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From London, Tadawul Makes First Step towards the World

CEO of Saudi Tadawul Mohammed Al-Rumaih speaking during the conference (Asharq Al-Awsat)
CEO of Saudi Tadawul Mohammed Al-Rumaih speaking during the conference (Asharq Al-Awsat)
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From London, Tadawul Makes First Step towards the World

CEO of Saudi Tadawul Mohammed Al-Rumaih speaking during the conference (Asharq Al-Awsat)
CEO of Saudi Tadawul Mohammed Al-Rumaih speaking during the conference (Asharq Al-Awsat)

The Saudi Stock Exchange (Tadawul) took its first step toward the world, starting from London, with the launching of the EFG Hermes Saudi Forum on Monday, under the theme, “Looking for Sustainable Growth.”

Participants, including investors, businessmen and stakeholders, gathered on Monday at the Rosewood Hotel in central London, to discuss the investment climate, the available opportunities, and the promising investment components that are unique to the Saudi economy.

The conference, which concludes on Tuesday, is organized by EFG Hermes, in cooperation with the Saudi Tadawul, in the presence of 375 guests, including representatives from more than 50 Saudi companies from various vital sectors, the Saudi Capital Market Authority, and the Public Investment Fund, in addition to 200 investors from more than 120 international financial institutions, and a group of the most prominent fund managers around the world.

Among the guests are the Chairman of the Board of Directors of the Saudi Capital Market Authority, Mohammed bin Abdullah Al-Kuwaiz, the CEO of Saudi Tadawul, Mohammed Al-Rumaih, the CEO of EFG Holding Group, Karim Awad, the co-CEO of EFG Hermes, Mohammed Ebeid, and the CEO For EFG Hermes in Saudi Arabia, Saud Altassan.

Al-Kuwaiz and Al-Rumaih spoke in two successive sessions about the importance of the Saudi financial market and the developments it has achieved at all levels.

The speakers stressed that Saudi Arabia had one of the largest emerging markets in terms of market capitalization, as its market value exceeded $3 trillion in September 2023.

They added that the Saudi financial market has attracted increasing foreign inflows since its inclusion in the main global indices, such as the MSCI Emerging Markets Index during 2019, and the FTSE Russell Emerging Markets Index during 2018.

For his part, Ebeid explained that the conference serves as a platform to showcase investment opportunities in the Saudi market, which is supported by the diversity of economic sectors, as well as the transformation initiatives launched by the government within the framework of Vision 2030.

The conference offers a unique opportunity to strengthen ties and provide a direct link between companies listed on the Saudi market and investors in emerging markets, which reflects the major role that EFG Hermes plays in supporting economic growth in the Kingdom and developing the capital market, he added.

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Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
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Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.

Palestinian teenagers bounced on trampolines and jumped through hoops inside a towering tent on the outskirts of Ramallah, the financial hub of the occupied West Bank.

But the circus students weren't the only ones bending over backwards in the pavilion: the school's director faced financial hurdles to buy the tent from Europe and trampolines from Asia.

"We are suffering with international payments," said Mohamad Rabah, head of the Palestinian Circus School, describing a bureaucratic process that could delay equipment delivery by up to a month.

Banking in the Palestinian territories is challenging, with the Palestinian Authority (PA) under scrutiny for potential terror financing, hindering transactions.

Israel has occupied the West Bank since 1967, with strong economic ties allowing two Israeli lenders to serve as correspondent banks in the Palestinian territory.

But this may change if Israel's far-right Finance Minister Bezalel Smotrich carries out threats to sever a vital banking route next month.

Since Hamas's October 7 attack triggered the Gaza war, Israel has imposed economic curbs on the PA, withholding tax revenues it collects on its behalf.

Smotrich said this week he had redirected $35 million in PA tax revenues to families of "terrorism" victims, a move condemned by the United States.

After three European countries recognized Palestinian statehood in May, Smotrich told Prime Minister Benjamin Netanyahu he would not extend indemnity to banks that transfer the funds from the end of June.

Israel's Bank Hapoalim and Israel Discount Bank need protection, expiring on July 1, to avoid sanctions for dealing with Palestinian lenders.

Israel's central bank and finance ministry declined to comment when contacted by AFP.

A Palestinian fruit vendor arranges his street cart in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- 'Humanitarian crisis' -

The banking channel used to pay for West Bank imports -- including essential goods like water, fuel and food -- handles $8 billion yearly.

Palestinian businesses receive nearly $1.7 billion annually for exports, according to the Palestine Monetary Authority.

"For us, because our economy is dependent on the Israeli economy, because Israel is controlling the border, the impact will be high," said PMA governor Feras Milhem.

The Palestinian economy is largely governed by the 1994 Paris Protocol, which granted sole control over the territories' borders to Israel, including the right to collect import duties and value-added tax for the PA.

Palestinian livelihoods have also been hurt by bans on laborers crossing into Israel and by a sharp downturn in tourism in the territory, including a quiet Christmas season in Bethlehem.

The United States has urged Israel to improve conditions, warning that severing the banking route would have a dire impact on the West Bank economy.

"I believe it would create a humanitarian crisis in due course if Palestinian banks are cut off from Israeli correspondence," US Treasury Secretary Janet Yellen said last month.

Western governments fear Israel's economic policies could destabilize the West Bank.

"The banking system may collapse and therefore the PA may collapse as well," a European diplomatic source in Jerusalem told AFP on condition of anonymity.

"The PA is in a financial crisis and it could collapse before August."

A Palestinian vendor unloads his stock in front of a shop in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- Digital currency -

Palestinian businessmen say their bottom lines have been hit since October 7.

Imad Rabah, who owns a plastics company, said his net income had fallen 50 percent in one year.

Musa Shamieh, who owns a womenswear company said the Israeli policies were designed to push Palestinians to leave the West Bank.

"They want us to leave our land and they know it will be hard for us to stay if we can't do business," Shamieh said.

Israel's harsh economic policies could eventually drive Palestinian policymakers to pursue sweeping changes to the monetary system.

"We need to work on a plan B when it comes to the trade relations," said Milhem, governor of the PMA, which uses an image of the former Palestinian pound as its logo.

Yousef Daoud, professor at the West Bank's Birzeit University, said the territory could scrap the shekel as its de facto currency in favor of a digital alternative.

"We can make our e-currency, just collect all the shekels, issue an equivalent amount of Palestinian pounds, one-to-one fixed exchange rate, and have the Palestinians deal with e-currency," he said.

"Somehow, eventually, we'll get rid of the shekel."