Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales

Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales
Saudi Arabia’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19). (Shutterstock/File Photo)
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Updated 03 August 2021

Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales

Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales
  • The value of Saudi Arabia’s oil exports in May increased by 147 percent to just over SR60 billion from a year earlier

RIYADH: Saudi Arabia’s net foreign assets rose 2 percent in June, recovering slightly from their lowest level in more than a decade as the Kingdom’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19).

Data from the Saudi Central Bank (SAMA) showed the foreign assets — a measure of its ability to support its dollar-pegged currency — rose by SR34 billion ($9.1 billion) to SR1.65 trillion from May to June. Total assets increased by SR16.18 billion to SR1.842 trillion, the central bank said on Saturday.

The value of Saudi Arabia’s oil exports in May increased by 147 percent to just over SR60 billion from a year earlier, while non-oil exports rose by 70 percent, the General Authority for Statistics showed last month.

The recent decline in Saudi Arabia’s foreign reserves to the lowest level in a decade was partly due to a lag between import payments and export receipts, the SAMA’s governor told Reuters last month.

The ratio of SAMA’s total assets at the end of July increased by 0.8 percent over the previous month and amounted to SR1.842 trillion. The rise in total assets is due to the rise in investments in securities abroad, which amounted to SR1.13 trillion, an increase of 0.5 percent over the previous month. The value of foreign exchange amounted to SR271 billion, an increase of 0.2 percent.

Net foreign assets declined significantly in 2020 as lower oil income strained finances and officials transferred $40 billion to the Kingdom’s sovereign fund to fuel an investment spree. The indicator — which topped $700 billion in 2014 after an oil boom increased savings — now stands at SR1.66 trillion.

The state’s general reserve declined during the period 2016 to 2020 from SR640 billion to SR358 billion, due to the increase in projects as a part of the Vision 2030 reform plans. The state is pouring significant funds on projects which will be compensated by future income, Zaed Alfaded, a financial analyst, told Arab News. These income streams are expected to increase with the country diversifying its economy away from oil and its price fluctuations, he added.

The government’s current account dipped from SR89 billion to SR52 billion, and then rose again to SR70 billion, as the government spent on its urgent requirements, Alfaded said.

Central bank data showed on Saturday that the issuance of SAMA bills, an indicator of increased lending to local banks, also declined, which Alfaded attributed to the bank’s plans to contain inflation and direct customers to save and invest. 

This strategy, he said, will reflect positively on the markets for trading in financial assets and other investment assets in the Saudi economy.


PIF lender SRC acquires new housing portfolio from Banque Saudi Fransi

PIF lender SRC acquires new housing portfolio from Banque Saudi Fransi
A common residential area built above on the desert near the corniche park in the Dammam, Saudi Arabia (Shutterstock)
Updated 17 sec ago

PIF lender SRC acquires new housing portfolio from Banque Saudi Fransi

PIF lender SRC acquires new housing portfolio from Banque Saudi Fransi
  • It follows other partnerships with banks and real estate finance companies in the Kingdom
  • The company expects the acquisition to provide “long-term liquidity to the housing market”

DUBAI: The Saudi Real Estate Refinance Company has signed its second housing finance portfolio purchase with Banque Saudi Fransi.

The company, which is wholly owned by the Public Investment Fund, expects the acquisition to provide “long-term liquidity to the housing market.”

“We have illustrated to primary originators in the Kingdom the crucial role we play in developing the housing market and supporting their businesses through liquidity and risk management solutions,” SRC chief Fabrice Susini said.

It follows other partnerships with banks and real estate finance companies in the Kingdom, as SRC seeks to promote stability in the real estate finance market. 

“SRC has played a vital role in ensuring that the Vision 2030 housing program objectives are being met and we expect ourselves to play a significant role in this by supporting them,” Rayan Fayez, managing director and chief executive officer of BSF, said.


Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO

Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO
Image: Shutterstock
Updated 28 min 13 sec ago

Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO

Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO
  • Although America continues to be their biggest market, Asia is going to be very important in the future Investcorp
  • The company is currently pursuing a five-year growth plan

Bahrani investment company Investcorp has ambitious plans to be a 100-billion-dollar company in seven years, its chief Mohammed Al-Ardhi said, saying the company is currently valued at nearly $40 billion.

“We believe in about seven years we can get there [through] acquisitions, organic growth, joint ventures, [these] are things that we have done and we will continue to do,” he said in an interview with Bloomberg.

