Saudi Arabia and Australia sign deal to boost trade ties

Saudi Arabia and Australia sign deal to boost trade ties
Arnold Jorge, CEO of Export Council of Australia, Mark Donovan, Australian ambassador to Saudi Arabia, and Sam Jamsheedi, president of the Australia Saudi Business Council and Forum. Supplied
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Updated 21 May 2024

Saudi Arabia and Australia sign deal to boost trade ties

Saudi Arabia and Australia sign deal to boost trade ties

RIYADH: Trade ties between Saudi Arabia and Australia are set to strengthen after the two countries signed an agreement to improve cooperation across multiple sectors. 

According to a press statement, the memorandum of understanding was inked between the Australia Saudi Business Council & Forum and the Export Council of Australia. 

The agreement will focus on cooperation in industry, mining and food as well as agriculture, technology, and artificial intelligence. 

The deal will increase the opportunities for Australian exporters to collaborate with Saudi entities, enhancing bilateral cooperation. 

The agreement was signed by the President of the Australia Saudi Business Council & Forum, Sam Jamsheedi, and Arnold Jorge, CEO of the Export Council of Australia, during the latter’s visit to the Kingdom with a delegation. 

“Under this strategic partnership, we will seek to work together closely in identifying initiatives that facilitate connections between Australia and Saudi Arabia,” said Jamsheedi. 

According to the UN Comtrade database, Australia’s exports to Saudi Arabia stood at $789.65 million in 2023. 

On the other hand, the Kingdom’s exports to Australia amounted to $702.75 million over the same 12-month period.  

“We will combine our resources and networks to boost the success of collaborations and partnerships between relevant organizations and individuals of our two countries,” said Jorge. 

The Australia Saudi Business Council was formed in 2013 to facilitate the promotion of ongoing and bilateral trade between the two nations.

In November, Saudi-based Abdel Hadi Al-Qahtani and Sons Co. and Australia’s SSS Group signed a $27 million deal to collaborate in the production of scaffolding systems in Saudi Arabia using local resources.

After the deal was signed, Australian Ambassador Mark Donovan told Arab News at the time that the cooperation agreement builds on the existing investment ties between both countries in various sectors, including education, health care, aviation, and services.

“A new and transformed Saudi Arabia is looking for business relationships around the world, and that’s what we’re very pleased to be a part of,” said Donovan at that time. 

In March, Australia’s University of Wollongong procured licenses to open its branches in the Kingdom. 

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister
Updated 25 June 2024

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

Saudi Arabia welcomes global players in AI to ‘set up shop’ in Kingdom: minister

RIYADH: Saudi Arabia has “a lot to offer” global players in the artificial intelligence sector looking to set up shop in the Kingdom, a top minister has insisted. 

Speaking during the World Economic Forum’s 15th Annual Meeting of the New Champions, also known as the Summer Davos, which opened in northeast China’s coastal city of Dalian on June 25, Faisal Al-Ibrahim, Saudi Arabia’s minister of economy and planning, affirmed that Saudi Arabia is focused on ensuring that the global transition toward these emerging technologies occurs equitably.

The Kingdom is making significant strides in the world of artificial intelligence in pursuit of its ambitious initiatives to position Saudi Arabia as a global leader in the field.

The National Strategy for Data and Artificial Intelligence, launched in 2020, is a cornerstone of these efforts, seeking to attract $20 billion in investments by 2030 and cultivate a workforce of 20,000 AI and data specialists.

“One thing we’re really keen on and we’ve been working with the forum recently on is global governance. The Kingdom recently joined the artificial intelligence governance alliance, we specifically launched an inclusivity initiative,” he said.

Highlighting the role that AI can play in either easing or alleviating global disparities, he added: “If AI isn’t going to be accessible by developing cultures or the whole world all together, the gap we have is from an economic point of view, from a capability point of view.

“Institutional capabilities are the reasons why economies become more complex, the reason why countries perform better, one of the main reasons, and if AI comes in and isn’t really accessible by everyone, then that is really a big challenge and can even exacerbate the challenges we live in.”

Featuring the theme “Next Frontiers for Growth,” the event, held from June 25 to 27, is gathering some 1,600 leading figures from the public and private sectors across nearly 80 countries and regions to jointly explore new drivers and pathways for global economic growth.

This year’s forum covers multiple key pillars, including “A New Global Economy, China and the World,” “Entrepreneurship in the Age of AI,” and “New Frontiers for Industries,” as well as “Investing in People,” and “Connecting Climate, Nature and Energy.”

