LONDON: The Danish toy company Lego is planning to ramp up growth in the Middle East with the opening of an office in Dubai toward the end of this year, according to the company’s CEO Niels Christiansen.
“The market there is already big, it is already growing … We believe we can accelerate that by now putting people on the ground in Dubai who can develop the region further,” he said at a press conference on March 6.
His comments come as the toy brick-maker announced that its 2017 profits were down compared to the previous year, with full-year net profit dropping to 7.8 billion Danish kroner ($1.3 billion) compared to 9.4 billion kroner in 2016.
Revenues decreased by 8 percent to 35 billion kroner in 2017 compared to 37.9 billion kroner last year.
The reduced revenues were partly blamed on too much inventory already sitting in shops and warehouses that needed to be sold off. Global consumer sales were flat in 2017, moving upward in the final months of the year benefiting from the Christmas season.
“2017 was a challenging year and overall we are not satisfied with the financial results,” Christiansen said.
“However, we ended the year in a better position. In December, consumer sales grew in seven of our 12 largest markets and we entered 2018 with healthier inventories. In 2018, we will stabilize the business and invest to build sustainable growth in the longer term,” he said.
He said there was “no quick-fix” to the company’s fortunes. “It will take some time to achieve longer-term growth,” he said.
While revenues declined in the company’s established markets of North America and Europe, Lego saw “significant” revenue growth in China.
The company is planning to further expand in the country, and last year signed a partnership deal with one of the country’s largest Internet companies, Tencent, to work together to develop online games for Chinese children.
Lego to build up presence in Mideast with Dubai office
Lego to build up presence in Mideast with Dubai office
UAE’s non-oil sector continues ‘robust’ growth in January: S&P Global
- Price pressures eased, with input costs rising at their slowest rate in 13 months
- Non-oil companies in the UAE raised their selling prices for the first time in four months
RIYADH: The UAE’s non-oil economy maintained steady growth in January, driven by a rise in new orders, favorable market conditions, and easing cost pressures, according to S&P Global.
The Emirates’ Purchasing Managers’ Index stood at 55, slightly down from December’s nine-month high of 55.4.
A PMI reading above 50 indicates growth in the non-oil sector, while a below 50 signals contraction.
The sustained expansion of non-oil business activity across the Middle East, including the UAE, highlights the region’s economic diversification efforts. Saudi Arabia posted a PMI of 60.5 in January, its highest level in a decade. Kuwait recorded a PMI of 53.4, followed by Egypt at 50.7, and Qatar at 50.2.
“The UAE PMI signalled another good month for the non-oil private sector in January, with the headline figure falling only slightly from December’s nine-month high,” said David Owen, senior economist at S&P Global Market Intelligence.
He added: “Robust expansions in activity and new business, as well as lower input cost inflation, suggest the economy is in a healthy position.”
S&P Global said non-oil businesses in the UAE experienced a sharp rise in sales volume, primarily driven by strong domestic demand.
Price pressures also eased, with input costs rising at their slowest rate in 13 months. The slowdown in inflation enabled firms to increase their purchases of inputs at the start of the year.
The PMI survey said favorable market conditions and strong client relationships led to faster delivery times among UAE non-oil businesses in January.
However, companies only recorded a modest increase in staff numbers, though the pace of hiring was the fastest since August.
“A persistently low rate of employment growth suggests that firms are lacking the ability to hire in order to tackle backlog issues,” said Owen. “Input resources similarly remain weak, which seems to be aggravating capacity pressures as work-in-hand rose at the quickest pace in eight months in January.”
Despite the positive trends, surveyed firms were less optimistic about their future outlook, with only 9 percent expecting growth over the next 12 months.
According to these firms, intense competition in the UAE’s non-oil sector was a key factor in dampening confidence.
“The broad decline in business confidence over the past few months will therefore be a surprise to some. Notably, total confidence was at its lowest level since December 2022,” said Owen.
He added: “Strong competition and cash flow concerns arising from heavy backlogs have appeared to sow doubt among firms that they can continue to boost their revenues, underlining efforts to reduce the gap between output and input prices.”
The survey said continued capacity strain in the first month of the year was due to heightened demand and administrative challenges, such as slow client payments.
The report added the rate of backlog accumulation accelerated to its fastest pace in eight months.
Due to strong demand pressures, non-oil companies in the UAE raised their selling prices for the first time in four months.
