SAMI to buy SAIC’s 10% stake in Al-Salam Aerospace Industries Co.

SAMI to buy SAIC’s 10% stake in Al-Salam Aerospace Industries Co.
SAIC’s exit aligns with the company’s strategy to enhance its performance by continuously reviewing investments and pursuing promising opportunities with growth and returns. SAIC
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Updated 13 December 2023
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SAMI to buy SAIC’s 10% stake in Al-Salam Aerospace Industries Co.

SAMI to buy SAIC’s 10% stake in Al-Salam Aerospace Industries Co.

RIYADH: Saudi Arabian Military Industries, an affiliate of the Public Investment Fund, has signed an agreement with Saudi Advanced Industries Co. to acquire its stake in Al-Salam Aerospace Industries Co.

According to a statement to the Saudi Stock Exchange, SAIC will sell its 10 percent stake in the military and civil aviation maintenance solution provider to SAMI.

“The value will be determined upon completion of the calculation of the partners’ own obligations according to the terms of the agreement,” stated SAIC in the bourse filing, adding that the book value of its share in the aviation maintenance solution provider stands at SR19.52 million ($5.20 million).

It said the deal’s financial impact will appear during the fiscal year 2023.

The decision to exit transpired because of losses exceeding the company’s capital, high obligations, and the challenges of supporting the firm from the partners.

SAIC’s exit aligns with the company’s strategy to enhance its performance by continuously reviewing investments and pursuing promising opportunities with growth and returns.

Additionally, the company is divesting from investments that have successfully achieved their goals or failed to meet expectations.

SAMI has been scouting for opportunities to enhance the Saudi defense sector. In October, the company signed two deals worth SR664 million with the General Authority for Defense Development to support the sector’s growth over the next four years.

The agreements indicated that SAMI would partner with national defense development centers and Saudi universities to meet the requirements of defense and security authorities and connect them to companies that would manufacture their designs.

Faleh bin Abdullah Al-Sulaiman, governor of the authority, noted that the contracts were the first in a series of programs to help stimulate the Kingdom’s defense sector.

He emphasized the importance of investing in national universities with specialized departments in this field.

SAMI CEO Walid Abukhaled also affirmed the company’s role in localizing defense industries, in line with Saudi Vision 2030.

The contracts also outlined investment in developing communication systems, surveillance and counter-drone technology.


Closing Bell: TASI records 1.23% rise to close at 11,913

Closing Bell: TASI records 1.23% rise to close at 11,913
Updated 07 October 2024
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Closing Bell: TASI records 1.23% rise to close at 11,913

Closing Bell: TASI records 1.23% rise to close at 11,913

RIYADH: Saudi Arabia’s Tadawul All Share Index rose by 1.23 percent to reach 11,913.62 points on Monday mainly driven by a significant growth in Al Majed Oud Co.’s stock price alongside other top performers. 

The total trading turnover of the benchmark index was SR7.02 billion ($1.87 billion), as 185 of the listed stocks advanced, while 45 retreated. 

The MSCI Tadawul Index increased by 17.08 points, or 1.16 percent, to close at 1,492.  

The Kingdom’s parallel market Nomu slipped, losing 6.79 points, or 0.03 percent, to close at 24,649.17 points. This comes as 44 of the listed stocks advanced, while as many as 23 retreated. 

TASI also recorded one of the best intraday highs since June, reaching 1.5 percent growth. 

The index’s top performer, Al Majed Oud Co., saw a 30 percent increase in its share price to close at SR122.20, thanks to a strong financial performance during the first half of the year. 

The perfume manufacturer recorded SR513 million in sales, a 21 percent increase compared to the year before. The company also saw an 18.2 percent increase in net profit to reach SR119.5 million, according to a bourse filing. 

The firm attributed the growth in sales and net profit to a rise in the number of stores and the full presence of the Hajj season, unlike the same period of the previous year. 

Other top performers included Al-Baha Investment and Development Co. and Al-Omran Industrial Trading Co., with share prices rising by 10 percent to SR0.33 and 9.94 percent to SR39.25, respectively. 

Red Sea International Co. and Anaam International Holding Group also recorded positive trajectories today, with share prices rising by 9.88 percent to SR65.60 and 9.52 percent to SR1.38, respectively. 

Other Tadawul announcements include Almarai Co.’s acquisition of Hammoudeh Food Industries, a Jordanian dairy and cheese producer. 

