Kuwait Plans New Sovereign Investment Fund to Boost Growth - Bloomberg
Kuwait plans to launch a new sovereign investment vehicle to invest in the local market and boost economic growth, according to the government’s latest work program.
The Ciyada Development Fund, as the new vehicle is called, “aims at accelerating growth of the Kuwaiti economy and improving quality of life, and enhancing advancement in different fields of development, through strategic planning and effective execution of mega development projects,” according to the program, officially released on Sunday.
The new vehicle is in addition to the country’s $700 billion sovereign wealth fund, a savings pot for life after oil, known as the Future Generations Fund, which is managed by the Kuwait Investment Authority and also invests abroad. The KIA also manages the General Reserve Fund, or treasury.
Ciyada will work in partnership with the local and international private sector, according to the program. The government said the new fund would operate “within the framework of good governance and transparency to achieve progress and prosperity.” This is in contrast to the FGF, which doesn’t publicly report its performance.
A feasibility study for Ciyada, which will have a different mandate to the FGF, will be concluded within a year.
The government’s work program is issued with the formation of every new cabinet.
Most Gulf markets extend gains; Egypt flat | Reuters
Most stock markets in the Gulf ended higher on Sunday, extending gains from the previous session when slowing U.S. inflation raised bets that the Federal Reserve will pause rate hikes after this month.
Most Gulf Cooperation Council countries, including Qatar, Saudi Arabia and the UAE, have their currencies pegged to the U.S. dollar and generally follow the Fed's policy moves, exposing the region to a direct impact from any U.S. monetary policy move.
Saudi Arabia's benchmark index (.TASI) gained 0.1%, helped by a 3.1% rise in Riyad Bank (1010.SE).
The kingdom's annual inflation rate eased to 2.7% in June from 2.8% the previous month, government data showed on Sunday.
Prices for housing, water, electricity, gas and other fuels rose by 9.1% overall in June compared with the same month last year, while restaurant and hotel prices were up by 4.3% and education by 3%, the kingdom's General Authority for Statistics data said.
In Qatar, the index (.QSI) added 0.1%, with Qatar Gas Transport Co (QGTS.QA) rising 1%.
Among other gainers, Qatar Islamic Bank (QISB.QA) edged 0.1% higher, after reporting an increase in first half net profit.
Outside the Gulf, Egypt's blue-chip index (.EGX30) closed flat.
Saudi inflation rate ticks down in June | Reuters
Saudi Arabia's annual inflation rate eased to 2.7% in June from 2.8% the previous month, government data showed on Sunday.
Prices for housing, water, electricity, gas and other fuels rose by 9.1% overall in June compared with the same month last year, while restaurant and hotel prices were up by 4.3% and education up by 3%, the kingdom's General Authority for Statistics data said.
On the other hand, prices for clothing and shoes fell 2.9%, communication costs were down by 0.7%, and miscellaneous personal goods and services by 0.1%.
Inflation in Saudi Arabia has been on a downward trend since starting the year at a rate of 3.4% in January.
Middle Eastern Wealth Flows to China Amid Anxiety About US Ties - Bloomberg
Oil-rich gulf monarchies are leveraging their wealth to deepen ties with China amid anxiety about the future of their longstanding security partnership with the US.
Seven months after President Xi Jinping participated in the first China-Gulf summit in Riyadh, economic exchanges between the world’s second largest economy and nations like Saudi Arabia and the United Arab Emirates have been accelerating — moving well beyond crude purchases where Beijing has been dominant for years.
One of the deals that could benefit from closer ties in the coming months is Chinese-owned seed giant Syngenta Group’s planned $9 billion Shanghai IPO. The state-backed company’s advisers have been having discussions with Middle Eastern sovereign funds including the Abu Dhabi Investment Authority and Saudi Arabia’s Public Investment Fund about becoming cornerstone investors, people with knowledge of the matter have said.
The value of acquisitions and investments by Gulf companies in China has climbed more than 1,000% year-on-year to $5.3 billion, according to data compiled by Bloomberg. This year is on the cusp of becoming the busiest ever by number of such deals, the data show.
Abu Dhabi’s $280 billion sovereign wealth fund, Mubadala Investment Co., is ramping up operations in China to hunt for investments, people familiar with the matter said. Dubai has seen a 24% surge in Chinese companies setting up in its commodities free zone after roadshows in the Asian country. Officials in Riyadh describe China as an indispensable partner for Vision 2030 — Crown Prince Mohammed bin Salman’s multi-trillion-dollar economic and social transformation plan. A string of Chinese firms have won contracts for the futuristic city NEOM.
Saudi Almarai’s net profit for Q2 2023 rises 7% to $148mln
Saudi-listed dairy giant Almarai Company reported a 7.06% increase in net profit at 557.08 million Saudi riyals ($148.45 million) for the second quarter of 2023, compared to 520.36 million riyals in the year-earlier period.
The higher profit was driven by increased revenue and improved operational efficiencies. However, the earnings were slightly impacted by rising funding costs in line with SAIBOR interest rates.
“Stable trading conditions have resulted in another positive quarterly performance for Q2 2023,” the company said in a statement.
The Gulf’s largest dairy producer’s H1 2023 net profit rose 26.71% year-on-year to 1.19 billion riyals.
The company stated that the key risk remains global cost inflation for dairy and feed commodities, although most have come off their peak levels in recent months. However, they still remain at elevated levels compared to the prior year.
Almarai said it continues to manage the risks by better hedging activities and leveraging its stock cover.
In April, the company’s shareholders approved a 10% cash dividend.
India ties up with UAE to settle trade in rupees | Reuters
India has signed an agreement with the United Arab Emirates that will allow it to settle trade in rupees instead of dollars, boosting India's efforts to cut transaction costs by eliminating dollar conversions.
During a visit by India's Prime Minister Narendra Modi to the UAE on Saturday, the two countries also agreed to set up a real-time payment link to facilitate easier cross-border money transfers.
The two agreements will enable "seamless cross-border transactions and payments, and foster greater economic cooperation", said a statement from the Reserve Bank of India on Saturday.
India, the world's third biggest oil importer and consumer and whose central bank last year announced a framework for settling global trade in rupees, currently pays for UAE oil in dollars.
Bilateral trade between the two countries was $84.5 billion in the year from April 2022 to March 2023.
An official with knowledge of the details of the agreement said India could make its first rupee payment for UAE oil to Abu Dhabi National Oil Co (ADNOC), Reuters reported on Friday.
The Reserve Bank of India said the two central banks agreed to link India's Unified Payments Interface (UPI) and UAE's Instant Payment Platform (IPP).
Such arrangements, which are a growing trend in Asia, typically lower the cost of payments.
Modi landed in Abu Dhabi earlier on Saturday for a one-day visit and met President Sheikh Mohamed bin Zayed Al Nahyan.
