SHANGHAI: Automakers are showcasing electric SUVs and sedans with more driving range and luxury features at the Shanghai auto show, trying to appeal to Chinese buyers in their biggest market as Beijing slashes subsidies that have propelled demand.
Communist leaders wanting China to lead in electric vehicles have imposed sales targets. That requires brands to pour money into creating models to compete with gasoline-powered vehicles on price, looks and performance at a time when they are struggling with a Chinese sales slump.
General Motors, Volkswagen, China’s Geely and other brands on Tuesday displayed dozens of models, from luxury SUVs to compacts priced under $10,000, at Auto Shanghai 2019. The show, the global industry’s biggest marketing event of the year, opens to the public Saturday following a preview for reporters.
On Monday, GM unveiled Buick’s first all-electric model for China. GM says the four-door Velite 6 can travel 301 kilometers (185 miles) before the battery needs charging.
VW showed off a concept electric SUV, the whimsically named ID. ROOMZZ, designed to travel 450 kilometers (280 miles) on one charge. Features include seats that rotate 25 degrees to create a lounge-like atmosphere.
Communist leaders have promoted “new energy vehicles” for 15 years with subsidies to developers and buyers. That, along with support including orders to state-owned utilities to blanket China with charging stations, is helping to transform the technology into a mainstream product.
“People’s mindset and governmental policies are more encouraging toward e-cars than in any other country,” said VW CEO Herbert Diess.
Electric vehicles play a key role in the ruling Communist Party’s plans for government-led development of Chinese global competitors in technologies from robotics to biotech.
Those ambitions set off Beijing’s tariff war with President Donald Trump. Washington, Europe and other trading partners complain Chinese subsidies to technology developers and pressure on foreign companies to share know-how violate its market-opening commitments.
Electric car subsidies end next year, replaced by sales quotas. Automakers that fall short can buy credits from competitors that exceed their targets or face possible fines.
“Most of the traditional car makers are under huge pressure to launch NEVs,” said industry analyst John Zeng of LMC Automotive.
Last year’s Chinese sales of pure-electric and hybrid sedans and SUVs soared 60% over 2017 to 1.3 million, or half the global total. At the same time, industry revenue was squeezed by a 4.1% fall in total Chinese auto sales to 23.7 million vehicles.
That skid that worsened this year. First-quarter sales fell 13.7% from a year ago.
Still, China is a top market for global automakers, giving them an incentive to go along with Beijing’s electric ambitions. Total annual sales are expected eventually to reach 30 million, nearly double last year’s US level of 17 million.
Under Beijing’s new rules, automakers must earn credits for sales of electrics equal to at least 10% of purchases this year and 12% in 2020. Longer-range vehicles can earn double credits. That means some brands can fill their quota if electrics make up as little as 5% of sales.
Also Tuesday, Nissan Motor Co. and its Chinese partner displayed the Sylphy Zero Emission, an all-electric model designed for China. Based on Nissan’s Leaf, the lower-priced Sylphy went on sale in August.
Mercedes Benz displayed its first all-electric model in China, the EQC 400 SUV. The Germany automaker says it can travel 400 kilometers (280 miles) on one charge and can go from zero to 100 kph (62 mph) in 5.2 seconds.
Mercedes plans to release 10 electrified models worldwide, with most built in China, according to Hubertus Troska, its board member for China.
Some Chinese rivals have been selling low-priced electrics for a decade or more.
China’s BYD Auto, the biggest global electric brand by sales volume, unveiled three new pure-electric models last month. All promise ranges of more than 400 kilometers (280 miles) on one charge.
Last week, Geely Auto unveiled a sedan under its new electric brand, Geometry, with an advertised range of up to 500 kilometers (320 miles) on one charge.
Geely’s parent, Geely Holding, launched a joint venture with Mercedes parent Daimler AG in March to develop electrics under the smart brand. Geely Holding is Daimler’s biggest shareholder and also owns Sweden’s Volvo Cars.
Beijing wants to force automakers to speed up innovation and squeeze out producers that rely too heavily on subsidies. But the technology minister acknowledged in January that China faces a difficult transition as that spending is ending.
Keeping development on track “will be a challenge,” said Miao Wei, according to a transcript on his ministry’s website.
The shift creates an opportunity for fledgling Chinese automakers that lag global rivals in gasoline technology. They have just 10% of the global market for gasoline-powered vehicles but account for 50% of electric sales.
The end of subsidies should lead to dramatic changes, said Zeng of LMC Automotive. He said longer-range, feature-rich models from global majors will replace small producers that cannot survive without subsidies.
Electric vehicles “will be much more competitive,” said Zeng.
As the cost of batteries and other components falls, industry analysts say electrics in China could match gasoline vehicles in price and become profitable for manufacturers in less than five years.
