UAE treasury bonds and sukuk programs raise $6.8bn, strengthening investment appeal

UAE treasury bonds and sukuk programs raise $6.8bn, strengthening investment appeal
The UAE was the second-largest issuer in the Gulf Cooperation Council bond market during the first half of 2024. Shutterstock
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Updated 23 September 2024
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UAE treasury bonds and sukuk programs raise $6.8bn, strengthening investment appeal

UAE treasury bonds and sukuk programs raise $6.8bn, strengthening investment appeal

RIYADH: The UAE Ministry of Finance reported raising 25 billion dirhams ($6.8 billion) through government bonds and dirham-denominated Islamic Treasury Sukuk Programs, launched in 2022. 

The ministry indicated that by the end of August, the programs had collectively raised the total amount, reflecting strong investor confidence and reinforcing the UAE’s position as a competitive global investment hub.

To date, 11.2 billion dirhams worth of government treasury bonds and 13.8 billion dirhams in Islamic sukuk have been issued under the two initiatives.

In May, the ministry repaid 4.85 billion dirhams in two-year treasury bonds, bringing the total outstanding bonds to 6.35 billion dirhams.

The UAE was the second-largest issuer in the Gulf Cooperation Council bond market during the first half of 2024, raising $20.6 billion through 65 issuances, up from $15.4 billion and 58 issuances in the same period last year.

This accounted for 27 percent of the total value of GCC bonds and sukuk. Saudi Arabia led the market, raising $37 billion through 44 issuances.

The combined outstanding public debt for the treasury bonds and Islamic Treasury Sukuk Programs now stands at 20.15 billion dirhams.

These programs were developed in collaboration with the Central Bank of the UAE, which acts as the issuance and payment agent. Settlement is conducted through a local platform that meets international standards, ensuring transparency and efficiency in the bond and sukuk issuance process. 

The ministry’s efforts have been supported by major banks, including Emirates NBD, Abu Dhabi Commercial Bank, First Abu Dhabi Bank, and others, serving as primary treasury bond distributors. 

Demand for each auction has been exceptionally high, with bids frequently exceeding the subscription sizes several times, a reflection of the strong market appetite for UAE debt instruments.

The program’s success has helped the UAE maintain high sovereign credit ratings, with an AA score from Fitch Ratings and an Aa2 standing from Moody’s, both with a stable outlook.

This financial credibility, alongside robust economic policies, has further enhanced the UAE’s attractiveness as an investment hub.

In addition to boosting investor confidence, these bonds and sukuk are playing a crucial role in developing a local currency market and establishing a medium-term yield curve. 

The bonds are issued with maturities ranging from two to five years, with plans to introduce longer-term bonds in the future. 

This strategy aims to diversify the UAE’s funding sources, stimulate the domestic financial and banking sector, and provide secure investment alternatives for local and foreign investors. 

By issuing these bonds and sukuk in the local currency, the UAE is positioning itself to better meet future funding needswhile strengthening the regional financial market. 

The Ministry of Finance continues pursuing initiatives to enhance the country’s economic resilience and contribute to its long-term sustainable growth.


Saudi startup ecosystem poised to drive sustainable growth, says UNDP expert

Saudi startup ecosystem poised to drive sustainable growth, says UNDP expert
Updated 09 December 2024
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Saudi startup ecosystem poised to drive sustainable growth, says UNDP expert

Saudi startup ecosystem poised to drive sustainable growth, says UNDP expert

RIYADH: Saudi Arabia is showing the world how economic growth can be achieved without compromising sustainability, thanks to its Vision 2030 program and an emerging startup ecosystem, a UN official said.  

Speaking at COP16 in Riyadh, Vito Intini, regional chief economist at the UN Development Programme, said that startups in the Kingdom are evolving faster and are expected to contribute a lot to the country’s economic development in the future.  

A recent Wamda report revealed that funding for Saudi startups surged to $94 million in November, an 88 percent increase from October. 

“Saudi Vision 2030 demonstrates how sustainability and economic growth can go hand in hand,” Intini said. “The implementation of Saudi Vision 2030 is hopefully increasing a strong emphasis on supporting startups as drivers of innovation in the broader economic and social transformation.” 

Intini commended Saudi Arabia for building a robust entrepreneurial landscape that supports the growth of startups.

“By fostering an entrepreneurial ecosystem and investing in green innovation, the Kingdom can accelerate its sustainability agenda, including promoting the transition to clean energy, more efficient water use, and more sustainable land use,” he added. 

