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UAE, Egypt central banks enter into currency swap 

UAE, Egypt central banks enter into currency swap 
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Updated 28 September 2023
Arab News
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UAE, Egypt central banks enter into currency swap 

UAE, Egypt central banks enter into currency swap 
Updated 28 September 2023
Arab News
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RIYADH: Financial trade between the UAE and Egypt is expected to surge after the monetary authorities of the two nations signed a currency swap agreement. 

The countries’ respective central banks formalized an arrangement between the UAE dirham and the Egyptian pound, according to a press statement. 

The deal, signed by Central Bank of the UAE Gov. Khaled Mohamed Balama and his Egyptian counterpart Gov. Hassan Abdullah, allows for the exchange of local currencies between the two institutions with a nominal size of up to 5 billion dirhams ($1.36 billion) and 42 billion Egyptian pounds. 

A currency swap agreement is a legally binding contract between two parties that outlines the terms and conditions under which they will exchange currencies and make periodic interest payments.  

Commenting on the agreement, Balama expressed that it reflects the strong relationship between the countries and provides an opportunity to promote cooperation while developing their respective economic and financial markets. 

“In line with the efforts of the UAE and Egypt’s leadership to collaborate more broadly across multiple areas, the CBUAE is keen to deepen its cooperation with the CBE (Central Bank of Egypt) to achieve common interests, positively impact the trade, investment, and financial sectors, and enhance financial stability,” Balama added. 

Furthermore, Abdullah noted that the move was in support of the “continued robust relations” between the UAE and Egypt.

He added he was confident the move will “bolster cooperation between both financial sectors in their respective currencies.” 

A day before signing the deal, Abdullah met with his Chinese counterpart Pan Gongsheng in Beijing, where the two heads discussed various topics intending to enhance economic and financial cooperation between the countries. 

A currency swap agreement was among the most prominent subjects examined, intending to improve the partnership between nations.

The discussions also included the Egyptian government’s plan to issue panda bonds denominated in Chinese yuan.

Additionally, the officials encouraged Chinese and Egyptian banks to establish a presence in each other’s county to enhance financial integration between economies.

Topics: UAE Central Bank Egypt central bank

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Closing Bell: Banque Saudi Fransi raises $810m in sukuk issuance to strengthen capital base

Closing Bell: Banque Saudi Fransi raises $810m in sukuk issuance to strengthen capital base
Updated 28 August 2024
MANAL AL-BARAKATI
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Closing Bell: Banque Saudi Fransi raises $810m in sukuk issuance to strengthen capital base

Closing Bell: Banque Saudi Fransi raises $810m in sukuk issuance to strengthen capital base
  • Tadawul All Share Index closed down 65.05 points to 12,117.15
  • Day saw a total trading turnover of SR6.85 billion, with 90 stocks advancing and 131 retreating
Updated 28 August 2024
MANAL AL-BARAKATI

RIYADH: Banque Saudi Fransi completed the issuance of additional tier-one sukuk, raising SR3 billion ($810 million) under its SR8 billion capital program. 

The privately placed sukuk, denominated in Saudi Riyals, offers a 6 percent return per annum. 

According to a statement on the Saudi Stock Exchange, or Tadawul, each sukuk has a nominal value of SR1 million and is perpetual, with provisions for early redemption under specific conditions, such as a capital event or tax event. 

This issuance marks a strategic move to bolster the bank’s capital base and support long-term growth objectives, following initial disclosures made on Tadawul in August. 

Meanwhile, the Saudi Stock Exchange’s Tadawul All Share Index closed down 65.05 points, or 0.53 percent, at 12,117.15. The day saw a total trading turnover of SR6.85 billion, with 90 stocks advancing and 131 retreating. 

Red Sea International Co. emerged as the top performer, with shares rising 9.9 percent to SR45.50. Saudi Arabian Amiantit Co. and Saudi Real Estate Co. also saw gains, with share prices up 6.7 percent and 5.59 percent, respectively. 

In contrast, Jabal Omar Development Co. was the worst performer, with a 3.54 percent drop to SR25.9. 

On the announcement front, United Mining Industries Co. released its interim financial results for the first half of 2024. 

UMI reported a 5.5 percent increase in sales for the six months ending June 2024 compared to the same period last year. 

This growth is primarily attributed to a shift in the company’s sales mix and the successful implementation of new marketing strategies to enhance market penetration and customer engagement. 

