Saudi Arabia and Boeing strike $37bn deal for 121 aircraft

Update Saudi Arabia and Boeing strike $37bn deal for 121 aircraft
From left: Tony Douglas, CEO of Riyadh Airlines; Yasser Othman Al-Rumayyan, governor of the Public Investment Fund and chairman of Riyadh Airlines; Princess Reema bint Bandar, ambassador to the US; David Callahon, CEO of Boeing; Brad McMalone, senior vice president, commercial airplanes, Boeing (Supplied)
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Updated 14 March 2023

Saudi Arabia and Boeing strike $37bn deal for 121 aircraft

Saudi Arabia and Boeing strike $37bn deal for 121 aircraft
  • 72 Boeing 787 Dreamliner planes set for Riyadh Air
  • White House Press Sec. hails ‘historic’ deal

RIYADH: Saudi Arabia has agreed a $37 billion deal with US firm Boeing which will see the company manufacture up to 121 aircraft to help get the Kingdom's new airline off the ground.

The deal will see Boeing 787 Dreamliner planes with General Electric engines delivered to Saudi Arabia, with 72 of them set for Riyadh Air – the carrier announced by Saudi Crown Prince Mohammed bin Salman on Sunday.

Some 39 of the planes are confirmed for the new airline, which has an option to acquire 33 more.

Riyadh Air is wholly owned by the Public Investment Fund, and its governor Yasir Al-Rumayyan – also chairman of the carrier – said: “This is a momentous day for PIF and Riyadh Air, and highlights our determination to significantly extend Saudi Arabia’s connectivity with the world.

"Our stated commitment is to create a world-class airline and this partnership with Boeing in building the fleet is the next step in achieving the aspirations of Saudi Arabia as a global transportation hub.

"We look forward to fostering strong strategic relationships within the wider aviation ecosystem as we continue to shape the new airline to become one of the leading carriers around the world.”

Stan Deal, president and CEO of Boeing Commercial Airplanes, welcomed the “significant order", adding: "We are incredibly proud of our nearly eight decades of partnership to drive innovation and sustainable growth in Saudi Arabia’s aviation sector. Our agreement builds on that longstanding partnership and will further expand access to safe and sustainable commercial air travel for decades more.”

Riyadh Air is set to make the Saudi capital a gateway to the world and a global destination for transportation, trade, and tourism, according to a statement from the Saudi Press Agency.

Using the Saudi capital as its hub, the airline is expected to add $20 billion to the Kingdom’s non-oil gross domestic product growth and create more than 200,000 direct and indirect jobs.

According to a statement from White House Press Secretary Karine Jean-Pierre, talks between Boeing and Saudi Arabia had been ongoing for years, culminating with "intensive negotiations over recent months".

She said: "Today’s announcement ensures that Boeing and General Electric will anchor Saudi Arabia’s new international airline together with support for a new international airport. 

"This partnership is another milestone in eight decades of cooperation between Saudi Arabia and American industry.  Our administration looks forward to working with Saudi Arabia and all partners in the Middle East to support a more prosperous, secure, and integrated region, which ultimately benefits the American people."

Tony Douglas, CEO of Riyadh Air, described the new airline as reflecting "the ambitious vision of Saudi Arabia to be at the core of shaping the future of global air travel".

He added: "By positioning the airline as both a global connector and a vehicle to drive tourist and business travel to Saudi Arabia, our new 787-9 airplanes will serve as a foundation for our worldwide operations, as we build the wider network and connect our guests to Saudi Arabia and many destinations around the world."

The launch of Riyadh Air is part of PIF’s plan to utilize the capabilities of promising industries and help the Kingdom achieve its goal of economic diversification. The sovereign fund has more than $600 billion in assets and is the main driver of the Kingdom’s efforts to wean itself off oil.

Last November officials announced plans for a new airport in the capital Riyadh — spanning 57 sq. km — that is set to accommodate 120 million travelers per year by 2030 and 185 million travelers by 2050.

The capacity of the existing Riyadh airport is around 35 million travelers.

NEOM secures $5.6bn to develop 1st phase of residential communities for workforce

NEOM secures $5.6bn to develop 1st phase of residential communities for workforce
Updated 19 sec ago

NEOM secures $5.6bn to develop 1st phase of residential communities for workforce

NEOM secures $5.6bn to develop 1st phase of residential communities for workforce

RIYADH: Developmental work is fast gaining pace at Saudi Arabia’s futuristic city NEOM as the giga-project finalized contracts worth SR21 billion ($5.6 billion) to build the first phase of residential communities for the workforce.

In one of the world’s largest public-private partnership deals for social infrastructure, NEOM signed up some of the leading Saudi developers to build 10 communities across the smart city that will accommodate an additional 95,000 occupants upon completion of the first phase. 

According to a press release, the preferred bidders who will invest in developing this first-phase residential project include Alfanar Global Development, Almutlaq Real Estate Investment Co., Nesma Holding Co. and Tamasuk Holding Co.

Tamasuk Holding Co. will be investing in the project through two separate partners — Al Majal Al Arabi Group  Co. and the Saudi Arabian Trade and Construction Co.

