Investments in Saudi tourism to accelerate in 2024, says top expert

Investments in Saudi tourism to accelerate in 2024, says top expert
Saudi Arabia’s National Tourism Strategy aims to attract over 150 million visitors by 2030. Shutterstock
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Updated 12 February 2024
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Investments in Saudi tourism to accelerate in 2024, says top expert

Investments in Saudi tourism to accelerate in 2024, says top expert

RIYADH: Investments in Saudi Arabia’s tourism and entertainment sectors will continue to accelerate in 2024 as the Kingdom steadily diversifies its economy, according to an expert. 

In a recent commentary, Samy Chaar, chief economist at Swiss banking group Lombard Odier, said shifting away from hydrocarbon production would be essential to Saudi Arabia’s and the Middle East region’s future economic prospects. 

“Diversification away from hydrocarbon production will be key to the region’s economic prospects, where ‘National Visions’ will act as catalysts for coordinated investments into non-oil and gas sectors,” said Chaar. 

He added: “In Saudi Arabia, investments in tourism and entertainment sectors will continue to accelerate in 2024. Public sector investments in the UAE will continue to jump as the country leads the region in solar energy investment.” 

The Kingdom considers developing the tourism and entertainment sectors a crucial goal in its Vision 2030 journey, as the region is slowly reducing its dependency on oil. 

Saudi Arabia’s National Tourism Strategy aims to attract over 150 million visitors by 2030 and increase the tourism sector’s contribution to the country’s gross domestic product to more than 10 percent.

Chaar underscored that the inflation rate in the Middle East is expected to dip in 2024 following the recent rapid interest rate hiking cycles. 

He further noted that the region’s monetary authorities might intervene in the money market to cap intermittent liquidity squeezes. 

When discussing the area’s overall monetary growth, Chaar said that the Middle East is poised for a modest economic rebound in 2024. 

“A gradual reversal of oil output cuts for some Gulf Cooperation Council economies, together with eventual rate cuts, is likely to propel growth in the region by just under 3 percent in 2024, shrugging off the slowing global economy,” said Chaar. 

He added: “Amid elevated geopolitical risks, but with slowing global demand growth and ample supply, we expect Brent crude to trade in a USD 80-90 per barrel range this year with risks to the downside in coming months, then toward the middle of the range from mid-year.”

Earlier in February, in its latest economic outlook report, the International Monetary Fund echoed similar views and projected a 2.8 percent economic growth in the Middle East region in 2024. 

The IMF also warned that the economic development in the region will be impacted further if the tension in Gaza escalates.


Alandalus Property commences $222m commercial center in Makkah

Alandalus Property commences $222m commercial center in Makkah
Updated 17 sec ago
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Alandalus Property commences $222m commercial center in Makkah

Alandalus Property commences $222m commercial center in Makkah

RIYADH: Saudi holy city Makkah is set to see a boost in its commercial infrastructure with Alandalus Property Co. commencing construction on an SR831 million ($222 million) project. 

In a statement to Tadawul, the Saudi-based real estate firm announced the start of work on a new commercial center in the Makkah Al-Mukarramah region, spanning over 50,650 sq. m. 

The center is designed to include 350 rental units, such as showrooms, retail spaces, hypermarkets, entertainment areas, and dining options. It will also feature parking facilities for 1,800 vehicles. 

Alandalus’ move underscores its commitment to enhancing Makkah’s commercial capabilities. This project follows recent expansions by UAE-based Lulu Group, which launched two new projects in Makkah and Madinah earlier this year. 

“According to the developer’s report, the optimal final engineering design for the project was chosen from a group of designs prepared by the most skilled engineering offices in the Kingdom,” said Alandalus in the Tadawul statement.  

It added that construction is underway with all necessary municipal permits secured, and the center is expected to be completed in the first quarter of 2027. 

The project is being developed by Masat Property Co., a joint venture between Alandalus and Buroj International, with Hamat Holding Co., in which Alandalus holds a 25 percent stake, overseeing construction. 

Funding for the project will be primarily sourced from bank loans, with supplementary contributions from the partners’ own resources. 

