Chinese industrial profits surge; mixed signals from Western Europe's consumers: Economic wrap

Chinese industrial profits surge; mixed signals from Western Europe's consumers: Economic wrap
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Updated 27 October 2021

Chinese industrial profits surge; mixed signals from Western Europe's consumers: Economic wrap

Chinese industrial profits surge; mixed signals from Western Europe's consumers: Economic wrap
  • Compared to January, profits in the coal mining and washing industries surged by 172.2 percent in September

The industrial sector’s profits in China saw a year-on-year jump of 16.3 percent in September to reach CNY738.74 billion ($115.5 billion), official data revealed. This is higher than last month’s gain of 10.1 percent.

While the sector faced rising prices and disruptions in the supply chain, mining and raw materials industries still grew at significantly high rates, pushing the entire sector’s profits up. 

Compared to January, profits in the coal mining and washing industries surged by 172.2 percent in September while profits of the fuel processing industry soared by 930 percent over the same period. On the other hand, power firms experienced a decline in profits, falling by 24.6 percent.

Consumer Confidence in Western Europe

France’s official statistics agency said that consumer confidence declined to 99 points in October, down from 101 points in September. It was below the long-term average of 100. 

Households were mainly worried about the impact of increasing prices on their ability to save in the future. They also seemed to have a negative outlook for their future financial situation and standard of living.

Germany's GfK consumer climate index unexpectedly jumped to 0.9 heading into November 2021. This is the highest level since April 2020. However, rising prices could pose risks to consumer confidence if they were to persist.

The GFK Group added that Germans seem to make more purchases now in a bid to avoid surging prices in the future.

Australia’s Inflation Rate 

Year-on-year inflation rate in Australia was down to 3 percent in the third quarter of 2021 from a 12.5-year high of 3.8 percent in the previous quarter, official data showed. 

Transportation costs slowed to 10.4 percent in 3Q of this year compared to 10.7 percent in the previous quarter. Similarly, price inflation for tobacco and alcohol products reached 4.4 percent, falling from the previous period’s 6.7 percent rise.

Turkey’s trade deficit and economic confidence

The trade deficit in Turkey sharply narrowed to $2.55 billion in September, down from a deficit of $4.86 billion in the same month last year, Turkish Statistical Institute said.

Exports jumped by a significant 30 percent year-on-year in September to reach $20.8 billion. Exports for manufactured products rose by 29.7 percent while sales of mining and quarrying activities leaped by 38.8 percent.

Meanwhile, imports rose by a lower 11.9 percent to be valued at $23.3 billion in September. This was mainly driven by a rise in purchases of intermediate goods, which increased by a 16.5 percent annual rate.

Turkey’s economic confidence index lowered to 101.4 in October. This is a 1 percent decrease from September’s reading of 102.4, the highest since April of 2018. 

Consumers and manufacturers’ sentiment got more pessimistic but service providers, retailers and constructors had a more favorable outlook. 

France’s producer prices

Industrial producer prices in France increased by 1.7 percent month-on-month in September, up from August’s 1 percent rise, official data showed.

Sources of inflationary pressures included rises in mining and quarrying activities prices as well as hikes in the costs of utilities.

In addition, producer prices rose annually by 11.6 percent in September compared to the same month in 2020. 

Indonesia’s FDI

Indonesia's foreign direct investment inflows fell by 2.7 percent on an annual basis to IDR 103.2 trillion ($7.3 billion) in the third quarter of 2021, official data revealed. This is a sharp decline when compared to the previous quarter’s 19.6 percent gain. Also, this was the first decrease since the second quarter of 2020.


US investment bank Moelis to open Riyadh office, hire Saudis

US investment bank Moelis to open Riyadh office, hire Saudis
Updated 26 November 2021

US investment bank Moelis to open Riyadh office, hire Saudis

US investment bank Moelis to open Riyadh office, hire Saudis

RIYADH: US investment bank Moelis & Co. plans to open an office in the Saudi capital Riyadh and will soon begin hiring staff in the Kingdom, Bloomberg reported.

The New York-based company sees the Kingdom attracting more foreign investors and benefiting from an “energy supercycle,” Vice Chairman Eric Cantor said in an interview.

The boutique financial adviser, founded by Wall Street veteran Ken Moelis, wants to do more deals in the region as the world’s biggest oil exporter prepares for as many as 160 privatizations in 2022, as well as a flood of initial public offerings to the Kingdom’s stock market.

“We are waiting for a final stamp on our license,” Cantor said. “It’s forthcoming and part of that is hiring Saudis,” he said, without saying how many people the bank wants to employ.

Moelis has its main office for the Middle East in Dubai. The move to open one in Riyadh comes as Saudi Arabia pushes international firms to relocate their regional headquarters there.

 


Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO
Updated 26 November 2021

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

RIYADH: Oil demand will return to 2019 levels by the end of 2022, despite some delays in projects due to repercussions from the pandemic, Baker Hughes CEO Lorenzo Simonelli told Al-Arabiya.

National oil companies in the Middle East have been preparing for the increased demand, while international oil companies, especially those in North America, have been maintaining financial discipline in returning funds to shareholders, he said.

However, some independent oil companies have already begun to increase their capital spending, he said.

