Saudi Capital Market Forum to host CONNECT Hong Kong edition in May 

Saudi Capital Market Forum to host CONNECT Hong Kong edition in May 
Khalid Al-Hussan, CEO of Saudi Tadawul Group, speaking at the Capital Market Forum. Shutterstock
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Updated 20 February 2024

Saudi Capital Market Forum to host CONNECT Hong Kong edition in May 

Saudi Capital Market Forum to host CONNECT Hong Kong edition in May 

RIYADH: Saudi Arabia’s Capital Market Forum is set to enhance ties with China’s capital markets by venturing beyond borders to host the next edition in Hong Kong.

The Capital Market Forum — CONNECT Hong Kong, set for May 9 in the port city, was announced by Khalid Al-Hussan, CEO of Saudi Tadawul Group, during a fireside chat at the Riyadh forum. 

Al-Hussan said: “I’m very delighted to announce today, and for the first time, we will be taking the Capital Market Forum beyond Saudi borders in collaboration with the Hong Kong Exchange on May 9. We will be conducting the Capital Market Forum in Hong Kong, under what we call CMF Connect.” 

He added: “The event will help integrate the Saudi capital market with the rest of the world. This is the first step for us to take it outside Saudi, so that would be also an additional value to the forum in the future.”

The forum, designed to facilitate cross-border investments and foster collaboration, will feature a series of strategic discussions and networking platforms, inviting key financial minds and decision-makers.

It is also the first Asian edition and is poised to contribute to economic growth, enhance the integration of global financial markets, and further elevate the interconnectivity of the Saudi capital market with essential hubs in line with Vision 2030’s Financial Sector Development Program.

Al-Hussan also outlined the reasons behind diversifying their offerings to serve additional clients, highlighting three key motivations, including enabling the reforms of the country and the economy, strengthening the company’s position and deliverables to clients, and providing additional products.

He further elaborated that various economic sectors, such as minerals and other initiatives, require commodity markets to serve their needs.

“Today, most of these are using international markets for picking up that reference. We do think that we got the opportunity to enable that to happen within the Kingdom,” Al-Hussan said.

He added: “Second, for diversification purposes, we want to strengthen our position, strengthen our offering for our clients.”

Al-Hussan went on to say: “The third, as a listed entity, we want to grow our business by offering further products and grow our business lines, and this is one of the business lines we’re focusing on.”

Furthermore, he underscored the significant growth in registered qualified foreign investor files in Saudi Arabia’s financial system. As of 2017, there were only 50 registered QFI files.

“Today we have more than 3,700 QFI registered in the system owing roughly around $85 billion positions in the Saudi exchange or in the Saudi corporates actually,” Al-Hussan said.

He added: “There is also an advantage of promoting the Kingdom overall. I think the government has made over 700 regulatory and business reforms over the course of the last few years, and all of these are focused on opening up the economy, Opening up the market, and promoting investments to the Kingdom.”

Al-Hussan went on to say: “We continue to do the same. We continue to do this in two legs; one, continue to do and diversify our offering to the market or to the investors. Second, we continue our promotion and indication efforts.”

PIF’s Alat, Lenovo forge $2bn partnership to establish manufacturing hub in Saudi Arabia 

PIF’s Alat, Lenovo forge $2bn partnership to establish manufacturing hub in Saudi Arabia 
Updated 15 sec ago

PIF’s Alat, Lenovo forge $2bn partnership to establish manufacturing hub in Saudi Arabia 

PIF’s Alat, Lenovo forge $2bn partnership to establish manufacturing hub in Saudi Arabia 

RIYADH: Saudi Arabia’s pursuit of a sustainable manufacturing hub gains momentum as Alat partners with Lenovo Group to establish a facility and invest $2 billion through zero-coupon convertible bonds. 

As part of the agreement, the Chinese firm will set up a regional headquarters in Riyadh for the Middle East and Africa region, along with a new manufacturing hub in the Kingdom, to supplement its existing 30-plus production sites worldwide. The facility will prioritize smart, sustainable manufacturing and will initially cater to customers in the MEA region. 

The Public Investment Fund-owned firm’s investment in Lenovo will be in the form of a bond subscription agreement, with the electronics giant issuing $2 billion in convertible bonds. 

Amit Midha, CEO of Alat, said: “We are incredibly proud to become a strategic investor in Lenovo and partner with them on their continued journey as a leading global technology company.”   

