BENGALURU: Tesla said on Friday it has increased its borrowing capacity for a car lease program to $1.1 billion from $600 million.
The move comes as the electric car maker spends heavily to fix production bottlenecks of its new Model 3 sedan.
The company increased the borrowing capacity under certain warehouse agreements, the company said in a filing. A spokesman said it was related to Tesla’s car lease program.
In August, Tesla said it would raise about $1.5 billion through its first-ever offering of junk bonds as it seeks fresh sources of cash to ramp up production of its new Model 3 sedan.
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Tesla raises borrowing capacity for car leases to $1.1 billion
Tesla raises borrowing capacity for car leases to $1.1 billion
Bahrain’s real estate sector holding steady, report says
RIYADH: Bahrain’s real estate sector remained steady in the first quarter of this year, with 6,124 sales transactions, representing a marginal 3 percent year-on-year decline, an analysis showed.
According to a report released by real estate services firm Savills, the value of transactions in the property market also witnessed a slight drop of 1.2 percent in 2023 to $2.92 billion compared to the previous year.
However, the volume of real estate transactions in the country grew by 24.1 percent in 2023 compared to 2022.
“Despite challenges, the real estate sector continues to grow, driven by government support, rising investor confidence, and an increasing demand for real estate in the region,” said Hashim Kadhem, head of professional services, residential sales and rental market at Savills.
According to the report, home buyers in Bahrain are becoming more strategic in the market, primarily focusing on mid-range properties.
Moreover, more affordable housing options with improved amenities have shifted the market dynamics in favor of tenants.
Kadhem added: “Bahrain’s coastal location and flourishing high-end tourism industry continued to drive demand for luxury waterfront properties, which appeal to buyers seeking exclusivity and comfort.”
The report revealed that a stream of projects is expected to be handed over this year, which could further widen the gap between demand and supply and potentially affect capital values in the short term.
According to the study, capital values of apartments grew slightly by 0.3 percent in the first quarter of this year compared to the previous three months.
On the other hand, high-end villas witnessed a 4.5 percent dip in capital value in the first quarter compared to the same period of the previous year.
Office sales and rental market
The report revealed that Bahrain’s office sector real estate market experienced a quiet period in the first quarter of this year, with businesses renewing leases in high-quality Grade A properties.
According to Savills, capital values for these remained stable in the first quarter, driven by an increase in supply.
Grade A office spaces enjoy a premium over the average rent prevailing in the area due to their location, infrastructure, and young age.
The report also suggested that co-working spaces also witnessed high demand in the first quarter, mainly from startup companies and businesses looking to downsize.
Oil Updates – prices steady as investors assess OPEC+ output cut extension
NEW DELHI: Oil prices were little changed on Monday, as investors weighed a move by producer group OPEC+ to extend deep output cuts well into 2025, according to Reuters.
Brent futures for August delivery were down 14 cents, or 0.2 percent, to $80.97 a barrel at 9:40 a.m. Saudi time, after falling to a session’s low of $80.55. US West Texas Intermediate crude futures for July delivery slipped 9 cents, or 0.1 percent, to $76.90, after falling to $76.39 earlier.
Brent settled down 0.6 percent and WTI posted a 1 percent loss last week.
The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, are currently cutting output by a total of 5.86 million barrels per day, which is about 5.7 percent of global demand.
This includes 3.66 million bpd of cuts that were due to expire at the end of 2024, and voluntary cuts by eight members of 2.2 million bpd to expire by the end of June 2024.
But on Sunday, the group agreed to extend the cuts of 3.66 million bpd by a year until the end of 2025. It will also prolong the cuts of 2.2 million bpd by three months until end-September 2024, before phasing it out over a year from October 2024 to September 2025.
Analysts said investors will take time to do the math of the reduction in production and digest the decision.
