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Saudi Arabia working to ensure stability of global oil markets, says crown prince  

Saudi Arabia working to ensure stability of global oil markets, says crown prince  
The remarks were made during Crown Prince Mohammed bin Salman’s opening address at the annual royal inaugural speech of the fourth year of the eighth session of the Shoura Council on Wednesday. AFP/File
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Updated 28 December 2023
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Saudi Arabia working to ensure stability of global oil markets, says crown prince  

Saudi Arabia working to ensure stability of global oil markets, says crown prince  
Updated 28 December 2023
ARAB NEWS  
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RIYADH: Saudi Arabia’s involvement in the global economy’s energy markets is geared toward bolstering the stability of the global oil markets, according to the crown prince.  

The remarks were made during Crown Prince Mohammed bin Salman’s opening address at the annual royal inaugural speech of the fourth year of the eighth session of the Shoura Council on Wednesday. 

According to a release by the Ministry of Energy, he emphasized the Kingdom’s crucial role in establishing and continuing the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, through spending that aims to accelerate market stability and ensure the sustainability of its supplies. 

The Saudi prime minister highlighted the significance of oil in supporting global economic growth, expressing the Kingdom’s eagerness to develop and invest in all its energy resources. 

In his address, he also spotlighted the Kingdom’s commitment to “new energy” programs and initiatives, citing their “positive impact on the Saudi economy,” according to the release. 

He further added that through plans and programs aimed at increasing the contribution of renewable energy sources, the Kingdom aims to have about 50 percent of its energy produced through renewables by 2030. 

The crown prince said: “Your country has achieved leadership in protecting the environment by introducing local and international initiatives that rely on clean energy and contribute to reducing carbon emissions, the most important of which are the Saudi Green Initiative and the Middle East Green Initiative.”  

He emphasized that developing a plan with clear milestones to achieve global goals affirms the Kingdom’s commitment to international sustainability efforts and contributes to increasing the region’s capabilities to protect the Earth. 

The crown prince also noted that Saudi Arabia will continue working toward economic transformation in accordance with the goals of Vision 2030, stating that the positive results achieved already show the promise of more success in future economic reforms to strengthen the financial position of the Kingdom. 

Topics: saudi crown prince Saudi Crown Prince Mohamad bin Salman

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Number of active mining licenses in Saudi Arabia reaches 2,295

Number of active mining licenses in Saudi Arabia reaches 2,295
Updated 13 November 2024
Arab News
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Number of active mining licenses in Saudi Arabia reaches 2,295

Number of active mining licenses in Saudi Arabia reaches 2,295
  • The goal is to transform mining into the third pillar of the national industry and leverage the Kingdom’s vast mineral wealth, estimated at around SR9.3 trillion
Updated 13 November 2024
Arab News

RIYADH: Saudi Arabia’s Ministry of Industry and Mineral Resources issued 35 new mining licenses in September, the Saudi Press Agency reported on Wednesday citing the National Center for Industrial and Mining Information.

These permits included 24 exploration licenses, seven quarry licenses for building materials, three reconnaissance licenses, and 1 mining exploitation and small mine license.

Official spokesperson for the ministry, Jaraah bin Mohammed Al-Jaraah, explained that by the end of September 2024, the total number of active mining licenses in the sector had reached 2,295. The majority of these licenses are quarry licenses for building materials, with 1,461 issued, followed by 566 exploration licenses, 203 mining exploitation and small mine licenses, 42 prospecting licenses, and 23 surplus mineral resource licenses.

Al-Jaraah emphasized that the Ministry of Industry and Mineral Resources is focused on protecting and enhancing the value of the mining sector in alignment with Saudi Arabia’s Vision 2030. The goal is to transform mining into the third pillar of the national industry and leverage the Kingdom’s vast mineral wealth, estimated at around SR9.3 trillion.

