S&P Global lowers 2023 growth forecast for emerging markets

S&P Global lowers 2023 growth forecast for emerging markets
Inflation is forcing monetary policies to stay restrictive, the agency warned (Shutterstock)
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Updated 29 November 2022

S&P Global lowers 2023 growth forecast for emerging markets

S&P Global lowers 2023 growth forecast for emerging markets

BENGALURU: S&P Global Ratings lowered its 2023 growth forecast for emerging economies on Tuesday, citing persistent pressures from the Russia-Ukraine conflict, a lingering COVID-19 pandemic and tight monetary policy conditions, according to Reuters.

The ratings agency now projects real gross domestic product growth of 3.8 percent next year, down from its previous forecast of a 4.1 percent expansion.

“The downward revision to growth comes from all EMs (emerging markets) excluding China and Saudi Arabia, with most economies poised to expand below their longer-run trend rates,” it said, adding that forecasts for 2024 and 2025 remain broadly unchanged, averaging at 4.3 percent.

While inflation in emerging markets have passed the peak or are peaking soon on the back of declining food and fuel inflation, it is still poised to remain above central banks’ targets in many economies, forcing monetary policies to stay restrictive, the agency warned.

“But the deceleration in inflation--coupled with a worsening growth outlook--could bring policy easing onto the agenda in several EMs, especially in Latin America, by the middle of next year,” S&P said.

 


Tonomus teams with Oracle, Nvidia to boost AI capabilities across NEOM, Saudi Arabia

Tonomus teams with Oracle, Nvidia to boost AI capabilities across NEOM, Saudi Arabia
Updated 15 sec ago

Tonomus teams with Oracle, Nvidia to boost AI capabilities across NEOM, Saudi Arabia

Tonomus teams with Oracle, Nvidia to boost AI capabilities across NEOM, Saudi Arabia

 

RIYADH: With the aim of boosting artificial intelligence capabilities across NEOM and Saudi Arabia, Tonomus announced it had teamed up with Oracle and Nvidia at LEAP 23 on Tuesday.
The collaboration by Tonomus, a cognitive multinational conglomerate and the first company to be established as a full-fledged subsidiary of NEOM, is designed to accelerate AI-powered innovation for a broad range of use by enterprises and government organizations.
Tonomus will provide customers with direct access to Nvidia’s advanced AI, digital twin solutions that take advantage of the planned Oracle cloud region to be located at NEOM.
“The longstanding alliance between Oracle and Nvidia complements Tonomus’ ongoing mission to build the infrastructure and ubiquitous connectivity required to enable the world’s first ecosystem of cognitive technologies,” Joseph Bradley, CEO of Tonomus, said.
“This monumental collaboration will empower NEOM with geographical advantage and place Saudi Arabia firmly on the map as a regional hub for the provision of AI capabilities.”
“Tonomus will benefit from Oracle cloud infrastructure’s unmatched capability of supporting modern cloud native applications in a secure environment. This, coupled with our existing partnership with Nvidia, will speed AI adoption for enterprises,” added Richard Smith, executive vice president, cloud and technology, Europe, Middle East, and Africa of Oracle.
“Nvidia software and systems on OCI provide an ideal platform for developers like Tonomus to build AI-forward, modern cities,” Jaap Zuiderveld, vice president of EMEA at Nvidia, commented.


LEAP announces 8 investment funds worth $646m 

LEAP announces 8 investment funds worth $646m 
Updated 1 min 58 sec ago

LEAP announces 8 investment funds worth $646m 

LEAP announces 8 investment funds worth $646m 

RIYADH: Investment funds are set to plough $646 million into Saudi Arabia’s digital sector to boost innovation and entrepreneurship.

The eight projects will target the growth of start-ups and medium-sized companies as they ignite competition in the fields of research, development and innovation.

The Ministry of Communications and Information Technology announced the new funds at the LEAP 23 conference being held in Riyadh. 

The leading fund stands at $150 million, and intends to provide alternative financing that is compatible with Islamic law, which will be used for developing technology companies.  

The Saudi investment company Impact 46 also launched a $133 million fund targeting emerging tech companies in the Middle East and North Africa region.  

Merak Capital announced a $53 million pot to develop the Kingdom’s tech companies, and the Saudi Investment Bank has created a $40 million fund to launch an innovation incubator for financial tech. 

