Report: War with Hamas to Cost Israel Over $50 Bln

A Palestinian woman collects tree branches amid a shortage of fuel and cooking gas in Khan Yunis in the southern Gaza Strip as the conflict continues between Israel and Hamas. (Reuters)
A Palestinian woman collects tree branches amid a shortage of fuel and cooking gas in Khan Yunis in the southern Gaza Strip as the conflict continues between Israel and Hamas. (Reuters)
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Report: War with Hamas to Cost Israel Over $50 Bln

A Palestinian woman collects tree branches amid a shortage of fuel and cooking gas in Khan Yunis in the southern Gaza Strip as the conflict continues between Israel and Hamas. (Reuters)
A Palestinian woman collects tree branches amid a shortage of fuel and cooking gas in Khan Yunis in the southern Gaza Strip as the conflict continues between Israel and Hamas. (Reuters)

Israel's war in the Gaza Strip will cost as much as 200 billion shekels ($51 billion), the Calcalist financial newspaper reported on Sunday, citing preliminary Finance Ministry figures.

The daily said the estimate, equal to 10% of gross domestic product, was premised on the war lasting between eight to 12 months; on it being limited to Gaza, without full participation by Lebanon's Hezbollah, Iran, or Yemen; and on some 350,000 Israelis drafted as military reservists returning to work soon.

Calcalist said half of the cost would be in defense expenses that amount to some 1 billion shekels a day. Another 40-60 billion shekels would come from a loss of revenue, 17-20 billion for compensation for businesses, and 10-20 billion shekels for rehabilitation.

Finance Minister Bezalel Smotrich has previously said Israel's government was preparing an economic aid package for those impacted by Palestinian attacks that will be "bigger and broader" than during the COVID-19 pandemic.

On Thursday, Prime Minister Benjamin Netanyahu said the state was committed to helping everyone affected.

"My directive is clear: Open the taps and channel funds to whoever needs them," he said without giving figures. "Just like we did during COVID. In the past decade, we have built here a very strong economy, and even if the war exacts economic prices from us, as it is doing, we will pay them without hesitation."

In the wake of the war, S&P cut its outlook for Israel's rating to "negative", while Moody's and Fitch put Israel's ratings on review for possible downgrade.

The financial toll is already severe. Israeli stocks are the world’s worst performers since fighting erupted. The main index in Tel Aviv is down 15% in dollar terms, equivalent to almost $25 billion, according to Bloomberg.

The shekel has slumped to its weakest level since 2012 — despite the central bank announcing an unprecedented $45 billion package to defend it — and is heading for its worst yearly performance this century. The cost of hedging against further losses has soared.

Spending by households has collapsed, dealing a major shock to the consumer sector that accounts for about half of gross domestic product.

Private consumption fell by nearly a third in the days after the war broke out, relative to an average week in 2023, according to the Shva payments-system clearinghouse. Expenditure on items such as leisure and entertainment plunged as much as 70%.

By one measure, the decline in credit-card purchases was more dire than what Israel experienced at the height of the pandemic in 2020, according to Tel Aviv-based Bank Leumi.

"Entire industries and their offshoots cannot work," said Roee Cohen, head of a federation of small businesses. "Most employers have already decided to place staff on unpaid leave, affecting hundreds of thousands of workers."

Israel’s central bank downgraded its outlook for the economy on Oct. 23, but still forecasts growth in excess of 2% this year and next — assuming the conflict is contained.

Even as some construction sites reopen, many workers are missing. The industry is heavily reliant on 80,000 Palestinians living in the West Bank, an area that’s been under a security lockdown since mid-September and where unrest has grown since Israel’s airstrikes and near-total blockade on Gaza began.

A halt in construction and real estate, which contribute 6% to Israel’s tax revenues, will stunt government income and could spark a renewed price surge in a housing market that’s been among the most expensive in Europe and the Middle East in recent years, according to Bloomberg.