The ongoing development projects are set to significantly enhance infrastructure in Makkah and Madinah, supporting their transformation into leading hubs for business and tourism. 

In December 2022, the Makkah Chamber of Commerce, Madinah Chamber of Commerce, and the Islamic Chamber of Commerce, Industry, and Agriculture signed the Manafea agreement, aimed at transforming these holy cities into pivotal financial and business hubs in the Islamic world. 

In a separate update, Alandalus reported a 67 percent decline in net profit for the first quarter of 2024, falling to SR4.7 million compared to the same period last year.  

The drop was attributed to higher financing costs and increased expenses in the hospitality and office sectors.  

It added that consolidated revenue also decreased by 2.70 percent year-on-year to SR53 million, driven by a 6 percent decline in the retail and operations segment. 


Saudi-China financial markets enter new era with ETFs listed on Chinese bourses: PIF 

Saudi-China financial markets enter new era with ETFs listed on Chinese bourses: PIF 
Updated 26 min 2 sec ago
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Saudi-China financial markets enter new era with ETFs listed on Chinese bourses: PIF 

Saudi-China financial markets enter new era with ETFs listed on Chinese bourses: PIF 

RIYADH: Saudi Arabia and China’s financial markets will see a new chapter of connectivity with the recent launch of exchange-traded funds on Chinese bourses, according to Public Investment Fund Governor Yasir Al-Rumayyan. 

At the listing event in Shenzhen, Al-Rumayyan stressed that the ETF gives investors in Asia access to the Saudi equity market and its sustainable long-term growth driven by strategic economic transformation. 

Last week, two new ETFs focused on the Kingdom’s stocks debuted in Shanghai and Shenzhen. The feeder funds, operating under the Qualified Domestic Institutional Investor program, began trading on July 16, with both briefly hitting the 10 percent daily limit on their launch day. 

The first fund, CSOP Saudi Arabia ETF QDII, managed by China Southern Asset Management, is listed on the Shenzhen Stock Exchange after raising 634 million Chinese yuan ($87 million).  

The second fund, the Huatai-PineBridge managed CSOP Saudi Arabia ETF QDII, started trading on the Shanghai Stock Exchange after raising 590 million Chinese yuan. 

These new ETFs are among the first batch of funds in China able to invest in the Saudi Arabia stock market. 

PIF aims to attract foreign investors and deepen capital inflows into Saudi Arabia, continuing from the success of the CSOP Saudi Arabia ETF introduced on the Hong Kong Stock Exchange in November 2023. This fund, launched with an initial investment of over $1 billion, including a $500 million contribution from PIF, became the world's largest Saudi Arabian ETF. 


Saudi Arabia launches competition for 5 licenses to boost mineral exploration

Saudi Arabia launches competition for 5 licenses to boost mineral exploration
Updated 21 July 2024
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Saudi Arabia launches competition for 5 licenses to boost mineral exploration

Saudi Arabia launches competition for 5 licenses to boost mineral exploration

RIYADH: Saudi Arabia has unveiled its largest mineralized belts to date, spanning 4,788 sq. km and including five new exploration licenses. 

Three of the permits, which were offered to local and global firms, are reserved for the Jabal Sayid site in Madinah.  

It covers an area of 2,892 sq. km and entails minerals like gold, silver, copper, zinc, and lead, according to a statement issued by the Ministry of Industry and Mineral Resources.  

The remaining two licenses pertain to the Al-Hajjar Site in the Asir region, which encompasses 1,896 sq. km and also includes gold, silver, copper, zinc, and lead. 

This initiative aims to accelerate the exploration and development of Saudi Arabia's mineral resources, valued at SR9.3 trillion ($2.4 trillion).  

This is in line with Saudi Arabia’s ambition to transform mining into a foundational industrial pillar of the country’s economy. It also aligns with the ministry’s goal to further bolster the sector and contribute to ongoing developments under Saudi Vision 2030.    
 


Global electricity demand to grow by 4% in 2024: IEA 

Global electricity demand to grow by 4% in 2024: IEA 
Updated 21 July 2024
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Global electricity demand to grow by 4% in 2024: IEA 

Global electricity demand to grow by 4% in 2024: IEA 

RIYADH: Global electricity demand is expected to rise by around 4 percent this year, up from 2.5 percent in 2023, driven by robust economic growth, according to an analysis.  

