Sah bonds: All you need to know about Saudi Arabia’s first dedicated savings product for individuals

Sah bonds: All you need to know about Saudi Arabia’s first dedicated savings product for individuals
The Sah bonds are organized by the National Debt Management Center and designed as a savings product for individuals, offering attractive returns. Shutterstock
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Updated 05 February 2024
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Sah bonds: All you need to know about Saudi Arabia’s first dedicated savings product for individuals

Sah bonds: All you need to know about Saudi Arabia’s first dedicated savings product for individuals

RIYADH: Saudi Arabia has launched the subscription to its first savings product dedicated to individuals – Sah –  with a yield reaching 5.64 percent on the first issuance.

Registration for the Islamic-compliant bond, issued by the Ministry of Finance, started on Sunday, Feb. 4, at 10 a.m. and will end on Tuesday, Feb. 6, at 3 p.m.

The Sah bonds are organized by the National Debt Management Center and designed as a savings product for individuals, offering attractive returns. 

The bonds are offered monthly according to the issuance schedule, with a one-year savings period, fixed returns, and profits disbursed at the end of the bond’s maturity date.

Future returns will be determined based on market conditions from month to month.

The NDMC responded to the most common questions about the product as follows:

What is “Sah”?

Sah is the first savings product specifically designed for individuals and compliant with Islamic Shariah in the form of bonds under the Kingdom’s local bonds program in Saudi riyals.

What is the purpose of issuing Sah?

The goal is to enhance financial planning for the future, increase individual savings rates by encouraging periodic deductions from their income for savings, and expand the range of savings products available.

Who is responsible for issuing Sah?

It is issued by the government of the Kingdom through the Ministry of Finance and the National Debt Management Center.

What are the features of Sah?

It is Shariah-compliant, offers annual returns, easy subscription, no fees for participants, and no restrictions on redemption.

Is Sah compliant with Islamic Shariah?

Yes, it is.

How are Sah bonds offered?

Through participating financial institutions.

Which financial institutions provide the subscription service for Sah?

SNB Capital, AlJazira Capital, Alinma Investment, SAB Invest and Al Rajhi Capital.

Are there any fees for subscribing to Sah?

There are no fees for participants.

What is the value of the bond?

The nominal value of the bond is SR1,000 ($266.66).

Is the bond value fixed or variable?

It is fixed.

Is the yield fixed or variable?

The yield is fixed for each issuance.

What is the minimum subscription amount for Sah?

The minimum is SR1,000, equivalent to the value of one bond.

What is the maximum subscription amount for Sah?

SR200,000 for the total issuances per individual during the program period.

When are Sah profits distributed?

The annual profits for the bonds will be paid on the maturity date.

What does the “maturity date” mean?

It is the date when the bond period ends, and the maturity date is in the Gregorian calendar.

How are the bond value and returns paid after maturity?

Subscription amounts with profits – if any – will be transferred to the bondholder directly after the maturity date.

What is the risk percentage when subscribing to Sah?

Low risk.

Who is the targeted qualified subscriber?

Saudi individuals aged 18 and above.

What is the yield percentage for Sah?

Returns depend on market conditions from month to month.

Can Sah bonds be bought and sold through trading in the financial market?

No, the bonds will be registered but not traded in the market.

Is there a dedicated application for subscribing to Sah?

There is no specific application for subscribing to Sah; subscriptions are made through participating financial institutions.

Why is the yield not increased?

The yield for each issuance is determined based on market conditions from month to month.

Can I withdraw my funds whenever I want?

Yes, bondholders can request redemption during the specified periods as per the published annual calendar for Sah, and accumulated profits will not be forfeited upon early withdrawal.

Can I subscribe with more than SR1,000?

Yes.

I have savings exceeding SR1,000; how can I invest them?

You can allocate a suitable amount each month for subscription to Sah.

If I subscribe with SR10,000, what will be the return?

The return depends on the specified yield for each issuance.

Why is the product named Sah?

It is derived from Government Bonds.

Can I subscribe at any time?

There is a predefined subscription period, as outlined in the annual calendar for Sah.

Does the Sah product cover zakat for savers?

No, the Sah product does not cover zakat.


Oil Updates – crude extends recovery to cap volatile week

Oil Updates – crude extends recovery to cap volatile week
Updated 13 September 2024
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Oil Updates – crude extends recovery to cap volatile week

Oil Updates – crude extends recovery to cap volatile week

NEW YORK/SINGAPORE: Oil prices rose on Friday, extending a rally sparked by output disruptions in the US Gulf of Mexico, where Hurricane Francine forced producers to evacuate platforms before it hit the coast of Louisiana.

