Pakistan pushes to forge strategic, economic partnership as Saudi FM visits Islamabad

Pakistan pushes to forge strategic, economic partnership as Saudi FM visits Islamabad
Pakistan Prime Minister Shehbaz Sharif (right) meets Saudi foreign minister Prince Faisal bin Farhan in Islamabad, Pakistan on April 16, 2024. (PM Office)
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Updated 16 April 2024
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Pakistan pushes to forge strategic, economic partnership as Saudi FM visits Islamabad

Pakistan pushes to forge strategic, economic partnership as Saudi FM visits Islamabad

ISLAMABAD: Pakistani top leaders, including the prime minister, president and foreign minister, said on Tuesday the ongoing visit of Saudi Foreign Minister Prince Faisal bin Farhan to Islamabad would help transform a longstanding friendship between the two nations into a strategic and commercial partnership.

Prince Faisal arrived in Pakistan on Monday on a two-day visit aimed at enhancing bilateral economic cooperation and pushing forward previously agreed investment deals. His trip comes a little over a week after Crown Prince Mohammed bin Salman met Prime Minister Shehbaz Sharif in Makkah and reaffirmed the Kingdom’s commitment to expedite investments worth $5 billion.

Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and the top source of remittances to the cash-strapped South Asian country.

“We aim to transform our traditionally fraternal ties into a strategic and economic partnership,” Foreign Minister Ishaq Dar said as he addressed a Pakistan-Saudi Arabia Investment Conference in Islamabad, held under the umbrella of Pakistan’s Special Investment Facilitation Council, set up last year to oversee all foreign investments. 

“Your investments are not just financial commitments but are crucial in nurturing a deeply valued partnership,” Dar told the visiting dignitary. 

“It is through the SIFC platform that we intend to streamline investment processes while ensuring rapid decision making and efficient handling of investments … The SIFC has a central role in augmenting our infrastructure and streamlining our regulatory frameworks to set the stage for a flourishing investment friendly economic environment.”




Saudi and Pakistani officials pose for a group picture after the Pakistan-Saudi Arabia Investment Conference in Islamabad, Pakistan on April 16, 2024. (@KSAMOFA/X)

Dar said SIFC would ensure that investments were “swift and mutually beneficial, embodying our commitment to facilitating foreign direct investment in Pakistan.”

Pakistan was blessed with fertile agricultural lands, minerals and a large and dynamic population, complemented by a flourishing IT sector and abundant prospects for renewable energy creation, the foreign minister added. 

He said Pakistan’s fertile lands and a vast network of water resources presented numerous investment opportunities in agri-tech and food processing, with the South Asian nation having the potential to become the region’s food basket.

“Our mining sector is marked by untapped potential especially in the expansive Tethyan belt known for its abundant deposits of copper, gold and other valuable minerals,” Dar said. “The strategic advancements in these areas are highlighted by projects such as Riko Diq copper [and gold] project which exemplifies our commitment to leveraging our natural resources for mutual benefit.”




Pakistan Prime Minister Shehbaz Sharif (center) meets Saudi foreign minister Prince Faisal bin Farhan who is leading a high-level delegation in Islamabad, Pakistan on April 16, 2024. (PM Office)

On Sunday, Pakistani state media reported Saudi Arabia was likely to invest $1 billion in the mine project in Pakistan’s southwestern Balochistan province, one of the world’s largest underdeveloped copper-gold areas.

The foreign minister said Pakistan’s goal was to transform the country into a hub of economic activity, and innovation and create an attractive environment for global investors like Saudi Arabia. 

“Investing in Pakistan is not merely a placement of capital. It would actually be instrumental toward forging a partnership that promises mutual prosperity and progress,” he concluded. 

“Your engagement and investment in Pakistan will be handled with utmost respect and institutionalized commitment from our side, ensuring that together we achieve remarkable success.”

MEETINGS WITH PM AND PRESIDENT

Prince Faisal also met Pakistani PM Sharif on Tuesday who said the Saudi official’s visit would herald a new era of strategic and commercial partnerships between the two long-time allies.

