Al Rajhi’s share jump isn’t just another TASI rally

CAIRO/RIYADH: Mining and quarrying activity (which includes oil activity) continued to be a key driver for the growth in the Saudi Industrial Production Index (IPI), which grew annually by 5.8 percent in August. 

The sector’s growth  increased by 6.5 percent YoY in August, according to data published by GASTAT.

Non-oil manufacturing also exhibited a notable growth of 5 percent in August while electricity and gas supply activity declined annually by 4 percent. However, electricity and gas supply activities hold only a 2.9 percent weight in the index, making its variations less influential on the index’s overall value.

Month-on-month the IPI also rose by 3.6 percent in August propelled by a significant 13 percent growth in non-oil manufacturing activity.

Egyptian urban inflation

Egyptian cities’ yearly inflation rate reached 6.6 percent in September compared to 5.7 percent in August, data from CAPMAS revealed. This is a noticeable increase from the rate recorded in April, when it stood at just 4.1 percent.

The price increase was mainly driven by sharp hikes in food prices. in particular, the price of vegetables (across the whole republic) jumped by a pronounced 38.1 percent YoY in September.

Month-on-month inflation rate for the entire country also jumped from a negative 0.1 percent in August to a positive 1.6 percent in September.

However, the annual urban inflation rate is still within the Egyptian central bank’s target range of 5-9 percent. The monetary policy committee is expected to meet on October 28 to decide interest rates.

Omani budget deficit narrows

The Sultanate’s budget deficit fell from OR1.96 billion in August last year to OR1.05 billion in August, mirroring a dramatic 46.2 percent decline in the deficit. This was mainly due to a considerable growth in revenues driven by increases in oil and gas prices, the Omani Ministry of Finance reported.

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Revenues increased by almost 14 percent year-on-year as the average oil price jumped to $55.6 in August from the $50 recorded in the same month last year. Expenditures also decreased by 1.7 percent contributing to the fall in the country’s deficit.

As a result of these developments, S&P has decided to revise its outlook for the country from stable to positive, and they expect Oman’s fiscal deficit to slide sharply as a share of GDP; a drop from 15.3 percent in 2020 to 4.2 percent in 2021.

Tunisian banks at risk

Tunis’ 10 biggest banks experienced significantly higher profits in the first half of 2021 as their net aggregated income grew annually by 37 percent.

However, Fitch Ratings agency has said that this masks the various risk factors which could hamper the sector. These include an unstable political environment, the expiry of debt relief measures and the transition to IFRS 9 accounting.

The agency expected the country’s GDP to increase only by 3.4 percent in 2021, compared to the huge decline it faced last year when it contracted by 9.3 percent. In addition, the banks’ assets quality is quickly deteriorating as the NPL ratio reached 11 percent in H1 2021. Fitch also added that “capital buffers could prove insufficient in a severe stress scenario, which cannot be ruled out.”

Global taxes for corporates

A minimum tax rate of 15 percent for corporations has been agreed upon by 136 countries. Consequently, countries’ tax revenues will see a surge of $150 billion annually, the OECD said.

However, this tax rate is below the average 23.5 percent rate levied by industrialized countries.

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Jobless claims in the U.S.

The US job market and economy continue to show positive signs of recovery from last year’s coronavirus recession as the number of Americans applying for unemployment benefits fell last week, dropping by 38,000 to 326,000. This is the first drop in four weeks, according to data published by the Department of Labor.

Turkish Lira

The Turkish currency’s exchange rate has fallen to an all-time low, as it reached 8.9750 TL per dollar on Friday. This was partly due to worries about the course of the country’s monetary policy.


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