LONDON: Britain said on Sunday that it wants talks with the EU to move on to the next phase, as it set out details of the future relationship it envisages with the bloc and senior ministers presented a united approach to negotiations.
Britain is keen to start talking about its post-Brexit relationship with Europe, wary of the need to reassure anxious businesses, citizens and investors. But Brussels has insisted that progress must be made on divorce arrangements first.
“We need to get on with negotiating the bigger issues around our future partnership to ensure we get a deal that delivers a strong UK and EU,” David Davis, Brexit minister, said in a statement.
Britain’s call to move forward with Brexit talks came as Chancellor of the Exchequer Philip Hammond and International Trade Secretary Liam Fox presented a united front that there should be a time-limited transition period — signalling a truce between rival factions in Prime Minister Theresa May’s cabinet.
Davis’s Brexit department said it was preparing to publish several papers, including plans for a new customs arrangement and a proposal on how to resolve the difficulties of a non-physical border between Ireland and Northern Ireland.
“We’ve been crystal clear that issues around our withdrawal and our future partnership are inextricably linked,” a source in Britain’s Brexit department said.
“These papers show we are ready to broaden out the negotiations.”
Talks so far have focused on how much Britain should pay to leave the EU, what rights British and EU citizens will have, and how to manage a land border to the bloc in Ireland. The two sides will be looking for a solution to those issues at the next round of talks due at the end of this month.
The decision to announce the publication of papers on its plans indicates Britain’s desire to counter criticism from Brussels about its approach to the talks.
In July, EU officials said progress was difficult not because Britain had unacceptable demands, but because it had no position at all on many issues. EU negotiators have warned that an already-tight timetable could be delayed ahead of a scheduled March 2019 exit.
Irish Schengen area
A British paper focused on “issues unique to Northern Ireland and Ireland” is expected ahead of the talks, but no further details of the proposal were provided on Sunday.
The Sunday Telegraph reported that Britain was seeking a “Schengen area” between Britain and Ireland, which would allow free movement of people and a “light-touch customs regime” across the border of the Republic of Ireland and Northern Ireland. The Brexit department declined to comment on the story.
The report, which cited an unnamed source in the Brexit department, said that Irish citizens would be able to work freely in the UK, and British citizens would work freely in Ireland. Citizens of other EU countries could access the UK over the Irish border but would not be able to work in Britain without a work permit.
Separate papers would also address “Continuity in the availability of goods for the EU and the UK” and “Confidentiality and access to official documents,” the Brexit department said.
Eager to push talks past the opening divorce issues and on to the future trading and legal ties to the bloc, Britain also promised a series of “Future Partnership” papers in the run-up to October’s European Council. The first will be a proposal for new customs arrangements.
The push to move forward with Brexit comes as Prime Minister May’s top ministers moved to strike a more united tone on leaving the EU, after in-fighting in the wake of an electoral failure in June in which May’s Conservative party lost its majority in parliament.
Some still dispute her approach, with former foreign minister for the now-opposition Labour party David Miliband and pro-EU Conservative MP Anna Soubry warning in Sunday newspapers of the economic “self-harm” of leaving the single market.
However, pro-European finance minister Hammond and ardent Brexiteer trade minister Fox set out a joint position in the Sunday Telegraph that a transition period was needed when Britain leaves the EU, but single market membership would still end and the interim period would not be used to stop Brexit.
Foreign Secretary Boris Johnson said in a tweet that the article was the “right way forward” and would “create certainty and a great new European relationship.”
Britain says Brexit talks should move to next phase
Britain says Brexit talks should move to next phase
IsDB, SFD, Arab Coordination Group join initiative to raise $500m for education initiatives
RIYADH: A global partnership involving the Islamic Development Bank will inject $500 million into educational initiatives across member countries of the Organization of the Islamic Cooperation.
During the annual meetings and golden jubilee celebrations of the IsDB, the Arab Coordination Group and the Saudi Fund for Development also joined The Global Partnership for Education, the Saudi Press Agency reported.
The Global Partnership for Education is a multi-stakeholder partnership and funding platform that aims to strengthen education systems in developing countries.
The amount will be raised by the Smart Finance for Education Initiative, an innovative financing tool.
Moreover, partners also pledged an additional $350 million to the initiative, including $150 million from the IsDB, $100 million from the Arab Bank for Economic Development in Africa, and $50 million from The Islamic Solidarity Fund for Development as well as $50 million from the Global Partnership for Education.
The initiative aims to enhance access to quality education in 37 OIC member countries, where 28 million children are without schooling.
Also at the event, the Islamic Corporation for the Insurance of Investment and Export Credit, a member of the IsDB concerned with providing Shariah-compliant insurance services, signed a retakaful agreement for a percentage of the shares allocated to Indonesia for the benefit of the country’s Eximbank.
A retakaful agreement is an Islamic reinsurance contract where takaful operators transfer a portion of their risk to a retakaful operator in compliance with Shariah principles.
