Saudi perfume maker Al Majed Oud to offer 30% of shares in IPO on Tadawul

Saudi perfume maker Al Majed Oud to offer 30% of shares in IPO on Tadawul
The company offers over 650 products across 132 brands through 286 stores. Al Majed for Oud
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Updated 19 August 2024
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Saudi perfume maker Al Majed Oud to offer 30% of shares in IPO on Tadawul

Saudi perfume maker Al Majed Oud to offer 30% of shares in IPO on Tadawul
  • IPO will offer a maximum of 7.5 million shares
  • Of these, 2.25 million will be allocated to public funds

RIYADH: Saudi perfume manufacturer Al Majed for Oud Co. plans to launch an initial public offering on the Kingdom’s main stock market, releasing 30 percent of its issued share capital. 

A company statement revealed that the IPO will offer a maximum of 7.5 million shares. Of these, 2.25 million will be allocated to public funds.

The shares, which will be listed and traded on the Main Market of the Saudi Exchange, include 20 percent — or 1.5 million shares — reserved for retail investors. 

This move will help the firm raise capital, enhance share valuation, and reduce capital while maintaining corporate identity and improving its reputation to attract and retain employees. 

This comes as the fragrance market is expanding rapidly due to rising consumer preferences, higher disposable incomes, tourism growth, and increased digital adoption. 

According to a market study by Euromonitor International, the Saudi fragrance market is projected to increase at an 11.3 percent compound annual growth rate from 2023 to 2027, reaching SR13.4 billion ($3.57 billion) by 2027. 

This will be driven by increasing disposable incomes, women’s empowerment, and tourism, including Hajj and Umrah. 

Majed Ali Othman Al-Majed, chairman of Al Majed for Oud, said: “For over six decades, Al Majed for Oud has grown to become a major player in the regional oud and perfume industry. Our dedication to tradition and quality has allowed us to earn the trust and loyalty of our customers.” 

He added: “As we prepare to list on the Saudi Exchange, we are poised to begin a new chapter that integrates our rich legacy with innovation and strategic expansion.” 

One of the leading players in the Kingdom’s oud and perfume market, the company is expanding within the Gulf Cooperation Council region and offers over 650 products across 132 brands through 286 stores as of Dec. 31, 2023. 

It reported a 30.4 percent revenue increase in 2023, with revenues rising from SR442.5 million in 2021 to SR767 million in 2023, reflecting a 31.7 percent CAGR. Its profit margin improved to 66.6 percent in 2023, up from 61.7 percent in 2021. 

“This listing is driven by a strategic ambition to diversify our investor base and strengthen our business operations to accelerate our growth and expansion strategy both locally and internationally,” said Waleed Al-Majed, managing director and CEO at Al Majed for Oud. 

The intention to list Al Majed for Oud Co. on the Saudi Exchange comes as the Kingdom’s IPO market continues to expand. 

A PwC report from May highlighted Tadawul’s leading role in GCC IPOs, with the primary market hosting three offerings that raised $667 million and the secondary market generating $57 million from six deals. 


Closing Bell: Saudi main index slips to close at 11,769

Closing Bell: Saudi main index slips to close at 11,769
Updated 06 October 2024
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Closing Bell: Saudi main index slips to close at 11,769

Closing Bell: Saudi main index slips to close at 11,769
  • Parallel market Nomu lost 259.40 points, or 1.04%, to close at 24,655.96
  • MSCI Tadawul Index lost 22.10 points, or 1.48%, to close at 1,474.92

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 188.50 points, or 1.58 percent, to close at 11,769.04.

The total trading turnover of the benchmark index was SR6.20 billion ($1.65 billion), as 19 of the stocks advanced and 213 retreated. 

The Kingdom’s parallel market Nomu lost 259.40 points, or 1.04 percent, to close at 24,655.96. This comes as 17 of the listed stocks advanced while 48 retreated. 

The MSCI Tadawul Index lost 22.10 points, or 1.48 percent, to close at 1,474.92. 

The best-performing stock of the day was Al-Baha Investment and Development Co., whose share price rose 7.14 percent to SR0.30. 

United Wire Factories Co. and Kingdom Holding Co. were among the other top performers.

The worst performer was Saudi Ceramic Co., whose share price dropped 7.26 percent to SR28.75. 

Other worst performers were Elm Co. and Arab Sea Information System Co.

