UAE and Australia set to sign economic trade cooperation agreement

UAE and Australia set to sign economic trade cooperation agreement
UAE’s Foreign Trade Minister Thani bin Ahmed Al-Zeyoudi announced in a statement on X that the country is poised to enhance its global trade network by strengthening its ties with Australia. Shutterstock
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Updated 13 December 2023
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UAE and Australia set to sign economic trade cooperation agreement

UAE and Australia set to sign economic trade cooperation agreement

RIYADH: The UAE has agreed to initiate negotiations with Australia to establish a comprehensive economic partnership agreement, according to its foreign trade minister. 

Thani bin Ahmed Al-Zeyoudi announced in a statement on X, formerly known as Twitter, that the country is poised to enhance its global trade network by strengthening its ties with Australia. 

This development is part of the strategic expansion of the UAE’s comprehensive economic partnership program. 

Al-Zeyoudi emphasized the importance of Australia as a key economic ally. He noted that the country’s commitment to open trade and abiding by international rules makes it an ideal partner. 

The endeavor comes as part of the UAE’s broader agenda to augment its economic and trade relations on a global scale. 

The minister highlighted the growth in non-oil bilateral trade between the UAE and Australia, which surged by 28 percent in 2022, reaching $4.5 billion. 

He anticipates that the prospective partnership will further strengthen economic ties between the two nations. The focus will be on reducing tariffs, enhancing market accessibility, and fostering investment opportunities. 

The UAE’s strategy to double its foreign trade and expand its national economy by 2030 involves forging comprehensive economic partnership agreements with key global markets. 

To date, the UAE has successfully signed such agreements with India, Turkey, Indonesia, Cambodia, and Georgia. 

Moreover, the UAE continues its negotiations to establish similar agreements with other strategically important markets, reinforcing its presence on the global trade map. 

The Central Bank of Iraq and the First Abu Dhabi Bank have formalized an agreement, announced on Dec. 13, to facilitate the financing of trade and import activities using the UAE dirham. 

The apex bank released a statement detailing the outcomes of a meeting held in Dubai, where Ali Al-Alaq, governor of the Central Bank of Iraq, met with Hana Al-Rostamani, president of the First Abu Dhabi Bank Group. 

The focus of this collaboration is to use the UAE dirham for trade and import transactions, with the First Abu Dhabi Bank playing a key role in these operations. 

Further elaborating on the agreement, it was mentioned that the operations involving the transfer in UAE dirhams have already started.

Five Iraqi banks are initially part of this agreement, with plans to expand this network gradually. This initiative aims to enable Iraqi banks to establish connections with global banks. 


Saudi Exchange approves listing of $12.08bn in govt debt instruments

Saudi Exchange approves listing of $12.08bn in govt debt instruments
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Saudi Exchange approves listing of $12.08bn in govt debt instruments

Saudi Exchange approves listing of $12.08bn in govt debt instruments

 

RIYADH: Saudi Arabia’s stock exchange has approved the listing of SR45.28 billion ($12.08 billion) worth of government debt instruments submitted by the Ministry of Finance. 

A Tadawul statement revealed that the exchange approved increasing the issuance of a government debt instrument, dated April 7, from SR15.98 billion to SR17.63 billion. 

Similarly, the bourse also approved the increase of another instrument, dated April 1, from SR29.29 billion to SR38.53 billion. 

According to a Tadawul statement, the listing commenced on May 27. 

On May 23, the exchange approved the Ministry of Finance’s request to list Saudi government debt instruments with a total value of SR18.84 billion. Trading in these debt instruments will begin on May 27. 

Earlier this month, Saudi Arabia’s National Debt Management Center revealed that the Kingdom completed its riyal-denominated sukuk issuance for May at SR3.23 billion. 

In a press statement, the NDMC disclosed that the Shariah-compliant debt product for the month was divided into two tranches: the first, valued at SR71 million, set to mature in 2029, and the second, valued at SR3.16 billion, due in 2026. 

