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DUBAI: The ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum issued a law imposing an annual tax of 20 percent on foreign banks operating in the emirate on Thursday.
Banks which are licensed to operate in Dubai’s international financial centre are exempt from the tax, Dubai Media Office said.
RIYADH: Saudi bank loans reached SR2.82 trillion ($753.27 billion) in August, representing an annual growth rate of 12.11 percent — the highest in 18 months, according to recent data.
Figures from the Saudi Central Bank, also known as SAMA, showed that corporate lending dominated the sector, making up around 54 percent, with individual loans comprising the remaining figure.
The former category grew by 16 percent, outpacing the 7.56 percent growth in personal loans, underscoring the increasing demand for business financing across key sectors.
Real estate activities led corporate lending, accounting for 20.1 percent of all business loans and growing by 26.37 percent to reach SR303.48 billion.
The wholesale and retail trade sector followed, constituting 13.3 percent of these loans, with SR201.3 billion in financing. Lending to manufacturing came third, making up 11.8 percent, totaling SR179.1 billion.
Loans to the electricity, gas, and water supply sectors accounted for 11.1 percent of total lending, amounting to SR167.66 billion. This category experienced a growth rate of 26.2 percent, nearly matching that of the real estate sector.
While professional, scientific, and technical activities represented a small portion of total corporate loans at just 0.6 percent, they posted the highest annual growth rate of 58.83 percent, amounting to SR8.45 billion.
Corporate lending in Saudi Arabia, particularly in the real estate sector, has seen significant growth, driven by the Kingdom’s focus on large-scale projects aligned with Vision 2030.
The government’s ongoing commitment to giga-projects such as NEOM, Qiddiya, and the Red Sea Development, alongside sustained public investment in infrastructure, has created heightened demand for financing.
This surge in real estate activities, coupled with solid non-oil GDP growth, reflects a vibrant operating environment for banks, as businesses increasingly seek funding to participate in these transformative developments.
In a July report, Fitch Ratings projected that Saudi banks will continue to grow at nearly twice the rate of the GCC average, with financing growth for 2024 expected around 12 percent.
The report also indicated that banks are likely to increase their focus on corporate financing, which is anticipated to account for approximately 60 percent of new loan originations in 2024.
Lending growth in Saudi Arabia’s electricity, gas, and water supply sector is fueled by several key factors, with one significant driver being government investment.
The Kingdom prioritizes infrastructure development through its Vision 2030 strategy, resulting in substantial financing for renewable energy projects and utility enhancements.
Furthermore, a strong focus on sustainability initiatives encourages funding for projects centered on renewable energy sources such as solar and wind, facilitating the transition to a more sustainable landscape.
Population growth and urbanization further fuel demand for expanded utility services. The increasing need for electricity, gas, and water in urban areas necessitates substantial investments, prompting utilities to seek financing for infrastructure upgrades.
Moreover, regulatory support from the government enhances the lending environment through policies that encourage efficiency and reliability in utilities, making banks more inclined to finance projects in this sector.
As the Saudi economy diversifies away from oil dependency, investments in utility infrastructure are essential to support industrial and commercial activities, creating additional demand for financing.
Additionally, technological advancements in energy production, distribution, and water management encourage utilities to invest in innovative solutions, prompting financial institutions to fund projects that incorporate cutting-edge technologies.
Saudi banks robust financing growth has intensified competition for liquidity, particularly in the context of a high-interest-rate environment that has mirrored increases set by the US Federal Reserve over the past 2 years.
As interest rates rise, there has been a notable influx of savings deposits, particularly from government-related entities. While this trend underscores the growing financial strength of these entities, it also poses challenges for banks, as GRE deposits are often more expensive compared to traditional savings and current accounts.
In this competitive landscape, the reliance on these higher-cost deposits can squeeze profit margins. However, despite these challenges, Fitch Ratings estimates that Saudi banks will maintain a stable average net financing margin of approximately 3.2 percent, as seen from 2022 to the first quarter of 2024.
