OPEC countries extend 2.2m bpd voluntary production cut until end of December
OPEC countries extend 2.2m bpd voluntary production cut until end of December/node/2577911/business-economy
OPEC countries extend 2.2m bpd voluntary production cut until end of December
OPEC announced on Sunday that eight key OPEC+ member nations have agreed to extend their voluntary production cuts of 2.2 million barrels per day through December 2024. (Reuters/File Photo)
OPEC countries extend 2.2m bpd voluntary production cut until end of December
Originally implemented in April and November 2023, these additional reductions aim to stabilize the global oil market
Updated 5 min 8 sec ago
Arab News
LONDON: OPEC announced on Sunday that eight key OPEC+ member nations have agreed to extend their voluntary production cuts of 2.2 million barrels per day through December.
The countries are Saudi Arabia, Russia, and Iraq, as well as the UAE, Kuwait, Kazakhstan, Algeria, and Oman.
Originally implemented in April and November 2023, these additional reductions aim to stabilize the global oil market, according to a statement from the OPEC Secretariat.
The countries emphasized their commitment to full adherence to the Declaration of Cooperation, which includes monitoring the production adjustments to ensure compliance.
The 53rd meeting of the Joint Ministerial Monitoring Committee, held on April 3, underscored this dedication, establishing a timeline for the eight nations to fully offset any overproduction by September 2025.
Both Iraq and the Russia-Kazakhstan alliance recently reiterated their strong support for the agreement, pledging to uphold their compensation schedules.
Pakistan set to deliver fourth consecutive rate cut today to revive economy
All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates next week
Policymakers continue efforts to revive a fragile economy as inflation eases off recent record highs
Updated 43 min 32 sec ago
Reuters
KARACHI: Pakistan’s central bank is expected to cut its key interest rate further at its policy meeting today, Monday, with policymakers continuing their efforts to revive a fragile economy as inflation eases off recent record highs.
The central bank, the State Bank of Pakistan, has slashed the benchmark policy rate to 17.5 percent from an all time-high of 22 percent in three consecutive policy meetings since June, having last reduced it by 200 basis points in September.
All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates. Two expect a 150 bps cut, twelve predict a 200 bps reduction, and one forecasts a 250 bps cut.
Economic activity has stabilized since last summer when the country came close to a default before an eleventh hour bailout by the International Monetary Fund (IMF).
The IMF, which in September gave a boost to Pakistan’s struggling economy by approving a long-awaited $7 billion facility, said that the South Asian nation had taken key steps to restore economic stability with consistent policy implementation under the 2023-24 standby arrangement.
While the economy has started to gradually recover, and inflation has moved sharply down from a multi-decade high of nearly 40 percent in May 2023, analysts say further rate cuts are needed to bolster growth.
Mustafa Pasha, Chief Investment Officer at Lakson Investments, said rates must drop under 15 percent and hold below that for six months to have a material impact.
The IMF in its latest October report forecast Pakistan’s gross domestic product growth at 3.2 percent for the fiscal year ending June 2025, up from 2.4 percent in fiscal 2024.
The government expects annual inflation to have come in at 6-7 percent last month and slow further to 5.5-6.5 percent in November.
However, inflation could pick up again in 2025, driven by electricity and gas tariff hikes under the new $7 billion IMF bailout, and the potential impact of taxes on the retail and wholesale sector proposed in the June budget.
Ahmad Mobeen, senior economist at S&P Global Market Intelligence, said that while lower rates will offer some relief to the manufacturing sector, the benefits may be limited due to “elevated input costs, driven by high electricity and gas tariffs, combined with global supply and shipping constraints.”
Sindalah showcases Saudi Arabia’s investment potential, says commentator Ali Shihabi
Likens Kingdom’s approach to giga-projects to that of venture capitalist following launch of NEOM’s new tourism destination
Updated 47 min 27 sec ago
Arab News
DUBAI: Sindalah Island, NEOM’s new luxury tourism destination under construction on Saudi Arabia’s Red Sea coast, represents a critical milestone in the Kingdom’s economic transformation and proves many of its early doubters wrong, Saudi commentator Ali Shihabi has said.
Appearing on Arab News’ current affairs program “Frankly Speaking,” Shihabi highlighted the significance of Sindalah, saying its launch marked an important shift in global perceptions of the Kingdom as a holiday destination and as an investment opportunity.
