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DUBAI: The ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum issued a law imposing an annual tax of 20 percent on foreign banks operating in the emirate on Thursday.
Banks which are licensed to operate in Dubai’s international financial centre are exempt from the tax, Dubai Media Office said.
RIYADH: OPEC+ members reaffirmed their commitment to production cuts aimed at maintaining stability in the global oil market during a meeting held on Monday.
The 58th Joint Ministerial Monitoring Committee session, conducted via videoconference, reviewed crude oil production data for November and December 2024 and highlighted the strong overall compliance by both OPEC and non-OPEC countries involved in the Declaration of Cooperation.
The committee reiterated its commitment to the DoC, which is set to extend through the end of 2026. It also commended Kazakhstan and Iraq for their improved compliance, including the additional voluntary production adjustments they made.
OPEC also welcomed the renewed pledges from overproducing countries to achieve full compliance with production targets.
These countries are expected to submit updated compensation schedules to the OPEC Secretariat by the end of February 2025, covering the overproduced volumes since January 2024.
The committee stressed its ongoing role in monitoring adherence to production adjustments. It will continue to track additional voluntary production cuts announced by participating OPEC and non-OPEC nations, in line with the decisions made during the 52nd JMMC meeting on Feb. 1, 2024.
In a procedural update, the committee announced that, effective Feb. 1, 2025, Kpler, OilX, and ESAI will replace Rystad Energy and the Energy Information Administration as secondary sources for assessing crude oil production and compliance with the DoC.
The next JMMC meeting is scheduled for April 5, 2025.
LONDON: Oil prices rose on Monday after US President Donald Trump imposed tariffs on Canada, Mexico and China, raising fears of supply disruption, though gains were capped by concern over what could be an economically damaging trade war.
Brent crude futures rose $1.28, or 1.7 percent, to $76.95 a barrel by 3:32 p.m. Saudi time after touching a high of $77.34.
US West Texas Intermediate crude futures were up $1.89, or 2.6 percent, at $74.42 after touching their highest since Jan. 24 at $75.18.
Trump’s sweeping tariffs on goods from Mexico, Canada and China kicked off a trade war that could dent global growth and reignite inflation.
The tariffs, which will take effect on Feb. 4, include a 25 percent levy on most goods from Mexico and Canada, with a 10 percent tariff on energy imports from Canada and a 10 percent tariff on Chinese imports.
“The relatively soft stance on Canadian energy imports is likely rooted in caution,” Barclays analyst Amarpreet Singh said in a note.
“Tariffs on Canadian energy imports would likely be more disruptive for domestic energy markets than those on Mexican imports and might even be counterproductive to one of the president’s key objectives — lowering energy costs.”
Goldman Sachs analysts expect the tariffs to have limited near-term impact on global oil and gas prices.
Canada and Mexico are the top sources of US crude imports, together accounting for about a quarter of the oil US refiners process into fuels such as gasoline and heating oil, according to the US Department of Energy.
The tariffs will raise costs for the heavier crude grades that US refineries need for optimum production, industry sources said.
Gasoline pump prices in the US are certainly expected to rise with the loss of crude for refineries and the loss of imported products, said Mukesh Sahdev at Rystad Energy.
Trump has already warned that the tariffs could cause “short-term” pain for Americans.
US gasoline futures jumped 2.5 percent to $2.11 a gallon after touching the highest level since Jan. 16 at $2.162.
“It is clear that the tariffs will have a negative effect on the global economy, with physical markets set to get tighter in near term, pushing crude prices higher,” said Panmure Liberum analyst Ashley Kelty.
Investors will also be watching for news from an OPEC+ meeting on Monday, with expectations that the oil producer group will stick to its current plan of gradual increases to output.
Rystad’s Sahdev added that tariffs, if kept for long, have the potential to cause production losses in Canada and Mexico, which could help OPEC+ to unwind output curbs.
RIYADH: Saudi stock market profits are set to grow by 8 percent in 2025, with the petrochemical sector driving the increase, according to a new report by SNB Capital.
