LEAP 2023 attracts funds worth $2.43bn for tech startups as investment continues to flow on day four of event

LEAP 2023 attracts funds worth $2.43bn for tech startups as investment continues to flow on day four of event
The new funding announced on Wednesday will support the growth of emerging technology companies in Saudi Arabia. (Supplied)
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Updated 08 February 2023

LEAP 2023 attracts funds worth $2.43bn for tech startups as investment continues to flow on day four of event

LEAP 2023 attracts funds worth $2.43bn for tech startups as investment continues to flow on day four of event

RIYADH: Investment programs worth $2.43 billion were announced on the third day of the Saudi tech event LEAP 2023, following on from the $9 billion in deals revealed on the event's first day.   

The new funding announced on Wednesday will support the growth of emerging technology companies in Saudi Arabia. This is in addition to eight other investment funds worth $646 million launched during the event to stimulate innovation and digital entrepreneurship.   

Organizations providing the $2.43 billion funding include Saudi Arabia’s Riyad Bank, which announced the launch of $1 billion in financing for telecommunications and information technology enterprises. The National Technology Development Program also started six new initiatives and attracted a corpus of $430 million from global technology companies.  

Banque Saudi Fransi is another Saudi bank that signed off on a finance portfolio, this one worth $1 billion to finance and grow companies in the information and communication sector.  

According to the Ministry of Communications and Information Technology, the funding included one from STV worth $150 million, which is its first fund for alternative financing that is compatible with Islamic law.  

Additionally, Riyadh-based IMPACT46 also announced the launch of a $133 million fund, which targets emerging technology companies in the Kingdom and the Middle East.  

The list also includes Merak Capital which launched Merak Fund for direct financing, valued at $53 million, for nurturing technology companies in the Kingdom, even as the Saudi Investment Bank earmarked $40 million for an innovation incubator in the field of financial technology.  

The announcements included Rakeza’s venture capital fund backed by a global business accelerator in Riyadh valued at $25 million and the launch of BIM Ventures, a business development company worth $100 million in partnership with Al-Sulaiman Group to spot innovative and financially sustainable technology companies.  

On Wednesday, Shorooq Partners launched a financial fund to accelerate electronic games estimated to be $115 million, while Planetary Capital floated the first Saudi-Canadian corpus to invest in emerging space technology companies, both local and global, amounting to $30 million.  

The event also bolstered the Saudi-Chinese relationship as Camel Lab partnered with Hong Kong-based Android developer Weo Technology to launch an application called Ha, the latest and most competitive social platform ever. 

The investment flow continued on day four of LEAP, with a further $580 million announced.

One of the most prominent announcements was revealed by Ignite – a programme under Saudi’s Digital Content Council – which launched several initiatives, a package of financing programmes, and pioneering private sector partnerships amounting to $170 million. 

Technology consulting services company Wipro revealed investments of $110 million to expand its cloud studio service, develop digital healthcare solutions, and support the development of local talent.

Unity, the global games development platform, also announced the establishment of its first regional academy and a center for developing electronic games - in partnership with the MCIT - to create and foster technical talents.

Zoho, a leading IT, software development, and cloud computing company, outlined plans to expand its presence in the Kingdom with new office openings and the establishment of a cloud area for its services. Zoho also confirmed an allocation of $300 million over the next 10 years as a portfolio balance to support Saudi startups aiding the country’s digital transformation.

Having entered the data center arena in 2021, DAMAC Group announced the expansion of investments in large data centers in the Kingdom with a total capacity of more than 55 megawatts.

Day four of the event also saw digital enabler stc Group reveal a collaboration with Oracle to modernize its database technologies and accelerate its transition to the cloud. 

Yazeed Alfaris, vice president of applications at stc, said: “Oracle Exadata [email protected] provides us with the flexibility we need to build a robust, extensive cloud platform in our own data centers, that offers both security and scalability to meet the changing requirements of our business and our customers.”


GCC banks to see ‘limited impact’ from global banking worries prompted by SVB collapse: Kamco

GCC banks to see ‘limited impact’ from global banking worries prompted by SVB collapse: Kamco
Updated 31 March 2023

GCC banks to see ‘limited impact’ from global banking worries prompted by SVB collapse: Kamco

GCC banks to see ‘limited impact’ from global banking worries prompted by SVB collapse: Kamco

RIYADH: Banks in the Gulf Cooperation Council region are set to see a limited impact from the banking crisis hitting the US and Europe, according to a report from Kamco Invest.

The investment banking subsidiary of Kuwait Projects Company argues that financial institutions in the GCC had limited exposure to Silicon Valley Bank – the US firm that collapsed in March prompting concerns of contagion sweeping across the world in the manner of the 2008 global crash.

