Fledgling UAE rail network step toward bridging the Gulf

Fledgling UAE rail network step toward bridging the Gulf
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A picture taken on April 1, 2021 shows a technician working at waggons of the Etihad Rail network, in Al-Mirfa, in the United Arab Emirates. (AFP)
Fledgling UAE rail network step toward bridging the Gulf
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Employees working in the main wagon of a train of the Etihad Rail network, in Al-Mirfa, in the United Arab Emirates. (AFP/Giuseppe Cacace)
Fledgling UAE rail network step toward bridging the Gulf
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Etihad Rail, when completed, will run across a 1,200-kilometer track that will connect all of the emirates. (AFP/Giuseppe Cacace)
Fledgling UAE rail network step toward bridging the Gulf
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It will run from Ghweifat in the western region of Abu Dhabi to the emirate of Fujairah on the eastern coast. (AFP/Giuseppe Cacace)
Fledgling UAE rail network step toward bridging the Gulf
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The rail network will eventually also link with neighboring Saudi Arabia. (AFP/Giuseppe Cacace)
Fledgling UAE rail network step toward bridging the Gulf
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A stop sign near a train of the Etihad Rail network, in Al-Mirfa, in the United Arab Emirates. (AFP/Giuseppe Cacace)
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Updated 25 June 2021

Fledgling UAE rail network step toward bridging the Gulf

Fledgling UAE rail network step toward bridging the Gulf
  • Etihad Rail will operate 750 miles of track connecting all of the emirates and Saudi Arabia
  • The long-term plan is to be part of a wider railway network connecting all six GCC countries

ABU DHABI: In the desert emirate of Abu Dhabi, Ibrahim Al-Hammadi inspects a freight train on the UAE’s first railway line. He climbs aboard the locomotive, does a final systems check and then it’s full steam ahead.
Hammadi is the first Emirati to become a train driver — in a country which already has a space program and two of the world’s biggest airlines, but is only now developing a rail network to connect all seven of its emirates.
“I was intrigued when I saw the train operating,” the 23-year-old told AFP. “It was something new, and it pushed me to ask around about learning how to drive it.”
The United Arab Emirates is well known for its audacious infrastructure and technology projects. It successfully sent a probe to Mars earlier this year, and the world’s first superfast hyperloop system is planned to link its two main cities, Dubai and Abu Dhabi.
When completed, Etihad Rail will operate 1,200 kilometers (750 miles) of track connecting all of the emirates — from Ghweifat in the western region of Abu Dhabi to the emirate of Fujairah on the eastern coast — and link with neighboring Saudi Arabia.
The long-term plan is to be part of a wider railway network that would connect all six Gulf Cooperation Council countries, including Bahrain, Kuwait, Oman and Qatar as well as the UAE and Saudi Arabia.
A spirit of competition between the emirates, which each have their own specialities and areas of interest, is credited with holding back the national rail project.
“There has been some hesitance from the federal government to spend on national economic integration projects... along with traditional issues on emirate-level sovereignty,” Karen Young, senior fellow at the Middle East Institute, told AFP.
“The UAE is a federal system and its centralization of authority and economic and development policy within (the federal capital) Abu Dhabi are still relatively new.”

And so far there has been little progress on the multi-billion-dollar GCC railway, which has languished after a feasibility study was approved by the six countries back in 2004.
“The rail projects within the GCC have been in a planning process for years, part of bigger goals of trade and economic integration within the regional organization of the Arabian peninsula,” Young said.
“That integration has faced a number of obstacles, from a shared currency policy that is now moot, to the dispute with Qatar which severed basic investor rights, citizen travel and trade.”
That dispute, which lasted for more than three years before being resolved in January, saw Saudi Arabia and its allies, including the UAE, sever ties with Qatar in June 2017 partly over allegations that Qatar was too close to Iran. Doha denied the accusations.
Hammadi works on Etihad Rail’s first section of line, which covers 264 kilometers and has been operational since 2016.
He drives trains transporting granulated sulfur from Abu Dhabi’s inland fields in Shah and Habshan to the port of Ruwais.
Freight is currently the line’s main focus but as it is extended through the mountains between the emirates of Dubai and Fujairah, the line is also set to offer passenger services that will run at speeds of up to 200 kph (125 mph).
That will provide an alternative to the UAE’s network of mega-highways, some more than a dozen lanes wide, which carry endless streams of motorists in a car-dependent nation, as they zip through canyons of skyscrapers or rocky mountains, and towering dunes.

