S&P upgrades Oman’s credit rating to BB+ with stable outlook  

S&P upgrades Oman’s credit rating to BB+ with stable outlook  
S&P’s assessment underscores a transformation in Oman’s non-oil sector. Photo/Shutterstock
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Updated 01 October 2023
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S&P upgrades Oman’s credit rating to BB+ with stable outlook  

S&P upgrades Oman’s credit rating to BB+ with stable outlook  

RIYADH: In a new development signaling a shift in Oman’s economic landscape, global credit rating agency Standard & Poor has upgraded the nation’s long-term credit rating from “BB” to “BB+.” 

S&P Global’s assessment underscores a transformation in Oman’s non-oil sector, promising substantial growth in the years ahead, particularly between 2023 and 2026. This shift is expected to play a pivotal role in enhancing the country’s financial prosperity. 

Furthermore, government fiscal and economic momentum is set to continue until 2026, forecasting an average of 2 percent year-on-year growth in the country’s gross domestic product, according to the agency. 

“Oman’s economy depends on the oil sector, which accounts for about 30 percent of GDP, 60 percent of goods exports, and 70 percent of government fiscal receipts. This dependence weighs on our assessment of its fiscal and external resilience, and we reflect this in the rating,” the report stated. 

The agency predicts a deceleration in economic growth by 1 percent in 2023, mainly attributed to reductions in oil production.   

Nonetheless, the dip in oil output is anticipated to be counterbalanced by a surge in condensate and gas. 

In the non-hydrocarbon sector, Oman is projected to witness a 2 percent increase in 2023, with hydrocarbon manufacturing expected to rally in 2024 and 2025. 

Moreover, the banking sector witnessed a marked boost in credit balance, registering a growth of 5.3 percent in July 2023 compared to the same month the previous year. 

Data from the nation’s central bank indicates that credit extended to the private sector surged by 5.2 percent by the end of July 2023, totaling 20.2 billion Omani rials ($52.41 million). 

Highlighting another significant sector, Oman’s tourism industry is poised for expansion over the upcoming years. Its contribution to the GDP is projected to rise to 2.75 percent, up from 2.4 percent in 2023, according to Oman’s Minister of Heritage and Tourism. 

In a statement to Oman News Agency, Salim Al-Mahrouqi detailed that the tourism industry was responsible for 1.07 billion Omani rials of the comprehensive 1.9 billion Omani rials revenue in 2022. 


Oil Updates – crude extends gains on US strategic reserve purchases

Oil Updates – crude extends gains on US strategic reserve purchases
Updated 12 sec ago
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Oil Updates – crude extends gains on US strategic reserve purchases

Oil Updates – crude extends gains on US strategic reserve purchases

NEW DELHI: Oil prices rose on Monday, extending gains for a second session as US efforts to replenish strategic reserves provided some support, although concerns of crude oversupply and softer fuel demand growth next year persisted, according to Reuters.

Brent crude futures rose 0.7 percent, or 56 cents, to $76.40 a barrel by 10:35 a.m. Saudi time, while US West Texas Intermediate crude futures were at $71.71 a barrel, also up 0.7 percent, or 48 cents.

Both contracts jumped more than 2 percent on Friday but fell for the seventh straight week, their longest streak of weekly declines since 2018, on lingering oversupply concerns.

The recent price weakness drew demand from the US, which has sought up to 3 million barrels of crude for the Strategic Petroleum Reserve for delivery in March 2024.

“We know the Biden Administration is in the market looking to refill the SPR, which will provide support,” IG analyst Tony Sycamore said in a note, adding that prices were also being supported by technical chart indicators.

Despite the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, having pledged to cut 2.2 million barrels per day of production in the first quarter, investors remain skeptical supply will drop.

Output growth in non-OPEC countries is seen leading to excess supply next year.

RBC Capital Markets expects stock draws of 700,000 bpd in the first half but only 140,000 bpd for the full year.

“Prices will remain volatile and directionless until the market sees clear data points pertaining to the voluntary output cuts,” RBC analysts said in a note.

With cuts not implemented until next month and country level production data to follow subsequent to January, it will be a volatile two months before there is preliminary clarity on quantifiable data on compliance, the analysts added.

The latest consumer price index data from China, the world’s top oil importer, showed rising deflationary pressures as weak domestic demand cast doubt over the country’s economic recovery.

Chinese officials pledged on Friday they would spur domestic demand and consolidate and enhance the economic recovery in 2024.

This week, investors are watching for guidance on interest rate policies from meetings at five central banks, including the Federal Reserve, and data on US inflation, for their impact on the global economy and oil demand. 


