Saudi first budget surplus in eight years presents an opportunity for stock market growth

Update Saudi first budget surplus in eight years presents an opportunity for stock market growth
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Updated 13 December 2021

Saudi first budget surplus in eight years presents an opportunity for stock market growth

Saudi first budget surplus in eight years presents an opportunity for stock market growth
  • Tadawul’s main and parallel indexes, TASI and Nomu, closed the pre-budget session in green territory

RIYADH: After eight years of budget deficits, Saudi Arabia reported a SR90 billion ($24 billion) projected surplus for 2022, estimating a 7.4 percent gross domestic product growth according to a Cabinet statement — an opportunity that sets the stage for stock market improvement.

“The current budget shows strong macro indicators that will enhance the confidence in economic growth and continuous reforms that are necessary to make the stock market more attractive to all investors to maintain positions,” Mazen Alsudairi, head of research at Al Rajhi Capital told Arab News.

"The economy growth next year is supported with 4 percent growth in non-oil activities and that's also another driver for strong stock market performance, in addition to an expected increase in liquidity," he added.  

The Kingdom’s budget picture for next year could have a big impact on investor sentiment amid uncertainty, potentially leading to a rally momentum for the Saudi bourse.

Tadawul’s main and parallel indexes, TASI and Nomu, extended their gains in the post-budget trading session, up 0.74 percent and 1.08 percent respectively in midday trading.

Elevated investor appetite led to stronger bourse performance in the Kingdom, outperforming other Mideast stocks. The UAE’s main index DFM was up slightly by 0.25 percent, Abu Dhabi’s index ADX lost 0.23 percent, and the Qatari index QSI went down by 0.07 percent.

Actual 2021 budget figures could also drive a healthier stock market. The stock market saw a recovery this year with many companies turning into profit after a slump in revenues and profitability in 2020.

Some 26 enlisted companies in the Saudi stock exchange rebounded from a nine-month 2020 net loss to profit this year. With improved companies’ performance, TASI soared 26.89 percent and Nomu rose 18.48 percent in the one-year period ending Dec.13.

For the current fiscal year, the Kingdom’s economy narrowed the budget deficit to SR85 billion from the initial estimate of SR145 billion made last year, thanks to the recovery of markets wounded by the wave of diminished economic growth and wrecked supply chains caused by the coronavirus pandemic.

Revenues are set to stand at SR930 billion in 2021, in contrast to the estimated revenues of SR846 billion projected last year. The revenue boost was attributed to gains in Saudi’s non-oil sector which saw a revenue increase from SR332 billion in 2019 to SR372 billion in 2021, which likewise bodes well for non-oil stocks in the coming period.

The overall positive performance indicated an uptrend in the economy and potentially better financial results in the near term, hence improving investors’ level of confidence in the market.


US asset manager Apollo acquires $400m stake in UAE’s Aldar Properties

US asset manager Apollo acquires $400m stake in UAE’s Aldar Properties
Updated 12 sec ago

US asset manager Apollo acquires $400m stake in UAE’s Aldar Properties

US asset manager Apollo acquires $400m stake in UAE’s Aldar Properties

RIYADH: US asset manager Apollo has acquired a $400 million minority stake in UAE-based Aldar Investment Properties, a subsidiary of Abu Dhabi- listed Aldar Properties PJSC.

The acquisition is part of the previously announced $1.4 billion investment by Apollo into Aldar’s transformational growth initiatives, Aldar said in a statement.

“Apollo is a highly respected global investor, and this commitment displays strong belief in Aldar’s transformational growth agenda and reinforces the reputation of the UAE and Abu Dhabi, which are experiencing a trend of increasing capital inflows from long-term institutional investors,” CEO of Aldar Properties, Talal Al Dhiyebi, said.


