KARACHI: When Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index hit an intra-day all-time high of 53,124 points on May 25, 2017, hardly any analysts were ready to look back as the majority of them were eyeing 56,000 as the next level before the country moved into the election year, but it turned out to be a mere dream, equity analysts say.
The start of 2017, was euphoric at Pakistan’s equity market and the main index hit a high of 52,876, but circumstances reversed and the index sunk as low as 37,919 points by the end of the year.
“Political turmoil (cases against former Prime Minister Nawaz Sharif), a weak economy and disappointing foreign flows in the equity market were the major causes that put PSX in the reverse gear,” Zeeshan Afzal, executive director-research at Insight Securities, told Arab News.
The market’s worst performance mainly in the later half of 2017 still continues, and the stakeholders expect that the trend will not reverse till the elections are over. The results of the elections will set the future direction of the market.
Pakistan Muslim League Nawaz (PML-N) faces tough challenges after the conviction and imprisonment of Mian Nawaz Sharif. Analysts believe that the PTI will take advantage of the situation and may be in a position to make the next government.
“A polarized political landscape akin to the 1990s, with marginalization of PML-N’s grass root support and swing momentum in favor of the PTI, should underpin the formation of a coalition government at the center,” according to AKD Research.
Pakistan’s 105 million voters will decide about the new government on Wednesday (July 25), in one of the most tightly contested elections in Pakistan’s history.
Nabeel Khursheed, analyst at Topline Securities, says: “We believe one of the following scenarios can unfold: first, the PTI grabs 85-95 seats and forms a coalition with smaller parties and independents; second, the PML-N grabs 80-90 seats and forms a coalition with the PPP, smaller parties and independents; and third, the PTI and PML-N get less than 80 seats.
“In the first scenario the market may react positively as this outcome is expected to lead to a stable government. In the case of the second scenario, the immediate reaction of the market will be negative as former PM and PML-N party head Nawaz Sharif has called the upcoming general elections a referendum against his disqualification. The market may react positively in the long run. In the case of a third scenario the market will react negatively as there will be a brief confusion,” Khursheed explains.
Analysts say no matter who wins the election, the winner should have a clear majority.
“The market will take a positive turn if any party gets a majority or even gets the ability to make a strong coalition government because the split mandate would be negative. The winning of PML-N or PTI will be positive for the market,” Zeeshan Afzal said.
“If the PML-N wins the election with a majority, the market is expected to react positively because they had driven the market to its highest level and investors believe that they will continue with their policies. Investors will react to the elections of others according to the policies of the parties,” Ahsan Mehanti, chief executive of Arif Habib Group, told Arab News.
Analysts believe that whoever makes the next government will have to face tremendous pressure in the first month: There will be no time for a honeymoon because the worst economic situation demands immediate attention.
“The next government will have to show its seriousness about the economic situation. Going to the IMF would be an unfavorable choice as its program will come up with conditions the government will have to meet. Further monetary tightening will turn the investors to other avenues,” Amin Yousuf, CEO of AKY Securities, told Arab News.
“Who will invest in the stock market in a high-interest rate regime,” Yousuf asked, adding: “Investors will turn to other avenues like secured government savings. There will be no more foreign investment in equities as long as the Pak rupee instability persists.”
Two working days are left until the general election. During this period the investors’ interest is likely to remain glued to election euphoria. The vulnerable economic position and persistent foreign selling remain major concerns for valuations.
The interim government has also started preparatory work for a fresh IMF program. In this environment banks, oil and gas exploration and the production sector, and independent power producers are expected to perform well. Persistent foreign selling owing to the sliding Pak rupee, the US interest rate liftoff and the global trade war may continue to drag the index.
Election results to set direction of Pakistan’s stock market
Election results to set direction of Pakistan’s stock market
- Weak coalition government may create confusion among investors
- Political uncertainty, weak economy keep Pakistan stock market under pressure
Saudi tourism fund signs MoU for development of resorts in Kingdom
RIYADH: Saudi Arabia is set to witness the development of new luxury resorts as the Tourism Development Fund signed a memorandum of understanding with Karisma Hotels and Resorts International, the Saudi Press Agency reported.
