As Global Trade Wars Scare Markets, UAE Business Conditions Grow at Highest Rate YTD…

Global Markets update:
Last week started on a negative note, due to the tussle on trade which affects sharply China and most other emerging markets. Wall Street initially contained the losses thanks to a rebound in energy and tech stocks (and despite bank stocks hit a low for the year), but the rest of the week saw selling orders dominate, as the trade war fears intensified. All major bourses recorded weekly losses which marked also a rather negative month (the Dow Jones lost almost 2%). In Europe the broadly positive end of the European Council helped to contain the losses. MENA markets were also skewed to the downside with the exception of Dubai, Qatar and Bahrain (the latter supported by the Saudi-led rescue package. In currency markets the yen slipped in response to trade tensions while the euro regained ground; the largest movements involved emerging currencies: the yuan touched new lows for the year, while rising energy prices sent India’s rupee to an all-time low against the dollar. The oil price continued its positive streak, unfazed by the additional output agreed in the OPEC-Russia deal. Gold prices slipped close to the lower bound of its multi-month trading range, despite resurgent inflation.

MENA News:
Saudi Arabia, UAE and Kuwait pledged to support Bahrain financially, thereby also calming investors concerns. Prior to the announcement, the country’s credit default swaps had risen to a record high 543 points, sovereign bonds had fallen to record lows and the dinar had weakened in the spot market (prompting the central bank to commit to its currency peg). No details of the aid package were revealed, but the market response was favourable – CDS spreads were down and appetite for government debt recovered.
More than 120k women have applied for licenses in Saudi Arabia and the demand is very high, according to a spokesman for the Ministry of Interior.
A 2018 Global Business & Spending Survey by American Express shows UAE and Saudi Arabia to be more confident to increase spending and investment levels in their business. Around 84% and 83% of finance executives in the UAE and Saudi Arabia respectively were upbeat. Almost three quarters (73%) of Middle East respondents expect to increase headcount by 6% or more this year, compared to 71% globally.
 
UAE News: 
The health of the UAE’s non-oil private sector improved to the greatest extent in the year-to-date, buoyed by strong inflows of new business and output growth. Promotional activity helped to stimulate client demand, expanding at the fastest pace since December last year. The survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector. 
Bilateral trade between UAE and Hong Kong touched USD 10.87bn in 2017, from USD 10.59bn a year ago. Road vehicles, telecommunications equipment, electrical machinery are few of the top imports from Hong Kong.

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SOURCES:
Nasser Saidi & Associates
CPI Financial