SHANGHAI: China is expected this week to conduct the maiden test flight of a locally manufactured passenger jet built to meet soaring domestic travel demand and to challenge the dominance of Boeing and Airbus.
The C919, built by state-owned aerospace manufacturer Commercial Aircraft Corporation of China (COMAC), was set to take wing over Shanghai on Friday, the company said on Wednesday, according to the official Xinhua news agency.
“If weather conditions are not suitable, the maiden flight will be rescheduled,” COMAC said, adding that engineers had completed some 118 tests.
The narrow-body jet represents nearly a decade of effort in a state-mandated drive to reduce dependence on European consortium Airbus and US aerospace giant Boeing.
“The first flight itself is not a huge deal. (But) of course, it is going to be a hugely symbolic moment in the evolution of China’s aviation industry,” said Greg Waldron, Asia managing editor at industry publication Flightglobal.
The C919 is the country’s first big passenger plane and the latest sign of growing Chinese ambition and technical skill, coming one week after China launched its first domestically made aircraft carrier and docked a cargo spacecraft with an orbiting space lab. The C919 can seat 168 passengers and has a range of 5,555km.
China is a huge battleground for Boeing and Airbus, with its travelers taking to the skies in ever-growing numbers.
The Chinese travel market is expected to surpass the US by 2024, according to the International Air Transport Association (IATA).
Airbus has estimated Chinese airlines will need nearly 6,000 new planes over the next two decades, while Boeing foresees 6,800 aircraft. Both put the combined price tags for those planes at around $1 trillion.
But aviation analysts said Shanghai-based COMAC has a long journey ahead before it can challenge the lock on the market by Boeing and Airbus.
“This is an important milestone for China with this new aircraft. But for it to move to the next stage, which is to sell this product, is not going to be so easy,” said Shukor Yusof, an analyst with Malaysia-based aviation consultancy Endau Analytics.
But COMAC may be able to rely on purchases by fast-growing Chinese airlines. It had already received 570 orders by the end of last year, almost all from domestic airlines.
Waldron agreed it would take time but said that over the next century China would become a world aviation player.
“You are going to have three big companies. You will have Boeing, you will have Airbus, and you will have COMAC,” he said.
China has dreamed of building its own civil aircraft since the 1970s when it began work on the narrow-body Y-10, which was eventually deemed unviable and never entered service. COMAC’s first regional jet, the 90-seat ARJ 21, entered service in 2016, several years late.
The ARJ 21 is currently restricted to flying domestic routes as it still lacks the Federal Aviation Administration (FAA) certification that would allow it to fly US skies. China also has been in talks with the FAA to obtain certification for the C919, without result.
The C919’s first test flight had been due to take place in 2016 but was delayed.
Besides the C919, China is also working with Russia to develop a long-haul wide-bodied jet called the C929.
Made-in-China passenger jet set to take wing
Made-in-China passenger jet set to take wing
Saudi Arabia raises $3.09bn in sukuk issuances for December
RIYADH: Saudi Arabia’s National Debt Management Center has successfully concluded its riyal-denominated sukuk issuance for December, raising SR11.59 billion ($3.09 billion).
This marks a substantial 239.88 percent increase from the previous month, when the Kingdom raised SR3.41 billion in sukuk. Saudi Arabia had raised SR7.83 billion in October and SR2.6 billion in September.
Sukuk, which are Shariah-compliant Islamic bonds, provide investors with partial ownership of the issuer’s assets until the bonds mature. The rise in sukuk issuance aligns with positive global market projections.
A Moody’s report released in September forecasted that the global sukuk market would remain robust in 2024, with total issuance expected to reach between $200 billion and $210 billion, an increase from just under $200 billion in 2023.
The December sukuk issuance by NDMC was structured into four tranches, each with varying maturities. The largest tranche, valued at SR5.58 billion, is set to mature in 2027. Another tranche, worth SR3.90 billion, will mature in 2029, while a third tranche, valued at SR706 million, is due for repayment in 2031. The final tranche, amounting to SR1.4 billion, will mature in 2034.