EVs carry a higher sticker price in China than gasoline models. But industry analysts say owners who drive at least 16,000 kilometers (10,000 miles) a year save money in the long run, because maintenance and charging cost less.
Electric car makers woo Chinese buyers with range, features
Electric car makers woo Chinese buyers with range, features
Bitcoin approaches $100,000 on optimism over Trump crypto plans
- Bitcoin has doubled this year, up 40 percent since US election
- Trump, pro-crypto Congress seen clearing regulatory clouds
SINGAPORE/LONDON/NEW YORK: Bitcoin came within a whisker of closing above $100,000 for the first time on Thursday as the election of Republican Donald Trump as US president spurred expectations that his administration will create a friendly regulatory environment for cryptocurrencies.
The world’s largest cryptocurrency was trading between $98,000 and $99,000 in late afternoon trading in the US on Thursday, after briefly touching $99,073. Bitcoin has more than doubled in value this year and is up about 40 percent in the two weeks since Trump was voted in as the next US president and a slew of pro-crypto lawmakers were elected to Congress.
Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.
Crypto investors see an end to increased scrutiny under US Securities and Exchange Commission Chair Gary Gensler, whom Trump has said he will replace.
Trump also unveiled a new crypto business, World Liberty Financial, in September. Although details about the business have been scarce, investors have taken his personal interest in the sector as a bullish signal.
Billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies.
Over 16 years after its creation, bitcoin appears on the cusp of mainstream acceptance.
“Everyone who’s bought bitcoin at any point in history is currently in profit,” Alicia Kao, managing director of crypto exchange KuCoin, said.
“But those who bought it early, when there were significant obstacles to doing so and there was the might of the world’s financial and governmental forces intent on crushing it, are the real winners. Not because they’re rich, but because they’re right.”
Bitcoin’s rebound from a slide below $16,000 in late 2022 has been rapid, boosted by the approval of US-listed bitcoin exchange-traded funds in January this year.
The Securities and Exchange Commission had long attempted to block ETFs from investing in bitcoin, citing investor protection concerns, but the products have allowed more investors, including institutional investors, to gain exposure to bitcoin.
Crypto rush
More than $4 billion has streamed into US-listed bitcoin exchange-traded funds since the election. This week, there was a strong debut for options on BlackRock’s ETF, with call options — bets on the price going up — more popular than puts.
“There is a persistent bid in the market,” said Joe McCann, CEO and founder of Asymmetric, a digital assets hedge fund in Miami. “$100,000 is a foregone conclusion.”
Crypto-related stocks have soared along with the bitcoin price and shares in bitcoin miner MARA Holdings were up nearly 2.3 percent on Thursday.
“Once you break out to new highs, you attract a lot of new capital,” John LaForge, head of real asset strategy at Wells Fargo Investment Institute, said.
“It’s like gold in the 1970s, where this new high is in a price discovery mode. You don’t know how high it’s going to go,” he said.
Yet the rise is not without critics.
Two years ago, the industry was wracked by scandal with the collapse of the FTX crypto exchange and the jailing of its founder Sam Bankman-Fried.
The cryptocurrency industry also has been criticized for its energy usage, with miners under scrutiny over their potential impact on power grids and greenhouse gas emissions due to their energy-intensive operations.
Crypto crime also remains a concern, with an analysis by crypto researchers Chainalysis finding that at least $24.2 billion worth of crypto was sent to illicit wallet addresses last year, including addresses identified as sanctioned or linked to terrorist financing and scams.
Saudi Arabia’s GACA ushers in new era of passenger experience with AI
JEDDAH: Saudi Arabia’s aviation authority is revolutionizing the passenger experience by incorporating artificial intelligence into its services, in alignment with the nation’s strategic aviation plan, a senior Saudi official said.
At the 2024 Global Civil Aviation Forum in Shanghai, Abdulaziz bin Abdullah Al-Dahmash, vice president of the General Authority of Civil Aviation for Quality and Passenger Experience, highlighted the authority’s ongoing initiatives designed to improve passenger satisfaction.
A session dedicated to GACA’s role in enhancing the passenger experience featured international experts and focused on the authority's efforts to align with Saudi Arabia's aviation strategy and Vision 2030.
The discussion underscored Saudi Arabia's use of data analytics and AI to transform the aviation sector, supporting the National Aviation Strategy and the broader Vision 2030 objectives. This approach is part of the Kingdom's goal to achieve excellence in both aviation services and infrastructure.
The National Aviation Strategy serves as a roadmap to solidify Saudi Arabia’s position as a global leader in tourism, business travel, and logistics. Built around three core pillars — empowering national tourism, improving domestic aviation, and aligning with Vision 2030 — the strategy aims to enhance interconnectivity, increase the market share of national carriers, and expand airport infrastructure.
