LONDON: Britain’s financial watchdog said on Tuesday that the cost of living crisis, meeting climate targets and improving diversity should be reflected in how banks determine pay and bonuses.
“Your role is key in ensuring that your firm’s remuneration policies support the purpose, long-term strategy and values of your firm, while reflecting the current economic environment,” the Financial Conduct Authority (FCA) said in a letter to chairs of remuneration committees at banks.
Fuel bills, food prices and borrowing costs are all rising in Britain, putting a squeeze on household incomes, and firms have until Aug. 31 to respond to the watchdog.
“This includes how your firm will take into account the impact of the current economic environment on bonus pools and individual outcomes,” the FCA said.
Some UK banks have already started to reward staff with cost-of-living linked payments. HSBC for instance said on Monday it would give some of its workforce a one-off 1,500 pounds ($1,830) to help them deal with inflation pressures.
The FCA also asked banks to provide details of how their environmental, social and governance (ESG) commitments are linked to remuneration policy, including any targets.
“We believe that linking progress against these commitments to a measurable proportion of pay could be effective in encouraging individuals to take accountability for change,” the FCA letter said.
Pay also has a role to play in improving diversity and inclusion at banks, the watchdog said.
“In your role as Chair, your oversight of the link between the performance management framework and incentives is critical and you may wish to review how remuneration policy takes into account some of the risks that an employee’s working preferences negatively influence their remuneration.”
Banks must reflect cost of living crisis in pay, says UK watchdog
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Banks must reflect cost of living crisis in pay, says UK watchdog
- Fuel bills, food prices and borrowing costs are all rising in Britain
- Some UK banks have already started to reward staff with cost-of-living linked payments
Oil Updates - prices advance as investors reassess US inventories data
TOKYO: Oil prices edged up on Thursday, following two consecutive sessions of decline, as investors reassessed the latest data on US crude oil and gasoline inventories and returned to buying mode, according to Reuters.
Brent crude futures for May were up 31 cents, or 0.4 percent, at $86.40 a barrel while the more actively traded June contract rose 32 cents, or 0.4 percent, to $85.73 at 7:15 a.m. Saudi time. The May contract expires on Thursday.
US West Texas Intermediate crude futures for May delivery were up 39 cents, or 0.50 percent, to $81.74 a barrel.
Both benchmarks were on track to finish higher for a third consecutive month, and were up about 4.5 percent from last month.
In the prior session, oil prices were pressured following last week’s unexpected rise in US crude oil and gasoline inventories, driven by a rise in crude imports and sluggish gasoline demand, according to Energy Information Administration data.
However, the crude stock increase was smaller than the build projected by the American Petroleum Institute.
“We ... expect US inventories to rise less than normal in reflection of a global oil market in a slight deficit,” Bjarne Schieldrop, chief commodities analyst at SEB Research, said in a note, adding: “This will likely hand support to the Brent crude oil price going forward.”
Also providing support to prices were US refinery utilization rates, which rose 0.9 percentage points last week.
Recent disappointing inflation data affirms the case for the US Federal Reserve to hold off on cutting its short-term interest rate target, a Fed governor said on Wednesday, but he did not rule out trimming rates later in the year.
“The market is converging on a June start to cuts for both the Fed and the European Central Bank,” JPMorgan analysts said in a note. Lower interest rates support oil demand.
Investors will watch for cues from a meeting next week of the Joint Monitoring Ministerial Committee of producer group the Organization of Petroleum Exporting Countries amid supply concerns over geopolitical risks.
OPEC and its allies, known as OPEC+, are is unlikely to make any oil output policy changes until a full ministerial gathering in June, but any sign of members not sticking to current production quotas will be viewed as bearish, analysts at ANZ Research said.
“The lack of a ceasefire deal between Israel and Hamas continues to keep tension in the Middle East elevated,” ANZ said.
Dubai sees 550% annual rise in global SMEs attracted to the emirate
RIYADH: Asian and Australian businesses helped fuel a 550 percent annual rise in small and medium enterprises setting up in Dubai in 2023, according to a report.
