Saudi Arabia records its first quarterly budget surplus since Q1 2019

Update Saudi Arabia records its first quarterly budget surplus since Q1 2019
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Updated 01 November 2021

Saudi Arabia records its first quarterly budget surplus since Q1 2019

Saudi Arabia records its first quarterly budget surplus since Q1 2019
  • The Kingdom’s budget turned to a surplus of $1.78 billion in Q3 of this year

CAIRO: Saudi Arabia reported its first quarterly budget surplus since the first quarter of 2019 as oil prices are trading at multiyear high and the government cut down on its social spending and rationalized expenditures.

The Kingdom’s budget turned to a surplus of SR6.68 billion ($1.78 billion) in the third quarter of this year, up from a deficit of SR4.61 billion in the previous quarter, and a deficit of SR41 billion in the third quarter of 2020, the Saudi Ministry of Finance revealed in its latest quarterly report.

Oil revenues went up by 60 percent in the three months ending Sept. from a year ago reaching SR148 billion, according to the ministry’s report.

Social spending fell down by 41 percent over the same period, while subsidies fell down by almost half, the data showed.

“The surplus occurred despite a noticeable rise in financing cost which rose by 20 percent, which is in line with the larger international and domestic debt the Kingdom is accumulating,” Mohamed Ramady, a London-based independent economist, told Arab News. 

“The surplus was a result of a combination of rationalized spending and higher oil prices, and this is expected in the next quarter,” he added.

The International Monetary Fund expects the Saudi economy to grow by 2.8 percent in 2021 — higher than forecasts by other global and local institutions.

In its latest regional economic outlook, the international organization said that oil exporters such as Saudi Arabia are expected to expand their production after August 2021. 

In addition, strong vaccination campaigns and higher oil prices are projected to boost the non-oil sector of the Kingdom’s economy, prompting an expansion in economic activity.

The Saudi Ministry of Finance expects the Saudi economy to grow by 2.4 percent in 2021, in line with the World Bank’s predictions. 

Capital Economics and OECD also had similar forecasts for 2021. 

As for the 2022 outlook, Capital Economics had the most positive forecast for the Saudi economy, saying it would jump by 7.3 percent. 

The Ministry of Finance posted its projection for 2022 growth at 4.8 percent. The IMF and OECD had the same expectation as well.


Cement producer Qassim signs MoU to acquire Hail Cement

Cement producer Qassim signs MoU to acquire Hail Cement
Updated 16 sec ago

Cement producer Qassim signs MoU to acquire Hail Cement

Cement producer Qassim signs MoU to acquire Hail Cement

RIYADH: Qassim Cement Co. has signed a non-binding memorandum of understanding with Hail Cement Co. regarding a securities exchange transaction, in which the former will acquire all of Hail’s issued shares.

Both parties will therefore proceed with due diligence in connection with the proposed transaction, according to a bourse filing.

Upon completion of the relevant financial evaluation and after consideration of the due diligence, Qassim and Hail will begin discussions on a non-binding exchange ratio.

Hail’s shareholders will receive 0.1933 newly issued shares in Qassim for each share they own in Hail.


TotalEnergies signs $1.5bn deal with QatarEnergy to increase LNG production 

TotalEnergies signs $1.5bn deal with QatarEnergy to increase LNG production 
Updated 9 min 13 sec ago

TotalEnergies signs $1.5bn deal with QatarEnergy to increase LNG production 

TotalEnergies signs $1.5bn deal with QatarEnergy to increase LNG production 

RIYADH: France’s TotalEnergies on Saturday signed a new $1.5 billion deal with QatarEnergy to help expand the country’s natural gas production as Europe scrambles to find new energy sources to replace Russian supplies. 

The partnership deal was signed by QatarEnergy CEO and the country’s minister of energy Saad Al-Kaabi and Patrick Pouyanné, CEO of TotalEnergies. 

Al-Kabbi said that TotalEnergies would have a 9.375 percent stake out of a 25 percent stake in the North Field South project dedicated to international partners. 

QatarEnergy will hold 75 percent of NFS.

“We are not overexposed to Qatar. We are happy to invest in new licenses here. Because we cannot invest in Russia, there is logic to continue investing in Qatar,” said Pouyanné. 

He added: “If Qatar had offered more investment, then we would have invested more in Qatar.” 

The new deal comes at a time when European nations are diversifying their energy imports away from Russia after the invasion of Ukraine. 

The North Field expansion projects comprise two parts; the North Field East or NFE project and the North Field South project. 

The NFE project is expected to increase Qatar’s liquified natural gas production capacity from 77 to 110 million tons per annum, while the NFS project will elevate the country’s LNG production capacity from 110 to 126 million tons per annum. 

Earlier, in June and July, QatarEnergy and TotalEnergies signed five separate partnership agreements in the NFE project worth around $29 billion. 

Britain’s Shell, Italy’s ENI and US giants ConocoPhillips and ExxonMobil have already signed up to be part of the North Field East project.

