Saudi PIF appoints two new deputy governors as it targets more than $1 trillion in AUM

Saudi PIF appoints two new deputy governors as it targets more than $1 trillion in AUM
PIF aims to reach assets under management of over $1.07 trillion by 2025 while investing $40 billion annually into the local economy during the same time period. (Shutterstock)
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Updated 09 June 2021

Saudi PIF appoints two new deputy governors as it targets more than $1 trillion in AUM

Saudi PIF appoints two new deputy governors as it targets more than $1 trillion in AUM
  • Turqi Alnowaiser will take on their deputy governor roles alongside their current responsibilities

RIYADH: Saudi Arabia’s Public Investment Fund (PIF) said on Tuesday it has created two new deputy governor roles to help drive its expansion.

Turqi Alnowaiser, who heads the international investments division, and Yazeed Alhumied, who leads the MENA investments division, will take on their deputy governor roles alongside their current responsibilities, the PIF said in a statement on Tuesday.

There will be no changes to the current reporting structures to Governor Yasir Al-Rumayyan, nor to the existing structure of the Fund’s business units, the PIF said.

PIF aims to reach assets under management of over $1.07 trillion by 2025 while investing $40 billion annually into the local economy during the same time period.

PIF announced in December 2020 that its total employee count surpassed 1,000, up from around 700 at the start of the year. The sovereign fund had around 40 staff members in 2016.

The fund said around 84 percent of its employees were Saudi citizens and 26 percent were women.


Is COVID-19-driven shift in MENA consumer behavior here to stay?

Is COVID-19-driven shift in MENA consumer behavior here to stay?
Updated 24 July 2021

Is COVID-19-driven shift in MENA consumer behavior here to stay?

Is COVID-19-driven shift in MENA consumer behavior here to stay?
  • Online shopping platforms have witnessed unprecedented growth since the onset of the pandemic
  • In the GCC alone, e-commerce grew from $5 billion in 2015 to about $24 billion in 2020

CAIRO: Businesses of all sizes may have been hit by pandemic lockdowns, but online shopping platforms have witnessed unprecedented growth in the region, with e-commerce growing from $5 billion in 2015 to about $24 billion in 2020 in the GCC alone, according to a Middle East report by global management consultancy Kearney.

“People who used to go to stores and supermarkets moved to buying from apps. They now see the convenience and experience the ease of online shopping,” said Fahim Al-Zubaidi, CEO and co-founder of Akshaak, an e-commerce platform aimed at home-based businesses and individual projects.

While this shift in behavior may have been heightened during lockdowns, Al-Zubaidi believes it is here to stay.

“People will not stop going to shopping malls, but some of the products, particularly groceries and electronics, will move from shops to e-commerce platforms,” he said. 

While people may not stop going to shopping malls, many people who have good experience shopping online during the pandemic may prefer continue doing that. (AFP)

Another person who expects this shift in consumer behavior to persist long after the pandemic ends is Mahdi Al-Olabi, founder and CEO of R2S, a tech company that provides logistic solutions for e-commerce firms in Egypt.

“During the months of the lockdown, we experienced a huge spike in business, about 40 percent to 60 percent increase in deliveries,” he said.

“We’ve seen a shift in consumer culture, particularly when it comes to buying electronics, grooming products and workout equipment. While the buying calmed down a bit after lockdown, there has been a significant consumer culture change to the concept of shopping online. I don’t think that is ever going to go away.”

These predictions seem to be in line with projected e-commerce growth trends in the Middle East. According to the Kearney Middle East report, MENA e-commerce is estimated to reach $50 billion by 2025.

However, the shift in consumer habits is not the only change the region is experiencing. E-commerce growth has also accelerated the use of digital payments. The Middle East, traditionally dominated by cash transactions, now has more online shoppers preferring to use digital payments, according to a study from London-based Checkout.com.

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$50 billion - Projected MENA e-commerce volume in 2025

The report reveals that 53 percent of the region’s consumers now most often use digital payments for their online purchases. Al-Olabi anticipates an even brighter future for e-commerce if this trend continues.

“Once people become comfortable using digital payments, it will be reflected in the growth of e-commerce,” he said. “They’re directly correlated. The more a country moves toward becoming a digital society, the more people will be apt to use e-commerce.”

Lydia Schoonderbeek, founder of Egypt-based beauty products e-tailer Source Beauty, said that although cash on delivery is still the preferred payment method for her customers, she sees an uptick in credit card transactions.

