Pace of CEO resignations at listed KSA firms picked up amid pandemic

The largest number of resignations in one company was four within three years. (SPA)
The largest number of resignations in one company was four within three years. (SPA)
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Updated 31 July 2021

Pace of CEO resignations at listed KSA firms picked up amid pandemic

The largest number of resignations in one company was four within three years. (SPA)
  • Three quarters of the resignations were attributed to special circumstances while 8 percent left for other roles

RIYADH: Saudi Arabian listed companies lost CEOs at twice the average annual pace in the first half of the year as the stresses of the pandemic took their toll.  
There were 128 CEO resignations from 97 companies listed on the Tadawul’s main and parallel markets over the past five years for an average of about 25 a year, according to a study by the Capital Market Authority (CMA). However, 26 CEOs resigned in the past six months, Maaal newspaper reported. The largest number of resignations over the past five years came from the telecommunications sector and the real estate management and development sector with six and 13 resignations, respectively, the study showed.
Three quarters of the resignations were attributed to special circumstances while 8 percent left for other roles. The largest number of resignations in one company was four within three years.
Developing the Saudi market to align with Vision 2030 requires good investment tools and excellent financial results, and the pandemic revealed the inability of some executive departments in some companies, in dealing with the risks and changes occurring, and the lack of capabilities to help them lead companies, Faiz Alhomrani, a financial market analyst told Arab News.

HIGHLIGHT

The largest number of resignations over the past five years came from the telecommunications sector and the real estate management and development sector with six and 13 resignations, respectively, the study showed.

Companies’ shareholders started to see that some CEOs or executive departments did not provide anything, and they couldn’t achieve positive results, neither in financial results nor in cash distributions, during three to four years, Alhomrani said.
“I think four years for a CEO is enough time to be evaluated,” he said.
The number of resignations in 2017 and 2020 was the highest during the study period (2016-2020), which may be attributed to unfavorable economic conditions during those years, with 45 percent of year 2020 resignations occurring in the fourth quarter.
Previous studies confirm that the biggest reason behind forced resignations is the company’s poor performance, CMA said.
The Saudi market today has moved from an internal local market to a global market and has begun to be closely linked to global markets, thus if CEOs have not new ideas, they will have to resign, said Alhomrani.
Major Saudi companies to have lost a CEO last year include STC, Almarai, Savola, Sipchem, Petrochem, Samba, Alinma Bank, Bank Aljazira, NCB and ANB.


Saudi, Oman ties open door for businesses to explore opportunities in the sultanate

Saudi, Oman ties open door for businesses to explore opportunities in the sultanate
Updated 19 September 2021

Saudi, Oman ties open door for businesses to explore opportunities in the sultanate

Saudi, Oman ties open door for businesses to explore opportunities in the sultanate
  • Several KSA businesses in talk with their Omani counterparts to expand into the sultanate

JEDDAH: More Saudi businesses are actively exploring investment opportunities in Oman following recent reciprocal visits of Saudi and Omani top officials.
The visits have given a new impetus to the bilateral ties and slammed open doors of new opportunities for both countries in various sectors.
Among a long list of such businesses are Al Sayadiyah United Co. and Luberex Co. for Trade and Industry, which are reportedly in talks with their Omani counterparts to expand into the sultanate. 
Marwan Raffa, CEO of the Kingdom-based Al Sayadiyah United Co., said the company has been operating for about 40 years. It trades in fish and seafood items from different Gulf Cooperation Council countries and expects a very good experience in trade operations with Oman.
The CEO is in touch with Oman's counterparts to expand business operations in the country.
He said the Kingdom’s relationship with other countries, of course, would affect his line of work.
“Good relationships open up more opportunities,” he said.

FASTFACTS

Currently, the total Saudi investments in Oman amount to nearly SR24 billion and Omani investments have reached over SR4 billion.

