Dubai’s DEWA says increases IPO size to 17 percent, could raise as much as $5.7bn

Dubai’s DEWA says increases IPO size to 17 percent, could raise as much as $5.7bn
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Updated 30 March 2022

Dubai’s DEWA says increases IPO size to 17 percent, could raise as much as $5.7bn

Dubai’s DEWA says increases IPO size to 17 percent, could raise as much as $5.7bn

 

DUBAI: Dubai Electricity and Water Authority (DEWA) has increased its initial public offering (IPO) size to 17 percent from 6.5 percent, the company said on Tuesday, meaning it could raise as much as $5.7 billion.


This could mark DEWA’s public share-sale as potentially the biggest for the region since Saudi Aramco’s record $29.4 billion in 2019.


The state utility firm said in a statement it increased the size of the tranche reserved for institutional investors from 5.9 percent to up to 16.4 percent, while the tranches for retail investors and employees will remain the same.


Top Saudi banks’ profits surge 9.3% in Q3 as interest income rise: Report  

Top Saudi banks’ profits surge 9.3% in Q3 as interest income rise: Report  
Updated 14 sec ago

Top Saudi banks’ profits surge 9.3% in Q3 as interest income rise: Report  

Top Saudi banks’ profits surge 9.3% in Q3 as interest income rise: Report  

RIYADH: The aggregate net profit of Saudi Arabia’s top 10 banks increased by 9.3 percent to SR16.5 billion ($4.39 billion) in the third quarter of 2022, compared to the previous three months, as rising interest income boosted their performance, an analysis done by professional services firm Alvarez & Marsal showed.  

Ten of the largest listed banks it analyzed include Saudi National Bank, Al Rajhi Bank, Riyad Bank, Saudi British Bank, Banque Saudi Fransi, Arab National Bank, Alinma Bank, Bank Albilad, Saudi Investment Bank, and Bank Aljazira. 

In its report, ‘Saudi Arabia Banking Pulse for Q3’, Alvarez & Marsel noted that the aggregate net interest income of these 10 banks increased by 15.9 percent in the third quarter that ended in September.  

This comes as Saudi Arabia’s central bank, known as SAMA, raised its repo and reverse repo rates by 150 basis points quarter-on-quarter in the third quarter, to 3.75 percent and 3.25 percent respectively. 

This was in line with the US Federal Reserve’s move to tame surging inflation and maintain price stability.  

On Nov. 3, SAMA increased its Repo rate once again by 75 bps to 4.50 percent while also increasing the Reverse Repo rate to 4 percent, following the US Federal Reserve’s decision to raise rates by 75 basis points to curb inflation. 

“We expect SAMA to continue matching policy rate hikes by the US Federal Reserve, which will help boost the overall banking sectors’ NIMs (net interest margin),” said Asad Ahmed, managing director and head of Middle East financial services at Alvarez & Marsal.  

He added: “Overall, rising interest rates, improvement in asset quality and strong economic rebound are positives for the banking sector in Saudi Arabia.  

"The profitability growth is expected to continue for KSA banks as the interest rate outlook remains in an upward trajectory.”  

The analysis showed that aggregate loans and advances at the end of the third quarter grew 2.9 percent from the previous quarter, continuing to outpace the 0.02 percent growth in deposits quarter on quarter.  

According to the report, the operating income increased by 4.9 percent quarter-on-quarter, primarily driven by growth in total interest income mainly due to higher interest rates.  

The report further noted that the loan-to-deposit ratio in these banks continued to increase for the seventh consecutive quarter by 2.6 percent, to settle at 96.2 percent in the July to September period.  

Saudi National Bank topped the list of banks in terms of assets, as it holds assets worth SR964.4 billion as of the third quarter of 2022. 

It was followed by Al Rajhi and Riyad Bank with assets worth SR740.6 billion and SR347.9 billion respectively, the report added. 

