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UBS gets green light to open Saudi branch for banking operations

UBS gets green light to open Saudi branch for banking operations
UBS is a global firm providing financial services in over 50 countries. Shutterstock
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Updated 23 April 2024
Arab News
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UBS gets green light to open Saudi branch for banking operations

UBS gets green light to open Saudi branch for banking operations
Updated 23 April 2024
Arab News
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RIYADH: In a move aimed at enhancing Saudi Arabia’s financial landscape, the Kingdom has granted permission for a branch of the Swiss bank UBS to operate within the nation. 

According to the Saudi Press Agency, the approval was granted during a session chaired by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud, held by the Cabinet in Jeddah on April 23.

The session commenced with King Salman briefing the Cabinet on the recent communications and discussions held between the Kingdom and several countries regarding shared relations, regional issues, and global developments, as reported by SPA.

In this context, the Cabinet reaffirmed Saudi Arabia’s steadfast stance toward promoting security and stability in the region and the world. 

The Minister of Media, Salman bin Yousef Al-Dossary, stated in a press release following the session that the Cabinet praised the outcomes of the second ministerial meeting of the dialogue between the Gulf Cooperation Council countries and Central Asian countries. 

He emphasized the Kingdom’s commitment to continue strengthening communication channels with various countries worldwide and supporting areas of joint coordination, including multilateral efforts.

Additionally, the Cabinet expressed its appreciation for the participants of the forthcoming World Economic Forum special meeting, set to take place in Riyadh in the upcoming week, highlighting the Kingdom’s dedication to encouraging global collaboration and tackling shared challenges.

Moreover, the Cabinet announced that the World Bank had selected Saudi Arabia as a center for knowledge dissemination to promote worldwide awareness of economic reforms, underscoring its leadership in achieving significant progress in global competitiveness indicators.

Al-Dossary further highlighted that the Cabinet applauded the achievement of five Saudi cities in obtaining advanced positions in the 2024 Smart Cities Index.

Following today’s session, the Cabinet approved cooperation agreements with Qatar, the Dominican Republic and the UK as well as Turkey, Chad, Portugal, Hong Kong, and Yemen.

Additionally, the body authorized discussions regarding statistical collaboration with Australia and maritime cooperation with Egypt. It also endorsed anti-corruption agreements with South Korea, archival partnerships with Greece, and financial technology collaboration with Singapore.

Authorization was granted for negotiations on science and technology cooperation with the Bahamas. A unified law for international road transport within GCC countries was approved, and additional compensation was granted to Tabah village’s affected families in the Hail region. 

Furthermore, final accounts for various government entities were approved.

Topics: UBS Saudi cabinet

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Saudi Arabia’s crude production climbs to 8.97m bpd in October: JODI 

Saudi Arabia’s crude production climbs to 8.97m bpd in October: JODI 
Updated 15 sec ago
Dayan Abou Tine
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Saudi Arabia’s crude production climbs to 8.97m bpd in October: JODI 

Saudi Arabia’s crude production climbs to 8.97m bpd in October: JODI 
Updated 15 sec ago
Dayan Abou Tine

RIYADH: Saudi Arabia’s crude oil production rose to 8.97 million barrels per day in October, a 0.36 percent increase year on year, according to the latest data from the Joint Organizations Data Initiative. 

The report noted a 5.91 percent drop in crude exports, which fell to 5.92 million bpd. Domestic petroleum demand also declined by 96,000 bpd year on year, reaching 2.49 million bpd. 

Refinery crude exports surged 35 percent year on year to 1.41 million bpd in October but declined by 9 percent, or 139,000 bpd, compared to September. 

Key refined products included diesel, motor gasoline, aviation gasoline, and fuel oil. Diesel exports accounted for 46 percent of refined product shipments, while motor and aviation gasoline made up 20 percent, and fuel oil comprised 13 percent. Notably, gas diesel shipments rose 43 percent to 641,000 bpd in October. 

