S&P Global opens in Riyadh as credit ratings agencies eye growth in Kingdom’s debt markets

S&P Global Ratings has expanded its operations in the Middle East with the opening of a branch in Riyadh's Kingdom Tower. (Reuters)
Updated 24 October 2017
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S&P Global opens in Riyadh as credit ratings agencies eye growth in Kingdom’s debt markets

LONDON: S&P Global Ratings has opened a branch in Riyadh, becoming the first international credit rating agency to be fully licensed to operate in Saudi Arabia.
S&P’s move into the Kingdom comes as the country strives to expand its capital markets by encouraging more Saudi companies to issue debt — an option that will require them to obtain a credit rating.
Typically, domestic corporates have mainly used bank loans to meet their financing needs.
The growth of the capital markets will also help the Kingdom fulfil its Vision 2030 plans to diversify its economy away from its dependency on oil.
“As Saudi Arabia’s capital markets evolve to match the size of the country’s economy, there is a prime potential for greater debt issuance,” said Meshari Al-Khaled, the newly appointed office head and managing director for the office.
“Only 15 percent of listed companies in Saudi Arabia have a credit rating so there is a significant opportunity for S&P Global Ratings to serve investors through our objective evaluation of risk for governments, corporates and financial institutions,” he said.
John Berisford, president of S&P Global, added: “The CMA’s 2020 ambitious enabling program presents significant opportunities for the country and investors alike.
“As the first international credit rating agency in the country, we are pleased to be able to facilitate access to capital for governments and companies and look forward to supporting the further development of transparent and liquid debt markets in the Kingdom.”
S&P received its final license from Saudi Arabia’s Capital Market Authority (CMA) after having been pre-approved last October. The new office will be based in Kingdom Tower in central Riyadh.
Al-Khaled — a Saudi national who will head up the agency’s Riyadh operations — has worked for the last 11 years with the government entity, the Saudi Arabian General Investment Authority (SAGIA), to drive foreign investment into the country.
Before that, he had worked within Saudi Arabia’s Alawwal Bank’s investment banking unit.
“I am now eager to support the development of the Kingdom’s economy working with S&P Global Ratings, whose credit ratings play a key role in enabling corporations and governments to raise capital,” he said.
The new office was launched with a formal event in Riyadh on Oct. 23, attended by senior government officials and executives from various financial institutions and publicly-listed companies.
The other two major international rating agencies, Fitch and Moody’s, won approval to operate in the Kingdom in April and July this year.
S&P’s Riyadh launch followed news on Monday that the initial public offering (IPO) of the country’s national oil company, Saudi Aramco will happen in 2018 as planned, according to the company’s CEO Amin Nasser in a CNBC interview.


Lufthansa to start flights to Israeli Red Sea resort Eilat

Updated 18 July 2018
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Lufthansa to start flights to Israeli Red Sea resort Eilat

  • More than 175,000 foreign tourists flew into Ovda in the first five months of 2018
  • Lufthansa said it would fly to Ovda from Frankfurt and Munich twice weekly starting Oct. 28

JERUSALEM: Lufthansa said on Wednesday it will launch four weekly flights to Eilat, the Red Sea resort which Israel hopes to turn into a winter vacation spot for foreign tourists.
More than 175,000 foreign tourists flew into Ovda, a converted military airfield 60 km (40 miles) from Eilat, in the first five months of 2018, double the amount for all of 2017.
Helping spur growth is a government grant of 60 euros ($70) per passenger for airlines starting routes to Eilat.
Lufthansa said it would fly to Ovda from Frankfurt and Munich twice weekly starting Oct. 28.
Eilat, Israel’s southernmost city, borders Jordan and Egypt. It will later be served by the new Ramon International Airport which is expected to open in early 2019.
Since 2015, a number of airlines, mainly low-cost, have been operating direct flights to Ovda, led by Ryanair and WizzAir.
“The number of flights to the city has increased from four weekly flights to more than 60 weekly flights,” said Tourism Minister Yariv Levin.
The Tourism Ministry has a budget of 30 million shekels ($8.25 million) a year for subsidising flights to Ovda.
“We are willing to pay more,” Levin said, adding the ministry is also in talks with British Airways. The airline declined to comment.
International tourist arrivals in Israel hit a record 3.6 million last year, pumping $5.5 billion into the economy.