India shares hit new high, beating January 2008 peak

Updated 28 December 2013

India shares hit new high, beating January 2008 peak

MUMBAI: Indian shares jumped to their highest-ever trading level, beating the previous record set in 2008, fueled by strong foreign fund inflows and an easing of both global and domestic economic concerns.
The Bombay Stock Exchange benchmark Sensex hit a new high of 21,293.88 points in morning trade on Dhanteras day, part of the five-day festival of lights called Diwali.
The index's previous intraday record high was 21,206.77 points on January 10, 2008.
The Sensex retraced later on profit taking to end at a new record close of 21,196.81 points.
Sentiment has been improving across Asian markets over hopes that the US central bank may delay plans to start tapering its massive stimulus programme.
India's market has been sluggish for most of 2013, due to an outflow of foreign funds over fears of an end to the US program, while the country's slowing economic growth, weak rupee and high trade deficit also weighed.
But with global and domestic fears beginning to ease, investments are starting to flow in again.
Foreign funds pumped $2.55 billion into Indian equities in October, taking their total purchases to $16.48 billion for 2013, regulatory figures showed.
"This rally has been fueled by an avalanche of global liquidity into emerging markets, after the reprieve by the US Fed as far as the US tapering plan goes," said Ajay Bodke, head investment strategist with Mumbai brokerage Prabhudas Lilladher.
Local sentiment has improved as several Indian firms, including IT and auto giants, have reported better-than-expected earnings data for the September-ended quarter.
India's Finance Minister P. Chidambaram Friday warned investors against "excessive exuberance" despite being confident that the country's current account deficit may narrow, as exports improve and investments into India rise.
"The markets seem to be happy but I would caution investors against excessive exuberance," Chidambaram told reporters in New Delhi.
Chidambaram said he was confident that India's current account deficit — the broadest measure of trade — could be contained at $60 billion this fiscal, from an earlier figure of $70 billion.
The appointment in September of renowned economist Raghuram Rajan as India's new central bank governor also appears to have helped sentiment, analysts say.
Rajan, a former International Monetary Fund chief economist, has outlined a plan to boost investor confidence, fight high inflation and support the ailing rupee.
The rupee, which was one of the worst performing Asian currencies this year, has started to stabilise, gaining more than 10 percent against the dollar from its record low of 68.85 in August.
Rajan has been hawkish in his stance on inflation, which remains above the bank's comfort levels, by raising interest rates in his two monetary policy meetings since taking office.
India's annual inflation jumped to a seven-month-high of 6.46 percent for the month of September, led by surging food and fuel prices.
But analysts such as Bodke hope that consumer prices could start to ease soon, thanks to a good monsoon, giving the central bank room to cut rates and spur growth, something business leaders have been calling for.
India recorded five percent growth last year, the slowest in a decade, and far below the levels of eight to nine percent that it enjoyed in recent years.
Economists remain concerned that the rupee, though stable now, may come under pressure in coming weeks when the central bank eventually ends a temporary facility it opened to sell dollars directly to state-run oil firms.
Fears of fresh outflows once the US Fed commences tapering off its stimulus programme also remain.
"I would call this an illusionary rally. There are some roadblocks ahead in terms of valuations and economic fundamentals," said Jigar Shah, India's head of research for Kim Eng Securities.
The Congress party-led government of Prime Minister Manmohan Singh is anxious both to tame inflation and to revive the economy as it seeks a third term in office, with elections due by next May.
Foreign investors are eyeing the 2014 elections with hopes that a new government could announce more plans to boost reforms and investments into key areas such as infrastructure and banking.

PIF-backed Lucid Motors makes trading debut on Nasdaq

Updated 3 min 31 sec ago

PIF-backed Lucid Motors makes trading debut on Nasdaq

  • will make itsLucid to make trading debut on New York’s Nasdaq Global Select Market on Monday
  • Lucid merged with special purpose acquisition vehicle Churchill Capital Corp. IV

RIYADH: Lucid Motors, the Californian electric vehicle (EV) carmaker majority-owned by Saudi Arabia’s Public Investment Fund (PIF), will make its trading debut on New York’s Nasdaq Global Select Market on Monday.

