MSM Index: 53

MENA Morning Note Wednesday, September 04, 2019

ECONOMIC NEWS China stocks firmed on Wednesday, bucking a global retreat, as the country’s upbeat Value Previous % GCC service sector data outweighed lingering worries over a protracted Sino-U.S. trade war. 03-Sep-2019 Closing Change The CSI300 index rose 0.1% to 3,859.14 points at the end of the morning session, while the Shanghai Composite Index gained 0.2% to 2,936.68. Activity in China’s services MSM 4,016.62 4,002.66 0.35% sector expanded at the fastest pace in three months in August as new orders rose, Dubai 2,876.44 2,889.81 -0.46% prompting the biggest increase in hiring in over a year, a private survey showed on Wednesday. China’s economy showed clear signs of a recovery in August, especially in Abu Dhabi 5,105.12 5,156.01 -0.99% the employment sector, Zhong Zhengsheng, director of Macroeconomic Analysis at Saudi Arabia 7,924.18 7,971.14 -0.59% CEBM Group, said in a statement alongside the data The data helped offset worries over the year-long trade dispute, which has strained economic growth in China and the United Bahrain 1,543.18 1,540.75 0.16% States. U.S. President Donald Trump on Tuesday warned he would be “tougher” on Qatar 10,300.01 10,274.15 0.25% Beijing in a second term if trade talks dragged on, compounding market fears that ongoing trade disputes could trigger a U.S. recession. (Reuters) Kuwait 5,961.32 5,953.50 0.13%

Egypt 14,999.58 15,110.23 -0.73% Oil prices recovered some ground on Wednesday after touching their lowest in close to a month during the previous session on concerns that a weakening global economy could 8,243.32 8,432.41 -2.24% depress demand. Brent crude LCOc1 was up 12 cents, or 0.21%, at $58.38 a barrel by 0425 GMT, while U.S. West Texas Intermediate futures CLc1 gained 20 cents, or 0.37%, Value Asia % Change at $54.14 at barrel. Oil prices sunk to a nearly one-month low on Tuesday following data 04-Sep-2019 that showed U.S. manufacturing activity in August contracted for the first time in three years and euro zone manufacturing activity contracted for a seventh month in August. NIKKEI 20,679.52 0.26% But global markets bounced on Wednesday after a private survey showed that activity in Hang Seng 25,871.25 1.35% China’s services sector expanded at the fastest pace in three months in August as new Shanghai 2,940.90 0.37% orders rose, prompting the biggest increase in hiring in over a year. China is the world’s second-largest oil consumer and largest importer. (Reuters) Value USA % Change 03-Sep-2019 Oman Dow Jones Ind. 26,118.02 -1.08% Oman’s burgeoning In-Country Value programme is helping retain as much as 40% of contract values within the country, according to Salim bin Nasser al Aufi S&P 500 Index 2,906.27 -0.69% Under-Secretary of the Ministry of Oil and Gas. The ICV programme is NASDAQ 7,874.16 -1.11% delivering benefits to the local economy through an emphasis on the localisation Value EUROPE % Change of equipment, services, job creation, and human capital development, among 03-Sep-2019 other goals. (Oman Observer) FTSE 100 7,268.19 -0.19%

