Saudi Arabia takes longer view of oil price in budget calculation: Finance minister

Update Saudi Arabia takes longer view of oil price in budget calculation: Finance minister
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Updated 14 December 2021

Saudi Arabia takes longer view of oil price in budget calculation: Finance minister

Saudi Arabia takes longer view of oil price in budget calculation: Finance minister

RIYADH: Saudi Arabia’s Finance Ministry said it looks at long-term and historical periods to ensure oil price outlook is more accurate, according to Finance Minister Mohammed Al-Jadaan. 

Speaking at a budget forum in Riyadh, the finance minister said revenues are calculated based on structural income factors. 

He said the Saudi budget surplus will go to the National Development Fund to finance the private sector (projects), the Public Investment Fund, and to pay off debts. 

The minister said the objectives are clear financial sustain- ability and empowerment of the Kingdom’s private sector. 

He said during the last 25 years ending 2015 the ministry noticed fluctuation in public expenditures which resulted from more than 85 percent of the fluctuation in oil prices. “If prices go high, expenditures go high ,if prices go down, expenditures go down,” he added. 

Al-Jadaan said fluctuations in Saudi spending went down from 25 percent between 1995-2015, to 2.9 percent over the past five years due to the fiscal sustainability program. 

Commenting on the non-oil sector, the minister said the income generated through this sector will be used to bolster the economy by exploring more avenues for revenue generation. 

He said the structural revenues on which we base the ceilings on the mid-term range are based on a very complicated equation that takes into consideration the historical review of oil prices. 

Following the approval of the budget, the minister earlier said the Kingdom will reconsider its current value-added tax rate once the government’s financial position improves. 

The minister highlighted the importance of supporting the growth of small and medium enterprises, in parallel with the implementation of structural transformations that support long-term growth. 


GASCO mulls JV to set up composite cylinder factory with UK’s Aburi Composites

GASCO mulls JV to set up composite cylinder factory with UK’s Aburi Composites
Updated 10 sec ago

GASCO mulls JV to set up composite cylinder factory with UK’s Aburi Composites

GASCO mulls JV to set up composite cylinder factory with UK’s Aburi Composites

RIYADH: National Gas and Industrialization Co., or GASCO, is studying the feasibility of partnering with UK’s Aburi Composites and Saudi-based Front End Co. to operate a joint cylinder factory.

Once the deal is finalized, the joint factory will be specialized in manufacturing composite cylinders, Nomu-listed GASCO said in a bourse filing.

This aligns with its strategy and experience in the gas supply chain, strengthening its investments in gas supply chains and enhancing localization opportunities.

UK-based Aburi Composites is a leading supplier of composite fiberglass cylinders, while Front End provides advisory services to support the expansion of international companies.


Macro Snapshot — UK inflation tops 10%, Dutch economy grows 2.6 percent in Q2

Macro Snapshot — UK inflation tops 10%, Dutch economy grows 2.6 percent in Q2
Updated 9 min 13 sec ago

Macro Snapshot — UK inflation tops 10%, Dutch economy grows 2.6 percent in Q2

Macro Snapshot — UK inflation tops 10%, Dutch economy grows 2.6 percent in Q2

CAIRO: UK’s inflation topped 10 percent recording its highest rate since 1982.

British consumer price inflation jumped to 10.1 percent in July, its highest since February 1982, up from an annual rate of 9.4 percent in June, intensifying the squeeze on households, official figures showed on Wednesday.

The increase was above all economists’ forecasts in a Reuters poll for inflation to rise to 9.8 percent in July, and will do nothing to ease the Bank of England’s concerns that price pressures may become entrenched. 

Spain’s public debt-to-GDP ratio

Spain’s public debt ended the second quarter at the equivalent of 116.8 percent of gross domestic product, the Bank of Spain said on Wednesday.

Spain’s debt-to-GDP ratio at the end of June was lower than the 117.7 percent registered in March and below the 118.7 percent at the end of 2021, the central bank said.

Dutch economy grows 

Economic growth in the Netherlands surprisingly jumped to 2.6 percent in the second quarter compared with the previous three months, as household spending boomed despite soaring inflation and companies increased their investments.

The strong expansion confounded expectations among economists that growth would remain at roughly the same 0.5 percent pace seen in the first quarter of 2022.

“These numbers show that, despite recent worries, a recession is not yet in sight,” Statistics Netherlands chief economist Peter Hein van Mulligen said.

US retail sales flat 

US retail sales were unchanged in July as declining gasoline prices weighed on receipts at service stations, but consumer spending appeared to holding up, which could further assuage fears that the economy was already in recession.

The Commerce Department on Wednesday said that retail sales’ flat reading last month followed a downwardly revised 0.8 percent increase in June. Retail sales in June were previously reported to have advanced 1.0 percent.

Economists polled by Reuters had forecast that sales would gain 0.1 percent, with estimates ranging from as low as a 0.3 percent decline to as high as a 0.9 percent increase. Retail sales are mostly goods and are not adjusted for inflation.

(With input from Reuters) 


Egypt In-Focus — Central bank reluctant to hike interest rates; beverage industry by 30%

Egypt In-Focus —  Central bank reluctant to hike interest rates; beverage industry by 30%
Updated 14 min 44 sec ago

Egypt In-Focus — Central bank reluctant to hike interest rates; beverage industry by 30%

Egypt In-Focus —  Central bank reluctant to hike interest rates; beverage industry by 30%

CAIRO: Despite pressure from investors, Egypt’s central bank is hesitant to raise interest rates, reported Bloomberg.