The UAE hopes the rail network’s supply chain will help diversify its oil-dependent economy.
“Railways have always been a vital component in the economic, social and strategic growth of countries around the world,” Hammadi told AFP.
“It developed the infrastructure in the western region (of the UAE), increased security and safety on the roads and lessened congestion.
“The Etihad Rail project will connect the country’s key centers of trade, industry and population.”
For the project’s first stage, Etihad Rail operates seven locomotives and 240 freight wagons, with each locomotive hauling up to 110 wagons as it crosses the country’s vast desert.
In the Abu Dhabi control room, Maitha Al-Remeithi, the first female Emirati train controller, walks from one section to another monitoring the dozens of screens in the room.
For Remeithi — who started working with Etihad Rail in 2017 — it was her passion for something “unique, exciting and new” that drove her toward the rail industry.
“The railway is growing every day, and as I am involved in the daily running of the operation, I can see its positive impact within the transport sector from safety, environmental and logistics perspectives,” the 30-year-old said.
Etihad Rail says that one full freight train can replace 300 trucks, and cut CO2 emissions by 70-80 percent.
“Using rail as a mode of transport means fewer trucks on the roads; the need for road maintenance is less and CO2 emissions are less,” Remeithi said.


Saudi stock market index hits 14-year high

The Tadawul All-Share Index (TASI) on Tuesday reached its highest level since January 2008 with 11,209 points. (Shutterstock/File Photo)
The Tadawul All-Share Index (TASI) on Tuesday reached its highest level since January 2008 with 11,209 points. (Shutterstock/File Photo)
Updated 03 August 2021

Saudi stock market index hits 14-year high

The Tadawul All-Share Index (TASI) on Tuesday reached its highest level since January 2008 with 11,209 points. (Shutterstock/File Photo)
  • Fitch Ratings also recently confirmed the long-term rating of Saudi Arabia at “A” with a change in the future outlook to stable

JEDDAH/RIYADH: The Tadawul All-Share Index (TASI) on Tuesday reached its highest level since January 2008 with 11,209 points.

The market index has witnessed a gradual rise since the beginning of the year, reaching about 2,500 points or 28.7 percent. The optimism in the market is also attributed to the rising oil prices following the easing of global COVID-19 restrictions and OPEC+ deal.

“The Tadawul index is benefitting today from many factors including the increase in the number of listed companies over the past 5 years and the rising investor confidence as the Kingdom is recovering from the pandemic,” said Faiz Alhomrani, a financial market analyst told Arab News. “The market today also benefited from the strong results of the banking and petrochemical sectors.”

Alhomrani also said that the increase in the oil prices also supported the markets as it is an indicator of increased government spending, adding that Tadawul might hit new highs around 13-14,000 points but this might take two years.

Saudi Finance Minister Mohammed Al-Jadaan recently said the coronavirus disease (COVID-19) pandemic in the Kingdom is very much under control.

Fitch Ratings also recently confirmed the long-term rating of Saudi Arabia at “A” with a change in the future outlook to stable, and Capital Economics raised its forecast for the growth of the Saudi economy from 2.2 percent to 4.8 percent during the current year, and from 4.1 percent to 6.3 percent in 2022. 

Tadawul had recorded its highest level on Sept. 9, 2014 session at 11,160 points, and the market's rise at that time came after the approval of the Saudi Cabinet to open the stock market to qualified foreign financial institutions, according to Argaam.


Dubai-based company setup firm expands operations in Saudi Arabia

Dubai-based company setup firm expands operations in Saudi Arabia
Updated 03 August 2021

Dubai-based company setup firm expands operations in Saudi Arabia

Dubai-based company setup firm expands operations in Saudi Arabia

RIYADH: Pro Partner Group, a Dubai-based company specializing in company formations, has expanded its operations in Saudi Arabia.

It was established in 2014 and has offices in Abu Dhabi, Dubai, Oman, and Qatar. The company helps new entrants into the market to manage the legal requirements, arrange employment visas and other paperwork.

