Saudi Arabia and Canada have both announced that they will resume diplomatic relations, ending a bitter 2018 dispute over human rights.

In separate statements, the two countries said they would “restore the level of diplomatic relations” that had been in place prior to the 2018 spat.

Each side will also appoint a new ambassador. Saudi Arabia has yet to announce its selection, while Canada named Jean-Philippe Linteau, a longtime member of its Department of Foreign Affairs and International Trade.

The move was prompted by discussions between Canadian Prime Minister Justin Trudeau and Saudi Crown Prince Mohammed bin Salman during November’s Asia-Pacific Economic Cooperation (APEC) Forum. Canada cited “mutual respect and common interests” as motivation for the rekindled ties.

Diplomatic ties first ruptured in 2018 when Saudi Arabia arrested several high-profile female human rights activists.

They included Samar Badawi, whose brother, the dissident Raif Badawi, was also imprisoned at the time. His wife and children had fled to Canada, where they were granted citizenship.

The new arrests prompted a series of social media messages in support of the activists, first from Canada’s foreign minister, then from the foreign ministry itself.

“Canada is gravely concerned about additional arrests of civil society and women’s rights activists in #SaudiArabia, including Samar Badawi,” the ministry wrote on its official Twitter page in August 2018.

“We urge the Saudi authorities to immediately release them and all other peaceful #humanrights activists.”

Those messages prompted a Twitter feud with Saudi Arabia, which retorted that Canada’s interference in its affairs was a “breach of the principle of sovereignty”.

“The Canadian position is a grave and unacceptable violation of the Kingdom’s laws and procedures,” Saudi Arabia’s Ministry of Foreign Affairs wrote in response, in a string of messages announcing it would recall its ambassador to Canada.

It also declared Canada’s Ambassador Dennis Horak a “persona non grata” and gave him 24 hours to leave the country.

Relations between Canada and Saudi Arabia remained frosty, particularly after allegations in October 2018 that journalist Jamal Khashoggi had been murdered in the Saudi consulate in Istanbul.

Canada, among other countries, denounced the killing as an “unconscionable attack on the freedom of expression” and imposed sanctions against Saudi nationals linked to the attack.

But recently, Saudi Arabia has been on the world stage for a series of rapprochements. In March, the kingdom re-established diplomatic relations with Iran in a deal brokered by China, and this month, it resumed ties with Syria. It also hosted Syrian President Bashar al-Assad for Friday’s Arab League summit.

Saudi Arabia has also worked to broker peace in Sudan, hosting talks between representatives for the country’s two warring generals. The United States has also been party to those negotiations, and White House National Security Adviser Jake Sullivan has also met Saudi officials to discuss peace in Yemen.

The new owner of Silicon Valley Bank’s (SVB) US operations, First Citizens, is cutting around 500 roles held by former SVB workers, the BBC understands.

Two months ago, First Citizens bought the business after SVB’s collapse.

The failure of SVB, along with two other US banks, triggered fears of a more widespread banking crisis, which forced authorities to step in.

SVB’s business in the UK was bought in March by London-headquartered banking giant HSBC for a nominal £1 ($1.25).

In an email seen by the BBC, First Citizens’ chief executive Frank Holding highlighted the problems faced by SVB earlier this year and said the cuts will affect: “select SVB corporate functions and do not include any personnel in client-facing positions.”

“The team in India that supports SVB is not impacted by the changes,” he added.

The BBC understands that the job cuts amount to around 3% of the company’s total workforce.

The story was first reported by US-based news website Axios.

First Citizens is based in Raleigh, in the US state of North Carolina and calls itself America’s biggest family-controlled bank. It has been one of the largest buyers of troubled banks in recent years.

Under the deal, all 17 former SVB branches opened under the First Citizens brand.

In the UK, HSBC bought SVB’s British operations in a deal led by the government and the Bank of England. Earlier this month, HSBC said its profits had got a $1.5bn boost from the takeover.

Also this month, Greg Becker, the former boss of SVB, apologised during a Congressional testimony, blaming rising interest rates and mounting withdrawals by customers as key causes of the bank’s collapse.

Interest rates were cut sharply during the 2008 global financial crisis and again during the Covid pandemic as central banks around the world sought to encourage economic growth.

But rates have been rising over the past year as central banks try to rein in soaring prices.

These rate rises have hit the value of investments in which most banks keep some of their customers’ money, and contributed to the bank failures in the US.

His account contrasts with those of regulators who blamed SVB’s leadership for its failure to manage interest rate risks or diversify its business.

