AlUla participates in global forums to strengthen Saudi-China cultural ties
AlUla participates in global forums to strengthen Saudi-China cultural ties/node/2553476/business-economy
AlUla participates in global forums to strengthen Saudi-China cultural ties
The events, held from June 27 to 30, underscored AlUla’s prominent role within the International Tourism Alliance of Silk Road Cities, a network connecting 63 destinations across 28 countries along ancient trade routes. Supplied
AlUla participates in global forums to strengthen Saudi-China cultural ties
Updated 21 July 2024
Arab News
RIYADH: Saudi Arabia and China have deepened their cultural ties as the Royal Commission for AlUla participated in key global forums in Istanbul and Luoyang.
The RCU attended the Silk Road Dialogue and the International Ancient Capitals Forum to enhance collaboration and showcase AlUla as the world’s “largest living museum.”
The events, held from June 27 to 30, underscored AlUla’s prominent role within the International Tourism Alliance of Silk Road Cities, a network connecting 63 destinations across 28 countries along ancient trade routes.
The forums were instrumental in expanding Saudi-China cultural partnerships and organizing official visits to AlUla.
Saudi Arabia’s strategic focus on tourism, centered around AlUla’s rich heritage, has become a cornerstone in deepening cultural and economic ties with China, showcasing the Kingdom’s commitment to leveraging its historical assets to foster international partnerships.
Discussions at the International Ancient Capitals Forum included high-level meetings with Luoyang officials on tourism, agriculture, conservation, and urban development, exploring new areas of cooperation between the two nations.
“The Royal Commission for AlUla continues to build on the deep-rooted foundations of cultural partnership that exists between China, the Kingdom, and northwest Arabia,” said an RCU spokesperson in a statement.
The spokesperson added: “The Silk Road Dialogue and International Ancient Capitals Forum events represented exciting opportunities to develop new avenues of collaboration, with a focus on expanding knowledge exchange and promoting tourism, with diverse initiatives built upon our shared status as ancient destinations and rapidly developing landmarks for human heritage.”
The forum was launched to foster dialogue and collaboration between cities with a millennia-long history. It also facilitates an agreement signed earlier this year between AlUla and its Chinese partners at the Henan Provincial Administration of Cultural Heritage.
The partnership seeks to enhance knowledge and shared resources, focusing on archeology, preserving cultural heritage and museums and research collaboration as well as talent development, tourism and other cultural exchanges.
It also includes establishing a technology-driven archeological laboratory, conducting excavation activities, engaging in research and fostering connections between heritage sites in AlUla and Henan.
The deal further involved implementing collaborative exchange programs, participating in exhibitions and events, and utilizing museum technologies such as virtual reality and augmented reality.
Electric vehicles will account for up to half of auto sales by 2030, BYD Pakistan says
Warren Buffett-backed Chinese electric vehicle giant BYD last month announced its entry into Pakistan
Partnership has announced plans to open assembly plant in 2026 but will introduce vehicles for sale this year
Updated 12 sec ago
Reuters
KARACHI: Up to 50% of all vehicles bought in Pakistan by 2030 will be electrified in some form in line with global targets, BYD Pakistan, a partnership between China’s BYD and Pakistani car group Mega Motors, said.
Warren Buffett-backed Chinese electric vehicle giant BYD last month announced its entry into Pakistan, making the South Asian nation of 250 million people one of its newest markets.
The partnership has announced plans to open an assembly plant in early 2026, but will introduce vehicles for sale later this year, after launching three models in August.
“I see conversion to new energy vehicles NEV at up to 50 percent,” Kamran Kamal, BYD’s spokesperson in Pakistan, told Reuters in an interview at his office on Thursday.
Kamal is also the CEO of Hub Power, which owns Mega Motors.
The target is an ambitious one for Pakistan’s auto sector, which has been largely dominated by Japanese automakers Toyota, Honda and Suzuki, with vehicle sales hitting a 15-year low in the fiscal year to June.
Recently South Korea’s KIA has begun challenging for market share along with Chinese companies Changan and MG, all of whom offer hybrid vehicles. BYD Pakistan is the first major new energy vehicle entrant in the Pakistani market.
Hybrid electric vehicle sales in Pakistan have more than doubled in the past year. While reaching 30 percent NEV adoption by 2030 is feasible, achieving 50 percent may be more challenging due to infrastructure hurdles, said Muhammad Abrar Polani, auto sector analyst at Arif Habib Limited.
Kamal said the challenge of charging infrastructure would be addressed by government plans to incentivise its construction.
Local media reported in August that standards for EV charging stations had been drafted by the power ministry, with the government considering offering them affordable electricity.
Kamal said BYD Pakistan is collaborating with two oil marketing companies to establish a charging infrastructure network and aims to establish 20 to 30 charging stations within the initial phases concurrent with the rollout of its cars.
