Kuwaiti pension fund profits rose 44 percent in third quarter

Kuwaiti pension fund profits rose 44 percent in third quarter
A panorama of Kuwait City, featuring the iconic Kuwait Towers, Kuwait, March 16, 2020. (Reuters)
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Updated 12 February 2021

Kuwaiti pension fund profits rose 44 percent in third quarter

Kuwaiti pension fund profits rose 44 percent in third quarter
  • PIFSS Director General Mishaal Al-Othman: The institution recorded profits of $6.8 billion during the third quarter of the fiscal year (Oct. 1 to Dec. 31)
  • The total assets of the investment portfolio have grown by 19.4 percent compared with the total at the end of the previous financial year

RIYADH: Kuwait’s Public Institution for Social Security (PIFSS) has announced net profits of $18.9 billion on investments during the first nine months of the fiscal year 2020-2021.

In a statement on its website, the institution said this indicates it is prepared for any fluctuations in global markets, Asharq Business reported.

Mishaal Al-Othman, director general of PIFSS, said that the institution, which manages the country’s $132 billion pension fund, recorded profits of $6.8 billion during the third quarter of the fiscal year (Oct. 1 to Dec. 31). This represented a 44 percent increase on the previous quarter, and a 57.5 percent increase compared with the third quarter of the previous year.

The total assets of the investment portfolio have grown by 19.4 percent compared with the total at the end of the previous financial year.

The institution’s executive management team pursues a long-term conservative investment strategy capable of absorbing market volatility, said Raed Al-Nusif. deputy director general for investment and operations affairs.

He added that this strategy is applied with the assistance of large global consulting firms to reduce the amount of non-invested funds, which decreased from 37.2 percent of total assets at the end of March 2017 to 6.7 percent at the end of December 2020, in accordance with a five-year plan drawn up by investment firm Cambridge Associates in 2016.

That plan ends in March this year and will be replaced by a new five-year plan drawn up by Mercer that provides guidance on the geographical and qualitative distribution of investments. The strategy is reviewed periodically to reflect developments in global markets and to achieve the goal of reducing the level of non-invested funds to less than 4 percent.


Wa’ed startup grants reach $5.1m at Yanbu roadshow

Wa’ed startup grants reach $5.1m at Yanbu roadshow
Image: Shutterstock
Updated 15 sec ago

Wa’ed startup grants reach $5.1m at Yanbu roadshow

Wa’ed startup grants reach $5.1m at Yanbu roadshow
  • The investment company issued two loans and three incubation seed grants to five new startups during the event
  • The next event will be in Jeddah on October 5

Wa’ed, the entrepreneurship arm of Aramco, has nearly doubled its financial support to Saudi startups to SR19.1 million ($5.1 million) during an event in Yanbu, following the SR8.9 million in grants last week. [Leaving this in but we couldn't find more info on the grants last week, if too obscure we can remove this line]

The investment company issued two loans and three incubation seed grants to five new startups during the event, which took place at the King Fahd Cultural Center.

Startups in the petrochemical sector were the highlight of the Yanbu roadshow, while future shows will focus on drones, security technology, reverse engineering, tourism among others.

“With this second round of support in Yanbu, Wa’ed is broadening its commitment to the next generation of ambitious Saudi entrepreneurs,” Fahad Alidi, Wa’ed’s managing director, said. 

Wa’ed recommended loans to Rawabet, a supplier of auto and appliance parts, and Tech Air, a developer of air filtration and sanitization systems for buildings.

The three startups that were granted seed funds were Buy Sell Online Marketing Company, a platform for comparative price quotes for chemicals; Rama Farms, which develops hydroponics and aquaponics farm environments; and Sorting Medical Waster, a female-led medical waste disposal project. 

These were all part of Wa’ed’s national roadshow to find and fund Saudi startups, with future events planned in Jeddah, Riyadh, Madinah, and Makkah through December 6. 

The next event will be in Jeddah on October 5.


‘solutions by stc’ raises $966.4m in IPO

‘solutions by stc’ raises $966.4m in IPO
Updated 22 September 2021

‘solutions by stc’ raises $966.4m in IPO

‘solutions by stc’ raises $966.4m in IPO
  • The financial impact of the IPO will reflect on the company’s Q3 2021 financials

DUBAI: Solutions by STC has completed the institutional and retail subscription for its initial public offering, where it raised SR3.624 billion ($966.4 million). 

The Saudi Telecoms Company unit is offering 20 percent of its share capital, or 24 million shares out of 120 million. 

Final allocations of offer shares, as well as the refund of excess subscription amounts will be based on the prospectus, the company said in a Tadawul filing. 

The financial impact of the IPO will reflect on the company’s Q3 2021 financials. 


