Saudi Arabia on track for 1.9% GDP growth

The central bank's foreign currency reserves have been boosted in recent months. (AFP)
Updated 16 September 2018

Saudi Arabia on track for 1.9% GDP growth

  • Ahmed Al-Kholifey, governor of the Saudi Arabian Monetary Authority, says IMF growth target is achievable
  • SAMA also said its foreign reserves have been increasing this year

LONDON: Saudi Arabia's economy can achieve an International Monetary Fund forecast of 1.9 percent gross domestic product growth this year, the central bank governor said on Sunday.

The IMF said last month that growth in the non-oil sector was expected to accelerate as the Kingdom moved ahead with economic reforms.

Ahmed Al-Kholifey, governor of the Saudi Arabian Monetary Authority (SAMA), made the comments during a press conference in Riyadh.

SAMA also said its foreign reserves have been increasing this year and a large proportion of recent capital outflows had been due to foreign investment by other Saudi institutions, Reuters reported.

Ayman bin Mohammed Al-Sayari, deputy governor for investment, said the foreign reserves increased last month to $509-510 billion at the end of August from $502 billion in July.

Al-Sayari said Saudi institutional investors were coming to the central bank to exchange their local currency for hard currency that would be used to invest abroad.

“A lot of the capital flows or at least a considerable portion of that...figure was merely some other institutional investors, quasi-sovereign, who have elected to...invest more internationally than locally," he told the news conference.

This pattern was seen in the first two quarters of the year, he said.

Brent oil has jumped near $80 a barrel from $67 at the end of 2017, swelling Saudi Arabia's current account surplus and shrinking its state budget deficit

HP rejects Xerox takeover bid, says open to acquiring Xerox instead

Updated 18 November 2019

HP rejects Xerox takeover bid, says open to acquiring Xerox instead

  • In rejecting Xerox's $33.5 billion cash-and-stock acquisition offer, HP said the offer “significantly” undervalued the personal computer maker
  • Xerox made the offer for HP on Nov. 5 after resolving its dispute with its joint venture partner Fujifilm Holdings Corp.
NEW YORK: HP Inc. said on Sunday it was open to exploring a bid for US printer maker Xerox Corp. after rebuffing a $33.5 billion cash-and-stock acquisition offer from the latter as “significantly” undervaluing the personal computer maker.
Xerox made the offer for HP, a company more than three times its size, on Nov. 5, after it resolved a dispute with its joint venture partner Fujifilm Holdings Corp. that represented billions of dollars in potential liabilities.
Responding to Xerox’s offer on Sunday, HP said in a statement that it would saddle the combined company with “outsized debt” and was not in the best interest of its shareholders.
However, HP left the door open for a deal that would involve it becoming the acquirer of Xerox, stating that it recognized the potential benefits of consolidation.
“With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction,” HP said in its statement.
The move puts pressure on Xerox to open its books to HP. Xerox did not immediately respond on Sunday to a request for comment on whether it will engage with HP in negotiations as the potential acquisition target, rather than the acquirer.
HP on Sunday published Xerox CEO John Visentin’s Nov. 5 offer letter to HP, in which he stated that his company was “prepared to devote all necessary resources to finalize our due diligence on an accelerated basis.”
Activist investor Carl Icahn, who took over Xerox’s board last year together with fellow billionaire businessman Darwin Deason, said in an interview with the Wall Street Journal last week that he was not set on a particular structure for a deal with HP, as long as a combination is achieved. Icahn has also amassed a 4% stake in HP.
Xerox had offered HP shareholders $22 per share that included $17 in cash and 0.137 Xerox shares for each HP share, according to the Nov. 5 letter. The offer would have resulted in HP shareholders owning about 48% of the combined company. HP shares ended trading on Friday at $20.18.
Many analysts have said there is merit in the companies combining to better cope with a stagnating printing market, but some cited challenges to integration, given their different offerings and pricing models.
Xerox scrapped its $6.1 billion deal to merge with Fujifilm last year under pressure from Icahn and Deason.
Xerox announced earlier this month it would sell its 25% stake in the joint venture for $2.3 billion. Fujifilm also agreed to drop a lawsuit against Xerox, which it was pursuing following their failed merger.

Test for new HP CEO
In 2011 as the centerpiece of its unsuccessful pivot to software. Little over a year later, it wrote off $8.8 billion, $5 billion of which it put down to accounting improprieties, misrepresentation and disclosure failures.
More recently, HP has been struggling with its printer business segment recently, with the division’s third-quarter revenue dropping 5% on-year. It has announced a cost-saving program worth more than $1 billion that could result in its shedding about 16% of its workforce, or about 9,000 employees, over the next few years.
Xerox’s stock has rallied under Visentin, who took over last year as CEO. However, HP said on Sunday that a decline in Xerox’s revenue since June 2018 from $10.2 billion to $9.2 “raises significant questions” regarding the trajectory of Xerox’s business and future prospects.