01 May 2016

Gulf Industry magazine helps you catch up with the numbers behind economic and industrial developments in the region.

Imports of Brazilian livestock hit $724m

TOTAL imports of agricultural and livestock products by the Middle East from Brazil amounted to $724.3 million in March 2016, up 46.3 per cent in comparison to figures from the same period last year, according to statistics released by the Brazil Ministry of Agriculture and Supply (MAPA).

The Middle East ranks third in the world in Brazilian agricultural and livestock imports after Asia and the European Union, it added.

Saudi Arabia has emerged as the largest importers from Brazil, registering an increase of 5.9 per cent, followed by Egypt at 16.8 per cent, and the UAE at 69.4 per cent, it said.

Soy complex was the most exported item among the agricultural and livestock categories for the period, recording a total sale of $3.4 billion and an increase of 23.8 per cent. Followed by meats with earnings of $1.24 billion and growth of 5.4 per cent, and the sugar-alcohol complex with total sales of $737.2 million and an increase of 10.8 per cent, said the statement.

Brazil has exported $20 million worth of agribusiness products year to date up to March, registering an increase of 8.7 per cent over the same period in 2015.

According to MAPA, the soy complex,  meats and forest products were the most exported items with the livestock and agriculture category accounting for 49.4 per cent of all of Brazil’s exports during the period. 


Japanese brands dominate car market 

FIFTY-four per cent of cars sold in Saudi Arabia in 2015 were from Japan, while the kingdom’s 800,000-plus commercial vehicle (CV) segment is dominated by brands such as Isuzu and Mitsubishi, a report said.

According to analysts Frost & Sullivan, Japanese brands also comprised nearly 69 per cent of UAE passenger vehicle sales in 2015.

Demand for Japanese parts is also at an all-time high. The latest statistics from Dubai Customs show that 23 per cent of Dubai’s auto parts and accessories imports in 2014 (worth $1.6 billion) came from Japan – more than from any other country. Much of this was re-exported into the high-volume markets of Saudi, Iraq, and Afghanistan.


M&A deal count remains steady in Q1

A TOTAL of 13 merger and acquisition deals with a value of $1.5 billion were announced in the Middle East in the first quarter of this year, according to a report.

The total number of deals was the same as in Q1 2015, but the total deal value declined by 39.7 per cent from $2.5 billion, said the report by Mergermarket, a leading news and intelligence service for mergers and acquisitions.

Mergermarket identifies the telecommunications sector as the most targeted in the Middle East, entirely as a result of Saudi Telecom Company’s $494 million acquisition of Kuwait Telecommunications – the highest valued deal of the quarter.    

Kirsty Wilson, global research editor at Mergermarket, said: “The UAE attracted the highest number of deals during the quarter, with the announcement of seven deals totalling $447 million. The highest valued UAE deal of the quarter was the $292 million acquisition of e-commerce platform Souq.com by Standard Chartered Private Equity limited, Baillie Gifford and International Finance Corporation, in a funding round that valued the company at $1 billion.”

Deal value in the telecommunications sector grew significantly, totalling $494 million in the first quarter of 2016, compared with $223 million in the same period last year. Other sectors that experienced considerable growth were construction, which recorded $135 million in Q1 2016, compared with $41 million in 2015, and transport, with deal value totalling $90 million in the first quarter, compared with $21 million in the same period last year.


Billionaires’ worth down 23pc to $95.5bn

THE past year was unkind to billionaires all over the world, including the Middle East, where Arab billionaires saw their net worth drop by 23.8 per cent from a year ago, according to the latest Forbes Middle East report.

Aggregate net worth of the billionaires dropped $29.9 billion from one year ago to a recent $95.5 billion. There are 32 Arab billionaires, according to the report.

Forbes Middle East added five new billionaires, including Hussain Sajwani from the UAE, Sheikh Faisal Bin Qassim Al Thani of Qatar, and Oman’s Suhail Bahwan.

Prince Alwaleed of Saudi Arabia remains the wealthiest Arab in the world, even though his net worth fell by more than 20 per cent from a year ago, Forbes said.

The youngest Arab billionaire on the list is Fahd Hariri from Lebanon. The youngest son of former Lebanese Prime Minister Rafik Hariri, Fahd has a net worth of $1.2 billion at the age of 34. While he currently lives in Paris, he develops residential buildings in Beirut.

With seven, Lebanon has the most billionaires, making it also one the countries with the highest number of billionaires per capita in the world. Saudi billionaires are the richest with a combined net worth of $34.6 billion. The second richest are from the UAE with a combined net worth of $19.7 billion.

Families remain pillars of Arab economies, providing jobs and stability. Saudi Arabia again tops the rich list, with 12 of the 15 richest families. Nine out of the 15 families made a fortune owning licensing rights to foreign brands, mostly American.


GCC attracts $4.5bn investment in Q1

GCC countries attracted combined investment of $4.57 billion across 64 transactions during the first quarter of 2016, led by the UAE which had 23 targets, said an industry expert.

While Saudi Arabia and Kuwait followed with 15 targets each, Oman had seven and Qatar and Bahrain had two each, added Ramachandran Narayanan, partner and head of Deal Advisory at  KPMG Middle East and South Asia (MESA) part of KPMG International, a global network of professional services firms providing audit, tax and advisory services.

“Sixty-five per cent of total Mena deal making for the first quarter of 2016 was attributable to GCC countries,” he added, commenting on the latest edition of KPMG’s International Global M&A Predictor. 

The appetite to do deals is predicted to rise by 4 per cent over the next months. The capacity of corporates to fund M&A growth, meanwhile, is expected to rise by 13 per cent over the same period.

Energy is expected to see the highest increase in M&A appetite during 2016, at 23 per cent. Basic materials is at 12 per cent and consumer staples at 6 per cent. 

In terms of capacity, technology is the star performer, with an expected increase of 90 per cent, as tech companies continue to increase their cash stockpiles.

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