Chip shortages, China’s energy crisis could hamper Saudi retail sector: Al Rajhi Capital

Chip shortages, China’s energy crisis could hamper Saudi retail sector: Al Rajhi Capital
Manufacturing of microchips (Shutterstock)
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Updated 04 January 2022

Chip shortages, China’s energy crisis could hamper Saudi retail sector: Al Rajhi Capital

Chip shortages, China’s energy crisis could hamper Saudi retail sector: Al Rajhi Capital

Supply chain disruptions in chip delivery, coupled with the energy crisis in key producer China mean the Kingdom’s retailers could face lower availability of products, a Saudi investment bank said in a report.

Al Rajhi Capital explained that chip shortages will hamper the production and distribution of electronic devices. 

The lead time for the delivery of chips – which is the amount of time between order placement and delivery – rose to 21.7 weeks in September 2021, significantly up from the previous year’s average of 12.6 weeks.

The firm expects this disruption to continue through 2022, hindering Saudi retailers’ revenues due to a lower availability of products.

Apple is set to reduce its production of iPhone 13 to 80 million units in the fourth quarter of 2021, down from an earlier estimate of 90 million phones.

However, the Riyadh-based firm pointed out that, due to costlier mortgage-related payments, consumption patterns are changing in the Kingdom, with a noticeable shift towards entertainment and education, among others. 

This, in turn, could mean that consumers’ might assign a lower share of their purchases towards electronic devices.

The company projects that mortgage loan growth would outpace other consumer borrowing, resulting in a lower share of expenditures on non-essentials.

Three companies that Al Rajhi Capital says will be affected by these developments are: Al-Hokair, Jarir and Extra. 

Al-Hokair could face lower purchases of expensive clothing, as consumers shift their expenditure towards mortgages, while Jarir and Extra are expected to be impacted by lower revenues from electronics.


Commodities Update — Gold inches up; Copper hovers near 17-month low

Commodities Update — Gold inches up; Copper hovers near 17-month low
Updated 11 sec ago

Commodities Update — Gold inches up; Copper hovers near 17-month low

Commodities Update — Gold inches up; Copper hovers near 17-month low

RIYADH: Gold inched higher on Monday, as weakness in Treasury yields kept prices above the $1,800-mark and marginally outweighed pressure stemming from elevated US dollar levels.

Spot gold was up 0.1 percent at $1,811.99 per ounce, by 0319 GMT. 

US gold futures rose 0.6 percent to $1,812.10.

Silver eases

Spot silver eased 0.2 percent to $19.84 per ounce, while platinum fell 0.5 percent to $884.49. 

Palladium dropped 1.3 percent to $1,934.40.

Copper languishes near 17-month low amid slowdown fears 

Copper prices slipped on Monday to hover near a 17-month low as renewed lockdowns in top consumer China and the prospect of aggressive rate hikes stoked fears of global economic slowdown, denting demand for metals.

Three-month copper on the London Metal Exchange was down 0.3 percent at $8,027.50 a ton, as of 0404 GMT.

The most-traded August copper contract in Shanghai fell 2.1 percent to $9,153.68 a ton by the midday break.

Russian ship carrying Ukrainian grain detained by Turkey

Turkish customs authorities have detained a Russian cargo ship carrying grain which Ukraine says is stolen, Ukraine’s ambassador to Turkey said on Sunday.

Ukraine had previously asked Turkey to detain the Russian-flagged Zhibek Zholy cargo ship, according to an official and documents viewed by Reuters.

Reuters reporters saw the Zhibek Zholy ship anchored about 1 km from shore and outside of the Karasu port on Sunday, with no obvious signs of movement aboard or by other vessels nearby.

“We have full co-operation. The ship is currently standing at the entrance to the port, it has been detained by the customs authorities of Turkey,” Ambassador Vasyl Bodnar said on Ukrainian national television.

Bodnar said the ship’s fate would be decided by a meeting of investigators on Monday and that Ukraine was hoping for the confiscation of the grain.


TASI begins higher despite market fears: Opening bell

TASI begins higher despite market fears: Opening bell
Updated 04 July 2022

TASI begins higher despite market fears: Opening bell

TASI begins higher despite market fears: Opening bell

RIYADH: Saudi stocks opened higher in the early morning trading session, despite ongoing market fears of higher interest rates weighing on investors' sentiment.

The main index, TASI, gained 0.11 percent to reach 11,477, while the parallel market, Nomu, started flat at 21,082, as of 10:08 a.m. Saudi time.

This was led by a rise in the banking sector, with Al Rajhi, the Kingdom’s largest valued bank, adding 0.25 percent, and Saudi National Bank adding 0.75 percent.

Among the biggest IT companies, Elm Co. gained 0.48 percent and Al Moammar Information Systems Co. gained 0.12 percent, respectively.

Shares of Saudi Aramco, the largest player on the Saudi oil market, opened 0.52 percent lower.