The signing took place at the International Hospitality Investment Forum in Berlin on Wednesday. The MoU seeks to explore opportunities for developing resorts and enhancing new areas of the tourism and hospitality sector in the Kingdom.
The agreement outlines a roadmap to determining a methodology for investing and providing financial and non-financial support to a vibrant ecosystem of investors, clients, and partners.
“The Tourism Development Fund is unlocking a great potential with Karisma Hotels and Resorts as we join forces to explore the feasibility of funding and supportive innovative projects that will significantly contribute to the growth of the tourism sector,” SPA quoted TDF CEO Qusai Al-Fakhri as saying.
The fund aims to connect the world with opportunities in the Kingdom’s fast-growing tourism sector. It offers financial and non-financial support to international and local investors.
“We are proud to announce the company’s significant entrance into Saudi Arabia with multiple hotel developments throughout the Kingdom in collaboration with our partners and local developers. Karisma will introduce first-of-its-kind experiential leisure hotels in partnership with worldwide acclaimed brands, bringing a new offering of leisure vacations to the Kingdom,” Esteban Velasquez, CEO of Karisma Hotels and Resorts, said.
Saudi Arabia’s tourism sector has revised its 2030 target to 150 million visitors, up from the initial 100 million.
The tourism sector has become important to the national economy, as spending on tourism by domestic and international tourists exceeded SR250 billion ($66.7 billion) in 2023. The sector is set to contribute 10 percent to the non-oil gross domestic product and create 1 million job opportunities by 2030. This spending represented more than 4 percent of the Kingdom’s GDP and 7 percent of the non-oil GDP, highlighting the significance of the tourism sector to the Kingdom’s economy.
During a panel discussion, Mahmoud Abdulhadi, deputy minister of investment attraction, underscored the Kingdom’s potential opportunities for both international and local businesses to invest in the tourism industry.
He noted that the Hospitality Investment Enablers initiative, announced by the Ministry of Tourism within the Investment Enablers Program, is in line with Vision 2030's strategic goals
The top official said the initiative aims to increase and diversify tourism offerings, enhance the capacity of tourism hospitality facilities in tourist destinations, and attract private investments in the hospitality sector.
Closing Bell: TASI loses 34.45 points to close at 12,465
RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 12,465.98 points on Wednesday, dipping 34.45 points or 0.28 percent.
The parallel market, Nomu, gained 92.53 points or 0.35 percent to close at 26,401.91.
Meanwhile, the MSCI Tadawul 30 Index also slightly declined 9.29 points or 0.59 percent to conclude at 1,569.13.
The main index posted a trading value of SR9.5 billion ($2.55 billion), with 96 stocks advancing and 131 declining.
Ash-Sharqiyah Development Co. was the top performer on TASI as its share price surged 9.95 percent to SR21.44. Batic Investments and Logistics Co. followed with its share pricing jumping 9.27 percent to close at SR2.83.
Saudi Ground Services Co. also performed well, climbing 9.09 percent to SR58.80. The Mediterranean and Gulf Insurance and Reinsurance Co. and Almunajem Foods Co. increased 8.53 and 6.32 percent to SR28 and SR117.80, respectively.
Conversely, Fawaz Abdulaziz Alhokair Co. recorded the most significant dip, declining 5.16 percent to SR11.40.
Astra Industrial Group and Etihad Etisalat Co. also experienced setbacks, with their shares dropping to SR175.40 and SR51.39, reflecting declines of 3.73 and 3.39 percent, respectively.
Saudi Chemical Co. and Saudi Real Estate Co. also reported significant losses of 3.08 percent and 2.88 percent to SR7.87 and SR22.22, respectively.
Nomu’s top performer was Future Care Trading Co., which saw a 10.68 percent jump to SR9.64.
Ladun Investment Co. and Mayar Holding Co. also recorded notable gains, with their shares closing at SR5.63 and SR4.10, marking an increase of 9.96 and 7.89 percent, respectively.
