Saudi Arabia’s NDMC closes March sukuk issuance at $897m

Saudi Arabia’s NDMC closes March sukuk issuance at $897m
The total amount allocated was SR3.37 billion with the sukuk issuance divided into tranches. (Shutterstock)
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Updated 22 March 2023

Saudi Arabia’s NDMC closes March sukuk issuance at $897m

Saudi Arabia’s NDMC closes March sukuk issuance at $897m

RIYADH: Saudi Arabia’s National Debt Management Center announced the closure of the Riyal-denominated sukuk program issuance for March with the total bid amount received at SR8.34 billion ($2.2 billion).   

The total amount allocated was SR3.37 billion with the sukuk issuance divided into tranches — the first has a size of SR2.77 billion maturing in 2031 and the second at SR600 million maturing in 2037.  

Also called an Islamic bond, sukuk is a debt product issued according to Shariah or Islamic laws.    

“This issuance confirms the NDMC's statement in the mid of February of this year that NDMC will continue, in accordance with the approved Annual Borrowing Plan, to consider additional funding activities subject to market conditions and through available funding channels locally or internationally,” NDMC’s website stated.  

This is to ensure the Kingdom's continuous presence in debt markets and manage the debt repayments for the coming years while considering market movements and the government debt portfolio risk management, the statement added.  

Last month, NDCM closed the issuance of SR3.65 billion while the total value of all bids received for February stood at SR3.71 billion.  

Also divided into two tranches, February sukuk issuance had a size of SR7.5 billion in the first tranche maturing in 2030. The second tranche is valued at SR5.6 billion with the maturity year of 2034. 

The program saw a decrease of SR280 million in the amount allocated in March compared to February despite seeing a massive increase in bids received month-over-month.  

According to an S&P Global report released in January, global sukuk issuances are expected to continue declining in 2023 to about $150 billion compared to $155.8 billion in 2022 and $170.4 billion in 2021.    

The Saudi Riyal Sukuk Program is one of the Kingdom’s financing tools where the Ministry of Finance issues local instruments that are then organized by the NDMC and later divided into monthly tranches for investors.   

UAE In-Focus – Abu Dhabi launches initiatives to boost smart manufacturing in SME sector

UAE In-Focus – Abu Dhabi launches initiatives to boost smart manufacturing in SME sector
Updated 19 sec ago

UAE In-Focus – Abu Dhabi launches initiatives to boost smart manufacturing in SME sector

UAE In-Focus – Abu Dhabi launches initiatives to boost smart manufacturing in SME sector

RIYADH: The Abu Dhabi Department of Economic Development launched two initiatives that will prepare small and medium enterprises to meet the objectives of the emirate’s industrial strategy, reported the state-run news agency WAM.

The department launched the Smart Manufacturing Competence Center, which will act as a catalyst for local and global industry stakeholders to establish an innovative and sustainable ecosystem.

It also launched the Smart Manufacturing Incentive Program. It aims to assist SMEs in the industrial sector in their transformation toward smart manufacturing.

The program will implement the six transformational programs of Abu Dhabi Industrial Strategy: Industry 4.0, Circular Economy, Talent Development, Ecosystem Enablement, Homegrown Supply Chain, and Value Chain Development.

Abu Dhabi aims to invest 10 billion dirhams ($2.7 billion) across these initiatives to double the size of its manufacturing sector to 172 billion dirhams, create 13,600 jobs and increase the country’s non-oil exports to 178.8 billion dirhams by 2031.  

Scheduled to begin operations in the first quarter of 2024, the SMCC will facilitate stakeholder collaboration, consolidate innovative manufacturing services and promote knowledge sharing.

MoIAT offers career opportunities in the industrial sector  

The UAE’s Ministry of Industry and Advanced Technology has launched a new initiative to offer 500 training and job opportunities to local talent.

In collaboration with the Emirati Talent Competitiveness Council and the Ministry of Human Resources and Emiratization, the program aims to equip Emiratis with skills to join the industrial sector.

The program will be specially designed and structured by leading institutes, including the Center of Excellence for Applied Research and Training and Abu Dhabi Vocational Education and Training Institute, WAM reported.

More than 70 industrial companies from the UAE will participate in offering these training and employment opportunities through the Nafis platform.

Tabby raises debt facility to $350m  

UAE-based fintech company Tabby upsized its debt facility to $350 million after closing a financing round by US-based Partners for Growth along with Atalaya Capital Management and CoVenture.

