Closing Bell: Saudi main index rose to close at 11,729

Closing Bell: Saudi main index rose to close at 11,729
The best-performing stock of the day was Rasan Information Technology Co. Shutterstock
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Updated 23 June 2024

Closing Bell: Saudi main index rose to close at 11,729

Closing Bell: Saudi main index rose to close at 11,729

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 231.04 points, or 2.01 percent, to close at 11,729.97.

The total trading turnover of the benchmark index was SR5.18 billion ($1.38 billion) as 79 of the stocks advanced, while 151 retreated.

Similarly, the Kingdom’s parallel market Nomu gained 71.63 points, or 0.27 percent, to close at 26,825.62. This comes as 32 of the listed stocks advanced while 36 retreated. 

Meanwhile, the MSCI Tadawul Index also gained 38.14 points, or 2.65 percent, to close at 1,475.68.

The best-performing stock of the day was Rasan Information Technology Co. The company’s share price surged 10.60 percent to SR53.20. 

Other top performers include ACWA Power Co. as well as Fawaz Abdulaziz Alhokair Co.

The worst performer was Batic Investments and Logistics Co., whose share price dropped by 5.81 percent to SR3.08. 

Other worst performers were Etihad Atheeb Telecommunication Co. as well as Saudi Manpower Solutions Co.

On the announcements front, Yanbu Cement Co. has announced the signing of a non-binding memorandum of understanding with Southern Province Cement Co. to evaluate the feasibility of merging the two companies.

According to a Tadawul statement, both firms will commence the process of due diligence, examining operational, technical, and financial as well as legal and actuarial aspects. 

They will also engage in non-binding discussions regarding the details of the terms and conditions for the proposed merger.

The MoU shall terminate upon the signing of the merger agreement by both companies or upon the expiration of 12 months from the date of its signing. It may also be extended with the approval of both firms jointly.

Additionally, either company may terminate the MoU by providing written notice to the other party in this regard.

Moreover, Edarat Communication and Information Technology Co. has announced the receipt of a letter of award from Almoammar Information Systems Co. to provide facility management support services for Sahayeb Data Centers.

A bourse filing revealed that, under the terms of the agreement, Edarat will provide support services, including managing, operating, and maintaining Sahayeb Data Centers located in Riyadh and Dammam, starting in the second quarter of 2024 and continuing until the end of 2025.

Riyadh office market thriving thanks to regional HQ initiative: Savills 

Riyadh office market thriving thanks to regional HQ initiative: Savills 
Updated 28 sec ago

Riyadh office market thriving thanks to regional HQ initiative: Savills 

Riyadh office market thriving thanks to regional HQ initiative: Savills 

RIYADH: The office market in Riyadh continued its strong performance in the second quarter of 2024, thanks to government investment incentives attracting international corporations to establish regional headquarters. 

According to the latest Saudi commercial market report by Savills, over 120 international companies relocated their regional headquarters to the Kingdom’s capital in the first quarter of this year, marking a 477 percent increase compared to the same period in 2023. 

The moves came after the Saudi government announced a range of benefits for those companies that set up Middle East bases in Riyadh, including a 30-year exemption from corporate income tax, withholding tax on headquarters activities, as well as discounts and support services. 

Ramzi Darwish, head of Saudi Arabia at Savills Middle East, said: “The Kingdom’s ongoing efforts to diversify its revenue streams and create an attractive business environment are proving successful, as evidenced by the high volume of international inquiries.”   

He added: “In the second quarter of 2024 alone, nearly 70 percent of inquiries received by Savills originated from outside Saudi Arabia, with a significant portion of 50 percent coming specifically from US and UK corporations.” 

This growth in leasing activity was driven by sectors such as technology, media and telecommunications, consulting and engineering, manufacturing, and IT, with 50 percent of transactions involving new entrants, reflecting a positive market sentiment for expansion.  

The British real estate consultancy firm noted that this trend is expected to persist, supported by a strong pipeline of inquiries for the remainder of the year. 

The report also noted that the increase in leasing activity in the capital led to rent prices in North and North-East Riyadh seeing annual increases of 23 percent and 20 percent, respectively. 

These price rises sit alongside foreign direct investment in the city rising 5.6 percent year-on-year in the first quarter of 2024. 

“Limited prime office space in Riyadh, coupled with strong business confidence, has driven Grade A occupancy as high as 98 percent, and rents are increasing steadily, rising by 3 percent quarter-over-quarter in Q2 and a significant increase of 13 percent year-on-year,” said Amjad Saif, head of transactional services at Savills in KSA. 

Savills noted that the city’s expanding market and promising economic prospects were attracting leading businesses from various industries, reinforcing Riyadh's role as a crucial hub for both regional and global commerce. 

It also noted that prominent companies such as PayerMax and Ernst & Young have established their regional headquarters in the Kingdom.  

