Saudi Arabia is ‘fastest growing nation among G20 countries’

Saudi Arabia is ‘fastest growing nation among G20 countries’
Saudi Arabia has carried out a record number of reforms in recent years in the regulation and supervision of the banking sector. (AFP file photo)
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Updated 09 September 2023

Saudi Arabia is ‘fastest growing nation among G20 countries’

Saudi Arabia is ‘fastest growing nation among G20 countries’
  • The financial policies adopted by the Kingdom have a wide impact at the global level

The Kingdom’s membership of the G20 is a result of its increasing importance in exporting and pricing of global energy as well as the increase in the volume of its international trade and worldwide impact, the Saudi Press Agency reports.

It has also come about as a result of the increase in its financial resources, which are projected to rise in the future, thus increasing the importance of Saudi Arabia in the global economy.

The financial policies adopted by the Kingdom have a wide impact at the global level, affecting the activity of the economy and global trade through remittances abroad and the policy of investing in global securities. The expansion of the circle of influence of the Saudi economic role in the region also contributed to the classification of the Kingdom among the best emerging economies in the world alongside other emerging countries such as China, India and Turkiye, given the economic weight the Kingdom has in the Arab Gulf region, the Middle East and Arab countries.

Among the positive results of the Kingdom’s membership of the G20 group is the provision of regular communication channels with senior global financial and economic policy makers, which enhances bilateral cooperation with major countries. The Kingdom’s membership in this group has raised the importance of providing more transparency, as well as financial and economic data related to the Kingdom, similar to the countries of the developed world. It is expected that the Kingdom’s membership of the group will lead to coordination and reform of some policies in a number of financial and economic fields, which will lead to further development of the financial and economic sectors and ultimately serve the best interests of Saudi Arabia and its economy.

The establishment of multiple economic cities is a culmination of the Kingdom’s global economic potential. Saudi Arabia has also initiated the construction of the King Abdullah Financial Center project in Riyadh on an area of ​​1.6 million sq m, forming one of the major financial hubs in the world due to its presence in one of the largest economies in the region. It is the first of its kind in the Middle East region in size, organization, technical specifications and equipment.

Saudi Arabia has carried out a record number of reforms in recent years in the regulation and supervision of the banking sector. These were highly commended by a World Bank report, placing it 12th globally out of 183 countries. According to the report, the Kingdom, through its membership in the G20 and in coordination with the countries of this group, is exerting strong efforts to achieve stability and support developing countries, in addition to its contribution to regional and international development institutions.

The economic decisions and policies adopted by Saudi Arabia during the years of comprehensive development were marked out by their moderation, as the Kingdom is committed to playing an active and positive role to achieve global economic stability and formulate a global economic system that achieves balanced and sustainable global economic growth that preserves the interests of all developed and developing countries. The OECD announced in its annual report, “OECD Global Economic Prospects,” for the years 2022 and 2023, that the Saudi GDP achieved the highest growth rate among the G20 countries.

The Saudi economy achieved 8.7 percent growth in its GDP, the highest rate among the G20 countries in 2022. It exceeded the international organization’s expectations, which was set at 8.3 percent as a maximum, while the current growth rate stands as the highest annual rate in the past decade.

Saudi Arabia secured first place among the G20 countries in the rate of worker productivity growth in 2022, according to a series of modeled readings issued annually by the International Labor Organization.

This 4.9 percent increase represents the highest productivity growth rate achieved by the Kingdom, which was lagging at -6.3 percent in 2019. Following that, in 2021, the productivity growth rate rose to 4.4 percent, before reaching its highest level in 2022.

Saudi Arabia has scored 94.4 percent in a security audit carried out by the International Civil Aviation Organization. The audit revealed that the Kingdom secured seventh rank among the G20 countries in aviation security. ICAO carries out this exercise with the aim of ensuring that its member states are complying with international standards.

The International Telecommunication Union showed that the Kingdom ranked second among the G20 countries and fourth globally in the readiness of its digital systems. The ranking follows the Kingdom’s success in building a sustainable regulatory framework and shifting toward digital collaborative regulation to empower the digital economy,

As one of the leading countries in the field of communications and information technology at the level of the G20 countries, and based on its cumulative achievements, the Kingdom was able to transform the digital economy working group into a permanent working group, leading the countries of the group to adopt a roadmap toward a common framework on defining and measuring the digital economy, in addition to adopting the principles of reliable human-centered artificial intelligence. These developments led to the consolidation of Saudi Arabia’s position at the regional and global level as a leading technology hub.

The Kingdom has led international efforts in investments and innovations to bridge the digital gap by piloting fifth-generation networks via high-altitude platform systems, covering nearly half a million sq km in remote areas.

