Fitch upgrades Oman’s credit rating to BB+

Fitch upgrades Oman’s credit rating to BB+
According to the agency, the Omani government’s commitment to implementing measures to maintain financial security was a key factor contributing to the advancement. Shutterstock
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Updated 26 September 2023
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Fitch upgrades Oman’s credit rating to BB+

Fitch upgrades Oman’s credit rating to BB+

RIYADH: Reflecting Oman’s commitment to fiscal stability, US-based Fitch Ratings upgraded the Gulf nation’s long-term foreign currency issuer default rating to “BB+” from “BB.”   

According to the agency, the Omani government’s dedication to implementing measures to maintain financial security was a key factor contributing to the advancement.  

This promise comes in response to the challenging scenario of the oil price’s breakeven point, which has declined from $80-90 per barrel between 2017 and 2019 to less than $70 per barrel in 2023.  

The agency also noted that the upgrade implied that the government would not backtrack on recent fiscal consolidation measures.  

“The reduction of Oman’s fiscal breakeven price to below $70 per barrel over our forecast horizon from $80-$90 over 2017-19 significantly reduces vulnerability to oil price swings, although risks remain,” said Fitch Ratings in its report. 

As for falling debt, the analysis said that Oman continues to pre-pay some of this deficit, using the budget surplus from high oil prices, expecting the numbers to decrease by about 8 percent in nominal value in 2023. 

“The Petroleum Reserve Fund has not been used for these repayments and was over $2.5 billion in August 2023. Oman’s debt management has smoothed its debt profile, reducing the risk of liquidity pressures,” Fitch added in its report. 

The rating agency also indicated that lower external debt has eased external liquidity risks, although repayments prevented the accumulation of foreign assets. 

“We project sovereign net foreign assets ... to return to a positive position in 2023, after falling to -9 percent of gross domestic product in 2020, from 53 percent in 2014,” it said.

Foreign exchange reserves will rise only modestly in 2023 as debt repayments continue to cover 3.3 months of current account payments, below the ‘BB’ median of 4.3 months, according to the document.

Fitch also noted that renewable energy and hydrogen sector investments are expected to spur growth from 2025.

Meanwhile, the state’s general budget will achieve a financial surplus of about 4.1 percent in 2023, 2.4 percent in 2024, and 1 percent in 2025. 

The report indicated that it expects public debt, as a ratio to GDP, to decline to about 36 percent during 2023 and to stabilize at 35 percent during 2024 and 2025, compared to previous forecasts that predicted this number would reach about 45 percent in 2023. 

The Omani government’s trend in managing public deficits and repaying some foreign loans prior to their maturity, taking advantage of additional revenues, was lauded by the rating agency, which also noted this reduces the risks of external financial liquidity pressures. 

Fitch expected the rate of net foreign assets to revert to its original positive standing and that foreign cash reserves would grow moderately during the remainder of 2023. 

It added that the country’s credit rating may go up if external public debt, as a ratio to GDP, continues declining and net sovereign foreign assets continue to improve.


Pakistan is aiming to increase trade with Saudi Arabia to $20bn: minister

Pakistan is aiming to increase trade with Saudi Arabia to $20bn: minister
Updated 5 sec ago
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Pakistan is aiming to increase trade with Saudi Arabia to $20bn: minister

Pakistan is aiming to increase trade with Saudi Arabia to $20bn: minister

RIYADH: Pakistan is aiming to increase its trade capacity with Saudi Arabia to $20 billion through enhancing business conditions, according to a top official.

The Saudi-Pakistani Business Forum kicked off in Riyadh on Feb. 22 under the patronage of Minister of Commerce Majid bin Abdullah Al-Qasabi, organized by the Federation of Saudi Chambers, according to the Kingdom’s official press agency.

During the event, Pakistan’s Minister of Commerce Gohar Ejaz highlighted the role of the Free Trade Agreement between the Gulf Corporation Council countries and his nation in opening up opportunities for investors from both regions. 

He expressed his ambition to increase trade volume to $20 billion by improving the business environment between the two countries and encouraging the private sector, especially since Pakistan represents a significant market and opportunity for Saudi investors.

Chairman of the Federation of Saudi Chambers Hassan Al-Huwaizi noted the leaps in trade exchange between the Kingdom and Pakistan, which reached $5.7 billion, adding that Pakistan now ranks 20th in the list of Saudi trading partners, with broader prospects for partnership and Pakistani investors in Vision 2030 projects.

Ejaz pointed out that the agreement provides protection and guarantees for Saudi and Gulf investments, explaining that the forum comes within Pakistan’s interest in developing its relations with the Kingdom and benefiting from Vision 2030 projects.

