BEIJING: China’s yuan firmed slightly against the US dollar on Thursday as the manufacturing and service sectors returned to growth after coronavirus curbs were eased, but gains were capped by signs that the country’s strict “zero-Covid” strategy will remain in place.  

The onshore yuan was changing hands around 6.6960 at midday, 40 pips stronger than the previous late session close, despite China’s central bank setting a weaker midpoint rate. 

By midday break, the Shanghai Composite index rose 1.3 percent to 3,405.64 points, while the blue-chip CSI300 index gained 1.62 percent to 4,492.2 points.

Both indexes were set for their best months since July 2020, if gains hold.

China’s June service sector activity expands at faster pace: official PMI

China’s services sector activity expanded at the fastest pace in 13 months, after authorities ended a city-wide lockdown in Shanghai, an official survey showed on Thursday.

The official non-manufacturing purchasing managers’ index rose to 54.7 in June — indicating the first activity expansion in four months — from 47.8 in May, data from the National Bureau of Statistics showed.

A reading above the 50-point mark indicates expansion in activity while a reading below indicates contraction.

China’s official composite PMI which includes both manufacturing and services activity, stood at 54.1, compared with 48.4 in May.

Q2 job confidence among Chinese households lowest since 2009: PBOC survey

A Chinese index of employment confidence dived in the second quarter to its lowest since the global financial crisis of 2008 and 2009, a central bank survey showed on Wednesday, after tough COVID-19 curbs took a toll on the economy from April to June.

Nearly 46 percent of Chinese households think the employment situation remains “grim” in the second quarter, urban depositors surveyed by the People’s Bank of China said.

Another indicator of future expectations of employment also dropped to the worst level since 2009.

With the survey-based jobless rate in 31 big cities rising to a record of 6.9 percent in May, Premier Li Keqiang said China would strive to return the economy to a normal track and cut the jobless rate as soon as possible, state media said on Tuesday.

Faced with economic uncertainties, more than 58.3 percent of the households are inclined to save rather than spend or invest in the second quarter, up from 42.4 percent in the first quarter, the PBOC survey showed.

DUBAI: Governments in the Middle East and North Africa need to adopt new tools and policies and collaborate to accelerate the shift to a low-carbon economy, according to a new report. It was was published by the Mohammed bin Rashid School of Government in Dubai and co-authored by Jeffrey Beyer, managing director of Zest Associates, a UAE-based sustainability consultancy. “The MENA (Middle East and North Africa) region has an opportunity to capitalize on its resources, create jobs and tackle climate change, but this will require much greater investment from the private sector,” said Beyer. “There are actions governments can take now that are low-cost, relatively easy to implement and would have a big impact in making the Middle East a more attractive environment for green investment.” The report, titled “Financing a Green Transition in MENA,” was funded by HSBC, the largest and most widely represented international banking organization in the region. It focuses on how the region might finance a post-COVID green recovery, and examines green finance activities in Saudi Arabia, the UAE, Bahrain, Egypt, Kuwait, Iraq, Oman and Qatar. It offers a series of regional and country-level recommendations for ways in which governments can mobilize the $230 billion annual funding needed for the Arab world to achieve the UN Sustainable Development Goals, a key measure of the transition to net-zero emissions. “HSBC is playing a leading role in mobilizing the transition to a global net-zero economy, not just by financing it but by helping to shape and influence the global policy agenda,” said Sabrin Rahman, HSBC’s managing director, head of sustainability for Europe, the Middle East, North Africa and Turkey. “This report sets out measures the Middle East region can implement to ensure competitiveness and connectivity but also to stimulate new sectors, employment and business models to attract international investment flows.” Governments in the MENA region are well-positioned to shape the ways in which green finance can be raised and channeled, according to the report. Government expenditure as a percentage of gross domestic product is high in many of the countries examined, averaging 20 percent of GDP and reaching 28 percent in Saudi Arabia, compared with a global average of 17 percent. The MENA region is also home to some of the world’s largest sovereign wealth funds, alongside many powerful state-owned enterprises. “There are many success stories from across the Middle East that show how government action can create the conditions for green investment to flow. For example, the UAE Sustainable Finance Working Group is establishing common standards that will channel finance toward the UAE’s sustainability goals,” said Beyer. “In Saudi Arabia, the Saudi Electric Company has developed a green sukuk framework that has allowed it to tap into capital markets using a traditional Islamic finance instrument. Initiatives like these can be adapted to mobilize green finance in other countries in the region.” According to the report, there are two main ways countries in MENA can increase green investments from the private sector. One is taking steps to improve the “enabling environment,” conditions that affect the viability of sustainable investments, including policy and governance frameworks, as well as programs or initiatives that help finance flow. For example, countries could launch Green Investment Banks, establish entities to facilitate energy-efficiency markets, and develop a common green taxonomy. The other is by adopting specific financial and economic tools to raise and deploy capital, manage risks, and mobilize private-sector investment. For example, countries could issue green bonds or green sukuk, tap into international climate finance, and use sovereign wealth funds and state-owned enterprises to finance and operate new, low-carbon industries. The national recommendations reflect unique domestic circumstances and focus on areas in which action is currently limited or completely absent, rather than suggesting that existing initiatives be enhanced or scaled up. The regional recommendations target areas in which collaboration would deliver stronger returns than if the measures were implemented by each country individually. “There are areas where collaboration among countries in MENA has the potential to be a game changer in the transition to net zero,” said Beyer. “For example, establishing a MENA carbon market would be a cost-effective way of lowering carbon emissions whilst remaining regionally competitive, and creating a standard definition or ‘taxonomy’ for what counts as ‘green’ would bring clarity to investors, unlock sustainable finance and avoid greenwashing.” The findings of the report were presented by Beyer during a panel on green finance at the Arab Green Summit in Dubai on June 21-22. Its authors hope it will be a resource for governments in the MENA region as they attempt to attract investment for renewable-energy projects, energy-efficiency improvements, low-carbon transport, and green buildings.

