TOKYO: A self-driving car service could be on Tokyo’s public roads in time for the 2020 Olympics as Japan looks to drive investment in new technology to drive economic growth, according to a government strategic review announced on Monday.
The strategy, presented at a meeting chaired by Prime Minister Shinzo Abe, also includes plans to allow the development of virtual power plants by the fiscal year ending March 2022.
The proposals are part of a larger package of fiscal and economic policies the government aims to compile by the end of the month.
The review said the government plans to begin testing a driverless car system on public roads sometime this fiscal year with the goal of launching a self-driving car service for the 2020 Tokyo Olympics. The government will then try to commercialize this system as early as 2022.
Economists see enormous potential in the development of autonomous vehicle and artificial intelligence technologies, which could help businesses cope with an aging and declining workforce. However, Japanese companies have struggled to keep up with their Chinese, European and US counterparts in implementing such innovations into their work practices.
Japan’s economy contracted in the first quarter, ending eight straight quarters of growth, which was the longest continuous expansion since the 1980s bubble economy.
Since taking office in late 2012, Abe has introduced several gradual changes that have benefited the economy by drawing more women into the workforce, narrowing the pay gap between regular and contract employees, increasing inbound tourism, and slowly opening the door to foreign labor.
This year’s growth strategy focused more on promoting technology and changing some regulations to make it easier for companies to do business.
The government also plans to change regulations for universities to make it easier for students to earn multi-disciplinary degrees needed to work in artificial intelligence.
Additionally, the review flagged a plan to allow for virtual power plants by fiscal 2021. Virtual power plants connect several small energy-generating and energy-storage systems, allowing them to collectively work like a large conventional power plant, which could help energy grid operators save money.
While the benefits of such systems are known, companies have been reluctant to invest in deploying these networks unless regulations allow them to easily distribute their energy across the power grid.
Japan looks to launch driverless car system in Tokyo by 2020
Japan looks to launch driverless car system in Tokyo by 2020
Egypt economy set for 4% growth despite regional tensions, says minister
RIYADH: Egypt’s economy is on track to grow 4 percent in the current fiscal year, driven by ongoing structural reforms, according to the minister of planning and economic development.
In a meeting with the National Press Authority, Rania Al-Mashat confirmed the country was still on course to hit that figure — originally flagged in April — despite output from the Suez Canal being affected by regional tensions.
The minister also used the meeting to outline Egypt’s plans to enhance its investment climate, with the government seeking $4.2 billion in macroeconomic support from global partners.
This comes against a backdrop of a surge in foreign direct investment inflows, which reached a record $46.1 billion in the 2023/2024 fiscal year, compared to just $10 billion the previous year, according to data released by the Central Bank of Egypt.
Al-Mashat also emphasized the government’s commitment to prudent investment management, highlighting that the public investment budget for the current year is capped at 1 trillion Egyptian pounds ($19.78 billion), with a focus on completing projects that are at least 70 percent finished, according to a release.
Between 2020 and 2024, the private sector secured $14.5 billion in concessional development financing from global partners. For the first time, soft international financing for the private sector has surpassed government financing in 2024, Al-Mashat noted.
The minister also disclosed that negotiations are underway with the EU and other international partners for a second phase of macroeconomic support, totaling €4 billion ($4.10 billion) in budget aid, alongside €1.8 billion in investment guarantees.
She highlighted Egypt’s renewable energy progress, with the National Platform for the “NWFE” program securing $3.9 billion in financing for renewable projects. The program is set to add 4,200 megawatts of clean energy capacity and phase out 1,200 MW of thermal power generation.
Al-Mashat also outlined the ministry’s long-term vision following the merger of planning, economic development, and international cooperation portfolios. The aim is to drive sustainable growth and improve the quality and quantity of economic development in line with Egypt’s Vision 2030 and other strategic frameworks.
The government is currently drafting the 2025/2026 Socio-Economic Development Plan, aligned with the mid-term budget framework. She pointed out that efforts to restructure the National Investment Bank and manage debt with key institutions, such as the National Bank of Egypt and Egypt Post, are also ongoing.
Despite stringent controls on investment spending, human development remains a priority. Al-Mashat noted that nearly 50 percent of the 2024/2025 investment plan — amounting to nearly 2 trillion pounds — will go toward public investments, with a significant portion dedicated to human development and water and sanitation projects.
The minister concluded the meeting by pointing out the role of 54 joint committees that the ministry oversees, which are designed to promote economic cooperation and opportunities with other nations.
Global sukuk issuance set to reach $200bn in 2025: S&P Global
RIYADH: Global sukuk issuance is projected to hit between $190 billion and $200 billion in 2025, driven by increased activity in key markets such as Saudi Arabia and Indonesia, according to a recent analysis from S&P Global.
