Closing bell: TASI maintains upward trajectory for 2nd consecutive day 

Closing bell: TASI maintains upward trajectory for 2nd consecutive day 
The total trading turnover of the benchmark index was SR6.74 billion ($1.80 billion) as 104 of the 228 listed stocks advanced, while 108 retreated. (Shutterstock)
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Updated 25 July 2023
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Closing bell: TASI maintains upward trajectory for 2nd consecutive day 

Closing bell: TASI maintains upward trajectory for 2nd consecutive day 

RIYADH: Saudi Arabia’s Tadawul All Share Index continued its upward trend for the second consecutive day, climbing 80.78 points, or 0.68 percent, to close at 11,882.68. 

The total trading turnover of the benchmark index was SR6.74 billion ($1.80 billion) as 104 of the 228 listed stocks advanced, while 108 retreated. 

While Saudi Arabia’s parallel market Nomu edged up 284.89 points, or 1.15 percent, to close at 25,113.16, the MSCI Tadawul 30 Index rose 0.68 percent to 1,569.61. 

The best-performing stock of the day was the Mediterranean and Gulf Insurance and Reinsurance Co., whose share price soared 9.97 percent to SR13.46.

Alinma Bank and Saudi Research and Media Group were top performers in the benchmark index, whose share prices surged by 8.46 percent and 5.04 percent, respectively. 

The worst performer was Alkhaleej Training and Education Co., whose share price dipped 3.38 percent to SR20. 

On the announcements front, Saudi National Bank reported a 10.4 percent surge in net profit to SR10.03 billion in the first half of 2023, compared to SR9.09 billion in the same period a year ago. 

According to a Tadawul statement, SNB said the rise in net profit was attributed to a higher operating income and lower operating expenses. 

The statement added that the net profit of SNB in the second quarter of 2023 rose 9.3 percent to SR5.01 billion from SR4.58 billion in the same period of 2022. Despite recording a rise in profit, SNB’s share price fell 0.74 percent to SR40. 

Another company that announced its financial results for the first half was Zahrat Al Waha for Trading Co. In a statement to Tadawul, the company revealed that its net profit fell marginally by 1.56 percent to SR9.8 million in the first six months of this year, compared to SR9.91 million in the first half of 2022.

The trading firm attributed the fall in net profit to higher selling and distribution expenses and a rise in general and administrative expenses. Its share price dipped 0.26 percent to SR38. 

Meanwhile, Sahara International Petrochemical Co., also known as Sipchem, announced its financial results on Tuesday. The company’s net profit narrowed in the first half of this year to SR783.3 million, compared to SR2.34 billion during the same period in 2022. 

Sipchem, in a statement, revealed that the fall in net profit was driven by a decrease in the selling prices of the company’s products. Its share price on Tuesday edged up 0.54 percent to SR37.10.


Dubai’s Parkin to sell 24.99% stake in IPO 

Dubai’s Parkin to sell 24.99% stake in IPO 
Updated 8 sec ago
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Dubai’s Parkin to sell 24.99% stake in IPO 

Dubai’s Parkin to sell 24.99% stake in IPO 

DUBAI: The Dubai government is selling a 24.99 percent stake in Parkin, which oversees public parking operations in the emirate, through an initial public offering in the emirate’s first privatization deal this year, Parkin said in a statement on Tuesday. 

Parkin’s shareholder, Dubai Investment Fund, plans to sell all of the 749.7 million shares in the offering, the firm said, adding it expects to make its bourse debut next month. 

The offering begins on March 5, with a price range announced on the same day, and the subscription period ends on March 12 for retail investors and on March 13 for qualified investors. 

Reuters was first to report in June last year that the Roads & Transport Authority was considering strategic options for its parking business and invited banks to pitch for roles in a potential IPO. 

Parkin operated about 179,000 paid public parking spaces across the Dubai emirate of the end of last year, of which 4,000 or so were at multi-storey car parks. It also manages an additional 18,000 spaces at developer-owned facilities, it said. 

The RTA is monetizing assets on behalf of the Dubai government as part of a wider privatization program to list state-linked companies and boost attention to its exchange. 

The RTA raised $1 billion from the sale of a 25 percent stake in toll-road operator Salik in 2022 and another $315 million in December from the sale of another 24.99 percent stake in Dubai Taxi Corp., its public taxi business. 