Other notable firms include Northern Trust, Bechtel, and PepsiCo, as well as IHG Hotels & Resorts, PwC, and Deloitte. 

Riyadh office market 

The UK-based firm noted that limited prime office space in Riyadh drove Grade A occupancy rates to 98 percent by the end of the second quarter, with these facilities commanding higher rents due to their location, modern infrastructure, and newer construction. 

“This trend reflects a thriving office market in the Saudi capital. Fuelled by robust demand, however, a significant increase in Grade A office space supply is anticipated by the end of 2025. This anticipated influx of over 650,000 square meters of new space is expected to enhance tenant options and mitigate the potential for a supply shortage,” added Savills in the report.  

The analysis noted significant leasing activity in the second quarter of this year, led by engineering and manufacturing companies, followed by legal services and pharmaceutical firms. 

According to Savills, around 60 percent of leasing inquiries were focused on office spaces under 1,000 sq. meters, indicating a rising preference for agile and efficient work environments. 

Non-oil sector  

Savills noted that Saudi Arabia’s non-oil sector emerged as a key economic driver, expanding by 3.4 percent in the first quarter of 2024 compared to the same period last year.  

The firm pointed out that Saudi Arabia’s moderate inflation rate of 1.6 percent in May is a positive indicator for the non-oil business environment.  

Savills, citing data from S&P Global and Riyad Bank, added that the Purchasing Managers' Index remained steady in the expansionary zone at 56.4 in May, marking the 45th consecutive month above the neutral 50 threshold, which signals growth in the Kingdom’s private sector. 

The latest S&P Global report on July 3 revealed that the PMI stabilized at 55, driven by increased demand, higher output levels, and rising employment. 

In that report, Naif Al-Ghaith, chief economist at Riyad Bank, observed that the growth figures for the second quarter suggested a positive outlook for Saudi Arabia’s non-oil GDP, with expectations of growth surpassing 3 percent.  

He noted that the strong performance of non-oil sectors throughout the quarter continued to drive economic growth and diversification efforts in the country. 

In another report released earlier this month, Savills noted that Riyadh is projected to be among the top 15 fastest-growing cities by 2033, driven by a 26 percent population increase and ongoing government infrastructure spending. 

The analysis highlighted that Riyadh is the only non-Asian city on the list, with its growth attributed to a population surge from 5.9 million to 9.2 million over the next decade. 

In May, S&P Global also indicated that the establishment of free economic zones and the regional headquarters program could further boost foreign direct investment inflows into the Kingdom. 

Closing Bell: Saudi main index steady at 12,101.21

Closing Bell: Saudi main index steady at 12,101.21
Updated 37 min 46 sec ago

Closing Bell: Saudi main index steady at 12,101.21

Closing Bell: Saudi main index steady at 12,101.21

RIYADH: Saudi Arabia’s Tadawul All Share Index was steady on Wednesday, as it shed just 4.33 points or 0.04 percent to close at 12,101.21.

The total trading turnover of the benchmark index was SR6 billion ($1.60 billion) with 108 of the listed stocks advancing, while another 108 declining. 

The Kingdom’s parallel market showcased a positive performance, as it gained 173.13 points to close at 26,337.13. 

The MSCI Tadawul Index marginally shed 0.05 points to 1,512.89.

Kingdom Holding Co. was the best-performing stock of the day, as the firm’s share price surged by 8.52 percent to SR8.53. 

Other top performers on the main index were the Mediterranean and Gulf Insurance and Reinsurance Co. and Amlak International Finance Co., whose share prices soared by 6.71 percent and 5.36 percent, respectively. 

The worst performer of the day was Arabian Contracting Services Co., as its share price declined by 3.14 percent to SR228.60. 

Share prices of Dr. Soliman Abdel Kader Fakeeh Hospital Co. and Modern Mills for Food Products Co., also slipped by 3.04 percent and 2.62 percent, respectively. 

The positive performance of Nomu was driven by Clean Life Co., with its share price edging up by 12.90 percent to SR105. 

The share prices of Naba Alsaha Medical Services Co. and Qomel Co. – both listed on the parallel market – also increased by 10 percent and 5.76 percent, respectively. 

The worst performer on Nomu was Alhasoob Co., which saw its share price edge down by 5.79 percent to SR50.40. 

Other losers on the parallel market were Marble Design Co. and Al Rashid Industrial Co., whose share prices slipped by 5.56 percent and 4.86 percent, respectively. 

On the announcements front, Sure Global Tech Co. said that it received a contract worth SR13.97 million from Saudi Arabia’s Research, Development and Innovation Authority. 

In a press statement, the company revealed that the scope of the contract includes establishing and developing a national electronic platform for RDIA to manage and support the authority’s research, development and innovation. 

