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. 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 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.