Standard Chartered Bank aims to boost Saudi-China economic ties with strategic expansion 

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Updated 19 March 2024
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Standard Chartered Bank aims to boost Saudi-China economic ties with strategic expansion 

Standard Chartered Bank aims to boost Saudi-China economic ties with strategic expansion 

RIYADH: Saudi Arabia offers significant growth potential for foreign banks operating in the Kingdom to meet the increasing demand from Chinese clients, according to a senior banker. 

Speaking to Arab News, Jerry Zhang, CEO of Standard Chartered Bank China, noted that the company is strengthening its infrastructure and services to better support Chinese clientele in Saudi Arabia, indicating confidence in the market’s potential. 

Zhang said: “We are actually hiring a corridor banker. Corridor banker, meaning that a Chinese-speaking local relationship manager is servicing the underlying clients. So, we are hiring additional resources to be stationed in Saudi to serve the Chinese clients here. This is absolutely driven by the demand.”  

She added: “We are also beefing up supporting systems and services capabilities to serve Chinese clients here onshore. That’s a straightforward proof of how we see the potential of this market.” 

Standard Chartered’s banking presence in the region is relatively new, as it commenced operations in Saudi Arabia in 2022. 

However, the corridor between the Middle East and China already contributes 10 percent to the bank’s income and is experiencing rapid growth. 

“Hopefully, in 12-24 months’ time, we will see the share of the Middle East corridor within the entire China origination income grow faster, particularly in Saudi Arabia, and I can claim a large share of that and report it to you,” Zhang said. 

Additionally, the CEO underlined that Saudi Arabia and China align strategically. The Kingdom is actively seeking diversification in its economy, particularly in sectors like infrastructure, new energy, technology, logistics, and e-commerce. These sectors are recognized as key areas where North Asian companies excel. 

“Therefore, I think Chinese companies do have an edge and also an urge to come across to Saudi Arabia to provide their products and services, expanding into this part of the world very fast. In our Standard Chartered’s position, we’ve been consistently transitioning to support the so-called emerging new economy in China for the past eight to 10 years,” Zhang continued. 

The CEO underscored that new economy sectors, such as technology and innovation, have experienced significant growth and now contribute nearly 50 percent of the firm’s corporate income.  

This transition aligns strategically with both countries’ goals and supports Saudi Arabia’s Vision 2030 by providing services in sectors relevant to its objectives. 

Zhang further elaborated on the development of the Chinese economy, highlighting its 5.2 percent growth rate last year, which is considered strong compared to other major economies.  

She anticipates a 4.8 percent growth rate for 2024, primarily driven by consumption and growth in these rising industries. 

“More than 30 million cars have been produced and sold. For the first time in history, China has exceeded Japan to become the No. 1 exporter of cars worldwide, and for EV (electric vehicle) cars in particular, last year, I think China has produced close to 10 million EVs and more than 30 percent in the penetration ratio,” Zhang said. 

Commenting on the relationship between the North Asian country and Saudi Arabia, Zhang said that Standard Chartered China has engaged with the Kingdom’s leadership team and women entrepreneurs in technology, whom they have sponsored and supported through programming. 

“First, we saw the bilateral relationship really accelerate after President Xi’s visit. By the end of 2022 and during the investment conference, both sides had signed more than 60 agreements worth more than $25 billion in contracts, which is extremely exciting, and things have been moving even faster from there,” Zhang commented. 

She added, “The two central banks have signed a currency swap program worth 50 billion RMB, which will pave a very strong foundation for financial collaboration between the two nations as well... We are seeing this extremely friendly government-to-government relationship that further nurtures the economic ties between the two sides.” 

The bank is enhancing its presence by adding more personnel, introducing new products and solutions, and implementing best practices from its global operations in the Kingdom. 

Mazen Bunyan, CEO of Standard Chartered Saudi Arabia, emphasized that the Kingdom and China share a historic and long-standing relationship. Additionally, both nations have very similar strategies for achieving their economic growth, diversification, and objectives. 

“We have a very unique opportunity and position as a global bank in both markets to leverage on that network, on connectivity. We’re expanding on the market. We’re expanding our operations, and adding people, products and services on the ground, and solutions,” Bunyan told Arab News. 

