Saudi industrial production up; Egyptian inflation rises: Economy wrap

Saudi industrial production up; Egyptian inflation rises: Economy wrap
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Updated 10 October 2021

Saudi industrial production up; Egyptian inflation rises: Economy wrap

Saudi industrial production up; Egyptian inflation rises: Economy wrap

CAIRO/RIYADH: Mining and quarrying activity (which includes oil activity) continued to be a key driver for the growth in the Saudi Industrial Production Index (IPI), which grew annually by 5.8 percent in August. 

The sector's growth  increased by 6.5 percent YoY in August, according to data published by GASTAT.

Non-oil manufacturing also exhibited a notable growth of 5 percent in August while electricity and gas supply activity declined annually by 4 percent. However, electricity and gas supply activities hold only a 2.9 percent weight in the index, making its variations less influential on the index's overall value.

Month-on-month the IPI also rose by 3.6 percent in August propelled by a significant 13 percent growth in non-oil manufacturing activity.

Egyptian urban inflation

Egyptian cities’ yearly inflation rate reached 6.6 percent in September compared to 5.7 percent in August, data from CAPMAS revealed. This is a noticeable increase from the rate recorded in April, when it stood at just 4.1 percent.

The price increase was mainly driven by sharp hikes in food prices. in particular, the price of vegetables (across the whole republic) jumped by a pronounced 38.1 percent YoY in September.

Month-on-month inflation rate for the entire country also jumped from a negative 0.1 percent in August to a positive 1.6 percent in September.

However, the annual urban inflation rate is still within the Egyptian central bank’s target range of 5-9 percent. The monetary policy committee is expected to meet on October 28 to decide interest rates.

Omani budget deficit narrows
The Sultanate’s budget deficit fell from OR1.96 billion in August last year to OR1.05 billion in August, mirroring a dramatic 46.2 percent decline in the deficit. This was mainly due to a considerable growth in revenues driven by increases in oil and gas prices, the Omani Ministry of Finance reported.

Revenues increased by almost 14 percent year-on-year as the average oil price jumped to $55.6 in August from the $50 recorded in the same month last year. Expenditures also decreased by 1.7 percent contributing to the fall in the country’s deficit.

As a result of these developments, S&P has decided to revise its outlook for the country from stable to positive, and they expect Oman’s fiscal deficit to slide sharply as a share of GDP; a drop from 15.3 percent in 2020 to 4.2 percent in 2021.

Tunisian banks at risk
Tunis’ 10 biggest banks experienced significantly higher profits in the first half of 2021 as their net aggregated income grew annually by 37 percent.

However, Fitch Ratings agency has said that this masks the various risk factors which could hamper the sector. These include an unstable political environment, the expiry of debt relief measures and the transition to IFRS 9 accounting.

The agency expected the country’s GDP to increase only by 3.4 percent in 2021, compared to the huge decline it faced last year when it contracted by 9.3 percent. In addition, the banks’ assets quality is quickly deteriorating as the NPL ratio reached 11 percent in H1 2021. Fitch also added that “capital buffers could prove insufficient in a severe stress scenario, which cannot be ruled out.”

Global taxes for corporates

A minimum tax rate of 15 percent for corporations has been agreed upon by 136 countries. Consequently, countries’ tax revenues will see a surge of $150 billion annually, the OECD said.
However, this tax rate is below the average 23.5 percent rate levied by industrialized countries.

Jobless claims in the U.S.

The US job market and economy continue to show positive signs of recovery from last year’s coronavirus recession as the number of Americans applying for unemployment benefits fell last week, dropping by 38,000 to 326,000. This is the first drop in four weeks, according to data published by the Department of Labor.

Turkish Lira

The Turkish currency’s exchange rate has fallen to an all-time low, as it reached 8.9750 TL per dollar on Friday. This was partly due to worries about the course of the country’s monetary policy.


Profits of SABIC Agri-Nutrients jump over 300% to $1.2bn

Profits of SABIC Agri-Nutrients jump over 300% to $1.2bn
Updated 12 sec ago

Profits of SABIC Agri-Nutrients jump over 300% to $1.2bn

Profits of SABIC Agri-Nutrients jump over 300% to $1.2bn

RIYADH: Saudi Arabian petrochemical firm SABIC Agri-Nutrients Co. has seen a nearly fourfold jump in its profits in 2021, buoyed by an increase in selling prices.

Amid global economic recovery in 2021, net profit soared to SR5.23 billion ($1.2 billion), compared to SR1.29 billion a year earlier, according to a bourse filing.

Revenues almost tripled, reaching SR9.59 billion, and the profit per share was up from SR3 to SR11.

The company, half-owned by SABIC, attributed the profit hike to higher selling prices of products.

However, profits were capped by an increase in inventory as well as general and administrative expenses, the firm said in a statement to the Saudi exchange, Tadawul.

The homegrown fertilizer producer earlier said it plans to take over 49 percent of Dubai-based ETG Inputs Holdco’s share capital amid a SR1.2 billion deal. 

 


Saudi stocks end flat amid earnings season, crude oil rally: Closing bell

Saudi stocks end flat amid earnings season, crude oil rally: Closing bell
Getty Images
Updated 27 min 29 sec ago

Saudi stocks end flat amid earnings season, crude oil rally: Closing bell

Saudi stocks end flat amid earnings season, crude oil rally: Closing bell

RIYADH: Saudi Arabia’s stock market was flat at the closing bell on Thursday, as investors saw a wave of earnings announcements lead to cautious trading, despite a rally in the energy market.

