#SaudiArabia lays down #Dubai challenge by luring multinationals | Financial Times

Saudi Arabia lays down Dubai challenge by luring multinationals | Financial Times

Saudi Arabia has lured a coterie of 24 multinationals to set up regional headquarters in Riyadh as the Gulf kingdom seeks to turn its capital into a business hub to rival Dubai’s dominance. 

US engineering group Bechtel and Indian hotelier Oyo are among the companies that will establish regional headquarters, according to Fahd al-Rasheed, president of the Royal Commission for Riyadh City. 

The announcement from the multinationals, which came during a Future Investment Initiative conference held in Riyadh last week, marks another step towards a rehabilitation of Crown Prince Mohammed bin Salman’s ambitious economic reforms, which were thrown into turmoil by the gruesome murder of journalist Jamal Khashoggi in 2018. 

Multinationals now appear more comfortable with the reputational risk attached to the kingdom, which is also mired in a bloody war in Yemen, as they eye potential profits from Prince Mohammed’s plan to cut the country’s dependence on oil and overhaul the economy.

KSA Labor Market, 2017-2020 – The Bitter Lake tks @AndrewMLeber

KSA Labor Market, 2017-2020 – The Bitter Lake

For my dissertation I look at a fair amount of Saudi labor statistics, which have attracted a bit of media coverage of late – the General Authority for Statistics delayed the release of the Q3 2020 labor market report several times “to ensure that the data collected… are up to the standards GASTAT is committed to.”

Now that the data has been released (showing a slight drop in the unemployment rate, from 15.4% to 14.9%), I’ve compiled a quick overview of the last few years of statistics. Jobs creation has been a key metric of success for Saudi Arabia’s economic reforms (“SAUDI CROWN PRINCE’S LEGACY RESTS ON RISKY JOB REFORMS,” FT, England and Omran 2020) so it’s worth seeing what the numbers tell us.

That said, even at their best these statistics can be a bit… opaque. Saudi government agencies did not regularly publish a measure of unemployment rates until the 21st century, and changes in methodology make it hard to compared numbers over time. Most recently, in 2016, GASTAT transitioned from estimating the size of the labor force through surveys to measuring employment through the registration of employees with the General Organization for Social Insurance (private sector) and the Civil Service (mostly public sector, some state-owned enterprises. This means that current numbers are only comparable as far back as late 2016; other measures start appearing more recently.

Thoughts? There is certainly more I could go into here (wages by age, unemployment rates by age cohort, public vs private-sector employment by region) and maybe I’ll come back to this in the days ahead. 

#Oman Wealth Fund’s Latest Revamp Focuses on Tourism, Real Estate - Bloomberg

Oman Wealth Fund’s Latest Revamp Focuses on Tourism, Real Estate - Bloomberg

Oman’s wealth fund plans to restructure its tourism and real estate investments in the latest shift by the $17 billion sovereign investor.

The Oman Investment Authority will transfer a shareholding company, a tourism development project and resorts to the Omran Tourism Development Co., also known as Omran Group, the wealth fund said in a statement Sunday.

This move aims to “drive growth for Omran Group and strengthen its role in supporting economic diversification,” the statement added. Omran Group was established by the government in 2005 to focus on developing sources of economic diversification and attracting foreign direct investment to the Gulf nation, according to its website.

Last June, Oman combined its two wealth funds -- the State General Reserve Fund and the Oman Investment Fund -- into one entity.

The sultanate -- one of the Gulf’s weakest sovereigns --- is aiming to add greater variety to its economy as it struggles to improve its finances. Its budget deficit has swollen to become the widest in the region, due to lower oil prices and the coronavirus pandemic.

#Saudi Chemical Giant Sabic Sees Vaccinations Boosting Income - Bloomberg

Saudi Chemical Giant Sabic Sees Vaccinations Boosting Income - Bloomberg

Chemicals maker Saudi Basic Industries Corp. expects sales and earnings to increase this year after it beat analysts’ estimates by making a profit in 2020.