BYD Pakistan will initially sell fully assembled vehicles, which are subject to higher import charges than vehicles shipped in parts and assembled locally.
“Our main focus is to have locally assembled cars on the roads as soon as possible,” said Kamal, citing difficulties in importing and selling fully assembled units under Pakistan’s current duty structure.
Kamran said BYD Pakistan is deciding on the size of a new plant, but details about the investment and partnership with power utility HUBCO will be disclosed later.
Saudi banks’ real estate loans reach $218bn thanks to annual 12% growth
Updated 06 September 2024
Dayan Abou Tine
RIYADH: Saudi banks real estate loans reached SR816.83 billion ($217.82 billion) in the second quarter of 2024, marking an annual 12 percent rise, according to official data.
Figures from the Saudi Central Bank, also known as SAMA, indicated that this amount represents approximately 30 percent of the total banks’ loan portfolio for the three-month period.
Retail real estate loans made up the largest share at 79 percent, increasing by 10 percent during this period to reach SR641.72 billion.
Corporate real estate loans, although accounting for 21 percent of the total, grew at a faster annual rate of 18 percent, totaling SR175.12 billion.
The share of real estate loans within Saudi banks’ total loan portfolios has steadily increased in recent years. According to data from SAMA, five years ago, these loans accounted for about 17 percent of total lending activities.
This figure rose to 18.5 percent in 2021, then jumped to 28.5 percent in 2022, and 29.6 percent in 2023. As of the second quarter of this year, real estate loans now make up 29.7 percent of the total.
This growth is being driven by several key factors, including urban development, evolving lifestyle preferences, and the rise of e-commerce. There is also a growing emphasis on sustainability, a shift towards remote work, demographic changes, and supportive government policies.
In particular, there is a notable increase in demand for various property types, ranging from residential apartments and villas to commercial offices and retail spaces.
Hospitality venues are also seeing heightened interest, as mixed-use developments become more prevalent. These developments blend residential, commercial, and recreational areas, creating dynamic communities that meet a wide array of needs.
Macroeconomic trends such as population growth, urbanization, and economic stability are further bolstering this market.
Additionally, strategic initiatives like Vision 2030, which aim to diversify the economy and attract foreign investment, are providing a robust framework for sustained growth.
Real estate companies in Saudi Arabia are increasingly focusing on affordable housing and sustainable construction, recognizing the long-term potential of these areas.
As a result, Saudi Arabia’s real estate sector stands out as a compelling opportunity for investment and development, attracting both local and international players looking to capitalize on the country’s evolving landscape.
According to a study by Mordor Intelligence, the Kingdom’s commercial real estate market is highly fragmented and competitive, driven by increasing demand for new properties due to growing commercial activities.
Developers compete based on factors such as land banks, property location, and upcoming projects, as well as construction costs, and company reputation.
The study noted that prominent real estate development companies in the market include Al Saedan Real Estate, Kingdom Holding Company, and SEDCO Development.
It also cited Jabal Omar Development Company, Makkah Construction & Development Co., and Dar Alarkan Real Estate Development Co., as well as Saudi Taiba Investment and Real Estate Development Co.
In parallel, home financing is experiencing significant growth, aligning with the government’s goal to increase homeownership among Saudi nationals to 70 percent by 2030.
In 2016, SAMA revised regulations to increase loan-to-value ratios for financing companies from 70 percent in 2014 to 85 percent.
In 2017, the LTV cap was extended to 85 percent for citizens seeking their first home through banks, and further increased to 90 percent in 2018.
As the government continues to boost affordable housing supply, the creation of the Saudi Real Estate Refinance Company in 2017, a subsidiary of the Kingdom’s Public Investment Fund, has strengthened the provision of mortgage-backed securities for investors.
The demand for real estate financing is expected to grow from SR280 billion in 2017 to SR500 billion by 2026, driven by robust economic growth. SRC plays a vital role in this expansion by making the housing market more accessible to both local and international investors.
According to a study by Deloitte, the lack of refinancing firms in the Saudi mortgage market had previously constrained banks’ ability to expand their loan portfolios within any single sector.
However, the establishment of the Saudi Real Estate Refinance Company has changed this dynamic, allowing banks to package their loan portfolios into mortgage-backed securities that can be sold to investors.
Impact of interest rates
US Federal Reserve building in Washington D.C. Shutterstock
The Saudi real estate market has been significantly impacted by fluctuations in interest rates, which are closely tied to US monetary policy due to the Saudi riyal’s peg to the US dollar.
As the Federal Reserve raised the level to combat inflation, the Gulf Cooperation Council nations, including Saudi Arabia, followed suit, leading to higher borrowing costs across the region.
These elevated interest rates initially created challenges for individuals and companies seeking real estate financing in the Kingdom.
The cost of credit increased, causing potential buyers to hesitate, particularly in a market that was already experiencing rising property prices.
