Lebanon’s central bank to commit to audit as Macron urged to freeze ‘doubtful’ assets

Syrian refugee children sell flowers at a traffic light in Beirut, Lebanon, Saturday, April 3, 2021. (AP)
Syrian refugee children sell flowers at a traffic light in Beirut, Lebanon, Saturday, April 3, 2021. (AP)
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Updated 07 April 2021

Lebanon’s central bank to commit to audit as Macron urged to freeze ‘doubtful’ assets

Lebanon’s central bank to commit to audit as Macron urged to freeze ‘doubtful’ assets
  • Central bank confirmed its commitment and would stay in contact to re-activate forensic audit
  • Macron should freeze suspect assets held by Lebanese officials in France to break a ‘political-economic mafia’

BEIRUT: Lebanon’s finance ministry said the central bank agreed on Tuesday to provide by the end of the month the documents required by Alvarez & Marsal for a stalled forensic audit.
The audit, which hit a roadblock last year, is a key condition for foreign aid that Lebanon badly needs as it grapples with a financial collapse rooted in decades of waste and graft. The currency has crashed and banks are paralyzed.
When restructuring consultancy A&M withdrew from the audit last November, it said it had not received the information it needed from Lebanon’s central bank.
Parliament agreed in December to lift banking secrecy for one year, amid much back-and-forth between Lebanese officials including the ministry and the central bank over whether certain information could be disclosed.
After a meeting with the central bank and A&M on Tuesday, the finance ministry said the bank confirmed its commitment to an audit and to deadlines to provide the necessary documents. It said attendees would stay in contact “in order to re-activate the forensic audit and evaluate the current development.”
There was no immediate comment from the central bank or A&M.
French President Emmanuel Macron should freeze suspect assets held by Lebanese officials in France to break a “political-economic mafia” that has plunged Lebanon into crisis and misery, an open letter said Tuesday.
Macron called for radical reform in Lebanon after a deadly Beirut port blast and has expressed exasperation at the lack of change, as the former French mandate territory remains mired in political stalemate.
Analysts have said that sanctions such as asset freezes could be the most effective lever for Paris to pressure Beirut, even if France has so far not explicitly indicated it is ready for such a measure.
Macron should issue instructions “with a view to implementing the legal mechanism for freezing assets of doubtful origin held in France by Lebanese political and economic leaders,” said the letter published in France’s Le Monde daily signed by more than 100 Lebanese civil society figures.
It said that a “political-economic mafia is responsible for the misery, hunger and insecurity from which more and more Lebanese suffer.”
The letter suggested that such a legal process should draw on the precedent set over ill-gotten assets owned in France by some African leaders and former Syrian vice president Rifaat Assad.
“This endemic corruption on a grand scale has scandalously enriched Lebanese political leaders” by emptying the treasury and embezzling aid sent after the civil war, the letter alleged.
It was signed by lawyers, doctors, journalists and activists, including prominent political scientist Karim Emile Bitar, former Lebanese culture minister and UN Libya envoy Ghassan Salame and former MP and TV host Paula Yacoubian.
The letter was drafted after French Foreign Minister Jean-Yves Le Drian said in March that “the time has come” to raise international pressure on Lebanon to form a government.
Lebanon’s prime minister-designate Saad Hariri and President Michel Aoun again failed last month to agree on a new government cabinet after months of deadlock, as the country sinks deeper into economic crisis.
A steep depreciation of the Lebanese pound along with an explosion of poverty and unemployment have eroded purchasing power and fueled anger among the population.
The outgoing government of premier Hassan Diab resigned in the wake of an August 4 explosion at Beirut’s port that killed more than 200 people and sparked protests against the entrenched ruling class. 
(With Reuters and AFP)


Saudi public debt up 5.6% to $240.4bn in Q1 2021

Saudi public debt increased about 5.6 percent during the first quarter of this year nearly amounting to SR901.4 billion ($240.4 billion). (Shutterstock)
Saudi public debt increased about 5.6 percent during the first quarter of this year nearly amounting to SR901.4 billion ($240.4 billion). (Shutterstock)
Updated 06 May 2021

