TOKYO: Honda reported Tuesday its fiscal third quarter profit more than doubled to 284 billion yen ($2.7 billion) despite the coronavirus pandemic as auto sales grew in Japan and the US
Japanese automaker Honda Motor Co. had reported a 116 billion yen profit for October-December a year earlier.
Honda’s quarterly sales inched up less than 1 percent to 3.7 trillion yen ($35 billion).
Cost cuts also helped boost Honda’s bottom line, despite difficulties caused by the pandemic, including computer chip shortages, according to Tokyo-based Honda.
The maker of the Accord sedan, CR-V crossover and Asimo robot said it carried out a major review of its operations to streamline expenses.
Honda said its motorcycle sales slipped in the three months through December to about 3 million motorcycles from 3.1 million units a year ago.
Auto sales held up, increasing slightly to 809,000 vehicles from 808,000 vehicles.
Honda raised its profit forecast for the year through March to 465 billion yen ($4.4 billion), up from the previous projection for a 390 billion yen ($3.7 billion) profit.
The latest forecast is also better than the 456 billion yen profit Honda earned the previous fiscal year.
But Honda warned the outlook remains uncertain because the impact from COVID-19 was still unclear.
Japanese rivals Nissan Motor Co. and Toyota Motor Corp. also report earnings this week.
The pandemic has affected industries, companies and regions differently, mostly negatively.
But some companies, including Honda, have proved resilient, holding better than some others.
Japan automaker Honda’s profit rises despite pandemic damage
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Japan automaker Honda’s profit rises despite pandemic damage
- Honda’s quarterly sales inched up less than 1 percent to 3.7 trillion yen ($35 billion)
Saudi Influence expands as 8 new firms join MSCI’s Global and Small Cap Indexes
RIYADH: Eight new Saudi companies have joined MSCI’s global and small capital indexes, highlighting the Kingdom’s growing influence on the international investment landscape.
According to an official document, the financial solution provider has included SAL Saudi Logistics Services Co. in the MSCI Global Standard Index.
MSCI has also added seven stocks to the Small Cap Index, including Al-Babtain Power & Telecommunication, Etihad Atheeb Telecom, and the Mediterranean and Gulf Insurance and Reinsurance Group.
Additional inclusions comprised Middle Mast Pharmaceutical Industries Co., known as Avalon Pharma, Saudi Advanced Industries Co., Saudi Paper Manufacturing Co., and Walaa Cooperative Insurance Co.
Conversely, MSCI has removed six companies from the Small Cap Index: Amlak International for Real Estate Development & Finance Co., known as Amlak, Fawaz Abdulaziz Al Hokair & Co., known as Cenomi Retail, Methanol Chemicals Co., and Riyad REIT.
Additionally, Saudi Co. for Hardware and Saudi Arabian Refineries Co. have also been excluded.
As a result, the number of Saudi companies listed on the Small Cap Index now stands at 80, while the Global Standard Index includes 41 companies. MSCI stated that these changes will be implemented at market close on May 31.
The Saudi companies included in the MSCI Global Standard Index reflect the diverse and robust economic landscape of the Kingdom, with the oil giant Aramco leading the list.
The banking sector is represented by Al-Rajhi Bank, Riyad Bank, and Alinma Bank. It also includes Bank AlJazira, Bank AlBilad, and Saudi French Bank, as well as National Commercial Bank, SABB, and Saudi Investment Bank.
Industrial and petrochemical giants such as SABIC, Advanced Petrochemical, and Saudi Basic Industries Corp., as well as SABIC Agri-Nutrients, Kayan, Yansab, and Ma’aden, feature prominently in the global index, underscoring the Kingdom’s leadership in these fields. Telecommunications and technology are highlighted by stc and solutions by stc.
The healthcare sector includes Bupa Arabia for Cooperative Insurance Co., Dr Sulaiman Al Habib Medical Services Group Co., and Al-Mouwasat, as well as Dallah Healthcare, and Al-Nahdi Medical Co.
Retail and consumer goods are represented by Jarir Marketing Co., Almarai Co., and Savola Group, while the energy sector features Saudi Electricity Co., ACWA Power, and Power and Water Utility Co. for Jubail and Yanbu.
Additional key players include Saudi Research and Media Group, known as SRMG, Tadawul Group, and Luberef. The list also features the Co. for Cooperative Insurance, ADES Holding Co., and SAL Saudi Logistics Services Co., illustrating the wide-ranging and dynamic nature of Saudi Arabia’s corporate environment.
The Saudi companies in the MSCI Small Cap Index also represent diverse sectors, including Saudi Cement, Ataa Educational Co., Al-Rajhi Takaful, eXtra, and Arriyadh Development Co., known as Tameer.
MSCI stands as a premier provider of essential decision support tools and services for the worldwide investment community, according to its website.
GCC bank’s profitability to remain strong in 2024 due to delay in US Fed’s rate cut
RIYADH: A delay in interest rate cuts by the US Federal Reserve will see Gulf Cooperation Council banks’ profitability remain strong in 2024, according to S&P Global Ratings.
This comes as most GCC central banks typically mirror the Fed’s rate movements to preserve their currency pegs.
In a statement, the US credit rating agency revealed that it also expects asset quality to remain robust despite the prolonged high interest rates, thanks to supportive economies, contained leverage, and a high level of precautionary reserves.
