CGI Gulf Insights of the Week

  • ByCGI Gulf Insights of the Week
  • Monday, 03 December 2018
  • Published inDecember 2018
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Country Risk Update
United Arab Emirates

Risk Indicator - DB3c
Risk Level - Slight
Ratings Trend - Improving

The UAE will continue to strengthen its position as a regional safe haven and business hub. Access to global markets from Dubai will be among the best in the world.The IMF supports the government’s move towards stimulus, but has made a recommendation to replace business fees with corporate taxation.
Market Overview
Now No. 1: UAE passport most powerful in the world
The UAE passport has jumped to Number 1 as the world's most powerful passport on Saturday, December 1, 2018 — on the eve of the country's 47th National Day celebrations, according to the Dubai Media Office.With this historic achievement, UAE passport holders are now able to gain visa-free entry to 167 countries worldwide, according to Passport Index.The UAE passport was ranked No. 27 in December 2016. In October this year, it rapidly notched higher to No. 4.Then it went up to No. 3 on November 8, with Emirati citizens able to fly to 163 countries without securing a visa prior to departure — just behind Singapore and Germany, whose citizens are able to travel visa-free to 165 countries. Four more countries were added to the UAE list as of December 1, 2018. It took just three weeks before the UAE landed on top, thus skipping the No. 2 position among the world's most powerful travel documents.His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, tweeted: “On the glorious UAE National Day, our achievements are getting doubled. The Passport Index has just ranked the UAE passport as Number 1 globally, with visa-free entry to 167 countries worldwide. Congratulations to the UAE and its people and big thanks to the Ministry of Foreign Affairs and International Cooperation’s teams led by Shaikh Abdullah Bin Zayed”.
Egypt Terminates Repatriation Mechanism For Foreign Investors
In line with Egypt’s liberalization of the foreign exchange regime, the Central Bank of Egypt (CBE) has decided to end foreign investors’ repatriation mechanism for any fresh foreign currency portfolio investments wishing to enter the local currency Egyptian T-Bills, T-Bonds market and the stocks listed on the Egyptian Stock Exchange. The foreign exchange repatriation mechanism was heavily utilized by foreign investors in order to guarantee liquidity as Egypt suffered from foreign currency shortage. The decision, which will be effective on December 4, 2018, is to be applied on new foreign currency portfolio investments without impacting the existing balances “inside the mechanism” before that date. Egypt has secured a $12 billion IMF loan following the liberalization of the Egyptian pound on November 3, 2016. Egypt’s foreign currency resources have reached $111 billion, and Egypt's current account deficit decreased from $19.8 billion (5.9% of GDP) for the fiscal year 2015/16 to $5.9 billion (2.4% of GDP) for fiscal year 2017/18. Furthermore, Egypt's Balance of Payments achieved an overall surplus of $12.8 billion (5.1% of GDP) for fiscal year 2017/18 compared to a deficit of $ 2.8 billion (0.8% of GDP) for fiscal year 2015/16. “The move will allow a fresh portfolio inflow directly to the banking sector and comes at a critical time where the banking sector NFAs continue to weaken, registering a deficit of $3.95 billion in September, up from a deficit of $2.3 billion in August,” securities brokerage company Beltone Financial said in a statement.
Standard Chartered said to cut Dubai, Singapore jobs amid cost reductions
Standard Chartered is cutting jobs in Dubai and key markets including Singapore as it looks to curb expenses, people familiar with the matter said. Some senior roles are included in the cuts, the people said, asking not to be identified because the emerging-markets lender’s strategy isn’t yet public. As many as 100 positions may be impacted in Dubai although the number hasn’t been finalized, two of the people said. The eliminations also include leadership at the firm’s priority banking operations, which offer personalized wealth-management services, one of the people said. The staff reduction is coming as Standard Chartered CEO Bill Winters is looking for ways to reignite growth. The bank is weighing a plan to simplify its structure, reduce funding expenses and free up liquidity, people familiar with the matter said earlier this week. A representative for Standard Chartered said the company has made “substantial progress in executing the transformation plan laid out in 2015” and will disclose its strategy for improving returns at its full-year results in February.
French majors eye Oman economic zone for investment
Four leading French companies have announced plans to explore investment opportunities in the Special Economic Zone of Duqm, Oman. CMA CGM, EDF Renewables, FIVES and SUEZ announced the creation of the French Business Syndicate with the goal of assessing various investment possibilities. In response to the recent visit to France of Yahya Al Jabri, chairman of the Special Economic Zone Authority of Duqm (SEZAD), the companies said the syndicate will further strengthen the business relationship between Oman and France. The syndicate has showed interest in a global approach to cement factory ecosystems and related facilities including solar power generation plant and the production of alternative fuel.The companies have also proposed to implement an educational programme to enhance the integration of young Omanis in the projects. Al Jabri welcomed the French investments in Duqm saying the agreement reached by the four companies to study investment opportunities in the zone is in line with its aspirations.
Dnata Acquires Majority Stake In AI Technology Firm
Dubai-based air service provider dnata has acquired a majority stake in bd4travel (Big Data for Travel), a tech company that provides artificial intelligence (AI)-driven IT solutions to online travel agencies. The value of the deal was not disclosed. Based in Germany and the UK, bd4travel’s services were designed specifically to meet the challenges of the travel industry. The company’s algorithms allow online travel agencies to engage with anonymous customers and personalize their shopping experience in real-time, recommending the most relevant products, services and content to them. The deal will also help dnata improve its operational efficiency, the company said in a statement. The acquisition is effective immediately, with no interruption to the services offered by bd4travel. The business will continue under the bd4travel branding, the statement added. “The processing of big data and the application of artificial intelligence-driven digital customer interactions represent major competencies of future-proof organizations,” said Iain Andrew, Divisional Senior Vice President, Travel Services, dnata. “With their outstanding, scalable technology, expert team and proven business model, bd4travel offers solutions for both.
Commodity Tracker
Business Events this Week In UAE
Beneficial Ownership, Driving Transparency to Improve Business Performance
Date: 6th December,2018
Business Updates
Understanding who owns and controls the companies with whom you do business can be challenging, but critical to the on boarding process of customers, suppliers and partners. D&B's Ultimate Beneficial Ownership reveals how data and analytics can help you identify business ownership and legal structures and overcome regulatory hurdles.
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