Saudi Arabia saved $6bn through digital services, says official

Launched by the Digital Government Authority, the two-day forum is being held under the theme ‘Our Future Now’ in Riyadh. It aims to discuss challenges and opportunities in the implementation of digital technology. SPA
Launched by the Digital Government Authority, the two-day forum is being held under the theme ‘Our Future Now’ in Riyadh. It aims to discuss challenges and opportunities in the implementation of digital technology. SPA
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Updated 19 December 2023
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Saudi Arabia saved $6bn through digital services, says official

Saudi Arabia saved $6bn through digital services, says official
  • Up to 36% of medical consultations in Saudi Arabia are provided remotely

RIYADH: Over a third of medical consultations in Saudi Arabia are done via digital channels, said Ahmed Al-Suwaiyan, governor of Digital Government Authority.

Speaking on the first day of the Digital Government Forum in Riyadh on Tuesday, Al-Suwaiyan said it indicated the level of success with which the Kingdom is moving toward digital transformation in all spheres of life ensuring increased productivity, efficiency, and transparency, reported Al-Ekhbariya.

The forum aims to showcase the Kingdom’s achievements in the field of digital technology and serve as a platform for industry players to boost networking and explore opportunities.

The event seeks to facilitate exchanging experiences, building partnerships, discussing challenges and future directions of digital government as well as exploring cutting-edge technical practices and highlighting investment opportunities in the Kingdom.

He cited the example of Absher to drive home his point about digital transformation.

The all-purpose “Absher platform helped the country save more than $6 billion (SR23 billion),” he said.

Absher is an electronic platform of the Ministry of Interior that provides basic services of the ministry digitally and in an integrated manner to citizens, residents, and visitors.

Al-Suwaiyan said: “Thirty-six percent of medical consultations in the Kingdom are provided remotely (via digital channels).”

“We saved over SR5.5 billion through the budget preparation and implementation process,” he added.

The president of the Court of Grievances of Saudi Arabia, Khalid bin Mohammed Al-Yousef, spoke about how digital transformation in the Kingdom has come a long way.

“The Government Entities Portal will be launched to manage digital services,” Al-Yousef revealed.

“The use of artificial intelligence in the judiciary helped in making decisions,” he added.

The assistant minister of foreign affairs for executive affairs, Abdulhadi bin Ahmed Al-Mansouri, told the audience how the Kingdom launched the e-Visa platform. He highlighted the importance of the portal and how it will benefit people in a hassle-free manner.

Speaking on the occasion, the CEO of the Saudi Authority for Intellectual Property, Abdulaziz bin Mohammed Al-Suwailem, said: Thanks to digital technology “rights owners can move from the concept of registering and proving rights to managing the intellectual property portfolio in an integrated manner.”

The CEO of the Saudi Food and Drug Authority, Hisham bin Saad Al-Jadhaie, also participated in the event. Al-Jadhaie explained the goal of the entity is to use AI to ensure the safety of drug shipments before their arrival.

The assistant minister of interior for technology affairs, Bandar bin Abdullah Al-Mishari, said: “The ministry faces a major challenge to integrate fieldwork with AI.”

Giving Qatar’s point of view in terms of digital transformation, the assistant undersecretary for digital government affairs, in Qatar’s Ministry of Communication and Information Technology, Mashael Al-Hammadi, talked about the country’s investment during the World Cup.

“During the World Cup, we invested approximately $280 million in the communications and information technology sectors,” Al-Hammadi said.

The CEO of Bahrain’s Information and eGovernment Authority, Mohammed bin Ali Al-Qaed, shed light on how legislation and policies are the most important data enablers for a controlled exchange of information.

Launched by the Digital Government Authority, the two-day forum is being held under the theme “Our Future Now.”


US firm Alcoa offloads stake in Ma’aden joint ventures for $150m

US firm Alcoa offloads stake in Ma’aden joint ventures for $150m
Updated 15 September 2024
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US firm Alcoa offloads stake in Ma’aden joint ventures for $150m

US firm Alcoa offloads stake in Ma’aden joint ventures for $150m

RIYADH: American industrial giant Alcoa Corp. is set to sell its stakes in Ma’aden Aluminum Co. and Ma’aden Bauxite and Alumina Co. to the Saudi Arabian Mining Co., or Ma’aden.

The deal will involve Alcoa receiving $150 million in cash and newly issued shares representing approximately 2.21 percent of Ma’aden’s share capital after the transaction.