Topics: Saudi Ministry of Industry and Mineral Resources Mining licenses Saudi mining

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Saudi Arabia’s CMA approves regulatory changes to strengthen debt market

Saudi Arabia’s CMA approves regulatory changes to strengthen debt market
Updated 13 November 2024
Nadin Hassan
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Saudi Arabia’s CMA approves regulatory changes to strengthen debt market

Saudi Arabia’s CMA approves regulatory changes to strengthen debt market
Updated 13 November 2024
Nadin Hassan

RIYADH: Saudi Arabia’s Capital Market Authority has approved its largest regulatory overhaul to date for the sukuk and debt instruments market, marking a significant step in the country’s financial sector development.

The newly approved changes introduce key amendments to the rules on the offer of securities and continuing obligations, particularly related to the issuance of debt instruments.

These adjustments simplify prospectus requirements for public, private, and exempted offerings, streamlining the process and reducing regulatory burdens.

These changes will take effect as soon as they are published and are designed to attract a wider range of issuers and foster deeper investment in the market.

“By facilitating the listing requirements for debt instrument, we are increasing the attractiveness of the local debt capital market to drive increased participation from issuers and investors,” Mohammed Al-Rumaih, CEO of the Saudi Exchange, said.

The amendments to the listing rules of debt instruments mark a significant milestone in the continued development of Saudi Arabia’s debt capital market, further reinforcing our commitment to building a globally competitive and sophisticated debt capital market.”

The reforms aim to strengthen Saudi Arabia’s regulatory framework for debt instruments, creating a more dynamic and accessible market. Notably, the amendments allow the Kingdom’s development funds, sovereign wealth funds, and development banks to issue debt instruments through exempt offerings, subject to specific conditions.

This flexibility will enable these institutions to better align their financing strategies with Saudi Arabia’s broader development goals.

“As we move forward, the Saudi Exchange remains focused on providing a robust platform for debt financing that supports the Kingdom’s Vision 2030 ambitions, specifically the Financial Sector Development Program aspirations in deepening the debt capital market,” Al-Rumaih said.

The new regulations also simplify the documentation process for public offerings, reducing prospectus requirements by more than 50 percent.

A dedicated section for public offerings will improve regulatory clarity, ensuring that all material information is disclosed to investors while maintaining investor protection.

In addition to easing public offering requirements, the changes introduce more flexibility for private offerings. The CMA has eliminated the prior requirement for advance notification before launching an offering.

Issuers can now notify the CMA and immediately proceed with their offerings, a change that is expected to expedite the financing process and improve efficiency.

These regulatory enhancements are part of Saudi Arabia’s broader efforts to develop its sukuk and debt markets as a crucial funding channel for businesses.

By improving access to financing, the reforms are expected to drive greater economic growth and help position the sukuk and debt markets as central components of the Kingdom’s financial ecosystem.

The reforms align with Saudi Arabia’s Vision 2030 strategy, which seeks to diversify the economy and enhance the capital markets. They also reflect the CMA’s ongoing commitment to improving market transparency, protecting investors, and increasing market participation.

In parallel, the CMA recently invited public feedback on amendments to the investment funds regulations, which are also part of efforts to refine the framework for private and foreign investment funds, particularly in retail markets. These changes aim to better protect retail investors, addressing risks that emerged from a 2021 regulation allowing individual retail investments up to SR200,000 ($53,245).

The consultation period for these proposed changes will run for 30 calendar days.

With these far-reaching regulatory reforms, Saudi Arabia is poised to further strengthen its sukuk and debt markets, positioning them as key drivers of economic growth and investment. The CMA’s efforts to enhance transparency and investor protection are expected to boost both domestic and international confidence in the Kingdom’s financial markets.

Topics: CMA Sukuk Debt market bonds

Saudi PIF to offer 2% of Saudi Telecom Co. shares to investors

Saudi PIF to offer 2% of Saudi Telecom Co. shares to investors
Updated 13 November 2024
REEM WALID 
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Saudi PIF to offer 2% of Saudi Telecom Co. shares to investors

Saudi PIF to offer 2% of Saudi Telecom Co. shares to investors
  • Goldman Sachs Saudi Arabia and SNB Capital are acting as joint global coordinators and bookrunners for PIF
  • Remaining shares held by PIF represent 62% of the firm’s issued share capital
Updated 13 November 2024
REEM WALID 

RIYADH: Saudi Arabia’s Public Investment Fund has announced the offering of 2 percent of its Saudi Telecom Co.’s stake, amounting to 100 million shares, to qualified institutional investors locally and globally.