This surge in sukuk issuance comes as the Kingdom is expected to lead the Gulf Cooperation Council region in bond and sukuk maturities between 2025 and 2029.
A report by Kamco Invest, released earlier this month, projected that Saudi Arabia’s total bond and sukuk maturities during this period would reach $168 billion, with government-issued bonds and sukuk accounting for $110.2 billion of that total.
In December, Fitch Ratings also highlighted that the GCC debt capital market crossed the $1 trillion threshold in outstanding debt by the end of November.
Earlier in October, Fitch had noted that the growth in sukuk issuance was driven by improving financing conditions, especially after the US Federal Reserve’s rate cut to 5 percent in September. Looking ahead, Fitch expects interest rates to decline further, reaching 4.5 percent by the end of 2024 and 3.5 percent by the end of 2025, which is likely to spur more sukuk issuances in the short term.
Saudi, Nigerian ministers hold talks to strengthen economic relations
RIYADH: Saudi Arabia and Nigeria held high-level talks to discuss financial and economic developments, focusing on regional and global challenges, as well as opportunities for collaboration.
The meeting, led by the kingdom’s Minister of Finance Mohammed Al-Jadaan, included a delegation from the African country headed by Finance Minister Wale Edun and Budget and Economic Planning Minister Abubakar Atiku Bagudu.
The discussions aimed to strengthen economic ties and explore joint strategies to navigate evolving financial landscapes.
This comes as trade between Nigeria and Saudi Arabia showed a significant imbalance in 2023, with Nigeria exporting goods worth $76.29 million to the Kingdom, while imports from Saudi Arabia amounted to $1.51 billion, according to the UN COMTRADE database on international trade.
Closing Bell: Saudi main index closes in red at 11,914
- Parallel market dropped by 0.11% to 30,920.40
- MSCI Tadawul Index shed 3.17 points to close at 1,496.90
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, as it shed 34.84 points, or 0.29 percent, to close at 11,913.95.
The Kingdom’s parallel market also dropped by 0.11 percent to 30,920.40, while the MSCI Tadawul Index shed 3.17 points to close at 1,496.90.
The total trading turnover of the benchmark index was SR3.83 billion ($1.02 billion), with 64 of the listed stocks advancing, while 168 declining.
The best-performing stock of the day was Al-Baha Investment and Development Co., as its share price surged by 9.09 percent to SR0.48.
Other top performers were Saudi Chemical Co., increasing 4.66 percent to SR9.66, and Shatirah House Restaurant Co., rising 4.44 percent to SR21.30.
The share price of United Electronics Co. slipped by 6.77 percent to close at SR92.20.
First Milling Co. announced the successful expansion of its Mill A, boosting production capacity from 300 tonnes to 550 tonnes per day.
In a Tadawul filing, the company, which produces flour, feed, and bran, said that the financial impact of the expansion will be reflected in the fourth quarter of this year.
The company’s share price gained 1.35 percent, closing at SR59.90.
Banque Saudi Fransi announced that its shareholders approved a 107.4 percent capital increase, raising its capital from SR12.05 billion to SR25 billion.
The bank said that the decision was finalized during an extraordinary general meeting held on Dec. 23.
Banque Saudi Fransi’s share price dropped 0.62 percent to close at SR15.94.
Meanwhile, retail investors began subscribing to 3.47 million shares of Saudi-based online beauty brand Nice One on the main market.
The company announced on Dec. 16 that it set the final offer price for its initial public offering at SR35 per share, aiming to raise SR1.2 billion.
The retail subscription period, which started on Dec. 24, will run through Dec. 25.
Saudi Arabia’s Capital Market Authority approved Ejada Systems Co.’s request to float 20.05 million shares, representing 45 percent of its share capital.
In a statement on Tadawul, the company said that its prospectus will be published well ahead of the subscription period.
It will provide investors with key information, including financial statements, business activities, and management details to support informed investment decisions.