This resilience reflects the banks’ effective management of funding costs, allowing them to navigate the shifting deposit landscape while still capitalizing on the opportunities presented by the strong financing growth within the kingdom.
In September, Saudi Arabia reduced its benchmark interest rate from 6 percent to 5.5 percent, following a 50-basis-point cut by the central bank, aligning with a similar move by the Federal Reserve.
The decrease is expected to further stimulate Saudi Arabia’s non-oil sectors, particularly construction and services, by making credit cheaper and enhancing domestic spending.
Analysts believe this monetary easing could support Vision 2030, driving investment in infrastructure and innovation while potentially benefiting the real estate market.
RIYADH: The Royal Commission for AlUla has unveiled its first Annual Sustainability Report, marking a milestone in the commission’s ongoing efforts to transform the region into a global destination for cultural, social, environmental, and economic sustainability.
The report highlighted the successes of RCU’s journey and its commitment to responsible development aligned with national and global sustainability frameworks, including the Saudi Green Initiative, Vision 2030, as well as UN goals.
According to RCU’s Governor Prince Badr bin Abdullah bin Farhan – who also serves as the Kingdom’s Minister of Culture – the commission is on an “ambitious journey to achieve the goals of the AlUla Vision, emanating from the spirit of Saudi Vision 2030.”
He added: “Our first Sustainability Report is a testament to our commitment to sustainability. It showcases our ambitions, goals, and activities in this field for our generation and the ones to come.”
Key achievements: Sustainability in action
The report highlighted RCU’s transformative achievements, notably raising AlUla’s Heritage Sustainability Index to 75 percent, surpassing its initial target of 63 percent.
Visitor satisfaction across the heritage sites reached 96 percent, reflecting the commission’s focus on delivering exceptional experiences while maintaining the integrity of AlUla’s cultural and historical landmarks.
RCU has also made considerable strides in social and educational development. Over the past year, the commission has provided 747 university scholarships to local students, enabling them to study in 117 international institutions.
This initiative is part of RCU’s broader goal of investing in the local community and empowering the next generation.
These educational efforts align with the commission’s vision to enhance the natural and social potential of our people and place, ensuring a sustainable future for the many aspects of life in AlUla, as noted by Abeer Al-Akel, acting CEO of RCU.
Community satisfaction also stands at 90 percent, reflecting the success of initiatives such as the Hammayah Programme, which has trained 1,400 local leaders and generated 2,500 employment opportunities.
Economic growth and job creation
Economic sustainability remains central to RCU’s long-term vision. By the end of 2023, the commission had created over 6,000 jobs in tourism-related sectors, with 1,500 jobs directly in the industry.
In addition, RCU’s Vibes AlUla initiative, which supports local entrepreneurs, led to the establishment of 336 new micro, small, and medium-sized enterprises and created 198 new local job opportunities.
The report emphasized RCU’s continued focus on sustainable economic development through partnerships with both local and international stakeholders.
As Al-Akel highlighted: “By promoting sustainable livelihoods, supporting local businesses and employment, and driving economic diversification, we aim to build a resilient and thriving economy in line with the objectives of Vision 2030.”
Green and climate-neutral initiatives
Aligned with Vision 2030 and the Saudi Green Initiative, RCU is pursuing a climate-neutral future, with a target to achieve carbon neutrality by 2035.
In 2023, the commission made significant strides in this direction through a number of innovative environmental projects.
These include planting over 111,000 trees in protected areas, converting agricultural waste into fertilizer, and expanding water distribution networks to achieve 95 percent coverage for AlUla’s population.
Another achievement from the report is the commission’s focus on green mobility. RCU has partnered with Lucid Motors to introduce electric vehicles to the region, including a fleet of 30 EVs and the installation of 10 charging stations across AlUla.
These efforts aim to reduce carbon emissions and provide sustainable transportation solutions for both residents and visitors.
As part of its nature conservation efforts, RCU has reintroduced several native species to the AlUla ecosystem. The report noted that 108 Arabian gazelles, 385 Sand gazelles, 328 Arabian oryxes, and 59 Nubian ibexes were released into the wild, contributing to biodiversity and the overall health of the local environment.
