IMF raises Asia’s economic forecast on China recovery, warns of risks 

IMF raises Asia’s economic forecast on China recovery, warns of risks 
The reopening of China’s economy will be pivotal for the region with the spillover to Asia seen focused on consumption and service-sector demand rather than investment, the IMF said. (Shutterstock)
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Updated 02 May 2023
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IMF raises Asia’s economic forecast on China recovery, warns of risks 

IMF raises Asia’s economic forecast on China recovery, warns of risks 

RIYADH: The International Monetary Fund raised Asia’s economic forecast on Tuesday as China’s recovery underpinned growth, but warned of risks from persistent inflation and global market volatility driven by Western banking sector woes. 

The reopening of China’s economy will be pivotal for the region with the spillover to Asia seen focused on consumption and service-sector demand rather than investment, the IMF said. 

“Asia and Pacific will be the most dynamic of the world’s major regions in 2023, predominantly driven by the buoyant outlook for China and India,” the IMF said its regional economic outlook report. 

“As in the rest of the world, domestic demand is expected to remain the largest growth driver across Asia in 2023.” 

Asia’s economy is expected to expand 4.6 percent this year after a 3.8 percent increase in 2022, contributing around 70 percent of global growth, the IMF said, upgrading its forecast by 0.3 of a percentage point from October. 

China and India will be key drivers with an expansion of 5.2 percent and 5.9 percent, respectively, though growth in the rest of Asia is also expected to bottom out this year, the report said. 

But the IMF cut next year’s Asian growth forecast by 0.2 of a point to 4.4 percent, and warned of risks to the outlook such as stickier-than-expected inflation, slowing global demand as well as the impact of US and European banking-sector stress. 

“While spillovers to the region from stress in the US and European financial sectors have been relatively contained thus far, Asia remains vulnerable to tightening financial conditions and to sudden and disorderly repricing of assets,” the IMF said. 

And while Asia has strong capital and liquidity buffers to fend off market shocks, the region’s highly leveraged corporate and household sectors are “significantly” more exposed to a sharp increase in borrowing costs, it added. 

The IMF also urged central banks in Asia — excluding Japan and China — to keep monetary policy tight to bring down inflation, which could remain stubbornly high due in part to robust domestic demand. 

“The costs of failing to bring inflation below target are likely to outweigh any benefits from keeping monetary conditions loose,” the IMF said. 

“Insufficient tightening in the short term would require disproportionately more monetary tightening later to avoid high inflation becoming ingrained, making a larger contraction more likely.” 

While China will be a key driver of the region’s growth, the country’s property sector remains a risk that policymakers need to address to ensure an even recovery in the sector, the IMF said. 

Recent moves by the government to ease financing to developers had largely benefited bigger developers. Still, regions in China with smaller, weaker players had yet to show signs of a recovery, said Thomas Helbling, deputy director of the Asia and Pacific Department at the IMF. 

“While the government’s (recent) effort has stabilized the market, it should proactively support the restructuring of weaker developers which are still suffering,” said Helbling at a media briefing in Hong Kong. 

China’s policymakers have been trying to stabilize the sector that accounts for a quarter of the national gross domestic product after a string of defaults among developers and a slump in home sales. 

“For regions with weaker housing markets, the recovery has yet taken place. We need further policy measures to limit potential risks,” said Helbling. 

 
 


LEAP24 to showcase $11.9bn in tech investment deals, minister says

LEAP24 to showcase $11.9bn in tech investment deals, minister says
Updated 12 sec ago
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LEAP24 to showcase $11.9bn in tech investment deals, minister says

LEAP24 to showcase $11.9bn in tech investment deals, minister says

RIYADH: Saudi Arabia’s international technology conference LEAP is set to witness $11.9 billion of investment deals over its three-day duration— eclipsing last year’s figure of $9 billion, according to a senior minister.

During the opening remarks at the annual event, Minister of Communications and Information Technology Abdulla Al-Swaha highlighted that investments in generative artificial intelligence acceleration and cloud infrastructure sectors are set to be key benefactors from the funding blitz.

