Real estate loans to retail customers up 7.3% in Q3: Saudi Central Bank

Real estate loans to retail customers up 7.3% in Q3: Saudi Central Bank
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Updated 29 November 2021

Real estate loans to retail customers up 7.3% in Q3: Saudi Central Bank

Real estate loans to retail customers up 7.3% in Q3: Saudi Central Bank

Real estate loans made to Saudi individuals increased by 7.2 percent to hit SR412.6 billion ($110 billion) in the third quarter of this year, data from the Saudi Central Bank showed. 

Saudi banks lent SR533.4 billion in real estate loans to both retail and corporate customers in Q3, while finance companies lent a much lower SR25.4 billion.

The value of residential mortgage financing provided by banks to Saudi individuals  fell to SR11.8 billion in October, down from both the previous month and the same period in 2020. 

The number of contracts for these deals, however, increased to 23,899 contracts in October, SAMA data revealed. This reflected a 3.4 percent uptick from September’s level.

On the other hand, total contracts for residential mortgages were numbered at a higher 25,483 in October 2020. Their value was SR12.1 billion.

In particular, new residential mortgages for houses amounted to SR9.1 billion in October. Meanwhile, new bank loans used to finance the purchases of apartments by individuals were valued at SR2.3 billion in the same month.

These mortgages are used by individuals to finance the purchases of houses and apartments.


Turkey’s swap deal with the UAE is a boost, but won’t solve the lira’s underlying problems

Turkey’s swap deal with the UAE is a boost, but won’t solve the lira’s underlying problems
Updated 20 sec ago

Turkey’s swap deal with the UAE is a boost, but won’t solve the lira’s underlying problems

Turkey’s swap deal with the UAE is a boost, but won’t solve the lira’s underlying problems
  • Agreement is valued at $4.9 billion
  • Comes ahead of Turkey's President Erdogan planned visit to Abu Dhabi in February

ANKARA: At a time when Ankara is searching for foreign resources and facing unprecedented inflation rates, Turkey’s currency swap deal with the UAE is a much-needed confidence boost for the country’s economy.

However, analysts have warned that this deal alone will not solve the underlying problems facing the lira. 

The two nations have signed a three-year agreement worth $4.9 billion, including finance and trade relations.

Securing foreign swap lines are expected to fuel Turkey’s much-needed foreign currency reserves. 

“While this is a good vote of longer-term confidence in the Turkish economy, the currency swap will not address the roots of Turkey’s economic challenges. Many of these challenges are linked to nonconventional economic policy decisions,” Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington, told Arab News.

According to Mogielnicki, the currency swap puts some cash behind recent efforts to improve strained relations between the UAE and Turkey.

“The UAE is likely interested in using the currency swap to better position Emirati firms and investors to engage with Turkish markets as well as to support foreign policy objectives,” he said. 

Noting that currency swaps reduce dependency on a third currency and thus avoid fees arising from exchange rate volatility and transfer costs, Mogielnicki said that this move paves the way for greater trade and investment between countries.

“The broader MENA region is unlikely to be worse off because of the currency swap, but I don’t view this agreement as especially significant for the region,” he added. 

Enver Erkan, the chief economist of Tera Investment in Istanbul, welcomes the swap agreement with the UAE as a positive step towards increasing the gross foreign exchange reserves held by the Turkish Central Bank.

 “We, on the other hand, also consider the economic landscape in terms of net reserves excluding swaps. While net reserves are around $8 billion under the current circumstances, there is a negative picture of minus $56 billion in net reserves excluding swaps,” he told Arab News. 

Talks between Turkey's central bank and its counterpart in Azerbaijan on securing a possible currency swap line are also ongoing. 

Swap agreements are mainly used by countries that conduct large-scale trade relations between each other to finance part of these relations to be paid in local currencies.

Turkey already has some swap deals with China, Qatar and South Korea worth about $23 billion.

With this latest currency swap agreement, the Turkish Central Bank's total swap figure with foreign central banks reached $28 billion.

The swap agreement with China in 2012 and subsequent arrangements have permitted Turkish companies to pay for imports from China using yuan.

The agreement between Turkish and Emirati Central Banks will be valid for a period of three years, with the possibility of being extended further. 

Emre Peker, European director for political risk consultancy Eurasia Group, thinks the swap agreement will not have a material impact on Turkey's economy, but it will help Turkish companies trading with the UAE on the margins. 

“It is not a game changer, but will alleviate some financing pressures, considering that the swap covers Turkey's average annual exports to the UAE,” he told Arab News. 

The agreement comes ahead of a trip by Turkish President Recep Tayyip Erdogan to Abu Dhabi in February as part of Turkey’s moves to repair ties and concentrate on the economy.

Mustafa Sentop, Speaker of the Grand National Assembly of Turkey, told the Emirates News Agency the visit is “going to be a testament to the improved ties between our countries.”

"We believe that the leaders of Turkey and the UAE standing next to each other will deliver an important message on its own. The objective is to further strengthen the bilateral relations. There are mutual efforts to conclude new agreements and to renew previous commitments to cover a wider range in our current cooperation," he added.