Announcements

Almarai Co. has announced its interim condensed consolidated financial results for the period ending on Sept. 30. According to a Tadawul statement, the firm recorded a net profit of SR1.88 billion in the first nine months of the year, reflecting a 12.15 percent surge compared to the same period in 2023.

The increase in consolidated profits attributable to the company’s shareholders in the current period compared to last year is due to higher revenue growth, disciplined cost control, a favorable product mix, and stabilized commodity costs.

Al-Etihad Cooperative Insurance Co. has announced that it is signing a contract with the Ministry of Human Resources and Social Development to ensure the financial dues of non-Saudi workers in the private sector per the agreed terms and conditions and the insurance policy approved by the Insurance Authority.

A bourse filing revealed that the one-year SR391 million contract provides insurance coverage for the financial dues of non-Saudi workers in the delinquent entities of the private sector, in cooperation with several Saudi insurance and reinsurance companies, and in accordance with the agreed terms and conditions for one year. This will commence from the date of signing the agreement with the Ministry of Human Resources and Social Development and after obtaining the final approval of the Insurance Authority.

The policy represents the cooperation between the Ministry of Human Resources and Social Development and the Insurance Authority to protect the financial rights of non-Saudi workers in delinquent entities according to the ministry’s classification.

The insurance cover includes wages, unpaid dues, and a return ticket to the worker’s home country within the agreed-upon cover limits and following an agreed set of terms and conditions.

It is expected that the financial impact of this agreement will be reflected in the company’s financial performance starting from the fourth quarter of the year.


EVIQ, Ceer partner to enhance Saudi EV infrastructure

EVIQ, Ceer partner to enhance Saudi EV infrastructure
Updated 06 October 2024
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EVIQ, Ceer partner to enhance Saudi EV infrastructure

EVIQ, Ceer partner to enhance Saudi EV infrastructure
  • Initiative will establish a comprehensive charging network to support widespread electric vehicle adoption
  • Kingdom aims to convert 30% of vehicles in Riyadh to electric by 2030

JEDDAH: Saudi Arabia’s Electric Vehicle Infrastructure Co., EVIQ, has formed a strategic partnership with the Kingdom’s first EV brand, Ceer, to expand the nation’s charging infrastructure and promote sustainability. 

EVIQ, a joint venture between the Public Investment Fund and the Saudi Electricity Co., aims to bolster the electric vehicle ecosystem by collaborating with manufacturing brands and local partners to implement installation and maintenance operations.  

This initiative will establish a comprehensive charging network to support widespread electric vehicle adoption. 

EVIQ CEO Mohammad Baker Gazzaz highlighted the agreement’s significance in supporting the electric vehicle sector in Saudi Arabia.   

“This partnership will help encourage the wider adoption of electric vehicles, making them a seamless and convenient choice for drivers in the Kingdom. We look forward to fruitful cooperation with Ceer to achieve a more environmentally friendly and sustainable future for the Kingdom.” 

Saudi Arabia aims to convert 30 percent of vehicles in Riyadh to electric by 2030, part of a larger strategy to cut emissions in the capital by 50 percent and achieve carbon neutrality by 2060.  

The Kingdom is also targeting the production of approximately 300,000 vehicles by 2030, seeking a 50 percent share of car sales in the Gulf Cooperation Council countries by 2025. 

Ceer CEO James DeLuca emphasized that the partnership extends beyond building an electric vehicle industry. “We are also committed to providing an exceptional experience for electric vehicle owners in the Kingdom. We are pleased to partner with EVIQ to ensure a comfortable and seamless driving experience for electric vehicles in the Kingdom,” he said.   

The partnership signifies a major step toward realizing the Kingdom’s vision of developing an automotive industry and promoting sustainable transportation.  

By aligning Ceer’s commitment to advanced Saudi electric vehicles with EVIQ’s goals of building an effective network, this collaboration paves the way for a smooth transition to electric mobility. 

Last year, EVIQ announced plans to install over 5,000 fast chargers across 10,000 locations throughout the Kingdom.  

This strategic initiative not only enhances Saudi Arabia's electric vehicle infrastructure but also aligns with broader economic and environmental objectives, paving the way for a sustainable future and diversified economy. 

Ceer is investing significantly in research and development to produce competitive electric vehicles, with government support through incentives and regulations designed to foster industry growth. 


