Saudi Arabia’s NDMC closes August issuance of sukuk program at $824m

Saudi Arabia’s NDMC closes August issuance of sukuk program at $824m
The total value of bids stood at nearly SR5.08 billion, said NDMC in a statement (Shutterstock)
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Updated 24 August 2022

Saudi Arabia’s NDMC closes August issuance of sukuk program at $824m

Saudi Arabia’s NDMC closes August issuance of sukuk program at $824m

RIYADH: Saudi Arabia’s National Debt Management Center has closed the issuance of SR3.09 billion ($824 million) SR-denominated sukuk in August.

The total value of bids stood at nearly SR5.08 billion, NDMC said in a statement.

The sukuk offering was divided into three tranches.

The first tranche has a size of SR1.69 billion maturing in 2027, while the second amounts to SR1.3 billion, which will mature in 2030.

The third tranche has a size of SR100 million, maturing in 2034.

Saudi Arabia’s cumulative public indebtedness stood at SR966.5 billion by the end of the second quarter of 2022, according to data from the Ministry of Finance.

The aggregate public debt consisted of SR604.8 billion of domestic debt, and SR361.8 of the external debt.

Public debt in the Kingdom saw a SR7.9 billion increase from the first quarter to the second quarter of this year, according to data compiled by Arab News.

While domestic debt in Saudi Arabia rose by SR25.4 billion, external debt dropped by SR17.5 billion in the second quarter compared to the first of this year.

At the end of 2021, the country’s cumulative indebtedness amounted to SR938 billion, which accounted for 30 percent of Saudi Arabia’s gross domestic product, NDMC data showed.

During the COVID-19 pandemic in 2020, the debt accounted for 32.4 percent of GDP totaling SR853 billion.

The years 2019, 2018 and 2017 showed a total debt of SR677.9 billion, SR560 billion and SR443.3 billion accounting to 22.5, 18.29, and 17.17 percent of total GDP in the Kingdom respectively.

The data showed that the Kingdom’s indebtedness from their total GDP saw a strict increase from 2015 until the pandemic struck in 2020, and has taken a downturn for the first time in the post-pandemic years.

As for the issuance size of sukuk, they stood at SR157.9 billion in 2021, with a repayment amount of SR 73.4 billion, according to the NDMC data.

The issuance size in 2020 recorded SR220 billion, with a repayment amount of SR44.4 billion, according to data from the NDMC.

“Energy transition in core Islamic finance countries, and increased ESG awareness among regional issuers, along with improved automation through fintech solutions are expected to support the growth of the sukuk market,” according to Mohamed Damak, senior director of financial services in S&P Global Ratings.

Damak identified several factors that will promote stable issuance volumes in the near future.

These include lower financing needs in some core Islamic finance countries, scarcer and more expensive liquidity, and increasing complexity which deter issuer and investor’s appetites.

Furthermore, higher Environmental Social Governance awareness that would drive a gradual increase in issuance volumes, and digital sukuk that could lead to a smoother issuance process are additional factors that would promote stability.


Cigna Worldwide becomes 1st foreign health insurance firm to operate in Saudi Arabia

Cigna Worldwide becomes 1st foreign health insurance firm to operate in Saudi Arabia
Updated 10 sec ago

Cigna Worldwide becomes 1st foreign health insurance firm to operate in Saudi Arabia

Cigna Worldwide becomes 1st foreign health insurance firm to operate in Saudi Arabia

CAIRO: Cigna Worldwide Insurance Co. has become the first foreign health insurance company to start operations in the Kingdom following the issuance of a license by the Saudi Central Bank.

The permit aims to fulfill the objectives of the bank’s “Rules for Licensing and Supervision of Branches of Foreign Insurance and Reinsurance Companies in Saudi Arabia” initiative. 

It also comes as part of its role in supporting financial stability and contributing to economic growth aligned with Vision 2030’s objectives. 

The licensing falls under the strategy of the central bank, also known as SAMA, to encourage foreign direct investments to increase the sector’s competitiveness and utilize the Kingdom’s economic potential. 

“SAMA reaffirms its ongoing efforts to support the financial sector as a whole, raise the level of effectiveness and flexibility of financial transactions and encourage innovation in financial services,” stated SAMA’s website. 

Moreover, enabling new international entrants will enhance the quality of provided services, increase the diversification of investors and introduce unique business models to the market, according to the site.

 


Aramco announces deal with Zoom at LEAP 2023 

Aramco announces deal with Zoom at LEAP 2023 
Updated 7 min 34 sec ago

Aramco announces deal with Zoom at LEAP 2023 

Aramco announces deal with Zoom at LEAP 2023 

RIYADH: In line with the Kingdom’s aim to accelerate digital transformation, the Saudi Arabian Oil Co., also known as Saudi Aramco, announced a strategic partnership with Zoom and an increase in funding for Wa’ed Ventures on Feb. 6.  

The announcements were made at the second edition of LEAP, a major international technology conference held annually in Saudi Arabia. 

