MSM Index: 53

MENA Morning Note Monday, November 05, 2018

ECONOMIC NEWS Value Previous % Oil prices fell on Monday as the start to US sanctions against Iran’s fuel exports was GCC softened by waivers that will allow major buyers to still import Iranian crude, at least 31-Oct-2018 Closing Change temporarily. Prices came under pressure as it became clear that Washington was allowing MSM 4,424.86 4,422.17 0.06% several countries to continue importing crude from Iran despite the sanctions, which officially started on Monday. The US said on Friday it will temporarily allow eight Dubai 2,794.98 2,805.22 -0.37% importers to keep buying Iranian oil. Washington has so far not named the eight, referred Abu Dhabi 4,919.84 4,920.67 -0.02% to as “jurisdictions,” a term that might include Taiwan which the US does not regard as a country. China, India, South Korea, Turkey, Italy, the United Arab Emirates and Japan Saudi Arabia 7,846.93 7,879.37 -0.41% have been the top importers of Iran’s oil, while Taiwan occasionally buys Iranian crude. Bahrain 1,315.18 1,313.23 0.15% Japan said on Monday it was in close communication with the US. While Chief Cabinet Secretary Yoshihide Suga declined to detail any potential sanction waivers, he said his Qatar 10,331.14 10,280.96 0.49% government had asked Washington that sanctions should not have an adverse impact on Kuwait 5,072.89 5,069.36 0.07% Japanese companies. (Reuters) Egypt 13,170.28 13,202.32 -0.24% Asian stocks were hammered on Monday as fears of faster rate hikes in the United States 8,243.32 8,432.41 -2.24% and uncertainty around the Sino-U.S. trade war dented risk sentiment, while sterling

jumped to two-week highs on hopes of an orderly Brexit. “We expect U.S.-China trade Value tensions to get worse before they get better,” Citi analysts said in a note. “Although trade Asia % Change growth has held steady, concerns are rising in business surveys,” they added. “Equity 01-Nov-2018 markets do not seem to be fully incorporating the risks of an escalation of tensions yet, NIKKEI 21,962.65 -1.26% which could have an effect on investment, sentiment, inflation, and growth.” Sentiment is Hang Seng 25,785.20 -2.65% also broadly expected to be nervous ahead of U.S. congressional midterm elections on Tuesday. Opinion polls show a strong chance that the Democratic Party could win control Shanghai 2,649.84 -1.00% of the House of Representatives after two years of wielding no practical political power Value USA % Change in Washington. (Reuters) 31-Oct-2018

Oman Dow Jones Ind. 25,270.83 -0.43% Oman's Duqm Refinery said it had signed a $4.61 billion multi-sourced Sharia compliant S&P 500 Index 2,723.06 -0.63% project financing agreement. "The financing is provided by 29 reputed financial NASDAQ 7,356.99 -1.04% institutions from 13 countries; insurance and guarantees are provided by three major Value export credit agencies," the Refinery said. The financing is the largest project financing EUROPE % Change and the largest Sharia-compliant facility for a green field project in Oman. (Zawya) 31-Oct-2018 FTSE 100 7,094.12 -0.29% PDOs largest ever gas project, Rabab Harweel Integrated Project being developed with a whooping investment of around US$5bn is likely to start production in late 2019, a senior DAX 11,518.99 0.44% official from the company said on Sunday. Oman produces roughly around 100mn cubic CAC 40 5,102.13 0.32% meters of gas per day, but it is not enough to meet the requirement and still imports a significant amount of gas from Qatar through a pipeline to meet growing demand. Value Currencies % Change However, PDO along with the Ministry of Oil and Gas officials have expressed optimism 01-Nov -2018 about the possibility of increasing natural gas production in the country with promising early results in projects such as Khazzan, RHIP and Yibal Khuff. (Muscat Daily) USD-JPY 113.2200 -0.02%