The company aims to take advantage of the Riyadh Strategy 2030 announced by Crown Prince Mohammed bin Salman in January. 

“Companies both large and small are already looking at the benefits of setting up a business in the Kingdom and taking advantage of commercial opportunities that are potentially more lucrative than in neighboring markets,” said Jane Ashford, founder, and chair of PRO Partner Group.

Under the ambitious Riyadh strategy, the Saudi government wants to attract up to 500 international companies to set up their regional bases in the city, creating around 35,000 new jobs for Saudi locals and doubling the capital’s population. The strategy aims to invest up to SR70 billion ($18.67 billion) in the national economy by the end of the decade and it is already attracting international players eager to expand into the Kingdom.

“I see Saudi Arabia as our biggest opportunity of the region by far. And I think in the next two to three years, our business in Saudi Arabia should eclipse our UAE business and Qatar business,” said Nazar Musa, CEO of Pro Partner Group.

“This year, we are 60 percent more than Q1 of last year, and Q1 of last year was 30 more than the year before,” Musa said of the company’s recent growth.

Musa said the recent announcements by the Saudi government had spurred interest among companies to expand their operations to the Kingdom. “Obviously, there are businesses that have been there for years and years, but I’m talking about the kinds of companies that are starting to speak to us for the first time about opportunities in the Kingdom,” he said.

The Global Entrepreneurship Monitor (GEM) 2020/2021 report, which surveyed adults aged between 18 and 64, found that 90.5 percent of those surveyed in Saudi Arabia believed there were good opportunities to start a business in their area, ranking it first in the world among 43 countries surveyed.


Saudi Aramco investors expect profit surge after strong first half

Saudi Aramco investors expect profit surge after strong first half
Updated 03 August 2021

Saudi Aramco investors expect profit surge after strong first half

Saudi Aramco investors expect profit surge after strong first half
  • Investors looking for news on size of dividend
  • JP Morgan predicts $23.7bn of net income

DUBAI: The oil reporting season will reach a climax next week with the announcement of first half results from the biggest company in the sector, Saudi Aramco.

With strong crude prices for most of the six months to June 30, and rising output as OPEC+ constraints were steadily lifted during the period, analysts are expecting a big increase in profits from the Saudi oil giant.

Analyst Christian Malek at JP Morgan is forecasting around $23.7bn of net income, a huge jump on the $6.6bn Aramco reported last year after the oil price collapsed as the COVID-19 pandemic severely hit demand.

“Against a positively trending demand/price backdrop, we expect a robust quarterly net income print from Aramco,” Malek said in a recent report to investors.

Higher oil prices, seasonally higher gas volumes, strong conditions in the petrochemical business and higher throughput from the start up of the Jazan facility will contribute to a strong first half performance, he added.

But analysts will also be looking for news on the dividend. At the time of its flotation in late 2019, Aramco promised at least $75bn per year in payouts to shareholders, but there is increasing speculation that the company might pay a higher special dividend for the first half, buoyed by strong financials. Other big oil companies like Shell, BP and Total all announced measures to boost shareholder returns in results this week.

“There is a logic to the argument for a special dividend this time round,” Malek told Arab News. “Aramco has done fantastically well consolidating fiscally. The majors in the oil sector have all been looking at ways of returning cash to shareholders, and there is no reason Aramco should be an exception.”

Other analysts agreed that there was scope for Aramco to boost its dividend.

“Aramco has had a fantastic year so far, and the results will be good,” said Ranjith Raja, head of MENA oil and shipping research at data group Refinitiv. “Other oil companies announced dividend increases or share buy-backs, so why not Aramco? They would not only be meeting the $75bn promise, but going beyond that, which would be very good for investor sentiment.”

In a program of investor and media calls after the results are announced on Sunday, analysts will ask CEO Amin Nasser about plans for further asset sales after the disposal of a stake in its pipeline business earlier this year, and for an update on the renewed talks about a link-up with Indian refining and petrochemicals group Reliance Industries.

They will also seek guidance on the progress of plans to sell another tranche of shares in Aramco, believed to be under consideration at the company.

Aramco’s finances are regarded as especially strong in a global oil sector that is just beginning to recover from the pandemic recession.