Although the Egyptian pound was devalued five months ago, investors still believe that the currency needs another devaluation to reflect its true value.

Speculations about the weakening of the pound had already been circulating when Egypt requested another loan from the International Monetary Fund in March.

 “The recent communication from the IMF hinted at a clear unhappiness with the lack of FX flexibility ahead of any potential new loan program,” stated Paul Greer, a London-based money manager at Fidelity International.

“To that end, we are expecting the Egyptians to continue to weaken their currency,” he added.

The central bank’s next monetary policy meeting is scheduled for Aug. 18, and after its decision to keep rates unchanged in June, investors have no idea what to expect.

Industrial growth 

Egypt’s beverage industry surged by 30.2 percent month-on-month in May with the beginning of the summer season, according to data from the Central Agency for Public Mobilization and Statistics.

Moreover, the manufacturing and extractive industries saw a 3.91 percent month-on-month rise in May.

Also, the food industry witnessed a similar monthly increase of 3.26 percent that month.

Suez Canal Bank 

The growth of the retail banking sector in Egypt had positive effects on profits, bank deposit growth, and lending portfolios in the Suez Canal Bank, according to Hussein Al-Refai, Chairman and Managing Director of the Egyptian Suez Canal Bank.

Its profits grew by 11.2 percent reaching 268 million Egyptian pounds in the first half of 2022, and it induced 1.7 billion Egyptian pounds in investments and assets volume, he added in an interview with CNBC Arabia.


Saudi Maaden, AMAK, Vedanta among qualified bidders for Umm Ad Damar exploration license

Saudi Maaden, AMAK, Vedanta among qualified bidders for Umm Ad Damar exploration license
Updated 17 min 47 sec ago

Saudi Maaden, AMAK, Vedanta among qualified bidders for Umm Ad Damar exploration license

Saudi Maaden, AMAK, Vedanta among qualified bidders for Umm Ad Damar exploration license

RIYADH: Saudi Maaden, AMAK and Vedanta are among 13 qualified bidders in the pre-qualification stage for a license at Umm Ad Damar mining site, the Saudi Ministry of Industry and Mineral Resources has announced.

The site is located in the Madinah region in Mahd Adh Dhahab Governorate, and is presented to local and international investors.

Other eligible bidders include African Rainbow Metals Co, Abdulrahman Saad Al-Rashed & Sons Co, Barrick Gold, and ERG Arabia, and an alliance between Moshico Resources, Ajlan & Bros Mining Co, Yallmaden Limited, Yancol Australia Limited, UDS Golden Group, Saudi Alara Ventures, and Noreen Mining.

The ministry added that the announcement of qualified bidders marks the end of the first phase of the bidding process, to obtain a license to inspect the Umm Ad Damar site. 

It will also hold a workshop this month for qualified bidders to clarify more details about the upcoming stages.


TASI rises as earning season continues: Closing bell

TASI rises as earning season continues: Closing bell
Updated 17 August 2022

TASI rises as earning season continues: Closing bell

TASI rises as earning season continues: Closing bell

RIYADH: Saudi Arabia’s benchmark index rose in the last hours of Wednesday, as the market was boosted slightly by new positive earnings reports.

TASI edged up 0.81 percent to finish at 12,646, while Nomu, the parallel market, declined 2.28 percent to end at 21,533.

This was led by a 9.94 percent leap in Fawaz Abdulaziz Alhokair following a 26 percent profit surge to SR58 million ($15 million) in the second quarter.

PIF-owned ACWA Power Co. added 0.81 percent, after announcing it will sign a $2.4 billion wind power deal with Uzbekistan's Ministry of Investment & Foreign Trade.

Al Moammar Information Systems Co. added 0.19 percent as it signed a SR39 million contract with the Saudi Ministry of Environment, Water, and Agriculture

Alamar Foods Co edged down 1.29 percent, despite reporting a SR66 million net profit in the first half of 2022, a 10 percent increase from the first half of last year.

Arabian Centres Co. added 0.19 percent, after reporting a higher second-quarter profit of SR128 million.

Al Jouf Cement Co. rose 0.78 percent, after Abdul Karim Al-Nuhair was appointed CEO after Jamal Al Amer resigned.

In the financial sector, Al Rajhi Bank rose 1.59 percent, while the Saudi National Bank, the Kingdom's largest lender, increased 0.14 percent.

Among the Kingdom’s insurers, Amana Cooperative Insurance Co. gained 0.46 percent while Saudi Enaya Cooperative Insurance Co. fell 1.30, as both firms reported 50 percent and 53 percent narrowed losses in the first half, respectively.

Wataniya Insurance Co. sank 22.7 percent, after it saw its losses widen by 44 percent to SR37 million in the first half of 2022, while Alinma Tokio Marine Co. gained 1.23 percent, after turning into a profit of SR2.4 million in the first half of 2022.

In the energy market, Brent crude reached $92.14 a barrel, while US West Texas Intermediate declined to $86.71 a barrel, as of 3:18 p.m. Saudi time.