Hisham Al-Askar: Expectations of negative results for some companies in the second and third quarters
Source: Dubai – Alaa Al-Minshawi
The talk of the Saudi Finance Minister, Muhammad Al-Jadaan, regarding the expected measures to maintain the sustainability of the state’s public finances, has opened the door to more questions regarding the private sector’s preparedness for the challenges related to the effects of the Corona pandemic.
Perhaps the government’s initiative in taking measures to protect the macroeconomic gains and the basic services it provides to individuals places a double responsibility on the private sector, which faces a number of great challenges.
Saudi Arabia has allocated about 180 billion riyals in the form of initiatives and incentives to stimulate economic activity and support the health sector in the face of the consequences of the Corona virus.
The head of the Risk and Governance Committee in companies listed in the Saudi stock market, Hisham Al-Askar, said that the private sector in Saudi Arabia is required to follow the example of government measures in the interim dealing with the economic effects of the Corona crisis, as government measures began since the beginning of the crisis when they launched many stimulus packages for economic activity Until it moved to the current stage assumed by the reality of the situation to hedge the worst conditions.
The military added that the closing losses will greatly affect the results of many shareholding companies in the second and third quarters due to the imbalance of the budget equation, meaning that the expected revenues in the previous strategic plans of the companies will not be achieved, and that the growth rate will not be achieved, which also means the importance of being aware and alert Executive departments and departments to quickly set other scenarios in the fastest time, and not to wait for the next quarterly results of this year, this falls within the responsibilities that fall on them.
The military said that the emergency risks that fall under any kind of sudden risks such as fires, natural disasters, pandemics, etc., such as what we live in now are among the most important and most difficult types of risks facing companies because they require quick dealing, required by the reality of the situation in finding solutions in the shortest possible time period.
Delays or slowdowns in dealing with this risk will affect the company’s financial position more quickly than other risks facing companies such as commercial or legislative risks that guarantee legal responsibility for products, administrative responsibility, training and employee relations, environmental provisions, fraud prevention, or risks Mankind, which focuses on work ethics, or issues related to human, animal and environmental health, all of which are time factors that help in reversing the risks related to emergency conditions or pandemics.
The military pointed out that the work of the boards of directors in companies, whether listed in the money market or not listed, should be based as quickly as possible on the speed of drawing a new strategy to limit the effects of this pandemic, and also what is related to the impact associated with government hedging procedures and finding appropriate solutions such as reducing operational expenses and other solutions Which varies according to the nature and activity of each facility.
Al-Askar indicated that the company’s employees ’jobs should not be affected, as the stimulus packages targeted the preservation of jobs in the private sector, according to the talk of Finance Minister Mohamed Al-Jadaan to Al-Arabiya, and the continued provision of basic services.