The trade volume between the two countries amounted to more than SR2 billion ($533)

Oman’s coasts and beaches are no less than 3,000 km long. He said it is a great and fruitful place for his business.
“The location of the Sultanate of Oman in the south of the Arabian Peninsula and its coasts overlooking the Indian Ocean in the south and the Arabian Sea in the east, with a length of more than 3,000 km, makes it a treasure trove of marine life and an excellent and rich source of seafood,” he said.
Al Sayadiyah has 12 restaurant branches in the Kingdom — 10 in Jeddah and 2 in Riyadh.
Ali Al-Attas, CEO of Luberex Co. for Trade and Industry. His company makes car oil in Oman.
“We want to open a market in Oman and neighboring countries,” Al-Attas told Arab News.
He said manufacturing in Oman has high-quality outcomes. “Oman’s manufacturing quality is well known, just as Saudi Arabia’s industrial manufacturing.”
“Its process for investment is easy as well,” he added.
Luberex was established in 2016 and manufactures all types of car oils in Oman, and manufactures more items such as paint spray and rust remover in Riyadh.
Their annual turnover is $3 million-$5 million, and they are looking to be listed on Tadawul.
Oman’s Sultan Haitham bin Tariq recently visited Saudi Arabia during which the two sides agreed on several initiatives including boosting Saudi investments in Oman’s Duqm region, cooperation in the energy, food, culture, sports, and tourism sectors.
Saudi and Omani businessmen are also considering setting up a joint venture specialized in petrochemicals and chemicals, Argaam reported recently.
The report quoted Nasser Al-Hajri, chairman of the Saudi-Oman Joint Business Council as saying, “Saudi businessmen are looking for major investments in Oman’s industrial, petrochemical, chemical manufacturing, fish farming, mining, food, animal feed, tourism and real estate sectors.
The proposed name of the  joint venture is “Gulf Company.”
Saudi businessmen are keen on investing in Oman, provided they get better incentives and facilities, Al-Hajri said.
The trade volume between the two countries amounted to more than SR2 billion ($533 million) in the first quarter of 2021.
The number of Saudi investors in Oman has reached 1,235 whereas 320 Oman companies have so far invested in various sectors in the Kingdom.
Currently, the total Saudi investments in Oman amount to nearly SR24 billion and Omani investments have reached over SR4 billion.


UAE, UK sign deal to strengthen cooperation on climate action

UAE, UK sign deal to strengthen cooperation on climate action
Updated 19 September 2021

UAE, UK sign deal to strengthen cooperation on climate action

UAE, UK sign deal to strengthen cooperation on climate action
  • The MoU comes ahead of the UN COP26 climate summit in November

DUBAI: The UAE and the UK on Saturday signed a memorandum of understanding to strengthen cooperation to accelerate measures to protect environment.

The MoU comes ahead of the UN COP26 climate summit in November, due to be hosted by the UK in the city of Glasgow and offers a framework for wide-ranging cooperation by government entities, companies, and research agencies in support of realizing COP26 goals.

UAE Minister of Industry and Advanced Technology, Dr. Sultan Al-Jaber, who is also special envoy for climate, and UK Minister of State for Middle East and North Africa James Cleverly signed the memorandum, which recognizes that strong, decisive climate action can be an engine for economic growth.

HIGHLIGHT

Under the MoU, the UAE and the UK will work together in seeking to deliver on the Paris Agreement, including by reducing emissions to keep 1.5 degrees in reach, facilitating greater action on adaptation, mobilizing finance for climate action and collaborating on pathways to low emission and climate-resilient growth.

Under the MoU, the UAE and the UK will work together in seeking to deliver on the Paris Agreement, including by reducing emissions to keep 1.5 degrees in reach, facilitating greater action on adaptation, mobilizing finance for climate action and collaborating on pathways to low emission and climate-resilient growth.

Al-Jaber said: “Fifteen years ago, the UAE made a strategic decision to invest heavily in innovation and low-carbon energy, especially renewables and in partnership with other countries. 

