Macro Snapshot — Foreign investment in Tunisia up 73% in Q1; Mexican inflation seen at 21-year high

The EU said in March it planned to lend €450 million ($475 million) to support Tunisia’s budget and said it would invest 4 billion euros in coming years. File
The EU said in March it planned to lend €450 million ($475 million) to support Tunisia’s budget and said it would invest 4 billion euros in coming years. File
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Updated 08 May 2022

Macro Snapshot — Foreign investment in Tunisia up 73% in Q1; Mexican inflation seen at 21-year high

Macro Snapshot — Foreign investment in Tunisia up 73% in Q1; Mexican inflation seen at 21-year high

RIYADH:  Foreign investments in Tunisia rose by 73 percent in the first three months of 2022 compared to the same period a year earlier, the Foreign Investment Promotion Agency reported, according to Tunisia’s state news agency.

The EU said in March it planned to lend €450 million ($475 million) to support Tunisia’s budget and said it would invest 4 billion euros in coming years.

The North African country has been seeking international help to support its strained public finances.

Mexican inflation 

Mexican inflation is expected to have continued its upward climb in April, reaching heights not seen since January 2001, a Reuters poll showed, reinforcing forecasts that the central bank will again hike its key interest rate next week.

The median forecast of 11 analysts surveyed was for consumer price inflation to rise 7.72 percent in the year through April, far above the Bank of Mexico’s target of 3 percent, plus or minus 1 percentage point.

Annual core inflation, which strips out some volatile food and energy items, was seen at 7.17 percent in April, also a 21-year high.

By comparison, headline inflation rose 7.45 percent in the year through March, while core inflation increased 6.78 percent. 

UK income hit from high inflation

People and businesses in Britain need to realize they are unlikely to recover the income lost to high inflation any time soon, the Bank of England’s chief economist said on Friday in the latest warning from the central bank of tough times ahead.

A day after the BoE forecast inflation would surpass 10 percent later this year, causing a sharp economic slowdown — and possibly a recession — Huw Pill said the central bank was unable to cushion people from surging energy and goods prices.

“What we are buying is becoming more expensive relative to what we are selling,” Pill told an online briefing for businesses hosted by the BoE.

“That does imply some sort of squeeze ... on the real spending power of domestic residents in the UK. How that is distributed across firms, across wage-earners, across pensioners and so forth, monetary policy does not have much to say about that.”

Austria’s account deficit

Austria’s current account balance swung to a deficit in 2021 for the first time in 20 years as coronavirus-related travel restrictions hurt tourism badly and Austrian investments abroad grew, the Austrian National Bank said on Friday.

The country recorded a current account deficit of €2.1 billion ($2.2 billion), or 0.5 percent of gross domestic product, a sharp swing from a surplus of €7.2 billion in 2020, the year the pandemic and restrictions aimed at slowing it began in Europe.

The pandemic’s impact on the global economy “severely affected” Austrian trade in 2021, ONB Vice Gov. Gottfried Haber said in a statement, adding that many problems remain.

“Disrupted supply chains, rising energy prices and volatile markets will continue to affect Austria’s economy in the immediate future as well, as will the unforeseeable consequences of the war in Ukraine,” he said.

World food prices ease 

World food prices eased slightly in April after hitting a record high in March, pushed lower by vegetable oils and cereals, the UN food agency said on Friday.

The Food and Agriculture Organization’s food price index, which tracks the most globally traded food commodities, averaged 158.5 points last month versus an upwardly revised 159.7 for March.

The March figure was previously put at 159.3.

“The small decrease in the index is a welcome relief, particularly for low-income food-deficit countries, but still food prices remain close to their recent highs, reflecting persistent market tightness and posing a challenge to global food security for the most vulnerable,” said FAO Chief Economist Maximo Torero Cullen.

Although it declined month-on-month, the April index was 29.8 percent higher than a year earlier, pushed up in part by concerns over the impact of the Russian invasion of Ukraine.