He added: “At the same time, we continue to engage with key stakeholders on each side, China and Saudi Arabia, to smooth the knowledge gap to help the engagement between the two counterparts or two countries.” 

Bunyan highlighted that the bank has around 50 employees working directly in the Kingdom, the majority of whom are Saudi nationals. Additionally, a significant number of women leaders are present within the organization’s regional workforce. 

“We have also a very huge portion of women leaders within both entities, and we continue to invest in talent in Saudi Arabia and develop them as well in line with the Vision 2030 Human Capital Development Program,” Bunyan said. 

Standard Chartered Bank in Saudi Arabia operates as a full-fledged wholesale organization, focusing on serving government and quasi-government financial institutions as well as large and global companies in the Kingdom. The bank’s objective is to deliver value to these clients and support them in achieving their respective objectives and strategic priorities. 

The financial institution plays a significant role in facilitating inward business into Saudi Arabia, leveraging its extensive global footprint, particularly in regions like China.  

Additionally, Standard Chartered assists international companies in establishing their presence and operations in the Kingdom, serving as a bridge between these companies and the Saudi market. 


Saudi PIF, French private equity group to acquire 38 percent of Heathrow airport

Saudi PIF, French private equity group to acquire 38 percent of Heathrow airport
Updated 15 June 2024
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Saudi PIF, French private equity group to acquire 38 percent of Heathrow airport

Saudi PIF, French private equity group to acquire 38 percent of Heathrow airport
  • Ferrovial to remain as shareholder under revised deal for UK’s busiest hub

LONDON: Saudi Arabia’s sovereign wealth fund and a French private equity group will acquire a 38 percent stake in Britain’s busiest airport, Heathrow, officials announced on Friday.

Dutch-based transport company Ferrovial SE said the Public Investment Fund and Ardian had made a revised offer to acquire shares representing 37.62 percent of the share capital of FGP Topco, the parent company of Heathrow Airport Holdings Ltd, for more than £3.2 million ($4.1 million).

Under the new agreement, Ferrovial, which operates in more than 15 countries, will remain as a shareholder with shares representing 5.25 percent of the issued share capital of FGP Topco.

Following the sale, the Topco shareholders and Ferrovial will together hold shares “representing 10 percent of the issued share capital,” while PIF and Ardian will buy 22.6 percent and 15 percent respectively of FGP Topco through separate vehicles, Ferrovial said.

“The parties have been working toward satisfaction of the condition for the sale of the Tagged Shares to be sold alongside Ferrovial’s shares by exploring different options to satisfy the same,” the statement added.

The deal remains subject to regulators’ approval, Ferrovial said.

In November, Ferrovial had said it was planning to offload its stake, with PIF taking 10 percent and Ardian taking 15 percent, but the deal has been amended to allow FGP Topco shareholders to sell their shares on the same terms under so-called “tag-along rights.”

“Ardian is pleased to have worked closely with the parties to find this revised agreement and reiterates its strong commitment to investing in the UK,” the French company said in a separate statement.

The private investment house, which manages or advises $166 billion of assets on behalf of more than 1,600 clients globally, added that it “actively supports its assets to accelerate their transformation by leveraging data and new technologies to reduce emissions, creating new, more sustainable revenue sources, becoming more independent and resilient to external shocks, and improving their impact on both local and global environments.”


IMF heralds Saudi Arabia’s ‘unprecedented economic transformation’ in glowing report

IMF heralds Saudi Arabia’s ‘unprecedented economic transformation’ in glowing report
Updated 14 June 2024
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IMF heralds Saudi Arabia’s ‘unprecedented economic transformation’ in glowing report

IMF heralds Saudi Arabia’s ‘unprecedented economic transformation’ in glowing report

RIYADH: Saudi Arabia’s “unprecedented economic transformation” is progressing well thanks to prudent government policies and successful diversification efforts, according to the International Monetary Fund.

In a report focusing on the changing economic landscape of the Kingdom, the organization highlighted growing domestic demand, ongoing financial reforms, and environmental policies as areas of strength.

The findings comes just days after the Organisation for Economic Co-operation and Development released figures showing that Saudi Arabia’s economy witnessed growth above the G20 average in the first three months of the year.

