Saudi Arabia passes SR2 trillion foreign investment milestone in 2020, despite pandemic

Saudi Arabia passes SR2 trillion foreign investment milestone in 2020, despite pandemic
Foreign investors are looking for opportunities in emerging markets especially the Saudi market, which provides safety and rewarding returns. (Social media)
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Updated 25 April 2021

Saudi Arabia passes SR2 trillion foreign investment milestone in 2020, despite pandemic

Saudi Arabia passes SR2 trillion foreign investment milestone in 2020, despite pandemic
  • The Kingdom generated $46.21 billion in new investment from overseas, at a time when the world was fighting the coronavirus

RIYADH: Foreign investment in Saudi Arabia passed the SR2 trillion ($0.53 trillion) mark for the first time at the end of 2020, despite the financial impact of the COVID-19 pandemic.

The total value of investments from overseas rose 9 percent year-on-year, or SR173.3 billion, in 2020, from SR1.833 trillion at the end of 2019, according to data from the Saudi Central Bank (SAMA).

Fadhel Al-Buainain, a member of the Shoura Council, said that the milestone was remarkable and reflected the attractiveness of the Saudi market. He attributed the growth to the success of government programs designed to diversify the investment opportunities on offer and the legislative processes put in place to support and nurture the Kingdom’s investment ecosystem.

Al-Buainain, who is also a member of the board of directors of the Saudi Financial Association, said the fact that the government was able to attract SR173.3 billion in investment during a global pandemic when travel and movement was restricted and there was a strain on government and corporate reserves was a ringing endorsement of the Kingdom’s handling of the crisis.

“Certainly, foreign capital is looking for opportunities in emerging markets . . . especially the Saudi market, which provides investment opportunities, safety and rewarding returns, in addition to important partnerships in major global pioneering projects,” Al-Buainain said.

He added that the opportunities were a result of the progress made as part of the Vision 2030 program and the partnerships led by the sovereign wealth fund, the Public Investment Fund.

Talat Zaki Hafiz, an economist and financial analyst, said that the increase in capital flowing into Saudi Arabia was due to “the significant improvement in the investment environment in the Kingdom.” This was a result of “the upgrading of a number of investment laws,” he said.

In addition, Hafiz said that the announcement of a number of big projects by the government, such as The Line, and projects related to clean and renewable energy, had attracted the attention of global investors.

“The announcement of the SR27 trillions ($7 trillion) that will be spent by the government over the coming 10 years has attracted the attention of foreign investors,” Hafiz said. “I believe the decision of the government to diversify its economy away from oil has created huge investment opportunities to foreign and local investors.”

The Ministry of Investment of Saudi Arabia (MISA) issued 466 foreign investor licenses in the fourth quarter of 2020, the highest number of licenses recorded in a quarter since 2005. This represented a 52 percent rise compared to the previous quarter and a 60 percent increase over the same period in 2019.

Hafiz said that this was helped by Saudi Arabia improving “significantly” in the World Bank’s Doing Business 2020 report, moving up 30 points to 62 in the latest rankings.

“Saudi Arabia’s impressive reforms in doing business this year show its commitment to fulfilling a main pillar of its National Vision 2030 — a thriving economy,” Issam Abousleiman, World Bank regional director of the Gulf Cooperation Council (GCC), said in October.

“Easing the business climate for local entrepreneurs to thrive as well as foreign investors to work in the Kingdom shows a forward path to creating more jobs for Saudi youth and women, and creating sustainable, inclusive growth.”

Saudi Arabia made its biggest improvement in the area of starting a new business. According to the World Bank, it now costs only 5.4 percent of income per capita to start a business in the Kingdom, compared to the average across the Middle East and North Africa of 16.7 percent.

“One of the most important factors that attracted foreign investors is the issuance of new legislation and amendments in some existing legislation,” according to Ayed Alblaihshi, a municipal investment specialist.

According to the World Bank report, some of the reforms that had a big impact were making it easier to get a construction permit online, the streamlining of the provision of electricity supplies, loosening up access to credit, making it easier to export and import goods and making the insolvency rules much clearer.

Alblaihshi said the fact that the growth was not confined to any specific sector was a tribute to the government’s goal to diversify the economy away from a reliance on a small number of areas, such as hydrocarbons.

“This confirms and strengthens the continuation of confidence in the local market to attract foreign investments during the next period, in order to achieve the goals of Vision 2030,” he said.


Saudi holdings of US treasury bills rose for 2nd month in a row

Saudi holdings of US treasury bills rose for 2nd month in a row
Updated 18 sec ago

Saudi holdings of US treasury bills rose for 2nd month in a row

Saudi holdings of US treasury bills rose for 2nd month in a row
  • The Kingdom is the 16th largest holder of US debt

RIYADH: Saudi Arabia’s holding of US Treasury securities increased for the second consecutive month in July, reaching $128.1 billion, according to new data from the US government.

The holdings increased by 0.2 percent from June, and 2.8 percent from July last year. However, the Saudi holdings in July is down by 5.2 percent from the beginning of the year when it was $135.1 billion, the data showed.

This increase in June and July is in line with global trends, as countries around the world increased their holdings by 5.7 percent in the two months leading up to July.

However, analysis showed that Saudi holdings are still down from their peak of $184.4 billion in February 2020. As the global pandemic took hold in March last year, the Saudi government decreased its holding, as the Kingdom’s reserves were hit by the collapse in oil prices.

In July last year, Saudi Arabia began to boost its holdings once again, peaking in November and then continuing to decline by low single percentages till May 2021.