The CMA approved a request by Umm Al Qura for Development and Construction Co. to float 130.78 million shares, representing 9.09 percent of the firm’s share capital.
The authority also approved Ratio Specialty Co. to float 5 million shares, equal to 25 percent of the company’s share capital, on the Kingdom’s parallel market.
EBRD supports Africa’s largest onshore wind project in Egypt with $275m loan
- 1.1 GW wind farm in Egypt will reduce annual CO2 emissions by more than 2.2 million tonnes
- Loan to Suez Wind consists of $200 million A loan from the EBRD and $75 million in B loans from Arab Bank and Standard Chartered
JEDDAH: The European Bank for Reconstruction and Development is supporting Egypt in launching Africa’s largest wind farm, backed by a $275 million syndicated loan.
The loan to Suez Wind consists of a $ 200 million A loan from the EBRD and $ 75 million in B loans from Arab Bank and Standard Chartered, the international financial institution said in a press release.
It added that the initiative is being co-financed by the African Development Bank, British International Investment, and Deutsche Investitions- und Entwicklungsgesellschaft, as well as the OPEC Fund for International Development and the Arab Petroleum Investments Corporation.
The wind farm in the Gulf of Suez will have an installed capacity of 1.1 gigawatts, delivering clean, renewable energy at a lower cost than conventional power generation. It is expected to produce over 4,300 GWh of electricity annually and reduce CO2 emissions by more than 2.2 million tons per year, supporting Egypt’s energy sector alignment with its commitments under the Paris Agreement.
Rania Al-Mashat, Egypt’s minister of planning, economic development, and international cooperation, said that her country is committed to advancing its renewable energy ambitions, aiming to derive 42 percent of its energy mix from renewable sources by 2030, in line with their nationally determined contributions.
“Through our partnership with the EBRD, a key development partner within the energy sector of Egypt’s country platform for the NWFE program, we are mobilizing blended finance to attract private-sector investments in renewable energy,” said Al-Mashat, who also serves as governor of the north African country to the EBRD
The minister added: “So far, funding has been secured for projects with a capacity of 4.7 gigawatts, and we are working collaboratively to meet the program’s targets to reduce Egypt’s fuel consumption and expand clean energy projects.”
Managing Director of the EBRD’s Sustainable Infrastructure Group, Nandita Parshad, expressed pride in the bank’s role as the largest financier of the landmark 1,100-megawatt wind farm in the Gulf of Suez, which is also the largest onshore wind farm in EBRD’s operational countries to date.
“Egypt continues to be a trailblazer for large-scale renewables in Africa: first with the largest solar farm and now the largest windfarm on the continent. Great to partner on both with ACWA power and to bring new partners in this project, Hassan Allam Utilities and Meridiam,” she said.
Suez Wind is a special project company jointly owned by Saudi energy giant ACWA Power and HAU Energy, a recently established renewable energy equity platform that the EBRD is investing in alongside Hassan Allam Utilities and Meridiam Africa Investments.
The EBRD, of which Egypt is a founding member, is the principal development partner in the republic’s energy sector under the Nexus of Water, Food, and Energy program, launched at COP27. This wind farm is one of the first projects within NWFE’s energy pillar, advancing progress toward the country’s 10-gigawatt renewable energy goal.
It plays a vital role in supporting Egypt’s efforts to decarbonize its fossil fuel-dependent power sector and achieve its ambitious renewable energy targets.
Since the EBRD began operations in Egypt in 2012, the bank has invested nearly €13.3 billion in 194 projects across the country. These investments span various sectors, including finance, transport, and agribusiness, as well as manufacturing, services, and infrastructure, with a particular emphasis on power, municipal water, and wastewater projects, according to the same source.
Last month, EBRD announced it was supporting the development and sustainability of Egypt’s renewable-energy sector by extending a $21.3 million loan to Red Sea Wind Energy.
The loan was established to fund the development and construction of a 150-megawatt expansion to the 500-megawatt wind farm currently being constructed in the same region.
