UAE In-Focus: UAE has 11 IPOs worth $2.2bn in the pipeline, says top official

UAE In-Focus: UAE has 11 IPOs worth $2.2bn in the pipeline, says top official
Dubai entities that went for IPO last year included Dubai Electricity and Water Authority, which raised 22.3 billion dirhams (Shutterstock)
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Updated 25 January 2023

UAE In-Focus: UAE has 11 IPOs worth $2.2bn in the pipeline, says top official

UAE In-Focus: UAE has 11 IPOs worth $2.2bn in the pipeline, says top official

RIYADH: After seeing its highest level of initial public offerings by aggregate value in 2022 for 14 years, the UAE is set to keep up the momentum this year with IPOs worth more than 8 billion dirhams ($2.2 billion) in the pipeline, a top official said.

Speaking at the MENA IPO Summit in Dubai, the deputy CEO of the Securities and Commodities Authority, Mohammed Khalifa Al Hadari, said that 2021 had been a year of recovery but there had been significant growth in local capital markets in 2022.

“There are 11 new IPOs with a total value exceeding 8 billion dirhams, including four free zone companies and two special purpose acquisition companies, waiting in the pipeline currently,” he said.

Al Hadari added: “The current flurry of activity is more sustainable than the previous IPO booms as it is part of the wider well-defined government strategy to expand diversity to supply the markets.  

“The Dubai government last year announced plans for 10 state-owned companies as part of their strategy to double the size of the capital markets to around 3 trillion dirhams and attract foreign investments.” 

The UAE’s IPO pipeline was very strong last year with a number of public and private sector entities listing on the Dubai and Abu Dhabi stock exchanges.  

Dubai entities that went for IPO last year included Dubai Electricity and Water Authority, which raised 22.3 billion dirhams, the UAE’s and Europe, Middle East and Africa’s largest-ever IPO. 

Al Hadari went on to say that Abu Dhabi Securities Exchange could list 13 additional companies this year including four companies from outside the UAE. 

India-UAE Partnership Summit calls for economic partnerships 

The India-UAE Partnership Summit called for building new economic partnerships that could drive the two countries’ strategic development plans.  

Held at Dubai Chambers’ headquarters, the summit was inaugurated by Indian Commerce and Industry Minister Piyush Goyal. He highlighted that the UAE-India Comprehensive Economic Partnership Agreement has given a natural boost to key sectors such as food and agriculture products as well as gems and jewelry. 

“India and the UAE are both pursuing dynamic trade and investment policies… Our growing bilateral trade will play an integral role in the UAE’s efforts to double the size of its economy by 2030,” Goyal said.

He added: “The destinies of the UAE and India have been inextricably intertwined for centuries. A closer collaboration, trust and the spirit of entrepreneurship will create limitless opportunities for our economies, our industries, our cities, and our people, now and for generations to come.”

During his keynote address, Mohammad Ali Rashid Lootah, president and CEO of Dubai Chambers, revealed that the number of new Indian companies that joined Dubai Chamber of Commerce in 2022 exceeded 11,000, bringing the total number of Indian companies registered with the Chamber to more than 83,000.

He confirmed that this year will see expansion in the Chamber's Mumbai office activities to keep pace with the growing momentum in bilateral relations. 

Abu Dhabi hotel revenue hits $1.5bn in 2022

Reflecting a strong rebound in tourism, a total of 4.1 million hotel visitors stayed in Abu Dhabi hotels during 2022, 24 percent up from 2021, data by the Department of Culture and Tourism – Abu Dhabi, revealed.

Hotel revenues climbed by 23 percent from the previous year to 5.4 billion dirhams in 2022.

The statistics showed that Abu Dhabi hotels recorded occupancy rates of 70 percent during the reference year, a growth of 0.2 percent compared to 2021.

The average hotel stay for guests was about 3 nights per guest, and the average revenue per available room was 263 dirhams, up 19 percent. 

UAE nationals accounted for the largest share of the capital’s hotel guests during the past year, with a share of 29 percent, or the equivalent of 1.18 million guests. 

Indian nationalities led all other non-Emiratis with a share of 12 percent, or the equivalent of 480,000 visitors, up 31 percent from the same period in 2021.


Closing bell: Saudi bourse slips 29 points to close at 10,811 

Closing bell: Saudi bourse slips 29 points to close at 10,811 
Updated 30 January 2023

Closing bell: Saudi bourse slips 29 points to close at 10,811 

Closing bell: Saudi bourse slips 29 points to close at 10,811 

RIYADH: Saudi Arabia’s Tadawul All Share Index fell 28.81 points — or 0.27 percent — on Monday to close at 10,810.68. 

