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AS IT HAPPENED: Future Investment Initiative - Day One

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The Future Investment Initiative (FII), an international platform for debate between global leaders, investors and innovators, kicks off in Saudi Arabia on Wednesday. (AFP)
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The Future Investment Initiative (FII), an international platform for debate between global leaders, investors and innovators, kicks off in Saudi Arabia on Wednesday. (AN Photo)
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Updated 28 January 2021
Arab News
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AS IT HAPPENED: Future Investment Initiative - Day One

  • A host of high-profile experts coming together under the theme “The Neo-Renaissance
  • Jamaican eight-time Olympic gold medalist Usain Bolt among speakers
Updated 28 January 2021
Arab News

RIYADH/LONDON: The Future Investment Initiative (FII), an international platform for debate between global leaders, investors and innovators, kicked off in Saudi Arabia on Wednesday with a host of high-profile speakers brought together under the theme “The Neo-Renaissance.”

Opening remarks at the King Abdul Aziz International Conference Center (KAICC) came from Yasir Al-Rumayyan, Governor of Saudi Arabia's Public Investment Fund (PIF) and FII Institute Chairman.

Other speakers include Jamaican eight-time Olympic gold medalist Usain Bolt, Matteo Renzi, former prime minister of Italy and Kevin Rudd, former Australian prime minister.

Follow the coverage below (all times GMT):

18:40 - FII CEO Richard Attias brings day one to a close, and that ends our first day coverage here at Arab News. Remember to come back to www.arabnews.com/fii2021 for coverage of the second day's discussions.

18:30 - ICYMI: Saudi Arabia has revamped over half of the 400 foreign direct investment (FDI) regulations, as foreign investment rose in 2020 compared to 2019, said Minister of Investment Khalid bin Abdulaziz Al-Falih.

“We have performed better than most, and ultimately, investors trust a government that provides security to them and the population. Saudi Arabia handled it better than most, as investors want to trust governments that look after them. Saudi Arabia, through our leadership, has shown that,” he stated. READ MORE HERE.

18:20 - The value of mergers and acquisitions declined globally by 5% year-on-year to $3.6 trillion in 2020, the lowest level since 2017, according to studies. But two sectors where there was still significant activity were technology and pharma.

Sarah Al-Suhaimi, chairwoman at Tadawul and CEO of NCB Capital in Saudi Arabia joins the panel to discuss a blueprint for financial leaders assessing future market opportunities and public-private partnerships needed to ensure sustainable growth.

18:15 - ICYMI: The COVID-19 pandemic has led to the restructuring of the global health care system, with an accelerated shift in focus away from hospitals to providing more facilities to homes, speakers told delegates at the Future Investment Initiative (FII) conference place in Riyadh.

Dr. Harsh Vardhan, India’s Minister of Health and Family Welfare, said another health care trend was a closer collaboration between the government and citizens, where all elements of society must work together to ensure the safety and wellness of the whole country. READ MORE HERE.

18:05 - We've reached the penultimate panel of day one of the FII, which looks at the "new pathways" to global growth, after the pandemic resulted in a steep rise in unemployment and sharp contraction in specific segments of the economy, with input from CEO of Bahrain's Mumtalakat Holding Company Khalid Al-Rumaihi and Senegal's economy minister Amadou Hott.

17:55 - Prince Abdulaziz bin Salman, Saudi Arabia’s Minister of Energy, said that Saudi Arabia is working with so many countries on green hydrogen and blue hydrogen.

“Easily and simply, I could say, that we will be pioneering more of that blue hydrogen and green hydrogen,” Prince Abdulaziz said. READ MORE HERE.

17:40 - Saudi Arabian finance minister Mohammed bin Abdullah Al-Jadaan joins his Bahraini counterpart Shaikh Salman bin Khalifa Al-Khalifa to discuss how the Gulf nations are adapting to the challenges of economic diversification posed by the COVID-19 pandemic.