He added: “With the establishment of a regional headquarters in Riyadh and a world class manufacturing hub, powered by clean energy, in the Kingdom of Saudi Arabia, we expect the Lenovo team to further their potential across the MEA region.” 

This move aligns with the Saudi firm’s commitment to Vision 2030, supporting environmentally-conscious production powered by clean energy, creating new jobs in the industrial and electronics sectors, and capitalizing on regional economic growth opportunities. 

Through this investment, Alat anticipates creating 15,000 direct and 45,000 indirect jobs in Saudi Arabia, generating a cumulative gross domestic investment impact of $10 billion by 2030. 

Lenovo’s convertible bonds will be due three years after issuance and will convert to equity upon maturity at an initial conversion price of 10.42 Hong Kong dollars ($1.33) per share. 

“Through this powerful strategic collaboration, Lenovo will have significant resources and financial flexibility to further accelerate our transformation and grow our business by capitalizing on the incredible growth momentum in the MEA region,” said Yuanqing Yang, chairman and CEO of Lenovo. 

He added: “Looking ahead, Lenovo plans to build a tech and manufacturing hub in Saudi Arabia and will help define the future of the region as a center of innovation which Alat will benefit from. This is a huge vote of confidence in our company, our market leadership, and our future growth potential.”  

Moreover, the partnership between Alat and Lenovo aims to harness the transformative potential of digital technologies while establishing the region as a global innovation hub.  

This collaboration is expected to significantly impact the region’s journey toward a diversified, resilient, and technologically advanced future. 

Launched in February by Crown Prince Mohammed bin Salman, Alat aims to position Saudi Arabia as a global center for sustainable technology manufacturing, focusing on advanced technologies and electronics.  

Egypt-China trade drops to $13.9bn in 2023: official data

Egypt-China trade drops to $13.9bn in 2023: official data
Updated 41 min 14 sec ago

Egypt-China trade drops to $13.9bn in 2023: official data

Egypt-China trade drops to $13.9bn in 2023: official data

RIYADH: Trade exchange between Egypt and China dropped to $13.9 billion in 2023, compared to $16.6 billion the year before, according to official data. 

Egypt’s Central Agency for Public Mobilization and Statistics stated that value of the country’s exports to China reached $909 million during 2023, down from $1.9 billion in 2022, while Egyptian imports from China amounted to $12.9 billion in 2023, a decrease from $14.8 billion in 2022. 

Among the most significant commodity groups exported to China in 2023 were fuels, mineral oils, and their distillation products valued at $414 million, stone and cement products worth $116 million, fruits worth $78 million, machinery and electrical appliances worth $31 million, and copper and its products worth $27 million. 

On the import side, the leading commodities imported from China included machinery and electrical appliances worth $4.3 billion, iron and steel worth $1.2 billion, synthetic textile fibers worth $1.1 billion, organic chemical products worth $790 million, and plastics and their products worth $773 million. 

Chinese investments in Egypt reached $956.7 million during 2022-2023, a significant rise from $563.4 million during the fiscal year 2021-2022.  

Conversely, Egyptian investments in China rose to $208.4 million during the fiscal year 2022-2023, compared to $126.5 million the year before. 

Additionally, remittances from Egyptians working in China amounted to $19.5 million during the fiscal year 2022-2023, up from $13.2 million the previous year.  

In contrast, remittances from Chinese workers in Egypt totaled $3.5 million during the fiscal year 2022-2023, a slight decrease from $4.1 million a year earlier. 

Furthermore, CAPMAS released Egypt’s foreign trade data for March 2024, revealing a trade balance deficit of $2.37 billion, compared to $3.09 billion for the same month of the previous year, marking a decrease of 23.2 percent.  

Key indicators showed that the value of exports decreased by 10.9 percent, amounting to $3.57 billion during March 2024, compared to $4 billion for the same month of the previous year. 

This decline is attributed to the decrease in the value of exports of certain goods, most notably plastics in primary forms by 6.7 percent, fertilizers by 57.4 percent, iron bars, rods, angles, and wires by 1.1percent, and crude oil by 49.9 percent.  

Conversely, the value of some exported goods increased during March 2024 compared to the same month of the previous year, most notably petroleum products by 130.3 percent, fresh fruits by 7.2 percent, ready-made garments by 14.2 percent, and pasta and various food preparations by 26.8 percent. 