RIYADH: American investment company BNY Mellon is organizing a series of international campaigns to attract and facilitate investments in Saudi Arabia, according to a top official.

The company has collaborated with SNB Capital Co., the Saudi Ministry of Investment and Tadawul to put the Kingdom on the global financial map.

“Our campaign in London was held with large investment managers who have already invested in Saudi or are interested in increasing their exposure in the Kingdom,” Hani Kablawi, chairman of international at BNY Mellon, told Arab News in an exclusive interview. 

Global investment managers, already contracted with BNY Mellon, want to access KSA and know they can do that by simply extending their relationship with us.

Hani Kablawi, Chairman of international at BNY Mellon

“This series of campaigns will take us to New York, Hong Kong, and Singapore,” he added.

Kablawi noted that the campaign in London was to “strengthen connections and help investors understand how they could access markets or increase their exposure to them.”

While sharing his views on facilitating investments in the Kingdom, Kablawi said BNY Mellon’s role was to guide potential investors.

“Our role is to help prevent obstacles from getting in the way administratively for investors interested in investing in Saudi,” he said. 

Kablawi added that these upcoming campaigns would happen this year and next year. He also clarified that the time frames would be fixed after discussing with Saudi partners who will also be a part of these campaigns.

During the interview, Kablawi noted that the association between SNB Capital and BNY Mellon could help access over 100 global markets globally.

He added that several global investors are exploring the opportunity to venture into the Saudi market by extending their relationship with BNY Mellon.

“Global investment managers, already partnered and contracted with BNY Mellon, want to access Saudi Arabia and know they can do that by simply extending their relationship with us,” said Kablawi.

• In October 2020, SNB Capital, formerly NCB Capital, announced its entry into an alliance with BNY Mellon, one of the largest investment services companies in the world.

• SNB Capital is the securities, asset management, and investment banking arm of Saudi National Bank, the Kingdom’s largest commercial bank.

• In August 2021, BNY Mellon and SNB Capital announced they had launched integrated global securities services capabilities to institutional and large asset owners based in the Kingdom.

• BNY Mellon’s association with SNB Capital grew further as they launched transformative data management solutions in the Kingdom in December 2021 to help build a robust, market-leading and inclusive capital markets ecosystem.

He explained: “It is a cross-border arrangement enabling Saudi investors to access global markets and enabling global investment managers to access Saudi.”

Glen Fernandes, BNY Mellon regional global client management for the Middle East and Africa region, said: “In today’s world, Saudi Arabia has a lot of opportunities. We’ve seen a robust IPO pipeline that’s developing and many big projects are going on in Saudi Arabia. Investors are paying interest and watching that closely.”

Kablawi also mentioned the complexity of investing sustainably and factoring in Environmental, Social and Governance considerations, given the lack of harmonized taxonomy, standardized global regulations and disclosure.

“Once there are well-accepted, sustainable accounting standards and greater availability of consistent, accurate ESG data globally, investors can make better-informed, data-driven decisions. But, unfortunately, that is still an obstacle today,” he further noted.

In October 2020, SNB Capital, formerly NCB Capital, announced its entry into an alliance with BNY Mellon, one of the largest investment services companies in the world.

SNB Capital is the securities, asset management, and investment banking arm of Saudi National Bank, the Kingdom’s largest commercial bank.

In August 2021, BNY Mellon and SNB Capital announced they had launched integrated global securities services capabilities to institutional and large asset owners based in the Kingdom.

BNY Mellon’s association with SNB Capital grew further as they launched transformative data management solutions in the Kingdom in December 2021 to help build a robust, market-leading and inclusive capital markets ecosystem. In October 2021, during the FII Summit in Riyadh, Kablawi said that BNY aims to make SNB Capital the local champion across investment management and investment services.