This move aligns with US firm’s strategy to deepen its involvement with Ma’aden and underscores its ongoing commitment to the Saudi company.

It also comes at a time when Ma’aden has reported impressive financial results, achieving a net profit of SR2 billion ($532 million) in the first half of 2024, a remarkable 160 percent increase compared to the same period in 2023.

Ma’aden CEO Bob Wilt remarked: “Ma’aden formed our joint venture with Alcoa in 2009 to develop a world-class aluminum business. Now, it’s time for our partnership to evolve.”

He added: “Streamlining the management structure of our aluminum business is a crucial step forward as we prepare for future growth and continue to build mining as the third pillar of the Saudi economy.”

Alcoa’s President and CEO William Oplinger stated: “We deeply value our partnership with Ma’aden and our joint ventures. We are confident that under this new arrangement, MBAC and MAC are well-positioned for success.”

He also noted that the transaction would simplify Alcoa’s portfolio, enhance visibility into the value of its investment in Saudi Arabia, and provide greater financial flexibility.

The transaction will grant Ma’aden full ownership and complete operational and management control of MAC and MBAC, streamlining its aluminum business operations. The deal is subject to regulatory and corporate approvals, as well as the completion of other customary closing conditions, with an expected completion by the first quarter of 2025.

Ma’aden’s strong performance and strategic advancements highlight its commitment to leading the mining sector and supporting Saudi Arabia’s economic diversification, particularly in establishing mining as a key pillar of the Kingdom’s industrial sector.


Closing Bell: Saudi main index climbs to 11,900

Closing Bell: Saudi main index climbs to 11,900
Updated 15 September 2024
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Closing Bell: Saudi main index climbs to 11,900

Closing Bell: Saudi main index climbs to 11,900
  • Parallel market Nomu fell by 164.65 points, or 0.63%, to finish at 25,769.95
  • MSCI Tadawul Index increased by 7.12 points, or 0.48%, ending the day at 1,478.60

RIYADH: Saudi Arabia’s Tadawul All Share Index rose by 57.75 points, or 0.49 percent, to close at 11,900.30 on Sunday. 

The benchmark index saw a total trading turnover of SR4.14 billion ($1.10 billion), with 138 stocks advancing and 80 declining. 

The Kingdom’s parallel market Nomu fell by 164.65 points, or 0.63 percent, to finish at 25,769.95, as 19 stocks advanced and 46 retreated. 

The MSCI Tadawul Index increased by 7.12 points, or 0.48 percent, ending the day at 1,478.60. 

The top performer of the day was Saudi Fisheries Co., with its share price surging 9.93 percent to SR25.35. 

Other top gainers included Amlak International Finance Co. and Saudi Arabian Cooperative Insurance Co., with their share prices rising by 7.59 percent and 7.36 percent, respectively. 

The worst performer was Al-Baha Investment and Development Co., which saw its share price drop by 5.56 percent to SR0.17. Middle East Specialized Cables Co. saw a decline of 1.99 percent, while First Milling Co. dropped by 1.83 percent. 

On the announcements front, Riyad Capital, acting as the sole financial adviser, lead manager, bookrunner, and underwriter for Fourth Milling Co.’s initial public offering, has revealed the offering price range and the start of the institutional book-building period. 

According to a Tadawul statement, the price range for the offering is set between SR5 and SR5.30 per share, with the book-building period running from Sept. 15 to 19. 

The offering includes 162 million ordinary shares, representing 30 percent of Fourth Milling’s current share capital. Participating parties can apply for a minimum of 300,000 shares, with a maximum of 26.99 million shares available. 

The financial adviser may reduce the number of shares allocated to participating parties to 129.6 million, or 80 percent of the total offer, to accommodate individual demand. Up to 32.4 million shares, or 20 percent, will be allocated to individual subscribers. 

The total offering size is projected to range from SR810 million to SR858.6 million, suggesting a market capitalization of SR2.7 billion to SR2.8 billion at listing. The company will have a free float of 30 percent of shares post-listing. 

The Capital Market Authority has also approved the registration and offering of 3 million shares of Multi Business Group for Projects Co., representing 20 percent of the firm’s share capital, in the parallel market. The offer will be limited to qualified investors, with the prospectus to be published ahead of the offering. 

