DUBAI: Days after Amazon announced the launch of its first Middle East centers, online retailer Noon.com has gone live in the UAE, boosting a rapidly nascent e-commerce sector in the Gulf.
The site started working at the weekend and the app is scheduled to launch in days, its backer Dubai-based real estate giant Emaar Properties said in a statement.
Analysts said the arrival of Noon.com is expected to trigger a price war in the developing regional e-commerce market and will likely alter how shopping is done in the consumerist culture of the Gulf.
“It is important for us to shape a digital marketplace that is relevant to our local markets and serves as a growth platform for brick-and-mortar retailers,” said the project’s founder, Emaar chief Mohammed Alabbar.
Investors of the $1 billion project include Saudi Arabia’s Public Investment Fund and leading Kuwaiti retail business group M.H. Al-Shaya Co.
Described by Emaar as an “Arabic-first e-commerce platform,” Noon.com will offer a range of clothing, home goods, and grocery staples.
It is also expected to start delivering to Saudi Arabia within the next few weeks.
The news comes just six months after Emaar offered $800 million to acquire rival retailer Souq.com but lost to international giant Amazon, which acquired the region’s biggest online retailer for $650 million.
On Sept. 25, Amazon Web Services announced a deal with the government of Bahrain to open its first Middle East data centers in the Gulf, expected to be ready by 2019.
Combined with the interest of Amazon and its subsidiaries in regional e-commerce, Noon.com and Souq.com are expected to intensify competition in what consultancy McKinsey has called an untapped e-commerce market.
E-commerce competition “will help change the culture of shopping in the region in the long-term,” said the CEO of Dubai-based Old Town Advisers consultancy.
“I don’t think the (e-commerce) market is saturated to such a point” that there is no place for newcomers, Faraz Mehmood told AFP. “There is still room for more.”
Smaller players in the online shopping market may, however, find it difficult to compete, Mehmood said.
Noon to trigger web shopping price war in Gulf
Noon to trigger web shopping price war in Gulf
Oil Updates – prices steady with focus on Israel-Hezbollah ceasefire, OPEC+ policy
TOKYO: Oil prices steadied on Wednesday, with markets assessing the potential impact of a ceasefire deal between Israel and Hezbollah, and ahead of Sunday’s OPEC+ meeting of producers.
Brent crude futures rose 5 cents to $72.86 a barrel by 7:15 a.m. Saudi time, while US West Texas Intermediate crude futures were up 3 cents at $68.80 a barrel.
Both benchmarks settled lower on Tuesday after Israel agreed to a ceasefire deal with Lebanon’s Hezbollah.
A ceasefire between Israel and Hezbollah will take effect on Wednesday after both sides accepted an agreement brokered by the US and France, US President Joe Biden said on Tuesday.
The accord cleared the way for an end to a conflict across the Israeli-Lebanese border that has killed thousands of people since it was ignited by the Gaza war last year.
Israeli Prime Minister Benjamin Netanyahu said he was ready to implement the deal with Lebanon and would “respond forcefully to any violation” by Hezbollah.
“Market participants are assessing whether the ceasefire will be observed,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
“We expect WTI to trade within the range of $65-$70 a barrel, factoring in weather conditions during the Northern Hemisphere’s winter, a potential increase in shale oil and gas production under the incoming Donald Trump administration in the US, and demand trends in China,” he said.
On the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sources said the group is discussing a further delay to a planned oil output hike that was due to start in January, ahead of a Dec. 1 meeting to decide policy for early 2025.
The group pumps about half the world’s oil and had planned to gradually roll back oil-production cuts with small increases over many months in 2024 and 2025. But a slowdown in Chinese and global demand, and rising output outside the group, have put a dampener on that plan.
“Our longstanding base case has been that OPEC+ defers the tapering of output cuts all the way through 2025,” Citi Research analysts said in a note, adding that the tapering could start in April instead of January.
“From the producer group’s point of view, holding off the unwind could allow the market the chance to be more balanced, via supply disruptions or more resilient demand, while bringing barrels back makes lower prices a foregone conclusion.”
In the US, President-elect Donald Trump said he would impose a 25 percent tariff on all products coming into the US from Mexico and Canada. Crude oil would not be exempt from the trade penalties, sources told Reuters on Tuesday.
Meanwhile, US crude oil stocks fell while fuel inventories rose last week, market sources said, citing API figures on Tuesday.
Crude stocks fell by 5.94 million barrels in the week ended Nov. 22, exceeding analysts’ forecast of a drop of about 600,000 barrels.