Saudi public debt up 5.6% to $240.4bn in Q1 2021

Saudi public debt increased about 5.6 percent during the first quarter of this year nearly amounting to SR901.4 billion ($240.4 billion). (Shutterstock)
  • he debt grew by 24.6 percent compared to the same period in 2020, which amounted to SR723.46 billion

RIYADH: Saudi public debt increased about 5.6 percent during the first quarter of this year nearly amounting to SR901.4 billion ($240.4 billion), compared to the end of the fourth quarter of last year.

This recorded the fastest growth rate since the second quarter of last year, which was caused by the pandemic repercussions, Al Eqtisadiah reported.

The debt grew by 24.6 percent compared to the same period in 2020, which amounted to SR723.46 billion.

About 57 percent of the debt comes from internal debt nearly amounting to SR513.74 billion, while the external debt amounted to about SR387.63 billion, Al Eqtisadiah reported citing data of the Ministry of Finance.

The volume of debt to GDP increased to 35.6 percent at the end of the first quarter of this year compared to the end of last year at 32.3 percent, based on the GDP at constant prices.  

The rise in the debt comes despite the budget recording its lowest deficit for the first quarter of this year since the third quarter of 2018 at SR7.44 billion, due to the 9 percent decline in oil revenues on an annual basis, despite the growth of non-oil revenues.

Saudi Arabia was able to raise funds to pay its deficit by about SR29.55 billion, which exceeds the actual deficit for the first quarter, as it intends to use the rest of the funding to pay the deficit for the remainder of the year. 

Saudi Arabia is trying to take advantage of the lower interest rates in the debt markets.

The Ministry of Finance previously estimated that this year's public debt reaches SR937 billion, as the Corona crisis increased the target level of public debt.


Occupancy rate of Makkah hotels sees over 30% rise in second half of Ramadan

Saudis and expatriates used to spend the last 10 days of the holy month in Makkah for worship, but many of them put the habit on hold since the pandemic started. (Shutterstock)
Saudis and expatriates used to spend the last 10 days of the holy month in Makkah for worship, but many of them put the habit on hold since the pandemic started. (Shutterstock)
Updated 06 May 2021

Occupancy rate of Makkah hotels sees over 30% rise in second half of Ramadan

Saudis and expatriates used to spend the last 10 days of the holy month in Makkah for worship, but many of them put the habit on hold since the pandemic started. (Shutterstock)
  • Makkah is the main artery of hotels in Saudi Arabia, alone accounting for more than 64 percent of the sector

JEDDAH/MAKKAH: The occupancy rate at the beginning of the holy month of Ramadan varied between 10 and 20 percent, while in the second half it rose to 30-38 percent, Rayan bin Osama Filali, chairman of the Hotel Committee, an affiliate of the Makkah Chamber of Commerce and Industry told Arab News.

Filali explained that for the first time, a relatively mild increase in the prices during the last days of Ramadan was witnessed — an unprecedented occurrence, as prices often increase by 300 percent during the last 10 days of Ramadan, compared with the rest days of the month.

“The size and impact of the pandemic caused the cancellation of offers promoted by hotels in the last 10 days of Ramadan,” Filali noted. The fact that only a small percentage of hotels was able to operate “showed the extent of the damage to the sector due to the coronavirus disease (COVID-19), which disrupted the entire system, causing losses that are likely to cast a shadow for years to come.”

The chairman of the Hotel Committee said that the pandemic had directly disrupted much of the hotel sector’s dynamism, as it is one of the most productive, stimulating and job-creating market sectors.

He also said that only 26 hotels in Makkah’s central region are operating this Ramadan season with average prices dropping by 55 percent.

Makkah is the main artery of hotels in Saudi Arabia, alone accounting for more than 64 percent of the sector, which, according to Filali, needs at least four years to recover from the present crisis.