Many prospective homeowners and investors adopted a wait-and-see approach, hoping for a reduction in rates before making major purchasing decisions.
Despite the persistence of the high level, the market has shown resilience and begun to regain momentum.
Elias Abou Samra, CEO of Rafal Real Estate Development Co., noted in an interview with Arab News in July the market has adapted to the “higher-for-longer” interest rate environment.
Buyers have come to terms with the fact that waiting for a reduction in rates could be offset by further increases in property prices.
This realization has prompted many to move forward with their purchasing decisions, boosting demand for mortgages and real estate transactions.
Another contributing factor is that, despite the challenges of rising interest rates, the impact has been softened by a significant increase in construction activity across Saudi Arabia’s giga-projects and other major development initiatives supported by PIF.
These large-scale projects have maintained momentum in the real estate market, helping to counterbalance the effects of higher borrowing costs.
In an August statement, the US Federal Reserve indicated its readiness to cut interest rates, expressing confidence that inflation is easing and caution over potential further slowing in the job market.
While the Fed chair Jerome Powell did not specify a timeline or the extent of the potential rate cuts, his comments suggest a possible rate reduction at the upcoming mid-September policy meeting.
There is uncertainty about whether the Fed will implement a more aggressive cut, such as a half-point reduction, instead of the usual quarter-point.
For Saudi banks, expected rate cuts could spur corporate loan growth, while their strong asset quality is likely to mitigate any downside risks in 2024.
Fitch Ratings recognizes the Kingdom’s banks as having the strongest risk profiles among GCC lenders, thanks to robust asset quality, conservative underwriting standards, and strict regulation by the Saudi Central Bank.
Oil Updates – crude steadies ahead of key US jobs report
Updated 06 September 2024
Reuters
NEW YORK/BEIJING: Oil prices ticked up in Asian trading on Friday, with investors exercising caution ahead of key US employment data as they weighed a big withdrawal from the country’s crude inventories and a delay to production hikes by OPEC+ producers.
Brent crude futures rose 13 cents to $72.82 by 8:07 a.m. Saudi time, and US West Texas Intermediate crude futures were up 12 cents, or 0.17 percent, to $69.27.
“It seems that broader caution prevails, as market participants are still trying to wrap their heads around the mixed US economic data coming through this week, while the lead-up to the crucial jobs report may limit some risk-taking,” said Yeap Jun Rong, a market strategist at IG.
For the week, Brent was on track to drop nearly 8 percent, while WTI was headed for a decline of almost 6 percent.
There have been mixed signals on the US economy this week, ahead of nonfarm payrolls data on Friday that is expected to be key to the size of a US interest rate cut at the Federal Reserve’s Sept. 17-18 meeting.
US services sector activity was steady in August, but private jobs growth slowed, remaining consistent with an easing labor market.
“Memories of the early-August sell-off across global markets may remain fresh on investors’ mind, which kept sentiment on tenterhooks on the risks that US labor conditions may turn in another surprise downside,” Yeap said.
In early August, oil prices fell by more than a dollar and Brent settled at a seven-month low after fears of a US recession sparked a global market sell-off, though prices later recovered on worries of escalating conflict in the Middle East.
On Thursday, Brent again settled at a more than one-year low as worries about US and Chinese demand offset support from a big withdrawal from US oil inventories and the decision by OPEC+ to delay planned oil output increases.
Crude stockpiles fell by 6.9 million barrels to 418.3 million barrels compared with analysts’ expectations in a Reuters poll for a 993,000-barrel draw, because of lower imports.
OPEC+ agreed to delay a planned oil production increase for October and November, the producers group said on Thursday, adding that it could further pause or reverse the hikes if needed.
“Markets appear to be underwhelmed with the move,” ING analysts wrote in a note, adding that demand worries remain a key driver of weak sentiment.
On the demand front, the slumping US dollar offered some support, as it sagged near a one-week low on the mixed signals from job market indicators. A weaker dollar makes oil cheaper for buyers using other currencies.
Egypt’s central bank leaves overnight interest rates steady
Lending rate remained at 28.25%, while the deposit rate stood at 27.25%
It was the third time that it left rates unchanged since a 600 basis point hike on March 6
Updated 05 September 2024
Reuters
CAIRO: Egypt’s central bank as expected left its overnight interest rates on hold on Thursday, saying inflation pressures had subsided but that economic growth had softened.
The lending rate remained at 28.25 percent, while the deposit rate stood at 27.25 percent, the bank said in a statement.
It was the third time that it left rates unchanged since a 600 basis point hike on March 6, when it signed a $8 billion financial support agreement with the International Monetary Fund.
All but one of 15 analysts polled by Reuters this week had expected rates to remain on hold, with a sole analyst predicting a 100 bps cut.