The official also emphasized the role of startups in the broader Middle East and North Africa region, particularly in tackling environmental challenges like land degradation. 

“According to studies that have tried to quantify the cost of land degradation, North Africa has greater losses to its ecosystem and income than other regions. On average, land degradation is estimated to cost about one percent of gross domestic product,” Intini said.  

Through innovative solutions and advanced technologies, he said, startups play a critical role in addressing and reversing the effects of land degradation. 

In the same panel discussion, Himanshu Mishra, associate professor at King Abdullah University of Science and Technology, highlighted Saudi Arabia’s proactive steps to secure a green future.  

“In Saudi Arabia, there is a perfect storm of opportunity in terms of getting rid of organic wastes, doing soil amendment, massive urban greening, and massive rehabilitation. There is a tremendous nationwide alignment on these goals,” Mishra added. 


Saudi ports see 4.29% rise in cargo handled in November

Saudi ports see 4.29% rise in cargo handled in November
Updated 09 December 2024
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Saudi ports see 4.29% rise in cargo handled in November

Saudi ports see 4.29% rise in cargo handled in November

RIYADH: Saudi ports reported a 4.29 percent year-on-year increase in the volume of tonnes handled in November, according to official data.

The Saudi Ports Authority, also known as Mawani, revealed that the Kingdom's ports processed 24.73 million tonnes of cargo last month, up from 23.74 million tonnes in November 2023.

The data also showed significant growth in container traffic, with the number of exported containers surging by 23 percent to 261,030 containers. The number of imported containers also rose by 15.62 percent, reaching 259,355 containers during the same period.

This growth contributes to Saudi Arabia’s rising profile as a global logistics hub, with the Kingdom now ranked 15th in the world for container handling in 2024, according to Lloyd’s List, a UK-based maritime journal.

However, overall container throughput showed a slight decline, with the total number of handled containers dropping by 9.14 percent to 670,185 containers. Additionally, transshipment volumes fell sharply by 49.43 percent year on year, with just 138,660 containers transshipped in November.

In terms of cargo types, general cargo totaled 1.13 million tonnes, while solid bulk cargo amounted to 3.59 million tonnes. Liquid bulk cargo saw the highest volume at 13.05 million tonnes.

The Kingdom’s ports also received 716,541 heads of cattle in November, marking a 4.98 percent decline compared to the same period last year.

Meanwhile, navigational traffic saw a 6.96 percent drop, with 949 vessels calling at Saudi ports in November 2024, down from 1,020 ships in November 2023. The number of passengers arriving by sea also fell by 15.78 percent, with 66,422 passengers recorded.

On a positive note, the number of cars imported through Saudi ports increased by 11.82 percent, totaling 99,760 cars during the month compared to 89,269 cars in November 2023.


US businesses eye opportunities in Saudi market at Riyadh forum

US businesses eye opportunities in Saudi market at Riyadh forum
Updated 09 December 2024
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US businesses eye opportunities in Saudi market at Riyadh forum

US businesses eye opportunities in Saudi market at Riyadh forum
  • Kingdom is third-largest source of imported oil to the US, supplying approximately half a million barrels per day
  • Forum’s discussions centered on Saudi Arabia’s Vision 2030

JEDDAH: US companies are eager to capitalize on the Kingdom of Saudi Arabia's rapidly growing market, with new opportunities in energy, transportation, tourism, and healthcare highlighted at the Saudi-US Business Forum held in Riyadh.

Organized by the Federation of Saudi Chambers in collaboration with the US Department of Commerce, the event took place on Dec. 8, according to the Saudi Press Agency.

The forum was attended by Waleed Al-Orainan, secretary-general of the FSC, and Alison Dilworth, deputy chief of mission at the US Embassy, alongside representatives from both the Saudi and US governments and private sectors.

According to the US Department of State, the two nations share a strong economic relationship, with the US being Saudi Arabia’s second-largest trading partner and Saudi Arabia ranking as one of the US’ top trading partners in the Middle East.

The Kingdom is also the third-largest source of imported oil to the US, supplying approximately half a million barrels per day, as reported in the 2023 bilateral relations report. The two countries have a Trade and Investment Framework Agreement in place to foster deeper economic cooperation.