In a release to mark the the end of an official visit to the Kingdom by the IMF, the organization projected Saudi Arabia’s overall GDP growth will accelerate to around 4.5 percent in 2025 before stabilizing at 3.5 percent per year over the medium term.

It forecast non-oil growth to reach 3.5 percent in 2024 “before picking up in 2025 onwards.”

It added: “Oil output is projected to contract by 4.6 percent in 2024 but increase by 5.1 percent in 2025, reflecting an extension of oil production cuts in 2024 and a gradual recovery to 10 mbpd in 2025.”

Reflecting on the transformation policies undertaken by the Saudi government, the IMF noted that “Efforts to diversify the economy have started to bear fruit.”

The report added: “Building on these successes, it will be important to sustain the non-oil growth momentum, maintain financial sector stability, continue mitigating risks of overheating, reverse declining total factor productivity and ensure inter-generational equity.”

The IMF welcomed the “recent recalibration” of funding requirements associated with the Vision 2030 objectives, and also praised the Kingdom’s drive to become a haven for private sector development.

“Reforms to enhance Saudi Arabia’s business environment and attractiveness for foreign investment are progressing well,” said the IMF, noting that Saudi Arabia climbed 15 notches in the IMD’s World Competitiveness ranking in two years, obtaining the 17th position globally in 2023. 

“Ongoing work to boost human capital through the Human Capability Development program, further increases in female labor force participation, significant strides in digital transformation and AI preparedness, streamlining of fees and levies, promotion of access to land and finance, and stronger governance would further enhance private sector growth, help attract more FDI, and contribute to total factor productivity growth,” the report added.

The IMF described Saudi Arabia’s financial sector as being on a “strong footing,” noting that bank credit growth – mainly to the corporate sector – continues to surpass deposit growth and is expected to remain at around 10 percent in 2024. 

“The continued efforts by SAMA to modernize the regulatory and supervisory frameworks are key to safeguarding financial stability,” said the report, adding: “SAMA should continue using macroprudential tools to forestall possible risks stemming from a lending boom.”

The report also noted Saudi Arabia’s environmental initiatives, saying that the Kingdom “remains committed” to achieving net zero emissions by 2060. 

“The authorities continue to invest in renewable energy, energy efficiency, clean hydrogen, and carbon capture technologies,” said the IMF, adding: “Eliminating energy subsidies would incentivize energy conservation and improve returns on investment in renewable energies. Augmenting the active green finance portfolio—including through the implementation of the Green Finance framework announced in March 2024 and by an inaugural sovereign green bond issuance planned for this year—would be critical for mobilizing private capital.”


China approves first ETFs tracking Saudi equities, fund managers tell Reuters

China approves first ETFs tracking Saudi equities, fund managers tell Reuters
Updated 14 June 2024
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China approves first ETFs tracking Saudi equities, fund managers tell Reuters

China approves first ETFs tracking Saudi equities, fund managers tell Reuters

SHANGHAI: China approved its first exchange-traded funds investing in Saudi Arabia equities on Friday, fund managers told Reuters, as Beijing expands ties with the Middle East amid rising tensions with the West.

The products, managed by China’s Huatai-Pinebridge Investments and Southern Asset Management separately, will track Hong Kong-listed CSOP Saudi Arabia ETF, which debuted in November by Hong Kong-based CSOP Asset Management, according to the two fund managers.

“The approval will further deepen the cooperation between Saudi and China in capital markets,” said Ding Chen, chief executive officer at CSOP.

The CSOP Saudi Arabia ETF, which tracks the performance of the FTSE Saudi Arabia Index, is down roughly 5 percent so far this year, compared with a 3 percent gain in China’s stock benchmark CSI 300 .

Reuters reported in August that China and Saudi Arabia’s stock exchanges were talking about allowing exchange-traded funds (ETFs) to list on each other’s bourses, as the countries look to deepen financial ties amid warming diplomatic relations.

Through the ETF, investors in China will be able to trade Saudi stocks including the oil giant Saudi Aramco and Saudi National Bank.