Last August, Tabby secured $150 million in debt funding to facilitate its “Buy Now Pay Later” offering further.

The company will use the additional financing to serve more customers and retailers. Tabby claims to have 4 million customers and 15,000 retailers.

PIF to buy 30% shares in Kingdom’s leading grocery chain

PIF to buy 30% shares in Kingdom’s leading grocery chain
Updated 37 min 44 sec ago

PIF to buy 30% shares in Kingdom’s leading grocery chain

PIF to buy 30% shares in Kingdom’s leading grocery chain


RIYADH: In a bid to expand its existing portfolio and strengthen the private sector, Saudi Arabia’s sovereign wealth fund has inked a deal to invest in Tamimi Markets Co., one of the leading grocery chains in the Kingdom. 

According to the agreement, the Public Investment Fund will become a shareholder with 30 percent ownership of Tamimi Markets by way of a capital increase and subscription of new shares. 

In a press statement, the fund said that this new investment aims to enable Tamimi Markets to transform from a national grocery chain to a major regional player. 

PIF currently has several strategic investments in the consumer goods and retail sector, which includes, a shopping platform, Halal Products Development Co., and Americana Restaurants International. 

“PIF is investing in the grocery and food supply chain to ensure a strong Saudi presence in the market, enabling the private sector to capitalize on positive market demand,” said Majed Al-Assaf, head of consumer goods and retail, Middle East and North Africa Investments Division at PIF. 

He added: “This partnership is expected to contribute to the expansion of Tamimi Markets’ operations and product offering, accelerating its regional growth plans and benefiting consumers through greater choice. Our investment aligns with PIF’s strategy to create Saudi national champions in key sectors that contribute to the diversification of the economy.” 

Tariq Al-Tamimi, chairman of Tamimi Holding said that PIF’s new investment could help the firm to expand further across the region in the next few years.

Earlier in January, data released by the Sovereign Wealth Fund Institute revealed that the PIF has maintained the sixth spot in the list of top sovereign wealth funds worldwide, with assets worth $607.42 billion. 

Currently, the sovereign fund owns 71 companies in 10 different sectors, and until now, it has created more than 500,000 direct and indirect jobs.

Gulf nations invest in Latin America energy projects

Gulf nations invest in Latin America energy projects
Updated 01 June 2023

Gulf nations invest in Latin America energy projects

Gulf nations invest in Latin America energy projects
  • Saudi Arabia, UAE among most promising partners as region strives to meet needs brought by economic development

SAO PAULO: As Latin American countries have been moving to enhance their energy infrastructure and meet the needs brought by economic development, investors worldwide have been demonstrating their desire to explore the region’s new opportunities.

Gulf nations, especially Saudi Arabia and the UAE, have been among the most promising partners in the region’s upcoming energy endeavors.

The most recent announcement regarding Latin American-Middle Eastern energy partnerships was made last week, when Paraguayan authorities met with their Emirati counterparts and discussed the terms of a memorandum on economic cooperation. Partnerships in renewable energy projects were part of the deal.

With three hydroelectric power plants, Paraguay produces much more electricity than it needs, and exports the excess — more than 60 percent — to Brazil and Argentina.

“But in eight or 10 years, our situation will be much less comfortable. We’ll need to invest in electricity production, something that we’ve never thought about over the past 40 years,” Victorio Oxilia, an energy expert and professor at the National University of Asuncion, told Arab News.

Not only will demand from the population grow, but new industries will implement projects in Paraguay and require more energy, he added.

“At the same time, we need to diversify our sources. All our hydroelectric plants depend on the River Parana. Severe droughts can easily impact power generation,” he said.

Investing in solar energy plants is the natural response to those challenges. A government strategic plan for 2040 established it as a priority, Oxilia said, adding: “It’s a resource that abounds in the whole territory, so it’s a great candidate to be developed not only by Paraguay’s public energy company, but also by private agents.”

The projects currently being discussed will probably be followed by many more in the coming years, and will encompass wind power, hydrogen and synthetic biofuels.

A recent law, promulgated in January, determined a series of incentives for renewable energy production.

“There’s great potential when it comes to substituting the fossil fuels we now use in transportation and which we have to import,” Oxilia said.

Paraguay’s economy has been growing over the past few years thanks to agriculture — the nation is a major grain producer and exporter.