 

 

17:35 - ICYMI: Saudi Arabia is cultivating the trust of global investing institutions as it seeks to attract foreign funds into the Kingdom’s ambitious development plans, Khalid Al-Falih, the Minister of Investment, told the Future Investment Initiative (FII) summit. READ MORE HERE.

17:20 - Amin Nasser, President and CEO of Saudi Aramco and Abdullah Amer Al-Swaha, Saudi Arabia's Minister of Communications and IT join Dr. Thomas A. Kennedy, Executive Chairman, Board of Directors, Raytheon Technologies to discuss the future of global technology policy.

17:05 - As we look ahead into 2021 and beyond, where will the greatest opportunities be to invest in assets with high conformity to environmental, social and governance (ESG) principles? Our next panel, which include a NEOM investor and the CEOs of Nasdaq and London Stock Exchange, are discussing their predictions.

16:45 - Our next panel is Playing to Win: How will global investment drive the future of the sports industry? And the panelists are discussing how Saudi Arabia was able to mitigate the effects of the COVID-19 pandemic to continue hosting world-class sporting events — such as the Dakar Rally, FIA Formula E and golf's Saudi International. 

Alejandro Agag, CEO of ExtremeE (Pictured, R), said the reason this can happen in the Kingdom is because “everything works in Saudi Arabia... nothing is impossible here.”

Moderator: Richard Attias, CEO, FII Institute

• Bader Alkadi, Advisor to the Minister of Sport, Saudi Arabia 

• Dr. Amina Mohamed, Cabinet Secretary for Sports, Culture and Heritage of the Republic of Kenya

• Alejandro Agag, Founder and CEO, Extreme E, UK

• Usain Bolt, Eight-Time Olympic Gold Medalist, Jamaica

• Jean Todt, President, Fédération Internationale de l’Automobile, France

The panel also included a brief appearance from eight-time Olympic gold medalist Usain Bolt who spoke about athletes having to compete in the COVID-19 era without spectators.

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16:00 - Prince Abdulaziz bin Salman, Saudi Arabia's Minister of Energy, first has a discussion with Palki Sharma Upadhyay, the executive editor at WION, which precedes a panel discussion on how the energy sector can be part of and power the post-COVID-19 crisis recovery.

15:50 - ICYMI: Yasir Al-Rumayyan, governor of Saudi Arabia’s Public Investment Fund (PIF), is concerned about the different valuation of financial and other assets that has been a feature of markets affected by the coronavirus (COVID-19) pandemic. READ MORE HERE.

15:40 - Next up, Peggy Johnson, CEO of Magic Leap, is in discussion with Turqi Al-Nowaiser of Saudi Arabia's Public Investment Fund about the expected investment ($72.8 billion by 2024) in AR/VR and how it will revolutionize the sector.

15:30 - ICYMI: Yasir Al-Rumayyan, governor of the Public Investment Fund (PIF), said that the sovereign wealth fund is looking to invest not only in large companies but in the entire spectrum of technology. READ MORE HERE.

15:15 - Next up, our panelists will discuss how work will change in the post-COVID era, and how the pandemic and its aftermath will influence the way CEOs reshape their companies to provide stability and hope to a workforce living in a new social, political, and economic reality.

Moderator: Edie Lush, Executive Editor, Hub Culture, UK

• Yousef Abdullah Al-Benyan, Vice Chairman and CEO, SABIC, Saudi Arabia (pictured)

• Patrice Caine, Chairman & CEO, Thales Group, France

• Todd Gibbons, CEO, BNY Mellon, USA

• Daniel S. Loeb, Founder and CEO, Third Point LLC, USA

• Andrew N. Liveris, Special Advisor, Public Investment Fund, Saudi Arabia

15:05 - Next is a brief discussion between Lameen Abdul-Malik, Nobel Peace Prize 2005 and Head of THINK and Anand Mahindra, chairman of the Mahindra Group in India.

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14:45 - The health of nations: A CEO’s guide to investing in the next decade of global health is our third panel. 