While MSCI Tadawul 30 Index ended flat at 1,492.97, the parallel market Nomu fell 27.67 points to 19,151.14. 

TASI’s total trading turnover of the benchmark index on Monday was SR5 billion ($1.33 billion), with 69 stocks of the listed 223 advancing and 135 retreating. 

Fawaz Abdulaziz Alhokair Co., also known as Cenomi Retail, was the topmost gainer of the day, rising 7.03 percent to SR18.88. 

The company was also the topmost gainer on Sunday as it rose 9.98 percent, following the announcement of its plans to divest 26 non-strategic brands to rationalize its brand portfolio. 

The franchisee retailer wants to focus on “champion brands” occupying the No. 1 or No. 2 positions in their sectors.  

The other top gainers were East Pipes Integrated Co. for Industry, healthcare player Al Hammadi Holding, Al Kathiri Holding Co., and Allianz Saudi Fransi Cooperative Insurance Co. 

The worst performer on Monday was Alinma Hospitality REIT Fund, which fell 4.80 percent to SR9.52 on its debut after opening at SR9.25. 

The SR1.2 billion fund was listed on Monday at SR10 per unit, taking the total number of real estate investment trusts in the primary market to 18. 

Subscriptions to the fund’s units took place during the period from Oct. 30 to Nov. 7, 2022. A minimum of 50 units were allocated to each subscriber, while the remaining shares were allocated pro-rata.    

The other stocks that performed poorly included Halwani Bros. Co., Yanbu Cement Co., Allied Cooperative Insurance Group, and Mulkia Gulf Real Estate REIT. 

Among sectoral indices, 12 of the 21 listed on the stock exchange declined, while one stayed flat and the rest advanced. 

The Media and Entertainment Index was the worst-performing sector as it fell 2.01 percent to 22,423.88, weighed down by its vital constituent, Saudi Research, and Media Group, which stumbled 2.48 percent to SR189. 

The Software & Services Index was the best-performing index thanks to Elm Co., which jumped 3.08 percent to SR354.60. On the other hand, Al Moammar Information Systems Co. moved up 2.34 percent to SR96.20. The other gainers were Arabian Internet and Communications Services Co. and Arab Sea Information System Co. 

On the announcements front, Saudi Paper Manufacturing Co. informed the stock exchange that its shareholders approved on Jan. 29 the board of directors’ recommendation to repurchase up to 1 million treasury shares, not exceeding 5 percent of the issued capital. 

The decision came as the board and executive management saw that the share market price was less than its fair value. 

The repurchase will be financed from the company’s resources using its cash balances or credit facilities, the company said in the statement to Tadawul.   


GCC banks to refrain from redeeming hybrid capital as volatility rises: S&P Report 

GCC banks to refrain from redeeming hybrid capital as volatility rises: S&P Report 
Updated 30 January 2023

GCC banks to refrain from redeeming hybrid capital as volatility rises: S&P Report 

GCC banks to refrain from redeeming hybrid capital as volatility rises: S&P Report 

RIYADH: Gulf Cooperation Council banks will refrain from redeeming the hybrid capital instruments at the first call date for the next 12 to 24 months, owing to the increasing volatility, scarce liquidity and significant rise in the cost of capital, said S&P Global Ratings in its latest report. 

Interest rates in the Gulf have been rising quickly as central banks matched course with the US in support of their currency pegs with the US dollar.

“Liquidity is becoming scarcer and more expensive, even in the Gulf. Current market conditions mean banks that replace an existing hybrid capital instrument with a new one could incur a significant increase in their cost of capital,” said Mohamed Damak, primary credit analyst at S&P Global Ratings in Dubai, in the report. 

Over the past decade, the GCC banks have shown a marked preference for conventional and Islamic hybrid capital instruments, resulting in their contribution to the total adjusted capital increasing from 2.3 percent at the end of 2011 to 13.5 percent as of Sept. 30, 2022. 

While some banks have abstained from issuing hybrid instruments, others have almost a quarter of their TAC in hybrids. Most GCC banks have also issued only additional Tier 1 instruments, which absorb losses or conserve cash while operational.  

For instance, banks in the UAE and Bahrain issued a large portion of their AT1 instruments on the international capital market in hard currencies. In contrast, Saudi Arabia and Qatar focused on the local market, with issuance denominated in local currencies. 