S&P Global said business conditions in Dubai’s non-hydrocarbon sector remained promising, with the emirate’s PMI reaching 55.3 — only slightly below December’s nine-month high of 55.5.
Non-oil firms in Dubai saw robust activity expansion in response to greater new business inflows.
Cost pressures also eased, with input price inflation slipping to a three-month low.
Employment and inventory levels saw fractional increases, reflecting a subdued outlook for future business activity.
Regarding future expectations, business confidence in Dubai’s non-oil sector dropped to its lowest level in over four years.
Saudi Fund for Development approves grant for King Salman Hospital in Pakistan — PM
- Project will be built in Hazara district with SFD grant of $40 million
- Riyadh also approves $1.2 billion oil deferred oil payment facility
ISLAMABAD: Prime Minister Shehbaz Sharif said on Feb. 6 the Saudi Fund for Development had approved a $40 million grant to build the King Salman Hospital in Pakistan’s northwestern Khyber Pakhtunkhwa province.
The announcement comes a day after Pakistan signed an agreement with SFD to defer by one year a $1.2 billion payment on the country’s oil imports.
SFD has supported more than 40 projects and programs valued at approximately $1.4 billion to finance energy, water, transportation and infrastructure projects in Pakistan since the Fund’s establishment in 1975.
“There are other SFD projects like the King Salman Hospital with an investment of $40 million” Sharif said while addressing a federal cabinet meeting in which he thanked Saudi authorities for approving the $1.2 billion oil facility. “These are grants and the hospital will be fully built with this in Hazara [district].”
The Saudi facility to defer oil payments can help Islamabad boost its foreign reserves ahead of the first review of a $7 billion International Monetary Fund bailout, due in March. The agreement comes as Pakistan continues to navigate a tricky economic recovery path and implement tough conditions attached to the IMF loan program.
“Our brother Crown Prince Mohammed bin Salman sent a delegation yesterday [Feb. 4] and our oil facility which was for 10 months in 2023 ended in December 2023,” Sharif added. “Now, it has been renewed and they have provided us with $1.2 billion annually for our oil facility.”
On Monday, Pakistan also finalized a loan agreement for a Gravity Flow Water Supply Scheme in the Mansehra district of KP under which the SFD will provide $41 million to enhance access to clean drinking water for at least 150,000 people, according to Sharif’s office.
The SFD has also proposed a partnership with the Pakistan government to offer training programs for young Pakistanis and impart “modern and relevant” skills to help them meet labor market demands in Saudi Arabia.
Pakistanis constitute one of the largest migrant communities in Saudi Arabia with an estimated 2.64 million working there as of 2023. While 97 percent of them are blue-collar workers, there is a growing demand for skilled labor in the Kingdom as it seeks to modernize its economy under the Vision 2030 scheme.
Oil Updates — prices decline amid rising US crude inventories, Sino-US tariff war
SINGAPORE: Oil prices slid on Wednesday as rising stockpiles in the US and market worries about a new Sino-US trade war offset President Donald Trump’s renewed push to eliminate Iranian crude exports.
Brent crude futures were down 39 cents, or 0.51 percent, at $75.81 a barrel by 7:27 a.m. Saudi time. US West Texas Intermediate crude (WTI) lost 26 cents, or 0.36 percent, to $72.44.
Oil on Tuesday traded in a wide range, with WTI falling at one point by 3 percent, its lowest since Dec. 31, after China announced tariffs on US imports of oil, liquefied natural gas and coal in retaliation to US levies on Chinese exports.
Prices rebounded, however, after Trump restored the “maximum pressure” campaign on Iran to curtail its nuclear program he enacted in his first term that cut Iranian crude exports to zero.
Weighing down the market on Wednesday was the higher-than-expected US crude inventories data overnight, said Jun Rong Yeap, a market strategist at IG.
Crude stocks rose by 5.03 million barrels in the week ended Jan. 31, according to market sources, citing American Petroleum Institute figures.
Gasoline inventories rose by 5.43 million barrels, and distillate stocks fell by 6.98 million barrels, the API reported, according to the sources.
Official US government oil inventory data is due to be released at 6:30 p.m. Saudi time on Wednesday.
Rising crude and fuel stockpiles in the world’s biggest oil consumer signal consumption weakness, adding to investor worries about the impact of tarrifs on the global economic and energy demand outlooks.
