MENA Business Telegraph Monitor – April 7

MENA Business Telegraph Monitor – April 7

MENA Business Telegraph Monitor – April 7

Oil/Jobs – “The jobs and livelihoods of some 300 million people are at risk in the current crisis in the global oil business, according to Fatih Birol, executive director of the International Energy Agency (IEA). Speaking exclusively to Arab News, Birol said the oil industry is going through ‘perhaps the worst time in its history, and this could have major implications for the global economy, financial markets, and even more for employment,'” Arab News reports.

Qatar/Gas – “Qatar Petroleum (QP) will postpone the start of production from its new gas facilities until 2025 following a delay in the bidding process, Minister of State for Energy Affairs H E Eng. Saad bin Sherida Al Kaabi, the President and CEO of QP, said. In an interview with Reuters, HE Al Kaabi underlined that Qatar Petroleum is pressing ahead with foreign as well as domestic expansion despite the global market turmoil caused by the coronavirus pandemic,” The Peninsula reports.

Egypt/Infrastructure – “North Sinai Governor Mohamed Shousha announced on Tuesday that construction of the largest desalination plant in Africa and the Middle East has started. The capacity of the first phase is 100,000 cubic meters daily, and that of the second and third phases is 300,000 cubic meters per day,” Egypt Today reports.

Dubai/Covid-19 – “The closure of all commercial activities in Dubai will continue until the end of the national disinfection programme on April 18, it was announced today. In a tweet, Dubai Economy said that exempted sectors will operate as usual,” Al Bawaba reports.

UAE/Taqa – “The board of Abu Dhabi National Energy Company (Taqa) gave the nod to a sale and purchase agreement for its asset swap deal with Abu Dhabi Power Corporation (ADPower) that will create a regional utilities champion. Taqa’s board also approved the issuance of a mandatory convertible bond to ADPower for the planned deal, it said in a statement to the Abu Dhabi Securities Exchange, where its shares trade. The energy firm has also recommended its shareholders to approve the deal at the annual general assembly due to be held on April 29,” The National reports.

UAE/Emaar – “Emaar chairman Mohamed Alabbar has hit back at claims that Emaar has suspended work on all major projects due to Covid-19, describing them as ‘nonsense being peddled by people in the media who have no sense.’ It follows a report by Reuters earlier today that Emaar had suspended work on all major projects including Dubai Creek Harbour due to the spread of the Covid-19 virus.Speaking to Arabian Business, Alabbar said: ‘This is not even speculation or rumour, it is total lies and nonsense. And I am astonished that in this time, when the whole world is on lockdown, people can come up with this kind of thing to damage us. I won’t allow it. Let’s be clear. There is no virus on any of our sites. There are no cases of Covid-19. None of our sites have stopped operating,'” Arabian Business reports.

Israel/Reserves – “Israel’s foreign exchange reserves at the end of March 2020 stood at $126.043 billion, down $5.215 billion from their record level at the end of February, the Bank of Israel reports. The reserves represent 31.9% of GDP, down from 33.2% at the end of February,” Globes reports

Lebanon/Wheat – “Lebanon’s government is considering importing wheat for the first time since 2014, weighing its dwindling supply of dollars against concerns that the coronavirus may threaten the nation’s food security. The Economy Ministry is studying a possible purchase of 80,000 tons of the grain, it said, without specifying the timing. A tender seeking offers from suppliers would require the cabinet’s approval,” Bloomberg/Daily Star of Lebanon report.

 

Charlie Lay: Demand Shocks and the Death of the Bull Market

Charlie Lay: Demand Shocks and the Death of the Bull Market

I recently met Charlie Lay in November of 2019 at the CommerzBank Emerging Markets Macro Conference held in Dubai. Charlie is a Singapore-based senior economist and FX strategist at CommerzBank, one of Germany’s largest banks and its biggest player in trade finance globally (and that’s saying a lot given Germany’s export machine). As Charlie took the stage, a fellow attendee nudged me and said: “you’ll like this guy.” He was right.

Charlie regaled the attendees with a sharp and humorous presentation on China, broader Asia, and the global economy peppered with pop culture references from music and the movies. Beyond the laughs, it was obvious that Charlie knew Asian markets and their intersection with the global economy very well. I gave Charlie a call in Singapore on March 21 to talk through this Covid-19 moment, and trade thoughts on what it all means for Asia, world markets and the broader global economy (and we had an email exchange with minor updates on April 6). Here are some excerpts of his thoughts, edited for brevity.