In its latest report, S&P Global noted that global sukuk issuances totaled $193.4 billion in 2024, a slight decrease from $197.8 billion in 2023. Despite this marginal decline, the market saw a notable 29 percent year-on-year increase in foreign-currency denominated sukuk, which surged to $72.7 billion in 2024.
The report highlighted that Malaysia and Gulf Cooperation Council countries, particularly Saudi Arabia, were the primary drivers of foreign-currency denominated sukuk issuances.
Sukuk, a Shariah-compliant bond, offers investors partial ownership in an issuer’s assets and is structured to adhere to Islamic finance principles.
“We expect foreign currency-denominated issuance to remain strong in 2025,” S&P Global said in its analysis.
The agency also anticipates that monetary easing will persist, albeit at a slower pace than initially expected. This, coupled with substantial financing needs in core Islamic finance nations, particularly due to ongoing economic diversification initiatives, is expected to prompt issuers to capitalize on favorable market conditions.
The S&P report comes at a time of significant activity in Saudi Arabia’s debt and sukuk markets. A December report from Kamco Invest indicated that Saudi Arabia would face the largest share of bond maturities in the GCC region from 2025 to 2029, reaching an estimated $168 billion.
Despite global geopolitical tensions, S&P Global forecasts that these will have little impact on sukuk issuance in 2025.
Mohamed Damak, head of Islamic Finance at S&P Global Ratings, stated: “Our forecasts assume no major shift in global liquidity compared to our base-case expectations and no significant escalation of geopolitical risks in the GCC that could disrupt the economic performance of top sukuk issuers.”
S&P Global also noted that the implementation of the Accounting and Auditing Organization for Islamic Financial Institutions’ Shariah Standard 62 is not expected to affect sukuk volumes until 2026.
This guideline, which was published as an exposure draft in late 2023, aims to standardize various aspects of the sukuk market, including asset backing, ownership transfer, and trading procedures.
“We believe the impact of AAOIFI’s Shariah Standard 62 will only materialize in 2026, at the earliest,” S&P Global said.
“There is uncertainty regarding whether market feedback will lead to any significant revisions to the original proposals, which we view as potentially disruptive for the industry.”
Fitch Ratings echoed similar concerns about the potential impact of these guidelines, suggesting that the final adoption could lead to significant changes in the structure of the sukuk market and may even increase fragmentation.
As sukuk markets continue to evolve, experts are closely monitoring the interplay between regulatory changes, geopolitical factors, and market dynamics that could shape the future of this vital segment of global finance.
Saudi firm Halo AI closes $6m seed round
RIYADH: Saudi Arabia’s focus on artificial intelligence is starting to take shape after local firm Halo AI secured $6 million in seed funding.
The funding round, led by Saudi-based Raed Ventures and UAE’s Shorooq Partners, also garnered interest from former C-level executives from Snapchat, as well as leaders from Microsoft, Airbnb, Amazon, and investors behind gaming unicorns, according to a press release.
This investment aligns with the Kingdom’s efforts in AI as it pursues its ambitious initiatives to position Saudi Arabia as a global leader in the field.
The National Strategy for Data and Artificial Intelligence, launched in 2020, is a cornerstone of these efforts, seeking to attract $20 billion in investments by 2030 and cultivate a workforce of 20,000 AI and data specialists.
Halo AI, which specializes in using the tech to enhance collaborations between brands and creators, is gearing up to move beyond its successful launch in the Kingdom to new markets, including Dubai and Kuwait, with further expansion across the Middle East and North Africa, and into Europe as well as North America.
“After decades of building ad products at Meta and Snapchat, we recognized that traditional approaches couldn’t solve the fundamental inefficiencies in creator marketing,” said Vito Strokov, co-founder and CEO of Halo AI.
“Our agentic AI operates as an intelligent partner in the collaboration process, making autonomous decisions about creator-brand matches, optimizing campaign performance in real-time, and consistently delivering breakthrough results,” Strokov added, stating that the platform reduces manual work by 85 percent while delivering performance metrics that exceed industry standards.
The investment, announced during the 1 Billion Pitches competition at the 1 Billion Followers Summit in UAE, will support Halo AI’s global expansion plans.
The creative economy is a sector set to be significantly impacted by AI. According to Halo, its technology is designed to automate and optimize creator-brand partnerships, claiming to achieve a 97 percent campaign completion rate compared to the industry average of 65 percent.
Additionally, campaigns can be launched within 48 hours, while creators are guaranteed payment within 72 hours — claims that underscore Halo AI’s potential to develop the market.
The company claims it has already secured partnerships with brands such as Kitopi, ToYou, 1/2M, and Syarah.
Tina Daher, principal at Shorooq Partners, highlighted the platform’s impact on the creator economy.
“Halo AI’s pioneering technology is a game-changer, bringing unmatched precision, scalability, and efficiency to this space. At Shorooq, we’re excited to support Halo AI’s vision to redefine how brands and creators connect, enabling them to unlock unprecedented value and impact across the region and globally,” Daher said.