That is opening new opportunities in different areas, and may also include green energy in the future, Oxilia said.

“The Chaco region is near the big lithium reserves in Chile and Argentina. It’s a region that … can concentrate a cluster of lithium battery manufacturers,” he added.

In January, during Abu Dhabi Sustainability Week, Paraguayan officials met with directors of the Abu Dhabi Fund for Development, who promised to fund — or at least lend money for — renewable energy projects in the South American country.

On the same occasion, Costa Rican authorities discussed with Emirati officials potential partnerships in electricity production.

In an interview with local news website La Republica, Environment and Energy Minister Franz Tattenbach said the Central American nation needs to transform its transportation sector and adopt electric buses, for instance.

Mario Alvarado Mora, who directs the Costa Rican Association of Energy Producers, told Arab News that 99 percent of the electricity produced in the country is environmentally clean, “but two-thirds of the nation’s energy come from nonrenewable sources and are used mostly in transportation.”

He added: “Costa Rica has a great challenge, and also a great opportunity, to decarbonize its energy mix and use renewable resources.”

The energy sector is pushing the government for legislative changes in order to increase legal safety and attract more foreign investors, he said. A bill containing some of these changes is being analyzed in Congress.

In Argentina, where both Saudi Arabia and the UAE are planning to invest in energy endeavors, the most pressing needs concern not so much energy production but its distribution infrastructure, said Juan Jose Carbajales, a professor at Jose Clemente Paz National University in Buenos Aires.

“We lack pipelines to take crude and natural gas from Vaca Muerta deposits to regional markets. We also need to expand our high-voltage grid,” he told Arab News, referring to the giant geological formation in Neuquen, Rio Negro, La Pampa and Mendoza provinces that contains major reserves of oil and gas.

Carbajales lamented that there are many projects for wind and hydroelectric power plants currently suspended due to the lack of distribution infrastructure.

“That situation also limits the expansion of hydrogen fuel because electricity is needed in its production,” he added.

In April, Argentina signed a $500 million deal with the Saudi Fund for Development for food and energy projects, including the gas pipeline Nestor Kirchner.

Scheduled to be completed in June, the pipeline will connect Vaca Muerta to Buenos Aires province. The SFD loan will also fund transmission lines.

In 2022, the sovereign funds of Saudi Arabia, Qatar, Abu Dhabi and Kuwait announced that they would invest $1 billion in Argentina until the end of 2023. Some of the partnerships include energy generation and infrastructure.

Such investments are fundamental for Argentina given that it is facing serious macroeconomic challenges, including high inflation.

“Those problems make it harder for the country to have access to the international capital markets,” Carbajales said.

Another Latin American country with great plans involving energy — especially renewable energy — is Mexico, which in February disclosed its project for that sector and invited nations worldwide to invest in it during the inauguration of a solar plant in the state of Sonora.

Also in February, Saudi Minister of Economy and Planning Faisal Al-Ibrahim told Mexican magazine Expansion that investments in energy were part of the potential partnerships between the two countries.

Lawyer and energy expert Marcial Diaz told Arab News: “Mexico doesn’t have the means to make the necessary investments in projects connected to wind power, solar power and the market of fuels.”

He added that Mexico imports almost 70 percent of its fuel, so a transformation in that area is fundamental, with private investors directly collaborating in new endeavors.

Skeptical about the current administration’s ability to draw foreign investments for energy projects, Diaz said such plans usually take a long time, “so endeavors being conceived now will only be carried out during the next administration.”

He added: “No Latin American country is self-sufficient in energy terms, so it’s important for all of us to count on long-term investments.”


Wallen Trading signs partnership with Renault Group to distribute cars in KSA

Wallen Trading signs partnership with Renault Group to distribute cars in KSA
Updated 01 June 2023

Wallen Trading signs partnership with Renault Group to distribute cars in KSA

Wallen Trading signs partnership with Renault Group to distribute cars in KSA

RIYADH: Wallan Trading Co., one of the leading players in the Saudi car market, signed a strategic partnership to become the official distributor of Renault Group as the Riyadh-based firm looks to expand its automotive offerings in the Kingdom.

A key distributor of global automobile brands including Hyundai Motors, Genesis, Kenworth, and Geely Motors, Wallan Trading says the new partnership will help boost its services in the Kingdom.  

Fahad bin Saad Al-Waalan, chairman of the Wallan Group, said: “We are pleased to cooperate with the giant Renault Group. This alliance allows us to expand our areas of services to our customers in the Kingdom by offering world-class Renault cars.”  