Goldman Sachs Saudi Arabia and SNB Capital, acting as joint global coordinators and bookrunners for PIF, announced that the share price, or offer rate, would be determined through an accelerated book-building process, according to a statement on the Saudi Stock Exchange.

This falls in line with PIF’s vision, which has about $925 billion assets under management, of becoming a global investment powerhouse and the world’s most impactful investor, enabling the creation of new sectors and opportunities that will shape the future global economy, while driving the economic transformation of Saudi Arabia.

The Tadawul statement said that following the completion of the offering, the remaining shares held by PIF in the company, representing 62 percent of the firm’s issued share capital, will be subject to a 90-day contractual lock-up undertaking.

The company will not receive any proceeds from the issuance, and the offering will not dilute the shares of the organization’s additional shareholders.

The statement also said that the final number of offer shares, price, and results will be announced by Nov. 14. 

The sale will be executed through off-market negotiated deals on Nov. 14 before market opening, under the Negotiated Deals Framework stipulated under the Trading and Membership Procedures issued by the Saudi Exchange.

The offering will be available to institutional investors within the Kingdom, qualified foreign institutional backers in line with the Rules for Foreign Investment in Securities, and institutional beneficiaries of swap agreements made with a Capital Market Authority-authorized person to trade shares on the Saudi Exchange on their behalf. 

It will also be open to Gulf Cooperation Council investors, including companies and funds authorized to trade in Saudi shares.

Topics: Saudi Arabia's Public Investment Fund (PIF) Saudi Arabia Saudi Telecom Co. (STC) PIF STC

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Closing Bell: Saudi Arabia’s TASI closes in red, down 0.97%

Closing Bell: Saudi Arabia’s TASI closes in red, down 0.97%
Updated 13 November 2024
Nadin Hassan
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Closing Bell: Saudi Arabia’s TASI closes in red, down 0.97%

Closing Bell: Saudi Arabia’s TASI closes in red, down 0.97%
  • MSCI Tadawul 30 Index declined 15.60 points to close at 1,500.54 points
  • Parallel market Nomu closed the day at 29,205.53 points, reflecting an increase of 95.12 points
Updated 13 November 2024
Nadin Hassan

RIYADH: The Tadawul All Share Index in Saudi Arabia concluded Wednesday’s trading session at 11,930.45 points, marking a decrease of 117.22 points or 0.97 percent. 

MSCI Tadawul 30 Index also declined 15.60 points to close at 1,500.54 points, a 1.03 percent decrease. 

The parallel market Nomu closed the day at 29,205.53 points, reflecting an increase of 95.12 points, or 0.33 percent.

TASI reported a trading volume of SR5.540 billion ($1.474 billion), with 52 stocks gaining and 178 falling.

The best-performing stock was Shatirah House Restaurant Co., whose share price surged 10 percent to SR20.24.  

Other top performers include Saudi Cable Co. and Alkhaleej Training and Education Co., whose share prices soared by 5 percent and 4.08 percent to SR88.20 and SR30.60, respectively.

Other top performers include Bawan Co. and Middle East Specialized Cables Co.

The worst performer was Ash-Sharqiyah Development Co., whose share price dropped by 5.18 percent to SR19.40.

Other worst performers were United International Transportation Co. and National Medical Care Co., whose share prices dropped by 3.87 percent and 3.33 percent, respectively, to stand at SR79.50 and SR168.60.

Saudi Tadawul Group Holding Co. was another worst performer, whose share price dropped by 3.08 percent to SR232.60.   

On the parallel market Nomu, Leaf Global Environmental Services Co. was the top gainer, with its share price surging by 8.68 percent to SR98.90.

