Egyptian businesses seek PM’s intervention to ease industrial sector woes  

Egyptian businesses seek PM’s intervention to ease industrial sector woes  
The Egyptian Businessmen Association stated that many factories have stopped operating due to the lack of the necessary production requirements. (Shutterstock)
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Updated 19 April 2022

Egyptian businesses seek PM’s intervention to ease industrial sector woes  

Egyptian businesses seek PM’s intervention to ease industrial sector woes  

RIYADH: Egypt’s business community that is grappling with multiple challenges has urged the country’s prime minister to urgently intervene to prevent a complete shutdown of the production sectors.  

In a letter written to Prime Minister Mostafa Madbouly, the Egyptian Businessmen Association stated that many factories have stopped operating due to the lack of the necessary production requirements, and are unable to pay dues.

Association members believe that the continued persistence of the present situation will lead to high inflation rates due to the imbalance between supply and demand.

Moreover, the body has called for the return of the system of collecting documents by banks for all import operations related to production requirements, industrial and agricultural.

Kamal El-Desouky, a member of the Federation of Industries and the Egyptian Businessmen Association, told Al-Arabiya there are many obstacles in moving from the payment system of shipping documents to that of documentary credits.

This decision will have large negative repercussions on the Egyptian industrial sector, he warned.

El-Desouki fears that the state's plan to increase exports to $100 billion annually will be disrupted by this decision, as the country lacks the required production and spare parts to maintain factories.


Driven by economic diversification, KSA’s construction industry leads the MENA region: JLL

Driven by economic diversification, KSA’s construction industry leads the MENA region: JLL
Updated 19 sec ago

Driven by economic diversification, KSA’s construction industry leads the MENA region: JLL

Driven by economic diversification, KSA’s construction industry leads the MENA region: JLL

RIYADH: Despite macroeconomic conditions impacting the sector globally, the construction industry in the Kingdom continues to lead the Middle East and North African region, said a recent report.
Demonstrating its commitment to driving economic diversification and transforming the Kingdom in line with its Vision 2030, the Kingdom witnessed the highest value of project awards in 2022, according to JLL’s Q4 2022 KSA Construction Market Intelligence Report.  

Construction output growth in Saudi Arabia is anticipated to rise by 3.2 percent in 2022, with a further annual average growth rate of 4 percent between 2023 to 2026 as indicated by Global Data.  

Not surprisingly, the Kingdom has maintained its position as the strongest market across the MENA region with the highest total value of project awards for four consecutive years.
As of October 2022, the Kingdom holds a 35 percent market share with a recorded $31 billion worth of contract awards against an overall MENA total of $87 billion as tracked by MEED Projects.  

Saudi Arabia’s pipeline value of unawarded (pre-execution) projects is estimated at $1.1 trillion, which includes projects from the study stage through to the main contractor bid. Approximately 70 percent comprise ‘construction’ sector projects with residential, cultural, leisure and hospitality as sub-sector leaders, which is the driving force behind the Vision 2030 strategy.
In the second half of 2022, 13,000 hotel keys are expected to be delivered in Riyadh, Jeddah, and Makkah, accentuating the continuation of the Kingdom’s hospitality sector development.  

The top 10 contractors in the Kingdom are responsible for $400 billion in projects that are currently in the execution stage, accounting for 40 percent of the total future pipeline value of $1.1 trillion.
According to MEED Projects, the total value of projects awarded in the Kingdom between 2021 and 2025 will reach $569 billion, with a total of $85 billion (15 percent) awarded to date across 2021 and 2022 (October end).  

JLL’s market intelligence data further revealed that global economic volatility in the first two quarters of 2022 created challenges in the local construction market in terms of delivery lead times and instant price increases, with suppliers reluctant to guarantee prices for extended periods of time.  

“Given the volatile market conditions and rising construction material prices, which reached a significant peak during the second quarter of this year, there is a need for robust mitigation strategies,” said Laura Morgan, market intelligence lead MEA at JLL.  

She added: “Moving forward, the construction sector will prioritize development needs that are aligned with evolving trends and demands, with an emphasis on innovation and digitization playing a significant role within the segment and in powering Vision 2030 projects.”


GCC region has over 170K hotel rooms under development: Report 

GCC region has over 170K hotel rooms under development: Report 
Updated 07 December 2022

GCC region has over 170K hotel rooms under development: Report 

GCC region has over 170K hotel rooms under development: Report 

RIYADH: Gulf Cooperation Council countries have over 170,000 hotel rooms under active development, equivalent to 40 percent of the region’s existing inventory, according to research by hotel market intelligence company STR. 

The development figure is almost four times greater than the rest of the world, which currently lags at an average of 11 percent more being created compared with existing supply. 

Danielle Curtis, exhibition director of Arabian Travel Market, the firm that commissioned the research, said: “Between Expo 2020, the 2022 FIFA World Cup, and Saudi Arabia’s ambitious Vision 2030 strategy, the GCC’s hospitality sector development pipeline remains robust in contrast to global hotel development, which is slowing, due to weak economic growth forecasts. 