The Riyadh-based firm, controlled by Saudi Aramco, said it sees the global rollout of coronavirus vaccines leading to a 2% to 5% gain in revenue this year. Pretax income will be “moderately higher” than in 2020, while capital expenditure will be similar, Sabic said in a results statement.

Sabic earned net income of 40 million riyals ($10.7 million) in 2020, down sharply from 5.2 billion riyals in 2019. Still, analysts expected a loss of almost 300 million riyals, according to the median estimate in a Bloomberg survey, after the pandemic caused demand for chemicals products to sink.

Sabic’s net income between October and December was 2.2 billion riyals, more than double the figure for the third quarter.

“The fourth quarter benefited from sustained economic recovery,” said Chief Executive Officer Yousef Al-Benyan. “Distributing competitive dividends to our shareholders continues to be paramount and this is supported by our firm commitment to maintaining capital discipline, as well as our ability to uphold a strong balance sheet and credit rating.”

Gulf markets lower as #SaudiArabia says vaccines delayed | Reuters

Gulf markets lower as Saudi Arabia says vaccines delayed | Reuters

Major Middle East stock markets ended lower on Sunday, tracking a slide in global markets at the end of last week and after Saudi Arabia extended measures to fight the coronavirus crisis.

Saudi Arabia’s benchmark index fell 1.2%, after the government said COVID-19 vaccines were being delayed. The kingdom extended its travel ban for citizens and port closures to May 17 from March 31.

Shares in Al Rajhi Bank dropped 1%, while National Commercial Bank slipped 2.4% lower.

Saudi Basic Industries Corp (SABIC), the Gulf’s largest petrochemical maker, slid 1.8% despite posting a net profit of 2.22 billion riyals ($592 million) in the fourth quarter of 2020 compared with a net loss a year earlier.

Dubai’s main share index retreated 1.6%, extending the previous session’s losses, as Dubai Islamic Bank fell 1.8% and Emirates NBD Bank dropped 1.7%.

Dubai suspended non-essential surgeries in hospitals for a month and halted live music at restaurants indefinitely after daily coronavirus infections surged in the United Arab Emirates.

In Abu Dhabi, the index slipped 0.9%, hit by a 1.6% fall in the country’s largest lender First Abu Dhabi Bank and a 0.6% decrease in telecoms giant Etisalat.

The Qatari index lost 0.7%, with Qatar Fuel shedding 2.2% to be the worst performer on the benchmark.

ADCB 2020 net profit down 27% as provisions for hospital group NMC build | Reuters

ADCB 2020 net profit down 27% as provisions for hospital group NMC build | Reuters

Abu Dhabi Commercial Bank said on Sunday it posted a 27% drop in net profit for 2020, as it booked significantly higher provisions including new ones for troubled hospital operator NMC, for which it had nearly $1 billion in lending exposure.

The bank posted a net profit of 3.81 billion dirhams ($1.04 billion) for the year ending Dec. 31, down from a net profit of 5.24 billion dirhams a year earlier.

It beat analysts’ mean net profit estimate of 3.46 billion dirhams, according to Refinitiv data.

Its fourth quarter net profit fell 4% year-on-year to 1.01 billion dirhams. It was down 26% compared to the third quarter.

#Dubai house prices to drop at slower pace: Reuters poll | Reuters

Dubai house prices to drop at slower pace: Reuters poll | Reuters

Dubai’s house prices are expected to fall at a slower pace this year and next than previously thought as hopes for a successful vaccine rollout and an economic recovery boost confidence in the sector, a Reuters poll showed.

After declining 3.5% in the first quarter of 2020, Dubai property prices have shown signs of stabilising. They fell by a much slower 0.9% year-on-year in the third quarter after barely changing in Q2, United Arab Emirates central bank data found.

