Aramco could sell more shares to benefit PIF, Saudi crown prince tells FII

Aramco could sell more shares to benefit PIF, Saudi crown prince tells FII
Crown Prince Mohammed bin Salman said it would not be difficult for the PIF to raise the value of its assets to SR4 trillion. (Screengrab)
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Updated 29 January 2021

Aramco could sell more shares to benefit PIF, Saudi crown prince tells FII

Aramco could sell more shares to benefit PIF, Saudi crown prince tells FII
  • Second IPO could be reinvested for the benefit of Saudi citizens
  • Mohammed bin Salman: PIF can reach SR4 trillion in assets if it values NEOM and Red Sea Development

DUBAI: Saudi Aramco, the world’s biggest oil company, could launch a second offering of shares to follow the historic initial public offering of 2019, Crown Prince Mohammed bin Salman told the Future Investment Initiative (FII) gathering.

“This will yield a cash flow transferred to the Public Investment Fund (PIF) to be reinvested domestically and internationally for the benefit of Saudi citizens,” the Crown Prince said.

 

 

He gave no indication as to the size of the second potential offering, nor whether it would take place on domestic or international stock markets. Aramco is currently listed on Riyadh’s Tadawul exchange.

Yasir Al-Rumayyan, governor of the PIF, who is also chairman of Aramco, said recently that the oil company could sell more “if market conditions are right.”

He also held out the prospect of Aramco selling other assets or partnering with regional and international partners, as other regional energy companies have done.

The Crown Prince said that PIF could reach its ambitious target of SR4 trillion ($1.07 trillion) assets under management by 2025 by putting a valuation on some of its assets, like NEOM and the Red Sea Development, which are currently rated as zero value by the PIF, as well as by privatizing other companies in which it holds stakes.


25,000 UAE students join after-school maths and coding program as parents fret over pandemic lost learning

25,000 UAE students join after-school maths and coding program as parents fret over pandemic lost learning
Updated 15 June 2021

25,000 UAE students join after-school maths and coding program as parents fret over pandemic lost learning

25,000 UAE students join after-school maths and coding program as parents fret over pandemic lost learning
  • Global demand for math and coding education has surged
  • Cuemath has taught over 200,000 students across 20 countries

DUBAI: More than 25,000 school children in the UAE have signed up for the pilot program of Cuemath, an after-school math and coding program backed by Google.
Cuemath’s online learning program was launched early this year in the UAE, and thousands of students have downloaded the application and online classes.
Demand among students in grades 3 to 7 has been especially strong, the company said in a statement.
The company recently received $40 million in funding, which it said will be utilized in bringing its curriculum to more students in the Emirates. It was backed by Google and Sequoia Capital.
Cuemath has taught over 200,000 students across 20 countries, including the US, UK, Singapore, Canada, Nigeria, Egypt, and Thailand.
Global demand for math and coding education has surged, the company said, with its program growing three times across its geographies.
The trend has been driven by a boom in the EdTech industry during the pandemic when millions of kids were forced to study at home.
“Education is transforming globally, as digital formats allow students to access education best practice from anywhere,” Manan Khurma, founder of Cuemath, said.
“The MEA EdTech and smart classroom market is forecast to double to $7.6 billion by 2027. The global market is many multiples of this,” he added.


Emirates reports $5.5bn loss as group headcount falls by 33,000

Emirates reports $5.5bn loss as group headcount falls by 33,000
Updated 9 min 26 sec ago

Emirates reports $5.5bn loss as group headcount falls by 33,000

Emirates reports $5.5bn loss as group headcount falls by 33,000
  • Emirates Group revenues fell some 66 percent to $9.7 billion over the year

DUBAI: Emirates reported a full-year loss of $5.5 billion, the first time it has fallen into the red in more than 30 years.
The results highlight the devastating impact of the pandemic on the carrier that has helped Dubai become one of the world’s most important international aviation hubs.

Overall employee numbers for the wider Emirates Group, which includes dnata, fell by more than 33,000 over the year as its headcount fell 31 percent to about 75,000. It carried 6.6 million passengers over the year, down 88 percent on a year earlier.