“Today’s MoU, on the eve of the UN climate summit in Glasgow, builds on our long-standing partnership with the UK, including on environmental cooperation and investment. We look forward to strengthening our collaboration across all sectors to help support and realize the bold ambitions the UK has outlined for COP26.”

The UAE was the first country in the region to ratify and sign the Paris Accords and the first in MENA to set an economy-wide reduction in emissions by 2030, as part of its second Nationally Determined Contributions. 

November’s UN climate summit will see the official launch of the Agriculture Innovation Mission for Climate , co-founded by the UAE and the US with endorsement from the UK’s COP Presidency. 


Flexible-work platform attracts more than 10,000 Saudis since launch

Flexible-work platform attracts more than 10,000 Saudis since launch
Updated 19 September 2021

Flexible-work platform attracts more than 10,000 Saudis since launch

Flexible-work platform attracts more than 10,000 Saudis since launch
  • The ministry seeks to achieve a target of 57,000 contracts via the platform by the end of 2022

RIYADH: A platform to help workers find part-time and freelancing work in Saudi Arabia has managed to attract interests from more than 10,000 seekers of flexible work hours since May 2020, according to the Ministry of Human Resources and Social Development.

The ministry seeks to achieve a target of 57,000 contracts via the platform by the end of 2022, Al-Eqtisadiah newspaper reported, citing the ministry.

The ministry launched the platform, known as Marn, which offers hourly-based employment and does not require employers to pay end-of-service benefits.

BACKGROUND

The ministry launched the platform, known as Marn, which offers hourly based employment and does not require employers to pay end-of-service benefits.

The platform appeals to employers because it reduces their overheads and means they are only paying wages when they receive orders. The retail and wholesale sectors have benefited most from the flexible work system, along with the construction and logistics sectors, the newspaper added.

In 2020, Minister of Human Resources and Social Development Ahmed Al-Rajhi, launched mrn.sa, platform.

Under the system, an employee’s working hours with a single employer should be less than half the total working hours at the facility.

The flexible work contracts are limited to Saudis only.


ACWA Power bets big on Uzbekistan growth

ACWA Power bets big on Uzbekistan growth
Updated 18 September 2021

ACWA Power bets big on Uzbekistan growth

ACWA Power bets big on Uzbekistan growth
  • ACWA has invested about $1.2 billion in Uzbekistan thus far
  • ACWA plans to contribute to $100 million Uzbekistan fund

MOSCOW/RIYADH: In the crowded corridors of the Hilton Tashkent City, ACWA Power Chairman Mohammad Abunayyan talks quietly with key delegates of the Islamic Development Bank’s annual meeting in Uzbekistan, who approach him one after another.

Abunayyan, a lean, middle-aged, intelligent-looking man is with IDB officials celebrating the launch of the $100 million Economic Empowerment Fund for Uzbekistan earlier this month.

ACWA Power is planning on becoming one of the Saudi investors that will make up 45 percent of the fund, which is also being financed with money from the Islamic Development Bank and the Uzbek government.

ACWA’s contribution would be the latest in a long line of investments in the Central Asian nation, where the utility now has assets worth $4.6 billion having invested about $1.2 billion, according to the prospectus for its initial public offering that was launched earlier this month.

Although that is less than one tenth of the SR248 billion ($66 billion) of assets ACWA has accumulated globally since it was established in 2004 with what Abunayaan describes as a small equity investment. Abunayaan joined the board in 2008.

Beyond its home market in Saudi Arabia, ACWA also owns assets in Turkey, South Africa, Vietnam and Egypt.

Still, Uzbekistan is an important market for ACWA Power.

In 2020, the company was awarded three projects: Sirdarya Combined-Cycle Gas Turbine (CCGT) independent power producer (IPP) with 1,500 MW of gross contracted power capacity; the 500 MW Bash Wind IPP; and the 500 MW Dzhankeldy Wind IPP.

