DETROIT: For years, France’s Renault and Japan’s Nissan struggled to make money in the global auto business.
Then came Carlos Ghosn, a Renault executive who helped to orchestrate an unprecedented transcontinental alliance, combining parts of both companies to share engineering and technology costs.
Now Ghosn’s arrest in Japan for alleged financial improprieties at Nissan could put the nearly 20-year-old alliance in jeopardy.
Ghosn, 64, born in Brazil, schooled in France and of Lebanese heritage, is set to be ousted later this week from his spot as Nissan chairman. He also could also lose his roles as CEO and chairman of Renault, threatening the alliance formed in 1999 that’s now selling more than 10 million automobiles a year.
He’s been “the glue that holds Renault and Nissan together,” Bernstein analyst Max Warburton wrote in a note to investors. “It is hard not to conclude that there may be a gulf opening up between Renault and Nissan.”
Nissan has said it will dismiss the Ghosn after he was arrested in Japan Monday for allegedly abusing company funds and misreporting his income. That opens up a leadership void at the entire alliance, for which Ghosn officially still serves as CEO and chairman.
Ghosn added Mitsubishi to the alliance two years ago after the tiny automaker was caught in a gas-mileage cheating scandal. He had even floated the idea of a full merger between the three companies.
“Today’s events throw any prospect of that up in the air,” Michael Hewson, chief market analyst at CMC Markets in London, wrote in a note to investors.
Nissan CEO Hiroto Saikawa has publicly resisted the idea of an outright merger. So, with Ghosn out at Nissan and probably Renault as well, the companies are unlikely to get any closer.
The companies now share technology, and they save money by jointly purchasing components.
While there could be some scrutiny of the relationships between the companies, they’re so intertwined now that cutting them apart would be difficult, said Kelley Blue Book analyst Michelle Krebs. “I would not predict its demise,” Krebs said of the alliance.
She said she sees further consolidation in an industry that faces unprecedented research costs for autonomous and electric vehicles, while at the same time continuing to develop cars and trucks powered by internal combustion engines.
“The last thing one of the world’s biggest automakers needs is the disruption caused by an investigation into the behavior of a man who has towered over the global auto sector,” said Michael Hewson, chief market analyst at CMC Markets in London.
Nissan’s board is to meet Thursday to consider Ghosn’s fate. Renault, where Ghosn is also CEO, said its board will hold an emergency meeting soon, and experts say it is unlikely that he will be able to stay at the company or the broader alliance.
The brash Ghosn was once viewed as a savior in the auto business with the ability to turn around the two struggling companies. In 2006 he even proposed an alliance with global giant General Motors.
Bernstein’s Warburton wrote that Ghosn’s once-mighty reputation has been declining for years, while Krebs said Nissan never could meet Ghosn’s goal of 10 percent US market share even though it has relied on “bad behavior” such as heavy discounts and sales to rental car companies.
Saikawa reiterated Nissan’s commitment to the venture, while a Renault statement expressed “dedication to the defense of Renault’s interest in the alliance.”
Ghosn’s arrest casts doubt on future of Renault-Nissan alliance
Ghosn’s arrest casts doubt on future of Renault-Nissan alliance
- Carlos Ghosn been ‘the glue that holds Renault and Nissan together,’ Bernstein analyst Max Warburton wrote in a note to investors
- With Ghosn out at Nissan and probably Renault as well, the companies are unlikely to get any closer
Saudi economy expands 1.3% in 2024 amid non-oil growth
RIYADH: Saudi Arabia’s economy grew 1.3 percent in 2024, supported by an expansion in non-oil activities despite a decline in the oil sector, according to data from the General Authority for Statistics.
Growth accelerated in the fourth quarter of 2024, with gross domestic product expanding 4.5 percent year on year — the highest quarterly increase in two years — supported by a 4.7 percent rise in non-oil activities and a 3.4 percent uptick in oil activities.
However, oil sector’s output declined 1.5 percent compared to the third quarter.
These figures align with GASTAT’s January real GDP projections, which estimated 4.4 percent annual growth in the fourth quarter of 2024. Flash estimates at the time indicated that the Kingdom’s non-oil activities grew 4.6 percent year on year in the three months leading up to December, reflecting ongoing economic diversification efforts.