By leveraging its strategic location and investment potential, Saudi Arabia’s aviation strategy directly contributes to Vision 2030, which aims to strengthen services and bolster the travel and logistics sectors.
Al-Dahmash noted that to achieve the National Aviation Strategy’s ambitious goals, which include tripling passenger traffic to 330 million annually by 2030, Saudi Arabia is prioritizing major infrastructure projects.
This includes constructing new airports, such as the King Salman International Airport, and expanding existing ones to accommodate the surge in passenger numbers. Alongside this, there is a strong focus on improving operational efficiency and enhancing the overall passenger experience.
In this context, GACA is actively developing and implementing programs to meet evolving passenger expectations. One such innovation is the introduction of AI-powered systems that manage and monitor passenger flow, tracking wait times across Saudi airports.
Additionally, the “Bagless Traveler” initiative is transforming the travel process by enabling passengers to complete check-in and baggage handling from their accommodation. During its pilot phase, the service successfully assisted over one million passengers, with more than 2 million bags processed without incident.
Al-Dahmash also emphasized the importance of regulatory frameworks that GACA has implemented, noting that these efforts have significantly improved services at Saudi airports, leading to higher levels of passenger satisfaction. This success has garnered recognition, with several airports receiving local and international awards.
Moreover, GACA has presented its innovative passenger experience programs at global conferences, sharing its best practices with civil aviation authorities worldwide, demonstrating how others can leverage these advancements for similar success.
Closing Bell: Saudi main index slips to close at 11,840
- Parallel market Nomu gained 681.17 points, or 2.28%, to close at 30,540.28
- MSCI Tadawul Index lost 4.52 points, or 0.30%, to close at 1,486.82
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Thursday, losing 27.40 points, or 0.23 percent, to close at 11,840.52.
The total trading turnover of the benchmark index was SR5.39 billion ($1.43 billion), as 98 of the stocks advanced and 131 retreated.
The Kingdom’s parallel market Nomu gained 681.17 points, or 2.28 percent, to close at 30,540.28. This comes as 63 of the listed stocks advanced, while 23 retreated.
The MSCI Tadawul Index lost 4.52 points, or 0.30 percent, to close at 1,486.82.
The best-performing stock of the day was Al-Baha Investment and Development Co., whose share price surged 10 percent to SR0.33.
Other strong performers included Saudi Reinsurance Co., with a 7.05 percent increase in its share price to SR43.30, and Saudi Chemical Co., which saw its share price rise 5.46 percent to SR10.24.
Saudi Cable Co. recorded the largest decline, with its share price dropping 4.02 percent to SR97.90.
CHUBB Arabia Cooperative Insurance Co. also saw its stock fall 3.13 percent to SR49.50.
Naseej International Trading Co. experienced a 2.64 percent drop in its share price, which fell to SR92.30.
On the announcements front, Saudi Awwal Bank has disclosed its intention to issue an SR-denominated Additional Tier 1 Sukuk through a private placement in the Kingdom, as part of its SR20 billion Additional Tier 1 Sukuk issuance program.
According to a Tadawul statement, the bank has appointed HSBC Saudi Arabia as the sole lead manager for the proposed offer. The statement said the purpose of the issuance is to strengthen the bank’s capital base and support the achievement of its long-term strategic objectives.
The amount and terms of the sukuk will be determined at a later stage, based on market conditions at that time.
Saudi Awwal Bank closed the session at SR31.40, down 0.63 percent.
The Saudi Investment Bank has announced the completion of its US dollar-denominated Additional Tier 1 capital sustainable sukuk offering under its Additional Tier 1 capital sukuk program.
A bourse filing revealed that the offer is valued at $750 million, comprising 3,750 sukuk with a par value of $200,000 each and a return of 6.275 percent.
The sukuk have a perpetual maturity, callable after five years. Settlement of the sukuk issuance is scheduled for Nov. 27, and the sukuk will be listed on the London Stock Exchange’s International Securities Market.
Saudi Investment Bank closed the session at SR13.88, down 0.29 percent.
Aramco to increase borrowing, focus on dividend growth, CFO says
RIYADH: Saudi Aramco plans to increase borrowing and focus on enhancing its dividend distribution strategy, revealed the company’s chief financial officer.
In an interview with Bloomberg, Ziad Al-Murshed explained that this move is part of the company’s efforts to optimize its capital structure.
Aramco is considered one of the pillars of the Saudi economy, encompassing the entire oil production chain, from hydrocarbon extraction to energy generation, as well as refining and commercial distribution activities.
“You’ll see us do a couple of things. One is, just take on more debt compared to use of equity,” Al-Murshed said during the interview.