Fawaz Abdulaziz Alhokair Co. led the fallers with a 3.07 percent decline, followed by Abdulmohsen Alhokair Group for Tourism and Development which fell 2.48 percent.

In the energy sector, West Texas Intermediate crude was trading at $108.56 per barrel and Brent crude was trading at $111.74 per barrel as of 10:10 a.m. Saudi time.


SABB to pay $301m in dividends for H1

SABB to pay $301m in dividends for H1
Updated 04 July 2022

SABB to pay $301m in dividends for H1

SABB to pay $301m in dividends for H1

RIYADH: Saudi British Bank, also known as SABB, has proposed a dividend of SR1.13 billion ($301 million) for the first half of 2022.

The dividend payout per share has been set at SR0.55 for over 2 billion shares eligible for dividends which will be distributed on July 27, according to a bourse filing.

SABB, which was voted the best bank in 2022, recently appointed Yasser Ali Al-Barrak as its new CEO for corporate and institutional banking.

The bank has posted a 3 percent increase in net profit to SR1 billion in the first quarter of 2022, over SR974 in the year-ago quarter.


Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday
Updated 04 July 2022

Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday

RIYADH: Saudi stocks ended their first trading session of July in red, extending losses after an 11-percent decline in June due to fears over inflation and recession.

TASI, the main benchmark index, fell 0.5 percent to 11,464 on Sunday and the parallel market, Nomu, shed 2.3 percent to 21,082.

Oman’s stock exchange declined 0.3 percent in line with Saudi Arabia.

However, the Bahraini bourse led the gains in the region as it advanced by 1.4 percent, followed by Kuwait and Qatar, up 1 and 0.7 percent, respectively.

Outside the Gulf, Egypt’s blue-chip index EGX30 lost as much as 2.4 percent.

In the oil market, Brent crude futures rose slightly to $112.16 a barrel and US West Texas Intermediate reached $108.82 a barrel by 8:59 a.m. Saudi time on Monday.

Stock news

The Saudi British Bank, or SABB, appointed Yasser Ali Al-Barrak as its new CEO for corporate and institutional banking

SABB’s board of directors proposed a dividend distribution of SR1.13 billion ($301 million) in total, or SR0.55 per share, for the first half of 2022

Al-Khaleej Training and Education Co. entered into a non-binding agreement to potentially acquire 51 percent of Al-Minhaj Private Schools Co.

Ayyan Investment Co. named Faisal Al-Qahtani chairman of the board and Abdul Aziz Al Shaikh vice-chairman

Wafrah for Industry and Development Co.’s rights issue was 78 percent subscribed, generating SR120 million in proceeds

Jahez International Co. for Information System Technology appointed Lulua Bakr to replace audit committee chairman Abdulwahab Al-Butairi following his resignation

Saudi Basic Industries Corp.'s health insurance contract with Bupa Arabia was renewed for one year starting July 4

Calendar

July 4, 2022

Launch of single-stock futures trading on Tadawul

July 7, 2022

Saudi Exchange will close for the Eid Al Adha holidays and resume trading on July 13


Dubai fintech YAP raises $41m to expand footprint, eyes Saudi market among others

Dubai fintech YAP raises $41m to expand footprint, eyes Saudi market among others
Updated 04 July 2022

Dubai fintech YAP raises $41m to expand footprint, eyes Saudi market among others

Dubai fintech YAP raises $41m to expand footprint, eyes Saudi market among others

RIYADH: The UAE’s fintech YAP, a leading digital banking platform, has raised $41 million in a funding round led by Saudi Arabia’s Aljazira Capital, Abu Dawood Group, Astra Group and Audacia Capital.

The company plans to complete series A funding by the end of the year and use the funds to expand its regional footprint, it said in a statement.

It recently partnered with Bank AlJazira to launch its consumer and business banking platforms in Saudi Arabia.

“There is incredible demand for fintech products in the region, and we are well placed to be a market leader to address these needs,” said Marwan Hachem, co-founder and group CEO of YAP, in the statement.

Marwan Hachem, co-founder and group CEO of YAP (Supplied)

The company has also received regulatory approval in Pakistan and Ghana to offer similar services and plans to soon launch in Egypt.

YAP offers users a simple interface with a complete view of consumer spending analytics and easy ways to transfer money and pay bills.

With no minimum balance required, the app also provides customers with real-time notifications of purchases, withdrawals, and transfers.

YAP’s product development pipeline includes a new multicurrency offering, products for children and households, equity trading, loans and buy-now-pay-later options through the YAP Store, the YAP Financial Marketplace, and the YAP Hub.

“The momentum and growth we have seen since our launch validate the need for the YAP platform throughout the region. We look forward to expanding into new markets and enhancing our offering in the months ahead with these investments,” Anas Zaidan, co-founder and managing director of YAP, said in the statement.

Since its launch in 2021, the platform has provided over 130,000 users with an extensive database of resources at their fingertips to become expert money managers.