Supply Shocks vs Demand Shocks

Let’s go back to 2018 – the start of the trade war. That was the beginning of the supply shock which caused people to rethink the global supply chain. Firms began to think: maybe it’s not such a wise idea to put all the production in one location. We saw a glimpse of this in 2011 with Fukushima, but that earthquake did not cause supply disruptions in the US. Rather, flooding in Thailand did. For example, Honda reduced production in the US and Europe because of a shortage of parts from Thailand. So, back then, we had a supply side shock.

Now, with coronavirus, we are seeing a huge demand side shock. In the last 12 months, the world has been in a manufacturing recession. We saw early signs of this in the US while the services sector was still holding up well. Employment growth in the US has been good. We’ve seen 2.2 million jobs per year since the financial crisis, since 2010. Now, we have a demand side shock that exactly hits the services sector. So, the very leg that has been holding up the US economy is in trouble. Financial markets are pricing in the risk of a full blown financial sector shock. That’s why you see a rush to dollars. There is a big scare now in the financial sector that there will be a shortage of dollars. The credit market is seizing up. There is no liquidity. Gold is being sold off. Bonds are being sold off. The world’s deepest and largest market, the Treasury market, has been swinging 50 basis points (we spoke on March 21, 2020).

In the bond market, you cannot find a bid. Fed restarted QE again. This is QE5. QE4 was the Repo market last September. The Fed is trying to desperately avoid a financial sector shock.

“The 11 year bull market is finally dead.”

Now, let’s go back 12 years. The Fed pumped liquidity into the system and there was a massive rally in financial assets. The rich got richer. Hence, the big theme about income inequality that accelerated and the rise of populism. So, in terms of markets: Is Covid 19 the last straw that broke the camel’s back? Are all of the excesses in the market coming to the fore? We have seen a huge build-up in credit and financial assets. Prices were overvalued. Bull markets can stay overvalued for some time, so they need something to recalibrate. Bull markets die from recessions or Federal Reserve interest rate hikes or geopolitical shocks. This time, it’s undone by a health crisis. The 11 year bull market is finally dead.

Main Street will get hit harder. The corporate sector will be hit, and SMEs will be hit most. What we are seeing now is a supply side shock, a demand shock, andthe Fed is desperately trying to avert a full blown financial crisis. However, there is also a health crisis hitting the economy. People are likely to be reluctant to go out and spend even when the all clear comes.

The Legacies and Scars of Covid-19

Every crisis leaves legacies and scars. In the case of Civid-19, the obvious scars are the human tragedy. What about markets? Let’s go back to the 2008 crisis. What happened?, Well, regulation on banks increased and banks pose less of a systemic risk now. For banks, their ability to leverage was restricted. Banks are basically not an issue going into this crisis. They are well-capitalized and not as levered because they are not allowed to do so.

What are the market/economic scars and legacies that will result from this crisis? First, I think we will see a continuation of the rethink of global supply chains. We will see more onshoring and near shoring. This may lead to higher costs of production and higher prices for the consumer. Second, perhaps governments will spend more on research and development, especially in the field of infectious diseases. Third, governments will spend more on healthcare. There will be many more legacies of this global pandemic when it’s all over.

China Economy and Fall-Out

Q1 growth will most likely be negative and even if we get a sharp rebound in the second half, we are unlikely to see more than 4% growth for the full year. The risks are clearly to the downside given that global demand is also hit. China’s major trading partners will in turn be hurt. Unlike 2008, China doesn’t have the luxury of a big bazooka stimulus. It will provide support, of course, by way of lower rates, cuts in RRR (reserve requirement ratios), speed-up infrastructure projects and the like, but it is likely to tread more cautiously this time, cognizant of containing leverage in the system.