In its latest report, the International Energy Agency highlighted that intense heatwaves and the growing adoption of electricity-powered technologies, such as electric vehicles and heat pumps, are driving the increase in global electricity demand. 

Many regions experienced severe heatwaves in the first half of 2024, which heightened electricity needs and strained power grids. May was the hottest month of the year, marking the 12th consecutive month of record-high temperatures. 

India, Mexico, Pakistan, the US, Vietnam, and several other countries experienced severe heatwaves in the first half of the year, leading to surging peak loads due to increased cooling needs. 

“Growth in global electricity demand this year and next is set to be among the fastest in the past two decades, highlighting the growing role of electricity in our economies as well as the impacts of severe heatwaves,” said Keisuke Sadamori, director of Energy Markets and Security at IEA.  

The energy agency added that more households, especially in emerging economies, have started to purchase air conditioners, further driving electricity demand in these regions. 

The IEA also emphasized that adopting higher efficiency standards for air conditioning is crucial to mitigate the impact of increased cooling demand on power systems. 

The report also highlighted that expanding and reinforcing power grids is essential for ensuring a reliable electricity supply. 

The IEA noted that renewables are rapidly advancing globally, with solar photovoltaic set to achieve new records. 

India and China to drive growth 

The energy think tank further noted that this rise in electricity demand growth will be driven by countries like India, China, and the US.  

“We expect this demand trend to continue in 2025, with growth also at 4 percent. In both 2024 and 2025, the rise in the world’s electricity use is projected to be significantly higher than global GDP (gross domestic product) growth of 3.2 percent. In 2022 and 2023, electricity demand grew more slowly than GDP,” the IEA added.  

According to the analysis, electricity demand in China is forecast to increase by 6.5 percent in 2024, similar to its average rate between 2016 and 2019.  

India will witness an 8 percent rise in electricity consumption in 2024, matching its rapid growth in 2023.  

“In the first half of 2024, the country (India) grappled with heatwaves of record duration, with peak load reaching a new high and putting exceptional strains on power systems. Assuming a return to average weather conditions, we expect electricity demand growth in India to ease moderately to 6.8 percent in 2025,” the IEA added.  

The report further highlighted that electricity demand in the US is set to rebound significantly in 2024, increasing by 3 percent year-on-year, driven by a positive economic outlook and the rising need for air conditioning amid severe heatwaves.  

In the EU, demand is expected to increase by 1.7 percent as economic difficulties ease, but uncertainty over the pace of growth remains.  

“EU electricity consumption had contracted over the two previous years, with the decline in output from energy-intensive industries an important driver. Signs of a recovery in EU electricity demand emerged starting in the fourth quarter of 2023,” said the IEA.  

It added: “Growth gained further traction during the first half of 2024 as energy prices stabilized and various industries that had previously curtailed operations restarted.”  

Clean energy sources  

According to the analysis, despite a sharp rise in power consumption, solar PV alone is expected to meet roughly half of the growth in global electricity demand by 2025.  

IEA further noted that global electricity generation from solar PV and wind is expected to surpass that from hydropower in 2024.  

“The global energy transition is set to achieve another significant milestone by 2025, with total renewable generation poised to overtake coal-fired electricity output. The share of renewables in global electricity supply rose to 30 percent in 2023 and is projected to climb further to 35 percent in 2025,” said the IEA.  

Despite the sharp increases in renewables, global power generation from coal is unlikely to decline this year due to the strong growth in demand, especially in China and India.  

The study highlighted that carbon dioxide emissions from the global power sector are plateauing, with a slight increase in 2024 followed by a decline in 2025.  

“It’s encouraging to see clean energy’s share of the electricity mix continuing to rise, but this needs to happen at a much faster rate to meet international energy and climate goals,” said Sadamori.  

He added: “At the same time, it’s crucial to expand and reinforce grids to provide citizens with secure and reliable electricity supply – and to implement higher energy efficiency standards to reduce the impacts of increased cooling demand on power systems.”  

