Mideast CEOs’ confidence in global economy at record levels

Mideast CEOs’ confidence in global economy at record levels
The Davos Congress Centre under snow at the World Economic Forum (WEF), where PwC research showed the confidence of regional CEO's in the global economy was at record levels. (AFP)
Updated 24 January 2018

Mideast CEOs’ confidence in global economy at record levels

Mideast CEOs’ confidence in global economy at record levels

DAVOS: Middle East CEOs are more optimistic about global economic activity than ever, according to the annual survey by accounting and consulting firm PwC unveiled in Davos at the World Economic Forum annual meeting.
Th survey reported that regional CEOs, like their counterparts elsewhere in the world, were more confident about economic prospects than in previous years. For the first time, a majority of top executives in the region — some 52 percent — thought that global economic growth would improve this year.
That level has doubled since last year, and is higher than the previous record in 2014, before the drastic falls in the price of oil that year.
That positive feeling is in line with the global trend shown in the PWC survey. A record-breaking number of CEOs were optimistic about the economic environment worldwide, at least in the short term, the survey showed, with the strongest levels shown in the US, where 59 percent of bosses think things will improve this year.
“CEOs’ optimism in the global economy is driven by the economic indicators being so strong. With the stock markets booming and gross domestic product (GDP) expected to grow in most major markets around the world, it’s no surprise CEOs are so bullish,” said PwC’s global chairman, Bob Moritz.
CEOs, especially in the Middle East, are rather more cautious when it comes to their own markets, however. Outside of North America, confidence about the bosses’ own corporate growth is slightly better, but there was a downturn in perceived prospects in western Europe, Africa and the Middle East.
Only 33 percent of regional CEOs thought revenue growth would improve in their organizations this year, down from 38 percent last time.
The bosses’ changing attitude to foreign investment is also having an effect on regional business, the survey showed. Saudi Arabia was in the number 12 slot as an investment destination for global CEOs in 2017, but has fallen out of the top rankings this time. The UAE became the region’s top representative in the top FDI rankings, at number 15.
The US consolidated its position as the number one destination for investment, with 46 percent of CEOs saying that it was the most important for overall growth prospects in 2018, compared with 43 percent.
China was the second most important market for global CEOs, while both India and Canada reported a surge in investor interest.
Over-regulation was once again regarded as the main factor “that keeps CEOs awake at night,” according to PwC. An unchanged 43 percent said this was their biggest worry this year, but terrorism, geopolitical uncertainty and cyber threats all increased as potential concerns.
In the Middle East, geopolitical uncertainty, cyber threats and over-regulation were the top three worries for regional CEOs. They were less worried about unemployment, social instability and the availability of key skills among their potential workforce.
The PwC survey is based on interviews with 1,293 CEOs in 85 countries between August and November last year.


Saudi entertainment shares jump on easing of restrictions

Saudi entertainment shares jump on easing of restrictions
Updated 6 min 50 sec ago

Saudi entertainment shares jump on easing of restrictions

Saudi entertainment shares jump on easing of restrictions
  • The stock gained 5 percent in early trade

DUBAI: Saudi entertainment and retail shares gained on Sunday after the government said it would end most coronavirus-related restrictions, including resuming indoor dining and reopening cinemas, entertainment activities and events.

The sector has been one of the worst affected by a year of restrictions which has forced restaurants, cinemas and other venues to close their doors.
Entertainment giant Abdul Mohsen Al Hokair Group for Tourism and Development said all of its entertainment venues and cinema joint ventures would re-open on Sunday.
However, it said that the suspension of party and meeting halls as well as some other hotel facilities would continue until notified otherwise by the government.
The stock gained 5 percent in early trade.
Saudis will also be allowed to exercise in gyms following the relaxation of restrictions. Leejam Sports Company said it would re-open all of its facilities from Sunday.
Its stock rose 3.5 percent.


Saudi Ground Services slashes costs after year of worldwide flight disruption.