RCU’s Arabian Leopard Conservation Breeding Programme, which saw the birth of seven new cubs, also continued to play a pivotal role in protecting the critically endangered species.
Global partnerships: A collaborative approach to sustainability
One of the key strengths of RCU’s approach is its collaboration with world-leading organizations.
The report underscored RCU’s partnerships with UNESCO, the International Union for Conservation of Nature, and King Abdullah University of Science and Technology to promote conservation and sustainability.
These partnerships helped in the development of innovative solutions that enhance sustainability across all dimensions – environmental, social, cultural, and economic.
Prince Badr emphasized the importance of these collaborations, noting in the report: “Innovative solutions were adopted and important local, regional and international partnerships were forged with organizations.”
The collaborations included UNESCO for the protection of cultural heritage, IUCN for the promotion of comprehensive regeneration, and Red Sea Global in the areas of sustainability and environmental initiatives.
There were also partnerships with Space for Giants for the protection of biodiversity, Artefact for driving artificial intelligence and data transformation, and Thales Group.
With the release of this annual sustainability report, the commission is aiming to continue building on its sustainability successes as it transforms AlUla into a model of sustainable development for the Kingdom and the world.
In the report, Al-Akel underscored RCU’s role as a leader in the field, saying: “By protecting the cultural heritage from our past, and enhancing the natural and social potential of our people and place, we ensure a sustainable future for the many aspects of life in AlUla.”
CAIRO: Saudi Arabia’s startup ecosystem accounted for 60 percent of the Middle East and North Africa region’s funding in September, with $170.8 million raised across 23 deals.
According to Wamda’s monthly report, $282 million was raised across 63 startups in the region, a 234 percent increase month-on-month and a 607 percent rise year-on-year. Debt financing constituted 12 percent of the total raised.
Saudi mobility startup SHIFT led the month’s funding rounds by raising $82.8 million, followed by online car marketplace Syarah, which secured $60 million in a series C round, including $20 million in debt financing.
The UAE ranked second with $73.8 million raised by 12 startups, while Egypt trailed, with 13 startups collectively raising $25 million.
Fintech continued to dominate investor sentiment in the MENA region for the fourth consecutive month, attracting $102.5 million across 14 startups.
Mobility followed closely, driven by SHIFT’s substantial funding round. E-commerce and educational tech sectors showed strong activity, raising $63 million and $4.35 million, respectively, each with nine deals.
The software-as-a-service sector saw $10 million in investments across eight startups.
Accelerator programs had a notable impact on deal volume, with Flat6Labs’ demo days in Jordan and Saudi Arabia accounting for 17 deals valued at a combined $2 million.
Early-stage investments remained a priority for investors, who poured $102 million into 15 seed deals and $5 million into seven pre-seed startups. In contrast, only two later-stage rounds were reported, Paymob’s $22 million series B and Syarah’s series C.
Female-founded startups struggled to attract significant funding, raising only $583,000, mostly through grants.
In contrast, male-founded startups dominated the landscape, securing $260 million across 49 deals. Additionally, $21 million was raised by seven startups co-founded by both men and women.
AILA secures $1.15m for AI-powered edtech
Saudi edtech startup AILA closed a $1.15 million pre-seed round led by Sabah Hub, with participation from White Hill Capital and three other angel investors.
Established in 2023, AILA provides a generative artificial intelligence-powered platform for personalized and curriculum-aligned learning experiences.
The company plans to utilize the funds for regional expansion and technology enhancement.
Saudi Arabia’s Tawaref acquires Amaana.ai
Saudi-based investment community Tawaref acquired local AI company Amaana.ai for an undisclosed amount.
Founded in 2020 by Saeed Al-Ansari, Tawaref supports startups in the region with investments and entrepreneurial services, while Amaana.ai automates business entry processes into Saudi Arabia.
The acquisition aims to enhance Tawaref’s capabilities in providing innovative financial and technological solutions.
“The integration of Amaana.ai allows us to elevate our service offerings and reinforce our mission to support startups with advanced, AI-driven solutions. By blending our expertise, we’re providing smarter and more efficient solutions that will help our clients navigate the Saudi market with ease,” said Al-Ansari.
