#SaudiArabia forecasts $21 bln deficit in 2024 | Reuters

VIEW Saudi Arabia forecasts $21 bln deficit in 2024 | Reuters

Saudi Arabia approved its 2024 budget on Wednesday, which forecasts a fiscal deficit of 79 billion riyals ($21.06 billion) or 1.9% of GDP next year, as it pushes ahead with plans to bolster its non-oil sectors as part of plans to diversify its economy.

Following are comments from economists and analysts:

MAZEN ALSUDAIRI, HEAD OF RESEARCH AT AL RAJHI CAPITAL
"The debt to GDP ratio is still under control. The deficit to GDP is 2%, total debt to GDP is about 26%, it’s very low. The level of deficit is under control. You have to push the diversification of the economy. There are so many targets, for example the Expo (in 2030), there are other sport events that are going to happen, giga projects need infrastructure, it’s investment."

NAIF ALGHAITH, CHIEF ECONOMIST AT RIYAD BANK
"There is an increase in spending; now it is about 29% of GDP so this really gives a push to the economy. The Ministry of Finance spending is not the only thing that drives the economy, the giga projects complement the spending.
If you divide the budget into revenues and spending, the revenue side will be impacted by the oil cut. So in 2024, it's (estimated at) 1.172 trillion riyals, it's quite conservative and I think Saudi Arabia could in the baseline get higher revenues."

JUSTIN ALEXANDER, DIRECTOR OF KHALIJ ECONOMICS AND GULF ANALYST AT GLOBALSOURCE PARTNERS
"The core story is the same one from September- significantly higher spending levels than were contemplated a few years ago are here to stay, and the government is comfortable in budgeting deficits rather than targeting movement towards a fiscal balance because it is confident of securing financing."

MONICA MALIK, CHIEF ECONOMIST AT ABU DHABI COMMERCIAL BANK
"There were no major surprises in the 2024 budget, which was in line with the pre-budget statement despite the recent decline in the oil price. The revenue estimate in the budget still looks conservative in the context of the extension of the production cut in 1Q. As such, we forecast a smaller deficit based on a higher revenue outlook. We see strong underlying economic momentum driven by the investment plans in 2024."

Asia’s first #SaudiArabia ETF lists on Hong Kong stock exchange

Asia’s first Saudi Arabia ETF lists on Hong Kong stock exchange

Asia’s first exchange traded fund investing solely in Saudi Arabia’s equities market has listed on the Hong Kong exchange attracting $1bn in initial investment, marking one of the territory’s largest ever debuts. 

The CSOP Saudi Arabia ETF was launched on the back of strong government support, after more than a year of high-level efforts by senior Hong Kong officials attempting to woo investment from the Middle East. 

The ETF invests in a portfolio correlated to the FTSE Saudi Arabia Index, which has a market capitalisation of more than $270bn and aims to align with the Saudi Vision 2030 project, Crown Prince Mohammed bin Salman’s road map for economic diversification and global engagement. 

Its top holdings include Saudi Aramco, the state-owned petroleum and natural gas company, and Al Rajhi Banking & Investment, the country’s largest bank.  

The Public Investment Fund, Saudi Arabia’s $700bn sovereign wealth fund, has been named as an anchor investor in the fund. CSOP Asset Management, which manages the ETF, declined to say how much of the $1bn initial fundraising came from PIF but called the wealth fund “the most important cornerstone investor” for the product.

Gulf funds increase investment in south-east Asia as China retreats

Gulf funds increase investment in south-east Asia as China retreats

Sovereign funds from Saudi Arabia, the United Arab Emirates and Qatar have driven a significant increase in Gulf investment in south-east Asia’s start-ups, marking a rare bright spot as fundraising in the region tumbles to its lowest in six years. 

There have been 59 deals in the region involving a Gulf-based investor in 2022-23, according to data from Refinitiv, up from seven deals in 2018-19. 

The surge comes as venture capital funding has plunged globally and Chinese investors have reined in their investments in the region. The activity of technology giants including Alibaba and Tencent, which had been pumping billions of dollars into south-east Asian tech and ecommerce groups, has slowed. 

The Qatar Investment Authority, which has $475bn of assets under management, is stepping up dealmaking in the fast-growing region home to 750mn people. In 2022 the Qatari fund invested in Carsome, a Malaysia-based online used car platform, in a $300mn financing round. 

That year the Mohammed bin Rashid Innovation Fund, launched by the United Arab Emirates’ finance ministry, backed Indonesian software company Avani and Abu Dhabi state fund Mubadala Investment Company acquired a strategic stake in Singapore carbon exchange AirCarbon. 

Meanwhile Aramco Ventures, a subsidiary of Saudi Arabia’s oil company Saudi Aramco, in October led a $10mn fundraising round in Redex, a Singapore-based provider of services to manage renewable energy certificates.

Mideast Stocks: Most Gulf bourses end in red on falling oil, #Saudi shares edge up

Mideast Stocks: Most Gulf bourses end in red on falling oil, Saudi shares edge up

Most stock markets in the Gulf closed lower on Wednesday on falling oil prices, although the Saudi index bucked the trend to close higher.

Oil prices - a catalyst for the Gulf's financial markets - continued to fall as investors weighed the effectiveness of an extension in OPEC+ cuts in tightening supply against a worsening demand outlook in China.