Saudi Ground Services slashes costs after year of worldwide flight disruption.
Updated 15 min 17 sec ago

Saudi Ground Services slashes costs after year of worldwide flight disruption.

Saudi Ground Services slashes costs after year of worldwide flight disruption.
  • The company services 28 airports across the Kingdom and processed more than 690,000 flights a year before the pandemic

DUBAI: Saudi Ground Services said it had slashed operating costs as it posted a loss caused by the collapse in global air travel.

The company which services 28 airports across the Kingdom and processed more than 690,000 flights a year before the pandemic, reported a total comprehensive loss of SR446.7 million ($118.9 million) for last year, it said in a Tadawul stock exchange filing.

“Despite the challenges faced by the company in light of the pandemic, Saudi Ground Services has executed several initiatives aimed at increasing the efficiency of operation and thus reducing the impact of the pandemic on the company’s profitability,” it said in the statement.

Companies that specialize in baggage handling, cargo and other airport services have been among the hardest hit over the last year as global air travel collapsed. Swissport, the world’s largest provider of ground and cargo handling services in the aviation industry, has axed thousands of jobs in response to the crisis in aviation. Smaller operators such as Hong Kong-based Jardine Aviation have also cut jobs.

Despite the challenges faced by Saudi Ground Services over the last year, it said that it had executed several strategies aimed at boosting efficiency which limited what would otherwise have been a much bigger hit to its business.

As a result, it reduced operating costs by some SR581 million in the current year, it said.
“In addition to cost reduction initiatives, the company has taken certain initiatives such as the opportunity to increase sales by providing disinfection services for aircraft in addition to other services which also contributed to reducing the impact of the pandemic on the company’s profitability.” it said.


UAE’s first independent digital banking platform launches

UAE’s first independent digital banking platform launches
Updated 07 March 2021

UAE’s first independent digital banking platform launches

UAE’s first independent digital banking platform launches
  • Global leaders in digital banking, such as Revolut, one of the world’s fastest-growing apps, do not have a UAE presence

DUBAI: The first independent digital banking platform in the United Arab Emirates launched on Sunday, a neobank hoping to become a leader in the Middle East, Africa and South Asia.

Dubai-based YAP does not have a banking licence itself but has partnered with RAK Bank which provides international bank account numbers for YAP users and secures their funds under its own banking licence.

YAP, like other neobanks which do not have physical branches, does not offer traditional banking services like loans and mortgages, but offers spending and budgeting analytics, peer-to-peer payments and remittances services and bill payments.

YAP is in the process of partnering with banks in other countries, head of product Katral-Nada Hassan said, including a bank in Saudi, in Pakistan and in Ghana.

Global leaders in digital banking, such as Revolut, one of the world’s fastest-growing apps, do not have a UAE presence.

Some UAE banks have in recent years launched their own digital banking offerings targeted at digitally-savvy and younger users, such as LIV by Emirates NBD and Mashreq Neo by Mashreq Bank.

Abu Dhabi state-owned holding company ADQ last year said it plans to set up an as-yet unnamed neobank using a banking licence of the country’s biggest lender, First Abu Dhabi Bank (FAB).

“The fintech revolution has become very popular in other parts of the world and we saw a gap and unique need for this service in the Middle East,” said YAP CEO and founder Marwan Hachem

Hassan said there are challenges for fintechs looking to expand to the UAE.

“There are a lot of fintechs right now looking at partnering with banks, but that requires a lot of discussion, relationship building ... It is not an easy thing to do,” she said, adding YAP’s founders had an existing relationship with RAK Bank.

YAP is at seed funding stage, funded by founders, a private equity firm and private investors, Hassan said, adding that more than 20,000 customers have pre-registered and accounts will gradually go live in coming weeks.


