Turkish banking links weigh on Gulf markets

Gulf markets sunk as investors shied away from banks with links to Turkey’s deepening economic turmoil. (AFP)
Updated 13 August 2018
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Turkish banking links weigh on Gulf markets

DUBAI: Saudi Arabia’s stock index touched its lowest level in more than three months on Monday, with regional markets sinking as investors shied away from banks with links to Turkey’s deepening economic turmoil.
Attracted by its large population and surging economy, several Gulf banks have expanded into Turkey in recent years, most recently Dubai’s largest bank Emirates NBD, which in May agreed to buy Turkey’s Denizbank in a $3.2 billion deal.
But investor confidence in the economic outlook has been shattered by the lira tumbling on worries over President Tayyip Erdogan’s increasing control over the economy and deteriorating relations with the United States.
Emirates NBD slumped by 4.6 percent. Emaar Properties , which has projects in Turkey, was down 2.3 percent.
The main Dubai index slipped by 1.5 percent, while he main Saudi index lost 2.4 percent.
National Commercial Bank (NCB), Saudi Arabia’s largest bank by assets, fell by 3.7 percent. NCB’s exposure to Turkey is estimated by Arqaam Capital as 8 percent of its assets and 12 percent of its loans.
Other Saudi blue-chip stocks were also down. Saudi Basic Industries Corp. (SABIC) fell by 2.4 percent, while Al Rajhi Bank slipped by 2.6 percent.
The Middle East and North Africa’s largest bank, Qatar National Bank, retreated by 2.6 percent. Around 15 percent of the bank’s assets and 14 percent of its loans relate to Turkey, according to Arqaam Capital.
Qatar’s Commercial Bank, which owns Turkey’s Alternatifbank, edged down 0.6 percent. The wider index shed 0.8 percent.
In Kuwait, Kuwait Finance House and Burgan Bank , both of which have loans and other assets in Turkey, declined by 1.3 percent and 1.4 percent, respectively.


Time to tear down Mideast trade barriers, Davos panel hears

Updated 23 January 2019
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Time to tear down Mideast trade barriers, Davos panel hears

  • Mohammad Al-Tuwaijri, Saudi minister of economy and planning, said a move to ease movement of traffic across the border could be followed elsewhere
  • Majid Al Futtaim CEO Alain Bejjani: Now there’s this seriousness between Saudi Arabia and the UAE, I hope it gets to frictionless trade

DAVOS: Amid global trade wars and the rise of protectionism, Middle East economic and business leaders on Tuesday issued a clarion call for the exact opposite: To ease customs restrictions in the region.
A panel at Davos heard how an agreement between Saudi Arabia and the UAE to boost cooperation — including the reduction of obstacles to trade across the shared border — could be a blueprint for the wider region.
Mohammad Al-Tuwaijri, Saudi minister of economy and planning, said a move to ease movement of traffic across the border — partly through the use of technology — could be followed elsewhere. “We want to establish a reference for others to follow,” he said.
Alain Bejjani, CEO of retail and leisure group Majid Al Futtaim, said “frictionless trade” would give the region a boost.
“Now there’s this seriousness between Saudi Arabia and the UAE, I hope it gets to frictionless trade,” he told Arab News on the sidelines of the Davos forum.
Bejjani declined to say whether that would involve a customs union, a common market or a common currency. Given the imposition of trade tariffs between the US and China, and the rise of Brexit, globalization — something espoused by many Davos delegates — is seen as on the wane.
But Bejjani said breaking down barriers in the Middle East could help it better compete with Western Europe and the US.
“For the past almost century now… we’ve been ingeniously working on making sure we put barriers across the Arab world. The reality is we have a market that’s as big as most of the largest markets in the world… if we’re smart enough to work together,” he told the Davos panel.
Khalid Al-Rumaihi, chief executive of the Bahrain Economic Development Board, agreed that Saudi-UAE cooperation was “a great template” for others to follow.
Aside from “opening up” Middle East markets, Al-Rumaihi said harmonizing regulation in the region would also be beneficial to businesses and entrepreneurs.
“If the rules are changing in each country, if they’re not harmonized, it’s very difficult… for an entrepreneur (to understand) the regulatory environment. So they don’t scale very quickly, and that’s something we need to solve,” he said. Talk of freer trade within the Middle East is especially relevant when it comes to the Palestinian territories, which are subject to Israeli occupation and blockade.
Palestinian Prime Minister Rami Hamdallah said freer movement and a reduction of duties would help the economy grow.
“We need to see our products being waived (of) customs,” he said. “We need mobility — we’re under occupation.”