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  
Fragrances remain the most purchased beauty product by females in the GCC. Shutterstock
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Updated 25 June 2024
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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.  


Global AI Summit in Riyadh to host top-level discussions on AI impact 

Global AI Summit in Riyadh to host top-level discussions on AI impact 
Updated 21 July 2024
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Global AI Summit in Riyadh to host top-level discussions on AI impact 

Global AI Summit in Riyadh to host top-level discussions on AI impact 
  • The event, organized by the Saudi Data and AI Authority, will focus on one of today’s most pressing global issues — AI technology

RIYADH: Saudi Arabia will welcome economic policymakers, major technology and artificial intelligence companies, international thought leaders, and heads of international organizations to Riyadh this September as the Global AI Summit returns for its third edition.

The event, organized by the Saudi Data and AI Authority, will focus on one of today’s most pressing global issues — AI technology — and will attempt to find solutions that “maximize the potential of these transformative technologies for the benefit of humanity,” a statement released Sunday said.

The third edition of the event will be held at the King Abdulaziz International Conference Center from Sept. 10 to 12 under the patronage of Saudi Crown Prince Mohammed bin Salman in his capacity as chairman of the board of directors at SDAIA, the statement added.

The GAIN Summit will take place amid increasing concerns about the impact of AI technologies and will reaffirm the Kingdom’s commitment to supporting international efforts aimed at enhancing human welfare in the face of the challenges associated with developing technology.

GAIN 2024 will focus more on AI than its previous editions in 2020 and 2022, with topics including innovation in the sector, key developments shaping a better future for AI, and fostering a supportive environment for human resources in the field.

Other topics include AI at local and global levels, the complementary relationship between humans and AI, business leaders in AI, the relationship between data and applications, GenAI, AI ethics, AI processors and infrastructure, and AI and smart cities.


Saudi industry minister to visit Brazil, Chile to explore lithium production

Saudi industry minister to visit Brazil, Chile to explore lithium production
Updated 21 July 2024
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Saudi industry minister to visit Brazil, Chile to explore lithium production

Saudi industry minister to visit Brazil, Chile to explore lithium production
  • Alkhorayaf will land in Brazil on Monday and leave for Chile, the world’s second-largest producer of lithium, next Sunday

RIYADH: Bandar Alkhorayaf, Saudi Arabia’s mining and industry minister, will visit Brazil and Chile this week, the ministry said on Sunday.

In Brazil, he will hold meetings with officials to discuss expanding the Kingdom’s mining capacity, food processing, and aviation, while in Chile he will explore lithium production, needed for electric vehicle batteries.

“This aligns with the Kingdom’s direction towards expanding the production of EVs,” a Saudi government statement said. 

Alkhorayaf will land in Brazil on Monday and leave for Chile, the world’s second-largest producer of lithium, next Sunday.

On the first leg of the tour in Brazil, Alkhorayaf will meet agricultural and industrial groups, including Minerva Foods, JBS, and BRF SA, as well as the Brazilian Mining Association and mining company Vale.

Brazil’s Energy Minister Alexandre Silveira said last month that Saudi Arabia’s Public Investment Fund plans to invest $15 billion in Brazil in areas such as green hydrogen, infrastructure, and renewable energy.

In Chile, the minister will meet his counterpart Aurora Williams, as well as mining companies Antofagasta, and Codelco, a state-run company tasked with bringing the Chilean government into the lithium industry.

Saudi Arabia’s sovereign wealth fund, the PIF, and the Kingdom’s mining company, known as Ma’aden, which is 67 percent owned by the PIF, formed a joint venture called Manara Minerals to invest in mining assets abroad.


Closing Bell: Saudi main index closes in green at 12,195  

Closing Bell: Saudi main index closes in green at 12,195  
Updated 21 July 2024
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Closing Bell: Saudi main index closes in green at 12,195  

Closing Bell: Saudi main index closes in green at 12,195  

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 6.73 points, or 0.06 percent, to close at 12,195.05.   

The total trading turnover of the benchmark index was SR6.12 billion ($1.63 billion), as 74 of the listed stocks advanced, while 154 retreated.   

The MSCI Tadawul Index also closed in green, gaining 2.46 points, or 0.16 percent, to close at 1,529.46.   

The Kingdom’s parallel market Nomu rose 67.8 points, or 0.26 percent, to close at 25,770.14. This comes as 27 of the listed stocks advanced while as many as 34 retreated.   

The best-performing stock of the day was Saudi Manpower Solutions Co., whose share price surged 9.88 percent to SR10.34. 

Other top performers include Maharah Human Resources Co. as well as Al-Baha Investment and Development Co., whose share prices soared by 8.35 percent and 8.33 percent, to stand at SR6.88 and SR0.13, respectively.   

The worst performer was Electrical Industries Co., whose share price dropped by 5.51 percent to SR6.00.    

Other notable declines included Alinma Hospitality REIT Fund and The Mediterranean and Gulf Insurance and Reinsurance Co., with share prices falling 3.38 percent to SR8.29 and 3.25 percent to SR29.80, respectively. 

On the announcement front, Saudi Tadawul Holding Co. reported a profit increase to SR146 million for the second quarter of 2024, reflecting a 55 percent rise from SR105.2 million in the same period last year.  