Additionally, the value of imports decreased by 16.2 percent, amounting to $5.94 billion during March 2024, compared to $7.09 billion for the same month of the previous year.  

Saudi Arabia’s real GDP to grow by 2.5% in 2024 driven by non-oil activities: World Bank 

Saudi Arabia’s real GDP to grow by 2.5% in 2024 driven by non-oil activities: World Bank 
Updated 50 min 16 sec ago

Saudi Arabia’s real GDP to grow by 2.5% in 2024 driven by non-oil activities: World Bank 

Saudi Arabia’s real GDP to grow by 2.5% in 2024 driven by non-oil activities: World Bank 

RIYADH: Saudi Arabia’s real gross domestic product is expected to grow by 2.5 percent in 2024, driven primarily by robust non-oil private activities, which are predicted to grow by 4.8 percent.

Similarly, economic growth in the Gulf Cooperation Council region is projected to rebound to 2.8 percent and 4.7 percent in 2024 and 2025, respectively, according to the Spring 2024 Gulf Economic Update issued by the World Bank. 

With oil production quotas expected to be gradually lifted during the second half of 2024, oil GDP in the GCC is projected to grow by 1.7 percent this year before ramping up aggressively in 2025 to reach 6.9 percent.

Meanwhile, non-oil GDP in the GCC should remain robust and expand by 3.6 percent in 2024 and 3.5 percent in the medium term, supported by accommodative fiscal policy, lower interest rates, and strong private consumption and investment.

Talking to Arab News, Safaa El-Tayeb El-Kogali, World Bank’s country director for GCC, said the growth was further driven by region-wide efforts to steer economies away from oil.

“I have to point out here that really the efforts to reform the economy and diversify it in all the countries of the GCC are reflected in the robust growth of the non-oil economy, which is expected to be 3.5 percent in 2024 and 3.6 percent in 2025,” the top executive said.

However, she outlined that he GCC region experienced an economic slowdown in 2023, growing at an annual rate of 0.7 percent, after registering a stellar growth of 7.6 percent in 2022. 

While the growth in 2022 was supported by a boom in commodity prices, increased oil production, and strong non-hydrocarbon activities, the deceleration in 2023 was primarily due to cuts in oil production, which contracted by 5 percent, in line with tighter quotas introduced by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to stabilize oil prices, she added.

Thus, the overall oil GDP in the region is expected to register a contraction of 0.8 percent in 2024, according to the World Bank report, however, these trends are expected to be reversed in 2025, with oil output anticipated to ramp up aggressively resulting in 5.9 percent overall GDP growth.

According to the official, this was further exacerbated by tightening global monetary conditions and geopolitical developments, the “conflict in the Middle East” and the ramifications of shipping disruptions in the Red Sea. 

Further escalation of the war on Gaza could have adverse economic implications and spillover effects on the region, thus increasing uncertainty and dampening investor confidence, reduce tourism, cause capital outflows and financial market instability, weigh on investment growth, and subsequently weaken prospects for output and productivity growth, the report stated.

The World Bank official said: “In the context of expected slower global growth in 2024 for the third consecutive year, oil prices will continue to play an integral part in defining the growth prospects for the GCC region. Despite ongoing OPEC+ production cuts, average oil prices for 2024 are expected to remain flat compared to 2023, with a further decline anticipated in 2025.”

She added: “Despite the cautious oil production levels implemented by OPEC+ members, oil prices are expected to remain nearly unchanged in 2024 (at $80 per barrel) and further decline to $76 per barrel in 2025. Several factors present large uncertainties to energy market outlook, notably the geopolitical tensions recently exacerbated by the military attacks between Iran and Israel and the ongoing disruptions of commercial shipping routes in the Red Sea. Any further escalation in regional conflicts could disrupt energy supplies, leading to a spike in energy prices.”

According to the official, other factors include the recent strikes on Russian energy infrastructure, the degree of compliance by OPEC+ countries to production quotas, and the prospects of global economic growth and the ensuing volatility in world oil consumption and demand.

Additionally, weaker-than-projected growth in China could cause a sharper than expected deceleration in global economic activity, she further explained. 