According to the Emirates News Agency, the UAE is Turkey’s top trading partner among the Gulf Cooperation Council countries, with trade between the two countries US$8 billion in 2020. 

Sentop said the trade in the first 10 months of 2021 had amounted to US$6.4 billion.lira


Oil falls from 7-year high after US inventory build

Oil falls from 7-year high after US inventory build
Updated 50 min 44 sec ago

Oil falls from 7-year high after US inventory build

Oil falls from 7-year high after US inventory build
  • Both oil benchmarks are headed for a fifth straight weekly advance

RIYADH: Oil prices slid on Friday, a day after reaching a seven-year high, as higher inventories of US crude and fuel prompted profit taking.

Brent crude fell 2.1 percent to $86.50 a barrel as of 12:21 p.m. Riyadh time after touching $89.50 on Jan. 20, the highest level since October 2014. US benchmark WTI declined 2.2 percent to $83.65 a barrel after reaching a seven-year high on Wednesday.

Both benchmarks are still headed for a fifth straight weekly advance and are up about 10 percent this year.

US gasoline inventories rose by 5.9 million barrels last week to their highest since February 2021, the US Energy Information Administration said in a report on Thursday. Crude stockpiles increased by 515,000 barrels last week.

“An unexpected increase in US crude stockpiles prompted investors to take profits,” said Tatsufumi Okoshi, senior economist at Nomura Securities, who added the recent rally has been overdone. “Still, losses were limited as expectations that supply tightness would continue amid recovering demand and geopolitical tensions between Russia and Ukraine and in the Middle East kept investors cautious about selling.”

Investors are concerned about potential disruptions to supply after Yemen’s Houthis attacked the UAE, OPEC’s third-largest producer, and Russia, the world’s second-largest oil producer, makes increasingly ominous noises about a potential invasion of Ukraine.

However, the International Energy Agency said on Wednesday that oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, while demand holds up despite the spread of the omicron coronavirus variant.

Oil prices were also supported by French oil giant TotalEnergies’s announcement on Friday that it would withdraw from Myanmar over “worsening” human rights abuses committed since the country’s military took power in a February 2021 coup.

“The situation, in terms of human rights and more generally the rule of law... has led us to reassess the situation and no longer allows TotalEnergies to make a sufficiently positive contribution in the country,” the company said in a statement.

A fire broke out early Friday at a site belonging to the Kuwait National Petroleum Company, forcing a suspension of export operations there, the company said in a statement.

The fire in the Shuaiba Industrial Area in eastern Kuwait did not result in any injuries, according to a brief statement issued by the company. The fire occurred at a petroleum coke flowline. The coal-like substance is a byproduct of refined crude oil that is used in the steel and aluminum industry.

Only a week ago, a deadly fire erupted during maintenance work at a major oil refinery run by the same company, killing two Asian workers. Another 10 were wounded, five of them critically. An earlier fire erupted at that same oil refinery three months prior, resulting in several injuries.

Kuwait, a nation home to 4.1 million people, has the world’s sixth-largest known oil reserves.


Airbus says it revokes Qatar order for 50 A321 jets as rift widens

Airbus says it revokes Qatar order for 50 A321 jets as rift widens
Updated 21 January 2022

Airbus says it revokes Qatar order for 50 A321 jets as rift widens

Airbus says it revokes Qatar order for 50 A321 jets as rift widens
  • Qatar Airways is expected to fight the A321 contract’s termination, having said it plans to take delivery of the jets even though it is refusing to take more A350s until a dispute over surface erosion on the larger planes has been resolved

PARIS: Airbus on Thursday raised the stakes in a dispute with one of its largest customers, Qatar Airways, over grounded and undelivered A350 jets by announcing it had revoked a separate contract for 50 smaller A321s the airline needs to open new routes.
The move is expected to deepen a dispute that moved closer toward a rare courtroom clash on Thursday, with a procedural hearing over Qatar’s claim for $600 million in compensation over A350 flaws pencilled in for the week of April 26 in London.
Airbus revealed it was walking away from the contract for A321neos in skeletal arguments presented during a scheduling session over the A350 dispute at a division of Britain’s High Court on Thursday, people familiar with the matter said.
“We confirm we did terminate the contract for 50 A321s with Qatar Airways in accordance with our rights,” an Airbus spokesman said following a filing setting out provisional arguments, reported earlier by Bloomberg News.
Qatar Airways is expected to fight the A321 contract’s termination, having said it plans to take delivery of the jets even though it is refusing to take more A350s until a dispute over surface erosion on the larger planes has been resolved.
The airline had no immediate comment on the A321 contract.
The A321 order stems from a deal first signed some 10 years ago which was then worth $4.6 billion at list prices. It was later modified to switch 10 of the A321s to a newer version.
Qatar Airways has said the A321s will help it launch flights to new markets where there is currently not enough demand for larger aircraft, but which are out of reach of smaller A320s.