The minister of commerce emphasized in a speech, conveyed by Acting Deputy Governor of the Foreign Trade Authority’s Deputyship of Private Sector Affairs and Global Presence Fawaz bin Rafaah, the significant role played by the private sectors of Saudi Arabia and Pakistan in developing the volume of trade exchange, as reported by the Saudi Press Agency.

Fahd Al-Bash, president of the Saudi-Pakistani Business Council, revealed several initiatives and projects the council is working on in cooperation with investors from both countries. 

These include launching a portal for rice importers from Pakistan, establishing a technology center in Riyadh, a halal meat center in Makkah, as well as a market for Pakistani products in the Kingdom and joint petrochemical industries to meet the needs of the market.

Forum participants discussed the opportunities and initiatives provided by Vision 2030 for Pakistani investors, as well as the investment options available to Saudi businessmen in Pakistan across various targeted economic sectors.

During the forum, the ministry of investment screened a presentation titled “Invest in Saudi Arabia,” covering the financial environment and opportunities in the Kingdom. 

The Agricultural Development Fund also presented its services and efforts in agricultural sector development. 

Additionally, the Saudi Export-Import Bank showcased its efforts and services in developing Saudi exports and serving exporters, while the Pakistani Investment Council reviewed the investment opportunities available in Pakistan.


Saudi Arabia and China explore investment opportunities in civil aviation 

Saudi Arabia and China explore investment opportunities in civil aviation 
Updated 27 min 53 sec ago
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Saudi Arabia and China explore investment opportunities in civil aviation 

Saudi Arabia and China explore investment opportunities in civil aviation 

RIYADH: Economic cooperation in Saudi-China civil aviation is set to strengthen, with top officials meeting in Beijing to discuss investment opportunities and technology transfer for industry advancements.  

This comes as a high-level delegation, led by Abdulaziz Al-Duailej, president of the Kingdom’s General Authority of Civil Aviation, began a visit to the Asian country, convening a joint round table meeting to explore cooperation in connectivity and discuss partnership aspects across various areas. 

Furthermore, both nations discussed the exploration of innovative solutions in aviation, including sustainable fuels, advanced air mobility, and traffic management systems.  

They expressed interest in integrating artificial intelligence and digital technologies to enhance the aviation experience and operational efficiency. 

Additionally, the Saudi delegation emphasized substantial investments in the sector and reiterated the Kingdom’s openness to further opportunities.  

This aligns with GACA’s goal of modernizing the airport system and supports the Kingdom’s tourism sector target of attracting 150 million visitors by 2030. 


Saudi Arabia has 4k firms in entertainment industry thanks to Vision 2030 boom – top official

Saudi Arabia has 4k firms in entertainment industry thanks to Vision 2030 boom – top official
Updated 33 min 16 sec ago
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Saudi Arabia has 4k firms in entertainment industry thanks to Vision 2030 boom – top official

Saudi Arabia has 4k firms in entertainment industry thanks to Vision 2030 boom – top official

RIYADH: Saudi Arabia’s entertainment sector has surged to 4,000 companies from fewer than 10 since the launch of Vision 2030, according to a top official.

Speaking at the Saudi Media Forum in Riyadh on Feb. 21, General Entertainment Authority CEO Faisal Bafarat said the industry has already created over 150,000 local jobs since the Kingdom’s economic diversification initiative was instigated in 2016.

Bafarat also underscored the importance of high competitiveness among business sectors in creating new forms of entertainment, which is now attracting more capital in the Kingdom, the Saudi Press Agency reported. 

Aligned with the economic diversification goals of Vision 2030, Saudi Arabia launched the General Entertainment Authority in 2016. 

The organization is currently working toward the development of entertainment options that fit the needs of people from all walks of life in the Kingdom.

The media sector’s contribution to Saudi gross domestic product reached SR14.5 billion ($3.86 billion) in 2023 and is targeting SR16 billion this year.

For his part, Ahmed Al-Mehmadi, the executive director of operations at the General Entertainment Authority, said that media has become a fundamental pillar in the entertainment industry. 

According to Al-Mehmadi, effective local and regional media partnerships will catalyze the growth of the entertainment industry in Saudi Arabia. 

He added that the authority is committed to diversifying and energizing its platforms to reach various local and global segments of society. 

The third edition of the Saudi Media Forum, hosted by the Kingdom’s Broadcasting Authority, was organized in Riyadh from Feb. 19 to 21. 

The gathering brought together some 2,000 industry specialists and experts from the region and beyond. The event also showcased the latest technologies and innovations from over 200 local and international companies. 

Saudi Arabia has launched multiple initiatives to grow the communications industry, which includes the Media Zone project that provides a dedicated space to gain knowledge of art practices within the industry.

