Qatar National Bank raised provisions and remains on alert

Qatar National Bank QPSC braced for credit losses by boosting the amount of money set aside in provisions and signaled caution over the main international markets where it has a presence.

The Middle East’s biggest bank booked 7.1 billion riyals ($1.9 billion) in loan-loss provisions during 2021, up 21 percent from the previous year, according to a statement on Tuesday. Total assets rose about 7 percent to 1.1 trillion riyals.

The Doha-based bank said it “remains cautious on the external environment with respect to potential risks that may arise from key markets where QNB Group operates.”

Many banks in the Gulf are seeing higher profits on the back of improvements in trade and tourism as regional economies recover from the pandemic. Qatar’s outlook for 2022 has also brightened thanks to higher energy prices and the possible boon to business from the soccer World Cup.

Beyond Qatar, QNB has operations stretching from Turkey, Egypt and India to France. Turkey, where the Qatari bank owns QNB Finansbank, made up 9.6 percent of its loans in September, down from 10.4 percent in 2020, according to Bloomberg Intelligence.

Turkey has seen its currency weaken to historic lows throughout December, fueled by fears that President Recep Tayyip Erdogan’s push for lower interest rates would stoke inflation. Turkish authorities have since unrolled a series of measures to support the lira.

“While the headline results missed our expectations, we note that this is almost entirely driven by higher” loan-loss provisions, Citigroup Inc. analyst Rahul Bajaj said in a research note. Much of the increase in the charges appears “to be used for building provision coverage.”


Gas crunch pushes anxious buyers to pay more for contracts

Worries that the current shortage of liquefied natural gas will persist through the middle of the decade are triggering a rush to sign long-term deals, pushing up the price of contracts for the super-chilled fuel.

While contracts had been getting cheaper over the last few years due to rising supply from Qatar and end-users favoring the more affordable spot market, the anxiety spurred by the current supply crunch has reversed the trend. There’s a lack of uncontracted gas available through 2025, which is boosting oil-indexed agreements, according to consultancy Wood Mackenzie Ltd.

“2021 saw the return of contracting activity to its highest levels over the last five years,” Valery Chow, WoodMac’s head of Asia-Pacific gas and LNG research, said in a report released Thursday. “Asia accounted for 85% of global contracts signed, with China leading the pack.”

China’s Beijing Gas Group Co. recently signed a deal to buy LNG from a portfolio player at about 12.7% to 12.9% of the price of Brent crude. By comparison, Qatar was signing supply agreements to customers in Asia’s largest economy in the low-10% range early last year.

LNG spot rates from Asia to Europe surged to records in 2021 as supply struggled to keep pace with the demand rebound from the depths of the pandemic. Importers stuck without contracted LNG supply linked to the price of oil — a practice dating back to the 1970s — were forced to pay astronomical rates to secure spot cargoes of the electricity feedstock and heating fuel.

Crude prices have been much less volatile than spot LNG benchmarks over the past year, increasing customer preference for oil-indexed deals. Contracts linked to the U.S. Henry Hub gas index have also been gaining in popularity, due to lower prices in the U.S. and the availability of new supply. WoodMac said it expected them to stay “in vogue” in 2022.


Mannai weighs Inetum sale in deal that may fetch over $2 billion

Mannai Corp. said its board approved the sale of French information technology services provider Inetum SA, paving the way for a disposal that could fetch upward of $2 billion.

Mannai didn’t identify the potential buyer or how much it expects to receive from the sale. The deal is subject to entering definitive transaction documentation and approvals, the company said in a statement on Wednesday.

Shares in the company rose 1.6 percent at 9:30 a.m. in Doha, valuing Mannai at $683 million. The stock has gained about 84 percent over the past year, outpacing a 16 percent increase in the benchmark index.

The Qatari trading company has been working with advisers to help gauge interest in Inetum, Bloomberg reported last year. The company could fetch about $2.4 billion and attract private equity firms as well as other technology companies, the people said at the time.

Inetum offers systems integration, technology consulting, application engineering, outsourcing and software development services and is a top player in several European markets. The Paris-based company has nearly 27,000 employees in 26 countries and generated 1.97 billion euros of revenue last year, according to its website.

