Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 

Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 
The meeting comes as Saudi Arabia strives to attract foreign direct investments aligned with its Vision 2030 goals. (Shutterstock)
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Updated 05 October 2022

Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 

Russian firms eye stronger business ties with Saudi Arabia amid western sanctions 

RIYADH: A business delegation of 23 Russian companies held talks with Saudi firms in Riyadh on Oct. 4 amid a growing call from the US and EU to cut ties with Kremlin entities. 

The meeting comes as Saudi Arabia strives to attract foreign direct investments aligned with its Vision 2030 goals. 

The talks stressed on the vitality of elevating trade relationships between Saudi Arabia and Russia, while taking advantage of investment opportunities and establishing commercial partnership relations between the two parties to serve common interests. 

Stanislav Yankovitz, the commercial representative at the Russian Embassy, noted that the trade relationship between Saudi Arabia and Russia has leapfrogged in recent years, with commercial exchange volume in 2021 witnessing an increase to $1.7 billion, and is expected to reach $5 billion by the end of 2024.  

The event also witnessed bilateral meetings between businesspeople and representatives of Russian companies working in various sectors which include creative industries, education, electric power and design engineering.

Some of the other sectors include cosmetics, furniture, perfumery, food industry, industrial, information technology, smart technologies, medical equipment and oil and gas.

Counselor of the Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Saudi Arabia Alexander Istomin, said that Russian-Saudi relations are strong and that they have been witnessing continuous rapprochement.

The head of the Saudi-Russian Business Council Tariq Al-Qahtani said that it is playing a crucial role in strengthening trade relations between the two countries as it seeks and provides investment opportunities through the establishment of joint projects. 

Western firms exiting Russia

Meanwhile, owing to the conflict in Ukraine, several western companies have exited their operations in Russia, despite chances of revenue loss. 

Adidas, which has over 500 stores in Russia, suspended its operations in the country — the move is expected to cut 1 percent of its revenue this year. 

Cigarette maker Philip Morris also announced that it has suspended planned investments and will reduce manufacturing in Russia. 

In the energy sector, BP said it would sell its nearly 20 percent stake in Rosneft, the Russian state-controlled oil company. The firm also wrote off $25.5 billion on its nearly 20 percent holding in Rosneft. 

Another energy major Exxon Mobil had announced that it would end its involvement in a large oil and natural gas project. 

In a move that could cost billions, Shell also exited its joint ventures with Gazprom, the Russian natural gas giant.


TASI sheds 304 points as investors’ fears continues pushing the market to ‘red’

TASI sheds 304 points as investors’ fears continues pushing the market to ‘red’
Updated 12 sec ago

TASI sheds 304 points as investors’ fears continues pushing the market to ‘red’

TASI sheds 304 points as investors’ fears continues pushing the market to ‘red’

RIYADH: Saudi Arabia’s benchmark index slipped 304 points on Monday, as investors shied away from the market due to dampening business sentiments, inflationary pressures, and looming uncertainties surrounding the future of the global economy. 

The Tadawul All Share Index, known as TASI, was down 2.84 percent at 10,419 on Monday, while the parallel market Nomu shed 44 points or 2.98 percent to 1441. 

TASI slipped below 11,000 on Nov. 21 and has been hovering under that mark since then.

On Monday, of the 219 listed companies on TASI, 190 retreated, while 20 advanced. 

Etihad Atheeb Telecommunication Co. rose 2.88 percent to lead the gainers, followed by Saudi Industrial Investment Group and Theeb Rent a Car Co., whose share prices surged 2.09 percent and 1.60 percent respectively. 

Prior to the market opening Saudi Industrial Investment Group declared a 7.5 percent cash dividend, at SR0.75 ($0.20) per share, totaling SR566.1 million. 

Saudi Enaya Cooperative Insurance Co. led the fallers, as it was down 9.93 percent at the end of Monday’s trading session. 

Other top fallers were Saudi Arabia Refineries Co., Al-Rajhi Company for Cooperative Insurance, Riyad Bank, and Dr. Sulaiman Al Habib Medical Services Group. 