Both deals garnered strong demand from investors; books were oversubscribed multiple times. 

A post-COVID economic rebound, neutral political stance, ease of doing business, convenient time zones, and tax-free status have all contributed to Dubai's attracting droves of wealthy individuals in recent years. 

The number of residents in the city jumped by 100,240, official statistics show, reaching 3.65 million people at the end of last year, compared with 3.55 million people on Jan. 1, 2023. 

Rothschild was appointed as an independent financial adviser while Emirates NBD, Goldman Sachs and HSBC are acting as joint global coordinators and joint bookrunners. 

After the offering, Parkin plans to pay a semi-annual dividend in April and October, Chief Financial Officer Khattab Abu Qaoud said. He added that the minimum dividend payout for 2024 would be more than the net profit for the year, or exceed free cash flow to equity. 

Companies domiciled in the Gulf Cooperation Council raised $11 billion in IPO proceeds in 2023, down 45 percent from 2022. GCC IPOs accounted for 40 percent of proceeds raised in EMEA during 2023, down from 56 percent during 2022, LSEG data showed. 

Parkin reported revenues of 779 million dirhams ($212.11 million) in 2023, up 14 percent from a year earlier, while its core profit rose 23 percent to 414 million dirhams. 


Saudi PIF initiates sale of 7-year dollar sukuk: Reuters 

Saudi PIF initiates sale of 7-year dollar sukuk: Reuters 
Updated 27 min 17 sec ago
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Saudi PIF initiates sale of 7-year dollar sukuk: Reuters 

Saudi PIF initiates sale of 7-year dollar sukuk: Reuters 

RIYADH: Saudi Arabia’s Public Investment Fund has commenced the sale of US dollar-denominated sukuk with priority payment for a seven-year term, as reported by Reuters. 

According to a banking document viewed by the agency, the initial indicative price for the bond sale has been set at a premium of around 115 basis points above US Treasury bonds. 

The Kingdom’s sovereign wealth fund, managing assets exceeding $700 billion, has appointed Goldman Sachs, HSBC, and Standard Chartered to arrange meetings with potential investors. 

PIF, along with the government of Saudi Arabia, last month joined a wave of emerging market issuers seeking to take advantage of rising demand for debt before central banks are expected to lower interest rates later this year.  

A sukuk is a financial offering that complies with Islamic religious rules regarding interest. PIF accounted for about a quarter of the $124 billion spent by sovereign wealth funds worldwide last year, according to a report in January from industry specialist Global SWF.  

The fund plans to ramp up its deployment of capital to $70 billion a year after 2025, from $40 billion to $50 billion currently, PIF Gov. Yasir Al-Rumayyan said last week in Miami. 

It raised $5 billion through the sale of a triple-tranche conventional bond in January and $3.5 billion from a sukuk deal in October 2023.  

Last month’s $5 billion bond issuance successfully concluded pricing, drawing demand that propelled order books to reach $27 billion, marking an oversubscription of more than five times, as stated in an official announcement. 

It comprised three tranches — one valued at $1.75 billion with a five-year coupon maturing in 2029, another for the same amount with a 10-year coupon, and the final valued at $1.5 billion over a 30-year period. 

Fahad Al-Saif, head of PIF’s global capital finance division, said: “Continued strong demand from international institutional investors is testament to the ongoing success of PIF’s medium-term capital raising strategy.” 

Loans and debt instruments represent one of PIF’s four sources of funding. The wealth fund is rated A1 by Moody’s with a positive outlook and A+ by Fitch with a stable outlook. 


Oil Updates – crude prices cling to gains amid concerns about Red Sea attacks on shipping

Oil Updates – crude prices cling to gains amid concerns about Red Sea attacks on shipping
Updated 38 min 22 sec ago
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Oil Updates – crude prices cling to gains amid concerns about Red Sea attacks on shipping

Oil Updates – crude prices cling to gains amid concerns about Red Sea attacks on shipping

RIYADH: Oil prices on Tuesday mostly held onto gains made a day earlier amid attacks on shipping in the Red Sea that have exacerbated supply worries, according to Reuters.

Brent crude futures fell 1 cent to $82.52 a barrel by 7:35 a.m Saudi time, while US West Texas Intermediate crude futures rose 1 cent to $77.59 a barrel.