Mannai acquired 51 percent of the company, known at the time as GFI Informatique, in 2016. It later bought out remaining shareholders and delisted the company from the Paris bourse.


Qatar opens World Cup ticket sales with top seats costing $1,598

Fans can start applying to buy tickets for the FIFA World Cup in Qatar, with a prime seat for the final priced at 5,850 Qatari riyals ($1,598).

Ticket applications opened on Wednesday for the world’s biggest soccer tournament, which starts in November. A seat for a group-stage match starts at 250 riyals for international visitors, but Qatari residents will get special discounts and can pay as little as 40 riyals. The current sales round runs through Feb. 8.

Scheduled to start on Nov. 21, this year’s World Cup – moved from the summer because of heat – may prove to be the first major sporting event open to global fans since the start of the Covid-19 pandemic. Both Japan and China decided to bar international visitors from the Summer and Winter Olympics.

The gas-rich nation has invested hundreds of billions of dollars to develop infrastructure and erect new stadiums. A key organiser estimated the event will spur a $20 billion boost to the economy, but risks from new coronavirus variants could still upset those projections.

The country hopes to attract more than 1.2 million visitors during the month-long event. Organisers have said Qatar’s compact size will make the event more sustainable and that fans may even be able to attend more than one game per day.

An influx of people could put pressure on the import-dependent country’s resources. Qatar has leased two cruise ships to increase its hospitality capacity.

o counter the risk of price-gouging, the government has set maximum rates for 80 percent of the rooms rented from Nov. 1 through the end of the tournament, making the cheapest rooms available for up to 464 riyals. The government will make these accommodations available through a web portal that’s yet to go live.

Even before a temporary surge of people in the country of 2.6 million, Qatar has experienced its highest inflation on record. Consumer prices rose 6.5 percent in December from the previous year, driven by recreation and transportation costs.

Qatar has a lot at stake in the World Cup, working to overcome allegations of corruption and human rights abuses linked to its staging of the event.


Porsche Middle East’s order book bulges to highest in a decade

Luxury car maker Porsche has announced that its order book in the Middle East and Africa for 2022 is its largest for a decade.

The Stuttgart-based auto manufacturer said it delivered 6,841 sports cars across the region in 2021, marking a 10 percent increase compared to the previous year.

Orders for new models rose 37 percent, with the Cayenne premium SUV continuing to win over customers with 2,427 sales representing 35 percent of total volume.

It was closely followed by the Macan which maintained strong growth with 34 percent of total sales amounting to 2,359 units while the brand’s compact SUV recorded a 25 percent increase over the previous year despite a 2022 model year update in the final months of 2021.

The top three volume markets for the regional office were the UAE, Saudi Arabia and Kuwait, with the highest growth recorded in India, Morocco and Saudi Arabia, the statement added.

Dr Manfred Bräunl, CEO at Porsche Middle East and Africa, said: “We are very pleased with the growth we have seen during the past 12 months, given the challenges many industries continue to face.”

Demand for the iconic 911 remained strong with deliveries accounting for 14 percent of total sales representing close to 1,000 units while the 718 Boxster and Cayman were responsible for four percent of sales.

In addition to increasing new car deliveries, the offering from Porsche Exclusive Manufaktur for bespoke colour and trim finishes also witnessed significant growth.

More than 85 percent of all models ordered featured at least one individualisation option available through the brand’s customisation programme.

Last year, Porsche Middle East’s regional office in Dubai extended its successful global pilot of virtual consultation and turned it into a permanent function that is currently available in nine of its markets.

Bräunl said: “We are the first Porsche organisation in the world to develop a virtual sales consultation programme where people can discuss their model of choice directly with a Porsche expert and enjoy a personal tour of a vehicle on display from the comfort of their home via livestream.”

Moving into 2022, Porsche Middle East will see the arrival of many new models, including the latest generation Macan, the all-new GTS version of the Taycan saloon, the 911 GT3, the 718 GT4 RS and the Panamera Platinum Edition.