The report says balance sheets of the banks in the region remain strong, and in the final quarter of 2022 both aggregate lending and customer deposits remained strong.

“The broader GCC banking sector is expected to see only a limited indirect impact from the ongoing banking sector crisis in the US and Europe,” said the report, adding: “Shares of banks globally and in the region, especially, were affected due to fears of a contagion as the collapse of SVB was the biggest lender failure since the global financial crisis of 2008. 

“However, the collapse had only marginal impact with minimal exposure of banks only in the UAE, while most of the other countries in the GCC remained unaffected. 

“The bulk of the exposure was from various startups and VCs that had accounts with SVB that may now bank with local banks, although under increased scrutiny.”

The report also shows that rising interest rates in the US and its almost full replication by most GCC central banks during 2022 resulted in higher aggregate net interest margin for the region’s banking sector. 

NIM for GCC banks averaged at a multi-year high of over 3 percent during the fourth quarter of 2022, despite partially reflecting the higher interest rates as bulk of the rate hikes were made during the second half of the year. 

Saudi Arabia’s banks reported the highest average margin of 3.2 percent during the quarter followed by UAE and Qatari banks with margins also above the 3 percent mark after several quarters.

Aggregate lending in the GCC remained strong during the final quarter of 2022, with  central bank data showing Qatari banks experienced the strongest lending growth during, while Bahrain and the UAE banks showed a slight decline. 

Customer deposits bounced back to a stronger growth over the same period, with a quarter-on-quarter increase of 2.5 percent to reach $2.2 trillion 


Riyadh chosen to host Global Real Estate Summit

Riyadh chosen to host Global Real Estate Summit
Updated 31 March 2023

Riyadh chosen to host Global Real Estate Summit

Riyadh chosen to host Global Real Estate Summit

RIYADH: Saudi Arabia will host the 42nd edition of the Global Real Estate Summit next December in Riyadh, it has been announced.

The summit is considered the industry's largest annual gathering, and sees real estate leaders and CEOs from all over the globe coming together, according to the Saudi Press Agency.

The event will address the Saudi real estate sector in light of the Kingdom's Vision 2030 and its successes achieved to date.

Workshops, meetings, and lectures aiming to deal with the challenges of the real estate industry as well as available investment opportunities will be held throughout the event. 

There will also be discussions on the role of the industry's leaders in creating revolutionary ideas through best international practices and the mechanism of their application in the region.

A visit to prominent major projects will also occur during the summit.

The Kingdom’s achievement in hosting this global summit comes after the World Real Estate Federation meeting in Cannes, France, held on March 15, with the participation of Eye of Riyadh, the media partner of the international real estate event MIPIM, held between March 14 to 17.


Global money market funds see strong demand for fifth week in a row

Global money market funds see strong demand for fifth week in a row
Updated 31 March 2023

Global money market funds see strong demand for fifth week in a row

Global money market funds see strong demand for fifth week in a row

BENGALURU: Global money market funds continued to attract big inflows in the week ended March 29, as investors chased safer assets amid lingering worries over the turmoil in the banking sector and concerns over tightening economic conditions, according to Reuters.

Global money market funds obtained a net inflow of $47.6 billion, which was their fifth consecutive weekly inflow, underscoring investors’ caution after the collapse of two regional US lenders earlier this month.

Meanwhile, investors sold about $18 billion worth of global equity funds after buying about $13.1 billion a week ago.

They exited US and European equity funds of $20.68 billion and $630 million respectively, but acquired $2.3 billion worth of Asian funds.

Still, some sector-focused equity funds were in demand, with tech and consumer discretionary receiving a net of $1.41 billion and $630 million in net buying.

Meanwhile, global bond funds received $481 million in a second consecutive week of net buying, thanks to safe-haven demand for government bond funds. Global government bond funds had $5.08 billion worth of inflows.

However, high-yield and short- and medium-term bond funds saw $2.94 billion and $1.43 billion worth of net selling, respectively.

Among commodities, precious metal funds obtained $371 million in a third straight week of net buying. Energy funds also gathered $111 million worth of inflows.

Data for 23,903 emerging market funds showed that equities received $1.1 billion and bonds secured $24 million worth of inflows after witnessing two weekly outflows in a row.

Euro zone government bond yields edged up on Friday as receding concerns about the prospects of a global banking crisis offset the likelihood of persistent inflation in the zone.

Euro zone inflation dropped by the most on record in March, according to data on Friday. Core price pressures, which exclude food and energy, accelerated, which keeps the heat on the European Central Bank to keep raising rates.

