Bitcoin is a ‘high-risk’ speculation tool, say Saudi finance experts

Bitcoin is gaining due to the liquidity available to speculators in the market. (AFP)
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Updated 21 January 2021

Bitcoin is a ‘high-risk’ speculation tool, say Saudi finance experts

  • The cryptocurrency is not tied to any central bank or a financial institution that guarantees it

RIYADH: Bankers and economists have warned of the “significant risks” in Bitcoin trading, despite the digital currency’s recent headline-grabbing valuations.
Introduced in 2008, Bitcoin surged to a record high on Jan. 8 of $41,530, before retreating to $35,529 on Jan. 20.
Fadhel Al-Buainain, a former Saudi banker, told Arab News that Bitcoin is a first-class speculation tool without any support from cash reserves or economic superpowers, in contrast to the valuation mechanism of currencies like the dollar, the euro and others.
Bitcoin started, he noted, as an instrument for the movement of money denominated in US dollars and away from the conventional banking system, but soon transformed into an independent digital currency that is valued purely on the basis of supply and demand.
“The risks involved with Bitcoin are major and significant,” he said, adding: “The first risk is that nobody knows how it started and where it gets its strength. Another risk is that it is not tied to any central bank or a financial institution that guarantees it.
Besides, most of the banks do
not approve it.
Al-Buainain, who is a member of the Saudi Financial Association, assessed that the biggest issue with Bitcoin is the fact it has been used as a money laundering tool by those involved in the drug trade and other illegal activities. “This makes it a suspicious currency from a legal perspective,” he said.
Some analysts have speculated that Bitcoin could rise all the way to $100,000. Bitcoin has taken advantage of this optimism, especially among traders looking for a get-rich-quick scheme, leading to the potential for a bubble.
“I don’t think the Bitcoin legislation is effective because it is not associated with any reliable bank. Therefore, everything that is said about its legislation is inaccurate and impractical,”
Al-Buainain said.
The banker said there is a place for digital currencies, but only if their valuation is determined by central banks.
Mohammed Al-Suwayed, a financial analyst, said while he believed Bitcoin may rise as high as $100,000, the market was
easily manipulated.
Bitcoin is gaining now, he added, because of the liquidity available to speculators in the stock market. But he assessed that the speculation could end at any moment, causing the valuation to plummet, as has been seen before.
The Saudi Central Bank’s Standing Committee for Awareness on Dealing in Unauthorized Securities in the Foreign Exchange Market has previously warned against trading in unlicensed forex currency exchange markets.
The committee said investing in digital currencies is a high-risk strategy due to the fluctuation of prices and Bitcoin not being subject to the Saudi banking regulatory authorities.
Abdullah Al-Qahtani, a member of the committee, stressed that the first and most important defense against any fraud is being aware of fraudulent practices.
The committee was formed by a royal decree and focuses on increasing public awareness about trading in securities in unauthorized markets and the marketing of unlicensed digital currencies.
The committee is chaired by the Capital Market Authority and has members from the ministries of interior, media and commerce, as well as the Saudi Central Bank. It works with government agencies to curb unlicensed trading activities in unlicensed digital currencies.

 


Futures advance as vaccines, stimulus boost bets on economic rebound

Updated 03 March 2021

Futures advance as vaccines, stimulus boost bets on economic rebound

  • President Joe Biden said the US will have enough COVID-19 vaccine for every American adult by the end of May

BENGALURU: US stock index futures rose on Wednesday as a swift global roll out of vaccines and a new round of stimulus bolstered bets on a quick economic rebound, with investors also focusing on private employment and service sector reports.

Texas sweepingly rolled back coronavirus restrictions on Tuesday, lifting a mask mandate and saying most businesses may open at full capacity next week as many US states record a sharp decline in new infections and hospitalization.