Some context for you: The global healthcare market is expected to surpass $11 trillion by 2022, while Deloitte data shows funding for health technology innovators surpassed $7.4 billion in 2019 and continues to rise.

So how can business and government expand access to healthcare, train healthcare workers, remove regulatory barriers, and encourage investment in advanced health technologies?

Moderator: Dr. Peter H. Diamandis, Founder and Executive Chairman, XPRIZE Foundation, Board of Trustees Member, FII Institute, USA

• Dr. Harsh Vardhan, Minister of Health and Family Welfare, Science and Technology, Earth Sciences, India

• Dr. Bernd Montag, CEO, Siemens Healthineers, Germany

• Dr. Ali Parsadoust, Founder and CEO, Babylon Health, UK

14:30 - Kirill Dmitriev of the Russian Direct Investment Fund speaks briefly about the fund's achievements last year - including the Sputnik V vaccine - and how looking ahead to 2021, it wants to work closer with Saudi Arabia on transforming the Kingdom into a leading investment destination and continue to work on oil price regulation.

14:00 - Our second panel discussion looks at how, with lower oil prices and costs of the pandemic taking their toll, global business leaders and policymakers will strengthen investment and trade partnerships in the midst of new geopolitical realities and economic possibilities.

Moderator: Fatima Daoui, Anchor Business News, Al Arabiya 

H.E. Khalid bin Abdulaziz Al-Falih, Minister of Investment, Saudi Arabia

• H.E. Dr. Rania Al-Mashat, Minister of International Cooperation, Egypt 

• H.E. Sultan Ahmed bin Sulayem, Group Chairman and CEO, DP World, UAE 

• Lord Grimstone of Boscobel, Kt, Minister for Investment, Department for International Trade and the Department for Business, Energy & Industrial Strategy, UK 

• Eric I. Cantor, Vice Chairman and Managing Director, Moelis & Company, USA

13:45 - PHOTOS: 200 seats have been allocated for FII guests in the plenary hall, as well as for the media in the event's media center.

13:20 - ICYMI: The fifth edition of the Future Investment Initiative (FII) will take place from Oct. 25th to 28th, Richard Attias, CEO of organizing body the FII Institute, confirmed on Wednesday. READ MORE HERE.

13:10 - The first panel discussion of the day asks how the global investment community can leverage the economic downturn brought about by the COVID-19 pandemic, in order to build a stronger, more sustainable future for all. Panelists for this talk are: 

Moderator: David Rubenstein, Co-Founder and Co-Executive Chairman, The Carlyle Group, USA

• H.E. Yasir Al Rumayyan, Chairman, FII Institute and Governor and Board Member, Public Investment Fund, Saudi Arabia

• Ray Dalio, Co-Chairman and CIO, Bridgewater Associates, USA

• Laurence D. Fink, Chairman and CEO, BlackRock, USA

• Dr. Thomas P. Gottstein, CEO, Credit Suisse Group, Switzerland

• David M. Solomon, Chairman and CEO, The Goldman Sachs Group, USA

13:00 - The opening remarks from Yasir Al Rumayyan, Chairman of the FII Institute and governor and board member of Saudi Arabia's Public Investment Fund, will get us started on day one.

12:45 - Follow Arab News' special coverage of this year’s FII, at our dedicated online section. 

12:30 - Jamaican eight-time Olympic gold medalist Usain Bolt is one of the star speakers lined up to take part in the event, you can hear him at 7 p.m. KSA (4 p.m. GMT)...

12:15 - Hello, and welcome to the first day of coverage of the Future Investment Initiative (FII) - guests and media participants attending the two-day event have limited access due to the exceptional circumstances of the coronavirus disease (COVID-19) pandemic. 

Topics: business economy FII 2021 Future Investment Initiative (FII) Saudi Arabia

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Saudi bank loans increase by 11% in March to hit $712bn, fueled by real estate activities

Updated 6 sec ago
Dayan Abou Tine
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Saudi bank loans increase by 11% in March to hit $712bn, fueled by real estate activities

Updated 6 sec ago
Dayan Abou Tine

RIYADH: Saudi banks extended loans worth SR2.67 trillion ($711.5 billion) in March, marking an 11 percent increase as compared to the same month in 2023, according to the latest official data.