 

(With input from Reuters) 


Oil Updates — Crude bounces back; OPEC general-secretary dies; US investors form venture eyeing Venezuelan oil

Oil Updates — Crude bounces back; OPEC general-secretary dies; US investors form venture eyeing Venezuelan oil
Updated 14 sec ago

Oil Updates — Crude bounces back; OPEC general-secretary dies; US investors form venture eyeing Venezuelan oil

Oil Updates — Crude bounces back; OPEC general-secretary dies; US investors form venture eyeing Venezuelan oil

RIYADH: Oil prices rose nearly 3 percent on Wednesday before paring some gains as investors piled back into the market after a heavy rout in the previous session.

Brent crude futures rose as much as $3.08, or 2.9 percent, to $105.85 a barrel in early trade after plunging 9.5 percent on Tuesday, the biggest daily drop since March. 

It was last up 92 cents, or 0.9 percent, at $103.69 a barrel at 0243 GMT.

US West Texas Intermediate crude climbed to a session high of $102.14 a barrel, up $2.64, or 2.7 percent, after closing below $100 for the first time since late April. It was last up 46 cents, or 0.5 percent, at $99.96 a barrel.

OPEC general secretary Mohammad Barkindo dies at 63

OPEC secretary-general Mohammad Barkindo has died at Abuja, Nigeria at the age of 63, Arab News learned.

He will be buried in his home town Yola, a source confirmed.

The news of Barkindo’s death was confirmed by Mele Kyari, managing director of Nigerian National Petroleum Corporation.

In a tweet, Kyari described Barkindo’s departure as a great loss to his immediate family, NNPC Nigeria, OPEC and the global energy community.

US investors form venture to pursue oil and gas projects in Venezuela

Two US investment funds on Tuesday said they formed a joint venture with a Venezuelan firm to pursue oil and gas exploration and production projects in the US-sanctioned South American country.

Gramercy Funds Management and Atmos Global Energy said their joint venture would work with an arm of Inelectra Group, a Caracas-based firm that holds a stake in the Gulf of Paria East oil project off Venezuela’s eastern coast, where it found oil in 2001.

US companies are barred from doing business with Venezuelan state-run oil firm PDVSA, a policy begun in 2018 by the Trump administration and continued under US President Joe Biden.

The companies did not disclose the size of their investment in the oil venture. Spokespeople did not immediately reply to requests for comment.

Any effort is subject to approvals by the US and Venezuela, the companies said.

Ali Moshiri, a US executive and former chief of Chevron Corp’s Latin American operations, set up an investment fund in 2019 to pursue energy projects in Venezuela. The partners aim to “contribute to balancing oil supply and demand,” he said in a statement.

The oil effort “will be beneficial to US interests in the region and the US economy by lowering fuel prices for American consumers,” said Matt Maloney, a partner at Connecticut-based emerging market investor Gramercy.

(With input from Reuters) 


Commodities Update — Gold slowly climbs up; grains fall on recession fear; copper slides

Commodities Update — Gold slowly climbs up; grains fall on recession fear; copper slides
Updated 1 min 11 sec ago

Commodities Update — Gold slowly climbs up; grains fall on recession fear; copper slides

Commodities Update — Gold slowly climbs up; grains fall on recession fear; copper slides

RIYADH: Gold found temporary respite on Wednesday after touching a near seven-month low in the previous session, as the dollar paused for breath after a blistering surge to 20-year highs.

Spot gold rose 0.3 percent to $1,770.27 per ounce by 0330 GMT. 

US gold futures also firmed 0.3 percent to $1,769.10.

Silver drops

Spot silver dipped 0.1 percent to $19.27 per ounce, while platinum was down 0.7 percent at $859.52. 

Palladium slipped 0.2 percent to $1,929.35.

Grains fall

Chicago corn futures lost more ground on Wednesday, with prices trading near a multi-month low reached in the previous session on worries around a global recession.

Wheat eased, while soybeans ticked higher.

The most-active corn contract on the Chicago Board of Trade lost 0.8 percent to $5.73-3/4 a bushel as of 0252 GMT, while wheat gave up 0.6 percent to $8.02-1/2 a bushel.

Soybeans added 0.3 percent to 13.19-1/4 a bushel.

Copper dips

Copper prices fell on Wednesday to their lowest since November 2020, weighed down by a robust US dollar and threats to demand from heightened fears of a global recession and renewed lockdowns in top consumer China.