The CMA also approved the registration and offering of 337,500 shares of Digital Research Co. and 250,000 shares of Balsm Alofoq Medical Co., both representing 20 percent of each firm’s share capital, in the parallel market. 

The offering for Al-Majed for Oud Co. was held on Sept. 15, with Saudi Fransi Capital serving as the lead manager and Banque Saudi Fransi and Al-Rajhi Bank acting as receiving entities. The retail offering comprised 1.5 million shares, each priced at SR94. 


Nestle to build its first Saudi manufacturing plant in Jeddah 

Nestle to build its first Saudi manufacturing plant in Jeddah 
Updated 7 min 2 sec ago
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Nestle to build its first Saudi manufacturing plant in Jeddah 

Nestle to build its first Saudi manufacturing plant in Jeddah 

JEDDAH: Swiss food and beverage company Nestle has signed an agreement to establish its first manufacturing plant in Saudi Arabia.

The new facility will be located on a 117,000 sq. meter site in Jeddah’s Third Industrial City.

The Saudi Authority for Industrial Cities and Technology Zones, also known as MODON, announced the agreement, which was formalized in the presence of Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Alkhorayef, who also serves as MODON’s chairman.

The signing ceremony, held on Sept.15 in Jeddah, was also attended by Majed Al-Argoubi, CEO of MODON, and Robert Helou, CEO of Nestle Saudi Arabia, according to the Saudi Press Agency.

Slated to open in 2025, the plant represents an initial investment of SR270 million ($72 million). The project is set to enhance local production capabilities, contribute to sustainable food security in the Kingdom, and meet local demand while enabling exports to other Middle Eastern and North African markets.

The initiative aligns with Saudi Arabia’s broader efforts to improve food security by diversifying and localizing food sources and reducing import dependency. In support of the National Industrial Strategy, MODON is advancing the food sector through the development of industry clusters in Jeddah’s second and third industrial cities, aimed at strengthening supply chains and boosting exports.

With an initial production target of 15,000 tonnes annually, the plant is expected to foster growth in the region’s food manufacturing industry. The factory will focus on producing food for children and will feature an automated production line with advanced packaging and filling technologies operated by highly skilled local professionals.

The project is anticipated to create hundreds of direct and indirect jobs and will include a central warehouse, an industrial services building, an advanced laboratory, and an administrative office.


Saudi Arabia launches strategy to boost market transparency, foreign investment

Saudi Arabia launches strategy to boost market transparency, foreign investment
Updated 15 September 2024
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Saudi Arabia launches strategy to boost market transparency, foreign investment

Saudi Arabia launches strategy to boost market transparency, foreign investment
  • Plan’s objectives include creating strong debt market and boosting global competitiveness of asset management industry
  • Blueprint comprises three pillars and over 40 initiatives designed to propel the market’s growth and efficiency

RIYADH: Saudi Arabia’s Capital Market Authority has unveiled a plan for 2024-2026 to develop a robust debt market and enhance the international competitiveness of its asset management industry.

The strategy emphasizes safeguarding investors’ rights by increasing transparency and ensuring market integrity. It revolves around three main pillars and includes over 40 initiatives aimed at boosting market growth and efficiency. A key aspect of this approach is enhancing the stock market’s role in capital raising.

To achieve this, the authority plans to introduce special purpose acquisition companies on the parallel market and facilitate the issuance of Saudi depositary receipts. These measures are designed to offer more diverse investment opportunities and make the market more attractive to both domestic and international investors.

Highlighting the plan’s bold objectives, CMA Chairman Mohammed El-Kuwaiz said: “Our new strategy emphasizes the creation of a robust debt market, the enhancement of the asset management industry, and the attraction of increased investments to the national economy.”

The top official made these remarks during the Debt Markets and Derivatives Forum held in Riyadh last week. 

The undertaking will build on past successes while aligning with Saudi Vision 2030, which supports the national economy by facilitating an advanced financial ecosystem and attracting international investments.

The plan focuses on increasing transparency, spurring innovation in financial technology, and expanding financing options. It represents a significant step toward realizing the goals of Saudi Vision 2030, which seeks to enhance the national economy by creating a sophisticated financial ecosystem and attracting global investments.

These initiatives are designed to build on past achievements and position Saudi Arabia as a leading financial hub in the region.

Additionally, the CMA is focusing on developing the sukuk and debt instruments market by creating regulatory frameworks for green, social, and sustainable debt instruments. This aligns with the global push toward environmental, social, and governance criteria.