Figures released by the Saudi Central Bank, also known as SAMA, showed personal borrowings accounted for 35 percent of this growth, while the remaining 65 percent went to the corporate sector, particularly for real estate activities, as well as electricity, gas, and water supplies.

Real estate financing for corporate dealings specifically surged by 27 percent in the third month of the 2024, marking the highest annual growth rate in 10 months, reaching SR275.2 billion.

A study by Mortor Intelligence, which used 2023 as a base year, estimated the Kingdom’s real estate market at $69.51 billion in 2024, and expects it to reach $101.62 billion by 2029, growing at a compounded annual growth rate of 8 percent between 2024 and 2029.

The surge in real estate and construction endeavors may have heightened the need for debt-based financing primarily sourced from the local banking sector. Saudi banks play a central role in the provision of loans for real estate projects.

According to SAMA data, new retail residential mortgage loans experienced a notable increase, reaching a 14-month high at SR7.63 billion in March. This marked a 5 percent rise compared to the amount granted in the same month last year and a 10 percent increase from the previous month.

In March, lending for home purchases accounted for the largest portion, comprising 64 percent of new mortgages to individuals, totaling SR4.91 billion. The most notable growth, however, was observed in apartment loans, surging by 28 percent to reach SR2.24 billion. Meanwhile, land loans experienced a more modest growth of 4 percent, reaching SR474 million in new mortgages.

One factor contributing to this growth could be the need for residential properties from expatriates arriving in the Kingdom, along with government initiatives aimed at modernizing the financial system.

In a March study by Knight Frank, a notable trend emerged among expatriates, with 68 percent expressing a strong preference for owning an apartment rather than a villa. This inclination was especially prominent among individuals aged 35-45 and 45-55.

Growth in lending for electricity, gas and water supplies came as the second contributor in corporate loans after real estate, registering an annual rise of 27 percent to reach SR147.42 billion in March.

According to an April report by Global Data, the key sectors in the Saudi Arabia power market are the residential sector, commercial sector, industrial sector, and others. In 2023, the residential sector had the dominant share in the power consumption market.

The American International Trade Administration also stated in a January report that Saudi Arabia has experienced rapid economic and population growth since the discovery of oil. The population is projected to increase to 40.1 million by 2030.

Due to limited water resources, the country continues to invest in desalination facilities to meet rising water demands, aiming to deliver 2.18 billion cubic meters per year of desalinated water.

The Ministry of Environment, Water, and Agriculture has allocated $80 billion for water projects, with the wastewater treatment services market also expanding steadily according to the report. In 2021, Saudi Arabia built 133 wastewater treatment facilities, marking a 14.66 percent increase from the previous year.

SAMA data also revealed that financing for professional, scientific, and technical activities soared by 54 percent, hitting SR6.4 billion, marking the highest annual growth rate among sectors.

Education loans also showed robust growth, with an annual increase of 28 percent to reach SR6.27 billion. Additionally, financing for administrative and support service activities rose by 20 percent, totaling around SR34.22 billion.

While the proportion of lending allocated to the scientific and education sectors may currently be modest, the Saudi government acknowledges their pivotal significance in driving the Kingdom’s comprehensive transformation agenda.

Recognizing the paramount importance of innovation and fostering a culture of scientific inquiry, the government has implemented diverse initiatives aimed at nurturing these sectors.

These efforts are believed to have played a part in the gradual increase in lending support extended to these sectors by financial institutions. As the Kingdom continues to prioritize knowledge-based industries and endeavors, further advancements and investments in these areas are anticipated to amplify, propelling the nation towards its ambitious developmental goals.