Meanwhile, Fatih Birol, IEA’s executive director, said that the energy industry should urgently reduce its carbon emissions if the world wants to avoid catastrophic climate change in the coming decades, according to a press statement.  

“About 80 percent of emissions that cause climate change come from fossil fuels. This is the reason there is a need to reduce emissions if we want a planet in the future that is like it is today,” Birol told the Al-Attiyah Foundation in a podcast interview.  

He added: ‘This doesn’t mean that tomorrow we will not need fossil fuels, but the share of fossil fuels needs to decline. If we don’t, we will face catastrophic implications like floods, heat waves, and other extreme weather events. Continuing with the current fossil fuel-based energy system is not good news for anybody— producers and consumers alike.”  

In the latest report, the IEA also projected that global nuclear generation is on track to reach a new high in 2025, surpassing its previous record in 2021.  

According to the energy agency, nuclear generation is forecast to rise globally by 1.6 percent in 2024 and by 3.5 percent in 2025, driven by a steady increase in output by the French nuclear power fleet as maintenance works are completed.  

The restarting of reactors in Japan and the arrival of new reactors in various markets, including China, India, Korea, and Europe, support the growth in nuclear power generation globally.  

The report also noted that the rise of artificial intelligence has put the electricity consumption of data centers in focus, making better stocktaking more important than ever. 

“In many regions, historical estimates of data centers’ electricity consumption are hampered by a lack of reliable data. At the same time, future projections include a very wide range of uncertainties related to the pace of deployment, the diverse and expanding applications of AI, and the potential for energy efficiency improvements,” said the IEA.  

It added: “Expanding and improving the collection of electricity demand data from the sector will be crucial to identify past developments correctly and to understand future trends better.”


AlUla participates in global forums to strengthen Saudi-China cultural ties

AlUla participates in global forums to strengthen Saudi-China cultural ties
Updated 21 July 2024
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AlUla participates in global forums to strengthen Saudi-China cultural ties

AlUla participates in global forums to strengthen Saudi-China cultural ties

RIYADH: Saudi Arabia and China have deepened their cultural ties as the Royal Commission for AlUla participated in key global forums in Istanbul and Luoyang.  

The RCU attended the Silk Road Dialogue and the International Ancient Capitals Forum to enhance collaboration and showcase AlUla as the world’s “largest living museum.” 

The events, held from June 27 to 30, underscored AlUla’s prominent role within the International Tourism Alliance of Silk Road Cities, a network connecting 63 destinations across 28 countries along ancient trade routes.  

The forums were instrumental in expanding Saudi-China cultural partnerships and organizing official visits to AlUla. 

Saudi Arabia’s strategic focus on tourism, centered around AlUla’s rich heritage, has become a cornerstone in deepening cultural and economic ties with China, showcasing the Kingdom’s commitment to leveraging its historical assets to foster international partnerships. 

Discussions at the International Ancient Capitals Forum included high-level meetings with Luoyang officials on tourism, agriculture, conservation, and urban development, exploring new areas of cooperation between the two nations. 

“The Royal Commission for AlUla continues to build on the deep-rooted foundations of cultural partnership that exists between China, the Kingdom, and northwest Arabia,” said an RCU spokesperson in a statement. 

The spokesperson added: “The Silk Road Dialogue and International Ancient Capitals Forum events represented exciting opportunities to develop new avenues of collaboration, with a focus on expanding knowledge exchange and promoting tourism, with diverse initiatives built upon our shared status as ancient destinations and rapidly developing landmarks for human heritage.” 

The forum was launched to foster dialogue and collaboration between cities with a millennia-long history. It also facilitates an agreement signed earlier this year between AlUla and its Chinese partners at the Henan Provincial Administration of Cultural Heritage.  

The partnership seeks to enhance knowledge and shared resources, focusing on archeology, preserving cultural heritage and museums and research collaboration as well as talent development, tourism and other cultural exchanges. 

It also includes establishing a technology-driven archeological laboratory, conducting excavation activities, engaging in research and fostering connections between heritage sites in AlUla and Henan. 

The deal further involved implementing collaborative exchange programs, participating in exhibitions and events, and utilizing museum technologies such as virtual reality and augmented reality.