The three-year project aims to create and develop a national e-platform for research management that considers the requirements of digital government, Sure Global Tech added. 

Saudi minister targets food production localization and aviation cooperation during Brazil visit

Saudi minister targets food production localization and aviation cooperation during Brazil visit
Updated 52 min 29 sec ago

Saudi minister targets food production localization and aviation cooperation during Brazil visit

Saudi minister targets food production localization and aviation cooperation during Brazil visit

RIYADH: Food production localization and aviation were areas of focus as a senior Saudi minister met with leading Brazilian companies during a trip to the South American country.

The Kingdom’s Minister of Industry and Mineral Resources, Bandar AlKhorayef, held talks with executives from Minerva Foods and JBS, which are prominent in the red meat and poultry sectors. 

The discussions aimed to explore opportunities for localizing food production within Saudi Arabia, transferring knowledge and innovations, and examining the latest advancements in modern manufacturing technologies. 

In a separate meeting, AlKhorayef spoke with a top official from Brazilian aviation company Embraer.

The visits highlight Saudi Arabia’s strategic effort to enhance production capabilities by fostering international partnerships and utilizing advanced manufacturing technologies.

It aligns with the Kingdom’s broader vision to diversify its economy and develop robust, sustainable industries in collaboration with global leaders. 

During the visit to Minerva Foods’ facilities, the minister reviewed advanced manufacturing technologies and discussed potential investment opportunities with company officials, according to the Saudi Press Agency. 

Minerva Foods is a notable player in the Saudi market, where imports, particularly red meat, account for 25 percent of the industry. The Saudi Agricultural and Livestock Investment Co., also known as SALIC, is a major investor in Minerva, holding a 33.8 percent stake. 

SALIC acquired a 19.5 percent stake in 2016 for $210 million, increasing its investment through additional purchases in 2018 and 2020, totaling $204 million. 

The minister also met with Gilberto Tomazoni, CEO of JBS, one of the world’s largest meat and poultry producers known for developing cultivation and production technologies.

JBS is currently establishing a food factory in Jeddah under the Seara brand, with an investment of up to SR500 million ($133.29 million). The facility is expected to start operations by the end of this year, aiming to address the food needs of the Saudi market. 

The partnerships with Minerva Foods and JBS underscore the Kingdom’s dedication to ensuring a stable food supply while attracting foreign investment and expertise to its growing food industry, the SPA report added. 

The minister’s visit to meat production facilities came after he met with leading Brazilian pharma companies to discuss enhancing the localization of vaccines and pharmaceuticals, leveraging the country’s expertise. 

During his discussions, AlKhorayef emphasized the potential for collaboration, highlighting the sector’s importance to Saudi Arabia’s National Industrial Strategy.

AlKhorayef also engaged in discussions with Dimas Douglas Tomlin, executive vice president of strategy and innovation at Brazilian aviation company Embraer.

The dialogue was centered on enhancing cooperation in the sector and localizing its operations within the Kingdom, a release by the ministry said. 

They further explored ways to strengthen collaboration between Saudi Arabia and Embraer, leveraging the Brazilian company’s expertise in aircraft manufacturing, assembly, and maintenance. 

This initiative is part of the Kingdom’s broader efforts to diversify its economy and develop new, advanced industries, aligning with the national strategy that targets 12 sectors, including aviation.

During his visit, the minister toured several of Embraer’s key facilities, including the Ozires Silva, Eugenio de Melo, and Gavião Peixoto sites. 

Interaction between the Kingdom and the Brazilian company began during the Saudi-Brazilian Aviation Forum in 2023. 

In May 2024, Embraer, the Kingdom’s National Industrial Development Center, and business conglomerate AHQ Group signed a memorandum of understanding to enhance the aviation ecosystem in Saudi Arabia. 

This partnership aims to adopt Embraer aircraft, foster technological cooperation, and develop the supply chain.

Turkiye, Saudi Arabia end $5bn deposit agreement

Turkiye, Saudi Arabia end $5bn deposit agreement
Updated 10 min 53 sec ago

Turkiye, Saudi Arabia end $5bn deposit agreement

Turkiye, Saudi Arabia end $5bn deposit agreement
  • Decision is expected to improve Turkiye’s external liabilities by approximately $7 billion
  • it aims to lower the country’s external liabilities

RIYADH: Turkiye has terminated a $5 billion deposit agreement made with the Saudi Fund for Development as part of a review of its reserve management strategy.

The decision to end the arrangement, finalized with Saudi authorities, is expected to improve Turkiye’s external liabilities by approximately $7 billion through the reduction of deposit balances, according to the country’s central bank.

The original deal was signed off in March 2023, and was intended to provide crucial financial support to the Turkish economy as it grappled with the aftermath of devastating earthquakes and high inflation rates. 