Bräunl said the brand’s business partners remain committed to continual investment in their market, including Saudi Arabia, Morocco, Egypt and India where the network will almost double with four new showrooms scheduled to open by the end of 2022.


Progress for Saudi women is uneven, despite cultural changes and more jobs


At the cramped shop where Kholoud Ahmed sells the traditional Muslim women’s gowns known as abayas, the rainbow of colors is a revelation.

In the past, women in Riyadh typically dressed in the same black abaya no matter where they were going. Now, observed Ahmed, 21, there’s a differently colored or styled abaya for every occasion: weddings, meeting friends at a cafe, visiting parents.

“Colored abayas used to be a strange thing for us in Riyadh, something unusual,” said Ahmed, the store’s clerk. “Within a year it has significantly changed. It has become normal nowadays.”

Since Crown Prince Mohammed bin Salman became Saudi Arabia’s de facto leader more than four years ago, he has promised new opportunities for Saudi women as part of a broad modernization plan called Vision 2030.

The plan, which is advertised across Riyadh on posters and flags, is meant to wean the kingdom away from its historical reliance on oil and shift it toward new industries, including technology, pharmaceuticals and tourism.

But to create more job opportunities for Saudis and draw international investors and corporations to the desert monarchy, Crown Prince Mohammed is also chipping away at the conservative culture that has kept many women close to home for years and scared away many foreigners.

Over the last five years, the percentage of women working outside the home has almost doubled, according to official statistics, to 32% from nearly 18%. Women today serve as customs officials at the King Khalid International Airport in Riyadh, client relationship managers at banks and hostesses at restaurants.

In addition to changes in the workplace, public space is becoming less strictly segregated by sex. In coffee shops in Riyadh like Overdose (motto: “Caffeine, it’s my drug of choice”), male and female customers can now sip lattes in mixed company.

Women can attend certain sporting events at stadiums, which was forbidden until a few years ago. They are no longer required to use separate entrances from men although some establishments still use them. They can also now apply for passports, live by themselves and travel on their own.

But the progress has been uneven.

The guardianship system, which despite some recent reforms is still in place, means that women must rely on permission from men — often their fathers or husbands, but in some cases their sons — to enter into marriages and make key decisions.

One prominent women’s rights activist was jailed for three years after pushing publicly for some of the very changes Crown Prince Mohammed wanted to make — including allowing women to drive. She has since been released and has published a research paper on the status of Saudi women.

Those fits and starts are also evident in quotidian ways. Women’s attire in Riyadh, though more relaxed than a few years ago, is still far from liberal; even women who avoid abayas wear clothes with long sleeves, high necklines and low hemlines.

They may be using money from their newly earned paychecks to shop for kitten-heeled boots and slip dresses at Zara, but such outfits are still worn only in private settings.

“It’s not like before, like you have to wear, like, hijab and everything,” said Marwa, a 19-year-old university student who was shopping at Ahmed’s shop, referring to the traditional head scarf worn by Saudi women. “Now you can have free choice, but limited. It’s not like you are showing parts of your body.”

However much things have changed, the culture remains sufficiently conservative — and cautious of angering the authorities — that Marwa, like many of the Riyadh residents interviewed for this article, declined to give her full name.

Marwa said other cultural changes, like allowing store owners to remain open during prayer time to accommodate both merchants and shoppers, created problems of their own.

Some people who are devout and would pray no matter what, she said, could be offended by the business-as-usual attitude. “It’s like you’re not respecting the prayer time,” she said. Her friend Alaa — who wore sweatpants and sneakers under her abaya and sported a wrist tattoo that said “Trust no one” — nodded.

During the call to prayer a few minutes later, a number of male store workers nearby locked their doors and walked to the mall’s prayer room on an upper floor. On the ground floor, about 10 women, patrons who were wearing black abayas and hijabs, took rugs from a corner pile and knelt on them to pray. Other women sat quietly on benches, watching their children ride around in battery-operated toy cars.

A 52-year-old father of six, who gave only a nickname, Abu Abdullah, said he saw the benefits of more flexible prayer times and new opportunities for women. “During traveling, we don’t pray,” he said. “Even women, they don’t pray for seven days,” referring to the fact that women are forbidden to pray when they are menstruating.