These steps, procedures, developments and qualitative leaps achieved by the telecommunications sector and its accelerated steps to keep pace with technical developments have enhanced the Kingdom’s progress in the relevant indicators and reports. The Kingdom has been ranked second in digital competitiveness among the G20 countries according to the European Center for Digital Competitiveness. It has been ranked third globally for its digital government transformation by the World Bank’s GovTech Maturity Index for 2022. Saudi Arabia presented a pioneering model in bridging the digital gap, as it succeeded in connecting 99 percent of its population to digital infrastructure.

The Kingdom has provided the first-of-its-kind experience in connecting the offline world through non-terrestrial networks program and land networks, considered the ideal solution to accelerate bridging the digital gap. The Kingdom has also launched the world’s largest virtual hospital, which uses artificial intelligence to provide advanced medical services.

In youth and women’s empowerment, the Kingdom has achieved in a short time a qualitative leap in the empowerment of women in the technology sector, with the growth of Saudi women in the technology sector jumping from 7 percent to 33 percent, exceeding the average of the G20 countries and the EU.

In the financial markets, the Kingdom was placed third in IPO and corporate boards indices within the G20 countries, ranking among the top three in 6 out of 12 indices related to the financial market at the G20 level.

Saudi Arabia was ranked 17th globally out of 64 countries that are the most competitive in the world, to become one of the top 20 countries for the first time in the World Competitiveness Yearbook 2023. The yearbook is published by the World Competitiveness Center of International Institute for Management Development. It is one of the major competitiveness reports that the National Competitiveness Center follows up on and analyzes in collaboration with relevant government entities.

Supported by its strong economic and financial performance in 2022 and its improved business legislation, the Kingdom advanced seven places in the 2023 edition, which ranked it third among the G20 countries for the first time, surpassing countries with advanced global economies such as South Korea, Germany, France, Japan, Italy, India, the UK, China, Mexico, Brazil and Turkiye in accordance with methodology of the report that covers different aspects of competitiveness.

The Kingdom’s access to the international G20, which includes the 20 most powerful economies in the world, represents an increase in the influential role it plays in the global economy as it is based on a solid industrial economic foundation and has an important role in formulating global economic policy, and is a safe hub for investments from around the world.

Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

Closing Bell – Saudi indexes end week in green, TASI closes at 12,188
Updated 18 July 2024

Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

RIYADH: Saudi Arabia’s Tadawul All Share Index ended the week in green, gaining 30.71 points, or 0.25 percent, to close at 12,188.32.         

The total trading turnover of the benchmark index was SR8.7 billion ($2.3 billion) as 108 of the listed stocks advanced, while 113 retreated.   

Similarly, the MSCI Tadawul Index also gained 6.61 points, or 0.43 percent, to close at 1,527.   

The Kingdom’s parallel market Nomu dropped 185.57 points, or 0.72 percent, to close at 25,702.34. This comes as 32 of the listed stocks advanced, while as many as 33 retreated.   

The best-performing stock of the day was Saudi Manpower Solutions Co., with the company’s share price surging 6.33 percent to SR9.41.    

Other top performers include Saudi Public Transport Co. as well as Tourism Enterprise Co., whose share prices soared by 5.83 percent and 5.06 percent, to stand at SR18.88 and SR0.83 respectively.    

In addition to this, other top performers included Saudi Industrial Development Co. and National Gypsum Co.  

The worst performer was Al-Baha Investment and Development Co., whose share price dropped by 7.69 percent to SR0.12.     

Others to see falls were Al Sagr Cooperative Insurance Co. as well as Leejam Sports Co., whose share prices dropped by 6.19 percent and 3.12 percent to stand at SR23.34 and SR230, respectively.    

AYYAN Investment Co. and B MBC Group Co. also recorded falls.

On the announcement front, Advanced Petrochemical Co. announced a net loss of SR17 million for the first half of 2024, a significant decline from the SR103 million net profit recorded during the same period in the previous year. 

The company attributed this downturn to several factors, including a 20 percent year-on-year decrease in sales revenue due to scheduled maintenance activities in 2024. 

Advanced Petrochemical posted a SR67 million loss share in its investment in SK Advanced for the current six-month period, compared to a SR43 million loss in the first half of 2023. 

In the second quarter of 2024, the company’s net profit decreased by 30 percent to SR42 million, down from SR60 million in the same period of 2023. This reduction was primarily driven by a 12 percent year-on-year increase in propane prices, despite an overall rise in quarterly revenues. 

UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars

UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars
Updated 18 July 2024

UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars

UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars
  • Emirate’s debt capital markets outstanding are expected to reach $300 billion in the second half of 2025

RIYADH: The UAE’s debt capital market outstanding surged by 11.8 percent annually to $281 billion in the first half of this year, with 71.5 percent of US-denominated dollars, a new report has revealed.
According to data released by the credit agency Fitch Ratings, the country’s debt capital markets outstanding are expected to reach $300 billion in the second half of 2025.
“The DCM structural reforms, the implementation of the Dirham Monetary Framework, and generally resilient investor appetite have led to notable growth over the past five years,” said the Global Head of Islamic Finance at Fitch Ratings, Bashar Al-Natoor.
“However, there are still gaps to address,” he added. “The dirham market remains nascent, the investor base is highly concentrated in banks and most corporates still prefer bank financing over bonds or sukuk.”
Following the UN climate change conference COP28 in the UAE in late 2023, environmental, social, and governance debt issuance in the first half of this year fell 35 percent to $3.3 billion, with sukuk accounting for the vast majority of 67.5 percent.
The Emirates was the third-largest US dollar debt issuer among emerging markets, excluding China, with an 8.9 percent share of the total in the first half of 2024.
Al-Natoor said that despite the growth in Islamic finance, many corporates still prefer traditional bank financing over issuing bonds or sukuk due to perceived complexities in adhering to Shariah standards set by the Accounting and Auditing Organization for Islamic Financial Institutions.
The only countries with a larger percentage than the UAE were Saudi Arabia, with a 17.4 percent share, and Brazil, with 9.4 percent, according to Fitch Ratings.

Sukuk issuance in all currencies increased by 9.8 percent annually, totaling $8.4 billion, outperforming bond issuance, which decreased by 44.3 percent to $39 billion.

Dollar-denominated DCM issuances included a notable share of sukuk at 27.7 percent in the first half, down from 35.3 percent in the same period last year. 

Fitch has assigned ratings to $26.5 billion worth of UAE sukuk, with 94.3 percent maintaining investment-grade status.

Certain UAE banks, both Islamic and conventional, have been restricted from investing in specific sukuk unless they hold them until maturity due to guidelines from the Higher Shariah Authority of the Central Bank.

“We forecast consolidated UAE government debt at 24 percent of GDP (gross domestic product) at end-2024, well below the 49 percent ‘AA’ category median,” the credit rating agency said, adding: “Individual emirates have varied debt profiles; Sharjah stands out with a higher debt burden.”

Abu Dhabi and Dubai are expected to post surpluses, whereas deficits are projected for Sharjah and Ras Al-Khaimah, where Fitch upgraded RAK’s rating to “A+” from “A” in May 2024.

Almarai, 30Export sign deal for nearly $16m export boost strategy

Almarai, 30Export sign deal for nearly $16m export boost strategy
Updated 18 July 2024

Almarai, 30Export sign deal for nearly $16m export boost strategy

Almarai, 30Export sign deal for nearly $16m export boost strategy

RIYADH: A SR60 million ($15.9 million) deal has been signed between food company Almarai and marketing logistics firm 30Export to boost the former’s foreign trade prospects.

The agreement, overseen by Minister of Industry and Mineral Resources Bandar Alkhorayef and Abdulrahman Al-Thukair, the CEO of Saudi Export Development Authority, was signed by Abdullah Al-Bader, CEO of Almarai Co. and Ali Al-Malki, 30Export.

According to a statement by Thamer Al-Mishrafi, the spokesman of SEDA, this memorandum of understanding will empower the brand in international markets.

This comes as SEDA aims activate all its efforts and capabilities to explore available means of support in order to enhance the penetration of national products and services into targeted global markets.

The project also increases Saudi Arabia’s import-export capacity by improving its connectivity with international trade routes, aliginng with Vision 2030 goal.

The effort aims to diversify national income sources and increase the share of non-oil Saudi exports to at least 50 percent of total gross domestic product by 2030

It also comes as part of the Export Housing initiative launched by SEDA last year, which enables licensed export houses to facilitate the export of high-quality national products to international markets.

These export houses, licensed and qualified by SEDA, play a crucial role as commercial intermediaries, offering a range of services across the export value chain.

“This effort aims to assist local factories in accessing global markets, thereby facilitating the export movement and enhancing the reach of national goods and services to targeted international markets,” Al-Mishrafi said in a statement on X.

Saudi Arabia’s non-oil exports saw an annual rise of 3.3 percent in the first quarter of 2024, fueled by an increase in the value of re-exports.

According to the General Authority for Statistics, while national non-oil exports experienced a slight dip of 5.2 percent, the value of re-expored goods surged by 31.5 percent during the same period.

In October last year, SEDA and Saudi Post, also known as SPL, signed an agreement to promote the “Made in Saudi” brand across various channels locally and internationally.

The collaboration agreement was rolled out within the framework of the National Strategy for Transport and Logistics and the National Strategy for Industry.

Both parties also introduced joint services to support the national economy’s transformational goals in light of the Saudi Vision 2030.

