COP28 president hails global leaders’ practical initiatives at final dialogue

COP28 president hails global leaders’ practical initiatives at final dialogue
COP28 President Sultan Al-Jaber. AP.
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Updated 05 December 2023
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COP28 president hails global leaders’ practical initiatives at final dialogue

COP28 president hails global leaders’ practical initiatives at final dialogue

RIYADH: COP28 President Sultan Al-Jaber has applauded world leaders for their practical initiatives during the final dialogue, expressing optimism for the continued “open mindset” throughout the remainder of COP.  

This comes as high-level dialogues between the COP28 Presidency and the International Energy Agency received a strong endorsement of practical actions. 

The conclusion of the dialogues, co-chaired by Al-Jaber and the executive director of the IEA, Fatih Birol, marked a significant achievement, bringing together over 40 high-level leaders, including four heads of state and 18 heads of delegation and ministers from diverse regions.  

Al-Jaber said: “I am encouraged by the practical actions brought forward by world leaders today at the final dialogue, and I hope that you take this open mindset and optimism throughout this COP.” 

Addressing the significance of the dialogues, Al-Jaber emphasized the need for collaboration, stating: “This series of dialogues has allowed us to converge on the critical elements of the just energy transition. The transition will not be straightforward, but it will be harder if we cannot agree on its central components.”  

Birol echoed this sentiment, expressing satisfaction at the alignment and support for the IEA’s five goals for COP28.  

These goals include tripling renewable capacity and doubling energy efficiency by 2030, a structured decline in fossil fuel use, commitment from the oil and gas industry to align with 1.5 degrees, and financing mechanisms for clean energy in developing countries. 

The leaders showed strong support for the COP28 presidency’s Global Renewables and Energy Efficiency Pledge, with over 110 countries signing up to the initiative.   

Urgency on the coal front emerged as a key consensus, with a focus not only on preventing new unabated coal plants but also on accelerating the retirement of existing facilities. 

As the final dialogue unfolded during the World Climate Action Summit as part of COP28 in Dubai, heads of state, government leaders, and international organizations convened to solidify their commitment to an orderly energy transition.  

Al-Jaber urged participants to carry the open mind and optimism demonstrated during the final dialogue throughout COP28, reinforcing the importance of collective action in addressing the pressing challenges of our time.  

This positive momentum sets the stage for further deliberations and collaborative efforts at COP28 UAE, hosted at Expo City Dubai till Dec. 12. 


UK’s non-dom tax reforms set to reshape Arab investment landscape

UK’s non-dom tax reforms set to reshape Arab investment landscape
Updated 7 sec ago
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UK’s non-dom tax reforms set to reshape Arab investment landscape

UK’s non-dom tax reforms set to reshape Arab investment landscape

RIYADH: Arab investors will face significant changes to their UK tax affairs after the British government announced reforms to rules for non-UK domiciled individuals.

Effective from April 6, 2025, these changes will alter the tax efficiency strategies that many Arab investors have relied upon for UK property and investments. 

So-called “non-dom” status is a tax classification that allows UK residents whose permanent domicile is in a different country to limit their tax liability on foreign earnings. 

They have traditionally only been required to pay UK taxes on income generated within Britain, creating considerable tax savings for those who designate a lower-tax country as their domicile. 

Starting in 2025, non-dom status will be abolished and replaced with a residency-based tax regime.

In an interview with Arab News, Vijay Valecha, chief investment officer at Century Financial said: “The disadvantages of the tax measures announced is that if an Arab buyer is planning to buy additional properties in the UK, they have to pay an increased surcharge of 5 percent.” 

Moreover, if a buyer intends to dispose of a non-residential property, they have to pay increased capital gains tax 18 percent — 24 percent, he explained. 

Arabs living in the UK who earn income abroad will also suffer from the abolishment of the non-UK domiciled tax status as their tax burden will increase, according to Valecha.

The CIO did reveal some positive news for investors, saying: “Non-resident Arab buyers can still purchase residential property in the UK at a 2 percent surcharge, a potential benefit.” 

