Kingdom’s GDP seen at healthy 6% in 2012

Updated 11 September 2012
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Kingdom’s GDP seen at healthy 6% in 2012

JEDDAH: The global economic picture is expected to remain murky in H2, 2012, as major economies continue to tread water without some discernible uptrend. Employment growth will curtail as Europe grapples with austerity and American businesses maintain tight purse strings. In this context, the International Monetary Fund (IMF) expects Europe to contract -0.3 percent in 2012, followed by a modest +0.7 percent growth in 2013. Chinese growth is expected to significantly slowdown in 2012 to +8.0 percent from +9.2 percent in 2011. Saudi Arabia's GDP growth will be slower but still healthy at +6.0 percent in 2012, according to a report by Riyad Capital.
For 2013, although the IMF is expecting +4.1 percent GDP growth for Saudi Arabia, Bloomberg consensus forecast is +3.1 percent. Overall for the world economy 2013 should be better than 2012, however skepticism is growing fueled by the uncertain future for the euro and its unpredictable impact.
Oil prices
Given the weaker economic environment, oil price moved from a high of about $110 a barrel to a low of $78 a barrel in the first half of 2012. In the past three months, prices staged a recovery and found support in the $85 to $95 range despite an absence of durable change in the economic environment. Price changes are partially a result of inverse movements of the US dollar, which gained strength against major currencies in early summer and subsequently eased.
The International Energy Agency (IEA) expects non-OECD oil demand to surpass that of OECD in 2013, comprising some 45.7 mbd out of the total 90.5 mbd. This, Riyadh Capital said has significant implications for oil exporters such as Saudi Arabia indicating a more diversified market for their product. If Western economies stagnate, oil demand will be supported through developing economies. Even with the interdependence of economies, we envision limited prospects of sustained declines in oil prices. Any correction will be welcomed through higher consumption. As such, Oxford Economics forecasts Saudi oil production to continue at +2.1 percent CAGR through 2020 reaching 11.7 mbd from the current 9.9 mbd. However, IMF forecasts highlight a troubling trend of declining revenues for Saudi Arabia over the next five years. Revenues are projected to decline from $351 billion in 2012 to $296 billion by 2017.
The report said employment growth for young Saudis has come under the spotlight in the past two years as more state resources are allocated to education and training programs. The total population is expected to register +2.1 percent CAGR through the next five years reaching nearly 32 million, providing an expanding retail target market for banks.
Job creation
Success at finding jobs for the young should provide meaningful boost in demand for banking products such as car and personal loans. The government has managed an expansionary policy in the past three years thanks to its SR 2.4 trillion foreign reserves to spur job and infrastructure growth. However the pace of that expenditure may come under pressure on declining revenues which could potentially curtail the effectiveness of some of the programs.
Low rates
The prevailing low rate environment pressured sector revenues in 2011 which showed signs of improvement in 2012 as volume compensated for yields. Riyad Capital expects rates to remain benign through 2013 inline with facilitative policy adopted by the US. This could render Saudi banks heavily dependent on volume growth to boost revenues, which in our view will become increasingly difficult. Consequently, banks will need to raise their risk appetite in search of yields. Second, with European debt markets rattled, yields on investment grade securities have hit record lows further squeezing banks' investment income. Compounded by dwindling supply of Saudi government bonds, the banks will need to source alternative vehicles to park liquidity such as high grade corporate issues and sukuk.


Samsung announces folding phone with 5G — at nearly $2,000

Updated 21 February 2019
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Samsung announces folding phone with 5G — at nearly $2,000

  • The device looks similar to a conventional smartphone, but then opens like a book to reveal a display the size of a small tablet
  • Samsung is also making improvements to its flagship Galaxy S devices and plans to offer a 4G version of its folding phone
SAN FRANCISCO/LONDON: Samsung Electronics Co. Ltd. on Wednesday unveiled a nearly $2,000 folding smartphone in a bid to top the technology of Apple Inc. and Chinese rivals and reignite consumer interest amid slumping sales.
The Galaxy Fold will go on sale on April 26 and take advantage of new and faster 5G mobile networks. The device looks similar to a conventional smartphone, but then opens like a book to reveal a display the size of a small tablet at 7.3 inches (18.5 cm).
The device “answers skeptics who said that everything that could be done has been done,” DJ Koh, chief executive of Samsung Electronics, said at an event in San Francisco. “We are here to prove them wrong.”
Samsung remains the world’s largest smartphone maker with nearly a fifth of global unit sales but underperformed a slumping market last year. Chinese rival Huawei Technologies Co. Ltd. — whose Mate series of phones also command premium prices — gained market share. Other Chinese makers like Xiaomi Corp. have also been increasing prices, leaving Samsung to defend its turf against upstart rivals in addition to its longtime foe Apple.
With the foldable phone, Samsung is going on the offense on two fronts in the smartphone race: It is offering an eye-catching new feature with the big, bending screen and the first 5G connection in a premium phone, a feature analysts do not expect Apple to match until 2020.
Samsung is also making improvements to its flagship Galaxy S devices and plans to offer a 4G version of its folding phone.
It also challenges the notion of what a phone can cost, debuting at nearly twice the price of current top-of-the-line models from Apple and Samsung itself.
Patrick Moorhead, founder of Moor Insights & Strategy, said the new folding device could help Samsung stay at the top and lure consumers to upgrade devices that have looked largely the same over the past five years.
“Samsung and Apple go back and forth” to lead the premium smartphone market, Moorhead said. “I think this is Samsung’s chance to take back the innovation crown.”
And even though the $1,980 starting price is steep, some dedicated Samsung fans said they would pay it. Navneet Kumar Singh, a Samsung enthusiast from India who traveled to San Francisco to watch the launch, is ready to place his order.
“The prices of the flagship models have been a little aggressive in India,” he said, “But in the end, if you invest the money you’re getting a different experience.”
Samsung also introduced several accessories to compete against Apple, including a pair of wireless headphones called Galaxy Buds. The headphones include wireless charging, a feature that Apple has promised to put into is competing AirPods but has not yet released.
Samsung also said that its new Galaxy phones will be able to wirelessly charge its headphones and new smartwatches by setting the accessories on the back of the phone.

10 times faster
Along with the folding phone, Samsung also added new cameras and a 5G version to its Galaxy series of phones.
Verizon Communications Inc. will be the first carrier to offer service for Samsung’s 5G phones. The networks are expected to be 10 times faster than current ones, improving viewing of live news and sports events.
With the 5G versions of its flagships, the Korean electronics maker looks to have beaten Chinese rivals in the 5G race, although the device will operate only on the small number of networks launching later this year. Apple is not expected to release a 5G smartphone until late 2020.
The new networks are not available in many places yet but will roll out this year and next. Consumers who want to hold on to their phones for several years before upgrading may be tempted to buy a 5G phone now so that it will be able to take advantage of those networks later, said Bob O’Donnell of TECHnalysis Research. That could sway some Apple buyers over to Samsung and other Android makers with 5G devices.
“People are going to be thinking about, am going to be able to use this a year from now? Two years from now? Three years?” he said.
Rival smartphone makers are expected to announce 5G models at next week’s Mobile World Congress, the industry’s top annual event, in Spain. Samsung said its 5G handset would be available in the early summer.
The Galaxy 10 series needs to appeal to consumers who are reluctant to upgrade for only incremental technological improvements in performance.
All of the Galaxy series of rigid phones except the 5G will be available from March 8, with the S10+ priced from $1,000, the S10 priced from $900 and the smaller S10e from $750.
The mainline S10 compares with $999 for Apple’s iPhone XS and $858 for Huawei’s premium Mate 20 Pro.