Almarai Co. will acquire Hammoudeh through its subsidiary Teeba Investment for SR263 million, subject to adjustments. The move aims to strengthen Almarai’s presence in Jordan, aligning with its broader growth strategy of expanding within core markets. 

The acquisition will be financed through Almarai’s internal cash flows and remains contingent on meeting contractual conditions and receiving regulatory approvals in both Saudi Arabia and Jordan.

This transaction is expected to expand Almarai’s regional operations, enhance its product range, and leverage operational scale for increased growth and profitability. 

The Saudi dairy and cheese giant saw a 1.62 percent increase in its share price to close its Monday trading at SR56.50. 

Rasan Information Technology Co. has also announced a board recommendation to increase its capital from SR75.8 million to SR77.5 million by capitalizing retained earnings. 

This increase includes the issuance of 1.7 million ordinary shares allocated to an employee share program as part of a long-term incentive plan. 

The recommendation will be subject to approval by the upcoming Extraordinary General Assembly, the date of which will be announced after securing the required regulatory approvals. 

Rasan Information Technology Co. closed the day with a 5.17 percent increase in its share price to reach SR61. 


PIF’s Aseer Investment Co. inks deal with private sector to develop tourism project

PIF’s Aseer Investment Co. inks deal with private sector to develop tourism project
Updated 59 min 1 sec ago
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PIF’s Aseer Investment Co. inks deal with private sector to develop tourism project

PIF’s Aseer Investment Co. inks deal with private sector to develop tourism project

RIYADH: Saudi Arabia’s Abha city has secured a new investment partnership to boost tourism by developing culturally rich dining and retail experiences.

The Public Investment Fund firm Aseer Investment Co. has signed the deal with Nimr Real Estate and the National Co. for Tourism, or Syahya, to propel the project, the Saudi Press agency reported.

This aligns with the objectives of developing Abha, which will offer a range of benefits, including retail stores that reflect the cultural heritage of the Asir region.

The partnership also seeks to be a model for multiple collaborations with private sector investors and create more regional job opportunities.

Investments in the region are expected to create between 14,000 and 18,000 job opportunities and contribute to up to 6 percent of the non-oil gross domestic product within 10 years, as outlined by the CEO of AIC Osama Al-Othman in February.

The latest agreement seeks to empower the local community and develop and diversify the regional economy in line with the strategy of PIF.

In February, during PIF’s second Private Sector Forum, Prince Turki bin Talal, chairman of Aseer Investment Co., unveiled the company’s ambitious plans as it embarked on its operational journey to make the area the number one tourist destination in the Kingdom.

Asir aims to establish itself as a year-round global destination, showcasing its rich culture and diverse natural attractions. The region has pioneered the creation of a distinct tourism identity in the Kingdom, encapsulated in the slogan “Karam Al-Arouma,” or “the generosity of the people of Asir.”

Ancient palaces and forts in the Asir region have been restored to draw tourists seeking a blend of history and modernity. 

These historical sites are spread across six different areas, each varying in size and elevation. Notable restorations include the Abu Nuqtah Palace in Tabab near Abha, Lahj Palace in Al-Dara village, and the Wazih and Aziz palaces, along with Al-Musalla fort in Al-Abu Sarah, situated in Al-Aziza village of Al-Soudah.

Many of these structures, some over 200 years old, are constructed from stone and wood. They have been transformed into hotels, complete with cafes, restaurants, and other modern amenities, all while preserving their original architectural charm.


Saudi agriculture set to grow with 9,683 Q3 licenses enhancing food security, local production

Saudi agriculture set to grow with 9,683 Q3 licenses enhancing food security, local production
Updated 07 October 2024
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Saudi agriculture set to grow with 9,683 Q3 licenses enhancing food security, local production

Saudi agriculture set to grow with 9,683 Q3 licenses enhancing food security, local production
  • Fish resource category received the highest number of licenses, totaling 5,969
  • Licensing period ran from the beginning of July to the end of September

JEDDAH: Saudi state-owned National Co. for Agricultural Services issued 9,683 agricultural licenses in the third quarter of the year to enhance food security and boost local production, said the CEO.

Omar Al-Suhaibani highlighted that the licensing period ran from the beginning of July to the end of September.

The company, known as AgriServ, is dedicated to empowering farmers, breeders, and commercial enterprises in the agricultural sector. 