In April, Saudi Arabia issued sukuk amounting to SR7.39 billion, compared to SR4.44 billion in March and SR7.87 billion in February. 

In March, the NDMC also concluded its second government sukuk savings round, with a total volume of requests reaching SR959 million, allocated to 37,000 applicants. 

In March, the center announced that this financial product, also known as Sah, offers a return of 5.64 percent and has a maturity date of March 2025. 

In April, a report released by credit-rating agency S&P Global projected that global sukuk issuance will hover between $160 billion and $170 billion in 2024. 

The US-based firm also noted that the issuance of this debt product began on a strong footing in 2024, with Saudi Arabia becoming a key contributor to the performance. 

Another study released by Fitch Ratings in April echoed similar views, noting that global sukuk issuance is expected to continue its robust growth in the coming months, propelled by economic diversification efforts and the development of the debt market.


Closing bell: Saudi main index slips to close at 11,850 

Closing bell: Saudi main index slips to close at 11,850 
Updated 26 May 2024
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Closing bell: Saudi main index slips to close at 11,850 

Closing bell: Saudi main index slips to close at 11,850 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 145.35 points, or 1.21 percent, to close at 11,850.64.    

The total trading turnover of the benchmark index was SR4.37 billion ($1.16 billion) as 55 of the stocks advanced, while 166 retreated.   

Similarly, the Kingdom’s parallel market Nomu slipped 41.38 points, or 0.16 percent, to close at 26,638.19. This comes as 26 of the listed stocks advanced while 33 retreated.   

Meanwhile, the MSCI Tadawul Index slipped 20.47 points, or 1.37 percent, to close at 1,473.08. 

The best-performing stock of the day was Bupa Arabia for Cooperative Insurance Co. The firm’s share price surged 4.79 percent to SR240.80.  

Other top performers include Saudi Fisheries Co. as well as National Medical Care Co. 

The worst performer was Al-Baha Investment and Development Co. whose share price dropped by 7.14 percent to SR0.13. 

Other worst performers were Electrical Industries Co. as well as Saudi Arabian Mining Co. 

On the announcements front, East Pipes Integrated Co. has announced its annual financial results for the period ending on March 31.  

According to a Tadawul statement, the company’s net profit hit SR267 million in the year ending in March 2024, reflecting a 167 percent surge when compared to the corresponding period a year earlier.   

The increase is mainly due to a sustained rise in average sales prices as well as a decrease in the cost of production per tonne. 

Moreover, Saudi Ground Services Co. has announced that the board of directors has approved establishing a 100 percent owned new subsidiary as a limited liability company in Saudi Arabia under the name “Ground Service Co. for Travel and Tourism Services.”  

A bourse filing revealed that the new subsidiary will have a share capital of SR500,000. 

This decision comes after meeting the requirements set by the relevant authorities and regulations for operating travel agency services and air transport procedures, which are in line with the National Economic Activities Classification Guide, following the necessary approvals from the authorities. 

This step aligns with the strategic direction of Saudi Ground Services Co., aiming for growth, business development, and diversification of its revenues. 

Furthermore, MBC FZ-LLC, a subsidiary wholly owned by MBC Group, has announced the signing of a production contract worth SR65 million with MedYapim Middle East Audiovisual Media Production Co., a related party, for the production of a television series. 

The contract is expected to be completed by February 2025, in accordance with the terms and conditions of the agreement and is projected to have a positive impact on the firm’s financial statements of 2025. 


DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port

DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port
Updated 26 May 2024
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DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port

DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port

RIYADH: The Saudi logistics sector is poised for growth with DP World’s investment of SR900 million ($250 million) to build a distribution center at the Jeddah Islamic Port.

With this strategic move, the UAE multinational logistics company will also enhance its operational capabilities, providing more efficient and comprehensive services to its clients.