In a dialogue session entitled “What do we expect from future growth?” Al-Ibrahim discussed the rapid growth of non-oil activities in Saudi Arabia since the launch of Vision 2030.

He said: “The Kingdom achieved the fastest economic growth rate for the year 2022 at 8.7 percent, and non-oil activities achieved 5.6 percent, and even today, the growth of non-oil activities remains strong, as non-oil activity constitutes 51 percent of the real gross domestic product. The Kingdom’s non-oil economy is larger than its oil economy.”

At the conclusion of his participation, the minister stressed the necessity of developing a comprehensive and integrated approach to addressing worldwide economic challenges, noting that by adopting international cooperation, innovation, and comprehensive solutions, the global community can effectively address some of these obstacles and mitigate their severity.

Saudi financial sector to grow bond offerings, investment minister reveals at London forum

Saudi financial sector to grow bond offerings, investment minister reveals at London forum
Updated 25 June 2024

Saudi financial sector to grow bond offerings, investment minister reveals at London forum

Saudi financial sector to grow bond offerings, investment minister reveals at London forum

RIYADH: Bond offerings in Saudi Arabia are set to expand with increased activity, highlighting significant growth opportunities in the Kingdom’s financial sector, according to the investment minister.

On the sidelines of the UK-Saudi Sustainable Infrastructure Summit in London on June 24, Khalid Al-Falih noted that despite the substantial and rapid growth in business opportunities in the Kingdom, certain aspects of the financial sector have not progressed fully, reported the Independent Arabia.

“Considering the size of the growth acceleration and its scope in business opportunities in Saudi Arabia, some aspects related to the financial sector have not fully evolved yet, especially in terms of penetration levels and trading of issued bonds. Bond offerings in Saudi Arabia should witness growth through increased activity. There are significant growth opportunities available in Saudi Arabia,” Al-Falih stated.

The minister emphasized that sustainable energy sources are a pivotal sector set for significant growth in the Kingdom, positioning the nation as a worldwide leader in competitive solutions, contributing to global economic growth.

Saudi Ambassador to the UK Prince Khalid bin Bandar said the relationship between Riyadh and London has “grown stronger over time and will continue to strengthen,” reported the Independent Arabia.

He added: “Our mission is to ensure that people living in Saudi Arabia, regardless of what is happening there today, continue to receive those opportunities.”

The ambassador further highlighted the expansive growth potential across all industries in the Kingdom, highlighting upcoming presentations about promising opportunities in the country.

“For example, if you look at the country's capacity for renewable energy, before launching the 2030 plan, it was very limited, and today we are doubling what we can offer year after year. By 2030, our goal is for 50 percent of our energy sources to be renewable, produced by clean energy,” Bandar said.

He continued: “This is just the beginning, and we will continue to do so in every area you can imagine, whether it's this topic or another. I think it makes our mission easy to know that there is always room for growth.”

According to the Independent Arabia, the ambassador further explained his perspective on investment opportunities in Saudi Arabia, saying that he learned from his days in the private sector the danger of being the one to “miss the boat.”

He continued: “I say that the promising investment opportunities in Saudi Arabia are making the boats flow, and they are getting bigger every day, and more ports are opening their arms. Yes, there are promising opportunities in Saudi Arabia. Some people might say ‘I can miss this boat and get on the next one,’ and I say ‘Why should you miss this boat?’ There are great opportunities in Saudi Arabia.”

He discussed the bright future ahead for the nation’s many industries, pointing out that they are now expanding, particularly in the financial sector.

“You can talk about these opportunities or go explore them in Saudi Arabia,” he said to the group of investors, reported the Independent Arabia.

Nadhmi Al-Nasr, CEO of Saudi Arabia’s $500-billion giga-project NEOM, said that the Kingdom is eager to strengthen its infrastructure-focused alliances with Britain.

Al-Nasr stated that NEOM is currently the largest sustainable region in the world and highlighted bold plans and objectives to become carbon neutral by 2030. He mentioned that NEOM will encompass 26,500 sq. km, which is the same area as Belgium.

“The United Kingdom has some of the most innovative green technology companies that embrace the circular economy and green, sustainable solutions. We look forward to integrating new and existing partnerships with our British funding, and we see that there are several great opportunities for both countries on the rise,” Al-Nasr said, as reported by the Independent Arabia.

Furthermore, the Lord Mayor of the City of London, Alderman Professor Michael Mainelli, said that “Vision 2030” represents a foundational strategy for economic and social transformation in Saudi Arabia.