Three-month copper on the London Metal Exchange was down 2.5 percent at $7,483 a ton, as of 0440 GMT, its lowest since November 27, 2020.

The most-traded August copper contract in Shanghai dropped 5.5 percent to $8,582.76 a ton by the midday break.

(With inputs from Reuters)


Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite

Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite
Updated 06 July 2022

Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite

Saudi Advanced Petrochemical’s profits down 37% as raw material costs bite

RIYADH: Saudi Arabia’s Advanced Petrochemical Co. saw its profit decline by 37 percent during the first half of 2022, hit by higher raw material prices.

The Jubail-based company’s profit dropped to SR274 million ($73 million), compared to SR436 million for the same period a year earlier, according to a bourse filing.

The decline was propelled by a rise in propane and outsourced propylene prices by 51 and 20 percent, respectively, and a decrease in profit share from its South Korean unit SK Advanced Co. by SR75 million.

This was coupled with an increase of 174 percent in offshore logistics costs, despite a 24-percent higher sales volume.

Sales of the Saudi-listed petrochemical producer surged to SR1.68 billion during the six-month period.

In a separate announcement, Advanced Petrochemical said it will distribute a cash dividend of SR142.53 million at SR0.55 per share for the second quarter of the year on Sept. 18. 

 


TASI falls to its lowest level in 2022 as fear grips the market: Opening bell

TASI falls to its lowest level in 2022 as fear grips the market: Opening bell
Updated 57 min 3 sec ago

TASI falls to its lowest level in 2022 as fear grips the market: Opening bell

TASI falls to its lowest level in 2022 as fear grips the market: Opening bell

RIYADH: Saudi Arabia's main index, TASI, fell 0.77 percent to 11,257, its lowest level at the opening bell in 2022 amid rising investor concerns of a possible global recession.

This was also weighed down by a 3.01 percent slump in Saudi Tadawul Group and a 1.31 percent decline in Saudi Aramco, the largest player on the Saudi oil market.

Chemicals maker Petro Rabigh slid 1.62 percent, while Advanced Petrochemical Co. shed 1.52 percent, after reporting a 37 percent decline in profit for the first half of 2022, hit by raw material costs.

In the banking sector, the Kingdom’s largest valued bank Al Rajhi dropped 0.50 percent, while the Saudi National Bank declined 0.45 percent.

Saudi British Bank, which was voted the best bank in 2022, lost 0.73 percent of its share price.

The National Shipping Co. of Saudi Arabia, known as Bahri, gained 2.94 percent to lead the gainer, following the completion of its SR3.9 billion ($1.04 billion) sukuk offering.

This was followed by Tanmiah Food Co. gaining 2.33 percent, following its agreement to sell two subsidiaries to US Tyson for SR262.6 million.

The parallel market, Nomu, started Wednesday’s session flat, reaching 21,140 points.

In the energy sector, West Texas Intermediate crude was trading at $101.33 per barrel and Brent crude was trading at $105.15 per barrel as of 10:27 a.m. Saudi time.


US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m
Updated 06 July 2022

US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

US food company Tyson to buy Tanmiah subsidiaries’ stakes for $70m

RIYADH: Tyson International Holding Co., a wholly-owned subsidiary of New York-listed Tyson Foods, has reached an agreement to acquire equity stakes in two of Tanmiah Food Co.’s subsidiaries for SR262.6 million ($70 million).

Tyson will acquire 15 percent of shares in Agricultural Development Co. and 60 percent of shares in Supreme Foods Processing Co., according to a bourse filing.

In partnership with Tyson, Tanmiah will double its production capacity and develop new halal products for the international market, expanding its product portfolio and enhancing its supply chain and procurement processes.

The agreement with Tyson will also strengthen and boost the Tanmiah brand in the Gulf Cooperation Council and other regions.

With SR20 million in registered capital, Agricultural Development Co. rears and produces broilers, feed mills, and operates hatcheries. It also raises fresh chicken.

Supreme Food Processing Co. produces pre-prepared chicken and beef products. It has a registered capital of SR8.6 million.