MENA Business Telegraph Monitor – April 4-6

MENA Business Telegraph Monitor – April 4-6

Middle East Business Telegraph Monitor – April 4-6

A round-up of business stories from the regional press

Iran/Business – “Iran plans to scale back restrictive measures adopted to minimize exposure to the novel coronavirus in business outlets under its new initiative dubbed Smart Distancing. As per the plan, low-risk businesses are scheduled to resume activities starting April 11 in all provinces, except Tehran that can follow suit on April 18, President.ir reported. High-risk workplaces, including swimming pools, sports centers or any place of gathering, will remain closed until further notice,” Financial Tribune reports.

Oil Price – “Gulf states backed Saudi Arabia’s proposal for an emergency Opec+ meeting that could include the US, the world’s largest producer, for the first time as oil prices continued to fall. The UAE, Opec’s third-largest producer, said it fully backed Riyadh’s calls for a meeting of the producers, which was tentatively set for Thursday,” The National reports.

Algeria/Oil – “Algeria, which chairs the presidency of the OPEC Conference, urged Sunday oil producing countries to seize the opportunity of the meeting scheduled on 9 April in order to agree on “an global, massive and immediate” production cut,” Algeria Press Service reports.

Dubai/Emirates – “Emirates airline is in talks to raise billions of dollars in loans, on top of Dubai’s state bailout for the world’s largest long-haul airline carrier, as the coronavirus pandemic grounds flights. The carrier is reaching out to local and international banks about the funding that will be in addition to the undisclosed amount of financial aid from the government, according to people with knowledge of the matter, who asked not to be identified because the information is private,” Bloomberg/Arabian Business reports.

Iraq/Halliburton Attacked – At least three rockets are reported to have hit near Halliburton‘s site in the Burjesia area of Basra early on Monday morning. It is understood that the incident caused no casualties or damage. It is the first attack to target US energy interests in Iraq in recent months,” Iraq Business News reports.

Saudi Arabia/Carnival Cruise – “The Public Investment Fund, Saudi Arabia’s sovereign-wealth fund, recently purchased a large stake in the embattled cruise lineCarnival. Public Investment disclosed that it owns 43.5 million Carnival shares (ticker: CCL) as of Monday in a form filed with the Securities and Exchange Commission. The fund’s investment amounts to an 8.2% stake in the cruise line. It is now Carnival’s third-largest shareholder, according to S&P Capital IQ,” Barron’s reports.

UAE Economy – “The Central Bank of the United Arab Emirates (CBUAE) said on Sunday it has doubled to $70 billion a stimulus package to support the Gulf state’s economy amid the coronavirus pandemic. ‘The aggregate value of all capital and liquidity measures adopted by the CBUAE since 14 March 2020 has reached 256 billion dirhams ($70 billion),’ the central bank said in a statement,” AFP/Jordan Times reports.

GCC Banks – “The GCC conventional and Islamic banks will see significantly reduced revenue and credit growth in 2020 mainly due to the sharp decline in oil prices, accelerated real-estate price corrections in some markets and drop in vital nonoil economic sectors, said a report. The sharp drop in oil prices and measures implemented by regional governments to contain transmission of the coronavirus (Covid-19) will take a toll on important sectors such as real estate, hospitality, and consumer-related, stated S&P Global Ratings in its report,” Gulf Daily News reports.

Turkey/Hazelnuts – “Turkey, the world’s biggest hazelnut supplier, yielded revenues of $1.65 billion from the nuts exports between September 2019 and this March, according to a regional trade group on April 2. The Black Sea Hazelnut and Products Exporters’ Association data showed that the seven months figure jumped 52 percent from the same period last year,” Hurriyet Daily News reports.

Egypt – “A number of Egyptian businessmen have submitted to the finance ministry several proposals on how to lessen the negative impact of the coronavirus outbreak on the economy, Finance Minister Mohamed Maait said. Maait said in a statement on Monday that the proposals are under consideration, adding that some of these proposals would require legislative amendments, and so the ministry will submit them to the Prime Minister Mustafa Madbouly,” AhramOnline reports.

New Books in Our Humble Reading Room

New Books in Our Humble Reading Room

New Silk Road Monitor Memo

To: The good people of our humble Caravanserai

Re: Library Update

Dear Fellow Travelers,

On this day of 5 April, in the Gregorian Calendar of the Year 2020, we are enriched by the addition of seven new books to our humble, unworthy library. These luminaries bring light to our shelves.

