China In-Focus — PMI says July activity growth slowed; Nio to make power products for Europe

China In-Focus — PMI says July activity growth slowed; Nio to make power products for Europe
The Caixin/Markit manufacturing Purchasing Managers’ Index eased to 50.4 in July (Shutterstock)
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Updated 01 August 2022

China In-Focus — PMI says July activity growth slowed; Nio to make power products for Europe

China In-Focus — PMI says July activity growth slowed; Nio to make power products for Europe

RIYADH: China’s factory activity expanded at a slower pace in July, as growth momentum softened in output, new orders and employment, a private sector poll showed on Monday.

The Caixin/Markit manufacturing Purchasing Managers’ Index eased to 50.4 in July from 51.7 in the previous month. The reading was well below analysts’ expectations for a slight dip to 51.5.

The 50-point index mark separates growth from contraction on a monthly basis.

China’s major manufacturing hubs, including the commercial hub Shanghai, saw a solid rebound in June from widespread COVID-19 lockdowns in spring.

Yet the recovery has started to fade amid fresh virus flare-ups and weakening domestic and global demand, as well as a prolonged property market slump.

The findings were slightly better than the government’s official PMI on Sunday that showed China’s factory activity unexpectedly contracting in July. 

The Caixin survey is believed to focus more on smaller, export-oriented companies.

Nio to make power products for Europe at its first overseas plant

Chinese electric car maker Nio plans to open its first overseas plant in September to make power products for the European market as it accelerates expansion abroad.

The plant, in Pest, Hungary, will develop and manufacture power products such as battery-swapping stations to serve European users, Nio said in a statement late on Friday.

Nio will speed up construction of battery swapping stations in Europe with a view to expanding sales of its cars in countries including Germany, the Netherlands, Sweden and Denmark in the second half of this year.

Nio started shipping its ES8s to Norway in 2021 and has opened a showroom in Oslo.

The company has been touting its after-sales services with city-center showrooms and battery service networks as important competitive advantages.

Nio has said it planned to establish 4,000 battery swapping stations worldwide, a quarter of them outside China.

Alibaba strives to keep New York listing amid audit dispute

Alibaba Group Holding Ltd. on Monday said it would work to maintain its New York Stock Exchange listing after the Chinese e-commerce giant was placed on a delisting watchlist by US authorities.

The company on Friday became the latest of more than 270 firms to be added to the US Securities and Exchange Commission’s list of Chinese companies that might be delisted for not meeting auditing requirements. 

The Holding Foreign Companies Accountable Act is intended to address a long-running dispute over the auditing compliance of US-listed Chinese firms.

It aims to remove foreign companies from US exchanges if they fail to comply with American auditing standards for three consecutive years.

“Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” it said in a statement to the Hong Kong bourse.

Tesla inks battery deals with two Chinese suppliers

To secure supplies amid rising competition, Tesla Inc. has inked two long-term deals with its existing battery materials suppliers, Bloomberg reported citing separate stock-exchange statements from the companies. 

The report noted that Tesla signed pricing agreements with Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co. to ensure supply until the mid of this decade. 

According to the report, these long-term deals are for ternary precursor materials which include chemical cocktails which play a crucial role in storing energy in lithium-ion batteries. 

(With input from Reuters)


Bahrain’s GDP grows at 6.9% in Q2 2022

Bahrain’s GDP grows at 6.9% in Q2 2022
Updated 18 sec ago

Bahrain’s GDP grows at 6.9% in Q2 2022

Bahrain’s GDP grows at 6.9% in Q2 2022
  • The Gulf country will see modest hike in oil production in 2022 to 0.19 mbpd

RIYADH: Bahrain’s gross domestic product grew 6.9 percent year on year in the second quarter of 2022, posting the biggest annual increase since 2011, Bahrain’s Crown Prince Salman bin Hamad Al-Khalifa said on Twitter on Sunday.

In the first quarter, the Gulf country’s GDP grew 5.5 percent year on year at constant prices. The country’s non-oil economy recorded growth of 7.8 percent in the same period.