Saudi Arabia secures over half of MENA startup funding in September

Saudi Arabia secures over half of MENA startup funding in September
Updated 06 October 2024
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Saudi Arabia secures over half of MENA startup funding in September

Saudi Arabia secures over half of MENA startup funding in September
  • Investors express confidence in Saudi entrepreneurial talent by pouring $165 million into 13 firms
  • Fintech emerged as the leading sector in September, attracting $134.84 million

RIYADH: The startup ecosystem in the Middle East and North Africa is experiencing significant growth, with Saudi Arabia emerging as a key driver of funding activity.

According to a recent report by Rasmal, MENA startups raised a total of $328.3 million across 60 companies in September, reflecting increasing investor confidence in the region’s entrepreneurial talent.

This surge in funding highlights MENA’s expanding role in the global startup landscape, fueled by government initiatives and a rising appetite for risk and innovation in the private sector.

Saudi Arabia led the regional funding efforts, securing $165.34 million across 13 startups — accounting for more than half of the total capital raised in MENA. This significant investment underscores the Kingdom’s strategic economic diversification goals outlined in Vision 2030, which aims to reduce dependence on oil and foster growth in technology and innovation sectors.

Cities like Riyadh and Jeddah are emerging as key startup hubs, supported by government initiatives and increasing private investment that contribute to a robust ecosystem for entrepreneurial growth.

Government programs, including the Public Investment Fund and various venture-focused initiatives, have been instrumental in driving this transformation. The Saudi government’s proactive stance has attracted private investment, with venture capital firms, accelerators, and incubators keen to nurture local talent.

FASTFACTS

  • MENA startups raised $328.3 million across 60 companies in September.
  • Saudi cities like Riyadh and Jeddah are emerging as key startup hubs supported by government initiatives.
  • The UAE has emerged as another significant player in the MENA startup ecosystem, raising $114.32 million across 28 companies.
  • Egypt attracted $25.09 million, primarily focused on technology and innovation sectors.
  • Countries like Bahrain, Oman, and Morocco are also gaining investor interest, albeit on a smaller scale compared to regional leaders.

These efforts are fostering an enabling environment for startups across diverse industries such as technology, logistics, healthcare, and energy, laying the foundation for sustainable long-term growth.

The UAE has emerged as another significant player in the MENA startup ecosystem, raising $114.32 million across 28 companies. Dubai, in particular, continues to attract investors due to its business-friendly policies and status as a global gateway.

In September, sectors like fintech, e-commerce, and property technology saw substantial investments, reinforcing the UAE's commitment to becoming a leader in financial technology. Initiatives such as the Dubai International Financial Centre Innovation Hub have been pivotal in attracting both funding and talent to the region.

This growth underscores the UAE’s efforts toward economic diversification, reducing dependence on oil and positioning itself as a resilient, innovation-driven economy. The variety of sectors receiving investments further highlights the country’s comprehensive growth strategy to build a sustainable and diversified future.

While Saudi Arabia and the UAE led the funding landscape, other countries in the region also showed promise. Egypt attracted $25.09 million, primarily focused on technology and innovation sectors.

Cairo’s startup ecosystem has benefited from government initiatives designed to support small and medium enterprises, providing essential infrastructure for early-stage companies. This growth occurs amid significant economic challenges, as Egypt faces turbulence due to weakening monetary policies.

Countries like Bahrain, Oman, and Morocco are also gaining investor interest, albeit on a smaller scale compared to regional leaders. Bahrain’s emphasis on fintech and Oman’s investments in logistics and e-commerce signal these nations’ intent to establish their presence in the regional ecosystem. However, challenges remain in countries like Iraq and Kuwait, where political instability and regulatory barriers hinder the attraction of venture capital, resulting in an uneven distribution of funding across the region.

According to the Rasmal report, fintech emerged as the leading sector in September, attracting $134.84 million. This strong focus underscores the region's rapid adoption of digital financial solutions and the increasing demand for technology-driven banking services. Governments and businesses are prioritizing financial inclusion, which is driving further growth in the sector.

Logistics technology also attracted significant attention, driven by the ongoing e-commerce boom. As consumer preferences shift toward online shopping, the need for efficient supply chain solutions has grown. SHIFT, a logistics technology company, secured the largest investment of the month with $83 million, highlighting the growing importance of infrastructure to support e-commerce and evolving supply chain demands in MENA.

In September, late-stage startups garnered the majority of funding, securing $129.08 million of the total amount raised. This trend indicates a growing preference among investors for ventures that have demonstrated market success and scalability.

Given global economic uncertainties, late-stage startups with proven business models are often viewed as safer investments. Nevertheless, early-stage companies continue to play a vital role in the ecosystem, with seed-stage startups raising $57.30 million across 33 deals, reflecting ongoing interest in nurturing new ideas and emerging businesses.

