Current situation offers opportunity to firms like NEC and Samsung to shine
Updated 29 June 2020
AFP
TOKYO: With growing pressure to keep China’s Huawei out of 5G network development, it could be time for firms like Japan’s NEC and South Korea’s Samsung to shine.
Washington has pushed allies to bar Huawei, a Chinese telecom giant, from building next-generation 5G mobile networks, claiming its equipment can be used to spy for Beijing.
Huawei denies the charges, but US pressure has prompted an about-turn in Britain.
The government had already pledged to cut the firm out of the most sensitive “core” elements of 5G that access personal data, and is now reportedly pushing for plans to end Huawei’s involvement in Britain’s 5G infrastructure by 2023.
But excluding Huawei is not without challenges, because there are currently only two alternatives in Europe for 5G equipment such as antennas and relay masts: Finland’s Nokia and Sweden’s Ericsson.
Britain has encouraged Washington to form a club of 10 democratic nations that could develop its own 5G technology, but there has been little movement so far.
“The vast majority of the commercial networks sold in the world come from the big three,” said Sylvain Chevallier, in charge of telecoms at BearingPoint consultancy, referring to Huawei, Nokia and Ericsson. “But a world of three is not good for operators, and if it goes down to two it will be worse still,” he told AFP.
That leaves a tempting potential opening for telecoms firms like Samsung and NEC. But building a successful 5G network is no simple task.
That is a lesson Samsung has already learned. Despite being a major player in 3G, it found itself unable to compete with the big three on 4G and struggled to win commercial contracts.
“This has been a challenge for Samsung,” said Daryl Schoolar, a mobile technology specialist at consulting group Omdia.
In building its 5G network, Samsung has so far focused on North America and parts of the Asia-Pacific region.
The logo of NEC, Japan’s electronics and information technology company, is displayed at the firm’s headquarters in the capital Tokyo. (AFP/File)
“So while operators may feel uncertain about Samsung Networks, they are much further along in the process of being a global presence than NEC,” Schoolar added.
NEC does have some advantages, including a partnership in Japan with mobile operator Rakuten.
The firms have already cooperated on a 4G network and are now jointly developing a 5G system.
The Japanese firm is also a leader on undersea cables, fiber optic networks and — thanks to its affiliate Netcracker — logistics management software.
“Netcracker has a strong presence with operators in Europe, which could be a real entry point for NEC,” said Stephane Teral, chief telecoms analyst at LightCounting, a market research firm.
NEC is tightlipped about its contracts for mobile networks, saying only that it is holding feasibility demonstrations for “a number of customers and we are engaged in commercial discussions with others.”
Britain’s government has reportedly asked both NEC and Samsung to take part in demonstrations as it looks to diversify its 5G options.
And on Thursday, NEC announced a tie-up with Japanese operator NTT intended in part to speed up the development of a 5G network.
Samsung and NEC joined forces 2 years ago and have launched a joint marketing team to offer 5G products to European and Asian markets.
Still, the path ahead will be tough, said Schoolar.
“I think it’s a major challenge for NEC. It requires more than radios, it requires investing in people who can do system integration, sales, customer support, network design and engineering,” he said.
“Plus NEC will need to build operator trust that they will be there to support them in 5 to 10 years as those 5G networks evolve.”
Washington has backed the use of nonproprietary technology like Open RAN in 5G development, hoping it will provide an entry point for US firms.
Such a move would open up opportunities for NEC, allowing them to “create an economic model that would shake up traditional equipment manufacturers,” said Chevallier.
Global sustainable bond issuance to reach $1tn in 2025: Moody’s
Impending maturity wave is set to escalate, signifying additional refinancing requirements alongside regular issuance goals
Moody’s said ESG risks this year will be influenced by policy decisions and financing.
Updated 26 January 2025
REEM WALID
RIYADH: Global sustainable bond issuance is projected to reach $1 trillion in 2025, driven by a worldwide focus on green development, according to global credit rating agency Moody’s.
In their latest report, the New York-based firm said that increased examination of greenwashing, changes in market norms and regulations, and a more intricate landscape, which includes political challenges in certain nations, are expected to impede growth.