According to the latest Economic Insight report for the Middle East, commissioned by ICAEW and compiled by Oxford Economics, Bahrain’s oil sector growth will be driven by higher oil production, despite a decline in the first quarter. Since 2015, the annual real growth of Bahrain’s oil sector has only expanded once relative to the previous year, in 2019. Based on the current OPEC+ agreement, Bahrain will see a modest increase in oil production in 2022 to 0.19 million barrels per day from 0.17 million bpd.

This small increase, combined with elevated prices, will return the oil sector to growth in 2022 before stagnating again as the government continues its diversification efforts. The forecast is for oil production to expand by 5.8 percent in 2022, compared to 2.4 percent in 2021.

Scott Livermore, ICAEW economic adviser, and chief economist and managing director, Oxford Economics Middle East, said: “The surge in oil prices and introduction of a 10 percent VAT is supporting Bahrain’s revenues and will help authorities come close to balancing the budget in 2022, two years earlier than the 2024 target set in the Fiscal Balance Program.”

The rise of inflationary pressures and rate hikes by the US Fed will force the Central Bank of Bahrain into more rate increases, beyond the 225 basis points cumulative increase in the key policy rate already this year.

Inflation averaged 3.4 percent in the first half this year, a level not seen since 2016, before rising to 3.9 percent in July.

ICAEW expects inflation to average 3.9 percent this year after prices fell annually in both 2020 and 2021.

Consumer spending is likely to be increasingly constrained going into 2023, leading to a GDP growth slowdown to below 2 percent by 2024.

As of now, the central bank has sufficient reserves to maintain the currency peg with the US dollar and is likely to follow policy moves by the Fed closely so it’s not expected to have significant pressure to devalue the dinar.

The current account returned to surplus in 2021 at 6.7 percent of GDP, the largest surplus since 2013. ICAEW expects the higher price of oil exports and a continued resurgence of international travel to push this surplus above 10 percent in 2022.


Saudi ministry begins localization of amusement parks, leisure centers

Saudi ministry begins localization of amusement parks, leisure centers
Updated 25 September 2022

Saudi ministry begins localization of amusement parks, leisure centers

Saudi ministry begins localization of amusement parks, leisure centers

RIYADH: In a bid to create more jobs for Saudi nationals, the Ministry of Human Resources and Social Development has started the implementation of its localization program at amusement parks  and entertainment centers.

The ministry aims to localize 70 percent of the jobs in that area. It also seeks to localize entertainment centers within closed commercial complexes by 100 percent. The ministry has published on its website a step-by-step guide for the implementation of its decision. Failure to comply with the decision after the grace period, which is 180 days from April 4, 2022, will result in penalties.

The ministry also said the localization decision is applicable to all leisure centers across the Kingdom.

Saudi Arabia is working to localize 18 professions over the next year, as the Kingdom steadily progresses in its efforts to create more jobs in line with Vision 2030, according to Saudi Transport Minister Saleh bin Nasser Al-Jasser.

In June, the ministry issued six decisions to localize a number of professions and activities, in cooperation with the regulatory authorities.

In a statement, the ministry said the localized professions include licensed aviation, optics, customer service, regular inspection activities, outlets of postal and parcel delivery services, and outlets of seven business activities across the Kingdom.

The move aims to provide Saudi nationals with more than 33,000 job opportunities.

The decision to localize the licensed aviation professions will be implemented in two phases: The first starts on March 15, 2023 and includes the 100 percent localization of copilots, air controllers, and dispatchers. Meanwhile, the aviation transport pilot and air host professions will be 60 percent and 50 percent localized, respectively.

The second phase will start on March 4, 2024, and includes the localization of airline transport pilot and air host professions by 70 percent and 60 percent, respectively. The decision applies to all private establishments, which have five or more employees in the specified professions.


TASI, Nomu edges down; Hail Cement leads gainers: Closing bell

TASI, Nomu edges down; Hail Cement leads gainers: Closing bell
Updated 25 September 2022

TASI, Nomu edges down; Hail Cement leads gainers: Closing bell

TASI, Nomu edges down; Hail Cement leads gainers: Closing bell

RIYADH: The Saudi main index, also known as TASI, and the parallel market, Nomu, edged down on Sunday. 

