Macro Snapshot — Canadian inflation surges to 31-year-high; US mortgage interest rates skyrockets

The CPI common measure, which the Bank of Canada says is the best gauge of the economy’s performance, rose to 2.8 percent from a revised 2.7 percent in February. Reuters
The CPI common measure, which the Bank of Canada says is the best gauge of the economy’s performance, rose to 2.8 percent from a revised 2.7 percent in February. Reuters
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Updated 20 April 2022

Macro Snapshot — Canadian inflation surges to 31-year-high; US mortgage interest rates skyrockets

Macro Snapshot — Canadian inflation surges to 31-year-high; US mortgage interest rates skyrockets

RIYADH: Canada’s annual inflation rate accelerated in March to 6.7 percent, a full percentage point higher than in February and well above expectations, driven by widespread price pressures, Statistics Canada data showed on Wednesday.

The rate is the highest since January 1991, when it hit 6.9 percent, and was above the Bank of Canada’s 1 percent-3 percent control range for the 12th consecutive month. Analysts surveyed by Reuters had forecast inflation would rise to 6.1 percent in March.

“Prices increased against the backdrop of sustained price pressure in Canadian housing markets, substantial supply constraints and geopolitical conflict, which has affected energy, commodity, and agriculture markets,” Statscan said.

The CPI common measure, which the Bank of Canada says is the best gauge of the economy’s performance, rose to 2.8 percent from a revised 2.7 percent in February. CPI trim was 4.7 percent and CPI median was 3.8 percent.

South Africa's annual inflation hits 5.9%

South Africa’s consumer inflation rose to 5.9 percent year on year in March from 5.7 percent in February, data from Statistics South Africa showed on Wednesday, driven mainly by fuel on the back of higher oil prices because of the war in Ukraine.

The increase in the headline number was slightly below analysts’ forecasts for 6 percent annual inflation, as food prices which have also been affected by the Russia-Ukraine conflict rose slightly less in March than in February.

March’s month-on-month consumer inflation was 1.0 percent compared with 0.6 percent in February, in line with economists’ predictions.

The March figures mean inflation remained just within the central bank’s 3 percent-6 percent target range, at a joint five-year high along with December’s reading.

Stripping out energy prices, producer prices rose 14 percent year-on-year.

Japan March exports rise 14.7% 

Japan’s exports rose 14.7 percent in March from a year earlier, Ministry of Finance data showed on Wednesday.

That was weaker than the 17.5 percent increase expected by economists in a Reuters poll, and followed growth of 19.1 percent in February.

March imports gained 31.2 percent year-on-year, versus the median estimate for a 28.9 percent increase.

The trade balance came to a deficit of 412.4 billion yen ($3.19 billion), versus a median estimate for a 100.8 billion yen deficit.

German producer prices at record high

German producer prices rose 30.9 percent on the year in March, reflecting the effects of the war in Ukraine for the first time, data from the Federal Statistics Office showed on Wednesday.

March’s figures mark six consecutive months of increasingly steeper increases, mainly due to rising energy prices, according to the statistics office.

“These results should already contain first implications deriving from Russia’s attack on Ukraine,” said the office.

The jump in factory gate costs, considered a leading indicator for consumer prices, was the biggest since records started in 1949, the statistics office said.

Producer prices registered a jump of 4.9 percent compared to the previous month.

Eurozone production rebounds as expected

Eurozone industrial production rebounded as expected in February from a January slump thanks to stronger output of consumer goods, which offset declines in the output of energy and capital goods, data showed on Wednesday.

The EU’s statistics office Eurostat said industrial output in the 19 countries sharing the euro rose 0.7 percent month-on-month for a 2.0 percent year-on-year gain, rebounding from declines of 0.7 percent for the month 1.5 percent year-on-year in January.

Economists polled by Reuters had expected the 0.7 percent monthly increase in February and had forecast a 1.5 percent annual rise.

The data comes largely from before the start of the Russian invasion of Ukraine on Feb. 24 — an event that severely shook business sentiment in March.

US mortgage interest rates 

The average interest rate on the most popular US home loan climbed to a 12-year high last week and fewer homebuyers sought properties in a sign that the Federal Reserve’s aim of cooling the housing market may be beginning to have an impact, data from the Mortgage Bankers Association showed on Wednesday.

