UAE In-Focus — Non-oil business growth slips to 12-month low in January  

UAE In-Focus — Non-oil business growth slips to 12-month low in January  
The seasonally-adjusted S&P Global UAE PMI fell to 54.1, slipping slightly from 54.2 in December and the lowest since January 2022. (Shutterstock)
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Updated 09 February 2023

UAE In-Focus — Non-oil business growth slips to 12-month low in January  

UAE In-Focus — Non-oil business growth slips to 12-month low in January  

RIYADH: Non-oil private sector growth in the UAE declined in January, registering a 12-month low, revealed the latest S&P Global UAE Purchasing Managers’ Index report.

The seasonally-adjusted S&P Global UAE PMI fell to 54.1, slipping slightly from 54.2 in December and the lowest since January 2022.  

“Weak global conditions weighed on export demand in January, as firms saw foreign sales decrease at the fastest rate since June 2021. Firms were somewhat optimistic about future output prospects,” said David Owen, senior economist at S&P Global Market Intelligence, in the report.   

However, output and new orders both rose sharply, while robust supply chains and stable energy prices helped to keep input costs settled. Employment and purchasing activity continued to increase, the report stated.  

“While the UAE PMI was at a one-year low of 54.1 in January, it continued to signal a robust improvement in business conditions at non-oil companies at the beginning of 2023,” added Owen.  

UAE Aramex net profits fall 27% to $44.92m 

Aramex announced a 27 percent decline in net profits to 165 million dirhams ($44.92 million) for the year 2022, even as its revenues fell 2 percent to 5.9 billion dirhams in the corresponding period.  

In the fourth quarter, revenues declined by 5 percent to 1.5 billion dirhams, and net profit fell 27 percent to 33.8 million dirhams.  

The company attributed the decline in revenues to the COVID-19 restrictions in China, the general slowdown in economic growth and the decline in consumer confidence.  

Global inflation and currency depreciation in critical markets such as Lebanon and Egypt also took a toll on the numbers.  

ADNOC Distribution revenues soar 53% to $8.47bn  

ADNOC Distribution’s revenues surged 53 percent to 31.1 billion dirhams in 2022 from 20.9 billion in 2021.  

The company’s profits rose 22 percent to about 2.75 billion dirhams from 2.252 billion dirhams in 2021.  

The fuel distributor witnessed an increase in the total quantities of fuel sold during 2022, as it recorded a growth of 8 percent annually, with a 19 percent rise in the volumes of commercial fuel.  

On Thursday, the company’s board of directors recommended a cash dividend of 1.285 billion dirhams, or 10.285 fils per share, for the second half of 2022. It will be presented to shareholders for approval during the annual meeting of the general assembly to be held in 2023. 


PIF’s SALIC supplies 30% of Saudi Arabia’s wheat demand

PIF’s SALIC supplies 30% of Saudi Arabia’s wheat demand
Updated 18 sec ago

PIF’s SALIC supplies 30% of Saudi Arabia’s wheat demand

PIF’s SALIC supplies 30% of Saudi Arabia’s wheat demand

RIYADH: The Saudi Agricultural and Livestock Investment Co., known as SALIC, met 30 percent of Saudi Arabia’s demand for wheat in 2022, it has announced.

Wholly owned by the Public Investment Fund, SALIC supplied more than 1 million tons of wheat through direct and indirect contracts and exceeded 1.2 million tons in strategic commodities last year. 

“We are proud to supply 30 percent of the Kingdom’s wheat needs through direct and indirect contracts, in addition to a number of other essential food commodities,” SALIC CEO Sulaiman Al-Rumaih said.  

The company managed to directly supply 720,000 tons of wheat, which represents 20 percent of the Kingdom’s annual purchase, and more than 300,000 tons of indirectly supplied wheat.  

SALIC achieved this by winning tenders launched by the General Food Security Authority as part of a program to encourage and support Saudi investors abroad in diversifying sources of wheat to enhance food security in the Kingdom.  

“These efforts contribute to the company’s goal of achieving the national objective of reaching food security by providing strategic commodities through SALIC’s investments in countries with competitive advantages around the world,” Al-Rumaih explained.  

SALIC also supplied 120,000 tons of barley, 70,000 tons of soybeans, 12,000 tons of red meat and 11,000 tons of rice through its subsidiaries.  

Al-Rumaih pointed out that “one of the supply contracts, for 60,000 tons of barley, is unprecedented in the process of ensuring local food security, as efforts between the government and private sectors have been integrated across all stages of the supply chain, in line with the goals of Saudi Arabia’s Vision 2030 to ensure food security.”  

He added: “SALIC has contracted to supply barley for Mansour Al Mosaid Co., which was funded by the Agricultural Development Fund, and the shipment was delivered from Australia through one of Bahri’s vessels.” 

