Britain and Switzerland to sign post-Brexit trade agreement

In this file photo taken on January 21, 2019 A pedestrian walks pas a placard reading "People's Vote" as Brexit activists demonstrate outside of the Houses of Parliament in central London, while Britain's Prime Minister Theresa May makes a statement to the House of Commons on changes to her Brexit withdrawal agreement. (AFP file)
Updated 11 February 2019
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Britain and Switzerland to sign post-Brexit trade agreement

  • The accord will protect a trade relationship worth $41.41 billion
  • Britain has reached an impasse in its last-minute renegotiation of an exit deal that it agreed with the EU last year
LONDON: Britain and Switzerland will sign an agreement on Monday to continue trading on preferential terms after Brexit, the British trade department said, protecting a trade relationship worth 32 billion pounds ($41.41 billion).
The formal signing of the deal, on which agreement had previously been announced, is one of only handful of concrete steps Britain has made toward ensuring that all the trade deals it currently benefits from as an EU member will continue after it leaves the bloc next month.
“Not only will this help to support jobs throughout the UK but it will also be a solid foundation for us to build an even stronger trading relationship with Switzerland as we leave the EU,” International Trade minister Liam Fox said in a statement.
The deal reflects Switzerland’s “mind the gap” strategy of ensuring seamless trade ties with Britain, regardless of whether London is able to strike and approve a formal exit agreement with Brussels by March 29, the date it is scheduled to leave.
Britain has reached an impasse in its last-minute renegotiation of an exit deal that it agreed with the EU last year but that was overwhelmingly rejected by the British parliament in January.
The government said last month it expects Britain will have most of the agreements it needs to replicate existing trade deals between the EU and third countries ready by the end of March.
A similar continuity agreement has been announced with Israel, and ‘mutual recognition’ deals have been agreed with Australia and New Zealand.
But the head of the Confederation of British Industry, Carolyn Fairbairn, said on Sunday the “unfolding nightmare” of Britain’s exit meant that major trade partners like Japan and South Korea were reluctant to sign deals until they knew the exact shape of future EU-Britain ties.
“It will be the decisions that businesses take about jobs and investment — and they will reduce them — so you have less potential to trade globally, that will mean less investment in the future and that will mean fewer jobs in the future,” she told Sky News.


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.