The average contract rate on a 30-year fixed-rate mortgage increased to 5.2 percent in the week ended April 15 from 5.13 percent a week earlier, the MBA survey showed. It has risen 2 percentage points from one year ago.

The bulk of the run up, however, has occurred since the start of the year, causing the fastest climb in home-financing costs in decades as the Fed abandoned a cautious approach to raising its benchmark overnight lending rate in favor of swifter and more decisive action to bring down persistently high inflation.

China keeps lending benchmark unchanged

China kept its benchmark lending rates for corporate and household loans steady at its April fixing on Wednesday, defying expectations, as Beijing has become more cautious in rolling out easing measures to aid a slowing economy.

The one-year loan prime rate was kept at 3.7 percent, same as previously, and the five-year was unchanged at 4.6 percent.

A vast majority of the 28 traders and analysts surveyed in a snap Reuters poll this week expect a reduction this month. Among them, 11, or 39 percent of all respondents, predicted a marginal cut of 5 basis points in both rates. 

Most new and outstanding loans in China are based on the one-year LPR. The five-year rate influences the pricing of mortgages.

(With input from Reuters)


Saudi Arabia’s Kingdom Holding unveils $3.4bn investment program

Saudi Arabia’s Kingdom Holding unveils $3.4bn investment program
Updated 56 min 6 sec ago

Saudi Arabia’s Kingdom Holding unveils $3.4bn investment program

Saudi Arabia’s Kingdom Holding unveils $3.4bn investment program

RIYADH: Kingdom Holding Co.unveiled its investment program worth SR12.8 billion ($3.4 billion), according to a bourse filing.

In June, the company announced that it completed its investment program during the period between the second quarter of 2020 and Q2 2022. The program invested in companies operating in diverse sectors with a proven track-record of growth and strong financial position.

The company’s total investments amounted to SR4.33 billion in 2020, SR3.75 billion in 2021 and SR4.73 billion in 2022.

 

 

 


UAE In-Focus — SWVL announces a $20m private placement; Dubai developer plans to raise $4.6bn loan

UAE In-Focus — SWVL announces a $20m private placement; Dubai developer plans to raise $4.6bn loan
Updated 14 August 2022

UAE In-Focus — SWVL announces a $20m private placement; Dubai developer plans to raise $4.6bn loan

UAE In-Focus — SWVL announces a $20m private placement; Dubai developer plans to raise $4.6bn loan

DUBAI: SWVL, Dubai-based mobility and transport solutions provider, announced on Wednesday that it had entered into a deal with US-based institutional investors to sell and buy over 12 million shares and securities for 73.4 million dirhams ($20 million) at 6.06 dirhams a share.

The sale of securities and private placement will take place on Friday, the statement said.

It said warrants issued under Series A and Series B will expire five and two years from the date of issuance, respectively.

The company will receive additional 110 million dirhams if the warrants are exercised during this period, it added.

Earlier this year, a special purpose acquisition company bought the transport startup.

Since its founding in Egypt in 2017, it has raised a total of 969 million dirhams.

Dubai developer plans to raise $4.6bn loan

The developer of Dubai’s artificial palm-shaped islands, Nakheel, plans to refinance existing debt by raising 17 billion dirhams ($4.6 billion), according to Bloomberg.

In addition to Dubai Islamic Bank and Emirates NBD, Mashreqbank is seeking financing from the company, the people said, asking not to be identified because the information is confidential.

Aside from regional and global lenders, the banks arranging the loan are also asking them to participate.
 
Emaar reports $1.8bn in H1 revenues

Emaar Development had its highest property sales during the first half of 2022, supported by recent successful launches that will create value for years to come, according to Emirates News Agency, known as WAM.

Compared to 2021, real estate sales increased by 10 percent to 15.216 billion dirhams ($4.143 billion) in the first half of 2022, WAM said.

It added that the Emaar Properties-owned build-to-sell business launched 15 projects in different master plans during the first half of 2022.

The earnings before interest, taxes, depreciation, and amortization at Emaar Development was 2.564 billion dirhams in the first half of 2022, up 15 percent from the same period in 2021, while revenue was 7.282 billion dirhams, WAM said.