Rakeza also launched a daring investment fund worth $25 million, supported by a global business accelerator in Riyadh.  

BIM Ventures Co. has set aside $100 million for business development, and will work with Al-Sulaiman Group to use its corporate-building studio to create emerging tech companies that are both innovative and financially stable.  

A leading tech investor in the region, Shorooq, also opened its second investment fund with a value of $115 million. It was launched to develop companies in the Kingdom, as well as to create another financial fund to accelerate electronic games.  

To conclude the round of investment fund announcements was Planetary Capital’s launch of the first Saudi-Canadian fund.  

It intends to invest in emerging space tech companies, both local and global, with a value of $30 million. 


Closing bell: TASI extends its downward slide, closing 86 points down to 10,461 

Closing bell: TASI extends its downward slide, closing 86 points down to 10,461 
Updated 7 min 48 sec ago

Closing bell: TASI extends its downward slide, closing 86 points down to 10,461 

Closing bell: TASI extends its downward slide, closing 86 points down to 10,461 

RIYADH: Saudi Arabia’s Tadawul All Share Index on Tuesday lost 86.21 points — or 0.82 percent — to close at 10,469.50. 

While MSCI Tadawul 30 Index dropped 1.11 percent to 1,436.58, the parallel market Nomu rose 1.23 percent to 18,992.80. 

TASI’s total trading turnover of the benchmark index on Tuesday was SR3.76 billion ($1 billion), with 101 stocks of the listed 224 advancing and 109 retreating. 

Bupa Arabia for Cooperative Insurance Co. was the worst performer as it fell 5 percent to SR152. The other poor performers were Tourism Enterprise Co., Middle East Specialized Cables Co., Riyad Bank and Basic Chemical Industries Co. 

Abdulmohsen Alhokair Group for Tourism and Development was the topmost gainer, rising 4.60 percent to SR24.54.  

Americana Restaurants International also soared 4.01 percent to SR3.89 — the stock’s highest level since it was listed in December 2022. The stock has risen 42 percent since then.  

The other top performers included Saudi Kayan Petrochemical Co., Raydan Food Co. and Tabuk Agricultural Development Co. 

Among sectoral indices, 15 of the 21 listed on the stock exchange declined, while the rest advanced. 

On the announcements front, Edarat Communication and Information Technology Co. informed the stock exchange that it signed a one-year renewable framework agreement to provide cloud hosting services to government agencies. 

Under the contract, the company will carry out various types of cloud computing services by submitting direct purchase orders from the beneficiary to Edarat. Its share price edged up to SR304.20 

Savola Group’s board of directors approved the buyback of up to 2.5 million shares as treasury shares to be allocated for the long-term employee stock incentive plan. 

The purpose of the repurchase is to attract and retain outstanding talent and to motivate them to strengthen their performance further, the company said in a statement to Tadawul. However, Savola’s share price dropped 2.92 percent to SR28.3. 

Molan Steel Co. also renewed Shariah-compliant credit facilities worth SR5 million with Alinma Bank, the company said in a statement to Tadawul. 

In addition, the firm increased the credit facilities by SR3.5 million, bringing its total loans secured from Alinma Bank to SR8.5 million. 

The facilities are to finance the working capital requirements and will be available until Oct. 31. The steelmaker’s share price gained 1.44 percent to SR35.15. 

Meanwhile, Saudi Pharmaceutical Industries and Medical Appliances Corp. also told the exchange that it would outline its revamped five-year strategy in a virtual meeting on Tuesday. SPIMACO’s strategy sets ambitious targets to grow revenue by a compound annual growth rate of 13-15 percent up to 2027 and achieve a 15-17 percent earnings before interest, taxes, depreciation, and amortization margin by 2027 through adopting a new and improved business model. The company’s share price closed marginally up at SR23. 


SABIC plans $1.3bn investments in second stage of energy transition 

SABIC plans $1.3bn investments in second stage of energy transition 
Updated 26 min 25 sec ago

SABIC plans $1.3bn investments in second stage of energy transition 

SABIC plans $1.3bn investments in second stage of energy transition 

RIYADH: Saudi Basic Industries Corp. is set to invest $1.3 billion in the second phase of its energy transition, said Fahad Al-Sherehy, vice president of Energy Efficiency and Carbon Management.