“Cash on delivery makes up 80 percent of our payments, but credit cards are slowly coming into the spectrum,” she said. “In one particular month, it was up to about 30 percent. People are starting to feel more confident not dealing with cash.”

While e-commerce may be growing in the region, the industry still has some catching up to do. According to Schoonderbeek, online payment systems need to be more user-friendly.

“Sometimes you’re asked to put an OTP code, and if you get preoccupied with something and don’t put the code in on time, you have to start the whole shopping experience again. The likelihood of you abandoning that whole experience is high. This needs to be fine-tuned.”

Providing the option to pay in instalments is another feature that should be made available to online shoppers, Schoonderbeek says. “People are price-sensitive; they should have the option of paying in instalments. This is not here yet, maybe because e-commerce in Egypt is still very much in its infancy.”

Meanwhile, Al-Zubaidi is concerned that the rapid growth of e-commerce in the region will affect service quality.

“With an increased number of e-commerce sites, we will have an issue with quality. Now everyone wants to open an e-commerce site. They think they will be successful, but they’re just copying other e-commerce startups. If they don’t have the right strategy, they will close down.”

However, he is optimistic about the future, adding: “It will take time, but the market will clean itself.”


Startups provide vital shot in the arm for MENA health sector

Startups provide vital shot in the arm for MENA health sector
Updated 24 July 2021

Startups provide vital shot in the arm for MENA health sector

Startups provide vital shot in the arm for MENA health sector
  • In 2020 alone, 351 digital health startups in the region attracted a combined $13.8 billion in investment
  • Personal experience inspired some innovators to launch apps that provide culturally relevant solutions

DUBAI: The events of the past year have underscored the urgent need for quality healthcare services as well as innovative solutions. In 2020 alone, 351 digital health startups attracted a combined $13.8 billion in investment, almost double the amount in either 2018 or 2019, according to an estimate by MobiHealthNews.

Among them was Dubai-headquartered Okadoc, a physician-booking platform that landed $10 million in Series A funding to expand into new GCC markets.

Vezeeta, which allows patients to find and access medical services across 50 cities, attracted $40 million in fresh capital.

Bahrain-based Saaya Health aims to bring affordable, culturally relevant mental health solutions to GCC consumers.

The move follows its significant success in the B2B space, where it has employee assistance agreements with pharmaceuticals leader Bayer and cosmetics major L’Oreal.

“Access to good-quality and culturally appropriate mental health support is rare in this market, including corporate mental health and employee assistance programs,” company founder Sarmad Ahmad said.

“There was — and sometimes still is — a stigma around the words ‘mental health.’ The coronavirus pandemic has really put our emotions in sharp focus as we have all had had time for introspection. As people look to improve their relationships, their habits, tackle stress and improve performance at work, the demand is rising for good-quality counsellors and therapists.”

Saaya Health’s services are delivered online in seven countries, with 52 therapists providing counselling in 12 languages, including Arabic, French, Pashto, Malayalam, Hausa and Swahili. With its corporate partnerships, the company offers digital mental health services to more than 700,000 individuals.

“Our long-term goal is to be an impact unicorn, serving a billion people globally. Bahrain, with its strong digital infrastructure, will serve as our base to launch a three-year plan to reach at least 5 million people across the MENA region.”

Maria Lagbes, a Filipino doctor who joined the Women Responders team, leaves the ambulance service headquarters after receiving an emergency call on July 13, 2017, in Dubai. (AFP)

The urge to help a friend can sometimes spark the idea for a new business venture. That was the case with medical device company ProvenMed, whose founders Amine Staali and Souheil Guessoum built an innovative adult urinary incontinence device that is already helping thousands of people across 10 different markets.

Over 200 million people worldwide suffer from the condition. Launched in 2019, ProvenMed’s flagship device, ActviGo, is a reusable and washable system-integrated urinary external catheter for male incontinence management. It eliminates the need for diapers and condom catheters, allowing patients to manage their condition hygienically and discreetly.

The company, based in Abu Dhabi’s HUB71, also produces non-invasive reusable male external catheters, breathable undergarments, leakproof urine collection bags and portable bidets.

ProvenMed launched an online store in 2019 to bypass coronavirus-linked distribution issues, offering worldwide delivery. A winner of August’s Dubai Smartpreneur 5.0 competition, the business now wants to expand into Asia and Europe as well as develop similar incontinence solutions for women, children with bedwetting problems, people with special needs and the military.

