China preparing for Evergrande's downfall: WSJ

China preparing for Evergrande's downfall: WSJ
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Updated 23 September 2021

China preparing for Evergrande's downfall: WSJ

China preparing for Evergrande's downfall: WSJ
  • Local governments have been ordered to assemble groups of accountants and legal experts to examine the finances around Evergrande's operations in their respective regions
  • Both bonds would default if Evergrande fails to settle the interest within 30 days of the scheduled payment dates

Chinese authorities are asking local governments to prepare for the potential downfall of debt-ridden China Evergrande Group, the Wall Street Journal reported on Thursday, citing officials familiar with the discussion.

The move has been characterised as "getting ready for the possible storm" by the officials, according to the report.


The officials said local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion, the WSJ reported.


Local governments have been tasked with preventing unrest and mitigating the ripple effect on home buyers and the broader economy, the officials said, according to the report.


Evergrande, China's second-biggest property developer, has $83.5 million in dollar-bond interest payments due on Thursday on a $2 billion offshore bond and a $47.5 million dollar-bond interest payment due next week.


Both bonds would default if Evergrande fails to settle the interest within 30 days of the scheduled payment dates.


The company, which epitomised the borrow-to-build business model, ran into trouble over the past few months as Beijing tightened rules in its property sector to rein back debt levels and speculation.


Investors are worried that a downfall could spread to creditors including banks in China and abroad.

 


Mideast economy recovering but social unrest on the rise: IMF

Mideast economy recovering but social unrest on the rise: IMF
A member of Lebanon's Hezbollah movement fires his gun during the funeral of some of their members who were killed during clashes in the capital Beirut's southern suburbs on October 15, 2021. (AFP via Getty Images)
Updated 36 sec ago

Mideast economy recovering but social unrest on the rise: IMF

Mideast economy recovering but social unrest on the rise: IMF
  • "The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance"

The Middle East and North Africa is on track to economic recovery, but rising social unrest and unemployment are threatening to hinder "progress", the International Monetary Fund said Tuesday.


The MENA region, which includes the Arab countries and Iran, saw its real GDP growth shrink by 3.1 percent in 2020 due to lower oil prices and sweeping lockdowns to prevent the spread of the coronavirus.


But with rapid vaccination campaigns, particularly in the Gulf nations, the IMF predicted that GDP growth would rise to 4.1 percent this year, a slight upgrade of 0.1 percent from the last projection in April.


"The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance," Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told AFP in an interview.


But "this recovery is not the same in all countries. It is uncertain and uneven because of the divergence in vaccination... and geopolitical developments", Azour added.


The IMF said this month that while prospects for oil-exporting economies improved with higher oil prices, low-income and crisis-hit countries are witnessing "fragile" recoveries.


It warned of "a rise in social unrest" in 2021 that "could pick up further due to repeated infection waves, dire economic conditions, high unemployment and food prices".


Unemployment rates increased in MENA last year by 1.4 percent to reach 11.6 percent.


This rise exceeds that seen during the global financial crisis and the 2014-15 oil price shock, the IMF said.


The fund also warned of the longer-term risk of the uneven recovery, which could lead to a "permanent widening of existing wealth, income, and social gaps and, ultimately, weaker growth and less inclusive societies".


About seven million more people in the region are estimated to have entered extreme poverty during 2020-21 compared to pre-crisis projections, according to the IMF.


In Lebanon, the continuing drop in the value of the currency has dashed hopes that the government formed last month can stem an economic crisis, branded by the World Bank as one of the worst since the mid-19th century.


Nearly 80 percent of the Lebanese population lives below the poverty line.


"The Fund has already started technical discussions with the authorities... to develop what would be in fact that the framework within which the fund can help Lebanon," said Azour, a former Lebanese finance minister.


Gulf nations ranked in world’s best places to live and work: HSBC report

Gulf nations ranked in world’s best places to live and work: HSBC report
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Updated 38 min 15 sec ago

Gulf nations ranked in world’s best places to live and work: HSBC report

Gulf nations ranked in world’s best places to live and work: HSBC report

Three Gulf countries are among the top 10 best places to live in the world for expats, with UAE climbing 10 places to secure the 4th position, while Bahrain ranked 8th and Qatar took the 10th position. 

