UAE mandates private firms to reserve board seats for women

The UAE also leads the world in women’s parliamentary representation, with women occupying 50 percent of positions in the Federal National Council. Reuters/File
The UAE also leads the world in women’s parliamentary representation, with women occupying 50 percent of positions in the Federal National Council. Reuters/File
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Updated 18 September 2024
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UAE mandates private firms to reserve board seats for women

UAE mandates private firms to reserve board seats for women

JEDDAH: The UAE has mandated private joint-stock companies to reserve at least one board seat for women, reinforcing the nation’s commitment to gender equality in leadership.

The Ministry of Economy issued this new directive, which will take effect once the current board terms expire, aligning with the Gulf state’s goal of enhancing global competitiveness. This initiative highlights the leadership’s dedication to empowering women and advancing sustainable development goals.

The ministerial resolution, which regulates the governance and operations of private joint-stock companies, builds on a similar mandate introduced for public joint-stock firms in 2021. This earlier measure has yielded positive results by improving institutional performance and economic outcomes.

The UN Development Program recently announced that the UAE has climbed to 7th place in the 2024 Gender Inequality Index, a significant rise from 49th in 2015 and 11th in 2022. This announcement was made during the 68th session of the Commission on the Status of Women in New York.

In 2015, the Gulf country established its Gender Equality Council, a federal entity tasked with developing and implementing the gender equality agenda. The council aims to close the gender gap across all government sectors, positioning the UAE as a global model for equality.

The UAE also leads the world in women’s parliamentary representation, with women occupying 50 percent of positions in the Federal National Council. Additionally, women are highly represented in the labor market, specialized professions, and emerging fields, according to the UAE government portal.

Minister of Economy Abdullah bin Touq Al-Marri emphasized that, under the guidance of the UAE’s leadership, the country is committed to enhancing women’s contributions across various fields, particularly in economic development.

“The decision will reinforce the UAE’s vision to enhance gender balance, empowering women in the business sector and increasing their presence in leadership and decision-making roles,” he was quoted as saying by the UAE’s official news agency.

The minister added that the initiative will further strengthen the Gulf nation’s global competitiveness and its position as a leader in gender equality.

Al-Marri pointed out that women in the UAE have consistently demonstrated their capabilities over the past decades, making significant contributions to the business, financial, and investment sectors.

“Today, they are indispensable partners in economic growth and vital to the UAE’s global competitiveness. This decision will bring added value to private joint-stock companies, enhancing their institutional performance by drawing on the insights and experiences of successful businesswomen in the country,” he said.

He expressed his deep gratitude to Sheikha Manal bint Mohammed bin Rashid Al-Maktoum, president of the UAE Gender Balance Council, for her efforts to enhance women’s participation in the economy.

Mona Ghanem Al-Marri, vice president of the council, emphasized the strategic collaboration between the Ministry of Economy and the council, noting that the ministry’s decision will significantly advance gender balance.

She added that the decision reflects the productive partnership between the ministry and the council, underscoring the country’s unwavering commitment to empowering women economically and increasing their participation in the workforce.

The Ministry of Economy announced that the implementation of this decision will commence in January 2025 and urged relevant companies to integrate this requirement into their future board restructuring plans.


Saudi Arabia’s MSMEs see 17% growth in credit facilities, SAMA report

Saudi Arabia’s MSMEs see 17% growth in credit facilities, SAMA report
Updated 19 sec ago
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Saudi Arabia’s MSMEs see 17% growth in credit facilities, SAMA report

Saudi Arabia’s MSMEs see 17% growth in credit facilities, SAMA report

RIYADH: Credit facilities extended to micro, small, and medium enterprises in Saudi Arabia grew by 17.04 percent year on year in the second quarter of 2024, totaling SR307.4 billion ($82 billion), according to recent data. 

The Saudi Central Bank, known as SAMA, reported that 94 percent of these were provided by Saudi banks, while finance companies accounted for the remaining 6 percent. 

The facilities accounted for 8.8 percent of banks’ total lending portfolio and 19.5 percent of finance companies’ credit portfolios. The government is urging financial institutions to allocate 20 percent of their loan portfolios to this sector, demonstrating strong and ongoing support for these enterprises. 

Recent reforms in Saudi Arabia have simplified investment and startup processes, increasing this sector’s share of gross domestic product from 21 percent in 2013, with a Vision 2030 goal of reaching 35 percent.

In the second quarter, medium-sized enterprises received the largest share of credit facilities, totaling 54 percent or SR167.31 billion.

Notably, micro enterprises experienced substantial growth, achieving a 45.53 percent increase in credit to SR33.7 billion, despite holding a smaller overall share.  

Credit to small enterprises, making up 35 percent of MSME financing, rose by 26.84 percent to SR106.39 billion during the same period. 

Micro enterprises are defined as those generating revenues up to SR3 million with a workforce of no more than five employees. 

Small enterprises have earnings ranging from SR3 million to SR40 million and can employ up to 49 workers, while medium enterprises generate between SR40 million and SR200 million in revenue and employ 50 to 249 individuals. 