UAE non-oil sectors push GDP growth to 4% in 2024: CBUAE
- Growth is projected to accelerate to 4.5% in 2025 and 5.5% in 2026
- Non-oil GDP growth is forecast to remain robust, expanding by 4.9% in 2024 and 5% in 2025
RIYADH: The UAE economy is expected to grow by 4 percent in 2024, driven by robust performance across key non-oil sectors, according to official projections.
The Central Bank of the UAE’s Quarterly Economic Review for December indicates that growth will be supported by sectors including tourism, transportation and financial services, as well as insurance, construction, real estate, and communications.
Looking ahead, growth is projected to accelerate to 4.5 percent in 2025 and 5.5 percent in 2026, as the country continues to benefit from economic diversification policies aimed at reducing its dependence on oil revenues.
Non-oil GDP growth is forecast to remain robust, expanding by 4.9 percent in 2024 and 5 percent in 2025.
The report attributed this growth to strategic government policies aimed at attracting foreign investment and promoting economic diversification.
In the second quarter, non-oil GDP grew by 4.8 percent year on year, compared to 4.0 percent in the first quarter, supported by manufacturing, trade, transportation and storage, and real estate activities.
In September, the CBUAE revised its GDP growth forecast for the year upward by 0.1 percentage points, citing expected improvements in the oil sector.
Initially projecting a 3.9 percent growth for 2024, the central bank adjusted the figure to 4 percent. In its second-quarter economic report, the CBUAE forecasted a growth rate of 6 percent for 2025.
The UAE’s 16 non-oil sectors continued their steady growth in the third quarter of the year, with wholesale and retail trade, manufacturing, and construction being key contributors.
The manufacturing sector has benefited from increased foreign direct investment, aligning with both federal and emirate-level strategies.
The first nine months of the year also saw strong performance in the construction sector, reflecting significant investment in infrastructure and development projects.
Non-oil trade exceeded 1.3 trillion dirhams ($353.9 billion) in the first half of the year, representing 134 percent of the country’s GDP, a 10.6 percent year-on-year increase.
This growth underscores the success of the UAE’s economic diversification agenda and its comprehensive economic partnership agreements with various countries, which have strengthened trade relationships and driven exports.
The UAE has set ambitious economic targets to diversify its economy and reduce dependence on oil revenues.
Under the We the UAE 2031 vision, the country aims to double its GDP from 1.49 trillion dirhams to 3 trillion dirhams, generate 800 billion dirhams in non-oil exports, and raise the value of foreign trade to 4 trillion dirhams.
Additionally, the UAE plans to increase the tourism sector’s contribution to GDP to 450 billion dirhams.
Oil production averaged 2.9 million barrels per day in the first 10 months of the year and is forecasted to grow by 1.3 percent for the year, with further acceleration to 2.9 percent in 2025.
The fiscal sector also performed strongly in the first half of the year, with government revenue rising 6.9 percent on a yearly basis to 263.9 billion dirhams, equivalent to 26.9 percent of GDP.
This increase was fueled by a significant 22.4 percent rise in tax revenues. Meanwhile, the fiscal surplus reached 65.7 billion dirhams, or 6.7 percent of GDP, marking a 38.8 percent increase from the 47.4 billion dirhams surplus, or 5.1 percent of GDP, recorded in the first half of 2023.
Government capital expenditure surged by 51.7 percent year on year to 11 billion dirhams, reflecting the UAE’s commitment to advancing large-scale infrastructure projects and enhancing the country’s economic and investment landscape.
In the private sector, economic activity remained robust, with the UAE’s Purchasing Managers’ Index reaching 54.1 in October this year, signaling continued optimism among businesses driven by sustained demand and sales growth.
Dubai’s PMI stood at 53.2 in October, closely aligning with the national average, indicating consistent growth in the emirate’s non-oil private sector.
Employment and wages also showed strong performance, with the number of employees covered by the CBUAE’s Wages Protection System rising by 4 percent year-on-year in September.
Average salaries increased by 7.2 percent yearly during the same period, reflecting strong domestic consumption and sustainable GDP growth.
