Lebanon sells cheapest Big Mac in the world as currency collapses

Lebanon sells cheapest Big Mac in the world as currency collapses
For those paid in Lebanese pounds, the Big Mac is becoming an increasingly unaffordable luxury. (Reuters)
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Updated 27 July 2021

Lebanon sells cheapest Big Mac in the world as currency collapses

Lebanon sells cheapest Big Mac in the world as currency collapses
  • Lebanese pound is 70 percent undervalued according to the Big Mac Index
  • A split is emerging between those paid in Lebanese pounds and those in dollars

RIYADH: Lebanon is home to the world’s cheapest Big Mac after the pound slumped in value, leaving it more than 70 percent undervalued against the US dollar, according to the Economist Intelligence Unit.

At 29,904 Lebanese pounds, a Big Mac is not cheap for those being paid in local currency, but with an exchange rate of 17,800 to the dollar, it costs just $1.68 for tourists and those lucky enough to get paid in dollars.

The slump in the Lebanese pound is exacerbating and accelerating inflation on a basic basket of goods, such as rice, sugar and flour, on a daily basis, said Lebanese economic analyst Bassel Al-Khatib.

Most people are paid in the local currency in Lebanon, where the national minimum wage stands at 675,000 Lebanese pounds per month, which was once worth almost $450 at the official exchange rate, but today barely fetches $30 on the black market, according to the Crisis Observatory at the American University of Beirut (AUB).

The Observatory said the cost of food has soared by 700 percent over the past two years, and this increase had picked up pace to 50 percent in the past few weeks alone.

Most Lebanese people are getting poorer on a daily basis, pushing some of them to sell their gold, cars and even furniture to survive, while others wait for US dollar transfers from their relatives abroad, or wait for civil society aid, Al-Khatib told Arab News.

This is all reflected in Lebanese social media, which is flooded with donation requests for new-born baby milk and medications that are not available anymore in the markets or are sold for extremely high prices. There are also numerous donation requests for people in need of food.

At the same time, others are sharing their expensive restaurant bills, such as Babel Baher who spent 5 million Lebanese pounds on a meal and posted the cheque on Facebook.

“$250 is almost nothing for someone coming from abroad,” a Facebook user called Rania wrote under the post. “This is a very cheap bill for someone who has US dollars and this dinner is not expensive at all compared to abroad.”

Al Khatib said that those paid in US dollars are living an affordable life with only $300 out of their salaries while before they needed $3,000 to have the same quality of life.

“The patchwork policies to support some commodities is not helping as all commodities that are subsidized are smuggled, ” said Al Khatib.

The country’s mismanagement with no plan or economic vision to save Lebanon from its worsening crisis, led us here, and there are no positive prospects as long as there are no radical solutions in the country, he said.


Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday
Updated 27 June 2022

Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday

RIYADH: Saudi stocks gained in the first trading session of the week, recovering slightly following steep declines due to fears over interest rate hikes and a potential recession.

The main index, TASI, surged 1.8 percent to close at 11,513, while the parallel market, Nomu, shed 0.9 percent to 20,681.

Most Gulf stock exchanges advanced in line with Saudi Arabia, with Qatar’s QSI topping the region as it jumped 3.2 percent.

Oman and Kuwait added 0.1 and 1.3 percent, respectively, while the Bahraini index slipped 0.4 percent.

Apart from the Gulf, the Egyptian blue-chip index EGX30 ended flat.

In energy trading, Brent crude futures edged up to $112.9 a barrel by 9:26 a.m. Saudi time after rebounding 2.8 percent on Friday, and US West Texas Intermediate traded at $107.29 a barrel.

Stock news

Arab National Bank’s board recommended a dividend payout of SR750 million ($200 million), or SR0.5 per share, for the first half of 2022

Gulf General Cooperative Insurance Co. appointed Jamal Al-Dabbagh as board chairman and Saud Al-Sulaiman as vice-chairman

Amana Cooperative Insurance Co.’s rump offering was 123 percent covered, generating SR104 million in proceeds

The boards of the Saudi Exchange and Muqassa provided the necessary approvals for the launch of single-stock futures trading starting July 4

Future Care Trading Co. set its price guidance at SR90 per share as it prepares for a direct listing on Saudi Arabia’s parallel Nomu market

Saudi Arabian Refineries Co. established a SR5 million unit, namely Al-Sado Investment Co., to carry out real estate, financial, tourism, and construction activities

Middle East Healthcare Co. completed the construction of its Saudi German hospital in Makkah

Al Alamiya for Cooperative Insurance Co. signed an agreement worth SR24.5 million with Key Car Rental Co. for vehicle insurance coverage

Calendar

June 27, 2022

End of Alamar Foods’ IPO book-building

Retal Urban Development Co. will start trading its shares on TASI

June 28, 2022

End of the Saudi Investment Bank’s Sukuk offering


China In-Focus — Yuan edges up; China’s industrial profits slump in May; Central Bank makes biggest daily cash injection in 3 months