He added: “Newly arrived investors will enjoy a four-year grace period where foreign income and gains remain untaxed, offering short-term planning flexibility.” 

Key changes 

Under the current system, non-dom status can be obtained if an individual was born outside the UK or if their father’s permanent residence was in another country; or by becoming a domicile of choice, which is a classification available to individuals over 16 who decide to live indefinitely in another country. 

From April 2025, newly arrived UK residents who have not been living in the country in the prior 10 years will receive a 100 percent tax relief on foreign income and gains for their first four years. 

For capital gains tax, lower-rate taxpayers earning under £50,270 ($54,760) will now be taxed at 18 percent, up from 10 percent, while higher-rate taxpayers will see their rates increase to 24 percent from 20 percent. 

Additionally, non-UK assets will be subject to UK inheritance tax if the individual has been a resident for at least 10 of the last 20 years. 

Effective Oct. 31, 2024, the stamp duty surcharge on second homes increased from 3 percent to 5 percent. 

Long-term strategies 

Valecha anticipated that these changes may negatively impact the long-term investment strategies of Arab buyers, “due to higher surcharges on additional homes, capital gains taxes on disposal of secondary homes, and abolishment of the non-dom status.” 

“In order to optimize their portfolio, Arab buyers can consider diversifying their portfolio to other asset classes and geographical regions that offer favorable tax regimes,” he said. 

The UAE, for instance, could see increased interest due to its tax-free environment, and “Arab buyers looking to diversify can now consider investing their wealth in their own country.” This, he added, could improve capital flows in the UAE and boost the country’s real estate sector. 

The UK government projects that these reforms could generate up to £12.7 billion in additional revenue over five years, underscoring the significant contribution expected from foreign investors. 

With strategic planning, Valecha suggested that Arab investors can still leverage competitive opportunities in the UK market, even within this redefined landscape.


Closing Bell: Saudi main market sheds points, Nomu gains 2.8% 

Closing Bell: Saudi main market sheds points, Nomu gains 2.8% 
Updated 36 min 24 sec ago
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Closing Bell: Saudi main market sheds points, Nomu gains 2.8% 

Closing Bell: Saudi main market sheds points, Nomu gains 2.8% 

RIYADH: Saudi Arabia’s Tadawul All Share Index ended Monday’s trading session in the red, losing 8.95 points, or 0.07 percent, to close at 12,039.31. 

The total trading value of the benchmark index was SR6.1 billion ($1.6 billion), with 66 listed stocks advancing, while 166 retreated. 

The MSCI Tadawul Index also shed 0.34 points, or 0.02 percent, closing at 1,512.48. 

However, the Kingdom’s parallel market Nomu gained 765.32 points, or 2.80 percent, to close at 28,062.77, with 41 stocks advancing and 32 retreating. 

The best-performing stock of the day was Shatirah House Restaurant Co., also known as Burgerizzr, whose share price surged by 9.96 percent to SR22.52.  

Other top performers included Retal Urban Development Co., which saw a rise of 9.64 percent to SR15,70, and Al-Baha Investment and Development Co., which increased by 7.14 percent to SR0.30. 

Elm Co. and Al-Baha Investment and Development Co. also recorded gains of 4.64 percent and 4.29 percent, closing at SR1,122 and SR21.90, respectively. 

Several Saudi firms released their financial results for the first nine months of the year. 

Saudi Telecom Co. recorded a 3.9 percent yearly increase in profit to reach SR56.6 billion, mainly attributed to the rise in stc KSA and stc’s subsidiaries revenue by 0.6 percent and 11 percent, respectively. 

Net profit also recorded growth of 1.9 percent to reach SR11.2 billion, largely driven by the increase in revenue and the decrease in zakat and income tax expenses. 

The company closed Monday’s trading session in green with a 0.59 percent increase in its share price to reach SR42.30.

National Gas and Industrialization Co. also saw a significant 15.5 percent year-on-year increase in revenue to reach SR2 billion in the first nine months. 