“The visit is the beginning of a new era of strategic and commercial partnership between Pakistan and Saudi Arabia,” Sharif was quoted as saying in a statement from his office after he met Prince Faisal. “Pakistan wants to further promote cooperation in the fields of trade and investment between the two countries.”

The PM said Pakistan was taking steps to promote foreign investment and make partnerships “mutually beneficial” for allies, adding that Islamabad was grateful to the Saudi leadership for increasing investment.

Informing the Saudi delegation about the wide potential of investment in Pakistan, Sharif briefed them about the Special Investment Facilitation Council and measures the body was taking to promote investment. 

Sharif also invited the Saudi crown prince to Islamabad.

“The people of Pakistan are looking forward to the visit of His Highness the Crown Prince Muhammad Bin Salman to Pakistan,” the PM’s office said.

President Asif Ali Zardari and Prince Faisal also met on Tuesday and reiterated the two nations’ resolve to build a strong partnership and promote mutually beneficial economic cooperation.

Zardari said Pakistan was working to transform its long-standing and decades-old relationship with Riyadh into a “long-term strategic and economic partnership.”




Pakistan's President Asif Ali Zardari meets Saudi Arabia's Foreign Minister Prince Faisal bin Farhan in Islamabad, Pakistan on April 16, 2024. (President's Office)

The two sides also discussed regional dynamics and recent developments in the Middle East and called for an immediate and unconditional ceasefire in Gaza and an end to Israeli air and ground offensives there.

INVESTMENT PUSH

In a statement shared with media on Monday, the Pakistan information ministry said the Saudi delegation would consult with Pakistani officials “on the next stages of investment and implementation issues.”

Saudi Arabia’s planned investment in the Reko Diq gold and copper mining project would be discussed during the visit, the ministry said, adding that Riyadh was also interested in investing in agriculture, trade, energy, minerals, IT, transport and other sectors in Pakistan:

“As a result of this visit, Pakistan’s export capacity will increase, joint ventures will be launched and new opportunities will be paved.”

Cash-strapped Pakistan desperately needs to shore up its foreign reserves and signal to the International Monetary Fund (IMF) that it can continue to meet requirements for foreign financing that has been a key demand in previous bailout packages. Pakistan’s finance minister, Muhammad Aurangzeb, is currently in Washington to participate in spring meetings of the International Monetary Fund and World Bank and discuss a new bailout program. The last loan deal expires this month.

Saudi Arabia has often come to cash-strapped Pakistan’s aid in the past, regularly providing it oil on deferred payments and offering direct financial support to help stabilize its economy and shore up its forex reserves.

Last year, however, Saudi Arabia’s finance minister said the Kingdom was changing the way it provides assistance to allies, shifting from previously giving direct grants and deposits unconditionally and moving toward mutually beneficial investment deals backed by internal economic reforms.

The PM said Pakistan was taking steps to promote foreign investment and make partnerships “mutually beneficial” for allies, adding that Islamabad was grateful to the Saudi leadership for increasing investment.

Informing the Saudi delegation about the wide potential of investment in Pakistan, Sharif briefed them about the Special Investment Facilitation Council and measures the body was taking to promote investment. The body was set up last year to oversee all foreign funding.

Sharif also invited the Saudi crown prince to Islamabad.

“The people of Pakistan are looking forward to the visit of His Highness the Crown Prince Muhammad Bin Salman to Pakistan,” the PM’s office said. 


Closing bell: Saudi main index slips to close at 11,850 

Closing bell: Saudi main index slips to close at 11,850 
Updated 26 May 2024
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Closing bell: Saudi main index slips to close at 11,850 

Closing bell: Saudi main index slips to close at 11,850 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 145.35 points, or 1.21 percent, to close at 11,850.64.    

The total trading turnover of the benchmark index was SR4.37 billion ($1.16 billion) as 55 of the stocks advanced, while 166 retreated.   

Similarly, the Kingdom’s parallel market Nomu slipped 41.38 points, or 0.16 percent, to close at 26,638.19. This comes as 26 of the listed stocks advanced while 33 retreated.   

Meanwhile, the MSCI Tadawul Index slipped 20.47 points, or 1.37 percent, to close at 1,473.08. 

The best-performing stock of the day was Bupa Arabia for Cooperative Insurance Co. The firm’s share price surged 4.79 percent to SR240.80.  

