Saudi property market adapts to new tax

Saudi property market adapts to new tax
Property deals in Saudi Arabia are exempted from a 15 percent value-added tax (VAT) as the government seeks to support the real estate sector. (SPA)
Short Url
Updated 04 August 2021

Saudi property market adapts to new tax

Saudi property market adapts to new tax

RIYADH: The Saudi Zakat, Tax and Customs Authority registered over 543,000 transactions related to the Real Estate Transaction Tax (RETT) since its implementation in October 2020, the official Saudi Press Agency (SPA) reported.

The highest number of tax transactions was reported in Riyadh with 125,110 followed by Jeddah (55,680), Buraidah (50,462), Makkah (18,955) and Madinah (18,557).

“This gives a positive impression to the property market,” Khaled Almobid, CEO of Riyadh-based Menassat Reality Co. told Arab News.

He said many thought the new tax might contribute to a decline in the demand of property but “the market started to adapt to it,” which is a positive sign for the Kingdom’s real estate sector.

Property deals in Saudi Arabia are exempted from a 15 percent value-added tax (VAT) as the government seeks to support the real estate sector.

Instead a 5 percent tax was introduced last year to boost the economy as it was hit hard by the impact of the coronavirus disease (COVID-19) pandemic and weaker oil prices.

“The buyer used to pay a value-added tax (VAT) of 15 percent, and due to the real estate conditions in the Kingdom, it was turned into a tax paid by the seller, not the buyer, called the real estate transaction tax, and it was reduced to 5 percent,” Almobid said.


Egypt’s sovereign fund eyes investment in fintech sector

Egypt’s sovereign fund eyes investment in fintech sector
Updated 24 sec ago

Egypt’s sovereign fund eyes investment in fintech sector

Egypt’s sovereign fund eyes investment in fintech sector

RIYADH: The Sovereign Fund of Egypt is exploring investment opportunities in the fintech sector with a focus on small and medium projects, Ayman Suliman said in a CNBC Arabiya interview.

Talking about investments in other sectors, the chief executive officer of the fund said the tourism sector represents 20-20 percent of the fund's total investments.

Suliman also mentioned the fund’s plans to transform the historic Bab Al-Azab area in Cairo’s Salah Al-Din Al-Ayoubi Citadel into the first integrated innovation zone in the Middle East and North Africa.  

He said several projects in the health sector are also being studied such as the expansion of pharmaceutical exports.

“The health sector is a mainstay in the fund’s investment portfolio,” the CEO added.

The fund aims to attract private investments in Egypt’s underutilized assets and create wealth for future generations and boost the country’s economic growth.


Abu Dhabi to use drones to deliver medical supplies

Abu Dhabi to use drones to deliver medical supplies
Updated 30 min 47 sec ago

Abu Dhabi to use drones to deliver medical supplies

Abu Dhabi to use drones to deliver medical supplies

DUBAI: Abu Dhabi is working on plans to add advances drones to its health sector’s supply chain, said an official statement.

Drones will be used to deliver medical supplies, medicine and blood units, vaccines and samples between laboratories, pharmacies, blood banks across healthcare facilities around the city in a safe manner.

The project will create a state-of-the-art delivery system and network using drones at 40 stations throughout the year 2022, the statement said. 

The project is a collaboration between Abu Dhabi’s Department of Health, the General Civil Aviation Authority, SkyGo and Matternet. It will leverage existing advanced infrastructure to transform healthcare logistics.

It aligns with the year of preparation for the “UAE Projects of the 50,” the UAE's Fourth Industrial Revolution Strategy, and broader strategies to position Abu Dhabi as a global hub for innovation. 

The statement issued by the Abu Dhabi Government Media Office said: The use of drones will yield environmental benefits with a reduction in CO2 emissions and reduced road traffic congestion.” 

SkyGo and Matternet have completed phase one of testing and are now working on phase two, which will be finalized by the end of this year and will address all aviation safety requirement and risk assessments.


Oil, equities appear to shake off Evergrande worries

Oil, equities appear to shake off Evergrande worries
Updated 21 September 2021

Oil, equities appear to shake off Evergrande worries

Oil, equities appear to shake off Evergrande worries
  • Evergrande, founded in 1996, is one of China’s biggest builders of apartments, office towers and shopping malls

LONDON: Oil and equities finally appeared to shake off concerns that have plagued financial markets in recent days following the crisis at China’s largest property group Evergrande.

Most economists now believe there is little risk of wider global financial market contagion from the problems at Evergrande which is on the verge of defaulting on its massive $300 billion debt pile.