The growth in profit was driven primarily by rising gas prices and an uptick in sales volume. This shift is further supported by enhanced revenues from commercial projects and increased sales of empty cylinders. 

Additionally, the company has witnessed gains from the sale of scrap and spare parts, as well as from transportation and various other services. 

The firm also reported an increase in net profit by 2.1 percent to reach SR188.7 million, primarily driven by a significant rise in gross profit resulting from enhanced revenues and a reduction in zakat expenses. 

Despite this, the company closed Monday’s trading session in red, shedding 2.21 percent to close at SR106.

Bupa Arabia for Cooperative Insurance Co. also recorded significant gains. The company saw insurance revenues increase by 15 percent to reach SR13.4 billion, driven by business growth.

Profit before zakat and income tax attributable to shareholders for the current period amounted to SR1.3 billion, an increase of 31.4 percent, mainly due to gains across multiple aspects of the business.

Despite the strong gains, Bupa closed Monday’s trading session in red, shedding 1.49 percent to close at SR198.20.

On a different note, SNB Capital launched its SNB Capital Saudi Nomu Market Fund to facilitate easier access to the parallel market.

The fund is designed for retail investors aiming to strategically invest in the listed equities on the Nomu market without having to meet the Qualified Investor criteria. 


Saudi airline flynas expands African reach with new routes to Uganda and Djibouti

Saudi airline flynas expands African reach with new routes to Uganda and Djibouti
Updated 50 min 42 sec ago
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Saudi airline flynas expands African reach with new routes to Uganda and Djibouti

Saudi airline flynas expands African reach with new routes to Uganda and Djibouti

JEDDAH: Saudi budget airline flynas will add two new African destinations to its network starting in January 2025, aligning with its broader expansion strategy across the continent. 

Beginning Jan. 8, the airline will operate three weekly flights from Riyadh to Entebbe, Uganda, and the same number from Jeddah to Djibouti, according to the airline’s statement. 

The expansion is part of the airline’s “We Connect the World to the Kingdom” initiative and supports Saudi Arabia’s National Civil Aviation Strategy, which aims to expand connectivity to 250 international destinations and reach 330 million passengers. 

The routes to Entebbe and Djibouti also align with Saudi Arabia’s goal of welcoming 150 million tourists annually by 2030 and advancing the Pilgrims Experience Program, which seeks to streamline travel access to the holy cities of Makkah and Madinah. 

The airline’s new routes to Uganda and Djibouti mark additional steps in its effort to grow its international network, offering more accessible travel for passengers across the region. 

This announcement follows flynas’s recent increase in domestic seat capacity by over 480,000 on routes to Taif, Abha, and Al-Baha during the summer, marking a 21 percent rise from the previous year. 

The airline has also expanded its fleet with the arrival of its 53rd A320neo in July as part of its ongoing order of 120 Airbus aircraft. 

The new model airplane arrived at King Khalid International Airport in Riyadh, reinforcing flynas’s position as a prominent low-cost airline in the Middle East and ranking among the top four globally. 

During the UK’s Farnborough International Airshow in July, flynas signed a deal to double its fleet, with plans to purchase 160 additional Airbus planes, including 30 wide-body A330neos and 130 A320s. 

CEO and Managing Director Bander Al-Mohanna described the agreement as a key step toward establishing flynas as a leading global low-cost carrier. 

Since its inception in 2007, flynas has grown to serve over 70 domestic and international destinations, with 1,500 weekly flights and more than 80 million passengers flown to date. 


Saudi Arabia’s Q3 budget deficit decreases to $8bn

Saudi Arabia’s Q3 budget deficit decreases to $8bn
Updated 37 min 5 sec ago
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Saudi Arabia’s Q3 budget deficit decreases to $8bn

Saudi Arabia’s Q3 budget deficit decreases to $8bn

RIYADH: Saudi Arabia reported a budget deficit of SR30.23 billion ($8.06 billion) for the third quarter of 2024, a decrease of 15 percent compared to the same period last year, according to the Ministry of Finance.

