Fitch affirms Kuwait’s AA- rating with stable outlook 

Fitch affirms Kuwait’s AA- rating with stable outlook 
An AA- rating from Fitch indicates minimal default risk, demonstrating a strong ability to meet financial obligations. Shutterstock
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Updated 17 March 2024
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Fitch affirms Kuwait’s AA- rating with stable outlook 

Fitch affirms Kuwait’s AA- rating with stable outlook 

RIYADH: Kuwait’s foreign and local currency sovereign credit ratings have been affirmed at AA- with a stable outlook by Fitch Ratings, driven by strong fiscal and external balance sheets. 

An AA- rating from Fitch indicates minimal default risk, demonstrating a strong ability to meet financial obligations. 

“Kuwait’s fiscal and external balance sheets remain among the strongest of Fitch-rated sovereigns,” said the credit rating agency.  

The report, however, added that the assessment is marginally curbed by Kuwait’s significant reliance on oil.  

“The rating is constrained by Kuwait’s heavy dependence on oil, its generous welfare system and large public sector that could be challenging to sustain in the long-term, and a political context that hampers efforts to tackle consistent fiscal and economic rigidities and approve legislation to allow debt issuance and clarify government financing sources,” stated Fitch.  

The US-based agency added that Kuwait’s fiscal and external balance sheets remain among the strongest of Fitch-rated sovereigns. 

The report further projected that Kuwait’s sovereign net foreign asset position will average 529 percent of gross domestic product in 2024-25. 

It noted that conflicts between the elected parliament and the 15-member cabinet are a recurring feature of Kuwaiti politics, resulting in frequent resignations of ministers and dissolutions of parliament. The most recent dissolution in February led to elections scheduled for April 4. 

“After the election, the government will aim to pass a liquidity law (as previous governments have), but parliamentary approval remains highly uncertain. However, our forecasts, notably for government debt, are based on the assumption that a liquidity law is passed in the fiscal year ending March 2026,” said Fitch.  

The assumption highlights Fitch’s view that the rating remains resilient to a moderate increase in government debt. “In the absence of a liquidity law, Fitch believes the government would still be able to meet its limited debt service obligations in the coming years, given the assets at its disposal,” the report added.  

The rating agency expects an average oil price of $79.8 per barrel for the financial year 2024, representing a 5 percent dip compared to 2023.  

“In the financial year 2025, we assume Kuwait’s average oil price will fall to $71 per barrel and that its crude output will rise to 2.66 million barrels per day, assuming that OPEC+ (Organization of the Petroleum Exporting Countries and its allies) loosens production constraints somewhat,” stated the report.  

It added that gross government debt remains low, estimated at 3.1 percent of GDP in the financial year 2023, and it is expected to rise to 11 percent of the GDP by 2025. 


Saudi airline flynas named Best Low-Cost Airline in the Middle East for 7th consecutive year

Saudi airline flynas named Best Low-Cost Airline in the Middle East for 7th consecutive year
Updated 24 June 2024
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Saudi airline flynas named Best Low-Cost Airline in the Middle East for 7th consecutive year

Saudi airline flynas named Best Low-Cost Airline in the Middle East for 7th consecutive year

RIYADH: Saudi Arabia’s flynas has been named the Best Low-Cost Airline in the Middle East for the seventh time in a row by a leading industry body.

The carrier was also ranked in the top three low-cost airlines in the world by the International Skytrax Organization, the global authority for assessing airline performance. 

Bander Al-Mohanna, CEO of flynas, received the gong for the firm’s Middle East ranking during the annual Skytrax Awards ceremony held in London. 

“Consolidating our position among the top four in the low-cost aviation sector worldwide and being named the Best LCC in the Middle East for the seventh time in a row, according to Skytrax awards, is a success in the name of the Kingdom of Saudi Arabia,” Al-Mohanna said 

“The Kingdom is at the forefront of the world's countries in various fields, especially in the travel, tourism, and aviation sectors, which have received significant attention and goals of Saudi Vision 2030,” he added. 

