German economy “going great guns” as growth picks up further in November

The subindex for manufacturing jumped to 62.5 in November, the highest reading since February 2011 and the second-greatest improvement in business conditions since 1996 when the survey was started, IHS Markit said. (Reuters)
Updated 23 November 2017
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German economy “going great guns” as growth picks up further in November

BERLIN: Germany’s private sector shifted into an even higher gear in November as factories churned out goods at the fastest pace in nearly seven years, a survey showed on Thursday, suggesting Europe’s biggest economy is firing on all cylinders.
Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that account for more than two-thirds of the economy, rose to 57.6 from 56.6 in the previous month.
That beat the consensus forecast in a Reuters poll of economists who expected a broadly stable reading. It was also well above the 50 mark that separates growth from contraction.
“The German economy is going great guns, with manufacturing enjoying one of the best growth spurts seen over the past two decades,” IHS Markit economist Phil Smith said.
The subindex for manufacturing jumped to 62.5 in November, the highest reading since February 2011 and the second-greatest improvement in business conditions since 1996 when the survey was started, IHS Markit said.
Analysts polled by Reuters had expected the sector to lose some steam.
“Demand for plant and machinery is surging,” IHS Markit economist Chris Williamson said. “Business investment in the euro area is really kicking higher and of course Germany, being a major producer of business machines, is riding this tide.”
The stronger-than-expected PMI figures for November suggest the economy will grow 0.9 percent on the quarter from October to December, Williamson added.
Services business activity also increased in November, with Markit’s subindex for the sector rising to 54.9.
This was slightly weaker than analysts had predicted. In a sign that the strong upswing is pushing up inflationary pressure due to capacity constraints and record delivery delays, output prices rose the fastest in six-and-half years.
“There is a clear indication for hawks (among European Central Bank policymakers) that core price pressures are building,” Williamson said.
Another survey published by the ZEW research institute last week showed that the mood among German investors improved further in November.
The sentiment surveys from ZEW and Markit will be followed by the closely watched Ifo business climate index on Friday. Analysts expect the indicator to edge down after the breakdown of political talks on forming a new coalition government.


Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

Updated 20 July 2018
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Potential SABIC deal would affect Saudi Aramco IPO time frame, says CEO Nasser

JEDDAH: A potential deal to buy a stake in petrochemical maker SABIC would affect the time frame of Saudi Aramco's initial public offering (IPO), the oil firm's president and CEO Amin H. Nasser said Friday. 

The IPO of around 5 percent of Aramco, which was initially to take place this year but is now more likely to happen later, would be the world's biggest listing, raising up to $100 billion.

Nasser said that buying a stake in a chemical company like SABIC would positively affect Aramco's revenue, Al Arabiya reported.

“We are still in the very early stages of the discussion to buy a stake in SABIC,” the Aramco CEO said.

“Aramco is ready for the initial offer and the timing remains subject to the state's decision.”

Saudi Aramco said on Thursday it is looking at the possibility of buying a stake in SABIC, a move that could boost the state oil giant’s market valuation ahead of the planned IPO.
Aramco said in a statement that it was in “very early-stage discussions” with the Kingdom’s Public Investment Fund (PIF) to acquire the stake in SABIC via a private transaction. It has no plans to acquire any publicly held shares, it said.
In a separate statement, PIF also said talks about a sale were in early stages. “There is a possibility that no agreement will be reached in relation to this potential transaction,” it said.