Kuwait trade surplus with Japan hits $543m

Kuwait trade surplus with Japan hits $543m
Kuwait has maintained a trade surplus with Japan for 16 years and seven months. Shutterstock
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Updated 18 September 2024
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Kuwait trade surplus with Japan hits $543m

Kuwait trade surplus with Japan hits $543m

RIYADH: Kuwait’s trade surplus with Japan rose 15 percent year on year to 76.9 billion Japanese yen ($542.8 million) in August, official data showed. 

This marks the first increase in two months, driven by a surge in Kuwaiti exports to Japan, according to a preliminary report by the Japanese Ministry of Finance. 

The Gulf nation has maintained a trade surplus with Japan for 16 years and seven months. 

Kuwaiti exports to Japan grew by 11.8 percent in August to 98.4 billion yen, rebounding after two months of declines. Meanwhile, Kuwaiti imports from Japan rose for the fourth consecutive month, increasing by 1.9 percent to 21.5 billion yen. 

In contrast, the Middle East’s overall trade surplus with Japan fell by 4.8 percent to 852.2 billion yen in August, as exports from the region dropped by 1 percent compared to the previous year. 

Shipments of oil, refined products, liquefied natural gas, and other natural resources, which account for 94.7 percent of the region’s exports to Japan, declined by 2.3 percent. 

Imports from Japan to the Middle East, however, rose by 12.8 percent, driven by higher demand for cars and machinery. 

Japan, the world’s third-largest economy, recorded a trade deficit for the second consecutive month in August, totaling 695.3 billion yen. This was influenced by the ongoing depreciation of the yen, which has continued to push up the cost of imports. 

Japan’s exports rose 5.6 percent, supported by shipments of semiconductor manufacturing equipment, while imports increased by 2.3 percent, fueled by rising costs of pharmaceuticals and petroleum products, exacerbated by the weaker yen against the dollar. 

In the energy sector, Japan imported 62.54 million barrels of oil in June, with 96.3 percent or 60.26 million barrels, sourced from the Arab region, as reported by the Agency of Natural Resources and Energy of Japan’s Ministry of Economy, Trade, and Industry in July. 

Saudi Arabia and the UAE dominated Japan’s oil imports, with Saudi Arabia contributing 25.82 million barrels, representing 41.3 percent of the total, and the UAE providing almost the same share with 25.84 million barrels. 

Kuwait was a significant contributor to Japan’s oil imports in June, supplying 5.21 million barrels, or 8.3 percent of the total. 

Other key suppliers included Qatar, with 2.44 million barrels, accounting for 3.9 percent, and Oman, with about half a million barrels, making up 0.8 percent. 

With Japan continuing its ban on importing oil from Iran and Russia in June, the remaining shipments of the fuel were sourced from the US at 1.4 percent, Central and South America at 1.6 percent, Southeast Asia at 0.5 percent, and Oceania at 0.2 percent. 

China remains Japan’s largest trading partner, followed by the US. 


UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 

UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 
Updated 16 sec ago
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UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 

UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 

RIYADH: Bilateral trade between the UAE and Jordan is projected to increase to $8 billion by 2032, up from $4.2 billion in 2023, following the signing of a Comprehensive Economic Partnership Agreement, said a top official. 

UAE Minister of State for Foreign Trade Thani bin Ahmed Al-Zeyoudi emphasized that the CEPA, signed on Oct. 6, will create growth opportunities for businesses, young entrepreneurs, and startups in both nations. 

He noted that the agreement followed a series of negotiations and coordination meetings held in a short period, as reported by the state news agency WAM. 

The UAE has been actively strengthening its trade ties globally to enhance non-oil trade, in line with its economic diversification efforts, and in September the Emirates concluded talks to sign CEPAs with New Zealand and Australia, while also planning negotiations with Japan for a similar agreement. 

“The agreement will come into effect later this year after its ratification, and will mark the culmination of a long-standing, deep-rooted relationship between the two brotherly countries and their peoples,” Al-Zeyoudi told WAM after signing the CEPA with Jordan. 