This aligns with the green bond market, which has advanced a decade beyond the international treaty on climate change that was signed in 2016, known as the Paris Agreement. The market provides a boost to the sector as initial issuances are gradually approaching maturity.
The impending maturity wave is set to escalate this year and 2026, signifying additional refinancing requirements alongside regular issuance goals, according to capital market firm AXA Investment Managers.
“We expect global sustainable bond issuance to total $1 trillion in 2025, in line with 2024. Social bonds will be constrained by a lack of benchmark-sized projects, while transition-labeled bonds and sustainability-linked bonds will remain niche segments as they navigate evolving market sentiment,” Moody’s report said.
“A continued focus on climate mitigation financing, as well as growing interest in climate adaptation and nature, will spur green and sustainability bond issuance,” it added. “Meanwhile, the widening gaps between decarbonization ambitions and implementation will be brought into focus by the contrast of fresh pledges and increasingly destructive climate events.”
Regarding the outlook on environmental, social, and governance factors, Moody’s said the risks this year will be influenced by policy decisions and financing.
“Companies will encounter challenges in handling environmental and social risks within their supply chains. Additionally, technological disruptions, climate change, and demographic shifts could exacerbate social risks and pose policy obstacles for governments,” the agency added.
It said at the time that the year-on-year increase in green, social, sustainability, and sustainability-linked bonds came despite a quarter-on-quarter drop, with the volume issued down 14 percent in the three months to the end of September compared to the preceding period.
For the first nine months of 2024, sustainable bond volumes reached $769 billion, marking a 3 percent decline compared to the same period last year.
Despite the quarterly dip, Moody’s forecasted that the total sustainable bond volumes will reach $950 billion in 2024 “buoyed by relatively robust volumes in the first half of the year and continued issuer appetite for funding environmental and social projects with labeled bonds.”
Saudi benchmark index inches up 0.26% to close at 12,386
Updated 26 January 2025
Reem Walid
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 32.12 points, or 0.26 percent, to close at 12,386.16.
The total trading turnover on the benchmark index reached SR5.11 billion ($1.36 billion), with 161 stocks advancing and 69 retreating.
The Kingdom’s parallel market, Nomu, also saw a modest gain, rising 49.70 points, or 0.16 percent, to close at 30,896.29, as 49 stocks advanced and 42 declined.
The MSCI Tadawul Index closed up by 2.01 points, or 0.13 percent, finishing at 1,545.39.
Kingdom Holding Co. emerged as the day’s top performer, with its share price surging 9.80 percent to SR10.20. Other notable performers included Al-Baha Investment and Development Co., which rose 9.30 percent to SR0.47, and Saudi Fisheries Co., whose share price jumped 7.84 percent to SR24.28.
On the downside, Al-Jouf Cement Co. recorded the largest drop, falling 3.57 percent to SR12.44. Arabian Pipes Co. also saw its stock decline by 2.50 percent, closing at SR13.26, while Rasan Information Technology Co. dropped 1.94 percent to SR90.80.
On the announcements front, Al-Baha Investment and Development Co. announced its annual financial results for the period ending Dec. 31. The company reported a net profit of SR8.37 million for 2024, a 69.48 percent increase compared to 2023. The growth was primarily driven by a 13 percent rise in revenues, a 98 percent drop in zakat provisions, a 39 percent reduction in financing costs, and a decline of SR1.18 million in investment properties.
Al-Moammar Information Systems Co. has signed a SR58.6 million contract with the Saudi Authority for Data and Artificial Intelligence to enhance the AI network through software and services.
According to a bourse filing, the 36-month deal is expected to generate positive financial impacts starting in Q1 2025. The stock closed at SR160.40, up 0.51 percent.
Al-Sagr Cooperative Insurance Co. received an Insurer Financial Strength Rating of “BBB” and a National IFS Rating of “A+” with a stable outlook from Fitch Ratings.
The ratings reflect Al-Sagr’s strong capitalization, solid financial performance, and well-diversified insurance portfolio, despite its moderate operating scale within the Saudi insurance market. Al-Sagr’s stock closed at SR18.10, up 3.20 percent.