The company aims to achieve its strategic goals through investments in the sector. It has completed the acquisition of 35.43 percent of Olam Agricultural Holding and 100 percent of the Australian Lamb Co. along with Minerva Foods. It also acquired 9.2 percent of LT Foods, which trades in Basmati rice.   


Oil Updates — Crude gains on supply concerns; Syria gets new oil minister

Oil Updates — Crude gains on supply concerns; Syria gets new oil minister
Updated 26 min 24 sec ago

Oil Updates — Crude gains on supply concerns; Syria gets new oil minister

Oil Updates — Crude gains on supply concerns; Syria gets new oil minister

RIYADH: Oil rose for a third session on Wednesday as a halt to some exports from Iraqi Kurdistan raised concerns of tightening supply and as easing fears of a global banking crisis supported risk sentiment in the wider markets.

Crude exports of 450,000 barrels per day from Iraq’s semi-autonomous northern Kurdistan region were halted on Saturday following an arbitration decision that confirmed Baghdad’s consent was needed to ship the oil.

Brent crude climbed 28 cents, or 0.36 percent, to $78.93 a barrel at 12.00 p.m. Saudi time, while West Texas Intermediate US crude increased 41 cents, or 0.56 percent, to $73.61.

Syria’s president appoints new oil minister in reshuffle

Syrian President Bashar Assad has appointed a new oil minister and changed four other ministers in a cabinet reshuffle, state media said on Wednesday.

Hassan Kaddour, who was the general director of the Syrian Petroleum Company for the last two years, replaces Bassam Touma as oil minister, the report said.

Assad named Mohsen Abdelkarim Ali as the internal trade minister, Abdelqader Jokhdar as the industry minister, Louay Al-Munajjed as the social affairs minister and Ahmed Bostachi as a state minister.

EU countries seek legal option to stop Russian LNG imports

EU countries agreed on Tuesday to seek a legal option to stop Russian companies sending liquefied natural gas to EU nations, by preventing Russian firms from booking infrastructure capacity.

Energy ministers from the bloc proposed that new EU gas market rules should include the option for governments to temporarily stop Russian and Belarusian gas exporters from bidding up-front for capacity on the infrastructure needed to deliver LNG into Europe.

The proposal is part of countries’ negotiating position on new EU gas market rules. It must be negotiated with the European Parliament — a process that can take months.

The 27-country EU has pledged to ditch Russian gas in response to Moscow’s invasion of Ukraine. Europe’s pipeline imports of gas from Russia have plunged since the invasion, but LNG imports have increased.

Russian LNG deliveries to Europe increased last year — to 22 billion cubic meters, up from around 16 bcm in 2021, according to EU analysis.

(With input from Reuters) 


Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover

Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover
Updated 29 March 2023

Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover

Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover

ZURICH, March 29 : UBS Group AG has rehired Sergio Ermotti as CEO to steer its massive takeover of neighbor Credit Suisse — a surprise move that seeks to take advantage of his experience in rebuilding the bank after the global financial crisis, according to Reuters.

The trader turned corporate problem fixer faces the tough challenge of laying off thousands of staff, cutting back Credit Suisse’s investment bank and reassuring the world’s wealthy that UBS remains a safe harbor for their cash.

Ermotti, the current chairman of Swiss Re, will take the helm from April 5. He was chief executive of UBS from 2011 to 2020.

He takes charge weeks after UBS bought rival Swiss bank Credit Suisse in a shotgun merger engineered by Swiss authorities to stem turmoil after Credit Suisse ran aground.

That deal made UBS Switzerland’s one and only global bank, underpinned by roughly 260 billion francs ($170 billion) in state loans and guarantees, a risky bet that makes the Swiss economy more dependent on a single lender.

UBS shares climbed 2.2 percent in early trade.

Analysts said Ermotti’s experience paring back UBS’s investment bank after the 2008 financial crash made him well equipped for the job.

“The decision to bring back Sergio Ermotti is very positive as it reduces integration and execution risk by 80 percent,” said Davide Serra, CEO of Algebris Investments.

“Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. As a shareholder and bondholder I am very happy,” he added.

Ermotti said he was looking forward to integrating UBS and Credit Suisse.

“The task at hand is an urgent and challenging one,” Ermotti said in a statement.

“In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options.”

Current CEO Ralph Hamers, who succeeded Ermotti in November 2020, “has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country,” UBS said in a statement.

“The board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition,” UBS added.

Hamers, who will stay on as an adviser, had no big-ticket M&A experience under his belt and faced the task of combining two banks with $1.6 trillion in assets, more than 120,000 staff and a complex balance sheet.

He was a notable absentee from the announcement of UBS’s takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a “sad day” that nobody wanted.

A nearly 30-year veteran of Dutch lender ING, Hamers had been a surprise choice when he was appointed to lead UBS, as he had little experience in investment banking or wealth management.

At ING, Hamers was seen as a tech-savvy boss who spurned the image of a stuffy banker for a young, modern and approachable CEO, and there he was credited with overseeing a digital transformation.