Local investors, in this case, may include cash-rich governments and their related entities, which invested in providing support for banks while receiving a defined return. 

“Both Islamic and conventional hybrid AT1 instruments allow issuers to suspend payments —periodic distributions for the Islamic instruments and coupons for the conventional instruments — without triggering a default, while the bank is still a going concern,” said Damak in the rating report.  

With low-cost hybrid instruments no longer available, S&P Global expects more noncall decisions in the GCC, such as Qatari and Omani issuers choosing to refrain from redeeming hybrid instruments on the first call date over the past three years.


American carmaker Canoo ties up with GCC Olayan to supply EVs in Saudi Arabia  

American carmaker Canoo ties up with GCC Olayan to supply EVs in Saudi Arabia  
Updated 30 January 2023

American carmaker Canoo ties up with GCC Olayan to supply EVs in Saudi Arabia  

American carmaker Canoo ties up with GCC Olayan to supply EVs in Saudi Arabia  

RIYADH: American electric vehicle startup Canoo signed an agreement with Saudi Arabia’s General Contracting Co. Olayan to sell, service and distribute its cars in the Kingdom. 

This collaboration falls in line with Saudi Arabia’s Vision 2030 strategy to adopt electric vehicles and sustainable mobility solutions.  

In addition to fleet solutions, both companies plan to create a joint venture to initiate a digital vehicle ecosystem for service maintenance repair, local assembly and ultimately manufacturing, according to a recent press release. 

“We recognize that there is a growing demand for sustainable mobility solutions in Saudi Arabia, partly driven by the Kingdom’s launch of the Saudi Green Initiative and its pledge to achieve net zero by 2060,” said CEO of Olayan Saudi Holding Co. Uwaidh Al-Harethi.  

“With that in mind, we are pleased to sign the product and service distribution agreement with Canoo and are proud to be the exclusive distributor of its electric vehicles in our market,” he added.  

GCC Olayan, a prominent multi-national subsidiary of OSHCO, has been providing leading brands in the Kingdom for more than 75 years.  

"Canoo vehicles are built on the company’s proprietary multi-purpose platform architecture that integrates all high-tech components such as the motors, battery module and other critical driving components,” stated the press release. 

The company said the vehicles will offer more usable interior space, better driver ergonomics and improved road visibility.  

Its unique design will also enable the company to localize the offering, as well as provide for a scalable local manufacturing approach, revealed the press release.  

Al-Harethi noted, “the new partnership will combine GCC Olayan’s over 75 years of experience in the automotive and adjacent sectors with Canoo’s innovative electric vehicle technology to cater to this need in the market and contribute to global efforts to tackle carbon emissions as well as to Saudi Vision 2030’s sustainability goals.


Saudi Aramco signs agreements worth $7.2bn at iktva Forum

Saudi Aramco signs agreements worth $7.2bn at iktva Forum
Updated 26 min 13 sec ago

Saudi Aramco signs agreements worth $7.2bn at iktva Forum

Saudi Aramco signs agreements worth $7.2bn at iktva Forum
  • Aramco Digital Co. launched to accelerate digital transformation

DHAHRAN: Saudi Arabian Oil Co. signed deals valued at around $7.2 billion at the seventh edition of the In-Kingdom Total Value Add Forum in Dhahran on Monday.

During the forum, the company also launched Aramco Digital Co. to accelerate its digital transformation efforts. 

“I am proud to announce a major new initiative in digital transformation with the launch of the Aramco Digital Company today. We are planning to invest $1.9 billion over the next three years, making it the biggest Aramco investment in digital to date, while adding value to the Kingdom’s digital ecosystem,” Saudi Aramco’s president and CEO Amin Nasser said. 

Saudi Arabia will be a land of opportunities for investors but “truly a Kingdom of opportunities for all,” he stressed.  

Commenting on the launch of the company, Ahmad A. Al-Sa’adi, Aramco executive vice president of technical services, said: “The launch of Aramco Digital Company is a great example of innovation in action, providing state-of-the-art AI and emerging technology expertise in a vital sector of the economy.” 

The energy giant inked over 100 agreements and memorandums of understanding on the first day of the event, which runs until Feb. 2 and is held under the theme “Accelerating Future Success.”

During the event, Aramco signed a strategic partnership agreement with Zoom, as well as struck a deal with Taulia Inc. to implement supplier financing solutions. 

The company also entered into a definitive agreement with DHL to form a joint venture and offer procurement and supply chain services and partnered with Saudi Arabia’s Ministry of Investment to develop and promote investment opportunities. 

