Saudi stocks drop after inflation data fuels rate hike concerns: Closing bell

Saudi stocks drop after inflation data fuels rate hike concerns: Closing bell
The Tadawul All Share Index ended the session with a 1.58 percent loss to 11,893 (Shutterstock)
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Updated 14 September 2022

Saudi stocks drop after inflation data fuels rate hike concerns: Closing bell

Saudi stocks drop after inflation data fuels rate hike concerns: Closing bell

RIYADH: Saudi stocks fell during the final hours of Wednesday amid concerns about an upcoming Fed rate hike following a surge in US inflation.

The Tadawul All Share Index ended the session with a 1.58 percent loss to 11,893, while the parallel market Nomu finished with a 0.69 percent drop at 20,851.

Saudi oil giant Aramco fell 0.54 percent, while Rabigh Refining and Petrochemical Co. declined 2.24 percent,

The Kingdom’s largest valued bank Al Rajhi fell 2.21 percent, while Alinma Bank edged down 1.75 percent.

The Saudi National Bank, which is the Kingdom's largest lender, shed 1.04 percent, while Saudi British Bank dropped 1.62 percent.

United Electronics Co., known as eXtra, was down 1.34 percent, after it invited its shareholders to vote on a 33 percent capital increase to SR800 million ($231 million).

Scientific and Medical Equipment House Co. fell 0.15 percent, after it signed a SR118 million contract with the Ministry of Education for the operation, maintenance and cleaning of the educational health services center at Najran University.

Taiba Investments Co. fell 0.88 percent, following shareholders approval for the SR459 million purchase of all Savola Group Co. shares in Knowledge Economic City Co..


MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  

MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  
Updated 18 sec ago

MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  

MENA faces $994bn infrastructure funding gap between 2016 and 2040: report  

RIYADH: The Middle East and North Africa region is confronting the largest infrastructure funding gap in the Organisation of Islamic Cooperation, estimated to be about $993.9 billion between 2016 and 2040, according to the ICD-Refinitiv OIC Infrastructure Outlook 2023 report.  

The study noted that the region faced a funding gap of $684.9 billion in the infrastructure development of roads, $110.8 billion in water, $47.3 billion in rail, $33.6 billion in ports and $24.7 million in airports during the 25 years.  

Electricity infrastructure is the only sector where MENA holds a surplus of $27.4 billion.  

Sub-Saharan Africa, on the other hand, faced an infrastructure funding gap of $665 billion between 2016 and 2040, with telecommunication accounting for $178.6 billion, electricity for $126.3 billion and rail for $42.5 billion.  

Similarly, Europe and Central Asia were better placed with a gap of $547 billion, lagging by $414 billion in road development.  

“As Islamic markets grow in global importance … and their potential expands as markets for consumption and investment, it is becoming increasingly vital that the gaps are filled,” said Mustafa Adil, head of Islamic finance, Refinitiv, in the report.  

The report further revealed that the overall funding gap for the 57-member OIC countries is estimated at $2.7 trillion during the 25 years.    

The top five countries in terms of infrastructure funding gaps included Turkiye with $405 billion, Egypt with $230 billion, Nigeria with $221 billion, Bangladesh with $192 billion and Iran with $153 billion.  

Moreover, the most significant funding gap across the OIC was in roads, making up 53 percent of the total.  

Telecommunications, electricity and water contributed 38 percent of the overall gap, followed by rail, ports and airports with a combined 9 percent.  

The report further said key challenges facing OIC countries in developing the infrastructure are lack of funding, limited institutional capacity, vulnerability to political risk, weak legal and regulatory frameworks, and the environmental and social implications of any infrastructure projects.  

There are, however, significant opportunities to support economic growth and boost prosperity, increase trade, enhance social welfare, improve energy security and climate resilience, and improve regional integration, the report said.  


SAMA opens registration for investment training program

SAMA opens registration for investment training program
Updated 53 min 43 sec ago

SAMA opens registration for investment training program

SAMA opens registration for investment training program

RIYADH: Striving to create a robust community of investment professionals, the Saudi Central Bank, also known as SAMA, has opened registration for the third Investment Immersion Program.