The collapse of SVB was followed by the failure of another US lender, Signature Bank and early May, JP Morgan Chase took over First Republic, which had also been under pressure.

Meanwhile in Europe, Swiss officials brokered a rescue deal for troubled banking giant Credit Suisse by its rival UBS, which Swiss prosecutors are investigating.

India’s strong credit demand and softening crude oil prices could buoy the economy, putting the South Asian country on course for a 6.5% expansion this fiscal year, according to a top adviser to the Finance Ministry.

These indicators together with an uptick in construction activity may shield the economy from slower global growth and weather-related risks, Chief Economic Adviser V Anantha Nageswaran said in an interview at his New Delhi office.

Data next week is likely to show the economy expanded 7% in the year that ended March, according to Bloomberg estimates compiled on Thursday. While higher borrowing costs might have slowed some activity, India remains the world’s fastest-growing major economy, outpacing China and drawing foreign inflows into the equity markets.

“In the economic survey we said 6.5% is our baseline with the downside risks more than the upside risks and we maintained it in the April monthly economic report,” said Nageswaran, who advises Finance Minister Nirmala Sitharaman, and is the lead author of the government’s annual economic report card.

“Now I am incrementally, slightly more inclined to move to the neutral range, in saying risks to this number are evenly balanced in the kind of position I am willing to take,” he added.

So barring the monsoon and geo-political risks, India’s economy is on a “steady auto-pilot” and “ticks all the right boxes at this point,” Nageswaran said.

High frequency indicators compiled by Bloomberg showed India’s economy gaining momentum in April thanks to higher tax collections and a booming services sector. However, exports and imports declined, smudging the outlook for Asia’s third-largest economy.

For Nageswaran, the data is positive overall. Trade is “not singing a different tune” as goods exports are falling on slowing global demand and the decline in imports is due to lower crude oil prices, he said.

The stable current account deficit and rising foreign exchange reserves are all giving positive signs, he added.

Inflation has slowed to an 18-month low of 4.7%, but a hot summer, which could impact crops, is fueling concerns. Other inflation risks could come from volatile global commodity prices as India is a major importer of crude and edible oils.

Nageswaran said he is “confident about the inflation trajectory” and sees it slowing further to 4% by next year if crude prices stay low.

CNN — 

New York City is sinking under the collective weight of all of its buildings, a new study has found.

This gradual process could spell trouble for a city around which the sea level has been rising more than twice as fast as the global rate — and is projected to rise between 8 inches and 30 inches by 2050.

What’s more, scientists expect more frequent and extreme rainfall events such as nor’easters and hurricanes due to the human-fueled climate crisis.

“We’re a ways off from the ocean simply moving in,” said lead study author Tom Parsons, a research geophysicist at the US Geological Survey. “But we’ve had a couple of major hurricane events with Sandy and Ida in New York where heavy rainfall caused inundation in the city, and some of the effects of urbanization have allowed water to come in.”

The paper, published in the journal Earth’s Future, aims to show how high-rise buildings in coastal, riverfront or lakefront areas could contribute to future flood risk and that measures should be taken to mitigate the potentially hazardous impacts.

Sinking city risks — and a mystery

The researchers calculated the mass of the 1,084,954 buildings that existed across the five boroughs of New York City at the time, reaching the conclusion that they weighed about 1.68 trillion pounds (762 billion kilograms) — equivalent to roughly 1.9 million fully loaded Boeing 747-400s.

The study team then used simulations to calculate the effects of that weight on the ground, comparing that with satellite data showing actual surface geology. That analysis revealed the rate at which the city is sinking: “The average is about 1 to 2 millimeters a year, with some areas of greater subsidence that are up to about 4½   millimeters a year,” Parsons said.

Subsidence is the technical term for the sinking or settling of Earth’s surface due to natural or artificial causes. A September 2022 study found that 44 of the 48 most populous coastal cities have areas that are sinking faster than sea levels are rising. This latest study’s novel approach is to take into account specifically the weight of New York City’s buildings and how they are contributing to the subsidence of the land beneath them.

Mystery of why Roman buildings have survived so long has been unraveled, scientists say

However, not all of the sinking is due to the buildings. “We could see some correspondence where there’s construction on very soft soils and artificial fill,” Parsons said. “Other places, we see subsidence that’s difficult to explain. And there’s a lot of different causes of it, such as post glacial relaxation that happened after the last ice age, or groundwater pumping.”

Some areas of lower Manhattan, Brooklyn and Queens are among those that are sinking at a faster than average rate, according to the study.

