JP Morgan: Diverse Assets Can Weather Expected Recession

Steven Rees, the Managing Director of Investments for the Middle East and North Africa at JP Morgan Private Bank
Steven Rees, the Managing Director of Investments for the Middle East and North Africa at JP Morgan Private Bank
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JP Morgan: Diverse Assets Can Weather Expected Recession

Steven Rees, the Managing Director of Investments for the Middle East and North Africa at JP Morgan Private Bank
Steven Rees, the Managing Director of Investments for the Middle East and North Africa at JP Morgan Private Bank

Nowadays, the global economy is facing numerous threats that cannot be ignored. The US banking sector has experienced significant disruptions, while markets in Europe continue to grapple with rising inflation rates and the devastating effects of the ongoing Ukraine war.

Steven Rees, the Managing Director of Investments for the Middle East and North Africa at JP Morgan Private Bank, concurs with the market consensus that the US will likely face a recession in the next 6-12 months.

However, in a report sent to Asharq Al-Awsat, Rees expressed belief that diversified investment portfolios can continue to yield strong returns as the world approaches 2024.

Rees also pointed out that the worst of the stock market downturn has passed.

Regardless of the possibility of an economic recession, Rees ruled out the stock market dipping to the same levels it saw in October 2022.

According to Rees, expectations are based on several factors, including corporate profit growth, which plays a more significant role in stock market gains than many realize.

Although there’s been a slight decline in profits and their margins from their peak levels, and demand growth is slowing, corporate sales remain robust, revealed Rees.

Transportation and energy costs are low, and the dollar is weak, coupled with a less competitive job market environment, he further elaborated.

As a result, analysts’ projections for corporate earnings over the next 12 months have risen in the US, Europe, and China, Rees emphasized.

Moreover, Rees said that promising opportunities are present globally in various areas. These include investment strategies focused on companies with growth in dividend distributions, the shift towards clean energy, and the next wave of digital innovations.

Considering the diverse sectors, Rees added that healthcare and technology companies, particularly with many leading firms operating in the Middle East region, are favored.

Rees emphasized that the essence of investing revolves around constructing portfolios resilient to various types of risks in the long run.

He remarked that it might be premature to label the market as a new bull run, but added that he doesn’t believe it’s in a bearish phase either. Stocks have the potential for steady appreciation, while bonds can offer return stability.

Alternative investments also open the door to a plethora of investment opportunities, stressed Rees.

He further underscored that all these options have the capability to outperform cash in the long term, regardless of the occurrence of an economic recession.



Saudi Central Bank to Asharq Al-Awsat: Payment Digitization Anchors Kingdom's Global Financial Hub Status

Abdulelah Aldeheem, Assistant Governor for Executive Affairs at the Saudi Central Bank. (Turky Al-Agili)
Abdulelah Aldeheem, Assistant Governor for Executive Affairs at the Saudi Central Bank. (Turky Al-Agili)
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Saudi Central Bank to Asharq Al-Awsat: Payment Digitization Anchors Kingdom's Global Financial Hub Status

Abdulelah Aldeheem, Assistant Governor for Executive Affairs at the Saudi Central Bank. (Turky Al-Agili)
Abdulelah Aldeheem, Assistant Governor for Executive Affairs at the Saudi Central Bank. (Turky Al-Agili)

The Saudi Central Bank is spearheading a comprehensive regulatory and technical initiative to transform the Kingdom’s digital payments landscape, shifting from traditional banking to establishing a global financial hub, opening the sector to regulated foreign investment, and licensing more international electronic payment applications.

The effort forms part of a broader initiative to enhance the competitiveness of the national economy and solidify Saudi Arabia’s position as a regional and global financial hub.

The push includes updating regulatory frameworks, enabling payments companies, e-wallet providers, and foreign-owned exchange houses, as well as expanding the acceptance of international wallets and applications at points of sale and across e-commerce platforms.