The impact of China’s retaliatory tariffs on US energy imports will be limited “given that neither global supply nor demand of these commodities are changed by China’s tariffs,” analysts at Goldman Sachs said in a note on Tuesday.
Both countries will be able to find alternative markets, the note said.
As for Iran, Trump on Tuesday restored his “maximum pressure” campaign on Iran that includes efforts to drive its oil exports down to zero in order to stop Tehran from obtaining a nuclear weapon.
While Trump said he was open to a deal with Iran, he signed a presidential memorandum re-imposing Washington’s tough policy on Iran. The plan could impact about 1.5 million barrels per day of oil that the country exports, analysts at ANZ said on Wednesday, citing shiptracking data.
“The clampdown on Iran may be what is needed to stabilize bearish sentiments for oil prices for now and there may room for further recovery, at least in the near term,” said IG’s Yeap.
Saudi Arabia’s Debt Capital Market set to reach $500bn by end of 2025: Fitch Ratings
RIYADH: Saudi Arabia’s Debt Capital Market is expected to hit $500 billion by the end of 2025, fueled by the Kingdom's economic diversification efforts under Vision 2030, according to Fitch Ratings.
In its latest report, Fitch highlighted several factors contributing to this growth, including the government’s need for deficit funding, maturing obligations, and continued reforms.
The DCM, which involves the trading of securities like bonds and promissory notes, serves as a key mechanism for raising long-term capital for both businesses and governments.
Fitch also noted that the DCM in the Gulf Cooperation Council region had surpassed the $1 trillion mark by November 2024, bolstered by strong oil revenues. The agency predicts continued growth, with the GCC region expected to remain one of the largest emerging-market issuers of dollar-denominated debt through 2025.
“Saudi Arabia’s sukuk market maintains a strong credit profile, with 97.4 percent of Fitch-rated Saudi sukuk rated investment-grade and 98 percent of issuers holding a stable outlook. Notably, no Fitch-rated Saudi sukuk or bonds defaulted in 2024,” said Bashar Al-Natoor, global head of Islamic finance at Fitch Ratings.
He added: “2025 has started strong, with a growing pipeline of issuances. We expect the market to surpass $500 billion by year end, driven by Vision 2030 initiatives, robust government support, and favorable funding conditions.”
Fitch’s analysis further said that Saudi Arabia became the largest dollar-denominated debt issuer in emerging markets (outside of China) and the world’s largest sukuk issuer in 2024. The Kingdom’s DCM grew by 20 percent year on year in 2024, reaching $432.5 billion in outstanding debt.
The report also emphasized the increasing importance of environmental, social, and governance debt in the region, with $18.6 billion in outstanding ESG-related bonds in 2024.
Saudi banks have significantly expanded their international DCM activities since 2020, aligning with their growth strategies and foreign-currency requirements. Additionally, corporates are diversifying their funding sources, moving beyond traditional bank loans, according to Fitch.
In another report, Fitch projected that global ESG sukuk issuances will exceed $50 billion in outstanding debt by 2025, driven by major Islamic finance markets like Saudi Arabia and Indonesia. The agency noted a 23 percent year-on-year growth in global ESG sukuk, which reached $45.2 billion in 2024, outpacing the 16 percent growth in global ESG bonds.
Saudi Cabinet approves cooperation agreement with WEF to secure minerals for development
RIYADH: Saudi Arabia’s Cabinet has authorized the Ministry of Industry and Mineral Resources to sign a cooperation agreement with the World Economic Forum to secure critical materials for global development.
According to the Saudi Press Agency, the Cabinet — chaired by Crown Prince Mohammed bin Salman — gave the green light for the deal among a host of decisions.
Strengthening the mining sector is a crucial goal outlined in the Kingdom’s Vision 2030 agenda, as the nation is steadily spearheading its economic diversification journey by reducing its reliance on crude revenues.
Speaking at the Future Minerals Forum in Riyadh in January, Alkhorayef said that Saudi Arabia seeks to promote exploration opportunities across 5,000 sq. km of mineralized belts in 2025, aligned with the Kingdom’s plans to establish mining as the third pillar of its industrial economy.
At that time, the minister added that Saudi Arabia’s mining sector is the fastest growing globally, with the country holding an estimated mineral potential worth $2.5 trillion.