Al-Mohanna attributed the achievement to the enduring loyalty of their guests, the dedication of their team, and the tremendous support that all Saudi companies enjoy from the government.

“Scooping the award for the seventh time in a row reflects flynas’ persistent commitment to excellence in products and services within the expansion and growth plan we launched under the slogan ‘We Connect the World to the Kingdom,’” he added. 

Al-Mohanna explained that this aligns with the objectives of the National Civil Aviation Strategy, which aims to enable national air carriers to connect the Kingdom with 250 international destinations, accommodate 330 million passengers, and host 100 million tourists yearly by 2030.  

He also noted that it supports the objectives of the Pilgrims Experience Program to facilitate access to the Two Holy Mosques. 

Skytrax Awards are decided yearly by passenger votes through comprehensive surveys and are among the most coveted awards in the aviation industry worldwide. 

Flynas connects more than 70 domestic and international destinations with over 1,500 weekly flights, aiming to reach 165 destinations, in line with the objectives of Saudi Vision 2030.


World Bank approves $700m financing for Egypt

World Bank approves $700m financing for Egypt
Updated 24 June 2024
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World Bank approves $700m financing for Egypt

World Bank approves $700m financing for Egypt

CAIRO: The World Bank has approved $700 million in financing to support Egypt’s private sector, economic resilience and green growth.

The Development Policy Financing operation is designed to help Egypt address short-term economic challenges while advancing structural reforms to spur private sector growth.

It also aims to hasten Egypt’s green transition, including by scaling up renewable energy and increasing efficiency in the electricity, water and sanitation sectors.

Egypt’s minister of international cooperation, Rania Al-Mashat, said: “The government of Egypt is undertaking ambitious economic and structural reforms aimed at creating a more competitive, green and private sector-led economy.

“Through this budget support instrument, the DPF with the World Bank helps advance policy reforms on three of its top national priorities: Building macro-fiscal resilience, enhancing economic competitiveness and improving the business environment, and supporting the green transition.

“Our longstanding partnership with the World Bank underpins the realization of Egypt’s development and reform efforts.”

The DPF is the first in a series of three operations.

It will advance key reforms, including strengthening governance for state-owned enterprises, empowering the the Egyptian Competition Authority, ensuring accuracy in payroll taxes, scaling up renewable energy and launching a voluntary carbon credit market regulatory framework.

In March, the World Bank Group announced a three-year $6 billion program to support Egypt.

“Creating good, sustainable jobs and building resilience to climate change are critical for the current and future prosperity of Egypt’s citizens — especially the poor and vulnerable,” said Stephane Guimbert, World Bank country director for Egypt, Yemen and Djibouti.

“Reforms supported by this operation are an important step toward a more sustainable, inclusive economy,” he added.

Egypt’s Ministry of International Cooperation said that the DPF is aligned with the World Bank and Egypt’s Country Partnership Framework for FY2023-FY2027.

The framework is based on research by the World Bank Group on Egypt, including the Country Private Sector Diagnostic and the Country Climate and Development Report.

Of the $700 million in the DPF, $200 million is contingent on complementary financing from development partners.

The ministry added that the DPF aligns with Egypt’s development priorities and national strategies, including the Sustainable Development Strategy Vision 2030, the State Ownership Policy, the National Climate Change Strategy 2050, and the Nexus of Water, Food and Energy.
 


Saudi Arabia launches world’s largest renewable energy geographic survey

Saudi Arabia launches world’s largest renewable energy geographic survey
Updated 24 June 2024
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Saudi Arabia launches world’s largest renewable energy geographic survey

Saudi Arabia launches world’s largest renewable energy geographic survey

RIYADH: The world’s largest renewable energy survey will take place in Saudi Arabia, it has been announced – with the installation of 1,200 measuring stations.