The presence of government-backed incubators and accelerators remains crucial in supporting early-stage companies, providing mentorship and infrastructure to facilitate growth. However, the Rasmal report highlighted a significant gender disparity in funding: male founders secured 96.79 percent of the funds raised in September, while female founders received only 3.21 percent. This imbalance underscores the ongoing challenges faced by female entrepreneurs in accessing venture capital.

Addressing this gap will require a more inclusive investment approach, with increased support for women-led startups. Initiatives like the TiE Women MENA Programme are working to promote gender inclusivity, but more action is needed to foster a balanced and diverse entrepreneurial landscape across the region.

Among the notable startups funded in September were Syarah, an online car sales marketplace that raised $40 million, and TON, a fintech firm that secured $30 million. These companies illustrate the diversity of sectors gaining traction, from automotive e-commerce to financial services, showcasing the breadth of opportunities for investors in the MENA region.

Overall, the MENA startup ecosystem is well-positioned for continued growth, driven by investor interest in key markets and favorable government policies. However, rising geopolitical tensions may impact this growth trajectory. The focus on fintech and logistics is likely to persist, aligning with the region’s broader digital transformation. Simultaneously, other industries, such as healthtech and renewable energy, are expected to grow, reflecting shifting priorities and emerging opportunities.

Challenges, including the gender funding gap and difficulties in attracting venture capital in certain countries, remain significant. Nonetheless, ongoing efforts by governments, investors, and entrepreneurs to foster innovation are likely to gradually address these issues.


Oman’s broad money supply surges 13.3%

Oman’s broad money supply surges 13.3%
Updated 06 October 2024
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Oman’s broad money supply surges 13.3%

Oman’s broad money supply surges 13.3%
  • Climb mainly attributed to 16.5% increase in narrow funds and 12.1% in quasi-money
  • Sultanate’s public revenue saw an annual decline of 2% year on year in the second quarter of the year, reaching $16.1 billion

RIYADH: An increase in Oman’s narrow money led the country’s broad capital supply to grow 13.3 percent year-on-year to reach 24.2 billion Omani rials ($62.6 billion) by the end of July.

Statistics issued by the Central Bank of Oman showed the climb was mainly attributed to a 16.5 percent increase in narrow funds and 12.1 percent in quasi-money. 

This consists of total savings deposits and time deposits in Omani rials, certificates issued by financial institutes, margin accounts, and all foreign currency reserves in the banking sector. 

The growth in figures suggests vibrant and expanding economic activity, with more funds circulating within the economy. 

Oman’s public revenue saw an annual decline of 2 percent year on year in the second quarter, reaching $16.1 billion, the country’s news agency reported in August.  

The sultanate’s economic landscape is heavily influenced by its reliance on oil and gas revenues, making it vulnerable to global price fluctuations. 

The government has been actively working to diversify the economy and reduce dependence on hydrocarbons as part of its Vision 2040 plan. 

The figures also indicated that cash held by the public decreased by 5.2 percent by the end of July, while demand deposits increased by 22.8 percent, the Oman News Agency reported.

Regarding the interest rate structure of conventional commercial banks, the weighted average interest rate on deposits in Omani rials jumped from 2.3 percent in July 2023 to 2.71 percent in July 2024. The weighted average interest rate on loans in Omani rials increased from 5.4 percent to 5.6 percent during the same period.

The average interest rate in the interbank lending market for one night recorded an increase of 5.32 percent in July compared to 5.54 percent in the same month last year. 

This was due to a rise in the weighted average interest rate on repurchase operations, which rose to 6 percent from 5.79 percent during the same period last year. The change aligns with the policies of the US Federal Reserve.

The total credit balance granted by conventional commercial banks in the Gulf country increased 1.6 percent by the end of July and by 0.7 percent for credit given to the private sector to reach 20.4 billion rials.

The total investments of conventional commercial banks in securities increased by 35.8 percent to reach about 6 billion rials by the end of July.

The statistics showed that the investment of these banks in government development bonds decreased by the end of last July by 6.5 percent to reach 1.9 billion rials, while the investment of commercial banks in foreign securities increased by 115 percent to reach 2.5 billion rials.

Regarding the budget’s liabilities, total assets at conventional commercial banks increased by 11.4 percent to reach 24.8 billion rials during the same period.

Within total deposits, government balances at commercial banks decreased by 1.7 percent to reach 5.4 billion rials, while public sector institutions increased by 23.4 percent to reach 1.9 billion rials.