Saudi-based Walaa Cooperative Insurance Co. maintains ‘A-’ rating: S&P Global
S&P expects Walaa to maintain this level of capital adequacy over the next two years
It also expects the company to gradually improve its combined ratio to about 98% in 2025—2026
Updated 26 January 2025
NOUR EL-SHAERI
RIYADH: Saudi Arabia’s Walaa Cooperative Insurance Co. maintained its “A-” long-term insurer financial strength rating by S&P Global, with a stable outlook.
The New York-based credit rating agency also affirmed its “gcAAA” long-term Gulf Cooperation Council regional scale rating and “ksaAAA” long-term Saudi national scale assessment for Walaa, highlighting the insurer’s capital position and planned business growth initiatives.
This comes as the company completed an SR468 million ($124.8 million) rights issue in December 2024, initially announced in September 2023.
The additional capital will support the firm’s growth strategy and enhance its regulatory solvency margin.
S&P said Walaa’s capital adequacy exceeded its 99.99 percent confidence level before the reserve increase, with the recent capital injection further strengthening the company’s financial stability.
The rating agency expects Walaa to maintain this level of capital adequacy over the next two years, underpinning its stable outlook.
The firm’s stock price has already seen a significant 5.26 percent increase by 2:20 p.m. Saudi time to reach SR24.
Despite its strong capital position, Walaa’s operating performance has lagged behind similarly rated peers, according to S&P.
At the end of the third quarter of last year, the company ranked as the fifth largest insurer in the Kingdom, with insurance revenue reaching SR2.4 million and a growth rate of 17 percent.
However, the insurer faced challenges in profitability, driven by its medical insurance segment.
The combined ratio — a key measure of underwriting performance — stood at 101 percent for the third quarter of 2024, compared to 98 percent during the same period the previous year.
While the motor insurance segment, which experienced losses between 2021 and 2023, returned to profitability in 2024, reporting a service result of SR18 million for the third quarter, Walaa’s medical insurance business posted a significant loss of SR85 million during the same period.
This marks a sharp decline from the SR4 million loss recorded in the third quarter of 2023. The company plans to expand its medical insurance segment over the next two years, aiming for breakeven by the year’s end.
S&P said the goal may be challenging due to the competitive and concentrated nature of the medical insurance market in Saudi Arabia, which is projected to reach $4.33 billion this year, according to German online data gathering platform Statista.
The medical segment is dominated by The Co. for Cooperative Insurance and Bupa Arabia for Cooperative Insurance, which collectively accounted for 76 percent of market revenue and most of the segment’s profitability in the third quarter of 2024, according to S&P.
Walaa’s ability to achieve breakeven in this segment will play a critical role in the recovery of its overall performance.
S&P expects Walaa to gradually improve its combined ratio to about 98 percent in 2025— 2026 as it continues to diversify its business and recover its operating performance.
The agency also flagged potential risks, including the possibility of a negative rating action if Walaa’s underwriting performance is weaker than its local and regional peers or if its capital adequacy falls below the 99.95 percent confidence level.
S&P views the likelihood of a rating upgrade as limited during the outlook period. Any positive rating action would depend on Walaa’s ability to significantly increase and diversify its premium income without impairing operating performance, while maintaining capital adequacy at the 99.99 percent confidence level and a low-risk investment portfolio.
World leaders to attend Saudi Real Estate Future Forum 2025 for industry-shaping discussions
Event will gather over 300 speakers from 85 countries to lead discussions on the direction of real estate
Key themes and sessions at RFF 2025 will encompass various topics, with over 30 high-level dialogue events and 25 in-depth workshops
Updated 26 January 2025
MIGUEL HADCHITY
RIYADH: The Real Estate Future Forum is set to serve as a global hub for industry leaders, policymakers, and investors as Saudi Arabia transitions toward a diversified and innovation-driven economy.
The event will be held from Jan. 27— 29 at the Four Seasons Hotel in Riyadh and will gather over 300 speakers from 85 countries to lead discussions on the direction of real estate.
