US Fed Reserves eases net assets purchases as economic indicators improve: Economic wrap

US Fed Reserves eases net assets purchases as economic indicators improve: Economic wrap
United States Federal Reserve building
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Updated 04 November 2021

US Fed Reserves eases net assets purchases as economic indicators improve: Economic wrap

US Fed Reserves eases net assets purchases as economic indicators improve: Economic wrap

In a sign of easing pandemic-related support, the Federal Reserve decided to reduce the monthly pace of its net asset purchases, the Federal Open Market Committee (FOMC) said in a note issued on Wednesday. 

The Fed will now purchase $10 billion less of Treasury securities each month. It will also reduce its monthly purchases of agency mortgage-backed securities by $5 billion.

This comes at a time when economic indicators and employment levels continue to improve following strong vaccination rollouts and considerable policy support.

The committee also added that similar drops in the pace of net purchases are likely to take place in the future but remains open to different possibilities in case the economic outlook changes.

The Federal Reserve also decided to keep its interest rate on hold at 0.25 percent as the labor market continues to recover. Employment remains below maximum levels, meaning that interest rate hikes will have to wait, Jerome Powell, Head of the Federal Reserve, said.

However, the labor market could reach full employment by the second half of next year if it continues the current trend of growth.

Japan’s private sector

The private sector in Japan witnessed its first growth in six months as its Purchasing Managers’ Index (PMI) surged to 50.7 in October, up from 47.9 in September.

The services activity also underwent its first expansion since January 2020. Manufacturers also rebounded from the fall experienced a month earlier.

Employment also jumped for the ninth consecutive month, the highest growth in jobs since April 2019.

Russia's inflation up 

Russia's year-on-year inflation rate recorded 8.1 percent in October, which is higher than previous month’s rate of 7.4 percent, Russia’s Federal State Statistics Service said. This was the highest rise in consumer prices since January 2016.

Food prices were the main contributor to the mounting inflationary pressures, rising by a yearly rate of 10.9 percent.

On a monthly basis, the inflation rate reached the highest level since March 2015, recording a 1.1 percent rate in October.   

Trade surpluses

Brazil's trade surplus shrank to $2 billion in October, down from $4.4 in the same month a year earlier, official data revealed.

Exports rose annually by 27.6 percent to reach $22.5 billion in October. This was mainly driven by larger outbound shipments of mining goods and manufactured products, where they increased by 40.5 percent and 24.4 percent respectively.

Meanwhile, imports grew by a faster rate of 54.9 percent to $20.5 billion. Purchases of mining goods skyrocketed by 141.7 percent and imports of manufactured products surged by 51.4 percent.

Moreover, Australia's trade surplus signalled a decline in September, falling to AUD12.2 billion ($9.1 billion) from a record high of AUD14.7 billion ($11 billion) in the previous month, the Australian Bureau of Statistics said. 

Exports dropped 6 percent on a monthly basis to a three-month low of AUD45 billion ($33.4 billion) due to weaker foreign demand as more countries grapple with rising infections of the Delta strain. 

Imports also declined, albeit at a marginal rate of 1 percent, to reach AUD32.7 billion ($24.3 billion). 

Looking at the first nine months of 2021, the trade surplus jumped considerably to AUD97.4 billion ($72.4 billion), growing by 83.2 percent compared to the same period of 2020.


Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast
Updated 20 January 2022

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

Saudi SABIC, ExxonMobil begin operations of petrochemical JV on US Gulf Coast

RIYADH: Riyadh-based Saudi Basic Industries, also known as SABIC, one of the leading petrochemical firms worldwide, announced the start of operations of its petrochemical joint venture with US ExxonMobil.

US Texas is to witness the launch of an ethylene production unit – operating an annual capacity of around 1.8 million tons, the homegrown petrochemical company said in a statement.

The new production unit, which started construction in 2019, will produce materials to be utilized in packaging, agricultural film, construction materials, clothing, and automotive coolants.

