Saudi Arabia sees first budget surplus since 2014

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Saudi Minister of Finance Mohammed al-Jadaan speaks during financial sector conference in Riyadh on April 24, 2019. (Reuters)
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The Saudi minister of energy said global oil inventories are continuing to rise. (SPA)
Updated 25 April 2019
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Saudi Arabia sees first budget surplus since 2014

  • Saudi Arabia plans to increase state spending in 2019
  • The country will work on stabilizing the global oil market

DUBAI: Saudi Arabia achieved its first budget surplus since 2014, at about $7.41 billion in the first quarter, the country’s minister of finance said on Wednesday.

The surplus was on the back of a jump in oil and non-oil revenues, after Saudi Arabia's finances were hit hard by a slump in oil prices almost five years ago.

Foreign direct investment in Saudi Arabia increased by 28 percent in the first quarter, Finance Minister Mohammed Al-Jadaan said.

The country is also launching a $3.33 billion initiative to support the growth of the private sector, including SMEs, he said.

“We are committed to the reform, this is not about the oil, this is about an economy that needs to be diversified,” Al-Jadaan said.

“If we have higher oil prices, I’ll be happier. I will have stronger reserves and that will provide a buffer for the down cycle,” he added.

Saudi Arabia plans to increase state spending by 7 percent this year, in an effort to spur economic growth that has been hurt by low oil prices, according to its 2019 state budget.

Average non-oil GDP grew at a faster 2.1 percent last year, compared with 1.3 percent in 2017, Al-Jadaan said.

The minister's remarks come during the first day of Financial Sector Conference in Riyadh, organized by the Ministry of Finance and Saudi Arabian Monetary Authority (SAMA).

Saudi Arabia does not see a need for any immediate action as global oil inventories continue to rise, Saudi Energy Minister Khalid Al-Falih told the conference.

“We will not leave our customers scrambling to find the oil they need, we will make sure the oil market remains balanced at global level,” the minister said.

In other news from the Saudi capital, the stock exchange Tadawul announced the listing of Al-Moammar Information Systems Company, the first IT-related entity in the bourse’s roster of 201 listed companies.

The company held a five-day public offering last March and opened for subscription 4.8 million ordinary shares, at an offer price of 45 Saudi riyals per share, representing 30 percent of its paid-up capital.

Saudi Arabia’s Council of Ministers also issued a new banking license to Swiss lender Credit Suisse.


China opens up finance sector to more foreign investment

Updated 20 July 2019
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China opens up finance sector to more foreign investment

  • China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020
  • Beijing has long promised to further open up its economy to foreign business participation and investment

BEIJING: China lifted some restrictions on foreign investment in the financial sector Saturday, as the world’s second largest economy fights slowing growth at home and a damaging trade war with the US.
China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, a year earlier than originally planned, the Financial Stability and Development Committee said in a statement posted by the central bank Saturday.
Foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies, the statement said.
Beijing has long promised to further open up its economy to foreign business participation and investment but has generally dragged its feet in implementing the moves — a major point of contention with Washington and Brussels.
Saturday’s announcement followed a Friday meeting chaired by economic czar Liu He where policymakers focused on tackling financial risk and financial contagion and pledged new steps to support growth, according to a state council statement.
Additional measures include scrapping entry barriers for foreign insurance companies like a requirement of 30 years of business operations and canceling a 25 percent equity cap on foreign ownership of insurance asset management firms.
Foreign owned credit rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said.
US President Donald Trump has launched a damaging tariff war in an attempt to force Beijing to further open up its economy and limit what he calls its unfair trade practices.
The US and China have hit each other with punitive tariffs covering more than $360 billion in two-way trade.
Trump and Xi Jinping agreed to revive fractious trade negotiations when they met on the sidelines of the G20 summit in Japan on June 29 and top US and Chinese negotiators have held phone talks this month.