He also noted that the economic implications on the 1,200 hotels were extreme and that most hotels suspended their activities completely, closing their facilities and sending thousands of workers home.

“These workers are still waiting for hotels to open their doors after the end of the pandemic or the completion of the inoculation campaign of the entire community,” he added.

According to Filali, the hotel sector generates huge financial returns for all the countries of the world, and the holy capital depends mainly on the permanence of an industry that creates thousands of jobs annually.

Filali remarked that the sector was awaiting a major expansionary boom but that the virus threatened the industry despite the efforts of the Saudi leadership to maintain the salaries of its employees for several months with the unemployment insurance program “Saned.”

“The lack of demand on bookings and the high operating volume and cost of food have paralyzed the tourism sector, which has led many hotels to suspend their operations until the pandemic ends,” said Filali.

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Hotels surrounding the courtyards of the Grand Mosque in Makkah were on Tuesday authorized to issue Umrah permits to guests during Ramadan as part of an initiative to help revive the holy city’s struggling hospitality sector. Click here for more.

Bassam Khanfar, general manager of the Shaza Makkah Hotel, told Arab News that over 17,000 rooms remained vacant due to the pandemic.

He said that a gradual resumption of operations and purchasing power must be taken into account so that the sector can recover with the least possible losses.

He noted out that the average price of a room in the first 20 days of Ramadan was SR 1,300, increasing to an average of SR 1,900 in the last 10 days of the holy month.

Khanfar’s hotel offered a discount of 50 percent to health practitioners in recognition of their great efforts in fighting the virus — efforts echoed in the performance of the Kingdom as a whole in addressing the pandemic.

Saudis and expatriates used to spend the last 10 days of the holy month in Makkah for worship, but many of them put the habit on hold since the pandemic started.

Ahmed Al-Ghamdi, a Jeddah cafe owner, told Arab News: “Before the pandemic, I was keen to perform Umrah in the last 10 days of every Ramadan, especially on the 27th night, which is when Laylat Al-Qadr (Night of Power) is believed to have occurred.”

He added that the Grand Mosque normally would see hundreds of thousands of worshippers during the last 10 days of Ramadan, in pre-COVID-19 times.

“Unluckily, I can’t perform Umrah this time because I have not yet received the first dose of the vaccine despite my attempts to get vaccinated. But it’s to be expected, as millions are trying to register for the vaccine,” he said.

Al-Ghamdi’s friend, retired army officer Salem bin Saleh, said he was lucky to get the first doses and is planning to perform Umrah in the few coming days.

“Performing Umrah in the last 10 days of Ramadan has been one of my habits for over 30 years,” Saleh told Arab News.

He said that performing Umrah in Ramadan is equal in reward to performing Hajj, as Prophet Muhammad said.

“The feeling you get during and after performing Umrah in Ramadan is indescribable,” Saleh added.


Saudi AC distributor sees 30.5% increase in Q1 revenue

According to a report by research company Euromonitor, the Saudi AC market is set to grow by 2 percent in the next two years. (Shutterstock)
According to a report by research company Euromonitor, the Saudi AC market is set to grow by 2 percent in the next two years. (Shutterstock)
Updated 06 May 2021

Saudi AC distributor sees 30.5% increase in Q1 revenue

According to a report by research company Euromonitor, the Saudi AC market is set to grow by 2 percent in the next two years. (Shutterstock)
  • The quarterly rebound is in contrast to a net loss of SR3.3 million in the same period last year

RIYADH: Al Hassan Ghazi Ibrahim Shaker Co. (Shaker), a Saudi importer, manufacturer and distributor of air conditioners (ACs) and home appliances, has reported that revenue in the first three months of 2021 grew 30.5 percent year-on-year to SR288.3 million ($76.88 million), resulting in a net profit of SR4.5 million for the quarter.

The quarterly rebound is in contrast to a net loss of SR3.3 million in the same period last year.