In the banking sector, Alinma Bank and Al Rajhi Bank fell 3.03 percent and 3.75 percent respectively. 

Saudi Aramco, one of the biggest energy producers in the world slipped 2.12 percent when the session closed on Monday. 

In the food and beverage sector, Almarai Co. went down 2.43 percent. 

Meanwhile, Jeddah-based Middle East Paper Co. announced it had restored the production capacity and operations of its plant in Al Khumrah on Dec. 1, ahead of the previously projected date to complete restoration works. 

Last week, MEPCO revealed the record rainfall in Jeddah had resulted in a stoppage of work at the plant on Nov. 24.

According to a statement, MEPCO incurred a decline in sales worth SR18 million, which equals to almost 7 percent of the projected figures for the fourth quarter. 

In another major development, Al-Saif Stores for Development & Investment Co., known as Alsaif Gallerym announced the successful completion of the book-building process for institutional investors, where the final offer price was set at SR115 per share, with a coverage ratio amounting to 1550 percent of the total offer shares. 


UAE In-Focus — UAE, Japan to set up joint business council; Dubai Future Labs signs 3 deals 

UAE In-Focus — UAE, Japan to set up joint business council; Dubai Future Labs signs 3 deals 
Updated 48 min 29 sec ago

UAE In-Focus — UAE, Japan to set up joint business council; Dubai Future Labs signs 3 deals 

UAE In-Focus — UAE, Japan to set up joint business council; Dubai Future Labs signs 3 deals 

RIYADH: In an effort to increase trade ties, the UAE and Japan agreed to set up a joint business council that will promote cooperation and facilitate greater movement of business communities between both countries.   

The Federation of UAE Chambers of Commerce and Industry, and Japan External Trade Organization in Dubai, also known as JETRO Dubai, signed an agreement to set up the proposed bilateral business council by the first quarter of 2023, the Emirates News Agency reported.

The council will work toward developing joint projects and exchanging the expertise of the two sides. 

This came during a meeting that brought together Humaid Mohammed bin Salem, secretary general of FCCI, and Masami Ando, managing director of JETRO Dubai, in the presence of officials from both sides. 

Bin Salem urged Japanese companies to invest in the UAE and take advantage of government incentives, as well as the favorable investment climate and legislation. He called on Emirati and Japanese businesses to explore business opportunities in the two countries and develop active partnerships to boost trade exchange. 

Dubai Future Labs signs 3 deals  

Dubai Future Labs, a part of Dubai Future Foundation, signed three agreements with Emirates, DP World, and dnata to deploy advanced future technologies across aviation and logistics – two vital non-oil sectors for Dubai and the UAE. 

These national partnerships aim to activate the Dubai Robotics and Automation Program that was launched last September to boost the development, testing and adoption of robotics and automation and accelerate its deployment in key economic sectors, WAM reported. 

Dubai Future Labs’ deal with DP World will include developing smart, autonomous electric vehicles for terminal operations that can serve as a more sustainable, reliable, efficient and safer alternative. 

Its agreement with Emirates work will facilitate various innovative pilot projects including a robot check-in agent that leverages facial recognition and interacts with passengers as well as a robot waiter serving in airport lounges.  

Whereas the deal between Dubai Future Labs and dnata will promote research, development and trial innovations to further improve safety, efficiency and sustainability across the company’s ground handling and cargo operations at Dubai International and Dubai World Central airports. 

Integrated platform for investment 

Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum approved the establishment of an integrated national platform that highlights opportunities for investors in various sectors, such as financial technology, tourism, manufacturing, and renewable energy.  

The platform will be supervised by the Ministry of Economy. 

He also approved the national building regulations and standards, which includes sustainability standards for roads, buildings, and housing, to decrease the consumption of natural resources and reduce the carbon footprint of the UAE. 

The UAE Cabinet meeting also approved the foreign investor compass project, which represents one of the transformative projects of the Ministry of Economy, WAM reported. 