Beijing, frustrated by what it sees as Washington’s weaponization of economic policies, has sought to expand ties with countries in Europe, the Middle East and Africa. Its diplomatic push to court others include US ally Saudi Arabia.

Earlier this week, China’s securities regulator told Reuters that it welcomes foreign financial institutions and investors, including those from the Middle East, to expand investment in China.

The statement was made in response to a Reuters request seeking comment on news that Qatar’s sovereign wealth fund had agreed to buy a 10 percent stake in China Asset Management Co., the country’s second biggest mutual fund company.


Saudi deputy minister highlights Kingdom’s manufacturing sector potential to German businesses

Saudi deputy minister highlights Kingdom’s manufacturing sector potential to German businesses
Updated 14 June 2024
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Saudi deputy minister highlights Kingdom’s manufacturing sector potential to German businesses

Saudi deputy minister highlights Kingdom’s manufacturing sector potential to German businesses

RIYADH: Investment opportunities in Saudi Arabia’s manufacturing sector were set out to a host of German companies by the Kingdom’s deputy industry minister during a trade show in Frankfurt.

Engineer Khalil Ibrahim bin Salamah met with representatives from firms including systems suppliers the GEA Group, chemical company LINDE, and packaging solutions company IMA, in a bid to strengthen ties between the two nations at a trade show in Frankfurt.

The minister discussed increasing cooperation with the business people, as well as setting out the most prominent investment opportunities provided in the Kingdom’s industrial sector, according to the Saudi Press Agency.

The meetings were held on the sidelines of ACHEMA, a global trade show for the chemical, pharmaceutical and food industry.

Bin Salamah also visited several big-name German petrochemical factories, such as Sanofi, during which he discussed enhancing innovation and sustainability and discovering opportunities to localize pharmaceutical industries.

He also held talks with representatives from global firms including Jagdamba Enterprise, Baker Hughes, and Panametrics.

 

 


Startup Wrap – Middle East SME funding activity flourishes with significant sums 

Startup Wrap – Middle East SME funding activity flourishes with significant sums 
Updated 14 June 2024
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Startup Wrap – Middle East SME funding activity flourishes with significant sums 

Startup Wrap – Middle East SME funding activity flourishes with significant sums 

CAIRO: The Middle East region has been witnessing a significant boost in startup activity, with numerous entrepreneurs securing funding across key sectors.  

Additionally, multiple investment pools were established, with Qatari and Emirati venture capitals aiming to further amplify the ecosystem. 

Regional startups are particularly eyeing the burgeoning Saudi market, with UAE-based proptech firm Stake raising $14 million in a series A funding round to enter the Kingdom.

The round was led by Middle East Venture Partners, with participation from Aramco’s Wa’ed Ventures, Mubadala, and Republic. 

Founded in 2021 by Rami Tabbara, Manar Mahmassani, and Ricardo Brizido, Stake is a digital real estate investment platform that offers options for income-generating properties in Dubai. 

The newly raised funds will be used to expand Stake’s services into Saudi Arabia this year. 

In 2022, Stake closed its pre-series A round at $8 million, backed by MEVP and BY Ventures, with participation from returning investors Vivium Holding and Combined Growth Real Estate. 

Saudi edtech Tahdir raises $270k in pre-seed round  

Saudi-based edtech Tahdir has closed a pre-seed funding round of $270,000 from a group of angel investors.  

Founded by Mohammed Al-Doukhi and Khalil Al-Haid, Tahdir’s platform automates daily school and educational management processes, and the company claims to be serving 92 schools with over 30,000 users. 

The investment will help the company enhance its capabilities and expand its operations within the Kingdom. 

Egypt-based medtech i‘SUPPLY secures pre-series A round  

i‘SUPPLY was founded in 2022 by Ibrahim Emam, Malek Sultan and Moustafa Zaki. Supplied

Egypt-based medical tech startup i‘SUPPLY has secured a pre-series A round, bringing its total funding to $2.5 million since its inception in 2022.  

This round saw participation from several investment funds, including Disruptech Ventures, OneStop Capital, Axian Investment CVC, and Egypt Ventures. 

Founded by Ibrahim Emam, Malek Sultan, and Moustafa Zaki, i‘SUPPLY aims to digitize the pharmaceutical business by offering a one-stop-shop solution to quickly predict and overcome supply chain disruptions.  