About 15% of Israel’s tech workforce has been called up for reserve duty, estimates Avi Hasson, chief executive officer of Startup Nation Central, a non-profit group that tracks the industry. Those numbers are even higher at startups, which tend to employ younger workers, he said.

Lior Wayn, CEO of Mica, an artificial intelligence firm specializing in mammography analysis, said he’s trying to keep operations as normal as possible after several employees were affected by the attacks.

Among 500 high-tech companies surveyed last week, nearly half reported a cancellation or delay of an investment agreement. Among the respondents that include locally-owned and multinational businesses, over 70% said significant projects are being postponed or scrapped.

Even as companies say they are learning to adapt, the plight of many suggests the crisis will leave long-lasting scars across Israel’s economy.



Riyadh Global Medical Biotechnology Summit Concludes with Agreements Exceeding SAR5 Billion

The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)
The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)
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Riyadh Global Medical Biotechnology Summit Concludes with Agreements Exceeding SAR5 Billion

The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)
The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)

The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday with more than 40 agreements, initiatives and announcements unveiled through partnerships, programs and projects with a combined estimated value exceeding SAR5 billion.

The initiatives aim to advance biotechnology localization and strengthen its healthcare and economic impact, the Saudi Press Agency said.

The summit drew delegations and experts from more than 57 countries and more than 200 speakers. The total number of visitors and registrants exceeded 15,000.

Its program included more than 80 sessions, along with seven high-level executive sessions, covering artificial intelligence, genomics, vaccines, biomanufacturing, advanced therapies, investment, and talent development.

The Life Sciences Innovation Forum attracted five specialized investment funds that expressed readiness to invest more than $120 million in promising opportunities and companies.

Meanwhile, the Next Generation Biotechnologist Forum focused on empowering early-career researchers and scientists.

The accompanying exhibition spanned more than 6,000 square meters and featured more than 120 sponsors and exhibitors, including international pavilions from Spain, China, Japan, Germany, the United States of America, and the Republic of Korea.


Goldman Sachs Sees October Fed Hike after Hawkish Signal

FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo
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Goldman Sachs Sees October Fed Hike after Hawkish Signal

FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo

Goldman Sachs now expects the Federal Reserve to raise interest rates by another quarter point in October, making it one of the first major Wall Street banks to forecast consecutive rate hikes following the US central bank's hawkish signal on Wednesday.

The call represents a reversal of Goldman's earlier view that the US Fed had completed its tightening cycle after September's quarter-point increase.

Goldman said the Fed's updated rate projections, which showed a strong ⁠majority of policymakers ⁠expecting at least one more increase this year, pointed to a "two-hike baseline" for 2026.

The brokerage said October was the most likely timing for the next move because policymakers framed further tightening as supporting "a timelier return" to the Fed's 2% inflation target.

The ⁠Fed earlier on Wednesday raised interest rates by 25 basis points to a 3.75%-4.00% range.

Goldman said the meeting was more hawkish than expected, citing policymakers' rate projections, an upward revision to the neutral interest rate and Chair Kevin Warsh's repeated description of the move as having only "removed a dose of accommodation."

Traders see roughly 50% odds of another quarter-point Fed rate hike in October, according to CME Group's ⁠FedWatch tool, ⁠up sharply after policymakers signaled further tightening could be needed.

Goldman's revised forecast leaves Bank of America Global Research as the only other major brokerage expecting a more aggressive tightening path, with BofA projecting rate hikes in October and December, Reuters reported.

Markets will also be watching policy decisions from the Bank of England, due later in the day, and the Bank of Japan on Friday for further clues on the global interest-rate outlook.


Saudi Money Market Funds Face Investment Reshuffle

The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)
The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)
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Saudi Money Market Funds Face Investment Reshuffle

The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)
The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)

Saudi money market funds are entering a new phase of liquidity management and portfolio restructuring as new rules cap foreign investments at 5% of net asset value.

Fund managers will have to balance returns, liquidity and risk more carefully.