Earlier this month, another report by Kamco Invest revealed that Al Rajhi Bank recorded a profit of $1.2 billion in the third quarter, supported by higher net financing and investment income, fees from banking services, and exchange income.  

The Kamco Invest report further noted that Saudi National Bank reported a 24.6 percent increase in the net profit to $1.3 billion, driven by a 16.1 percent drop in operating expenses due to a lower net impairment charge for credit losses. 


Algerian business leaders hold meetings in Rome

Algerian business leaders hold meetings in Rome
Updated 22 min 36 sec ago

Algerian business leaders hold meetings in Rome

Algerian business leaders hold meetings in Rome
  • First official meeting with Algerian delegation by member of Italy’s new government
  • Deputy minister hails ‘excellent’ relations between the two countries

ROME: A delegation of business leaders from the Algerian Economic Renewal Council held a meeting in Rome with Valentino Valentini, Italy’s deputy minister of economic development in charge of business.

It was the first official meeting with an Algerian delegation by a member of Italy’s new government led by Prime Minister Giorgia Meloni.

The delegation represented sectors such as agriculture, construction, pharmaceuticals, tourism and oil.

Valentini underlined the “excellent political relations between Italy and Algeria,” and expressed his determination to “intensely raise the level of economic partnership through Italian investments, transfer of know-how and innovative technologies, particularly in the sectors of agriculture, mining, tourism and textiles,” according to a communique issued by the Ministry of Economic Development.

He recalled the “already very intense cooperation,” and the official bilateral meetings that were held in both countries at the highest institutional levels. He vowed even greater cooperation “which will benefit both our countries.”

Valentini also recalled that Italian Ambassador in Algiers Giovanni Pugliese called for an increase in flights by ITA Airways, Italy’s national carrier, between the two countries.

Council President Kamel Moula presented the new Algerian Code for Investments, and pledged the council’s support for Italian investors in identifying Algerian partners for the creation of joint ventures.

“An ambitious co-production partnership can open the doors to joint exports of manufactured and certified products to Europe and Africa,” he said.

The council said in a communique that by meeting the delegation, Italy’s new government confirmed the “great interest given to strengthening economic cooperation between the two countries.”

The delegation also met in Rome with Barbara Beltrame Giacomello, deputy president of Confindustria, the Italian association of entrepreneurs.


Oil Updates — Crude prices down; Ukraine wants lower cap on Russian oil 

Oil Updates — Crude prices down; Ukraine wants lower cap on Russian oil 
Updated 27 November 2022

Oil Updates — Crude prices down; Ukraine wants lower cap on Russian oil 

Oil Updates — Crude prices down; Ukraine wants lower cap on Russian oil 

RIYADH: Oil prices fell 2 percent on Friday in thin market liquidity, closing a week marked by worries about Chinese demand and haggling over a Western price cap on Russian oil. 
Brent crude futures settled down $1.71, or 2 percent, to trade at $83.63 a barrel, having retraced some earlier gains. 

US West Texas Intermediate crude futures were down $1.66, or 2.1 percent, at $76.28 a barrel.  

Ukraine wants lower cap on Russian oil, at $30-$40 per barrel 

The price for Russian seaborne oil should be capped at between $30 and $40 per barrel, lower than the level that the Group of Seven nations has proposed, Ukrainian President Volodymyr Zelensky said on Saturday. 

EU governments, seeking to curb Moscow’s ability to fund the Ukraine war without causing an oil supply shock, are split over a G7 push that the cap be set at $65 to $70 per barrel. It is due to enter into force on Dec. 5. 

“The limit that is being considered today — about $60 — I think this is an artificial limit,” said Zelensky, who has consistently pushed allies to impose tougher sanctions of all types against Russia. 

“We would like the sanctions to be very effective in this fight, so that the limit is at the level of $30-$40, so Russia feels them (the sanctions),” he told a news conference. 

The idea of the cap is to prohibit shipping, insurance and reinsurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price set by the G7 and its allies. 