Mutual investments between the UAE and Jordan are estimated at around $22.5 billion, with the the Gulf country being the largest international investor in its Middle Eastern neighbor at $4 billion, accounting for 14 percent of the Emirates’ total foreign direct investment, stated the minister. 

He added that promising areas of investments that both countries can explore include tourism, hospitality, real estate, and renewable energy, as well as transport, logistics, manufacturing, pharmaceuticals, and food security. 

Non-oil trade between the UAE and Jordan exceeded $4.2 billion in 2023, reflecting a 37.9 percent increase compared to 2021 and a 47.7 percent rise from 2019. 

The CEPA follows a $2.3 billion agreement signed last month to develop a 360-km railway network linking Jordan’s Aqaba port to its mining hubs at Al-Shidiya and Ghor Al-Safi. 

According to a press release, the project will be developed and operated by UAE’s Etihad Rail and is part of a $5.5 billion investment package agreed upon by the two countries in November 2023. 

The UAE has previously signed CEPAs with countries including India, Turkiye, Indonesia, and Cambodia, all expected to support the the country’s economy, which is projected to grow by 4 percent this year, according to a report from its the central bank last month. 


Oil Updates – prices dip after strongest weekly rise in over one year

Oil Updates – prices dip after strongest weekly rise in over one year
Updated 07 October 2024
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Oil Updates – prices dip after strongest weekly rise in over one year

Oil Updates – prices dip after strongest weekly rise in over one year

SINGAPORE: Oil prices fell on Monday, after posting their steepest weekly rise in more than a year last week, as oversupply concerns amid softer demand countered the worries over a wider Middle East conflict disrupting exports in the key oil-producing region.

Brent crude futures fell 28 cents, or 0.36 percent, to $77.77 per barrel by 9:45 a.m. Saudi time. US West Texas Intermediate crude futures slipped 19 cents, or 0.26 percent, to $74.19 per barrel.

Brent rose by more than 8 percent last week, the biggest weekly gain since January 2023, while the WTI contract gained 9.1 percent week-on-week, the most since March 2023, on expectations that Israel could strike Iranian oil infrastructure in response to an Iranian missile attack on Israel on Oct. 1.

However, as the Israeli response is still developing, some investors likely sold futures to lock in their gains from the recent climb.

“Technical profit-taking seems to be the most logical explanation,” Priyanka Sachdeva, senior market analyst at Phillip Nova, said on the softening in oil prices.

Still, oil markets are bound to experience tailwinds amid fears of Israel’s retaliation on Iran, as the potential mass-scale escalation of conflict in the Middle East has countered mounting demand-side pressures, Sachdeva said.

Israel bombed Hezbollah targets in Lebanon and the Gaza Strip on Sunday ahead of the one-year anniversary of Hamas’ Oct. 7 attacks on Israel that triggered the current war between Israel and the Iranian-backed militant groups. Its defense minister also said all options were open for retaliation against Iran.

Hezbollah rockets hit Israel’s third-largest city of Haifa, police said early on Monday, and Israeli media reported 10 injured in the country’s north.

ANZ Research cautioned that despite the rally in oil prices last week, the impact of the conflict on oil supply will be relatively small.

“We see a direct attack on Iran’s oil facilities as the least likely response among Israel’s options,” it said.

“Moreover, we have seen a diminished impact of geopolitical events on oil supply. This has led to a significantly smaller geopolitical risk premium being applied to oil markets in recent years, and OPEC’s 7 million barrels per day of spare capacity provides a further buffer.”

OPEC and its allies including Russia and Kazakhstan, a grouping known as OPEC+, has millions of barrels of spare capacity since it has been cutting production in recent years to support prices amid weak global demand.

The producer grouping has enough spare oil capacity to compensate for a full loss of Iranian supply if Israel knocks out that country’s facilities, but it would struggle if Iran retaliates by hitting the installations of its Gulf neighbors, according to analysts.

At its last meeting on Oct. 2, OPEC+ kept its oil output policy unchanged including a plan to start raising production from December.