Escalating violence ups pressure for Myanmar sanctions

Escalating violence ups pressure for Myanmar sanctions
Updated 07 March 2021

Escalating violence ups pressure for Myanmar sanctions

Escalating violence ups pressure for Myanmar sanctions
  • The UN special envoy urged the Security Council to act to quell junta violence that this week killed about 50 demonstrators
BANGKOK: The escalation of violence in Myanmar as authorities crack down on protests against the Feb. 1 coup is raising pressure for more sanctions against the junta, even as countries struggle over how to best sway military leaders inured to global condemnation.
The challenge is made doubly difficult by fears of harming ordinary citizens who were already suffering from an economic slump worsened by the pandemic but are braving risks of arrest and injury to voice outrage over the military takeover. Still, activists and experts say there are ways to ramp up pressure on the regime, especially by cutting off sources of funding and access to the tools of repression.
The UN special envoy on Friday urged the Security Council to act to quell junta violence that this week killed about 50 demonstrators and injured scores more.
“There is an urgency for collective action,” Christine Schraner Burgener told the meeting. “How much more can we allow the Myanmar military to get away with?“
Coordinated UN action is difficult, however, since permanent Security Council members China and Russia would almost certainly veto it. Myanmar’s neighbors, its biggest trading partners and sources of investment, are likewise reluctant to resort to sanctions.
Some piecemeal actions have already been taken. The US, Britain and Canada have tightened various restrictions on Myanmar’s army, their family members and other top leaders of the junta. The US blocked an attempt by the military to access more than $1 billion in Myanmar central bank funds being held in the US, the State Department confirmed Friday.
But most economic interests of the military remain “largely unchallenged,” Thomas Andrews, the UN special rapporteur on the rights situation in Myanmar, said in a report issued last week. Some governments have halted aid and the World Bank said it suspended funding and was reviewing its programs.
Its unclear whether the sanctions imposed so far, although symbolically important, will have much ímpact. Schraner Burgener told UN correspondents that the army shrugged off a warning of possible “huge strong measures” against the coup with the reply that, “‘We are used to sanctions and we survived those sanctions in the past.’”
Andrews and other experts and human rights activists are calling for a ban on dealings with the many Myanmar companies associated with the military and an embargo on arms and technology, products and services that can be used by the authorities for surveillance and violence.
The activist group Justice for Myanmar issued a list of dozens of foreign companies that it says have supplied such potential tools of repression to the government, which is now entirely under military control.
It cited budget documents for the Ministry of Home Affairs and Ministry of Transport and Communications that show purchases of forensic data, tracking, password recovery, drones and other equipment from the US, Israel, EU, Japan and other countries. Such technologies can have benign or even beneficial uses, such as fighting human trafficking. But they also are being used to track down protesters, both online and offline.
Restricting dealings with military-dominated conglomerates including Myanmar Economic Corp., Myanmar Economic Holdings Ltd. and Myanmar Oil and Gas Enterprise might also pack more punch, with a minimal impact on small, private companies and individuals.
One idea gaining support is to prevent the junta from accessing vital oil and gas revenues paid into and held in banks outside the country, Chris Sidoti, a former member of the UN Independent International Fact-Finding Mission on Myanmar, said in a news conference on Thursday.
Oil and gas are Myanmar’s biggest exports and a crucial source of foreign exchange needed to pay for imports. The country’s $1.4 billion oil and gas and mining industries account for more than a third of exports and a large share of tax revenue.
“The money supply has to be cut off. That’s the most urgent priority and the most direct step that can be taken,” said Sidoti, one of the founding members of a newly established international group called the Special Advisory Council for Myanmar.
Unfortunately, such measures can take commitment and time, and “time is not on the side of the people of Myanmar at a time when these atrocities are being committed,” he said.
Myanmar’s economy languished in isolation after a coup in 1962. Many of the sanctions imposed by Western governments in the decades that followed were lifted after the country began its troubled transition toward democracy in 2011. Some of those restrictions were restored after the army’s brutal operations in 2017 against the Rohingya Muslim minority in Myanmar’s northwest Rakhine state.
The European Union has said it is reviewing its policies and stands ready to adopt restrictive measures against those directly responsible for the coup. Japan, likewise, has said it is considering what to do.
The Association of Southeast Asian Nations, or ASEAN, convened a virtual meeting on March 2 to discuss Myanmar. Its chairman later issued a statement calling for an end to violence and for talks to try to reach a peaceful settlement.
But ASEAN admitted Myanmar as a member in 1997, long before the military, known as the Tatmadaw, initiated reforms that helped elect a quasi-civilian government led by Aung San Suu Kyi. Most ASEAN governments have authoritarian leaders or one-party rule. By tradition, they are committed to consensus and non interference in each others’ internal affairs.
While they lack an appetite for sanctions, some ASEAN governments have vehemently condemned the coup and the ensuing arrests and killings.
Marzuki Darusman, an Indonesian lawyer and former chair of the Fact-Finding Mission that Sidoti joined, said he believes the spiraling, brutal violence against protesters has shaken ASEAN’s stance that the crisis is purely an internal matter.
“ASEAN considers it imperative that it play a role in resolving the crisis in Myanmar,” Darusman said.
Thailand, with a 2,400 kilometer (1,500-mile)-long border with Myanmar and more than 2 million Myanmar migrant workers, does not want more to flee into its territory, especially at a time when it is still battling the pandemic.
Kavi Chongkittavorn, a senior fellow at Chulalongkorn University’s Institute of Security and International Studies, also believes ASEAN wants to see a return to a civilian government in Myanmar and would be best off adopting a “carrot and stick” approach.
But the greatest hope, he said, is with the protesters.
On Saturday, some protesters expressed their disdain by pouring Myanmar Beer, a local brand made by a military-linked company whose Japanese partner Kirin Holdings is withdrawing from, on people’s feet — considered a grave insult in some parts of Asia.
“The Myanmar people are very brave. This is the No. 1 pressure on the country,” Chongkittavorn said in a seminar held by the East-West Center in Hawaii. “It’s very clear the junta also knows what they need to do to move ahead, otherwise sanctions will be much more severe.”