“I have heard about 14 major projects, which are amazing, futuristic, and inspiring projects, along with a plan for important infrastructure initiatives worth $800 billion to double the size of Riyadh city over the next decade,” Mainelli said.

He underscored that “these giant projects will support major events that we will hear about, such as Saudi Arabia hosting Expo 2030 and the 23rd and 24th World Basketball Championships, and Miami Valley skiing holidays.”

Mainelli continued: “These diverse events will play a prominent role in the future, all of which are related to the ambition of building modern, reasonable, and sustainable cities, as evident from Saudi Arabia's embrace of new technologies such as hydrogen and artificial intelligence.”

The Lord Mayor of the City of London added that artificial intelligence and other technologies will propel Saudi Arabia toward net zero and broader climate goals.

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn
Updated 25 June 2024

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn

Bahrain’s NBB hires Goldman Sachs to explore merger worth $2.43bn

RIYADH: Bahrain’s national bank appointed Goldman Sachs as a financial adviser for its negotiation with top banking institutions regarding a potential merger deal between the two, a disclosure showed.

According to a statement by the body on the country’s stock exchange, National Bank of Bahrain – which currently holds a market capitalization of $3.25 billion – is in the process of appointing an advisor to conduct due studies and diligence related to its merger with rival Bank of Bahrain and Kuwait, known as BBK, which has a valuation of $2.43 billion.

The potential deal coincides with the recent surge of mergers and acquisitions in the region, where businesses and financial institutions within the Gulf Cooperation Council have increasingly favored pooling their resources to achieve operational efficiency and maximize profits.

In Saudi Arabia, for example, the total volume of mergers and acquisitions deals during the first quarter of 2024 reached $955 million, with the chemicals sector accounting for 52.4 percent of the total. 

NBB also appointed Freshfields Bruckhaus Deringer, a leading international law firm, as a legal advisor for the deal, according to the disclosure while BBK announced the selection of Citigroup Global Markets as its financial advisor.

This continues a trend in the region’s banking sector. Last year, Oman’s second-largest financial institute, Bank Dhofar, pursued a merger with its smaller rival, Ahli United Bank, creating a lender with just under $20 billion in assets.

These deals come as a testament to global rating agency Moody’s expectation in March of last year that banks in the GCC region will witness a rise in M&A activity, enabling future synergies and oil revenue divergences in the area. 

“Consolidation among GCC region banks brings scale to support the diversification of Gulf economies away from oil and benefits in revenue and cost synergies,” said Francesca Paolino, an analyst at Moody’s. 

The rating agency noted that this development would occur despite the region’s pre-existing strong bank financial fundamentals and modest over-banking level.  

It also said that the majority of Middle East M&A activities were concentrated in Saudi Arabia, the UAE, and Egypt, which collectively recorded 563 deals or 89 percent of the region’s total volume. 

Closing Bell: Saudi main index rises to close at 11,730.77

Closing Bell: Saudi main index rises to close at 11,730.77
Updated 25 June 2024

Closing Bell: Saudi main index rises to close at 11,730.77

Closing Bell: Saudi main index rises to close at 11,730.77

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Tuesday, gaining 33.73 points, or 0.29 percent, to close at 11,730.77.

The total trading turnover of the benchmark index was SR7.09 billion ($1.89 billion) as 169 of the stocks advanced, while 54 retreated. 

Similarly, the MSCI Tadawul Index gained 0.35 points, or 0.02 percent, to close at 1.470.96.

Meanwhile, the Kingdom’s parallel market Nomu lost 354.77 points, or 1.32 percent, to close at 26,423.10. This comes as 33 of the listed stocks advanced, while 26 retreated.

The best-performing stock of the day was Al-Rajhi Co. for Cooperative Insurance. The company’s share price surged 8.96 percent to SR180.

Other top performers include Bupa Arabia for Cooperative Insurance Co. as well as Sustained Infrastructure Holding Co., whose share prices rose 6.97 percent and 5.49 percent respectively. 

The worst performer was Ades Holding Co., whose share price dropped by 2.83 percent to SR21.3.

Other fallers were Miahona Co. as well as Saudi Manpower Solutions Co. and Qassim Cement Co, whose shares declined 2.56 percent and 2.4 percent respectively.

On the announcements front, United International Transportation Co., known as Budget Saudi’s shareholders, approved raising capital by issuing new shares in order to fully acquire Al Jazira Equipment Co. Ltd., known as AutoWorld. 