The company attributed this growth to a 50.3 percent increase in operating revenues, which reached SR741.1 million in the first half of 2024, up from SR493.0 million in the corresponding period of the previous year. 

According to a release on the bourse, Saudi Arabian Amiantit Co. reported a net profit of SR5.11 million for the second quarter of 2024, reversing a net loss of SR10.08 million from the same quarter last year, marking a 150.7 percent improvement.  

This positive shift was attributed to a 17.4 percent increase in revenue due to expanded sales and a higher volume of new orders. 

Kingdom Holding Co., Sumou Holding Co., and Jeddah Economic Co. have signed an agreement to establish a new SR6.8 billion fund to acquire the Alinma Jeddah Economic Fund, currently fully owned by Jeddah Economic Co. Kingdom Holding Co. will hold a 40 percent stake in the new fund. 


Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn

Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn
Updated 21 July 2024
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Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn

Saudi Arabia’s US treasury bond possession increases 22.46% year-on-year to $136.3bn

RIYADH: Saudi Arabia’s possession of US treasury bonds increased to $136.3 billion in May, compared to $111.3 billion for the same month in 2023.

The figures mark a 22.46 percent year-on-year increase.

Data released by the US Treasury Department placed Saudi Arabia in 17th spot among the largest investors in such financial instruments in May.

The report revealed that the Kingdom held bonds valued at $135.4 billion in April, compared to $135.9 billion and $131.1 billion in March and February, respectively.

The figures illustrate Saudi Arabia’s growing influence in international financial markets, highlighting a keen understanding of leveraging sovereign wealth to secure and strengthen the Kingdom’s global economic position.

Moreover, Saudi Arabia is the only Arab and Middle Eastern country among the top 20 major holders of US Treasury securities.

A report published in January by the Saudi Central Bank, also known as SAMA, revealed that its investments in foreign securities stood at $1 trillion at the end of December 2023.

SAMA also has $361.75 billion as deposits with banks abroad, the report added.

The data analysis also revealed that Japan emerged as the largest investor in US bonds in May, with holdings totaling $1.128 trillion. China and the UK followed, with portfolios valued at $768.3 billion and $723.4 billion, respectively. 

Luxembourg claimed the fourth spot with assets valued at $385.4 billion, while Canada and the Cayman Islands secured the fifth and sixth positions with treasury portfolios worth $354.5 billion and $336.5 billion, respectively. 

Ireland attained seventh spot with treasury reserves worth $317.7 billion, followed by Belgium and Switzerland, with assets amounting to $313 billion and $290.4 billion, respectively.

France held the 10th position with treasury assets amounting to $283 billion, while Taiwan and India occupied 11th and 12th places with portfolios worth $263.3 billion and $237.8 billion, respectively.

The data collected is primarily from US-based custodians and broker-dealers. Since American securities held in overseas accounts may not be attributed to the actual owners, the department said, the data may not provide a precise accounting of individual country ownership of treasury securities.


Saudi capital market systems prove resilient during global tech outage

Saudi capital market systems prove resilient during global tech outage
Updated 21 July 2024
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Saudi capital market systems prove resilient during global tech outage

Saudi capital market systems prove resilient during global tech outage

RIYADH: Saudi Arabia’s capital market systems proved resilient during the global technical outage on July 19, which disrupted flights, broadcasting services, and essential services worldwide. 

The Saudi Capital Market Authority stated that it promptly coordinated with market stakeholders to mitigate the effects of the interruption, ensuring that operations remained unaffected.  

According to the CMA, its systems were fully operational and prepared to support investors during the trading sessions on July 21.

The outage, triggered by a software update from cybersecurity firm CrowdStrike, caused widespread disruptions across various sectors. 

In response, the CMA directed listed companies on the Saudi capital market to disclose any significant developments related to the incident. The market regulator emphasized that its technical teams are monitoring systems around the clock to ensure ongoing stability and business continuity. 

The Saudi Exchange also reassured investors of its system’s reliability and readiness to provide continuous service. 

On July 20, Saudi Arabia’s National Cybersecurity Authority stated that the impact of the outage on the Kingdom was limited. The authority also noted that it has implemented exceptional measures to monitor threats and cyber risks and to respond to any incidents. 

The Saudi Central Bank confirmed that its payment and banking infrastructure remained unaffected by the outage, emphasizing its adherence to international cybersecurity and operational standards.  

The apex bank also highlighted its commitment to regularly updating precautionary measures to ensure effective business continuity and the resilience of its banking and payment systems. 

The Saudi Data and Artificial Intelligence Authority also stated that its systems and those it hosts in the Kingdom were not impacted by the global technical failure. 

“SDAIA confirms that its systems and the national systems hosted by it in the Kingdom are not affected by the technical failure that struck most countries of the world today,” it stated in a statement posted on X. 

The incident has sparked renewed discussions about the importance of cybersecurity and resilience in critical infrastructure, with many organizations reassessing their strategies and safeguards to prevent future disruptions.

The Kingdom’s Vision 2030 underscores a robust commitment to advancing cybersecurity, with strategic investments aimed at enhancing digital infrastructure and safeguarding national assets against emerging cyber threats.