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May 2017

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

Global steel demand to hit 1.5bn MT in 2017

GLOBAL steel demand will grow by 1.3 per cent to more than 1.5 billion metric tonne in 2017, and increase by 0.9 per cent to a little over 1.548 billion MT in 2018, said a report.

China will likely see flat demand this year, followed by a two per cent decline in 2018, stated Platts, S&P Global, a leading independent provider of information and benchmark prices for the commodities and energy markets.

Central and South America are likely to experience the biggest demand growth over the next two years, with 3.5 per cent and 4.7 per cent increases expected in 2017 and 2018, respectively, said the report citing a senior official of the World Steel Association. Speaking at a media briefing in London, worldsteel’s director general Edwin Basson pointed to mostly modest growth expectations for all regions, outside of China. That region saw a 13.6 per cent decline in 2016, he stated. The CIS region is forecast to return to steel demand growth over the next two years, as well, bouncing back from a 4.1 per cent decline in 2016 to increases in 2017 and 2018 of 3.2 per cent and 3.4 per cent, respectively, said the association in its short-range outlook.

 

Bahrain telecom revenues top $1.19bn

THE revenues of Bahrain’s telecom industry continued to rise, reaching BD450 million ($1.193 billion) in 2015 compared to BD430 million in 2014, the Telecommunications Regulatory Authority’s (TRA) latest Annual Market Indicators Report said.

The latest figure represents 4 per cent of Bahrain’s gross domestic product (GDP, the report said. The report reveals that consumer welfare is improving steadily through the price drops of services because of increased competition. The evidence of this is an increase of penetration rates in various markets across the sector. Licensed revenue decreased by 5 per cent from BD383 million in 2014 to BD363 million in 2015, while unlicensed revenue , such as from handset devices increased by 88 per cent from BD47 million in 2014 to BD87.5 million in 2015.  The decrease in licensed revenues was due to hyper-competition and pressure on prices and profitability, it said. 

Fixed telephony is being outpaced by mobile due to the freedom of movement offered by mobile, as well as its cost effectiveness and the  improved quality of mobile networks, and is indicated by outgoing traffic from mobile to fixed representing only 3 per cent out of total domestic minutes.

 

Iran provides $66bn loans to mining, industry

IRAN has allocated loans amounting to over $66 billion to the mining, industry and trade sectors in the year to March 20, said a senior ministry official in a report.

Some $46 billion in banking facilities were earmarked for mining and industry sectors while over $20 billion were extended to the trade sector last year, Mohammad Reza Nematzadeh, Minister of Industry, Mines, and Trade, was quoted as saying in an Iran Daily News report.

He added the figures show an increase of 32 per cent and 26 per cent, respectively, against the figures for the previous year.

The minister cited official data as saying that the value added for the mining sector grew by five per cent in the nine months to December 20, 2016.

Nematzadeh added that since production in most fields, particularly in auto manufacturing, basic metals, home appliances and food industry has grown, the value added for the 12 months of last year is predicted to stand at 12 per cent.

 

Global robot market ‘likely to hit $188bn’

THE robotics industry has grown at an annual rate of 17 per cent, and the worldwide market is expected to reach $188 billion by 2020, says a report released by LG, a leading global electronics company. Robots were designed to perform difficult and hard laborious work, or to carry out dangerous tasks, such as: disposal of radioactive materials, mine detection, or even for industries that require concentration, accuracy and fatigue such as assembly of car parts. The market for surgical robots worldwide is at $11.4 billion, with an expected increase of 22.2 per cent by the year 2020.

 

GCC debt markets raise record $69bn in 2016

ISSUANCES from GCC debt capital markets set a new record in 2016, with regional sovereigns raising a total debt of $69.1 billion during the year, outpacing the previous record set in 2014 by $35.6 billion, said a report. In a year of continued volatility, yields fell steeply in the first half of 2016 but started to rebound during the summer months, according to Securities & Investment Company (Sico) Fixed Income – Asset management market outlook. They then spiked even higher in the fourth quarter, following the US election results and the raising of interest rates from 0.25 to 0.50 per cent by the US Federal Reserve (Fed). Sico chief executive officer Najla Al Shirawi said: “Economic reforms and austerity measures being introduced by GCC governments had a positive impact on investor sentiment in 2016, with the Barclays GCC USD Bond Index closing the year up by 4.8 per cent.”

 

Family-run firms claim 80pc of private sector

FAMILY-run enterprises claim 70 to 80 per cent of private sector in the GCC, making them the backbone of regional economies, a report said.

However, key issues such as corporate governance and succession continue to stalk family-led enterprises in the GCC, added the recent report on ‘Family Matters: Managing the GCC’s Family Business Powerhouses’ released by Orient Planet Research, an Orient Planet Group venture. Governance, financial and succession concerns are turning into challenges due primarily to the force of globalization, the rising number of family members in each generation, the growing size of the company, and the difficulties associated with succession planning.

 

Robust Mideast activity despite global dip

GLOBAL cross-border M&A activity continued to dip as political turbulence and economic uncertainty become the new normal for dealmakers, while deal flow in the Middle East remained stable, according to a new report.

Baker McKenzie›s Cross-Border M&A Index, which tracks quarterly deal activity using a baseline score of 100, decreased to 218 for Q1 2017, down 17 per cent from the prior quarter and 9 per cent from Q1 2016. In Q1 2017, cross-border M&A made up 49 per cent of all deal value and 35 per cent of all deal volume. The Q1 2017 Middle East Index has remained fairly steady at 141.3, a slight dip on Q1 2016 figures (155.6), and the previous quarter (189.9), indicating that despite sustained political and economic uncertainty, the Middle East M&A market remains steadfast. The UAE is yet again a dominant country for M&A in the region this quarter, coming out top for deal volume for both inbound and outbound activity.




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