“We’ve put our hands together so that we get the best of BNY Mellon globally and SNB Capital locally as a national champion in reaching and supporting institutional investors here in the Kingdom,” he said.

He added that digitization is crucial for BNY Mellon due to the amount of data it has in its systems. It also helps its clients make more informed decisions, investment, risk, operational oversight, marketing and distributing decisions.

RIYADH: Thailand’s deputy Minister of Industry, Gala Pong The Visri, emphasized the importance of collaboration with Saudi companies in the mining and technology sector during a meeting in Bangkok, Saudi Press Agency (SPA) reported.

At the Ministry's headquarters in the Thai capital, the minister met with a delegation from the Riyadh Chamber led by Board of Directors Karim Al-Enezi.

The minister highlighted opportunities for joint cooperation in the mining sector, as well as research, consultancy, and investment opportunities in the industrial sector, during the meeting.

Al-Enezi emphasized the importance of holding a number of bilateral meetings between businessmen and women from the two countries in order to foster more partnerships and trade exchange.

Abdullah Al-Khorayef, Board Member and Chairman of the Industrial Committee, emphasized the Ministry of Industry and Mineral Resources' role in increasing the number of factories and Saudi investments.

Al-Khorayef also emphasized the significance of local content and Thailand's facilities for technology transfer and participation in large projects.

He also discussed the industrial capabilities of Saudi organizations such as the Royal Commission for Jubail, the Royal Commission for Yanbu, and Modon, as well as financing opportunities through the Industrial Development Fund, the Export Bank, and Nandab, one of the most important Vision 2030 programs.

LONDON: Oil prices rose steeply on Thursday after sharp losses in the previous two sessions, as investors returned their focus to tight supply even as fears of a global recession persisted.

Brent crude futures were up $4.68, or 4.7 percent, at $105.37 a barrel. WTI crude futures climbed $5.11, or 5.2 percent, to $103.64 a barrel.

Trade was volatile, with prices earlier in the session showing losses of about $2.

“With Russian oil supplies set to drop as the year progresses and it runs out of Western parts to maintain fields, and with the rest of OPEC hopelessly uninvested in maintaining production capacity, I fear the days of $100 oil will be with us for some time yet,” said Jeffrey Halley, a senior market analyst at OANDA.

On the supply side, traders are bracing for oil supply disruptions at the Caspian Pipeline Consortium, which has been told by a Russian court to suspend activity for 30 days.

Exports via the CPC, which handles about 1 percent of global oil supplies, were still flowing as of Wednesday morning.

In a sign that oil supply may remain tight, Washington tightened sanctions on OPEC member Iran on Wednesday, pressuring Tehran as it seeks to revive a 2015 Iran nuclear deal and unleash its exports from US sanctions.

Oil prices have dropped in the past few weeks, highlighting fears of a sharp economic slowdown and a hit to commodities demand.

Brent and WTI closed on Wednesday at their lowest since April 11. The declines follow a dramatic fall on Tuesday when WTI slid 8 percent while Brent tumbled 9 percent — a $10.73 drop that was the third biggest for the contract since it started trading in 1988.

“Recession fears continue to grow and that obviously does raise some concerns for the demand outlook,” said Warren Patterson, ING’s head of commodity research.

“However, supportive fundamentals should mean that further downside is relatively limited.”

LONDON: Stock markets recovered further Thursday as investors weighed recession risks, while the pound rallied on the resignation of Britain’s scandal-hit Prime Minister Boris Johnson as leader of the Conservative party.

“Stocks bounce as pressure points ease,” said independent markets analyst Stephen Innes.

The Federal Reserve on Wednesday stressed its readiness to continue hiking US interest rates to tackle soaring inflation.

Minutes of their last meeting made clear that officials did not plan to let up in efforts this year to try to cool prices.

Inflation stands at the highest levels since the early 1980s both in the US and Britain, where attention Thursday was firmly on political upheaval gripping the nation.

The pound rallied against the dollar and euro. Gains by London’s blue-chip FTSE 100 stock index accelerated following Johnson’s announcement, standing up 1.3 percent in trading.

“The pound is pushing higher, hitting session highs inching closer back up to ... $1.20, a critical support level it broke below this week amid the political and economic uncertainty,” said Victoria Scholar, head of investment at Interactive Investor.

“The currency market is relieved that Johnson is finally resigning, removing some of the political uncertainty that was priced into the pound and paving the way for a new prime minister,” she added.

Berenberg Bank Senior Economist Kallum Pickering said that “the UK economy and its financial markets look set to benefit from more stable leadership.”

The euro meanwhile remained under $1.02 — a level it slumped under this week on its way to hitting a 20-year low.

The European single currency is being hammered by growing fears of a recession for the eurozone and the likelihood of more aggressive US interest-rate hikes.

In afternoon trading, Paris stocks were up 1.5 percent and Frankfurt rose 1.7 percent.

Wall Street stocks rose at the opening bell, with the Dow adding 0.7 percent.