“While the hospitality sector’s growth does highlight the region’s increasing popularity on the global stage, it is also indicative of regional government strategy to diversify gross domestic product growth away from hydrocarbons into tourism, which will help to drive demand still further, over the coming years.” 

The STR report estimates there are 135,560 existing rooms in Saudi Arabia with an active pipeline of 82,639 rooms, making a total room inventory projected for 2030 at over 218,000. Similarly, for the UAE, there are more than 202,000 existing rooms with an active pipeline of 48,910 rooms, leading to a combined total of almost 251,000 rooms by 2030. 

The UAE’s historic occupancy performance defines what the region can expect as new rooms enter the market. Rooms supply increased by more than 70,000 rooms between 2010 and 2019, a staggering 68 percent increase or about 6 percent average annual growth. 

“With such levels of investment and development, we are expecting a marked increase in the number of GCC participants at ATM 2023, including inbound tour operators and travel agents from across the globe, as the region continues to attract growing numbers of tourists, for whom environmentally friendly and sustainable development will be critical,” added Curtis. 

ATM, the leading Middle East travel and tourism event for international inbound and outbound tourism professionals, takes place at the Dubai World Trade Centre on May 1-4 2023 under the official theme of ‘Working Toward Net-Zero.’


Metaverse to contribute $7.6bn to Saudi economy by 2030: report  

Metaverse to contribute $7.6bn to Saudi economy by 2030: report  
Updated 07 December 2022

Metaverse to contribute $7.6bn to Saudi economy by 2030: report  

Metaverse to contribute $7.6bn to Saudi economy by 2030: report  

RIYADH: The potential contribution of the metaverse to Saudi Arabia’s economy could be around $7.6 billion annually by 2030, as the Kingdom steadily diversifies its economy in line with its goals outlined in Vision 2030, according to a new analysis.  

Released by Strategy& Middle East, a part of the PwC network, the report noted that besides the Kingdom, the 3D-rendered internet business in the UAE could contribute approximately $3.3 billion to its economy by the end of this decade.  

Moreover, the emerging technology’s contribution to Qatar and Kuwait is expected to hit around $1.6 billion and $1 billion, respectively, by 2030.  

“The potential contribution of the metaverse to Gulf Cooperation Council economies could be around $15 billion annually by 2030, of which $7.6 billion would be in Saudi Arabia and $3.3 billion in the UAE,” said Strategy& Middle East in its report.  

The metaverse could contribute $800 million to Kuwait’s economy, while Bahrain’s share will be around $400 billion.  

The report further noted that the metaverse is still developing, and organizations in the GCC region should act appropriately and seize the opportunity to reap the maximum from this emerging technology.  

“The projections assessed growth in the component technologies, platforms, hardware, and software, as well as the economic contribution of new metaverse applications such as content creation, shopping, and so on,” said Tony G Karam, partner, Strategy& Middle East.  

The report also identified travel and tourism as the sector with the potential to reap the greatest economic gain from the metaverse, estimated at $3.2 billion.  

Saudi Arabia’s $500 billion megacity NEOM’s digital subsidiary has created a metaverse that allows people to be present in the virtual city and enjoy the experience as an avatar or a hologram.  

“There could be metaverse tours of AlUla, Saudi Arabia’s first UNESCO World Heritage Site, or fashion festivals, spas, wellness retreats, and entertainment and sports events. Metaverse visits would inspire in-person travel. Later, travelers could return through the metaverse to relive their experiences,” said Jad N Baroudi, principal, Strategy& Middle East. 

Earlier in October, Fares Akkad, regional director for Meta in the Middle East and North Africa, told Asharq Business that the metaverse is predicted to add $360 billion to the economy in the MENA and Turkiye over the next 10 years.  

In July, Dubai formally announced its Metaverse strategy would help it become a leading metaverse economy. The strategy aims to add $4 billion to the nation’s economy and create 40,000 new jobs in the next five years.  

The UAE has also established the Middle East’s first metaverse incubator 8 to develop early-stage metaverse and Web3 applications. 


Oil Updates — Crude up; China’s crude oil imports hit 10-month high

Oil Updates — Crude up; China’s crude oil imports hit 10-month high
Updated 07 December 2022

Oil Updates — Crude up; China’s crude oil imports hit 10-month high

Oil Updates — Crude up; China’s crude oil imports hit 10-month high

RIYADH: Oil futures edged slightly higher on Wednesday on hopes for improved Chinese demand while uncertainty about how a Western cap on Russian oil prices would play out kept markets on edge after a sharp fall the previous session. 

Brent crude futures gained 13 cents, or 0.16 percent, at 0416 GMT to $79.48 a barrel after they fell below $80 for the second time in 2022 during the previous trading session. 

US crude futures clawed back earlier losses and were steady from the previous close at $74.25 a barrel. 

China November crude oil imports hit 10-mth high 

China’s crude oil imports in November rose 12 percent from a year earlier to their highest in 10 months, data showed on Wednesday, as companies replenished stocks with cheaper oil and new plants started up. 