The Kingdom’s Energy Minister Prince Abdulaziz Al-Saud inaugurated the Geographic Survey Project for Renewable Energy, stating that it is unprecedented in its scope and aims to pinpoint optimal sites for  solar and wind power initiatives across the Kingdom, according to an official release. 

The minister highlighted the project’s global significance, stating that no other country has undertaken a geographic survey of this magnitude. 

The undertaking, part of the National Renewable Energy Program, will conduct an extensive geographic survey covering over 850,000 sq. km, with contracts awarded to Saudi companies. 

This area, excluding populated regions, sand dunes, and airspace restrictions, is equivalent to the combined landmasses of the UK and France or Germany and Spain. 

The survey will identify the best locations for renewable energy development based on resource availability and strategic priorities.

The initiative will contribute to achieving the Kingdom’s goal of having renewable power sources make up about 50 percent of the energy mix for electricity production by 2030. 

It will also support the nation’s Liquid Fuel Displacement Program, which aims to displace 1 million barrels per day of liquid fuels across utilities, industry, and agriculture sectors by 2030.

Starting in 2024, Saudi Arabia plans to launch new renewable energy projects with an annual capacity of 20 gigawatts, aiming to reach between 100 and 130 GW by 2030, depending on electricity demand. 

The project’s initial phase will involve deploying stations across the designated areas to gather comprehensive data. 

These stations will then be relocated to identified sites for permanent installation, providing continuous data collection. 

Solar energy measurement stations will record Direct Normal Irradiance, Global Horizontal Irradiance, Diffuse Horizontal Irradiance, dust and pollutant levels, albedo, ambient temperature, rainfall, humidity, and atmospheric pressure. 

Wind energy stations will measure wind speed, direction, temperature, pressure, and humidity at heights up to 120 meters. 

Data collection will employ the latest technologies and adhere to global quality standards. 

A platform by the ministry will monitor, record, and transmit the information, using artificial intelligence to assess and rank sites for renewable energy projects. 

The minister noted that the accuracy and continuous updating of the project’s data make it financeable in accordance with the requirements of relevant local and international institutions.

He added that this will contribute significantly to the immediate allocation of land lots for renewable energy projects and expedite initiative announcement and execution, after coordination with relevant authorities.

The undertaking aims to reduce the current 18 to 24-month waiting period for data acquisition, minimizing risks and enhancing investment attractiveness in the renewable energy sector, he added. 

The minister further stated that this project reaffirms Saudi Arabia’s commitment to its ambitious renewable energy targets, including producing and exporting eco-friendly energy and clean hydrogen.


Saudi Arabia and UK strengthen sustainable infrastructure collaborations at London summit

Saudi Arabia and UK strengthen sustainable infrastructure collaborations at London summit
Updated 24 June 2024
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Saudi Arabia and UK strengthen sustainable infrastructure collaborations at London summit

Saudi Arabia and UK strengthen sustainable infrastructure collaborations at London summit

RIYADH: Collaborations in city development, green technologies, and infrastructure financing were discussed by officials from Saudi Arabia and the UK at a special event in London.

The UK-Saudi Sustainable Infrastructure Summit, held on June 24, brought together over 250 leaders from the industry and financial sectors of both countries, along with key representatives from major giga-projects. 

This follows robust bilateral relations, with both countries signing an agreement in late 2022 to enhance cooperation on green finance, as Saudi Arabia increasingly seeks ethical funding for its transformative giga-projects. 

The Kingdom has committed to ambitious climate goals, including a target to reduce carbon emissions by 278 million tonnes annually by 2030 and to increase renewable energy generation capacity by 50 percent. 

The Lord Mayor of the City of London Alderman Professor Michael Mainelli said: “This summit offers an excellent platform to adopt and share knowledge gained from Saudi Arabia’s ambitious Vision 2030 sustainable development plans. Saudi Arabia is investing more in infrastructure than any other country in the Middle East region, including in 14 new giga-projects.”   