UMX raises $4.5m for global gaming growth
Saudi game studio UMX raised $4.5 million from Jetapult, an investment company backed by Accel Partners.
Founded in 2014, UMX specializes in developing mobile car games. The new capital will be used to expand UMX’s game portfolio and reach new audiences globally.
“This significant investment from Jetapult not only marks a milestone for UMX Studio but also heralds a new era for the Saudi Arabian gaming industry. We are thrilled to partner with a globally recognized leader in the gaming investment space,” said Ali Al-Harbi, founder of UMX.
JARAS Hospitality closes $666k pre-seed
JARAS Hospitality, a Saudi startup focused on integrated hospitality management solutions, secured $666,000 in a pre-seed round led by undisclosed angel investors.
The company, founded in 2023, plans to use the investment to further develop its product and expand its customer base.
“We are thrilled to have closed this investment round, which provides strong support for our vision to deliver innovative solutions that contribute to improving the hospitality sector. The investment will give us the opportunity to accelerate our growth and expand our market presence,” CEO Ahmed Al-Zubaidi said.
SVC invests $15m in Vision Ventures’ Saqr Fund II
Saudi Venture Capital committed $15 million to Vision Ventures’ Saqr Fund II, a $90 million-target venture capital fund that will focus on early-stage startups across Saudi Arabia and the broader MENA region.
Vision Ventures, founded in 2016, is a sector-agnostic firm investing in early-stage tech startups.
WellPal relocates to Saudi Arabia after new funding
Egyptian health e-commerce platform WellPal relocated its operations to Saudi Arabia following an undisclosed investment from an angel investor.
Founded in 2019 by Mohamed Ali and Mohamed Tantawy, WellPal, a Flat6Labs portfolio company, offers health products for fitness and wellness through its app.
The company aims to strengthen its position in the Saudi market and expand regionally.
“We are proud to support the Saudi Vision 2030, particularly in enhancing the quality of life for its citizens. Through WellPal’s AI-powered features, we look forward to providing tailored health and lifestyle products that can help our customers make smarter and healthier choices,” Ali, the firm’s CEO, said.
Rabbit Mobility raises $1.3m to fuel North African expansion
Egyptian micromobility startup Rabbit Mobility closed a $1.3 million investment round led by 500 Global and Untapped Global.
The funds will support the company’s growth and expansion across Egypt and other North African markets.
Rabbit Mobility was founded in 2020 by Kamal El-Soueni, Mohamed Mansoury and Bassem Magued and provides a fleet of electric scooters for urban mobility.
Morocco’s Agenz secures funding from Renew Capital
Morocco-based property tech startup Agenz received an undisclosed investment from Renew Capital.
Founded in 2020 Malik Belkeziz, Agenz offers instant property valuations using advanced data intelligence.
“Our platform helps people make smarter decisions by providing accurate data on property values and market trends,” said Belkeziz.
The funds will help the company expand its reach in Morocco and other African markets.
Moonbase Capital launches $15m investment fund
Spain-based Moonbase Capital launched its second investment vehicle, a $15 million fund aimed at acquiring and growing small to medium-sized enterprises worldwide.
The fund will target emerging markets, including Latin America, Southeast Asia, and the Middle East, with a focus on investing in 15 SMEs over the next three to four years.
The first close is expected in the first quarter of next year, with capital sourced from family offices and high-net-worth individuals in Europe, Egypt, and the Gulf Cooperation Council.
Abhi raises $15m debt financing round
UAE-based fintech Abhi has raised $15 million in debt financing in a round led by Shorooq Partners and Amplify Growth Partnership.
Established in Pakistan in 2021 by Ali Ladhubhai and Omair Ansari, Abhi focuses on improving financial inclusion for employees and SMEs across the MENA and Pakistan region.
The new funding will support Abhi’s expansion efforts, enabling it to scale its operations and broaden access to earned wage access services for both blue- and white-collar workers in the region.
