Kingdom’s Petchem industry will adjust to energy price rise

Updated 29 December 2015
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Kingdom’s Petchem industry will adjust to energy price rise

RIYADH: Saudi Aramco’s Chairman Khalid Al-Falih said he is confident that local industries, including the Saudi petrochemical sector, would adjust to the rise in domestic energy prices and remain competitive.
Earlier, the government said it was hiking prices for fuels, water and electricity as well as gas feedstock used by industry, as part of subsidy reforms designed to help state finances cope with low oil prices.
The price of methane was raised to $1.25 per million British thermal units and ethane to $1.75; previously, both were at 75 US cents, among the lowest in the world.
Al-Falih said Saudi Arabia is better equipped to wait out currently low oil prices than other producers, adding that he expected a more stable market “some time in 2016.”
“Saudi Arabia more than anyone else has the capacity to wait out the market until this balancing takes place,” Reuters quoted him as saying at a news conference.
The Ministry of Finance stated in its 2016 budget document that the government is to adjust subsidies for water, electricity and petroleum products over the next five years, Any changes made to such prices would be aimed at achieving efficient use of energy and conserving natural resources, and would also be structured to minimize the negative effects on lower- and middle-income citizens, the document said.
A number of structural economic reforms, including “privatising a range of sectors and economic activities,” would also be planned, the ministry added.


UAE’s Network International shrugs off Brexit to list shares in London

Updated 17 min 27 sec ago
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UAE’s Network International shrugs off Brexit to list shares in London

  • The planned share sale comes at an uncertain time in the UK
  • The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore

DUBAI: Network International, the UAE payments processor, has committed to a London IPO next month in what would be the UK’s first big share sale of the year.
The company intends to have a free float of at least 25 percent and admission to the London Stock Exchange is expected to take place in April, Network International said in a regulatory filing on Thursday.
The planned share sale comes at an uncertain time in the UK where there is still no clarity around whether Britain will leave the EU or not at the end of the month.
VPS Healthcare, the Abu Dhabi-based hospital operator, is reconsidering plans to list in London due to uncertainty surrounding Brexit, Bloomberg reported on Thursday citing a person familiar with the matter.
The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore.
Emirates NBD, Dubai’s biggest bank, owns 51 percent of Network International while Warburg Pincus and General Atlantic jointly own the rest.
The share sale will be a key test of investor demand for new listings in London after a subdued 2018 across most European markets.
“Volatility has continued in recent months, driven by the uncertainty around trade between the US and China, the wider geopolitical climate and the potential end of the current bull run,” said Peter Whelan, partner and UK IPO Lead at PwC in a recent report.
“We are seeing a healthy number of companies preparing for an IPO in 2019 despite the ongoing Brexit negotiations which have clearly impacted IPO activity on the London market.”
The payment processor reported earnings of $298 million last year according to its website, up from $262 million a year earlier. It does not disclose net income figures.
The company handles digital payments across the Middle East, which generate three quarters of its total earnings.
Last year it processed some $40 billion in payments for more than 65,000 merchants.
Its key markets in the region include the UAE and Jordan it says that Saudi Arabia offers “significant opportunities.” It also offers services in 40 African countries with Egypt, Nigeria and South Africa being its most important segments on the continent.