behn, director of Middle East and Africa at Euromoney Conferences, co-organisers of the GCC Financial Forum said: “With international financiers, senior regional policymakers and leading fintech firms attending from across the Middle East, the GCC Financial Forum will once again be an unmissable event.”

Commodity Tracker

Business Events this Week In UAE

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Date: 6 March 2019

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