Lockheed Martin evaluates 400 Saudi Arabian firms in defense review

Chief executive of Lockheed Martin in Saudi Arabia, Joseph Rank. (Supplied)
Chief executive of Lockheed Martin in Saudi Arabia, Joseph Rank. (Supplied)
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Updated 22 February 2021

Lockheed Martin evaluates 400 Saudi Arabian firms in defense review

Chief executive of Lockheed Martin in Saudi Arabia, Joseph Rank. (Supplied)
  • Kingdom ramps up sector with aim to spend half of its military budget with local companies by 2030

JEDDAH: With a recent joint agreement with Saudi Arabian Military Industries (SAMI) to enhance the Kingdom’s defense capabilities and localize its military industry, Lockheed Martin (LM) has become a vital partner in the development of the Kingdom’s defence capabilities as part of Vision 2030.

The agreement states that SAMI will own 51 percent of the joint venture with LM, which aims to establish a research and development center, to be named the KSA Defense Systems Engineering & Technology Center of Excellence (DSTC).

“The DSTC will deliver critical defense mission capabilities to meet the urgent and long-term needs of the Ministry of Defense (MoD) in systems engineering, system integration and test and Research & Technology (R&T) defense domains,” Joseph Rank, the chief executive at Lockheed Martin in Saudi Arabia, told Arab News.

LM will be leveraging its defense and aerospace products and experience to support the General Authority for Military Industries (GAMI) and SAMI, while simultaneously providing human capital development to Saudi employees within the center and establishing a Saudi defense supply chain, he said.

Saudi Arabia’s defense budget is one of the largest in the world – reportedly $80 billion in 2018 – and LM aims to make sure more of this budget is spent at home. When SAMI was launched in 2017 only 3 percent of Saudi Arabia’s defense spending was spent locally. The Kingdom is aiming to increase this to 50 percent by 2030 with the help of LM is part of achieving this target.

“Our plan focuses on two main areas. First, we work closely with the US government to identify technologies that are releasable to our partner nations. Second, we work very closely with the Saudi authorities to identify which localization projects are economically viable and of value to the Kingdom,” explained Rank.

As part of this collaboration, LM has evaluated more than 400 companies in Saudi Arabia to gain a thorough understanding of the Kingdom’s defense needs. “The process is still ongoing, but we are on the way to helping our Saudi partners develop into world-class producers of military equipment,” Rank said.

LM is working across a variety of technologies in sectors such as aviation, cyber, naval and land systems. “The main objective is to bring capabilities that are in line with the requirements and needs of the armed services and assist in the development of these capabilities in partnership with local industrial companies. The focus is on the design, integration, training and lifetime support of military equipment and services,” he added.

The US company has witnessed “some slowdowns” during the pandemic, just like everyone else, but Rank said the impact was minimal. “We have invested heavily in protecting our global supply chains and deployed proactive measures to position ourselves for the fastest possible recovery. Here in Saudi Arabia, we have been impressed by how rapidly our partners and key stakeholders were able to transition to remote working and teleconferencing protocols,” Rank said.

Saudi Arabia’s agility and technology adoption has enabled LM and ensured many initiatives remain on track, he continued.

The Kingdom’s stance on encouraging the development of its people has pushed LM to invest in various educational programs, including funding the MBSC (Mohammed Bin Salman College) for Business in Jeddah, developing technology development curriculums with GAMI and a signed Master Research agreement with King Abdulaziz University in Jeddah.

LM has signed further agreements to develop theory and on-hand training with the King Abdulaziz City for Science and Technology, King Saud University, King Abdullah University of Science and Technology, King Fahd University of Petroleum and Minerals and Jeddah University.

For its future endeavors, the company hopes to support the Saudi Space Commission on several programs through internships and training. The Saudi Geostationary Satellite 1 (SGS-1), manufactured by Lockheed Martin and first launched in 2019, is going to push the Kingdom forward through its space economy journey.

LM has also entered an agreement with the Saudi Technology Development and Investment Company (TAQNIA) to develop space systems, building satellite testing facilities and expecting further expansion in the future.

There is certainly a lot of scope for potential partnership. The CEO of SAMI told Reuters this week the defense company is aiming to be one of the top 25 in the world by 2030, generating annual revenue of $5 billion.

What to expect at the Saudi Green Initiative forum today 

What to expect at the Saudi Green Initiative forum today 
Updated 23 October 2021

What to expect at the Saudi Green Initiative forum today 

What to expect at the Saudi Green Initiative forum today 
  • Crown Prince Mohammed bin Salman is launching the forum to announce the Kingdom’s new “green” objectives

DUBAI: The Saudi Green Initiative forum in Riyadh is happening today, with high-profile government leaders and international personalities taking the stage to discuss the Kingdom’s environmental efforts. 

Crown Prince Mohammed bin Salman is opening the forum to announce the Kingdom’s new “green” objectives. 

His remarks will be followed by fireside chat with Prince Abdulaziz bin Salman bin Abdulaziz Al-Saudi, the Kingdom’s energy minister. 