DAX 11,910.86 -0.36% Oman Housing Bank revealed that the total number of approved loans, which are supported by the government, during the first half of 2019 reached 630 CAC 40 5,466.07 -0.49% loans, worth more OMR 26.8 mn. (Times of Oman) Value Currencies % Change Four major oil and gas companies in the Sultanate have joined forces to boost 04-Sep-2019 the level of Omanisation in key maintenance work on their facilities. PDO, USD-JPY 106.0300 -0.08% Oman Shell, Oman LNG and the Oman Oil-Orpic Group signed a MoU USD-OMR 0.3850 -0.06% committing the operators to collaborate on developing a self-sustaining business model for the turnaround activities of oil and gas installations. A turnaround EUR-USD 1.0976 0.02% entails the shutdown of a plant for a while for maintenance, refitting and inspection purposes before it is brought back on stream. The total workforce for GBP-USD 1.2106 0.21% a 20-day turnaround can reach up to 800-900 people with major shutdowns involving 1,200 or more depending on the size and complexity of a plant. Value Commodities % Change (Times of Oman) 04-Sep-2019 Oil 54.20 0.48% PDO says it is finalising a strategy to add wind-based capacity to its rapidly expanding and diversifying renewable energy programme. Managing Director Gold 1,552.80 -0.20% Raoul Restucci said the company’s first wind-based power project is likely to Silver 19.36 1.47% come up within its Block 6 concession in a windswept part of Dhofar Governorate. (Oman Observer) Note: All the above data updated at 8:00 AM, Muscat time (5:00am GMT) Oman sold 47.2 million Rial ($123 million) of bills due Oct 2 on Sep 2. Investors offered to buy 1.11 times the amount of securities sold. The bills were sold at a price of 99.84, have a yield of 2.089 percent and will settle on Sep 4. (Bloomberg)

This report has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. While all care has been taken to ensure that the facts stated herein are accurate and the estimates, opinions and expectations contained herein are fair and reasonable, neither United Securities LLC, nor any of its employees shall be, in any way, responsible for the contents. This shall not be construed as an offer to buy or sell the investments referred to in this report.

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MENA Morning Note Wednesday, September 04, 2019 UAE Sentiment soured further in the United Arab Emirates as a gauge of business conditions in the second-largest Gulf economy slumped to an eight-year low. In an echo of disputes that have roiled global trade, sales to foreign customers posted a “weaker upturn” and new orders stagnated in the U.A.E. in August, according to IHS Markit. Its Purchasing Managers’ Index dropped to 51.6 from 55.1 in July, declining for a third month and edging close to the threshold of 50 that separates contraction from growth. Fears of a global downturn are deepening as signs of a manufacturing slump have emerged from Europe to Asia. Domestic competitive pressures are compounding the outlook for the U.A.E., a federation of seven emirates that includes oil-rich Abu Dhabi and tourism and trade hub Dubai. (Bloomberg)

The manufacturing sector's contribution to the UAE's non-oil GDP grew 2.5 pc to AED122 bn in real prices in 2018 from AED119.7 bn in 2017, according to figures revealed by the Federal Competitiveness and Statistics Authority . Being a mainstay to a diversified economy, the sector has maintained its steady growth over the past five years, with its gross output growing 5 pc in 2017 as compared to 2016, during which manufacturing industries hit a growth rate of 4.8 pc. Economic expansion is primarily driven by the non-oil sectors, including manufacturing, construction, transshipment, and financial service industries. It's noteworthy that Abu Dhabi has embarked on an ambitious growth and diversification programme, Economic Vision 2030, to boost nonoil sector growth. The emirate has announced a three-year, AED 50 billion (USD13.6 bn) stimulus package to jumpstart nonoil activity in the capital emirate. (Zawya)

An online database from one of the leading retailers of Apple Inc. and Samsung Electronics Co. mobile phones in the Middle East was exposed, including prepaid debit card numbers and personal information belonging to about 10,000 third-party salespeople. The Axiom Telecom LLC data exposure, which is relatively small compared to some recent breaches, contained passwords belonging to third-party salespeople that appeared to unlock an app designed for their small businesses to place orders and view incentives and invoices, an Axiom official told Bloomberg News. The security flaw may prove embarrassing for the company’s founder, Emirati entrepreneur Faisal Al Bannai, who is better known as the managing director of the cybersecurity company DarkMatter. That company has been under scrutiny for allegedly providing staff for a secret hacking operation that targeted human rights activists, journalists and other governments on behalf of a United Arab Emirates intelligence agency. (Bloomberg)