Banking and healthcare are also expected to see big rises, with the industries benefiting from increased loan activity and expanded operations.
If petrochemicals are excluded from the analysis — with energy giant Aramco dominating the market — the Saudi stock exchange would see a 14 percent growth in profits.
This broad-based growth across key sectors highlights the resilience and dynamism of the Saudi economy, setting the stage for heightened market activity and increased investor confidence.
These favorable conditions have translated into a surge in initial public offerings, with strong demand from both institutional and retail investors driving significant gains in 2024.
The petrochemical field is projected to record substantial growth of 74 percent in 2025, driven by improved prices, additional production capacities, and a return to full operational activity following widespread maintenance closures in 2024.
The healthcare division is anticipated to achieve a 23 percent rise in net profits, up from 11 percent in 2024, driven by a 20 percent revenue increase attributed to new expansions that help mitigate margin pressures.
The cement sector is also poised for strong growth, supported by the acceleration of mega projects, while the car rental industry is expected to benefit from fleet expansion, operational efficiencies, and lower interest rates, though short-term rental margins could face some pressure.
Strong expectations for IPO activity in 2025 have been bolstered by lower interest rates, accelerating economic activity, and attractive investor incentives, according to SNB Capital.
Macroeconomic sentiment remains favorable, with over 85 percent of managers forecasting at least three interest rate cuts in 2025, signaling a shift toward easier financial conditions.
The report underlines a growing proportion of managers who view the market as undervalued relative to its fair worth, though a majority still consider it fairly valued at its peak.
Oil prices are expected to stabilize in 2025, with most fund managers predicting a range between $70 and $79 per barrel.
Optimism is rising across sectors such as tourism, banking, and construction, while cautious views persist for the energy and petrochemical industries as they continue to navigate challenges.
The strong market activity witnessed in 2024 lays the foundation for the optimistic forecasts for 2025, as the momentum generated by increased IPOs, rising transaction values, and sectoral recovery is expected to carry forward into the coming year.
The Tadawul All-Share Index recorded a sharp increase in IPOs in 2024, reversing a decline in the prior year.
The number of IPOs rose to 14, up from eight in 2023, with total proceeds reaching SR14.2 billion, compared to SR11.9 billion the previous year.
Institutional subscription coverage rates improved significantly, averaging 126 times in 2024 compared to 61 times in 2023, while retail subscription coverage increased to an average of 16 times from 11 times.
Market activity surged in 2024, with the number of negotiated deals reaching approximately 3,500, compared to 918 in 2023 and 1,316 in 2022, according to SNB.
Negotiated deals generally refer to transactions that are arranged through direct agreements between buyers and sellers rather than through open market auctions or bidding processes.
In the context of the stock markets, it can imply block trades, private placements, or structured deals involving large volumes of shares or assets that require direct negotiation to determine terms such as price and volume.
Although the average deal size declined to SR24 million from SR34.6 million in 2023, the total value of transactions climbed to SR84 billion, significantly higher than SR29.5 billion in 2023 and SR38.9 billion in 2022.
Major offerings contributed to increased market liquidity and a higher proportion of free-floating shares.
Among them, Saudi Aramco’s secondary offering in June stood out as the largest secondary issuance in the Middle East, Europe, and North Africa since 2000.
The offering raised SR42 billion through the sale of 1.55 billion shares at SR27.25 per share, surpassing the scale of its 2019 IPO.
Saudi Telecom Co. followed with a secondary offering in November, generating SR38.6 billion through the sale of 2 percent of its public shares, or approximately 100 million shares.
Meanwhile, SAL Logistics Services completed an IPO valued at SR6 billion, with shares expected to be distributed to shareholders in early 2025 at an estimated value of SR7 billion.
JEDDAH: Kuwait’s government projected its budget deficit to rise by 11.9 percent to 6.31 billion Kuwaiti dinars ($20.4 billion) for the fiscal year 2025-2026, up from the 5.6 billion dinars shortfall estimated for the current fiscal period.
