EconSource: Saudi Aramco Confirms it is Studying Potential Share Sale
Saudi Arabia’s government is considering selling shares in state oil giant Saudi Aramco as part of a privatization drive to raise money in an era of cheap oil, Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman told The Economist in an interview.

“That is something that is being reviewed, and we believe a decision will be made over the next few months,” he said. “Personally I’m enthusiastic about this step. I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco.” On Friday, Aramco confirmed that is studying whether to list “an appropriate percentage” of the company’s shares or a bundle of “downstream” units. The findings of its review will be presented to the board of directors, which would make recommendations to the company’s Supreme Council. The initial public offering proposal is consistent with the broader direction of economic reform in Saudi Arabia, including state asset sales and market deregulation, Aramco said. [AFP, BBC, Bloomberg, WSJ, Reuters, 1/7/2016]
 
Turkey’s central bank may begin steps to “simplify” monetary policy at its meeting this month if an easing of market volatility endures, according to the text of a presentation by Central Bank Governor Erdem Basci to parliament’s Planning and Budget Commission. Investors have long urged the bank to move towards using a single interest rate; markets were disappointed by the bank’s failure to simplify policy or hike rates at its last meeting on December 22. The bank’s inaction reignited concerns about political threats to its independence and renewed pressure on the lira. “If the decline in volatility witnessed with the start of global monetary policy normalization is lasting, monetary policy simplification steps could start from the next meeting,” Basci’s presentation said. The next meeting of Turkey’s monetary policy committee is scheduled for January 19. [Reuters, 1/7/2016]
 
Morocco’s government adopted a bill on Thursday outlining planned pension reforms. Unions have vowed to block the reforms, which they say would damage workers’ rights. According to a government statement, the proposed changes to state pension funds include an increase in the retirement age to 63 by 2019, higher workers’ contributions, and an expansion of the calculation base. Workers will have to pay 14 percent of their salaries by 2019 and government contributions will rise in tandem, adding 1 percentage point each year to meet the new plan. Morocco’s four largest labor unions said they are planning sit-ins and strikes in protest of the bill. “We reject the so-called reform that will make the workers pay for the managers’ mismanagement,” said a leader of the Moroccan Worker’s Union Mohamed al-Wafi. “The increase in the retirement age should be optional and the state should pay two thirds of the contribution,” he said. Wafi added that unions are planning a sit-in on Tuesday outside the Moroccan parliament and are discussing a general strike. [Reuters, 1/7/2016]
 
The World Bank lowered its forecast for Egypt’s economic growth in fiscal year 2015/2016 from 4.2 percent to 3.8 percent, warning of the implications of the Russian metrojet crash for the tourism industry and a foreign currency shortage. “The contraction in foreign currency inflows that would accompany a shrinking tourism industry would not only negatively impact growth, but would exacerbate the existing foreign currency shortage,” the Bank said in its Global Economic Prospects report. The Bank predicts “an additional round of currency devaluation” to be taken by new Central Bank Governor Tarek Amer to boost foreign currency reserves. However, the Bank warned that a further round of devaluation would mean “monetary policy will have to resist pressure on an inflation rate that is already high.” The Bank also noted that there is space to accelerate fiscal reforms, even the introduction of a second round of energy subsidy cuts and a plans to implement a value-added tax have stalled. [Ahram Online, Aswat Masriya, 1/7/2016]
 
Also of interest
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Saudi Aramco confirms it is studying potential share sale
Saudi Arabia’s government is considering selling shares in state oil giant Saudi Aramco as part of a privatization drive to raise money in an era of cheap oil, Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman told The Economist in an interview. “That is something that is being reviewed, and we believe a decision will be made over the next few months,” he said. “Personally I’m enthusiastic about this step. I believe it is in the interest of the Saudi market, and it is in the interest of Aramco, and it is for the interest of more transparency, and to counter corruption, if any, that may be circling around Aramco.” On Friday, Aramco confirmed that is studying whether to list “an appropriate percentage” of the company’s shares or a bundle of “downstream” units. The findings of its review will be presented to the board of directors, which would make recommendations to the company’s Supreme Council. The initial public offering proposal is consistent with the broader direction of economic reform in Saudi Arabia, including state asset sales and market deregulation, Aramco said. [AFP, BBC, Bloomberg, WSJ, Reuters, 1/7/2016]

Turkish central bank says may begin simplifying rate policy this month
Turkey’s central bank may begin steps to “simplify” monetary policy at its meeting this month if an easing of market volatility endures, according to the text of a presentation by Central Bank Governor Erdem Basci to parliament’s Planning and Budget Commission. Investors have long urged the bank to move towards using a single interest rate; markets were disappointed by the bank’s failure to simplify policy or hike rates at its last meeting on December 22. The bank’s inaction reignited concerns about political threats to its independence and renewed pressure on the lira. “If the decline in volatility witnessed with the start of global monetary policy normalization is lasting, monetary policy simplification steps could start from the next meeting,” Basci’s presentation said. The next meeting of Turkey’s monetary policy committee is scheduled for January 19. [Reuters, 1/7/2016]

Morocco government adopts draft bill on pension reform
Morocco’s government adopted a bill on Thursday outlining planned pension reforms. Unions have vowed to block the reforms, which they say would damage workers’ rights. According to a government statement, the proposed changes to state pension funds include an increase in the retirement age to 63 by 2019, higher workers’ contributions, and an expansion of the calculation base. Workers will have to pay 14 percent of their salaries by 2019 and government contributions will rise in tandem, adding 1 percentage point each year to meet the new plan. Morocco’s four largest labor unions said they are planning sit-ins and strikes in protest of the bill. “We reject the so-called reform that will make the workers pay for the managers’ mismanagement,” said a leader of the Moroccan Worker’s Union Mohamed al-Wafi. “The increase in the retirement age should be optional and the state should pay two thirds of the contribution,” he said. Wafi added that unions are planning a sit-in on Tuesday outside the Moroccan parliament and are discussing a general strike. [Reuters, 1/7/2016]

World Bank cuts Egypt’s predicted 2016 growth rate
The World Bank lowered its forecast for Egypt’s economic growth in fiscal year 2015/2016 from 4.2 percent to 3.8 percent, warning of the implications of the Russian metrojet crash for the tourism industry and a foreign currency shortage. “The contraction in foreign currency inflows that would accompany a shrinking tourism industry would not only negatively impact growth, but would exacerbate the existing foreign currency shortage,” the Bank said in its Global Economic Prospects report. The Bank predicts “an additional round of currency devaluation” to be taken by new Central Bank Governor Tarek Amer to boost foreign currency reserves. However, the Bank warned that a further round of devaluation would mean “monetary policy will have to resist pressure on an inflation rate that is already high.” The Bank also noted that there is space to accelerate fiscal reforms, even the introduction of a second round of energy subsidy cuts and a plans to implement a value-added tax have stalled. [Ahram Online, Aswat Masriya, 1/7/2016]

Also of interest
US approves $800 million sale of Hellfire missiles to Iraq | Reuters
Egypt’s cabinet approves Kuwait fund’s loan for Egypt-Saudi power link | Amwal Al Ghad
European parliamentary delegation discusses investment opportunities in Tunisia | TAP
Turkish lira slips for fourth consecutive day on China worries | Reuters