Saudi operations help to grow Shuaa earnings

Shuaa Capital has expanded operations in Saudi Arabia. (Supplied)
Updated 06 November 2018
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Saudi operations help to grow Shuaa earnings

  • Highest quarterly profit since 2008
  • Deal struck with Jabal Omar Development

LONDON: Dubai-headquartered investment house Shuaa Capital has posted its highest quarterly profit since 2008 as it continues to expand its operations in Saudi Arabia, UAE and Kuwait.
The company reported a 30.1 million dirham ($8.2 million) net profit for the third quarter this year, a 31 percent increase year-on-year, according to a filing on the Dubai stock exchange.
Year-to-date net profit stood at 56.4 million dirhams, slightly down on the 59.8 million dirhams recorded in the same period in 2017.
The increased profit has been driven by growth in the company’s asset management arm which oversees the development of real estate projects in Saudi Arabia and the UAE. The division reported a 8.5 million dirham profit in the third quarter, a 35 percent increase on the previous year.
Shuaa expanded its presence in Saudi Arabia earlier this year, signing a preliminary deal with the Saudi real estate developer Jabal Omar Development Company to jointly manage real estate investment funds in the Kingdom.
Jabal Omar’s existing flagship development is in Makkah, just walking distance from the Grand Mosque. Set to be delivered in phases, the project will feature high-rise towers, luxury apartments, residential units and shopping malls.
The investment house also worked with the hotel management firm Rotana on the Centro Waha Riyadh hotel which opened in the Saudi capital city in October last year. The hospitality project was funded by the Shariah-compliant Shuaa Saudi Hospitality Fund I.
Kuwait is another target market for the firm, said Shuaa chief executive Fawad Tariq-Khan, in a DFM statement, saying the company will build on its acquisition of Amwal International Investment Company and its subsidiary Noor Capital Markets, which was first announced in July 2017.
“Our recent acquisition of Amwal International Investment Company in Kuwait, and intended business affiliations are meant to help us benefit from synergies and capture inbound and outbound business prospects,” he said.
“Activating these investments and partnerships is imminent, and we expect the final quarter to be another game changing quarter for the group,” he said.
This quarter’s results continue the growth seen in the second quarter where profits rose by 21 percent to reach 14.6 million dirhams.
However, Shuaa’s profits more than halved in the first quarter compared to 2017, a decline which Shuaa’s management partly blamed on lower interest income from its lending arm following a reduction in bank debt at its lending subsidiary, Gulf Finance Corporation.


Palestinians in financial crisis after Israel, US moves

Updated 22 March 2019
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Palestinians in financial crisis after Israel, US moves

  • A Ramallah-based economics professor said the Palestinian economy more generally, remain totally controlled by and reliant on Israel
  • Israeli-Palestinian peace efforts have been at a standstill since 2014

RAMALLAH, Palestinian Territories: The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft.
That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 percent of the PA’s monthly revenues, with other funds coming from local taxes and foreign aid.

While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations with the US administration after President Donald Trump declared the disputed city of Jerusalem Israel’s capital in December 2017.
The right-wing Israeli government, strongly backed by the US, has since sought to squeeze Abbas.
After a deadly anti-Israeli attack last month, Prime Minister Benjamin Netanyahu said he would withhold $138 million (123 million euros) in Palestinian revenues over the course of a year.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA.
Israel said the amount it intended to withhold was equal to what is paid by the PA to the families of prisoners, or prisoners themselves, jailed for attacks on Israelis last year.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes of the fight against Israeli occupation.
Israel says the payments encourage further violence.
Abbas recently accused Netanyahu’s government of causing a “crippling economic crisis in the Palestinian Authority.”
The PA also said in January it would refuse all further US government aid for fear of lawsuits under new US legislation targeting alleged support for “terrorism.”

Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over 2,000 shekels ($555) will receive only half their salaries until further notice.
Prisoner payments would continue in full, Bishara added.
Nasser Abdel Karim, a Ramallah-based economics professor, told AFP the PA, and the Palestinian economy more generally, remain totally controlled by and reliant on Israel.
The PA undertook similar financial measures in 2012 when Israel withheld taxes over Palestinian efforts to gain international recognition at the United Nations.
Abdel Karim said such crises are “repeated and disappear according to the development of the relationship between the Palestinian Authority and Israel or the countries that support (the PA).”
Israel occupied the Gaza Strip and the West Bank, including now annexed east Jerusalem in the Six-Day War of 1967 and Abbas’s government has only limited autonomy in West Bank towns and cities.
“The problem is the lack of cash,” economic journalist Jafar Sadaqa told AFP.
He said that while the PA had faced financial crises before, “this time is different because it comes as a cumulative result of political decisions taken by the United States.”
Abbas appointed longtime ally Mohammad Shtayyeh as prime minister on March 10 to head a new government to oversee the crisis.
Abdel Karim believes the crisis could worsen after an Israeli general election next month “if a more right-wing Israeli government wins.”
Netanyahu’s outgoing government is already regarded as the most right-wing in Israel’s history but on April 9 parties even further to the right have a realistic chance of winning seats in parliament for the first time.
Israeli-Palestinian peace efforts have been at a standstill since 2014, when a drive for a deal by the administration of President Barack Obama collapsed in the face of persistent Israeli settlement expansion in the West Bank.