Sun. Jun 4th, 2023
RIYADH: Banking revenue growth in Saudi Arabia is set to outstrip others in the region as increased spending in the environmental transformation fuels profits, according to the Boston Consulting Group. 
Analysis by the US-based firm forecasts the Kingdom’s retail banking revenues to grow at a Compound Annual Growth Rate of 11.4 percent between 2021 to 2026 — a rise from 8.7 percent from 2016 to 2021. 
This is higher than the Gulf Cooperation Council countries — the UAE, Saudi Arabia, Kuwait, Bahrain, and Qatar — as a whole, which are forecast to see an 8.8 percent CAGR within the same period to 2026. 
Recovery in oil prices combined with increased interest rates are key contributors to a post-pandemic revival, boosting economic growth and consumer spending, according to BCG, which also said increased spending on environmental, social, and governance and sustainability is the next frontier for competitive advantage in the sector. 
“Saudi Arabia has deployed hugely ambitious projects under Vision 2030. Acting as facilitators, instigators and key actors of change for the nation will be retail banks,” said Martin Blechta, principal at BCG. “ESG in banking is very much a credit portfolio review and there is a significant first mover’s advantage – whereby, banks that start this activity ahead of competitors have more choice to prioritize the right clients.  
“As they consider a redirected future, retail banks must adapt to changing consumer preferences and utilize digital tools and technology to craft solutions that will fulfill customers’ needs in new and sustainable ways while advancing the overall ESG agenda.” 
The report reveals that one-quarter of retail banks surveyed globally report that ESG is a primary focus area for their digital transformation, and another 38 percent saying it is a key criterion in selecting and prioritizing digital transformation initiatives.  
In addition to ESG, through the five years from 2021 to 2026, payments, mortgages, and deposit products are likely to drive banking revenue growth in the GCC retail banking sector.  
An accelerated pace of digital payments and e-commerce adoption in the wake of COVID-19 will further benefit payment revenue growth. 
Bhavya Kumar, managing director and partner at BCG, said: “In today’s evolving marketplace, engaging with customers and other stakeholders on ESG issues is a matter of rising urgency. ESG assessments must now be expanded to include the changing needs and preferences of stakeholders.  
“As of now, banks are in the best position to execute that outreach through the promotion of sustainable customer behaviors, resulting in greater contributions towards the Kingdom’s Vision 2030.” 
He added: “Through ESG-related products, banks can shape the sector and the country’s leap forward.” 
RIYADH: Saudi Arabia’s job numbers witnessed their strongest growth rate since January 2018 in December 2022, as non-oil companies witnessed a sharp expansion in business activity driven by robust market demand and business intake, according to a report.
The latest Riyad Bank Saudi Arabia Purchasing Managers Index report noted that the Kingdom’s headline PMI stood firmly above the 50.0 no-change mark at 56.9 in December.
Saudi Arabia’s PMI in December witnessed a slight decline from November when the index hit 58.5.
In October, Saudi Arabia’s PMI was 57.2, while in September, it was 56.6.
According to the index, released by S&P Global, readings above the 50 mark show growth, while those below 50 signal contraction.
“Job creation in the non-oil sector has never been this strong in almost five years. This is attributed to the ongoing reforms that support the private sector under the Saudi Vision 2030,” said Naif Al-Ghaith, chief economist at Riyad Bank.
He added: “We see operating conditions remaining favorable in December, characterized by rapid growth in the non-oil activities and a robust labor market by the end of 2022, with both jobs and wages having far more momentum than previously thought.”
BEIJING: China Energy Investment Corp. said on Monday China’s National Development and Reform Commission in Qinghai province has approved a hydro power plant worth 17 billion yuan ($2.46 billion) on Dec. 30 in the province.
The plant is a so-called pumped storage hydropower facility that is used to pump water from a lower reservoir to an upper reservoir during periods of high electrical demand. The plant will start full production in 2028. 
Normality returns
Some people in China’s key cities of Beijing, Shanghai and Wuhan braved the cold and a spike in COVID-19 infections to return to regular activity on Monday, confident of a boost to the economy as more recover from infections.
However, a wave of infections has since erupted nationwide, after borders had been kept all but shut for three years amid a strict regime of lockdowns and relentless testing.
Traffic is building again on the capital’s roads as people quickly return to outdoor sites, such as lakes, rivers and shopping malls. But business is still slow at some smaller, confined places such as restaurants, owners said.
In recent days state media have sought to reassure the public that the COVID-19 outbreak was under control and nearing its peak.
More than 80 percent of those living in the southwestern province of Sichuan have been infected, its Center for Disease Control and Prevention said on Saturday.
But Monday’s one new COVID death — flat with the previous day — among China’s population of 1.4 billion does not match the experience of other countries after they reopened.
AFP: Europe’s wholesale natural gas prices fell on Monday to their lowest level since Russia invaded Ukraine, which had driven them to a record high last year.
A mild winter has enabled countries to tap less gas from stocks that were built up in anticipation of cuts in supplies from Russia, which was Europe’s main supplier before the war.
The benchmark European contract — Dutch TTF gas future for the coming month — soared to a record €345 ($368) per megawatt hours in March. It still reached as high as €342 in August.
But prices have been falling since then, hitting €73 on Monday — 50 percent down from a month ago and the lowest level since before the war on Feb. 21.
Gas exports by Russian energy giant Gazprom to the EU and Switzerland fell by 55 percent last year, the company said Monday.