The rules do not require funds to exit existing foreign investments immediately. The Capital Market Authority has given managers transition periods to bring portfolios into compliance. This allows deposits and murabaha transactions to mature before funds are reallocated, avoiding early exits that could hurt returns or disrupt liquidity management.

The measures also require foreign counterparties to hold investment-grade credit ratings, strengthening protection against overseas exposure risks.

Financial analysts say the main impact may not be an immediate shift in capital flows. Instead, the rules are likely to reshape money market fund portfolios and how managers allocate liquidity between domestic and foreign instruments, based on returns, liquidity and credit quality.

As investment options in the Saudi market expand, the restructuring could direct greater attention toward domestic liquidity instruments. The transition periods will allow managers to adjust gradually, retain flexibility over existing investments and reduce the risks of rapid reinvestment.

Investor protection

Financial analyst Abdullah Al-Jabali told Asharq Al-Awsat that the move was part of the Capital Market Authority’s efforts to regulate higher-risk investments and strengthen investor protection, particularly amid global market shifts and continued uncertainty over interest rates.

The decision seeks to reduce Saudi money market funds’ exposure to foreign investments and limit the impact of related volatility, he said. The timing and scale of interest-rate cuts in the coming years remain unclear.

Al-Jabali said the measures go beyond imposing a cap on foreign investments. They also tighten requirements governing the entities through which funds may invest, taking into account credit ratings, solvency and reliability. This would help reduce risk and safeguard investors’ money.

The rules also seek to prevent money market funds from concentrating investments in instruments or entities that could be difficult to exit when needed. This would strengthen liquidity and improve funds’ ability to respond to market changes, he said.

Al-Jabali expected further regulations to follow, potentially covering other foreign investments such as real estate funds, financing funds and foreign sukuk. The measures could also extend to funds’ private-equity investments outside the kingdom.

He said the changes reflected the authority’s efforts to reduce risks linked to some investment practices, strengthen the investment environment and protect investors in the Saudi market.

Financial analyst Tariq Al-Atiq told Asharq Al-Awsat that the decision was primarily intended to reduce risk, strengthen investor protection and impose greater discipline on the placement of liquidity outside the kingdom.

Money market funds typically invest in deposits, murabaha transactions and short-term sukuk. Financial companies affiliated with banks manage a large proportion of these funds, he said.

A fund valued in Saudi riyals does not necessarily hold all its investments inside the kingdom, Al-Atiq said. Some liquidity may be placed with Gulf or foreign banks in search of higher returns. The decision would reduce that exposure and return some liquidity to the domestic market.

Giving funds up to two years to comply takes into account the fixed maturities of deposits and murabaha transactions, he said. Early exits could hurt fund performance, while allowing foreign deposits to expire without renewal would support a gradual, orderly transition.

Gradual compliance

The Saudi Capital Market Authority has capped foreign investments by public money market funds at 5% of net asset value and given managers transition periods to bring existing holdings into compliance.

Under a circular sent to capital market institutions, managers of public money market funds whose foreign investments exceed 5% must comply with the cap within two years of the circular’s date.

The requirement also affects transactions made during the transition. Until compliance is achieved, managers must not make an investment or enter into or renew any transaction that would breach the limit.

Funds with foreign investments exceeding 20% of net asset value face a shorter deadline. Their managers must reduce that exposure to below 20% within six months of the circular’s date.

They must then continue reducing foreign investments until they reach the final 5% cap within the timeframe set by the circular.

The rules therefore set different paths based on the level of foreign exposure. Funds above the 5% cap have up to two years to comply, while those above 20% must first bring their exposure below 20% within six months.

The authority also required all foreign investments by public money market funds to be made with counterparties holding investment-grade credit ratings issued by licensed credit-rating agencies.

Managers whose funds hold foreign investments that do not meet this requirement must bring them into compliance within two years of the circular’s date.

The Capital Market Authority stressed that capital market institutions must comply with the circular, the Capital Market Law and its implementing regulations. It designated the Collective Investment Schemes Compliance Department to answer questions about the new requirements.