Lana Medical Co. and Al-Modawat Specialized Medical Co. also fared well, as their share price increased by 7.25 and 6.92 percent, closing at SR42.90 and SR151.40.
On Nomu, Alqemam for Computer Systems Co. was the worst performer, declining by 9.72 percent to SR90.10. Other underperformers included Saudi Parts Center Co. and Clean Life Co., whose share prices dropped 6.10 percent and 5.71 percent to SR60.0 and SR94.20, respectively.
Chinese businesses shown NEOM opportunities as ‘Discover’ tour hits Beijing, Shanghai
RIYADH: Opportunities for Chinese companies to engage with and invest in NEOM have been showcased in Beijing and Shanghai, attracting significant interest from several companies.
The giga-project kicked off the Chinese leg of its global “Discover NEOM” tour in the capital on April 15, followed by a visit to the country’s biggest city on April 17, attracting a cumulation of over 500 business and industry leaders.
Organized in partnership with the China Council for the Promotion of International Trade Beijing and CCPIT Shanghai, the events featured presentations by NEOM’s leadership team that highlighted on-the-ground progress and milestones, as well as detailed overviews of the initiative’s diverse economic sectors.
Numerous opportunities for Chinese companies to engage and invest in the advanced urban and economic zone were showcased during these gatherings, eliciting significant interest. Many companies expressed enthusiasm and discussed concrete next steps with NEOM’s leadership, according to a release.
“We are grateful to CCPIT Beijing and CCPIT Shanghai for supporting our visit to China and for the opportunity to present NEOM’s vision,” Nadhmi Al-Nasr, CEO of NEOM, said.
“To date, NEOM has already engaged with over 15 major Chinese businesses and invested in a number of Chinese startups to support the growth and diversification of NEOM. Collaboration with China will continue to play a vital role in the development of NEOM, and we look forward to strengthening our engagement with the country’s business community,” he added.
Over 100 Chinese building companies participated in the event’s construction-focused forum, which presented many collaboration opportunities.
Furthermore, the private showcase, “Discover NEOM: A New Future by Design,” was a highlight of the events.
It offered guests an immersive experience exploring NEOM’s developments. These included THE LINE, a 170-km-long city designed as the future of urban living; Oxagon, which is reshaping the traditional industrial model; Trojena, NEOM’s mountain resort; and Sindalah, a luxury island destination in the Red Sea set to open later this year.
“Both Beijing and NEOM are accelerating the development of new modes of productivity, deepening comprehensive reforms, promoting scientific and technological innovation, and working to ensure the protection of our environment,” Guo Huaigang, chairman of CCPIT Beijing, said.
“We look forward to the role our cooperation can have in Beijing’s future prosperity,” he added.
Expressing Shanghai’s interest in fostering its relationship with Saudi Arabia, Zhao Zhuping, deputy secretary general of the Shanghai Municipal Government, stated that the entity looks forward to deepening mutually beneficial engagement with NEOM.
“Discover NEOM China” marks the latest installment of NEOM’s global roadshow, following engagements in major international cities such as Seoul, Tokyo, and Singapore, as well as New York, Boston, and Miami.
Paris, Berlin, and London have also been visited by the expedition.
Saudi crude production hits 7-month high in February
- The Kingdom’s crude exports rose to 6.32 million bpd or 0.32 percent: JODI data
RIYADH: Saudi Arabia’s crude production reached a seven-month high of 9.01 million barrels per day in February, data from the Joint Organizations Data Initiative showed.
This represented a rise of 55,000 bpd or 0.61 percent compared to the previous month.
Furthermore, the data indicated that the Kingdom’s crude exports rose to 6.32 million bpd, reflecting a monthly increase of 0.32 percent.
In early April, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, chose to keep their existing output policy unchanged as oil prices hit a five-month high.
Led by Saudi Arabia and Russia, OPEC+ extended voluntary output cuts of 2.2 million bpd until June to bolster the market. The decision was reached during the 53rd meeting of the Joint Ministerial Monitoring Committee on April 3.
Oil prices surged due to supply constraints, attacks on Russian energy infrastructure, and conflicts in the Middle East, with Brent crude exceeding $89 a barrel.