Lending to the MSME sector in Saudi Arabia is experiencing strong growth, driven by the Kingdom’s economic diversification efforts under Vision 2030. 

As the country shifts away from oil dependency, demand is rising for private businesses to expand in key sectors such as entertainment, hospitality, sports, and retail — industries supported by a young, aspirational consumer base. 

Government initiatives like the Kafalah program play a crucial role in empowering MSMEs, particularly in the non-oil sector, by providing financial support and fostering sustainable economic development. 

Monsha’at key figures 

Monsha’at, a key enabler of Saudi Arabia’s Vision 2030, plays a vital role in the SME ecosystem by enhancing access to finance, promoting entrepreneurship, and providing critical support for business development. 

The authority facilitates funding for this sector through partnerships with financial institutions and initiatives like the Kafalah Program, which increases lending. It prioritizes upskilling SMEs through training programs and advocates for regulatory reforms to improve the business environment. 

According to its second quarter report, Saudi Arabia saw a significant surge in commercial registrations, which grew by 78 percent year on year to 121,521, with 45 percent attributed to female-owned businesses. 

This rise underscores the private sector’s crucial role in driving the Kingdom’s economy and signals a boost in entrepreneurial activity and the creation of new businesses, many of which fall under the MSME category. 

The report also indicated a 4.3 percent increase in new registrations compared to the first quarter of 2024, demonstrating sustained growth across various sectors of the economy. 

In terms of regional distribution, Riyadh accounted for 32 percent or 482,690 active registrations, followed by Makkah with 23 percent or 342,840, the Eastern Province with 235,606, and other regions totaling 457,520. 

The report emphasized the vital role of financial technology in enhancing the growth and sustainability of MSMEs in Saudi Arabia. 

Established by SAMA and the Capital Market Authority, initiatives to foster a dynamic fintech ecosystem have led to significant advancements in the sector, exemplified by the Kingdom’s first fintech initial public offering for Rasan in May, which attracted considerable investor interest. 

By the end of 2023, the Kingdom was home to 216 active fintech companies employing over 6,500 skilled professionals. This growth reflects a robust investment landscape, with more than $1.84 billion in venture capital flowing into the sector. 

According to the report, the Fintech Lab has emerged as a key driver in this space, promoting growth and innovation by offering a supportive regulatory framework for entrepreneurs and startups to develop and test new products and services. 

This initiative has led to the emergence of innovative business models and the expansion of fintech startups. Furthermore, the Lab provides investment solutions for various investors and financing options for SMEs.

Authorized fintech companies have made significant contributions to job creation across multiple sectors. 

Looking ahead to 2024, initiatives such as the Open Banking Lab will create a collaborative environment for banks and startups to innovate, while the Financial Academy aims to enhance training for entrepreneurs and SMEs. 

Additionally, the Makken Program will continue to support startups by easing regulatory and technological compliance costs, ensuring that this sector remains a driving force in the expansion of Saudi Arabia’s MSME landscape. 


Nintendo shares rise on Saudi Public Investment Fund report

Nintendo shares rise on Saudi Public Investment Fund report
Updated 07 October 2024
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Nintendo shares rise on Saudi Public Investment Fund report

Nintendo shares rise on Saudi Public Investment Fund report
  • Nintendo’s shares jumped 4.44% to end at 8,087 yen
  • Kingdom has built up a stake of 8.6% in Nintendo as part of a $38-billion push

TOKYO: Nintendo shares jumped more than four percent Monday after a top official of Saudi Arabia’s sovereign wealth fund was quoted as saying it was mulling hiking its stake in the Japanese gaming giant.
Riyadh has built up a stake of 8.6 percent in Nintendo as part of a $38-billion push into gaming under Crown Prince Mohammed bin Salman’s Vision 2030 program to diversify away from oil.
It also has stakes in “Resident Evil” maker Capcom, Activision Blizzard, Electronic Arts, and Scopely, the US mobile games company behind “Monopoly Go!.”
“There are always opportunities,” Prince Faisal bin Bandar bin Sultan, vice-chair of Saudi Arabia’s Savvy Games — a subsidiary of the Public Investment Fund — told Kyodo News in an interview published Saturday.
He added, however, that the fund had no intention of raising stakes without the consent of the firms concerned.
“It’s important to keep the communication going so you get there in the right way,” he said. “We don’t want to rush into anything.”
Nintendo’s shares jumped 4.44 percent Monday to end at 8,087 yen ($54.48).
Saudi Arabia aims to create 250 gaming companies and studios on its soil, 39,000 game-related jobs, be in the top three of professional gamers per capita and to produce a blockbuster “AAA” game by 2030.
Savvy has already bought esports tournament organizer ESL Gaming and platform FaceIt. Riyadh last year hosted the eSports World Cup that saw 2,500 gamers battle for $60 million in prize money.
“There’s a lot we want to do to get it done and to reach our targets at 2030,” Prince Faisal told AFP in an interview in May.
“But we also want to make sure that we are taking the time to study things, to look at things. And make sure we’re making the right steps and not just throwing cash out there to see what hits,” he had said.


UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 

UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 
Updated 30 min 47 sec ago
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UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 

UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 
  • Deal will create growth opportunities for businesses, young entrepreneurs, and startups in both nations
  • Mutual investments between the UAE and Jordan are estimated at around $22.5 billion

RIYADH: Bilateral trade between the UAE and Jordan is projected to increase to $8 billion by 2032, up from $4.2 billion in 2023, following the signing of a Comprehensive Economic Partnership Agreement, said a top official. 

UAE Minister of State for Foreign Trade Thani bin Ahmed Al-Zeyoudi emphasized that the CEPA, signed on Oct. 6, will create growth opportunities for businesses, young entrepreneurs, and startups in both nations. 

He said the agreement followed a series of negotiations and coordination meetings held in a short period, as reported by the state news agency WAM. 

The UAE has been actively strengthening its trade ties globally to enhance non-oil trade, in line with its economic diversification efforts, and in September the Emirates concluded talks to sign CEPAs with New Zealand and Australia, while also planning negotiations with Japan for a similar agreement. 

“The agreement will come into effect later this year after its ratification, and will mark the culmination of a long-standing, deep-rooted relationship between the two brotherly countries and their peoples,” Al-Zeyoudi told WAM after signing the CEPA with Jordan. 

Mutual investments between the UAE and Jordan are estimated at around $22.5 billion, with the Gulf country being the largest international investor in its Middle Eastern neighbor at $4 billion, accounting for 14 percent of the Emirates’ total foreign direct investment, stated the minister. 

He added that promising areas of investments that both countries can explore include tourism, hospitality, real estate, and renewable energy, as well as transport, logistics, manufacturing, pharmaceuticals, and food security. 

Non-oil trade between the UAE and Jordan exceeded $4.2 billion in 2023, reflecting a 37.9 percent increase compared to 2021 and a 47.7 percent rise from 2019. 

The CEPA follows a $2.3 billion agreement signed last month to develop a 360-km railway network linking Jordan’s Aqaba port to its mining hubs at Al-Shidiya and Ghor Al-Safi. 

According to a press release, the project will be developed and operated by UAE’s Etihad Rail and is part of a $5.5 billion investment package agreed upon by the two countries in November 2023. 

The UAE has previously signed CEPAs with countries including India, Turkiye, Indonesia, and Cambodia, all expected to support the country’s economy, which is projected to grow by 4 percent this year, according to a report from its central bank last month. 


Oil Updates – prices extend gains on fears of wider Middle East conflict

Oil Updates –  prices extend gains on fears of wider Middle East conflict
Updated 07 October 2024
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Oil Updates – prices extend gains on fears of wider Middle East conflict

Oil Updates –  prices extend gains on fears of wider Middle East conflict
  • Brent crude rises toward $80
  • Conflict escalation risk counters demand-side pressures, says analyst

LONDON: Oil prices extended gains on Monday, with Brent nearing $80 to build on last week’s steepest weekly jump since early 2023, driven by fears of a wider Middle East conflict and potential disruption to exports from the major oil-producing region.

Brent crude futures rose $1.11, or 1.4 percent, to $79.16 a barrel by 11:39 a.m Saudi time. US West Texas Intermediate crude futures jumped $1.28, or 1.7 percent, to $75.66.

Brent climbed by more than 8 percent last week while WTI soared by 9.1 percent on the possibility that Israel could strike Iranian oil infrastructure in response to an Iran’s Oct. 1 missile attack on Israel.

The potential escalation of the conflict has countered mounting demand-side pressures, said Priyanka Sachdeva, analyst at Phillip Nova.

Rockets fired by Iran-backed Hezbollah hit Israel’s third-largest city, Haifa, early on Monday. Israel, meanwhile, looked poised to expand ground incursions into southern Lebanon on the first anniversary of the Gaza war, which has spread conflict across the Middle East.

That spread has raised fears that the United States, Israel’s superpower ally, and arch-foe Iran will be sucked into a wider war.

ANZ Research, however, expects any immediate on supply to be relatively small.

“We see a direct attack on Iran’s oil facilities as the least likely response among Israel’s options,” it said, noting the buffer provided by producer group OPEC’s 7 million barrels per day of spare capacity.

OPEC and its allies including Russia, known collectively as OPEC+, are due to start raising production from December after cutting in recent years to support prices because of weak global demand.

OPEC+ has enough spare oil capacity to offset Israel knocking out Iranian supply, but it would struggle if Iran retaliates by attacking installations of neighboring Gulf nations, analysts have said.

When the Middle East conflict began a year ago, Brent stood at $88.15, but prices are now about $10 lower.

“While nothing can touch the emotion that the conflict has brought to the oil community, it has been well and truly smothered by macroeconomic considerations that have thwarted any idea of an increase in global demand,” said John Evans of oil broker PVM.


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.