China In-Focus — Yuan edges up; China’s industrial profits slump in May; Central Bank makes biggest daily cash injection in 3 months
Updated 27 June 2022

China In-Focus — Yuan edges up; China’s industrial profits slump in May; Central Bank makes biggest daily cash injection in 3 months

China In-Focus — Yuan edges up; China’s industrial profits slump in May; Central Bank makes biggest daily cash injection in 3 months

BEIJING: China’s yuan edged up against the dollar on Monday, after Shanghai declared victory against COVID-19 over the weekend, but gains were limited ahead of more convincing signs of a recovery.

Shanghai, the country’s commercial hub, will gradually resume dining-in in restaurants from June 29 after the city’s Communist Party chief declared victory in the battle against the latest wave of COVID shocks that put the city under lockdown for two months.

Prior to market opening, the People’s Bank of China set the midpoint rate at a more than two-week high of 6.6850 per dollar, 150 pips or 0.22 percent firmer than the previous fixing of 6.7.

In the spot market, the onshore yuan opened at 6.6890 per dollar and was changing hands at 6.6876 at midday, 22 pips firmer than the previous late session close.

China’s May industrial profits slump

Profits at China’s industrial firms shrank at a slower pace in May following a sharp fall in April, as activity in major manufacturing hubs resumed, but COVID-19 restrictions still weighed on factory production and squeezed factory margins.

Profits fell 6.5 percent from a year earlier, less than the 8.5 percent decline in April, according to data released by the National Bureau of Statistics on Monday.

May’s improvement was driven by surging profits in the coal mining and oil and gas extraction sectors, as the Russia-Ukraine war sparked a rally in global commodity prices.

However, profits in the manufacturing sector dropped 18.5 percent in May as equipment manufacturing improved significantly, Zhu Hong, senior NBS statistician, said in a statement. 

April profits were down a sharper 22.4 percent.

The gap between profit margins of upstream and downstream sectors narrowed in May, analysts at Goldman Sachs said in a note, adding the divergence of profits across various sectors and firms remained significant.

PBOC makes biggest daily cash injection

China’s central bank made the biggest daily cash injection into the banking system via open market operations in nearly three months on Monday, to ease pressure from rising cash demand toward the end of the first half of the year.

The People’s Bank of China injected 100 billion yuan ($14.95 billion) worth of seven-day reverse repos, the biggest daily injection via the liquidity tool since March 31.

The central bank said the operation was to keep “half year-end liquidity stable,” according to an online statement.

The PBOC started pumping more cash into the financial system last Friday. Demand usually surges toward the end of the quarter, when commercial banks also have to shore up cash positions for an administrative quarterly health check by the central bank. 

With 10 billion yuan worth of such reverse repos due on Monday, the PBOC net injected 90 billion yuan on the day.

(With inputs from Reuters) 


Commodities Update — Gold rises; Corn falls on improving weather prospects; Copper gains on easing Covid restrictions

Commodities Update — Gold rises; Corn falls on improving weather prospects; Copper gains on easing Covid restrictions
Updated 27 June 2022

Commodities Update — Gold rises; Corn falls on improving weather prospects; Copper gains on easing Covid restrictions

Commodities Update — Gold rises; Corn falls on improving weather prospects; Copper gains on easing Covid restrictions

RIYADH: Gold prices gained on Monday, as news of some Western nations planning to officially ban imports of the metal from Russia for its invasion of Ukraine sparked some interest in bullion.

Spot gold rose 0.5 percent to $1,835.75 per ounce by 0520 GMT. 

US gold futures were up 0.4 percent at $1,837.30. 

Silver rises

Spot silver rose 1.3 percent to $21.38 per ounce, while platinum gained 0.7 percent to $913.51. 

Palladium climbed 2.6 percent to $1,925.31.

Corn, soybeans drop

Chicago corn fell on Monday weighed by the prospect of improving weather in some producing regions.

Wheat edged up, while soybeans dropped slightly.

The most-active corn contract on the Chicago Board of Trade slid 1.53 percent to $7.38-3/4 a bushel. Chicago wheat rose 0.19 percent to $9.38-1/4 a bushel, while soybean shed 0.26 percent to $14.2-1/2 a bushel.

US Midwest corn crop was more likely to receive some much-needed rain early in its yield-determining pollination phase of development, according to the latest weather outlook.

Copper gains

London copper prices gained on Monday as the easing of COVID-19 restrictions in top metals consumer China raised hopes of a revival in demand, although fears of a global economic slowdown due to rapid interest rate hikes limited gains.

Three-month copper on the London Metal Exchange was up 0.5 percent at $8,420 a ton, as of 0441 GMT, after dropping to its lowest since February 2021 at $8,122.50 in the previous session.