The Wine of Wisdom: The Life, Poetry and Philosophy of Omar Khayyam, by Mehdi Aminrazavi

Syria’s Uprising and the Fracturing of the Levant, by Emile Hokayem

Indonesia, Etc: Exploring the Improbable Nation, by Elizabeth Pisani

The Dawn of Eurasia, by Bruno Macaes

Super Continent: The Logic of Eurasian Integration, by Kent Calder

A Modern Contagion: Imperialism and Public Health in Iran’s Age of Cholera, by Amir Afkhami

China’s Western Horizon: Beijing and the New Geopolitics of Eurasia, by Daniel Markey

Zahra’s Paradise, by Amir and Khalil

 

East Asia Business Telegraph Weekly – April 5

East Asia Business Telegraph Weekly – April 5

A weekly round-up of leading business/economic stories shaping East Asia from the pages of the regional press

CHINA/Finance – “Alibaba affiliate Ant Financial has launched an asset management service in collaboration with US-based asset management firm Vanguard Group to meet investment demands from retail consumers. The service was officially rolled out yesterday through Ant Financial’s smartphone financial service application Alipay, which has some 900 million users,” Shanghai Daily reports

CHINA/Equities – “Luckin Coffee Inc’s shares crashed more than 75 percent after the company revealed an internal investigation that alleged its COO was involved in 2.2 billion yuan ($310 million) in fabricated transactions over the past year. he company, a so-called rival to Starbucks Corp in China, said on April 2 the internal probe revealed the aggregate sales amount associated with the fabricated transactions from the second quarter of 2019 to the fourth quarter of 2019 amounted to around 2.2 billion yuan,” China Daily reports.

REGIONAL/ADB Report – “Regional economic growth in developing Asia will decline sharply in 2020 due to the effects of the novel coronavirus (COVID-19) pandemic, before recovering in 2021, according to the Asian Development Outlook 2020, the Asian Development Bank’s (ADB) annual flagship economic publication. Excluding Asia’s high-income newly industrialized economies, growth will drop from 5.7% to 2.4% this year before recovering to 6.7% next year, says ADB. Nine Asian economies that rely on tourism and commodities are likely to shrink, the ADB said, and the hardest hit would be Thailand,” Thailand Business News reports.

REGIONAL – “The World Bank is estimating that the coronavirus outbreak will cause economic growth to slow significantly this year in China and other East Asian-Pacific countries, throwing millions into poverty. Under a worse-case scenario, the region could suffer its sharpest downturn since a devastating currency crisis more than two decades ago, the bank said in an updated forecast,” Japan Today reports.

S. KOREA/Korean Air – “Korean Air Lines issued a desperate plea for government support Thursday, arguing shared interest and alluding to economic catastrophe if no direct funding is provided. ‘The airline industry is a basic industry that supports a country’s fundamental,’ the company said in a statement. ‘Considering that Korea relies highly on imports and exports, Korean industries could collapse if the airline industry falls,'” Korea JoongAng Daily reports.

HONG KONG/HSBC – “HSBC chief executive Noel Quinn sent a letter to each of the bank’s shareholders in Hong Kong on Friday to explain the lender’s decision to cancel its dividend this week and reassure investors of its strong capital position. The unusual step of writing directly to the bank’s shareholder base in the city came after a torrid three-day stretch that saw about US$15 billion shaved off the company’s market capitalisation after the bank cancelled its final interim dividend for 2019 and said it would not pay a dividend for at least the first three quarters of the year,” South China Morning Post reports.

JAPANA/ANA – “Japanese airline group ANA Holdings Inc. has asked the government-affiliated Development Bank of Japan and private financial institutions to set up credit lines totaling ¥1.3 trillion, it was learned late Friday. With its revenue from passenger flight services tumbling due to a plunge in demand blamed on the coronavirus pandemic, the company aims to make sure that it can secure loans whenever a need arises through the credit lines as the fight against the new virus could take time, according to sources familiar with the matter,” Japan Times reports.

INDONESIA – “Indonesia’s response to contain the COVID-19 outbreak has been slower compared with some other countries in the region despite policies to limit the economic and financial shock being introduced in a relatively coordinated manner, a credit rating agency has said. ‘Indonesia’s response to contain the coronavirus outbreak has lagged some other countries in the region. But its policies to limit the related economic and financial shock have been introduced in a relatively coordinated manner,’ Moody’s Investor Service wrote in a research note published on Friday,” The Jakarta Post reports.

