PIF — driving force behind economic diversification: Year in Review

Special PIF — driving force behind economic diversification: Year in Review
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Updated 05 January 2022

PIF — driving force behind economic diversification: Year in Review

PIF — driving force behind economic diversification: Year in Review
  • Several non-oil sectors have been identified as priority sectors in the fund’s diversification plan

DUBAI: This was a crunch year for Saudi Arabia’s sovereign wealth body, the Public Investment Fund, as it announced a five-year strategy to push the Kingdom’s diversification drive.

It picks up from the body’s first five-year plan launched in 2017, when the Saudi government chose the PIF to “lead the charge in building a national economic transformation.”

The fund posted around SR1.5 trillion ($400 billion) in assets under management, at the end of 2020 — growing nearly threefold from SR570 billion from 2015.

The Saudi sovereign wealth fund aims to more than double this growth — targeting around SR4 trillion in assets under management by 2025, with a focus on contributing billions of dollars to the Kingdom’s non-oil gross domestic product.

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Several non-oil sectors have been identified as priority sectors in its diversification plan, such as housing, healthcare and financial services.

But it was tourism that saw the first major announcement from the PIF in 2021.

HIGHLIGHTS

In January, the fund launched Cruise Saudi, which bids to establish a leisure liner industry in the Kingdom.

Another major project in tourism, the Soudah Development Co. in the Asir region, was announced the following month with an investment of SR11 billion.

Other notable PIF announcements in tourism include The Rig — a 150,000 square meter offshore oil-themed tourism destination, the fund partnered with E1 Series to create the world’s first electric powerboat championship and two PIF-owned companies — The Red Sea Development Co. and Amaala — merged to create a Red Sea tourism powerhouse.

In January, the fund launched Cruise Saudi, which bids to establish a leisure liner industry in the Kingdom, in line with the government’s Vision 2030 aspirations of opening Saudi Arabia up to the world.

Another major project in tourism, the Soudah Development Co. in the Asir region, was announced the following month with an investment of SR11 billion.

Other notable PIF announcements in tourism include The Rig — a 150,000 square meter offshore oil-themed tourism destination, the fund partnered with E1 Series to create the world’s first electric powerboat championship and two PIF-owned companies — The Red Sea Development Co. and Amaala — merged to create a Red Sea tourism powerhouse.

The next few months saw the PIF make internal moves to expand its team to capture more domestic and international investment opportunities.

Two deputy governors joined the fund in June — Turqi Al-Nowaiser and Yazeed Alhumeid. Three other senior executives also came into the business — Eyas Al-Dossari, Omar Al-Madhi, and Abdulla Shaker.

Saudi Crown Prince Mohammed bin Salman said the fund invested around SR84 billion this year as it bids to boost the Saudi economy, which has run a deficit for several years and last year was hit by record-low oil prices.

In December, the crown prince announced that around SR75 billion will be invested in the project, led by the PIF’s Central Jeddah Development. The new destination will feature thousands of hotel rooms and residential units, surrounded by major lifestyle and tourism projects over 5.7 million square meters.  

This project aims to add SR47 billion to the Kingdom’s economy by 2030. 

This year also saw major movements in the PIF’s stakes in major companies — including acquiring a 25 percent share in Emaar The Economic City, and publicly offering some of its stake in stc, the Kingdom’s largest telecoms operator.

An eye-catching move saw the PIF, alongside other investors, finally seal a $410 million deal to buy English Premier League football club Newcastle United.

After the high-profile transaction, the Saudi fund assumed a dominant position in the North East club’s new ownership structure, owning 80 percent of shares.

The fund invests outside the Kingdom as a way of bringing value to the Saudi economy, and in 2021, it almost tripled its holdings of US-listed stocks to $43.45 billion in the third quarter – buying shares in retail giant Walmart and social media firm Pinterest among others.

The next four years will be key for the PIF as the Kingdom draws ever nearer to 2030.


UAE producing near to its maximum oil production capacity: Energy minister

UAE producing near to its maximum oil production capacity: Energy minister
Updated 56 sec ago

UAE producing near to its maximum oil production capacity: Energy minister

UAE producing near to its maximum oil production capacity: Energy minister

ABU DHABI: The UAE is producing near to its maximum oil production capacity based on its current OPEC+ production baseline, Emirates News Agency (WAM) reported on Monday.

“In light of recent media reports, I would like to clarify that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline (3,168 mbopd) which UAE is committed by until the end of the agreement,” Suhail bin Mohammed Al-Mazrouei, Emirati Minister of Energy and Infrastructure, said.

 


NEOM awards London-based Keller major piling contract for ‘The Line’

NEOM awards London-based Keller major piling contract for ‘The Line’
Updated 27 June 2022

NEOM awards London-based Keller major piling contract for ‘The Line’

NEOM awards London-based Keller major piling contract for ‘The Line’

RIYADH: Saudi Arabia’s $500-billion project NEOM has awarded UK’s Keller a major piling contract for “The Line,” a 170-km megacity being developed within the Kingdom’s flagship project. 

Starting in the west at the Gulf of Aqaba and terminating at the NEOM International Airport within the upper valley region, The Line is subdivided into around 135 modules, according to a statement. 