Other top performers include Saudi Fisheries Co. as well as National Medical Care Co. 

The worst performer was Al-Baha Investment and Development Co. whose share price dropped by 7.14 percent to SR0.13. 

Other worst performers were Electrical Industries Co. as well as Saudi Arabian Mining Co. 

On the announcements front, East Pipes Integrated Co. has announced its annual financial results for the period ending on March 31.  

According to a Tadawul statement, the company’s net profit hit SR267 million in the year ending in March 2024, reflecting a 167 percent surge when compared to the corresponding period a year earlier.   

The increase is mainly due to a sustained rise in average sales prices as well as a decrease in the cost of production per tonne. 

Moreover, Saudi Ground Services Co. has announced that the board of directors has approved establishing a 100 percent owned new subsidiary as a limited liability company in Saudi Arabia under the name “Ground Service Co. for Travel and Tourism Services.”  

A bourse filing revealed that the new subsidiary will have a share capital of SR500,000. 

This decision comes after meeting the requirements set by the relevant authorities and regulations for operating travel agency services and air transport procedures, which are in line with the National Economic Activities Classification Guide, following the necessary approvals from the authorities. 

This step aligns with the strategic direction of Saudi Ground Services Co., aiming for growth, business development, and diversification of its revenues. 

Furthermore, MBC FZ-LLC, a subsidiary wholly owned by MBC Group, has announced the signing of a production contract worth SR65 million with MedYapim Middle East Audiovisual Media Production Co., a related party, for the production of a television series. 

The contract is expected to be completed by February 2025, in accordance with the terms and conditions of the agreement and is projected to have a positive impact on the firm’s financial statements of 2025. 


DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port

DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port
Updated 26 May 2024
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DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port

DP World, Mawani launch $250m logistics park project at Jeddah Islamic Port

RIYADH: The Saudi logistics sector is poised for growth with DP World’s investment of SR900 million ($250 million) to build a distribution center at the Jeddah Islamic Port.

With this strategic move, the UAE multinational logistics company will also enhance its operational capabilities, providing more efficient and comprehensive services to its clients.

 Sunday’s announcement signals the start of construction on the quarter-billion-dollar project, which will be developed in two phases and is scheduled to open in the second quarter of 2025.

The park offers an in-land container depot with a handling capacity of 250,000 twenty-foot equivalent units and warehouse space of 100,000 sq. meters, said a press release.

Integrated with the recently awarded 30-year concession for the South Container Terminal, the state-of-the-art facility will bolster trade to enable Saudi Arabia’s strategy to become an economic powerhouse by 2030.

In June 2022, DP World and the Saudi Ports Authority, known as Mawani, signed a 30-year agreement, with an investment exceeding SR500 million, to construct a cutting-edge, port-centric logistics park in Jeddah.

The deal aims to develop the park, covering 415,000 sq. meters, featuring an in-land container depot capable of accommodating around 250,000 TEU and warehousing storage space totaling 100,000 sq. meters. Potential expansions could raise the storage capacity to 200,000 sq. meters.

The agreement was signed under the patronage of Saudi Minister of Transport and Logistic Services Saleh Al-Jasser, who is also chairman of the board of Saudi Ports Authority,

According to a statement from the Dubai government’s media office, the 415,000 sq. meter greenfield facility will include 185,000 sq. meters of warehousing space and a vast multi-purpose storage yard, establishing it as the largest integrated logistics park in the Kingdom.

The statement further mentioned that the park will accommodate over 390,000 pallet positions, providing customers with an efficient platform for the smooth movement of goods to and from Jeddah.

The collaboration between Mawani and DP World also includes the management of the South Container Terminal through a separate 30-year concession signed in 2020, the media office said in its release.

It added that the terminal is currently in the final phase of a comprehensive modernization project, scheduled for completion in the last quarter of 2024. This project will ramp up the handling capacity to 5 million TEU. 

“Saudi Arabia has always been a deeply important market for DP World, and this milestone represents our ongoing commitment to the Kingdom,” Sultan Ahmed bin Sulayem, chairman and CEO of DP World, said.