SINGAPORE – “Manufacturing in Singapore fell to its lowest level since 2009 last month. With factories trying to limit their losses from a recession caused by the coronavirus pandemic, a spike in job cuts is a real risk. The Singapore Purchasing Managers’ Index (PMI) declined 3.3 points to 45.4 in March, said the Singapore Institute of Purchasing and Materials Management (SIPMM). It was the second contraction in a row and the lowest reading since February 2009 when the index was at 45 points, SIPMM said in a statement on Friday (April 3),” Singapore Straits Times reports.

THAILAND – “The Thai economy is forecast to shrink by 4.8% by Asian Development Bank (ADB), 5.6% by Siam Commercial Bank’s Economic Intelligence Center (EIC) and 5% by Standard Chartered Bank (Thai), heading for its deepest contraction since the financial meltdown of 1998. ADB predicts GDP to contract by 4.8% in 2020 before recovering to 2.5% in 2021, the bank said in a recent report,” The Bangkok Post reports.

MALAYSIA/Palm Oil – “Malaysia’s palm oil inventories for March likely slipped below February’s end-stocks to 1.65 million tonnes, as better than expected exports offset a small rise in output likely disrupted by the coronavirus pandemic, a Reuters survey showed. March stockpiles likely fell 1.9% from the previous month, its lowest since June 2017, according to the median estimate of nine planters, traders and analysts polled by Reuters,” Reuters/Edge Markets reports.

PHILIPPINES – “The Asian Development Bank (ADB) downgraded its growth forecast for the Philippine economy this year because of the effects of the coronavirus disease 2019 (Covid-19) pandemic on the country. ‘Economic growth is projected to fall to 2 percent in 2020 before a strong recovery to 6.5 percent in 2021, assuming the Covid-19 outbreak is contained by June of this year,’ the Manila-based multilateral lender said in its Asian Development Outlook 2020 report on Friday,” Manila Times reports.

VIETNAM –  Market research firm Fitch Solutions estimates Vietnam’s GDP will grow at its lowest paces in 34 years at 2.8% this year. The growth rate forecast by Fitch Solutions, a unit of credit rating firm Fitch Group, is the lowest since 1986 when the country opened its economy to the world after decades of war,” VNExpress reports.

MENA Business Telegraph Monitor – April 3

MENA Business Telegraph Monitor – April 3

Middle East and North Africa Top Business Stories – April 3

Oil Markets – “The OPEC+ coalition is rushing to pull together a meeting of its members – and possibly other oil producing nations – after President Donald Trump called for a coordinated production cut to stem the historic rout in crude prices,” Bloomberg/Gulf News reports.

Aviation – “The International Air Transport Association (Iata) urged governments to “act faster” to provide financial relief for airlines in the Middle East and Africa, as their collective passenger revenue losses increase to $23 billion (Dh84.48bn) due to the Covid-19 outbreak,” The National reports.

Egypt/Aviation – “Egypt’s airline industry faces a potential loss in revenue of $1.6 billion and 9.5 million fewer passengers due to the coronavirus crisis, the International Air Transport Association (IATA) said,” Ahram Online reports.

Kuwait/Agility – “Kuwait’s Agility, one of the biggest Middle East logistics companies, is taking measures to cut costs and preserve cash as the novel coronavirus pandemic slashes global air freight demand and capacity,” The National reports.

Aviation/Emirates – “Emirates has announced that the airline has received approvals to carry passengers on certain flights, which will start from April 6. The initial flights will commence from Dubai to London Heathrow, Frankfurt, Paris, Brussels and Zurich, with four flights a week to London Heathrow, and three flights a week to the other cities, the airline said,” Gulf Daily News reports.

Libya/Central Bank – “The Head of the Libyan Presidential Council Fayez Al-Sarraj has called on the administration of the Central Bank of Libya (CBL) to attend an emergency meeting to take necessary and urging measures to unite the CBL,” Libya Observer reports.

UAE/Mubadala – “The venture capital arm of Abu Dhabi state investor Mubadala plans to launch a healthcare fund next year to tap into increased demand for investment in life sciences and digital health technology following the coronavirus outbreak,” Reuters/Al-Arabiya Business reports.