Saudi Arabia Saudi Arabian bond market increased by 29% in volume to $25.6 billion from eight deals during the first half of 2019, according to a recent report by Debtwire Par, the provider of high-value news, data, and analysis on global debt markets.The second quarter dominated, representing 70% of bond volumes for the period, a result of notable deals such as USD 3.1bn and USD 7.5bn of bonds issued from the Government of Saudi Arabia. Loan market of the GCC nation witnessed a drop during the first six months of 2019, compared to H1-18 levels with volume totalling $9.8 billion from 13 deals. (Zawya)

Global materials testing firm Element Materials Technology has secured a four-year contract from Sepco Arabia Co., a unit of Sepco Electric Power Construction Corporation, it said in a statement on Tuesday. The contract includes providing on and off-site civil testing services for work done on one of GCC's largest maritime industries and shipyard projects located in Saudi Arabia. As per the deal, Element will support Sepco in the construction of Packages 4, 5, and 6 of the King Salman International Complex for Maritime Industries and Services project at Ras Al Khair in Saudi Arabia. Element’s experts in the Middle East will establish an on-site testing facility for a minimum of four years and provide civil testing services for Sepco’s three packages. The scope of work includes soil testing, concrete and concrete aggregate testing, asphalt testing and inspection, construction materials testing, stone testing, and water testing, it stated. (Argaam)

Russia’s energy minister Alexander Novak plans to visit Saudi Arabia and meet with his counterpart ahead of president Vladimir Putin’s visit to the country later this year, Novak tells reporters in Vladivostok. Putin’s visit is planned for October Says Russian-Saudi energy relations are strong amid management reshuffles in Saudi Aramco Saudi Arabia removed Energy Minister Khalid Al-Falih from his position as Chairman of Saudi Aramco, the second time his role has been scaled back in less than a week, as the government prepares to sell shares in the state-owned oil company; U.S. oil production growth flattening is a new trend to watch, Novak says Russia ready for trilateral gas talks with Ukraine and EU commission in September; date may be discussed with Ukraine and EU next week. (Bloomberg)

Saudi government has appointed Transport Minister Nabeel Al-Amudi to the board of the Saudi Arabian Oil Co, according to a cabinet statement on Tuesday. (Bloomberg)

A delegation sent by Yemen’s southern separatists arrived in Saudi Arabia on Tuesday for talks with the Riyadh-backed Yemeni government, as the kingdom seeks to end fighting between the two that threatened a Gulf alliance. The head of the Southern Transitional Council, Aidarous Al- Zubaidi, was leading the six-member team, according to a statement. Arabiya TV said the council’s representatives were in Jeddah. (Bloomberg)

Saudi Arabia is edging closer to allowing tourists access to the kingdom with a plan to open visa applications at the end of September, according to three people familiar with the matter. The visas will be available to people from about 50 countries, one of the people said, while another said that the country list was still in flux as recently as last month. The plans were first reported by Saudi newspaper Okaz, which said the visas would be issued online or on arrival for a fee of 440 riyals ($117) starting Sept. 27, citing people it didn’t identify. (Bloomberg)

United Securities LLC, P.O. Box 2566, Postal Code – 112, Ruwi, Sultanate of Oman Tel: +968 24763300, Fax: +968 24788671, Website: http://www.usoman.com, Email: [email protected]

MENA Morning Note Wednesday, September 04, 2019

CORPORATE NEWS

Oman Al Ahlia Insurance Company announced the interim dividend of 5 bz to shareholders as on 15 September 2019. (MSM)