Topics: Saudi Arabia loans real estate SAMA

Saudi Arabia’s car imports surge to 160k over last 2 years: official figures 

Updated 26 min 4 sec ago
Arab News
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Saudi Arabia’s car imports surge to 160k over last 2 years: official figures 

Updated 26 min 4 sec ago
Arab News

RIYADH: Saudi Arabia’s car imports in 2023 hit 93,199, utilizing all modes of transportation — land, sea, and air — reflecting nearly a 40 percent growth from the previous year. 

In the last two years, the Kingdom has imported a total of over 160,000 cars, with 66,870 imports recorded in 2022 alone, according to Hamoud Al-Harbi, the spokesperson for the Zakat, Tax, and Customs Authority, reported Saudi Press Agency. 

This positions Saudi Arabia as one of the largest markets globally for automobiles, accounting for more than half of the car sales in the Gulf Cooperation Council countries, and ranking among the top 20 markets worldwide. 

According to the authority’s spokesperson, cars were primarily imported from Japan, India, South Korea, the US, and Thailand to the Kingdom during the past two years. 

Wael Al-Dhayyab, the official spokesperson for the Saudi Standards, Metrology, and Quality Organization, underscored the rigorous efforts undertaken by the Vehicle Inspection Unit in 2023. They inspected 60,473 vehicles to uphold the highest technical and safety standards.  

Concurrently, 18,150 energy efficiency certificates were issued for tire products, highlighting SASO’s commitment to ensuring tire quality and safety in the Saudi market. 

Al-Dhayyab emphasized that these endeavors demonstrate the organization’s dedication to enforcing stringent standards, fostering tire quality, and safety.  

Moreover, he stressed the body’s pivotal role in advancing energy efficiency and endorsing initiatives aimed at enhancing product safety and economic growth. 

Additionally, Al-Dhayyab noted a significant milestone in 2023, with SASO awarding 172 conformity certificates for electric vehicles, witnessing a 465 percent surge from the previous year. 

This emphasizes the organization’s crucial role in facilitating the shift toward sustainable energy adoption. 

Furthermore, he pointed out that the body issued 1,505 fuel efficiency cards for new light vehicles, indicating its commitment to promoting eco-friendly transportation solutions.

The surge in the import of motor vehicles led to Saudi banks witnessing a 7.67 percent increase in letters of credit to the private sector in the first 11 months of 2023, compared to the same period the previous year. 

The data, released by the Saudi Central Bank, revealed that settled LCs and received bills to this sector hit SR155.19 billion ($41.38 billion).   

LCs, a financial document issued by a bank, guarantee payment to the seller upon fulfilling specified conditions in a trade transaction. 

The growth is primarily attributed to an upsurge in the import of motor vehicles, accounting for around 75 percent of the overall increase.     

The import value in this category reached SR39.7 billion, marking a 26.29 percent increase, the data showed. 

Topics: Saudi car imports

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UAE’s Mubadala Capital plans $13.5bn investment in Brazil’s biofuel sector 

Updated 59 min 22 sec ago
Arab News
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UAE’s Mubadala Capital plans $13.5bn investment in Brazil’s biofuel sector 

Updated 59 min 22 sec ago
Arab News

RIYADH: Brazil’s biofuel market is set for substantial growth as UAE’s Mubadala Capital has committed to invest $13.5 billion over the next decade.

Oscar Fahlgren, head of Brazil strategy at the sovereign wealth fund, disclosed the budget for the initiative during an interview with the Financial Times. He divulged the details of the fund’s plans to produce renewable diesel and sustainable aviation kerosene primarily utilizing non-food plant matter.

In his interview with the newspaper, Fahlgren said Mubadala’s Brazilian subsidiary, Acelen, will initiate the development of a large-scale biofuel project by 2026.  

The fund’s executive stated that the funds will be sourced through a blend of equity and debt over a span of five to 10 years.  

The endeavor will encompass five modules, each valued at $2.7 billion, housing a new biorefinery capable of processing 20,000 barrels of fuel per day. Additionally, it will include the necessary infrastructure and cultivated acreage to sustain the input crop.  