With more than 700 speakers from 50 counties and 900 local and international companies in attendance at the Riyadh Front Center for Exhibitions and Conventions, this year’s edition of LEAP represents a huge economic advance in the Kingdom through many partnerships, deals and investment tours.

The strategic partnership with Aramco aims to build Zoom’s first global data center in the Kingdom to support the digital transformation ecosystem.

It is expected to connect to the Zoom global data center network and will serve Saudi Arabia and the region.

The two companies will also explore the joint development of innovative technology solutions for the energy sector. 

The partnership aims to contribute to the digital transformation of various market sectors, such as energy, industry, education and healthcare. 

Aramco also announced that additional funds had been allocated by the company to Wa’ed Ventures, increasing the size of its Kingdom-focused venture capital arm from $200 million to $500 million.

The increase aims to enable the company to deliver an accelerated investment performance regionally and globally.

Wa’ed Ventures intends to localize global frontier technologies to advance the Kingdom’s innovation ecosystem; expand investments in mid and growth-stage startups; and fund underserved domains such as environmental, social and governance, the metaverse and quantum computing. 

Amin Nasser, Aramco’s president and CEO, said: “Our establishment of a diversified network of partners has helped us maintain a track record of reliability, and our new strategic partnership with Zoom is expected to further enable innovative solutions focusing on the digital transformation ecosystem.”

“Furthermore, with an expanded fund size, Wa’ed Ventures aims to facilitate the cross-pollination of innovation between the global and local markets,” he added. 


Closing bell: TASI continues to decline, closes flat at 10,589 

Closing bell: TASI continues to decline, closes flat at 10,589 
Updated 24 min 32 sec ago

Closing bell: TASI continues to decline, closes flat at 10,589 

Closing bell: TASI continues to decline, closes flat at 10,589 

RIYADH: Saudi Arabia’s Tadawul All Share Index on Monday lost 2.87 points — or 0.03 percent — to close at 10,588.58. 

While MSCI Tadawul 30 Index dropped 0.10 percent to 1,452.66, the parallel market Nomu slipped 0.76 percent to 18,761.95. 

TASI’s total trading turnover of the benchmark index on Monday was SR4.46 billion ($1.19 billion), with 101 stocks of the listed 224 advancing and 109 retreating. 

On Feb. 6, Saudi Reinsurance Co. was the topmost gainer, rising 5.73 percent to SR16.98.  

The other top gainers were Basic Chemical Industries Co., Riyadh Cables Group Co., Saudi Industrial Investment Group and Elm Co. 

The worst-performing stock of the day was Salama Cooperative Insurance Co., which dropped 3.81 percent to SR16.16. 

Other stocks that poorly performed were Etihad Atheeb Telecommunication Co., Riyad Bank, Alinma Bank and The Mediterranean and Gulf Insurance and Reinsurance Co. 

Among sectoral indices, 11 of the 21 listed on the stock exchange declined, while the rest advanced. 

The Software and Services Index was a clear winner, with the industry catapulting 2.98 percent to 38,040.86 and driving all five constituents in the green. 

On the other hand, the Food and Beverages Index fell 1.23 percent to 4,772.11. Five of the 10 constituents in the sector advanced and the rest declined. 

On the announcements front, Tihama Advertising and Public Relations Co. on Monday informed the stock exchange issued its prospectus for capital increase through an SR350 million rights issue. 

The company plans to offer 35 million shares, at SR10 per share, to raise the capital by 700 percent. 

Tihama aims to finance expansion plans and future investments, support working capital and pay off financial liabilities. The company’s share price rose 2.38 percent to SR94.8. 

Abdullah Saad Mohammed Abo Moati for Bookstores Co. announced that financial statements for the third quarter ended Dec. 31, 2022, might miss the disclosure deadline due to a cyberattack on its servers on Dec. 8, 2022. 

Abo Moati said the cyberattack resulted in the loss of financial data from Nov. 4 to Dec. 7, 2022. However, it restored data through hardcopy backups. 

The company also assigned an accredited cybersecurity company to examine the systems and network to ensure operations ran smoothly and normally. Its share price fell 2.46 percent to SR27.75. 

Meanwhile, Leejam Sports Co. signed on Feb. 5 a memorandum of understanding with UAE-based healthcare provider Burjeel Holding Co. to start a partnership in physiotherapy and sports healthcare services in Saudi Arabia. 

Both companies plan to establish a new company in a 50-50 partnership, the sports company said in a statement to Tadawul. 

The partnership aims to establish and operate a network of physiotherapy, rehabilitation and sports healthcare clinics within and outside Leejam centers in the Kingdom. 

The statement said it would also include the provision of physiotherapy and related wellness services, with a particular focus on sports medicine and advanced rehabilitation therapies. Leejam Sports’ share price closed flat at SR86.4. 


Microsoft, Huawei and Oracle among $9bn of tech deals announced during LEAP23 in Riyadh 

Microsoft, Huawei and Oracle among $9bn of tech deals announced during LEAP23 in Riyadh 
Updated 54 min 54 sec ago

Microsoft, Huawei and Oracle among $9bn of tech deals announced during LEAP23 in Riyadh 

Microsoft, Huawei and Oracle among $9bn of tech deals announced during LEAP23 in Riyadh 

CAIRO: Saudi Arabia witnessed the signing of $9 billion worth of investment contracts on the first day of the global tech event LEAP23 that began on Feb. 6 in Riyadh. 