The world’s largest crude importer brought in 46.74 million tons of crude oil last month, equivalent to 11.37 million barrels per day, according to data from the General Administration of Customs. 

That was up from 10.16 million bpd in October and 10.17 million bpd in November 2021. 

Chinese state refiners stepped up purchases of US crude oil, taking advantage of arbitrage opportunities, while maintaining high imports of Russian oil ahead of the Dec. 5 European embargo and imposition of an oil price cap. 

Independent traders last month also moved a record amount of deeply discounted Iranian crude passed off as oil sourced from Malaysia, Oman or elsewhere in the refining hub of Shandong province, according to tanker tracker Vortexa Analytics. 

The higher imports resulted in a crude oil stock build of 41 million barrels over the month, Vortexa estimated. 

Imports for the first 11 months of the year totaled 460.26 million tons, or about 10.06 bpd, down 1.4 percent from last year’s corresponding period. 

Wednesday’s data also showed fuel exports reached 6.144 million tons, the highest since June 2021 and up from 4.456 million tons in October, reflecting Beijing’s additional release of quotas. 

Year-to-date exports, at 46 million tons, remained 19 percent below year-ago levels due to a broad curb on fuel exports earlier in the year. 

Turkish straits tanker delays not due to Russia oil price cap: official 

Disruptions in tanker traffic from Russia’s Black Sea ports to the Mediterranean result from a new Turkish insurance rule, not the price cap on Russian oil agreed by a coalition of Group of Seven countries and Australia, an official with the group said on Tuesday. 

Of the 20 loaded crude oil tankers facing delays in the region, all but one appear to be carrying Kazakh — not Russian — origin oil and would not be subject to the price cap “under any scenario,” the official said. 

“There should be no change in the status of their insurance from Kazakh shipments in previous weeks or months,” the official added. 

Markets are closely watching the impact of a G7-led price cap on Russian seaborne oil that took effect on Monday, but G7 officials say the measure did not cause the backup in Turkiye’s Bosphorus and Dardanelles straits into the Mediterranean. 

 “The price cap policy does not require ships to seek unique insurance guarantees for each individual voyage, as required under Turkiye’s rule,” the official said. “These disruptions are the result of Turkiye’s rule, not the price cap policy.” 

(With input from Reuters)  


Closing Bell: TASI recovers from surging volatility to close at 10,444 points 

Closing Bell: TASI recovers from surging volatility to close at 10,444 points 
Updated 06 December 2022

Closing Bell: TASI recovers from surging volatility to close at 10,444 points 

Closing Bell: TASI recovers from surging volatility to close at 10,444 points 

RIYADH: Saudi Arabia’s benchmark index recovered on Tuesday after registering a massive fall on Monday, signaling the surging volatility in the market. 

The Tadawul All Share Index on Tuesday gained 25 points to close at 10,444.27 points after touching a low of 10,282.81 at 10:31 a.m. Saudi time. The recovery came close on the heels of the 304 points crash the bourse witnessed on Monday. 

The parallel market Nomu, however, could not match the pace with the TASI momentum and fell nearly 291 points to close at 18,506.03. 

The advance-decline ratio was pegged positively, with 109 stocks of the listed 219 heading north and 91 turning south. The total trading turnover was SR4.96 billion ($1.32 billion). 

According to market sources, investors were pessimistic about the Saudi market as they expected the earnings might not meet the historical growth it booked. 

The Saudi market is trading at a price-earnings ratio of 13.2x, which is relatively lower than its three-year average PE of 25.8x. 

On Tuesday, financial market tracker Argaam reported that shares of 39 Saudi-listed firms, including Saudi Telecom Co., Al Rajhi Bank and units of two real estate investment trust funds, hit their lowest levels in 52 weeks on Tuesday. 

The stocks that fell the most during this period included United Cooperative Assurance Co., which declined by 78 percent to SR7.6 and CHUBB Arabia Cooperative Insurance Co. by 58 percent to SR15.32. 

Other stocks included Malath Cooperative Insurance Co., which fell by 57 percent to SR10.88, Tabuk Agricultural Development Co. declined by 51 percent to SR51.3, while Red Sea International Co. dropped by 48 percent to SR23.18. 

On a positive note, however, information and communications technology firm Perfect Presentation for Commercial Services Co. on Tuesday announced a cash dividend of SR0.7 for the third quarter of the fiscal year, distributing a total of SR10.5 million. The company’s share closed 1.42 percent higher at SR156.70. 

The National Agricultural Development Co. also disclosed the launch of its strategic plan to the exchange, including expanding its leadership in dairy, juice, food, and agricultural products across new markets. The share price of the company tipped lower to touch SR22.76. 

The Saudi Exchange also celebrated the listing of AlRajhi Bank Tier 1 Sukuk. AlRajhi Bank is one of the world’s largest Islamic banks by market cap, with a strong presence in the Kingdom. 

“The addition of AlRajhi Bank Sukuk to the Saudi Exchange is another step toward diversifying the products available to local, regional and international investors, in line with our commitment to Vision 2030 and its Financial Sector Development Program,” said Mohammed Al-Rumaih, CEO of Saudi Exchange.