The program embodies a blend of lectures and hands-on training in multiple investment fields, intent on fostering employment and cultivating local investment expertise.

It has been designed in collaboration with the Wharton School of the University of Pennsylvania and several prominent global banks and asset managers.

Participants will be offered a range of development programs to enhance their technical investment skills, and will receive attractive employment benefits, SAMA said.

The program’s registration will continue until June 30. Saudi nationals with bachelor’s or master’s degrees in finance, accounting, economics, statistics, or other business-related majors from Saudi or accredited international universities are eligible to apply.

Candidates must hold good grades, demonstrate proficiency in English, be under the age of 27, and successfully navigate both behavioral and technical assessments, in addition to interview processes.


UAE banks’ profits surge 35% to $4.98bn in Q1: report

UAE banks’ profits surge 35% to $4.98bn in Q1: report
Updated 30 May 2023

UAE banks’ profits surge 35% to $4.98bn in Q1: report

UAE banks’ profits surge 35% to $4.98bn in Q1: report

RIYADH: The UAE’s banking sector recorded a 35 percent growth in net profits to 18.3 billion dirhams ($4.98 billion) during the first quarter of 2023, reported global professional services firm Alvarez & Marsal.

This boost in profitability resulted from improved cost efficiencies, lower impairment charges, and increased non-core income.

“This has been a very strong quarter for the UAE banks. We expect that for the balance of the year, the UAE banking sector will maintain the gains of the first quarter,” said Asad Ahmed, managing director and head of the Middle East financial services at Alvarez & Marsal, in a statement.

He added that the banks’ net interest margins remained stable at 2.8 percent in the first quarter.

“Stable NIMs, improving cost efficiencies, and lower impairments have led to record profits for the UAE banks in the current quarter, although we witnessed a mixed performance by some banks on the margin front.”

NIM reveals the amount of money a bank earns in interest on loans compared to the amount it pays in interest on deposits. It is one of the indicators of a bank’s profitability and growth.

Amid monetary tightening, the banking sector experienced a 6.2 percent growth in deposits and a 2 percent rise in loans and advances.

Customer deposits mobilization outperformed the rise in deposits for the first time since the first quarter of 2022, reaching 43.5 percent, according to the report.

Moreover, the UAE banks’ aggregate net interest income rose by 0.4 percent quarter on quarter.

According to the report, banks reported higher profitability as return on equity improved by 5.9 percent quarter on quarter to 19.3 percent.

It added that the return on assets also improved to 2.2 percent, reflecting levels not seen in the past four years.

Ahmed expected that these banks would be equipped to face a mild reduction in economic growth resulting from the agreed oil output cuts and higher interest rates.

He noted: “Higher margins should drive bank profitability though slightly tempered by an uptick in provisioning. The UAE banks are well provided for and sufficiently capitalized to maintain capital adequacy ratio levels, well above regulatory requirements.”

The UAE’s top 10 listed banks analyzed in the report included First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank, and Mashreq Bank.

The report also examined Abu Dhabi Islamic Bank, Commercial Bank of Dubai, National Bank of Fujairah, National Bank of Ras Al-Khaimah, and Sharjah Islamic Bank.

It assessed the banks’ key performance areas, including size, liquidity, income, operating efficiency, risk, profitability, and capital.


Saudi construction sector accounts for 6% of GDP, says official

Saudi construction sector accounts for 6% of GDP, says official
Updated 30 May 2023

Saudi construction sector accounts for 6% of GDP, says official

Saudi construction sector accounts for 6% of GDP, says official

RIYADH: The construction sector, valued at over SR255 billion ($68 billion) accounts for 6 percent of the gross domestic product of the Kingdom, according to the chairman of Saudi Contractors Authority.

Speaking at the Builders of Egypt Forum in Cairo on Sunday, Zakria Al-Abdulqadir said the construction sector is the second-largest non-oil sector in Saudi Arabia.

The official said the authority organized the sixth edition of the Future Projects Forum last week, which showcased 3,000 projects worth around $270 billion.

He said SCA is the current chair of the Federation of Contractors from Islamic Countries, which represents the construction sector of 26 Islamic countries.

The Cairo event was organized by the Egyptian Federation for Construction and Building Contractors in collaboration with the African Federation for Construction Contractors’ Association.