“Overall, I think the decision is slightly bearish, as the market was not expecting OPEC+ to start unwinding the cuts in the fourth quarter,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Goldman Sachs analysts echoed the sentiment, saying that the meeting was viewed as bearish despite the extension of production cuts, as eight OPEC+ countries had already signalled plans to gradually phase out the 2.2 million bpd of voluntary cuts over the October 2024 to September 2025 period.
“The communication of a surprisingly detailed default plan to unwind extra cuts makes it harder to maintain low production if the market turns out softer than bullish OPEC expectations,” the analysts said, adding: “The communication of a gradual unwind reflects a strong desire to bring back production of several members given high spare capacity.”
In the Middle East, Gaza conflict mediators urged Israel and Hamas to finalize a ceasefire and hostage release deal outlined by US President Joe Biden, though Israel has said there will be no formal end to the war as long as Hamas retains power.
Israel said it was assessing a governing alternative to the Iran-backed group.
An aide to Prime Minister Benjamin Netanyahu said Israel had accepted a framework deal for winding down the Gaza war, though the aide said it was flawed and in need of much more work.
Saudi Arabia to become 1st G20 country to replace all street lights with energy-saving LEDs: official
RIYADH: Saudi Arabia is set to become the first G20 country to install LED street lights to conserve energy, said a top official of the National Energy Services Co., known as Tarshid.
Speaking in a panel titled “Saudi Vision 2030 Outlook” on the first day of the Global Project Management Forum 2024 taking place in Riyadh from June 2 to 3, Mohammed Muaafa, technical services director of Tarshid, said the company has worked on a large number of projects to conserve electricity in various types of commercial and residential projects across the Kingdom.
These efforts are in line with the Kingdom’s target of producing 50 percent renewable electricity by 2030 and achieving net-zero emissions by 2060.
“We will be the first country in G20 that fulfills this goal of turning all the street lamps into energy-saving ones,” Muaafa said.
The top official said Tarshid’s main objective is to reduce the consumption of electricity and reduction of emissions.
He said the project has helped us save 70-75 percent of energy.
The Global Project Management Forum 2024 is designed to bring together the most influential global community of project managers and diverse stakeholders for immersive learning, networking, and collaboration.
The two-day annual aims to highlight the latest developments in the field of project management across various sectors and serve as a platform for industry experts to share creative ideas to achieve their professional goals.
Closing Bell: Saudi main index rises to close at 11,625
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 121.61 points, or 1.06 percent, to close at 11,625.10.
The total trading turnover of the benchmark index was SR5.6 billion ($1.49 billion) as 112 stocks advanced, while 110 retreated.
On the other hand, the Kingdom’s parallel market Nomu slipped 492.33 points, or 1.85 percent, to close at 26,118.24. This comes as 25 stocks advanced, while 35 retreated.
Meanwhile, the MSCI Tadawul Index rose 19.25 points, or 1.34 percent, to close at 1,455.32.
The best-performing stock of the day was East Pipes Integrated Company for Industry. The company’s share price surged 8.96 percent to SR163.00.
Other top performers included Al Hassan Ghazi Ibrahim Shaker Co. as well as Mouwasat Medical Services Co.
The worst performer was Astra Industrial Group whose share price dropped by 3.92 percent to SR147.
On the announcements front, East Pipes Integrated Co. for Industry announced the sign off of several contracts with Saudi Arabian Oil Co., or Aramco, with value exceeding SR1.65 billion for the manufacturing and supply of steel pipes.
According to a Tadawul statement, the financial impact of the 19-month contract will be reflected from the final quarter of the financial year 2024-25 to final quarter of the financial year 2025-26.
Moreover, Group Five Pipe Saudi Co. announced contracts sign off with Saudi Aramco worth SR186 million to manufacture and supply spiral-welded steel pipes.
A bourse filing revealed that the financial impact of the two-month contract is expected to be reflected starting from the second quarter of the fiscal year 2025.
Additionally, Gulf Union Al-Ahlia Cooperative Insurance Co. announced that it signed an insurance contract with Saeed Raddad Group to provide cooperative health insurance services to its employees and their families for one year.