Morocco – “‘Give us our money,’ demands a group of home buyers, standing on land that should by now be finished condos — one of many fictitious projects that together comprise what is described as Morocco’s biggest-ever property scam,” AFP/Arab News reports.

Iraq/Coronavirus –  “Iraq has thousands of confirmed COVID-19 cases, many times more than the 772 it is has publicly reported, according to three doctors closely involved in the testing process, a health ministry official and a senior political official,” The Baghdad Post reports.

Iran/Coronavirus – “Iran’s death toll from the new coronavirus rose on Friday to 3,294 as it claimed 134 lives in the past 24 hours, according to Health Ministry Spokesman Kianoush Jahanpur,” Reuters reports.

Egypt/Suez Canal – “Traffic in Egypt’s Suez Canal has not been affected so far by the spread of the new coronavirus, the chief of its authority, Osama Rabie, said on Wednesday,” Albawaba reports.

Qatar – “Qatar, the world’s biggest exporter of liquefied natural gas, hired banks to raise more than $5 billion in bonds as early as next week to shore up its finances against the global coronavirus pandemic and oil-price war,” Bloomberg/Daily Star of Lebanon reports.

 

Whither Belt and Road Amid the Covid-19 Pandemic?

Whither Belt and Road Amid the Covid-19 Pandemic?

Nikkei Asian Review has a good piece on the fate of China’s Belt and Road Initiative (BRI) amid the global Covid-19 pandemic.

Some excerpts from the piece below:

Some think a weakened China will have little choice but to step back and reassess its foreign investments in the post-pandemic world. But a Belt and Road 2.0 could also present new opportunities to wield influence — especially in Southeast Asia — as the European Union and other investors nurse their own wounds…

 

 

Even before the virus panic, the Chinese economy grew just 6.1% last year, the slowest pace in decades. The effects showed up in its investment figures: Foreign direct investment declined by 9.8% from 2018, with nonfinancial outbound direct investment falling 8.2%, according to the Ministry of Commerce.

 

A closer look, however, shows that while investment in Europe and North America plunged, China’s outlays in Asian countries — particularly Southeast Asia — fell only slightly or even increased. This suggests the region could remain a priority even if Beijing cuts back other investments further.

 

“The BRI will not end here. It is too important to Xi’s image,” said Jeremy Garlick, assistant professor of international relations at the University of Economics in Prague. “But it may be transformed and streamlined … as the economy contracts.”

 

The days when China seemingly threw money at everything may be ending, but it still has Xi’s reputation to protect. Overseas projects also remain critical for supporting Chinese corporate earnings and employment while gaining global clout.

MENA Business Telegraph Monitor – April 2

MENA Business Telegraph Monitor – April 2

Oil/Saudi/Russia – “Saudi Arabia and Russia signalled on Thursday they were ready to cooperate to help stabilise the oil market after calls with U.S. President Donald Trump to discuss the slump in prices triggered by the end of a deal to curb output and a collapse in demand,” Reuters reports.

GCC Banks – “The outlook for the banking systems of Saudi Arabia, UAE, Kuwait, Bahrain, Qatar has been changed to negative from stable, said credit ratings agency Moody’s Investors Service in a report on Thursday,” Al Arabiya Business reports.

Iraq/Najaf – “The economy of Iraq’s Najaf province, the main centre of Shiism, will collapse in the next few weeks as a result of travel restrictions imposed to contain the country’s coronavirus outbreak, the governor said on Thursday,” The National reports.

Kuwait – “Kuwait’s central bank announced a stimulus package on Thursday to support vital sectors and small and medium enterprises (SMEs) amid the fallout from the coronavirus epidemic,” Gulf News/Reuters reports.

Lebanon Currency – “The battered Lebanese pound has weakened even more during a coronavirus lockdown, with banks blocking access to already scarce dollars, forcing up their price on the parallel market and the cost of imports the heavily indebted country relies on,” The Daily Star of Lebanon/Reuters reports.

Aviation – “The International Air Transport Association (IATA) has urged Middle East governments to support their airlines with regional revenues expected to plunge by almost 40 percent this year as the spread of the coronavirus (COVID-19) paralyzes global travel,” Arab News reports.