 Sunday’s announcement signals the start of construction on the quarter-billion-dollar project, which will be developed in two phases and is scheduled to open in the second quarter of 2025.

The park offers an in-land container depot with a handling capacity of 250,000 twenty-foot equivalent units and warehouse space of 100,000 sq. meters, said a press release.

Integrated with the recently awarded 30-year concession for the South Container Terminal, the state-of-the-art facility will bolster trade to enable Saudi Arabia’s strategy to become an economic powerhouse by 2030.

In June 2022, DP World and the Saudi Ports Authority, known as Mawani, signed a 30-year agreement, with an investment exceeding SR500 million, to construct a cutting-edge, port-centric logistics park in Jeddah.

The deal aims to develop the park, covering 415,000 sq. meters, featuring an in-land container depot capable of accommodating around 250,000 TEU and warehousing storage space totaling 100,000 sq. meters. Potential expansions could raise the storage capacity to 200,000 sq. meters.

The agreement was signed under the patronage of Saudi Minister of Transport and Logistic Services Saleh Al-Jasser, who is also chairman of the board of Saudi Ports Authority,

According to a statement from the Dubai government’s media office, the 415,000 sq. meter greenfield facility will include 185,000 sq. meters of warehousing space and a vast multi-purpose storage yard, establishing it as the largest integrated logistics park in the Kingdom.

The statement further mentioned that the park will accommodate over 390,000 pallet positions, providing customers with an efficient platform for the smooth movement of goods to and from Jeddah.

The collaboration between Mawani and DP World also includes the management of the South Container Terminal through a separate 30-year concession signed in 2020, the media office said in its release.

It added that the terminal is currently in the final phase of a comprehensive modernization project, scheduled for completion in the last quarter of 2024. This project will ramp up the handling capacity to 5 million TEU. 

“Saudi Arabia has always been a deeply important market for DP World, and this milestone represents our ongoing commitment to the Kingdom,” Sultan Ahmed bin Sulayem, chairman and CEO of DP World, said.

He added that Jeddah Logistics Park, strategically located on the vital Asia-Europe shipping route, will provide world-class multimodal connectivity and market access for customers while supporting the ambitious aims of Saudi Vision 2030.

“This investment marks a significant step as we mark 25 years of operations in Jeddah and underscores our enduring commitment to facilitating the flow of trade,” Sulayem added.

On the other hand, Mawani President Omar bin Talal Hariri highlighted that this new logistics area will be connected to DP World’s South Container Terminal at Jeddah Islamic Port, facilitating growth and increasing the number of containers handled at the terminal.

“The project is part of Mawani’s broader efforts to expand the number of logistics centers in Saudi ports, in partnership with major national and international companies, and in line with the objectives of the National Transport and Logistics Strategy and Vision 2030,” Hariri said.


King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report

King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report
Updated 26 May 2024
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King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report

King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report

RIYADH: Saudi Arabia’s King Khalid International Airport emerges as one of the top three performing terminals in the Kingdom, according to official data. 

The Riyadh-based aviation facility topped the category for international terminals with over 15 million passengers annually, achieving an 82 percent compliance rate with the General Authority of Civil Aviation’s standards. 

In its monthly report for April, GAC outlined the performance of the country’s airports, highlighting King Fahd International Airport and Abha International Airport as premier travel hubs. 

Based on 11 key criteria, the evaluation aims to improve service quality and enhance the passenger experience.  

King Abdulaziz International Airport in Jeddah came second with the same commitment rate but was outperformed by King Khalid International in meeting the criteria. 

King Fahd International Airport led the category for international airports with 5 to 15 million passengers annually, also with a 91 percent commitment rate. Prince Mohammad bin Abdulaziz International Airport in Madinah, which had the same commitment rate, was second. 