Europe was previously Gazprom’s main export market but supplies have been drastically reduced because of sanctions following Russia’s offensive in Ukraine in 2022.
European nations filled up their gas storage facilities and launched campaigns to encourage consumers to save on energy during the winter.
European storage levels were at 83 percent on Monday, reducing the need to buy more gas for now.
The EU has scrambled to find new sources of natural gas in efforts to cut its heavy reliance on Russian supplies.
RIYADH: Saudi Arabia’s ports sector has added yet another trade link from a leading shipping line, with the Kingdom’s Jubail Commercial Port linking with Turkey, the Indian Subcontinent, Africa, and the Middle East, announced the Saudi Ports Authority, also known as Mawani. 
To be operated by the Mediterranean Shipping Co., the new service will connect Jubail Port with 11 global ports via weekly sailings to Middle Eastern ports Khalifa, Jebel Ali, Hamad, Karachi, Mundra, Hazira, Alexandria, Tekirdag, Aliaga, Mersin, and King Abdullah. The service will operate five vessels with an average carrying capacity of 8,000 twenty-five equivalent units. 
The latest route will position Jubail Port as a competitive hub and uncover a host of value-added opportunities for importers and exporters aligned with the objectives of the Kingdom’s National Transport and Logistics Strategy, according to a press release. 
Jubail Commercial Port operates as a gateway to local industries to export their products to global markets bolstering Saudi foreign trade and economic growth. 
Saudi Arabia’s ports sector is set to welcome other trade links from leading shipping lines that are choosing the Kingdom as a vital port thanks to its strategic location at the crossroads of three continents, Mawani added. 
Last week, Mawani and MSC’s MEDLOG also signed an agreement to establish the first-ever integrated logistics park and re-export zone at King Abdulaziz Port with an investment exceeding $26 million. 
Also last week, another shipping service connecting India to East Med commenced linking Qatar’s Hamad port with other global ports including Jubail Commercial Port. 
Over the last two years, Mawani had struck significant partnerships worth over $500 million with national and international giants to establish six modern logistics parks that could create more than 6,000 direct and indirect job opportunities. 
Mawani was established in 1976 to transform Saudi ports into investment platforms and facilitate the Kingdom’s trade with the rest of the world. 
The Authority seeks an effective regulatory and commercial environment supported by an operating model that enables growth and innovation in the Kingdom’s maritime industry. 
RIYADH: Saudi Arabia’s Tadawul All Share Index inched up 31.67 points — or 0.30 percent — on Monday to close at 10,578.34, picking up from Sunday’s 68 points increase. 
The total trading turnover of the benchmark index on Monday rose to SR3.67 billion ($980 million) from Sunday’s SR2.3 billion. The advance-decline ratio endorsed the market sentiment as 176 stocks of the listed 223 moved further while 36 lagged. 
The slight pickup in the trading turnover is encouraging, especially after the International Monetary Fund managing director Kristalina Georgieva on Sunday warned that a third of the world would fall into recession in 2023.  
The turnover remained subdued in 2022 as the oil-led economic slowdown dampened investor sentiments. The total volume of shares traded last year declined by 35 percent to 43.5 billion shares compared to 66.9 billion in 2021. 
According to data compiled by Kuwait-based Kamco Invest, the total value traded during the year also declined by 23.8 percent to reach SR1.7 trillion compared to SR2.23 trillion in 2021. 
The sectoral pulse on Monday also gathered some sheen, as 18 of the 21 indices booked gains. The topmost gainer was the Capital Goods Index which advanced 173 points to close at 5,525.46. Its constituent Riyadh Cables upped 7.13 percent to close at SR39.80. 
Parallel market Nomu and MSCI Tadawul also rose 1.28 percent and 0.1 percent to close at 19,434.51 and 1,473.12, respectively. 
Stock markets in the Gulf Cooperation Council region on Jan. 2 moved cautiously as four of the six indices tanked while Qatar and Abu Dhabi progressed by 1.44 percent and 0.41 percent, respectively. 
On the announcements front, Saudi Cable Co. informed that it had scrapped its earlier capital reduction plans and planned to increase its capital to SR346.73 million through an SR280 million rights issue.  
The company pointed out that this amendment was based on many discussions with financial advisers. The board withdrew its previous recommendation to reduce capital, as it negotiated with several investors to purchase part of its debt, which will be converted into ordinary shares at nominal value.  
Ataa Educational Co. also informed that it signed a lease contract for an educational complex in the Sulaymaniyah district in Riyadh with Tatweer Buildings Co. for SR118.03 million. 
The integrated educational complex spans an area of 13,940 square meters, with an annual rental value of SR4 million, the company said in a statement on Tadawul. The share price of the company closed marginally lower at SR53.70. 
Meanwhile, Halwani Bros. Co. signed on Jan. 1 a Shariah-compliant credit facility agreement at SR120 million with the Gulf International Bank, according to a statement to Tadawul. 
The credit facility included a sum of SR100 million to finance the working capital, extending for one year and renewable on an annual basis, and a sum of SR20 million to fund treasury products which will extend for five years. The share price of the company climbed 2.91 percent to close at SR46. 
Real estate developer Cenomi Centers Co.’s board of directors also declared a 7.5 percent cash dividend or SR0.75 per share for the six months ended Sept. 30, 2022, totaling SR356.25 million. The company’s share price soared 4.31 percent to SR19.86. 


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