Combined with the uncertain pace of economic recovery in top crude importer China, the production hike can easily shield the market from supply disruptions and continues to limit the upside in oil prices, said Phillip Nova’s Sachdeva.


Closing Bell: Saudi main index slips to close at 11,769

Closing Bell: Saudi main index slips to close at 11,769
Updated 06 October 2024
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Closing Bell: Saudi main index slips to close at 11,769

Closing Bell: Saudi main index slips to close at 11,769
  • Parallel market Nomu lost 259.40 points, or 1.04%, to close at 24,655.96
  • MSCI Tadawul Index lost 22.10 points, or 1.48%, to close at 1,474.92

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 188.50 points, or 1.58 percent, to close at 11,769.04.

The total trading turnover of the benchmark index was SR6.20 billion ($1.65 billion), as 19 of the stocks advanced and 213 retreated. 

The Kingdom’s parallel market Nomu lost 259.40 points, or 1.04 percent, to close at 24,655.96. This comes as 17 of the listed stocks advanced while 48 retreated. 

The MSCI Tadawul Index lost 22.10 points, or 1.48 percent, to close at 1,474.92. 

The best-performing stock of the day was Al-Baha Investment and Development Co., whose share price rose 7.14 percent to SR0.30. 

United Wire Factories Co. and Kingdom Holding Co. were among the other top performers.

The worst performer was Saudi Ceramic Co., whose share price dropped 7.26 percent to SR28.75. 

Other worst performers were Elm Co. and Arab Sea Information System Co.

Announcements

Almarai Co. has announced its interim condensed consolidated financial results for the period ending on Sept. 30. According to a Tadawul statement, the firm recorded a net profit of SR1.88 billion in the first nine months of the year, reflecting a 12.15 percent surge compared to the same period in 2023.

The increase in consolidated profits attributable to the company’s shareholders in the current period compared to last year is due to higher revenue growth, disciplined cost control, a favorable product mix, and stabilized commodity costs.

Al-Etihad Cooperative Insurance Co. has announced that it is signing a contract with the Ministry of Human Resources and Social Development to ensure the financial dues of non-Saudi workers in the private sector per the agreed terms and conditions and the insurance policy approved by the Insurance Authority.

A bourse filing revealed that the one-year SR391 million contract provides insurance coverage for the financial dues of non-Saudi workers in the delinquent entities of the private sector, in cooperation with several Saudi insurance and reinsurance companies, and in accordance with the agreed terms and conditions for one year. This will commence from the date of signing the agreement with the Ministry of Human Resources and Social Development and after obtaining the final approval of the Insurance Authority.

The policy represents the cooperation between the Ministry of Human Resources and Social Development and the Insurance Authority to protect the financial rights of non-Saudi workers in delinquent entities according to the ministry’s classification.

The insurance cover includes wages, unpaid dues, and a return ticket to the worker’s home country within the agreed-upon cover limits and following an agreed set of terms and conditions.

It is expected that the financial impact of this agreement will be reflected in the company’s financial performance starting from the fourth quarter of the year.


EVIQ, Ceer partner to enhance Saudi EV infrastructure

EVIQ, Ceer partner to enhance Saudi EV infrastructure
Updated 06 October 2024
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EVIQ, Ceer partner to enhance Saudi EV infrastructure

EVIQ, Ceer partner to enhance Saudi EV infrastructure
  • Initiative will establish a comprehensive charging network to support widespread electric vehicle adoption
  • Kingdom aims to convert 30% of vehicles in Riyadh to electric by 2030

JEDDAH: Saudi Arabia’s Electric Vehicle Infrastructure Co., EVIQ, has formed a strategic partnership with the Kingdom’s first EV brand, Ceer, to expand the nation’s charging infrastructure and promote sustainability. 

EVIQ, a joint venture between the Public Investment Fund and the Saudi Electricity Co., aims to bolster the electric vehicle ecosystem by collaborating with manufacturing brands and local partners to implement installation and maintenance operations.  

This initiative will establish a comprehensive charging network to support widespread electric vehicle adoption. 