The deal goes well with the $500 billion project’s plan for more private sector participation in developing the city’s infrastructure.

“NEOM has selected some of the leading companies in Saudi Arabia as partners in delivering and operating temporary communities with world-leading services and infrastructure,” said Nadhmi Al-Nasr, CEO of NEOM. 

He added: “The newly formed partnerships mark an important milestone for the region and are a testament to the capabilities of our team and partners who rapidly achieved financial close on a record amount.” 

The project owner revealed that the temporary residential projects, used by the workforce during the construction period of NEOM, will be built sustainably, using relocatable modular units which can be repurposed once the communities are no longer needed. 

These residential communities will also include a wide range of lifestyle facilities, including swimming pools, entertainment venues, multi-purpose sports fields, cricket ovals and outdoor courts for other sports.

“We are elated to partner with NEOM on this multi-nodal infrastructure project and to contribute to NEOM’s vision of disrupting the conventional approach to urban living. This is in line with our commitment to deliver high-quality solutions in a sustainable manner,” said Sabah Al-Mutlaq, vice chairman of Alfanar Global Development.

NEOM said the second phase of the temporary residential project is expected to be issued to the market in the coming months as it is reviewing interest from investors with plans to shortlist pre-qualified participants from now.

Mohammed Al-Balwi, chairman of Tamasuk, said: “We are immensely proud to be NEOM’s infrastructure partners. Together with Almajal and SATCO, we are committed to delivering the infrastructure that will facilitate the wider and rapid development of NEOM.”

The giga-project is being developed to attract additional investors for its commercial assets. With the signing of the multibillion-riyal investment, NEOM looks to achieve the project’s goal of having a direct economic impact on the region through developing local competency and creating jobs while advancing the use of sustainable solutions in construction.

NIDC inks deal with Valeo Egypt to boost Kingdom’s automotive sector 

NIDC inks deal with Valeo Egypt to boost Kingdom’s automotive sector 
Updated 21 min 3 sec ago

NIDC inks deal with Valeo Egypt to boost Kingdom’s automotive sector 

NIDC inks deal with Valeo Egypt to boost Kingdom’s automotive sector 

RIYADH: In a push to localize the Kingdom’s automotive industry, Saudi Arabia’s National Industrial Development Center has inked a strategic deal with Valeo Egypt, the software development unit of the global automotive supplier. 

The two parties signed a memorandum of understanding set to pave the way for the localization of automotive components and manufacturing of modern systems for mobility technology in the Kingdom, the Saudi Press Agency reported. 

The MoU was signed in the presence of Bandar Alkhorayef, the Saudi minister of industry and mineral resources, and Ahmed Saleh, the Egyptian minister of trade and industry. 

The deal will significantly enhance the efficiency and growth of Saudi Arabia’s automotive sector, as charted in the National Industrial Strategy’s objectives. 

The NIS serves as Saudi Arabia’s roadmap for diversifying its industrial base, boosting non-oil exports, attracting foreign investment, promoting innovation and research, and generating local employment. 

The strategy revolves around three key objectives, namely developing a resilient industrial economy, establishing an integrated industrial center, and achieving global leadership in manufacturing selected industrial commodities. 

The NIS has set ambitious goals for the industrial sector, with the aim of increasing the sector’s contribution to the Kingdom’s gross domestic product from $88.26 billion to $377.06 billion by 2035.

Additionally, it hopes to boost jobs in the industrial sector from 900,000 to 3.3 million during the same period.  

Closing bell: Saudi bourses stay steady for the 3rd consecutive day  

Closing bell: Saudi bourses stay steady for the 3rd consecutive day  
Updated 43 min 27 sec ago

Closing bell: Saudi bourses stay steady for the 3rd consecutive day  

Closing bell: Saudi bourses stay steady for the 3rd consecutive day  

RIYADH: Saudi Arabia’s Tadawul All Share Index remained steady for the third consecutive day, as it edged up 23.28 points, or 0.21 percent, to close at 11,316.87 on Tuesday.  

While parallel market Nomu gained 112.78 points to reach 21,428.78, the MSCI Tadawul Index went up 0.05 percent to close at 1,497.65.  

The total trading turnover of the benchmark index was SR6.69 billion ($1.78 billion) as 104 listed stocks advanced, while 106 retreated.  

The best-performing stock on the day was Abdullah Al Othaim Markets Co., whose share price surged 8.19 percent to SR14.80.  

The Power and Water Utility Co. for Jubail, and Yanbu and Aldrees Petroleum and Transport Services Co. were the other top gainers, as their share prices soared 7.07 percent and 6.96 percent, respectively.  

Tihama Advertising and Public Relations Co. was the worst performer with its share price dropping 2.52 percent to SR19.36.  

On the announcements front, Saudi Arabia’s Capital Markets Authority approved the public listing of Fad International Co., Atlas Elevators General Trading & Contracting Co., Clean Life Co., and Riyal Investment & Development Co. on Nomu.  