Under the theme “Future for Humanity: Shaping Dreams into Reality,” RFF 2025 will focus on innovations, sustainability efforts, and investment strategies reshaping the global property market.
This year’s edition will also spotlight the Middle East’s $1 trillion real estate pipeline, which is driving changes in urban development and creating new regional economic opportunities.
Saudi Arabia at the forefront of real estate evolution
The Kingdom’s Vision 2030 reforms have positioned the country as a leader in real estate development, combining innovation, sustainability, and economic growth.
Forum participants will get an in-depth look at major projects, including NEOM, The Red Sea Project, and Diriyah Gate, and their economic impact and long-term sustainability.
The discussions will provide insights into how these initiatives are influencing the broader real estate landscape.
A $1 trillion opportunity for global transformation
With the Middle East witnessing an unprecedented wave of urban expansion, the real estate sector has immense opportunities and critical responsibilities.
This year’s forum will highlight how key stakeholders can leverage digital transformation, sustainable construction, and strategic investments to build cities that are economically viable, environmentally responsible, and socially inclusive.
Benjamin Deschietere, managing director and partner at Boston Consulting Group, underscored the urgency of sustainability in real estate development.
“The Middle East’s $1 trillion real estate pipeline offers a once-in-a-generation opportunity to rethink how we design and build our communities,” he told Arab News.
“With buildings accounting for more than one-third of global greenhouse gas emissions, decisions made today in the region’s transformative mega-projects will impact generations and have the potential to influence global standards for decades,” he added.
Deschietere said that sustainability in design, the use of greener materials, and advancements in construction and procurement practices are essential rather than optional.
He said cities built with these principles would be more resource-efficient, livable, and valuable in the long term, adding that developers who adopt these approaches would gain a significant competitive edge in the coming decades
Benjamin Deschietere, managing director and partner at Boston Consulting Group. Supplied
A holistic approach to sustainability and innovation
RFF 2025 will focus on environmental sustainability and social and economic resilience. With the Kingdom’s target of developing 1 million new housing units by 2030, the forum will discuss how sustainable urbanization can drive affordability, job creation, and social equity.
Edoardo Geraci, managing director and partner at BCG, told Arab News of the need for a paradigm shift. “Traditional real estate has often prioritized growth over sustainability, but the future demands a more holistic approach.”
He added that beyond reducing carbon emissions, sustainable development must also consider social outcomes, such as inclusivity, affordability, and job creation.
“Passive design principles and smart building technologies already enable a reduction of lifecycle carbon emissions by up to almost 40 percent, offering significant cost savings over time,” the expert said.
Geraci also said the Middle East has a distinct chance to demonstrate how well-planned urban development can improve the quality of life, restore natural resources, and establish new standards for sustainable and resilient cities on a global scale.
Edoardo Geraci, managing director and partner at Boston Consulting Group. Supplied
RFF 2025 themes and sessions
Key themes and sessions at this year’s forum will encompass various topics, with over 30 high-level dialogue events and 25 in-depth workshops.
Discussions on smart cities and digital transformation will explore the role of artificial intelligence and blockchain in real estate transactions and homeownership, innovations in smart buildings and urban infrastructure, and the impact of big data on market forecasting and investment strategies.
Sustainable real estate and green building innovations will be another focal point, addressing the shift toward net-zero developments and green architecture, sustainable financing models for eco-friendly projects, and case studies from leading sustainable cities and giga-projects.
Real estate investment and financing trends will be examined, with insights into alternative financing models for large-scale undertakings, the impact of global economic shifts on Middle Eastern real estate markets, and future trends in institutional investment and private sector involvement.
The forum will also highlight the role of giga-projects in economic growth, offering perspectives from key players behind NEOM, The Red Sea Project, and Diriyah Gate, while discussing how these developments are shaping tourism, hospitality, urban living, the intersection of real estate, entertainment, and sports infrastructure.
RFF 2025 will provide an outlook on integrating advanced technologies into the real estate sector. Panels will dive into emerging trends like virtual reality for property marketing, the role of the metaverse in digital real estate, and the use of robotics and 3D printing in construction. The implications of these technologies for efficiency, cost savings, and consumer experiences will be examined.