RIYADH: A smattering of Arab markets saw positive growth in September, despite an overall decline for the region, according to the latest monthly bulletin released by the Arab Monetary Fund.
The Damascus Stock Exchange led the way with a 55.36 percent increase in trading volume, while the Muscat Stock Exchange followed closely, recording a rise of 54.67 percent.
Abu Dhabi also demonstrated strong performance, with a 37.28 percent surge in trading value, reflecting investor optimism and sustained economic activity.
Although some exchanges faced challenges, the overall market resilience in the Arab region contrasts sharply with the struggles seen in Western markets, according to the AMF.
In its 51st edition of the report on Arab Financial Markets, the organization provided a comprehensive analysis of these trends, offering detailed insights into trading volumes and values across the region’s stock exchanges.
The report showed that Arab markets overall saw a 10.78 percent drop in trading volume and a 2.76 percent decline in trading value compared to the previous month.
Saudi Arabia’s financial market saw a 12.42 percent decline in trading volume, with Dubai and Egypt also experiencing decreases of 7.31 percent and 4.36 percent, respectively.
The report suggested that these fluctuations were influenced by a mix of regional market sentiment, sector-specific performance, and global economic concerns.
The AMF’s bulletin provided a thorough overview of the financial landscape across the 16 Arab markets, highlighting a complex interplay of growth, stability, and decline, driven by both regional dynamics and broader international pressures.
Performance of the AMF Composite Index
One of the key highlights of the report is the performance of the AMF’s composite index, which measures the overall activity of Arab financial markets.
For September, this indicator rose by 0.58 percent, settling at 496.70 points. This represents a slight improvement from August, indicating a mild but steady recovery across Arab exchanges.
This increase corresponds to a gain of 2.87 points by the end of August.
Notably, 10 of the 14 Arab stock markets included in the index contributed positively to the overall growth, reflecting a diverse but generally favorable movement in market performance.
However, four exchanges recorded declines, reflecting the challenges some markets faced amid ongoing economic adjustments.
Leading performers: Iraq and Damascus take the lead
In terms of individual market performance, the Iraq Stock Exchange emerged as the standout performer in September, with its index surging by 8.26 percent.
This significant growth was followed closely by the Damascus Stock Exchange, which posted a 6.57 percent increase.
These strong gains highlight a continued upward trajectory in certain segments of the Arab financial markets, driven by positive market sentiment and regional economic developments.
Other Arab bourses also showed positive momentum, though to a lesser degree. Dubai’s Financial Market climbed by 4.12 percent, and Qatar’s Exchange rose 4.03 percent, both marking solid gains.
These performances were supported by the continued growth of sectors such as real estate, finance, and consumer goods.
The Saudi financial market, although not as dynamic as some of its peers, still recorded a 0.67 percent rise, indicating stability as the exchange continues to adjust to broader regional and global changes.
Markets in decline: Palestine and Kuwait struggle
While the report detailed significant gains in several markets, it also noted that not all Arab exchanges experienced growth.
The Palestine Exchange posted the largest decline, with its index dropping by 2.96 percent, followed by the Muscat and Kuwait markets, which fell by 0.76 percent and 0.62 percent, respectively.
These drops were influenced by specific internal market dynamics and reflect the challenges these markets faced during the month of September.
The decline in the Palestinian market can be partially attributed to political uncertainties and regional volatility that dampened investor confidence.
Similarly, economic adjustments and sectoral rebalancing weighed heavily on the Muscat and Kuwait markets, causing them to post negative returns for the month.
A global comparison: Arab markets vs. world indices
The report noted that the MSCI Emerging Markets Index for Asia posted a 7.80 percent rise, demonstrating resilience in the face of global economic challenges.
Latin American markets experienced a slight decline of 0.06 percent during the same period.
In contrast, European and American indices such as the FTSE and Nikkei saw declines of 1.67 percent and 1.88 percent, respectively.
This comparison highlights the relatively positive performance of Arab markets, particularly when viewed in the context of global financial trends.
This is particularly evident when considering that many Arab stock markets — particularly Iraq, Damascus, and Dubai — posted significant gains, even as global markets grappled with inflationary pressures and geopolitical instability.