The minister told those at the Riyadh-based gathering, which runs from March 4 to 7 and is the third edition of the event, that the Kingdom’s digital economy is “the most bold and audacious success story of the 21st century.”

He added: “When it comes to resilience, while the whole world was facing headwinds when it comes to VC (venture capital) funding with negative 30 to 40 percent, the Kingdom, under His Royal Highness leadership, we adjusted the sail and changed the headwinds into tailwinds and we grew by 33 percent.”


Saudi investor group joins hands with Pakistan’s SuperNova

Saudi investor group joins hands with Pakistan’s SuperNova
Updated 6 min 47 sec ago
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Saudi investor group joins hands with Pakistan’s SuperNova

Saudi investor group joins hands with Pakistan’s SuperNova

KARACHI: A leading Saudi investor group in the IT and technology sector has joined hands with SuperNova Solutions, a major Pakistani enterprise resource planning and business solutions provider, the Pakistani firm said on Monday. 

The partnership deal was signed on the sidelines of the LEAP tech convention taking place in Riyadh from March 4-7 and was welcomed by Ahmed Farooq, Pakistan’s ambassador in Saudi Arabia.

“It is a pivotal investment into Pakistan’s IT industry and SuperNova Solutions,” the company said in a press release, quoting the envoy. 

“Saudi Arabia will be the flag bearer of Pakistan’s IT capabilities on a world stage.”

Farooq specifically thanked Khaled Saad Al-Sabti, a key investor from Saudi Arabia in IT & tech sectors, for investing into Pakistan’s IT sector:

“His trust and confidence in Pakistan will bring a renewed attention of the world investors into Pakistan’s IT industry.”

Farooq inaugurated the Pakistan Pavilion at LEAP 2024 on Monday afternoon and witnessed the signing ceremony of the equity partnership between SuperNova Solutions and a group of influential Saudi investors.

“The investment is one of its kind and a substantive leap forward in Pakistan’s investment landscape,” Rashid Hakeem, SuperNova’s Pakistan chief executive, said. “This investment makes us go global; establish a strategic presence in the regional IT market and encourage other investors to embark on more partnerships, collaborations and JVs.”

He said the partnership would enhance Pakistan’s competitiveness, digital transformation and ERP implementation competencies, services and exports.

Saudi investor Muhammad Ghazali highlighted the “strategic rationale” behind the move, saying SuperNova would become an important part of the Saudi group’s investment portfolio. 

“Saudi Arabia is rapidly progressing toward its Vision 2030 goals and digital transformation has emerged as a key enabler, revolutionizing industries; government services and societal interactions,” Ghazali said. 

“This acquisition aligns perfectly with our vision of driving digital transformation and innovation. By combining our resources and expertise; we are well-positioned to help businesses harness the power of ERP solutions to achieve their strategic objectives.”


Saudi Arabia startups close February with $16.3m in funding 

Saudi Arabia startups close February with $16.3m in funding 
Updated 2 min 26 sec ago
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Saudi Arabia startups close February with $16.3m in funding 

Saudi Arabia startups close February with $16.3m in funding 

RIYADH: Saudi Arabia emerged as a significant player in the startup ecosystem this February, raising $16.3 million, making it the second-highest amount secured by any country across the Middle East and North Africa.

According to Wamda’s monthly investments report for the region, the Kingdom secured the funding across seven transactions, marking a 48.18 percent increase from a total of $11 million in January 2023.

The UAE led the region in startup funding in the second month of 2024, securing $65.6 million across 22 deals. This was greatly influenced by a $35 million sum raised by Flare Network to take over half of the total number of deals.

Investments in MENA startups amounted to $88.7 million in February, after 2024 kicked off at a slow pace with $86.5 million in January. The figure represented an 88.28 percent decrease from the $760 million raised in February 2023. 

Egypt saw only two startups raising $4.6 million in total.

“Web3 providers are the market’s rising stars this month, having raised $39 million in three rounds, led by Flare Network’s $35 million,” the report stated.

In terms of sector performance, foodtech showcased a robust performance, securing $21 million across two deals, with a notable $12 million directed toward The Cloud’s Series B round. 

Fintech and logistics startups raised $6.9 million and $5.4 million, respectively.