The wholesale and retail trade, restaurants, and hotels sector led annual growth among economic activities, rising 6.4 percent, followed by financial services, insurance, and business services at 5.7 percent.
Electricity, gas, and water activities increased 4.9 percent, while transport, storage, and communication, along with other mining and quarrying activities, grew 4.5 percent. Crude oil and natural gas activities declined 6.4 percent.
At current prices, Saudi Arabia’s GDP reached SR4.07 trillion ($1.09 trillion) in 2024, with crude oil and natural gas contributing 22.3 percent, government activities 16.2 percent, and wholesale and retail trade, restaurants, and hotels accounting for 10.3 percent.
Manufacturing, excluding petroleum refining, made up 9.1 percent, while real estate activities comprised 6.5 percent.
In the fourth quarter, petroleum refining saw the highest growth among economic activities, surging 15.3 percent year on year, despite a 2.2 percent quarter-over-quarter decline. Electricity, gas, and water activities grew 7.4 percent annually and 2.7 percent quarterly, while other mining and quarrying activities expanded 7 percent year on year and 3.4 percent quarter on quarter.
By expenditure components, private final consumption rose 3.9 percent annually and 0.3 percent quarterly. However, gross fixed capital formation declined 2.2 percent year on year and 4.6 percent quarter over quarter, while government final consumption expenditure dropped 6.6 percent and 6.4 percent, respectively.
Exports increased 5.2 percent annually and 6.9 percent quarterly, while imports rose 11.5 percent and 7.8 percent.
At current prices, Saudi Arabia’s GDP for the fourth quarter stood at SR1.025 trillion, with crude oil and natural gas activities contributing 19.7 percent, government activities 16.7 percent, and wholesale and retail trade, restaurants, and hotels 10.6 percent.
Manufacturing, excluding petroleum refining, accounted for 9.2 percent.
Saudi Arabia’s economic performance underscores its ongoing diversification push, with non-oil sectors playing a key role in mitigating the impact of oil sector volatility.
Saudi Arabia’s Tadawul dominates Arab exchanges with 62% market share in 2024
- Arab stock exchanges saw strong growth in 2024, with total trading values rising by 58.1% to surpass $1.03 trillion
RIYADH: Saudi Arabia’s Tadawul reinforced its position as the Arab world’s leading stock exchange, accounting for 62 percent of the total market capitalization of regional platforms in 2024.
A recent report by the Arab Federation of Capital Markets said Tadawul’s market capitalization overshadowed other regional exchanges, with the Abu Dhabi Securities Exchange following at a distant 18.6 percent.
The Dubai Financial Market, with a share of 5.6 percent, the Qatar Stock Exchange at 3.9 percent, and Boursa Kuwait, holding 3.2 percent, rounded out the top five.
This dominance comes amid strong performance in the Saudi market, leading the region with the highest turnover ratio of 247.1 percent.
The trading value at Tadawul reached $496.6 billion, significantly outpacing other markets.
The Arab Federation of Capital Markets achieved an 84.4 percent increase in total revenues, from $689,503 in 2023 to $1.2 million in 2024.
The FTSE-AFCM Low Carbon Select Index rose 4.9 percent in 2024, indicating increased investor interest in low-carbon companies.
Iraq Stock Exchange’s ISX60 index experienced a 20.2 percent surge in 2024 to 1,074 points, while Muscat Stock Exchange’s MSX30 index saw a 1.4 percent increase to 4,577 points.
Abu Dhabi Securities Exchange’s FADGI index witnessed a 1.7 percent decline to 9,419 points, and QSE’s QE index dipped by 2.4 percent in 2024 to 10,571 points.
Arab stock exchanges saw strong growth in 2024, with total trading values rising by 58.1 percent to surpass $1.03 trillion. The Egyptian Exchange led the way with a substantial 210.3 percent increase in trading value, reaching $324.4 billion.
Other exchanges also saw positive results, such as the Casablanca Stock Exchange, which grew by 55.2 percent, and the Damascus Stock Exchange, which saw a 163.3 percent increase.
Some platforms, including the Palestine Exchange, which saw a 56.4 percent decline in trading value, faced challenges.
Overall, trading volumes across the region grew by 21.3 percent, and the number of trades increased by 35.9 percent, reflecting a dynamic financial landscape with varying performances across different markets.