The emirate’s international chamber has revealed 104 SMEs were attracted to Dubai in the 12 months to the end of December, a development that underlines its ambitions to double the size of the emirate’s economy and consolidate its position among the top three global cities.
According to a statement, 32 percent of the firms shifting to the emirate were from the Middle East and Eurasia, followed by Asian and Australian SMEs at 29 percent.
Latin America and Europe accounted for 26 percent of companies, while 13 percent attracted were from Africa.
The top sector for these SMEs was trade and logistics at 17 percent, followed by IT at 13 percent, and food and agricultural firms third with 10 percent.
Mohammad Ali Rashed Lootah, president and CEO of Dubai Chambers, attributed the rise to the emirate’s business-friendly environment, the ongoing development of services together with favorable legislation, and the diverse range of investment opportunities available.
He added: “Our network of international representative offices in key global markets has effectively promoted Dubai’s business community and highlighted the emirate’s value for companies seeking global expansion.
“We remain dedicated to contributing to the objectives of the Dubai Economic Agenda, with a primary focus on attracting foreign direct investments in both traditional and emerging sectors.”
The growth in SMEs from across the globe moving to Dubai sits alongside a goal from the emirate’s leadership to see home-grown small businesses expand overseas.
The total number of representative offices across the world operated by the Dubai International Chamber increased by 16 in 2023 and now stands at 31.
This expansion received additional fuel in January when Dubai’s Crown Prince Sheikh Hamdan bin Mohammed announced a 500 million dirham ($136.16 million) plan to help SMEs tap into global markets.
The initiative was launched in conjunction with Emirates NBD, Dubai’s biggest lender by market value, and will see the bank provide financing to companies at competitive rates.
According to a release at the time, the SME sector accounts for 60 percent of the workforce in the emirate.
Saudi Mobily fastest growing firm in Middle East telecom sector in 2024: Brand Finance
RIYADH: Saudi Mobily has been ranked as the fastest-growing firm in the telecommunication sector in the Middle East in 2024 by marketing consultancy Brand Finance.
The list revealed that the value of the company has risen by about 18 percent compared to the previous year, thereby maintaining its leading position among the largest companies in the sector in the Middle East.
The newly released rankings and figures align with Saudi Arabia’s goal to further develop and promote digital transformation in the Kingdom and upgrade the services provided in the information and communication technology field.
“Mobily has become the best choice for both individual and corporate customers, as its achievements at the brand level reflect its outstanding performance in providing integrated and pioneering digital services in the Kingdom and its achievement of great progress in digital infrastructure development,” Senior Vice President of Brand and Corporate Communications at Mobily Noura Al-Shiha said.
Brand Finance also placed the firm’s CEO, Salman bin Abdulaziz Al-Badran, among the top 10 business chiefs in the global brand protection index.
This was mainly attributed to the various initiatives he launched since joining the company, also referred to as Etihad Etisalat Co., in 2019, and his pivotal role in enhancing the growth of the firm’s brand.
Al-Shiha said that Mobily’s CEO’s inclusion in the global brand protection index reflects his interest in making the company one of the strongest business names in the world.
Brand Finance evaluates labels based on several main criteria, including the Brand Strength Index, the companies’s impact on boosting revenue and profit, and future growth expectations.
The majority of Mobily’s investments focus on developing infrastructure and adopting new technologies such as cloud computing and the Internet of Things, increasing data centers, and expanding the scope of 5G network deployment.
Seeking to provide a modern experience to its customers, the company is keen to make them the focus of its attention by adopting the “Customer First” approach. This strategy aims to achieve the goals of Saudi Vision 2030, which strives to improve the quality of life for families and individuals in the Kingdom.
Closing Bell: Saudi main index closes in green at 12,607
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Wednesday, gaining 22.44 points, or 0.18 percent, to close at 12,607.98.
The total trading turnover of the benchmark index was SR7.35 billion ($1.96 billion) as 155 stocks advanced, while 62 retreated.
Similarly, the MSCI Tadawul Index increased by 1.57 points, or 0.10 percent, to close at 1,591.48.
