China’s May industrial output misses forecasts, retail sales a bright spot

China’s May industrial output misses forecasts, retail sales a bright spot
Industrial data has been released by the National Bureau of Statistics. Shutterstock
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Updated 17 June 2024
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China’s May industrial output misses forecasts, retail sales a bright spot

China’s May industrial output misses forecasts, retail sales a bright spot

BEIJING: China’s May industrial output lagged below expectations with the property sector still weak, adding pressure on Beijing for policy support to shore up growth, but retail sales beat forecasts thanks to a holiday boost, according to Reuters.

The industrial data released on Monday by the National Bureau of Statistics came in below expectations for a 6 percent increase in a Reuters poll of analysts.

However, retail sales, a gauge of consumption, in May rose 3.7 percent on year, accelerating from a 2.3 percent increase in April and marked the quickest growth since February. Analysts had expected retail sales to grow 3 percent due to the five-day public holiday earlier in the month.

Fixed asset investment expanded 4 percent in the first five months of 2024 from the same period a year earlier, versus expectations for a 4.2 percent rise. It grew 4.2 percent in the January to April period.

China’s property market downturn, high local government debt and deflation remain heavy drags on economic activity. The latest figures point to an uneven growth that reinforces calls for more fiscal and monetary policy support.

With narrowing interest margins and a weakening currency remaining key constraints limiting Beijing’s scope to ease monetary policy, China’s central bank left a key policy rate unchanged as expected on Monday.

The world’s second-largest economy grew faster than expected at 5.3 percent in the first quarter, but analysts say the government’s around 5 percent annual growth target is ambitious.

China’s exports grew faster than expected in May helped by improved global demand, but imports growth slowed significantly.

Tepid demand at home has also kept a lid on consumer prices as confidence remains low in the face of a protracted property sector crisis. New bank lending rebounded far less than expected in May and some key money gauges hit record lows.

Property investment fell 10.1 percent year-on-year in January-May, deepening from a decline of 9.8 percent in January-April.

China’s property sector has been hit by a regulatory crackdown and the government has slashed down payment requirements and canceled the floor rate for mortgage interest rate.

The central bank last month announced a relending program for affordable housing to accelerate sales of unsold housing stock.

The job market overall was steady. The nationwide survey-based jobless rate hit 5 percent in May, the same as that in April.

The government has vowed to create more jobs linked to major projects, roll out measures to promote domestic demand targeted at youths and has pledged greater fiscal stimulus to shore up growth. 


Saudi Arabia to bolster food security with 5 new investment projects in Al-Baha region 

Saudi Arabia to bolster food security with 5 new investment projects in Al-Baha region 
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Saudi Arabia to bolster food security with 5 new investment projects in Al-Baha region 

Saudi Arabia to bolster food security with 5 new investment projects in Al-Baha region 

RIYADH: Saudi Arabia’s food security is set to strengthen with five new investments in the agriculture sector of the Al-Baha region, aimed at achieving self-sufficiency under Vision 2030. 

The Ministry of Environment, Water, and Agriculture announced these opportunities through its FURAS portal, as reported by the Saudi Press Agency. The projects include cultivating orchards, coffee, palm trees, and producing flowers and wild plants. 

This comes as Saudi Arabia, despite about 90 percent of its territory being desert, is leading an agricultural boom aimed at boosting domestic crop production and reducing dependence on imported food.

The Kingdom has already achieved complete self-sufficiency in dates, fresh dairy products, and table eggs, according to the General Authority for Statistics’ Agricultural Statistics Publication. 

The new investment opportunities feature a coffee city project aiming to cultivate more than 150,000 trees across an area exceeding 2.29 million sq. m., with a production capacity surpassing 15,000 tonnes.  

The ministry has set a submission deadline of September 10, with bid envelopes scheduled to be opened the following day. 

Another initiative is the Al-Ennab Village project, situated near Al-Janabeen Dam, focusing on cultivating palm and fruit trees over an area of more than 4.6 million sq. m. The deadline for bids for this project is Sept. 24, with the envelopes scheduled to be opened the following day. 

MEWA emphasized the strategic importance of these projects in enhancing agricultural productivity and ensuring long-term food security for the Kingdom. 