Aimed at supporting future technology, digital entrepreneurship and tech startups, the deals were announced by Saudi Arabia’s Minister of Communications and Information Technology, Abdullah Al-Sawaha, during his opening speech at the event that will run till Feb. 9. 

These deals include Microsoft’s $2.1 billion investment that the tech giant is putting in to develop a super-wide cloud in the Kingdom, while Oracle’s agreed to invest $1.5 billion to establish a new cloud region in the country.  

Chinese tech firm Huawei also pumped in $400 million to offer cloud services in the Kingdom, while state oil firm Aramco formed a partnership with Zoom worth $434 million to establish a cloud area. In addition, the event saw the signing of $4.5 billion worth of other deals with a wide range of global and local firms for various sectors.  

These investments aim to strengthen the Kingdom’s position as the largest digital economy in the Middle East and North Africa region aligned with Crown Prince Mohammed bin Salman’s goal to empower the technology sector.  

Al-Sawaha stated that hosting the LEAP23 conference is a global affirmation of the great support directed by the Kingdom to transform the economy into a digital landscape that promises rapid developments in line with Vision 2030.  

The conference also witnessed some major announcements including Meta launching the opening of the first Metaverse Academy in MENA, headquartered in Saudi Arabia; WEO Technology and Camel Lab launching Hektar, a multi-content social media app. In addition, MENA Communication and STC announced the launching of Beem – a new application for instant messaging, high-quality voice and video calls, and business features.  

Al-Sawaha stressed that the technology sector holds unprecedented opportunities supported by the Crown Prince in sub-sectors including digital economics, Internet of Things, health tech, quantitative sciences, space and satellites, fintech and open sources.  

In his opening speech, the minister stated that the event is set to host more than 250,000 attendees, as opposed to 100,000 last year, and will continue to see more investments as the Kingdom holds a $42 billion opportunity platform and stands as the largest technology market in the region.  

He added that Saudi Arabia continues to lead the human technical workforce with more than 340,000 workers in the market and female participation in the technical sector reaching 32.5 percent, higher than the average of the EU and Silicon Valley.  

Taking place at the Riyadh Front Center for Exhibitions and Conventions, the conference was launched under the title “Towards New Horizons” with more than 400 global and local technology companies. 


Oil market to reach balance in 2023: KAPSARC expert

Oil market to reach balance in 2023: KAPSARC expert
Updated 06 February 2023

Oil market to reach balance in 2023: KAPSARC expert

Oil market to reach balance in 2023: KAPSARC expert

RIYADH: The oil market is on track to reach balanced levels between supply and demand in 2023, King Abdullah Petroleum Studies and Research Center expert Colin Ward said in an exclusive interview with Arab News.

During 2023, oil supply is projected to surge 2.7 million barrels per day while demand is expected to increase by 1.8 million bpd, the research expert disclosed.

“We're going to see a market that pretty much hit some form of balance,” Ward told Arab News on the sidelines of the International Association for Energy Economics conference in Riyadh. 

Despite this, the KAPSARC expert noted that many unprecedented events could consequently alter demand figures such as whether or not there is a recession coming.

In addition to this, China’s reopening also poses a factor that could impact the demand for oil, Ward revealed.

“We're already seeing indications that their demand for jet fuel is going up significantly because people are traveling a lot more,” he explained.

Speaking on the supply side, Ward reveals that the conflict between Russia and Ukraine as well as the behavior of the Organization of the Petroleum Exporting Countries and other key market players could potentially influence supply figures.

“If we are worried that the price cap is going to somehow have pushed back to where Russia may not wish to provide as much oil to the market, the 2 million barrels that OPEC pulled off is acting as a supply buffer, which means that it could come back online,” he exposed. 

In response to the price cap, people have been stocking up in order to assure that supplies are going to last, the KAPSARC expert pointed out.

“Going forward, there's going to be a period of probably a month or two where the logistics of delivering oil from sources to the consumers are going to take some time to get sorted out,” the researcher highlighted.

“We expect that there's probably going to be an increase in fuels being produced by some nations like China, India, perhaps Turkey or some others who would be able to supply the global market with these fuels,” he added.

The 44th IAEE International Conference is being held in the Saudi capital from Feb. 4 to 9, in what is a first for the Middle East and North African Region.

The event’s theme is “Pathways to a clean, stable, and sustainable energy future”, and is being hosted by KAPSARC and Saudi Association for Energy Economics.

More than 500 delegates from 40 countries are anticipated to attend the conference, with topics set to be discussed including energy, economic development, and climate change, the Circular Carbon Economy, and the role of hydrogen in the energy transition.

The IAEE is a global non-profit organization formed in the US in 1977 and works to promote dialogue and the exchange of ideas around the economic analysis of energy resources.