Seed-stage ventures continued to dominate investment, with a total of $25.5 million raised by 11 companies.

Business-to-consumer startups received a significant portion of funding, amounting to approximately $55 million across 16 transactions, while business-to-business enterprises secured $18.4 million through 17 deals.

Firms led by men continued to dominate the industry, accounting for over 55 percent of the total transaction value. Startups led by mixed-gender teams received 44.6 percent of the funds, while those led by women captured only 0.2 percent of the total investment.

Additionally, last month saw 14 new ventures not disclosing their fundraising amounts. A conservative estimate of $100,000 each was allocated to 12 of these companies. 

Notable recipients included Bookr, PIESHIP, and PhysioHome. Magpie Protocol and Groene Point received $1 million each for their undisclosed rounds.

In terms of venture capital activity, notable developments included the establishment of the Falcon Foundation in the UAE, with plans to invest $300 million in open-source generative AI models. 

The non-profit Falcon Foundation is dedicated to advancing the development of open-source generative artificial intelligence models and building sustainable ecosystems around projects that accelerate technology development, according to a press release.

Ray O. Johnson, CEO of the Technology Innovation Institute, stated: “We’re committed to fostering transparency and collaboration in AI. Extending the UAE’s collaborative spirit into AI development, we set new standards for openness, and we encourage all other entities that support open source from around the world to join us.”

Jordan’s Innovative Startups and SMEs Fund contributed $5 million to the MENA-focused initiative, MSA Novo.

MSA Novo is a multi-stage investment firm focused on emerging markets, according to its website. It also provides global best practices and institutional support to its portfolio companies, enabling them to scale to regional leaders.

“As a responsible investor in venture capital investment, MSA Novo is committed to building a better business for communities in the region and around the world,” the firm’s website says.

MSA Novo says it integrates environmental, social, and corporate governance to not only serve its goals but also as a powerful tool to further its investment impact, with a policy aiming to incorporate material ESG considerations into investment decisions with the objective of integrating sustainability elements into the fund’s investment process and improving the long-term financial outcomes.

COTU Ventures launched a $54 million inaugural fund, while Globivest completed the second close of its first initiative.

“We are on a mission to transform the culture of venture capital in the Middle East by setting the standard for others to follow,” COTU says on its website.

“We are the Champions Of The Underdog. We help people become extraordinary by showing them how to believe in themselves when they are at the loneliest, earliest, and most challenging parts of their journeys,” according to the firm’s manifesto.

Globivest is a venture capital firm on a mission to “break the myth that opposes capital returns to impact-driven models.”

According to its website, the company focuses on innovative and scalable early-stage startups. 

The firm seeks to establish long-term relationships with visionary entrepreneurs while adding clear value in strategy and execution.

Sawari Ventures also announced plans for a $150 million fund to support Egyptian businesses without specifying a timetable.

The Cairo-based venture capital firm invests in knowledge and innovation-based technologies across North Africa. 

“In our part of the world, everywhere you look, there are huge opportunities to be captured and entire industries ripe for transformation,” the company says in its website.

The firm’s objective is to enable entrepreneurs in the area to generate innovative solutions.

Sawari Ventures believes this will drive the region’s economies for years to come. 

The company invests in sectors including consumer internet, fintech, and ed-tech, as well as health tech, deep tech, and e-commerce.

These insights are a result of a collaboration between Wamda and Digital Digest, providing comprehensive monthly reports on the startup ecosystem


Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 

Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 
Updated 04 March 2024
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Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 

Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 

RIYADH: Saudi Arabia’s UNESCO World Heritage site, Al-Ahsa, is set to provide an enhanced hospitality experience as Hilton introduces three new resorts, establishing a farm-focused tourism hub. 

The global hotel operator and Dan Co., a Public Investment Fund company specializing in agritourism, ecotourism, and adventure tourism, have jointly announced the signing of an agreement.  

As part of the deal, Hilton will operate three resorts in the region: Al-Ahsa Agritourism Resort under LXR Hotels & Resorts, Al-Ahsa Eco Resort, and Al-Ahsa Adventure Resort, all part of the Curio Collection by Hilton. 