The Kingdom is the 16th largest holder of US debt. Japan remains No.1 with $1310.2 billion in US bonds, followed by China ($1068.3 billion), the UK ($539.5 billion), Ireland ($319.7 billion) and Switzerland ($298.3 billion).

The UAE holds $58 billion, an increase of nearly 100 percent year-on-year. Kuwait holds $46.4 billion, down by 3.1 percent year-on-year.


Saudi Arabia’s Algosaibi family plans recovery after $7.5bn debt deal

Saudi Arabia’s Algosaibi family plans recovery after $7.5bn debt deal
Updated 8 min 33 sec ago

Saudi Arabia’s Algosaibi family plans recovery after $7.5bn debt deal

Saudi Arabia’s Algosaibi family plans recovery after $7.5bn debt deal
  • It comes after successful negotiations over its $7.5 billion in debt since 2009 – a case many experts saw as a test for Saudi Arabia’s new bankruptcy law

DUBAI: The Algosaibi family is looking to restore some of its businesses after its landmark deal with creditors last week, Bloomberg has reported, citing the conglomerate’s chief restructuring officer, Simon Charlton.

In an interview, Charlton said the company was looking “where it would make the most sense and at what sort of level to return to the market.”

It comes after successful negotiations over its $7.5 billion in debt since 2009 – a case many experts saw as a test for Saudi Arabia’s new bankruptcy law.

Under the deal, Ahmah Hamad Algosabi & Brothers Co (AHAB) will repay its creditors 26 percent of their claim values through a mixture of cash, shares, and Saudi real estate.

“Our hope is that as the company emerges from this and gets access to credit and is back into the credit markets and will be able to raise working capital finance, we’ll be able to rebuild those businesses,” Charlton said.

AHAB will retain most of its operating manufacturing businesses, he added, including logistics, hospitality, and retail.


Aramco’s Wa’ed invests in online gifts marketplace Joi Gifts

Aramco’s Wa’ed invests in online gifts marketplace Joi Gifts
Updated 48 min 45 sec ago

Aramco’s Wa’ed invests in online gifts marketplace Joi Gifts

Aramco’s Wa’ed invests in online gifts marketplace Joi Gifts
  • The funds will be used to drive short-term growth, with initiatives including awareness campaigns and product development

DUBAI: The entrepreneurship unit of Aramco, Wa’ed, was one of the investors in Joi Gift’s recent funding round that gained $2.5 million in proceeds.

Joi Gifts is an online marketplace for gifts, which operates in eight countries, including Saudi Arabia, the UAE, Jordan, and Egypt.

Dubai-based Knuru Capital also participated in the Series A funding round, the startup said in a statement.

The funds will be used to drive short-term growth, with initiatives including awareness campaigns and product development. The company is also planning further regional expansion, after it announced its eighth country market earlier this year.

“We are thrilled with this investment, which enables Joi Gifts to further enhance and improve what is already the MENA region’s leading online one-stop shop for gifts,” Rami Kahale, Joi Gifts chief, said.

The company said the UAE and the Kingdom had some of the highest average spend on gifts globally, which contributes to its success.


Huawei to pump $15m into Middle East’s cloud computing market

Huawei to pump $15m into Middle East’s cloud computing market
Updated 19 September 2021

Huawei to pump $15m into Middle East’s cloud computing market

Huawei to pump $15m into Middle East’s cloud computing market
  • The investment, to be deployed over the next three years, will benefit more than 100 small and medium-sized enterprises (SMEs) in developing their cloud capabilities

DUBAI: Technology giant Huawei announced a $15 million investment to promote the use of cloud computing in the Middle East.

The investment, to be deployed over the next three years, will benefit more than 100 small and medium-sized enterprises (SMEs) in developing their cloud capabilities.

“The Huawei Cloud Oasis Program will thus provide truly unique and rewarding offerings to local businesses, while safeguarding the region’s digital future through extensive training opportunities in the cloud arena,” Eric Wan, vice-president of cloud marketing, ecosystem, and partner development at Huawei Middle East said.

Around $7.6 million will be allocated for partner development, more than $2.5 million to be put behind credits and other cloud resources, and more than $4.5 million in marketing support.

The program was announced at a virtual event last week where Huawei gathered key industry players to explore collaboration in building a high-tech ecosystem.

The move comes as the UAE implements a number of initiatives to boost the country’s digital capabilities – similar to many other countries in the Gulf.


Dubai-based ZENIQ to launch platforms that turn assets into digital tokens

Dubai-based ZENIQ to launch platforms that turn assets into digital tokens
Updated 19 September 2021

Dubai-based ZENIQ to launch platforms that turn assets into digital tokens

Dubai-based ZENIQ to launch platforms that turn assets into digital tokens
  • The first of these platforms, ZENIQ Art NFT, will facilitate the authentication, sale, and transfer of digital artworks in a “safe and secure” environment

DUBAI: A Dubai-based provider of blockchain-based applications is launching a tokenization project to better facilitate the trading of digital assets.

“The project will see the establishment of non-fungible token (NFT) platforms for real estate, gold and precious materials, gemstones, and digital art,” ZENIQ Technologies said in a statement.

The first of these platforms, ZENIQ Art NFT, will facilitate the authentication, sale, and transfer of digital artworks in a “safe and secure” environment.

“We are convinced that the ZENIQ Art NFT, used in conjunction with our secure blockchain platform, will stimulate uptake from artists, buyers and dealers alike and grow the market for digital artworks both in Dubai and internationally,” Erwin Dokter, founder of ZENIQ, said.

Dubai plays an integral role in digital art investments, he said, explaining why the emirate is the perfect place for the project.

“We believe that Dubai will be the focus for the sixth era of world creativity,” Dokter added.