The S&P Pan Arab Composite Index rose by 1.9 percent year-on-year in December, while the Amman Stock Exchange index posted a modest 2.4 percent growth. The Casablanca market saw its MASI index jump by 22.2 percent, demonstrating strong performance in the Moroccan market.
The Damascus Stock Exchange index registered the largest increase at 65.7 percent, and the Saudi Exchange index saw the smallest growth at 0.6 percent during this period.
Closing Bell: Tadawul rises on positive trading day, Nomu follows suit
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 25.41 points, or 0.22 percent, to close at 11,836.52.
The total trading turnover of the benchmark index was SR3.95 billion ($1.05 billion), with 46 stocks advancing and 182 retreating.
The Kingdom’s parallel market, Nomu, also gained 35.09 points, or 0.11 percent, to close at 31,331.82, as 18 stocks advanced while 40 retreated.
The MSCI Tadawul Index also gained 4.40 points, or 0.30 percent, to close at 1,494.48.
The best-performing stock of the day was Dar Alarkan Real Estate Development Co., whose share price rose 7.48 percent to SR18.40.
Other top performers included Dallah Healthcare Co., whose share price rose 6.83 percent to SR131.40, and Bupa Arabia for Cooperative Insurance Co., whose share price surged 4.78 percent to SR171.
Kingdom Holding Co. recorded the most significant drop, falling 9.94 percent to SR7.70.
Arabian Shield Cooperative Insurance Co. also saw its stock prices fall 7.48 percent to SR17.82.
Batic Investments and Logistics Co. saw its stock prices decline by 7 percent to SR2.79.
On the announcements front, the Saudi Exchange announced the listing and trading of shares of Derayah Financial Co. on the main market starting March 10, with +/- 30 percent daily price fluctuation limits and +/- 10 percent static price fluctuation limits.
According to a Tadawul statement, these fluctuation limits will apply during the first three days of listing, and from the fourth trading day onwards, the daily price fluctuation limits will revert to +/- 10 percent, while the static price fluctuation limits will no longer apply.
The statement further revealed that Derayah Financial Co. will have the symbol 4084 and ISIN Code SA1690F1VQ15.
Lazurde Company for Jewelry announced its annual financial results for the year ended Dec. 31. A bourse filing revealed that the firm reported a net profit of SR11.7 million in 2024, reflecting a 62.01 percent drop compared to 2023.
This decrease in net profit is primarily attributed to one-off expenses totaling SR10.2 million related to the cost of changing the company’s distributor in the Gulf Cooperation Council and a provision for a legal dispute. In 2023, there was a one-off gain of SR10.1 million from the sales of an administrative office in the UAE.
The company ended the session at SR13.08, down 3.63 percent.
Fourth Milling Co. also announced its annual financial results for the year ended Dec. 31. According to a Tadawul statement, the company reported a net profit of SR170 million in 2024, reflecting a 19.68 percent surge compared to 2023. This jump is linked to a 12.7 percent rise in revenue and enhanced operational and production efficiency, which improved profit margins.
Fourth Milling Co. ended the session at SR4.05, up 0.25 percent.
Qatar’s international reserves climb 3.81% to $70.29bn in February
RIYADH: Qatar’s international reserves and foreign currency liquidity rose 3.81 percent in February, reaching 255.916 billion Qatari riyals ($70.29 billion), up from 246.509 billion riyals in the same month last year.
According to the latest data from the Qatar Central Bank, official reserves increased by 9.218 billion riyals, totaling 196.817 billion riyals at the end of February, despite a 13.175 billion riyal decline in foreign bonds and Treasury bills holdings, which stood at 125.790 billion riyals, Qatar News Agency reported.
Official reserves comprise several components, including foreign bonds and treasury bills, cash balances with foreign banks, gold holdings, Special Drawing Rights, and Qatar’s quota at the International Monetary Fund.
In addition, the central bank’s total international reserves include other liquid assets in foreign currency deposits.
The figures reflect continued growth in Qatar’s international reserves, highlighting the country’s financial stability despite fluctuations in global markets.
Gold reserves saw a significant uptick, rising by 13.85 billion riyals to 38.263 billion riyals. Cash balances with foreign banks increased by 8.63 billion riyals, reaching 27.67 billion riyals. Conversely, SDR deposits at the International Monetary Fund decreased by 98 million riyals, totaling 5.09 billion riyals.