Oil Updates – crude regains ground on political uncertainty in US, Mideast

Oil Updates – crude regains ground on political uncertainty in US, Mideast
Updated 15 July 2024
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Oil Updates – crude regains ground on political uncertainty in US, Mideast

Oil Updates – crude regains ground on political uncertainty in US, Mideast

SINGAPORE: Oil regained ground on Monday, with political uncertainty in the US and the Middle East supporting prices, offsetting downward pressure from a stronger dollar and weak demand in top importer China, according to Reuters.

Brent crude futures rose 15 cents, or 0.2 percent, to $85.18 a barrel by 7:25 a.m. Saudi time after settling down 37 cents on Friday. US West Texas Intermediate crude stood at $82.41 a barrel, up 20 cents, or 0.2 percent.

Oil prices shrugged off the impact from the dollar, which firmed after a failed assassination bid on US presidential candidate Donald Trump.

“I don’t think you can ignore the uncertainty that the weekend’s assassination attempt will cast across a deeply divided country in the lead-up to the election,” said IG market analyst Tony Sycamore.

In the Middle East, talks on ending the Gaza conflict between Israel and Hamas halted on Saturday after three days, though a Hamas official said the following day it had not withdrawn from discussions.

However, an Israeli attack targeting the group’s military leader killed 90 people on Saturday.

The uncertainty around the volatile situation has kept the geopolitical premium in oil elevated.

Oil markets are also broadly underpinned by supply cuts from OPEC+ with Iraq’s oil ministry saying it will compensate for any overproduction since the beginning of 2024.

Last week, Brent fell more than 1.7 percent after four weeks of gains while WTI futures slid 1.1 percent as a fall in China’s crude imports, the world’s top importer, countered robust summer consumption in the US.

“While fundamentals are still supportive, there are growing demand concerns, largely emanating from China,” ING analysts led by Warren Patterson said in a note.

China’s crude oil imports fell 2.3 percent in the first half of this year to 11.05 million barrels a day, amid disappointing fuel demand and as independent refiners cut output due to weak profit margins.

Crude throughput at Chinese refineries fell 3.7 percent in June from a year earlier to 14.19 million bpd, the year’s lowest so far, customs data showed on Monday.

China’s economy slowed in the second quarter as a protracted property downturn and job insecurity weighed on domestic demand, keeping alive expectations Beijing will need to unleash more stimulus.

In the US, active oil rig count, an early indicator of future output, fell by one to 478 last week, the lowest since December 2021, energy services firm Baker Hughes said on Friday.


New SAMA platform Naqd to facilitate easier account access for agencies 

New SAMA platform Naqd to facilitate easier account access for agencies 
Updated 14 July 2024
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New SAMA platform Naqd to facilitate easier account access for agencies 

New SAMA platform Naqd to facilitate easier account access for agencies 

RIYADH: A new digital platform will allow government agencies to access their accounts in the Saudi Central Bank easily and conveniently. 

The central bank, also known as SAMA, has announced the launch of Naqd, a platform for government banking services. The service is designed to provide government entities with easy and secure access to their accounts at the central bank and to conduct financial transactions through a trusted digital platform. 

The initiative is part of SAMA’s strategy to offer banking outlets to government entities and support digital transformation. 

The central bank is fostering digitalization across the spectrum with the launch of several initiatives. 

In May, SAMA announced the launch of a new undertaking — “View My Bank Accounts” — for individual bank account holders. The service enhances reliability and reduces the risk of suspicious transactions, unauthorized account use, and impersonation.  

The Naqd platform aims to digitize financial transaction services for government entities, providing a unified and secure platform. 

It facilitates round-the-clock access to account information, account management and real-time monitoring of transactions conducted from and to government accounts. 

The platform is intended to deliver electronic banking services that support government financial transactions, enhance user experience, and increase efficiency and productivity in financial dealings using the latest technologies.

Additionally, it aims to reduce the time required to execute government banking procedures. 


Saudi environment minister launches financial support program to propel fisheries sector

Saudi environment minister launches financial support program to propel fisheries sector
Updated 14 July 2024
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Saudi environment minister launches financial support program to propel fisheries sector

Saudi environment minister launches financial support program to propel fisheries sector

RIYADH: Saudi Arabia’s fisheries sector is set to receive a boost thanks to a new direct financial support program launched by the Kingdom’s minister of environment, water and agriculture.