“It’s all about feedstock (which) in reality is agriculture. And Brazil is probably the best-placed country on the planet when it comes to agricultural proficiency because of the climate and the fertile soil,” said Fahlgren, adding, “Brazil is to agriculture what Abu Dhabi is to oil.”   

The project will also include the conversion of an existing oil refinery in the northeastern Brazilian state of Bahia acquired from government-owned Petrobras in 2021.  

“It’s a very important capital project,” Fahlgren said. “I see tremendous opportunity to invest in the green energy transition space in Brazil,” he added.  

Mubadala’s venture into bioenergy will leverage its existing $6 billion investments in the country, constituting approximately a quarter of the group’s global portfolio. 

“We’ve been very active investing in Brazil, for the past 10-plus years, in an environment where most foreign investors have been shying away,” Fahlgren said.    

Mubadala also plans to open a stock exchange in Brazil next year through its Americas Trading Group.  

“Brazil is a very large country. It has only one stock exchange. And I think that’s suboptimal infrastructure for the players that operate in this segment,” said Fahlgren. 

“It will probably be a staged launch — perhaps start with equities, then expand. No asset classes are off the table.”   

The asset management arm of the Emirati sovereign wealth fund is increasing its bets on Latin America’s largest economy, where its holdings span metro lines and medical universities to a majority stake in the local owner of the Burger King brand.  

“We’re very bullish on the investment climate in Brazil right now and the opportunities we see,” said Fahlgren. “We do have a number of assets that are relatively mature today, and could be potential exit candidates in the not-too-distant future,” he added. 

 

Topics: Mubadala UAE Brazil Biofuel Investment

Eastern Province showcases environmental opportunities during investment forum

Updated 58 min 51 sec ago
Arab News
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Eastern Province showcases environmental opportunities during investment forum

Updated 58 min 51 sec ago
Arab News

RIYADH: Investors eyeing environmental opportunities in Saudi Arabia’s Eastern Province stand to benefit from a forum held on May 5, amidst efforts to preserve natural resources. 

Organized by the Eastern Chamber under the theme “Restoration and Sustainability,” the Environmental Investment Forum 2024 aims to underscore the importance of ecological preservation. 

The event, patronized by Prince Saud bin Naif, Gov. of the region, also delves into the effects of environmental regulations and legislation on the business sector, the Saudi Press Agency reported. 

Badr bin Suleiman Al-Ruzaiza, chairman of the regional chamber, emphasized the importance of environmental protection within the framework of the Kingdom’s Vision 2030.

He stressed that the country’s ambitious plan views environmental stewardship not only as a religious and ethical imperative but also as a humanitarian duty. 

Al-Ruzaiza elaborated that Vision 2030 aims to reduce pollution by improving waste management efficiency across diverse sectors. He underscored the Kingdom’s proactive approach in addressing environmental issues domestically and globally. 

The chairman emphasized the paramount significance of the environmental sector in conserving renewable natural resources. 

He stressed its pivotal role in laying the essential groundwork for achieving holistic and sustainable growth, ensuring food security, and improving overall quality of life. 

He stated that the forum seeks to shed light on the importance of the environment and ways to preserve it, addressing the impact of environmental regulations and legislation on business sectors.  

Additionally, it aims to review investment opportunities for businesses in the environmental sector, as well as available financing channels for projects in this vital sector. This represents environmental investment as a key driver and effective element in achieving sustainable development. 

Al-Ruzaiza clarified that the forum supports environmental protection practices, presents experiences and solutions, and aims to expand knowledge about investment opportunities related to sustainability. It also focuses on methods for addressing them and implementing associated mechanisms.  

He also highlighted the array of sustainability initiatives and programs initiated by the Kingdom to foster green investments across various sectors. Furthermore, he emphasized the nation’s objective of increasing its reliance on clean energy sources, aiming to achieve 50 percent of total energy consumption by 2030.  

