Saudi inflation slows to 4.9% in March as VAT effect lingers

Saudi inflation slows to 4.9% in March as VAT effect lingers
VAT tripled in July 2020 to 15%. (File)
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Updated 16 April 2021

Saudi inflation slows to 4.9% in March as VAT effect lingers

Saudi inflation slows to 4.9% in March as VAT effect lingers
  • Saudi inflation jumped to 6.1% after VAT was increased last July
  • Food and beverages were the biggest contributors to inflation in March

RIYADH: Saudi Arabia’s annual inflation rate fell marginally in March as last July’s increase in value-added tax (VAT) continued to assert an effect on prices.

The consumer price index rose an annual 4.9 percent in March, compared with a 5.2 percent increase in February, the General Authority of Statistics (GASTAT) said in a statement on Thursday.

The inflation rate jumped to 6.1 percent in July 2020 from 0.5 percent in June as the VAT rate was increased from 5 percent to 15 percent and has mainly been drifting lower since.

The biggest contributors to March’s reading were food and beverage prices, which increased 10.2 percent from a year earlier, driven by a 12 percent increase in the cost of meat and 10.9 percent higher prices for vegetables, GASTAT said.

Transport costs rose 10.5% as vehicle prices rose 9.6%, while tobacco gained 13.1 percent and communication added 13.2 percent.

The cost of education fell 9.5 percent year over year, while housing, water, electricity, gas and other fuels declined 2.7 percent, driven by a 3.9% drop in housing rentals.

Saudi Arabia’s acting information minister said in November last year the kingdom could review its VAT increase once the coronavirus pandemic ends. Analysts at Al Rajhi Capital predicted the higher VAT rate would generate SR28 billion ($7.5 billion) in 2020 and SR88 billion in 2021 if maintained.

In 2018, Saudi Arabia and the UAE became the first two countries in the Arabian Gulf to introduce VAT.


US seeks to extradite Turkish businessman over fraud charges

US seeks to extradite Turkish businessman over fraud charges
Updated 4 min 29 sec ago

US seeks to extradite Turkish businessman over fraud charges

US seeks to extradite Turkish businessman over fraud charges
  • Korkmaz and co-conspirators allegedly used the proceeds from the scheme to buy the Turkish airline Borajet, hotels in Turkey and Switzerland and a yacht named the Queen Anne

WASHINGTON: The United States will seek to extradite a Turkish businessman from Austria so he can appear before a US judge in Utah, where he is facing charges of conspiring to commit money laundering and wire fraud, the US Justice Department said.
Sezgin Baran Korkmaz laundered more than $133 million in fraud proceeds through bank accounts that he controlled in Turkey and Luxembourg, the Justice Department said in a statement.
Korkmaz, it said, was arrested in Austria on Saturday at the department’s request following the unsealing of a superseding indictment charging him with conspiracy to commit money laundering, wire fraud and obstruction of an official proceeding.
Reuters was not immediately able to identify Korkmaz’s lawyers for comment.
The businessman is also being investigated by Turkey, where prosecutors in December detained 10 executives working at Korkmaz’s companies, after Turkey’s Financial Crimes Investigation Board (MASAK) said the companies were used for money laundering, Turkish state-news agency Anadolu reported.
The Turkish ambassador to Austria told Dogan News agency on Sunday that Korkmaz was detained on Saturday in a town about 260 km (160 miles) from Vienna and that Turkey had initiated an extradition process with Austrian authorities.
The Turkish Foreign Ministry did not return a call for comment.
It was not immediately clear where Korkmaz would be extradited. He is believed to have left Turkey in December before the police raids.
US prosecutors say the fraud proceeds stemmed from a scheme involving the filing of false claims for more than $1 billion in renewable fuel tax credits for the production and sale of biodiesel by Utah-based Washakie Renewable Energy.
Washakie could not immediately be reached for comment.
Korkmaz and co-conspirators allegedly used the proceeds from the scheme to buy the Turkish airline Borajet, hotels in Turkey and Switzerland, a yacht named the Queen Anne and a villa and an apartment on the Bosphorus in Istanbul, the Justice Department said.

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Global stocks, US yields recoup some losses

Global stocks, US yields recoup some losses
Updated 22 June 2021

Global stocks, US yields recoup some losses

Global stocks, US yields recoup some losses
  • Investors still digesting last week’s surprise hawkish shift by the US Federal Reserve

WASHINGTON: US stocks were higher on Monday and global stocks advanced in choppy trade after hitting a four-week low earlier in the session, with investors still digesting last week’s surprise hawkish shift by the US Federal Reserve.