Poland, Estonia and Lithuania are pushing for a much lower cap than $65-70 per barrel while Greece, Cyprus and Malta want a higher cap. 

OPEC+ meeting to take into account market conditions: Iraq 

The meeting of the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, in December will take into account the condition and balance of the market, Iraq’s state news agency quoted Saadoun Mohsen, a senior official at the country’s state oil marketer SOMO, as saying on Saturday. 

OPEC+’s October decision to reduce production by two million barrels per day bpd had played an important role in stabilizing global markets, Saadoun, who serves as Iraq’s delegate to OPEC, said.

He said that the cut hadn’t reduced Iraq’s exports. 

Iraq’s current production represents 11 percent of the group’s total output of 43 million bpd, he said, adding that Iraq expects a crude price range of at least $85-95 next year. 

OPEC+, which includes members of the OPEC+ led by Russia, will hold its next meeting in Vienna on Dec. 4. 

Oil markets are witnessing “severe fluctuations” due to the repercussions of the pandemic, a slowing global economy and the war in Ukraine, the Iraqi official said, making it harder to ensure price stability. 

(With input from Reuters) 

 


FIFA World Cup is a match-winner for the regional property market

FIFA World Cup is a match-winner for the regional property market
Updated 27 November 2022

FIFA World Cup is a match-winner for the regional property market

FIFA World Cup is a match-winner for the regional property market
  • Taking place in the Arab world for the first time, the 2022 FIFA World Cup is an unprecedented event

RIYADH: Before the start of the 2022 FIFA World Cup, real estate prices were surging in Qatar and neighboring countries, causing people to rent their properties at high prices and cash in on the increased market demand.

Taking place in the Arab world for the first time, the 2022 FIFA World Cup is an unprecedented event.

During the tournament, FIFA Tournament Time Demand Model has forecast that upward of 1.7 million people will visit the host country, with 500,000 visitors on the busiest days. Because of this, visitors to the emirate of just 2.8 million people are concerned about accommodation or prefer to stay in neighboring countries.

Despite some concerns, organizers are reassuring people there would be enough accommodation for all fans. Thousands of hotel rooms FIFA had reserved were recently released to ease the crunch, possibly decreasing prices.

The authorities have continued to provide housing to all World Cup fans. Still, according to Doha News, landlords have recently capitalized on the opportunity to charge outrageous prices, though residents claim this is at their expense.

Doha News reported that residents are being evicted, asked to sign short-term or 24-month lease agreements, or even had their rent raised significantly.

The World Cup is widely responsible for this situation, with many believing landlords are trying to take advantage of the visitors’ profits, making living conditions challenging for long-term residents, Doha News added.

According to Qatari law, a lease renewal can increase rent by up to 10 percent. Still, Anum Hassan, head of research for Valustrat’s Qatar office, disclosed that rents have increased by 40 percent in some districts of Doha over the past year.

During the World Cup period in 2022, the government removed the price cap, allowing landlords to charge between SR15,500 ($4,124) and SR20,600 per night.

Booking a villa through Airbnb for 29 days of the World Cup costs at least SR48,860, but prices can reach hundreds of thousands.

Despite this, the real estate market continues to benefit from the games. A recent report from Property Finder, one of the region’s leading property technology companies, revealed a 2.97 percent increase in residential sales in September and October due to this month’s FIFA World Cup.

Afaf Hashim, the country manager at Property Finder in Qatar, said: “Investors and first-time property purchasers are now more confident to invest in the Qatari property market in response to renowned sporting events happening in the country.” 

Investors and first-time property purchasers are now more confident to invest in the Qatari property market in response to renowned sporting events happening in the country.

Afaf Hashim, Country manager at Property Finder in Qatar

“The Ministry of Justice is also taking the required actions to make the market more transparent, which will pave the way for further investments shortly,” she added.