Raed Ventures also underscored the company’s significance in a rapidly growing sector.
“The creator economy is booming, and brands are seeking authentic connections with their audiences,” said Wael Nafee, general partner at Raed Ventures.
“Halo AI’s innovative AI-powered platform is transforming how creator-brand partnerships are formed and executed. We’re proud to lead their fundraising round and confident Halo AI will become a definitive platform in this rapidly growing market,” he added.
Sovereign fund ADIA invests $500m in US power firm AlphaGen
LONDON: The Abu Dhabi Investment Authority is investing $500 million in Alpha Generation, a US power infrastructure company owned by private equity, the companies told Reuters on Monday, as the race to invest in power generation assets intensifies.
Formed a year ago by ArcLight Capital Partners to manage and operate the buyout firm’s power infrastructure investments, AlphaGen constitutes one of the largest portfolios of independent power assets in the US, with more than 11 gigawatts of generation capacity spread across six states.
“This investment, and the partnership between ourselves and ADIA, will help catalyze both the future growth of, and the value of, this strategic portfolio of assets,” Angelo Acconcia, partner at ArcLight, told Reuters in an interview.
ADIA’s $500 million is for a minority stake in AlphaGen, according to a joint statement from the parties. Acconcia declined to comment on the size of the minority stake or the valuation at which the ADIA investment valued AlphaGen.
The move by the sovereign wealth fund comes amid a frenzy of deals activity in the US power industry, as the boom in artificial intelligence and data centers, as well as electrification efforts in manufacturing and transportation, is driving power demand to record levels, with further growth projected through the rest of the decade and beyond.
This is making investments into the US power sector, whether for generation assets, transmission infrastructure, energy storage or associated companies, increasingly attractive both for money managers and existing industry players.
On Friday, in the largest US power acquisition in nearly two decades, Constellation Energy agreed a $16.4 billion deal to purchase Calpine from the investors which owned the independent power producer.
Unlike utilities, independent producers — such as the plants operated by AlphaGen — can sell power at market prices, allowing them to profit more when demand rises.
ArcLight, an energy-focused private equity firm founded in 2001, has owned, controlled, or operated more than 65 GW of generation assets and 47,000 miles of transmission infrastructure, according to the statement.
The ADIA investment into AlphaGen is subject to regulatory approvals and is expected to close in the first half of 2025, the statement added.
Oil Updates — prices remain near 4-month highs as Russia sanctions weighed
LONDON: Oil prices eased on Tuesday but remained near four-month highs as the impact of fresh US sanctions on Russian oil remained the market’s key focus.
Brent futures slipped 28 cents, or 0.4 percent, to $80.73 a barrel by 7:00 a.m. Saudi time, while US West Texas Intermediate crude fell 18 cents, or 0.2 percent to $78.64 a barrel.
Prices jumped 2 percent on Monday after the US Treasury Department on Friday imposed sanctions on Gazprom Neft and Surgutneftegas as well as 183 vessels that trade oil as part of Russia’s so-called “shadow fleet” of tankers.
“Headlines surrounding Russia oil sanctions have been the dominant driver for oil prices over the past week, and combined with resilient US economic data, the tighter supply-demand dynamics have been seeing some momentum,” said IG market strategist Yeap Jun Rong.
“Prices are taking a slight breather today. With prices rising fast and furious by close to 10 percent since the start of the year, it does prompt some profit-taking as event risks around upcoming US inflation data releases loom.”
The US producer price index will be released later in the day, with consumer price index data on Wednesday.
The stakes are high for Wednesday’s figures, where any rise in core inflation greater than the forecast 0.2 percent would threaten to close the door on further Federal Reserve interest rate cuts this year.
Lower interest rates typically help in stimulating economic growth, which could prop up oil demand.
“The recent rally to a three-month high does signal an improvement in sentiment, but while broad bearish pressures have eased for the time being, a stronger catalyst is still needed to fuel a sustained broader uptrend,” IG’s Yeap added.
While analysts were still expecting a significant price impact on Russian oil supplies from the fresh sanctions, the actual physical impact could be less.
“These sanctions have the potential to take as much as 700k b/d of supply off the market, which would erase the surplus that we are expecting for this year. However, the actual reduction in flows will likely be less, as Russia and buyers find ways around these sanctions – clearly there will be more strain on non-sanctioned vessels within the shadow fleet,” ING analysts said in a note.
Meanwhile, demand uncertainty from major buyer China could blunt the impact of the tighter supply. China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic, official data showed on Monday.
“New sanctions on Russian tankers are expected to impact crude supply to China and India, though key players in these countries are still assessing the legal situation and possible workarounds,” said Sparta Commodities’ Philip Jones-Lux.