The forum’s discussions centered on Saudi Arabia’s Vision 2030, which aims to diversify the Kingdom’s economy and increase trade and investment opportunities with the US and other global markets. The event provided a platform for 72 US-based companies to explore export prospects in Saudi Arabia and investment opportunities in Vision 2030 mega-projects.

A key highlight was the anticipated $7 trillion in government spending through specialized development funds, creating significant opportunities for US businesses.

Special attention was given to innovative US exports, products, and services, with a number of participating companies being women-owned, aligning with Vision 2030’s focus on empowering Saudi women in the workforce.

Both sides expressed optimism that forums like the Saudi-US Business Forum would strengthen bilateral economic ties, enhancing cooperation through continuous dialogue between public and private sector representatives from both countries.

Trade between Saudi Arabia and the US reached $34 billion in 2023. The Kingdom’s leading exports to the US included mineral products and fertilizers, while machinery and mechanical appliances were among the top US exports to Saudi Arabia, according to SPA.


Saudi Arabia launches groundbreaking International Water Research Center

Saudi Arabia launches groundbreaking International Water Research Center
Updated 09 December 2024
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Saudi Arabia launches groundbreaking International Water Research Center

Saudi Arabia launches groundbreaking International Water Research Center
  • Plan is projected to contribute $31.99 billion to national GDP
  • Key strategic collaborations under MEWA’s partnership with KAUST were also announced during COP16

RIYADH: Saudi Arabia’s King Abdullah University of Science and Technology (KAUST) has officially launched the International Water Research Center, a groundbreaking initiative aimed at transforming global sustainability efforts.

The center was unveiled on Dec. 8 during COP16, with the Kingdom’s Minister of Environment Abdulrahman Al-Fadhli highlighting its focus on addressing critical challenges such as water scarcity, pollution, and the development of sustainable water solutions.

The center, a collaboration between KAUST and the Ministry of Environment, Water, and Agriculture, aligns with Saudi Arabia’s broader sustainability goals, including a target to recycle up to 95 percent of the country’s waste. This ambitious plan is projected to contribute SR120 billion ($31.99 billion) to the national gross domestic product.

In his speech,  Al-Fadhli emphasized the center’s role in reshaping global water sustainability practices. “The International Water Research Center, hosted by KAUST in collaboration with MEWA and leading international research institutions, is set to redefine global approaches to water sustainability,” he said. “It will focus on solving water scarcity, pollution, and developing environmentally friendly solutions.”

Al-Fadhli also announced key strategic collaborations under MEWA’s partnership with KAUST, including a joint research initiative with the National Livestock and Fisheries Development Program, the National Research and Development Center for Sustainable Agriculture, Estidamah, and KAUST. The partnership aims to explore algae-based biostimulants to enhance soil quality and promote sustainable agriculture in the Kingdom.

Further advancing agricultural research, the minister highlighted the NCDP-KAUST Research and Innovation Partnership, which includes four major projects totaling SR100 million. These projects aim to drive innovation in the palm industry, furthering the Kingdom’s agricultural sustainability and economic development.

Another key initiative, the Environment Fund’s Sustainability Innovation Fellowships, was also introduced by Al-Fadhli. This fellowship provides postdoctoral researchers with an opportunity to develop innovative water treatment solutions, addressing critical environmental challenges through cutting-edge research.

On the future of agricultural education, the minister discussed a collaboration between NEOM and the University of Tabuk, which has launched a comprehensive program to address the shortage of skilled professionals in agricultural sustainability.

Al-Fadhli also presented the “Celebrating Innovators in Saudi” panel, honoring individuals who have significantly advanced sustainability and environmental research. The recipients of the Lifetime Achievement Award include Prof. Iqbal Ismail, Prof. Samir Al-Solimani, and several other distinguished academics.

The minister then introduced the Sustainability Innovation Challenge Awards, which recognize companies excelling in sustainable practices. This year’s winners include ACWA Power for its achievements in renewable energy, NADEC for its sustainable agriculture innovations, and Tadweer for its leadership in waste management and recycling.

Finally, Al-Fadhli announced the winners of the Sustainability Innovation Challenge in the desertification category. The top project, “Rebalancing and Fueling Plant Growth,” was awarded to a team from Princess Nourah Bint Abdulrahman University for their innovative approach to restoring ecosystems using drought-resistant seeds and biostimulants.