However, the company’s net profit for the first half of the year declined by 36 percent compared to the corresponding period in the previous year. 

The decrease is largely due to provisions set aside in response to a legal claim involving the General Authority of Competition. 

Topics: Saudi Arabia Tadawul Tadawul All Share Index (TASI) MSCI Tadawul Index TASI Nomu TASI Closing Bell main Saudi stock exchange Finance

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Egypt uncovers major oil deposit in Western Desert, signaling boost in energy production

Egypt uncovers major oil deposit in Western Desert, signaling boost in energy production
Updated 28 August 2024
MANAL AL-BARAKATI
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Egypt uncovers major oil deposit in Western Desert, signaling boost in energy production

Egypt uncovers major oil deposit in Western Desert, signaling boost in energy production
  • Discovery was made in the West Fewebs-1 area of the Kalabsha Development Area
  • Oil is of particularly high quality, with a rating of 44 degrees, which could make it highly sought after on international markets, says minister
Updated 28 August 2024
MANAL AL-BARAKATI

RIYADH: Egypt has uncovered a significant new oil deposit in the Western Desert, which officials believe could substantially boost the country’s energy production. 

The discovery, made in the West Fewebs-1 area of the Kalabsha Development Area, revealed a substantial reserve of high-quality oil, according to a statement. 

Egypt’s Minister of Petroleum and Mineral Resources Karim Badawi emphasized the importance of this find, noting that the well has already shown promising results. 

“We have successfully drilled into the Paleozoic sands, and early tests have yielded an impressive 7,165 barrels of oil per day, alongside 23 million cubic feet of natural gas,” Badawi said. 

The oil is of particularly high quality, with a rating of 44 degrees, which could make it highly sought after on international markets, he added. 

This discovery highlights Egypt’s ongoing efforts to tap into its energy potential, particularly in the Western Desert, a region long recognized for its oil and gas prospects. 

Khalda Petroleum Co., which conducted the drilling on behalf of Apache and the Egyptian General Petroleum Corp., confirmed a substantial presence of hydrocarbons in the area. 

“This discovery underscores the richness of Egypt’s natural resources,” said an official from Khalda Petroleum. “The Paleozoic layer alone has shown a net thickness of 462 feet, indicating that there is much more to be uncovered.” 

The timing of this discovery is crucial as Egypt pushes for greater energy independence. Badawi has recently announced a series of new incentives aimed at boosting the country’s oil and gas production. 

These measures are designed to attract further investment and increase exploratory activities across the country. “We are committed to enhancing Egypt’s energy sector,” Badawi stated, “and this discovery is just one example of what can be achieved with the right support and collaboration.” 

In addition to the oil find, the Ministry of Petroleum and Mineral Resources has launched a new global bid for natural gas exploration. 

This initiative, which targets 12 areas in the Mediterranean and the Nile Delta, is part of Egypt’s broader strategy to capitalize on its natural gas reserves. “Our focus is on attracting international partners who can bring in the technology and expertise needed to fully realize Egypt’s energy potential,” Badawi said. 

Topics: energy Egypt egypt oil Western Desert

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Qatar’s foreign merchandise trade balance hits $5.52bn, up 2.5% year-on-year

Qatar’s foreign merchandise trade balance hits $5.52bn, up 2.5% year-on-year
Updated 28 August 2024
REEM WALID 
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Qatar’s foreign merchandise trade balance hits $5.52bn, up 2.5% year-on-year

Qatar’s foreign merchandise trade balance hits $5.52bn, up 2.5% year-on-year
  • Total exports amounted to around 30.2 billion riyals in July and imports reached an estimated 10.1 billion riyals
  • China was the top destination for Qatar’s exports, followed by South Korea and India
Updated 28 August 2024
REEM WALID 

RIYADH: Qatar’s foreign merchandise trade balance recorded a surplus of 20.1 billion Qatari riyals ($5.52 billion) in July, up 2.5 percent year-on-year, according to new figures. 

The foreign merchandise trade balance represents the difference between total exports and imports. 

Data released by the country’s National Planning Council further showed that the total exports of products, including goods of domestic origin and re-exports, amounted to around 30.2 billion riyals in July, reflecting an increase of 3.9 percent compared to the same month in 2023.

The Gulf nation’s imports of goods in July reached an estimated 10.1 billion riyals, showing an increase of 6.8 percent compared to the corresponding period a year earlier.