Brent crude futures rose by 34 cents, or 0.5 percent, to $72.31 per barrel by 6:22 a.m. Saudi time. US West Texas Intermediate crude futures rose by 39 cents, or 0.6 percent, to $69.36 a barrel.

If those gains hold, both benchmarks will break a streak of weekly declines, despite a rough start that saw Brent crude dip below $70 a barrel on Tuesday for the first time since late 2021. At current levels, Brent is set for a weekly increase of about 1.7 percent, and WTI is set to gain over 2 percent.

“A previous dip to an almost three-year low called for some near-term breather to end the week, as market participants price (in) for the disruptions to short-term oil supplies caused by Hurricane Francine,” said IG market strategist Yeap Jun Rong in an email.

Oil producers assessed damage and conducted safety checks on Thursday as they prepared to resume operations in the US Gulf of Mexico, as estimates emerged of the loss of supply from Francine.

UBS analysts forecast output in the region in September will fall by 50,000 barrels-per-day month over month, while FGE analysts estimated a 60,000 bpd drop to 1.69 million bpd.

Official data showed nearly 42 percent of the region’s oil output was shut-in as of Thursday.

“But if production delays were to prove to be short-lived and damages to oil platforms were to be minimal, those gains may be unwound, as the broader demand outlook continues to serve as a key headwind to limit any sustained recovery,” Yeap said.

Demand expectations remained dismal as both OPEC and the International Energy Agency this week lowered their demand growth forecasts, citing economic struggles in China, the world’s largest oil importer.

“The recent run of weaker Chinese economic data suggests that oil demand in the world’s second-largest economy may remain subdued for longer, while demand has been soft in other countries outside of China as well,” said IG’s Yeap.

China’s crude oil imports averaged 3.1 percent lower this year from January through August compared to the same period last year, customs data showed on Tuesday.

“Flagging domestic oil demand in China has become a hot topic and was further underlined by disappointing August trade data,” FGE analysts said in a note to clients.

Demand concerns have grown in the US as well. US gasoline and distillate futures traded at multi-year lows this week, as analysts highlighted weaker-than-expected demand in the top petroleum consuming country.

US oil and fuel stocks rose last week as demand declined sharply, data from the US Energy Information Administration showed on Wednesday. 


IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support

IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support
Updated 12 September 2024
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IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support

IMF board to discuss Pakistan’s $7 bln bailout on Sept 25 as PM hails friendly states for support
  • The South Asian country reached a staff-level agreement with the global lender in July, but approval for the 37-month program has been pending since then
  • Pakistan’s last $3 billion IMF program helped avert a sovereign default last year, amid a decline in foreign exchange reserves and local currency devaluation

ISLAMABAD: The International Monetary Fund (IMF) executive board will meet on September 25 to discuss a $7 billion program agreed with Pakistan this year, an IMF spokesperson said on Thursday, as Prime Minister Shehbaz Sharif appreciated “friendly” countries for their support in meeting the lender’s requirements.

The South Asian country reached a staff-level agreement with the global lender in July, but the IMF board’s approval for the 37-month program has been pending since then.

Pakistan’s last $3 billion IMF program helped avert a sovereign default last year, amid a decline in foreign exchange reserves to critical levels, currency devaluation and record inflation.

“The board meeting is scheduled to take place on September 25 and this is following Pakistan obtaining necessary financing assurances from its development partners,” IMF spokesperson Julie Kozack said in a press briefing.

The development came hours after Prime Minister Shehbaz Sharif appreciated “friendly” countries for helping Pakistan meet requirements necessary to secure the IMF bailout.

“I’d like to say that our friendly and brotherly countries have supported us and have come all the way,” Sharif said on Thursday, while addressing a federal cabinet meeting.

The premier avoided delving into details and said the incumbent government was focusing on the commitments made with the IMF.

“For now, it would be fine to say that the finance minister, other government institutions and our ambassador in China have worked hard together for this,” he said.

Islamabad has for years relied on China, Saudi Arabia and the United Arab Emirates for financial assistance to meet external financing requirements and avoid sovereign default, which it came close to last summer.

Pakistan’s sovereign dollar bonds rallied on Thursday afternoon, with the 2031 maturity trading 1 cent higher to bid at 79.93 cents on the dollar, according to Tradeweb data.