The US dollar retreated from Friday’s 10-week high. Yields on 10-year Treasuries turned higher after sliding overnight to a four-month low of 1.354 percent. But the benchmark note was still trading well below its recent mid-point range of about 1.6 percent after traders reacted to Federal Reserve expectations for a rate hike.

Shares of banks, energy firms and other companies that tend to be sensitive to the economy’s fluctuations were higher, recovering some losses after have fallen sharply since the Fed’s meeting on Wednesday, when the central bank caught investors off guard by anticipating two quarter-percentage-point rate increases in 2023.

The Dow Jones Industrial Average rose 1.45 percent, the S&P 500 gained 1 percent and the Nasdaq Composite added 0.2 percent.

“Bulls are attempting to regroup this morning after last Friday’s plunge,” Paul Hickey of Bespoke Investment Group said in a market note.

Stocks in Asia took their cue from Wall Street’s falls on Friday but European shares bucked the trend, with the pan-European STOXX 600 index up 0.6 percent.

“The situation in reality is actually pretty good — the Fed is stabilizing inflation,” said Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg. “Cyclical sectors may have overshot the market in the short term and so you may have a bit of pressure on the sector.”

Galy noted the “interesting part” of the correction was that it lagged as traders digested the news.

MSCI’s All Country World Index, which tracks shares across 49 countries, was up 0.5 percent after hitting its lowest since May 24.

Earlier in Asia, Japan’s Nikkei led declines with an over 3 percent drop and dipped below 28,000 for the first time in a month, while MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2 percent.

The US dollar index was down 0.4 percent, off Friday’s 10-week high of 92.408, following its biggest weekly advance in more than a year.

St. Louis Fed President James Bullard further fueled the sell-off on Friday by saying the shift toward faster policy tightening was a “natural” response to economic growth and particularly inflation moving quicker than anticipated as the country reopens from the coronavirus pandemic.

“We believe there is a limit to how much more hawkish the Fed can be given its inflation projections relative to the catch-up rates range,” BlackRock analysts said in a note.

“Our bottom line: We believe the Fed’s new outlook will not translate into significantly higher policy rates any time soon.”

Several Fed officials have speaking duties this week, including Chair Jerome Powell, who testifies before Congress on Tuesday. 

The euro was up 0.46 percent to $1.1915. Sterling recovered some ground, to trade 0.9 percent higher after sliding to its lowest since April 16.

Commodity-linked currencies have also suffered, with the Australian dollar hovering above a six-month low at $0.7495.

A stronger greenback has pressured cryptocurrencies, too, with Bitcoin falling 7.7 percent, while smaller rival Ether lost 11 percent.

In commodities, gold rebounded 1.0 percent to $1,781.41 an ounce on Monday, looking to snap a six-day losing streak, but remained near the lowest since early May.

Copper continued to fall on Monday, hitting its lowest level since mid-April after moves by China to rein in commodities price rallies and signals from the US Federal Reserve it will tighten monetary policy sooner than expected. 

Benchmark copper on the London Metal Exchange (LME) was down 0.8 percent at $9,070 a ton in official trading, after touching $9,011.

Crude oil rose, underpinned by strong demand during the summer driving season and a pause in talks to revive the Iran nuclear deal that could indicate a delay in resumption of supplies from the OPEC producer. Brent crude futures rose to $74.48 a barrel, up 1.32 percent on the day, as Intermediate (WTI) crude rose 1.9 percent to $73.


Startup of the Week: The Graze Board; Bringing together foods of every color and flavor

Startup of the Week: The Graze Board; Bringing together foods of every color and flavor
Updated 22 June 2021

Startup of the Week: The Graze Board; Bringing together foods of every color and flavor

Startup of the Week: The Graze Board; Bringing together foods of every color and flavor

JEDDAH: The Graze Board, established in 2019, is the first company in Jeddah offering cheese platters and charcuterie boards, presenting fresh, top-quality food in an artistic way.

It was founded by Heba Abed and her 15-year-old daughter Joory Khudary. Abed describes the family business as a “luxury catering brand.”

She said: “All employees of The Graze Board are either family or close friends. We keep the circle small so that we keep the secrets of The Graze Board a mystery.” The offerings are a combination of savory and sweet, with cheese, bread, vegetables and fruits. The boards look like a multi-color palette, with a variety of vibrant foods.

The business started with a tradition where Abed’s family members would gather together each week and bring cheese boards to share.