The Kingdom’s hosting of COP16 underscores its commitment to environmental protection and sustainability. As the largest multilateral conference Saudi Arabia has ever hosted, COP16 serves as a platform for mobilizing international cooperation to address the urgent environmental challenges facing the planet.


Saudi Arabia’s expat remittances soar 23% to $3.58bn: SAMA

Saudi Arabia’s expat remittances soar 23% to $3.58bn: SAMA
Updated 09 December 2024
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Saudi Arabia’s expat remittances soar 23% to $3.58bn: SAMA

Saudi Arabia’s expat remittances soar 23% to $3.58bn: SAMA
  • Expatriates make up 41.6 percent of the total population
  • Bangladeshi nationals are the largest group, totaling 2.12 million

RIYADH: Expatriate remittances from Saudi Arabia surged to SR13.43 billion ($3.58 billion) in October, marking the highest monthly total in two and a half years, according to recent data. 

Figures from the Saudi Central Bank, also known as SAMA, show that this sum reflects a 23 percent increase compared to the same month last year, underscoring robust growth in outbound transfers. 

Remittances sent abroad by Saudi nationals reached their highest value in nearly two years, totaling SR6.32 billion in October. This reflects a 14 percent increase compared to the same period last year, according to SAMA data. 

The significant rise is closely tied to the Kingdom’s evolving economic policies and efforts to create a globally attractive environment for expatriates. It is also driven by rising disposable incomes of Saudi nationals, investments abroad, and the ease of digital money transfers facilitated by fintech advancements. 

These transfers represent not only the financial support expatriates send to their home countries but also a reflection of their increased earning power and job stability within Saudi Arabia’s thriving economy. 

According to recent research by the Global Media Insight team, Saudi Arabia’s population stood at 37.47 million as of November. Riyadh remains the most populous city with 7.82 million residents, followed by Jeddah with 4.94 million. 

The latest Saudi census report, released in May 2023, highlighted that expatriates make up 41.6 percent of the total population. Among them, Bangladeshi nationals are the largest group, totaling 2.12 million — comprising 1.95 million men and 0.17 million women. 

Indian nationals occupy the second spot with 1.88 million individuals, of whom 1.71 million are men and 0.17 million are women. Pakistanis rank third, with a population of 1.81 million, including 1.65 million men and 0.16 million women. 

Factors driving remittance influx 

In July, Saudi Arabia was recognized as the second-best country for expatriates globally, according to the Expat Insider survey, outpacing nations like the US and UK. 

The survey highlighted Saudi Arabia’s strengths in career prospects, job security, and salaries, with 75 percent of expatriates reporting improved career opportunities after relocating to the Kingdom. 

This upward mobility, coupled with high satisfaction rates with the local economy — 82 percent of expats expressed confidence in its strength — has directly contributed to their financial capability to remit larger sums abroad. 

Moreover, the industrial sector’s growth, supported by government initiatives such as the fee waiver for expatriate workers in the sector, has played a pivotal role in boosting expatriate earnings. 

According to a September report by the Federation of Saudi Chambers, investments in the industrial sector surged by 54 percent from 2019, fueled by the fee exemption, which is set to continue until the end of 2025. 

These measures led to increased employment opportunities for expatriates, particularly in industrial roles, enhancing their income and capacity for overseas remittances.  

The introduction of the premium residency program in October further underscores Saudi Arabia’s commitment to attracting and retaining skilled expatriates. 

Offering benefits such as property ownership, business operations, and visa-free mobility, this initiative has drawn top-tier professionals, particularly in health care and other priority sectors. 

By securing premium residency, these expatriates gain stability and income growth, further amplifying their ability to send financial support back home. 

These factors collectively explain the robust increase in remittances. They highlight how Saudi Arabia’s dynamic economic transformation — rooted in Vision 2030 — continues to enhance the financial well-being of its expatriate population while strengthening the Kingdom’s global economic ties. 

Saudi Arabia’s advancements in financial technology have further revolutionized the remittance process, offering expatriates cost-effective, fast, and secure ways to transfer money abroad. 

Fintech innovations have introduced platforms and apps that simplify cross-border transactions. Digital banking tools have become widely accessible, ensuring that expatriates can send funds anytime, anywhere, with just a few clicks. 

These services often feature lower fees compared to traditional banking channels in other countries, making remittance from Saudi Arabia an attractive option for expatriates. 

Additionally, the Kingdom’s robust regulatory framework ensures transparency and security, further encouraging expatriates to rely on these digital solutions.