At the closing bell on Sunday, TASI was down 2.61 percent at 11,161. Nomu was down 1.91 percent at 19,875. 

Hail Cement Co. rose 8.02 percent to lead the gainers. Among the other gainers, Dallah Healthcare Co. was up 3.26 percent.

Alinma Tokio Marine Co. led the fallers, as it was down 8.92 percent at the end of today's trading session. 

Aramco, the largest player in the Saudi oil market, was down 2.64 percent at the end of Sunday's session.

In the banking sector, Alinma Bank and Al Rajhi Bank went down 3.27 percent, and 3.31 percent respectively. 

In the food and beverage sector, Almarai Co. went down 2.78 percent.

Oil prices had plunged about 5 percent on Friday. Brent crude is currently priced at $86.15 per barrel, while West Texas Intermediate is at $78.74 a barrel.


Analysts divided about TASI direction after it starts the week down 2.61%

Analysts divided about TASI direction after it starts the week down 2.61%
Updated 25 September 2022

Analysts divided about TASI direction after it starts the week down 2.61%

Analysts divided about TASI direction after it starts the week down 2.61%

RIYADH: Saudi stocks started and ended sharply lower on Sunday, in response to the Saudi Central Bank raising interest rates in line with the Fed's steep rate hike and forecast for further hikes to curb inflation, but analysts believe the impact on the market will be short-lived.

Hesham AbouJamee anticipated that the market will remain stable for the remainder of this week, and will turn positive next week.

“What’s happening today is a reflection of what is happening in the global markets and currencies. I think the shock will be only today,” the founder and CEO of Mekyal Financial Technologies, told Arab News.

However, Fawaz Al-Fawaz, a Saudi-based independent economist and columnist, argues that the market will continue to shift. 

“The markets are likely to continue to be volatile and in jittery mode until inflation is under control.”

At the end of Sunday’s session, the Tadawul All Share Index declined 2.61 percent to end at 11,161, while the parallel market Nomu declined 1.92 percent to finish at 19,875.

Speaking to Arab News, Saudi economist Ali Alhazmi said that the rate hike is not the only factor for this decline.

“The decline is also from the uncertainty about the global economics, or also the decline of growth and the existence of recession in major economies, especially the US and the EU.”

“We cannot avoid the continued closure in China, which affects supply chains. We also have the ongoing war between Russia and Ukraine.”

Ultimately, he concluded that the market direction is unpredictable, but he anticipated the decline to continue this week.


UAE In Focus — UAE, US sign MoU to lower trade barriers and promote economic growth

UAE In Focus — UAE, US sign MoU to lower trade barriers and promote economic growth
Updated 25 September 2022

UAE In Focus — UAE, US sign MoU to lower trade barriers and promote economic growth

UAE In Focus — UAE, US sign MoU to lower trade barriers and promote economic growth

RIYADH: The UAE Ministry of Industry and Advanced Technology has signed an initial agreement with the American National Standards Institute to lower trade barriers and promote economic growth.

The memorandum of understanding was signed during the ISO Annual Meeting 2022, which is taking place in Abu Dhabi this week, according to a statement. 

This comes in line with the ministry’s efforts to collaborate with global partners in the field of standardization as part of its work to align with international standards and best practices.

In the first half of 2022, the US was one of UAE’s largest trading partners, with non-oil trade between the two countries reaching almost $14.5 billion. 

Energy agreement 

UAE’s president Mohammed bin Zayed Al-Nahyan has signed an agreement with German Chancellor Olaf Scholz that covers accelerating energy security and industrial growth, according to Emirates News Agency.

As part of the agreement, Abu Dhabi National Oil Co. has entered into an Liquid Natural Gas supply agreement with RWE AG.

ADNOC will be providing LNG cargo for delivery in late 2022, to be used in the commissioning of Germany’s floating LNG import terminal at Brunsbüttel. 

Air defense

Israel has agreed to sell an advanced air defense system to the UAE, Reuters reported citing two sources familiar with the matter.

This constitutes the first such known deal between both countries since they forged ties in 2020.