Apple's iPhone 5 gets final approval for China release

Updated 01 December 2012
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Apple's iPhone 5 gets final approval for China release

SHANGHAI: Apple Inc's latest iPhone has received final clearance from Chinese regulators, paving the way for a December debut in a highly competitive market where the lack of a new model had severely eroded its share of product sales.
China is Apple's second-largest market and its Chinese fans are eagerly awaiting the latest model of its smartphone, the iPhone 5, which was released in the US in September.
Apple has said that the iPhone 5 will be released in China in December, but the long wait caused Apple's smartphone market share to halve to 10 percent in the second quarter as users switch brands or hold out for the latest model, data from industry research firm IDC showed in August.
The Telecom Regulatory Authority, under China's Ministry of Industry and Information Technology, showed two iPhone 5 models on its website that received approval this week. The two are the A1429, a WCDMA model that runs on China Unicom's network, and the A1442, a CDMA model that runs on China Telecom Corp's network.
The chairman of China Unicom, the country's second-largest mobile carrier, said early this month that it expected to start selling the iPhone 5 this year as it aims for a major boost in 3G users to 100 million by the year-end, up from 67 million in the first nine months.
Many users on Sina Corp's


Could Saudi Arabia become the China of the Middle East?

Updated 20 May 2018
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Could Saudi Arabia become the China of the Middle East?

  • Fund manager notes "interesting parralels" between economic development in China and Saudi Arabia
  • Such programs likely to attract foreign investors as Saudi markets open up

LONDON: A leading London-based financial expert — in charge of funds worth £2.3 billion ($3.1 billion) — is ready to boost his firm’s investments in companies in the Kingdom, as its reform program begins to create significant economic opportunities.
Ross Teverson, head of strategy, emerging markets equities at Jupiter Asset Management, has recently returned from a field trip to the Kingdom, where he met the heads of a number of major KSA companies.
“As a fund manager my approach emphasises the opportunities created by changing situations, so Saudi Arabia was a natural choice for a research trip,” he told Arab News in an exclusive interview.
A Gulf executive suggested to him that Saudi Arabia would become as important for the Middle East as China is for Asia.
“That might sound like a bold claim, but there are certainly some interesting parallels,” he said.
“Saudi Arabia appears to be taking cues from the China’s fixed asset investment model, by investing in infrastructure projects to remove bottlenecks to economic growth.”
Teverson highlighted the high-speed Haramain high-speed train service, which will link the cities of Madinah and Makkah to the King Abdullah Economic City (KAEC) on Saudi Arabia’s west coast and Jeddah’s King Abdulaziz International Airport, and the new Riyadh metro system — due for a soft opening next year — as examples of key infrastructure investments.
He also compared the recent crackdown on corruption launched by Crown Prince Mohammed bin Salman last year with similar moves by President Xi Jinping during the Chinese leader’s first years in office.
Once he reached Saudi Arabia — which he has been visiting for the past eight years — it became clear to Teverson that the Kingdom’s reforms were “real, far-reaching and occurring rapidly.”
Of particular note are moves to develop the Kingdom’s entertainment sector following the rescinding of a ban on cinemas, and important improvements to women’s rights, with restrictions on female drivers due to be lifted next month.
Such moves are already prompting “surging” female participation in the workforce, he said.
“Saudi Arabia has a young population — half of its citizens are under 25 — and my impression was that most people seem to approve of what Crown Prince Mohammed bin Salman is doing to diversify the country’s economy away from oil and make it more socially sustainable,” he said.
The inclusion of Saudi Arabia in index provider MSCI’s widely tracked emerging markets index, likely to happen in 2019, would clearly put it more on the radar of global passive and active investors.
Investment bank EFG-Hermes earlier this year said that the MSCI upgrade — following the announcement of a similar upgrade by fellow index provider FTSE earlier this year — may prompt up to $45 billion of inflows into KSA stocks.
But Everson admitted that there would be challenges along the way, and that investors would need to be selective to identify the best opportunities.
He highlighted health care as an interesting area, with spending in Saudi Arabia set to rise as medical provision moved from the state to the private sector. Improved availability of high-end services
domestically meant that some patients who had previously traveled overseas for treatment would spend more on health care at home.
“A high incidence of chronic conditions such as diabetes in Saudi Arabia and rising demand for long-term care for elderly patients also suggest structural growth in health care spending,” said Teverson.
Alpen Capital earlier this year forecast that heath care spending in the GCC is set to reach $104.6 billion in 2022 from an estimated $76.1 billion in 2017, with Saudi Arabia and the UAE accounting for the majority of the increase.
In other areas, however, more caution is required, said Teverson.
While the Kingdom’s banking sector looks attractive at first glance, there may be hidden asset quality risks for some lenders.
“If we do further research, we will pay particular attention to the quality of the banks’ loan books,” he said.
While today foreign investor participation in the KSA stock market is low, with so much changing the Kingdom looks set “to be an increasingly important story within the emerging markets asset class.”
Among the funds Teverson manages are the Jupiter Global Emerging Markets Fund and the Jupiter Emerging and Frontier Income Trust. The fund has a country exposure to the UAE of about 6 percent, with investments in Emaar Malls in Dubai and Sharjah-based carrier Air Arabia. The trust meanwhile has a 2 percent holding in Saudi Telecom.
Air Arabia fulfils an important niche in serving price-sensitive travelers in the region, he said.
“It’s essentially replicating the EasyJet or Ryanair model, and appears to be doing so very well. The company is also on a stable financial footing, which certainly isn’t something you get from all airline stocks, as it owns its planes (rather than leasing them) and has a strong balance sheet. Despite these attractions, we believe its growth potential has been overlooked by the market and so we have identified it as a source of under-appreciated change in the region.”
Teverson said that Jupiter would almost certainly up its exposure to Saudi Arabia. “If things develop in a very positive way, we could envisage a time when we would have more holdings, yes.”
His funds rarely take a stake of more than 5 percent in a single company, but his investment approach is one of looking for positive change in companies that “we think the market hasn’t priced in or understood. Under-appreciated change is what we are looking for.”
“As opposed to a value style that is very much driven by the valuation, and where investors may be happy to wait a very long time for valuations to go up, we need to have something that we can already observe improving, we need to see some positive change as well as an attractive valuation,” he said.
“We see emerging market tourism as an area of structural change, and if that structural change isn’t fully reflected in valuations, then that’s something we would consider closely,” he explained.
One group of favored stocks in the portfolio were what he described as technology enablers. For example, Jupiter has a holding in a Taiwanese company called Bizlink, with a relatively small market capitalization of about $1 billion. The company is the sole supplier of what are called battery wire harnesses, which are used by electric car maker Tesla.
“People look to obvious names like Tesla, but actually it’s often smaller companies that are enabling this change, providing components or key technologies. They can be bigger beneficiaries of what is happening in the end-market, and several of our technology holdings fit that model,” he said.