The Jan. 13-28 poll of 11 property market analysts predicted Dubai house prices would decline 2.0% this year, a significant improvement from a September survey that forecast a decline of 5.1%. It was expected to fall the same next year.

“While multiple factors are at play, an economic recovery and a successful vaccine rollout stand out as key drivers for the real estate sector, both of which will boost confidence in the market,” said Aditi Gouri, head of strategic consulting and research at Cavendish Maxwell in Dubai.

European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #SaudiArabia #Qatar close

European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #SaudiArabia #Qatar close

Mashreq Capital's Kettlewell on Turkish Sovereign Debt, #Dubai's Economy, and #Oman's Fiscal Reforms - Bloomberg

Mashreq Capital's Kettlewell on Turkish Sovereign Debt, Dubai's Economy, and Oman's Fiscal Reforms - Bloomberg

Oliver Kettlewell, Head of Fixed Income & Global Portfolios at Mashreq Capital, discusses the purchase of Turkish sovereign debt, how Dubai travel and tourism-sensitive bonds will benefit from the economy's reopening, and how Oman's fiscal reforms are amongst the slowest-paced reforms in the GCC. He speaks with Manus Cranny and Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

#UAE Central Bank Fines 11 Banks for Compliance Failure - Bloomberg

UAE Central Bank Fines 11 Banks for Compliance Failure - Bloomberg

The United Arab Emirates’ central bank imposed financial sanctions on 11 banks operating in the country for their failure to reach appropriate levels of compliance on anti-money laundering and sanctions.

The sanctions imposed on Jan. 24 amounted to a total of 45.76 million dirhams ($12.5 million), the regulator said in a statement. It didn’t identify the banks.

All banks operating in the UAE have been allowed “ample time” by the central bank to remedy any shortcomings and were instructed in the middle of 2019 to ensure compliance by the end of that year, it said.

Arqaam Capital's Meijer on the #UAE's Citizenship Plan for Foreigners, 2020 Bank Earnings - Bloomberg

Arqaam Capital's Meijer on the UAE's Citizenship Plan for Foreigners, 2020 Bank Earnings - Bloomberg

Jaap Meijer, Head of Equity Research at Arqaam Capital, discusses the United Arab Emirates' plans to open citizenship to select foreigners to boost growth and UAE 2020 bank earnings. He speaks with Manus Cranny and Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

#Dubai Stocks Lead Mideast Selloff Amid Travel Curbs: Inside EM - Bloomberg

Dubai Stocks Lead Mideast Selloff Amid Travel Curbs: Inside EM - Bloomberg

Most Middle East stocks fell, with shares in Dubai leading losses, as increased travel restrictions added to pessimism over vaccine rollouts sweeping global equity markets.

Dubai and Abu Dhabi’s gauges dropped 1.3% and 0.6%, respectively, as of noon local time. Saudi Arabia’s main index retreated 0.6% as Saudi Basic Industries Corporation fell as much as 1% even after 2020 profit beat estimates. Qatari stocks declined 0.5%.

The U.K. announced on the weekend it was banning direct passenger flights from the United Arab Emirates to stop the spread of a new virus strain originally identified in South Africa. Meanwhile, Saudi Arabian authorities delayed the reopening of the country’s borders.

Global stocks slumped last week, with the S&P 500 tumbling 1.9% on Friday, as bidding by retail traders for heavily-shorted U.S. stocks fanned speculation hedge funds would have to reduce their market exposure, while concern over the deployment of coronavirus vaccines sapped risk appetite. A gauge tracking emerging-market shares posted the biggest weekly drop since March.

Shares in Dubai had been recovering from a virus-triggered selloff amid prospects of a pick-up in tourism, one of the main pillars of the emirate’s economy. Sunday’s declines came even as the UAE announced plans to offer citizenship to select foreigners, the first Gulf nation to formalize a process aimed at giving expatriates a bigger stake in the economy.