“It’s nothing to do with the dividend, it is optimizing our capital structure so that we end up with a lower weighted average cost of capital,” he added.
Aramco returned to the debt market earlier this year after a three-year hiatus, raising $9 billion in two separate issuances. In June, it launched a $6 billion offering of dollar-denominated bonds, followed by a $3 billion issuance of Islamic bonds in September.
The CFO noted: “We had the luxury of sitting out those three years until the market became conducive.”
Al-Murshed provided insight into how the company increased its dividend by 4 percent in each of the past two years and is now paying over $81 billion in base dividends.
“We’re looking for it to be progressive over the years,” he said, adding that the company’s free cash flow supports this strategy.
While the company plans to issue debt regularly, Al-Murshed emphasized that it will not be overly frequent and revealed that Aramco has no plans to sell more debt for the remainder of 2024.
“We want to be active, but we don’t want to be too active,” he said.
The CFO further clarified that the company’s decision to sell debt is primarily aimed at broadening its investor base.
Al-Murshed did not specify whether Aramco would borrow to support its dividend payments, which are set to total $124 billion this year, exceeding the company’s earnings.
Earlier this month, Aramco reported a net profit of SR103.37 billion ($27.52 billion) for the third quarter of 2024, exceeding analyst expectations, which had projected a median net income of $26.9 billion.
However, in a statement released at the time, the company noted a 15.4 percent decline in net profit compared to the same period in 2023, attributed to challenging market conditions, including lower prices for crude oil, refined products, and chemicals.
Aramco’s vision remains to be the world’s leading integrated energy and chemicals company, operating in a safe, sustainable, and reliable manner.
Saudi Arabia's Ma’aden proceeds with $10bn capital raise to boost phosphate stake
- Ma’aden said its shareholders will convene virtually on Dec. 11 to approve the capital increase
- Plan includes issuing 111 million new ordinary shares valued at SR10 each
RIYADH: Saudi Arabian Mining Co., or Ma’aden, has issued a shareholder circular outlining the terms of its plan to raise its share capital to SR38.03 billion ($10.1 billion) from SR36.92 billion to boost its phosphate business.
The move follows an earlier announcement to acquire a 25 percent stake in Ma’aden Wa’ad Al-Shamal Phosphate Co. from Mosaic Phosphates B.V., increasing its ownership in the joint venture to 85 percent.
In April, Ma’aden announced the signing of an agreement to acquire 210.93 million shares owned by Mosaic Co. and its subsidiary, Mosaic Phosphates B.V. Regulatory approval for the transaction was granted in November by the Capital Market Authority.
In a bourse filing, Ma’aden said its shareholders will convene virtually on Dec. 11 to approve the capital increase. The plan includes issuing 111 million new ordinary shares valued at SR10 each, representing a 3.01 percent rise in the company’s share capital.
In exchange, Mosaic Phosphates will transfer its MWSPC stake to Ma’aden, aligning with the Saudi firm’s strategic expansion in the phosphate sector.
MWSPC, established in 2014 and based in Turaif, is a joint venture between Ma’aden, Mosaic Co., and Saudi Basic Industries Corp. Following the transaction, SABIC will retain its 15 percent stake while Ma’aden strengthens its position as a global phosphate leader.
Mosaic Netherlands Holding Co., a subsidiary of Mosaic Co., will receive the newly issued shares, which will be subject to a three-year lock-up period. Limited transfers will begin in the fourth year, with full tradability by the fifth year, the circular said.
The acquisition will enhance Ma’aden’s control over MWSPC, recognized as a low-cost, large-scale phosphate producer. It will also grant Ma’aden access to Mosaic’s marketing rights, a component of the deal’s valuation at SR5.62 billion.
Ma’aden expects increased earnings per share following the transaction, reflecting anticipated synergies and enhanced operational efficiencies, according to the document.
The company assured shareholders that all regulatory approvals for the transaction have been secured, with a detailed timeline for procedural steps provided in the circular.
The move underscores Ma’aden’s commitment to driving value creation in the Kingdom’s mining sector, aligning with Saudi Vision 2030 goals to diversify the economy and develop industrial capabilities.
In the first half of this year, Ma’aden achieved a net profit of SR2 billion, marking a 160 percent increase compared to the same period in 2023.
The surge in profitability was driven by several key factors. A major contributor to this financial success was the significant boost in sales volume, according to a Tadawul statement.
The company’s robust performance in primary aluminum and gold sales played a crucial role in driving up revenues. Ma’aden also benefited from reductions in raw material costs and lower depreciation expenses, which further enhanced its profitability.
Ma’aden’s performance and strategic advancements underscore its commitment to leading the mining sector and contributing to Saudi Arabia’s economic diversification goals, particularly in developing mining as a critical pillar of the Kingdom’s industry.
