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Global Home > Middle East

Sector-Wide Government Support for Qatari Banks Again in 2017

The Qatari authorities' propensity to support domestic banks was again evidenced in 2017 with a cumulative USD40 billion deposit injection (June-December) in the banking system.

Oil Windfall to Test Durability of Gulf Exporter Reforms

Gulf sovereigns are enjoying a fiscal windfall from the recovery in oil prices, but this will test the durability of improvements to the structure and management of public finances made in the region since the 2014 oil shock.

New Regulation to Drive Consolidation in Saudi Arabian Insurance Sector

We expect Saudi Arabia's new solvency framework introduced in 2018 to drive consolidation among the country's smaller insurance companies as minimum capital requirements increase. Foreign participation in the sector is also likely to grow, as the Saudi Arabian Monetary Authority appears to be actively encouraging foreign investment.

Rating action

Affirmed: Saudi Arabia at 'A+'; Outlook Stable

We expect the central government deficit to narrow only gradually, to 6.4% of GDP in 2019 (SAR180 billion), from 8.3% in 2017, as renewed growth in spending offsets sharp increases in both oil and non-oil revenue.

rating action

Qatar's Outlook Revised to Stable; Affirms at 'AA-'

Qatar has successfully managed the fallout from last year's rupture of trade, financial and diplomatic relations with the Quartet consisting of the UAE, Saudi Arabia, Bahrain and Egypt. Public sector liquidity injections have stabilised the banking sector and stemmed the outflow of non-resident funding. 

Sukuk Volumes Grow but Structural Constraints Remain

فيتش: حجم إصدارات الصكوك يشهد نمواً، مع وجود قيود هيكلية

The relatively moderate growth in sukuk volumes in 1Q18 highlights continued interest in the asset class, but also the structural constraints on faster expansion. Issuer funding needs and investor appetite for the remainder of the year will be determined by various factors including oil prices, tighter global financing conditions, and investor sentiment in the light of regional tensions in the Middle East. 

Milken Institute 2018 Global Conference

Milken Institute 2018 Global Conference - De-Risking Emerging Markets Investments

Jeremy Carter, Chief Credit Officer, joins panelists at the 2018 Milken Institute Global Conference to discuss the de-risking of emerging markets. ​

US's Iran Move Raises Middle East Risks

The US's withdrawal from the Iran nuclear deal is likely to further increase geopolitical risk in the Middle East. However, the full impact depends on the severity of US sanctions snapback and the responses from Iran, the other parties to the deal, and major regional powers.

Institutional Money Fund Foundations Laid in Saudi Arabia

Overall, we estimate that the Saudi Arabian money fund sector grew by around 10% over the three years to end-December 2017 in US dollar terms, with asset expansion particularly high in 2017. This compares with a global money fund growth of 5% over the same period.

2018 Milken Institute MENA Summit

One Belt One Road - Exporting China's Domestic Development Story​

James​​ McCormack, Global Head of Sovereign and Supranational ratings, joins thought leaders in Abu Dhabi to assess China's One Belt One Road Initiative, as a part of Fitch Ratings' sponsorship of the Milken Institute inaugural MENA Summit.

rating action

Downgrade: Bahrain to 'BB-'; Outlook Stable

The government has yet to identify a clear medium-term strategy to tackle high deficits and there is no clarity on a timeline towards the development of such a strategy. The government has continued to implement a number of measures to raise revenue and trim spending, including excise taxes at end-2017 and fuel price increases in January 2018. 

Saudi Bankruptcy Law Paves Way for Bank Resolution System

New bankruptcy legislation in Saudi Arabia, approved last week, may be a key step in the development of a legal infrastructure for resolving failed banks. But we believe the Saudi authorities will still provide support to local banks, particularly systemically important ones, if required, even once a resolution framework is in place.

rating action

Downgrade: Arab Bank to 'BB'; Outlook Stable

The downgrade of Arab Bank reflects its high lending growth in Jordan (23% in 2017, well above the sector average of about 8%), which we views as a challenging environment. This increased exposure to the Jordanian economic environment adds to an already high exposure to the Jordanian sovereign relative to the bank's equity via holdings of government securities. 

Qatar Deficit Narrowing But Public Finance Risks Persist

Recent data show Qatar's fiscal deficit is narrowing despite the economic boycott that began in June. But the dispute still presents risks to public finances, and is one factor reflected in the Negative Outlook on Qatar's 'AA-' sovereign rating. 

What to Watch in 2018

Outlook Compendium for Global Oil and Gas

Saudi Settlements Set to Bolster Sovereign Balance Sheet

Saudi Arabia's attorney general said last week that the Kingdom would receive close to USD107 billion in settlements from some of the businessmen and officials detained by the new anti-corruption commission last November. Most of the individuals held have been released, but 56 remain in custody, the attorney general said. 

Kuwait's Fiscal Strengths Mask Long-Term Challenges

We have raised our estimate for Kuwait's fiscal surplus in FY18 (ending 31 March 2018) to 1.9% of GDP, from 0.2% previously. Recent data published by the Ministry of Finance indicates that Kuwait's budget was close to balance in the first nine months of FY18, with revenues at 84% of original budget allocations, but spending considerably lower, at 63%. 

2018 Credit Outlook Conference

Risks and Problems with China

Panellists at the Fitch Ratings credit outlook conference 2018 debate the ever changing market in China.