Last week, ratings agency Fitch upgraded Aramco’s status from negative to stable, explaining “Saudi Aramco’s financial profile is conservative compared with that of international integrated oil producers.”

Aramco’s Tadawul-traded shares fell 1.9 percent on Aug. 3 to SR38.25 a piece.


Standard Chartered posts highest half-year MENA profit in 5 years

Standard Chartered posts highest half-year MENA profit in 5 years
Updated 03 August 2021

Standard Chartered posts highest half-year MENA profit in 5 years

Standard Chartered posts highest half-year MENA profit in 5 years
  • MENA operating profit reaches $476 million, up from $91 million a year earlier
  • MENA income was flat, rose 6 percent in Africa

JEDDAH: Standard Chartered Bank reported its biggest half-year operating profit in the Middle East and North Africa for five years as wealth management income increased and credit impairments fell.

The emerging market-focused lender posted an operating profit in MENA of $476 million in the six months to the end of June, up from $91 million a year earlier, it said in a statement. Globally, it reported a 57 percent increase in pretax profit to $2.55 billion, announced a $250 million share buyback and a $94 million dividend.

Income in the MENA region was flat year on year after being impacted by rate cuts and currency devaluation, which provided a drag of about 8 percent, the bank said. Income in Africa grew by 6 percent on a constant currency basis.

There was a significant improvement in the bank’s return on tangible equity in the region, and it reported a “great turnaround story in the UAE, with significantly improved returns.”

“This is the result of all the hard work the team has put in over the years and the execution of some tough decisions we made to drive efficiencies and reduce risk,” said Sunil Kaushal, regional CEO, Africa and Middle East. “This has happened during a period when the backdrop, while improving, remains uncertain and challenging and is a true testament to the resilience of our underlying business.”

“We are excited about the recent expansion of our network into the Kingdom of Saudi Arabia,” he said. “We will leverage our presence in the Kingdom to promote trade, investment and capital flows in support of the Saudi Vision 2030.”

Standard Chartered has launched digital banking platforms in nine key African Markets – Cote d’Ivoire, Uganda, Tanzania, Ghana, Kenya, Botswana, Zambia, Zimbabwe and Nigeria – the adoption of which has been accelerated by the pandemic, the bank said.


Saudi Arabia’s financial wealth exceeds $1tn as next generation takes over

Saudi Arabia’s financial wealth exceeds $1tn as next generation takes over
Updated 03 August 2021

Saudi Arabia’s financial wealth exceeds $1tn as next generation takes over

Saudi Arabia’s financial wealth exceeds $1tn as next generation takes over
  • Wealth to grow 4.1 percent annually through 2025
  • Saudi Arabia represents 45 percent of GCC financial wealth

RIYADH: Saudi Arabia’s financial wealth is expected to grow by 4.2 percent annually over the next five years, hitting $1.2 trillion in 2025 as the Kingdom sees more young people take over ventures, according to a study by Boston Consultancy Group (BCG).

The Kingdom’s wealth grew by 4.1 percent on annual basis from 2015 to hit $1 trillion in 2020, 84 percent of which is investable wealth, the report said, noting the Kingdom’s resilience in the face of the protracted COVID-19 pandemic.

Last year, Saudi Arabia represented 45 percent of the Gulf Cooperation Council’s (GCC) $2.2 trillion in 2020 of financial wealth, which is forecast to reach $2.7 trillion in 2025, BCG said.

The rise of the next-generation affluent and high-net-worth clients will have impact on the business landscape, BGC said in the report. These individuals, between 20 and 50 years of age, have longer investment horizons, a greater appetite for risk, and often a desire to use their wealth to create positive societal impact as well as earn solid returns, it said.

However, many wealth managers are not yet ready to serve the new young business leaders.

“Saudi Arabia’s growth of wealth has proven to be robust, springing back from challenges presented by the COVID-19 pandemic,” said Mustafa Bosca, managing director and partner at BCG.

“The Kingdom’s Vision 2030 has been a driving force to increasing economic productivity, which also is allowing Saudis to participate in an ever-more-global economy which has enabled growth in wealth despite the many economic disruptions that have occurred in recent times,” he said.