The Cabinet approved the draft budget on Feb. 2 for the upcoming fiscal year, which will be submitted for final approval by the Emir, Sheikh Meshal Al-Ahmed Al-Sabah.
In a brief statement following an extraordinary meeting, the Cabinet noted that the government expects revenues to total 18.2 billion dinars, a decrease from the 18.9 billion dinars forecast for 2024-2025. Expenditures are projected at 24.5 billion dinars, slightly lower than the 24.6 billion dinars allocated for the current year.
This comes amid growing economic challenges in Kuwait, with a recent report from the International Monetary Fund forecasting a 2.8 percent contraction in 2024, followed by a recovery in 2025. The IMF highlighted risks related to oil dependence and delays in reforms, though it also noted signs of recovery in the non-oil sector despite a contraction in the oil sector.
Despite the projected deficit for the full fiscal year, Kuwait posted a budget surplus of 150.4 million dinars in the first half of 2024-25, according to Finance Ministry figures released in November. The surplus was attributed to higher revenues and reduced spending.
The draft budget for the period from April 1, 2025, to March 31, 2026, includes projected oil revenues of 15.3 billion dinars, reflecting a 5.7 percent decline from the current budget. Non-oil revenues are expected to rise by 9 percent, reaching 2.92 billion dinars, as stated by Minister of Finance and Minister of State for Economic and Investment Affairs Noura Al-Fassam.
The finance minister stated that total estimated revenues decreased by 3.6 percent, with oil revenues, estimated at 15.3 billion dinars, falling by 5.7 percent for the current budget ending on Mar. 31, 2025.
She added that wages and subsidies are expected to account for 79.5 percent of total spending, with capital expenditures estimated at just 9.1 percent. Additionally, non-oil revenues are projected at 2.92 billion dinars, reflecting a 9 percent increase from the current budget.
The finance minister noted that the government is budgeting for an oil price of $68 per barrel for the upcoming fiscal year, although the breakeven price needed to cover the fiscal deficit is pegged at $90.5 per barrel.
RIYADH: Saudi Arabia’s insurance sector is set to see improved supervision and enhanced growth prospects following a new agreement between the Kingdom’s Capital Market Authority and the Insurance Authority.
The memorandum of cooperation aims to strengthen oversight for insurance firms listed on the Saudi financial market, while also fostering greater stability and growth within the sector, the Saudi Press Agency reported.
This aligns with the expected growth of Saudi Arabia’s insurance market, which is projected to reach a gross written premium of $19.27 billion this year, according to German data gathering platform Statista.
While the US is expected to generate the highest gross written premium at $3.93 trillion, Saudi Arabia’s market is witnessing rapid growth, driven by economic development and increasing awareness of the need for insurance protection.
The newly signed memorandum aims to ensure role integration and consistency between the two authorities, supporting the Kingdom’s Vision 2030 goals of developing the financial sector to meet its economic and developmental objectives.
A recent KPMG report revealed a 16.9 percent year-on-year revenue growth in Saudi Arabia’s insurance sector for the third quarter of 2024, driven by increases in motor, property, and medical insurance. It attributed the growth to ongoing economic reforms under Vision 2030, highlighting regulatory measures that have strengthened the sector’s development and stability.
Medical insurance was a key driver of overall growth, with revenues rising by 13.6 percent, largely due to the government’s implementation of mandatory health coverage regulations, according to the analysis.
Motor insurance also saw a significant boost, with revenues up 22.7 percent year on year, the report said.
The analysis added this growth was tied to an expanding auto market and regulatory measures ensuring compliance with insurance requirements.
The property and casualty insurance segment also experienced strong growth, with a 20.4 percent increase in revenues, reflecting the ongoing expansion of infrastructure and real estate projects across Saudi Arabia.
The growth comes as the Kingdom’s regulatory body is working to improve the sector’s efficiency and stability while supporting local infrastructure and fostering a thriving business ecosystem, the analysis said.
