Saudi Arabia unveils new measures to support mining, industry

Saudi Arabia unveils new measures to support mining, industry
(Reuters)
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Updated 06 May 2020

Saudi Arabia unveils new measures to support mining, industry

Saudi Arabia unveils new measures to support mining, industry
  • Ministry fees will be reduced and licenses automatically renewed to limit coronavirus impact

LONDON: Saudi Arabia will defer loan payments in the industrial and mining sectors as part of a raft of new measures aimed at reducing the impact of the global coronavirus pandemic.

Under the mandate of a royal decree, the Ministry of Industry and Mineral Resources launched 27 measures which also included developing new products to support working capital, reducing ministry fees and the automatic renewal of various licenses.

“These newly launched measures provide different layers of support toward sustaining operations within the industrial and mining sectors,” said a government statement.

Electricity bills will also be slashed by 30 percent and payment terms extended.

Significantly, the new support measures also include a plan to speed up local content requirements for companies that have 51 percent ownership by the Public Investment Fund. Some SR50 billion ($13.29 billion) has been allocated “to facilitate the settlements of the private sector dues,” the statement said.

Private sector companies will also be able to benefit from reduced interest rate loans and payment deferrals for 2020.

The measures also extend to taxation with the submission and payment of tax declarations suspended.

The plan comes as Gulf economies come under intense economic pressure from the double whammy of the pandemic and weaker oil prices.

Saudi Arabia’s non-oil private sector shrank for the second consecutive month in April according to Purchasing Managers’ Index data released on Tuesday.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) nudged up to 44.4 in April from 42.4 in March. Any reading below 50 indicates contraction while above indicates expansion.

“Saudi Arabian private sector output fell at the fastest pace since the survey began more than a decade ago, reflecting widespread business closures and a sharp reduction in customer demand,” said Tim Moore, economics director at IHS Markit.


Market traders ready to ride ‘Biden bounce’

Market traders ready to ride ‘Biden bounce’
Updated 19 January 2021

Market traders ready to ride ‘Biden bounce’

Market traders ready to ride ‘Biden bounce’
  • "Biden moving into the White House could drive markets into a bull run more sharply than previous inaugurations," a financial expert says

DUBAI: Investors are expecting a “Biden bounce” in global markets following the inauguration on Wednesday of Joe Biden as the 46th US president.

“History teaches us that we can expect the markets to react favorably to the inauguration of a new US president — and this time around it is likely to be no different,” said Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisers, with over 80,000 clients and $12 billion under advisement.

“Indeed, Biden moving into the White House could drive markets into a bull run more sharply than previous inaugurations because it is hoped the incoming administration will bring stability and, possibly, a halt to the uncertainty following the fiercely contested election. 

“Investors will also be buoyed by the $1.9 trillion fiscal stimulus announced by Biden, the Federal Reserve’s willingness to support markets, the new president’s multilateral trade agenda and his plans for stepping up the vaccine rollout. All of this will encourage confidence and optimism,” Green said.

Mazen Al-Sudairi, head of research at Riyadh-based financial services company Al Rajhi Capital, agreed with the optimism regarding a “Biden bounce.”

“One of the important outcomes with Biden is stability in the market. But there is also the stimulus factor coupled with the vaccine that is giving an indication of recovery in the market. This perceived unity in the US will be healthy for the global and Saudi market,” he told Arab News.

However, Green said that investors should be cautious for three reasons: “First, a market rally is going to be difficult to sustain indefinitely due to the enormous economic scarring caused by the pandemic.

“The major long-term headwind is mass unemployment, which is hitting demand, growth and investment on Main Street and which, ultimately, will have to impact Wall Street.

“Second, the new administration will have policies that will have an effect on different sectors of the economy. There will be a readjustment period that needs to be taken into account.

“And, third, not all shares are created equal and stock markets are heavily unbalanced at the moment. A handful of sectors are bringing up entire indexes,” he said.