He added that Jeddah Logistics Park, strategically located on the vital Asia-Europe shipping route, will provide world-class multimodal connectivity and market access for customers while supporting the ambitious aims of Saudi Vision 2030.

“This investment marks a significant step as we mark 25 years of operations in Jeddah and underscores our enduring commitment to facilitating the flow of trade,” Sulayem added.

On the other hand, Mawani President Omar bin Talal Hariri highlighted that this new logistics area will be connected to DP World’s South Container Terminal at Jeddah Islamic Port, facilitating growth and increasing the number of containers handled at the terminal.

“The project is part of Mawani’s broader efforts to expand the number of logistics centers in Saudi ports, in partnership with major national and international companies, and in line with the objectives of the National Transport and Logistics Strategy and Vision 2030,” Hariri said.


King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report

King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report
Updated 26 May 2024
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King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report

King Khalid International tops Saudi airport rankings with 82% compliance rate: GACA report

RIYADH: Saudi Arabia’s King Khalid International Airport emerges as one of the top three performing terminals in the Kingdom, according to official data. 

The Riyadh-based aviation facility topped the category for international terminals with over 15 million passengers annually, achieving an 82 percent compliance rate with the General Authority of Civil Aviation’s standards. 

In its monthly report for April, GAC outlined the performance of the country’s airports, highlighting King Fahd International Airport and Abha International Airport as premier travel hubs. 

Based on 11 key criteria, the evaluation aims to improve service quality and enhance the passenger experience.  

King Abdulaziz International Airport in Jeddah came second with the same commitment rate but was outperformed by King Khalid International in meeting the criteria. 

King Fahd International Airport led the category for international airports with 5 to 15 million passengers annually, also with a 91 percent commitment rate. Prince Mohammad bin Abdulaziz International Airport in Madinah, which had the same commitment rate, was second. 

In the category of international airports with 2 to 5 million passengers annually, Abha International Airport secured the top spot with a 100 percent commitment rate, outperforming King Abdullah bin Abdulaziz Airport in Jazan, which also had a 100 percent commitment rate but lagged in meeting the criteria. 

Al-Qaisumah International Airport ranked first among international terminals with fewer than 2 million passengers annually, with a 100 percent commitment rate, excelling in average waiting times for departure and arrival flights. 

Arar Airport achieved the highest performance among domestic terminals, with a 100 percent commitment rate, leading in average waiting times for departure and arrival flights. 

GACA’s performance evaluation is based on essential criteria such as passenger waiting times, time spent at baggage claim, and passport and customs areas, alongside standards related to accessibility for persons with disabilities and other global best practices. 

In an additional report released earlier in April, GACA revealed that the volume of air cargo handled by airports in the Kingdom saw an annual rise of 7 percent in 2023 to reach 918,000 tonnes.  

The analysis stated that the Kingdom’s aviation sector strongly rebounded in 2023, with airports witnessing a 26 percent rise in passenger transportation compared to 2022. 

GACA said that flight facilities in Saudi Arabia transported 112 million passengers last year, an 8 percent increase compared to 2019.  

The report revealed that the number of flights through the Kingdom’s airports in 2023 reached about 815,000, an increase of 16 percent compared to 2022. 

In 2023, airports in Saudi Arabia handled 394,000 international and 421,000 domestic journeys, the authority added. 


SME financing in Saudi Arabia surges 20.4% in Q4 of 2023

SME financing in Saudi Arabia surges 20.4% in Q4 of 2023
Updated 26 May 2024
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SME financing in Saudi Arabia surges 20.4% in Q4 of 2023

SME financing in Saudi Arabia surges 20.4% in Q4 of 2023

RIYADH: Financing provided to small and medium enterprises in Saudi Arabia surged by 20.4 percent year on year to $73.5 billion in the fourth quarter of 2023, official data showed. 

In its latest quarterly report, the Kingdom’s Small and Medium Enterprises General Authority said that credit facilities provided to micro and SMEs amounted to $6.7 billion and $24.6 billion, respectively, in the last three months of 2023. 

On the other hand, medium enterprises in the Kingdom secured finance worth $42.2 billion in the last quarter of the previous year. 