ADNOC boosts size of drilling unit IPO to $1.1bn

ADNOC boosts size of drilling unit IPO to $1.1bn
Updated 22 September 2021

ADNOC boosts size of drilling unit IPO to $1.1bn

ADNOC boosts size of drilling unit IPO to $1.1bn

DUBAI: State oil giant Abu Dhabi National Oil Co. (ADNOC) has increased to 11 percent of share capital the size of the initial public offering (IPO) of its drilling unit, ADNOC Drilling, because of oversubscription, the firm said on Wednesday.

ADNOC had previously targeted a minimum stake of 7.5 percent in the IPO of ADNOC Drilling, at 2.3 dirhams ($0.6262) per share.

In a statement it said the price had not changed but the number of ordinary shares offered was raised to 1.76 billion from 1.2 billion, which would correspond to a $1.1 billion transaction, according to Reuters calculations.

“The new offering size was determined by ADNOC, as the selling shareholder, based on significant investor demand and the considerable oversubscription across all tranches,” it said.

“The enlarged offering will enable a broader investor base to obtain exposure to ADNOC Drilling’s highly attractive value proposition.”

ADNOC will continue to own an 84 percent majority stake in the unit, while Baker Hughes will retain its 5 percent shareholding.

The IPO subcription period will end on Thursday for United Arab Emirates retail investors and on Sunday for domestic and international institutional investors.

Listing is expected on or around Oct. 3, ADNOC said.


Rise in gas prices add to near-term inflation: Capital Economics

Rise in gas prices add to near-term inflation: Capital Economics
Updated 22 September 2021

Rise in gas prices add to near-term inflation: Capital Economics

Rise in gas prices add to near-term inflation: Capital Economics
  • European countries likely to be most affected

RIYADH: A surge in natural gas prices is expected to jack up inflation worldwide with Europe likely to be most affected, said a Capital Economics report.

The report said unreasonable and extreme weather conditions led to longer periods of cooling and heating and China’s rebound from the pandemic also boosted gas demand. On the other hand, extreme weather and the pandemic-related price collapse in 2020 hit US production and exports. Outages at several liquefied natural gas plants and Russia limiting exports via Ukraine for political reasons caused an imbalance in the supply and demand, which raised gas prices globally.

The most pronounced impact has been in the euro zone, where the rise in gas and electricity inflation has added 0.5ppts to headline CPI inflation since the start of the year.

“Since the start of Q2, the European (TTF) gas price has surged by 290 percent, Asia LNG spot prices are up 260 percent and US natural gas (Henry Hub) has nearly doubled,” the report said.

In the US, higher gas and electricity inflation has added just 0.2ppts to CPI inflation this year given the less pronounced rise in US gas prices and the lower weight of gas and electricity in the CPI basket. Japan has experienced a boost of 0.4ppts, as its gas imports are tied to long-term contracts indexed to oil prices. It’s a similar story in many emerging markets where gas prices tend to be tied to long-term contracts and/or indexed.

“We think natural gas prices will remain elevated for some time yet. Globally, but particularly in Europe, stocks are at historic lows and will take some time to rebuild even if we are right and supply picks up,” wrote  Jennifer McKeown, head of Global Economics Service.

The analyst, however, predicted that by Q2 2022 prices will be under sustained downward pressure.

Current prices will incentivize supply, particularly in the US where shale operations can ramp up relatively quickly. The situation will probably also hasten the approval of the Nord Stream II pipeline from Russia to Germany. Prevailing prices are likely to curb demand, the report said.

The passthrough is likely to be far smaller since governments are already acting to limit the effect on consumers.

According to McKeown, gas and electricity inflation is likely to surge by 16 percent to add an average of 0.3ppts to headline inflation in major advanced economies in the rest of this year, on top of the 0.3ppt boost which they have experienced already. “This should reverse next year, particularly given our expectation that gas prices will recede. But there are risks in both directions, and gas prices are notably volatile,” she said.

The report said there will be a drag on activity in most economies as higher utilities prices eat into the income available for discretionary spending. There could also be adverse consequences for the energy industry, particularly in countries where prices are regulated – most notably the UK, it added.


Almarai cuts emissions, increases use of solar power by 119%

Almarai cuts emissions, increases use of solar power by 119%
Updated 22 September 2021

Almarai cuts emissions, increases use of solar power by 119%

Almarai cuts emissions, increases use of solar power by 119%

JEDDAH: Saudi Arabia leading multinational dairy company Almarai has taken several steps to reduce emissions and increased the use of solar energy by 119 percent, according to its annual Sustainability Report 2020.

The Tadawul-listed company has reduced car fuel consumption in its sales, distribution and logistics department by 4 percent as compared to 2019. According to the report, clean energy accounted for 2.5 percent of the total power consumption, which is 4.4 percent within the sustainability strategy’s limits.

“Climate change can pose risks to agricultural production,” said Abdullah Al-Otaibi, head of corporate communication and public relations at Almarai. He said in order to fight climate change the company is taking measures to ensure sustainable growth.

Al-Otaibi said their energy strategy is based on solar power generation, increasing operational efficiency and energy monitoring efficiency, and improving the energy culture in pastures.