Another focus will be community-centered urban planning and sessions will address the importance of inclusivity and accessibility in development projects, exploring how innovative housing models and mixed-use initiatives can enhance quality of life and foster social and economic prosperity.
The forum will also discuss sustainable procurement practices and supply chain transformation, offering insights into minimizing waste and achieving carbon neutrality in mega-projects.
Don’t miss this rare opportunity at #RFF2025 to hear from former U.S. President Bill Clinton, as he shares his invaluable perspective on global leadership, the role of real estate in shaping sustainable economies, and the future of transformative policies.
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The three-day event is set to feature a distinguished lineup of speakers, including government officials, global investors, and media personalities who will provide valuable insights into industry-shaping trends.
Notable speakers include Majid Al-Hogail, Saudi minister of municipalities and housing; Turki bin Talal, governor of Asir region; Saud bin Talal, governor of Al-Ahsa; former US President Bill Clinton; international media influencer Piers Morgan; and global media commentator Tucker Carlson.
With Vision 2030 strongly supporting tourism and lifestyle projects, discussions will explore how cultural preservation and modern innovation coexist in urban developments.
Sessions will delve into the design of projects such as New Murabba and Trojena in NEOM, examining how these ventures are redefining the Kingdom’s global image while fostering sustainable growth.
Insights into the transformative impact of major sporting and entertainment events on real estate demand and city planning will highlight the sector’s potential to drive broader socio-economic change.
The 2025 forum is expected to eclipse those numbers, offering an even greater platform for deal-making, policy announcements, and strategic partnerships.
A Glimpse into the Future
The Kingdom’s real estate sector is on the cusp of a technological and financial revolution driven by digital transformation, sustainable design, and forward-thinking policies.
As Vision 2030 continues to guide the nation toward an economically diversified and innovation-driven future, RFF 2025 will serve as a platform for international investors, developers, and policymakers looking to tap into the region’s potential.
RFF 2025 will offer various opportunities for networking, collaboration, and sharing expertise, making it a key event in the ongoing development of the global real estate industry.
RIYADH: A rise in the prices of several categories of consumer products pushed Oman’s annual inflation rate up by 0.7 percent in December compared to base year 2018, according to new data.
The rise in inflation was driven by increases in several key categories, including miscellaneous goods and services, which surged by 4.5 percent, health services by 3.2 percent, and food and non-alcoholic beverages by 1.7 percent, according to the National Center for Statistics and Information reported.
Food and non-alcoholic beverages saw a 1.7 percent price hike, while the restaurant and hotel group rose by 0.8 percent. Other sectors, including culture and entertainment, clothing and footwear, and furniture and household maintenance, also experienced minor price increases.
Despite this, Oman’s inflation remains among the lowest in the region, as the government has implemented measures to contain price rises. This effort has been supported by prudent fiscal policies, high oil prices, and growth in non-hydrocarbon exports.
These factors helped the country achieve a 6.2 percent budget surplus and a 2.4 percent current account gain in 2024.
The latest CPI data also highlighted specific price hikes in food categories. Vegetables saw a significant 7.6 percent increase, followed by milk, cheese, and eggs at 3.8 percent.
Other food products not categorized elsewhere rose by 3.7 percent, while sugar, jam, honey, and sweets increased by 2.8 percent. Meat prices were up 2.6 percent, fruits rose by 2.2 percent, and oils and fats climbed by 1.6 percent.
On the downside, transportation costs fell by 0.8 percent, non-alcoholic beverages dropped by 0.5 percent, and fish and seafood prices plunged by 6.3 percent. Prices in the housing, water, electricity, gas, and other fuels sectors remained stable, as did communications and tobacco prices.
For 2025, Oman projects a modest 2.7 percent growth in gross domestic product, while IMF projections released earlier this month point to a more optimistic 3.1 percent expansion. The inflation rate has been easing in recent months, declining to 0.6 percent during the first 10 months of 2024, down from 1.0 percent in 2023.