Several of Abu Abdullah’s five daughters were standing nearby, eating buttered corn and French fries. One of them, Nout al-Qahtani, 13, said she was thrilled about the changes for women in Saudi Arabia. “I want to work,” she said. “I really want to be a doctor.”

Her father noted that not every dream job would be appropriate.

“Some jobs don’t fit for some women,” he said, citing roles in plumbing and construction work as examples. “It’s better to put her in the right place,” he added.

Five miles north of the mall, a local soccer club, Al Shabab, was playing an out-of-town team at Prince Faisal bin Fahd Stadium. It was a mild evening, and the crowd was animated when the home team scored. On the men’s side of the stadium, hundreds of men jumped to their feet, chanting and clapping for the players.

Across the stadium on what’s known as the family side, where women and children were directed to sit, Najiba, a nurse at the hospital complex King Fahd Medical City, was watching with two colleagues. Although women have been able to go to sports events in Saudi since 2018, it was only her second time at a match.

Najiba, 34, and her friends said that they were seeing far more Saudi women working at the hospital in recent years, and that the idea of women in medical careers had become more palatable to families who might previously have considered a mixed-gender working environment problematic.

“Now the family accepts if they have a daughter or a wife working in health care,” said Najiba, who was a nurse in a neonatal intensive care unit for years before taking on an administrative role.

Below the nurses, a few children were playing in the front row. One child, who had been running around and yelling, was scolded by a female security guard.

Several female spectators said they never missed a match. One, a 29-year-old manager at the Saudi British Bank attending with her brother, spoke highly of Riyadh’s new entertainment options and the growing economic opportunities for women. “We’re so excited,” she said.

A little after 9:30 p.m., the match ended in a 3-0 victory for Al Shabab.

At one point, he held his hands in a heart shape in front of him. A clutch of men encircled the player, some with children hoisted on their shoulders. But one woman, her pink-tinted sunglasses atop her hijab, walked to the front of the crowd, raised her phone and got the shot.


Saudi Arabia expects 2022 budget surplus after years of deficit

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Saudi Arabia said on Sunday it expected to post its first budget surplus in nearly a decade next year, as it plans to restrict public spending despite a surge in oil prices that helped to refill state coffers hammered by the pandemic.

After an expected fiscal deficit of 2.7% of gross domestic product this year, Riyadh estimates it will achieve a surplus of 90 billion riyals ($23.99 billion), or 2.5% of GDP, next year – its first surplus since it went into a deficit after oil prices crashed in 2014.

“The surpluses will be used to increase government reserves, to meet the coronavirus pandemic needs, strengthen the kingdom’s financial position, and raise its capabilities to face global shocks and crises,” Crown Prince Mohammed bin Salman was quoted as saying by Saudi state press agency SPA.

The world’s biggest oil exporter plans to spend 955 billion riyals next year, a nearly 6% expenditure cut year on year, according to a budget document.

Riyadh plans to reduce military spending next year by around 10% from its 2021 estimates, the budget showed, a sign that the cost of the military conflict in neighbouring Yemen has started to ease.

Revenues jumped this year by almost 10% to 930 billion riyals from the budgeted 849 billion, driven by higher crude prices and oil production hikes as global energy demand recovered.

Next year, the kingdom expects revenues of 1.045 trillion riyals.

“We are totally now decoupling the government expenditure from the revenue”, Finance Minister Mohammed al-Jadaan told Reuters.

“We are telling our people and the private sector or economy at large that you can plan with predictability. Budget ceilings are going to continue in a stable way regardless of how the oil price or revenues are going to happen”.

The largest Arab economy shrank last year as the coronavirus crisis hurt its burgeoning non-oil economic sectors, while record-low oil prices weighed on its finances, widening the 2020 budget deficit to 11.2% of GDP.

But the economy bounced back this year as COVID-19 restrictions were eased globally and domestically.

Saudi Arabia forecast 2.9% GDP growth this year followed by 7.4% growth in 2022, according to the budget.