Saudi Arabia’s electricity and gas supply activities surge 32.2% in October: GASTAT  

Saudi Arabia’s electricity and gas supply activities surge 32.2% in October: GASTAT  
Updated 11 December 2023
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Saudi Arabia’s electricity and gas supply activities surge 32.2% in October: GASTAT  

Saudi Arabia’s electricity and gas supply activities surge 32.2% in October: GASTAT  

RIYADH: Saudi Arabia’s electricity and gas supply activities rose 32.2 percent in October, official data showed.  

According to the General Authority for Statistics, manufacturing activity also increased 0.6 percent in October compared to the year-ago period.  

However, the report added that the Kingdom’s Industrial Production Index for October declined by 12.3 percent compared to the same month in 2022, weighed down by the fall in mining and quarrying activities.  

Saudi Arabia’s mining and quarrying activities posted an annual decline of 18.4 percent in October as the Kingdom decreased its oil production to 8.9 million barrels per day.  

Saudi Arabia’s decision to reduce the oil output was aligned with an agreement reached by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to reduce supply and ensure market stability.


BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech

BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech
Updated 10 December 2023
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BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech

BNPL firm Jeel Pay receives SAMA permit, boosting Saudi fintech

RIYADH: Saudi fintech startup Jeel Pay has obtained a permit from the Saudi Central Bank to provide buy-now-pay-later solutions.  

Jeel Pay is a fintech firm that created a solution to streamline the payment and collection procedures within educational institutions.

This decision by SAMA brings the total number of companies authorized to practice BNPL activity in the Kingdom to seven, according to a statement. 

It also increases the number of licensed and authorized financing companies to 58, reflecting SAMA’s ongoing endeavor to support post-paid companies.

In alignment with Vision 2030 goals outlined in the National Fintech Strategy, the Kingdom aims to have 525 such companies, which will create 18,000 jobs and generate SR13.3 billion ($3.56 billion) in direct gross domestic product contributions.    

To achieve these objectives, SAMA is focused on fostering innovation within the financial sector and enhancing inclusion and accessibility across the Kingdom.  

In October, Saudi fintech startup KadiPay obtained a permit from SAMA to provide BNPL solutions.

In late July, the bank granted the same permit to another BNPL platform known as Tabby. 

In early July, amid efforts to affirm its commitment to supporting the fintech sector, the Saudi Central Bank granted BNPL platform Tamara a permit to pursue post-paid payment activity.

A permit was also given to MIS Forward in March to implement a BNPL solution, allowing customers to purchase from merchants without paying term-financing fees.

Also in March, Saudi Venture Capital announced its intent to boost this sector further by dedicating $80 million to its “Investment in Fintech VC Fund” in hopes of stimulating financing for startups and small and medium enterprises.  

This strategic decision to invest in the flourishing fintech scene is expected to further develop the ecosystem, which raised $239 million in funding in 2022, according to venture data firm MAGNiTT.

Speaking to Arab News in July 2022, SAMA’s Deputy Governor for Development and Technology Ziad Al-Yousef said that the bank is planning to make Saudi Arabia a regional financial technology hub as part of its strategy to implement the Financial Sector Development Program envisaged in the Kingdom’s Vision 2030 blueprint.   

He added at the time that the central bank is developing regulations to address new business models to assist and guide entrepreneurs in the payments, investments and financing sector. 


Rich nations, GCC urged to use SDRs to fund climate action in Africa

Rich nations, GCC urged to use SDRs to fund climate action in Africa
Updated 10 December 2023
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Rich nations, GCC urged to use SDRs to fund climate action in Africa

Rich nations, GCC urged to use SDRs to fund climate action in Africa

DUBAI: Leaders of the Gulf Cooperation Council countries have been called upon to seize the global leadership in innovative climate finance through their unused special drawing rights with the International Monetary Fund to help generate additional lending under climate finance for African economies.

“We are having conversations with various countries that have SDRs that are not used because, frankly, they don’t need them. And so this is a real opportunity for leadership by the really forward-looking, innovative leaders in the Gulf and elsewhere. So, we had a very productive conversation that we helped organize with the COP28 presidency, France, Japan, the African Development Bank, and the Inter-American Development Bank on Finance Day at COP28. And I think there was real momentum in the room. Japan had a very forward-leaning statement and France also had a very strong statement,’’ Eric Pelofsky, vice president, Global Economic Recovery, at the Rockefeller Foundation, told Arab News.

In August 2021, in response to the COVID-19 pandemic, the IMF issued a historic $650 billion in SDRs in order to help countries around the world with the necessary cushion to weather the storm. As these SDRs were issued on the economic size and existing reserves, some of the richest countries got the most of the SDRs, while leaving all of Africa with barely 5 percent or $33 billion in SDRs.

As a result, most of these SDRs have remained unused by the rich nations. Over the past few months, there have been calls by various civil society organizations and finance experts for the rich countries to repurpose or pledge their SDRs to allow poorer nations to raise much-needed funds for themselves. Though the rich nations agreed to pledge $100 billion worth of their SDRs for climate finance for Africa, there still remains a shortfall of $15 billion. 