This extension of cuts, alongside voluntary reductions announced in April 2023, including 500,000 bpd cuts from both Saudi Arabia and Russia, now extends through December of this year.
As a result of this decision, despite the monthly increase, crude output remains approximately 14 percent lower than the levels observed during the same month last year.
The next JMMC meeting is scheduled for June 1.
Refinery output
Meanwhile, refinery crude output, representing the processed volume of crude oil yielding gasoline, diesel, jet fuel, and heating oil, surged to a five-month high. It increased by 10 percent compared to the previous month, reaching 2.68 million bpd, according to JODI data. This also marked a 10 percent increase from the 2.44 million bpd recorded during the same period last year.
As one of the world’s leading oil producers, Saudi Arabia plays a crucial role in supplying these refined products to meet global energy demands.
In February, diesel, constituting 38 percent of the total output, declined by 7 percent to 1.02 million bpd, with its percentage share decreasing from 45 percent in January. Motor aviation or jet fuel maintained a 22 percent share, experiencing an 11 percent increase to 597,000 bpd. Meanwhile, fuel oil, making up 17 percent of the total refinery output, saw a slight uptick of 0.22 percent, totaling 455,000 bpd.
Conversely, refinery output exports surged to a 10-month high, reaching 1.39 million bpd, a 12 percent monthly increase. The most significant rise was observed in motor and aviation oil, up by 45 percent to 275,000 bpd. Fuel oil exports followed with a 38 percent increase to 219,000 bpd, while diesel oil saw a 13 percent rise to 629,000 bpd.
In February, 62 percent of refinery diesel oil output was exported, marking the highest percentage in eight months. Fuel oil and motor and aviation gasoline followed suit with export percentages of 48 percent and 46 percent, respectively.
Direct crude usage
Saudi Arabia’s direct burn of crude oil, involving the utilization of oil without substantial refining processes, experienced an increase of 52,000 bpd in February, representing a 17 percent rise compared to the preceding month. The total direct burn for the month amounted to 360,000 bpd.
The Ministry of Energy aims to enhance the contributions of natural gas and renewable sources as part of the Kingdom’s goal to achieve an optimal, highly efficient, and cost-effective energy mix.
This involves replacing liquid fuel with natural gas and integrating renewables to constitute approximately 50 percent of the electricity production energy mix by 2030.
Zain KSA introduces first 100% Saudi-made fleet tracking solution for businesses
RIYADH: Saudi telecom provider Zain KSA has become the first operator in the Kingdom to offer a 100 percent locally made fleet tracking system for businesses.
The new system is expected to empower businesses in Saudi Arabia to make informed decisions through comprehensive reports generated from precise data collection.
The launch of the system, entirely made in the Kingdom for the business sector, integrates cutting-edge tracking devices that are locally designed, manufactured, and assembled under the country’s “Saudi Made” program, the company said in a statement.
The telecom company further explained that the monitoring solution is a comprehensive cloud-based platform, providing businesses of all sizes with tools to optimize logistics operations, enhance travel routes, and minimize fuel consumption. This, in turn, reduces carbon emissions, preserves the environment, and fosters sustainability.
Saad bin Abdulrahman Al-Sadhan, chief business and wholesale officer at Zain KSA, said: “We are proud to be the first telecom and digital services provider to offer an integrated solution designed and developed in the Kingdom, aligning with our sustainability strategy of supporting local content.”
He added that their achievement aligns with the aspirations of the country’s leadership and Vision 2030 in enhancing the digital economy and localizing technology.
He also emphasized his company’s commitment to building an integrated technological ecosystem aiming at leveraging digitization and automation to serve and empower the productive, service, and logistical sectors across the Kingdom.
The executive further said that their fleet management method is a direct result of this commitment, and they take immense pride in being at the forefront of companies providing 100 percent national digital solutions.
The firm said in its release that by offering real-time GPS tracking, its system enhances road safety and security across the transportation and logistics sectors, empowering decision-makers with crucial insights through comprehensive reports based on accurate data.
It added that the system allows for informed decisions that boost operational efficiency and save costs.