UAE the top destination for Saudi Arabia’s non-oil goods: GASTAT

UAE the top destination for Saudi Arabia’s non-oil goods: GASTAT
Bolstering the non-oil private sector is a crucial part of the Kingdom’s Vision 2030 agenda, as it steadily pursues economic diversification by reducing its dependence on crude revenues. Above, Jeddah’s Islamic Seaport on the western Red Sea coast. (AFP)
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Updated 27 October 2024
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UAE the top destination for Saudi Arabia’s non-oil goods: GASTAT

UAE the top destination for Saudi Arabia’s non-oil goods: GASTAT

RIYADH: Saudi Arabia’s neighbor UAE was the favorite destination for the Kingdom’s non-oil goods in August, with exports seeing a monthly rise of 10.42 percent to reach SR6.78 billion ($1.81 billion).

According to the General Authority for Statistics, Saudi Arabia exported mechanical and electrical equipment amounting to SR2.78 billion to the country, representing a 16.80 percent increase from the previous month.

Outbound shipments of transport equipment to the UAE reached SR2.17 billion in August, marking a month-on-month rise of 57.24 percent.

Bolstering the non-oil private sector is a crucial part of the Kingdom’s Vision 2030 agenda, as it steadily pursues economic diversification by reducing its dependence on crude revenues.

Other major shipments to the UAE in August were chemical products valued at SR448.2 million, and plastic and rubber items amounting to SR359.1 million.

Affirming the growth of Saudi Arabia’s non-oil private sector, the Kingdom’s Purchasing Managers’ Index reached 54.8 in August, and later accelerated to 56.3 in September.

According to the Riyad Bank PMI report, compiled by S&P Global, Saudi Arabia’s growth in the non-oil private sector was driven by improved sales momentum and rising new orders in August and September.

The report also emphasized the significance of non-oil sector growth, given current crude production cuts and declining global oil prices, and added that the Kingdom is better positioned to navigate the challenges of market fluctuations for the commodity.

Other top destinations for Saudi Arabia’s non-oil goods

According to GASTAT, China was another major destination for Saudi Arabia’s non-oil goods, with exports to the Asian giant amounting to SR2.27 billion, representing a marginal decline from SR2.38 billion in July.

The authority revealed that China imported chemical and allied products worth SR1.11 billion in August, followed by plastic and rubber products amounting to SR786.3 million.

In August, Saudi Arabia also exported mineral products amounting to SR176.6 million to China, while outbound shipments of base metals totaled SR78.7 million.

India was another major destination for the Kingdom’s non-oil products, with outbound shipments to the Asian nation in August totaling SR2.08 billion.

According to GASTAT, India imported chemical products worth SR1.55 billion, while the outbound shipment value of plastic products and base metals to the Asian nation stood at SR497.1 million and SR366.1 million, respectively.

Other top destinations for Saudi Arabia’s non-oil goods in August were Singapore, Belgium, and Egypt, which imported goods valued at SR1.22 billion, SR896.8 million, and SR842.9 million, respectively.

In August, Bahrain imported non-oil goods worth SR816.8 million from Saudi Arabia, followed by Turkiye and Jordan at 797.6 million and SR787.9 million, respectively.

Overall, Saudi Arabia’s non-oil exports – including re-exports – in August reached SR27.52 billion, representing a 7.5 percent rise compared to the same month in the previous year.

Compared to July, the Kingdom’s non-oil outbound shipments witnessed a rise of 8.13 percent in August.

An outlook of overall merchandise exports

GASTAT revealed that Saudi Arabia’s overall merchandise exports, however, declined by 9.8 percent in August compared to the same month of the previous year, driven by a 15.5 percent decline in oil sales.

As a result, the percentage of oil out of total exports decreased to 70.3 percent in August, from 75.1 percent in the same month in the previous year.

To stabilize the market, Saudi Arabia cut its oil production by 500,000 barrels per day in April 2023, a reduction now extended until December 2024.

According to the authority, Saudi Arabia sent overall merchandise exports worth SR14.83 billion to China in August, followed by South Korea at SR8.94 billion and India at SR8.82 billion, respectively.

The strong flow of Saudi exports to China signifies strong bilateral relations between the nations. The Kingdom has been the largest trading partner of the Asian powerhouse in the Middle East since 2001, and bilateral trade between the nations reached $107.23 billion in 2023.

China and Saudi Arabia are strategic partners in various sectors, including energy and finance, as well as the Belt and Road Initiative.

