GCC Economic and Business Insights (22. August 2021): Saudi Wealth Fund PIF Buys Stake in Italian Supercar Maker Pagani, Kuwait Projects Downgraded to Ba2 by Moody's
IFSB: Islamic banking grows 4.3% in 2020 – The Islamic banking segment’s performance grew by 4.3% in 2020, compared to 12.4% in 2019. As of Q3 2020, the Islamic banking segment accounts for 68.2% (72.4% in 2019) of the total value of Islamic Financial Services Industry (IFSI) assets, the declining share being mainly due to increased prominence of the Islamic Capital Market (ICM) segment. This is as per the Islamic Financial Services Board (IFSB), which issued the ninth edition of its annual flagship publication i.e. the Islamic Financial Services Industry Stability Report 2021. The report provides updates on the key trends in growth and developments, analytical and structural outlooks, as well as examines the resilience of the IFSI against the Covid-19 shock and other vulnerability factors across the Islamic banking, Islamic capital market and takaful segments. (Zawya)
Saudi Arabia looks for free trade agreement with 11 countries in exports push – Saudi Arabia is looking for more trading partners under free trade agreements as the country aims at increasing non-oil exports share in GDP. The kingdom is resuming negotiations for free trade agreements with 11 countries, Okaz paper reported, citing a circular by the Federal of Saudi Chambers (FSC) to all chambers of commerce operating in the Kingdom, based on a directions of the General Authority for Foreign Trade (GAFT). Target countries are China, India, Pakistan, Australia, New Zealand, Britain, Indonesia, the Philippines, Bangladesh, Sri Lanka, and the USA. The Kingdom aims to export services including transport, distribution, professional and financial services, communication services, postal services as well as express mail, media, hotel, construction and contracting, education and training, travel and tourism, environmental, and entertainment. (Zawya)
- Saudi wealth fund PIF buys stake in Italian supercar maker Pagani – Saudi Arabia’s sovereign wealth fund has agreed to buy a minority stake in Italian supercar maker Horacio Pagani SpA. The investment by the Public Investment Fund, which is part of a long-term strategic partnership with the Italian company, will support the hypercar maker's development, the companies said in a joint statement on Thursday. The Pagani family will keep full control of the company, with the PIF joining Italian minority shareholders Nicola Volpi and Emilio Petrone, according to a statement. (Zawya)
- Saudi Arabia lodges WTO dispute over EU chemical duties – Saudi Arabia said European Union anti-dumping duties on imports of mono-ethylene glycol in June violated World Trade Organization rules, according to a document published Thursday on the WTO’s website. Mono-ethylene glycol is a key component in the production of polyester fibers, film, plastic bottles and engine coolant. EU imports of the substance from Saudi Arabia fell to $197mn in 2020, down from $316mn in 2019 and $434mn in 2018, according to the Geneva-based International Trade Center. Saudi Arabia says the EU’s duties violate key provisions of the WTO Anti-Dumping Agreement, the General Agreement on Tariffs and Trade and the Dispute Settlement Understanding. (Bloomberg)
- UAE Central Bank issues new guidelines on hawala transactions – The Central Bank of the UAE issued fresh guidance on anti-money laundering and combatting the financing of terrorism for Registered Hawala Providers in the UAE and Licensed Financial Institutions (LFIs) that provide services to RHPs. The new guidance, which came into effect on Wednesday, will help in effective implementation of the statutory AML/CFT obligations for RHPs and LFIs, the central bank said. It also takes Financial Action Task Force (FATF) standards and guidance into account. Hawala is the traditional practice of transferring money using non-bank settlement methods. Since the transactions provide anonymity, the practice is known to be used as a method of money laundering. (Zawya)
- UAE-based Emirates Global Aluminum refinances $5.5bn debt – Emirates Global Aluminum, which is owned by Abu Dhabi state fund Mubadala and Investment Corporation of Dubai, has refinanced a $5.5bn corporate debt to boost its balance sheet and reduce leverage. In a statement on Thursday, the industrial company said the senior unsecured loan cuts by $1bn the size of its existing seven-year $6.5bn loan facility, which was earlier signed in 2019. It also reprofiles EGA’s scheduled debt repayments and extends them by 2.5 years. “The terms include a mechanism that delivers material reductions in the cost of debt to EGA,” the statement noted. (Zawya)
- Dubai's SWVL buys on-demand bus service Shotl – Dubai- based transport startup, SWVL is acquiring a controlling stake in Shotl, a mass transit platform that partners with municipalities and corporations to provide on-demand bus and van services across Europe, LATAM and APAC. Shotl has a presence across 22 cities in 10 countries including Brazil and Japan and has over 350,000 bookings to date. The platform has more than 10 percent market share in Europe is focused in solving challenges posed by transportation voids in suburbs, cities and campuses with an on-demand platform that is simple to use, flexible, and sustainable, SWVL said in a statement. SWVL did not reveal the size of the transaction but said the deal is expected to close in the fourth calendar quarter of 2021, subject to customary closing conditions. (Zawya)
- Dubai records 365,632 tons exports, 260,001 tons imports in dhow trade during 1H2021 – Dubai is seeing a strong revival in wooden dhow trade this year due to the recent establishment of the Marine Agency for Wooden Dhows, with wooden dhow exports reaching 365,632 tons and imports reaching 260,001 tons in the first half of 2021. Established by the Ports, Customs and Free Zone Corporation (PCFC) in July 2020 to streamline and regulate the activity of the traditional vessels in the emirate’s waters, the Marine Agency for Wooden Dhows facilitated the entry of more than 5,383 wooden ships into the ports of the emirate in the first half of 2021 carrying merchandise from countries across the MENA region and beyond. (Zawya)
- Dubai's DP World says first-half profit jumps almost 52% – Dubai's DP World said on Thursday profit jumped almost 52% in the first half of 2021, fueled by higher consumer spending and a rebound in global trade since the coronavirus pandemic. DP World, one of the world's biggest port operators, said profit attributable to owners of the company jumped to $475mn in the period ended June 30, from $313mn last year. Revenues rose 21% to $4.95bn, from $4.0bn in the year earlier period, the company said in a statement. (Reuters)
- Three Gorges said to near deal for Dubai renewable firm Alcazar – State-owned China Three Gorges Corp. is nearing a deal to acquire Dubai-based wind and solar developer Alcazar Energy Partners, people with knowledge of the matter said, in one of China’s biggest pushes yet into Middle Eastern renewable energy. A consortium led by Three Gorges is in advanced talks to buy Alcazar Energy for about $500mn, the people said, asking not to be identified because the information is private. An announcement could come as soon as the next few days, according to the people. The deal could serve as a springboard for China to increase clean energy investments in the Middle East. Chinese companies have put their money into oil and gas in the likes of Iraq and the UAE for years, but have only recently taken an interest in renewables in the region. (Bloomberg)
- Kuwait Projects Downgraded to Ba2 by Moody's – Moody's Investors Service has today downgraded Kuwait Projects Company Corporate Family Rating (CFR) to Ba2 from Ba1 and the Probability of Default Rating (PDR) to Ba2-PD from Ba1-PD. Concurrently, Moody's downgraded to (P)Ba2 from (P)Ba1 the provisional ratings assigned to the senior unsecured $3bn Euro Medium Term Note (EMTN) program issued by Kuwait Projects Co SPC Limited and to Ba2 from Ba1 the ratings on the backed senior unsecured bonds due in 2023, 2026 and 2027 issued by Kuwait Projects Co SPC Limited. Moody's also affirmed Kuwait Projects Co SPC Limited's (P)NP backed short term rating. The outlook on all ratings remains negative. (Bloomberg)