Fitch revises Saudi Aramco’s outlook to stable as oil prices rise

Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative. (Reuters/File Photo)
Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative. (Reuters/File Photo)
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Updated 29 July 2021

Fitch revises Saudi Aramco’s outlook to stable as oil prices rise

Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative. (Reuters/File Photo)
  • Value of Saudi Arabia’s oil exports in May 2021 increased 147 percent to just over SR60 billion

RIYADH: Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative as oil prices improved this year and demand for the crude oil expected to continue increasing through 2022 with more vaccine roll out globally.

Fitch also affirmed the company’s long-term issuer default rating (IDR) at A. The revision of the outlook on Saudi Aramco’s IDR is driven by a similar action on the sovereign, the rating agency said in a report on Tuesday.

“We assess Saudi Aramco’s Standalone Credit Profile (SCP) at ‘AA+,’” Fitch said. This review follows Fitch Ratings decision to raise Saudi Arabia’s sovereign outlook to stable from negative last week due to significantly higher oil prices and continued government commitment to improve its public finances.

Fitch has upgraded Aramco’s credit rating because of improving oil prices, head of research at Riyadh-based Al-Rajhi Capital Mazen Al-Sudairi told Arab news.

“Aramco is expected to generate approximately SR85 billion net profit in the second quarter and the total first half of this year could be 90 percent full-year 2020 earnings, which will further enhance its balance sheet and ratios,” he said.

Aramco’s financial profile benefits from strong pre-dividend free cash flow generation and recently increased but still conservative leverage, the ratings agency said.

Oil exports

The value of Saudi Arabia’s oil exports in May increased 147 percent to just over SR60 billion ($16 billion) from a year earlier while non-oil exports rose by 70 percent, official data showed on Wednesday.

The jump in oil exports was the main driver of the rise in the value of total Saudi exports of goods in May 2021, when merchandise exports jumped by 120.1 percent year-on-year. The May 2020 trade was hit by the COVID-related lockdowns and travel bans.

Over the course of the year to May 2021, Saudi Arabia also significantly raised the share of oil exports in total merchandise exports — from 65.3 percent in May 2020 to 73.2 percent in May 2021. Saudi Arabia’s key trading partner continued to be China, the world’s largest oil importer. In May 2021, Saudi exports to China accounted for 21.4 percent of total exports, followed by India and Japan, with 9.3 percent and 7.5 percent of all Saudi exports, respectively.  

This year, the value of Saudi exports rose after crude oil prices rallied and Saudi Arabia and OPEC+ began to relax their production cuts in May.


Saudi investment chief Al-Falih in Kazakhstan to strengthen economic ties

Saudi investment chief Al-Falih in Kazakhstan to strengthen economic ties
Updated 27 September 2021

Saudi investment chief Al-Falih in Kazakhstan to strengthen economic ties

Saudi investment chief Al-Falih in Kazakhstan to strengthen economic ties

RIYADH: Saudi Investment Minister Khalid Al-Falih met Kazakhstan President Kassym-Jomart Tokayev and Prime Minister Askar Mamin during an official visit to the country on Sunday. 
The two sides discussed ways to enhance bilateral ties and bolster cooperation in different sectors. 
The Saudi delegation met government officials and representatives of major Kazakh companies. 
The visit aims to enhance economic ties between the two countries. During the 5th meeting of the Saudi-Kazakhstan Joint Committee, Al-Falih stressed the importance of promoting mutual and joint investments in the two countries and taking advantage of the available opportunities, especially as the Kingdom’s economy opened its door to foreign investments in several areas.
Al-Falih will also attend the signing of an MoU between the National Companies Entrepreneurship Program of the Ministry of Investment and Kazakh Invest.

 

 

 

 


Saudi stock market inches higher

Saudi stock market inches higher
Updated 26 September 2021

Saudi stock market inches higher

Saudi stock market inches higher

RIYADH: The Tadawul All Share Index ended Sunday’s trading 0.73 percent higher with 82.29 points while the parallel market Nomu declined by 195.17 points or 0.78 percent.