The kingdom does not disclose the oil price it assumes to calculate its budget.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, had estimated it was likely basing its budget on an oil price assumption that could be as low as $50-$55 per barrel, based on previous official revenue forecasts.

“There was a 15.7% increase in government revenue for 2022 vs the pre-budget. I think the assumption is now for a price of over $70 per barrel with the sharp increase in oil price”, she said.

Saudi Arabia’s ability to maintain fiscal diligence depends partly on the increasing roles of entities like the Public Investment Fund (PIF) or the National Development Fund in backing Prince Mohammed’s ambitious investment plans.

Saudi Arabia plans more than $3 trillion in investment in the domestic economy by 2030, a target that economists have said will be tough to meet.

“The budget’s expected surplus in 2022 comes not only on the back of higher oil prices and production, but also on the back of scaling back COVID-related spending as well as continuing with transferring the investment burden to the state funds led by PIF”, said Mohamed Abu Basha, head of macroeconomic analysis at EFG Hermes.


Saudi Arabia’s October crude oil exports hit 18-month high

Saudi Arabia’s crude oil exports in October rose for a sixth straight month to their highest since April 2020, the Joint Organisation Data Initiative (JODI) said on Thursday.

The kingdom’s crude oil exports rose to 6.833 million barrels per day (bpd), up from 6.516 million bpd in September.

The world’s largest oil exporter’s total exports including oil products stood at 8.26 million bpd while crude output rose by 118,000 bpd to 9.780 mln bpd in October. Both also hit their highest levels since April 2020.

The Organization of the Petroleum Exporting Countries its and allies, known as OPEC+, this month agreed to stick to their existing policy of monthly oil output increases, as they continue to unwind record output cuts made in 2020.

Saudi Arabia’s domestic crude refinery throughput rose to 2.611 million bpd in October, the highest level since January 2019. Its direct crude burn fell 215,000 bpd to 328,000 bpd, the JODI figures showed.

Monthly export figures are provided by Riyadh and other OPEC members to JODI, which publishes them on its website.


Saudi unemployment unchanged at 11.3% in Q3

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Unemployment among Saudi citizens remained at 11.3% in the third quarter, unchanged from the previous three months, official data showed on Monday.

The unemployment rate of Saudi Arabia’s working age population, which includes all residents above 15 years old, was 6.6% in the third quarter, data from the General Authority for Statistics showed.

That was also unchanged quarter on quarter, but down by 1.9 percentage points year on year.

Saudi Arabia has been pushing through economic reforms since 2016 to create millions of jobs and aims to reduce unemployment to 7% by 2030, but those plans were disrupted by the COVID-19 pandemic that sent oil prices plummeting last year.

Unemployment hit a record high of 15.4% in the second quarter last year but has declined rapidly since then, reaching pre-pandemic levels in the first quarter this year.


Saudi Arabia plans airport takeovers and privatisations

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Saudi Arabia plans to convert its airport operators into holding companies and transfer them to its powerful sovereign wealth fund with a view to eventual privatisation for some, the head of Saudi Arabia General Authority of Civil Aviation said on Monday.

Abdulaziz al-Duailej told the Saudi-owned Asharq Al-Awsat newspaper that Abha International Airport is being put on “the privatisation path” and is going through final technical and economic studies.

Airports in Taif and Qassim are also proposed for privatisation, he said, adding that requests to invest in the kingdom’s aviation sector are being studied.

The kingdom’s 22 airports will be set up as airport holding companies, which will oversee construction, operation and management. They will then be transferred to the Public Investment Fund (PIF) to “put on the market at a later time”, the newspaper reported.

The PIF is at the centre of Saudi Arabia’s Vision 2030 plans to transform the economy and reduce its dependence on oil.

Investments in the Saudi aviation sector, including in airports, freight, catering, maintenance and ground services, will be offered to local and foreign investors, Duailej told Asharq Al-Awsat.

Saudi Arabia aims to serve 330 million air passengers by 2030, more than triple the 100 million in 2019, he said.

The oil-rich kingdom’s aviation strategy includes expansion of existing airports and a focus on two large airports in Riyadh and Jeddah, as well as plans to set up a new national carrier.