USD-OMR 0.3850 0.00% The sultanate’s crude oil production, including condensates, stood at 265.46mn barrels for the first nine months of 2018. This is against an output of 264.61mn barrels for the EUR-USD 1.1385 -0.03% corresponding period of 2017, according to the latest data released by the NCSI. Of the total production, crude oil production was down by 2.2 per cent at 236.01mn barrels GBP-USD 1.2985 0.12% while condensates production rose 25.8 per cent to touch 29.46mn barrels. Oman recorded a daily average crude oil production of 972,400 barrels during January- Value September period of 2018. The average price of Oman crude surged by 32.7 per cent to Commodities % Change US$67.2 per barrel in the January-September period, from US$50.6 per barrel in the 01-Nov-2018 same period last year. The sultanate’s daily oil production stood at 970,600 barrels last Oil 62.68 -0.73% year. Oman’s natural gas production and imports rose 11.6 per cent to 34.21bn cubic meters in the first nine months of 2018, from 30.65bn cubic meters for the same period a Gold 1,233.80 0.04% year ago. (Muscat Daily) Silver 14.72 -0.24%

Oman Oil Marketing Company’s ship bunker fuel supply capabilities were showcased to industry leaders from Europe, Asia, USA, and the Middle East at the Gas & LNG Middle Note: All the above data updated at 8:00 AM, East Summit 2018. With mandates for cleaner fuels coming into effect by 2020, industry Muscat time (5:00am GMT) experts predict that by 2030, demand for LNG will grow from its current 1 million tonnes per annum to anywhere between 20 and 30 million tonnes per annum. (Times of Oman)

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.

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 Monday, November 05, 2018 UAE The UAE will pump Dh486 billion to ramp up its oil production by ADNOC, which will also help the state-owned oil firm to become self-sufficient, as well as to be a net gas exporter in the coming years. Adnoc will increase its oil production to four million barrels per day by 2020 and five million bpd by 2030. The announcement comes on the eve of US sanctions on Iran's vital oil sales to force Tehran into negotiations to scrap its nuclear energy and ballistic missile programmes. The council announced new discoveries of gas in place, totalling 15 trillion standard cubic feet. It also announced new discoveries of one billion barrels of oil in place and approved Adnoc's new five-year business plan and capital investment growth of Dh486 billion between 2019 and 2023. The gas strategy will sustain LNG production to 2040 and allow Adnoc to seize incremental LNG and gas-to- chemicals growth opportunities. (Zawya)

The results of the General Index on Consumer Confidence in Abu Dhabi's economic performance during the second quarter of 2018, issued by the Department of Economic Development - Abu Dhabi, showed a considerable improvement in confidence and optimism levels among consumers in Abu Dhabi. The levels of prevailing confidence among consumers in the Emirate represent one of the key enablers supporting the business environment and economic performance. The index said that the latest findings mark a significant rise compared with the same period in 2017, reflecting the extent of consumer confidence in the Emirate's economy to take advantage of the opportunities available, in addition to the continuing improvement in while keeping pace with global economic growth rates. (Zawya)

The UAE is home to one of the world’s leading peaceful nuclear energy programmes, said Secretary-General of the International Nuclear Law Association, INLA, while noting that the country’s coordinated efforts are unique, and the achievements of the Barakah Nuclear Plant are impressive. "The progress of this programme, since its inception a little more than ten years ago, has been spectacular, and we look forward to the commissioning of the first reactor," the INLA Secretary-General enthused. (Zawya)

Emirates is edging towards a deal with Rolls-Royce RR.L to power its latest Airbus A380 superjumbos but has not yet reached a final agreement. The fate of a lifeline order for up to 36 of the double-decker aircraft, of which Emirates already has over 100 in operation, has been widely questioned due to inconclusive talks over a separate deal between Emirates and engine makers. Industry sources have said Emirates is unhappy with the performance of Rolls-Royce Trent 900 engines on A380s already in service and that a shortfall in efficiency has meant Rolls-Royce having to pay hefty penalties. (Zawya)

The number of students at Dubai International Academic City has witnessed a surge in student registrations in the 2018-2019 academic year, with 27,500 students registering, marking a seven percent increase over the previous year. The increase is especially significant considering the latest trends in the global education market. According to the Wall Street Journal, the US experienced a drop in transnational student numbers with 17 percent fewer visas been issued. That is a 40 percent drop against its 2015 peak. Yet India and China have taken the biggest losses, with a 28 percent drop in visas for Indian students and 24 percent, respectively, for Chinese students. The UAE has also recently replaced the one-year student visas with five-year visas and, in case of exceptional students, up to 10-year visas, acknowledging the nation’s focus on attracting and retaining professional and skilled talent. (Zawya)