President Joe Biden also said the United States will have enough COVID-19 vaccine for every American adult by the end of May.
The US Senate is expected to take up Biden’s $1.9 trillion coronavirus relief package on Wednesday, with Democrats aiming to get it signed into law before March 14, when some current jobless benefits expire.
At 06:35 a.m. EST, Dow E-minis were up 202 points, or 0.64% and S&P 500 E-minis were up 21.5 points, or 0.56%. Nasdaq 100 E-minis were up 86.5 points, or 0.65%.
Futures tracking the small-cap Russell 2000 jumped about 1.1%.
Further aiding risk sentiment, the US 10-year Treasury yield was last up 1.44%, well below last week’s peak of above 1.61% that triggered a selloff in the equities market on valuation worries.
Investors have lately unwound positions in high-flying technology-focused stocks and moved into sectors that are likely to benefit from an economy recovery, including financials , energy and industrials.
Bank of America, Goldman Sachs and Morgan Stanley were up between 1.2% and 1.7% in trading before the bell.
ISM’s survey is expected to show US services industry activity remained at its highest level in nearly two years in February, unchanged from January.
A separate report is likely to show US private payrolls rebounded further in February after the economy shed jobs in December. It comes ahead of the more comprehensive monthly jobs report.
Chevron Corp. and Exxon Mobil Corp. rose about 1.5% each as oil prices were boosted by expectations that OPEC+ producers might decide against increasing output when they meet this week.
However, Exxon said that it planned to cut its workforce in Singapore, home to its largest oil refining and petrochemical complex, by about 7% due to “unprecedented market conditions” resulting from the COVID-19 pandemic.


Israeli minister says interconnection with Gulf grid would boost Mideast energy security

Updated 03 March 2021

Israeli minister says interconnection with Gulf grid would boost Mideast energy security

LONDON: The Israeli energy minister has said connecting his country’s electricity grid with other regional economies would boost energy security for the entire Middle East.

Israeli energy minister Yuval Steinitz made the remarks at the CERAWeek virtual gathering of global energy industry leaders on Wednesday, where his counterparts from the UAE and Egypt were also speaking.

“The connection with Egypt and the Emirates and the regional cooperation give us the assurances that we will be able to increase energy security in the future,” he said.

“Just one example, if we will be able to connect our electricity transmission systems between Egypt, Israel, the United Arab Emirates — and maybe through Jordan and Saudi Arabia — and we are also discussing connecting ourselves and this region to Europe through Cyprus and Greece, this would give us better energy security than we ever knew in the past.”

His remarks come as the Middle East energy landscape is being rapidly redrawn as new gas finds in the Eastern Mediterranean spark new rivalries at the same time as former foes reach rapprochement.

“It is a new Middle East — especially in the field of energy,” he said. “The establishment of the East Mediterranean Gas Forum in Cairo is a testimony to the new atmosphere."

The East Mediterranean Gas Forum, which was formed in 2019, includes Egypt, Israel, Jordan, Cyprus, Greece, Italy and the Palestinian territories — but not Turkey.

On Wednesday, the Turkish foreign minister said that his country was willing to negotiate with Egypt and sign a deal over maritime boundaries in the eastern Mediterranean.

“Depending on the trajectory of relations, we could negotiate maritime boundaries with Egypt and reach an agreement in the future,” Turkish Foreign Minister Mevlut Cavusoglu told reporters.

The idea of connecting the electricity grids of some of the region’s major power producers could also reduce redundancy in the grid, said UAE energy minister Suhail Al-Mazrouei.

“It is important that as we as countries talk about reducing emissions we need to talk about reducing redundancy in the systems we have and by doing that we can automatically reduce CO2 emissions,” he said.


Russian shipping line launched to export Egyptian crops

Updated 03 March 2021

Russian shipping line launched to export Egyptian crops

  • The inauguration of the Russian Leader Line comes in the wake of cooperation between Egypt and Russia

CAIRO: Egypt’s Kadmar Shipping Co. has announced the launch of the Russian Leader Line for transporting Egyptian agricultural crops between Alexandria and Russia.

In a statement, the company said that the line would start shipping citrus, potatoes, grapes, pomegranates, and other produce this month.

It added that shipments would take place via weekly direct sailings between the Alexandria Container and Cargo Handling Co. terminal at Dekheila port and the Novorossiysk container terminal on the Black Sea.

The inauguration of the Russian Leader Line comes in the wake of cooperation between Egypt and Russia and a presidential directive to increase Egyptian exports.