“Some of that seems to correspond with construction projects going on,” Parsons said. “But we also see subsidence on the north end of Staten Island that I can’t figure out an explanation for, and I’ve looked into all kinds of different things — so that still remains a mystery.”

Mitigating risk around sinking cities

Subsidence can pose an even earlier flooding threat than sea level rise, the research suggests, and not just in New York City. “It’s a global issue. My coauthors from the University of Rhode Island looked at 99 cities around the world, not only coastal but inland as well, and the vast majority of them have subsidence issues,” said Parsons, citing the case of Jakarta, which is sinking so fast that the Indonesian government is planning to build a new capital city elsewhere.

The sea level around New York City has been rising more than twice as fast as the global rate.

“We know that global sea levels are rising and shorelines are changing, and that it is critical to understanding the impact of human activities, such as greenhouse gas emissions, on our warming world,” said geophysicist Sophie Coulson, a postdoctoral fellow at Los Alamos National Laboratory who was not involved in the study. “This research takes a look at an important human factor that has only recently come into focus — the effect of urban building loads on coastal land subsidence.”

The authors, she added, use a clever combination of computer modeling, satellite measurements and GPS data to estimate the short- and long-term sinking rates of different areas of the city and identify the areas most at risk.

US banks’ aggregate loan-to-deposit ratio went up in the first quarter, marking the fourth consecutive quarter in which the ratio has increased.

The industry aggregate was 65.2% in the first quarter, compared to 63.6% in the fourth quarter of 2022 and 57.0% in the first quarter of 2022, according to S&P Global Market Intelligence data. The ratio remains below the pre-pandemic ratio of 72.4% in the fourth quarter of 2019.

Liquidity crunch

Investors often use a bank’s loan-to-deposit ratio to assess liquidity, a topic that made headlines late in the first quarter due to the failures of Silicon Valley Bank and Signature Bank and the emergence of a liquidity crunch.

Deposit outflows accelerated in the quarter, with dozens of banks logging declines in excess of 5%. In the first quarter, banks’ deposits stood at $18.742 trillion, a 2.5% decrease from the previous quarter and a 6% drop from the prior-year quarter.

Loans at banks totaled $12.212 trillion, slightly down 0.1% on a quarter-over-quarter basis but up 7.5% on a year-over-year basis. Banks reported weaker demand and tighter underwriting in several loan categories, according to the results of the Federal Reserve’s April 2023 Senior Loan Officer Opinion Survey on Bank Lending Practices.

JPMorgan Chase & Co., the largest US bank by total assets, recorded a loan-to-deposit ratio of 49.3% for the first quarter, compared with 50.6% a quarter ago and 44.6% a year ago.

While many other banks logged deposit outflows during the quarter, JPMorgan recorded inflows of “somewhat flighty deposits.”

“They just came into us. So it’s prudent and appropriate for us to assume that they won’t be particularly stable,” CFO Jeremy Barnum said on the company’s first-quarter earnings call held April 14.

On lending, the company is not tightening standards aggressively, Barnum said.

“We [did not] loosen our underwriting standards when all the numbers looked crazy good during the pandemic. And we’re not going to like overreact now and tighten unreasonably. Some of that correction happens naturally,” Barnum said.

Largest increases

Of the 20 banks with the largest year-over-year increase in their loan-to-deposit ratios during the first quarter, 17 booked declines in total deposits and increases in total loans. United National Corp. led the list with a 62.3-percentage-point increase in its ratio.

PacWest Bancorp ranked 19th with a 27.7-percentage-point yearly hike in its loan-to-deposit ratio to 101%. On a year-over-year basis, the Beverly Hills, Calif.-based bank holding company’s first-quarter deposits dropped 15.2% to $28.19 billion, while loans rose 16.9% to $28.47 billion.

PacWest recorded heavy deposit outflows following the bank failures in March. Even prior to the deposit event, PacWest has been trying to shrink its balance sheet and became “very selective” in lending, President and CEO Paul Taylor said on the company’s April 26 first-quarter earnings call.

Largest declines

The 20 banks with the largest year-over-year decrease in their loan-to-deposit ratios posted deposit growth. Of the 20 banks, 14 reported loan growth.

SoFi Technologies Inc. topped the ranking as its loan-to-deposit ratio plummeted 458.6 percentage points to 159.8%.

New York Community Bancorp Inc., the buyer of substantially all the deposits and certain loan portfolios of Signature Bridge Bank NA, was part of the list. The Hicksville, NY-based bank holding company’s loan-to-deposit ratio slipped 24.3 percentage points year over year to 98.9% as its loans grew 79.3% to $83.85 billion and deposits climbed 123.4% to $84.80 billion.