Emaar now has a robust backlog of 32.753 billion dirhams, which will be recognized as future revenue for the company.

Over 3,100 residential units have been delivered by Emaar Development across prime locations, including Dubai Hills Estate, Dubai Creek Harbor, Downtown Dubai, Emaar Beachfront, Arabian Ranches, and Emaar South. 

Currently, Emaar is developing over 26,100 residences in the UAE, with more than 55,100 being delivered as of June 2022. 


Saudi Arabia’s Halwani Bros posts 65% decline in profits as inflation bites

Saudi Arabia’s Halwani Bros posts 65% decline in profits as inflation bites
Updated 14 August 2022

Saudi Arabia’s Halwani Bros posts 65% decline in profits as inflation bites

Saudi Arabia’s Halwani Bros posts 65% decline in profits as inflation bites

RIYADH: Saudi food manufacturer Halwani Bros Co. has reported a 65 percent drop in profit in the first half of the year, due to increased costs resulting from global inflation.

The company’s net profit fell to SR18 million ($5 million) compared to SR52 million in the same period last year, according to a bourse filing.

Halwani Bros attributed the lower profits to rising raw material costs and increased marketing costs due to global inflation.

The devaluation of the Egyptian currency also weighed on profits from its subsidiary in Egypt, it added.

Founded in 1952, Jeddah-based Halwani produces and distributes a wide range of food products in Saudi Arabia as well as around the world.


NRG Matters — UAE to hold 8th green economy summit in September; Egypt joins Power Reactors Information System database 

NRG Matters — UAE to hold 8th green economy summit in September; Egypt joins Power Reactors Information System database 
Updated 14 August 2022

NRG Matters — UAE to hold 8th green economy summit in September; Egypt joins Power Reactors Information System database 

NRG Matters — UAE to hold 8th green economy summit in September; Egypt joins Power Reactors Information System database 

RIYADH: The UAE will hold the eighth World Green Economy Summit at Dubai World Trade Centre in September, as the Gulf state prepares to host COP28 next year, Emirates News Agency reported. 

Alongside promoting a green economy, the WGES plays a key role in supporting UAE’s climate action efforts and its commitment to sustainability. 

It also reflects the country’s support for energy and climate change issues and developing sustainable solutions to environmental challenges, according to the statement. 

Egypt's nuclear power plant 

The International Atomic Energy Agency has officially included Egypt among the countries that have a nuclear plant under construction, according to the Nuclear Power Plants Authority. 

The country is now included in the Power Reactors Information System PRIS database, which focuses on nuclear power plants worldwide. 

This happens as Egypt started the construction of the El-Dabaa plant, located in the northwestern governorate of Marsa Matrouh, which aims to generate a total of 4,800MW via four reactors.

Through a micro lens

Oman’s Sur Industrial City, affiliated to the Public Establishment for Industrial Estates, has signed an over $40 million investment contract with Al Ghaith for Chemical Industries to establish a chemical plant on a 60,000 sq. m. site.

The project aims to promote the growth of chemical industries and supply the oil and gas, petrochemical and water treatment industries with basic chemicals and raw materials, according to Trade Arabia. 

Also, China’s CATL said it would build a €7.3 billion ($7.6 billion) battery plant in Hungary, Europe's largest so far, as the electric vehicle battery maker gears up to meet growing demand from global automakers.

The construction of the 100GW plant in the eastern Hungarian city of Debrecen, is the firm’s biggest overseas investment, according to Reuters. 

It would start this year after receiving approvals and should last no more than 64 months.


Egypt plans to issue $6bn in international bonds

Egypt plans to issue $6bn in international bonds
Updated 14 August 2022

Egypt plans to issue $6bn in international bonds

Egypt plans to issue $6bn in international bonds

RIYADH: Egypt plans to issue international bonds worth between $6 billion this year, according to what a government source told Asharq. 

In the 2022-2023 budget, Egypt plans to obtain external financing by about 146.4 billion Egyptian pounds, which means an increase in the volume of external financing by about 87 percent over last year.

Meanwhile, last March Egypt offered for the first time international bonds denominated in Japanese yen in the Japanese market, with a value of $500 million.