Global debt down to $296tr in Q3, 2021

Global debt down to $296tr in Q3, 2021
The economic recovery helped reduce the ratio of the global debt to GDP to 350 percent in the third quarter. (Shutterstock)
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Updated 18 November 2021

Global debt down to $296tr in Q3, 2021

Global debt down to $296tr in Q3, 2021
  • This decline was mainly driven by the mature markets

RIYADH: Global debt declined to $296 trillion in the third quarter of 2021 after reaching its highest level in the previous three months, Bloomberg reported citing IIF data show.

The economic recovery helped reduce the ratio of the global debt to GDP to 350 percent in the third quarter. 

This decline was mainly driven by the mature markets, most significantly in the euro area and Japan, the IIF said.

Total debt in emerging markets rose to a record $92.5 trillion in the third quarter of the year, despite low borrowing costs and smaller budget deficits.


Schlumberger to roll out valves production line in Saudi Arabia as Aramco relationship deepens

Schlumberger to roll out valves production line in Saudi Arabia as Aramco relationship deepens
Updated 15 sec ago

Schlumberger to roll out valves production line in Saudi Arabia as Aramco relationship deepens

Schlumberger to roll out valves production line in Saudi Arabia as Aramco relationship deepens

US oilfield services company Schlumberger will open a valves production facility at King Salman Energy Park, also known as SPARK, on Jan. 31 through its subsidiary company, Cameron.

The firm already produces some of its materials in Saudi Arabia, including downhole tools, drilling chemicals, screens and valves. 

Speaking to Arab News on the sidelines of the In Kingdom Total Value Add forum held in Dhahran, Schlumberger’s managing director in Saudi Arabia, Ziad Jeha, talked up the importance of Cameron’s relationship with Saudi Aramco.

“This is again a product that is used by Saudi Aramco, namely in facilities and other process systems, and these valves range from two inch up to 42 inches and go up to 40 tons in weight,” said Jeha.

During the forum, Schlumberger was recognised as the best service provider working for Saudi Aramco.

“This is the second ‘Best iktva Overall Award’ that we have got. The first one we got was in 2017, and this a milestone that we will be very much keeping in our mind,” said Jeha.

The oil field service company is also involved in the Jafura gas field project launched by Aramco last November, located in the eastern part of the Kingdom.

Schlumberger delivered a record number of stages in December using local expertise, he said.

During the forum, Schlumberger signed an initial agreement with Aramco in regards to sustainability and reducing carbon footprint. 

The Houston-based company, announced in May 2021 its commitment to net zero by 2050.

“It is something that we are committed to and we are going to continue towards net zero by deploying new technologies, and ensuring that we contribute as part of our ESG and social responsibilities,” he said.


Oil heads for sixth weekly advance amid geopolitical tensions

Oil heads for sixth weekly advance amid geopolitical tensions
Updated 33 sec ago

Oil heads for sixth weekly advance amid geopolitical tensions

Oil heads for sixth weekly advance amid geopolitical tensions
  • Russian Foreign Minister Sergei Lavrov said on Thursday there was “little cause for optimism” following the US’s official response to Russian demands around NATO expansion.

RIYADH: Oil prices rose on Friday, headed for a sixth straight weekly advance, as geopolitical concerns centered on Russia and Ukraine raised the prospect of supply disruptions.

Brent crude gained 0.8 percent to $90.08 a barrel at 2:39 p.m. Riyadh time, after reaching a seven-year high of $91.04 on Thursday.

US benchmark WTI climbed 0.7 percent to $87.25 after reaching a seven-year high of $88.54 earlier in the trading session.

Both grades are on course for a sixth consecutive weekly gain, which would be the longest streak since October.

Russian Foreign Minister Sergei Lavrov said on Thursday there was “little cause for optimism” following the US’s official response to Russian demands around NATO expansion and European security. However, he reiterated that Russia does not want war with Ukraine.

“The risk premium on the oil price is now likely to be almost $10/bbl,” Commerzbank commodities analyst Carsten Fritsch wrote in a research note.

Price gains have been limited by the strength of the US dollar, which is on track for its biggest weekly gain in seven months as Federal Reserve Chairman Jay Powell signalled the central bank will raise interest rates as soon as March to contain inflation.

Traders remain focused on the next meeting on Feb. 2 of the Organization of the Petroleum Exporting Countries and allies led by Russia, collectively known as OPEC+, which is likely to see the group continue with its plan to add 400,000 barrels a day of supply to the market every month as it replaces pandemic-related cuts of 10 million barrels a day.

A longer-term bullish signal for oil prices came from the US on Thursday when a federal judge invalidated the results of an oil and gas lease sale in the Gulf of Mexico saying the Biden administration failed to properly account for the auction’s climate change impact.

The decision has cast uncertainty over the future of the US federal offshore drilling program. The Gulf of Mexico accounts for 15 percent of existing US oil production and 5 percent of dry natural gas output, according to the Energy Information Administration.

In a sign of growing global demand, crude oil imports by China, the world’s biggest importer of the commodity, could rebound by as much as 7 percent this year, analysts and oil company officials said.


Google to invest $1bn to push India's digitalization

Google to invest $1bn to push India's digitalization
Updated 44 min 49 sec ago

Google to invest $1bn to push India's digitalization

Google to invest $1bn to push India's digitalization

NEW DELHI: Google will invest up to $1 billion in partnership with India’s Airtel to provide affordable access to smartphones to over a billion Indians, the two companies said on Friday, according to AP.

The investment will help India’s small businesses adopt digital tools as India works to adopt digital education, payments and e-commerce amid the pandemic, Google said in a blog post.