Saudi Arabia, Pakistan in talks on refinery upgrades, greenfield project: official says
RIYADH: Saudi Arabia is set to deepen its strategic partnership with Pakistan through talks on refinery upgrades and a greenfield project for petroleum products, according to an official.
Speaking to Arab News on the sidelines of the World Investment Conference held in Riyadh, Musadik Malik, senator and minister of state for petroleum of Pakistan, noted that the collaboration extends beyond energy projects and includes an agreement to connect power grids between the two nations.
“We are working very closely with the Kingdom to figure out how, what are the future energy needs, particularly in the area of renewables, and jointly, we’re going to identify and scope the opportunity, and jointly we’re going to build a program to fulfill those needs,” Malik said.
He continued: “We have two different projects which are right now under, to say, research.
One is the upgradation of quantifier refineries, and the other is a large greenfield refinery which would not only produce petroleum products but also hydrocarbons. These are under research and negotiation, so these are not finalized.”
Malik highlighted that the partnership goes beyond just securing investments or transferring advanced technology. Instead, it involves a joint effort to carefully analyze Pakistan’s future energy needs and map out potential scenarios for how these demands might evolve over time.
This forward-looking approach ensures that both nations are not just reacting to immediate energy challenges but are proactively planning for the long term.
By working together to address these evolving requirements, Saudi Arabia and Pakistan aim to guarantee Pakistan’s energy security, creating a sustainable and reliable framework that supports the country’s growth and development.
Saudi Arabia and Pakistan are making significant strides in strengthening private-sector collaborations, with multiple agreements already yielding tangible results.
Malik highlighted the proactive approach both nations are taking to foster business-to-business partnerships.
“Our prime minister believes that the government should not be in the business of doing business but should facilitate it,” he said, emphasizing the central theme of the collaboration.
“A very large part of the concept we are jointly building on is the private sector of the Kingdom working with the private sector of Pakistan.”
The minister added that around $2.8 billion worth of memorandums of understanding have been signed between the two countries in October.
“Out of these 28 to 30 MOUs, seven or eight have already been converted into contracts and executed within just three to four months,” Malik said.
He continued, explaining the momentum of the partnership: “We have transacted significant deals, and contracts are in motion. Yesterday (Nov. 25), during a roadshow with the Kingdom’s private sector, we secured a non-disclosure agreement that could pave the way for a $1.8 billion investment.”
Malik emphasized the multifaceted nature of Saudi Arabia’s involvement in Pakistan, describing it as a “360-degree view” encompassing both public and private sectors.
“We are not only receiving investments and technology but also collaborating on long-term strategies to meet Pakistan’s growing energy demands,” he said. “The Kingdom’s Public Investment Fund and subsidiaries are actively identifying opportunities for mutual growth.”
Pakistan is tackling the challenge of energy demand fluctuations, a longstanding issue where consumption peaks in summer and drops to a third during winter.
This cyclicality forces the country to make capacity payments to investors, covering equity returns and debt servicing even when energy is underutilized, Malik explained.
To address this inefficiency, Pakistan signed an MoU with Saudi Arabia to connect their power grids.
“This grid connection will allow energy produced in the Kingdom and Pakistan to be transacted seamlessly,” Malik said. “When we connect with Saudi Arabia, it effectively means connecting with the GCC as well.”
The initiative also aligns with regional energy strategies, as Pakistan seeks similar arrangements with Central Asian states.
“In Central Asia, energy demand is high in winter and negligible in summer. With this connectivity, deficits will no longer remain deficits, and surpluses will clear in real-time,” he added, highlighting plans for a unified energy market facilitated by a shared grid.
Malik concluded the interview by praising Saudi Arabia’s unwavering support for Pakistan, describing the Kingdom as a true and steadfast ally.
“In good times and bad, we have always found the Kingdom by our side. This is the hallmark of true friendship,” he said.
Saudi Arabia reveals 33.8% annual spending boost on Vision 2030 projects
RIYADH: Spending on Vision 2030 programs by Saudi Arabia has increased by an annual rate of 33.8 percent since the launch of the Kingdom’s economic development initiative.
The announcement was made by Finance Minister Mohammed Al-Jadaan following the budget’s approval.
Al-Jadaan explained that the 2025 budget is designed to continue strategic investments in developmental projects, aligning with sectoral strategies and programs under Saudi Vision 2030.
On Tuesday, Saudi Arabia approved its state budget for the fiscal year 2025, with projected revenues of SR1.18 trillion ($315.73 billion) and expenditures of SR1.28 trillion, resulting in a deficit of SR101 billion.
The minister emphasized that the government remains dedicated to projects that promote sustainable economic, social, and environmental benefits. These include improving the business environment, boosting the trade balance, and increasing both local and foreign investments.
