E-commerce gaining ground in MENA, says report

The number of people using online shopping portals is also increasing in the region. In the UAE 62 percent of people have bought something online in the last month, a 25 percent year- on-year rise and 47 percent made a purchase using their mobile phones during the same period. (Reuters)
Updated 12 February 2017
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E-commerce gaining ground in MENA, says report

JEDDAH: With the advancement in technology and due to the immense popularity of the Internet in the Middle East, businesses in the region need to invest in technology and to come up with innovative ideas to help boost the growth of e-commerce.
Of the 246 million people living in the Middle East, 60 percent (147 million) have access to the Internet — up 15 percent from 2016 — 34 percent (93 million) are active on social media, representing a 47 percent year-on-year rise, and the mobile subscriptions in the region have reached 312 million.
The statistics were revealed in a study conducted by Hootsuite and We Are Social. The study said that consumers in the region now demand online solutions they can access through their mobile phones on social media platforms — and the financial sector in particular needs to invest in the appropriate technology or risk being left behind.
Chris Fountain, managing director of Turret Media, organizers of MEFTECH 2017, said: “The rise in digital use in the Middle East should not surprise anyone, but I think most people would be surprised at just how sharply it is rising and the figures on mobile use in the Gulf Cooperation Council (GCC) are quite incredible.”
Globally the amount of web traffic on mobile devices has soared in recent years, with just over half (50.3 percent) now being accessed this way, a significant rise from 2013 (35 percent) and from the first figure recorded in 2009 of 0.7 percent.
The research also revealed some startling findings on e-commerce, with 1.61 billion people buying stuff online in 2016 (22 percent of the global population). This equated to a total business to consumer market of $1.915trillion last year, $1,189 on average per person.
The number of people using online shopping portals is also increasing in the region. In the United Arab Emirates (UAE) 62 percent of people have bought something online in the last month, a 25 percent year- on-year rise and 47 percent made a purchase using their mobile phones during the same period. In Saudi Arabia, 39 percent people have made online purchases, an increase of 57 percent from last year and 33 percent bought things using their mobiles, said the report.
“What will be of particular interest to the financial sector and more specifically to those involved in financial technology is the huge rise in e-commerce. These figures highlight just how important it is that banks and other financial institutions are investing in the right technology that allows their customers and potential customers to carry out their transactions when and where they want. The firms who do not adapt and invest risk being left behind,” Fountain said.
The report also revealed interesting figures from the more affluent nations in the GCC with 99 percent of people in the UAE using the Internet, 70 percent in Saudi Arabia and 93 percent in Bahrain. Qatar and the UAE have the highest social media penetration in the world (both 99 percent), while Saudi Arabia has seen the highest growth in penetration with a 73 percent rise resulting in 59 percent of the Saudi population using social media platforms.
Highlighting the importance of MEFTECH 2017, to be held in Abu Dhabi in March, Fountain said that the event would showcase various innovative technologies, such as Facebook Finance.


Turkish lira hits record low, down 20 pct against dollar this year

Updated 23 May 2018
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Turkish lira hits record low, down 20 pct against dollar this year

ISTANBUL: The Turkish lira tumbled more than 5 percent on Wednesday before recovering some ground, the latest drop in a sell-off that reflects growing investor alarm over the direction of monetary policy under President Tayyip Erdogan.
The decline, exacerbated by stop-loss selling by Japanese retail investors overnight, brings the lira’s losses to more than 20 percent so far this year and puts it on track for its worst monthly performance since the 2008 financial crisis.
The sell-off has also increased expectations that the central bank may be forced to call an extraordinary meeting to raise interest rates before its next scheduled policy-setting meeting on June 7, as it has done in previous years.
“We expect the MPC to hold an interim meeting over the coming days to raise interest rates by at least 200bp,” Jason Tuvey of Capital Economics said in a note to clients.
“If policymakers refrain from tightening monetary policy, the risk of a disorderly adjustment and a sharp economic downturn (possibly recession) will mount.”
The lira was at 4.8500 at 0855 GMT from its close of 4.6746 on Tuesday. It earlier touched a record low of 4.9290. It also fell against the Japanese yen, amid talk Japanese retail investors were selling the lira as it hit stop-loss levels.
“We are bearish on the lira and always have been given its very weak external balances and with macroeconomic policy moving in the wrong direction as well,” said Kiran Kowshik, emerging markets forex strategist at UniCredit.
A self-described “enemy of interest rates,” Erdogan wants borrowing costs lowered to spur credit growth and construction, and he said last week he would seek greater control over monetary policy after elections set for June 24.
Economy officials told Reuters the government’s economic management team met at the start of this week to discuss potential measures, including possible steps by the central bank. Deputy Prime Minister Mehmet Simsek and Central Bank Governor Murat Cetinkaya attended the meeting.
Ratings agencies sounded alarm about monetary policy. S&P Global senior sovereign analyst Frank Gill told Reuters government finances could deteriorate rapidly if authorities failed to stem pressure on the currency and government borrowing costs .
Investors want to see decisive rate increases to rein in double-digit inflation, and Erdogan’s comments have reinforced long-standing worries about the central bank’s ability to do that.
Borsa Istanbul Group, the Istanbul stock exchange company, said in a statement on Wednesday it had converted its foreign currency assets into lira, aside from its short-term needs, in a step to support the Turkish currency.
The lira’s weakness was exacerbated by dollar gains against a basket of currencies, with investors awaiting the minutes of the Federal Reserve’s last policy meeting for hints on the pace of monetary tightening.
The yield on the benchmark 10-year bond rose to 15.30 percent at the opening from a last trade of 14.92 percent on Tuesday.
The main BIST 100 share index fell 0.22 percent to 103,105 points on Tuesday.