A doctor examines an inmate's X-ray at the medical center of Dubai's Al-Awir central prison amid the COVID-19 pandemic. (AFP file photo)

One product in development is a smart device that monitors illnesses remotely and shares data with urologists.

Jordan’s Carers is a mobile platform that enables households to find and access vetted in-home nurses, physiotherapists and childcare specialists. In the process, it creates new jobs for certified care-givers.

The app was named best healthcare solution in 2019 December’s UCAN Awards at the Sharjah Entrepreneurship Festival, a $250,000 contest that recognizes regional entrepreneurs who have created high-impact solutions for the post-COVID-19 world.

“Many people faced the same struggle — how do you trust a stranger or ascertain the right quality of care and experience?” founder Raad Al-Kalha said.

Personal experience inspired Al-Kalha to launch the app in Amman in 2018, starting with 35 care-givers and two services.

“We have expanded our offering to include nursing visits, physiotherapy and blood tests and have a network of 300 care-givers who have provided more than 28,000 hours of care, created 5,000 job opportunities, and achieved 300 percent year-on-year growth from 2019-20,” he said.


Egyptian government approves rise in fuel prices

Consumers purchase fuel at a petrol station near Cairo Airport, Egypt.(REUTERS file photo)
Consumers purchase fuel at a petrol station near Cairo Airport, Egypt.(REUTERS file photo)
Updated 11 min 51 sec ago

Egyptian government approves rise in fuel prices

Consumers purchase fuel at a petrol station near Cairo Airport, Egypt.(REUTERS file photo)
  • Prices of all three grades raised by 0.50 Egyptian pounds each
  • Citizens who use public transportation will not be affected by latest move, official says

CAIRO: The Egyptian government has raised fuel prices from Friday based on the decisions of the Automatic Pricing Committee for Petroleum Products.

The committee, which meets every three months, issued a statement raising gasoline prices by 25 piasters ($0.016), with the price of a liter of 80 octane gasoline rising to EGP 6.75 ($0.43). The price of 92 octane gasoline is now EGP 8 per litre and high-quality 95 octane gasoline is EGP 9.

The price of diesel remains unchanged at EGP 6.75 per liter for public transport vehicles and EGP 3,900 per ton for the industrial sector.

The government implemented the new gasoline prices on Friday morning, according to a statement from the Ministry of Petroleum and Mineral Resources.

The last price hike was in April, in line with the Egyptian government’s plan to gradually stop subsidizing fuel products within the framework of a reform program supported by the International Monetary Fund.

Prices have remained stable over the past year after dropping in April 2020 and October 2019.

FASTFACT

The price of diesel remains unchanged at EGP 6.75 per liter for public transport vehicles and EGP 3,900 per ton for the industrial sector.

The Egyptian Ministry of Petroleum stated that the pricing committee reviewed the average prices of Brent crude in the global market and the exchange rate of the dollar against the Egyptian pound for the period from April to June 2021.

These are the two most important factors “influencing the cost of providing and selling petroleum products in the local market, in addition to other burdens and costs,” the ministry said.

It said the committee’s recommendations reflected the current conditions in the world, such as the severe fluctuation in global prices resulting from the pandemic and the reduction of crude production.

Hossam Arafat, head of the General Division for Petroleum Products, said that the rise was due to the rise in the dollar, the increase in direct and indirect expenses and the rise in the price of a barrel of oil.

He said the prices of diesel used in public and private transportation would remain fixed. It means transportation ticket prices will remain unchanged.

Ahmed Mohamed, a government employee, said that the rise in fuel prices will not affect him because he does not own a car.

He said that the Egyptian government has been very open with its citizens for years, as it had told them that it would gradually stop subsidizing petroleum products.


OPEC should leave oil market in hands of the Saudis – Mizuho

OPEC should leave oil market in hands of the Saudis – Mizuho
Updated 23 July 2021

OPEC should leave oil market in hands of the Saudis – Mizuho

OPEC should leave oil market in hands of the Saudis – Mizuho
  • Saudi Arabia has managed production effectively during COVID era
  • Risks remain as COVID resurgence could hurt demand

RIYADH: OPEC and the entire energy industry should thank Saudi Arabia for helping oil prices recover from negative territory last year, and the market would be best left to the Kingdom to manage, according to a senior investment banking energy commentator.

“They’ve done a magnificent job of managing their production program in the COVID era,” Robert Yawger, executive director of Energy Futures at Mizuho Securities said in an interview on Bloomberg Television on Thursday.