Aramco in unique position to ‘surge’ capacity to meet oil demand recovery

Aramco in unique position to ‘surge’ capacity to meet oil demand recovery
Updated 07 March 2021

Aramco in unique position to ‘surge’ capacity to meet oil demand recovery

Aramco in unique position to ‘surge’ capacity to meet oil demand recovery
  • Oil prices jumped about 3 percent on Friday
  • Brent crude was up by about 4 percent over the week while WTI oil gained 7 percent

DUBAI: Saudi Aramco is uniquely positioned to respond to a surge in global oil demand according to a report from Bank of America Merrill Lynch.

“At maximum sustainable capacity of 12 million barrels per day (bpd) and proven ability to produce even more, Aramco is one of the few companies globally that can substantially boost output without committing additional capex,” the bank said on Sunday. “We believe that Aramco is uniquely positioned in the global oil world to meet potential resurgence of oil demand.
After the collapse of oil prices in 2020 linked to the COVID-19 pandemic, the market has staged a strong recovery so far this year with a number of banks raising their price estimates for the full year.
Oil prices jumped about 3 percent on Friday, to reach their highest in more than a year after OPEC and its allies decided not to increase supply in April.
Brent crude was up by about 4 percent over the week while WTI oil gained 7 percent.
The rapidly improving outlook for the sector has also sweetened the dividend out look for the company if the oil price remains within the $60 to $75 per barrel range, the bank said.
“Our scenario analysis suggests that Aramco would be well placed to implement its higher dividend distribution guidance given during the IPO and even increase dividends beyond its minimum $75 billion pledge,” Bank of Amerrca Merrill Lynch said.
The collapse of global oil demand over the last year has meant that the global onshore and offshore rig count has dropped to one of the lowest levels ever in the past few months.
With Aramco holding the lion’s share of spare capacity, it is poised to capitalize on a an oil price rebound.
“Given the capex dearth, oil market deficit, and forecast demand resurgence, Aramco remains one of the very few oil companies globally with the ability to surge production substantially without committing additional capex,” the bank said.