EVIQ CEO Mohammad Baker Gazzaz highlighted the agreement’s significance in supporting the electric vehicle sector in Saudi Arabia.   

“This partnership will help encourage the wider adoption of electric vehicles, making them a seamless and convenient choice for drivers in the Kingdom. We look forward to fruitful cooperation with Ceer to achieve a more environmentally friendly and sustainable future for the Kingdom.” 

Saudi Arabia aims to convert 30 percent of vehicles in Riyadh to electric by 2030, part of a larger strategy to cut emissions in the capital by 50 percent and achieve carbon neutrality by 2060.  

The Kingdom is also targeting the production of approximately 300,000 vehicles by 2030, seeking a 50 percent share of car sales in the Gulf Cooperation Council countries by 2025. 

Ceer CEO James DeLuca emphasized that the partnership extends beyond building an electric vehicle industry. “We are also committed to providing an exceptional experience for electric vehicle owners in the Kingdom. We are pleased to partner with EVIQ to ensure a comfortable and seamless driving experience for electric vehicles in the Kingdom,” he said.   

The partnership signifies a major step toward realizing the Kingdom’s vision of developing an automotive industry and promoting sustainable transportation.  

By aligning Ceer’s commitment to advanced Saudi electric vehicles with EVIQ’s goals of building an effective network, this collaboration paves the way for a smooth transition to electric mobility. 

Last year, EVIQ announced plans to install over 5,000 fast chargers across 10,000 locations throughout the Kingdom.  

This strategic initiative not only enhances Saudi Arabia's electric vehicle infrastructure but also aligns with broader economic and environmental objectives, paving the way for a sustainable future and diversified economy. 

Ceer is investing significantly in research and development to produce competitive electric vehicles, with government support through incentives and regulations designed to foster industry growth. 


Saudi Arabia secures over half of MENA startup funding in September

Saudi Arabia secures over half of MENA startup funding in September
Updated 06 October 2024
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Saudi Arabia secures over half of MENA startup funding in September

Saudi Arabia secures over half of MENA startup funding in September
  • Investors express confidence in Saudi entrepreneurial talent by pouring $165 million into 13 firms
  • Fintech emerged as the leading sector in September, attracting $134.84 million

RIYADH: The startup ecosystem in the Middle East and North Africa is experiencing significant growth, with Saudi Arabia emerging as a key driver of funding activity.

According to a recent report by Rasmal, MENA startups raised a total of $328.3 million across 60 companies in September, reflecting increasing investor confidence in the region’s entrepreneurial talent.

This surge in funding highlights MENA’s expanding role in the global startup landscape, fueled by government initiatives and a rising appetite for risk and innovation in the private sector.

Saudi Arabia led the regional funding efforts, securing $165.34 million across 13 startups — accounting for more than half of the total capital raised in MENA. This significant investment underscores the Kingdom’s strategic economic diversification goals outlined in Vision 2030, which aims to reduce dependence on oil and foster growth in technology and innovation sectors.

Cities like Riyadh and Jeddah are emerging as key startup hubs, supported by government initiatives and increasing private investment that contribute to a robust ecosystem for entrepreneurial growth.

Government programs, including the Public Investment Fund and various venture-focused initiatives, have been instrumental in driving this transformation. The Saudi government’s proactive stance has attracted private investment, with venture capital firms, accelerators, and incubators keen to nurture local talent.

FASTFACTS

  • MENA startups raised $328.3 million across 60 companies in September.
  • Saudi cities like Riyadh and Jeddah are emerging as key startup hubs supported by government initiatives.
  • The UAE has emerged as another significant player in the MENA startup ecosystem, raising $114.32 million across 28 companies.
  • Egypt attracted $25.09 million, primarily focused on technology and innovation sectors.
  • Countries like Bahrain, Oman, and Morocco are also gaining investor interest, albeit on a smaller scale compared to regional leaders.

These efforts are fostering an enabling environment for startups across diverse industries such as technology, logistics, healthcare, and energy, laying the foundation for sustainable long-term growth.

