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.


Saudi Arabia’s real GDP grows by 5.4% in Q4 2022: GASTAT

Saudi Arabia’s real GDP grows by 5.4% in Q4 2022: GASTAT
Updated 26 min 22 sec ago

Saudi Arabia’s real GDP grows by 5.4% in Q4 2022: GASTAT

Saudi Arabia’s real GDP grows by 5.4% in Q4 2022: GASTAT

RIYADH: Saudi Arabia's real gross domestic product grew by 5.4 percent in the fourth quarter of 2022, compared to the same period in 2021, driven by a high increase in non-oil activities, according to the latest report released by the General Authority for Statistics. 

The GASTAT report noted that non-oil activities in the Kingdom rose 6.2 percent year-on-year in the fourth quarter of 2022, while oil activities rose by 6.1 percent during the same period. 

The report further added that government services activities increased by 1.8 percent in the fourth quarter of last year, compared to the same quarter in 2021. 

According to the GASTAT report, Saudi Arabia's economy grew by 8.7 percent in 2022, compared to 3.2 percent recorded in 2021, driven by a growth in oil activities by 15.4 percent. 

In 2022, non-oil activities and government services activities rose by 5.4 percent and 2.2 percent respectively. 


Oil Updates — Crude slips; Russia bans oil exporters from adhering to Western price caps 

Oil Updates — Crude slips; Russia bans oil exporters from adhering to Western price caps 
Updated 31 January 2023

Oil Updates — Crude slips; Russia bans oil exporters from adhering to Western price caps 

Oil Updates — Crude slips; Russia bans oil exporters from adhering to Western price caps 

RIYADH: Oil prices extended losses on Tuesday as the threat of further interest rate increases and continued Russian crude flows canceled out demand recovery expectations from China. 

March Brent crude futures fell 5 cents or .06 percent to $84.85 per barrel by 08.15 a.m. Saudi time, while the more heavily traded April contracts fell by 32 cents or 0.38 percent to $84.18 a barrel. 

US West Texas Intermediate crude futures slipped 33 cents, or 0.44 percent, to $77.57 a barrel. 

Russia bans oil exporters from adhering to Western price caps 

The Russian government on Monday banned domestic oil exporters and customs bodies from adhering to Western-imposed price caps on Russian crude. 

The measure was issued to help enforce President Vladimir Putin’s decree of Dec. 27 that prohibited the supply of crude oil and oil products from Feb. 1, for five months, to nations that abide by the caps. 

The Group of Seven economies, the EU and Australia agreed on Dec. 5 to ban the use of Western-supplied maritime insurance, finance and brokering for seaborne Russian oil priced above $60 per barrel as part of Western sanctions on Moscow over its actions in Ukraine. 

The new Russian act bans corporates and individuals from including oil price cap mechanisms in their contracts. 

They also have to report to customs officials and the energy ministry any attempts to impose oil price caps. 

In addition, customs bodies have to prevent goods from leaving Russia if they find such mechanisms have been applied. 

CNOOC’s $3 billion UK portfolio sale halted on valuation gap 

CNOOC Ltd., China’s top offshore oil and gas producer, has halted a planned sale of its UK North Sea portfolio, which could have been valued at as much as $3 billion, according to a Bloomberg News report.  

Although initial offers failed to meet CNOOC’s expectations for the business, it could still resume a sale once conditions improve, the report added, citing people familiar with the matter.  

CNOOC did not immediately respond to Reuter's request for comment. 

Reuters has reported that CNOOC was preparing to exit its operations in Britain, Canada and the United States because of concerns in Beijing the assets could become subject to Western sanctions. 

(With input from Reuters) 

 

 

 


IMF lowers Saudi Arabia’s economic growth to 2.6% for 2023

IMF lowers Saudi Arabia’s economic growth to 2.6% for 2023
Updated 31 January 2023

IMF lowers Saudi Arabia’s economic growth to 2.6% for 2023

IMF lowers Saudi Arabia’s economic growth to 2.6% for 2023

RIYADH: The International Monetary Fund has lowered Saudi Arabia’s economic growth forecast to 2.6 percent for 2023, 1.1 percentage points lower than its October estimate of 3.7 percent, its latest report showed. 

