Saudi Arabia to launch national space strategy

 Saudi Minister of Communications and Information Technology Abdullah Al-Swaha said the Kingdom is making significant strides in the fields of space exploration and women’s empowerment. AN photo
Saudi Minister of Communications and Information Technology Abdullah Al-Swaha said the Kingdom is making significant strides in the fields of space exploration and women’s empowerment. AN photo
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Updated 06 March 2024

Saudi Arabia to launch national space strategy

Saudi Arabia to launch national space strategy
  • Al-Swaha says Kingdom will also set up a company to develop space sector

RIYADH: Saudi Arabia is working to launch a national strategy for space and a space company that will allow for comprehensive government investment and private sector contribution to the field, said the minister of communications and information technology.

Speaking at a press conference on the sidelines of LEAP, Abdullah Al-Swaha said the Kingdom is making significant strides in the fields of space exploration and women’s empowerment. 

He said after sending the first Arab Muslim woman to the international space station, the Kingdom is now looking to the next phase of its development in this sector. 

There are two main phases that Saudi Arabia will be focusing on, with details to be announced in the coming national strategy, he informed. First, Al-Swaha said, is the upstream, which is space exploration.

The second will be downstream, he noted, saying: “In the downstream, we will focus on three main markets: space telecommunications, to connect the unconnected world — we have a golden opportunity to fill this void in the Kingdom and our brothers in Africa and Asia. The second is navigation, which according to studies, affects 7 percent of the local production, and we, therefore, aim to localize this. Lastly, is carbon reduction through earth observation to be able to track emissions.”

Al-Swaha highlighted that Saudi Arabia has also become the “greatest success story” in the field of women’s empowerment.

In the field of technology and innovation, the nation’s baseline before the launch of Vision 2030 was 7 percent, he informed. 

Today, seven years later, women’s participation in the field starts at 35 percent, the minister pointed out, saying: “We have surpassed the median of Silicon Valley, which is 27 percent. We have surpassed the median of the EU, which is 22 percent.”

This comes as a testament to the “great movement” that is occurring in the nation, under the patronage of the crown prince, to revolutionize all sectors, the minister noted. 

Further highlighting the momentum that the Kingdom is witnessing, the minister said that Saudi Arabia’s digital economy is currently one of the 10 fastest worldwide in terms of the speed of advancement and volume of achievement. 

He underscored that while the global digital economy is growing by approximately 2 to 3 percent, in Saudi Arabia, it has grown by nearly 10 percent since the launch of Vision 2030, adding: “When you grow three times the global average, you realize that the scale of this achievement is great.”

Al-Swaha highlighted that, for the first time, “the Kingdom is receiving its fair share” from venture capital funding, with a growth size of 33 percent compared to last year.

The technical and digital market in Saudi Arabia has also grown “exceptionally well,” the minister added. 

He said: “In general, communications markets are called defensive markets, they grow in parallel with the growth of domestic product. The telecommunications market in the Kingdom grew twice this rate, and the technical market grew three times this rate. From a sum of SR113 billion ($30 billion) to more than SR183 billion with a growth rate of more than 9 percent, this is considered a historic achievement.”

PIF crowned world’s most valuable sovereign wealth fund

PIF crowned world’s most valuable sovereign wealth fund
Updated 7 sec ago

PIF crowned world’s most valuable sovereign wealth fund

PIF crowned world’s most valuable sovereign wealth fund
  • 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 19 min 31 sec ago

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.  

Saudi IPOs attract record $176bn in investor orders: Bloomberg 

Saudi IPOs attract record $176bn in investor orders: Bloomberg 
Updated 29 May 2024

Saudi IPOs attract record $176bn in investor orders: Bloomberg 

Saudi IPOs attract record $176bn in investor orders: Bloomberg 

RIYADH: Saudi companies have garnered SR659 billion ($176 billion) in orders for their initial public offerings, with investors eager to capitalize on the returns processed over the past two years. 

According to Bloomberg, this surge in demand for IPOs has surpassed the record set by Saudi Aramco in 2019 and is affecting the broader market.  

The Tadawul All Share Index, which tracks the Kingdom’s stock market, has fallen nearly 8 percent from its peak in March, lagging behind other emerging markets. This dip is partly due to investors holding onto cash for these new offerings, Bloomberg reported. 

Marwan Haddad, lead portfolio manager for Middle East and North Africa equities at Azimut, noted: “There is a notable surge in demand and a rush to the market.” 

Saudi Arabia is poised to lead the IPOs in the Middle East and North Africa region in 2024, with 27 companies aiming to list on the Kingdom’s main market, according to an analysis by Dubai International Financial Center. 

A report by DIFC, in association with the London Stock Exchange Group, said that the IPO pipeline in the MENA region seems promising this year, as several companies postponed their listings from 2023 to early and mid-2024 in anticipation of more favorable market conditions.   

“Deals will be driven mainly by Saudi Arabia, where 27 companies have expressed intent to list on the Saudi Exchange (Tadawul), in addition to expected follow-on issuances from Aramco and Savola,” said DIFC.  

Bloomberg noted that among the recent IPOs, Dr. Soliman Abdul Kader Fakeeh Hospital Co. attracted SR341 billion in orders for its SR2.86 billion IPO. Saudi Manpower Solutions Co. saw orders worth SR115 billion, 128 times more than the shares available to fund managers.  

Moreover, Rasan Information Technology Co., a pioneering fintech firm in Riyadh, received SR108.6 billion for its SR841 million IPO. Meanwhile, water treatment company Miahona drew SR94.4 billion in orders, 170 times its offering size. 

