Saudi flyadeal delays Boeing order

Budegt carrier Flyadeal started flights in 2017. (Supplied)
Updated 16 March 2019
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Saudi flyadeal delays Boeing order

  • Flyadeal will wait until investigations into two Boeing 737 MAX crashes are completed before deciding whether to proceed with a signed order for 30 of the jets
  • $5.9bn deal on hold after budget airline says it will wait on ndings of Ethiopian crash inquiry

DUBAI: Saudi Arabian budget airline flyadeal will wait until investigations into two Boeing 737 MAX crashes are completed before deciding whether to proceed with a signed order for 30 of the jets, its CEO said on Friday.
The 737 MAX has been banned from flying in most countries after an Ethiopian Airlines crash on Sunday that killed all 157 people on board. This was a second deadly incident involving the relatively new Boeing model in five months. In October, a Lion Air jet crashed in Indonesia killing all 189 people on board.
“We’re in a hold for the moment. We are monitoring and in constant contact with Boeing and will wait for the outcomes to be known before moving forward,” CEO Con Korfiatis told Reuters by phone.
Flyadeal ordered 30 Boeing 737 MAX 8s last December with purchasing options for 20 more in a deal that Boeing said was worth $5.9 billion at list prices.

 

The budget carrier, which started flights in 2017 and is owned by Saudi Arabian Airlines (Saudia), chose the MAX jet over Airbus’ narrowbody A320neo.
The US on Wednesday joined most countries in grounding the 737 MAX over safety fears. Acting Federal Aviation Administration (FAA) administrator Daniel Elwell has said he does not know how long the US grounding will last. 
Saudi Arabia has not said whether it has grounded the aircraft. It has been grounded in neighboring United Arab Emirates and Oman.
Emirati carrier flydubai this week said the 737 MAX remained integral to its future strategy and that it valued its long-standing relationship with Boeing.
Flydubai is one of the largest MAX customers having ordered 250 of the new model narrowbody jets since 2013. It currently has 13 MAX aircraft in its fleet.

FASTFACTS

Flyadeal ordered 30 Boeing 737 MAX 8s last December with purchasing options for 20 more in a deal that Boeing said was worth $5.9 billion at list prices.


Global exchange funds eye Saudi Arabian equities

Updated 20 March 2019
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Global exchange funds eye Saudi Arabian equities

  • It comes as the country joins the FTSE Russell emerging markets index
  • Index provider MSCI is also adding Saudi stocks to its own emerging markets index

LONDON: Global exchange-traded funds are building cash piles to place in Saudi Arabian equities, according to a ranking compiled by Bloomberg.
It comes as the country joins the FTSE Russell emerging markets index, which is expected to attract billions of dollars in foreign fund inflows.
“We believe Saudi’s inclusion in the FTSE Russell EM Index will have a significantly positive impact on stock markets, Salah Shamma, the regional head of investment at Franklin Templeton Emerging Markets Equity, told Arab News.
“With an estimated $115 billion benchmarked against the FTSE Russell EM Index, the Kingdom could constitute approximately 2.5 percent of the gauge, resulting in passive fund flows of about $3 billion,” he said.
A London-based exchange- traded fund (ETF) and another fund that trades in New York have together attracted around $327 million in new money since the beginning of January, Bloomberg reported on Tuesday.
The net flow as a percentage of assets for Saudi Arabia funds increased by about 48 percent this year.
FTSE Russell started to include Saudi stocks this week — the first of a five-stage process that will be fully implemented by March 2020.
Index provider MSCI is also adding Saudi stocks to its own emerging markets index.
Positions on the Saudi market through funds based abroad have delivered a return of about
12 percent each since the start of the year, compared with a gain of 10 percent for the Tadawul All Share Index, according to Bloomberg data.
Franklin Templeton’s Shamma believes the inclusion of Saudi equities in the two gauges will help to bring the wider region into the mainstream of emerging market investment.
“The fundamentals of the Saudi economy are strong, and we remain encouraged by the country’s progress in reducing its reliance on hydrocarbon revenues as well as the ambitious reform agenda that is underway there,” he said.
Listed companies in the Kingdom could see holdings by foreign investors rise to 10 percent when their shares are included in index providers MSCI and FTSE’s emerging-market indices, the chief executive of Tadawul told Reuters on Monday.
Saudi Arabia this week joined the FTSE Emerging All Cap Index with a weighting of 2.9 percent.
Khalid Al-Hussan told Reuters that he expected equities on Tadawul to attract $5 billion of passive fund inflows after the FTSE Russell inclusion. Foreign investors currently hold about 5.9 percent of Saudi shares.