The measures are intended to broaden payment options for individuals, visitors, and investors, raise efficiency in the financial sector, and enhance the appeal of the Saudi market to global capital.

Within this framework, Abdulelah Aldeheem, Assistant Governor for Executive Affairs at the Saudi Central Bank, told Asharq Al-Awsat that the central bank’s new strategy aims to create a society that is less dependent on cash while ensuring the highest levels of cybersecurity and consumer protection.

Aldeheem said the central bank continuously analyzes global developments in payments and adapts them to local market needs. Through ongoing cooperation with peer central banks and international organizations, it monitors and evaluates innovations, exploring modern technologies to keep pace with the rapid changes in this vital and sensitive sector, while safeguarding financial stability.

He stated that the central bank is committed to adopting and integrating the latest technologies to deliver advanced and secure financial services that meet user expectations, thereby reinforcing Saudi Arabia’s standing as a leading financial center in the region.

This work aligns with the bank’s strategy to enhance the payments ecosystem by providing secure and reliable core payment services that ensure interoperability and ease of access.

Broad regulatory powers over payments

Aldeheem stated that the Saudi Central Bank is the authority responsible for supervising and overseeing the payments sector, exercising all powers necessary to ensure financial stability, encourage innovation, and protect customers, in accordance with the Payments and Payment Services Law and its executive regulations.

These powers include issuing rules, regulations, and instructions governing payment systems and services, licensing and renewing payment system operators, setting capital, governance, and risk management requirements, classifying systemically important payment systems, overseeing payments infrastructure to ensure efficiency and continuity, obliging providers to safeguard and segregate customer funds and data, and conducting inspections and supervision.

Consumer protection at the core

On consumer protection, Aldeheem said that the central bank prioritizes protecting customers in the financial sector in line with international best practices. Regulatory frameworks require payment service providers to comply with provisions related to framework agreements, including the nature of the service, execution timelines, fees, currencies, and complaint handling.

Rules also cover the safeguarding of protected funds, including holding them in separate accounts at licensed banks. Providers are required to offer effective channels for receiving and resolving complaints fairly and transparently, comply with cybersecurity requirements, and adhere to final settlement rules and default management frameworks to protect customer rights.

The central bank licenses two types of payment activities, electronic wallets and payment services. Aldeheem said 28 companies are currently licensed, including 13 e-wallet providers and 15 payment service companies.

Future of ATMs

Despite the rapid growth of electronic payments, Aldeheem said the central bank closely monitors developments related to automated teller machines.

It has established a regulatory and supervisory framework for ATM networks and set clear rules for banks to ensure effective monitoring, thereby encouraging geographic coverage in line with financial inclusion targets, he told Asharq Al-Awsat.

Foreign ownership

Foreign investors can enter the exchange sector by either opening a branch of a foreign company or establishing a local firm. Aldeheem said foreign investors are permitted to own exchange companies in Saudi Arabia with full ownership.

Licenses enable exchange firms to buy and sell foreign currencies, as well as handle imports and exports. He noted that a Saudi company with foreign capital, Global Exchange AS Currency Services Ltd, was licensed in September as part of the sector's regulated opening to foreign investment.

Regulation of buy now, pay later services

Regarding buy-now, pay-later services, Aldeheem stated that the activity is classified as a financing service licensed by the Saudi Central Bank. It provides financing for goods and services without deferred payment costs and, in some cases, covers education or medical expenses, extending beyond traditional consumer finance.

The central bank issued rules governing BNPL companies to protect users, particularly individuals, ensure financing aligns with borrowers’ credit profiles, and safeguard the stability of the sector. The rules were reviewed and updated in November 2024.

Seven companies have been licensed to operate BNPL services, while six others are completing licensing requirements. New financing during the first nine months of 2025 reached about 28 billion riyals ($7.5 billion).