GROUNDING DISPUTE
The two companies have been locked in a row for months over A350 damage including blistered paint, cracked window frames or riveted areas and erosion of a layer of lightning protection.
Qatar Airways says its national regulator has ordered it to stop flying 21 out of its 53 A350 jets as problems appeared, prompting a bitter dispute with Airbus which has said that while it acknowledges technical problems, there is no safety issue.
Qatar Airways is seeking $618 million in compensation for the 21 grounded jets plus $4 million a day as the row drags on.
The Gulf carrier is also asking British judges to order France-based Airbus not to attempt to deliver any more of the jets until what it describes as a design defect has been fixed.
Airbus has said it will “deny in total” the complaint and has accused Qatar Airways, once one of its most highly courted customers, of mislabelling the problem as a safety concern.
It has indicated it will argue that state-owned Qatar Airways influenced its regulator to ground the jets to win compensation, while Qatar Airways has questioned the design and accuses Airbus of failing to produce studies, the people said.
Qatar Airways has said its local regulator is independently driving safety decisions and cannot evaluate the airworthiness of the affected jets without a deeper analysis from Airbus.
The European Union Aviation Safety Agency, which is responsible for the overall design but not the locally regulated airworthiness of individual planes in service, has said it has not so far found safety problems with A350s that it inspected.
Qatar is so far the only country to ground some of the jets.
But a Reuters investigation https://www.reuters.com/business/aerospace-defense/costly-airbus-paint-flaw-goes-wider-than-gulf-2021-11-29 in November revealed at least five other airlines had discovered paint or surface flaws since 2016, prompting Airbus to set up an internal task force before the Qatar row, and to explore a new A350 anti-lightning design.


World’s first hydrogen tanker to ship test cargo to Japan from Australia

World’s first hydrogen tanker to ship test cargo to Japan from Australia
Updated 21 January 2022

World’s first hydrogen tanker to ship test cargo to Japan from Australia

World’s first hydrogen tanker to ship test cargo to Japan from Australia
  • The hydrogen is cooled to minus 253 degrees Celsius (minus 423 Fahrenheit), liquefying it for export

MELBOURNE: A Japanese-Australian venture producing hydrogen from brown coal is set to start loading its maiden cargo on the world’s first liquid hydrogen carrier on Friday, in a test delayed by nearly a year because of the COVID-19 pandemic.
The Suiso Frontier, built by Japan’s Kawasaki Heavy Industries (KHI), arrived Australia this week from Kobe, following a longer trip than the expected 16 days as the ship dodged bad weather and rough seas, said a spokesperson for the Hydrogen Energy Supply Chain (HESC) venture. The ship is scheduled to head back to Japan in about a week.
Led by KHI, HESC is a A$500 million ($360 million) coal-to-hydrogen project backed by Japan and Australia as a way to switch to cleaner energy and cut carbon emissions.
Hydrogen, seen as a path to decarbonizing industries that rely on coal, gas and oil, is key to Japan’s goal to achieving net-zero emissions by 2050. Australia aims to become a major exporter of the fuel.
The Australian government on Friday committed a further A$7.5 million for HESC’s A$184 million pre-commercialization phase, and A$20 million for testing a capture and storage project for carbon dioxide released in the coal-to-hydrogen process to create a carbon neutral product.
Last year, HESC started extracting 70 kg of hydrogen a day from brown coal in the Latrobe Valley, about 135 km (84 miles) east of Melbourne, where brown coal mines have long fueled some of Australia’s most polluting power stations.
The hydrogen is produced by reacting coal with oxygen and steam under high heat and pressure. It is then trucked to a port site where it is cooled to minus 253 degrees Celsius (minus 423 Fahrenheit), liquefying it for export.
The partners are looking to produce up to 225,000 tons of hydrogen a year.
They will need to make a final investment decision by 2025, with Australia racing against countries in the Middle East and elsewhere to produce carbon neutral hydrogen, said Jeremy Stone, a director of J-Power, one of the HESC partners.
Partners in the project include Japan’s Electric Power Development Co, Iwatani Corp, Marubeni Corp., Sumitomo Corp. and Australia’s AGL Energy Ltd., whose mine is supplying the brown coal.


MENA mergers and acquisition deals reach $109bn in 2021, Saudi Arabia tops the region 

MENA mergers and acquisition deals reach $109bn in 2021, Saudi Arabia tops the region 
Updated 21 January 2022

MENA mergers and acquisition deals reach $109bn in 2021, Saudi Arabia tops the region 

MENA mergers and acquisition deals reach $109bn in 2021, Saudi Arabia tops the region 

RIYADH: Middle East and North Africa’s mergers and acquisition deals have hit $109 billion in 2021, a report released by Refinitiv showed.

The transaction amount is up 57 percent from 2020 and is the third year on record for the investments to hit the $100-billion mark.  

Saudi Arabia was the most targeted state, with $27.3 billion in mergers and acquisition activity, constituting half of the deals recorded in the region. 

During 2021, the amount of deals recorded a highest annual total since 1980, with 1,141 deals, up 40 percent compared to last year. 

Additionally, investment banking fees in the MENA region have totalled $1.4 billion during the year 2021, up 3 percent from the last year, the report revealed. 

The aforementioned figures were released by Refinitiv, a London Stock Exchange Group Business, in its report titled Middle East and North Africa Investment Banking Report for 2021.