The arrangement aims to provide strategic expertise and capabilities in the field of retakaful through a quota-sharing treaty specifically designed to support the launch of the financial institution’s new export credit takaful program product.
This comes as the business expected to be insured under this treaty is estimated at a value of $13 million during the year 2024.
During the IsDB annual meetings and jubilee celebrations, the bank’s president, Mohammed Sulaiman Al-Jasser, confirmed that the entity has designed a strategy for eco-conscious growth and low carbon reduction by supporting members to reach the zero-carbon goal.
Al-Jasser also pointed out that 40 of the bank’s projects are about renewable energy, green projects, and financing climate action.
He underlined the bank’s focus on green initiatives and sustainable development sukuk, indicating they are compatible with the Capital Markets Union standard.
The IsDB’s 2024 annual meetings are being held under the patronage of King Salman bin Abdulaziz in Riyadh from April 27 - 30.
The annual sessions coincide with IsDB’s golden jubilee, as the institution celebrates 50 years of promoting economic and social development in 57 member nations under the slogan “Taking pride in our past, shaping our future: authenticity, solidarity, and prosperity" reflecting the bank’s legacy and future goals.
Closing Bell: TASI closes in green; Saudi banks profits up
RIYADH: Saudi Arabia’s Tadawul All Share Index wrapped up Monday’s trading session at 12,369.46 points, witnessing an increase of 137.92 points, or 1.13 percent.
The parallel market, Nomu, ended the day at 26,227.72 points, shedding 3.11 points or 0.01 percent.
Conversely, the MSCI Tadawul Index grew by 24.35 points to close at 1,569.81, a 1.58 percent increase.
TASI reported a trading volume of SR8.2 billion ($2.19 billion), with 165 stocks making gains and 63 witnessing declines.
Nomu, on the other hand, saw a trading volume of SR52 million.
On the announcement front, Al Rajhi Bank reported an increase in profits to SR4.4 billion for the first quarter of 2024, reflecting a 6 percent rise from SR4.1 billion recorded during the corresponding period in 2023.
The bank primarily attributed this growth to a 10.2 percent increase in net income from financing and investment activities, driven by a rise in total income on financing and investment.
This was further supported by an increase in total returns on these investments, according to a bourse filing.
Its operational income also saw a healthy increase, rising by 6.6 percent due to gains in net financing and investment income alongside income from other operations.
However, these gains were partially offset by a decrease in income from banking service fees and foreign currency exchange activities.
On the expenditure side, total operating expenses, including provisions for credit losses, rose by 7.2 percent. This increase was largely due to higher depreciation costs and employee salaries and benefits.
Despite these rising costs, the bank managed to mitigate some financial pressures with a reduction in other general and administrative expenses. Notably, provisions for credit losses escalated significantly, from SR359 million in the previous year to SR421 million in 2024, reflecting a 17.3 percent increase.
Furthermore, Bank Albilad also saw an increase in profits as it released its first quarter results.
The bank reported a 15 percent increase in profits, reaching SR643.1 million up from SR559.9 million in the same quarter of the previous year, according to a bourse filing.
The increase in profits was primarily attributed to a robust performance in its investment and financing assets, which saw a 21 percent increase in income.
This significant growth in asset income helped offset the 54 percent rise in the return on deposits and financial liabilities, underlining the bank’s effective management of its asset portfolio against rising costs.
Additionally, Saudi National Bank also managed to secure an increase in profits in the first quarter. The bank reported a marginal rise in its profits to SR5.04 billion from SR5.02 billion during the same period last year.
This modest increase in profits was underpinned by a significant 21.9 percent rise in special commission income, driven largely by growth in the bank’s financing and investment portfolios, coupled with rising interest rates.
The bank also experienced a slight 0.4 percent increase in net income attributable to shareholders, buoyed by a 2.4 percent improvement in total operating income and gains from other non-operational financial activities.
However, petrochemical company Saudi Kayan reported a loss in its first quarter results. Despite the ongoing challenges, the company managed to reduce its losses to SR571.9 million from SR673.3 million in the same quarter the previous year.
Saudi Kayan attributed the narrowed losses primarily to an increase in revenues, spurred by higher sales volumes, which helped counterbalance the impact of lower average product selling prices.
In a Tadawul filing, the company noted that while the average selling prices had decreased, the overall financial performance improved compared to the previous year.
Saudi Aramco retains its status as Middle East’s most valuable brand
RIYADH: Energy giant Saudi Aramco has maintained its position as the Middle East’s most valuable brand, with a value of $41.5 billion, according to a report.
The latest analysis by Brand Finance revealed the firm continued to dominate the region despite an 8 percent drop in value, driven by a fall in crude oil prices and lower sales volumes.
The report noted that a 12 percent increase in brand value to $13.9 billion meant the Kingdom’s telecommunications firm stc was ranked as the second most valuable in the Middle East and the region’s most sought-after telecom company.
Andrew Campbell, managing director of Brand Finance in the Middle East, said that stc is steadily progressing as one of the leading telecommunications firms globally.