Users aged 25 to 45 accounted for around 67 percent of total financing. Wholesale and retail trade accounted for approximately 70 percent, followed by health services at 9 percent.

Growth in Mada point-of-sale transactions

Aldeheem said transactions processed through the national payments system, Mada, for point-of-sale devices rose 16 percent in 2024 from the previous year, reaching 10.4 billion transactions worth more than 668 billion riyals ($178.1 billion).

The growth coincided with a sharp expansion in POS devices, which exceeded 2.3 million units by the end of October 2025, the highest level on record, reflecting the depth of the shift toward electronic payments in the Saudi market.

Cash and electronic payments

While electronic transactions now account for 79 percent of operations, Aldeheem said the central bank does not aim to eliminate cash entirely. Its objective is to build a society that is less reliant on cash, while maintaining the national currency's acceptance as legal tender.

He stressed that ensuring the availability of all payment options, including cash, supports financial inclusion and serves residents and visitors alike.

Global payment applications

Regarding services such as Apple Pay, Samsung Pay, and Google Pay, Aldeheem explained that the central bank supports new entrants that meet regulatory requirements. Several new electronic payment applications are expected to launch in the near term, supported by interoperable infrastructure that allows seamless use at POS terminals and e-commerce platforms.

Saudi Arabia was among the first countries globally to adopt NFC-based mobile payments, he revealed, adding that the central bank continues to improve user experience while maintaining high security standards.

To facilitate payments for tourists and visitors, the central bank has invested in payments infrastructure for decades, linking global networks including Visa, Mastercard, American Express, UnionPay, Discover, and JCB through the Mada system.

Aldeheem said acceptance of international networks is being expanded in line with growth in tourist numbers. He cited a recent agreement between the Saudi Central Bank and Ant International, which will enable the acceptance of Alipay+ payments via Mada in 2026.

The bank has also worked to reduce the cost of accepting international card payments by reviewing fee structures with payment service providers, banks, and global card networks, supporting competitiveness in sectors such as hospitality and retail.

Unified digital services platform

Aldeheem said the central bank is enhancing its digital channels in line with national digital transformation goals. A unified electronic services portal has been launched, providing over 25 services to individuals, businesses, and government entities.

These include digital government banking services, regulatory sandbox applications, approvals for senior management appointments, ATM licensing, and consumer complaints services.

Digital check clearing and cybersecurity

Among the digital transformation initiatives is electronic check clearing, which processes check data electronically through a central clearing house, enabling settlement within one business day.

On cybersecurity, Aldeheem said requirements are embedded across all digital initiatives, with continuous testing to ensure readiness against evolving threats. National expertise within the central bank plays a key role in monitoring systems and strengthening defenses.

Currency in circulation and counterfeit protection

Addressing the rise in currency in circulation to nearly 250 billion riyals ($66 billion), Aldeheem cited economic growth, higher consumption, increased tourism, and year-round Umrah as key factors contributing to this increase. Cash in circulation accounts for approximately 6 percent of GDP and reflects confidence in the local economy.

Regarding counterfeiting, he stated that the sixth currency issue, printed under Custodian of the Holy Mosques King Salman bin Abdulaziz Al Saud, incorporates advanced security features.

The central bank has conducted awareness campaigns and training sessions for banks, customs officials, security agencies, and private sector workers to maintain trust in the national currency as a reliable means of payment and savings.


Egypt Non-Oil Private Activity Expands Second Month in December, PMI Shows

 Fireworks burst over the historical site of the Giza Pyramids, on the outskirts of Cairo, Egypt, early Thursday, Jan. 1, 2026. (AP)
Fireworks burst over the historical site of the Giza Pyramids, on the outskirts of Cairo, Egypt, early Thursday, Jan. 1, 2026. (AP)
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Egypt Non-Oil Private Activity Expands Second Month in December, PMI Shows

 Fireworks burst over the historical site of the Giza Pyramids, on the outskirts of Cairo, Egypt, early Thursday, Jan. 1, 2026. (AP)
Fireworks burst over the historical site of the Giza Pyramids, on the outskirts of Cairo, Egypt, early Thursday, Jan. 1, 2026. (AP)

Egypt's non-oil private sector expanded for the second straight month in December, albeit at a slower pace, with firms benefiting from increased new orders and a slight expansion in output, a business survey showed on Tuesday.

