Saudi looking to boost re-exports through Dubai

The Kingdom of Saudi Arabia is reported to be working toward further expanding trade links with the UAE, which has proven a fruitful re-export destination.  We shouldn’t be surprised to see an even more robust relationship in coming years, even though 45% of Saudi exports already either go to or through the Emirates.

Dubai: The Kingdom of Saudi Arabia is looking to explore new markets through the gateway of Dubai, Ahmad Hakbani, Secretary General of Saudi Export Development Authority, told Gulf News on Sunday.

“The main role of our authority is to ease Saudis’ businesses by supporting their industries and enhance their presence in the international markets,” he said. “And Dubai is an ideal gateway to achieve this target since it is a very popular re-export destination in the region.”

Saudi Arabia’s exports stood at Dh190 billion last year. Forty-five per cent of it goes either to or through the UAE.

The government of Saudi Arabia is also putting more efforts to boost trade between the two countries and take advantage of the strong trade environment in Dubai, Hakbani added without disclosing additional details.

“Authorities expanded the industrial area in Saudi by 300 per cent last year expecting Saudi’s industries to grow further in the region and internationally,” he said.

Saudi’s non-oil exports make up the petrochemical industry, which include downstream plastic production, building materials and food, he said.

While Saudi’s petrochemical industry achieved a steady growth of 20 per cent in the last five years, authorities are very optimistic of further growth in the coming years.

Satish Khanna, General Manager of Al Fajer Information and Services, said that currently Saudi’s share of petrochemical exports is estimated at 17 per cent worldwide, while it represents 70 per cent of the GCC’s overall petrochemical exports.

Saudi’s petrochemical exports are expected to reach 100 million tones by 2016, a 250 per cent increase comparing to 2006, Khanna said.

By Zaher Bitar

The full article is visible via the link below – Pankaj Oswal

http://gulfnews.com/business/economy/saudi-looking-to-boost-re-exports-through-dubai-1.1295164

Saudi Arabia’s Changing Oil Equation

This writer makes a strong case about the shifting control by Saudi Arabia over the price of oil due mainly to the country’s dominance as a producer as well as tempered use of the commodity.

It seems now that increased demand for use in Kingdom, coupled with rival producers, particularly in the US, and alternative products, has caused quite a stir.

Worth some consideration.

Article: Petchems, banks boost KSA stocks to 59-month high

Latest figures for the Saudi stock exchange reveal that petrochemical companies are responsible for a large part of the 59-month high experienced by the Tadawul All-Share Index (TASI).  Petchems rose 1.10% in the reporting period while the index as a whole rose 0.3%.  Crossing over the 8,000 point mark, the TASI again reminds us of the value petchems provide to the Saudi Arabian economy.

(MENAFN – Arab News) The rally in the Saudi stock exchange is partly driven by the market’s recent break above 8,000 points, say analysts.

“Market has broken the 8,000 mark and investors are willing to take increasing bets in many sectors including petrochemicals and banks,” John Sfakianakis, chief investment strategist at Saudi investment firm MASIC, told Arab News.

His remarks came as Tadawul All-Share Index (TASI) extended gains to hit a new 59-month high yesterday, boosted by banks and petrochemical shares.

“There are selective stocks in both of these sectors that still seen as a strong buy and investors are taking positions,” said Sfakianakis.

The benchmark index climbed 0.3 percent to 8,156.77 points, its highest level since September 2008. The market has risen 20 percent year-to-date.

The petrochemical sector index rose 1.10 percent and the banking index 0.23 percent.

“TASI’s performance has been positive so far this year due to a number of local factors, including strong economic fundamentals, good second quarter result and positive momentum in other GCC markets,” said Fahad Alturki, head of research at Jadwa Investment.

“These factors supported the performance of some sectors that are driven by local demand and consumption,” he said.

Alturki added: “The external environment has also been supportive with positive indicators on demand for Saudi oil over the last few months as well as positive economic data in the US, China and the EU, though downside risk remains on the background owing to regional geopolitical events and a fragile global economic recovery.”

Commenting on Tadawul’s trends, Jarmo T. Kotilaine, a regional analyst, said: “The market mood has clearly benefited from the uptrend in oil prices, which tends to be good for the competitiveness of the Saudi petrochemicals sector and the banking environment alike. The fears about continuous oil price weakness appear to have subsided with the US economy staging a fairly consistent, albeit slow recovery.”

Also, he said, the euro zone has returned to growth.

Although worries still persist about parts of the global economy, including China, there is more evidence of firmer ground in the advanced economies.

Recent data releases have tended to surprise on the upside, for instance US real estate data and even Chinese home prices.

“The positive mood will almost certainly be tested by fears about monetary policy tightening, although actual progress in this regard may prove slow. Hence the impact may well be recurrent volatility rather than a trend change,” Kotilaine said.

Ibrahim Al-Dossary, a financial consultant, said the Saudi bourse reached 8,131 points when it reopened after Eid Al-Fitr. “This was the highest reached by the market this year,” he pointed out.

He said the value of stock exchange declined to SR4.8 billion daily during the past three days.

Al-Dossary said the bourse achieved remarkable gains last week as a result of the good performance of the petrochemical sector, which rose by two percent.

Other sectors that drove the market up were cement, which rose by 1.8 percent, construction up 2.35 percent and real estate 1.5 percent.

Speaking to Reuters earlier, Hesham Tuffaha, a Riyadh-based fund manager, said: “We have started to see the market relatively overvalued.”

He said: “There are many sectors that are being driven by strong growth but the largest sectors, banks and petrochemicals, have not posted double-digit growth, which is the only thing that can justify the sharp rally in the index.”

The market may therefore come under pressure from profit-taking in the near term, he said.

Some analysts told Reuters that the banking and petrochemical sectors posted only single-digit growth in second-quarter earnings, and argue this may not be enough to extend the bull-run.

The full article is visible via the link below – By Pankaj Oswal

http://www.menafn.com/1093689748/Petchems-banks-boost-KSA-stocks-to-59month-high

Pankaj Oswal – Saudi Arabia reaffirmed as the world’s largest reserve base for petrochemicals

New research has found that Saudi Arabia remains atop the list of countries in terms of its known petrochemical reserves.  The Kingdom is also the leading producer in the industry.

The reserve is said to house approximately one-fifth of global oil reserves in what is a good sign for the country’s economy and as a destination for investment in the petrochemical sector.

Astoundingly, 31.4% of the value in Saudi Arabian Stock Exchange lives with companies in the petrochemicals space.  In 2012, the raw revenue of the 14 stock exchange listed companies was SR 310.5 billion; up 5.2% on 2011 figures.

The figures should not be surprising to anyone who has a solid understanding of the global market, but they come as a timely reminder of Saudi Arabia’s hegemony among more attention to emerging markets.

By Pankaj Oswal