Currently, Baker Hughes sees an improvement in oil and gas services activity, not only in North America, but also in international basins with low costs, he said.

When it comes to developing its products, Baker Hughes always takes into account carbon emissions and the Texas-based energy services company is trying to shift its sources in its manufacturing operations to renewables and has contracted with suppliers, Simonelli said.

The company pledged to reduce carbon emissions of the first and second scope by 50 percent by 2030, and to zero by 2050, Simonelli said. The company is now concerned with dealing with third scope emissions, he said.

 


Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 

Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 
Updated 26 November 2021

Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 

Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 

RIYADH: Venture capital impact investment in Saudi Arabia reached a new high in 2021 in both total number of transactions and capital deployed, according to a report produced by MAGNiTT and Saudi Aramco.

Impact investments are those aimed at generating a measurable social and environmental benefit alongside a financial return. 

Impact funding in the Kingdom up to the third quarter of 2021 was 130 percent higher than in 2020 in terms of funding, and 21 percent higher in transactions.

Some $444 million were invested through 403 deals with impact-driven startups across the Middle East and North Africa between 2016 and the third quarter of 2021, according to the report.

Of those deals, 20 percent involved Saudi-based firms.

Flat6Labs was the leading impact investor in startups based in the MENA region with 45 transactions between 2016 and the third quarter of this year to date. 

The Saudi Aramco Entrepreneurship Center, 500 Startups, the King Abdullah University of Science and Technology Innovation Fund, Oasis 500 and Falak Startups invested in 12 or more funding rounds raised by impact-driven startups in MENA.

The education and healthcare technology sectors accounted for the highest share in total impact VC deals, collectively registering 40 percent of all transactions in MENA from 2016 to the third quarter of this year to date.

The energy sector played a key role in impact investments across MENA, with 95 percent of all funding going to startups within the impact ecosystem.

 


Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap

Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap
Updated 26 November 2021

Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap

Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap

Bitcoin led a rout in cryptocurrencies on Friday as investors fled assets considered riskier, including stocks and commodities, and headed for the refuge of government bonds, the Japanese yen and the US dollar.

Concerns over a new COVID-19 variant that may evade vaccines and spread more quickly than previous mutations were seen as responsible for the movements.

Bitcoin, the largest digital currency, fell as much as 9.2 percent to $53,551, its lowest since Oct. 10. That would be Bitcoin’s biggest one-day decline since Sept. 20, leaving it more than one-fifth lower since hitting a record high of nearly $70,000 earlier in November.

The second-largest cryptocurrency, Ether, fell over 13 percent to its lowest in a month, trading at $3,924, down almost 20 percent from its record high, hit on Nov. 10.

A number of European and Asian nations have suspended travel to and from southern Africa after a potentially more deadly COVID-19 variant emerged in Botswana and South Africa. The variant has so many mutations that current vaccines may not be effective against it, according to scientists.

“The spread of (the variant), especially to other countries, could wither investor appetite further,” said Yuya Hasegawa at Tokyo-based exchange Bitbank. “BTC's upside will likely be limited and the market should brace for further loss.”

While cryptocurrencies wobbled, a plot of land in Axie Infinity, an animated, metaverse pet-training game, sold for $2.5 million on Thursday, according to a tweet on the game’s Twitter account.

The sale, for 550 ether, was the highest for a single plot of virtual land, according to the tweet. The transaction was for a section of Genesis land, one of several types available in the game.

A larger sale of virtual real estate took place on Monday in Decentraland. In that transaction, 618,000 MANA, worth about $3.2 million at the time, bought 116 land parcels, according to Tokens.com, whose Metaverse Group subsidiary made the purchase.

Interest in the metaverse has surged in recent months, spurred by Facebook, which changed its name to Meta in October in a sign of its increasing focus on the sector.

Revenue from virtual gaming worlds could grow to $400 billion in 2025, from $180 billion in 2020, Grayscale Investments said on Thursday. The overwhelming majority of that $400 billion will be in-game spending, compared to spending on premium games, the company said.

Grayscale defined the metaverse as “interconnected, experiential, 3D virtual worlds where people located anywhere can socialize in real-time to form a persistent, user-owned, internet economy spanning the digital and physical worlds.”


Anghami to complete US merger ‘soon,’ CEO says

Anghami to complete US merger ‘soon,’ CEO says
Updated 26 November 2021

Anghami to complete US merger ‘soon,’ CEO says

Anghami to complete US merger ‘soon,’ CEO says
  • Maroun said the company’s priority is growth not profitability as it seeks to increase its market share from 6 percent

RIYADH: Lebanon’s Anghami, known as the Spotify of the Arab world, will not postpone its merger with the blank-check company Vistas Media in a potential $90 million deal, according to the firm’s CEO.

Eddie Maroun said the agreement had suffered a delay due to the procedures of the Securities and Exchange Commission in the US, but the deal will still go ahead.

The process is currently in its final stages, and the implementation will be announced very soon, he told Al-Arabiya on Thursday.

Maroun said the company’s priority is growth not profitability as it seeks to increase its market share from 6 percent.

He expects Anghami to achieve profitability within three years, he added.

Subscriptions represent 80 percent of the company’s revenue with the rest coming from advertising, Maround said.

Founded in 2012 in Lebanon, Anghami is the first legal music streaming platform in the Middle East and North Africa region.