To stimulate market activity and support Saudi Arabia’s broader financial sector development goals, the CMA is simplifying the regulatory processes for offering, listing, and registering debt instruments. The objectives include increasing the stock market’s value to 80.8 percent of gross domestic product by 2025, up from 66.5 percent in 2019, and expanding the debt instruments market to 24.1 percent of GDP by the same year.

Central to this strategy is a strong emphasis on investor protection, which involves enhancing market transparency and supervisory mechanisms.

In response to recent increases in penalties and compensation for market violations, El-Kuwaiz highlighted the importance of protecting investor interests. “Trust is vital for a successful market,” he said, underscoring the CMA’s commitment to developing class action compensation procedures and improving the resolution process for complaints between financial institutions and their clients. These efforts are aimed at creating a transparent, accountable market environment that strengthens investor confidence.

The CMA’s plan also emphasizes empowering the financial market ecosystem, particularly through support for financial technology, or fintech.

Recognizing the crucial role of technology in fostering competition and efficiency within the financial sector, the CMA intends to promote the growth of fintech companies and facilitate open finance applications within the market framework. This strategy aims to integrate advanced technologies into the financial sector, streamlining operations and enhancing user experiences.

Building on the successes of the CMA’s 2021-2023 agenda, which saw a significant 52 percent increase in the number of listed companies—from 204 in 2019 to over 310 by the end of 2023—the new strategic plan seeks to further advance the market. These achievements have laid a solid foundation for the current strategy, highlighting the global recognition of the Saudi financial market’s expanding prominence.

The new plan aims to enhance the market’s appeal to foreign investors, with the goal of establishing the Saudi financial market as a regional and international leader by the end of 2026. This includes doubling the number of companies licensed to engage in fintech activities and increasing the volume of managed assets.

A notable aspect of the plan is its comprehensive approach to regulatory reforms and market development. This includes reforms to regulatory frameworks for offerings and listings, the development of investment fund regulations, and improvements to class action compensation procedures. The CMA’s focus on enabling more flexible fund structures and advancing the asset management industry reflects a forward-thinking approach to market growth and sophistication.

The CMA’s initiatives reflect the Kingdom’s ambition to position itself as a leading regional and global financial hub. By concentrating on ESG-aligned financial instruments, enhancing market transparency, and prioritizing investor protection, the CMA is laying the groundwork for a sustainable and resilient market environment.


Oman’s Islamic banking assets surge 18%, reflecting broader GCC growth trends

Oman’s Islamic banking assets surge 18%, reflecting broader GCC growth trends
Updated 15 September 2024
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Oman’s Islamic banking assets surge 18%, reflecting broader GCC growth trends

Oman’s Islamic banking assets surge 18%, reflecting broader GCC growth trends
  • Combined total represented 11.4% of the sultanate’s total banking sector assets
  • Islamic banking sector rose by 10.4%, amounting to around 6.4 billion rials

RIYADH: The combined assets of Oman’s Islamic banks and windows reached around 7.8 billion Omani rials ($20.2 billion) by June, an 18.1 percent increase from the same period in 2023.

According to data from the central bank, the combined total represented 11.4 percent of the sultanate’s total banking sector assets. 

The analysis showed that total financing provided by the Islamic banking sector rose by 10.4 percent, amounting to around 6.4 billion rials. 

Deposits in Islamic financial institutions and windows also grew by 14.7 percent, reaching nearly 6 billion rials by the end of June.

The growth in Oman aligns with a broader regional trend. A report by Moody’s Investors Service predicts that Islamic financing across the Gulf Cooperation Council will outpace conventional banking, driven by increasing demand for Shariah-compliant financial products and the stability of Islamic banks’ net profit margins. 

Unlike conventional banks, Islamic institutions benefit from fixed-rate retail financing, insulating them from US Federal Reserve monetary policy shifts.

As a result, GCC Islamic banks are expected to maintain superior returns on assets and a stronger net profit margin compared to conventional counterparts. 

Moody’s said that the profitability of Islamic financial institutions in the GCC will remain strong over the next 12 to 18 months, fueled by stable oil prices, ambitious economic diversification efforts, and strong business confidence. 

Globally, the sukuk market is also set to expand, with Moody’s projecting issuance to reach $200 to $210 billion in 2024, up from under $200 billion in 2023.