Concerns over China's economic health, which could limit overall fuel demand in the world's second-largest oil consumer, also weighed on prices. Dubai's main share index fell 0.2%, hit by a 0.7% decline in blue-chip developer Emaar Properties.

In Abu Dhabi, the index dropped 0.4%. Growth in non-oil business activity in the United Arab Emirates eased in November from multi-year highs seen the previous month as new order growth slowed and business confidence weakened, a survey showed on Wednesday.

Saudi Arabia's benchmark index, however, gained 0.3%, helped by a 1.9% increase in digital solutions provider Elm Co. On the other hand, oil giant Saudi Aramco eased 0.2%. The kingdom has lowered prices for the flagship Arab light crude it sells to Asia in January for the first time in seven months to $3.50 a barrel above the Oman/Dubai average, Aramco said on Wednesday.

The Qatari benchmark retreated 0.7%, falling for a fourth consecutive session, with Qatar National Bank losing 1.3%.

Outside the Gulf, Egypt's blue-chip index finished 1.7% lower as most of its constituents were in negative territory, including Commercial International Bank, which was down 1%. Separately, Egyptian inflation is expected to slow for a second month in November on base effects and moderating food price rises, a Reuters poll showed on Wednesday. Inflation had been working its way upwards over the last two years, climbing to a record high of 38% in September from 5.6% in November 2021.

#Saudi Oil Price Moves Seen Pushing Asian Customers Elsewhere - Bloomberg

Saudi Oil Price Moves Seen Pushing Asian Customers Elsewhere - Bloomberg

Asian crude buyers are likely to turn more to the spot market for cargoes after Saudi Arabia reduced pricing of its key grade by only half the amount forecast in a Bloomberg survey.

At least two customers receiving the kingdom’s contractual supply said they’re considering reducing their intake for January loading, according to refiners and traders involved in the market, who asked not to be identified as the information is confidential.

More refiners are likely to snap up physical cargoes from the Persian Gulf spot market where prices have fallen sharply this week, they said. Saudi and OPEC+ producers, which agreed last week to deeper output cuts, are also facing steeper competition from producers in the US and elsewhere that have an increased amount of crude to export.

Asia’s appetite for physical barrels, especially from the Middle East, has been relatively weak in recent months as India took large volumes of cheaper oil from Russia and Venezuela, and China faced increased pressure from shrinking refinery profits.

A key gauge of Asian crude demand — the premium of Oman futures against Dubai swaps — tumbled to the lowest in more than six months on Tuesday, according to data compiled by Bloomberg, indicating softening consumption in the upcoming cycle for February-loading cargoes.

The nominations for Saudi cargoes are due Wednesday, and buyers will be informed of their term allocations by the start of next week.

#AbuDhabi’s Neovision Sets Up $250 Million Carbon Credit Fund - Bloomberg

Abu Dhabi’s Neovision Sets Up $250 Million Carbon Credit Fund - Bloomberg

Abu Dhabi-based Neovision Wealth Management is setting up a $250 million fund to invest in the development of carbon credits in frontier markets.

The Global Carbon Credit Development Fund will focus on projects managed by investment firm Global Frontier Capital and will generate carbon credits, which are tradeable units of greenhouse gas emissions. The fund will be the first of its kind in the Middle East, the firms said.

Carbon credits allow purchasers to claim they offset their overall emissions by purchasing a certain amount of credits, though some environmentalist argue that’s not enough to curb discharges if fossil-fuel production continues to rise.

“As the world transitions towards a low-carbon economy, demand for carbon credits is expected to soar,” said Ryan Lemand, co-founder and chief executive officer of Neovision Wealth Management.

The United Arab Emirates, of which Abu Dhabi is the capital, is currently hosting the COP28 climate summit.

Gulf bourses mostly flat on falling oil prices; #Saudi edges up | Reuters

Gulf bourses mostly flat on falling oil prices; Saudi edges up | Reuters

Gulf stock markets fell on Wednesday on falling oil prices, while Saudi Arabia's shares edged up following two consecutive declines.

Saudi Arabia's benchmark stock index (.TASI) edged up 0.1% after previous session decline, supported by over 1% hike in Elm Company (7203.SE) and a 1.2% lift in telecoms firm Etihad Atheeb Telecommunication (7040.SE).

Shares in insurer Saudi Enaya (8311.SE) also surged 6.7% after saying its shareholders disapproved a take-over offer submitted by another rival United Cooperative Assurance (8190.SE), which was top loser on the index.

Separately, Saudi Arabia said on Tuesday it will offer tax incentives for foreign companies that locate their regional headquarters in the kingdom, including a 30-year exemption for corporate income tax.

Dubai's main share index (.DFMGI) fell 0.1%, in a fifth days of losing streak, led by losses in property and financial stocks, with blue-chip developer Emaar Properties (EMAR.DU) decreasig 1.2% and Dubai Islamic Bank (DISB.DU) easing 0.4%.

In Abu Dhabi, the benchmark index (.FTFADGI) was down 0.6%, extending losses to second consecutive session, led by a 0.7% drop in First Abu Dhabi Bank (FAB.AD), the United Arab Emirates' biggest lender, and a 1.6% fall in Emirates Telecommunications Group (EAND.AD).

Qatar's benchmark (.QSI) also fell 0.6%, its fourth negative day in a row, with most of its individual stocks in negative territory led by financial stocks. Qatar National Bank (QNBK.QA), the Gulf's largest lender, and Qatar Islamic Bank (QISB.QA) was down 1% and 0.8% respectively.