“We discussed that we should start it as a business. The Graze Board believes that family and friends cherish the moment they spend together eating meals in the dining room,” Abed said.

The family puts love and effort into each board, she said: “We choose the finest kinds of cheese, for instance. We also use the freshest bread we can find. The Graze Board creates a unique art piece from simple ingredients in each board.”

Many of the The Graze Board’s clients are repeat customers, too. “We have gained many loyal customers,” Abed said.

But the business did face some initial challenges, as the idea of cheese platters was fresh to the Kingdom and not many people understood the concept at first. “The biggest challenge was how to convince and attract customers to see, try, love and re-order our boards,” Abed added.

The Graze Board operates as a delivery service to clients, but Abed said that the company has ambitious plans to open a physical branch and spread across the Kingdom.


Wa’ed boosts investment in digital mapping startup

Wa’ed boosts investment in digital mapping startup
Updated 21 June 2021

Wa’ed boosts investment in digital mapping startup

Wa’ed boosts investment in digital mapping startup
  • Online applications for all Saudi-based entrepreneurs opened on Wednesday last week

RIYADH: Wa’ed, the entrepreneurship arm of Saudi Aramco, has boosted its investment in a digital mapping and indoor navigation startup in a bid to help it expand globally.

Alkhobar-based NearMotion provides mobile navigation tools for airports, hospitals, shopping malls, museums, theme parks and event stadiums, allowing users to get real-time information and services. This will be Wa’ed’s second investment in the company, having previously backed it in 2016.

Some of the startup’s clients include Johns Hopkins Aramco Healthcare in Dhahran, Dallah Hospital in Riyadh and MediClinic Middle East in Dubai.

The company also won a SR1.2 million ($320,000) contract for digital mapping services at the Saudi Ministry of Education’s 200,000 square-meter headquarters in Riyadh.

“We initially invested in NearMotion because its technology was unique and game-changing, and its success in the [Gulf Cooperation Council] has shown this,” Wassim Basrawi, managing director of Wa’ed, said in a statement. “With this second investment, we aim to help globalize this exciting Saudi success story.”

Wa’ed was established by Saudi Aramco in 2011 to offer loan financing activities to entrepreneurs, while its Wa’ed Ventures venture capital arm oversees a $200 million investment fund and a portfolio of more than 30 Saudi-based companies.

Wa’ed last week launched its first roadshow event to unearth and fund the next generation of Saudi entrepreneurs. With up to SR100 million at its disposal, Wa’ed is planning to hand out loans and venture capital investments to commercially feasible ventures that would fill existing gaps in the Kingdom’s economy.

The roadshow will visit Jubail, Yanbu, Riyadh, Jeddah, Makkah and Madinah. Online applications for all Saudi-based entrepreneurs opened on Wednesday last week.

“Seventy out of over 100 startups we supported were the first of their kind and received their first-ever investment from us, and this is what we are targeting now: Distinguished and not yet supported startups and ideas,” Basrawi said.


Saudi Ports appoints Omar Hariri as CEO

The Saudi Ports Authority (Mawani) board of directors has appointed Omar bin Talal Hariri as CEO. (SPA/File Photo)
The Saudi Ports Authority (Mawani) board of directors has appointed Omar bin Talal Hariri as CEO. (SPA/File Photo)
Updated 21 June 2021

Saudi Ports appoints Omar Hariri as CEO

The Saudi Ports Authority (Mawani) board of directors has appointed Omar bin Talal Hariri as CEO. (SPA/File Photo)
  • Hariri was Saudi Airlines Cargo and the Saudi Logistics Company “SAL” CEO, since 2018

RIYADH: The Saudi Ports Authority (Mawani) board of directors has appointed Omar bin Talal Hariri as CEO, effective early July 2021.

This appointment culminates 18 years of experience, which he started in 2004, as the new CEO proved his competency through the number of leadership positions he held in the transport and logistics sectors, Mawani said in a filing today, Monday.

Prior to this, Hariri was Saudi Airlines Cargo and the Saudi Logistics Company “SAL” CEO, since 2018. He led the two companies towards transformation by developing infrastructure, introducing the latest digital programs, modernizing systems and raising the Saudization rates to 95 percent, among other changes.

He also worked on developing and implementing the group's strategy in line with the Kingdom's Vision 2030.

Hariri held the position of CEO in several companies.

He is also a member of boards of directors and committees, in the International Air Transport Association Consulting (IATA Consulting), the Logistics Committee of the Jeddah Chamber of Commerce, and others.

He also chairs the Board of Directors of the SkyTeam Cargo Alliance.