PIF crowned world’s most valuable wealth fund brand

PIF crowned world’s most valuable wealth fund brand
Updated 29 May 2024

PIF crowned world’s most valuable wealth fund brand

PIF crowned world’s most valuable wealth fund brand
  • Public Investment Fund secured the top spot due to its diverse investment strategy: Brand Finance

RIYADH: Saudi Arabia’s Public Investment Fund has been named the world’s most valuable sovereign wealth with a brand value of $1.1 billion, according to an analysis. 

In its latest report, UK-based strategic consultancy Brand Finance revealed that Saudi Arabia’s wealth fund secured the top spot in the list due to its diverse investment strategy, trust in its name, and brand awareness, along with being a catalyst for economic advancement in the Kingdom. 

“PIF’s value is largely driven by high scores for the brand’s awareness, purpose, and commitment to positive growth,” said Brand Finance. 

Moreover, PIF was also ranked the second strongest sovereign wealth fund brand after Abu Dhabi Investment Authority. 

According to the report, ADIA was ranked the strongest wealth fund as it scored 63.9 brand strength index points out of 100 with an A+ rating, while PIF received 62.1 points with an A+. 

The Qatar Investment Authority, another wealth fund in the region, secured the third spot with 61.02 brand strength index points with an A+ rating. 

“According to Brand Finance research, PIF, Abu Dhabi Investment Authority, and Qatar Investment Authority demonstrate impressive brand awareness with A+ brand strength, underscoring the importance of brand perceptions in this sector,” said David Haigh, chairman and CEO of Brand Finance. 

He added: “With significant AUM (assets under management) and a long investment horizon, PIF and other sovereign wealth funds are leaning into strategies based on patience and partnership, which we expect to continue to drive the brand perception of these funds in the coming years.” 

PIF’s growth prospects

The PIF has been spearheading Saudi Arabia’s economic diversification efforts, as the Kingdom is steadily reducing its dependence on oil, aligned with the goals outlined in Vision 2030. 

A report released by Global SWF in April revealed that PIF’s assets under management surpassed $925 billion by the end of March 2024, up from $700 billion at the end of 2022, securing its position as the fifth-largest global sovereign wealth fund, after the government transferred an additional 8 percent stake in Aramco to its portfolio. 

“Looking ahead, PIF has ambitious growth prospects, aiming to reach $2 trillion in assets under management by 2030.This ambition has also turbocharged PIF’s brand value and brand strength as it has adopted bold investment strategies that contract other SWF brands,” said Brand Finance in its report. 

It added: “PIF has garnered significant media coverage and brand awareness through the purchase of Newcastle United in the UK and the formation of professional men’s golf tour LIV.” 

According to the report, the development of ambitious giga-projects in the Kingdom which includes “The Line,” a futuristic 110-mile smart city, has also captured the public imagination, which helped PIF garner the top spot as the most valuable sovereign wealth fund. 

“PIF’s position in the ranking is also a testament to its focus on future-proofing the Saudi economy through an initiative known as ‘Vision 2030,’ which aims to diversify the Kingdom’s economy. In a market historically dominated by oil, the initiative aims to create over 30 million private sector jobs,” added the UK-based firm. 

Norway’s Norges Bank Investment Management came second in the list of the world’s most valuable sovereign wealth funds with a brand value of $900 million, followed by China Investment Corp. and Government of Singapore Investment Corp. in the third and fourth places, respectively, valued at $700 million each. 

With its brand worth $600 million, France’s wealth fund Caisse des depots et consignations secured the fifth spot. 

Most valuable asset management brand

According to the report, American investment firm BlackRock was named the world’s most valuable asset management company with a brand value of $7 billion. 

“This No.1 ranking reflects its status as the world’s largest money manager, with over $9 trillion of assets under management. This brand value is a testament to BlackRock’s robust revenue growth, innovation, and products focused on meeting customer demand,” said Brand Finance. 

US-based multinational finance company J.P.Morgan was named the second most valuable asset management brand, followed by Vanguard, Blackstone, and Fidelity in the third, fourth, and fifth spots, respectively. 

Goldman Sachs secured the sixth spot in the list, while State Street Global Advisers and Bank of America were ranked seventh and eighth. 

“With 28 of the 50 brands hailing from the US, American firms dominate the asset management ranking,” added Haigh. 

The report revealed that J.P.Morgan is the world’s strongest asset management and sovereign wealth fund brand with an index score of 87.4 out of 100 and a AAA rating. 