“The high demand can be attributed to several factors: an influx of hedge fund managers, substantial appetite from retail investors facilitated by up to 10 times leverage from banks, and the ease of subscribing through digital channels,” Haddad said. 

He added that the demand appears inflated as investors adapt to smaller allocations. The oversubscription levels have caused frustration among international and local investors due to reduced allocations. The strong performance of these IPOs also fuels the requests. 

Data from Bloomberg shows that of the 61 companies that went public in the last two years, 17 hit the maximum allowed 30 percent increase on their first trading day.  

Over half of these companies ended their debuts above the offer price, with an average return of 32 percent. By contrast, European IPOs raising at least $100 million have averaged a 5.2 percent return over the same period. 

Faisal Hasan, chief investment officer at Al Mal Capital, said: “The good returns given by the IPOs in the recent past have attracted both retail and institutional investors, leading to the demand.” 

He explained that investors tend to place larger orders, knowing their final allocations will be smaller due to the high request level. 

The Kingdom’s initiative to diversify its stock exchange is another contributing factor.  

“Demand for new listings is strong in Saudi because every other IPO is adding a new sector to a market hitherto dominated by banks and chemical companies,” said Christian Ghandour, senior portfolio manager at Al Dhabi Capital.  

“Rasan, for example, adds the fintech and ‘insurtech’ flavors to the market,” he added. 

The Capital Markets Authority revised book-building regulations in late 2022 to ensure order books reflected genuine demand and were not inflated by leverage. While this initially reduced oversubscription levels, the effect is diminishing. 

Previously, IPOs such as ACWA Power Co. and solutions by stc received immense demand, with orders reaching $300 billion and $126 billion, respectively.  

This contrasts with Saudi Aramco’s record $29.4 billion IPO in 2019, which drew $106 billion in orders. The recent figures highlight the sustained and growing interest in Saudi IPOs. 

South Korea, UAE sign deal to slash import duties at leaders’ summit 

South Korea, UAE sign deal to slash import duties at leaders’ summit 
Updated 29 May 2024

South Korea, UAE sign deal to slash import duties at leaders’ summit 

South Korea, UAE sign deal to slash import duties at leaders’ summit 

SEOUL: South Korea and the UAE signed a trade pact on Wednesday to sharply cut import duties at a summit of their leaders that pledged closer business and investment ties. 

Host South Korea welcomed the UAE’s President Sheikh Mohammed bin Zayed Al-Nahyan with a traditional honour guard and a flypast of air force jets. 

“The special bond between the two leaders serves as an opportunity to deepen and advance the two countries’ special strategic partnership,” the office of President Yoon Suk Yeol said in a statement. 

The summit, which follows Yoon’s state visit last year to Abu Dhabi, focused on energy and defense, as South Korea seeks to tap the investment potential of the energy-rich Gulf state. 

In its statement, Yoon’s office said the UAE reaffirmed last year’s pledge of $30 billion in investment for South Korean businesses, in areas from nuclear power and defense to hydrogen and solar energy. 

The two sides also signed an agreement to boost investment flows into future-focused sectors in South Korea’s economy, it added. 

The Abu Dhabi National Oil Co. signed a letter of intent for a South Korean company to build at least six LNG carriers valued at about $1.5 billion, it said. 

The industry ministers formally signed a Comprehensive Economic Partnership Agreement agreed in October that will remove all tariffs on South Korean arms exports when it is ratified, South Korea said. 

The UAE will also drop import duty on automobiles over the next decade, during which South Korea’s tariffs on crude oil imports are to be removed. 

The deal will eventually scrap tariffs on more than 90 percent of the imports of both. 

On Tuesday, Sheikh Mohammed met the leaders of some of South Korea’s top conglomerates including Jay Y. Lee of Samsung Electronics, SK Group Chairman Chey Tae-won and Kim Dong-kwan of Hanwha Group, which has emerged as a major defense contractor. 

No new arms deal was unveiled, but Yoon’s office said both aim to boost long-term cooperation of their defense industries. 

South Korea has signed a series of global defense equipment contracts as part of its plans to become the world’s fourth-largest defense exporter by 2027. 

One such recent deal involves Poland, which seeks to bolster its defense as a close neighbor of Ukraine, which is at war with Russia. 

Saudi, Dutch officials hold talks on logistics at Port of Rotterdam

Saudi, Dutch officials hold talks on logistics at Port of Rotterdam
Updated 29 May 2024

Saudi, Dutch officials hold talks on logistics at Port of Rotterdam

Saudi, Dutch officials hold talks on logistics at Port of Rotterdam
  • Discussions touched on encouraging Dutch infrastructure investments for metal processing in the Kingdom

RIYADH: The Kingdom’s Industry and Mineral Resources Minister Bandar Ibrahim AlKhorayef has held talks with officials at the Dutch Port of Rotterdam on ways to enhance cooperation in logistics, the Saudi Press Agency reported on Wednesday.

They discussed the role of the Kingdom, as a supplier of vital minerals, in the global supply chain, and investment cooperation with Dutch companies in metal processing and recycling.

AlKhorayef reviewed the objectives of the National Industrial Development and Logistics Program, under Saudi Vision 2030, which focuses on developing this sector of the Kingdom’s economy.

The minister also toured the port’s FutureLand area where he was briefed on the services provided to shipping companies which includes towing, docking, repairs, building and supply.