The new project includes an electronic platform, guides and promotional tools that highlight various opportunities for foreign investors in the sectors of financial technology, agricultural technology, healthcare, education among others. 


Egypt’s output falls sharply amid inflationary pressure as PMI drops to 45.4: S&P Global

Egypt’s output falls sharply amid inflationary pressure as PMI drops to 45.4: S&P Global
Updated 05 December 2022

Egypt’s output falls sharply amid inflationary pressure as PMI drops to 45.4: S&P Global

Egypt’s output falls sharply amid inflationary pressure as PMI drops to 45.4: S&P Global

RIYADH: Egypt’s non-oil businesses witnessed a marked contraction in operating conditions in November, resulting in output falling at the sharpest rate since the early pandemic as the country continues to face inflationary pressure amid the weakening Egyptian pound, according to S&P Global. 

The impact of this was visible in Egypt’s Purchasing Managers’ Index which fell from 47.7 in October to 45.4 in November — the second lowest since June 2020, the report noted.

The rating agency said that the new low extends the current sub-50.0 sequence to two years.

The key reason for this downturn was a rapid decrease in business activity, with S&P research revealing that companies were forced to cut output as they faced accelerated cost rises. 

“Egyptian firms faced an immediate hit to demand from a rapid depreciation of the pound since late October, with the November PMI results signaling the worst drops in output and new orders since May 2020,” said David Owen, an economist at S&P Global Market Intelligence.  

He said the pound's depreciation against the US dollar led to a marked increase in prices paid for raw materials, which have already been exacerbated by import restrictions since early 2022.  

According to S&P Global, Egypt’s purchase price inflation hit a 52-month high, leading 42 percent of surveyed firms to report a rise in total input costs over the month. 

While new orders continued to fall rapidly for firms, Egypt saw employment levels still expanding for the fourth time in five months as business confidence recovered slightly from October's series low. 

But S&P said the rate of decline in new orders deepened in November, amid reports of spending cuts at customers due to rapid inflation and elevated interest rates. 

"The latest downturn also came in the midst of an emergency 2 percent hike in interest rates, amid continued efforts to bring inflation down from its current four-year high of 16.2 percent,” said Owen.  

While the latest FX move signals a further rise in inflation in November, he said it is hoped that slowing demand and falling commodity prices will start to alleviate price pressures in the medium- to long-term. 

Looking ahead, the report noted that Egyptian firms were slightly more optimistic about future output in November, albeit following a series record low in October. However, it added that concerns about high inflation, rising interest rates, currency weakness and a global economic slowdown remained dampeners on sentiment. 


Crown Prince announces Sindalah, NEOM’s first luxury island development

Crown Prince announces Sindalah, NEOM’s first luxury island development
Updated 05 December 2022

Crown Prince announces Sindalah, NEOM’s first luxury island development

Crown Prince announces Sindalah, NEOM’s first luxury island development
  • Sindalah is one of a group of islands that will be developed in the giga-project

RIYADH: NEOM’s first luxury island destination Sindalah will play host to superyachts and top-end apartments, Crown Prince Mohammed bin Salman revealed as he announced the latest project set to boost Saudi Arabia’s tourism industry.

Extending over an area of approximately 840,000sq. m., Sindalah is one of a group of islands that will be developed in the giga-project, and is expected to create 3,500 jobs for the tourism sector and hospitality and leisure services.

The island will act as a main gateway to the Red Sea, offering bespoke nautical experiences and is expected to start welcoming guests from early 2024, according to the Saudi Press Agency.

The Crown Prince said: “This is another significant moment for NEOM and a major step in the Kingdom realizing its tourism ambitions under Vision 2030. 

“Sindalah will be NEOM’s first luxury island and yacht club destination in the Red Sea, providing a scenic gateway to the Red Sea that will become the region’s most exciting and attractive tourism location. 

“It will be a destination where travelers can experience the true beauty of NEOM and Saudi Arabia, above and below the water, making Sindalah the future of luxury travel.”