“J.P. Morgan noted exceptional scores across several brand strength metrics, including awareness, familiarity, and performance. The only other brand featured in the rankings to achieve a AAA rating is BlackRock, placed second in terms of brand strength globally,” said Brand Finance. 

It added: “JP Morgan Asset Management has broadened its focus beyond investment banking in recent years, with the steadier, less-cyclical income of asset management driving the bank’s expansion.” 

French-based BNP Paribas Asset Management became the most valuable non-US firm for brand value, securing 13th place in the overall ranking. 

On the other hand, HSBC Asset Management emerged as the strongest among non-US brands, clinching the sixth spot in the overall list. 

In April, BlackRock and PIF signed a memorandum of understanding which entitled the former to establish a Riyadh-based multi-asset investment platform.

The platform will be anchored by an initial investment mandate of up to $5 billion from the PIF. 

Moreover, both parties have expressed the intention to establish BlackRock Riyadh Investment Management, which will encompass investment strategies across a range of asset classes.

On May 27, the PIF launched a company named Neo Space Group to propel the space and satellite sector in Saudi Arabia. 

The company aspires to become a national champion in the sector by developing local capabilities and boosting its strategic position within the growing global space economy, the fund said in a statement. 

Saudi banks witness 11% surge in loans to $716bn, fueled by corporate activities

Saudi banks witness 11% surge in loans to $716bn, fueled by corporate activities
Updated 29 May 2024

Saudi banks witness 11% surge in loans to $716bn, fueled by corporate activities

Saudi banks witness 11% surge in loans to $716bn, fueled by corporate activities

RIYADH: Saudi banking sector’s loans increased to SR2.68 trillion ($715.56 billion) in April, marking an 11 percent increase compared to the same month in 2023, official data showed. 

Figures released by the Saudi Central Bank, also known as SAMA, indicated that personal loans constituted 47 percent of banks’ total lending, with corporate loans making up the remaining 53 percent. 

The expansion of real estate projects under the Kingdom’s Vision 2030, coupled with high demand for housing credit by expatriates, as well as the digitalized and streamlined banking operations, are likely significant contributors to the growth in both personal and corporate lending. 

Personal loans, encompassing all types of credit extended to individuals, totaled SR1.27 trillion, marking a 7 percent growth during this period. 

The rise in this loan category can be attributed to various factors, notably the Kingdom’s commitment to homeownership plans. These initiatives have played a pivotal role in motivating individuals to pursue housing loans, bolstered by a range of government-backed programs and incentives designed to facilitate access to affordable housing options. 

Additionally, the increasing number of expatriates in Saudi Arabia has heightened the demand for residential properties, leading to increased borrowing for home purchases. 

Furthermore, the digitalization and streamlining of banking operations have made it more convenient for lenders to process applications and disburse funds efficiently. 

With the adoption of digital banking services, borrowers can quickly request and track their loan applications through online platforms, streamlining the entire borrowing process.  

These advancements in banking technology have simplified the lending process and enhanced transparency and accessibility, further fueling the growth in personal loans across the Kingdom.  

Among corporate loans, those granted for real estate activities comprised the majority, accounting for 20 percent of the total and amounting to SR278.86 billion. This category saw a 27 percent increase during this period.  

Closely following are loans extended for wholesale and retail trade, comprising 13 percent of corporate holdings and totaling SR190.06 billion. This category of claims saw a 9 percent annual rise. 

According to an April report by The Banker, the Kingdom’s financing growth is poised to continue its upward trajectory. This rise is anticipated to be driven by sustained demand for corporate and wholesale credit, compensating for a moderation in the country’s once-dominant retail mortgage market.  

Furthermore, the year 2024 holds promise as a potential turning point, as it may mark the realization of long-awaited opportunities for direct lending to the country’s giga-projects, the report added.  

These opportunities, coveted by banks for years, could finally come to fruition, signaling a significant development in the region’s financial landscape.  

In terms of growth rates, lending for professional, scientific, and technical activities recorded the highest annual increase among others at 52 percent, despite comprising a relatively low percentage share of total loans at SR6.3 billion.  

Real estate credit within corporate activities closely followed, growing by 27 percent. Meanwhile, lending for electricity, gas, and water supplies increased by 31 percent, reaching SR151.94 billion.