According to GASTAT, exports worth SR17.71 billion were sent to other countries through sea by Saudi Arabia in August, while outbound shipments via land and air totaled SR5.03 billion and SR4.78 billion, respectively.

King Fahad Industrial Sea Port in Jubail was the main exit point for Saudi Arabia’s exports with goods valued at SR3.67 billion.

Al-Batha Port handled outbound goods worth SR1.78 billion, while exports worth SR881.9 million passed through Al-Hadithah Port.

Among airports, King Khalid International Airport and King Abdulaziz International Airport handled export goods worth SR2.38 billion and SR1.84 billion, respectively.

Saudi Arabia’s imports in August

According to the GASTAT report, the Kingdom’s overall imports decreased by 3.93 percent in August compared to the same month of the previous year, reaching SR64.78 billion.

The Kingdom imported goods worth SR14.37 billion from China, led by mechanical appliances and electrical equipment valued at SR6.22 billion.

Official data added that Chinese imports of transport equipment and base metal products amounted to SR1.61 billion and SR1.24 billion respectively.

In August, Saudi Arabia also imported plastic and rubber products worth SR862.5 million from the Asian giant, while inbound shipment value of textiles and work of arts stood at SR838.9 million and SR799.4 million, respectively.

On the import side, China was closely followed by the US and India, with incoming shipments from these nations to the Kingdom valued at SR6.22 billion, and SR4.02 billion respectively.

German imports to Saudi Arabia amounted to SR3.05 billion in August, while inbound shipments from the UAE and Italy were worth SR2.63 billion, and SR2.51 billion, respectively.

According to the report, inbound shipments worth SR39.60 billion came to Saudi Arabia via the sea, while imports valued at SR16.87 billion, and SR8.31 billion came via air and land, respectively.

King Abdulaziz Port in Dammam was the primary entry point for goods in August through sea, with imports valued at SR18.48 billion, representing 28.5 percent of the total inbound shipments.

Jeddah Islamic Port handled inbound shipments worth SR13.65 billion, while King Abdullah Sea Port and King Fahd Industrial Sea Port were entry points to goods valued at SR1.24 billion and SR1.02 billion, respectively.

The report revealed that King Khalid International Airport in Riyadh welcomed inbound shipments worth SR8.57 billion in August, followed by King Fahad International Airport and King Abdulaziz International Airport, which handled imports valued at SR4.02 billion, and SR3.99 billion, respectively.

Al-Batha Port handled incoming shipments coming through land valued at SR3.54 billion, while Riyadh Dry Port was the entry point to imports worth SR2.77 billion.


China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties

China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties
Updated 05 November 2024
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China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties

China to issue $2bn bonds in Saudi Arabia amid deepening bilateral ties

RIYADH: China has announced plans to issue dollar-denominated bonds in Saudi Arabia starting the week of Nov. 11, marking its first debt issuance in US currency since 2021. 

The Asian country’s Ministry of Finance disclosed on Nov. 5 that it will sell up to $2 billion in bonds in Riyadh.

This issuance comes as China and the Kingdom are strengthening a multifaceted alliance that extends across multiple spheres.

In recent years, both nations have sought to broaden their economic cooperation, aligning strategic initiatives such as China’s Belt and Road Initiative with Saudi Arabia’s Vision 2030 plan.

“With the approval of the State Council, the Ministry of Finance will issue US dollar sovereign bonds of no more than $2 billion in Saudi Arabia in the week of November 11, 2024. The specific issuance arrangements will be announced separately before the release,” the ministry’s statement read.

Strengthening Saudi-Chinese relations

In September, the Kingdom’s Crown Prince Mohammed bin Salman and Chinese Premier Li Qiang co-chaired a pivotal meeting of the High-Level Saudi-Chinese Committee, where they reviewed aspects of joint cooperation and addressed regional and international developments. 

The session in Riyadh emphasized opportunities in energy, trade, and investment, as well as well as technology and security, while laying the groundwork for enhanced coordination across these sectors. 

Expanding tourism and education links

Tourism has emerged as a significant focus in Saudi-Chinese relations. In October, Saudi officials, including the Minister of Tourism Ahmed Al-Khateeb, engaged with Chinese counterparts to expand travel and investment ties.

The Kingdom received the designation of “Approved Destination Status” from Beijing earlier this year, following participation in key events in China. 

To attract 5 million visitors from the Asian country by 2030, Saudi Arabia has introduced Chinese payment processing options, launched tailored tourism campaigns, and increased direct flights between the two countries.