Indeed, it emerged that funds run by US asset management giant BlackRock and global bank HSBC appeared to have embarked on a “buying the dip” strategy and increased their holdings of Evergrande bonds as the developer’s liquidity crisis was intensifying.

Data by Morningstar reveals BlackRock bought up five different Evergrande dollar bonds through one of its high-yield funds, which had holdings in the developer then worth $18 million, in August.

An HSBC-run high yield fund also purchased Evergrande’s debt over the summer. The Morningstar data revealed the fund increased bond holdings by 38 percent since February, but the value of the fund’s total exposure at $31m declined over the same period due to falling prices.
Ashmore, the emerging market investment specialist, is understood to have the highest exposure with more than $400 million of its bonds. UBS had close to $300 million of exposure to Evergrande bonds.

Patrick Ge, manager research analyst at Morningstar, said: “We’ve seen a few funds adding to China Evergrande between July and August 2021, given widening spreads and attractive valuations. This is in line with what we have heard from some managers where they said that at its current levels, they believe Evergrande is a buy.”

Evergrande’s Hong Kong-traded shares have fallen 85 percent this year and its bonds have also been downgraded by global credit ratings agencies.

Simon MacAdam from Capital Economics said: “A managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence.”

However, Chinese regulators, who are understood to be looking at breaking the company up, have so far failed to provide any details about how they will resolve Evergrande’s $300 billion debt pile.

China watchers only expect the government to intervene if the company and its lenders fail to agree on how to handle its debts.

JP Morgan analyst, Frank Pan, said Evergrande was likely to go through the same process as developer China Fortune Land, which defaulted on $530m of dollar-denominated debt earlier this year.

Pan said: “That means a standstill for all creditors while allowing operations to continue.”

After a decade of warnings from economist on the threat posed by China’s rising debt levels, Beijing’s financial regulator last year imposed much tighter limits on real estate-related borrowing.

Evergrande has $18 billion of outstanding foreign-currency bonds, mostly held by Chinese banks and other institutions. 

Fears persist that China’s property sector, which has been a central engine of the country’s economic expansion, is facing an unprecedented slowdown because of the current tightened credit conditions.

If property companies default on their debts, investors who hold their bonds could find their finances under pressure, forcing them to sell other investments to raise cash, which could in turn impact on other markets beyond property and beyond China.

Evergrande, founded in 1996, is one of China’s biggest builders of apartments, office towers and shopping malls.

It is estimated to have more than 200,000 employees and supports almost 4 million jobs in construction and other industries through 1,300 projects in 280 cities across China.

Evergrande’s founder, Xu Jiayin, was China’s richest entrepreneur in 2017 with a net worth of $43 billion and remains the country’s richest real estate developer.


CMA approves Al Hasoob's listing on Nomu

CMA approves Al Hasoob's listing on Nomu
Updated 21 September 2021

CMA approves Al Hasoob's listing on Nomu

CMA approves Al Hasoob's listing on Nomu

RIYADH: Al Hasoob, the computer and electronics retailer with seven branches throughout Saudi Arabia, has won Capital Market Authority (CMA) approval to list on the parallel Nomu market.

The offer of 280,000 shares to qualified investors represents 20 percent of the company’s share capital, the CMS said in a filing on Tuesday.

No date was provided for the listing, but the CMA's approval is valid for six months and will be cancelled if the offering and listing of the Company's shares does not happen within this period.

 


Saudi per capita GDP up 28%

Saudi per capita GDP up 28%
Updated 21 September 2021

Saudi per capita GDP up 28%

Saudi per capita GDP up 28%

RIYADH: Saudi Arabia's per capita gross domestic product (GDP) surged by 27.9 percent in the second quarter of 2021 compared to the same period in 2020, official data has revealed.

The dramatic growth means the Kingdom's GDP per capita went from SR16,115 to SR20,605 - meaning the quarter was the highest since the fourth period of 2019, which at that time amounted to SR22,290.

The Q2 2021 rise is also a 3.6 percent increase on the previous quarter. 

The GDP increased during the second quarter of 2021 by 30 percent compared to the same period in 2020 to reach SR735.03 billion, according to the General Authority GASTAT.

The private sector accounted for 48 percent of GDP, followed by the oil sector with a share of 29.3 percent, and the government sector with a share of 22.6 percent.

GDP is final spending at buyers' prices, and includes government final consumption spending, private final consumption spending, gross capital formation, and net exports.