Last week, the Kingdom also launched the Hajj and Umrah Mediathon to improve the quality of coverage of the holy practices.

The Hajj Media Hub was also announced, allowing media professionals to enhance their coverage and showcase their work in an immersive exhibition.


Oil Updates – crude rises for second day on improving signs of US refinery demand

Oil Updates – crude rises for second day on improving signs of US refinery demand
Updated 22 February 2024
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Oil Updates – crude rises for second day on improving signs of US refinery demand

Oil Updates – crude rises for second day on improving signs of US refinery demand

SINGAPORE: Oil prices rose for a second day on Thursday on expectations that demand in the US, the world’s biggest oil consumer, will improve as refineries try to return to service after outages and as the dollar weakened, according to Reuters.

Brent crude futures rose 34 cents, or 0.4 percent, to $83.37 a barrel at 10:40 a.m. Saudi time. US West Texas Intermediate crude futures climbed 37 cents, or 0.5 percent, to $78.28 a barrel.

“Oil prices have been resilient thus far, with market participants seemingly eyeing a retest of its year-to-date high following its rally in February,” said Yeap Jun Rong, market strategist at IG, adding that geopolitical tensions provided support.

“That said, gains could be somewhat contained for now, given the higher-than-expected inventories build in US crude stocks from the API (American Petroleum Institute) figure overnight drove some wait-and-see for the EIA (Energy Information Administration) numbers to be released ahead,” Yeap added.

Crude stocks rose 7.17 million barrels in the week ended Feb. 16, market sources citing API figures said on Wednesday. Gasoline stockpiles also rose while distillate fuel inventories declined.

US crude inventories have climbed amid outages at large refineries that have left utilization rates at the lowest level in two years, though the plants are resuming output.

BP’s 435,000 barrel-per-day refinery in Indiana, the largest in the US Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1.

TotalEnergies’ 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage.

Analysts expect US refinery run rates to have risen to 81.5 percent last week from 80.6 percent of total capacity in the previous week, according to a Reuters poll.

Investors will keep an eye on the official inventory data from the US EIA that is due at 7:00 p.m. Saudi time on Thursday, delayed one day by a US holiday.

Crude was also supported by a weaker US dollar, which makes oil less expensive for traders holding other currencies.

The dollar index, which measures the greenback against six major peers, fell to 103.905 at 8:10 a.m. Saudi time. 

“The retreat in the US dollar for the fourth straight session may also boost the short-term appeal for oil,” said Yeap. 


NEOM to launch new guest retreat Elanan

NEOM to launch new guest retreat Elanan
Updated 21 February 2024
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NEOM to launch new guest retreat Elanan

NEOM to launch new guest retreat Elanan

RIYADH: Saudi Arabia’s Gulf of Aqaba coastline is poised for enhancement with the introduction of a new guest retreat, Elanan. 

The latest addition to NEOM features 80 bespoke rooms and suites and is designed with a well-being theme, offering a nature resort.

Elanan adopts a contemporary approach to wellness, incorporating new technologies that promote relaxation.

Moreover, Elanan’s innovative architecture seamlessly integrates with the surrounding environment. By incorporating these unique design methods, Elanan also showcases detailed sculptures that merge with the outdoor areas. 

Although the overall design is modern, the development is committed to preserving the natural landscape.

Elanan follows the recent announcements of Leyja, Epicon, Siranna, and Utamo, all of which are sustainable tourism destinations in the Gulf of Aqaba.

On Feb. 18, the Kingdom’s $500 billion giga-project introduced a luxury resort in Trojena. It is set to unveil a 105-key hotel with Raffles Hotels and Resorts in northwestern Saudi Arabia.

Scheduled to open in 2027, Raffles Trojena aims to provide guests with opportunities to engage with the region’s natural beauty through its ring-shaped architecture.

Omer Acar, CEO of Raffles Hotels & Resorts, said: “We are thrilled to collaborate with NEOM on the creation of Raffles Trojena, an architecturally significant resort that will showcase the very best in modern luxury hospitality and underscores Raffles’ commitment to growing in the Kingdom of Saudi Arabia.” 

He added: “Trojena is set to be a destination unlike any other, and this mountainside retreat continues the Raffles legacy of growing in the world’s most compelling locales, providing our guests with an opportunity to ignite their passions through highly personalized service and experiences.”  

The company said the property will embody the brand’s distinctive characteristics, encompassing its renowned butler service, diverse dining experiences, and a dedicated focus on local arts and culture.

It joins as the latest hospitality collaborator within NEOM’s Hotel Division, located in the Discover cluster — a segment of Trojena dedicated to natural exploration.