Since the launch of Qatar’s Vision 2030 in 2008, the country’s economy has experienced a solid 5 percent average annual growth. During this period, the nation has consolidated its position among the top three global exporters of liquified natural gas, established a world-class infrastructure backbone, and substantially grown the size of its sovereign wealth fund.

The data further revealed that the year-on-year surge in total exchanges was mainly due to higher exports of petroleum gases and other gaseous hydrocarbons like LNG, condensates and propane, among others, reaching around 17.6 billion riyals in July, an increase of 3.7 percent. 

Crude petroleum oils and oils from bituminous minerals amounted to nearly 4.9 billion riyals, representing an 8.3 percent decline year on. year.

The statement also revealed a 5.2 percent decrease in non-crude petroleum oils and oils from bituminous minerals, reaching 2.6 billion riyals in the previous month. 

In July, China was the top destination for Qatar’s exports with close to 5.9 billion riyals, a share of 19.6 percent of total exchanges, followed by South Korea with almost 3.8 billion riyals and a share of 12.6 percent, and India with about 3.7 billion riyals, a share of 12.2 percent.  

The group “Turbojets, Turbopropellers & Other Gas Turbines; Parts Thereof” was at the top of the imported group of commodities, with 600 million riyals in July, showing a decrease of 31.4 percent year on year.

In second place was “Parts of Balloons Etc; Parts of Aircraft; Spacecraft Etc” with 270 million riyals recorded during the month, a decrease of 41.9 percent year on year.

In third place was “Medicaments Mixed or not, In Dosage Etc. Form,” with 260 million riyals recorded during July, reflecting a surge of 34.4 percent when compared to the same month in 2023.

China was the leading country of origin of Qatar’s imports with about 1.5 billion riyals in July, a share of 14.8 percent of the imports, followed by the US with almost 1.4 billion riyals, a share of 14.3 percent, and Japan with 0.7 billion riyals, a share of 6.5 percent. 

Topics: Qatar qatar economy Finance qatar exports Qatari riyals qatar trade

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UK’s Islamic banking assets surge 26 percent to $8.2bn in 2023: Fitch Ratings

UK’s Islamic banking assets surge 26 percent to $8.2bn in 2023: Fitch Ratings
Updated 28 August 2024
Nirmal Narayanan
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UK’s Islamic banking assets surge 26 percent to $8.2bn in 2023: Fitch Ratings

UK’s Islamic banking assets surge 26 percent to $8.2bn in 2023: Fitch Ratings
  • UK’s Islamic finance industry to grow to $15 billion in the medium term
  • London Stock Exchange is now the third-largest listing venue for US dollar sukuk globally
Updated 28 August 2024
Nirmal Narayanan

RIYADH: Islamic banks in the UK saw their assets surge 26 percent in 2023 to $8.2 billion, reinforcing the country’s position as a key Western hub for Shariah-compliant banking. 

Fitch Ratings, in its latest report, expects the UK’s Islamic finance industry to grow to $15 billion in the medium term, up from $10 billion at the end of 2023. 

This growth will be driven by the conversion of a conventional bank to an Islamic bank, continued asset growth in Islamic banks and funds, and supportive regulations. 

It highlighted that the London Stock Exchange is now the third-largest listing venue for US dollar sukuk globally. The LSE holds a 35 percent global share of US dollar sukuk, with around $80 billion outstanding as of the end of the first half of this year. 

Sukuk, also known as Islamic bonds, are Shariah-compliant debt instruments through which investors gain partial ownership of an issuer’s assets until maturity. 

Islamic finance gained traction as a safer alternative following the 2008 global financial crisis, positioning London as a major hub for Shariah-compliant finance in the West. Countries like Luxembourg, the US, and Ireland have also become notable domiciles for sukuk, the report said. 

“English Law is the governing law for most dollar sukuk and Islamic syndications globally. UK banks are among the key sukuk arrangers and Islamic interbank and derivatives counterparts for Islamic banks,” said Fitch. 

It added: “London Metals Exchange is accessed by Islamic banks in many countries to facilitate cash financing through tawarruq contracts.” 

In Islamic finance, tawarruq contracts involve purchasing goods on credit at a marked-up price and then selling them at a lower price to obtain cash. The focus of these transactions is liquidity, not the possession of the goods. 

