CGI Gulf Insights of the Week

  • ByCGI Gulf Insights of the Week
  • Monday, 24 December 2018
  • Published inDecember 2018
View this email in your browser
Country Risk Update - Kuwait

Risk Indicator - DB3d
Risk Level - Slight 
Ratings Trend - Stable

Dun & Bradstreet upgrades Kuwait's country risk rating on the back of a strong oil price outlook by 2023 we expect oil will average over USD100/barrel. Business opportunities should increase as the government targets a more diverse economy with its national development plan.
Market Overview
Credit Suisse CEO in Saudi Arabia reportedly to step down in 2019
Credit Suisse Group AG’s chief executive officer in Saudi Arabia is leaving the bank, according to people familiar with the matter. Abdulaziz Bin Hassan has already resigned and is expected to step down next year, the people said, asking not to be identified. Credit Suisse declined to comment on 23rd December 2018, and Abdulaziz couldn’t be reached for comment. The Zurich-based company has hired three bankers from Bank of America Corp. in the Middle East since October as it seeks to boost its equities operation in the region after scaling back a few years ago amid a slowdown in trading
. The lender has also applied for a banking license in Saudi Arabia, which has the Arab world’s biggest stock exchange, ahead of its inclusion in the major emerging-markets benchmarks compiled by MSCI Inc. and FTSE Russell next year. The addition to the indexes is expected to trigger billions in inflows. 
Saudi bank stocks dip after Islamic levy settlement
Stocks of Saudi Arabian banks declined after they reached settlements worth SAR 16.7 billion ($4.5 billion) with the kingdom’s tax authority over an Islamic levy. A slump in oil prices last week added to the sell-off. The Tadawul Banks Index retreated as much as 3.1
percent at the open, the most in two months, before easing its decline to 1.8 percent as of 10:33 a.m. local time. All but one of its 12 members fell. The main Saudi equity gauge lost as much as 2.1 percent, the most since November. The tax authority had extended the 2.5 percent religious levy, known as the Zakat, by including items that were previously exempt while eliminating some deductions. The lenders had previously appealed against the extension. Meanwhile, Brent crude, the kingdom’s biggest source of revenue, plummeted 11 percent last week to the lowest level in more than a year. The 120-day correlation between Saudi stocks and oil is at the highest level in more than two years. Al Rajhi Bank, the second-biggest Saudi lender by market capitalization, was hit with SAR 5.41 billion, the highest payment among its peers. The shares, which sank as much as 5.7 percent on 23rd December 2018, trimmed their drop to 2.5 percent. Even though the settlement removes a cloud for Saudi banks that have been “hanging around for a while,” the banks were expecting a much better outcome, said Edmond Christou, a Dubai-based analyst at Bloomberg Intelligence.  The retreat on 23rd December 2018, eases the banking index’s gain this year to 25 percent. That’s still more than four times the increase in the main stock gauge.
UAE to finalise ICO regulations by 2019
Regulations for initial coin offering (ICO) will be introduced in the UAE by the end of the first half of 2019, according to the country’s Securities and Commodities Authority (SCA), which has approved the offerings as securities
. The move is aimed at providing businesses with a new, more secure option to raise capital through crowdfunding with the help of blockchain technology. ICOs are used as a source of capital for small and medium businesses as they allow them to issue cryptocurrency tokens to investors in the same way that shares are issued in initial public offerings of companies’ equities.SCA is set to partner with the Abu Dhabi Securities Exchange and Dubai Financial Market to develop trading platforms for ICOs next year. “We have signed agreements with law firms to come up with the sandbox and rulebooks for the issuance of ICOs. Legal requirements will be finished by the end of the first half of 2019… then there will be an adoption of technology and development of infrastructure on the side of the exchanges,” said SCA chief executive Obaid Al Zaabi. The Abu Dhabi and Dubai stock markets will adopt the latest blockchain technology using cryptography in order to issue ICOs, though the implementation plan will be introduced following the finalised agreements with ADX and DFM, Al Zaabi said. The chief executive said blockchain is likely to increase transaction speeds and reduce overall financial costs while adding security and efficiency. The chief executive said blockchain is likely to increase transaction speeds and reduce overall financial costs while adding security and efficiency.
Standard Chartered to make top-level changes in Gulf ops
Standard Chartered has announced a number of top-level changes in the Gulf region following the retirement of key executives. New CEOs has been appointed for the bank in Oman and Bahrain while CEOs will soon be named for operations in Saudi Arabia and Qatar, a statement said. It added that Boutros Klink has also been appointed CEO, Middle East, excluding the UAE. In his expanded role, he will have oversight over all GCC  countries and the wider Middle East and will hand over his duties as CEO, Bahrain to Abdulla Bukhowa, subject to statutory and regulatory approvals. The move comes as Ahmad Abu Eideh, cluster CEO, non-GCC will retire in March after navigating operations in Jordan, Egypt, Iraq, Lebanon through some difficult times. Muhannad Mukahall will take on the role of CEO, Jordan, subject to statutory and regulatory approvals. The bank said Gurcharan Kadan, CEO, Oman is also retiring in March and will be replaced by Hussain Yafai. Standard Chartered added that Jamal Tartir, CEO, Saudi Arabia will also be retiring and his replacement will be announced in due course. Sunil Kaushal, regional CEO, Africa and the Middle East, Standard Chartered Bank said: “These changes ensure a smooth and orderly succession which will allow us to continue our unrelenting focus on delivering our strategy and capturing opportunities across the region."
Saudi banks agree $4.5bn settlement over Islamic taxes
Major banks in Saudi Arabia reached settlements worth a combined 16.7 billion riyals ($4.5 billion) with the kingdom’s tax authority over a religious levy the lenders had been kicking against. The deals come as the world’s largest crude exporter predicts a budget shortfall of 131 billion riyals, or 4.2 percent of the gross domestic product, for 2019. The deficit was worsened as the nation boosted spending and extended benefits for government employees worth billions of dollars. The tax authority had extended the 2.5 percent religious levy, known as the Zakat, by including items that were previously exempt, while eliminating some deductions. Al Rajhi Bank was hit with the highest payment, agreeing to pay 5.41 billion riyals, the lender said in a statement posted on the Saudi Stock Exchange. Alinma Bank didn’t pay any settlement and said in a separate announcement that there will be a credit balance with the authority. The back taxes are being paid amid changes to the country’s banking landscape, which saw Saudi British Bank and Alawwal Bank strike a deal in May to combine in a $5 billion stock deal. Saudi Arabia released its 2019 numbers this week, with revenue estimated at 975 billion riyals versus 895 billion riyals in 2018. Taxes are projected to contribute 183 billion riyals to the budget in 2019, up from 166 billion riyals in 2018.
Commodity Tracker
Business Events this Week In UAE
Maintenance Strategy Development and Cost Effective Implementation 
@ Hyatt Regency Dubai & Galleria
Date: 24th - 27th December,2018
Business Updates

When you need to enrich your cash management strategy
When you need to refine your company’s credit policies
When you need stronger Account Management

CRIF Gulf D&B’s customer’s payment program (iTrade) provides exclusive data and analytics to help you ultimately reduce overall customer delinquency.
We would like to hear from you write to us at [email protected] for
Suggestions and Feedback


Our mailing address is:

Copyright © *|CURRENT_YEAR|* *|LIST:COMPANY|*, All rights reserved.

This email was sent to *|EMAIL|*
why did I get this?    unsubscribe from this list    update subscription preferences
crif GULF DWC LLC operates snb logo in the U.A.E territory.