“No one knows when the pandemic will be over, but we know recovery will be patchy,” said Sheikh Ahmed bin Saeed Al-Maktoum, the chairman and CEO of Emirates Airline and Group. “Economies and companies that entered pandemic times in a strong position, will be better placed to bounce back.”
While the pandemic has had a brutal impact on airlines worldwide, the crisis has impacted carriers and airports differently, depending on their route and passenger profiles. Because Emirates relies heavily on international travel without a domestic network, it has not benefited from the bounce back in domestic airline travel in other parts of the world, such as the US and China.
“It is not surprising that Emirates has reported a substantial loss and as with all airlines recovery will take an extended time,” aviation consultant John Strickland told Arab News. “However short term it has been able to benefit from the cargo capabilities of its 777-300ER’s. It is already evaluating options for the future shape of its fleet and network as new aircraft types enter its fleet and will extend the close partnership with flydubai which also increases its flexibility for network development options.”
Emirates Group revenues fell some 66 percent to $9.7 billion over the year. The company said it had received a capital injection of 11.3 billion dirhams ($3.1 billion) from its ultimate shareholder, the government of Dubai. Its dnata unit, which includes ground handling, travel services and catering, also received 800 million dirhams in relief, it said.
Emirates has cut costs across the group by renegotiating contracts and restructuring financial obligations which resulted in estimated savings of 7.7 billion dirhams for the year, it said.
Sheikh Ahmed said the airline aimed to recover its full operating capacity as quickly as possible.
“Together with Dubai’s undiminished ambitions to grow economic activity and build a city for the future, I am confident that Emirates and dnata will recover and be stronger than before,” he said.
Emirates’ total passenger and cargo capacity declined by 58 percent. It received three new A380 aircraft during the financial year and phased out 14 older aircraft comprising of 9 Boeing 777-300ERs and 5 A380s, leaving its total fleet count at 259 at the end of March.
Its order book for 200 aircraft remains unchanged.

 

 


After 17 years, truce nears in US-Europe jet subsidy war

After 17 years, truce nears in US-Europe jet subsidy war
Updated 15 June 2021

After 17 years, truce nears in US-Europe jet subsidy war

After 17 years, truce nears in US-Europe jet subsidy war
  • A deal to pause the world’s largest corporate trade dispute would help US planemaker Boeing and Europe’s Airbus , while granting relief to dozens of other industries affected by tit-for-tat tariffs that were suspended in March

PARIS: The United States and Europe are expected to announce a five-year suspension of tariffs in their 17-year-old dispute over aircraft subsidies on Tuesday, allowing them to focus on the threat posed by China’s nascent commercial aircraft industry, people familiar with the matter said.
A deal to pause the world’s largest corporate trade dispute would help US planemaker Boeing and Europe’s Airbus , while granting relief to dozens of other industries affected by tit-for-tat tariffs that were suspended in March. They face a renewed trade war within weeks if there is no progress.
US Trade Representative Katherine Tai discussed the dispute in her first face-to-face meeting with EU counterpart Valdis Dombrovskis on Monday ahead of Tuesday’s US-EU summit, where China will also be a key topic. Tai travels to Britain on Wednesday.
The European Commission, which oversees EU trade policy, and the United States had vowed to find a solution by July 11 when the currently suspended transatlantic tariffs are due to resume.
Officials had targeted a permanent solution through a pair of treaties — one between the United States and European Union, the original parties, and another between Washington and London following Britain’s exit from the EU — on new ground rules for aerospace.
But reaching a detailed accord has proven complex, given nearly two decades of legal wrangling and thousands of pages of documents, said one source briefed on the talks.
A standstill agreement would push back the resumption of tariffs by years at a time when US President Joe Biden has vowed to reset relations with European partners after four tumultuous years under former President Donald Trump.
Freezing the conflict over jet subsides, some of which have been rescinded or wound down, would give both sides more time to focus on broader agendas such as concerns over China’s state-driven economic model, several of the sources said.
The tariffs on $11.5 billion of goods were progressively imposed from 2019 after the United States and EU both won partial victories at the World Trade Organization over claims of unfair aid for Boeing and Airbus.
The dispute has dragged on since 2004 when the United States withdrew from a 1992 aircraft subsidy pact and took the EU to the WTO, claiming Airbus had managed to equal Boeing’s share of the jet market thanks in part to subsidized government loans.
The EU counter-sued over what it termed unfair R&D support and subsidized tax incentives for Boeing.
In recent months, top European, British and US officials have engaged in intense discussions to settle the dispute and focus on other challenges, including China.
Tai told Reuters in May she was optimistic about reaching a deal with Brussels, adding that the two sides needed to look at “the bigger question” of China’s ambitions to become a global player in the commercial aircraft industry.
The US has floated a joint review of aerospace funding in non-market economies like China, two of the people said.
One of the sources said the two sides had agreed to increase information-sharing, but gave no further details.
“There’s no question that the rise of China’s aircraft industry is ... on everybody’s proverbial radar,” US Chamber of Commerce Senior Vice President Marjorie Chorlins told reporters on Monday, noting what she described as China’s “heavy subsidization” of its industries.
She said settling the dispute would provide “a tremendous boost of goodwill” for broader US-European ties.
Brussels and Washington remain at odds over steel and aluminum tariffs, but are expected at Tuesday’s summit to set a Dec. 1 deadline to end punitive tariffs related to the dispute, according to a draft communique seen by Reuters.
Like the United States, the EU has sparred with Beijing on trade and security this year. But its 27 nations could struggle to agree a common front on topics like aerospace.
In April, for example, Hungary blocked an EU statement criticizing China’s new Hong Kong security law, sparking a row over the right of member states to veto EU foreign policy.
The Chinese embassy in Washington had no immediate comment.
None of the parties agreed to comment on the talks.
In a potentially key breakthrough, the United States had watered down opposition to the principle of future public loans for Airbus and removed its demand for compensation.
But its insistence on advance notice of any future public loans had triggered concerns among EU officials, who rejected giving Washington any veto power, people familiar with the talks said.
Even more critical is the benchmark to be used when deciding whether the interest on any future loans is market-compatible.
Under the 1992 subsidy pact, one third of a project could be financed by direct government support such as loans and cleared indirect R&D support up to 4 percent of a company’s revenue.
One option is to revisit that framework with market rules replacing subsidy quotas and a new cap on indirect R&D support.
Brexit has also complicated negotiations.
Britain and the United States came close to striking an aerospace agreement in December that could have forced the hand of Brussels in its own talks with Washington.
Britain’s ability to negotiate trade deals independently of the EU is central to its new “global Britain” stance. But its flexibility on Airbus is cramped by its role as one of four core nations involved in the planemaker, pre-dating its EU accession.
Airbus, which has 14,000 staff in Britain, has made plain work could shift abroad if the UK turns its back on aerospace.