“The launch of Sindalah was very, very important because you needed proof of a concept on the ground to show what can be done,” he said.
“For people to come and see it and feel it and enjoy it and experience it” validates the vision that Saudi Arabia has for NEOM and similar projects.
Sindalah Island, which will feature world-class yachting, luxury hotels and a golf club, could soon rival the likes of Monaco or Greece as a global destination. It is the latest in a bevy of megaprojects under construction across the Kingdom as part of the Vision 2030 transformation.
Sindalah Island is the latest in a bevy of megaprojects under construction across the Kingdom as part of the Vision 2030 transformation. (NEOM photo)
This transformation is already drawing the interest of major investors. Shihabi mentioned a recent conversation with an Indian investor planning to establish a $15 billion steel plant in the Kingdom, describing it as an “exciting opportunity” that showcases the nation’s appeal to foreign investors.
“His group will be investing a billion dollars in equity,” Shihabi told “Frankly Speaking” host Katie Jensen. “And he was very excited about the potential, the structure of incentives that are given to foreign investors, whether industrial investors, whether it’s the SIDF (Saudi Industrial Development Fund), or other facilities that the Saudi government makes available for foreign investors, and the good size domestic market also for different products.”
In Shihabi’s view, the Saudi government’s approach to giga-projects like NEOM is akin to that of a venture capitalist. The government has taken on the financial risk of building and launching these projects to attract global investors.
“It was a theoretical opportunity and you needed the Kingdom to be the venture capitalist really: to build the first models, even if those are loss leaders, because you needed a proof of concept on the ground,” he said.
Ali Shihabi, an author and commentator on the politics and economics of Saudi Arabia, speaks with Frankly Speaking host Katie Jensen. (AN photo by Abdulrahman bin Shalhoub)
Shihabi said Saudi Arabia’s Red Sea coastline, largely untouched by mass tourism, is “one of the last, if not the last, unspoiled virgin territory of exquisite seafront.”
By acting as an initial investor, the government aims to establish Saudi Arabia as a legitimate luxury destination and to cultivate demand among global tourists.
While Shihabi acknowledged that it will take time for Saudi Arabia to fully emerge as a tourism hub, he is confident that the foundation stones are in place. “Putting Saudi Arabia on the tourist mindset and map is going to take a number of years,” he said.
However, the momentum of these projects and Saudi Arabia’s investments in infrastructure, marketing, and partnerships are advancing the Kingdom’s vision to create an attractive and competitive tourism sector in the region.
“It will take time for tourists to get used to the concept of coming to the Kingdom as a tourist destination,” said Shihabi. “But I think that the foundation stones are being put in place successfully.”
The recent annual conference of the Future Investment Initiative in Riyadh, commonly referred to as “Davos in the desert,” showcased the Kingdom’s commitment to becoming a significant player on the global stage.
Shihabi, who is both an author and commentator on the politics and economics of Saudi Arabia, acknowledged that FII plays a valuable role in promoting the Kingdom’s image and helping international investors understand the scale and seriousness of Vision 2030.
Ali Shihabi is an author and commentator on the politics and economics of Saudi Arabia. (AN photo by Abdulrahman bin Shalhoub)
With the launch of projects like Sindalah and explosion of opportunities in NEOM, Saudi Arabia is gradually redefining its reputation on the world stage. However, Shihabi said changing global perceptions will require time and continued openness.
“The Kingdom has never been good at communication,” he said. “One of the deep structural problems the Kingdom had was it was closed off to the world. And the big change has been the opening up of the Kingdom to the world now.
“I encourage Western journalists, always, just to take a tourist visa, get on the plane and go and see things the way they are and the way they are developing and changing. And I can hardly think of a journalist who, having made the effort, has not changed his opinion of the Kingdom from what he had before he came to the Kingdom.
“The story really is a good one to be told on the ground and much easier to be told on the ground than to be explained in theory abroad. And there are a lot of skeptics; there are a lot of cynics.
“There’s a certain amount, I guess you can say, in the world of … I don’t want to exaggerate and use the word racism, but sort of prejudice toward Arabs and Muslims, which carries over to the Kingdom, prejudice against oil wealth. And a lot of historical baggage that the Kingdom has carried, which continues to affect its image.
“But I think that the more we open up the country and the more we allow people to come in and the more we allow people to see the changes on the ground, the better the image becomes.”
