June 18 – Daily Brief of World Finance & GCC News

WORLD FINANCE NEWS BRIEF

Big Banks Are Finally Hiring Again With Coders in Demand by bloomberg.com

Asia has emerged faster from the months-long lockdown, giving room for lenders in the region to step up recruiting.

“While other hiring can wait, tech is not just something that you can pull the plug on. The systems need to keep running.”

At the same time, a slowdown in tech funding has led to cutbacks at startups, providing an opportunity for financial firms to poach talent, said Neal Cross, Perth-based co-founder of fintech startup PictureWealth and former chief innovation officer at DBS.

Greek Banks/Bad Debts by ft.com

The latest initiative to reduce Greek banks’ bad loans, the Hercules Asset Protection Scheme, reflects the scale of the task.

Greece’s scheme looks like a serious effort to clean up the balance sheets of domestic banks saddled with bad debts since the financial crisis.

The NPL ratio — bad debts as a share of total lending — has remained stubbornly high at 40 per cent due.

Moody’s expects the sector’s NPE ratio to drop to about 28 per cent in the next year or two.

Analysts Unsettled by Currencies Under Spell of Stocks by ft.com

Currency analysts are lamenting an avalanche of cheap money from the US Federal Reserve, which they say has created bizarre conditions in which exchange rates track stocks rather than economic fundamentals.

For decades, strategists have analysed exchange rates on the basis of the outlook for growth

Ben Randol, a currency strategist at Bank of America, said fundamental economic indicators have not mattered for currencies since the Fed’s series of interventions in March. Instead, US equity markets have become the significant driver of the value of the dollar, which has weakened as stocks have soared.

The combination of rate cuts, asset-purchasing programmes and massive fiscal stimulus sparked a dramatic rally in share prices — which dragged foreign exchange markets along too.

GCC NEWS BRIEF

Where to Invest? GCC Investors to Prefer Commodities-Based Assets Post-Covid-19 by zawya.com

Weaker US dollar is needed to support the regional recovery, and we believe that eventually, it will weaken, but this could take some time,” said Hardy.

Over Million Expats to Leave Saudi Market in 2020 by zawya.com

About 1.2 million expat workers could leave the Saudi labour market by the end of 2020,

However, the final number of annual job losses will depend on the development of the pandemic and the measures taken to lessen its impact.

Since the beginning of 2020, approximately 323,000 workers have already departed Saudi Arabia, based on health insurance coverage of expats.

Outlook: Non-performing loans will hinder MENA banks’ recovery by zawya.com

The main obstacle to the region’s banks is the rise in non-performing loans (NPLs), according to London-based economic research consultancy Capital Economics.
a recent survey by the Dubai Chamber of Commerce found that a majority of businesses expect to close within the next year, with those in the travel and tourism sector expecting more acute pain in the coming months,” Capital Economics’ James Swanston wrote in a note.


Central banks in the Gulf and Jordan have lowered interest rates in line with the Fed, while in Egypt, Morocco, and Tunisia have cut rates too. 


In the Gulf countries at least, NPL ratios are generally low and banking sectors are well-positioned to withstand a jump in bad loans.

About the author

Financial advisor to UHNWI, private entities, family offices, and companies. Certified Anti-Corruption Manager from The American Anti-Corruption Institute

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