Speaking during a panel discussion at the 44th International Association of Energy Economics Conference, the SABIC official revealed that in the first phase of its transition worth $1 billion, the company recorded a 10 percent drop in carbon emissions.

Reflecting on the key aspects of energy efficiency, Al-Sherehy said it is a key enabler for decarbonization. The official said technological advancement will play a crucial role in energy transition and help in reducing costs as well.

Prince Sultan Al-Saud, CEO of the Saudi Industrial Development Fund, also highlighted the importance of the latest technology in the ongoing energy transition and energy efficiency. He called for more investments in technology to achieve the energy targets.

“To achieve our energy efficiency target, we need a forward-looking view of the investments in technology. The ongoing dialogue is hindering these investments. As we look into the future, recognition in what gets us to our goal has to be consistent with research and development to ensure the availability of technology for future use,” the SIDF chief said. 

The panelists also discussed the cost-effectiveness of energy efficiency measures. 

Tatsuya Terazawa, chairman and CEO of the Institute of Energy Economics in Japan, divided the process to achieve energy efficiency into three steps. 

Firstly, he gave the example of adjusting air conditioners or cooling temperatures in countries like Saudi Arabia and Egypt. By doing so, he added, immediate results can be achieved with absolutely no cost. 

“Secondly, speed. Most energy efficiency measures do not take time. They can be done right away, as opposed to developing windmills and solar panels which takes years in R&D,” the expert added. 

Terazawa also explained that by lowering energy consumption, energy-importing countries would buy less fuel while exporting nations would have more to sell. 

The 44th IAEE International Conference is being held in Riyadh from Feb. 4 to 9, in what is a first for the Middle East and North African Region. 

The event’s theme is “Pathways to a clean, stable, and sustainable energy future,” and is being hosted by the King Abdullah Petroleum Studies and Research Center and Saudi Association for Energy Economics. 


Saudi firms among global leaders in adopting cutting edge technology: KPMG report 

Saudi firms among global leaders in adopting cutting edge technology: KPMG report 
Updated 37 min 40 sec ago

Saudi firms among global leaders in adopting cutting edge technology: KPMG report 

Saudi firms among global leaders in adopting cutting edge technology: KPMG report 

RIYADH: Saudi organizations are demonstrating they are not risk averse in adopting tech at the cutting edge, and in some cases are moving farther and faster than their peers, according to a report by KPMG.

The findings – based on surveys of more than 2,200 executives around the world, including 51 in the Kingdom – show that almost 66 percent of Saudi-based respondents believe their organizations are either extremely or very effective at using tech to advance their business strategies.  

This marks the highest confidence level in this research series, supported by a high return on investment and indicating that effective digital transformation is less of a differentiator than in previous years. 

Titled “Tech Survey Saudi Arabia 2022,” the report was launched during LEAP 2023, the annual tech convention being held in Riyadh.

“Our latest global tech report finds a resilient, forward-looking attitude among technology professionals in the Kingdom and their peers globally,” commented Robert Ptaszynski, head of digital and innovation at KPMG in Saudi Arabia. 

Some 18 percent of the respondents have extremely effective transformation programs that have generated at least an 11 percent uplift in profit or company performance.  

The survey also showed that 80 percent of organizations in the Kingdom are at an advanced stage of their digital transformation strategies, with the leadership support and funding required to drive their program forward.  

Although 41 percent admit that progress is slower than expected, in general, digital transformation programs have put Saudi organizations in the Kingdom in an advantageous position to embrace new technologies.  

Moreover, the expected timeframe for most Saudi organizations to invest in quantum computing is two years, with 70 percent of businesses suggesting they have advanced in their adoption of data and analytics systems. 

Almost 53 percent of executives in Saudi Arabia find security and compliance requirements to be the top challenge their organization faces in their cloud journey. In comparison, 63 percent of organizations plan to increase investment in application security, which is 20 percent more than the global average.  

Cybersecurity teams are under pressure to keep up with evolving threats, with cultural obstacles and limited funding getting in the way of security efforts.

Nonetheless, most Saudi organizations are confident of their ability to prevent or mitigate security risks.