“We are confident that this partnership will provide a unique experience for customers, based on the Renault Group’s commitment to technological innovation and our solid experience in the Saudi market,” he added.  

Wallan started its business in the 1980s when it became the official agent of Hyundai in the central region of Saudi Arabia. The company has been growing its automobile portfolio since then with partnerships with other global passenger and commercial vehicle brands.

Jerome Banaud, managing director of Renault operations in Africa, the Middle East, and Asia Pacific, said: “We are delighted to proceed with this strategic alliance with the Wallan Group as its long-standing experience in the automotive sector and its strong customer focus perfectly match our brand goals.”  

Renault Group has a long history of providing automotive innovation and technology, including the introduction of Europe’s first mass-produced electric car. 

Eurozone inflation tumbles, fuelling ECB rates debate 

Eurozone inflation tumbles, fuelling ECB rates debate 
Updated 01 June 2023

Eurozone inflation tumbles, fuelling ECB rates debate 

Eurozone inflation tumbles, fuelling ECB rates debate 

FRANKFURT: Eurozone inflation eased more than expected last month as underlying price growth also slowed, fuelling a debate about the need for further European Central Bank rate hikes beyond an increase later this month. 

Inflation in the 20 nations sharing the euro eased to 6.1 percent in May from 7.0 percent in April, below expectations for 6.3 percent in a Reuters poll of economists. 

The reading came as only a modest surprise for investors, however, as national data earlier this week foreshadowed the drop. 

Core inflation, which excludes volatile food and fuel prices, and which has played an increasing role in the ECB’s policy deliberations, fell to 5.3 percent from 5.6 percent, coming well under expectations for 5.5 percent. 

The ECB has raised base rates by a combined 375 basis points to 3.25 percent over the past year to combat runaway prices and has essentially committed to another 25-basis point hike on June 15 given high underlying price pressures. 

“Today, inflation is too high, and it is set to remain so for too long,” ECB President Christine Lagarde said on Thursday. “That is why we have hiked rates at our fastest pace ever – and we have made clear that we still have ground to cover to bring interest rates to sufficiently restrictive levels.” 

Some economists argued that the bigger-than-forecast drop in underlying inflation suggests that not much work is left to be done. 

“Underlying inflation has probably passed its peak,” Commerzbank economist Christoph Weil said. “This supports our expectation that the ECB will raise key interest rates by 25 basis points for the last time in June.” 

Several influential policymakers, including the central bank governors of Germany, the Netherlands and Ireland, have already put a July rate hike on the table, and other economists sided with the policy hawks. 

They argue that July must be in play, partly because the ECB has been wrong about the inflation path for so long, it would rather err on the side of caution. 

“The May numbers and broader economic data will most likely convince the ECB to continue 25 basis points hikes in June and July and in our baseline forecast to pause after that,” Nordea said in a note. 

While Thursday’s benign price data add to the case for caution, Europe’s inflation problem is far from solved as price growth for many core items, particularly services, remains stubbornly high. 

Services inflation slowed to 5.0 percent from 5.2 percent while price growth for industrial goods eased to 5.8 percent from 6.2 percent, still excessive but both moving in the right direction. 

The ECB is also likely to take some comfort from the slowdown in food inflation to 12.5 percent from 13.5 percent as pressures on that front were still expected to build for some time. 

Recession risk  

Lower energy prices could push down headline inflation faster than some forecasts, but recent wage settlements could keep core inflation high. 

Eurozone wage growth is hovering in the 5 percent to 6 percent range, twice the rate that would be consistent with the ECB’s inflation target. 

But wages need to catch up after inflation ate deep into real incomes for years and the ECB is hoping that once inflation slows, wage growth will follow, so they will mutually extinguish each other. 

While that is a plausible scenario, the bloc’s labor market is exceptionally tight and firms, particularly in services, are reporting increasing labor shortages, an upside risk for wages and hence inflation. 

Another potential concern for the ECB is that economic growth appears less resilient than thought, particularly in manufacturing, with a raft of indicators showing that industrial activity could weigh on the overall economy even as services boom. 

This raises the risk that sharply higher borrowing costs could tip the bloc into recession, an outcome the ECB has tried to avoid. 

Financial investors see two more rate hikes from the ECB, with the first move fully priced in by June and a second in either July or September.