In the category of international airports with 2 to 5 million passengers annually, Abha International Airport secured the top spot with a 100 percent commitment rate, outperforming King Abdullah bin Abdulaziz Airport in Jazan, which also had a 100 percent commitment rate but lagged in meeting the criteria. 

Al-Qaisumah International Airport ranked first among international terminals with fewer than 2 million passengers annually, with a 100 percent commitment rate, excelling in average waiting times for departure and arrival flights. 

Arar Airport achieved the highest performance among domestic terminals, with a 100 percent commitment rate, leading in average waiting times for departure and arrival flights. 

GACA’s performance evaluation is based on essential criteria such as passenger waiting times, time spent at baggage claim, and passport and customs areas, alongside standards related to accessibility for persons with disabilities and other global best practices. 

In an additional report released earlier in April, GACA revealed that the volume of air cargo handled by airports in the Kingdom saw an annual rise of 7 percent in 2023 to reach 918,000 tonnes.  

The analysis stated that the Kingdom’s aviation sector strongly rebounded in 2023, with airports witnessing a 26 percent rise in passenger transportation compared to 2022. 

GACA said that flight facilities in Saudi Arabia transported 112 million passengers last year, an 8 percent increase compared to 2019.  

The report revealed that the number of flights through the Kingdom’s airports in 2023 reached about 815,000, an increase of 16 percent compared to 2022. 

In 2023, airports in Saudi Arabia handled 394,000 international and 421,000 domestic journeys, the authority added. 


SME financing in Saudi Arabia surges 20.4% in Q4 of 2023

SME financing in Saudi Arabia surges 20.4% in Q4 of 2023
Updated 26 May 2024
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SME financing in Saudi Arabia surges 20.4% in Q4 of 2023

SME financing in Saudi Arabia surges 20.4% in Q4 of 2023

RIYADH: Financing provided to small and medium enterprises in Saudi Arabia surged by 20.4 percent year on year to $73.5 billion in the fourth quarter of 2023, official data showed. 

In its latest quarterly report, the Kingdom’s Small and Medium Enterprises General Authority said that credit facilities provided to micro and SMEs amounted to $6.7 billion and $24.6 billion, respectively, in the last three months of 2023. 

On the other hand, medium enterprises in the Kingdom secured finance worth $42.2 billion in the last quarter of the previous year. 

The authority, also known as Monsha’at revealed that banks in Saudi Arabia provided credit facilities worth $68.9 billion in the fourth quarter of 2023, representing a rise of 21.1 percent compared to the same period of the previous year. 

On the other hand, finance companies in the Kingdom provided loans amounting to $4.6 billion in the last three months of 2023, marking a year-on-year rise of 9.3 percent. 

Developing the SME sector is crucial for Saudi Arabia as the Kingdom is currently on a path of economic diversification, as it steadily reduces its dependency on oil. 

The report revealed that 9,644 SMEs were benefitted from Monsha’at support centers in the first quarter of this year. 

Moreover, three SMEs had their initial public offering on the parallel market Nomu through the Tomoh program in the first quarter of 2024. 

Monsha’at also revealed that Saudi Arabia led venture capital funding in the Middle East and North Africa region with $240 million deployed across 35 deals in the first quarter of this year. 

“With $240 million deployed across 35 deals to Saudi-based companies, the Kingdom accounted for a remarkable 65 percent of all VC funding in the region,” said the authority. 

The report attributed 54 percent of this VC funding to the $130 million pre-initial public offering secured by Salla in March. 

“While the $240 million invested in the first quarter maintains the Kingdom’s dominance, it did reflect a considerable quarterly drop of 70 percent from the fourth quarter of 2023, along with a 42 percent year-on-year drop. This downturn mirrors the broader trend across the MENA landscape,” said Philip Bahoshy, founder and CEO of venture capital data platform MAGNiTT. 

He added: “Digging deeper, it becomes evident that while the overall funding has diminished, the Kingdom’s entrepreneurial ecosystem continues to attract investors.”