He also noted the country’s determination to double its spending on investment and financing projects that operate in areas supporting sustainability. 

The forum comes against the backdrop of the Eastern Province’s municipality recently unveiling a range of diverse investment opportunities, both permanent and temporary, across cities and governorates in the region. 

The municipality had cataloged over 20,000 investment assets covering an area exceeding 116 million sq. m., serving as a database for significant growth in the region, as reported by SPA in March. 

These encompass the development of waterfronts, plots, and infrastructure, as well as transportation, markets, and advertising billboards.  

Additionally, opportunities for recreational and tourist centers are available. These also cover sports activities, factories, and exhibitions, along with warehouses, workers’ housing, and various tourist and commercial investment sites. 

Topics: Saudi Eastern Province Investment

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Kuwait’s non-oil sector steadies in April, UAE maintains growth in April 

Updated 05 May 2024
ARAB NEWS 
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Kuwait’s non-oil sector steadies in April, UAE maintains growth in April 

Updated 05 May 2024
ARAB NEWS 

RIYADH: Non-oil activities in Kuwait demonstrated steady growth in April, buoyed by effective advertising and competitive pricing, supporting the expansion in new orders, an economy tracker revealed. 

According to the latest Kuwait Purchasing Managers’ Index by S&P Global, the country’s PMI dipped to 51.5 in April from 53.2 in March. 

A PMI reading above 50 indicates growth in the non-oil private sector, while readings below 50 signal contraction. 

The report noted that job creation scaled back for the first time in eight months as companies aimed to minimize costs, while the rate of purchase price inflation was one of the sharpest on record in April. 

According to the survey, this reduction in workforce numbers, coupled with a shortage of available raw materials, led to a buildup of backlogs of work in April. 

“The slowdown in growth seen in April is not cause for immediate alarm as Kuwaiti firms were still able to generate solid expansions in new business and output at the start of the second quarter,” said Andrew Harker, economics director at S&P Global Market Intelligence.  

The report mentioned that output prices increased only modestly in April, as companies endeavored to limit price hikes to customers by offering discounts. 

Furthermore, input costs also surged sharply in April, driven by a marked rise in purchase prices. 

“Growth continued to be predicated, at least in part, on competitive pricing. This put pressure on margins given rapidly increasing input costs, however. In a bid to limit expenses, firms cut back on employment numbers, thereby restricting the extent to which they were able to fulfill orders,” said Harker.  

He added: “There are clearly risks that this will prove unsustainable and so companies will be hoping that either cost inflation moderates or that demand strengthens sufficiently to reduce the need for discounting in the months ahead.”  

UAE maintains strong growth 

Meanwhile, in another report released last week, S&P Global revealed that the UAE’s non-oil private sector maintained robust output growth in April. The Emirates’ PMI reached 55.3, down from 56.9 in March but remained firmly above the 50 mark, indicating expansion. 

According to the survey, this slowdown was attributed to floods and rains that hit the country in April. 

“April data highlighted strong overall growth across the UAE non-oil private sector as buoyant domestic economic conditions helped to support long-term business expansion plans. However, the latest survey signaled a sharp slowdown in new business gains in the wake of heavy rainfall and flooding,” said Tim Moore, economics director at S&P Global Market Intelligence.  

He added: “Companies operating in Dubai recorded a particularly acute loss of sales momentum as adverse weather disruptions hit business and consumer spending.”  

S&P Global revealed that backlogs of work increased considerably in April, attributed to temporary business disruptions and heightened pressure on operating capacity. 

The report added that non-oil businesses in the UAE remained optimistic about future output over the next year, although the level of optimism eased, dropping to its lowest reading since January. 

“Non-energy businesses are nonetheless still highly upbeat about their year ahead growth prospects. Many commented on strong sales pipelines and swift recovery from the impact of heavy rainfall,” noted Moore.  

According to the survey, higher levels of employment were recorded in April, driven by new project starts and resilient demand conditions. 

Topics: PMI Kuwait UAE S&P Global

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