Two-year German Schatz yields, the most sensitive to shifts in expectations for interest rates, were up 4 basis points at 2.79 percent. They’ve risen by 41 bps this week — their largest weekly increase since early 1990.


Egypt’s central bank raises interest rates by 200 bps to tame inflation

Egypt’s central bank raises interest rates by 200 bps to tame inflation
Updated 31 March 2023

Egypt’s central bank raises interest rates by 200 bps to tame inflation

Egypt’s central bank raises interest rates by 200 bps to tame inflation

CARIO : The Central Bank of Egypt has raised its overnight interest rates by 200 basis points following a meeting of its Monetary Policy Committee, saying it aimed to bring high inflation into check, according to Reuters.

The bank set the lending rate at 19.25 percent and the deposit rate at 18.25 percent.

The median forecast in a Reuters poll of 15 analysts on Monday was for the bank to increase rates by 200 bps as it struggled to control surging inflation. Seven of the analysts expected an increase of 300 bps.

In February, headline inflation soared to a five-and-a-half-year high of 30.9 percent from 25.8 percent in January. Core inflation in February rose to a record high of 40.3 percent.

“The MPC stresses that achieving a tight monetary stance is a necessary condition to attain the CBE’s upcoming inflation targets of 7 percent (± 2 percentage points) on average by 2024 Q4 and 5 percent (± 2 percentage points) on average by 2026 Q4,” it said in a statement.

Domestic supply chain disruptions, a depreciating Egyptian pound, demand side pressures “as evidenced by developments in real economic activity relative to potential capacity” and high broad money growth outturns fueled inflation, the statement said.

Since last March, the Egyptian pound’s official exchange rate has fallen by almost half, to around 30.87 pounds to the dollar, after Russia’s invasion of Ukraine exposed vulnerabilities in the country’s finances, prompting a foreign exodus from its treasuries market.

On the black market it has sunk to between 35 and 36 to the dollar.

M2 money supply, which in Egypt includes deposits in foreign currency, grew by 31.6 percent in January and was up 31.5 percent year-on-year in February.

At its last meeting on Feb. 2, the central bank left interest rates steady, saying 800 bps in rate hikes put in place over the previous year would help to tame inflation, which in December had accelerated to a five-year high of 21.3 percent.

The MPC statement said gross domestic product had slipped to 3.9 percent in the fourth quarter of 2022 from 4.4 percent in the third quarter.

“Real GDP growth is expected to soften in fiscal year 2022/23 compared to the previous fiscal year, before picking up thereafter.” Egypt’s fiscal year ends on June 30.
 


SABB awarded ‘Best Private Bank in Saudi Arabia’ gong by Euromoney

SABB awarded ‘Best Private Bank in Saudi Arabia’ gong by Euromoney
Updated 31 March 2023

SABB awarded ‘Best Private Bank in Saudi Arabia’ gong by Euromoney

SABB awarded ‘Best Private Bank in Saudi Arabia’ gong by Euromoney

RIYADH: The Saudi British Bank has been named “Best Private Bank in Saudi Arabia” for 2023 by Euromoney in recognition of its services and the investment opportunities it provides.

SABB was awarded the gong at the Private Banking Awards 2023 ceremony, with the decision based on input from industry insiders and independent research which evaluates a series of performance metrics and other factors about private banks.

Reflecting on the win, Bandar Al Gheshayan, the bank’s chief wealth & personal banking officer, said: “Having SABB Private Bank awarded by Euromoney as the Best Private Bank in Saudi Arabia recognizes our ongoing efforts to partner with global entrepreneurs and high-net-worth Saudi Arabian and Expatriate nationals as they manage and grow their wealth.

“For over 40 years, SABB has proudly supported the growth of the financial sector in the Kingdom and offered assistance in bringing innovative banking and investment solutions to our clients.”

SABB was also named Saudi Arabia’s Best Private Bank for environmental, social, and governance investing.

Across the region, BNP Paribas Wealth Management was named the best private bank in the Middle East, with one judge commenting that the institution “appears to have a clear roadmap and vision.” 

“A large focus has also been put on sustainability (and the responsible investment offering is now broad and solid) as well as on digital,” according to comments released after the award was announced.

The awards come just a week after Euromoney crowned SABB as the “Best Trade Finance Service Provider” and “Market Leader” in Saudi Arabia for 2023 – the latter for the seventh successive year.

Those gongs were based on a survey by Euromoney, where Saudi corporates have recognized SABB as the market leader within the trade finance space. 

The survey takes into consideration corporates’ view on their banks’ ability in providing trade finance products, solutions, quality of services and market share.