According to a Tadawul statement, the contract value exceeds 5 percent of the gross written premiums according to the audited financial statements for the year 2023.
The one-year contract is expected to have a positive impact on Gulf Union Al-Ahlia Cooperative Insurance Co.’s financial results for 2024 and 2025.
Meanwhile, Ataa Educational Co. announced its interim financial results for the period ending April 30.
A bourse filing revealed that the company’s net profit hit SR44 million in the nine months ending in April 2024, reflecting a 7.4 percent surge when compared to the corresponding period a year earlier.
This jump is primarily owed to the acquisition of minority interest in Al-Yasmine, Al-Alsun, and Jeel Al-Majd companies, increased revenues in the education sector by 4 percent, and a decrease in operating costs by 2 percent.
IATA summit in Dubai focuses on airline industry challenges
RIYADH: Geopolitical and economic changes, safety, and emissions are in the spotlight at the 80th IATA Annual General Meeting and World Air Transport Summit that commenced in Dubai on June 2.
According to the International Air Transport Association, leaders from the global airline industry are attending the World Air Transport Summit scheduled to continue until June 4 at the event. Discussions will encompass topics such as artificial intelligence, innovation, and a review of the annual report on the air transport industry.
The gathering, hosted by Emirates and the first of its kind in Dubai, is expected to witness over 1,500 participants, including IATA’s member airlines, IATA AGM-level Strategic Partners, and international and regional associations. Additionally, it includes leading manufacturers, industry suppliers, and media representatives.
IATA’s Director General Willie Walsh stated: “Dubai’s world-leading connectivity places it at the crossroads of the planet. And it will soon be the center of the airline industry’s leadership as it hosts the 80th IATA Annual General Meeting and World Air Transport Summit.”
He added: “We look forward to hosting our industry colleagues in Dubai, Emirates’ home and hub. This is a city that has forged its place in global aviation and prospered, thanks to its visionary leaders and progressive policies that recognize air transport’s role as a key economic enabler.”
In line with this, the IATA chief noted that last year, aviation contributed 27 percent to Dubai’s gross domestic product and supported $37 billion in gross value added.
Tim Clark, president of Emirates, remarked that there are always exciting new developments in Dubai.
“I hope visiting delegates will get to a chance to experience this buzzing city and the UAE’s renowned hospitality for themselves.” Clark said.
The World Air Transport Summit is set to follow the annual meeting, offering a comprehensive program that addresses the critical issues facing aviation.
“The commitment to achieve net-zero carbon emissions by 2050 will top the agenda of the 80th IATA AGM and World Air Transport Summit. We will explore solutions to accelerate progress, particularly with the production of sustainable aviation fuel and the potential for carbon removals,” said Walsh.
He added that they will also assess their progress on safety, financial sustainability, and other key industry topics.
“It’s important that we put these challenges on the table so that all stakeholders, including governments, have a clear understanding of what airlines need to connect people and economies safely, efficiently, and ever more sustainably,” IATA director general said.
Meanwhile, the global aviation watchdog has announced a substantial decrease of nearly $1.8 billion in airline funds previously blocked by governments from repatriation.
This reduction, representing a notable 28 percent decline, has been observed as of the end of April, according to a statement by IATA.
Since December 2023, the blocked funds have diminished by $708 million, marking a significant step toward resolving the issue of hindered repatriation.
IATA reiterated the call for governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations.
"The reduction in blocked funds is a positive development. The remaining $1.8 billion, however, is significant and must be urgently addressed. The efficient repatriation of airline revenues is guaranteed in bilateral agreements,” Walsh said.
He added that even more importantly, it is a prerequisite for airlines — who operate on thin margins — to be able to provide economically critical connectivity. “No business can operate long-term without access to rightfully earned revenues.”
IATA added that the main driver of the reduction was a significant clearance of funds blocked in Nigeria. Egypt also approved the clearance of its significant accumulation of blocked funds. However, in both cases, airlines were adversely affected by the devaluation of the Egyptian pound and the Nigerian naira.
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