Crypto Moves – Bitcoin and Ethereum rise; Crypto hacking losses jumped 60 percent to $1.9bn 

Crypto Moves – Bitcoin and Ethereum rise; Crypto hacking losses jumped 60 percent to $1.9bn 
Updated 9 min 31 sec ago

Crypto Moves – Bitcoin and Ethereum rise; Crypto hacking losses jumped 60 percent to $1.9bn 

Crypto Moves – Bitcoin and Ethereum rise; Crypto hacking losses jumped 60 percent to $1.9bn 

RIYADH: Bitcoin, the leading cryptocurrency internationally, traded higher on Wednesday, rising by 1.39 percent to $24,340 as of 10:12 a.m. Riyadh time.

Ethereum, the second most traded cryptocurrency, was priced at $1,943.87 rising by 3.41 percent, according to data from Coindesk.

Crypto hacking losses jumped 60% to $1.9bn in first seven months

According to Chainalysis’ blog post released on Tuesday, losses caused by cryptocurrency hacks surged nearly 60 percent in the first seven months of the year to $1.9 billion, Reuters reported.

The stolen funds from hacking totaled $1.2 billion during the same period last year.

Using DeFi applications, which are often based on the Ethereum blockchain, it is possible to provide crypto-denominated lending outside of traditional banking institutions.

Despite the $190 million hack of cross-chain bridge Nomad and the $5 million hack of several Solana wallets in the first week of August, Chainalysis believes the trend will not reverse anytime soon.

Chainalysis said in the blog: “DeFi protocols are uniquely vulnerable to hacking, as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it’s possible that protocols’ incentives to reach the market and grow quickly lead to lapses in security best practices.”

North Korea’s “bad actors,” namely elite hacking units like Lazarus Group, are responsible for much of the money stolen from DeFi protocols, according to a US firm.

Chainalysis estimates that so far this year, North Korea-affiliated groups have stolen approximately $1 billion of cryptocurrency from DeFi protocols.

As a result of the slump in digital assets prices, the blockchain intelligence firm saw a sharp 65 percent decline in crypto scams through July. In the year to July, scam revenue was $1.6 billion, down 65 percent from about $4.46 billion a year ago.

Celsius considers financing proposals amid bankruptcy

An attorney for bankrupt crypto lender Celsius Network said Tuesday that the lender has received multiple offers to help fund its restructuring, according to Bloomberg. 

In a bankruptcy hearing Tuesday, Joshua Sussberg of Kirkland & Ellis said Celsius was considering financing packages of “various shapes and sizes,” Bloomberg said. 

It is expected that several more proposals will be submitted, he said, without providing details about the existing proposals.

If Celsius is to avoid liquidation and restructure or sell its business, it needs to raise additional funds. In court papers, the company expects its liquidity balance to turn negative in October after reaching $66.4 million in August. 

Next week, Celsius will meet with the unsecured creditor's committee and will work expeditiously on the path forward, according to a tweet. The next hearing is slated for September.

Stronghold gives back 26,200 bitcoin mining rigs to reduce debt

With the help of New York Digital Investment Group and WhiteHawk Capital, Stronghold Digital Mining Inc. has eliminated more than half of its debt and added liquidity, according to Bloomberg. Moreover, the company will restructure its convertible note.

It will return about 26,200 Bitcoin mining machines to NYDIG, which will wipe out the outstanding debt of $67.4 million from the original contract, Stronghold said in a statement Tuesday. 

WhiteHawk committed to restructuring and expanding Stronghold’s current equipment financing arrangements, reducing near-term payments, and providing more borrowing capacity of $20 million.

In the wake of the collapse of cryptocurrency prices from record levels reached in November, Bitcoin miners are struggling to raise capital and repay loans backed by the token or their mining rigs. 

The company is the latest Bitcoin miner forced to pay off an outstanding debt with its mining machines.

(With inputs from Reuters) 


India In-Focus — New Delhi boosts Saudi oil imports; shares end higher

India In-Focus — New Delhi boosts Saudi oil imports; shares end higher
Updated 17 min 7 sec ago

India In-Focus — New Delhi boosts Saudi oil imports; shares end higher

India In-Focus — New Delhi boosts Saudi oil imports; shares end higher

RIYADH: India’s crude oil imports from Russia in July fell for the first time since March along with its overall purchase, while supplies from Saudi Arabia rebounded for the first in five months, data obtained from trade and industry sources showed.