Saudi Fiscal Reform Progresses but Framework Incomplete

Recent fiscal measures in Saudi Arabia will raise government revenues sustainably, but spending increases highlight that commitment to consolidation is constrained by the desire to support economic growth.

Risks to Watch: Middle East

Next in Risks to Watch, Jan Friederich, Head of Middle East and African Sovereigns, discusses the Middle East in 2018, including key geopolitical risks facing sovereigns in the region over the next year and beyond. ​

rating action

Downgrade: Oman to 'BBB-'; Outlook Negative

Oman's sovereign balance sheet strengths are dwindling. We forecast government debt will hit nearly 55% of GDP by end-2019, from 41% of GDP at end-2017 and just 13% of GDP at end-2015. 

GCC Islamic Banks' Standalone Strength Weaker than Region's Conventional Banks

The sovereign ability to provide support has diminished in Saudi Arabia and Qatar, and this has reduced the average IDR by one notch in these countries since last year. The IDRs are on Negative Outlook in Qatar. Nevertheless, the sovereign willingness to provide support has remained extremely strong throughout the GCC and virtually no progress towards resolution has been made.

2018 outlook

GCC Islamic Banks' Outlook Negative

Of its rated Islamic banks, 17% in the Gulf Cooperation Council (GCC) region have a Negative Outlook. All the Negative Outlooks are in Qatar and are driven by the Qatari political dispute, which is affecting Qatar's ability, but not propensity, to provide support its banks. More Global 2018 Credit Outlooks

Rating Action

Bahrain's Outlook Revised to Negative; Affirms IDR 'BB+'

Bahrain's ratings are supported by high GDP per capita and human development indicators (relative even to the BBB median), a developed financial sector and the boost to external financing flexibility from strong GCC support. 

Credit Hotspot: Political Risk

Latest: Saudi Arrests Increase Political Uncertainty

Video

Fitch Ratings Saudi Arabia Office Opening Event

Excerpts from our KSA Credit Outlook panel include James McCormack, Global Head of Sovereign Ratings at Fitch Ratings, Fahad Al-Deweesh, CEO of J.P. Morgan Saudi Arabia, Tim Cooper, Chief Economist at BMI Research, among others

Outlook for Saudi Arabia's Sovereign Rating
Global Privatization in Context
Investor Reaction to Saudi Arabia's Vision 2030 Plan

Fitch Ratings Hosts Office Opening Event in Riyadh, Saudi Arabia

To mark the occasion, Fitch hosted an event in Riyadh with participation from senior representatives from Tadawul, Jadwa Investment Company and JP Morgan. This follows authorization obtained from the Capital Market Authority (CMA) in April 2017 to conduct credit rating activities in the Kingdom of Saudi Arabia.
 

why forum

Why Green Sukuk Could be a Growth Driver for Islamic Finance

Created to fund projects with positive environmental benefits, green bonds have become rapidly popular. Islamic Finance is one of the latest sectors to begin exploring the possibilities of what has been called “socially responsible” investing. Fitch Ratings' Bashar Al Natoor, Global Head of Islamic Finance discusses. 

DUBAI TV

Green Sukuk Opportunities and Challenges

Fitch Ratings's Global Head of Islamic Finance Bashar Al Natoor weighs on green sukuk opportunities and challenges. He speaks on Dubai TV.

GCC Oil & Gas

Myriam Affri, Senior Director, Corporates, discusses the credit metrics surrounding the over/undersupply of oil and the overall outlook for the industry.

Focus on Saudi Arabia

Jan Friederich, Head of MENA Sovereigns, considers the question of reforms in Saudi Arabia, following the change in royal succession and discusses the sovereign rating impact of a Saudi Aramco IPO.

Overview of GCC Banks

Redmond Ramsdale, Head of GCC Banks, considers the impact of tighter liquidity on GCC banks and discusses the deterioration in asset quality metrics.

Saoud Sulaiman Al-Behairi Appointed General Manager of Fitch Ratings in Saudi Arabia

Appointment of Mr. Al-Behairi follows the recent announcement that Fitch Ratings has obtained authorization from the Capital Market Authority to conduct credit rating activities in the Kingdom of Saudi Arabia and is establishing an on-the-ground presence in Riyadh.

Fitch Wins The Asset's Best Islamic Finance Rating Agency Award

Fitch Ratings has been named the Best Rating Agency for Islamic Finance by The Asset, a leading financial magazine in the Asia-Pacific region.

Practical Skills to Succeed in the Industry

Last year Fitch Learning delivered over 300 professional public courses worldwide and provided training to over 1,300 clients. See the full list of courses from Fitch Learning.

Fitch Ratings Authorized to Conduct Credit Rating Activities in the Kingdom of Saudi Arabia

Fitch Ratings today announces it has obtained authorization from the Capital Market Authority (CMA) to conduct credit rating activities in the Kingdom of Saudi Arabia. To support the ongoing development of Saudi Arabia's capital market, Fitch Ratings will establish an on-the-ground presence in Riyadh.

Contacts

Saoud Al Behairi

Saudi Arabia

Saoud Al Behairi

General Manager

+966 11 484 7140

Wael Mourad

Middle East

Wael Mourad

Business Inquiries

+971 4 424 1204

Jay Leitner

Middle East & Sub-Saharan Africa

Jay Leitner

Business Inquiries

+971 4 424 1222