Though the decision is a positive one for markets, more details are needed, Arqaam Capital’s head of equity research Jaap Meijer said in an interview with Bloomberg Television.

SABIC sees positive Q1 though cautious over COVID-19 | Reuters

SABIC sees positive Q1 though cautious over COVID-19 | Reuters

Saudi Basic Industries Corp, the world’s fourth-biggest petrochemicals firm, expects business performance to be positive in the first quarter of 2021 after an uptick in chemical prices but remains cautious given COVID-19 uncertainty, its CEO said on Sunday.

Saudi Aramco’s acquisition of a 70% stake in SABIC will have a financial benefit worth $3 billion to $4 billion, Yousef al-Benyan told reporters on a virtual news conference.

“There is an enhancement of cooperation between SABIC and Aramco. As mentioned, God willing, the benefits between the two companies is expected in the range of $3-4 billion. SABIC’s share of that is from $1.5-1.8 billion,” the chief executive said.

SABIC posted a net profit of 2.22 billion riyals ($592 million) in the fourth quarter, reversing a net loss of 890 million riyals a year earlier as the impairment charges it took on certain capital assets were reversed.

“Our outlook is that Q1 is going to be more or less equal to Q4 given the improvement we have experienced. We have seen an average 13% improvement in chemical prices,” Benyan said, adding, however, that prices remain lower than 2019 levels.

SABIC-Aramco tie-up to have benefit worth $3-4 billion - SABIC CEO | Reuters

SABIC-Aramco tie-up to have benefit worth $3-4 billion - SABIC CEO | Reuters

Saudi Aramco’s acquisition of a 70% stake in Saudi Basic Industries Corp (SABIC), the world’s fourth-biggest petrochemicals firm, will have a financial benefit worth $3 billion to $4 billion, SABIC’s CEO said on Sunday.

SABIC’s share of that benefit will be worth between $1.5 billion and $1.8 billion, its chief executive Yousef al-Benyan said on an earnings call.

Most Gulf markets fall in early trade | Reuters

Most Gulf markets fall in early trade | Reuters

Major stock markets in the Gulf traded lower on Sunday following Friday’s fall in global equities amid a growing battle on Wall Street between hedge funds and retail investors.

Saudi Arabia’s benchmark index fell 0.4%, with National Commercial Bank and Saudi Telecom Company both losing 0.9%.

The kingdom has postponed the end of a ban on travel for its citizens and the reopening of its ports from March 31 to May 17, the Saudi state news agency SPA said on Friday, citing an interior ministry official.

The health minister has said that deliveries of COVID-19 vaccines are being delayed.

Dubai’s main share index dropped 0.7%, weighed down by a 1.1% fall in blue-chip developer Emaar Properties and a 2.4% slide in Dubai Investments.

Dubai will roll out China’s Sinopharm vaccine to the general public from Sunday as coronavirus infections surged to record levels in the Middle East tourism hub, the government said on Saturday.

Last week, Dubai suspended non-essential surgeries in hospitals for a month and live music at restaurants indefinitely after daily infections of the coronavirus in the United Arab Emirates rose to their highest levels in January.

On Saturday, authorities reported 3,647 new cases and 12 deaths bringing the total number of cases and deaths from COVID-19 to 300,661 and 674 respectively.

In Abu Dhabi, the index eased 0.3%, with the country’s largest lender First Abu Dhabi Bank losing 0.5%.

Elsewhere, telecom giant Etisalat was down 0.4%.

The Qatari index lost 0.5%, as most of the stocks on the index were in negative territory including Qatar National Bank, the Gulf’s largest lender, which fell 0.8%.

Back in Saudi Arabia, Saudi Basic Industries Corp (SABIC), the Gulf’s largest petrochemical maker, slipped 0.1%, despite posting a net profit of 2.22 billion riyals ($591.87 million) in the fourth quarter.

SABIC had reported a net loss of 890 million riyals in the same quarter in 2019.