The UAE has emerged as another significant player in the MENA startup ecosystem, raising $114.32 million across 28 companies. Dubai, in particular, continues to attract investors due to its business-friendly policies and status as a global gateway.

In September, sectors like fintech, e-commerce, and property technology saw substantial investments, reinforcing the UAE's commitment to becoming a leader in financial technology. Initiatives such as the Dubai International Financial Centre Innovation Hub have been pivotal in attracting both funding and talent to the region.

This growth underscores the UAE’s efforts toward economic diversification, reducing dependence on oil and positioning itself as a resilient, innovation-driven economy. The variety of sectors receiving investments further highlights the country’s comprehensive growth strategy to build a sustainable and diversified future.

While Saudi Arabia and the UAE led the funding landscape, other countries in the region also showed promise. Egypt attracted $25.09 million, primarily focused on technology and innovation sectors.

Cairo’s startup ecosystem has benefited from government initiatives designed to support small and medium enterprises, providing essential infrastructure for early-stage companies. This growth occurs amid significant economic challenges, as Egypt faces turbulence due to weakening monetary policies.

Countries like Bahrain, Oman, and Morocco are also gaining investor interest, albeit on a smaller scale compared to regional leaders. Bahrain’s emphasis on fintech and Oman’s investments in logistics and e-commerce signal these nations’ intent to establish their presence in the regional ecosystem. However, challenges remain in countries like Iraq and Kuwait, where political instability and regulatory barriers hinder the attraction of venture capital, resulting in an uneven distribution of funding across the region.

According to the Rasmal report, fintech emerged as the leading sector in September, attracting $134.84 million. This strong focus underscores the region's rapid adoption of digital financial solutions and the increasing demand for technology-driven banking services. Governments and businesses are prioritizing financial inclusion, which is driving further growth in the sector.

Logistics technology also attracted significant attention, driven by the ongoing e-commerce boom. As consumer preferences shift toward online shopping, the need for efficient supply chain solutions has grown. SHIFT, a logistics technology company, secured the largest investment of the month with $83 million, highlighting the growing importance of infrastructure to support e-commerce and evolving supply chain demands in MENA.

In September, late-stage startups garnered the majority of funding, securing $129.08 million of the total amount raised. This trend indicates a growing preference among investors for ventures that have demonstrated market success and scalability.

Given global economic uncertainties, late-stage startups with proven business models are often viewed as safer investments. Nevertheless, early-stage companies continue to play a vital role in the ecosystem, with seed-stage startups raising $57.30 million across 33 deals, reflecting ongoing interest in nurturing new ideas and emerging businesses.

The presence of government-backed incubators and accelerators remains crucial in supporting early-stage companies, providing mentorship and infrastructure to facilitate growth. However, the Rasmal report highlighted a significant gender disparity in funding: male founders secured 96.79 percent of the funds raised in September, while female founders received only 3.21 percent. This imbalance underscores the ongoing challenges faced by female entrepreneurs in accessing venture capital.

Addressing this gap will require a more inclusive investment approach, with increased support for women-led startups. Initiatives like the TiE Women MENA Programme are working to promote gender inclusivity, but more action is needed to foster a balanced and diverse entrepreneurial landscape across the region.

Among the notable startups funded in September were Syarah, an online car sales marketplace that raised $40 million, and TON, a fintech firm that secured $30 million. These companies illustrate the diversity of sectors gaining traction, from automotive e-commerce to financial services, showcasing the breadth of opportunities for investors in the MENA region.

Overall, the MENA startup ecosystem is well-positioned for continued growth, driven by investor interest in key markets and favorable government policies. However, rising geopolitical tensions may impact this growth trajectory. The focus on fintech and logistics is likely to persist, aligning with the region’s broader digital transformation. Simultaneously, other industries, such as healthtech and renewable energy, are expected to grow, reflecting shifting priorities and emerging opportunities.

Challenges, including the gender funding gap and difficulties in attracting venture capital in certain countries, remain significant. Nonetheless, ongoing efforts by governments, investors, and entrepreneurs to foster innovation are likely to gradually address these issues.