Covering 1.8 million sq. m., the master development in Al-Ahsa aims to establish a farm-focused tourism hub amid green landscapes and local farms, offering visitors a chance to connect with nature and enjoy a variety of experiences. 

Al-Ahsa, a significant agricultural region in Saudi Arabia’s Eastern Province, is home to Al-Ahsa Oasis, the largest date palm oasis in the world.

Chris Nassetta, president, and CEO of Hilton, said the three new hotels further expands the company’s footprint in Saudi Arabia, where it plans “to quadruple their portfolio.”  

He said: “Al-Ahsa is one of the key regions identified under the National Tourism Strategy of Saudi Arabia, and we are pleased to bring Hilton’s renowned hospitality brands to this unique new tourism development in the country.” 

Each resort will offer a unique experience: luxury at LXR Hotels & Resorts Agritourism Resort, wellness at Curio Collection by Hilton Eco Resort, and outdoor adventure at Curio Collection by Hilton Adventure Resort, according to a press release. 

The central activation area, available to guests and the public, will feature a nature garden, amphitheater, dining and retail options, as well as a farmers’ market, and multi-purpose spaces for local agricultural vendors and retailers. 

Abdulrahman Abaalkhail, CEO of Dan Co., said that the collaboration with Hilton to operate the initial three resorts in Al-Ahsa will combine Hilton’s world-class hospitality with the scenic landscapes of the region. 

“This part of Saudi Arabia offers unique experiences rich in cultural and natural beauty yet underrepresented in the current tourism landscape. This delivers on our strategy to establish a Saudi homegrown hospitality brand with a pioneering heritage-inspired fusion of agricultural, eco, and adventure experience resorts, nestled in nature, setting a remarkable precedent in Saudi Arabia’s hospitality industry,” he said.  

Abaalkhail added that their business approach is intertwined with promoting cultural authenticity, sustainability, and empowering local communities. This strategy not only nurtures an inclusive ecosystem but also plays a pivotal role in advancing the Kingdom's overarching economic and tourism aspirations.   

The release further added that the resorts will be easily accessible via main roads, with Riyadh, Dammam, Khobar, Jubail, Bahrain, and Qatar within a one-and-a-half to three-and-a-half-hour drive away.   


MODON and General Electric seal deal to operate $346m technology center in Dammam 

MODON and General Electric seal deal to operate $346m technology center in Dammam 
Updated 04 March 2024
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MODON and General Electric seal deal to operate $346m technology center in Dammam 

MODON and General Electric seal deal to operate $346m technology center in Dammam 

RIYADH: Dammam’s General Electric Manufacturing Technology Center will soon begin operations thanks to a new agreement signed by the Saudi Authority for Industrial Cities and Technology Zones.    

The authority, also known as MODON, inked the deal with US multinational conglomerate GE to operate the SR1.3 billion ($346 million) complex across an area of more than 119,000 sq. m., according to a statement.  

This agreement aligns with MODON’s mission to develop and manage industrial cities and technology zones in line with national priorities and in partnership with the public and private sectors.  

It also coordinates with the authority’s endeavors to boost its partnerships with major global manufacturers and companies to contribute to the Saudi industry with advanced technologies.  

The deal cements the National Industrial Strategy’s aims to accelerate the diversification of its manufacturing base to enhance non-oil exports, encourage privatization, attract more foreign investment as well as increase funding for innovation and research and create local jobs.

This is not the first collaboration between MODON and GE. In 2023, the two entities signed an agreement whereby GE factories spread over 120,000 sq. m in the Eastern Region will come under MODON supervision. 

Through its strategy to empower industry and contribute to increasing local contribution, the authority seeks to help the private sector contribute some 65 percent to Saudi Arabia’s gross domestic product. 

In 2012, GE broke new ground when it launched the second phase of its high-tech GE Manufacturing Technology Center at Dammam’s Second Industrial City.

Since supplying Saudi Arabia with turbomachinery for its first oil expedition back in 1942, GE has been a growth technology partner to the Kingdom. 

The company has developed several successful programs with leading Saudi institutions such as the King Abdullah University of Science and Technology.