The transaction enables New York Community to pay down high-cost borrowings, rightsizes the company’s loan-to-deposit ratio and substantially improves its liquidity positioning, Compass Point Research & Trading analyst David Rochester wrote in a March 20 note. In the previous quarter, the company’s loan-to-deposit ratio was 119.4%.

 

RIYADH: Saudi Industrial Production Index (IPI) increased by 4.1% in March 2023 compared to March 2022.

The Saudi General Authority for Statistics said that the IPI continued to show positive growth rates due to the high production in mining and quarrying, manufacturing activity and electricity and gas supplies.

The Authority issued a statistical release on IPI showing that in March 2023, mining and quarrying grew by 1.6% compared to March 2022. Manufacturing activity increased by 10.5% compared to the same month of the previous year. Electricity and gas supplies increased by 16.6% compared March 2022.

The Saudi General Authority for Statistics issues a number of Industry-related statistical products, including the industrial production index (IPI), which is an economic indicator that reflects relative changes and evolution in the volume of industrial production quantities based on the data of the industrial production survey.

 

 

 

 

World Business

Britain pulled out of a seven-month stint of double-digit inflation in April, but the sharp decline still marked the third consecutive month that price pressures have been stronger than feared.

The Consumer Prices Index fell to 8.7% in April from 10.1% the previous month, the Office for National Statistics said Wednesday. It marked the biggest drop in the annual inflation rate in more than 30 years. None of the 36 economists surveyed expected a reading that high.

The figures are likely to fuel market expectations that the Bank of England will extend its cycle of interest-rate hikes through the summer to stamp out price pressures. The latest result was seen as a key crossroads determining whether the central bank could soon let up on the fight against inflation.

The pound extended gains after the release, rising 0.4% to $1.2466, bouncing back from a one-month low touched on Tuesday.

The latest CPI reading was helped by last year’s sharp increase in energy prices falling out of the comparison. Russia choked off supplies of natural gas to Europe after invading Ukraine, sending electricity prices spiraling higher across the continent.

Most concerning for the BOE, core inflation — which excludes volatile food and energy prices — accelerated unexpectedly to 6.8%, the highest since 1992 and up from 6.2% in March.

Natural gas and and electricity combined contributed 1.8 percentage points of the fall in inflation. But the cost of telecommunications services, reflecting a jump in mobile phone bills, and alcohol and tobacco rose. The cost of used cars also rose.

“The rate of inflation fell notably as the large energy price rises seen last year were not repeated this April, but was offset partially by increases in the cost of second-hand cars and cigarettes,” said Grant Fitzner, ONS chief economist. “However, prices in general remain substantially higher than they were this time last year, with annual food price inflation near historic highs.”

Grocery price inflation cooled slightly to 19% but remained close to the highest rate in more than 45 years. The BOE has blamed hedging by food producers and supermarkets rebuilding their profit margins again for keeping grocery inflation high despite falls on global agricultural commodity markets.

BOE Governor Andrew Bailey has said the central bank is looking for “evidence” that inflation is coming down before it can “rest” on its most aggressive hiking cycle in four decades. Some 12 consecutive hikes by the BOE have lifted the key lending rate to 4.5%, the highest since 2008.

The BOE expects a sharp decline in UK inflation throughout 2023 but is concerned about the persistence of price pressures even after the sharp decline in energy prices. Grocery bills have kept inflation elevated, the economy has been more resilient than expected, and the labor market remains extremely tight, fueling pay pressures.

Prime Minister Rishi Sunak has promised to cut inflation in half this year. He was expected to comfortably meet the target when it was made in January, but inflation has been stickier than the BOE had expected, surprising on the upside in each of the past two months.

“The IMF said yesterday we’ve acted decisively to tackle inflation but although it is positive that it is now in single digits, food prices are still rising too fast,” said Chancellor of the Exchequer Jeremy Hunt. “So as well as helping families with around £3,000 of cost of living support this year and last, we must stick resolutely to the plan to get inflation down.”

— With assistance by Constantine Courcoulas

(Updates with market reaction and detail from report.)

