- EY and Mizuho are the latest firms to receive licenses for Regional HQs in Riyadh. [see (1) below]
- A PIF-led consortium signed $3.3bn in power purchase deals for 5.5GW in solar plants.
- Aramco announced plans to buy a 25% stake in Port Arthur LNG in the US.
- A $1.5bn 10-year UAE bond was issued at +60bp.
- Dubai is spending $8bn to upgrade its drainage systems to prevent future flooding.
- Lunate has expressed an interest in buying stakes in Adnoc Gas Pipelines, part-privatized in 2020.
- Adnoc is making progress on its €12bn bid for German chemicals firm Covestro.
- Qatar Airways is in talks to acquire a 20% stake in Virgin Australia.
- KIA is opening an office in Riyadh and Kuwait Finance House may bid for a stake in Saudi Investment Bank.
- Oman’s non-oil GDP growth rebounded to 3.8% in Q1, driven by a 9.2% rise in manufacturing. [see (2) below]
- Oman’s parliament appears to be making progress with the draft Personal Income Tax law.
- National Bank of Bahrain is exploring a possible merger with Bank of Bahrain and Kuwait.
- Bahrain’s foreign minister visited Iran and began talks on restoring diplomatic relations.
- Iran is voting today in its presidential election. Two minor hardliners dropped out to clear the field.
- Netanyahu reiterated opposition to the possibility of a permanent ceasefire in Gaza.
These headlines are taken from a 3,600-word report from my economic research service with GlobalSource Partners, a leading source of independent emerging market intelligence. Click on any report
to get guest access and contact me or GlobalSource’s sales team for more information about subscribing to the service, which also includes the most extensive comparative GCC Databank available, updated weekly. Clients include banks, asset managers and governments spanning the GCC, Asia, Europe and US.
Here are two brief snippets from the report:
(1) More regional HQs are established in Riyadh
- After a slow start, the Regional HQ Program appears to be gathering pace. The program developed as a result of frustration at the large number of companies that served the Saudi market largely out of regional offices in other countries, particularly in Dubai. To receive a license, companies must commit to staff the offices with at least 15 people filling certain key roles related to regional operations.
- Initially, it relied on negative incentives - banning companies without a regional HQ from bidding for most government contracts, a requirement that came into force this year. However, positive incentives were also announced in late 2023, including tax holidays.
- Japan's Mizuho is the latest major bank to receive a license to set up a regional HQ in the King Abdullah Financial District, having previously engaged in the Kingdom’s debt capital market from its Dubai office, including as the sole arranger of SEC’s $1bn loan this year (BB
). Banks had initially hoped to avoid Regional HQ requirements but some are reassessing this, with Goldman Sachs also recently receiving a license.
- EY already has a large presence in the Kingdom, with over a thousand employees. It says that its new regional office will manage its 8,000 staff across 15 Middle Eastern countries, appearing to reflect the spirit of the regional HQ program not merely nominal compliance to retain access to government contracts (AN
).
(2) Oman's GDP growth rebounds in Q1
- Q1 GDP rebounded to 1.7% y/y real growth after a weak result of 0.3% in Q4 (NCSI
).
- The improvement was the result of the non-oil rebound to 3.8% y/y from 1.3% in Q4. Quarterly non-oil growth trends have been highly volatile in recent years which might reflect weaknesses in the data gathering or constant price estimation methodology.
- The major driver of non-oil growth was manufacturing which surged by 12.9% q/q and 9.2% y/y, after three quarters of y/y decline. Refining increased by two-thirds y/y as the new Duqm refinery came onstream and petrochemicals and other manufacturing also grew by 6%. Non-associated gas feeds most of Oman’s downstream industries, which are therefore not negatively impacted by crude oil production cuts in the way that they are in Saudi Arabia.
- Other strong sectors included transport (7.8%), retail & wholesale trade (5.8%) and finance (5.6%).
- However, hospitality remained a substantial drag, contracting by -12% y/y (and by -16% in nominal terms), which is surprising given that tourist numbers were up by 13% y/y in Q1.