Growing trade and investment

China has been Saudi Arabia’s largest trade partner since 2014, with bilateral trade reaching $97 billion in 2023. This figure includes $54 billion in Saudi exports and $43 billion in imports from China. 

Investments between the two nations have also surged, with Chinese investments in the Kingdom rising from $1.5 billion in 2022 to $16.8 billion in 2023. Saudi investments in China are also substantial, totaling $75 billion.

Saudi Arabia and China are exploring new avenues for collaboration, including joint investments in renewable energy, infrastructure, and technology, with a focus on sustainable development. 

The crown prince’s 2019 visit to Beijing set a foundation for this strategic partnership, resulting in 12 agreements and memoranda of understanding that continue to shape bilateral cooperation.


Saudi Arabia awards 11 mining exploration permits under accelerated program

Saudi Arabia awards 11 mining exploration permits under accelerated program
Updated 05 November 2024
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Saudi Arabia awards 11 mining exploration permits under accelerated program

Saudi Arabia awards 11 mining exploration permits under accelerated program

JEDDAH: Saudi Arabia has granted 11 mining exploration permits to local and international companies for six sites under its Accelerated Exploration Program, which aims to unlock the Kingdom’s underutilized mineral resources.

On Nov. 5, the Ministry of Industry and Mineral Resources announced that the permits, covering a total area of 850 sq. kim across Riyadh, Makkah, and Asir, were awarded as part of a competitive licensing round designed to boost the country’s mineral sector. This initiative is aligned with Saudi Arabia’s Vision 2030 and the National Industry Development and Logistics Program.

The recent competition concluded with one national company and five alliances consisting of 10 local and international firms being awarded the exploration rights. The competition was designed to maximize the value of the country’s mineral resources and expand the mining industry as a key pillar of the economy.

Transforming the mining sector

Saudi Arabia is aiming to transform mining into the third pillar of its industrial base, alongside oil and petrochemicals. The Kingdom is home to more than 5,300 mineral sites, estimated to be worth around SR5 trillion ($1.33 trillion), and the ministry is actively seeking to harness these resources to fuel economic growth.

Among the winners, the alliance of ANS Exploration and Odyssey Metal Ltd. was granted an exploration license for the Umm Qasr site in Riyadh, known for its deposits of gold, silver, lead, and zinc. Gold and Minerals Co. secured a license for the Wadi Doush site in Asir, an area rich in gold, silver, and copper ore deposits, covering 157 square kilometers.

The alliance of AuKing Mining Ltd. and Barg Al-Saman Mining Co. received a license for the Shuaib Marqan site in Riyadh, spanning 92 square kilometers and noted for its copper, silver, and gold resources. Meanwhile, Metal Bank Ltd. and the Mining Holding Co. were awarded the Wadi Al-Jouna site in Asir, which covers 425 square kilometers and contains copper, zinc, silver, and gold.

Other awarded licenses include the Hazm Shubat site in Asir, granted to the Rawkad and Masharef alliance, which is known for its gold deposits. The Midad Al-Muna for Mining and Tinka Resources alliance was given the license for the Huwaimdhan exploration site in Makkah, which also holds significant gold resources.

Commitment to local development

A total of 44 bids were received from 22 companies — many of them new to the Saudi market—during the competition. Bids were evaluated based on technical expertise, proposed work programs, and social and environmental considerations. As part of their commitment, the winning companies have pledged to invest SR75 million ($20 million) in exploration activities and SR5 million toward community development, aiming to create jobs and opportunities for citizens in underserved areas.

This licensing round marks a significant milestone for Saudi Arabia’s mining sector, with four companies receiving exploration licenses for the first time, further cementing the Kingdom’s appeal as a leading investment destination for mining.

Aligning with Vision 2030

The ministry highlighted that this initiative reflects investors' confidence in Saudi Arabia’s mining investment framework, which adheres to the highest standards of transparency and environmental responsibility. It also underscores the country’s commitment to diversifying its economy in line with Vision 2030, which aims to develop the mining sector as a key economic driver.

In a related development, the ministry recently announced another competition for seven mining exploration licenses, covering regions in Makkah and Riyadh and targeting a range of precious and base metals, including gold, copper, zinc, lead, and silver. The deadline for submitting technical proposals for this new licensing round is at the end of November.


Private sector drives 6.1% rise in Saudi capital investment for Q2

Private sector drives 6.1% rise in Saudi capital investment for Q2
Updated 05 November 2024
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Private sector drives 6.1% rise in Saudi capital investment for Q2

Private sector drives 6.1% rise in Saudi capital investment for Q2

RIYADH: Saudi Arabia’s gross fixed capital formation reached SR296 billion ($79 billion) in the second quarter of 2024, marking a 6.1 percent year-on-year increase, according to recent data. 