He added: “This investment, combined with the City of London’s expertise and leadership in sustainable finance, can set a global template for sustainable development.” 

The summit, organized by the Saudi British Joint Business Council in collaboration with the City of London Corp. and hosted at Plaisterers’ Hall in London, centered on discussions about urbanization, sustainable city development, and financing strategies, highlighting the expansion of green technologies and renewable energy solutions. 

The event was attended by a high-level Saudi delegation led by the Ministry of Investment and the Federation of Saudi Chambers. It builds on prior SBJBC and COLC gatherings, reinforcing the established Saudi-UK dialogue on clean energy development and decarbonization in the business sector. 

It also follows the recent Great Futures event held by the UK in Riyadh, underscoring increasing participation by UK companies in Saudi Vision 2030 initiatives aimed at transforming economic sectors and advancing giga project development. 

The event, supported by lead sponsors NEOM and Saudi Awwal Bank, underscores the importance of UK-Saudi cooperation in developing sustainable infrastructure and advancing the green transition. 

“I’m delighted to host this crucial summit. Sustainable infrastructure around the world is essential to tackling climate change, boosting economic development, and ensuring access to vital provisions such as transport, energy, and water,” said Mainelli. 

The panels delved into bridging the investment gap, utilizing smart urban planning for resilient and livable communities, and expanding initiatives in green technology and renewable energy. 


Closing Bell: Saudi Tadawul closes in the red across all indexes 

Closing Bell: Saudi Tadawul closes in the red across all indexes 
Updated 24 June 2024
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Closing Bell: Saudi Tadawul closes in the red across all indexes 

Closing Bell: Saudi Tadawul closes in the red across all indexes 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Monday, losing 32.93 points, or 0.28 percent, to close at 11,697.04.       

The total trading turnover of the benchmark index was SR8.6 billion ($2.3 billion), as 115 of the listed stocks advanced while 109 retreated.  

The Kingdom’s parallel market Nomu dropped 47.75 points, or 0.18 percent, to close at 26,777.87. This comes as 21 of the listed stocks advanced while as many as 33 retreated. 

Similarly, the MSCI Tadawul Index also dropped 5.07 points, or 0.34 percent, to close at 1,470.61.  

TASI’s best-performing stock of the day was Miahona Co. The company’s share price surged 9.93 percent to SR23.46.     

Other top performers include Etihad Atheeb Telecommunication Co. as well as Jazan Development and Investment Co., whose share prices soared by 7.88 percent and 6.92 percent to stand at SR91.70 and SR15.46, respectively.   

Additional top performers include Salama Cooperative Insurance Co. and Electrical Industries Co. 

The worst performer was Fawaz Abdulaziz Alhokair Co., whose share price dropped by 5.99 percent to SR8.32.    

Other firms to see a drop were Mouwasat Medical Services Co. as well as ACWA Power Co., whose share prices dropped by 3.69 percent and 3.56 percent to stand at SR120.20 and SR351.80, respectively.   

Additional falling performers include Theeb Rent a Car Co. and Dr. Sulaiman Al Habib Medical Services Group.     

In Nomu, Osool and Bakheet Investment Co. was the top gainer, with its share price rising by 16.80 percent to SR60.50.    

Other strong performers in Nomu were Mohammed Hadi Al Rasheed and Partners Co. as well as Al Mohafaza Co. for Education, whose share prices soared by 7.58 percent and 6.50 percent to stand at SR35.50 and SR20, respectively.   

Other top gainers include Future Care Trading Co. and Saudi Lime Industries Co.  

Mulkia Investment Co. was the major faller on Nomu, as its share price dropped 9.80 percent to SR31.30.    

The share prices of Alwasail Industrial Co. as well as Lana Medical Co. also fell by 4.68 percent and 4.47 percent to stand at SR2.65 and SR33.10, respectively.   

Other major losers include Saudi Top for Trading Co. and Jahez International Co. for Information System Technology.