The country’s central bank announced the agreement had been ended as part of a reassessment of Turkiye’s international deposit transactions in a bid to lower its external liabilities.

International reserves are readily available assets controlled by countries’ monetary authorities that can be used for international payments and converted into other currencies, the bank said.

When the deal was initially reached, the Saudi Fund for Development described it as not only underscoring the strong historical ties and cooperation between the two nations, but also showcasing the Kingdom’s commitment to bolstering Turkiye’s economic stability.

Turkiye has been working to strengthen its economic and business relationships with Gulf nations, including the UAE and Saudi Arabia, as part of its strategy to attract foreign currency inflows. 

On March 3 2023, Turkiye and the UAE signed a comprehensive economic partnership agreement to cut 93 percent of tariffs on non-oil trade and increase bilateral trade from $19 billion to $40 billion in the next five years.

Turkiye has struggled with a shortage of international reserves and high inflation rates, impacting living costs. 

In 2022, the Turkish lira depreciated by 30 percent against the dollar, exacerbated by soaring energy prices following Russia’s invasion of Ukraine.

Turkiye is the 17th largest economy in the world, according to the International Monetary Fund, with a GDP of $1.024 trillion as of 2023.

In February 2023, the country contended with the aftermath of severe earthquakes which caused significant casualties, damage, and displacement, with recovery needs estimated at $81.5 billion.

Following the May 2023 elections, Ankara’s new economic team has aimed to address inflation and macroeconomic imbalances. 

The economy grew 4.5 percent in 2023 but is expected to slow to 3 percent this year.

Addressing long-term issues like high inflation, low productivity, and weak foreign investment “would require robust fiscal measures and ambitious structural reforms to help accelerate sustainable economic growth,” the World Bank said earlier in April.

Dubai’s economy grows 3.2%, driven by financial, trade and transport sectors

Dubai’s economy grows 3.2%, driven by financial, trade and transport sectors
Updated 24 July 2024

Dubai’s economy grows 3.2%, driven by financial, trade and transport sectors

Dubai’s economy grows 3.2%, driven by financial, trade and transport sectors
  • Transportation, storage, financial and insurance activities sectors each posted a growth rate of 5.6%
  • Trade sector recorded a 3% increase

RIYADH: Dubai’s economy saw 3.2 percent year-on-year growth in the first quarter of 2024, with its gross domestic product reaching 115 billion dirhams ($31.3 billion). 

The transportation and storage industry, as well as the financial and insurance activities sector, each posted a growth rate of 5.6 percent, while the trade sector recorded a 3 percent increase. 

This comes as Dubai’s economy continues its upward trajectory, with significant growth across key sectors, reflecting the government’s strategic agenda to enhance the emirate’s global economic standing and attract foreign investment. 

Dubai’s Crown Prince Sheikh Hamdan bin Mohammed Al-Maktoum said the latest GDP figures cement the fact that the emirate showcases robust economic indicators, the Emirates News Agency, also known as WAM, reported. 

“Dubai is progressing in accordance with a clear vision whose foundations were laid down and whose goals were defined by His Highness Sheikh Mohammed bin Rashid Al-Maktoum. What we witness today is a practical reflection of this vision, which has placed Dubai among the leading economic and commercial centers of the world,” said Sheikh Hamdan. 

He added that the accomplishments of the emirate underscore the collaborative endeavors and teamwork of diverse stakeholders in achieving the goals set out in the emirate’s comprehensive development plans for 2033. 

The government’s plans include the Dubai Economic Agenda and Dubai Social Agenda 2033, both aimed at elevating overall well-being and quality of life, while strengthening the emirate’s position as a leading global economic hub and enhancing its appeal as a destination for foreign investments. 

“Dubai’s ambition is limitless, and its success story will remain a role model for cities wishing to create a promising future for their coming generations. Our goal is to sustain success and establish a culture of excellence and leadership across all sectors in the emirate to preserve these gains and move toward new horizons of excellence,” he added. 

Other sectors also contributed to the overall economic expansion, with the information and communications sector rising by 3.9 percent, the accommodation and food services sector increasing by 3.8 percent, and the real estate sector seeing growth of 3.7 percent.

Helal Saeed Almarri, director-general of the Department of Economy and Tourism said: “Dubai’s impressive quarterly growth performance underscores the sustained momentum and confidence within its dynamic business ecosystem, reflecting the robust diversification of our economic foundations.”

He added that initiatives such as the Foreign Direct Investment Development Program and the implementation of the Dubai Economic Model to monitor the city’s advancement will further help fuel the economy’s output.

“These measures will enhance collaboration between public and private sector stakeholders, propelling Dubai toward its goal of achieving top global status for economic growth and becoming a prime destination for business, talent, and investment,” Almarri further said.

In 2023, Dubai’s GDP reached approximately 429 billion dirhams, marking an annual increase of 3.3 percent.