Liquidity in Nomu amounted to about SR35 million whereas liquidity in the main market “TASI” remained around SR6 billion with 169.4 million shares traded, in 243,8000 deals.
Shares of 115 companies increased while stocks of 71 firms declined.

Twelve out of the 21 market sectors rose with basic materials up 2.5 percent, media and entertainment 1.7 percent, long-term and capital goods 0.9 percent.

While the remaining 9 sectors declined. Shares in the investment and finance sector dropped by 1.2 percent, communications 1 percent, and applications and technical services 0.8 percent.


Oman Air seeks oneworld alliance membership

Oman Air seeks oneworld alliance membership
Updated 26 September 2021

Oman Air seeks oneworld alliance membership

Oman Air seeks oneworld alliance membership

DUBAI: State-owned Oman Air announced on Sunday its intention to apply to join the oneworld global airline alliance and said it had asked fellow Gulf carrier and member Qatar Airways to help it.

Oman Air said it had approached Qatar Airways, whose chief executive Akbar Al-Baker is the chairman of the airline group, for guidance in making its application.

“As the industry recovers from COVID, airline alliances are going to be more important than ever,” the airline said in an emailed statement to Reuters.

“This will provide us with excellent global connectivity, a seamless travel experience and more valuable loyalty offerings for our guests.”

A oneworld spokesman said the alliance was at any time in talks with prospective members but that it did not comment on specific airlines.

“As airlines recover from COVID-19, alliances will become more important by providing global connectivity, as airlines reshape their networks, many with reduced fleets when compared to their pre-COVID size,” the onewolrd spokesman said.

A Qatar Airways spokesperson earlier referred comment to oneworld.

There are 14 airlines in the oneworld alliance, including Qantas, American Airlines and British Airways.

Qatar Airways holds direct and indirect stakes in three oneworld members, including British Airways and Cathay Pacific.


Saudi Arabia’s real estate deals rise by 19%

Saudi Arabia’s  real estate deals rise by 19%
Updated 26 September 2021

Saudi Arabia’s real estate deals rise by 19%

Saudi Arabia’s  real estate deals rise by 19%

RIYADH: The value of real estate transactions in Saudi Arabia increased by 19 percent to approximately SR15.59 billion ($4.1 billion) in the period between August and September, as compared to SR13.12 billion in the same period last year, Argaam reported citing figures issued by the Justice Ministry.
The number of real estate transactions recorded during the same period stood at around 20,900.
Commercial real estate deals rose by 93 percent to reach SR5.2 billion compared to the same period last year. 
Residential real estate deals represented 58.3 percent of the total transactions, commercial deals (33.4 percent), and agricultural and industrial deals stood at 8.3 percent.
Riyadh witnessed the largest number of real estate deals worth SR6.88 billion, followed by Jeddah at SR2.21 billion.


Saudi agriculture fund finances projects worth $480m

Saudi agriculture fund finances projects worth $480m
Updated 26 September 2021

Saudi agriculture fund finances projects worth $480m

Saudi agriculture fund finances projects worth $480m

RIYADH: Saudi Arabia’s Agricultural Development Fund approved funds worth SR1.8 billion ($480 million) to support different agricultural projects in the Kingdom since the beginning of the year, Argaam reported citing an official statement.
At a recent G20 meeting in Italy, Saudi Minister of Environment, Water and Agriculture Abdul Rahman Al-Fadhli said the Kingdom has allocated SR12 billion to support small farmers.
The minister noted that agricultural investments in Saudi Arabia, funded by the Agricultural Development Fund, have grown over the past four years by about 400 percent, which has contributed to building a resilient and sustainable food system.
The Kingdom has turned to modern technical methods in the field of agricultural extension, with the aim of reaching the largest segment of farmers in a faster and more efficient manner, the minister said.