According to bourse filings, Riyal Investment and Clean Life will offer 720,000 and 300,000 shares, representing 9 percent and 20 percent of their capital, respectively.  

On the other hand, Fad International and Atlas Elevators will float 240,000 and 1.2 million shares, accounting for 20 percent of each of their capital.  

Meanwhile, CMA issued a resolution to approve Al-Rajhi Co. for Cooperative Insurance’s request to increase its capital from SR400 million to SR1 billion by giving 1.5 bonus shares for every existing share owned by the shareholders. Its share price edged up 0.98 percent to SR123.60.  

The authority also approved a request by Takween Advanced Industries Co. to reduce its capital from SR950 million to SR464.65 million.   

According to a statement to Tadawul, the move will bring down the company’s number of shares to 46.464 million from 95 million. Its share price edged up 1.42 percent to SR10. 

Saudi real estate fund signs deals worth $3.64bn to boost housing market   

Saudi real estate fund signs deals worth $3.64bn to boost housing market   
Updated 54 min 14 sec ago

Saudi real estate fund signs deals worth $3.64bn to boost housing market   

Saudi real estate fund signs deals worth $3.64bn to boost housing market   

RIYADH: Aiming to boost Saudi Arabia’s housing market, the Kingdom’s Real Estate Development Fund inked finance agreements worth SR13.7 billion ($3.64 billion) in the first quarter of 2023.   

The deals sought to offer housing benefits to 21,000 citizens during the first quarter, according to the National Development Fund’s quarterly report. 

Such agreements are in line with the Kingdom’s Vision 2030 strategy that aims to provide adequate and affordable housing opportunities for Saudi families.   

The fund also deposited over SR2.7 billion into the accounts of Sakani beneficiaries during the first quarter of 2023, the report said.   

The Sakani program was launched in 2017 by REDF to facilitate home ownership in the Kingdom by developing new housing stock, allocating plots and homes to nationals and financing their purchase.   

Furthermore, the fund’s real estate advisor service recorded over 36,000 recommendations for housing and financing during the first quarter, in addition to approximately 53,000 new beneficiaries, showed the report.   

Saudi Arabia’s NDF provided over SR30 billion funding support in the first quarter of 2023, according to the report.   

The funding was allocated through a number of cooperation agreements and financing support for various economic sectors with an aim to achieve the social, economic and cultural goals envisioned in the Kingdom’s Vision 2030.    

This comes after the fund approved over SR135 billion in financing support for 2022, its annual report released in January showed.     

Additionally, the Saudi Industrial Development Fund approved financing agreements valued at SR875 million with 24 businesses to support the objectives of the National Strategy for Industry.    

Various achievements, agreements and new initiatives that helped in maximizing the developmental impact on the Saudi economy were also highlighted in the report.   

In May, the Kingdom’s housing market got a fresh stream of liquidity, with Saudi Real Estate Refinance Co. announcing SR3.5 billion in sukuk issuances.  

The latest issuance of SRC, owned by the Public Investment Fund, marked the sixth tranche under its upsized SR20 billion sukuk program. 

The real estate finance company will keep boosting market liquidity and assisting lenders and investors, which will stabilize the Saudi mortgage market, stated SRC CEO Fabrice Susini. 

Furthermore, this move will also speed up the rise of homeownership in the country, he added.   

“The positive response from investors to SRC’s latest sukuk issuance is a clear testament to the strength of the Kingdom’s housing market and economy,” Susini said. 

Egypt’s foreign reserves rise by $110m in May  

Egypt’s foreign reserves rise by $110m in May  
Updated 06 June 2023

Egypt’s foreign reserves rise by $110m in May  

Egypt’s foreign reserves rise by $110m in May  

RIYADH: Egypt’s foreign reserves saw a month-on-month increase in May of around $110 million to hit $34.66 billion, the latest data from the Central Bank of Egypt showed. 

After the economic breakdown following the Ukraine-Russia war, Egypt’s net international reserves dropped from a high of $40.9 billion in February 2022 to a record low of $33.14 billion in August of that year.   

However, the North African country’s NIR gradually increased in the past nine months.   

According to the central bank, Egypt’s international reserves comprise approximately $26.7 billion in foreign currencies, $7.95 billion in gold and $27 million in special drawing rights.   

The International Monetary Fund defines the SDR as an international reserve asset created to supplement the official reserves of its member countries. 

The IMF is currently assessing Egypt’s economic environment to release the second installment of a $3 billion loan approved in December 2022.   

According to data announced by the country’s central bank last month, Egypt’s net foreign assets deficit increased by $1.66 billion to $24.42 billion in March 2023 from 22.76 billion in February.   

Egypt’s current account deficit also dropped 77.2 percent to $1.8 billion in the first half of its fiscal year.   

The financial institution revealed this deficit reduction was fueled by Egypt’s current account turning a $1.41 billion surplus in the October to December quarter of 2022 as imports dropped and exports rose. 

This shift came after the country saw a $3.19 billion deficit between July and September — the first quarter of Egypt’s fiscal year. 

During most of 2022, import restrictions were in place to tackle the country’s current account shortfall.