This is in line with its projection for the Middle East region which is projected to decline from 5.3 percent in 2022 to 3.2 percent in 2023, primarily attributed to Saudi Arabia’s growth slowdown, according to IMF’s World Economic Outlook report.

In 2022, Saudi Arabia witnessed an economic growth of 8.7 percent, the highest in the region. 

IMF, in its report, noted that the economic growth slowdown in Saudi Arabia could be due to the decision made by the Organization of Petroleum Exporting Countries and its allies known as OPEC+ to reduce the oil output. 

Earlier in October 2022, OPEC+ had agreed to cut output by 2 million barrels per day, which equals to about 2 percent of world demand, from November 2022 until the end of 2023.

The IMF report, however, noted that non-oil growth in Saudi Arabia and the rest of the region will remain robust in 2023. 


Dubai International Financial Centre launches metaverse platform

Dubai International Financial Centre launches metaverse platform
Updated 30 January 2023

Dubai International Financial Centre launches metaverse platform

Dubai International Financial Centre launches metaverse platform
  • Strategy aims to grow the region’s GDP, attract companies

DUBAI: Dubai International Financial Centre announced the launch of the DIFC Metaverse Platform on Monday in a bid to attract technology innovators from across the globe, Emirates News Agency reported.

The platform is part of the Dubai Metaverse Strategy, which aims to add $4 billion to the emirate’s GDP by 2030, support 40,000 virtual jobs, and attract 1,000 blockchain and metaverse companies. 

The platform also supports the Dubai Economic Agenda’s goal of generating economic value worth $27 billion per year from digital transformation. 

Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications Omar bin Sultan Al Olama said that the metaverse platform is the first in a series of initiatives aimed at bolstering Dubai’s position as a global hub for the latest digital trends, and accelerating the pace of achieving the strategy’s objectives.

DIFC Authority CEO Arif Amiri said: “The Dubai government has shown great foresight in introducing a metaverse strategy that has the objective of making the emirate a global hub for technology and innovation.

“The development of the integrated DIFC Metaverse Platform will accelerate the achievements of Dubai’s aspirations in this sector.

“The initiative is a natural extension of our Innovation Hub proposition that has shaped the technology and innovation landscape in the Middle East, Africa and South Asia region.”

The DIFC Metaverse Platform includes an accelerator program with a physical studio for metaverse technology, which will foster the growth of a creator community and venture creation.

It will also work on metaverse policy development and legislation on open data, digital identity, and metaverse company law frameworks.


Saudi banks’ profits up 21% in December, central bank data shows

Saudi banks’ profits up 21% in December, central bank data shows
Updated 30 January 2023

Saudi banks’ profits up 21% in December, central bank data shows

Saudi banks’ profits up 21% in December, central bank data shows

RIYADH: Deposits in Saudi banks grew by 9 percent year-on-year to SR2.29 trillion ($609.97 billion) with the major chunk deposited by government agencies, the monthly bulletin issued by the Saudi Central Bank, also known as SAMA, showed.

Data showed that deposits by government entities rose by 27 percent, the highest in 16 years, reaching SR651.2 billion.

Saudi-listed banks reported a 21 percent rise in aggregate net profit before zakat and tax to SR6.16 billion in December 2022, compared to SR5.11 billion a year earlier.

The data covered the results of Tadawul-listed banks and some foreign banks operating in Saudi Arabia.

Banks’ aggregate assets increased nearly 10 percent year-on-year to SR3.62 trillion in December.

Loans issued to individuals in the Kingdom saw a 14 percent surge during 2022 reaching SR1.17 trillion by the end of 2022 as compared to SR1.02 trillion by the end of 2021.

The volume of residential real estate financing for individuals declined by 21 percent in 2022 for the first time since 2016. The total volume remained at SR123.4 billion.

The SAMA report showed that remittances from Saudi Arabia fell by 7 percent during 2022 to SR143.2 billion while remittances to the Kingdom from citizens living abroad recorded a growth of 11 percent to reach SR7.25 billion.

Assets held by the central bank shrank by SR63.8 billion month-on-month to SR1.93 trillion in December 2022. However, as compared to December 2021, SAMA’s assets rose by SR85.1 billion.

The central bank’s investments in foreign securities, which make up 58 percent of its total assets, edged down 0.2 percent year-on-year to around SR1.13 trillion last month.