The digital success at ING is what attracted UBS’s then-chairman Axel Weber to poach him, at a time that some analysts said UBS’s progress was stagnating. 


Gold retreats as waning banking crisis dampens demand

Gold retreats as waning banking crisis dampens demand
Updated 29 March 2023

Gold retreats as waning banking crisis dampens demand

Gold retreats as waning banking crisis dampens demand

RIYADH: Prices of safe-haven gold dropped on Wednesday as easing fears of a further contagion from the global banking crisis whetted appetite for riskier assets. 

Spot gold was trading 0.7 percent lower at $1,960.91 per ounce, as of 0619 GMT, after rising 1 percent on Tuesday. US gold futures slipped 0.6 percent to $1,962.10. 

"We've seen a natural retracement ... gold is pulling back after a failed 'bid' to break above $1,975," said Matt Simpson, senior market analyst at City Index. 

But some investors "still seem to be holding onto gold 'just in case' there's another skeleton or two lurking in the closet," Simpson said. 

The dollar firmed, making bullion expensive for overseas buyers. Asian shares surged on Wednesday. 

While gold would "ultimately" be supported by financial uncertainty, prices could become more volatile over coming weeks if inflation and US economic data stay elevated, Simpson said. 

Data on Tuesday showed US consumer confidence unexpectedly increased in March, while February's US trade deficit in goods widened modestly. 

Analysts at Macquarie, in a note, said they expect the Fed to "prioritize bringing inflation back to target – with one more rate hike and then no cuts in the early stages of economic contraction," resulting in cyclically weaker gold prices through the second half of 2023. 

The opportunity cost of holding non-yielding gold rises when interest rates are increased. 

Markets are pricing in a 44.5 percent chance of a 25-basis-point Fed hike in May. 

In contrast, MKS PAMP said in a note that "the Fed will have to choose between higher inflation, a harder landing or financial instability- all outcomes will keep safe havens in play," likely prompting gold to retest and pierce all time highs ($2,070/oz) this year. 

Silver fell 0.8 percent to $23.08 per ounce, platinum lost 0.7 percent at $956.76 and palladium edged down 0.2 percent to $1,416.93.


SRMG launches new venture capital arm, SRMG Ventures

SRMG launches new venture capital arm, SRMG Ventures
Updated 28 March 2023

SRMG launches new venture capital arm, SRMG Ventures

SRMG launches new venture capital arm, SRMG Ventures
  • SRMG’s new venture capital arm focuses on supporting content creation and digital media platforms
  • Inaugural investments in disruptive regional production house Telfaz11 and immersive video platform VUZ

RIYADH: SRMG, a global integrated media group, today announced the launch of its corporate venture capital arm, SRMG Ventures.

In line with SRMG’s transformative growth strategy, SRMG Ventures will invest in early-stage companies and technologies within the core target areas: media creators, digital media, media enablers and tools, including generative AI, as well as immersive and interactive entertainment. SRMG Ventures will initially target investments from the seed to Series B stage.

SRMG Ventures will enable SRMG to back and empower regional talent and entrepreneurs, acting as a catalyst for further growth of the rapidly evolving media industry in the region.

SRMG Ventures will provide SRMG with direct access to innovative technologies, as well as new media talent and content creators, that will continue to enhance SRMG’s own media portfolio and drive forward the future of media. The new corporate venture capital arm will additionally help SRMG penetrate new markets and further diversify its business offering, whilst generating tangible financial returns.

SRMG Ventures has also announced inaugural investments and partnerships with two fast-growing companies:

  • Telfaz11: a Saudi-based creative media studio specializing in locally relevant entertainment content, and producer of the box office hit “Sattar” and feature film “Alkhallat+” which was one of the top ten most watched movies in Saudi Arabia on Netflix.
  • VUZ: a leading VR-enabled social media app that allows users to engage with 360o videos enabling a new level of immersive realism.

Jomana R. Al Rashid, CEO, SRMG said: “We are excited to continue to lead and support the growth of the dynamic and fast-growing media and content industry in Saudi Arabia and beyond. Our new venture capital arm, SRMG Ventures, will enable us to discover and nurture new talent and content creators, and leverage the latest advances in virtual reality and artificial intelligence.

“The adoption of cutting-edge technologies will invigorate SRMG’s products and services, further elevating content offerings and experiences for our local and global audiences. Our first investments in two leading companies, one local and one regional, led by exceptional creatives from the Arab world, mark the beginning of this thrilling endeavor.”

The announcement comes at an important moment for the MENA media and venture capital sectors. The MENA media and entertainment sector is expected to grow at 9 percent to exceed $20 billion by 2026, outpacing global growth.

In addition, the MENA region, and Saudi Arabia in particular, is experiencing a vibrant entrepreneurial ecosystem, with venture capital funding crossing the $3bn mark in 2022, an annual rise of 8.3 percent, with Saudi Arabia startups securing $987m in 2022, a 72 percent increase compared to 2021.