This project is in line with SABIC’s strategy, aimed at diversifying its feedstock as well as strengthening its position in North America.

“This is a remarkable achievement that positions us well to help meet growing global demand for performance products while providing meaningful investment in the US Gulf Coast,’ president of ExxonMobil Karen McKee said, commenting on the partnership.

SABIC noted that the deal’s financial impact is expected to roll out on the company’s financial statements during the ongoing quarter.

In the latest trading session, shares of the company edged down by 0.2 percent to close at SR126 ($33.6).


Mastercard, Coinbase partner to make NFTs more accessible

Mastercard, Coinbase partner to make NFTs more accessible
Updated 20 January 2022

Mastercard, Coinbase partner to make NFTs more accessible

Mastercard, Coinbase partner to make NFTs more accessible

RIYADH: Payments giant Mastercard has partnered with cryptocurrency exchange Coinbase to make non-fungible tokens more accessible.

Mastercards can be used to make purchases on Coinbase’s upcoming NFT marketplace.

“We’re excited to announce today that we’re partnering with Coinbase to let people use their Mastercard cards to make purchases on Coinbase’s upcoming NFT marketplace,” Mastercard said in a statement.

“Getting more people involved safely and securely is perhaps the best way to help the NFT market thrive.”

Mastercard also sees greater potential for core NFT technology to go beyond art and collectibles in many other areas.

Coinbase announced in October last year that it is launching an NFT marketplace.

“Coinbase NFT, as a peer-to-peer marketplace that will make minting, purchasing, showcasing and discovering NFTs easier than ever,” Coinbase said.

“We’re making NFTs more accessible by building user-friendly interfaces that put the complexity behind the scenes. We’re adding social features that open new avenues for conversation and discovery. And we’re going to grow the creator community exponentially, a win for artists and for fans.” 


Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO
Updated 20 January 2022

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

Saudi Wafrah appoints Khaled Saleh Al Amoudi as CEO

RIYADH: Saudi food firm Wafrah for Industry and Developments has appointed Khaled Saleh Al Amoudi as CEO on Thursday, according to a bourse statement. 

The decision follows recommendation from the Remuneration and Nomination Committee.

With a M.Sc.in Financial Management, Al Amoudi currently holds the chief financial officer position at the firm, with more than 20 years of accumulated experience as CFO and in the governmental and bank sectors.


Tadawul approves $755m government debt listing

Tadawul approves $755m government debt listing
Updated 20 January 2022

Tadawul approves $755m government debt listing

Tadawul approves $755m government debt listing

RIYADH: Saudi stock exchange Tadawul approved listing of SR2.83 billion ($755 million) worth of government debt instruments, submitted by the Ministry of Finance, according to a bourse filing.

The first issuance dated January 8, amounts to SR1.25 billion, Tadawul said in a statement.

The second issuance dated January 12, is valued at SR1.59 billion.


Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales
Updated 20 January 2022

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

Profits of Saudi-based SADAFCO drop 28.6% as pandemic hits sales

RIYADH: Saudia Dairy and Foodstuff Co., or SADAFCO, reported a 28.6 percent decline in profit during the nine months ending Dec. 31, 2021. 

Profits dropped to SR146 million ($38.9million), compared to SR205 million in the corresponding period a year earlier, the company announced in a bourse statement.

SADAFCO attributed the lower profit figures to lower sales volumes driven by the pandemic, an increase from 5 percent to 15 percent in VAT, and higher material and logistics costs.

The financial statements of the company indicated a healthy cash flow, with a strong cash position of SR679 million.

SADACFO’s share price edged down by 0.12 percent in today’s session to close at SR167.

Earlier, the company’s board recommended cash dividends at SR3 per share for the first half of the fiscal year ended Mar. 31, 2022.

Jeddah-based SADAFCO operates sales and distribution depots in 24 locations across Saudi Arabia, Bahrain, Qatar, Jordan, and Kuwait. Its products are also exported to several countries in the MENA region.