Furthermore, the Kingdom’s parallel market, Nomu surged, gaining 350.14 points, or 1.31 percent, to close at 27,008.60. This movement occurred as 43 stocks advanced, while 19 retreated.
The best-performing stock of the day was Modern Mills for Food Products Co. Its share price surged by 30 percent to SR62.4 during its first trading session on the main Saudi stock market.
Other top performers included Saudi Advanced Industries Co. and Saudi Cable Co., with their share prices soaring by 9.92 percent and 9.9 percent, reaching SR41.55 and SR101, respectively.
Sustained Infrastructure Holding Co. and Red Sea International Co. also performed well.
The worst performer was Alkhaleej Training and Education Co., with its share price dropping by 9.90 percent to SR31.85.
On the announcements front, Saudi Arabia’s Modern Mills for Food Products Co. made its debut on the main market.
Furthermore, Taiba Investments Co. disclosed its annual financial results for the period ending Dec. 31, 2023. Its revenues amounted to SR536.4 million, up from SR330.2 million in 2022. This increase was attributed to the acquisition of Dur Hospitality Co., which contributed additional revenues from operating activities, along with an uptick in revenues from real estate leasing activity.
Moreover, the company’s net profit reached SR109.8 million in 2023, down from SR139.57 million in the corresponding period in 2022. This decline is attributed to the costs related to the acquisition incurred by the firm and an increase in provisions for certain legal cases.
BinDawood Holding Co. also disclosed its financial results for 2023, reporting revenues of SR5.6 billion compared to SR4.8 billion in 2022. This increase is attributed to the performances from both BinDawood and Danube stores.
The company’s net profit surged in 2023, reaching SR275 million, up from SR124.7 million in 2022.
“This increase in net profit margin is largely attributable to the cumulative impact of an increase in revenue and gross margin and is without the impact of any rent relief, which amounted to SR57.2 million in 2022,” the company stated in a Tadawul statement.
Meanwhile, MBC Group Co.’s revenues amounted to SR1.7 million in 2023, with a net profit of SR17,555.
However, the group lacks comparative figures as the current reporting period spans from its incorporation date on April 20, 2023, until the period’s end on Dec. 31, 2023.
Saudi Arabia’s private equity market sees $4bn in transactions
- Manufacturing sector takes the lead in investment volume, securing 46 percent of the total capital
RIYADH: Saudi Arabia’s private equity sector has been on an upswing for the past five years, culminating in transactions worth $4 billion in 2023, according to MAGNiTT.
The venture data platform, alongside Saudi Venture Capital Co., released report highlighting a significant surge in private equity activity within the Kingdom.
From 2020 onward, the sector has shown impressive growth, achieving a 3.7 multiple in 2021 compared to the year before and an exponential leap to 5.9 times in 2022 compared to the previous year.
Private equity investments involve capital infusion by investors or firms into private companies, not listed on the stock markets.
Managed by private equity firms, these investments aim to enhance the company’s value through strategic improvements and operational efficiencies, with the intent to sell the company at a profit later.
This sector is characterized by long-term investments, active management, and higher risk-reward profiles.
Private equity typically invests in more mature companies than venture capital, which focuses on early-stage companies with high growth potential, often in the tech sector, using equity financing.
Meanwhile, the report highlighted a noticeable shift in the nature of private equity deals with a substantial rise in buyout transactions, which have increased by 20 percentage points in their share of total negotiations from 2020 to 2023, the report stated.
Buyout transactions refer to the process where a private equity firm acquires a majority stake in a company, often taking it private to strategically restructure and improve its financial health.
Concurrently, growth transactions, which focus on investing capital into established companies seeking expansion or scaling opportunities, also saw an uptick of 2 percentage points during the same period.
Dominating the investment scene, buyout deals accounted for an average of 80 percent of the total capital invested, highlighting a strategic shift and burgeoning prominence in the Kingdom’s investment landscape.
The report further shed light on the transactional diversity and industry focus within the private equity sector over the last five years.
The food and beverages sector emerged as one of the most active areas for private equity transactions.
However, the manufacturing sector took the lead in investment volume, securing 46 percent of the total capital deployed from 2019 to 2023.