Saudi central bank governor opens fintech gathering in Riyadh

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Updated 26 February 2020

Saudi central bank governor opens fintech gathering in Riyadh

  • Near field technology and smartphones accounted for almost 57 percent of retail transactions in Saudi Arabia last year

LONDON: Saudi Arabia aspires to become a pioneering hub for the financial technology (fintech) sector, central bank governor Ahmed Alkholifey told the MEFTECH conference in Riyadh on Tuesday.

The two-day conference and exhibition brings together leading industry experts in digital payments, artificial intelligence and blockchain.

“The Kingdom of Saudi Arabia is devising its strategic plan in the financial and development sector with the goal of becoming a pioneering hub for innovation in the financial technology sector,” Alkholifey said. “The Kingdom spares no effort in working to provide a suitable environment that motivates success, supported by top local and international partners. We at the Monetary Authority seek to promote digitization of financial services and advance digital transformation in the sector to meet the demands and goals of the financial sector development program, which is one of the programs of Saudi Vision 2030.”

E-payment transactions grew sharply last year with non-cash transactions rising to 36.2 percent, exceeding the general goal of the Saudi Vision 2030 which is 28 percent.

The overall value of transactions reached an unprecedented record level last year, exceeding SR287 billion — an increase of 24 percent on the previous year.

The number of transactions carried out via near-field communication technology also more than quadrupled to 918.5 million.

In fact near field technology and smartphones accounted for almost 57 percent of retail transactions.

$8bn blow to Erdogan as investors flee Turkey

Updated 49 min 27 sec ago

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.