Brent crude oil crossed $90 per barrel, and US benchmark WTI crude oil reached $88.3 per barrel as of 3:48 p.m. Saudi time.

The main TASI index closed at 12,179 points, while the parallel market, Nomu, ended at 25,660 points.

TASI was pushed higher by gains in Saudi Kayan Petrochemical Co. but weighed down by National Petrochemical Co., known as Petrochem, and the Saudi Industrial Investment Group, even as all three firms reported earnings.

Saudi Kayan saw its share price soar over 2 percent, after it turned from losses into profits of SR2.39 billion ($640 million) in 2021.

Shares in Petrochem and the Saudi Industrial Investment Group were down 1.2 and 0.9 percent respectively, despite seeing major profit hikes on an annual basis.

The Kingdom’s largest valued bank, Al Rajhi Bank, and one of its leading petrochemical firms, Sipchem, were down 0.7 and 2.9, respectively.

Saudi Automotive Services Co., known as SASCO, soared nearly 10 percent, topping the gainers for a second consecutive day.

SASCO had earlier acquired 80 percent of gas station operator NAFT Services Limited Co. for SR1.1 billion.

Allied Cooperative Insurance Group led the fallers, with its shares declining almost 4 percent.


Rising costs, pandemic curbs take a bite out of McDonald’s profit

Rising costs, pandemic curbs take a bite out of McDonald’s profit
Image: Shutterstock
Updated 35 min 28 sec ago

Rising costs, pandemic curbs take a bite out of McDonald’s profit

Rising costs, pandemic curbs take a bite out of McDonald’s profit
  • Sales rise in Italy, Germany, France, the US and the UK boosted total revenue by 13 percent to $6.01 billion in the three months ended Dec. 31

McDonald’s Corp. missed revenue and profit expectations on Thursday, as higher costs and dismal sales in its over 4,500 restaurants in Australia and China due to pandemic-led curbs ate into gains from growth in the United States in the fourth quarter.


Operating costs rose 14 percent to $3.61 billion as supply chain bottlenecks led the world’s largest burger chain to spend more for ingredients such as chicken and beef, as well as packaging material, while it also raised wages in the United States.


Shares fell nearly 3 percent as sales in China contracted after some cities banned dining in restaurants to control fresh outbreaks ahead of the Winter Olympics. In Australia, sales growth remained muted compared to a year earlier.


“COVID-19 continued to result in varying levels of government restrictions on restaurant operating hours, limited dine-in capacity and, in some cases, dining room closures,” McDonald’s said.


Sales rise in Italy, Germany, France, the US and the UK boosted total revenue by 13 percent to $6.01 billion in the three months ended Dec. 31, but still the company missed market expectation of $6.03 billion, according to Refinitiv data.


Meanwhile, expenses for the burger chain that has more than 40,000 restaurants in over 100 countries have been rising. While McDonald’s had raised prices in 2021, higher costs continue to weigh on profit as it was forced to increase wages to retain workers in the United States, its largest market.


On a per share basis, McDonald’s earned $2.23, but missed analysts’ average estimate of $2.34.


Its US same-store sales increased 7.5 percent compared to analysts’ estimate of a 6.8 percent rise, thanks to the launch of special menu items such as McRib, loyalty program-driven growth in digital sales and higher prices.


Global same-store sales jumped 12.3 percent, compared with Wall Street estimates of a 10.73 percent rise. 


UAE’S First Abu Dhabi Bank books profits of $3.4bn

UAE’S First Abu Dhabi Bank books profits of $3.4bn
Image: Shutterstock
Updated 27 January 2022

UAE’S First Abu Dhabi Bank books profits of $3.4bn

UAE’S First Abu Dhabi Bank books profits of $3.4bn
  • The outstanding performance reflects indicators of economic recovery and positive momentum for the bank's core business

RIYADH: Largest bank in the UAE, First Abu Dhabi Bank announced its financial results of the last fiscal year with profits of 12.5 billion dirhams ($3.4 billion).

This figure compares to 10.6 billion dirhams in 2020, representing a 19 percent increase, according to a statement.

The outstanding performance reflects indicators of economic recovery and positive momentum for the bank's core business, the statement revealed.

Moreover, the group’s revenue saw a 17 percent surge thanks to strong trading performance and growth in fee-generating business. This contributed to alleviating the repercussions of low interest rates, the statement said.

Operational costs rose when compared to the corresponding period in 2020. This comes as a result of the persisting investments in digital and strategic initiatives as well as taking into consideration Egypt’s Bank Audi business.

Asset quality maintained adequate rates thanks to the proper management of risks and stimulus measures. These were within the framework of the comprehensive economic support plan tailored for the country’s central bank.

The group also maintained strong levels of liquidity, financing, and capital altogether.

Founded in 2017, FAB provides financial solutions, products, and services through its corporate and investment banking and personal banking franchises. 


Gold’s Gym Saudi Arabia jumps into the Kingdom’s IPO market  

Gold’s Gym Saudi Arabia jumps into the Kingdom’s IPO market  
Image: Shutterstock
Updated 27 January 2022

Gold’s Gym Saudi Arabia jumps into the Kingdom’s IPO market  

Gold’s Gym Saudi Arabia jumps into the Kingdom’s IPO market  

RIYADH: A leading fitness player in the Kingdom and globally, Gold’s Gym Saudi Arabia, has appointed a financial advisor amid plans to list on Saudi Exchange’s parallel market, Nomu.

To manage and lead the initial public offering, the fitness club selected BMG Financial Group, according to a statement by BMG.

US-based Gold’s Gym has several branches across Saudi Arabia, which are all owned by Jeddah's Batterjee Holding Co.