“We anticipate a slight deterioration in profitability in 2025, as the Fed could start cutting rates in December 2024, and most GCC central banks are likely to follow suit to preserve their currency pegs,” the statement said.
“However, we believe that several factors will mitigate the overall effect,” it added.
Moreover, S&P disclosed that every 100-basis point drop in rates cuts an average of around 9 percent off the region’s banks’ bottom lines.
This is based on the GCC banks’ December 2023 disclosures and assumes a fixed balance sheet and a parallel shift in the yield curve.
Pakistan shares hit fresh record on rate cut hopes, IMF talks
- Pakistan last month completed a short-term, $3 billion IMF program, seeking fresh, longer-term bailout
- IMF mission is in Pakistan to discuss financial year 2025 budget, policies, reforms under potential new program
Pakistan’s benchmark share index touched a lifetime high on Wednesday, breaching the key level of 75,000, on hopes that easing inflation could pave the way for interest rate cuts as early as June.
Still attractive stock valuations, expectations of more foreign inflows, and the start of talks with the IMF on a new loan program added to the bullish sentiment.
The index was trading at 75,013 points at 0531 GMT, up 0.7 percent, after hitting an intraday high of 75,115. It has surged 80 percent over the past year, and it is up 16.1 percent year-to-date after an IMF rescue last summer helped the government avert a debt default.
On Monday, the index closed at a record of 73,822, up 1 percent.
Mohammed Sohail, CEO of Topline Securities, said Wednesday’s gains were fueled by foreign fund buying.
On Tuesday, the MSCI index added a Pakistani bank, National Bank of Pakistan, to the MSCI frontier market index. Its shares rose 1.6 percent on Wednesday, outperforming the benchmark index.
“We estimate Pakistan’s weight will also increase, thereby having the potential to attract more passive foreign funds,” said Sohail.
The market is picking up steam due to an anticipated decline in inflation to 13.5 percent for May and expectations of a monetary easing cycle starting in June, said Shahid Habib, CEO of Arif Habib Limited.
Investors were also optimism about discussions on a new International Monetary Fund financing program and the economic roadmap ahead, Habib said.
Pakistan last month completed a short-term, $3 billion IMF program, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program.
An IMF mission is in Pakistan to discuss the financial year 2025 budget, policies, and reforms under a potential new program.
Wall Street bank Citi expects Pakistan to reach a four-year agreement with the IMF worth up to $8 billion by end-July, and recommends going long on the country’s 2027 international bond.
Global conference in Riyadh spotlights procurement and supply chain challenges
RIYADH: Key issues concerning procurement and supply chains will take center stage at a global conference in the Saudi capital, featuring over 35 international speakers.
The upcoming CIPS MENA Conference and Excellence in Procurement Awards, slated to be hosted by the Government Expenditure and Projects Efficiency Authority on May 16 at the Hilton Riyadh Hotel and Residences, reflects the Kingdom’s position as a hub of expertise in procurement and supply chains, according to the Saudi Press Agency.
The agenda will address critical topics, including building sustainable supply chains, enhancing local content, and promoting industry localization. It will also tackle current supply chain challenges and discuss the digital transformation in procurement and corruption in public procurement.
The conference will also focus on building partnerships between organizations in the private sector and government agencies, targeting specialists in the field of procurement and supply chains in the public and the private sectors, decision-makers in the field, and procurement technical systems companies.
Oil Updates – prices rise on US inventories drawdown expectations, CPI focus
SINGAPORE: Oil prices rose on Wednesday on expectations for higher demand as the US dollar weakened and a report showed US crude and gasoline inventories fell while the release of inflation data may point to a more supportive economic outlook, according to Reuters.
Brent crude futures were up 51 cents, or 0.6 percent, at $82.89 a barrel at 9:30 a.m. Saudi time. US West Texas Intermediate crude futures rose 55 cents, or 0.7 percent, to $78.57 a barrel.
US crude oil inventories fell 3.104 million barrels in the week ended May 10, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories fell by 1.269 million barrels and distillates rose by 673,000 barrels.
US government inventory data is due later on Wednesday and are likely to also show a drop in crude stockpiles as refineries increase their runs to meet increased fuel demand heading into the peak summer driving season.
“Expectations of another drawdown in US oil inventories should support oil prices,” ANZ Research said in a note.
US consumer price index data is also due on Wednesday and should give a clearer indication whether the Federal Reserve may cut interest rates later this year, which could spur the economy and boost fuel demand.
Oil prices also found support from a softer US dollar and stimulus measures from China, said independent market analyst Tina Teng, with a weaker greenback making dollar-denominated oil cheaper for investors holding other currencies.
Teng was referring to China’s plans to raise 1 trillion yuan ($138.39 billion) in long-term special treasury bonds this week to raise funds to stimulate key sectors of its flagging economy, which is the world’s largest oil importer.
“The US CPI and China’s economic data are key to driving oil prices for the rest of the week,” she added. China will release economic activity data on Friday.
Prices were also supported by concerns around Canadian oil supply, a key exporter to the US
A large wildfire is approaching Fort McMurray, the hub for Canada’s oil sands industry that produces 3.3 million barrels per day of crude, or two-thirds of the country’s total output.
