Ratings boost for Saudi reform program

Structural reforms could empower Saudi citizens and make Saudi Arabia more attractive to investors over the medium term, ratings agency S&P said. (Reuters)
Updated 22 November 2017
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Ratings boost for Saudi reform program

LONDON: Political reforms in Saudi Arabia have potentially lifted the country’s appeal to investors, as well as widening opportunities for Saudi citizens, according to a report out today from New York-based credit ratings agency Standard & Poor’s.
With that in mind, the agency said its ratings on KSA debt were unchanged at ‘A-/A-2’ , and the outlook remained ‘stable’.
The stable outlook was based on S&P’s expectation that the Saudi authorities would continue to take steps to consolidate public finances and maintain government liquid assets close to 100 percent of GDP over the next two years.
The agency said: “We think the risks emanating from recent shifts in Saudi Arabia’s political power structures and societal norms, alongside various regional stresses, are balanced by the possibility that these structural reforms could empower Saudi citizens and make Saudi Arabia more attractive to investors over the medium term.”
S&P said it could lower its ratings in the event of further deterioration in Saudi Arabia’s public finances. “Fiscal weakening could entail prolonged double-digit central government deficits as a percentage of GDP, a quicker drawdown of fiscal assets, or an unexpected materialization of contingent liabilities,” it said.
KSA’s debt ratings could also come under pressure if the agency observed a “significant” increase in domestic or regional political instability “as a result of the increasing centralization of power.”
Conversely, the agency could raise its ratings if Saudi Arabia’s economic growth prospects improved markedly beyond S&P’s current assumptions.
Last week, S&P said that despite uncertainties within GCC countries, capital market issuance of bonds and other debt instruments had climbed rapidly, with corporate and infrastructure capital market activity forecast to more than double from 2016 in 2017.
S&P Global Ratings said it saw an emerging trend in budget-constrained governments increasingly looking to their government-related entities to tap capital markets for corporate and project bonds to complement record sovereign debt issuance.
It added that the Qatar trade embargo had resulted in downgrades of one or more notches and negative CreditWatch placements or outlooks on all rated corporates in that country.


Oman’s workforce to get health insurance

Updated 18 min 56 sec ago
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Oman’s workforce to get health insurance

  • The mandatory health insurance will cover residents, expatriates as well as visitors entering the country
  • There were no details given as to when the insurance would be introduced

DUBAI: Companies in Oman will be obligated to provide their staff with health insurance, according to a statement released by Oman’s Capital Market Authority, local daily Times of Oman reported.
“The decision aims at meeting the needs of the employees of the private sector relating to coverage of basic health, to limit the high cost to employers in the private sector, in view of the current economic situation, in addition to providing quality services by the insurance companies and health care unit to the insured,” the statement read.
The mandatory health insurance will cover residents, expatriates as well as visitors entering the country.
There were no details given as to when the insurance would be introduced.