Summer Calm in the financial markets. At least for now…
SME Snapshot - weekly round-up of Global, MENA and SME news in under 60 seconds. Published by Business Exchange Bureau.
Global Markets Update:
Last week markets were rather calm, with Wall Street in the summer mood and other key indices on the back foot. The S&P500 for example despite retrenching last week, has reached a valuation 17.5 times forward earnings, way above historical averages. Japan shares lost ground amid geopolitical tensions related to North Korea and Qatar and even European bourses are in a somber mood. In currency markets, the yen strengthened in response to the decline in US Treasuries, while the euro-dollar fix was almost unchanged on the week. Oil prices surged when the EIA (Energy Information Administration) storage report showed a significant drop adding to a substantial momentum built over the past two weeks. But on Friday traders worried about the surge in OPEC’s oil exports and a rebound in US oil production. Gold prices dropped once again to just over USD 1200/ounce. A month ago they were just below USD 1300/ounce.
MENA Update:
Qatar’s response to the 13-point list of demands was rejected by the four-nation alliance, stating that it “evinced complacency”. As the boycott continues and Kuwait attempts to mediate the dispute, representatives from both the US and UK are also flying in to personally intervene in the discussions.
Egypt’s central bank hiked rates by 200bps for the second consecutive time: overnight deposit rate was raised to 18.75% from 16.75% and its overnight lending rate to 19.75%
Foreign investment in Egypt’s domestic treasury bills and bonds touched USD 1.25bn in Jun and about USD 9bn since the currency flotation in Nov.
In 2016, Saudi Arabia’s Aramco reached an all-time record for production of crude oil, pumping an average of 10.5mn barrels a day – the biggest daily figure of any oil company in history.
The number of female employees in Saudi Arabia’s private sector increased to 496,000 in 2016 from 215,000 in 2012 (around 130% in 4 years). Women now represent 30% of the total Saudi work force in the private sector, up from just 12% in 2011.
Arab countries are finalising plans to create a regional cross-border payments and settlements system, disclosed the Arab Monetary Fund. This Arab Regional Payments System – expected to be in operation by 2020 – will act as a correspondent for its participants such as banks and financial institutions, through a single, centralised platform for cross-border payment.
UAE News:
Laptop Ban On Emirates Airlines Lifted: Emirates Airlines announced this morning that the US ban on the carrying of laptops by passengers in its aircraft cabins has been lifted “effective immediately.” Emirates thus joins Etihad in successfully adjusting its security measures to meet the new US requirements. Meanwhile, Turkish Airlines has said it also expects to be granted a similar exemption from the US authorities soon.
Moody’s assigned a credit rating of Aa2 to UAE, given its strong economic fundamentals, and had upgraded the credit outlook from negative to stable recently.
According to a recent study by HSBC, UAE emerges as the second most expensive place globally for education (following Hong Kong). Sending a child to school in UAE, from primary to university, will cost about USD 99,378 (AED 365,025). This compares to Hong Kong’s USD 132,161 for total school costs.
Passenger traffic at the Dubai International Airport rose by 1.9% YoY to 6.85mn in May, bringing the year-to-date number to 36.97mn (up by 6.7%).
Abu Dhabi welcomed 2mn hotel guests during Jan-May this year, of which around 600k were domestic tourists. China was the largest source market internationally with 160k+ guests followed by India and the UK (at 136k and 104k respectively).
SME News:
The Middle East Small businesses drive big data market to $12billion by 2020. While small- and medium-sized enterprises (SMEs) comprise the majority of Middle East enterprises, they lag in digital technology adoption. Among SMEs in the region, only 18 and 15 percent in the UAE and in the Kingdom of Saudi Arabia, respectively, are digital, according to a recent report by Digital McKinsey.
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