• September 7, 2020

    Saudi Arabia Banking Sector – The worst might not be over yet

    As optimism grows over the reopening of economies worldwide, the adverse impact of the COVID-19 pandemic on the banking sector might not be over yet. The strength of a country’s banking sector is often reliant on its underlying economic conditions. As is the case for Saudi Arabia, which has the second largest banking industry in the GCC by total assets, with roughly 29% of the region’s total banking assets. According to estimates from Al Rajhi Bank, Saudi Arabia’s economy is...

  • July 21, 2020

    Estimating Corporate CapEx in Saudi Arabia

    COVID-19 has been a double whammy for the Saudi Arabian economy. First, the lockdown and curfew measures has affected the economic activity. Second, because of global lockdown, oil prices fell with the demand for oil falling sharply. Therefore, the output of Saudi corporate sector is also expected to be very much low for the year 2020 if not beyond. Average Fixed Capital Assets held by Saudi Listed Companies(2015-2019) Saudi listed companies held fixed capital assets measured by the average outstanding...

  • July 14, 2020

    How has liquidity in Saudi Tadawul fared during COVID-19?

    Liquidity is one of the key indicators of a stock market and is a fundamental requirement for market efficiency. In recent years, Saudi Arabia’s equity market has implemented reforms, such as relaxation of foreign ownership and has achieved milestones such as inclusion in key indices including the MSCI Emerging Market Indices. With the listing of Saudi Aramco, it has also become one of the top 10 markets globally, by market capitalization. Given the market’s importance in GCC and globally, the...

  • June 29, 2020

    Saudi Arabia’s move towards a cash less economy propelled by COVID-19

    The past decade has witnessed a large amount of technological disruption that has changed the way we interact with the world. The payments universe is not averse to this disruption, with the usage of cash diminishing by the day. The world has begun the transition towards a more cashless society, with mobile devices, digital wallets and other forms of payments gaining preference among users. A cashless society is one where all the financial transactions take place through transfer of digital...

  • July 30, 2019

    Saudi Corporate Capital Spending – An Encouraging Boost to Non-Oil GDP

    Capital Investment is a harbinger of future growth as the fruits from today’s investments will appear in the future. Saudi Corporate sector has invested large resources in capital expenditure in 2018 which is much higher than their total net income earned during the year. The Corporate sector as represented by 120 (non-financial) listed Companies included in Tadawul All Share Index (TASI) of Saudi Stock Market, was examined to measure change in Property, Plant & Equipment (PPE), gross of depreciation (Capex)...

  • September 17, 2018

    Bankruptcy law in Saudi Arabia

    Saudi New Bankruptcy Law. Saudi Arabia had no single bankruptcy law in place that prescribes procedures for businesses that face financial difficulty. The courts have traditionally refrained from declaring a debtor to be bankrupt until all feasible methods of debt enforcement are exhausted. This brought about a number of problems such as: No set procedure for collection of debts which leads to settlement of some creditors while others are missed out completely. Closure of viable businesses that may be facing...

  • July 12, 2018

    The “Seesaw” Game of Saudi Liquidity

    This article was originally published in Forbes Middle East. The advantages of the U.S dollar peg for Saudi Arabia have been multi-fold. It has resulted in stable export revenues, reduced transactions costs and a simple yet disciplined macroeconomic policy. This peg is especially important for Saudi Arabia as despite certain measures to diversify, their economy is dependent on oil and gas and connected activities. The oil price plunged in mid-2014, and the currency peg has been under pressure since then....

  • June 14, 2018

    The Burgeoning Entertainment Industry in Saudi Arabia

    As a part of its broader economic diversification plans, Saudi Arabia took an unprecedented policy move by framing a new entertainment policy. In line with the Kingdom’s Vision of 2030 of creating a vibrant society, General Entertainment Authority (GEA) has been established and an investment of US$ 64 Bn has been planned (BBC News 2018). GEA is part of the subprogram, Quality of Life under the Vision 2030 which aims for improving lifestyle by increasing entertainment and cultural avenues. Entertainment...

  • March 22, 2018

    How Inflationary is VAT in the GCC?

    The residents of Saudi Arabia and the UAE, who had long enjoyed a tax-free existence, were finally subject to a Value Added Tax of 5% on goods and services, from Jan 1st 2018. The introduction of VAT, which is seen as one of the biggest policy shifts in recent times across the region, is expected to bring in additional revenue to the respective governments. VAT being a consumption based tax, will have implications on customer spending as well as inflation....

  • December 28, 2017

    World’s Cheapest Power Project: A milestone shift to solar electricity generation?

    Saudi Arabia recently registered the cheapest price bid to supply solar electricity ever recorded. Abu Dhabi’s Masdar and Electricite de France SA bid to supply power from a 300-megawatt photovoltaic (PV) plant for as cheap as 1.79 cents a kilowatt hour. If the project is successfully awarded by the Ministry of Renewable Energy Project Development, it would top the leader board beating the previous record for a solar project in Abu Dhabi for 2.42 cents a kilowatt-hour. It is a...