“Concerns around shipping disruptions in the Red Sea have supported a rebound in the price of crude oil overnight, offsetting a more hawkish Fed currently weighing on the demand side of the equation,” said Tony Sycamore, an analyst at IG in Sydney.

The attacks by Iran-aligned Houthis in support of Palestinians have increased freight rates and shipping times. On Monday, US Central Command said that the Houthis had unsuccessfully fired a missile at the US flagged oil tanker Torm Thor in the Gulf of Aden on Feb. 24.

US President Joe Biden said on Monday he hopes to have a ceasefire in the Israel-Hamas conflict in Gaza start by next Monday. In public, Israel and Hamas continued to take positions far apart on a possible truce, while blaming each other for delays.

Both oil benchmarks settled more than 1 percent higher on Monday which followed declines of 2 percent-3 percent over the previous week as markets factored in a greater likelihood that rate cuts might take longer to come.

Kansas City Federal Reserve Bank President Jeffrey Schmid on Monday used a debut speech on policy to signal that he, like most of his central banking colleagues, is in no rush to cut interest rates. High borrowing costs typically reduce economic growth and oil demand.

Oil prices were also supported on Tuesday by indications of improved demand in China.

“Concerns over Chinese demand are abating, as refineries continue brisk buying in the physical market after a boom in Lunar New Year travel. This is despite them having planned more maintenance halts than usual,” analysts from ANZ Bank said in a note.

A market focus for the day will be the American Petroleum Institute industry group’s weekly data on US crude inventories which is due to be released at 0.30 a.m. on Wednesday.

Analysts polled by Reuters on Monday estimated on average that crude inventories rose by about 1.8 million barrels in the week to Feb. 23. 


WTO conference spotlights global trade challenges and collaborative solutions

WTO conference spotlights global trade challenges and collaborative solutions
Updated 27 February 2024
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WTO conference spotlights global trade challenges and collaborative solutions

WTO conference spotlights global trade challenges and collaborative solutions
  • Established in 1995, the World Trade Organization serves as global authority governing international trade regulations
  • The four-day conference, which kicked off on Monday, will feature trade ministers, senior officials from around the world

RIYADH: Global trading system accessibility, intellectual property, and dispute settlement take center stage as the 13th World Trade Organization Ministerial Conference commenced in Abu Dhabi.   

The four-day event, starting on Feb. 26, will address these issues within the WTO, featuring the participation of trade ministers and senior officials from around the world, the Saudi Press Agency reported. 

The event will bring together 175 member states, private sector leaders, nongovernmental organizations, and civil society representatives.  

The goal is to collaborate on advancing a more efficient, sustainable, and inclusive trading system while enhancing the effectiveness of trade policies and programs. 

Participants in this conference edition aim to build upon the achievements of the previous ministerial conference held in Geneva in June 2022. The event witnessed accomplishments in supporting fisheries, food security, and e-commerce, the SPA report added. 

Speaking on behalf of the Saudi government, Commerce Minister Majid Al-Qasabi began his video address by pointing out that the event provides a pivotal opportunity to mark the WTO’s 30th anniversary.  

“We all look forward to working with you to achieve successful outcomes of the MC 13. Such outcomes would support restoring trust in the multilateral trading system, that is facing significant challenges and headwinds, confirming the essential role of the WTO, and reiterating the global trade agenda,” he said.  

Al-Qasabi warmly welcomed Comoros and Timor-Leste as new members of the WTO, reaffirming the commitment to accelerating the remaining accession.  

He also announced the Kingdom’s approval of the Agreement on Fisheries Subsidies, noting the WTO’s contribution to the economic growth and development of its members.  

The minister emphasized the importance for the Kingdom to achieve constructive and meaningful outcomes in Abu Dhabi and beyond. 

He concluded by reaffirming Saudi Arabia’s commitment to working constructively with all members to ensure the success of the 13th ministerial conference and beyond. 

Established in 1995, the WTO serves as the global authority governing international trade regulations. Its biennial ministerial conference acts as the paramount decision-making platform, bringing together ministers and senior officials from all member nations to assess, revise, and enhance the treaties shaping the global trade framework.  

Ahead of the event, WTO Director General Ngozi Okonjo-Iweala unveiled a $50 million initiative aimed at empowering female entrepreneurs in developing countries. 

