Saudi Arabia licenses record number of foreign investors in Q1 2021

Saudi Arabia licenses record number of foreign investors in Q1 2021
In Q1 2021, 59 percent of new investment projects were full foreign ownership, with the remainder being joint ventures with local investors. (Reuters)
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Updated 11 August 2021

Saudi Arabia licenses record number of foreign investors in Q1 2021

Saudi Arabia licenses record number of foreign investors in Q1 2021
  • Saudi Arabia awarded 478 new foreign investor licenses in Q1 2021
  • The manufacturing sector led the way with 114 new licenses

RIYADH: Saudi Arabia awarded 478 new foreign investor licenses in Q1 2021, the most since records began in 2005, as the Kingdom’s economic rebound from COVID-19 continues.

The quarterly figures was a 36 percent increase on the same period in 2020 and 2.6 percent higher than the previous quarter, which was also a record, the Ministry of Investment of Saudi Arabia (MISA) said.

The manufacturing sector led the way with 114 new licenses, followed by retail and e-commerce (78), construction (78), professional and scientific (62) and ICT (41).

The data was presented in MISA’s Spring 2021 Investment Highlights report, which outlines the developments and pro-business reforms ongoing across the Saudi investment environment.

A 2018 reform allowed 100 percent foreign ownership of companies in the Kingdom. In Q1 2021, 59 percent of new investment projects were full foreign ownership, with the remainder being joint ventures with local investors.

“These latest figures show that, despite the ongoing impact of the COVID-19 pandemic on the global economy, foreign investors continue to have great confidence in Saudi Arabia’s historic transformation journey under the guidance of Vision 2030,” said HE Khalid Al Falih, minister of investment of Saudi Arabia.

Saudi Arabia attracted 18 percent of all foreign investment in the Middle East and North Africa last year, the most of any country in the region, according to The Financial Times’ fDi Intelligence.

The number of projects in Saudi Arabia fell by 49 percent in 2020 to 73, for a total value of $10.4 billion.


Sudan cut off from $650 million of international funding after coup

Updated 4 sec ago

Sudan cut off from $650 million of international funding after coup

Sudan cut off from $650 million of international funding after coup
KHARTOUM: Sudan was unable to access $650 million in international funding in November when assistance was paused after a coup, the finance minister of the dissolved government said — a freeze that puts in doubt basic import payments and the fate of economic reforms.
The financing included $500 million in budget support from the World Bank and $150 million in special drawing rights from the International Monetary Fund, said Jibril Ibrahim, who was appointed to a civilian transitional government in February.
Foreign funding was seen as crucial in helping Sudan emerge from decades of isolation and supporting a transition toward democracy that began with the 2019 overthrow of Omar Al-Bashir.
The Oct. 25 coup upended that transition. The United States has put on hold $700 million in economic assistance since the coup and the World Bank, which had promised $2 billion in grants, has paused disbursements.
After mass protests, the military on Nov. 21 announced a deal to reinstate Prime Minister Abdalla Hamdok. He is tasked with forming a government of technocrats but faces political opposition to the deal.
“Sudan had tremendous international support. Now donors will be much more cautious,” said one former official from the dissolved government.
The onus will now be on the military and the government to show they are not returning to the very Bashir-era model that was being restructured and reformed, the former official said.
The US Treasury declined to comment. The IMF, which approved a $2.5 billion, 39-month loan program in June that is subject to periodic review, said it continued to “closely monitor developments.”
Before the coup the inflation rate, one of the highest in the world, had begun to fall, and the exchange rate had stabilized following a sharp devaluation in February.
Western diplomats and bankers say those reforms are now at risk and it is unclear how Sudan can fund imports without printing banknotes, a policy that fueled a long-running economic crisis but stopped during the transition.
Around the time of the coup, Sudan had enough reserves to cover just two months of strategic imports, a second former official said.
Ibrahim, a former rebel leader who secured his ministerial role through a peace deal and expects to retain it, said he hoped international support would return gradually over the next three to six months and that meanwhile bills could be paid and reforms would continue.
“Basically we depend on tax, customs and gold revenues and on different (state) companies working in various fields,” Ibrahim said in an interview at the Finance Ministry in Khartoum. For imported basic goods, such as flour, fuel and medicine, “we cannot cover it completely, but the majority of the strategic commodities we can cover with our exports,” he said.
The government had begun to reduce its trade deficit through tax and customs reforms, but those revenues were interrupted by a blockade by a tribal group at Port Sudan before the coup. A further blockade has been threatened.
Ibrahim said the main impact of the freeze in international support would be on development projects covering areas including water supply, electricity, agriculture, health and transport. An internationally funded basic income program to lessen the impact of subsidy reform has also been frozen.
Sudan’s 2022 budget was being planned with no allowance for international assistance, Ibrahim said, but with a target of sticking to a 1.5 percent deficit limit defined under an IMF financing program. Projected growth for 2022 could fall from 3 percent to 1.5-2 percent, he said.
Ibrahim said Sudan would seek investment rather than grants from wealthy Gulf Arab states that now face their own economic challenges.
“Up till now there have not been any big promises of support from any country, Arab or non-Arab, but contacts with all friendly states continue,” he said.

Australia proposes central bank digital currency: Crypto Wrap

Australia proposes central bank digital currency: Crypto Wrap
Updated 08 December 2021

Australia proposes central bank digital currency: Crypto Wrap

Australia proposes central bank digital currency: Crypto Wrap

RIYADH: Australia turned the heads of crypto enthusiasts on Wednesday with the country’s Treasurer Josh Frydenberg announcing a consultation on digital currency reforms.