Another agreement signed by Aramco during the event was with Accenture to accelerate system integration and digital solution services. 

It also reached a deal with Achilles to develop and localize environmental, social, and governance rating services. 

The Aramco chief told the audience that the iktva program achieved 63 percent local content in 2022, up from 35 percent in 2015 when it was initially launched. Saudi Energy Minister Prince Abdulaziz bin Salman later said he hoped that the local content would reach 85 percent by 2030.

“Nothing would be possible without the outstanding commitment of our suppliers to localization in the first seven years of iktva. It has made Aramco’s businesses more cost-efficient, more resilient, and even more reliable while sharing the rewards we promised,” Nasser told the crowd. 

“My generation can be proud of passing on a world-leading, integrated energy business, as well as pioneering work on decarbonization and putting Aramco at the heart of lower carbon businesses, such as blue hydrogen, renewables, and more sustainable materials,” he said.  

From left, Saudi Minister of Energy,Prince Abdulaziz bin Salman bin Abdulaziz, Prince Saud bin Nayef bin Abdulaziz, Governor of the Eastern Province and Aramco President and CEO Amin Nasser (Aramco)

The forum highlights collective localization efforts in key focus areas including digital space, sustainability, industrial, and manufacturing sectors.

“The local supplier ecosystem is a top priority for Aramco as well as a major contributor to the Kingdom’s economy. Through this mega program we are helping to create a culture of innovation and provide high-quality jobs for our growing population,” added Al-Sa’adi.

The iktva program encourages the establishment of international companies’ regional headquarters in the Kingdom. Since its inception, more than 150 investments have been made within the Kingdom, including products manufactured for the very first time in Saudi Arabia. The company has also established 16 national training centers in 10 Saudi cities, covering more than 60 trades. To date, more than 48,000 Saudi nationals have graduated from these centers, Al-Sa’adi said. 

A presentation was also made on the first day of the event highlighting the role of Saudi women and their achievements in their respective fields.

Following the presentation, Prince Abdulaziz joked that the dozen or so exceptional women shown in the video will soon be taken from Aramco and employed by the ministry in Riyadh.

“The young ladies that you saw, I'm sure by next year you will find them in Riyadh working in the ministry,” the energy minister told the audience that burst into laughter.

“The vital role of the Ministry of Energy is to act as an enabler and the driver of the localization program. We are in constant contact with all other elements of the ecosystem and stand by or stand ready with other government entities to support, encourage and incentivize them to redouble their efforts,” Prince Abdulaziz said. 

The first day of the event attracted more than 10,000 visitors and over 290 companies took part in the exhibition space.


Emirates operates MENA’s first test flight powered by 100% green fuel

Emirates operates MENA’s first test flight powered by 100% green fuel
Updated 30 January 2023

Emirates operates MENA’s first test flight powered by 100% green fuel

Emirates operates MENA’s first test flight powered by 100% green fuel

RIYADH: The UAE’s Emirates airlines has operated its breakthrough test flight powered by 100 percent sustainable aviation fuel, according to a press release.

The flight is the first of its kind in the Middle East and North Africa region. It is “a milestone moment for Emirates and a positive step for our industry as we work collectively to address one of our biggest challenges — reducing our carbon footprint,” a statement quoted Chief Operating Officer of Emirates Adel Al-Redha as saying.

Nowadays, sustainable aviation fuel is used in airplanes but only in blends of 50 percent with conventional jet fuels.

 

That said, the Emirates flight will act as a reference for potential demonstrations in the near future where 100 percent sustainable aviation fuel is approved.

“We hope that landmark demonstration flights like this one, will help open the door to scale up the SAF supply chain and make it more available and accessible across geographies, and most importantly, affordable for broader industry adoption in the future,” Al-Redha added.

It is important to note that in order to procure and develop a sustainable aviation fuel blend that is capable of replacing conventional jet fuel, Emirates worked with its partners, namely GE Aerospace, Boeing, Honeywell, Neste, and Virent. 

“Sustainable aviation fuel will play a critical role in the aviation industry’s commitment to becoming net zero by 2050, requiring strong industry collaboration,” said Omar Arekat, vice president of commercial sales and marketing, Middle East at the Boeing Co.

“Sustainable aviation fuel plays a crucial role in reducing the emissions of air travel but to fully leverage its decarbonization potential we need to enable 100 percent sustainable aviation fuel use,” added Jonathan Wood, vice president of EMEA, renewable aviation at Neste.