Markets jump on Shareek investment package

Markets jump on Shareek investment package
Saudi Arabia will invest SR12 trillion ($3.2 trillion) in the Kingdom over the coming decade. (Shutterstock)
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Updated 31 March 2021

Markets jump on Shareek investment package

Markets jump on Shareek investment package
  • Riyadh’s Tadawul stock market leaps to five-year high, while oil claws back some of its recent losses
  • Saudi Aramco shares were trading close to an all-time high as the implications of the new Shareek strategy sank in

DUBAI: The financial world has welcomed Saudi Arabia’s ambitious new economic strategy, as analysts digested details of the bold plan to invest SR12 trillion ($3.2 trillion) in the Kingdom over the coming decade.

The Tadawul stock market in Riyadh leapt to a five-year high, while Brent crude, the oil benchmark, clawed back some of its recent losses. Saudi Aramco shares were trading close to an all-time high as the implications of the new Shareek strategy sank in.

Crown Prince Mohammed bin Salman announced late on Tuesday night that the Kingdom would boost economic activity by means of a plan to increase private sector investment, as well as via further investment by the Public Investment Fund, the Kingdom’s sovereign wealth fund. There would also be the stimulus from a new national investment strategy to be announced soon.

Economists and business leaders welcomed the strategy. Nasser Saidi, a Middle East economics expert, said the intention was to “jump start” the Saudi economy in the wake of the recession caused by the COVID-19 pandemic.

“This would be a massive increase in investment that will likely modernize and upscale infrastructure, including digital. As proposed, it should be strongly supportive of non-oil growth, increase overall productivity and lead to job creation for Saudi’s young population,” he added.

The plan involves incentives for publicly quoted companies to channel dividend payments into long-term investment in the Saudi economy. Amin Nasser, the chief executive of Saudi Aramco, which pays the biggest dividend on the Tadawul, said that the new strategy would not prevent the company from meeting its dividend pledges.

“We support this initiative, which is very much aligned with Vision 2030. It promotes GDP growth through new investment and will have a multiplier effect for the Saudi economy,” he told CNBC television.

Yousef Al Benyan, chief executive of petrochemicals giant SABIC, 70 percent of which is owned by Aramco, said the strategy would help it double its capacity. “It will enhance the company’s competitive position on the local, regional and global levels,” he said.

Saidi added that the move from dividends to investment could be a positive one: “This switch is likely to increase the efficiency of investment since SABIC, Aramco and other entities would aim to earn a market return on their investment. This would cut waste and inefficiencies, an overall gain to the economy.”

He also highlighted the impact the Shakeel strategy could have on persuading Saudi citizens to invest directly at home. “This revival of investment and successful program would attract back a fraction of the Saudi private wealth held offshore.”

Other financial experts were also impressed by the scale of the plan, which, along with government and consumer spending, amounts to a SR27 trillion stimulus over the coming decade, the biggest economic boost in the Kingdom’s history.

“Saudi Arabia is in a race against time to diversify its economy away from fossil fuels and is taking bold steps. The targets appear ambitious, but aiming high is what may be required at this juncture,” said Tarek Fadlallah, chief executive of Nomura Asset Management in the Middle East.


Dubai completes first phase of e-commerce free zone

Dubai completes first phase of e-commerce free zone
Updated 18 April 2021

Dubai completes first phase of e-commerce free zone

Dubai completes first phase of e-commerce free zone
  • It includes 470,000 square feet of real estate
  • The e-commerce sector in the Gulf is booming with the forced closure of bricks and mortar shops during the pandemic giving the industry a further boost

DUBAI: The first phase of a new Dubai fee zone dedicated to e-commerce has been completed.
It includes 470,000 square feet of real estate.
The 3.2 billion dirhams ($871 million) Dubai CommerCity project also includes 145,000 square feet of e-commerce logistics units and warehouses in a cluster managed and operated by Hellmann Worldwide Logistics and DHL.
It has leased 51 percent of the logistics warehouses to companies operating across IT, fashion, jewelry and electronics.
“The launch of Dubai CommerCity aims to lead the future of e-commerce business in the region,” said Sheikh Ahmed Bin Saeed Al-Maktoum, chairman of the Dubai Airport Freezone Authority. “The project has been thoroughly studied not only to provide foundational solutions, but also to stimulate and support business and prosperity at a time when the sector is going through peak growth.”
The e-commerce sector in the Gulf is booming with the forced closure of bricks and mortar shops during the pandemic giving the industry a further boost.
The free zone provides opportunities for manufacturers, distributors and global e-retailers while offering tax and investment incentives, it said.
It is divided into three main clusters — Business, Logistics and Social.


Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses
Updated 18 April 2021

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses
  • The deal will help the UAE lender to reduce any risks that may be associated with credit facilities

DUBAI: UAE export credit company, Etihad Credit Insurance (ECI), has signed an agreement with Emirates NBD to improve liquidity of UAE exporters by easing their access to credit facilities.
The deal will help the UAE lender to reduce any risks that may be associated with credit facilities, so businesses can pursue export and expansion opportunities, according to a joint statement.
More than 80 per cent of world trade relies on trade finance, ECI’s chief Massimo Falcioni said, and the agreement will allow Emirates NBD to offer innovative financial solutions to their clients.
Governments in the Gulf have been investing in strengthening local businesses as a strategy to recover from the COVID-19 pandemic, and to gradually veer away from oil-dependence.

 

 


Italian fashion brand Diesel launches online shopping platform in KSA, UAE

Italian fashion brand Diesel launches online shopping platform in KSA, UAE
Updated 18 April 2021

Italian fashion brand Diesel launches online shopping platform in KSA, UAE

Italian fashion brand Diesel launches online shopping platform in KSA, UAE
  • The website will feature new collections of the fashion line, as well as exclusive deals for online shoppers

DUBAI: Italian fashion retailer Diesel has launched its own e-commerce platform for customers in Saudi Arabia and the UAE, the company said on Sunday.
The website will feature new collections of the fashion line, as well as exclusive deals for online shoppers. It will also offer free shipping for customers in both countries.
Diesel has been in the market for four decades and is known for its denim and casual fashion offerings.
The COVID-19 pandemic has created huge demand for online shopping in the Gulf, with many retailers accelerating their digital efforts to take advantage of it


Kuwaiti coffee delivery app raises $10m in new funding

Kuwaiti coffee delivery app raises $10m in new funding
Updated 18 April 2021

Kuwaiti coffee delivery app raises $10m in new funding

Kuwaiti coffee delivery app raises $10m in new funding
  • The funding was provided by Kuwaiti listed investment house Al Imtiaz Investment Group
  • COFE was conceived in 2017 by Kuwait-based founder Ali Al-Ebrahim, developed in Silicon Valley and launched in 2018

DUBAI: Kuwaiti coffee delivery app COFE has raised $10 million in new funding, which it aims to use to scale up its operations in Kuwait, Saudi Arabia, the UAE and the UK and to expand into Egypt and Turkey.
The funding was provided by Kuwaiti listed investment house Al Imtiaz Investment Group. COFE was conceived in 2017 by Kuwait-based founder Ali Al-Ebrahim, developed in Silicon Valley and launched in 2018.
“From its early days, COFE has shown tremendous potential as a unique offering that caters to discerning coffee connoisseurs and their consumption habits, while helping to grow and transform revenue streams for vendors. Our partners have recognized this and are confident in our ability to serve existing customers and vendors, while expanding into new markets,” Al-Ebrahim said in a press statement.
Zev Siegl, a co-founder of international coffee chain Starbucks, is also an adviser to COFE. “I am happy to collaborate with the COFE App team and proud of the success and development they’ve achieved,” Siegl told the Mubasher website in April 2019. “During my stay in Kuwait, I visited more than 20 coffee shops and I was impressed by the high level of service, innovation and the high demand on coffee shops which ensure that the COFE app market will keep on growing and will reach the international market very soon.”


Israel and Greece sign record defense deal

Israel and Greece sign record defense deal
Updated 18 April 2021

Israel and Greece sign record defense deal

Israel and Greece sign record defense deal
  • The agreement includes a $1.65 billion contract for the establishment and operation of a training center for the Hellenic Air Force

JERUSALEM: Israel and Greece have signed their biggest ever defense procurement deal, which Israel said on Sunday would strengthen political and economic ties between the countries.
The agreement includes a $1.65 billion contract for the establishment and operation of a training center for the Hellenic Air Force by Israeli defense contractor Elbit Systems over a 22-year period, Israel’s defense ministry said.
The training center will be modeled on Israel’s own flight academy and will be equipped with 10 M-346 training aircraft produced by Italian company Leonardo, the ministry said.
Elbit will supply kits to upgrade and operate Greece’s T-6 aircraft and also provide training, simulators and logistical support.
“I am certain that (this program) will upgrade the capabilities and strengthen the economies of Israel and Greece and thus the partnership between our two countries will deepen on the defense, economic and political levels,” said Israeli defense minister Benny Gantz.
The announcement follows a meeting in Cyprus on Friday between the UAE, Greek, Cypriot and Israeli foreign ministers, who agreed to deepen cooperation between their countries.