“We identified that the nominal GDP has achieved greater growth from 2015 to 2023,” Al-Jadaan said during a press conference on the budget.
He also highlighted the growing contribution of non-oil sectors to the country’s GDP. “The contribution of non-oil activities to the gross domestic product increased from approximately 47 percent in 2016 to around 52 percent by the end of the first half of 2024,” Al-Jadaan noted, adding that such a shift was “extremely challenging to achieve within six years, as structural economic transformation does not occur in one or two years.”
The finance minister reaffirmed that the government continues to prioritize citizens' basic needs, with a focus on education, health, and social services. “There is a continued approach of planned expansion by the government to improve services provided to citizens and enhance the quality of these services. This expansion focuses on accelerating strategies with significant economic impact on jobs, business opportunities, and the sustainability of the Saudi economy,” he said.
He also reiterated the government’s commitment to completing ongoing projects, integrating technology and infrastructure into the broader economic system.
Al-Jadaan expressed optimism regarding the Kingdom’s economic indicators. “Economic indicators call for optimism, and non-oil GDP helped (overall) GDP continue to grow,” he remarked.
The minister clarified that the projected deficit in the 2025 budget aligns with the government’s financial planning framework, stating that Saudi Arabia plans to continue both local and international financing operations to cover the deficit and meet its debt obligations.
He also noted that the Kingdom is focusing on alternative financing methods to bolster economic growth, particularly through strategic spending on Vision 2030 programs. “The 2025 budget aims to maintain the Kingdom’s financial position and achieve fiscal sustainability by preserving manageable public debt levels and substantial government reserves,” Al-Jadaan explained.
“Debt levels in Saudi Arabia remain lower than those of most countries in the G20,” he added.
Al-Jadaan confirmed that government reserves are expected to remain stable at around SR390 billion by the end of 2025.
The finance minister also discussed the role of various sectors in driving economic growth. “The industrial sector is extremely important for several reasons, the foremost being national security. Having a robust industrial base means reducing exposure to external risks,” he said.
He further emphasized that exports and job creation within the industrial sector enhance the country’s balance of payments and support the broader economy.
Al-Jadaan highlighted tourism as another key sector contributing to job creation and economic stability. “Tourism, both in Saudi Arabia and globally, is one of the largest sectors contributing to job creation in the economy. It is also among the key sectors that significantly support the balance of payments,” he said. He noted that investments are being directed towards tourism projects and services across the Kingdom.
The transportation and logistics sectors were also emphasized as essential to the Kingdom's economic future. Al-Jadaan pointed out that a robust logistics infrastructure is crucial for the success of the industrial sector. “The transportation and logistics sector also has direct benefits, including the creation of logistics hubs that capitalize on Saudi Arabia’s central location, connecting three continents and serving as a strategic global crossroads,” he stated.
Turning to the energy sector, Al-Jadaan clarified that Saudi Arabia’s energy strategy encompasses much more than oil. “When discussing the energy sector, I am not referring solely to oil. I am speaking about the broader concept of energy, including renewable energy, gas, gas networks, and their delivery to industrial zones across the Kingdom,” he said.
He also discussed progress in the military sector, noting that the Ministry of Defense has completed its 10-year plan, with implementation already underway.
“The military sector has seen significant progress, with the Ministry of Defense completing its 10-year plan and the military sector now moving forward with its implementation,” Al-Jadaan explained.
Addressing the broader global economic landscape, Al-Jadaan assured that the Kingdom is maintaining stability despite external challenges. “Inflation in the Kingdom is under control despite its rise globally,” he said.
On public finances, the finance minister highlighted the role of Saudi Aramco in supporting government revenue. “Public finances in Saudi Arabia receive main sources of revenue, one of which comes from oil through the Aramco company. The first source is called the ‘royalty,’ which is a well-established concept with international standards. In Saudi Arabia, the royalty rate is set at 15 percent of Aramco’s oil sales,” he said. He also pointed out that Aramco is required to remit 50 percent of its profits to the government.
Al-Jadaan also touched on government efforts to control fuel prices, stating that billions are being spent to prevent price hikes. “When the Saudi government listed Aramco shares on the financial market, it had several objectives, all of which have been achieved. These included enhancing transparency, monetizing some of these assets, and utilizing the proceeds to support ongoing economic initiatives,” he said.
Finally, when discussing major infrastructure projects such as NEOM, Qiddiya, Diriyah Gate, and the Red Sea Project, Al-Jadaan emphasized that these initiatives have dedicated companies with their own budgets. “These companies have budgets allocated from the sovereign fund, not from the public treasury. They spend based on these budgets and they’re held accountable accordingly,” he stated.