In a speech in Melbourne, Frydenberg said the government is studying plans for a central bank digital currency, along with regulating the crypto market, as it seeks to reform how consumers and businesses in the country pay for goods and services.

The government will also consult on a digital version of cash that will be universally accessible and consider a license framework that allows crypto transactions in a regulated environment.

The Australian government expects to receive advice on both by the end of 2022, Bloomberg reported.

“If we do not reform the current framework, it will be Silicon Valley that determines the future of our payments system,” Frydenberg said in the speech. “These are significant shifts which we need to be in front of.”

Reacting to the speech, Mikkel Morch, executive director at crypto/digital assets hedge fund ARK36 said: “Governments around the world are waking up to the reality that cryptocurrencies have already become an entrenched part of the global payments environment - and one that is preferred over the legacy systems by a growing number of individuals.

“After the recent EU crypto regulation proposal, Australia has now announced its working on a similar document - and it is to be expected that other major jurisdictions will follow suit.”

“Importantly, the scope of the regulation outlined by the Australian Treasurer doesn't seem to be overly restrictive. Clearly, then, the regulators recognise the immense economic and innovation potential of crypto and don't want to stifle it,” Morch added.

Edan Yago, the lead contributor to the Bitcoin DeFi protocol Sovryn commented that it is a “question of time” before all payments and financial transactions are digitised on public ledgers, adding: “The future of money and finance is borderless and digital.”

India

India is considering appointing a capital markets regulator to oversee cryptocurrencies, as authorities look to classify them as financial assets, Bloomberg reported.

Prime Minister Narendra Modi’s government, which is planning to introduce legislation in the ongoing Parliament session, will give cryptocurrency holders a deadline to declare their assets and fulfil any new rules.

The bill will likely use the term crypto assets instead of cryptocurrency and will not refer to the central bank's plan to create its own digital currency, according to people with knowledge of the matter.

Violators can be fined up to 200 million rupees ($2.7 million) or imprisoned for a year and a half, according to the proposals.

The government may also consider setting a minimum investment level for crypto assets to protect small investors, Bloomberg News reported.

Daily Trading

Bitcoin, the leading cryptocurrency in trading internationally, traded lower on Wednesday, falling by 2.18  percent to $50,126 at 5:37 p.m Riyadh time.

Ether, the second most traded cryptocurrency, traded at $4,401, up by 2.38 percent, according to data from Coindesk.


Pakistan’s fashion startup raises $2.4m in Pre-Series A round

Pakistan’s fashion startup raises $2.4m in Pre-Series A round
Updated 08 December 2021

Pakistan’s fashion startup raises $2.4m in Pre-Series A round

Pakistan’s fashion startup raises $2.4m in Pre-Series A round

RIYADH: Pakistan-based fashion e-commerce startup Clicky has raised $2.4 million in a pre-Series A round led by early-stage investors in UAE and Pakistan, Magnitt reported. 

The startup aims to use the newly acquired funding to scale its private-label product, through working directly with manufacturers and fashion designers. 

Clicky, founded in 2016, offers fast fashion products with a focus on apparel, footwear, and accessories, working with diverse local manufacturers and International bands. 

The fashion startup has been experiencing growth of over 20 percent month-on-month and a fourfold business growth in less than a year, following Fatima Ventures and Souq’s investment in earlier rounds.  


Japan’s economy shrinks by 3.6% in the third quarter of 2021: Economic wrap

Japan’s economy shrinks by 3.6% in the third quarter of 2021: Economic wrap
Updated 08 December 2021

Japan’s economy shrinks by 3.6% in the third quarter of 2021: Economic wrap

Japan’s economy shrinks by 3.6% in the third quarter of 2021: Economic wrap

Japan’s gross domestic product narrowed by an annual rate of 3.6 percent in this year’s third quarter, lower than the government’s preliminary estimate of 3 percent.

Weak consumer spending was mainly responsible for the decline in activity, as well as exporters suffering from supply chain disruptions, according to Bloomberg.

French economy

Economic activity in France is set to rise again in December, even as the country grapples with another wave of Covid-19, the Bank of France said. It also added that economic activity surpassed pre-pandemic levels in November.

This is according to the central bank’s survey of 8,500 companies.

Economic activity was 0.5 percent above pre-crisis levels in November. It is also set to surpass this level by 0.75 percent this month. Consequently, production will grow by around 0.75 percent in the fourth quarter, Bloomberg reported.

China’s rate

China trimmed its relending facilities by 0.25 percent to boost activity in the rural sector. Small firms were particularly hit by higher production costs and this step aims to support them.

The three-month relending rate is now 1.7 percent. The six-month rate is 1.9 percent while the one-year rate is 2 percent.

India’s monetary policy

The Reserve Bank of India decided to keep its policy repo rate unchanged, at 4 percent, during its meeting on Wednesday. 

The new decision is in line with the bank’s target of a 4 percent inflation rate while boosting economic expansion.

It added that consumer prices are set to rise by 5.3 percent for the 2021-22 fiscal year.


International events help boost Dubai hotels’ profits

International events help boost Dubai hotels’ profits
Updated 08 December 2021

International events help boost Dubai hotels’ profits

International events help boost Dubai hotels’ profits

RIYADH: Hotels in Dubai are raking in huge profits due to high-profile international events taking place in the emirate.

Expo 2020 and T20 Cricket World Cup boost Dubai hotels’ gross operating profit per available room to SR668 ($178) while the total revenue per available room of hotels amounted to $316 in October, according to an industry report cited by Khaleej Times.

“The average occupancy rate across the UAE in October registered at 78.8 percent, the highest level recorded since October 2015. As of October 2021, Dubai recorded the highest occupancy rate of 80.7 percent.” the report said.