The company’s fourth and largest Uzbek asset in Uzbekistan is the Karakalpakstan 1,500 MW Wind IPP project, valued at $2 billion. The Karakalpakstan, Bash and Dzhankeldy projects are at advanced stages of development and Sirdarya IPP is under construction.

ACWA Power’s investments in Uzbekistan represent a sizeable chunk of total foreign direct investment (FDI) that the country has received in recent years.

“Uzbekistan attracted $2 billion in FDI in 2020 and targets another $5 billion this year,” Atabek Nazirov, director general of the Direct Investment Fund of Uzbekistan, told Arab News on the sidelines of the IDB’s two-day conference on Sept. 3.

Such investments mean a long-term relationship between ACWA Power and Uzbekistan.

“[In our projects] we need to lay the foundation for a long-term partnership, this is a relationship that lasts for 20, 25, 30 years,” Tom Teerlynck, executive vice president of ACWA Power, told Arab News at the IDB meeting.

“The early years go very smoothly because everybody is happy — agreements signed, infrastructure is being built, the services being provided,” he said. “But problems come in later when people in ministries or private companies change. So, it’s very important to lay very robust foundations.”

Uzbekistan officials are confident that ongoing reforms will propel economic growth, despite the global shock caused by COVID-19.

“In 2020, Uzbekistan was the only economy in the Central Asia region that did not have a negative gross domestic product [GDP],” said Direct Investment Fund of Uzbekistan’s Nazirov. “We were able to achieve just above 1 percent growth.”

The government is forecasting economic growth of 6.5 percent this year although that is a conservative scenario and it is hoping for closer to 7 percent, Ilhom Norkulov, Uzbekistan’s deputy minister of economic development and poverty reduction, told Arab News at the IDB meeting.

“For the next five years our target is to increase GDP to $100 billion so we are working to create conditions for the economy to grow 6-7 percent a year,” he said.

However, Uzbekistan’s economy is facing tailwinds in the form of a high inflation rate – expected at 10-11 percent this year – unemployment of 10.5 percent in 2020 (up from 5.8 percent in 2017) and a decline in average monthly wages to a low of $226 in the fourth quarter of 2018 from a peak of $415 in 2016, but back to $280 in the second quarter 2021, according to official data.

Government officials say they are fully aware of the issues, and maintaining economic reforms and income growth should ease the employment and wage conditions over the long run.


Italy tops list of countries importing Egyptian products during first half of year

Italy tops list of countries importing Egyptian products during first half of year
Updated 18 September 2021

Italy tops list of countries importing Egyptian products during first half of year

Italy tops list of countries importing Egyptian products during first half of year
  • Egyptian exports witnessed a remarkable increase during the first half of this year, by 35.4 percent

CAIRO: Official data revealed that Italy topped the list of the largest importers of Egyptian products during the first half of this year, recording $1.140 billion.

In second place was the US with Egyptian exports amounting to $1.103 billion. Saudi Arabia came in third place with $1.095 billion, followed by India in fourth place with exports worth $1.028 billion, and Turkey with total exports of $997 million.

According to data issued by the Central Agency for Public Mobilization and Statistics in Egypt, Egyptian exports witnessed a remarkable increase during the first half of this year, by 35.4 percent.

The data indicates an increase in the value of Egyptian exports to various countries to a record $19.4 billion, compared to $14.3 billion during the same period in 2020.

According to the data, the top 10 countries on the list accounted for 45.8 percent of the total value of Egyptian exports during the first half of this year. Petroleum products ranked first on the list of the 10 most important commodities exported by Egypt to various countries during the first half of this year, with a total of $2.7 billion.

In second place came crude oil exports with a value of $1.045 billion, followed by fresh fruits with a value of $943 million, ready-made garments with exports worth $920.2 million, fertilizers with $818.5 million, and plastics in their primary forms with $759.3 million.

CAPMAS data indicated that the top 10 commodities on the list represented 43.2 percent of the total value of Egyptian exports during the first half of this year.