“While Aramco remains the dominant player in terms of brand value in Saudi Arabia, stc’s strategic acumen, characterized by ongoing diversification and digital transformation, have further solidified the brand’s status as Saudi Arabia’s strongest brand, while also positioning it among the world’s leading telecoms brands,” said Campbell.
The report noted that stc encompassed “an integrated system of subsidiaries specialized across sectors, alongside its traditional telecommunications services.”
It add that the company’s acquisition of an interest in Telefonica “marks another key milestone in stc’s growth journey.” said Brand Finance.
With a brand value of $6.4 billion, Al Rajhi Bank became the third most valuable firm in the Kingdom.
Saudi Basic Industries Corp. and Saudi National Bank were ranked fourth and fifth, respectively, with values totaling $4.9 billion and $4.5 billion, respectively.
Saudi Arabia’s King Faisal Specialist Hospital & Research Center, with a value of $1.5 billion, became the Middle East’s most valuable Healthcare label, the report added.
In the UAE, Abu Dhabi National Oil Co. was named the most valuable brand, with a value of $15.2 billion.
On the other hand, Qatar National Bank was ranked the top-rated brand among Qatari firms, with a value of $8.4 billion.
Islamic finance industry projected to grow in 2024-2025
RIYADH: The Islamic finance industry is projected to grow globally in 2024-2025 with total assets likely to witness single-digit growth driven by economic diversification efforts, a report said.
It predicted that sukuk issuance globally would hover between $160 billion and $170 billion in 2024, representing a steady momentum from $168.4 billion in 2023 to $179.4 billion in 2022.
In its latest analysis, credit rating agency S&P Global highlighted that the industry grew by 8 percent and 8.2 percent in 2023 and 2022, respectively, stemming from growth in banking assets and the sukuk industry.
According to the US-based firm, Islamic banking assets grew 56 percent in 2023 compared to 72 percent in 2022.
Financial institutions across the Gulf Cooperation Council region accounted for 86 percent of the reserve increase in 2023, with Saudi Arabia becoming the chief contributor, having generated 56.7 percent of the maturation.
“We expect the implementation of Vision 2030 and growth in corporate and mortgage lending to continue supporting the Islamic finance industry over the next 12-24 months. In addition, the UAE showed a stronger contribution in 2023 thanks to the good performance of the non-oil sector,” the report noted.
It added: “Elsewhere, we observed some growth, particularly in Turkiye and Indonesia. The performance in Malaysia and Turkiye was somewhat tempered by the depreciation of the ringgit and the lira.”
According to the US-based firm, the issuance of this Shariah-compliant debt product began on a strong footing in 2024, with Saudi Arabia becoming a key contributor to the performance.
“The drop in issuance volumes in 2023, which mainly resulted from tighter liquidity conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit, was somewhat compensated by an increase in foreign currency-denominated sukuk issuance,” S&P Global said in the report.
It added: “The market has started 2024 on a strong footing, with total issuance reaching $46.8 billion at March 31, 2024, compared with $38.2 billion at March 31, 2023.”
The analysis highlighted that the sukuk market will continue its growth momentum in the near term as financing needs in core Islamic finance countries remain high, given ongoing economic transformation programs, especially in countries like Saudi Arabia.
“We expect the sukuk market to fill in some of these needs. Specifically, we see some opportunities in the structured finance space with banks tapping the sukuk market to refinance their sizable mortgage books,” said the agency in the report.
The agency highlighted that the drive for digitalization and sustainability initiatives have yielded mixed results in the Islamic finance industry.
“While opportunities related to sustainable finance are significant as the industry is concentrated in oil exporting countries, progress has been relatively slow and limited in the global context,” according to S&P Global.
However, the report noted that digitalization has helped the banking side of the industry.
S&P Global concluded the study by saying that the future of Islamic finance is sustainable, collaborative, and digital.
“It is sustainable thanks to the alignment between Shariah principles, overarching pillars of sustainability, and the value proposition of Islamic finance that capture more than just financial objectives,” said the report.
According to the analysis, the future of Islamic finance is collaborative because stakeholders do not want to disrupt the industry equilibrium and erase the development achieved over the past 50 years.
The report added that digitalization will also impact Islamic finance in the coming years, as leveraging emerging technologies could help the industry enhance its efficiency and ultimately increase its value proposition for investors and issuers.
Earlier this month, another report released by Fitch Ratings noted that global outstanding sukuk expanded 10 percent year on year to reach $867 million at the end of the first quarter of 2024.
The credit rating agency attributed the growth of this Islamic debt product to funding and refinancing needs, and the development of the debt capital market in the GCC region.
The report, however, added that new Shariah requirements that could alter credit risk, geopolitical uncertainties and high oil prices, could affect the growth of the sukuk market this year.
Saudi Aramco is looking at investment in new energies outside of the Kingdom, CEO says
DUBAI: Saudi Arabia’s state-oil giant Aramco is looking at investments right now in new energies outside of the Kingdom, CEO Amin Nasser said on Monday at the sidelines of a World Economic Forum special meeting held in Riyadh.