“We are in active discussions with the majority of buyers around the world and some are advancing more than others,” added Al-Kabbi. 

Qatar is one of the world’s top LNG exporters, alongside the US and Australia, and the country is aiming to increase its gas production by more than 60 percent by 2027. 

QatarEnergy estimates that the North Field holds about 10 percent of the world’s known natural gas reserves. LNG from the North Field is expected to start coming online in 2026. 

(With input from Reuters and AFP) 


Saudi Arabia launches 5 renewable projects to produce 3,300 MW energy

Saudi Arabia launches 5 renewable projects to produce 3,300 MW energy
Updated 6 min 59 sec ago

Saudi Arabia launches 5 renewable projects to produce 3,300 MW energy

Saudi Arabia launches 5 renewable projects to produce 3,300 MW energy

RIYADH: Saudi Power Procurement Co. has launched five projects to produce electricity using renewable energy, with a total capacity of 3,300 megawatts, according to the Saudi Press Agency. 

The launch includes three wind energy projects and two solar projects. The wind energy projects, located in Yanbu, Al-Ghat and Waad Al Shamal have a total production capacity of 1800 MW, with 700 MW, 600MW and 500 MW distributed respectively.

The total capacity of production from the two solar energy projects amounts to 1500 MW. The projects are based in Al Hinakiyah and Tabarjal and have capacities of 1100 MW and 400 MW respectively.

The launch of the projects is part of the fourth phase of the Ministry of Energy’s National Renewable Energy Program. 

In line with Saudi Vision 2030, the program is part of the Kingdom’s aims to reach the optimal energy mix for electricity production from renewable energy sources.


TASI dips following the Fed’s hefty interest rate hike: Opening bell

TASI dips following the Fed’s hefty interest rate hike: Opening bell
Updated 25 September 2022

TASI dips following the Fed’s hefty interest rate hike: Opening bell

TASI dips following the Fed’s hefty interest rate hike: Opening bell

RIYADH: Saudi Arabia’s main index fell in the wake of the Fed’s sharp interest rate hike and forecast of further and faster increases.

The Tadawul All Share Index sank 2.15 percent to start the week at 11,214, while the parallel market Nomu fell 0.96 percent at 20,069.

Saudi oil giant Aramco started with a 1.39 percent decline, while Rabigh Refining and Petrochemical Co. collapsed 4.73 percent.

The Saudi National Bank, the Kingdom’s largest lender, decreased by 3.01 percent, while Saudi British Bank declined by 1.27 percent.

The Kingdom’s largest valued bank Al Rajhi Bank edged down 3.20 percent, while Alinma Bank fell 2.99 percent.

Abdulmohsen Alhokair Group for Tourism and Development fell 4.89 percent, after inviting its shareholders to vote on reducing its capital to SR315 million ($84 million).

National Gypsum Co. led the fallers with a 4.51 percent decline, while Hail Cement Co. led the gainers with a 4.58 percent increase.


Here’s what you need to know before Tadawul trading on Sunday

Here’s what you need to know before Tadawul trading on Sunday
Updated 25 September 2022

Here’s what you need to know before Tadawul trading on Sunday

Here’s what you need to know before Tadawul trading on Sunday

RIYADH: Saudi Arabia’s main index dipped during its last trading session last week in anticipation of another large rate increase by the Federal Reserve on Wednesday.

The Tadawul All Share Index dropped 0.37 percent to end at 11,461, while the parallel market Nomu rose 0.23 percent at 20,265.

Tadawul was closed on Thursday in observance of Saudi National Day.

During Thursday’s session, most Gulf stock markets ended in red, following the Federal Reserve's sharp hike in interest rates and forecasting further and faster increases.

Dubai's main share index dropped 0.8 percent, while Abu Dhabi’s index remained unchanged.

In the same direction, the Qatari benchmark retreated 0.9 percent, Bahrain's main index retreated 0.2 percent, and Kuwait's main index retreated 0.7 percent.

Outside the Gulf, Egypt's stock index fell by 0.2 percent.

Stock News

Saudi Steel Pipe Co. has sealed a deal worth SR150 million ($40 million) with Saudi Aramco to supply steel pipes.

Arabian Pipes Co. also won a deal with Aramco for the supply of steel pipes worth SR155 million.

Albabtain Food has set its IPO price range at SR68-77 per share as it begins the book-building period.

Gulf Union Al Ahlia Cooperative Insurance Co. has appointed Aljazira Capital as its Financial Advisor for the proposed merger with Al Sagr Cooperative Insurance Co.

The Capital Market Authority approved Raydan Food Co.’s proposal to reduce its capital from SR338 million to SR158 million.

Following receiving the CMA’s approval, Abdulmohsen Alhokair Group for Tourism and Development has invited its shareholders to vote on reducing its capital to SR315 million.

Calendar

September 25, 2022
AlBabtain Food starts book-building for IPO