Crude oil futures fell below zero for the first time in history on April 20 last year as demand evaporated amid widespread lockdowns in response to the coronavirus pandemic.

That was an “unprecedented event” and “left a terrible scar on the industry,” said Yawger. “It rallied back under the management of the Saudis. The rest of OPEC has a lot to thank them for. Anyone that has anything to do with energy has a lot to thank them for, for that matter.”

WTI crude, the US benchmark, reached a six-year high of $76.98 on July 5 as OPEC+ failed to find agreement on output quotas, but has edged lower since then as the UAE and Saudi Arabia hammered out a compromise. The group will raise output by 400,000 barrels a month from August for 14 months.

While discipline on production has helped bring prices back, the market is at risk if renewed lockdowns hurt demand, said Yawger.

“I understand that everyone wants to get as many barrels on the market as possible, but you just can’t do that,” he said. “You cannot flood the market. It’s a very fragile state right now.”

“In my opinion, it’s best to let the Saudis manage it; they’ve done an incredible job. As long as they don’t flood the market themselves,” he said.

“Everybody remembers negative prices. That was the result of the price war last year. They all came to the assumption that it’s better to keep the barrels off the market and let the Saudis take charge and manage the situation than let prices slide in that direction again. Nobody can sustain that kind of slide for very long.”

“I don’t know if we’re going to see that $76.98 number again. That may be a challenge.”

US COVID-19 cases have climbed in recent weeks, reaching almost 64,000 yesterday compared with below 10,000 a day at the beginning of the month. However, that’s down from the peak in January of more than 250,000 new cases per day.

“If we have a COVID flare up that’s a third of what it was last fall, we have a serious problem on our hands and demand would not be that supersized as a result,” said Yawger. “If everybody was vaccinated we would not even be having this conversation. But because we’re headed into the winter with a big part of the population that’s not vaccinated, it has the potential to be a big problem for crude oil demand.”


New Russian war plane has Mideast orders in sights

New Russian war plane has Mideast orders in sights
Updated 23 July 2021

New Russian war plane has Mideast orders in sights

New Russian war plane has Mideast orders in sights
  • Plane has combat radius of 1,500 km and shortened takeoff and landing
  • Russia expects 300 orders for the plane over the next 15 years

DUBAI: Mideast governments could figure among customers for Russia’s new Sukhoi stealth fighter jet, a top Rostec executive told Arab News.
Known popularly as “The Checkmate,” the aircraft was inspected by President Vladimir Putin ahead of Moscow’s biennial airshow on Tuesday.
Designed to compete with the US F-15 fighter jet, few details had previously been made public about the plane made by Rostec, Russia’s defense industry manufacturing conglomerate and United Aircraft Corporation (UAC).
Victor Kladov, Rostec director for international cooperation and regional policy, told Arab News the aircraft had high export potential.
“This included singling out countries of the Middle East among potential customers,” he said.
Earlier, UAC General Director Yury Slyusar told Russian TV the plane had a combat radius of 1,500 kilometers and shortened takeoff and landing.
He expects as many as 300 orders for the plane over the next 15 years, mainly from the Middle East, Asia and Latin America.
“Market appetite for advanced aircraft such as “the Checkmate” is strong in the Middle East, particularly if workshare and investment opportunities can help to satisfy local offset and industrialization policies,” said Charles Forrester, a regional lead analyst at Janes, a defense intelligence provider. “The desire to have sovereign control over advanced capabilities is a key part of this, particularly given the challenge of supply chain security in the face of export controls from foreign partners.”
The plane is expected to cost between $25 million and $30 million according to Rostec CEO Sergey Chemezov.
Russia has invested heavily in its defense sector in recent years and has targeted exports to the Gulf states where it has been highly visible in regional arms fairs.
However strong US ties to the region have sometimes hampered its marketing push in the Arab world — with the Countering America’s Adversaries Through Sanctions Act (CAATSA) deterring potential clients.
“From an operational perspective, a number of militaries in the region are undertaking the process of refreshing their aircraft fleets that were acquired in the 1990s and 2000s, in order to deploy new capabilities, improve interoperability, and reduce maintenance costs. For some countries, such as Qatar and Egypt, this has involved significant increases in fleet sizes and capabilities. Changing threat dynamics, such as new anti-aircraft missile technology, have also meant that new capabilities are required to maintain an edge over their potential adversaries,” added Forrester.