Brexit ‘good news for Saudi trade’

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Britain's Prime Minister David Cameron and his wife Samantha smile as they leave after voting in the EU referendum in London, on Thursday. (AP)
Updated 22 March 2017
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Brexit ‘good news for Saudi trade’

JEDDAH: Trade between Gulf states including Saudi Arabia and Britain is likely to improve in the aftermath of the Brexit vote, according to economists.

“The fall of sterling will definitely benefit Saudi Arabia in terms of imports,” commented National Commercial Bank’s (NCB) group Chief Economist Said Al-Shaikh.
His remarks came as global stock markets lost about $2 trillion in value on Friday after Britain voted to leave the European Union, while the pound sterling suffered a record one-day plunge to a 31-year low and money poured into safe-haven gold and government bonds.
The sterling pared losses against the US dollar Friday after plunging 10 percent to its weakest in 31 years following Britain’s vote to leave the European Union, but still remained more than 7 percent lower on widespread market uncertainty.
It was last down 7.37 percent against the dollar, at $1.3765, after touching its weakest since before the 1985 Plaza Accord of $1.3228.
“The fall of the sterling will make the dollar stronger than before. As the riyal is pegged to the dollar, it will make the UK’s imports cheaper to Saudi Arabia,” Al-Shaikh told Arab News.
James Reeve, deputy chief economist and assistant general manager at Samba Financial Group, said there is unlikely to be much direct impact in terms of Saudi-UK relations.
“Saudi imports from the UK will be cheaper, but that’s about it. The bigger themes include oil prices which are likely to weaken with a stronger dollar and global equities market,” he told Arab News.
On Friday, Britain’s decision to quit the European Union led to sharp falls in property-related stocks on the expectation that the recent cooling of both residential and commercial markets — a major driving force of the economy for years — will deepen.

KPMG said it would expect companies' appetite to enter new property leases and increase their liabilities would diminish, particularly if Britain's departure from the EU weakens London's financial district.

Speaking to Arab News, Basil Al-Ghalayini, CEO of BMG Financial Group, said private investors of residential properties might find good bargains as a result of price corrections coupled with the decline in the pound sterling against GCC currencies.

John Sfakianakis, director of economic research at the Gulf Research Center, commented: “The initial impact is all about risk aversion. We’re getting big moves now but there will probably be little impact, if any, in the longer term.
“I don’t believe there will be a big long-term impact but in the short term, people are swallowing their gum” in surprise. People don’t want to be long anything at the moment. There’s a flight to safety and the dollar is rising.”
Friday’s blow to investor confidence and the uncertainty the Brexit vote has sparked could keep the US Federal Reserve from raising interest rates as planned this year, and even spark a new round of emergency policy easing from major central banks.
Gulf bourses have already been witnessing low activity because of Ramadan and the summer holidays.
Said Al-Shaikh told Arab News that Saudi stocks might be affected by the same sentiments across global markets because the Kingdom is also part of the global economy.
Al-Shaikh said Tadawul is also expected to fall on Sunday when it resumes trading after the weekend break. Sami A. Al-Nwaisir, chairman of Al-Sami Holding Group, commented: “The Saudi market has more time to absorb the news. So, even if there is negative reaction like other markets, the market reaction will not be deeply negative as time was in their favor.”
Asked about the Brexit’s impact on Saudi and Gulf economies, he added: “The GCC will be in a strong position because most of their assets in the UK are in real estate and especially in London, which is the center city for the ultra wealthy people around the globe.
“This will make London more attractive as far as areas like real estate and weaker pound are concerned, and we anticipate the new government will be friendlier toward doing their best to attract new investments.
“Aside from London, we can say it is a recession-proof city, whereby all the wealthiest people around the globe want to invest as it is a cosmopolitan city.
“Thus, we do anticipate the value of real estate will increase gradually as the demand will increase due to economic factors like weak currency and relaxed rules. The government eventually will enjoy prosperity and growth as we wish the best for the UK all the time.”
Sami A. Al-Nwaisir, added: “Also, we assume the new British government will be more friendly to foreign investors and less aggressive toward imposing taxes unlike the current administration of Prime Minister David Cameron. Besides, I think the university will be more relaxed in trying to acquire more students who were affected by the previous restriction of rules on foreigner visas and universities, and also the austerity measure that was adopted during the current government.”
Al-Ghalayini further commented on the Brexit impact: “Obviously, no one can predict about the impact of this verdict over the long term or even mid term. But, in the short term, we are witnessing the immediate negative impact either on the currency, shares or real estate markets.” 
He added: “As far as the real estate market is concerned, if these international banks and companies do relocate outside the UK as a result of this verdict, there will be an oversupply in the office space segment which will ultimately drive the price down. GCC investors in this segment will suffer as a result.” 
Al-Ghalayini said: “Furthermore, property developers from the GCC might find a noticeable increase in their cost of capital if they are relying on variable rates debt financing terms.”


FaceOf: Dr. Hussein bin Abdul Aziz Al-Asheikh, imam at Prophet’s Mosque and high court judge

Updated 20 August 2018
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FaceOf: Dr. Hussein bin Abdul Aziz Al-Asheikh, imam at Prophet’s Mosque and high court judge

Dr. Hussein bin Abdul Aziz Al-Asheikh is a respected imam and sermon performer at the Prophet’s Mosque, as well as a judge at the High Court in Madinah.

A royal recommendation by King Salman made Al-Asheikh the official sermon deliverer on the day of Arafat, 9 of Dul Hijjah. He will give this year’s sermon at Al-Nimra Mosque, one of the holy sites in Arafat, as well as leading Dhur and Asr prayers.

Last year, the Arafat sermon and prayers were performed by Sheikh Dr. Saad Shafaee Al-Shetri. In 2016, Sheikh Dr. Abdurrahman Al-Sudais, chief of the Presidency of the Two Holy Mosques, led the prayers.

Born in Bani Tamim in southern Saudi Arabia, Al-Asheikh pursued his scholarly career in Riyadh. He received his bachelor’s degree from Shariah College in Riyadh, and then joined the Higher Judicial Institute, receiving a master’s degree before pursuing a doctorate.

Al-Asheikh studied under great Islamic scholars, getting appointed as a magistrate in 1985. Five years later, he became a judge in the Great Court of Najran. He was transferred a year later to the Grand Court in Riyadh, where he stayed for many years before he joined the Grand Court in Madinah in 1997, receiving the royal decree that appointed him as an imam at the Prophet’s Mosque.

He has been leading prayers at the Prophet’s Mosque for more than two decades, while lecturing at the University of Madinah.

He has delivered many scientific lectures in jurisprudence, Tawheed, Hadith and grammar, in addition to some lectures at places such as the Great Mosque in Riyadh.