Switzerland retained its position as the number one place expats rated to live, while Australia came second, according to HSBC's 14th annual Expat Explorer study. 

Saudi Arabia was ranked 39th globally, out of the 48 places. 

Quality of life in the UAE constituted the main reason that makes expats stay longer. 

Chief executive officer of HSBC at UAE, Abdulfattah Sharaf said “The overwhelming sense of optimism from expats in the UAE about the 12 months ahead is reflective of the quick response from authorities to tackle the social and economic impact of the pandemic.”

The survey looked at people’s salaries, career growth potential, job security and savings, but it also asked people about social issues. 


Aramco Oil Pipeline to raise multi-billion dollar bonds: Bloomberg

Aramco Oil Pipeline to raise multi-billion dollar bonds: Bloomberg
Updated 44 min 13 sec ago

Aramco Oil Pipeline to raise multi-billion dollar bonds: Bloomberg

Aramco Oil Pipeline to raise multi-billion dollar bonds: Bloomberg

RIYADH: A consortium of investors in Saudi Aramco's oil pipelines, led by Washington-based EIG, is preparing to sell billions of dollars of bonds as soon as this week, Bloomberg reported citing people familiar with the matter.

The consortium may raise at least $4.5 billion of bonds, three of the people said. The aim is to refinance a loan of about $10.5 billion taken on to fund the pipeline investment. 

Citigroup Inc. and JPMorgan Chase & Co. will be among the banks managing the sale, the people said, asking not to be named for matters of privacy.

China’s Silk Road Fund and Abu Dhabi sovereign wealth fund Mubadala Investment Co. were also part of the consortium that paid $12.4 billion for a 49 percent stake in an Aramco subsidiary that has leasing rights over the pipelines. The deal was completed in June.

Aramco is looking for new ways to raise cash to maintain a $75 billion dividend and complete huge investment plans, Bloomberg said.


TASI crosses 11,800 point mark in early trade

TASI crosses 11,800 point mark in early trade
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Updated 58 min 10 sec ago

TASI crosses 11,800 point mark in early trade

TASI crosses 11,800 point mark in early trade

The Tadawul All Share Index, TASI, rose by 0.4 percent to surge past the 11,800 point level in early trade today. 

Turnover reached SR1.6 billion ($430m) during the period. 

Al Rajhi Bank rose more than 1 percent. 

Etihad Etisalat (Mobily) gained 2 percent to SR30.85 in a boost to the stock after it reported net profit after Zakat and tax of SR751 million for the first nine months of 2021.

SABIC Agri-Nutrients, Mouwasat, Dar Al Arkan and SGS increased between 1 and 3 percent. 

Here’s a wrap of market movements as of 10:30 a.m. Riyadh time:

Yamama Cement Co. net profit was down 36 percent to SR172.5 million for the first nine months of 2021. 

Fawaz Alhokair Co. and Arabian Centres Co. acquired 51 percent of VogaCloset. 

Saudi Paper board recommends capital increase through SR145 million rights issue.

Saudi Arabian Amiantit Co. announced the resignation of board member, Khalil Abdulfatah Kurdi.

 

 


'SGI signals a new era for mankind': How the Saudi Green Initiative Forum could change the world

'SGI signals a new era for mankind': How the Saudi Green Initiative Forum could change the world
Updated 19 October 2021

'SGI signals a new era for mankind': How the Saudi Green Initiative Forum could change the world

'SGI signals a new era for mankind': How the Saudi Green Initiative Forum could change the world
  • "We reject the false choice between preserving the economy and protecting the environment," says Crown Prince Mohammed Bin Salman

Since the early part of the last century, the image and fortunes of Saudi Arabia have been inextricably linked to a single element. The discovery and exploitation of oil transformed life in the KSA and positioned the country front and center in the petrol-driven global economy.

But times have changed over the last two decades. There is a recognition that oil and its derivatives, such as plastic and petrochemicals, are a primary cause of global warming, pollution and environmental catastrophe. In the KSA, air pollution from greenhouse gases shortens life expectancy by 1.5 years, while desertification and dust storms cause $13 billion of damage per year.

This bleak picture is a wake-up call, triggering a seismic shift across the world, away from carbon-sourced energy and hyper-consumption towards a cleaner and more sustainable way of life.