According to the report, investors and end-users are increasingly interested in properties listed for sale in Qatar, which has recently emerged as a hot spot for property investment.

There was a 4.98 percent increase in leads but a 7.71 percent increase in impressions. Some areas saw considerable gains in rental prices, while others saw substantial declines. For instance, Al-Hilal’s rent fell by 83.9 percent, while Salata’s increased by 93.75 percent.

Adam Stewart, the Qatar head of Knight Frank, told Arab News that the tourism and hospitality sector will contribute 12 percent of the country’s gross domestic product by 2030, worth about $55 billion, by which time tourist arrivals are projected to reach 7 million.

Set the ball rolling

Knight Frank does not expect a slowdown in the Dubai real estate market’s demand in the short to medium term; in fact, the opposite is expected, Faisal Durrani, partner and head of research in the Middle East at Knight Frank, told Arab News. 

The mainstream market is expected to register price growth of 5-7 percent by the end of 2022, with a similar figure expected in 2023.

Faisal Durrani, Partner and head of research in the Middle East at Knight Frank

“The mainstream market is expected to register price growth of 5-7 percent by the end of 2022, with a similar figure expected in 2023,” he said.

He also added that a new wave of tourism is expected in Saudi Arabia’s Dammam Metropolitan Area following the 2022 FIFA World Cup.

“Following the Saudi government’s recent announcement to allow Qatar World Cup ticket holders easy access to multiple entry tourist visas, the Kingdom is expecting to play host to some of the football fans unable to be accommodated in Qatar,” he said.

As a result of its proximity to Qatar and relative affordability, Dammam is expected to be a popular alternative to Dubai, Abu Dhabi and Manama during the World Cup, he added.

However, Alex Galtsev, founder and CEO of Realiste, a personal artificial intelligence firm on real estate investing, believes Qatar’s FIFA 2022 World Cup will benefit the Middle East real estate market.

“As a major tourist attraction and financial hub in the region, Dubai will be the main beneficiary outside Qatar,” he told Arab News.

There has already been an increase in demand for local hotel chains and resorts. “Because of limited accommodation options, tourists had to seek alternative options that were more affordable, such as short-term rentals. In turn, this has led to a 50 percent increase in rental prices in Dubai over the last three months,” Galtsev added.

Qatar’s FIFA guests opted for areas near downtown where the major tourist attractions are located rather than cheap suburban locations surrounded by desert. As a result, the districts near the waterfront are the following most popular renting areas.

However, Galtsev said that the demand for the short-time rental would significantly decrease after the event.

Despite these soaring prices and owners renting out their properties, what matters is the result and how they will affect the market overall.


Johnson & Johnson develops digital solutions to reduce time spent in hospitals

Johnson & Johnson develops digital solutions to reduce time spent in hospitals
Updated 27 November 2022

Johnson & Johnson develops digital solutions to reduce time spent in hospitals

Johnson & Johnson develops digital solutions to reduce time spent in hospitals

RIYADH: Johnson & Johnson, the global medical technology provider, is providing digital solutions that will shorten the time spent by patients in hospitals.

According to Marzena Kulis, managing director of Johnson & Johnson MedTech Middle East, the move is crucial in countries with lower bed capacity.

“The digital solutions that we currently offer help to shorten the time of patients’ stay, so the capacity can absorb more patients, especially in the geographies where capacity is limited,” Kulis said in an exclusive interview with Arab News.

“Our digital procedure software empowers, for example, surgical teams to design, apply and analyze surgical workflows. It provides valuable data analytics to reduce variability in surgery time, improve procedural efficiency and enhance education approaches,” she said.

Johnson & Johnson MedTech provides a broad range of medical technology devices used in interventional solutions, orthopedics and surgery. Their offerings include products to treat cardiovascular diseases, hemorrhagic and ischemic stroke, and a combination of products supporting hips, knees, trauma, spine and others.