Mohammed Ibrahim Abunayyan, CEO of Shaker, said in a press statement: “During the first quarter our team continued to demonstrate flexibility to operate in a challenging environment and deliver strong sales and earnings. At the beginning of the year, we rolled out our 2021-2023 strategy and we are pleased to already see the results of our growth plan.

“We continue to expand our footprint in our core segments – ACs and home appliances – by growing our portfolio and seeking new opportunities in the market. In the first quarter we welcomed Panasonic, a brand with which we have now entered the TV category. Meanwhile, we have pursued opportunities emerging from the government’s commitment to megaprojects across the Kingdom, and this is an area we will continue to place significant emphasis on.”

The company has also embraced new manufacturing techniques, such as robotics and artificial intelligence, at its LG-Shaker manufacturing facility in Riyadh, which has helped to increase production speed and accuracy and reduce sots, he added.

According to a report by research company Euromonitor, the Saudi AC market is set to grow by 2 percent in the next two years, while the home appliances market is expected to grow by 3 percent over the next three years

Growth will also be supported by government energy-efficiency programs including the Saudi Energy Efficiency Center’s high-efficiency AC initiative, and Tarsheed, the government’s National Energy Services Company.

Shaker also sees potential growth due to the launch of megaprojects such as NEOM and the Red Sea Project.


Bahrain’s Investcorp targets larger North American deals

Bahrain’s Investcorp targets larger North American deals
Updated 06 May 2021

Bahrain’s Investcorp targets larger North American deals

Bahrain’s Investcorp targets larger North American deals
  • Investcorp is the region's largest private equity and alternative asset manager
  • Investcorp plan to increase assets under management to $50 billion

RIYADH: Investcorp Holdings BSC is targeting larger private equity deals in North America as it seeks to boost assets under management to $50 billion, Bloomberg reported.

The biggest private equity and alternative asset manager in the Middle East sees buyouts in that region representing one of its best avenues to growth, David Tayeh, head of North America private equity, said in an interview.

The firm is also looking at more co-investments as a way of participating in bigger deals, he said.

“We want to grow our capacity to invest and broaden the top of the funnel of investments that we can look at from a size perspective,” said Tayeh. “At the moment there are deals that we really like that we don’t pursue because they’re outside our size range.”

Investcorp, which counts Abu Dhabi sovereign wealth fund Mubadala Development Co. as a major investor, outlined a plan to double its assets under management from about $25 billion in 2018 within seven years. It is targeting a combination of acquisitions and boosting its existing private equity, real estate and alternative investments units.


Abu Dhabi National Hotels first quarter profit more than doubles

Abu Dhabi National Hotels first quarter profit more than doubles
Updated 06 May 2021

Abu Dhabi National Hotels first quarter profit more than doubles

Abu Dhabi National Hotels first quarter profit more than doubles

DUBAI: Abu Dhabi National Hotels Company reported a more than doubling of net profit year over year in the first quarter as its financing costs fell.
First-quarter net profit was 40.7 million dirhams ($11.1 million), up from 16 million dirhams in the year earlier period, ADNH said in a filing to the Abu Dhabi Securities Exchange.
Revenue fell to 224.7 million dirhams from 344.3 million dirhams, while costs dropped to 201.8 million dirhams from 294.1 million dirhams.
While financing costs fell to 9.5 million dirhams from 19 million dirhams, the big difference from a year ago was the 41.9 million dirhams settlement of a legal claim in Q1 2020 that was not repeated in 2021.
The legal claim related to construction of one of its hotels. The total settlement amount was 200 million dirhams against available accrual of 158 million dirhams, resulting in a loss of 42 million dirhams, ADNH said.
Profit from joint ventures, including ADNH Compass Middle East, was 44.3 million dirhams, up from 39.6 million dirhams a year earlier.
The company, which owns 12 hotels in the UAE, including two Radissons, a Sheraton, a Park Hyatt and a Ritz Carlton, ended the quarter with 89.5 million dirhams less cash or equivalents at 264.9 million dirhams.