Each module contains eight buildings founded on large diameter bored piles. 

Keller had signed an umbrella framework agreement with respect to the project, and is mobilizing for an anticipated first works order on a portion of Module 40 which has an expected value to Keller of around £50 million ($61.5 million), with the work anticipated to be completed within the next 12 months.

Listed on the London Stock Exchange, Keller is an independent geotechnical solutions specialist.


NEOM, McLaren Racing partner to drive innovation in electric motorsport

NEOM, McLaren Racing partner to drive innovation in electric motorsport
Updated 27 June 2022

NEOM, McLaren Racing partner to drive innovation in electric motorsport

NEOM, McLaren Racing partner to drive innovation in electric motorsport

RIYADH: NEOM, one of Saudi Arabia’s flagship projects, has partnered with McLaren Racing to drive innovation and talent development in electric motorsport, according to a statement. 

With the partnership, NEOM becomes the title partner of the McLaren Formula E and Extreme E racing teams, which brings the two electric race series together under the banner of NEOM McLaren Electric Racing.

“Our partnership with McLaren Racing complements NEOM’s commitment to driving sustainable solutions and tackling some of society's most pressing challenges,” CEO Nadhmi Al-Nasr said. 

“The partnership will allow us to share our collective resources and experience to yield exciting results, not only for our own organizations, but also for the broader automotive and sports industries,” he added. 

McLaren will be located within OXAGON’s Research and Innovation Campus, which will provide cutting edge facilities and collaboration spaces. 

During 2023, McLaren and NEOM will create a bespoke program to nurture engineers and students, in line with the mega project’s commitment to develop Saudi talent. 


Thailand to seek fertilizer supply from Saudi producers

Thailand to seek fertilizer supply from Saudi producers
Updated 27 June 2022

Thailand to seek fertilizer supply from Saudi producers

Thailand to seek fertilizer supply from Saudi producers

RIYADH: Thailand is planning to negotiate with Saudi Arabia for the supply of fertilizers as the country is currently facing a shortage, especially due to the high cost of imports.

The Thai Chamber of Commerce will coordinate with Saudi suppliers and a business event is to be held between three major Saudi-based fertilizer suppliers and Thai importers on June 29, Thai local media reported citing Commerce Minister Jurin Laksanawisit.

Laksanawisit added that two Saudi suppliers were recently provided permission to sell fertilizers to Thailand.

Thailand heavily relies on imports for its fertilizers, with only 8 percent coming from domestic sources and a usage of about 5 million tons of fertilizer a year, according to the minister.

The country’s overall demand for fertilizer from Saudi Arabia is about 808,000 tons, the media report noted citing industry statistics.


US stocks — Wall Street sheds opening gains on losses in high-growth stocks

US stocks — Wall Street sheds opening gains on losses in high-growth stocks
Updated 27 June 2022

US stocks — Wall Street sheds opening gains on losses in high-growth stocks

US stocks — Wall Street sheds opening gains on losses in high-growth stocks
  • S&P 500 energy stocks among few gainers
  • Robinhood rises on Goldman Sachs upgrade
  • Indexes down: Dow 0.24 percent, S&P 0.36 percent, Nasdaq 0.68 percent

REUTERS: Wall Street’s main indexes fell after opening higher on Monday, as a rally last week on easing concerns over inflation lost steam, with high-growth stocks leading declines.

“We had a nice rally last week, so I think we’re seeing a little bit of profit taking this morning,” said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.

“The stocks that were up the most last week are the ones getting hit the hardest here today.”

The tech-heavy Nasdaq Composite index, which gained 7.5 percent last week, fell 0.7 percent to lead declines among the three major indexes.

Investors were betting on the retreat in oil prices from the three-month highs hit in June to potentially ease inflationary pressures and likely push the Federal Reserve to moderate its aggressive policy tightening.

However, data on Monday showed new orders for US-made capital goods and shipments increased solidly in May, pointing to sustained strength in business spending on equipment in the second quarter.

Oil prices also moved back into positive territory, pushing up the S&P 500 energy index by 2.2 percent, reining in expectations for inflation falling on the back of lower energy prices.

The US central bank has rapidly raised interest rates to tame 40-year-high inflation, stoking fears its actions could tip the world’s largest economy into a recession.

After the benchmark S&P 500 index earlier this month recorded a 20 percent drop from its January closing peak to confirm a bear market, investors have been trying to gauge when the market might hit its bottom.

At 10:11 a.m. ET the Dow Jones Industrial Average was down 76.62 points, or 0.24 percent, at 31,424.06, the S&P 500 was down 13.94 points, or 0.36 percent, at 3,897.80 and the Nasdaq Composite was down 78.44 points, or 0.68 percent, at 11,529.19.

Shares of Robinhood Markets rose 0.6 percent after media reports said Goldman Sachs upgraded the retail broker’s stock to “neutral” from “sell.”

Goldman Sachs, however, cut rating on Coinbase Global Inc. to “sell” from “buy,” according to media reports, sending shares of the cryptocurrency exchange lower by 9.4 percent.

Declining issues outnumbered advancers for a 1.03-to-1 ratio on the NYSE and a 1.31-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded 16 new highs and 41 new lows.