Number of hotel rooms in Saudi Arabia surges 107% in Q3
Room licenses doubled to over 3,950, as opposed to 2,000 permits in the third quarter of last year
Kingdom aims to create over 1 million tourism-related jobs, driving economic growth and increasing its global travel footprint
Updated 03 November 2024
NOUR EL-SHAERI
RIYADH: Saudi Arabia’s tourism sector experienced a 107 percent increase in hotel rooms year-on-year in the third quarter of the year, according to official data.
The Kingdom’s hospitality industry saw room numbers increase from 214,600 in the third quarter of last year to 443,200 during the same period in 2024.
Room licenses also doubled to over 3,950, as opposed to 2,000 permits in the third quarter of last year.
Saudi Arabia has ambitious tourism objectives, aiming to attract 150 million visitors annually by the end of the decade as part of its Vision 2030 plan.
The initiative is key to diversifying the country’s economy beyond oil, with tourism expected to become a necessary pillar of the Kingdom’s gross domestic product.
The nation has plans for investments exceeding $1 trillion for new attractions and infrastructure, including the Red Sea initiative and NEOM, a $500 billion mega-city.
An accessible e-visa program has also been introduced to facilitate international travel.
By focusing on heritage sites, luxury resorts, and cultural experiences, the Kingdom aims to create over 1 million tourism-related jobs, driving economic growth and increasing its global travel footprint.
In February, Saudi Arabia’s Minister of Tourism Ahmed Al-Khateeb announced plans to add 250,000 hotel rooms by 2030, with 75,000 to be developed through private sector contracts.
During a ministerial panel session at the Private Sector Forum in Riyadh, Al-Khateeb said the total number of hotel rooms in the Kingdom had reached 280,000 by the end of 2023.
He also said that the target for 2030 is approximately 550,000 hotel rooms, emphasizing the high quality of current and upcoming projects, which will position Saudi Arabia among the top global destinations.
The minister added that the tourism sector had reached a 10 percent contribution to GDP and a 7 percent contribution to non-oil GDP.
Al-Khateeb said that the Kingdom has surpassed its original target of attracting 100 million tourists by 2030, reporting 100 million visitors so far, including 77 million domestic and 27 million international travelers.
Closing Bell: Saudi indices close in green at 12,048
MSCI Tadawul Index increased by 5.51 points, or 0.37%, closing at 1,512.82
Parallel market Nomu gained 72.27 points, or 0.27%, to close at 27,297.45
Updated 03 November 2024
NOUR EL-SHAERI
RIYADH: Saudi Arabia’s Tadawul All Share Index started the week in green, gaining 26.15 points, or 0.22 percent, to close at 12,048.26.
The total trading value of the benchmark index was SR4.2 billion ($1.1 billion), with 82 listed stocks advancing, while 147 retreated.
The MSCI Tadawul Index also increased by 5.51 points, or 0.37 percent, closing at 1,512.82.
The Kingdom’s parallel market Nomu gained 72.27 points, or 0.27 percent, to close at 27,297.45, with 38 stocks advancing and 35 retreating.
The best-performing stock of the day was Riyadh Cables Group Co., whose share price surged by 9.98 percent to SR112.40.
Other top performers included MBC Group Co., which saw a rise of 9.98 percent to SR45.75.
Anaam International Holding Group and Al-Baha Investment and Development Co. also recorded gains of 8 percent and 7.69 percent, closing at SR1.35 and SR0.28, respectively.
Rabigh Refining and Petrochemical Co. was also among the top performers with SR8.61, recording a 5.51 percent increase.
Quara Finance Co. announced its nine-month financial results, seeing SR147.1 million in revenue, a 2.3 percent year-on-year increase.
Despite the company’s gains in sales, net profit saw a 28.1 percent yearly decline, recording SR34.5 million in net income.
Quara attributed the revenue increase to a growth in yield of the retail portfolio, while the decrease in profits was due to an increase in write-offs and decrease in write-off recoveries.
Quara closed Sunday’s trading at SR16, a 0.49 percent increase.
Elm Co. also released its financial results for the nine months of the year recording SR5.2 billion in revenue, a 25.2 percent year-on-year increase.
The company’s net profit also saw an increase to reach SR1.3 billion, a 29.1 percent growth.