The authority, also known as Monsha’at revealed that banks in Saudi Arabia provided credit facilities worth $68.9 billion in the fourth quarter of 2023, representing a rise of 21.1 percent compared to the same period of the previous year. 

On the other hand, finance companies in the Kingdom provided loans amounting to $4.6 billion in the last three months of 2023, marking a year-on-year rise of 9.3 percent. 

Developing the SME sector is crucial for Saudi Arabia as the Kingdom is currently on a path of economic diversification, as it steadily reduces its dependency on oil. 

The report revealed that 9,644 SMEs were benefitted from Monsha’at support centers in the first quarter of this year. 

Moreover, three SMEs had their initial public offering on the parallel market Nomu through the Tomoh program in the first quarter of 2024. 

Monsha’at also revealed that Saudi Arabia led venture capital funding in the Middle East and North Africa region with $240 million deployed across 35 deals in the first quarter of this year. 

“With $240 million deployed across 35 deals to Saudi-based companies, the Kingdom accounted for a remarkable 65 percent of all VC funding in the region,” said the authority. 

The report attributed 54 percent of this VC funding to the $130 million pre-initial public offering secured by Salla in March. 

“While the $240 million invested in the first quarter maintains the Kingdom’s dominance, it did reflect a considerable quarterly drop of 70 percent from the fourth quarter of 2023, along with a 42 percent year-on-year drop. This downturn mirrors the broader trend across the MENA landscape,” said Philip Bahoshy, founder and CEO of venture capital data platform MAGNiTT. 

He added: “Digging deeper, it becomes evident that while the overall funding has diminished, the Kingdom’s entrepreneurial ecosystem continues to attract investors.” 


Oman’s banking sector sees 2.9% rise in credit to $80bn by end of March

Oman’s banking sector sees 2.9% rise in credit to $80bn by end of March
Updated 26 May 2024
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Oman’s banking sector sees 2.9% rise in credit to $80bn by end of March

Oman’s banking sector sees 2.9% rise in credit to $80bn by end of March

RIYADH: Oman’s banking sector experienced a 2.9 percent rise in total credit, reaching 30.8 billion Omani rials ($80 billion) by the end of March, official data showed. 

In its monthly review of banking and monetary developments, the Central Bank of Oman disclosed that credit to the private sector rose by 3.6 percent year-on-year, reaching 25.9 billion rials by the end of March. 

Non-financial corporations held the largest share of the total private sector credit, accounting for approximately 45.4 percent by the end of March, followed closely by households at 45 percent. 

Financial corporations constituted 5.8 percent of the total, while the remaining 3.8 percent was allocated to other sectors. 

Total deposits held with other depository corporations witnessed a significant year-on-year growth of 11.7 percent, reaching 30.3 billion rials at the end of March, while total private sector deposits grew by 13.7 percent to 20.2 billion rials. 

The increase in private sector credit and deposits reflects robust economic activity and confidence in the financial system. 

Regarding the sector-wise composition of private sector deposits, household holdings contributed the most at 49.8 percent, followed by non-financial corporations at 30.9 percent, financial corporations at 16.5 percent, and other sectors at 2.8 percent. 

The combined balance sheet of conventional banks showed a year-on-year growth of 0.8 percent in total outstanding credit as of the end of March. 

Credit to the private sector increased by 1.6 percent, reaching 20.3 billion rials, while overall investments in securities surged by 28.0 percent to 5.7 billion rials. 

Investment in government development bonds decreased by 17.1 percent to 1.8 billion rials, while investments in foreign securities saw a dramatic increase of 139.0 percent to 2.3 billion rials. 

Moreover, aggregate deposits in conventional banks experienced significant growth, while government deposits declined. Public enterprise holdings increased substantially, and private sector deposits rose. 

Simultaneously, Islamic banks and windows witnessed notable growth in total assets, financing, and deposits, underscoring their expanding role within the banking system. 

The report further highlighted that the nation’s nominal gross domestic product declined by 2.8 percent at the end of the fourth quarter of 2023, primarily due to a significant drop in the hydrocarbon sector despite growth in the non-hydrocarbon sector. 

However, real GDP increased by 1.3 percent during the same period. Both the average oil price and daily production saw decreases, while inflation remained minimal.