The Ministry of Investment attributed this growth primarily to the non-government sector, which holds an 86.45 percent share of total GFCF.  

This sector saw an 8.2 percent increase, reaching SR255.9 billion, reflecting robust private-sector activity aligned with Vision 2030’s targets to boost private investment. Conversely, GFCF in the government sector declined by 5.2 percent to SR40.1 billion.   

GFCF, which measures net investments in assets like infrastructure, machinery, and construction, is a key indicator of long-term economic potential, as it reflects capacity-building investments that drive productivity and growth. 

Saudi Arabia’s appeal as a top investment destination continues to grow, with the Ministry of Investment issuing 3,810 licenses in the third quarter — a 73.7 percent annual rise, excluding permits from the Tasattur anti-concealment initiative.  

This strong performance highlights the Kingdom’s successful positioning as a competitive market, driven by an increasingly stable and business-friendly environment, according to the report. 

The ministry’s October report, which aligns its data with the latest IMF guidelines, showed that Saudi Arabia’s foreign direct investment stock reached SR897 billion in 2023, a 13.4 percent increase from 2022.  

Excluding the one-time SR55 billion Aramco pipeline deal, the data showed that net inflows — representing the total new foreign capital coming into the country after accounting for outflows — also surged by 91 percent during this period, reaching SR86 billion. 

As Saudi Arabia pushes toward its goal of making FDI 5.7 percent of its gross domestic product by 2030, this upswing in foreign capital not only strengthens the Kingdom’s position as a global investment hub but also reinforces the ongoing expansion in GFCF, contributing to sustainable economic growth.  

Saudi Arabia has been advancing a range of initiatives to attract and deepen foreign investment, positioning itself as a hub for international business in the Middle East. 

One such measure, announced in 2021, requires foreign companies bidding for government contracts to establish regional headquarters within the Kingdom by 2024. 

This mandate has already encouraged major firms to set up shops in Riyadh, underscoring the Saudi government’s commitment to drawing long-term investment. 

The Public Investment Fund has also played a critical role in bolstering the investment landscape. 

Recently, PIF signed a memorandum of understanding with Brookfield Asset Management to become an anchor investor in Brookfield Middle East Partners. 

This private equity platform plans to raise $2 billion to invest in various high-growth sectors, such as technology, healthcare, and industrials. Additionally, at least half of BMEP’s capital will be allocated to Saudi-based companies, facilitating FDI inflows directly into the Kingdom. 

Another major win came with BlackRock, the world’s largest asset manager, which recently secured approval to establish a regional headquarters in Riyadh. 

This move is set to expand BlackRock’s Middle East operations significantly, reinforcing Saudi Arabia’ appeal as an investment destination for global financial firms. 


Energy sector drives GCC IPO gains in Q3, positive year-end outlook: PwC 

Energy sector drives GCC IPO gains in Q3, positive year-end outlook: PwC 
Updated 8 min 13 sec ago
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Energy sector drives GCC IPO gains in Q3, positive year-end outlook: PwC 

Energy sector drives GCC IPO gains in Q3, positive year-end outlook: PwC 

RIYADH: Initial public offerings across the Gulf Cooperation Council region registered a year-on-year increase in proceeds in the third quarter of 2024 despite a decline in the number of listings, according to a new report. 

The energy sector spearheaded this quarter’s growth, led by NMDC Energy’s listing, which raised $877 million — the largest IPO in the UAE this year, stated PwC Middle East. 

Saudi Arabia’s parallel market, Nomu, also contributed to the quarter’s performance with three listings. 

PwC forecasts strong aftermarket performance for companies completing IPOs in 2024, predicting that most of the top 10 IPOs by deal size will trade above their initial offering prices. 

This outlook suggests a favorable market reception for large IPOs in the coming year, with strong investor demand potentially driving post-IPO stock prices higher. 

“As has been the case in recent years, Q3 has seen relatively few companies come to market. Since the end of the quarter, we have seen a number of IPOs either completed or announced across the GCC, including OQ Exploration and Production, Oman’s largest ever IPO, supporting the positive outlook for the remainder of 2024,” said Muhammad Hassan, capital markets leader at PwC Middle East. 

In the third quarter, bond issuances in the GCC raised $4.4 billion, marking an almost 30 percent increase over the previous year. 