The Dubai Land Department said the real estate brokerage commissions from the sale of land, building and residential units during the first nine months of the year surged to Dh842 million. The emirate's brokers earned a total of Dh429 million from land sales, Dh73 million from building sales and Dh340 million from residential unit sales through a total of 18,121 transactions during that period. The report also revealed high activity among women as real estate brokers in the market, where 1,901 female brokers registered 5,617 transactions with commissions amounting up to Dh261 million. Al Hashimi lauded the substantive and essential roles played by real estate brokers and real estate brokerage offices, stressing that 5,622 brokers contributed to enhancing the vitality of the sector during the reporting period. (Zawya)

Abu Dhabi's Department of Energy said on Sunday it was studying tenders for developing the Taweelah desalination plant. Seven offers were received and opened, the department said in a statement, adding that "it expects to register the lowest production cost of 8.26 dirhams per 1,000 gallons". ACWA Power, Engie, Sumitomo, Marubeni, Veolia, Valoriza, Utico, Cobra Instalaciones y Servicios, Orascom Construction, Samsung Engineering Co, Acciona Agua, Pal Group, Suez International, Sojitz and Besix SA are among the companies taking part. (Zawya)

Saudi Arabia The Saudi Bureau of Investigation and Prosecution warned employers across the Kingdom against keeping passports of workers to force them into working, abuse or threaten them, describing this as “human trafficking”. Human traffickers will be punished with penalties of up to 15 years of imprisonment and/or a fine of up to SAR 1 million. Penalties will be increased in case human trafficking crimes are committed against women, children or people with special needs. The Saudi Ministry of Labor and Social Development had earlier said employers who keep the passports, visas or medical certificates of their employees will be fined SAR 2,000. (Argaam)

SAGIA plans to invite 200 foreign entrepreneurs and 50 international venture capital funds to the Kingdom next December. SAGIA is seeking international innovators and entrepreneurs to launch their start-ups in the Kingdom, he said, adding that the authority focuses on IT and Fintech sectors, as well as entertainment, sports, and health technology. Government funds are being established now, such as Insha’at Fund, in an effort to attract venture capital investments and to support local and foreign projects in the Kingdom. (Zawya)

The number of online stores registered on Maroof has increased to 20,000 in 15 diversified activities, according to a Ministry of Commerce and Investment 2018 third quarter report. The platform is to ease concerns about payment protection and authenticity of products while shopping online. All brands listed on Maroof comply with Saudi trading rules and regulations, and electronic store sellers are accredited. The platform also helps to enhance the quality of e-store services through customer feedback and evaluation, and electronic store owners find that Maroof's free service provides a better opportunity for attracting traffic and sales. (Zawya)

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 Monday, November 05, 2018 Qatar Qatar named the head of its largest bank as the new trade minister and restructured the boards of its state-run energy firm and sovereign wealth fund amongst other changes in a top-level shake-up on Sunday. It was the first government reshuffle in Qatar, the world's top liquefied natural gas producer, since early 2016, but diplomats and analysts said the changes did not represent a significant shift in power in the world's largest liquefied natural gas exporter. Qatar's ruler issued decrees outlining changes to the boards of Qatar Petroleum and Qatar Investment Authority. (Zawya)

The bilateral relations between Qatar and Kazakhstan have witnessed significant growth in all sectors, including trade and investment in several promising sectors of the two fast growing economies. And the economic cooperation is expected to see major growth in the coming days as both sides are working aggressively to boost ties. Al Kuwari noted that Qatar Chamber highly welcomes enhancing cooperation between Qatari companies and their counterparts from Kazakhstan, in line with the MoU signed between both countries’ chambers during the “Made in Qatar” expo last year. The MoU aimed at strengthening cooperation between the Qatari and Kazakhstani private sector and increase mutual visits among both countries’ businessmen in a view with establishing joint ventures and projects as well as exchanging expertise between both countries’ companies, he added. (The Peninsula)

Kuwait Kuwait National Petroleum Company said Sunday 96.9 percent of its Biofuel project was completed by end of October. The USD 15.2 billion project consists of two parts: upgrading existing units in Ahmadi, Shuaiba and Abdullah Port Refineries as well as building new ones. Al-Mutairi said work was underway to building 22 new units in Abdullah Port, the most important of which was the crude oil distillation, with a production capacity of 264,000 barrels per day. There are 17 units being prepared in Ahmadi Refinery, most importatly the coal production unit with a capacity of 37,000 barrels per day, Al-Mutairi explained. He said 3.886 billion KD were so far spent on the project, including KD 890 million to build a central operation unit, the largest in the Middle East. KNPC signed funding agreements totaling USD 6.245 billion, he said, and the company had spent USD 5.545 billion. (Zawya)

