Total assets were
$133.4bn, having climbed steadily over the past year from $123.4bn at
the end of September 2001.
But bank deposits grew
even faster, rising 11.5% to $81.4bn as money was repatriated from
Rapid growth in the money
supply — the amount of currency actually available for use in the
kingdom — supports the view that repatriation has driven the build-up
in funds, the central bank said.
Liquidity is up 10% on a
year ago, it said.
The figures also appear
to shed some light on public finances.
Commercial banks' claims
on the public sector borrowing from the banks is a major source of
funding for the kingdom's huge budget deficit have fallen 3.7% in the
past three months to $34.2bn.
Recent reports from the
Saudi banking sector have suggested that higher-than-expected oil
revenues — up as much as 50% — mean the deficit will shrink this
That would help
counterbalance last year's budget, driven $6.7bn into the red in the
aftermath of 11 September.
In contrast to the
government position, private sector borrowing has soared thanks in part
to low interest rates, the central bank said, climbing 12.3% to $55.5bn
over the past year.
ARAB FUNDS LEAVE U.S. AS MARTS FALL
The gloomy performance by
U.S. markets, not politics or fear, led to the much-publicised
withdrawal of some Arab funds from the U.S., according to a senior HSBC
Investment Bank plc official.
David Bloom, London-based
currency strategist, who says investors, Arab and non-Arab, have been
exiting U.S. markets, expects the trend to continue as the U.S. economy
remains under pressure.
"It is a sensible
move, I expect more. We have had one movement, and I would expect
another of the same size," he said.
He said the much-touted
$200 million was totally arbitrary. "We in our bank looked and
found it very difficult to determine how much money has moved. How can
anybody outside the banking system throw up a figure?"
currencies are expected to lose up to 10 per cent over a year, if the
award-winning strategist is to be believed.
Bloom is pessimistic and
puts up a strong argument for a rather depressing global economic
outlook; and recent events look like proving his viewpoint.
He also predicts that the
Federal Reserve will cut rates by 100 basis points with the European
Central Bank following with a 75 basis point cut in a year.
Consequently, he says fixed income instruments such as bonds are the
best for investors over the next year.
"When the heartbeat
of capitalism is strong, nothing beats the dollar. But the dollar has
declined by about 10 per cent and I expect another fall of 10 per cent
over the next year or so. The decline would not be dramatic, but the
dollar would be under persistent pressure," Bloom said.
With it would be the GCC
currencies, which are pegged to the greenback.
SHARJAH PLANS NEW BODY TO SPUR GROWTH
A centre for investment
and strategic planning is likely to be set up in Sharjah to help in
economic development, Sheikh Tareq bin Faisal Al Qasimi, member of the
Sharjah Executive Council and chairman of the Sharjah Department of
Economic Development, said during the Consultative Council meeting.
The council's meeting was
the second and last to discuss economic plans and policies. It concluded
with a list of recommendations.
NEW ISRAELI DEFENCE MINISTER WANTED IN UK
The legal case to
investigate and potentially "arrest" the newly appointed
Israeli Defence Minister, Shaul Mofaz, seems to be gathering momentum by
This followed the naming
of Mofaz, former Chief of Staff of the Israeli Army, as a potential
defendant by the British Human Rights solicitor Imran Khan, representing
specific individuals and families in the West Bank, who lodged
complaints to the British Director of Public Prosecutions (DPP) against
the Israeli general requesting his arrest.
The complaints cover a
broad range of violations amounting to warcrimes and crimes against
humanity, including those under article 147 of the Fourth Geneva
In a significant move by
the (DPP) of the UK's Crown Prosecution Service, the case has been
referred to the highest investigative authority and anti-terrorist squad
in Scotland Yard.
U.S., FRANCE CLOSE TO DEAL ON IRAQ DRAFT
The United States and
France appeared on the brink of agreement on a UN resolution that would
allow weapons inspectors to test Iraq's cooperation before any possible
But diplomats said
differences were still crucial enough for the Bush administration to
postpone calls for a vote until after mid-term elections or run the risk
"It is looking
better than it ever was," said one Western diplomat closely
involved in the negotiations. "There is a small ravine left but it
is still 400 feet deep."
IRAQ REOPENS SAUDI CROSSING AFTER 12 YEARS
Iraq reopened a border
crossing with Saudi Arabia, allowing through people and goods for the
first time since it was shut in the 1990-91 Gulf War.
The reopening is one of
several signs that Baghdad, facing a U.S. and British campaign, wants to
improve its relationship with its former 1991 Gulf War foe.
Witnesses at the crossing
said 100 Saudi trade officials and businessmen crossed into Iraq at the
opening to attend Baghdad's 10-day trade fair.
Six GCC oil producers
have begun a countdown for an historic customs union with a flurry of
meetings before the summit of their heads of state in December to clear
remaining obstacles and ensure the project will not be put on the back
With just two months to
go, the six members are holding marathon talks to detonate possible land
mines that could blast off their ambitious plan and to ensure a smooth
transition from scattered economic entities into one powerful bloc. A
single economic bloc encompassing giant oil producers will push them
into history but economists argue whether the six members will be able
to make history.
