Saudi Aramco raises propane, butane prices for September

Propane and butane are types of liquefied petroleum gas with different boiling points. LPG is commonly used as a fuel for vehicles, heating, and as a feedstock for various petrochemicals. Reuters
Propane and butane are types of liquefied petroleum gas with different boiling points. LPG is commonly used as a fuel for vehicles, heating, and as a feedstock for various petrochemicals. Reuters
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Updated 29 August 2024
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Saudi Aramco raises propane, butane prices for September

Saudi Aramco raises propane, butane prices for September
  • Official selling prices for propane rose by $15 per tonne from the previous month
  • Butane prices increased by $25 per tonne from August

RIYADH: The Saudi Arabian Oil Co., also known as Saudi Aramco, has raised the official selling prices for propane in September by $15 per tonne from the previous month, according to an official statement.

The company also increased butane prices by $25 per tonne from August. Aramco’s September OSP for propane is now $605 per tonne, while butane is priced at $595 per tonne.

Propane and butane are types of liquefied petroleum gas with different boiling points. LPG is commonly used as a fuel for vehicles, heating, and as a feedstock for various petrochemicals.

Aramco’s OSPs for LPG are used as a benchmark for contracts supplying the product from the Middle East to the Asia-Pacific region.

In winter, the demand for propane rises significantly due to its use in heating homes, which can lead to higher prices if supply struggles to keep up.

Such fluctuations are a normal part of the market and are expected during colder months. The increase in prices reflects the basic economic principle of supply and demand, with higher demand resulting in higher costs.


Oil Updates – prices dip after strongest weekly rise in over one year

Oil Updates – prices dip after strongest weekly rise in over one year
Updated 28 sec ago
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Oil Updates – prices dip after strongest weekly rise in over one year

Oil Updates – prices dip after strongest weekly rise in over one year

SINGAPORE: Oil prices fell on Monday, after posting their steepest weekly rise in more than a year last week, as oversupply concerns amid softer demand countered the worries over a wider Middle East conflict disrupting exports in the key oil-producing region.

Brent crude futures fell 28 cents, or 0.36 percent, to $77.77 per barrel by 9:45 a.m. Saudi time. US West Texas Intermediate crude futures slipped 19 cents, or 0.26 percent, to $74.19 per barrel.

Brent rose by more than 8 percent last week, the biggest weekly gain since January 2023, while the WTI contract gained 9.1 percent week-on-week, the most since March 2023, on expectations that Israel could strike Iranian oil infrastructure in response to an Iranian missile attack on Israel on Oct. 1.

However, as the Israeli response is still developing, some investors likely sold futures to lock in their gains from the recent climb.

“Technical profit-taking seems to be the most logical explanation,” Priyanka Sachdeva, senior market analyst at Phillip Nova, said on the softening in oil prices.

Still, oil markets are bound to experience tailwinds amid fears of Israel’s retaliation on Iran, as the potential mass-scale escalation of conflict in the Middle East has countered mounting demand-side pressures, Sachdeva said.

Israel bombed Hezbollah targets in Lebanon and the Gaza Strip on Sunday ahead of the one-year anniversary of Hamas’ Oct. 7 attacks on Israel that triggered the current war between Israel and the Iranian-backed militant groups. Its defense minister also said all options were open for retaliation against Iran.

Hezbollah rockets hit Israel’s third-largest city of Haifa, police said early on Monday, and Israeli media reported 10 injured in the country’s north.

ANZ Research cautioned that despite the rally in oil prices last week, the impact of the conflict on oil supply will be relatively small.

“We see a direct attack on Iran’s oil facilities as the least likely response among Israel’s options,” it said.

“Moreover, we have seen a diminished impact of geopolitical events on oil supply. This has led to a significantly smaller geopolitical risk premium being applied to oil markets in recent years, and OPEC’s 7 million barrels per day of spare capacity provides a further buffer.”

OPEC and its allies including Russia and Kazakhstan, a grouping known as OPEC+, has millions of barrels of spare capacity since it has been cutting production in recent years to support prices amid weak global demand.

The producer grouping has enough spare oil capacity to compensate for a full loss of Iranian supply if Israel knocks out that country’s facilities, but it would struggle if Iran retaliates by hitting the installations of its Gulf neighbors, according to analysts.

At its last meeting on Oct. 2, OPEC+ kept its oil output policy unchanged including a plan to start raising production from December.

Combined with the uncertain pace of economic recovery in top crude importer China, the production hike can easily shield the market from supply disruptions and continues to limit the upside in oil prices, said Phillip Nova’s Sachdeva.


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.