Listed under the new ticker symbol “LCID”, the listing came about following the merger of Lucid and Churchill Capital Corp. IV — a special purpose acquisition company — on July 23. The EV firm will begin trading by ringing the Nasdaq opening bell on July 26.

The deal will help Lucid raise $4.4 billion, which will be used to fast track its production growth plans. The firm has over 11,000 paid reservations for its Lucid Air vehicle, which is on scheduled to start deliveries in the second half of this year.

“We are on track to meet our projected deliveries for the next two years, and we look forward to delighting our customers around the world with the best electric vehicles ever created,” Peter Rawlinson, CEO and CTO of Lucid Group, said in a press statement.

Michael S. Klein, chairman and CEO of Churchill Capital Corp. IV, said ahead of the merger: “Lucid has industry-leading technology, clear demand for its products, and is on track to deliver revenue-generating cars to customers in the second half of this year. We are excited to support Lucid’s transition into a public company and confident in its ability to address unmet needs in the automotive industry, which is moving toward electrification at a rapid pace and on a global scale.”

PIF announced its investment in Lucid Motors in Sept. 2018. The Lucid Motors CEO told Arab News in January that his team were scrutinizing possible locations in Saudi Arabia to open retail outlets — what Lucid calls “studios” — for their luxury EVs.

“We are already looking,” he said. “My retail team just returned from a scouting trip in the Kingdom, and that is very much on the road there. Hopefully, we can get a retail outlet there right at the tail end of 2021, probably early 2022.”

Earlier this month, the Wall Street Journal reported that Saudi Arabia stands to record a profit of nearly $20 billion on the back of its investment in Lucid.

PIF will own over 60 percent of the company, which is expected to have a market capitalization of about $36 billion.

Lucid’s expected market capitalization is nearly twice the valuation of Nissan Motor Co. and about two-thirds that of Ford Motor Co., which delivered more than 4 million cars last year. Lucid has yet to sell any cars.

Looking at the market for EVs, a report by the Pew Research Center found that 7 percent of respondents said they currently owned an electric or hybrid vehicle, and 39 percent said they were very or somewhat likely to buy an EV when they next came to purchase.

Interest has grown, with 1.8 million EVs registered in the US in 2020, more than three times as many as four years ago, according to the International Energy Agency.

While the US accounts for 17 percent of the world’s 10.2 million EVs, China is the biggest market, with 44 percent of all cars and Europe following with 31 percent.

Saudi Arabia to introduce insurance on domestic labor contracts in 2022

Updated 57 min 28 sec ago

Saudi Arabia to introduce insurance on domestic labor contracts in 2022

  • Move aims to increase attractiveness of Saudi labor market
  • Recruiters must carry the cost of insuring contracts for first two years

RIYADH: Saudi Ministry of Human Resource and Social Development is expected to start implementing insurance on the domestic labor contract early in 2022 in cooperation with the Saudi Central Bank (SAMA), Al Eqtisadia paper reported.

This decision guarantees the rights and benefits of the employer and the worker, including compensating the employer for the expense of bringing in a replacement domestic worker in the event of death, inability to work, or suffering from chronic or critical diseases, according to the ministry.

The move aims to increase the attractiveness of the Saudi labor market, improve the contractual relationship between workers and employers, and reduce risks in the domestic labor recruitment market, helping to cut costs.

“Recruitment companies and agencies used to provide a 3-month trial period for the worker, compensating families for any potential damage, but once the trial period ends, the two parties are not protected, causing lot of losses to Saudi families,” Saudi development and localization specialist Saleh Al-Anzi told Arab news.

“The insurance contract protects both the worker and the employer,” he said.

The insurance will be technically linked to the mediation contract for the recruitment of domestic workers through the Musaned platform, and the ministry will issue the implementation mechanism later in cooperation with the relevant authorities, including SAMA and the Ministry of Interior, sources familiar with the matter told the paper.

Recruitment companies must carry the cost of insuring the contracts of domestic workers they bring into the country for the first two years, the Saudi Council of Ministers decreed in May.