The new fund looks to unlock the power of the digital economy, helping women exporters overcome financing hurdles and capture untapped opportunities. 

“This initiative embodies our collective commitment to empowering women,” Okonjo-Iweala said, adding that it is a crucial step toward addressing the financing gap faced by women entrepreneurs, who are “key drivers of economic growth and development.” 

Meanwhile, Thani bin Ahmed Al-Zeyoudi, the UAE’s minister of state for foreign trade and chair of the 13th WTO Ministerial Conference 2024, announced that the country allocated $5 million to the $50 million fund.  

Abdullah bin Zayed Al-Nahyan, the UAE’s minister of foreign affairs, earlier announced that the Gulf country will provide a $10 million grant to support several key initiatives of the WTO.  

He added that the grant would be allocated to the Fisheries Funding Mechanism, the Enhanced Integrated Framework, and the WEIDE fund that will be launched during the event.

 


Moody’s affirms credit ratings of key Saudi companies

Moody’s affirms credit ratings of key Saudi companies
Updated 26 February 2024
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Moody’s affirms credit ratings of key Saudi companies

Moody’s affirms credit ratings of key Saudi companies

RIYADH: Several prominent Saudi companies received affirmation on their credit ratings from Moody’s Investor Services, a leading global provider of financial assessments, research, and risk analysis.

Following the agency’s recent update to its Government-Related Issuers Methodology, several firms, including Saudi Basic Industries Corp., Saudi Telecom Co., and Saudi Electricity Co., have maintained their A1 ratings, while Saudi Arabian Mining Co., also known as Ma’aden, continues to hold a Baa1 rating.  

For SABIC, the A1 rating acknowledges its strong global presence in the petrochemicals market, competitive cost structure, and robust financial health.  

Moody’s also highlights the cyclical nature of SABIC’s operations and its concentration in Saudi Arabia as considerations. 

stc’s A1 rating reflects its dominant position in the Saudi telecommunications sector, strong financial metrics, and substantial government support. Challenges include market competition and the capital intensity of the telecom industry, Moody’s stated. 

SEC’s rating considers its integrated electricity operations, market dominance, and regulatory support balanced against the company’s growing debt burden due to significant infrastructure investments. 

Ma’aden’s Baa1 rating is supported by its diversified production, low-cost operations, and strategic importance to Saudi Arabia’s economy. 

The company’s exposure to commodity price volatility and its expansion plans are areas of focus. 

The positive outlooks for SABIC, stc, and SEC align with Moody’s view on the government of Saudi Arabia, indicating a high likelihood of state support.  

Furthermore, Ma’aden’s stable outlook reflects its solid financial policies and liquidity management. 

The ratings of the Saudi companies could potentially be upgraded or downgraded based on several factors outlined by Moody’s.  

For SABIC, an upgrade could be on the horizon if the ratings of the Saudi government or Saudi Aramco are elevated or if the company itself demonstrates improved revenue and profitability and maintains strong credit metrics and liquidity.  

Conversely, SABIC’s ratings might face a downgrade if the company experiences a significant downturn in operating performance or engages in heavy debt-financed investments, pushing its deficit to earnings before interest, taxes, depreciation, and amortization ratio toward a multiple of 1.5. 

Similarly, stc could see its scores positively impacted if the ratings of the government or the Public Investment Fund are upgraded, given its status as one of the highest-rated telecom operators globally.  

However, an escalation in competition, debt-financed acquisitions, or sustained negative free cash flow could apply downward pressure on stc’s ratings. Any decrease in the government’s or PIF’s ratings would also likely result in a downgrade for stc. 

SEC’s situation mirrors that of the aforementioned entities, with the potential for an upgrade if the sovereign rating of Saudi Arabia or the PIF improves, contingent upon the company maintaining strong operational and financial performance.  

A downgrade could occur if there is a notable decline in the company’s liquidity profile or its financial metrics weaken significantly. 

Ma’aden’s ratings could be elevated if the company successfully reduces its debt relative to EBITDA and boosts its retained cash flow to net debt ratio while maintaining strong liquidity. 

Conversely, an increase in debt and EBITDA ratio beyond certain thresholds or a significant weakening of liquidity could trigger a downgrade.  

Adjustments in the perceived likelihood of support from PIF or the government in times of financial stress could also influence Ma’aden’s ratings.