Private sector deposits increased 9.7 percent to reach 16.3 billion rials in July, constituting 65.9 percent of total assets at conventional commercial banks.

S&P Global has raised Oman’s long-term sovereign credit rating for both local and foreign currencies from “BB+” to “BBB-,” with a stable outlook.

The general credit rating of Energy Development Oman has been modified to align with the sovereign score, confirming the company’s role in supporting and enhancing financial stability.

Sultan bin Ali Al-Mamari, the firm’s chief financial officer, said the modification of the credit rating to “BBB-” will enable the company to obtain financing for its investment program at better competitive rates and expand the investor base when issuing sukuk and bonds. Companies with investment credit worthiness are an attractive factor for major investors, which facilitates the process of attracting funding for oil and gas projects.

Energy Development Oman plays a pivotal role in the country’s government strategy to enhance financial stability, Al-Mamari said in a statement to the Oman News Agency. 

This will improve efforts to strengthen the credit rating, he said, adding that the firm’s total annual income amounts to 6.3 billion rials, and its contribution to the gross domestic product by the end of 2023 reached 22 percent.

The CFO further highlighted that sukuk issued by the company in September 2023 and July was met with great interest from investors, which enabled it to issue sukuk worth 750 million rials.

Azhar bin Ahmed Al-Kindi, the company’s chief operating officer, said that the firm is undertaking several initiatives to raise operational efficiency and reduce production costs while maintaining and increasing capacity.

He added that the company, through Petroleum Development Oman, plays an effective role in implementing many initiatives to support local communities and enhance national undertakings, reflecting the organization’s commitment to promoting sustainable development and achieving a lasting positive impact.


Saudi Arabia offers October ‘Sah’ sukuk savings products with over 4.9% return 

Saudi Arabia offers October ‘Sah’ sukuk savings products with over 4.9% return 
Updated 06 October 2024
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Saudi Arabia offers October ‘Sah’ sukuk savings products with over 4.9% return 

Saudi Arabia offers October ‘Sah’ sukuk savings products with over 4.9% return 
  • Investors will receive bond allocations on Oct. 15, with the redemption period spanning four days starting Oct. 20
  • Subscriptions start at a minimum of SR1,000 per bond, with a maximum limit of SR200,000

JEDDAH: Saudi Arabia has launched its October subscription for the subscription-based savings product, Sah, offering a 4.92 percent return to promote financial stability and growth among citizens. 

The Shariah-compliant, government-backed sukuk issuance began at 10:00 a.m. Saudi time on Oct. 6 and will close at 3:00 p.m. on Oct. 8, as announced by the National Debt Management Center. 

Investors will receive bond allocations on Oct. 15, with the redemption period spanning four days starting Oct. 20. Redemption amounts will be disbursed seven days later. 

Subscriptions start at a minimum of SR1,000 ($266.66) per bond, with a maximum limit of SR200,000, allowing for the purchase of up to 200 bonds. 

Issued by the Ministry of Finance and organized by the NDMC, the fee-free savings products offer low-risk returns and are distributed through the digital channels of approved financial institutions. 

Sah is Saudi Arabia’s first government sukuk designed to foster saving habits by encouraging citizens to set aside a portion of their income regularly. The initiative supports the Financial Sector Development Program, part of Vision 2030, which aims to raise the national savings rate from 6 percent to 10 percent by 2030. 

Saudi nationals aged 18 and above can invest in Sah through SNB Capital, Aljazira Capital, and Alinma Investment, as well as SAB Invest, or Al Rajhi Bank. The bonds are issued monthly, with a one-year savings period and fixed returns, paid out upon maturity. 

In September, the NDMC successfully allocated SR2.603 billion in sukuk. In a detailed statement, the authority outlined the distribution of the sukuk into six tranches. 

The first tranche comprised SR255 million, set to mature in 2027, while the second tranche secured SR375 million for bonds maturing in 2029. 

The third tranche reached SR638 million for Islamic bonds maturing in 2031, followed by the fourth tranche totaling SR1.021 billion, with maturity set for 2034. 

Moreover, the fifth tranche encompassed SR202 million for sukuk maturing in 2036, and the final tranche accounted for SR112 million, set to mature in 2039. 

As demand for such low-risk investment options continues to rise, it demonstrates the evolving preferences of individuals seeking stable, Shariah-compliant savings opportunities, further enhancing financial inclusion in the Kingdom.