Central bank policies: Interest rate cuts and market impacts
One of the key developments during September was the decision by the US Federal Reserve to reduce its interest rate range to 4.75 percent - 5 percent, marking the first cut in four years.
This decision followed eight consecutive rate hikes and was driven by the Federal Reserve’s assessment of easing inflationary pressures and the need to boost liquidity in the economy.
In response to the Fed’s decision, several Arab central banks followed suit to maintain economic stability and investor confidence, and also because many currencies in the region are pegged to the US dollar.
Saudi Arabia’s central bank reduced its repo rate by 50 basis points, while Bahrain, the UAE, and Kuwait made similar cuts.
Oil and gold: Geopolitical influence and market reactions
Oil prices fell during September, with Brent crude and West Texas Intermediate seeing declines of 7.3 percent and 5.9 percent, respectively.
The report attributes this drop to growing concerns about increased oil supply in global markets, coupled with weaker demand, especially from China, a key player in imports of the commodity.
The AMF pointed to OPEC’s decision to extend its voluntary production cuts for two more months, aiming to stabilize the market amid these fluctuations.
Despite the short-term drop in prices, OPEC+ reaffirmed its commitment to gradually lifting these cuts after November, with the possibility of adjustments based on global market conditions.
Meanwhile, gold prices surged by 5.2 percent in September, as investors sought safe-haven assets amid ongoing global economic uncertainty. By the end of the month, the price of gold reached $2,637.60 per ounce, reflecting the continued demand for stable, risk-averse investments.
Market capitalization: A snapshot of growth and decline
On a regional level, total market capitalization increased by 0.53 percent compared to August.
Beirut’s stock exchange led the charge, with its market capitalization growing by 10.97 percent, followed by Damascus, which saw a 6.31 percent increase.
However, the Saudi financial market, despite its overall stability in terms of index performance, experienced a slight decline in market capitalization by 1.26 percent, reflecting ongoing adjustments in its economic and financial sectors.
Similarly, Palestine and Oman saw market capitalization decreases of 2.41 percent and 2.08 percent, respectively.
LONDON: Oil futures steadied on Friday after data showed a fall in crude and fuel inventories in the US and the emergence of more fiscal stimulus to boost China’s economy, though prices were headed for their biggest weekly loss in more than a month.
Brent crude futures gained 23 cents, or 0.3 percent, to $74.68 a barrel by 11:40 a.m. Saudi time, while US West Texas Intermediate crude was at $70.96 a barrel, up 29 cents, or 0.4 percent.
Brent and WTI are set to fall about 6 percent this week, their biggest weekly decline since Sept. 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025.
Fears also eased about a potential retaliatory attack by Israel on Iran that could disrupt Tehran’s oil exports.
“Positive US economic data has helped alleviate some growth concerns, but market participants continue to monitor potential demand recovery in China following recent stimulus measures,” said Hani Abuagla, senior market analyst at XTB MENA.
US retail sales increased slightly more than expected in September, with investors still pricing in a 92 percent chance for a Federal Reserve rate cut in November.
Elsewhere, Energy Information Administration figures showed US crude oil, gasoline and distillate inventories fell last week.
Meanwhile, China’s central bank rolled out two funding schemes that will initially pump 800 billion yuan ($112.38 billion) into the stock market through newly-created monetary policy tools.
The latest policy news came at the same time that data showed slow third-quarter economic growth for the world’s top oil importer, though consumption and industrial output figures for September beat forecasts.
China’s refinery output also declined for the third straight month as weak fuel consumption and thin refining margins curbed processing.
Markets, however, remained concerned about possible price spikes given simmering Middle East tensions, with Lebanon’s Hezbollah militant group saying on Friday it was moving to a new and escalating phase in its war against Israel after the killing of Hamas leader Yahya Sinwar.
“Although the US would like to believe that the killing of the leader is an opportunity to resume serious and meaningful peace talks, it seems more like a wishful thinking than a realistic alternative,” said Tamas Varga, an analyst with oil broker PVM.