MIDEAST NEEDS 620 PLANES
Airbus estimated that the
Middle East will need 620 aircraft worth $50 billion in the next 20
Airbus is manufacturing a
military aircraft for European airforces and will start manufacturing it
once the German airforce collects the fund for its participation in the
project. The aircraft will be marketed globally once there is a need for
it, said David Velupillai, regional press manager.
Deutsche Bank, Atlas
Investment Group and Foursan Group announced the launch of the Jordan
Fund, a private equity fund created to make investments in Jordanian
The Jordan Fund will be
Jordan's first private equity fund, and will be a $50 million closed end
fund targeting mid- to late-stage private Jordanian companies.
ENOC TO USE TOTALFINAELF JAFZ FACILITY
Emirates National Oil Co
(Enoc) will produce lubricants at TotalFinaElf's facility in Jebel Ali
Free Zone, said an official closely involved with the project.
An agreement between Enoc
and TotalFinaElf was signed between Hussein Sultan, chief executive,
Enoc; and Jehan Eric Blumereau, chief representative, UAE, TotalFinaElf.
RACE ON TO ATTRACT FOREIGN INVESTMENT
An old story goes that
once an investor from Australia planned to set up a business in the Gulf
region and wanted to clarify the requirements with the concerned
He approached Saudi
Arabia and was told it must meet several conditions. Then the would be
investor approached Bahrain, which enlisted fewer restrictions. Finally,
he wrote to Dubai, and to his surprise the authorities told the firm to
list conditions that would satisfy him to set up a venture in the
Dubai is reaping the
benefits of opening up before others and taking initiatives to remain on
the top. The robust Jebel Ali Free Zone (Jafz) is home to hundreds of
foreign firms which, in turn, benefit exports.
Dubai's success has been
envied in other emirates within the UAE as well as the Gulf at large.
G77 LAUDS UAE'S INITIATIVE
G77 experts have welcomed
the UAE's initiative to launch, through Unesco, a South-South solidarity
programme in the field of education, aimed at reducing illiteracy and
improving education in the developing countries.
recommendations, called the Dubai Declaration, noted with deep concern
the huge knowledge gap between the North and the South, which has
contributed to the marginalisation of many developing countries, most
already afflicted by poverty.
The final text of the
conference noted that in this interdependent world, the endemic poverty
and deprivation in the South constitutes a threat to the security and
prosperity of the global community.
BATELCO THIRD-QUARTER PROFIT UP 22PC
Results for the nine
months show that the Batelco Group returned profits of 52.3 million
Baharaini dinars ($139.6 million) from a gross turnover of 138 million
dinars ($368.5 million), which represents a 10 per cent increase on
turnover for the same period last year.
GCC MINISTERS DISCUSS DEFENCE COOPERATION
Sayyid Badr bin Saud Al
Busaidy, Oman's Minister Responsible for Defence Affairs, stressed that
military cooperation among the GCC states was inevitable and determined
by ties of fraternity, joint interests and shared concerns.
He was speaking at the
first meeting of the GCC Joint Defence Council at Al Bustan Palace
KHALIFA OPENS BOROUGE COMPLEX
His Highness Sheikh
Khalifa bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme
Commander of the UAE Armed Forces, opened the Borouge Petrochemicals
Complex. High-ranking officials, Sheikhs and ministers were present.
The $1.2 billion complex
consists of an ethylene-breaking industry with a production capacity of
600,000 tonnes a year and two power star polyethylene lines with a
production capacity of 450,000 tonnes a year.
AMAN IPO OVERSUBSCRIBED
The Dh33 million first
public issue of Aman — the newly established Islamic insurance company
promoted by Dubai Islamic Bank, has been oversubscribed more than three
times for a total of Dh120 million.
The allotment of the
shares, which will be on a pro-rata basis will be announced on November,
A UNIFIED GCC CURRENCY
It would seem that it is
almost fashionable now for a reference to be made once in a while about
work on a unified GCC currency. I say fashionable because the idea of a
single currency came about after the birth of the euro and I do wonder
if the finance officials of the GCC really want to have a single
It is not as if the trade
between GCC partners is anywhere near the level where it would warrant
huge trade balance of payment issues. On the whole the entire GDP of the
GCC countries is in the region of $250-$300 billion a year, which is
less than the GDP of Netherlands alone.
The 1999 GDP of all Arab
countries was $531 billion and that too does not surpass the GDP of some
countries within the EU. Statistics on inter-GCC trade are a small
proportion and capital movements within the GCC are insignificant.
ARABS URGED TO INVEST IN SCIENTIFIC EDUCATION
The Arab countries need
to invest heavily in scientific education in order to create an equipped
and skilled human resources base for future economic growth, experts
said at the concluding day of the three-day Dubai Strategy Forum.
They also emphasised
educational reforms, democratisation of education, reforming the
curricula that will help reduce unemployment and relating the curricula
to the economic growth requirements of the future.
LEBANON SET FOR FRESH LOAN TALKS
Lebanese premier Rafiq
Hariri is to hold talks with the International Monetary Fund as part of
an attempt to raise $5bn (£3.2bn)in fresh loans.
Spokespeople for Mr
Hariri said he would travel to Washington for discussions with IMF
executive director Horst Koehler on 3 November.
The talks come ahead of a conference of
lending institutions and overseas aid donors, due to begin in Paris on