This is where the GCC leaders can step in, say the experts as their own unused SDRs can be leveraged to raise the much-needed funds for the African nations as well as other vulnerable countries. This is an area where the Rockefeller Foundation has been working intensively, most notably the climate change meeting, known as COP28, that is currently going on in Dubai.

Enthused by the outcome of the Finance Day discussions, Pelofsky said that he would continue to push the issue at the forefront in order to rope in more countries that have surplus SDRs that they don’t need.

“We think that it has generated some real momentum and we are continuing these conversations. I think we will see a lot more progress after the IMF publicly announces a board decision, which may happen by January, which would add hybrid capital to a list of approved uses of SDRs. And after that happens, we are going to see more countries come forward with their SDRs,” the executive added.

Civil society organizations and experts have set a target to raise$5 billion worth of SDRs for this purpose, which in turn could be leveraged to raise $20 billion worth of additional funding for climate finance. 

“I think it is a real opportunity to show leadership both from an innovative finance standpoint and it’s also an opportunity to show leadership globally because it signals that not only does the Gulf (countries) care about Africa, but it is also committed to its economic success,’’ added Pelosky, who has in the past served as a special assistant to the president of US for the Middle East and North Africa at the National Security Council.

Besides leveraging unused SDRs, another way in which the Rockefeller Foundation and especially Pelofsky and his team have tried to raise funds for climate finance is by looking at the capital adequacy norms followed by the multilateral development banks, notably the World Bank, following a report by a G20 committee which found that the MDBs were being far too conservative in their capital adequacy frameworks and that there was much more lending that could be done using their existing funds.

Pelofsky said that after this report was published, the Rockefeller Foundation commissioned a study by a London-based financial risks analysis firm which determined there was adequate headroom for an additional lending of close to $190 billion by the World Bank alone.

“So you’re talking about roughly $190 billion of additional headroom in the World Bank alone that could help drive development and climate resilience in countries that get money from the World Bank. And so from our standpoint that is a huge opportunity to start to change the trajectory of these countries which are facing debt crisis, food crisis, fuel crisis, and interest rate crisis. So we have been talking to lots of leaders around the world about this study and how one could actually go about implementing,” Pelofsky added.

 


UAE to launch the EV charging stations company

UAE to launch the EV charging stations company
Updated 10 December 2023
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UAE to launch the EV charging stations company

UAE to launch the EV charging stations company

RIYADH: The UAE is set to launch the establishment of the Emirates Electric Vehicle Charging Stations Co. as part of 10 newly approved initiatives, according to the country’ prime minister. 

Sheikh Mohammed bin Rashid Al-Maktoum, who is also the ruler of Dubai, presided over a Cabinet meeting at the Dubai Expo, coinciding with the 2023 UN Climate Change Conference.

He stated that the Cabinet approved 10 new initiatives to achieve the country’s recently established environmental targets.  

These include the adoption of the general framework for the 2031 Biodiversity Strategy, aimed at monitoring and protecting natural systems, ensuring their sustainability, and enhancing the national workforce’s proficiency in this field.

The initiatives also encompassed a global appeal for carbon removal from the waste sector. Sheikh Mohammed highlighted the launch of a national carbon credit registry, enabling government and private entities to assess and document their contributions to carbon emission reduction with authenticated government certificates. 

Moreover, the Cabinet approved the fifth national report, documenting the success of national efforts to reduce carbon emissions across various sectors. 

They also endorsed the first edition of the country’s long-term low-carbon development strategy and the establishment of the Emirates Electric Vehicle Charging Stations Co.

In addition, the UAE introduced a policy for sustainable aviation fuel and smart construction in the country.  

The prime minister emphasized that the UAE continues to earnestly work on sustainability and climate change, considering it a fundamental and consistent element in its comprehensive and ongoing development journey. 

He stated: “We reviewed the national efforts of the country in the environmental field, which included more than 120 decisions in sustainability, climate change, and the development of our natural resources issued by the council over the past five years.”

Adding: “In 2023 alone, we launched more than 60 new decisions, forming an integrated system of policies, legislation, strategies, and initiatives to enhance the country’s efforts and profile in addressing the world’s participation in mitigating the effects of climate change.”

The country achieved a 10 percent reduction in greenhouse gas emissions from 2019 to 2021 and secured the top regional position in the 2022 Environmental Performance Index, jumping 38 positions globally compared to 2018. 

Sheikh Mohammed highlighted that the UAE secured the second position globally in the Energy Transition category of the 2023 Global Green Future Index.

According to him, the UAE has invested over $50 billion in clean energy projects across 70 countries and pledged another $50 billion in the sector over the next decade.