UAE Dubai will set up a committee to balance property supply and demand as a slump in prices weighs on developers in the Middle East’s business hub. The emirate’s ruler Sheikh Mohammed Bin Rashid Al Maktoum said in a tweet he wanted the committee to ensure that “semi- government real estate companies in Dubai won’t compete with private-sector investors.” Members of the committee will include companies such as Emaar Properties PJSC, Nakheel PJSC, Dubai Properties Group and Meraas Holding LLC, according to a statement posted on the government’s Media Office website. Read: Dubai’s ‘Long Decline’ in Property Prices Isn’t Over Yet for S&P Property prices in the U.A.E., the second-biggest Arab economy, have dropped about 27% since October 2014 amid excess supply and sluggish economic growth. S&P Global Ratings expects prices in Dubai to fall by another 5% to 10% this year. The committee is “a step in the right direction,” said Khatija Haque, the head of Middle East and North Africa research at Emirates NBD in Dubai. “There’s a lot of concern that it may be too little too late, because we already have a number of projects underway which are going to be delivering 15,000 to 20,000 units per year for the next two years.” The Dubai Financial Market Real Estate Index lost 2% on Tuesday, trimming this year’s gain to 6.4%. The measure tumbled 39% in 2018. (Bloomberg)

Bonds of Aabar Investments sank the most on record after auditors raised concerns about the financial well- being of the company, the second-largest shareholder of Italian lender UniCredit SpA. The euro-denominated bonds due in March plummeted 22 cents to 75 cents as of 6:31 p.m. (Bloomberg)

Arabtec Holding PJSC today announced the appointment of Wail Farsakh as Group Chief Operating Officer. Wail has over 33 years’ experience in the UAE starting as a structural engineer, progressing to General Manager of Dutco Balfour Beatty, currently known as DBB Contracting. (DFM)

Arabtec announced that Arabtec Holding and Trojan Holding LLC are both willing to explore the possibility of entering into a cooperation agreement with a view to collaborate in the construction sector. The company will keep the market updated if an agreement is reached or otherwise. (DFM)

Saudi Arabia Saudi Aramco has told Saudi investment banks that it will invite pitches around the end of this month from local underwriters seeking a role on the company’s domestic listing, people with knowledge of the matter said. Aramco is considering a number of possible structures for its IPO, and no final decisions have been made, according to the people, who asked not to be identified because the information is private. (Bloomberg)

Saudi Aramco aims to select underwriters for its initial public offering as soon as this week, as the state energy giant accelerates preparations for the world’s biggest share sale, people with knowledge of the matter said. Global investment banks are finishing up a week of pitches that started last Tuesday in Dhahran, the eastern Saudi city where Aramco is based, according to the people. Some firms seeking a role on the deal made presentations in Dubai or London, the people said. Aramco plans to tell banks later this week or early next week whether they got a role on the offering, the people said, asking not to be identified because the information is private. (Bloomberg)

The board of directors of Leejam Sports Company announced SAR 0.5049/Share as dividend for the second quarter of 2019. The maturity date is fixed as Monday 09 September 2019. (Tadawul)

Saudi Automotive Services Company signed with NCB, along term financing agreement of SAR 100 million short term financing facility of SAR 55 million and hedge facility of SAR 11.25 million. (Tadawul)

Bahrain Aluminium Bahrain BSC is raising $1.5 billion through a syndicated seven-year loan to lower the cost of existing debt, according to three people familiar with the matter. National Bank of Bahrain BSC, Gulf International Bank BSC and Bank ABC are underwriting the facility, which is in the process of being offered to other investors, said the people, asking not to be identified because the information isn’t public. It will replace an earlier loan at better rates and with a longer maturity, they said. Alba, majority owned by Bahrain’s sovereign wealth fund, is doubling capacity at its aluminum smelter to make it the world’s largest, according to its website. Capital expenditure on the project has been earmarked at $3 billion. The company raised $1.5 billion through a dual tranche syndicated loan in 2016 and about $1.2 billion through various tranches in dual currency loans guaranteed by export credit agencies. Spokespeople at Alba, NBB, GIB and Bank ABC didn't immediately respond to emailed requests for comment. (Bloomberg)

United Securities LLC, P.O. Box 2566, Postal Code – 112, Ruwi, Sultanate of Oman Tel: +968 24763300, Fax: +968 24788671, Website: http://www.usoman.com, Email: [email protected]