Other Saudi ministers are also speaking at the forum, exploring specific themes around business and the environment, marine and ocean life, and the oil and gas industry. 

Big corporate icons, including Paddy Padmanathan of ACWA Power and Jasper Graf of Daystar Power US, are also participating in the forum.  

Bitcoin slips from record high as ETF mania subsides

Bitcoin slips from record high as ETF mania subsides
Updated 22 October 2021

Bitcoin slips from record high as ETF mania subsides

Bitcoin slips from record high as ETF mania subsides
  • JPMorgan analysts doubted whether the ETF will attract much new money into bitcoin

RIYADH: Cryptocurrencies declined on Friday following an ETF-fueled rally that saw it reach a record $67,016 on Wednesday, as investors questioned whether the new investment vehicle will attract as much new money to the assets as some have speculated.

Bitcoin, the world’s largest cryptocurrency, was trading at $63,498.16 as of 3:36 p.m. in Riyadh, a drop of 2.5 percent over the previous 24 hours. Ethereum, was 2.0 percent lower at $4,125.40 after approaching its all-time high of $4,380 from May.

Bitcoin’s recent rally — six-months after its previous top of $64,895 — was fueled by the debut of the ProShares Bitcoin Strategy ETF.

A dozen other futures-based bitcoin ETFs could launch in the coming months, with The Valkyrie Bitcoin Strategy ETF set to begin trading on Friday under the ticker BTF. The VanEck Bitcoin Strategy ETF expected to begin trading next week under the ticker XBTF.

Investors have bet the long-awaited launch of bitcoin ETFs will lead to greater investment from both retail and institutional investors, but analysts at JPMorgan suggested in a note that the ProShares ETF could have limited effect on investment volumes because there are so many options for investors already.

The ProShares ETF has created a significant shift in the balance of power among cryptocurrency exchanges. The Chicago Mercantile Exchange (CME), host to the ETF, has replaced Binance as the world’s biggest bitcoin futures platform this week.

As of 2 p.m. Riyadh time, the CME accounted for 22 percent, or $5.68 billion, of the total global futures open interest of $25.7 billion, while Binance contributed $5.66 billion, CoinDesk reported.

The value of funds held in CME-based futures contracts have tripled this month, with more than $1.5 billion flowing into the market after ProShares’ bitcoin ETF went live on Tuesday, CoinDesk said.

Elsewhere in the cryptoverse, Worldcoin said yesterday it raised $25 million from investors including Andreessen Horowitz, CoinBase Ventures and Digital Currency Group, valuing it at $1 billion.

The rather unique proposition is that coins are distributed in exchange for staring into an orb, which takes a scan of your retinas.

Based in Berlin, Worldcoin was founded by former Y Combinator President Sam Altman. It currently has 70 employees and 30 orbs, which it takes out into the world to offer worldcoins. It plans to ramp up orb production to 4,000 per month from November.

So far, about 130,000 people have stared into the orb, has a cap of 10 billion coins with the aim of giving one to every person on earth with the remaining 2 billion set aside for the Worldcoin Foundation and investors.

Oil stays near $85 a barrel, Brent set for seventh weekly gain

Oil stays near $85 a barrel, Brent set for seventh weekly gain
Image: Shutterstock
Updated 22 October 2021

Oil stays near $85 a barrel, Brent set for seventh weekly gain

Oil stays near $85 a barrel, Brent set for seventh weekly gain
  • Prices have been boosted by worries about coal and gas shortages in China, India and Europe

Oil prices stayed near multi-year highs on Friday, erasing some earlier losses in Asian trading hours, with concerns about tight supply and stockpiles fuelling bullish sentiment.

Brent crude futures rose 23 cents, or 0.3 percent, to $84.84 a barrel at 0933 GMT, after Thursday's three-year high of $86.10. The benchmark is set for its seventh weekly gain.

U.S. West Texas Intermediate (WTI) crude futures gained 20 cents, or 0.2%, to reach $82.70 a barrel, not far off a seven-year high hit this week.

Prices have been boosted by worries about coal and gas shortages in China, India and Europe, spurring some power generators to switch from gas to fuel oil and diesel.

Winter weather in much of the United States is expected to be warmer than average, according to a National Oceanic and Atmospheric Administration forecast.

"Crude oil's sharp rise may make it vulnerable to profit taking, however, a substantial correction may not happen unless global energy crisis subsides," said Ravindra Rao, vice president for commodities at Kotak Securities.

"Global gas and coal prices have eased but concerns persist with tighter market and higher demand winter season around the corner."

U.S. crude found support this week as investors eyed low crude stocks at the U.S. storage hub in Cushing, Oklahoma.

U.S. Energy Information Administration data on Wednesday showed crude stocks at Cushing fell to 31.2 million barrels, their lowest level since October 2018.

"America’s gasoline demand appears to be experiencing an Indian summer," PVM analysts said in a note, pointing to the highest implied demand for this time of year since 2007 despite high pump prices.