Additionally, $5.2 billion was raised through sukuk issuances, with 88 percent of these bonds listed on the Qatar Stock Exchange or Nasdaq Dubai. 

Governments in the region accounted for nearly 65 percent of total bond and sukuk issuances. 

“Looking forward, the outlook for the GCC IPO market remains positive with a healthy IPO pipeline of companies from a diverse range of sectors busy preparing for their upcoming IPOs across the region,” the report stated.

According to another report by the Kuwait Financial Center, also known as Markaz, Saudi Arabia and the UAE led IPO activity in the GCC with $1.7 billion raised in the third quarter, a 6 percent increase from the year before.

The analysis highlighted that the UAE dominated the quarter’s activity, leading the region with $1.1 billion in IPO proceeds from a single listing, accounting for 69 percent of the total raised across the GCC.  

Saudi Arabia followed with $512 million from its IPOs in the third quarter, contributing 31 percent to the regional total.

In the Kingdom, the food and beverage sector saw wheat milling company Arabian Mills for Food Products raise $271 million, accounting for 16 percent of the quarter’s proceeds.  

Meanwhile, perfume maker Al Majed for Oud, a key player in the consumer cyclical sector, raised $188 million, contributing 11 percent.  

The materials sector had a smaller presence, with ASG Plastic Factory Co. raising $8.8 million on Tadawul’s parallel Nomu market.  

The commercial and professional services sector witnessed three IPOs, including First Avenue Real Estate Development Co., Altharwah Albashariyyah Co., and Al Ashghal Al Moysra Co., which collectively raised $44.4 million.


Saudi-Portuguese Business Council launches investment regulation initiative

Saudi-Portuguese Business Council launches investment regulation initiative
Updated 4 min 21 sec ago
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Saudi-Portuguese Business Council launches investment regulation initiative

Saudi-Portuguese Business Council launches investment regulation initiative

RIYADH: Saudi Arabia and Portugal are aiming to increase awareness of investment regulations in both countries to boost trade thanks to a first-of-its-kind initiative. 

Announced by the Federation of Saudi Chambers, the Saudi-Portuguese Business Council signed a memorandum of understanding with Ibrahim Al Howishel Law Firm to facilitate the entry of Portuguese companies into the Kingdom. 

The MoU will also encourage regional companies to invest in Portugal by acting as a legal advisor. It will be the first of its kind among Saudi foreign business councils within the federation. 

Its objective is to increase the number of international investors in the Kingdom by informing them about the positive developments, regulatory environment, and investment landscape. 

Walid Al-Balhan, chairman of the Saudi-Portuguese Business Council, emphasized that the recently signed MoU aligns with Saudi Arabia’s Vision 2030, which aims to attract foreign investment and strengthen international business ties. 

He also said the advisor would address investor queries and provide guidance on regulations, building confidence among Portuguese companies looking to enter the Kingdom. 

He extended his gratitude to the Federation of Saudi Chambers and relevant government bodies for their support of the council’s initiatives. 

Under the agreement, both parties will collaborate with the Kingdom’s authorities to host workshops for Portuguese firms interested in the Saudi market. 

These sessions are expected to cover key topics, including the Premium Residency system, foreign investment regulations, and company setup processes, as well as strategic investment opportunities and incentives for firms considering relocating their headquarters to Saudi Arabia. 

The agreement also includes cooperative efforts to refine investment procedures for Saudi companies in Portugal, propose incentives for entities from the European country to attract investors within the Kingdom, and provide advisory support for companies in both nations. 

The newly established Saudi-Portuguese Business Council aims to strengthen economic relations between Saudi Arabia and Portugal from 2024 to 2028. 

Formed in August under the Federation of Saudi Chambers of Commerce and endorsed by Saudi Arabia’s General Authority for Foreign Trade, the council is led by President Al-Baltan, with Vice Presidents Tarfah bint Abdulrahman Al-Mutairi and Turki bin Nasser Al-Khilaiwi. 

The council aligns with Saudi Arabia’s strategy to deepen ties with European countries, focusing on collaborative sectors such as infrastructure, agriculture, tourism, technology, and renewable energy — all central to Saudi Vision 2030’s goal of diversifying the economy beyond oil. 

Saudi exports to Portugal grew by 50 percent between 2021 and 2022, with trade volume reaching $1 billion in 2023. The council seeks to enhance investment opportunities and create a supportive environment for businesses from both nations to access each other’s markets. 

This collaboration was formalized with a 2021 memorandum of understanding between the Saudi and Portuguese federations, marking a strategic step to capitalize on growth potential in each country.