“We want to strengthen this industry by tapping the full potential of technology to save and sustain and improve lives of patients through a wide array of potential technologies that can be applied in the healthcare sector,” she said. 

The company’s surgery portfolios include advanced and general surgery offerings. These devices are used predominantly in the professional fields by physicians, nurses, hospitals, eyecare professionals and clinics, according to a statement issued by the company.

“We apply the expertise in medical devices and advanced technology to ensure that our healthcare solutions are smarter, less invasive, and more personalized,” Kulis added.

The healthtech provider participated in the 33rd Annual Conference of the Saudi Heart Association, one of the largest cardiac meetings in the Middle East that were held in Riyadh from Oct. 13-15.

Heart of the matter

The company unveiled its “Get Smart About AFib” global campaign at the conference with cardiac scientists, caregivers, and several cardiac working groups to improve care and treatment for patients suffering from atrial fibrillation, or AFib.

AFib is the most common type of cardiac arrhythmia, and nearly one in four adults currently over the age of 40 across the globe is at risk of developing it. According to statistics from Saudi Health Ministry, cardiovascular diseases account for 37 percent of all deaths in the Kingdom.

The campaign aims to raise awareness of the disease to help reduce risks.

The health campaign will specifically focus on supporting education and detection of the life-threatening AFib condition that impacts nearly 40 million people globally.

Johnson & Johnson MedTech has been operating in the region for a couple of decades, establishing a headquarters in Riyadh back in 2017, along with two other offices in Jeddah and Dammam.

The US-based company employs around 180 people in Saudi Arabia, nearly half of them Saudis, with a target to increase its Saudization rates by 20 percent in the next couple of years.

“We are getting close to 50 percent in our medtech business, and we aim to grow by 10-20 percent in the next year or two,” said Kulis.

Kulis believes that the Saudi market is steadily growing and becoming one of the largest emerging markets for Johnson & Johnson. 

The digital solutions that we currently offer help to shorten the time of patients’ stay, so the capacity can absorb more patients, especially in the geographies where capacity is limited.

Marzena Kulis, Johnson & Johnson MedTech Middle East managing director

Saudi Arabia is planning to build medical facilities worth $13.8 billion by 2030, according to Faisal Durrani, Knight Frank’s partner and head of research in the Middle East.

“Vision 2030 has sharpened the focus on the public realm, liveability and habitability of Saudi cities. Wellness and well-being sit at its heart, with $13.8 billion worth of medical facilities expected to be built by the end of the decade,” Durrani told Arab News.

Digital health

The expenditure is part of a more comprehensive plan to invest $66.67 billion in the Kingdom’s healthcare infrastructure and boost private sector participation to 65 percent by 2030, targeting the privatization of 290 hospitals and 2,300 primary health centers.

“We look into the development of healthcare in the countries we operate in, and the healthcare market in Saudi Arabia is steadily growing, and we’ve seen and observed that for decades, and the forecast is to continue growing for the next decades as well,” Kulis said.

The Kingdom is expected to be the fastest-growing digital health market in the Gulf Cooperation Council, with the government allocating $1.5 billion for healthcare information technology and digital transformation programs.

Saudi Health Minister Fahad Al-Jalajel said during the opening of the digital event of the Healthcare Information Management Systems Society last year that digital technologies were one of the essential tools for dealing with the pandemic.

It helped develop the first interactive map of COVID-19 data, providing accurate statistics and employing AI to analyze data and make national strategic decisions.

The Kingdom is allocating about 14.4 percent of its 2022 budget to healthcare and social development, which amounts to $36.8 billion, the third largest expense after education and military, according to Dubai-based Omnia Health, a global medical directory.

With life expectancy in Saudi Arabia projected to increase from 76.4 to 81.8 years by 2050 and the Kingdom’s population expected to grow to 39.4 million by 2030, increased investment in the healthcare infrastructure and innovation is necessary to drive strong growth in the Kingdom’s healthcare sector, the medical directory reported.