​Large drawdown in FX reserves resulting from the unfreezing of government spending that began in mid November 2016. Government’s domestic net asset position fell by an annualized 15.7% of GDP.
Weak B/S growth for the banking sector with 1.6% y/y loan growth recorded in January, though with significantly improving earnings (+15.7% y/y). The banks are well positioned for profitability this year, in our view, following the higher provisions taken in Q4 and as credit re-pricing appears to be improving NIMs again. However, we expect most of earnings growth to be recorded in H2.
Strong POS growth should translate into revenue growth for retailers, corroborating our view of a nearing consumer cycle trough in 2017, despite 5% VAT in 2018 and higher energy prices.
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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