The S&P Global Egypt Purchasing Managers' Index (PMI) retreated to 50.2 in December from a 61-month high ‌of 51.1 ‌in November, topping the ‌50.0 ⁠threshold that ‌separates growth from contraction for a second month after holding below that line since last March.

A PMI reading of 50.2 historically correlates with annual gross domestic product growth of approximately 5%, S&P ⁠Global said.

"Improvements in order books have been a ‌clear factor behind strong business ‍performances over the ‍past few months," S&P Global economist ‍David Owen said.

Purchasing activity rose for the first time in 10 months, while employment fell. Cost inflation picked up slightly from its recent low in November, resulting in only a marginal increase in ⁠average selling prices.

Driving the improvement in business conditions were additional expansions in activity and new orders, reflecting reports from survey panelists of stronger demand conditions and increased client spending.

Employment declined, with many firms citing challenges in replacing staff who had left.

The firms surveyed viewed the next 12 months as ‌neutral, with the future output index at 50.


Oil Dips on Ample Supply Outlook, Market Weighs Venezuelan Output

FILE PHOTO: Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. Picture taken on April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo
FILE PHOTO: Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. Picture taken on April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo
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Oil Dips on Ample Supply Outlook, Market Weighs Venezuelan Output

FILE PHOTO: Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. Picture taken on April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo
FILE PHOTO: Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. Picture taken on April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo

Oil prices fell on Tuesday on expectations of ample global supply amid weak demand, and as the market weighed the prospect of higher Venezuelan crude output following the US capture of President Nicolas Maduro.

Brent crude futures fell 0.2%, or 14 cents, to $61.62 a barrel by 0450 GMT while US West Texas Intermediate crude was at $58.13 a barrel, down 0.3% or 19 cents.

Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, noted the oil price response to major geopolitical events, such as the US military action in Venezuela and ongoing strikes on Russian ‌energy infrastructure, had ‌been surprisingly muted, suggesting fundamental demand-supply factors remained the ‌key ⁠concern.

"From a ‌supply perspective, the oil complex remains packed with barrels. According to the latest International Energy Agency (IEA) and US Energy Information Administration (EIA) data, global crude supply continues to outpace consumption growth, pushing inventories higher and keeping downward pressure on prices," she said. Market participants polled by Reuters in December said they expected oil prices to be under pressure in 2026 due to growing supply and weak demand.

Price pressure ⁠could be exacerbated by the US capture of Venezuela's leader on Saturday, increasing the chance of ‌an end to a US embargo on Venezuelan ‍oil and potentially leading to higher ‍output. Maduro pleaded not guilty in a New York court on Monday ‍to narcotics charges. The administration of US President Donald Trump plans to meet US oil executives this week to discuss boosting Venezuelan oil production, a person familiar with the matter told Reuters.

"I think if the Trump playbook even partially comes to pass, Venezuelan crude oil production should increase... Should it increase, there will be more pressure on an already over-supplied market," said Marex ⁠analyst Ed Meir. Venezuela is a founding member of the Organization of the Petroleum Exporting Countries and has the world's largest oil reserves at about 303 billion barrels. However, its oil sector has long been in decline due in part to under-investment and US sanctions.

Its average output last year was 1.1 million barrels per day. Oil analysts said Venezuelan output could increase up to half a million barrels a day over the next two years with political stability and US investment.

ANZ Research said in a note, however, that they saw heightened levels of political instability as the more likely scenario, and that a significant injection ‌of funds would be required to increase output beyond Venezuela's current effective capacity.