Equities eye third week of gains after tech boost, S&P 500 hits new record

Equities eye third week of gains after tech boost, S&P 500 hits new record
Image: Shutterstock
Updated 22 October 2021

Equities eye third week of gains after tech boost, S&P 500 hits new record

Equities eye third week of gains after tech boost, S&P 500 hits new record

Global shares were on course for their third straight week of gains on Friday, buoyed by tech stocks in Asia overnight, while the dollar dipped and oil prices held steady.

MSCI's broadest gauge of global shares was up 0.1 percent in early European trade, 1.4 percent higher on the week and just 0.8 percent off its all-time high.

Germany's DAX gained 0.4 percent to 15,535.16. In Paris, the CAC 40 jumped 1.1 percent to 6,759.46, while Britain's FTSE 100 added 0.4 percent to 7,220.57.

The future for the S&P 500 was nearly unchanged while the future for the Dow industrials gained less than 0.1 percent.

On Thursday, the S&P 500 rose 0.3 percent to 4,549.78, its seventh straight gain. That eclipsed the record high it set on Sept. 2. 

That followed gains in Asia, where equity bulls were also comforted by news that heavily indebted Chinese property firm China Evergrande Group had made a surprise interest payment, averting a default for now.

Japan's Nikkei advanced 0.3 percent, led by the technology sector, while energy and basic materials shares were the biggest drags as coal futures extended their losses after Beijing signalled it would intervene to cool surging prices that contributed to the country's electricity shortage.

More broadly, investors have become increasingly concerned that persistent inflation could force central bankers to tighten monetary policy at a point where global economic growth remains fragile.

Mark Haefele, Chief Investment Officer, UBS Global Wealth Management, said in a note to clients that equities could still move higher, despite growing concerns around the impact of inflation and the potential for central banks to tighten policy.

"With current issues still appearing more temporary than structural, we believe equity markets will continue to move higher," Haefele said.

"Indeed, small increases in inflation expectations can be positive for markets if it helps to banish fears of deflation. Furthermore, by our assessment, global growth remains strong, supply chain challenges should recede into 2022, and corporate earnings should continue to grow."

U.S. stock futures point to a 0.1 percent lower open, after the cash index posted a record closing high overnight, led by surging tech shares.

Next week, Facebook, Apple, Amazon, and Google-owner Alphabet all report, with bulls hoping they can follow forecast-beating earnings this week from Netflix.

Meanwhile, yields on benchmark 10-year Treasury notes were at 1.6828 percent, easing back from a five-month high of 1.7050 percent reached overnight.

The dollar index, which gauges the greenback against six major rivals, was down 0.1 percent to 93.639 on Friday, despite initially bouncing off recent lows after U.S. jobless claims fell to a 19-month low, pointing to a tighter labor market.

The Fed has signalled it could start to taper stimulus as soon as next month, with rate hikes to follow late next year. Full employment is among the Fed's stated requirements for rates lift-off.

Fed Chair Jerome Powell speaks later on Friday in a panel discussion.

Across commodities, oil was flat with Brent crude set for its first losing week in seven and West Texas Intermediate its first in nine.

Gold was up 0.5 percent on the back of the weaker dollar, on course for its second week of gains.

STV eyes $1 billion for second Middle East tech fund

STV eyes $1 billion for second Middle East tech fund
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Updated 22 October 2021

STV eyes $1 billion for second Middle East tech fund

STV eyes $1 billion for second Middle East tech fund
  • Interest in the technology industry in the Middle East has increased the past few years as governments seek to diversify their energy-dependent economies

RIYADH: STV, the venture capital arm of Saudi Telecom founded by ex-Google executive Abdulrahman Tarabzouni, is looking to raise at least $1 billion for its second Middle East technology investment fund, making it potentially the biggest fund of its kind in the region.

The company, which was formed in 2017, has started talks with other potential backers, including Middle East sovereign wealth funds and international pension funds and endowments, Bloomberg reported, citing people familiar with the matter.

The people chose to remain anonymous as the details of the fund remain private. STV declined to comment.

Interest in technology has grown significantly with most governments within the region seeking to diversify away from dependency on oil and investors seeking long-term opportunities.

IPOs in the region have also recently taken prominence with Adnoc Drilling coming to the market as the largest IPO on the Abu Dhabi stock market.

STV was an early investor in Careem, which was acquired by Uber in early 2020, and also invested in communications platform Unifonic, which received a $125 million infusion led by SoftBank Group’s Vision Fund 2 in September.

STV took part in 30 percent of all start-up funding rounds in Saudi Arabia and 20 percent in the wider Middle East in recent years, its CEO Abdelrahman Tarabzouni said in June.

Founded in 2017, it invested in 12 funding rounds in Saudi Arabia and the Middle East during the previous nine months, compared with seven rounds during the previous two years, Tarabzouni said.

The venture capital firm, which has a portfolio of $500 million, is considering launching a second fund to invest in the growth of emerging companies and lead advanced rounds in them, he said.

Studies conducted by STV showed that there is an opportunity to create 40 unicorn companies in the Middle East and North Africa (MENA) and Saudi Arabia will have the lion’s share of these companies.