Sharif said Pakistan’s economy would greatly benefit if the monetary policy rate also reached single digits like the inflation rate, highlighting that the dialogue with the IMF was moving ahead in a “good manner.”

PM Sharif said Pakistan will take decisions regarding the growth rate once the program is finalized.

Pakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958. The latest economic crisis has been the most prolonged and has seen the highest-ever levels of inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

The conditions of the fresh IMF bailout have become tougher such as higher taxes on farm incomes and electricity prices. The bailout is aimed at cementing stability and inclusive growth in the crisis-plagued South Asian country.


Closing Bell: Saudi main index ends higher at 11,842.55

Closing Bell: Saudi main index ends higher at 11,842.55
Updated 12 September 2024
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Closing Bell: Saudi main index ends higher at 11,842.55

Closing Bell: Saudi main index ends higher at 11,842.55
  • Parallel market Nomu increased by 170.05 points, or 0.66%, closing at 25,934.60
  • MSCI Tadawul Index climbed, adding 8.32 points, or 0.57%, to end at 1,471.48

RIYADH: Saudi Arabia’s Tadawul All Share Index reversed this week’s trend, rising by 76.15 points, or 0.65 percent, to close at 11,842.55 on Thursday. 

Total trading turnover reached SR6.49 billion ($1.72 billion), with 154 stocks advancing and 72 declining. 

The Kingdom’s parallel market Nomu increased by 170.05 points, or 0.66 percent, closing at 25,934.60. The session saw 43 stocks advance and 25 decline. 

The MSCI Tadawul Index also climbed, adding 8.32 points, or 0.57 percent, to end at 1,471.48. 

Top performer Rasan Information Technology Co. saw its share price jump 6.90 percent to SR57.30. Nayifat Finance Co. and Zamil Industrial Investment Co. also performed well, with share price increases of 5.66 percent and 5.43 percent, respectively. 

Al-Baha Investment and Development Co. was the worst performer, with its share price falling 5.26 percent to SR0.18. 

Saudi Fisheries Co. and Jamjoom Pharmaceuticals Factory Co. also faced declines of 3.68 percent and 3.58 percent, reaching SR23.06 and SR183.20, respectively.

In Nomu, ASG Plastic Factory Co. led with an 8.51 percent rise, closing at SR51.00. Alhasoob Co. and Alqemam for Computer Systems Co. also saw gains, with share prices up 8.17 percent and 7.10 percent, respectively. 

The worst performer in Nomu was the Arabian Food and Dairy Factories Co., with a 3.61 percent drop to SR72. 

Edarat Communication and Information Technology Co. and Osool and Bakheet Investment Co. also fell by 3.46 percent and 3.12 percent, respectively. 

On the announcement front, Rabigh Refining and Petrochemical Co. reported a reduction in its accumulated losses to 36.16 percent of its SR16,710 million share capital by Aug. 31, down from 53.09 percent as of June 30. This equates to SR6.04 billion. 

The decrease was achieved by waiving SR1.88 billion each in loans by the founding shareholders, the Saudi Arabian Oil Co. and Sumitomo Chemical Co. Ltd., and the associated accrued commissions. 

Saudi Industrial Development Co. announced that its subsidiary, Global Marketing Co. for Sleeping System, known as Sleep High, plans to issue Murabaha sukuk valued at SR10 million. 

In a statement to Tadawul, the company announced that the sukuk will be available for purchase via Sukuk Capital’s website. Sukuk Capital is authorized by the Capital Market Authority to issue and invest in debt instruments. 


Bloom Consulting opens its first Middle East office in Saudi Arabia

Bloom Consulting opens its first Middle East office in Saudi Arabia
Updated 12 September 2024
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Bloom Consulting opens its first Middle East office in Saudi Arabia

Bloom Consulting opens its first Middle East office in Saudi Arabia
  • Move aims to create branding strategies that drive economic progression and enhance global competitiveness
  • Regional headquarters initiative has seen over 120 companies set up their Middle East bases in Riyadh this year

JEDDAH: Madrid-based Bloom Consulting has opened its first Middle East office in Saudi Arabia, partnering with Destination Consultancy to help cities and regions improve economic growth. 

In a statement, the company said that the move aims to assist in creating branding strategies that drive economic progression and enhance global competitiveness.

Bloom Consulting collaborates with global partners, amassing extensive experience in nation and place branding as well as placemaking. This includes its 2020 collaboration with the Royal Commission for Riyadh City to develop and implement the Riyadh City Brand strategy.