According to a Tadawul statement, the decision came during the extraordinary general meeting held on June 24.

Neft Alsharq for Chemical Industries began trading on the Nomu parallel market at SR3.6 per share and a total offering size of 5 million shares.

Furthermore, the Capital Market Authority, known as CMA, approved an application submitted by Arabian Mills Co. to float and list 15.39 million shares, or 30 percent of its capital, in an initial public offering on the main market.

The prospectus will be published ahead of the subscription start date, the market regulator said in a statement.

The CMA’s approval is valid for six months from the board’s resolution date, and will be deemed cancelled if the offering and listing of the company’s shares are not completed within this period, it added.

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  
Updated 25 June 2024

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  

Gulf luxury market set to soar on strong economic growth and consumer confidence: report  

RIYADH: The Gulf region’s luxury sector is growing twice as fast as the global industry, reaching $12.5 billion in 2023, driven by strong macroeconomics and flourishing tourism, a new report revealed.      

According to the findings by luxury goods retailer and distributor Chalhoub Group, further growth is anticipated, bolstered by projected robust economic reforms set to enhance the market due to high consumer confidence.   

In its analysis of the Gulf Cooperation Council luxury retail market, the group noted a positive outlook on the regional economy, reflected in consumers’ personal finances, with 93 percent of respondents claiming to be doing well financially.     

Jasmina Banda, chief strategy officer at Chalhoub Group, said: “The region’s luxury market is expected to continue its impressive growth trajectory, driven by strong macroeconomic fundamentals, a thriving tourism sector, and dynamic consumer behavior with 53 percent of GCC residents expressing optimism about the state of the economy.”    

In Saudi Arabia, 60 percent of respondents believe the economy is stronger, with 70 percent of affluent consumers reporting that the economy has improved over the past three months.     

Despite concerns about the rising cost of living, environmental factors, and geopolitical issues, GCC consumers predominantly express positive feelings, citing hopefulness, happiness, and confidence as their top emotions, the report added.    

Banda added: “This ongoing growth and dynamism is underpinned by numerous new openings including those of “new luxury” brands such as Zimmermann in Mall of Emirates and Jacquemus in Dubai Mall, pop-ups inside and outside of malls, and events happening across the region.”    

The UAE and Saudi Arabia are boosting the region’s growth with high-end fashion, luxury watches and jewelry, and prestige beauty products witnessing significant demand.    

Fashion, valued at $5.2 billion, leads as the largest sector within the GCC luxury market, closely followed by watches at $5.1 billion, according to the report by Chalhoub Group.

The high-end fashion segment alone grew by 10 percent in 2023, significantly outpacing the global average growth rate of 4 percent, and maintained strong momentum with a 7 percent increase in the first quarter of 2024, compared to the same quarter last year.     

The ultra-high-end and high-end segments, representing 86 percent of the total luxury fashion market, saw growth rates of 11 percent and 6 percent respectively from the previous year.  

The UAE has emerged as the leading market across all high-end fashion segments, including ultra-high-end, high-end, aspirational, and accessible luxury.   

This dominance is attributed to the Emirates’ tourism sector, the influx of high-net-worth individuals, and resilient local spending.  

The beauty category within the GCC is also experiencing robust growth. The sector saw a 15 percent year-on-year increase in 2023 and a further 10 percent rise in the first quarter of 2024.  

The UAE leads the market in prestige beauty, driven by strong domestic spending and healthy tourism, with Saudi Arabia following closely.   

Within the prestige beauty market, skincare has emerged as the leader in terms of growth, achieving a 30 percent increase.   

Mid-range and limited-distribution brands were the fastest-growing segments within skincare, while high-end and prestige brands grew at a slower pace.  

Fragrances remain the most purchased beauty product by females in the GCC, accounting for 48 percent of this market, followed closely by facial moisturizers and lip makeup.   

Key factors influencing beauty product purchases include good value for money, clean ingredients, and ease of use, the report stated.  

To enhance the shopping experience, consumers emphasize the importance of personalized services and convenience.  

According to the report, two-thirds of consumers actively seek guidance for fashion purchases, whether from personal stylists or in-store sales assistants. 

“The insights provided by Chalhoub Group highlight the GCC’s pivotal role in the luxury market’s evolution. With strong performance across various segments and countries, the region is poised for sustained growth and innovation in the years to come,” the report stated.  

Established in 1955, Chalhoub Group is a Dubai-based luxury goods retailer and distributor with eight owned brands and over 300 international brands.