The Kingdom has established a strategic plan for its agricultural sector that focuses on evaluating performance and formulating objectives across five key axes, including sustainability of natural resources, food security, societal welfare for farmers, economic contributions, and preventative measures.

Despite its desert climate and limited water resources, the country emphasizes national policies and strategies that tackle critical issues such as food and water security, sustainable agricultural development, and ecological balance. 

These efforts reflect Saudi Arabia’s commitment to enhancing agricultural productivity while ensuring the responsible management of its natural resources.

The CEO highlighted that the fish resource category received the highest number of licenses, totaling 5,969, followed by the plants division, which issued 2,476.

Other categories included 677 permits for veterinary establishments, 286 for public benefit markets, and 275 for animal resources. Al-Suhaibani highlighted that beekeepers within the plant resource sector accounted for the highest number of licenses, with 1,486 issued.

In the fish resource category, seasonal fishermen were granted 1,227 temporary fishing permits, while the veterinary business category registered 324 practice licenses. Authorizations for broiler chicken production led the animal resource category with 184 licenses, and there were 152 licenses for marketing service providers in public benefit markets.

AgriServ is a Saudi government-owned company established in 2018 as one of the outcomes of the transformation program in the provision of agricultural services.

It aims to provide high-quality and sustainable agricultural services to enhance operational efficiency, improve quality and productivity, and support the goals of agricultural sector development.

The company is responsible for executing the services assigned by the Ministry of Environment, Water, and Agriculture on sustainable commercial grounds, while MEWA retains legislative, regulatory, and supervisory duties over the sector.


Saudi Arabia’s MSMEs see 17% growth in credit facilities – SAMA report

Saudi Arabia’s MSMEs see 17% growth in credit facilities – SAMA report
Updated 6 min 24 sec ago
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Saudi Arabia’s MSMEs see 17% growth in credit facilities – SAMA report

Saudi Arabia’s MSMEs see 17% growth in credit facilities – SAMA report
  • 94% were provided by Saudi banks, while finance companies accounted for the remaining 6 percent94 percent of these were provided by Saudi banks, while finance companies accounted for the remaining 6%
  • Facilities accounted for 8.8% of banks’ total lending portfolio and 19.5% of finance companies’ credit portfolios

RIYADH: Credit facilities extended to micro, small, and medium enterprises in Saudi Arabia grew by 17.04 percent year on year in the second quarter of 2024, totaling SR307.4 billion ($82 billion), according to recent data. 

The Saudi Central Bank, known as SAMA, reported that 94 percent of these were provided by Saudi banks, while finance companies accounted for the remaining 6 percent. 

The facilities accounted for 8.8 percent of banks’ total lending portfolio and 19.5 percent of finance companies’ credit portfolios. The government is urging financial institutions to allocate 20 percent of their loan portfolios to this sector, demonstrating strong and ongoing support for these enterprises. 

Recent reforms in Saudi Arabia have simplified investment and startup processes, increasing this sector’s share of gross domestic product from 21 percent in 2013, with a Vision 2030 goal of reaching 35 percent.

In the second quarter, medium-sized enterprises received the largest share of credit facilities, totaling 54 percent or SR167.31 billion.

Micro enterprises experienced substantial growth, achieving a 45.53 percent increase in credit to SR33.7 billion, despite holding a smaller overall share.  

Credit to small enterprises, making up 35 percent of MSME financing, rose by 26.84 percent to SR106.39 billion during the same period. 

Micro enterprises are defined as those generating revenues up to SR3 million with a workforce of no more than five employees. 

Small enterprises have earnings ranging from SR3 million to SR40 million and can employ up to 49 workers, while medium enterprises generate between SR40 million and SR200 million in revenue and employ 50 to 249 individuals. 

Lending to the MSME sector in Saudi Arabia is experiencing strong growth, driven by the Kingdom’s economic diversification efforts under Vision 2030. 

As the country shifts away from oil dependency, demand is rising for private businesses to expand in key sectors such as entertainment, hospitality, sports, and retail — industries supported by a young, aspirational consumer base. 

Government initiatives like the Kafalah program play a crucial role in empowering MSMEs, particularly in the non-oil sector, by providing financial support and fostering sustainable economic development. 

Monsha’at key figures 

Monsha’at, a key enabler of Saudi Arabia’s Vision 2030, plays a vital role in the SME ecosystem by enhancing access to finance, promoting entrepreneurship, and providing critical support for business development. 