Fitch affirmed the growth of Islamic finance in the UK, noting that the country is home to four Islamic banks, all owned by Gulf Cooperation Council members. The report also indicated that the UK is set to establish its fifth Islamic bank, likely boosting competition and adding depth to the sector. 

“The conversion of Ahli United Bank to an Islamic bank, following the acquisition of its Bahraini parent by Kuwait Finance House in 2023, is expected to be completed in 2024,” said Fitch. 

The US-based credit rating agency, however, added that the domestic Islamic finance industry in the UK remains niche and is unlikely to achieve mainstream relevance until at least the medium term. 

“Despite their longstanding presence in the UK and supportive regulations, Islamic banks held only 0.1 percent of the UK banking system assets at end-2023,” said Fitch. 

It added: “Demand drivers are low as Muslims are only around 6.5 percent of the UK’s population, with generally limited awareness of Islamic finance, as well as varying levels of shariah-sensitivity and confidence in the product offering.” 

The US-based agency also said that the UK government plans to launch a Shariah-compliant alternative student finance product after 2025, potentially boosting financial inclusion. 

However, the report said that UK-Islamic funds face stiff competition from leading Western jurisdictions such as Luxembourg, Ireland, the US, and Jersey. 

Topics: United Kingdom Sukuk Islamic finance Islamic banking Finance Britain banking

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Saudi Cabinet approves deal with Iraq on financial intelligence cooperation

Saudi Cabinet approves deal with Iraq on financial intelligence cooperation
Updated 28 August 2024
MOHAMMED AL-KINANI
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Saudi Cabinet approves deal with Iraq on financial intelligence cooperation

Saudi Cabinet approves deal with Iraq on financial intelligence cooperation
  • Cabinet ratified a cooperation agreement for modern transportation methods with Estonia
  • MoUs between Saudi Arabia and both Mauritius and Sri Lanka on cooperation in promoting direct investments were also approved
Updated 28 August 2024
MOHAMMED AL-KINANI

JEDDAH: Saudi Arabia’s Cabinet has approved a memorandum of understanding with Iraq to enhance financial intelligence cooperation, focusing on anti-money laundering and counter-terrorism financing measures.

The agreement, endorsed during the weekly ministerial meeting chaired by Crown Prince Mohammed bin Salman in Riyadh on Aug. 27, involves exchanging investigations between the Saudi General Directorate of Financial Investigation at the Presidency of State Security and the Iraqi Money Laundering and Countering Financing of Terrorism Office, according to the Saudi Press Agency.

The deal was initially signed on the sidelines of the Arab Forum of Anti-Corruption Agencies and Financial Intelligence Units, held in Riyadh in May, which brought together around 600 experts and 75 speakers.

The Kingdom has made significant strides in combating money laundering and counter-terrorism financing by establishing comprehensive laws within these sectors.

Saudi Arabia has also formed partnerships and information-sharing agreements with other countries and international organizations, such as the Financial Action Task Force, to bolster global efforts against monetary crimes.

As a founding member of the Middle East and North Africa region’s FATF since November 2004, the Kingdom’s full membership reflects its reported “tangible progress” and efforts in implementing the task force’s guidelines.

In a statement to the Saudi Press Agency following the session, Minister of Media Salman Al-Dosari said that the Cabinet also ratified a cooperation agreement for modern transportation methods between the Ministry of Transport and Logistics Services and Estonia’s Ministry of Climate.

The minister added that the ministerial council further approved two MoUs between Saudi Arabia and both Mauritius and Sri Lanka on cooperation in promoting direct investments.

Al-Dosari said that the Cabinet approved a deal between the country’s General Court of Audit and the Tunisian Court of Accounts for cooperation in accounting, auditing, and professional fields.

In February, the GCA and Tunisia’s supreme audit institution signed a MoU in Tunis to enhance cooperation in accounting, supervisory, and professional work.

Hussam Al-Angari, GCA’s president, said the deal was built on agreements his entity had signed with similar agencies in other countries.

He added that it aims to improve cooperation between the two sides in financial auditing, compliance, and performance oversight, and that would be achieved through several research and consulting projects, meetings, conferences, and training programs on topics of common interest.

The Cabinet also addressed key local economic developments, including the latest statistics and related indicators, such as the 10.5 percent increase in non-oil exports in the second quarter of 2024 compared to the same period last year.

The council also reviewed several general topics on its agenda and took the necessary actions.

Topics: main Saudi cabinet Saudi - Iraq Saudi Arabia

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