 

 

Mohammed bin Salman, who is also the chairman of NEOM’s Board of Directors, said the launch of Sindalah is a major step in realizing the Kingdom’s tourism ambitions, in line with the goals outlined in Vision 2030.

Sindalah will have an 86-berth marina, as well as hosting 413 ultra-premium hotel rooms, in addition to 333 top-end serviced apartments. 

Other attractions in Sindalah include a luxe beach club, yacht club and 38 unique culinary offerings that will provide an incomparable experience in the Red Sea.

Sindalah is also expected to become a popular golfing destination by offering enthusiasts the opportunity to experience a world-class 6,474-yard (5,920 meters) par 70 course. With its 18 tees, the Sindalah golf course will deliver two unique nine-hole experiences.

NEOM, the $500 billion smart city, is one of the most important projects supporting Saudi Arabia’s national tourism strategy, as the Kingdom steadily diversifies its economy which was heavily dependent on oil for decades. 

In November, speaking at the World Travel and Tourism Council Global Summit, Nadhmi Al-Nasr, CEO of NEOM said that the hanging stadiums in the smart city will make tourists reimagine and visualize the future. 

“In The Line, we want people to come and see how sports stadiums are built, and where they are built. The sports stadiums in NEOM are 300 meter high, loose and hanging in the air,” said Al-Nasr.

He also added that OXAGON, the industrial city in NEOM also has all the potential to become a world-class tourist destination, where visitors can come and see how the future will be.

“It is in OXAGON where all industries will be, and it is the port of NEOM. Yet, we would like to see tourists spending a day or two in OXAGON. They will see the future of industries in OXAGON. Everything in NEOM is built for the future era. We want them to come and see how future sea ports will operate,” he added.


Saudi Arabia’s non-oil sector growth highest since September 2021 as PMI hits 58.5

Saudi Arabia’s non-oil sector growth highest since September 2021 as PMI hits 58.5
Updated 05 December 2022

Saudi Arabia’s non-oil sector growth highest since September 2021 as PMI hits 58.5

Saudi Arabia’s non-oil sector growth highest since September 2021 as PMI hits 58.5

RIYADH: Saudi Arabia’s Purchasing Managers’ Index hit 58.5 in November — the strongest level since September 2021 — as the Kingdom’s non-oil private sector continues to expand amid rising inflationary pressure, according to a report.

The latest Riyad Bank Saudi Arabia PMI report noted that the Kingdom has maintained growth in the non-oil private sector for the 27th consecutive month.

In October, Saudi Arabia’s PMI was 57.2, while in September, it was 56.6.

According to the index, released by S&P Global, readings above the 50 mark show growth, while those below 50 signal contraction.

“The Saudi economy (continued) its expansion in the non-oil sector in November, business conditions have improved across the board in light of rising demand,” said Naif Al-Ghaith, chief economist at Riyad Bank.

Al-Ghaith added that output levels in the Kingdom’s non-oil sector have expanded at the fastest rate in seven years, driving cost pressures higher, and resulting in increased prices charged to customers.

He added: “Improved business expectations were also observed as a result of the ongoing execution of Vision 2030 initiatives, which provided confidence to the outlook of the future output of the non-oil activities.”

According to the report, the rate of sales growth of non-oil companies picked up by the sharpest level in over a year in November, as over 41 percent of surveyed businesses reported an increase from the prior month.

The report further noted that these companies saw the quickest rise in new export business since November 2015, due to strong domestic conditions.

The PMI report also hinted at the uptick in input cost inflation during November, with average input prices rising sharply and at the quickest pace since July.

“The faster pace of cost inflation led to a solid and quicker increase in output charges, as firms looked to pass through higher expenses to their customers,” the report added.

The report further pointed out that output prices rose in the manufacturing, wholesale & retail and services sectors, while it fell in the construction industry.

According to the report, job creation in the non-oil sector was very mild in November, as most of the firms kept staffing unchanged.