“We operate in America, North America and Europe, in the Gulf and in Asia. America and Europe are 80 percent of our markets at the moment,” Al-Ardhi added.

The company is currently pursuing a five-year growth plan.

“Obviously it is about changing our model for many years. We have served the retail investors in the deal-by-deal model. We would like to change that. So, we target sustainable capital, institutional capital,” he said.

“The structure of going private (delisting) is the right thing for us to do now as we prepare the company for the next stage of its growth,” he added.

Al-Ardhi added although America continues to be their biggest market, Asia is going to be very important in the future Investcorp.

“The growth that is happening on the scale that it is happening there is just something you cannot ignore. We started our businesses in India two years ago and in China, we have offices in both of these countries and in Singapore. In China, we have concentrated on the consumer, on technology, on food. In India, we have concentrated financial services on the consumers and health care,” he said.

“We see a lot of growth there and we see a lot of appetite of our investors to actually -whether retail or institutional- to get the opportunities that we can bring in India and China and Southeast Asia,” Al-Ardhi added.


Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund

Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund
Updated 47 min 43 sec ago

Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund

Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund
  • The Riyadh development consists of high-end office spaces, as well as a retail space with a hotel and a gym.
  • The offering is expected to raise equity of SR370 million ($98.6 million)

DUBAI: Advisory firm Jadwa Investment has launched the second offering of its real estate investment trust (REIT) Saudi fund to acquire a luxury retail and office complex in Riyadh.

The offering is expected to raise equity of SR370 million ($98.6 million), which will be used to purchase “The Boulevard.”

The Riyadh development consists of high-end office spaces, as well as a retail space with a hotel and a gym.

Once acquired, the complex will become one of the fund’s flagship properties, representing 13.4 percent of its assets. It is expected to generate a net rental income of SR29.6 million annually.

“We are pleased to offer our existing and potential clients the opportunity to invest in Jadwa REIT Saudi at an attractive price and to gain exposure to prime real estate assets across Saudi Arabia,” Tariq Al-Sudairy, chief executive officer and managing director of Jadwa Investment, said.

The Jadwa REIT Saudi Fund is a closed-end, Shariah-compliant fund with a term of 99 years and total gross assets value of SR2.19 billion.

The acquisition will push the fund’s assets by 16.9 percent to SR2.56 billion.


Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO

Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO
Updated 49 min 52 sec ago

Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO

Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO
  • The Tadawul-listed company is involved in a number of public service projects
  • He holds more than 18 years of experience in the financial and investment sector

DUBAI: Saudi developer Arriyadh Development Company (ARDCO) has appointed Jihad bin Abdul Rahman Al-Qadi as its new chief executive officer.

The Tadawul-listed company is involved in a number of public service projects, including building, operating, and managing transportation centers and public markets.

Newly appointed Al-Qadi will assume the position in December, the company said in a stock exchange filing.

He holds more than 18 years of experience in the financial and investment sector. He has also worked in the treasury sector of the National Bank of Saudi Arabia, Jadwa Investment Co., and the Saudi Economic and Development Co.

He previously worked at the Public Investment Fund, where he was the director of real estate asset management and director of institutional development.

Al-Qadi is a member of a number of boards of directors, including that of the Islamic Development Bank Fund for Infrastructure, and the Saudi Economic Association.

The appointment is part of the company’s ongoing plans to boost value for its shareholders.


Saudi-government Kafalah grants $115m in loans to female-led enterprises

Saudi-government Kafalah grants $115m in loans to female-led enterprises
Image: Shutterstock
Updated 26 September 2021

Saudi-government Kafalah grants $115m in loans to female-led enterprises

Saudi-government Kafalah grants $115m in loans to female-led enterprises
  • Businesses in the central region of Riyadh got the lion's share as they received the highest Kafalah support
  • The Kafalah program spans several business sectors

The Small and Medium Enterprises Loan Guarantee Program (Kafalah), a government initiative to finance small and medium enterprises, granted SR432 million ($115 million) of loans to 456 businesses led by women in the first half of 2021, according to Al-Eqtisadiah newspaper.


Businesses in the central region of Riyadh got the lion's share as they received the highest Kafalah support, with 151 establishments accounting for 33 percent of the total, taking SR178 million in financing. This was followed closely by Makkah region with 115 establishments, or 25 percent, receiving SR97 million. The Eastern Province came third, with 102 establishments, or 22 percent, receiving SR99 million.


The Kafalah program spans several business sectors including wholesale commerce, catering and hotels, manufacturing industries, and administrative and support services.