Page 14 - MEOG Week 39 2021

MEOG NEWS IN BRIEF MEOG

POLICY In addition, the agency highlighted Saudi boosted Saudi gains.
Arabia’s unique position in the oil market Oil markets climbed for a sixth day on
S&P affirms Saudi’s credit and among OPEC members, which provide it Tuesday, also boosted by a tighter supply, but
power shortages in China which hit factory
with supply-side pricing power and financial
rating flexibility that other oil producers lack. output tempered the rally.
Brent crude futures gained 67 cents, or
S&P further indicated that the government
The S&P has updated its Saudi Arabia’s credit is expected to support local capital 0.8%, to $80.20 a barrel at 1016 GMT, after
rating report affirming its rating at “A-” with a expenditures and finance major projects reaching their highest level since October
stable outlook. On its report issued Monday, through the Public Investment Fund (PIF) 2018 at $80.75.
the agency expected a rebound in economic and the National Development Fund (NDF). Demand for oil will grow sharply in the
growth in 2021. Measures will remain to support growth and next few years as the global economy recovers
It also expected a return in the current foreign direct investment, which rose by 20% from the pandemic, OPEC said on Tuesday,
account level to surplus with the reduction of in 2020 and 11.3% in the first quarter of 2021. adding that the world needs to keep investing
the deficit rates in the public finances in 2021 The agency also stated that the government in oil production to avert a crunch even as the
and a sharp rebound in real non-oil economic is continuing to achieve the Kingdom’s Vision energy transition is under way.
activity in the second quarter of 2021. 2030 announced in 2016. Saudi Arabia’s benchmark index edged up
The agency highlighted the improvements The agency highlighted the achievements 0.1%, as Oil giant Saudi Aramco rose 3.6% in
in the real estate, manufacturing, and with relation to diversifying the economy its biggest intra-day gain since March 17 last
wholesale and retail trade, restaurants and away from oil and supporting the housing year, while petrochemicals company Saudi
hotels sectors. initiatives, which aim to increase home Basic Industries, was up 0.6%.
Moreover, S&P estimated that the public ownership to 70% by 2030. This is in addition S&P Global Ratings on Tuesday affirmed
finances budget deficit for the fiscal year 2021 to other important achievements made on Saudi Arabia’s A- (minus) credit rating with a
to reach about (4.3%) compared to the (5%) social reform and the women’s rights fronts. stable outlook, expecting a rebound in growth
expectation on its report published in March The agency commented on the decision through 2024 driven by higher oil prices,
considering the quality of the sovereign assets to amend the name of the “Saudi Arabian eased OPEC production quotas and a large
of the Central Bank (SAMA) and the Public Monetary Agency” to the “Central Bank vaccine rollout in the kingdom.
Investment Fund (PIF). of Saudi Arabia” and updating its mandate The rating agency sees Saudi Arabia’s
In addition, the agency estimated that the to include supporting economic growth, deficit dropping from 11.2% last year to 4.3%
current account will achieve a surplus of 3.3% maintaining monetary stability, and in 2021, while averaging 5.7% between this
of GDP for the fiscal year 2021 and 2.5% in supporting financial sector stability. year and 2024. Real GDP growth is expected
the period between 2021-2024. This is in addition to enhancing confidence to average 2.4% in the same period after
Furthermore, the agency expected the size especially by providing stimulus packages to contracting 4.1% in 2020.
of the public debt as a percentage of GDP for small enterprises and injecting liquidity into Bolstered by industrial shares, Qatari
the year 2021 to be around (30.2%) compared the banking sector during the pandemic. index, rose 0.7%, as Industries Qatar gained
to the (4.1%) contraction in the year 2020. SPA 3.6%, logging its sixth consecutive rise, while
S&P expects the real GDP growth of the Qatar Fuel added 0.7%.
Kingdom’s economy to be (2.4%) in the period Most major Gulf markets Dubai’s main share index gained 0.5%,
between 2021-2024. buoyed by a 1.8% rise in its largest lender
The agency also indicated that Saudi firm as Aramco leads Saudi Emirates NBD Bank and a 0.4% advance in
Arabia is one of the few countries in the Dubai Islamic Bank.
region that has implemented strong structural higher Financials stocks also lifted the Abu Dhabi
reforms at the public finances level, which index, which was up 0.1%, with the country’s
contributed to the growth of non-oil revenues Major stock markets in the Gulf ended higher largest lender First Abu Dhabi Bank rising
which amounted to about half of total on Tuesday, buoyed by rising oil prices on 0.8% and International Holding gaining 0.1%.
revenues in the year 2020. brighter demand outlook, while Aramco Dana Gas, however, closed flat after rising

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