Trump Organization announces deal to build Dubai tower

Trump Organization announces deal to build Dubai tower
Updated 18 July 2024

Trump Organization announces deal to build Dubai tower

Trump Organization announces deal to build Dubai tower

DUBAI: The Trump Organization on Thursday announced a deal to partner with a Saudi developer to build a high-rise tower in the UAE business hub of Dubai, its latest project in the Gulf.
Trump Tower Dubai will target “the Dubai luxury market,” real estate developer Dar Global said in a press release, adding that the location and design would be unveiled by the end of the year.
The development will include a Trump hotel and branded residential units, said Dar Global, the international subsidiary of Saudi developer Dar Al-Arkan.
The announcement came a little over two weeks after Dar Global announced a separate deal with the Trump Organization to build a high-rise tower in the Saudi coastal city of Jeddah.
It is also developing a Trump hotel and luxury villas in the capital of neighboring Oman, with completion expected in 2028, according to the firm’s website.
Former President Donald Trump entrusted the management of his real estate empire to his sons after taking office in 2017, although he held onto his shares in the Trump Organization.
His foreign business dealings prompted critics to sound the alarm about possible conflicts of interest, including in a 2022 Congressional report that found the foreign governments of six countries — the UAE among them — spent more than $750,000 at a Trump-owned hotel in Washington while trying to influence his administration in 2017 and 2018.
Trump, the presumptive Republican nominee in this year’s presidential election, cultivated close ties with Arab Gulf states during his term, choosing Saudi Arabia for his first foreign trip.
“We are proud to expand our presence in the region further through the launch of our iconic Trump Tower Dubai,” Eric Trump, the former president’s son and executive vice president of the Trump Organization, said in a statement.

UAE energy startups secure $30m in H1: IEA data

UAE energy startups secure $30m in H1: IEA data
Updated 18 July 2024

UAE energy startups secure $30m in H1: IEA data

UAE energy startups secure $30m in H1: IEA data

RIYADH: Investor confidence in UAE’s energy startups surged as they secured $30 million in the first half of 2024, surpassing the $24 million raised throughout 2023, an analysis showed.

In its latest report, the International Energy Agency revealed that companies in energy storage and batteries received the largest share of total financing, accounting for approximately 33.3 percent, followed by solar energy firms at 25 percent.

This increase in funding for startups in the renewable energy sector highlights the UAE’s efforts to accelerate its energy transition journey, aligning with its goal to achieve net-zero emissions by 2050.

The IEA report revealed that UAE wind energy firms accounted for 8.3 percent of the overall financing received in the first half of this year, while companies operating in other renewable and clean energy technologies collectively made up the remaining 33.3 percent.

The report also noted that the total number of startup companies operating in the UAE’s energy sector reached about 54 by the end of 2023.

Of these, 21 companies are in the renewable sector, followed by 12 firms in energy storage and batteries.

The IEA added that nine startups in the UAE are working in the energy efficiency industry, while another 12 are operating in other energy-related sectors.

Beyond energy initiatives, UAE startups are also focusing on developing technologies to tackle critical challenges such as water security.

In May, Airwater Co., an air-to-water technology firm, announced a strategic investment from Abu Dhabi-based venture capital firm Tau Capital, for an undisclosed amount, indicating sustained investor interest in innovative solutions from the region.

The investment will enable Airwater Co. to expand its manufacturing, infrastructure, and distribution capabilities, with a particular focus on scaling large-scale commercial and industrial atmospheric water generation facilities, as stated in a press release.

Bill Murray, managing director of Tau Capital, stated: “Airwater Co.’s tech-focused approach to water security exemplifies the type of transformative innovation which we at Tau Capital believe is essential for sustainable global development.”

This followed another investment in December 2023, when UAE-based Zeroe secured seed funding from the VOYAGERS ClimateTech Fund, bringing the total raised to $2.3 million.

The funding was aimed at enabling Zeroe to expedite the development of its AI-integrated SaaS platform, which optimizes carbon emission calculations, aiding companies in their transition to net-zero in a more efficient and cost-effective manner, according to a press release.

“We’re excited to be VOYAGERS’ second investment in the region, and we believe this investment confirms our push to be a leading solution in supporting organizations to measure emissions and access sustainable finance,” said Farouk Jivani, co-founder and CEO of Zeroe, in a statement release at that time.

Overall, the UAE was the top-funded ecosystem in the region in the first half of 2024, with 91 startups raising $455.5 million across different sectors, according to a report by Wamda released in July.

In terms of the energy sector, the IEA report noted that US startups received a total funding of $2.29 billion in the first half of this year, closely followed by China at $1.98 billion during the same period.

France received $633 million in funding for startups in the first six months of this year, while companies in India were financed with $248 million.

The IEA revealed that its analysis is based on data from Crunchbase, which references about 3.5 million startups worldwide, including 72,000 energy-related companies.