Regional stock market indices
Regional currency rates
Saudi spending spree launches new lending
Saudi lenders are entering what a recently released Goldman Sachs report called a “virtuous banking cycle,” as lending is due to be boosted by the country’s plans to increase infrastructure spending by more than 50 percent over the next five years, in addition to low consumer finance penetration, new legislation and attractive demographics. The report illustrated that this stimulus program will also lead to robust Saudi economic growth. Moreover, Goldman Sachs initiated coverage on Samba Financial Group, Saudi British Bank, Banque Saudi Fransi, and Arab National Bank with “buy” recommendations, and started with a “neutral” recommendation on Al Rajhi Bank and Riyad Bank.
Jordan Gate set for early 2011 completion
Bahrain-based Gulf Finance House (GFH) stated in early September 2010 that its Jordan Gate development project in Amman would be completed early next year. The news came after GFH signed a new agreement with Bayan Holding (Jordan Gate Company), Alhamad Company (the construction firm responsible for the project) and Hektar (a new investor). All told, the project will cost $300 million and consist of two 43-storey towers, one to serve as a hotel under Hilton operation and the other to be used for business offices and halls for meetings. The towers will be linked by a commercial podium featuring shops, entertainment centers and food courts. The project, says GFH, will be the largest construction development in Amman, and will support the Jordanian economy by providing world-class commercial infrastructure. GFH plans to further increase its capital by $300 million through issuing equity-linked convertible murabaha Islamic bonds, to be used for acquisitions and growth initiatives.
Oman cuts 2010 growth forecasts to 5%
The slower global economic recovery in recent months prompted Oman to revise its growth outlook for 2010 from 6.1 percent to 5 percent. This downgrade related to the anticipated crude oil price trend, which is expected to slip below $75 per barrel on the shortcomings of global demand. In 2009, 39.2 percent of Oman’s gross domestic product came from oil and gas exports, compared to an average of 43 percent in Saudi Arabia, Kuwait and Qatar. To try to mitigate this energy dependence, exposure to oil price fluctuations and to diversify government revenues, most Gulf countries have been adopting new tax regulations. For its part, Oman standardized its taxes on foreign and domestic companies in January, axing special rates for local firms. Income from petroleum sales was taxed at 55 percent, while tax on profits over $78,000 was set at 12 percent compared to 20 percent on adjusted profits in Saudi Arabia.