Elm attributed the revenue growth to a 25.66 percent increase in digital business revenue and a 29.02 percent rise in business process outsourcing revenue, partially offset by a 19.13 percent decline in professional services revenue.
Elm closed Sunday’s trading at SR1,072.20, a 4.85 percent increase.
Tanmiah Food Co. reported a revenue increase of 23.8 percent year on year for the first nine months, reaching SR1.8 billion.
Net profits also increase by 39.3 percent to reach SR69.1 million by the end of the period, driven mainly by fresh poultry.
Tanmiah Food closed Sunday’s trading at SR143, a 4.99 percent increase.
Dr. Sulaiman Al Habib Medical Services Group’s revenue also increased by 14.9 percent in the first nine months of the year compared to the same period last year, to reach SR8 billion.
Net profits grew to reach SR1.7 billion, an 11.8 percent year-on-year increase.
The revenue increase was primarily driven by growth in the hospital and pharmacy segments, fueled by a rise in the number of patients in the hospital sector. The rise in net profits was largely attributed to this revenue growth.
Dr. Sulaiman Al Habib Medical Services Group closed Sunday’s trading at SR288.40, a 0.77 percent increase.
Fragrance company Al Majed Oud Co. reported revenue of SR683.7 million for the first nine months of the year, marking a 25.5 percent increase compared to the same period last year.
Net profits rose to SR141.9 million, a 23.3 percent year-over-year increase. The company attributed the growth in profits and sales to the strong performance of branches opened in 2023, which significantly boosted sales in the current period.
Al Majed Oud Co. closed trading at SR150.60, a 1.05 percent decrease.
Saudi road maintenance time down 40% thanks to modern technology, transport minister says
Saleh Al-Jasser said cutting-edge innovations have helped reduce carbon emissions
Several road networks were surveyed to identify shortcomings and execute safety initiatives, minister said
Updated 03 November 2024
REEM WALID
RIYADH: Saudi road maintenance time has been slashed by 40 percent thanks to modern technologies, according to the Kingdom’s Minister of Transport and Logistics Services.
During a speech on the first day of the Road Safety and Sustainability Conference taking place in Riyadh from Nov. 3—4, Saleh Al-Jasser said the cutting-edge innovations have also helped reduce carbon emissions.
This falls in line with Saudi Arabia’s Roads General Authority’s vision of enhancing the safety and sustainability of the road sector through national competencies. It also aligns with the body’s keenness to improve the quality of road networks and user experience, as well as foster innovation.
It is also in line with the authority’s objective to reduce the number of road deaths to less than five cases per 100,000 people.
“Modern technologies have helped reduce road maintenance time by up to 40 percent while reducing carbon emissions,” Al-Jasser said.
He added: “The Kingdom has implemented many scientific innovations such as road cooling and rubber roads and has advanced in the road quality index to fourth place among the G20 countries.”
The minister highlighted how this confirms its leadership in achieving the highest safety and quality standards on roads.
“The Kingdom’s vision has given great attention to quality of life and road safety,” Al-Jasser said.
“The Kingdom’s road network is the world’s first in terms of connectivity, and enhances sustainable development for individuals and goods according to the highest standards of security and safety,” he also said.
The minister went on to say a large number of road networks were surveyed to identify shortcomings and execute safety initiatives. Several measures have been implemented following the reviews.
Speaking at the same event, the Vice Minister of Transport and Logistics Services for Road Affairs and Acting CEO of RGA, Badr Abdullah Al-Dulami, shared findings from the world’s largest road survey, which confirmed that 77 percent of the Kingdom’s roads meet safety standards. He also highlighted that protection measures in traffic diversions have risen to 95 percent.
“Expanding an advanced research study that the authority is working on to use the products of building demolition in asphalt mixtures, which contributes to preserving the environment and investing in natural resources,” Al-Dulami said.
“Launching the Saudi Road Code, which contributes to raising the level of safety, preserving the environment, and preparing the infrastructure for self-driving vehicles,” he added.
Chairman of the International Road Federation, Abdullah bin Abdulrahman Al-Muqbil, was also present during the event.
“To make roads safer for travel, we have harnessed modern technologies to sustain them and raise their efficiency,” Al-Muqbil said.
The chairman said the federation has established effective partnerships with member states, including the Kingdom, which has led to enhanced safety and sustainability in the road sector and the adoption of modern technologies.