The most-traded August copper contract in Shanghai fell 0.6 percent to $9,579.37 a ton by the midday trade.

(With inputs from Reuters) 


Saudi Arab National Bank to pay $200m dividend for first half following strong Q1 result

Saudi Arab National Bank to pay $200m dividend for first half following strong Q1 result
Updated 27 June 2022

Saudi Arab National Bank to pay $200m dividend for first half following strong Q1 result

Saudi Arab National Bank to pay $200m dividend for first half following strong Q1 result

RIYADH: Arab National Bank’s board has proposed a dividend payout of SR750 million ($200 million) for the first half of 2022 following strong earnings in the first quarter of the year.

It will distribute SR0.5 per share dividend to 1.5 billion eligible shares on July 18, according to a bourse filing.

The Saudi lender had earlier posted a 12-percent surge in its quarterly profit to SR650 million, from SR582 million in the same period last year.

The profit growth was primarily attributed to higher gains from special commissions, financing, and investment activities, along with a rise in net exchange and trading income.

Founded in 1979, Riyadh-based Arab National Bank is one of the 10 largest in the Middle East, operating through 156 branches in the Kingdom.

 


Oil Updates — Crude gains ahead of G7 discussions; Ecuador’s oil output halved; Ukraine attacks Crimean oil-drilling platform

Oil Updates — Crude gains ahead of G7 discussions; Ecuador’s oil output halved; Ukraine attacks Crimean oil-drilling platform
Updated 27 June 2022

Oil Updates — Crude gains ahead of G7 discussions; Ecuador’s oil output halved; Ukraine attacks Crimean oil-drilling platform

Oil Updates — Crude gains ahead of G7 discussions; Ecuador’s oil output halved; Ukraine attacks Crimean oil-drilling platform

RIYADH: Oil prices extended gains on Monday as investors stood on guard for any moves against Russian oil and gas exports that might come out of a meeting of leaders of the Group of Seven nations meeting in Germany.

Brent crude futures edged up 22 cents, or 0.2 percent, to $113.34 a barrel by 0342 GMT after rebounding 2.8 percent on Friday. 

US West Texas Intermediate crude was at $107.73 a barrel, up 11 cents, or 0.1 percent, following a 3.2 percent gain in the previous session.

The prospect of more supply tightness loomed over the market as western governments sought ways to cut Russia’s ability to fund its war in Ukraine, even though G7 leaders were also expected to discuss a revival of the Iran nuclear deal — which might lead to more Iranian oil exports.

Producer nations in OPEC+, which includes Russia, will likely stick to a plan for accelerated oil output increases in August when they meet on Thursday, sources said.

Ecuador’s oil output halved

Ecuador’s oil production has fallen by more than half due to road blockades and vandalism connected to nearly two weeks of anti-government protests, the energy ministry said on Sunday.

The sometimes-violent demonstrations by largely indigenous marchers demanding lower fuel and food prices, among other things, began on June 13 and have led to at least six civilian deaths.

President Guillermo Lasso, whose already-adversarial relationship with the national assembly has worsened during the marches, has offered concessions including easing security measures, subsidized fertilizers and debt forgiveness, and his government met on Saturday with indigenous groups.

“Oil production is at a critical level. Today the figures show a reduction of more than 50 percent,” the energy ministry said in a statement. 

He added, “In 14 days of demonstrations, the Ecuadorean state has stopped receiving around $120 million.”

Vandalism, the takeover of oil wells and road closures have prevented the transport of necessary supplies, the ministry said.

Before the protests, oil production was about 520,000 barrels per day.

The public oil sector, private producers of flowers and dairy products, tourism businesses and others have lost about $500 million, the ministry of production said in a statement.

Protesters reiterated on Sunday that marches would continue until Lasso has answered all of their demands.

“The central issues have not been won yet,” said CONAIE indigenous organization leader Leonidas Iza, adding that protesters want guarantees on fuel prices and a limit to the expansion of oil and mining. 

“We are going to return with results.”

Ukraine attacks Crimean oil-drilling platform 

Ukrainian forces have attacked a drilling platform in the Black Sea owned by a Crimean oil and gas company, Tass news agency cited local officials as saying on Sunday, the second strike in a week.

The platform is operated by Chernomorneftegaz, which Russian-backed officials seized from Ukraine’s national gas operator Naftogaz as part of Moscow’s annexation of the peninsula in 2014.

“It’s shelling by the armed forces of Ukraine, there are no casualties,” Tass cited a member of Crimea’s emergency services as saying. 

It gave no further details.

Last Monday Crimean officials said three people were wounded with seven missing after a Ukrainian strike that forced the suspension of work on three platforms. Chernomorneftegaz is under US and European Union sanctions.

(With inputs from Reuters)