The authority facilitates funding for this sector through partnerships with financial institutions and initiatives like the Kafalah Program, which increases lending. It prioritizes upskilling SMEs through training programs and advocates for regulatory reforms to improve the business environment. 

According to its second-quarter report, Saudi Arabia saw a significant surge in commercial registrations, which grew by 78 percent year on year to 121,521, with 45 percent attributed to female-owned businesses. 

This rise underscores the private sector’s crucial role in driving the Kingdom’s economy and signals a boost in entrepreneurial activity and the creation of new businesses, many of which fall under the MSME category. 

The report also indicated a 4.3 percent increase in new registrations compared to the first quarter of 2024, demonstrating sustained growth across various sectors of the economy. 

In terms of regional distribution, Riyadh accounted for 32 percent or 482,690 active registrations, followed by Makkah with 23 percent or 342,840, the Eastern Province with 235,606, and other regions totaling 457,520. 

The report emphasized the vital role of financial technology in enhancing the growth and sustainability of MSMEs in Saudi Arabia. 

Established by SAMA and the Capital Market Authority, initiatives to foster a dynamic fintech ecosystem have led to significant advancements in the sector, exemplified by the Kingdom’s first fintech initial public offering for Rasan in May, which attracted considerable investor interest. 

By the end of 2023, the Kingdom was home to 216 active fintech companies employing over 6,500 skilled professionals. This growth reflects a robust investment landscape, with more than $1.84 billion in venture capital flowing into the sector. 

According to the report, the Fintech Lab has emerged as a key driver in this space, promoting growth and innovation by offering a supportive regulatory framework for entrepreneurs and startups to develop and test new products and services. 

This initiative has led to the emergence of innovative business models and the expansion of fintech startups. Furthermore, the Lab provides investment solutions for various investors and financing options for SMEs.

Authorized fintech companies have made significant contributions to job creation across multiple sectors. 

Looking ahead to 2024, initiatives such as the Open Banking Lab will create a collaborative environment for banks and startups to innovate, while the Financial Academy aims to enhance training for entrepreneurs and SMEs. 

The Makken Program will continue to support startups by easing regulatory and technological compliance costs, ensuring that this sector remains a driving force in expanding Saudi Arabia’s MSME landscape. 


Nintendo shares rise on Saudi Public Investment Fund report

Nintendo shares rise on Saudi Public Investment Fund report
Updated 07 October 2024
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Nintendo shares rise on Saudi Public Investment Fund report

Nintendo shares rise on Saudi Public Investment Fund report
  • Nintendo’s shares jumped 4.44% to end at 8,087 yen
  • Kingdom has built up a stake of 8.6% in Nintendo as part of a $38-billion push

TOKYO: Nintendo shares jumped more than four percent Monday after a top official of Saudi Arabia’s sovereign wealth fund was quoted as saying it was mulling hiking its stake in the Japanese gaming giant.
Riyadh has built up a stake of 8.6 percent in Nintendo as part of a $38-billion push into gaming under Crown Prince Mohammed bin Salman’s Vision 2030 program to diversify away from oil.
It also has stakes in “Resident Evil” maker Capcom, Activision Blizzard, Electronic Arts, and Scopely, the US mobile games company behind “Monopoly Go!.”
“There are always opportunities,” Prince Faisal bin Bandar bin Sultan, vice-chair of Saudi Arabia’s Savvy Games — a subsidiary of the Public Investment Fund — told Kyodo News in an interview published Saturday.
He added, however, that the fund had no intention of raising stakes without the consent of the firms concerned.
“It’s important to keep the communication going so you get there in the right way,” he said. “We don’t want to rush into anything.”
Nintendo’s shares jumped 4.44 percent Monday to end at 8,087 yen ($54.48).
Saudi Arabia aims to create 250 gaming companies and studios on its soil, 39,000 game-related jobs, be in the top three of professional gamers per capita and to produce a blockbuster “AAA” game by 2030.
Savvy has already bought esports tournament organizer ESL Gaming and platform FaceIt. Riyadh last year hosted the eSports World Cup that saw 2,500 gamers battle for $60 million in prize money.
“There’s a lot we want to do to get it done and to reach our targets at 2030,” Prince Faisal told AFP in an interview in May.
“But we also want to make sure that we are taking the time to study things, to look at things. And make sure we’re making the right steps and not just throwing cash out there to see what hits,” he had said.