The third ‘Qatar Economic Forum, powered by Bloomberg’ will kickoff on Tuesday, bringing in more than 1,000 global business leaders at the iconic towers in Lusail Marina District, home to the Fairmont and Raffles Hotels.
The three-day forum will explore the latest trends in finance, energy, healthcare, and technology, and examine their potential to drive future growth. It will feature more than 50 regional and international speakers from the worlds of government, finance, and business.
The first day of the conference includes interviews with HE Saad Sherida Al-Kaabi, Minister of State for Energy Affairs, Qatar; HE Akbar al-Baker, Group Chief Executive Officer, Qatar Airways; Paul Kagame, President of Rwanda; Steven T Mnuchin, 77th Secretary of the Treasury of the US; Kristalina Georgieva, Managing Director, International Monetary Fund; David L Calhoun, President and Chief Executive Officer, The Boeing Company; Shou Chew, Chief Executive Officer, TikTok; Jeff Koons, Artist; and Peter Smith, co-founder and Chief Executive Officer, Blockchain.com.

China is likely to see its Covid-19 wave peaking at about 65 million infections a week toward the end of June, according to a senior health adviser, while authorities rush to bolster their vaccine arsenal to target the latest omicron variants.

XBB has been fueling a resurgence in cases across China since late April and is expected to result in 40 million infections a week by the end of May, before peaking at 65 million a month later, local media outlet the Paper reported Monday, citing a presentation by respiratory disease specialist Zhong Nanshan at a biotech conference in the southern city of Guangzhou.

His estimate provides rare insight into how the much anticipated second wave may play out, with immunity among the country’s 1.4 billion residents waning nearly six months after Beijing’s sudden dismantling of Covid Zero curbs saw coronavirus run rampant. In the wake of the pivot to living with the virus, the Chinese Center for Disease Control and Prevention stopped updating its weekly statistics earlier this month, leaving a question mark over Covid’s impact.

The 65-million-case estimate from disease modeling indicates the resurgence is likely to be more muted compared with the previous wave unleashed late last year and into January. Back then, a different omicron sublineage probably infected 37 million people every day, sending residents scrambling for limited supplies of fever medicine, overwhelming hospitals and crematoriums.

China is also preparing to roll out new vaccines that will target XBB. The country’s drug regulator has already given preliminary approval to two and another three or four “will be cleared soon”, Zhong said. “We can lead the pack internationally in developing more effective vaccines.”

The batch of XBB-specific vaccines will also add to a growing number of homegrown immunizations Beijing has signed off throughout the pandemic, and is in line with a recommendation from an expert panel at the World Health Organization last week to move away from using the original Wuhan strain in future shots. WestVac Biopharma, a vaccine developer based in the western Chinese city of Chengdu, also got the go-ahead to start testing its XBB-based shots on human last week.

Doha: Qatar’s equity market could attract as much as $3.5 billion of passive flows if the Gulf state proceeds with a plan to combine all of the local stocks held by its sovereign wealth and pension funds, according to Dubai-based Arqaam Capital.

The $450 billion Qatar Investment Authority and the General Retirement and Social Insurance Authority are examining a proposal to consolidate their local holdings worth up to $3 billion under a separate entity in a bid to draw more foreign investor interest and deepen markets, Bloomberg News reported on Tuesday.

The new entity would hire third-party funds to actively manage and trade the shares, effectively boosting activity in the overall market, according to people with knowledge of the plans who asked not to be identified because the information isn’t public.

Such a move could attract an estimated $2.46 billion inflows from MSCI trackers and $1 billion inflows from FTSE trackers in a “blue sky scenario” where both entities pooled all of their stakes to free float, Arqaam analysts Jaap Meijer and Elia Al Chaar, wrote in a note on Wednesday.

If the QIA added 5 per cent of its local stocks to free float, the exchange could draw $587 million of inflows in a base case scenario, they said. Qatar National Bank QPSC, Industries Qatar QSC and Qatar Islamic Bank SAQ are likely be the biggest beneficiaries, they said.

Qatar’s benchmark QE Index rose as much as 1.7 per cent on Wednesday, led by gains in Qatar National Bank, Qatar Islamic Bank, Qatar International Islamic Bank and Commercial Bank of Qatar – all of which are part of the MSCI Qatar Index.

EFG Hermes

Ahmed Difrawy, head of data and index research at EFG Hermes, said Qatari stocks could draw about $1.8 billion of passive inflows from the MSCI and FTSE indexes if the QIA sells 20 per cent of its local holdings. Qatar Islamic Bank, QNB, Ooredoo, Masraf Al Rayan and Commercial Bank are all expected to benefit, he wrote in a note on Wednesday.

Qatar is considering the plan on the hopes that more trading would raise investment returns, reduce costs and help with diversification, the people said. Any change may take place by the end of the year, but a final decision hasn’t been made.