Iraq/Kurdistan – “Gazprom Neft, the oil arm of Russian gas giant Gazprom, will not reduce investment in its project in Iraqi Kurdistan despite a request from the semi-autonomous Kurdistan Regional Government KRG to do so, it said on Tuesday,” EKurd.net reports.

Israel/Aviation – “In a notification to the Tel Aviv Stock Exchange, El Al Israel Airlines has announced that, because of the impact of the Covid-19 virus pandemic, it is extending the suspension of its flights to May 2, 2020,” Globes reports.

Oil Price – “Crude oil futures jumped 10% on Thursday after U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war,” The Peninsula/Reuters reports.

Morocco – “Bank Al-Maghrib Governor Abdellatif Jouahri announced new measures that allow Morocco’s central bank to triple resupply of funds to local banks to counter the effects of the COVID-19 outbreak,” The Arab Weekly reports.

 

MENA Business Telegraph Monitor – April 1

MENA Business Telegraph Monitor – April 1

Middle East and North Africa Top Business Stories – April 1, 2020

Lebanon Debt – “Global investment bank Morgan Stanley said Lebanon would face an uphill task in its efforts to restructure the country’s public debt estimated at $96.5 billion,” The Daily Star of Lebanon reports.

Oil Markets – “Oil slid to $25 a barrel on Wednesday, within sight of its lowest in 18 years, as a report showing a big rise in US inventories and a widening rift within OPEC heightened oversupply concerns,” Gulf Daily News/Reuters reports.

Dubai/Property – “Dubai’s property market will get more time to adjust its supply and demand situation now that the Expo 2020 event is likely to be postponed by 12 months. But, equally important, developers will still need access to new funding – and at a cheaper cost – to make sure ongoing projects do not stall,” Gulf News reports.

Saudi Arabia – “Saudi Arabia has approved the listing of government assets to be privatised on the Saudi stock exchange – Tadawul – following an IPO, the government announced following a virtual meeting on Tuesday,” Arabian Business reports.

Oil Markets – “US President Donald Trump said on Tuesday he would join Saudi Arabia and Russia, if need be, for talks about the sharp fall in oil prices resulting from a price war between the two countries,” Al Arabiya Business/Reuters reports.

Oil Markets – “This is looking like it will be a long and painful oil slump. Even a Russia-OPEC deal, not too likely, will not help much in addressing the enormous demand destruction and buildup of excess stocks. The demand decline in oil markets is massive: 20 million barrels per day or more, not all of which will return even after the crisis ebbs. The price wars have become almost a sideshow, and in their absence, the demand destruction would still hit very hard,” Robin Mills, Middle East oil/gas specialist, says in an interview with New Silk Road Monitor.

Gas Markets – “The impact of current market conditions on gas demand is two-fold. On one hand, it can stimulate demand by increasing its competitiveness compared to other fuels, and on the other hand, reduced economic, industrial and commercial activity can reduce baseload demand, the Doha-based Gas Exporting Countries Forum (GECF) has noted,” The Peninsula reports.

Egypt/Coronavirus – “The COVID-19 pandemic will be devastating to the Egyptian economy in the short term but the overall effect of the disease-induced emergency will depend on how long before it subsides, economists said,” Arab Weekly reports.

GCC Banks – “Gulf banks are limiting their lending to minimize potential losses from the coronavirus crisis and an expected squeeze in dollar liquidity in the oil reliant region, some bankers say,” Reuters reports.

Iran/Coronavirus – “Iran’s president said on Wednesday that, with the advent of the coronavirus, the United States had missed a historic opportunity to lift sanctions on his country, though the penalties had not hampered its fight against the infection,” Reuters reports.

Omar Khayyam: Overheard in the Caravanserai…

Omar Khayyam: Overheard in the Caravanserai…

Overheard in the caravanserai: a merchant, reflecting on the fleeting nature of life, reciting from Edward Fitzgerald’s version of the Rubaiyat of the great hakim Abu’l Fath Omar ibn Ibrahim Khayyam, otherwise known as Omar Khayyam.

 

“Oh, come with old Khayyàm, and leave the Wise
To talk; one thing is certain, that Life flies;
One thing is certain, and the Rest is Lies;
The Flower that once has blown forever dies.”
Share This