CORPORATE NEWS

Oman Yahya bin Said bin Abdullah Al Jabri, Chairperson of the Special Economic Zone Authority in Duqm, signed two usufruct (land lease) and development agreements with companies. The first agreement was to develop a commercial, tourism, educational, and recreational complex in three phases with Bin Zayed International Investment Group on Sunday. The second pact was with Al Shomookh Mining Industries Company, which plans to implement seven industrial projects in several stages in the heavy industries zone in the Special Economic Zone in Duqm. These projects would provide 2,000 jobs. (Zawya)

UAE Emirates Investment Bank reported 9M18 net profit of AED 31.01 million as compared to AED 42.43 million a year ago. The company achieved total revenue of AED 108.38 million compared to AED 132.27 million a year ago. (DFM)

United Foods Company reported 9M18 net profit of AED 3.25 million as compared to AED 2.39 million a year ago. The company achieved total revenue of AED 102.20 million compared to AED 99.60 million a year ago. (DFM)

Insurance House reported 9M18 net profit of AED 8.39 million as compared to AED 3.85 million a year ago. The company achieved total revenue of AED 104.14 million compared to AED 110.06 million a year ago. (ADX)

Abu Dhabi National Hotels reported 9M18 net profit of AED 154.68 million as compared to AED 141.42 million a year ago. The company achieved total revenue of AED 816.42 million compared to AED 897.36 million a year ago. (ADX)

Emirates Steel has signed a four-year, high value contract with Vale to supply iron ore pellets for its steel production in Abu Dhabi. Emirates Steel and Vale have a long-standing business relationship that commenced in 2007 and has through this four-year contract strengthened into a strategic partnership. Emirates Steel has an iron ore pellet requirement of around 6 million tons per year. The agreement with Vale comes in line with Emirates Steel strategy, which aims to secure flexible source of iron ore at competitive, stable and long term prices. This new partnership plays a vital role to further strengthening the growth of our steel production in Abu Dhabi, as well as realizing our vision of being a world class steel manufacturer providing the highest quality products, services and solutions to our customers and maximizing returns to our shareholders. (Hellenics Shipping News)

At the commencement of 2017, Arabtec Holding PJSC embarked on its 3-phase Strategic Roadmap to stabilise and prepare the business for growth. In June 2017, the Group achieved the first major milestone raising AED 1.5 billion through a Rights Issue. Delivering on its Strategic Roadmap, the Group has now achieved 6 consecutive quarters of profitability supported by positive cash from operating activities and a reduction in net debt. One of the strategic objectives for 2018, ‘Prepare’, is to continue to strengthen the Group’s balance sheet, including the refinancing of debt to provide a sustainable platform for continued growth. Moelis & Co have recently been appointed to advise and assist Arabtec with debt financial modelling, structuring options and engagement with finance providers. (DFM)

Load-Me, has raised $1 million in funding. The first $1 million of the Series A was deployed by three family office establishments from Saudi Arabia, Abdullah Alshawaf, and two Emirati investors. Proceeds from its A-round series will be used to add sea cargo, air cargo and warehousing services to the marketplace platform, Load-Me explained, noting that it was planning on its expanding in new markets. The company also said it was looking to close $5 million in financing before the end of 2018. (Argaam)

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 Monday, November 05, 2018

Meraas said work is progressing well on its Dubai Arena project with the active-lit façade already completed and the elegantly-panelled structure now fully installed. With work already under way on the external infrastructure and landscaping, including paving and parking spaces, and finishing touches being given to the first of 46 hospitality suites, the UAE group's ambitious project is on track for opening in 2019. With a capacity to accommodate 17,000 visitors, the venue will be able to accommodate many events and genres all year-round. (Zawya)

Deutsche Bank's asset manager, has entered into a binding agreement to acquire an equity stake of 15 percent in Dubai-based Neo Technologies. The deal comes as Dubai and other cities across the Gulf region compete to establish themselves as regional powerhouses in financial technology or fintech.. Under the agreement, DWS Group and Neo Technologies will form a partnership to collaborate on the development and expansion of digital asset management services in the Middle East and North Africa region, they said. The value of the transaction was not disclosed. (Zawya)