“With the gradual easing of previous shocks, inflationary pressures continued to subside, as annual headline and core inflation edged downward for the fifth consecutive month,” the central bank’s monetary policy committee wrote in a statement accompanying the decision.
Egypt’s economy, already shaky, has been buffeted successively by the coronavirus, Russia’s invasion of Ukraine and the war in Gaza.
Inflation dropped to 25.7 percent in July, the first time the real interest rate has been positive since January 2022. Inflation fell gradually from an all-time peak of 38 percent in September. August inflation figures are due on Tuesday.
“Domestically, real GDP growth softened to 2.2 percent in Q1 2024 compared to 2.3 percent in Q4 2023,” the MPC said.
“The softening is driven by declining public contribution to economic activity due to the impact of Red Sea maritime trade disruption on the service sector.”
The MPC said it expected economic growth to recover gradually in the fiscal year that began on July 1 and that inflation would decline significantly in the first quarter of 2025.
“The gradual unwinding of food inflation along with the improvement of inflation expectations suggest that inflation is currently on a downward trajectory,” it said.
Investor pressure on Nike builds over garment workers’ rights from Cambodia to Pakistan
Nike sources from five factories in Pakistan but is not a signatory to Pakistan Accord
Accord is a binding health and safety agreement between workers’ unions and brands
Updated 05 September 2024
Reuters
LONDON/NEW YORK: Investor pressure on Nike is building ahead of Tuesday’s annual shareholder meeting, with Norway’s sovereign wealth fund pledging to back a resolution demanding the company consider ways it can improve working conditions at garment factories.
Nike is struggling with sliding sales and also faces criticisms over its supply chain. Investment research firm MSCI downgraded its ESG (environmental, social and governance) rating for Nike in 2022 and 2023, and rates it as a “laggard” on supply chain labor standards.
The resolution proposed by a group of investors including Domini Impact Equity Fund says current approaches in the industry “often fail to identify and remedy persistent rights abuses such as wage theft, inadequate health and safety or gender-based violence.”
Domini was among more than 60 investors last year to sign a joint letter to Nike urging it to pay $2.2 million in wages to workers at suppliers in Cambodia and Thailand whom rights groups said were denied severance pay owed to them after factory shutdowns during the pandemic. Reuters could not independently verify the allegations, and Nike has denied them.
In a statement, Nike said its corporate governance team had been in touch with all the co-filers of the resolution.
“We greatly value the opportunity to engage with and solicit feedback from our shareholders, and we believe that maintaining an open dialogue strengthens our approach to corporate governance practices and disclosures,” it said.
The resolution reflects a push from some investors for Nike to create binding agreements with workers at factories and suppliers in countries where worker exploitation is a problem.
It asks Nike to consider whether binding agreements with workers would improve its ability to address human rights issues when sourcing from high-risk countries.
Nike sources from five factories in Pakistan, according to its own supply chain disclosures, yet it is not a signatory to the Pakistan Accord, a binding health and safety agreement between workers’ unions and brands that peers including Adidas and Puma have signed.
‘TOTAL SILENCE’
Several investors told Reuters that Nike’s lack of response to the 2023 letter, and to requests for meetings, were concerning.
“The total silence is the thing that worries me,” said Frank Wagemans, senior engagement specialist at Achmea Investment Management in the Netherlands. “We signed the joint investor letter last year, we also reached out to Nike ourselves and we didn’t get a reply which was quite astonishing to me because supply chain is probably the key ESG topic for Nike.”
The decision by Norway’s fund, Nike’s ninth biggest shareholder, went against recommendations by Nike’s management for shareholders to reject the resolution.
Nike has also urged shareholders to reject a separate proposal from investor Tulipshare, which urges Nike to assess the effectiveness of its supply chain management.
Tulipshare made the same proposal at last year’s shareholder meeting, where it won support from 11.7 percent of voters. Norway’s fund has said it will not support the Tulipshare proposal.
Shareholder advisory firms Glass Lewis and ISS also recommended voting against both resolutions.
Frankfurt-based Union Investment said it would back both proposals.
“We would like to see concrete efforts to enhance Nike’s understanding of gaps in its strategies to mitigate legal, reputational, and human rights risks,” said Janina Bartkewitz, ESG expert and analyst at Union Investment.
“Protecting vulnerable workers is of paramount importance.”
Marie Payne, responsible investment officer at Cardano in London, said new regulations like the European Union’s Corporate Sustainability Due Diligence Directive increased the need for companies to strengthen supply chain practices and to report on their efforts.
If any of the proposals get 20 percent of votes or more, that would send a signal to Nike that these issues are important to shareholders, said Caroline Boden, director of shareholder advocacy at Mercy Investments.
“Part of the strategy is to get the attention of the company, but another part is to signal to other shareholders that there’s a group of investors that perceives this issue as material, and which could pose further risk to the company,” she said.