Qatar recorded a budget surplus of 900 million riyals in the fourth quarter of 2024, up from 100 million riyals in the previous quarter.
In January, the Ministry of Finance stated on its X account that the surplus would be used to reduce public debt. It added that total expenditures for the quarter stood at 47.8 billion riyals, a 12 percent year-on-year decline, while revenues totaled 48.7 billion riyals, reflecting a 12.5 percent drop.
The health, municipal and environment, general secretariat, and energy sectors ranked as the top-performing areas during the quarter, according to the Sector Performance Index.
Qatar’s fiscal performance aligns with other Gulf Cooperation Council nations, such as Oman, which recorded a 6.2 percent budget surplus in 2024.
This reflects the IMF’s December review, which highlighted the region’s resilience amid oil production cuts, supported by diversification efforts and economic reforms.
Qatar’s real gross domestic product is expected to grow by 2 percent in 2024-25, driven by public investment, liquefied natural gas spillovers, and a robust tourism sector, according to the IMF.
It projected the Gulf nation’s medium-term growth to average 4.75 percent, fueled by a significant expansion in LNG production and the early impact of reforms under the Third National Development Strategy.
Fitch affirms Kuwait’s rating at AA-, outlook stable
- Assets projected to rise to 601% of GDP this year from an estimated 582% in 2024
- Government planning to introduce long-delayed excise tax in fiscal year ending March 2026
RIYADH: Fitch Ratings has reaffirmed Kuwait’s Long-Term Foreign-Currency Issuer Default Rating at AA-, with a stable outlook due to the country’s strong fiscal position and external financial consistency.
The US-based agency said Kuwait’s external balance sheet remains the strongest of all Fitch-rated sovereigns, with the nation’s net foreign assets projected to rise to 601 percent of the gross domestic product this year from an estimated 582 percent in 2024.
According to Fitch, an AA- ranking indicates expectations of very low credit risk and a strong capacity for payment of financial commitments.
Kuwait’s strong rating aligns with the broader trend in the Middle East region, where countries steadily diversify their economies by reducing their dependence on crude revenues.
In February, Fitch Ratings affirmed Saudi Arabia’s IDR at A+ with a stable outlook, while the UAE was rated AA-.
The Kingdom’s A+ ranking indicates Saudi Arabia’s strong capacity to pay financial commitments while signifying low default risk.
“The recently-appointed government has initiated reforms aimed at reducing reliance on oil revenue, improving government efficiency, and rationalizing spending, capping it at 24.5 billion dinars ($79.53 billion), accounting for about 51 percent of GDP,” said Fitch Ratings.
The report further said that the Kuwaiti government’s introduction of a 15 percent domestic minimum top-up tax on multinational companies came into effect on Jan. 1. It is expected to generate about 0.5 percent of GDP, amounting to 250 million dinars annually, with collections expected to commence by 2027.
The government is also planning to introduce the long-delayed excise tax in the fiscal year ending March 2026.
“Fitch views the pick-up in reform efforts as positive. However, a significant overhaul of generous public wages and welfare spending (79 percent of total expenditure; 40 percent of GDP) is unlikely in the short term, given the state’s deep-rooted generosity toward Kuwaiti citizens and still favorable oil prices,” the analysis added.
The Kuwaiti government is also planning to pass a liquidity/debt law, which will enable the country to raise new debt.
The agency said even without a liquidity law, the government would still be able to meet its financing obligations in the coming years, given the substantial assets at its disposal.
Kuwait’s overall revenue is expected to decline in the financial year 2025 due to oil revenue loss from lower crude prices as OPEC+ continues production cuts to maintain market stability, according to Fitch.
The country’s non-oil revenues are expected to grow modestly in the financial year but fall short of the government’s target of 2.9 billion dinars.
The study further said that the Kuwait government’s debt to GDP rose to 6 percent in FY25 and 9.2 percent in FY26, despite a $4.5 billion Eurobond maturing in March 2027.
The report also outlined some constraints that affected Kuwait’s rating, including the country’s weaker governance than peers, heavy dependence on oil, and its generous welfare system and large public sector, which could result in long-term fiscal pressure.
“Prospects remain unclear for meaningful fiscal adjustment to address long-term challenges and legislation to allow debt issuance and improve fiscal financing flexibility, although there are emerging signs of progress,” said Fitch.