Dubai International Financial Centre today announced the signing of a MoU with China Banking Association, CBA, noting that the move will be a significant addition to the Centre’s global network of strategic partnerships. DIFC and CBA will collaborate on sharing best practices and delivering enhanced services to their communities of over 2,000 active registered firms operating in the Centre, and 695 member units in the Association in the areas of financial services and FinTech. Additionally, the two entities will explore ways of providing education and professional training to the relevant members of their respective communities, in areas of common interest and mutual benefit. (Zawya)

Saudi Arabia Saudi Arabian Amiantit Co. reported 9M18 net loss of SAR -91.73 million as compared to SAR -54.29 million a year ago. The company achieved total revenue of SAR 674.32 million compared to SAR 559.37 million a year ago. (Tadawul)

Abdullah A. M. Al-Khodari Sons Company’s shareholders are set to vote on a proposed capital hike, on Nov. 27, 2018. In June, the company’s board of directors amended its previous recommendation to raise capital by SAR 566 million instead of SAR 458 million through the issuance of new shares. The board recommended a capital hike of up to SAR 309 million maximum instead of SAR 250 million, through issuance of new shares to vendors and partial or whole settlement of vendor liabilities. They also approved amending a recommendation to increase capital by SAR 257 million maximum instead of SAR 208 million, through issuance of new shares and settlement of outstanding debts owed to major shareholder Abdullah A.M. Al-Khodari Sons Investment Holding Company. (Argaam)

National Agricultural Development Co. will fully secure its needs of green fodder from its animal farm in Sudan. Several suppliers were also contracted by the company outside the Kingdom to supply the required fodder. The related financial impact from halting the cultivation of green fodder, if any, will be announced by year-end, after evaluating the company’s agricultural plan and studying the relocation of its agricultural assets to Sudan, Nadec added. In December 2015, the Saudi agriculture ministry issued a three year green fodder phase-out plan to end local production by 2019. (Argaam)

Alandalus Property Co. has put Panorama Jeddah project on hold, after reconsidering the project’s feasibility study. Sorouh El Marakez Co., which is 25 percent owned by Alandalus, was authorized to decide on the land plot, located in Jeddah's Al Sawari district.. Panorama Jeddah Mall was expected to cost SAR 754.44 million. (Argaam)

Jarir Marketing Co.’s board of directors has recommended a 23.5 percent cash dividend for the third quarter of 2018, at SAR 2.35 per share, amounting to SAR 282 million. (Argaam)

Tasnee is in talks with a strategic investor to sell Cristal’s Ashtabula complex. The deal shows positive signals and will help complete the Tronox- Cristal acquisition deal in the near term. The US FTC had objected to Venator Materials’ request to buy Ashtabula’s complex, citing that the transaction will lessen competition or create a monopoly in the American market. CFO added Tasnee’s Q3 2018 financial results were strong, lauding the efforts of the company’s employees and executive management. (Argaam)

Savola Group said on Sunday that Good Food Co., its wholly owned company, will complete the process of acquiring 51 percent shares in Dubai- based Al Kabeer Group by the end of fourth quarter 2018. The sellers of Al Kabeer Group have fulfilled the pre-conditions for transfer and pending formalities, including the share transfer, will be completed before Dec. 31, 2018. While the transaction amount has increased to SAR 571 million due to registering higher profits after issuance of the combined financial statements, Savola said it would have no material impact on its financials. The food products company had signed a binding share purchase agreement in May for the purchase of 51 percent of the shares of Al Kabeer Group for SAR 565.5 million. (Argaam)

SAFCO announces signing a non-binding MoU with SABIC on Thursday evening 1/11/2018. The MoU outlines the principles of cooperation between the two parties and contains the following key principles: SABIC is taking the necessary steps to establish a limited liability company under the name of SABIC Agri-Nutrients Investments Company – wholly owned by SABIC. The new company owns SABIC's investments in the affiliates that produce Agri-nutrients and some relevant products. (Gulf Base)

Qatar Gibbs Amphibians is establishing a strategic partnership with the Madaeen Al Doha Group for the supply and assembly of the Gibbs Humdinga. The subsidiary, called Gibbs Amphitech, will be based in Qatar and will supply Gibbs products in the region and other key markets including Australia, Canada and the UK. Gibbs Amphibians is the first company in history to successfully create fully homologated vehicles that can exceed 30 mph on water as well as achieve typical speeds on land, transitioning between land and water in under 5 seconds, at the push of a button. (The Peninsula)

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]