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COUNTRY INSIGHTS

Gulf weekly: Turkey invades Syria, Aramco IPO on track
GULF COUNTRIES · Report · 13 Oct 2019

​The political focus briefly shifted away from tensions with Iran as Turkey invaded Syria to combat Kurds and create a zone to resettle (mainly Arab) Syrian refugees. The Gulf states largely condemned the assault, in rare agreement with Iran. Meanwhile, Pakistan’s president is attempting mediatio...

​Understanding domestic politics: Successions, support, sects and settlers (part 1)
GULF COUNTRIES · Report · 11 Oct 2019

This is the first in our series of "Understanding the Gulf" background reports. Pending successions are creating uncertainties in Kuwait and Oman that have unsettled policymaking. Four states have partially-elected parliaments (all except Saudi and Qatar) but none have executive powers and so the...

Gulf weekly: Saudi rating downgraded; hints of possible Saudi-Iran talks
GULF COUNTRIES · Report · 06 Oct 2019

​Fitch’s downgrade of Saudi Arabia to A, in the aftermath of the Abqaiq attack but still leaves its rating well above market-implied levels. The fact that Qatar’s GDP contracted for the first in 26 years is less dramatic than it sounds. There was also GDP data for Saudi (fine) and PMI data for Sa...

OMAN: VAT train slowly chugs into the station, but other reforms will have to wait until it has left
GULF COUNTRIES · Report · 04 Oct 2019

My visit to Oman hasn’t thrown up many surprises; the economy continues to trundle along, and we are still waiting for the government to deliver on its fiscal reforms. VAT should finally happen in 2021, raising around 1.7% of GDP annually. While a number of other fiscal reforms are under con...

​QATAR: A recession may be on us, but doesn’t matter much
GULF COUNTRIES · Report · 01 Oct 2019

Qatar’s economy contracted by -1.4% y/y in real terms in Q2 2019 as the three largest sectors - hydrocarbons, manufacturing and construction - all declined. There is likely to also be a contraction in Q3, indicating a technical recession. However, none of this should concern investors too much be...

SAUDI: Fitch downgrades, S&P affirms, GDP growth slows
GULF COUNTRIES · Report · 30 Sep 2019

Fitch downgraded Saudi Arabia to A today, S&P affirmed it at A- on Friday. Moody’s has a review scheduled for 25th October. Even if Moody’s also downgrades, this is unlikely to delay an expected $10-20bn issuance in Q4, as the low global yield environment more than offsets the impact on pricing o...

Gulf weekly: No US-Iran talks but Abu Dhabi and Bahrain issue bonds
GULF COUNTRIES · Report · 29 Sep 2019

Tensions with Iran and its allies dominated the agenda once again. There was no discernible progress at the UN General Assembly, where the tone and posturing broadly supported our expectations of only a slow movement towards a new nuclear deal but little enthusiasm for escalating the conflict. Th...

​Overview of some key issues in the GCC (conference call summary)
GULF COUNTRIES · Report · 25 Sep 2019

This provides a brief overview of how we view the GCC region and some of the key issues in each country, extracted from our conference call, although this is not intended to be anywhere near comprehensive. Oman’s leadership vacuum is hindering reform efforts, especially fiscal ones, but gas outpu...

​Abqaiq attack reveals vulnerabilities which could reduce conflict risks (conference call summary)
GULF COUNTRIES · Report · 25 Sep 2019

Production seems to have been restored to pre-attack levels more quickly than expected. However, we remain sceptical about the pledge to restore full theoretical capacity back to pre-attack levels by the end of November. Was Iran involved? Probably in some capacity, although important question ma...

Rouhani doubles-down on no talks under sanctions position
GULF COUNTRIES · In Brief · 25 Sep 2019

In his address at the UN General Assembly, the Iranian president, Hassan Rouhani, very firmly reiterated his position that Iran would not negotiate with the US while sanctions remain in place (video - substantive comments start around minute 5). The gist of his argument was that there is no point...

Conference call on oil, politics & debt in the Gulf States - including impact of attacks on Saudi
GULF COUNTRIES · Report · 25 Sep 2019

The recent attack on Saudi Arabia's oilfields brings into focus the risks and opportunities of investment in the GCC countries. With the inclusion of all six GCC countries in the JP Morgan EMBI Indices and four of them in the MSCI Emerging Markets Index, there is surging interest in the region, a...

Trump's UN comments indicate a lack of enthusiasm for a conflict with Iran
GULF COUNTRIES · In Brief · 24 Sep 2019

World leaders will be trying to shape the global discourse over the Middle East at the UN General Assembly in New York this week, and perhaps even talking with Iran. Trump was the first to the podium this morning. He repeated criticism of Iran, blamed it for the Saudi attacks and said "As long as...

Gulf weekly: Aftermath of Abqaiq attack resonates but other business continues
GULF COUNTRIES · Report · 22 Sep 2019

The aftermath of the Abqaiq attack remained the main focus for the oil market and regional geopolitics. Developments to date seem to support our view that an escalation is unlikely and the focus is shifting to posturing and possible negotiations at the UN General Assembly over the next few days. ...

After Abqaiq: A quick recovery and reasons to de-escalate
GULF COUNTRIES · Report · 18 Sep 2019

Aramco says it’s restored Khurais output and about half of Abqaiq, with a full return to normal in two weeks. The oil market seems to believe Aramco, which we think can restore output before fully repairing the damage because the facilities had previously been operating below capacity. Aside from...

Is lending to bankrupt countries really a good idea?
GULF COUNTRIES · Report · 18 Sep 2019

There are a number of Middle Eastern states that would struggle to access international bond markets without the backing of the wealthy Gulf states. We analyze how this politics of support is unfolding across the region and examine differing oil price scenarios out to 2030 using our measure of de...

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