The office opening is the latest example of a firm establishing a presence in the Kingdom, following the regional headquarters initiative which has seen over 120 companies set up their Middle East bases in Saudi Arabia’s capital in 2024.

Bloom Consulting said that with the Kingdom undergoing significant transformation as part of Vision 2030, the need for robust place branding and strategic economic positioning has never been more critical.

Jose Filipe Torres, CEO of Bloom Consulting, stated that their partnership with Destination Consultancy, which exclusively represents their company, marks a significant milestone in their dedication to supporting Saudi Arabia’s economic aspirations.

“We believe that every place has a unique story to tell, and by harnessing that narrative, we can help regions attract investment, boost tourism, and ultimately enhance the quality of life for their residents.”

Iman Hajjed Al-Mutairi, founder and CEO of Destination Consultancy and managing partner at Bloom Consulting, stated: “We are thrilled to exclusively represent Bloom Consulting to bring cutting-edge Place Branding strategies to Saudi Arabia.”

Al-Mutairi, who has served as the executive director of destination branding, marketing, communication, and sales at Soudah Development Co. for nearly three years, emphasized that the economic growth of cities begins with a strong place brand.

“We will work together toward creating a vibrant and sustainable future for our cities and communities,” she said.

Destination Consultancy is a Saudi partner in strategic marketing and communication consulting focused on enhancing the economic viability and attractiveness of places with a commitment to driving impactful change.

In 2022, Brand South Africa chose Bloom Consulting for a project focused on assessing the country’s global reputation and providing strategic advice on brand management, while in the following year the firm worked with Essential Costa Rica to define Vision 2035 for the nation’s brand, incorporating new sustainability dynamics.


AI can affect job market positively, say experts at Global AI Summit

AI can affect job market positively, say experts at Global AI Summit
Updated 12 September 2024
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AI can affect job market positively, say experts at Global AI Summit

AI can affect job market positively, say experts at Global AI Summit
  • AI’s wealth creation will need equitable distribution, says executive
  • Other experts believe firms will set right ethical ‘guardrails’ around AI

RIYADH: Fears that the adoption of artificial intelligence will result in widespread job losses are overstated and there are likely considerable benefits to be derived from integrating the technology in the workplace, said experts during a panel discussion at the third Global AI Summit in Riyadh on Thursday.

Dr. Richard Benjamins, the co-CEO of RISE.ai, said AI would have an impact but probably in a positive way. “Some jobs will maybe disappear, but a lot of new jobs will be created,” he said.

He said the obvious negative was that some may lose their jobs, but AI could lead to greater productivity and even three- or four-day weekends. An important question was who would benefit.

“The question is, really, the issue of distribution of wealth,” he said. “Clearly, we are on a trend where there are increasing gaps between countries, and the haves and the have-nots.

“And within the countries also, the distribution is going to a few. I think a lot of people are worried about this and this has a huge impact on society.”

Benjamins said that most companies would regulate themselves to ensure their employees are not hurt in any way. However, there was also the possibility that employees would reject AI for fear of how it might affect their livelihoods.

Dr. Heather Doman, IBM’s global leader, responsible AI initiatives, said: “People are generally concerned … But I also want to say that I don’t personally feel that we need to slow down.

“Generally, we have learned, as with other technologies, that we can innovate and set the right guardrails around it, and that is what I believe we’re going to see.”

Benjamins added that AI must be used ethically. “I think AI is all about creating value and increasing productivity, but sometimes, even though the intention is positive and the use is legitimate, there might be, let’s say, negative, unintended consequences.

“If you speak about ethical AI, it’s to make sure that those unintended negative consequences are mitigated or prevented. And that requires what we call a methodology for responsible use of AI.”

He said that inaccuracies in AI could have varying consequences. If a social media algorithm is 1 percent inaccurate, it was probably not a big problem. But if a manufacturing process or healthcare analysis is 1 percent inaccurate, it could have significant consequences.

Simon Turner of Sofinnova Digital Medicine said: “I think we should go the way we’re going with healthcare in general … We’ve always had the guiderails, quality assurance, quality management, ethics committee approval, you know, a lot of work that’s been done in this space.

“AI is yet another tool, but not important. We’re just adding the same approach we’ve been using for years, which is always thinking first about the patient. So for us, it doesn’t really change much.”

The article originally appeared on Arab News Japan