This brings the total deficit for the nine months ending in September to SR57.96 billion, remaining in line with the ministry's previous forecasts.

Government revenues increased by 20 percent compared to the same quarter last year, reaching SR309.21 billion. Expenditures also rose, up 15 percent to SR339.44 billion, resulting in a budget deficit of SR30.23 billion.

Oil revenues constituted 62 percent of total government income, amounting to SR190.87 billion — a 30 percent increase during the period, according to the Ministry. Non-oil revenues represented the remaining 38 percent, totaling SR118.34 billion, reflecting a 6 percent rise.

Within the non-oil revenue sector, taxes on goods and services accounted for 62 percent, reaching SR73.94 billion, which signifies a 5 percent increase during this period.

The most notable growth occurred in “other taxes,” which surged by 69 percent to reach SR5.31 billion. The ministry indicated that these primarily include taxes paid by businesses, such as corporate zakat, along with other unspecified taxes.

Compensation for employees accounted for the largest share of government expenses, representing 41 percent at SR138.63 billion, reflecting a 6 percent increase during this period.

Expenditures on goods and services made up 24 percent, totaling SR82.69 billion, with a year-on-year rise of 15 percent.

Capital expenditures on non-financial assets constituted 14 percent, reaching SR48.15 billion, marking a 17 percent increase. Notably, subsidies grew significantly, rising by 10 percent to reach SR7.44 billion.

According to ministry data, the government's current account balance surged by 429 percent during this period, reaching SR76.7 billion.

In contrast, government reserves declined by 4 percent to SR390.08 billion. Additionally, public debt at the end of the third quarter totaled SR1.16 trillion, with 60 percent of this amount representing domestic debt.

In September, the ministry revised its estimate for the 2024 budget deficit to SR118 billion, marking a 49 percent increase from earlier projections. This adjustment reflects the Kingdom’s ambitious expansionary plans and ongoing investment in key projects aimed at bolstering economic growth and diversification.

Despite a backdrop of oil production cuts implemented by OPEC+ countries, which typically strain revenue streams, the Kingdom has managed to see a rise in overall revenues.

This resilience showcases Saudi Arabia’s strategic approach to navigating global market challenges while pursuing its Vision 2030 objectives, including infrastructure development, technological advancement, and the enhancement of public services.


Pakistan central bank cuts key rate by 250 bps to 15%

Pakistan central bank cuts key rate by 250 bps to 15%
Updated 04 November 2024
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Pakistan central bank cuts key rate by 250 bps to 15%

Pakistan central bank cuts key rate by 250 bps to 15%
  • Monday’s move follows cuts of 150 bps in June, 100 in July and 200 in September
  • It takes the total policy rate cuts in the country to 700 bps in under five months

KARACHI: Pakistan’s central bank cut its key policy rate by 250 basis points to 15 percent on Monday, it said in a statement, for a fourth straight reduction since June, as the country keeps up efforts to revive a sluggish economy with inflation easing.
Most respondents in a Reuters poll last week expected a cut of 200 bps after inflation moved down sharply from a multi-decade high of nearly 40 percent in May 2023, saying reductions were needed to bolster growth.
Average consumer price index inflation in the South Asian country is 8.7 percent in the current financial year, which started in July, the statistics bureau says. The International Monetary Fund (IMF) expects inflation to average 9.5 percent for the year ending June.
Monday’s move follows cuts of 150 bps in June, 100 bps in July, and 200 in September that have taken the rate from an all-time high of 22 percent, set in June 2023 and left unchanged for a year. It takes the total cuts to 700 bps in under five months.
October inflation came in at 7.2 percent, slightly above the government’s expectation of 6 percent to 7 percent. The finance ministry expects inflation to slow further to 5.5 percent to 6.5 percent in November.
However, inflation could pick up again in 2025, driven by electricity and gas price increases after a new $7-billion IMF bailout, and the potential impact of taxes on the retail, wholesale and the farm sector announced in the June budget to take effect in January 2025, some analysts say.