Morocco inks deal with global renewable energy agency

Morocco inks deal with global renewable energy agency
Updated 15 June 2021

Morocco inks deal with global renewable energy agency

Morocco inks deal with global renewable energy agency
  • The collaboration will be focused on advancing the country’s national green hydrogen economy

DUBAI: Morocco’s energy ministry will be working with the Abu Dhabi-based International Renewable Energy Agency (IRENA) to accelerate the country’s energy transition.
The collaboration will be focused on advancing the country’s national green hydrogen economy, as it aims to become a major green hydrogen producer and export, state news agency WAM has reported.
“The Kingdom of Morocco has shown great leadership in advancing the deployment of renewable energy to meet growing energy demand while creating new industrial opportunities across the country,” IRENA Director-General Francesco La Camera said.
Green hydrogen has been identified as a critical element of global decarbonization goals, and Morocco has expressed strong interest in developing domestic capacity and creating opportunities to share with the world.
“We will continue to promote and encourage the uptake of renewables in the context of climate change and sustainable development at a regional and an international level,” the country’s energy minister, Aziz Rabbah, said.
The pair will develop technology and market outlook studies, as well as design public-private models of cooperation in the hydrogen scene.

 


HSBC joins Morgan Stanley with bullish Dubai property note

HSBC joins Morgan Stanley with bullish Dubai property note
Updated 15 June 2021

HSBC joins Morgan Stanley with bullish Dubai property note

HSBC joins Morgan Stanley with bullish Dubai property note
  • HSBC also raised its rating on Dubai’s top developer Emaar Properties by about a quarter to 5.2 dirhams

DUBAI: HSBC has joined Morgan Stanley in a positive call on the Dubai property market driven by strong demand for larger homes.
The bank expects the real estate rally to last several years.
“The reported sales rebound in Dubai year-to-date has been remarkable,” HSBC’s Stephen Bramley-Jackson and Alok Baid wrote in a report.
HSBC also raised its rating on Dubai’s top developer Emaar Properties by about a quarter to 5.2 dirhams. The stock currently trades at about 4.13 dirhams.
Still the positive outlook on the market contrasts with other more negative views from some commentators that include international property consultancy Knight Frank.
It sees a supply glut that’s held down Dubai’s property prices for over half a decade to persist and likely keep it on the sidelines of a global upswing in values of prime residential real estate.
Fast emerging from the pandemic slump, the construction industry will deliver an estimated 62,000 homes in the emirate this year and nearly 63,500 in 2022, which would be the most since 2009, Knight Frank estimates.