Other top gainers on the parallel market were Fad International Co. and Al Mohafaza Co. for Education, with their share prices surging by 7.24 percent and 6.04 percent to reach SR81.50 and SR28.10, respectively.

Rawasi Albina Investment Co. and Amwaj International Co. were the other top gainers on Nomu.

Al-Razi Medical Co. was the major loser on this market, as the company’s share price slipped by 7.98 percent to SR47.85.  

First Avenue for Real Estate Development Co. and Obeikan Glass Co. were other major losers on Nomu, with share prices dropping by 6.18 percent and 6.01 percent, reaching SR8.35 and SR49.25, respectively.

Topics: Closing Bell Saudi stock exchange Tadawul All Share Index (TASI)

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GCC banks to remain resilient in 2025 despite anticipated rate cuts: S&P Global

GCC banks to remain resilient in 2025 despite anticipated rate cuts: S&P Global
Updated 13 November 2024
NOUR EL-SHAERI   
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GCC banks to remain resilient in 2025 despite anticipated rate cuts: S&P Global

GCC banks to remain resilient in 2025 despite anticipated rate cuts: S&P Global
  • S&P Global predicts a manageable impact on bank margins
  • GCC banking sector’s strong efficiency provides solid foundation for continued growth and resilience through 2025
Updated 13 November 2024
NOUR EL-SHAERI   

RIYADH: Banks in the Gulf Cooperation Council region are expected to maintain strong asset quality, profitability, and ample liquidity through 2025, according to a new report by S&P Global.  

The global credit rating agency highlighted the robust performance of the region’s banking sector, which it attributes to solid capitalization and well-managed balance sheets, despite potential challenges from lower interest rates.  

S&P Global said that while the outlook for GCC banks remains positive, heightened geopolitical risks or a sharp drop in oil prices could pose threats to their creditworthiness. However, the agency added that the banks are likely to demonstrate resilience in the face of such adverse scenarios, reflected in their currently high ratings. 

The report forecasts that Brent crude oil will average $75 per barrel from the fourth quarter of the year through 2027, supporting GCC economies.  

“In our view, GCC countries will also benefit from the implementation of economic transformation projects (in Saudi Arabia), the expansion of gas production (in Qatar), reform implementations (in Bahrain and Oman), and the non-oil economy’s good performance (in Bahrain and the UAE),” the report said.
 
Despite expected interest rate cuts by the US Federal Reserve, and mirrored reductions by GCC central banks, S&P Global predicts a manageable impact on bank margins.  

The decline in rates could reduce funding costs and mitigate unrealized losses in securities portfolios, with an estimated margin impact ranging from 20-60 basis points, depending on the country. 

GCC banks maintain strong capitalization levels, which continue to underpin their overall creditworthiness, according to the report.  

Shareholder support has been a key factor, with dividend payouts generally below 50 percent, allowing banks to retain profits and stabilize their capital positions. 

The quality of capital remains robust, with limited reliance on hybrid instruments. However, S&P Global anticipates an increase in hybrid issuance by GCC banks over 2025-2026, as institutions seek to take advantage of lower interest rates and address the first call dates of previously issued instruments. 

“GCC banks are mainly funded by domestic deposits, which have proved stable through periods of mild stress, such as the COVID-19 pandemic and previous instances of geopolitical risk,” the report added. 

It also outlined potential risks stemming from ongoing regional conflicts. 

S&P Global conducted stress tests on GCC banks, analyzing scenarios ranging from modest to severe geopolitical escalations.  

In severe cases, involving broader regional conflict and disruptions to trade routes, the impact could extend to energy prices and macroeconomic stability, affecting both sovereign and banking sector credit metrics. 

S&P Global said despite these challenges, the GCC banking sector’s strong efficiency, driven by low labor costs and increasing digitalization, provides a solid foundation for continued growth and resilience through 2025. 

Topics: Gulf Cooperation Council (GCC) gulf banks S&P Global Ratings S&P Global

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