It will also speed up the use of cloud-based computing for business. 

As part of the ‘Google for India Digitization Fund’ launched in 2020, Google will pay $700 million to acquire a 1.28 percent stake in Airtel. It is also committing up to $300 million for commercial agreements over the next five years, Airtel said in a statement.

The companies also plan to jointly develop software for 5G and other standards, it said.

Airtel is an Indian global communications solutions provider with over 480 million customers in 17 countries across South Asia and Africa.

Google’s services are accessed by over 100 million users in India. It has faced legal troubles with the Competition Commission of India which said the company has abused the dominant position of its Android system in the Smart TV market segment. 

Regulators contend that makers of Smart TVs have no alternative to Android and are therefore obliged to install Google’s apps.

Google has denied any violations, saying its licensing practices comply with the law.

— AP


End of Facebook’s cryptocurrency dreams points to challenges for stablecoins

End of Facebook’s cryptocurrency dreams points to challenges for stablecoins
Updated 28 January 2022

End of Facebook’s cryptocurrency dreams points to challenges for stablecoins

End of Facebook’s cryptocurrency dreams points to challenges for stablecoins
  • Facebook is said to be planning to sell the technical assets of Diem after facing regulatory pushback

LONDON: Facebook is said to be winding down its cryptocurrency project Diem and preparing to sell its assets following regulatory pushback in the US

The Diem Association, launched by Facebook in 2019 and supported by 25 businesses, will sell its technology to California-based Silvergate Bank for $200 million, the Wall Street Journal reported, citing people familiar with the discussions.

Originally named Libra, the crypto coin was initially planned to be backed by a basket of currencies, but under pressure from regulators narrowed its ambition to assuming the status of a stablecoin, backed one-to-one by US dollars.

Similar products already exist in the form of other stablecoins, such as Tether, Dai, Binance USD and USD Coin.

They are braced for action from regulators, who have shown an increasing interest in stablecoins and other crypto assets of late. Facebook’s failure to launch a preapproved coin does not bode well for them.

A report in November from the President’s Working Group on Financial Markets, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency called for urgent legislative action to limit the issuance of stablecoins to insured depository institutions and to enable their regulation.

They are most concerned about their ability to destabilize the financial system if there is a sudden run on withdrawals. The market for stablecoins is growing rapidly — up to nearly $130 billion as of the end of October from closer to $23 billion at the same time last year.

Stablecoins are mainly used in transactions involving other digital currencies, but they have the potential to be used in retail transactions as companies like Visa explore services relating to them.

However, there are reasons to believe stablecoins will not meet the same fate as Diem, which faced some unique challenges.

Because of Facebook’s size – it has about 2.9 billion users – it was always going to face greater scrutiny than rival products. It was liaising with regulators during a period of numerous scandals, including the Cambridge Analytica privacy row, which meant trust in the social media pioneer was historically low.

Diem hired former HSBC legal chief Stuart Levey as its first CEO and, in May last year, moved its headquarters from Switzerland to the US in an attempt to placate regulators. But the writing was on the wall when founder David Marcus left the company at the end of 2021.

However, Facebook’s parent company, Meta, has not given up all its crypto ambitions. It built a digital currency wallet, called Novi, and released it as a small pilot in October. Novi is central to its plans to pivot toward projects related to allowing its users to buy and sell non-fungible tokens, known as NFTs, which became a $40 billion market in 2021.

Don’t expect this to be the end of Meta’s crypto ambitions.

On the markets today, Bitcoin was down 0.6 percent to $36,379, while Ethereum declined 2.9 percent to $2,379.

However, outflows of $670 million of Bitcoin from centralized exchanges is a bullish sign for the largest cryptocurrency, according to CoinDesk. Most investors prefer to have direct custody of coins when they intend to hold them for the longer term, it said.


NAFT to increase to 500 gas stations in Saudi Arabia thanks to $300m Saudi Automotive Services deal

NAFT to increase to 500 gas stations in Saudi Arabia thanks to $300m Saudi Automotive Services deal
Updated 28 January 2022

NAFT to increase to 500 gas stations in Saudi Arabia thanks to $300m Saudi Automotive Services deal

NAFT to increase to 500 gas stations in Saudi Arabia thanks to $300m Saudi Automotive Services deal

RIYADH: NAFT Services will see its number of gas stations in Saudi Arabia more than double thanks to the SR1.1 billion ($293.1 million) deal with Saudi Automotive Services Co announced earlier this week.

The deal will see the automotive services firm, also known as SASCO, take an 80 percent stake in the gas station firm. 

The money will be used to expand NAFT's current network of 233 gas stations spread through the Kingdom to 500, SASCO’s Vice Chairman Sultan Al Hudaithi said in an interview with CNBC Arabia.

“We want to take advantage of this network to reach customers faster, whether individuals, companies or the government sector and to achieve synergy between benefiting from both SASCO and NAFT teams' expertises,” Al Hudaithi said.

“This is an important step to expand and shorten the time for natural growth. This acquisition enables us to rapidly spread in different regions in the Kingdom, and achieve more integration between the two companies,” he added.

Negotiations are underway with a group of local banks to finance the acquisition, and the percentage of self-financing is not determined yet, according to Al Hudaithi.

Once completed, the deal will see SASCO have a 5 percent share of the market.

The vice chairman said there will be progress in terms of services provided to the company's customers in the Kingdom.

On SASCO future performance, Al Hudaithi expected significant improvement in 2022, with Saudi recovery from the pandemic.

“With the return of schools, we expect the recovery to speed up in gas stations in general, as well as travel between cities,” he said.