According to a report issued by the US-Saudi Business Council recently, contract values in the Kingdom’s construction sector reached SR71.5 million during the fourth quarter of 2022, accounting for 37 percent of the total contracts awarded last year.   

The report said the overall deals struck between October and December were the highest since the first quarter of 2015 when contract values touched SR88.1 billion.   

“The surge in contract awards continues unabated on the back of a growing economy that was fueled by significant oil revenues and the acceleration of giga-projects following the COVID-19 slowdown,” said Albara’a Alwazir, director of economic research at the USSBC.


Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO

Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO
Updated 30 May 2023

Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO

Vision 2030 will improve connectivity between continents and enhance international trade: NIDLP CEO

RIYADH: Saudi Arabia’s Vision 2030 blueprint will have a profound impact beyond the Kingdom as it improves connectivity between continents and enhances international trade, said a top official. 

Speaking at an event organized at the King Abdullah Petroleum Studies and Research Center on Tuesday, Suliman Al-Mazroua, CEO of the National Industrial Development and Logistics Program, said that the Kingdom had witnessed several monumental changes in its economy since the launch of Vision 2030. 

“Vision 2030 impacts are not limited to Saudi Arabia. Becoming an industrial powerhouse and a global logistics hub will open new possibilities for products and markets. It will also improve connectivity between continents and enhance international trade. Therefore, we continue to invite the international community to be part of our journey,” said Al-Mazroua. 

He added: “Since Vision 2030 was launched, we started to enjoy the fruits of it across all aspects of our lives. Foreign direct investments in Saudi Arabia doubled. Private sector contribution to the GDP (gross domestic product) doubled.” 

Highlighting the growth of Saudi Arabia in the transport sector, Al-Mazroua revealed that Saudi Arabia had jumped 17 places in the Logistics Performance Index released by the World Bank last April. 

The index showed Saudi Arabia reaching the 38th spot, excelling in performance efficiency through several sub-indicators, including logistics competence, tracking, timeliness, customs, infrastructure and international shipments indices. 

According to Al-Mazroua, Saudi Arabia’s National Logistics Strategy, launched by Crown Prince Mohammed bin Salman in 2021, is one of the key drivers behind this growth. 

The strategy aims to position the Kingdom as a global logistics hub connecting three continents and improve all transportation services while improving the capabilities of Saudi Arabia’s air cargo sector by doubling its capacity to more than 4.5 million tons by 2030. 

“The customs used to take 288 hours, and now it takes two hours. We are among the best when it comes to processing, both in and out of the country,” said Al-Mazroua. 

According to the NIDLP CEO, technology is one of the most crucial enablers of the goals outlined in Vision 2030. 

“When we look at the future, we know technology is our friend. We will have smart mines, supplying smart factories connected to smart industrial cities powered by smart grids, and move goods and people through smart logistics. Connecting the smart is the new smart,” he said. 

Al-Mazroua added: “Having the right data will help us to predict the future and improvise clean energy generation. Look at the history; the semiconductor challenge the world faced a few months ago. When we look at the data, it was predicted. If we had the right data at that time, we would predict this issue and solve it.” 

Al-Mazroua continued that NIDLP, with its various initiatives, is always trying to minimize the risk and maximize the returns for investors. 

“In NIDLP, we are always investor-centric. We cater to both international and local investors through the fundamentals of risk and return. We try our best to minimize the risk and maximize the return for the investors,” said Al-Mazroua. 
He further noted that NIDLP is committed to maximizing the returns of the investors sustainably. It is enabling regulations, creating digital infrastructure, ensuring the availability of resources, opening world-class research and development centers and providing access to local and international markets. 

The program is also keen on protecting the environment, facilitating global energy transition and creating a transport and logistics sector built for the long term, which is crucial to achieving these sustainable goals. 

Last year, during an interview with Arab News, Al-Mazroua opined that Saudi Arabia’s logistics sector needs a considerable investment combined between the government and private sector by the end of this decade to turn the Kingdom into a global logistics hub. 

He added that the Kingdom would provide the right environment and regulations to attract world transportation companies which would help Saudi Arabia emerge as one of the world’s busiest logistics centers.