The new funding will bolster i’SUPPLY’s expansion plans, enhance its capabilities in financing small and medium-sized pharmacies, and further develop its fintech offerings and technological services. 

Egyptian fintech Sahl raises $6m in series A round 

Cairo-based fintech Sahl has raised $6 million in an investment that acts as a series A and seed funding round led by Ayady for Investment and Development. Existing investors Egypt Pay, Delta Electronic Systems, and E-Finance also participated in the round.  

Founded in 2020 by Ahmed Othman, Ibrahim Assal, and Abullah Assal, Sahl is a bill payment platform that allows users to recharge prepaid cards.  

The company is one of the few Egyptian firms integrating directly with several government entities.  

The new funds will help refine and develop Sahl’s offerings and extend its services to Saudi Arabia after its regional launch in the UAE.  

UAE’s Qstay raises $4.6m in pre-series A round 

Jumeirah beach residence. Supplied.

UAE-based hospitality platform Qstay has raised $4.6 million in a pre-series A funding round through a combination of conventional and convertible debt.  

Founded in 2020 by Artur Khayrullin, Ekaterina Rogozhina, Alec Fesenko, and Natalya Fesenko, Qstay operates as a virtual hotel brand with 200 units.  

Qstay provides digital app-based access to nearby pools, beaches, gyms, and spas for guests staying in beachfront properties.  

To date, the company has raised $11.1 million. In July 2022, Qstay closed a debt and equity Seed round of $6.5 million. 

UAE-based Polynome Group announces $100m fund for AI startups 

UAE-based event management company Polynome Group has announced a $100 million fund to invest in artificial intelligence startups.  

The fund will target startups in technology, AI software applications, and robotics, aligning with goals to expand the adoption of digital technologies beginning in the first quarter of 2025. 

The fund will adopt the “founders for founders” concept, investing in seed, series A, and growth stage startups with initial investments ranging from $500,000 to $5 million per company. 

UAE-based contech Tenderd secures $30m in series A funding 

Construction technology firm Tenderd has closed a $30 million series A funding round, led by A.P. Moller Holding, with new investors Quadri Ventures and Saurya Prakash joining existing investors Wa’ed Ventures, Nakhla Ventures, SOMA Capital, and Liquid 2 Ventures. 

Founded in 2018 by Arjun Mohan, Tenderd provides customers with AI-generated insights to increase asset utilization and reduce emissions, focusing on heavy industries such as construction and logistics.  

The capital will fuel technological innovations and support the UAE-based firm’s global expansion efforts. 

Qatar-based Rasmal Ventures launches first home-grown fund 

Qatar-based VC firm Rasmal Ventures LLC has launched its first home-grown fund, aiming to drive innovation and investment in Qatar and the Middle East and North Africa region.  

The Rasmal Innovation Fund I LLC targets high-performance startups in climate tech, fintech, business to business Software-as-a-Service, and AI sectors. 

For the initial closing, the fund has raised $30 million from institutional investors and family offices, with the goal of reaching $100 million in investment commitments. 

Kuwait-based travel tech Waves secures investment round 

Kuwait-based travel tech startup Waves has closed an investment round for an undisclosed amount, co-led by BNK Capital and Aujan Enterprises.  

Founded in 2021 by Abdulrahman Al-Sadoun and Sulaiman Al-Tunaib, Waves is an online marketplace for booking sea trips, marine activities, and chalets with operations in Kuwait, Saudi Arabia, Qatar, and the UAE. 

The investment will be used to enhance Waves’ services in Saudi Arabia. 

E-commerce platform Orisdi raises six-figure bridge round 

Iraq-based e-commerce platform Orisdi has raised a six-figure bridge round of investment, backed by existing investors including Al Sharqiya TV Group, Iraq Venture Partners, and various angel investors.  

Founded in 2019 by Ahmed Al-Kiremli and Hala Usama, Orisdi offers a range of products across verticals such as perfumes, cosmetics, appliances, stationery, and electronics. 

This funding round, which closed in April 2024, will support Orisdi’s business development efforts and highlight the potential of the e-commerce sector in Iraq.