An energy leader for decades, the KSA is now positioning itself at the vanguard of environmental action. This effort is encapsulated in the Saudi Green Initiative (SGI) – a national program to combat pollution and land degradation, increase vegetation cover, reduce carbon emissions and preserve marine life.

“The Kingdom fully recognizes its share of responsibility in advancing the fight against the climate crisis. Just as the Kingdom underpinned energy markets during the oil and gas era, it is going to become a global leader in forging a greener world,” says Crown Prince Mohammed Bin Salman, patron of the SGI.

Having introduced the concept of the Circular Carbon Economy (a closed-loop system involving ‘4Rs’: reduce, reuse, recycle and remove) during its presidency of the G20 summit last year, Saudi Arabia is again taking a leadership role by hosting the forthcoming SGI Forum, to be held in Riyadh on 23-24 November.

The forum will, in its own words, “catalyze climate action in a regionally and internationally coordinated manner . . . bring together heads of state, public officials, business leaders, academic pioneers and environmental specialists. . . and drive action and spark innovative solutions to help tackle climate change.”

The event will help to define a road map that seeks to rally the Gulf region and contribute to agreed global targets by confronting climate change, increasing the use of clean energy, offsetting the impact of fossil fuels and protecting the environment.

The SGI is hugely ambitious. Ten billion trees are to be planted in the Kingdom over the next decade, rehabilitating some 40 million hectares of degraded land and bringing about a 12-fold increase from current tree covers. This is equal to four percent of the global initiative to limit the degradation of land, and one percent of the target to plant one trillion trees globally.

The percentage of protected areas in Saudi Arabia will reach over 30 percent of total land – about 600,000 square kilometers — exceeding the global target of 17 percent. Carbon emissions will be reduced by 130 million tons brought about by a plan to generate 50 percent of the Kingdom’s energy from renewables by 2030; and landfills – where 95 percent of waste is currently deposited — will be reduced to only five percent of waste.

In fact, the very notion of ‘garbage’ will become largely a thing of the past, as every form of waste becomes the raw material for a value-added product or energy source, in what is a key part of the ‘circular economy’ concept.

The SGI will work in tandem with the broader Middle East Green Initiative, which includes all GCC states along with other regional countries. The overall goal is to plant 50 billion trees across the Middle East — the largest reforestation program in the world, restoring 200 million hectares of degraded land. Carbon emissions from the region are to be reduced by over 60 percent, equal to more than 10 percent of the intended global reduction.

While Saudi citizens are used to a comfortable life of big cars and disposable products, it is clear that the SGI is already having a profound cultural impact.

“I think the SGI will open up a whole new era for mankind,” Ziyad Al Shiha, chief executive of the Saudi Investment Recycling Company, a leading agency in the circular economy, told Arab News.

“We're at a turning point now and it’s part of a major shift in the world economy. We are putting investment on the ground, working with corporations, small and medium-sized enterprises and with individuals — anything that will contribute to the circular economy.”

The greening of Saudi Arabia will involve changes to the daily lives of ordinary people, and an entirely new mindset. It will be young people, in particular, who forge a new path away from the habits of the past few decades.

“The SGI is an initiative by our government for a greener future for Saudi and the Middle East,” Fatimah Ahmad, an executive at the $500 billion NEOM megacity project, told Arab News.

She added: “The KSA is taking the lead to protect tomorrow from the climate change crisis. It’s one of the Vision 2030 projects I am personally excited about. It’s an ambitious, wild dream and I am sure it will come true very soon.”

Cynical voices might say that the decline of the oil era, and the global transition to a greener way of life, will have a detrimental effect upon the economy and standard of living in Saudi Arabia.

But Crown Prince Mohammed Bin Salman has a more positive outlook. “We reject the false choice between preserving the economy and protecting the environment,” he declared when launching the SGI in March.

He added: “Climate action will enhance competitiveness, spark innovation, and create millions of high-quality jobs. Young people, both in the Kingdom and the world, are demanding a cleaner, greener and more inclusive future, and we owe it to them to deliver on this.”

The SGI Forum will no doubt generate more ideas, greater awareness and practical solutions in the drive towards a sustainable future in Saudi Arabia and across the world.