Abdulrahman Al-Fadhli will oversee the financial support for the Reef Saudi program, which aims to open new horizons for the development of the fisheries sector and stimulate the industry, according to a statement. 

The Sustainable Agricultural Rural Development Program, or Reef Saudi, seeks to improve the rural agricultural sector to raise the standard of living of small farmers and rural families, increase efficiency and productivity, and improve lifestyle and food security.

This move falls in line with the objectives of the Kingdom’s Vision 2030, as the program is an important step toward achieving several strategic goals, including strengthening the nation’s local economy.  

It also aligns well with Saudi Arabia’s Ministry of Environment, Water, and Agriculture’s continuous efforts over the past years to boost the fisheries sector, including establishing a national program to protect fish stocks and the industry as a whole, the provision of concessional loans to assist small-scale fishermen with the purchase of boats, and initiatives to modernize ports in the Red Sea and Arabian Gulf.

Moreover, the program requires that fisherman wishing to obtain support must have a fishing license, in either the Saudi artisan category or Saudi sailor category. 

The fisherman should also not be an employee in the public or private sector, be no younger than 18 years old, and be based within the Kingdom during the period, in addition to the duration of each fishing trip being no less than six hours.

Earlier this month, Saudi Arabia highlighted its role in leading and unifying international efforts to develop the fisheries sector during its presidency of a special UN committee dedicated to the industry. 

This came during the conclusion of the 36th session of the body, which was held at the headquarters of the Food and Agriculture Organization in Rome and was chaired by the Kingdom’s permanent representative to the FAO, Mohammed Al-Ghamdi.

During the meeting, Saudi Arabia reviewed its most prominent efforts to promote and develop the fisheries sector and achieve its sustainability during its two-year presidency, the Saudi Press Agency reported at the time.


Closing Bell: Saudi main index rose to close at 11,881

Closing Bell: Saudi main index rose to close at 11,881
Updated 14 July 2024
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Closing Bell: Saudi main index rose to close at 11,881

Closing Bell: Saudi main index rose to close at 11,881

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 89.14 points, or 0.76 percent, to close at 11,881.55.

The total trading turnover of the benchmark index was SR6.36 billion ($1.69 billion) as 154 of the stocks advanced, while 68 retreated.  

On the other hand, the Kingdom’s parallel market Nomu slipped 79.18 points, or 0.31 percent, to close at 25,696.86. This comes as 34 of the listed stocks advanced while 36 retreated. 

Meanwhile, the MSCI Tadawul Index gained 15.65 points, or 1.06 percent, to close at 1 1,488.02.

The best-performing stock of the day was Miahona Co. The company’s share price surged 9.96 percent to SR37.00.

Other top performers include MBC Group Co. as well as Al Taiseer Group Talco Industrial Co.

The worst performer was Al-Rajhi Co. for Cooperative Insurance, whose share price dropped by 7.27 percent to SR209.20. 

Other worst performers were Saudi Advanced Industries Co. as well as Arabian Pipes Co.

On the announcements front, ADES Holding Co. has announced that it has amended its existing syndicated facility, securing an additional equivalent to $3 billion, with the majority of existing lenders participating along with new, leading local and regional financial institutions.

According to a Tadawul statement, the new upsized financing is divided into the equivalent of a $2.7 billion standby term tranche to finance the group’s expansion plans and an additional $300 million revolving credit facility tranche to be applied toward the general corporate purposes of the company.

While the financing duration of the standby term tranche is eight and a half years, with a final maturity in December 2032, that of the RCF tranche is eight years, with a final maturity in June 2032. 

The financing entities include Saudi Awwal Bank, Riyadh Bank, Al Rajhi Banking and Investment Corp., and Arab National Bank, as well as the Saudi National Bank, Alinma Bank, Banque Saudi Fransi, and Aljazira Bank. Arab Petroleum Investments Corp. and Commercial Bank of Dubai PSC are also included.

The bourse filing also revealed that the guarantees offered for the financing entail mortgages over offshore rigs, share mortgages or pledges over entities that hold onshore or offshore rigs as applicable, and security over the collection accounts and debt service accrual account. 

They also include assignment of receivables under client contracts, assignment of receivables under insurance contracts in respect of financed rigs as well as promissory notes.