Saudi car rental facilities to issue e-contracts starting July 25

Updated 26 July 2021

Saudi car rental facilities to issue e-contracts starting July 25

  • Car rental facilities to issue all car rental contracts on the Naql portal

RIYADH: The Saudi Transport General Authority (TGA) started implementing the first phase of the unified electronic contract for car rental starting July 25, TGA announced on its Twitter account.
The unified electronic contract obliges car rental facilities to issue all car rental contracts on the Naql portal through the rental contracts service.
This service will enable the licensed establishments to issue a unified contract with complete statutory requirements and clauses, and will contribute to preserving the rights of the lessor and the lessee, enhancing the confidence in the services provided, and raising the level of quality of services, TGA said.
The unified electronic car contract will reduce disputes and the burden on the relevant authorities and will stimulate investment in the sector, according to the TGA.
TGA launched its Distinguished Transport Partner program in May to strengthen public-private partnerships in the sector.

Saudi PIF invests in Indian healthtech platform

Updated 51 min 24 sec ago

Saudi PIF invests in Indian healthtech platform

  • Healthifyme raises $75 million in Series C funding round
  • Khosla Ventures, LeapFrog Investment, HealthQuad and Unilever Ventures also invested in the round

RIYADH: The Saudi Public Investment Fund has invested in India-based healthtech Healthifyme’s $75 million Series C funding round, led by Khosla Ventures and LeapFrog Investment, Livemint reported.
HealthQuad and Unilever Ventures also participated in the round, along with existing investors Chiratae Ventures, Inventus Capital and Sistema Asia Capital, taking total investment in the startup to $100 million.
PIF assets have grown to about SR1.6 trillion ($426.6 billion) and it aims to expand this to SR4 trillion by the end of 2025, Deputy Governor Yazeed Al-Hamid said earlier this month.
The sovereign wealth fund aims to boost its local investments to account for 75-80 percent of the total, he said.
The Saudi sovereign fund has established 35 strategic companies since 2018, it announced on its Twitter account, on Sunday.
The companies are working to promote private sector growth and the diversification of the Kingdom’s economy, by launching new sectors and creating 366,000 direct and indirect jobs.
The Kingdom’s sovereign fund aims to generate approximately 1.8 million direct and indirect jobs by 2025.
The fund is focused on 13 strategic sectors including service utilities, renewable energy, aviation and defense, vehicles, transport and logistics, minerals and mining, financial services, health care, communications, media and technology, food and agriculture, and others.

Saudi Arabia increased support for housing sector in July

Updated 26 July 2021

Saudi Arabia increased support for housing sector in July

  • Sakani housing program beneficiaries received SR734 million in July
  • Figure compares with SR587 million a year earlier

RIYADH: Saudi Arabia’s Sakani housing program beneficiaries received SR734 million ($195.7 million) from the Ministry of Municipal and Rural Affairs and Housing and The Real Estate Development Fund (REDF) in July, up from SR587 million a year earlier, SPA reported.
This steady increase will continue for the next few years, Mohamed AlKhars, a member of the housing program advisory board and the chairman of Innovest Property Co. told Arab news.
Support for citizen’s first homes will be a policy that remains in places for many years in the Kingdom, he said.
However, the cost of support has fallen, he said. “There has been a drop in the interest on loans during the last three years, after negotiations with financiers, which are paid by the REDF,” said AlKhars.
The total amount deposited in the accounts of Sakani beneficiaries since the announcement of the transformation program in June 2017 until this July exceeded SR29.6 billion, said Mansour bin Madi, CEO of REDF.
In another Saudi step toward developing the housing sector, the Developers Services Center (ETMAM) approved nine housing schemes during the first half of this year, with a total area of more than 16.1 million square meters.
The approved plans included Riyadh, Makkah, Al-Qassim, the Eastern Province, Asir, Tabuk, and the northern border, Al Eqtisadiah reported.
ETMAM completed during the first half of this year building permit applications for 8,131 housing units, and the issuance of 119 real estate developer qualification certificates for sales projects.
“Those numbers will increase in the coming phase,” AlKhars said.
The center also contributed to the issuance of 45 sales licenses for off-plan sales projects, and 2,171 real estate developers were qualified in cooperation with the competent authorities to provide real estate development services.