Addressing inflation, Al-Jadaan clarified: “There is no officially targeted inflation rate in Saudi Arabia. However, globally, an inflation rate of 2 percent or 3 percent is considered acceptable.”
In conclusion, Al-Jadaan reaffirmed that the Saudi economy remains on a positive trajectory thanks to the government’s proactive policies and long-term planning, positioning the Kingdom to navigate both local and global challenges effectively.
Saudi Arabia’s Diriyah Co. set to attract new wave of investors with $500m ticket sizes
RIYADH: Saudi Arabia’s Diriyah Co. is attracting a new wave of global investors with potential ticket sizes of $500 million or more, according to the company’s investment head.
Speaking to Arab News during the World Investment Conference in Riyadh, Chief Investment Officer Jonathan Robinson revealed ongoing discussions with international investors spanning Asia, Europe, the Americas, and the Middle East, signaling an unprecedented level of global interest in the company’s projects.
“How many investors? We have dozens of live conversations, dozens, so we’re not talking one or two and we’re not talking one or two in any particular jurisdiction. We have conversations going across all these jurisdictions,” Robinson revealed.
“What’s the size? I think look, you know, we’re probably talking about investments, certainly in the $500 million and up. So it’s a good size, with international investors across multiple continents to come in, in a way, as a co-investor that I don’t think we’ve really seen in terms of breadth and depth or scale so far in the giga-project. So this is an exciting time. It is very real. And I think you will see those kinds of announcements coming out of Diriyah in the coming months,” he added.
“We have live conversations today, with investors in Asia, with investors in Europe, with investors in the Americas, as well as the many conversations that are ongoing across the region and including, of course, in Saudi Arabia,” Robinson said.
“I think in the coming months, you will see us make some pretty exciting announcements about partnerships with that global investor space. And that’s going to be groundbreaking in some respects. Not just for Diriyah, but potentially even for the Kingdom of Saudi Arabia, where you’re going to see a real level of participation joining us as partners and joint ventures in funds, through sole developer, co-developer models, where you’re going to see us partnering with some pretty new names,” Robinson said.
He elaborated on the breadth of investor engagement, highlighting that these partnerships will involve new and established players in Saudi Arabia.
“Some of them will be new names to the Kingdom. Some of them will be existing investors in the Kingdom but looking to step up that game. We’re moving our execution model now to one that’s really engaging with the private sector on this global scale, and those are very live conversations today,” Robinson explained.
“I think you will see coming out of Diriyah in the coming months, certainly into the first quarter of next year, we’ll be in a position to make some pretty big announcements. And those will include investors coming from all three continents,” he added.
Robinson described the initiative as a groundbreaking development for Saudi Arabia’s giga-projects. “I think it’s groundbreaking, first and foremost, that we’re bringing foreign investors in to co-invest in some of our giga-projects. That is groundbreaking. It’s been done at some level through operating companies and what have you, but as investors to co-invest in the development, ownership, operation, that will be groundbreaking,” he said.
Saudi Arabia, Iraq, and Russia reaffirm OPEC+ production cuts commitment
RIYADH: Saudi Arabia, Iraq and Russia on Tuesday emphasized the importance of fully committing to the OPEC+ oil supply agreement, including voluntary production cuts agreed by eight member states and measures to compensate for any increases in production, the Saudi Press Agency reported.
According to SPA, a trilateral meeting was held this morning in Baghdad, Iraq’s capital, which was attended by Saudi Energy Minister Prince Abdulaziz bin Salman, Russian Deputy Prime Minister Alexander Novak and Ali Maarij Al-Bahadli, Iraq’s director of distribution affairs at the Ministry of Oil.
The participants reaffirmed the significance of continued cooperation among OPEC+ countries and their full commitment to the voluntary agreements and production cuts, including those agreed upon by the eight countries, as well as compensating for any production increases.
Al-Bahadli reiterated Iraq’s determination to fully adhere to the agreement, voluntary cuts, and compensation for any production increase, in line with the updated schedule submitted by Iraq to the OPEC Secretariat.
Oil prices rose on Tuesday, steadying after falling more than $2 a barrel in the previous session on reports of a potential ceasefire between Israel and Lebanon’s Hezbollah.
Brent crude futures were up 53 cents, or 0.7 percent, at $73.54 a barrel as of 1231 GMT. US West Texas Intermediate crude futures were at $69.46 a barrel, up 52 cents, or 0.75 percent.
Prices fell sharply on Monday after multiple reports that Israel and Lebanon had agreed to the terms of a ceasefire in the Israel-Hezbollah conflict. A senior Israeli official said Israel looks set to approve a US plan for a ceasefire on Tuesday.