Indian refiners lifted more term supplies from Saudi Arabia as prices were attractive while prices for Russian supplies have climbed on robust demand.

India shipped in 877,400 barrels per day oil from Russia in July, a decline of about 7.3 percent from June, with Moscow continuing as its second-biggest oil supplier after Iraq.

Overall India, the world’s third-biggest oil importer and consumer, shipped in 3.2 percent less oil in July at 4.63 million bpd from June as some refineries planned maintenance turnaround from August, the data showed.

India’s oil imports from Saudi Arabia rose by 25.6 percent to 824,700 bpd in July, the highest in three months, the data showed, after the producer lowered official selling price in June and July compared with May. Saudi Arabia stayed at No. 3 spot among India’s suppliers.

Indian shares end higher

Indian shares closed higher on Wednesday, as investors pinned their hopes on strong earnings data amid signs of cooling inflation, sending the S&P BSE Sensex above the key 60,000 level for the first time since April 5.

The NSE Nifty 50 index closed 0.67 percent higher at 17,944.25 while the Sensex ended 0.7 percent higher at 60,260.13. Both indexes clocked their highest closing level in four months.

Indian rupee gains

The Indian rupee closed higher on Wednesday marking its biggest single-day gain in more than one week spurred by dollar inflows, as improved risk appetite drove a rally in equities while the greenback posted losses.

The partially convertible rupee closed at 79.4450 in its best session since Aug. 5. India’s foreign exchange markets were shut on Monday and Tuesday.

 

(With input from Reuters) 

 

 


Ajlan & Bros eyes $2bn investment in Tashkent city project: Top official 

Ajlan & Bros eyes $2bn investment in Tashkent city project: Top official 
Updated 22 min 33 sec ago

Ajlan & Bros eyes $2bn investment in Tashkent city project: Top official 

Ajlan & Bros eyes $2bn investment in Tashkent city project: Top official 

JEDDAH: Saudi conglomerate Ajlan & Bros Holding Group is eyeing an investment of $2 billion in a city project in Uzbekistan’s capital Tashkent as it signed multiple memorandums of understanding with Uzbek entities, the conglomerate’s CEO has confirmed. 

These MoUs were signed during the Saudi-Uzbek Business Council meeting in Jeddah on Wednesday. 

“The first agreement we signed was with the Tashkent city, the capital of Uzbekistan, and this is to cover multiple opportunities to develop infrastructure, commercial zones and industrial zones and retail zones in the city,“ Ali Al-Khatib, CEO of industrial manufacturing at Ajlan & Bros Holding Group told Arab News.

 Al-Khatib noted that the Tashkent city project is currently in its planning stage and things will be finalized soon after discussions with partners. 

The second agreement with the Ministry of Agriculture of Uzbekistan focuses on investments in the farming and agricultural sector. 

“We are also exploring the strategic red meat sector, where we aim to invest in the sector in Uzbekistan, and later bring it back to the Kingdom’s markets,” Al-Khatib added. 

He added that the investments in the agricultural sector could range between $50 million to $100 million.


Saudi-Uzbekistan council signs 10 investment agreements worth $12bn

Saudi-Uzbekistan council signs 10 investment agreements worth $12bn
Updated 28 min 27 sec ago

Saudi-Uzbekistan council signs 10 investment agreements worth $12bn

Saudi-Uzbekistan council signs 10 investment agreements worth $12bn

JEDDAH: Saudi Arabia and Uzbekistan have signed over 10 investment agreements, worth over SR45 billion ($12 billion), during the Saudi-Uzbek Business Council in Jeddah on Wednesday.

The agreements cover various sectors and include number of deals between Ministry of Investment and Foreign Trade of the Republic of Uzbekistan, the Ministry of Energy of the Republic of Uzbekistan, and ACWA Power, a developer, investor, co-owner and operator of a portfolio of power generation and desalinated water production plants. 
“Over 10 agreements were signed between the Kingdom and Uzbekistan in several sectors, with a value exceeding SR45 billion,” Saudi Minister of Investment Khalid Al-Falih said.