Snarl-ups to start-ups: Cairo’s jams inspire tech solutions

Updated 03 March 2021

Snarl-ups to start-ups: Cairo’s jams inspire tech solutions

  • Public transport in Egyptian capital is stretched to limits
  • Cairo driver wastes over five days a year sitting still in traffic

CAIRO: In gridlocked and heavily polluted Cairo, start-ups are searching for technological solutions to solve the transport headaches for an expanding megacity already struggling with over 20 million people.
With only three metro lines and overcrowded, run-down buses servicing the capital, public transport is stretched to its limits.
“The problem of traffic in Greater Cairo has resulted in very low average speeds, not exceeding 10 kilometers (six miles) per hour,” said traffic expert Osama Okail, from Cairo University, who says the solution to the capital’s woes must lie in fixing public transport.
Cairo, the most populous Arab city where a fifth of all Egyptians live, is ranked 30th worst in the world for congestion, according to TomTom, the Dutch vehicle navigations systems maker.
Runaway growth has pushed the ancient city to breaking point.
Egypt’s government has embarked on an ambitious urban transformation, but that is mainly focused on the construction of a new administrative city some 50 kilometers (30 miles) east of Cairo.
In Cairo itself, several giant road flyovers have been built to avoid jams in densely populated suburbs, criticized by some for the architectural damage done in historic areas.
For middle-class consumers, ride-hailing and delivery giant Uber and its Middle East subsidiary Careem have moved to plug the gap of poor public transport.
But tech-savvy Egyptians are also looking for their own homegrown solutions.
They include the start-up Transport for Cairo (TfC), which launched a detailed mapping of the city’s routes including informal transport networks to provide “actionable and high quality data.”
The data is used “to improve urban mobility,” to help commuters best navigate the city and cut down journey times.
“By mapping large cities and using the data for future planning, we are hoping to change them for the better,” said TfC co-founder Mohamed Hegazy.
“We are working with the authorities to change the way the system works.”
For now, an informal system of minibuses, motorized rickshaws, taxis, and millions of personal cars clog the city’s urban arteries bumper to bumper.
TomTom calculates that a Cairo driver wastes over five days a year sitting still in traffic.
That has a dramatic impact on work productivity, adding up to as much as $8 billion lost each year, according to a 2014 World Bank study.
It estimates Cairo’s traffic congestion could cost Egypt as much as four percent of its entire GDP.
Making travel simpler is one way to get commuters out of private cars and onto public transport, reducing congestion on the roads.
Another start-up, Ocra Wallet, is trying to digitise the estimated $30 million circulating as cash daily in commuter fares through its phone app, creating contactless payment to pay for tickets.
“We are working to make payments for transport easier,” Ocra founder Khalid Khaleel told AFP.
Ocra, which means fare in Arabic, is subsidising ticket prices by selling advertising to private bus companies.
“The money that comes from that we use to help users as well as drivers,” Khaleel said, adding he believes that by stopping the handling of cash, the app can help cut coronavirus transmission too.
Meanwhile, ridesharing service Tink hopes to break into the carpooling sector, with an app that creates social networks of common friends going to the same destination.
“We have turned carpooling more into social gatherings,” said one of Tink’s founders, Adel Al-Mahrouky.
Traffic snarl-ups mean higher levels of harmful emissions, with air pollution costing some one percent of GDP, the World Bank estimated.
For Egyptian tech experts, the hope is online solutions can help make much bigger changes.
Map-maker Hegazy believes his data can set Cairo on the path toward “the ultimate goal” — of decarbonizing the transport network.
“Everything must be electric,” he said.


Saudi Arabia plans to move real estate transactions onto digital platform

Updated 03 March 2021

Saudi Arabia plans to move real estate transactions onto digital platform

  • 10 million documents already digitized
  • Part of broader push to modernize sector

DUBAI: A planned digital platform will allow properties to be bought and sold in Saudi Arabia, Saudi Minister of Justice, Walid Al-Samaani told Al Saudiya Channel, on Tuesday, Al Arabiya reported.
It would give investors peace of mind by guaranteeing the accuracy of information about the properties being transacted.
He added that some 10 million real estate ownership documents out of an estimated 100 million had already been digitized as part of the process.
Modernizing the real estate sector is a key part of the Kingdom’s efforts to diversify its economy.