Saudi Arabia’s refinery output reached 2.74 million bpd, a 29 percent year-on-year increase, with diesel representing 45 percent of total refined products, followed by motor and aviation gasoline at 25 percent and fuel oil at 17 percent. 

OPEC+ recently extended its supply cuts — initially implemented to stabilize the market — by an additional three months, pushing them through March 2025.  

These voluntary cuts, amounting to 2.2 million bpd, will be phased out gradually between April 2025 and September 2026, with room for adjustments based on market conditions.  

The alliance, which includes major producers such as Saudi Arabia and Russia, is withholding 5.86 million bpd, roughly 5.7 percent of global demand, as part of measures introduced since 2022.  

The agreement, made during the 38th OPEC and non-OPEC Ministerial Meeting, also allows the UAE to increase output by 300,000 bpd starting in April 2025.  

Despite these efforts, Brent crude prices have remained steady, trading between $70 and $80 this year.  

Direct crude usage 

Saudi Arabia’s direct crude oil burn fell by 169,000 bpd in October to 362,000 bpd, a 32 percent year-on-year decline and a 30.1 percent drop from September. This marks the lowest level in seven months, driven by seasonal demand shifts and structural changes in the Kingdom’s energy strategy. 

The reduction is largely attributed to cooler temperatures in October, which significantly decreased electricity demand, particularly in regions reliant on air conditioning during the summer. Additionally, improvements in the Kingdom’s electricity infrastructure have reduced reliance on crude oil as a backup energy source.  

Topics: Oil Brent Production OPEC OPEC+

Arab-China trade surges to $400bn, paving way for housing cooperation

Arab-China trade surges to $400bn, paving way for housing cooperation
Updated 21 min 8 sec ago
Miguel Hadchity
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Arab-China trade surges to $400bn, paving way for housing cooperation

Arab-China trade surges to $400bn, paving way for housing cooperation
Updated 21 min 8 sec ago
Miguel Hadchity

RIYADH: Trade between Arab countries and China has surged by more than 1,000 percent over the past two decades, reaching approximately $400 billion in 2024, according to Ali bin Ibrahim Al-Maliki, assistant secretary-general of the Arab League.

Al-Maliki made the statement during the inaugural Arab-China Ministerial Meeting on Housing and Urban Development, held alongside the 41st session of the Arab Ministers of Housing Council in Algeria. The event aims to lay the groundwork for a strategic partnership that will benefit both sides, as reported by the Kuwait News Agency.

China, the world’s second-largest economy, continues to draw global attention due to its economic reforms and growth. In May, the China-Arab States Cooperation Forum in Beijing gathered leaders from Saudi Arabia, the UAE, and Egypt, culminating in the Beijing Declaration, which emphasized strengthening China-Arab cooperation and building a shared future.

“China has become the second-largest trading partner for Arab countries, with trade volume increasing from $36 billion in 2004 to nearly $400 billion in 2024,” Al-Maliki stated. He also highlighted the vital role of the housing and construction sectors in driving socioeconomic development and underscored the importance of China-Arab economic ties.

Al-Maliki stressed that the partnership between Arab states and China in the fields of construction and urban development could offer innovative, sustainable solutions to address global challenges, such as rapid population growth, climate change, and the need for sustainable resource management.

Algerian Housing Minister Mohamed Belaribi, who currently chairs the Arab Housing Ministers Council, described the meeting as a significant step toward forging high-level partnerships built on mutual benefit.

“Arab-Chinese relations have evolved since the 1950s, serving mutual interests and strengthening their positions regionally and globally,” Belaribi said.

He added that the meeting provided an opportunity to exchange expertise on key issues like housing sustainability, smart cities, earthquake-resistant construction, and urban renewal.

Chinese Minister of Housing and Urban-Rural Development, Ni Hong, emphasized the vast potential for enhanced cooperation between Arab countries and China in the construction and development sectors. “This opens the door for strengthened exchanges and marks the beginning of a new chapter in our collaborative efforts,” he said.

Ni also commended Arab countries for their achievements in urban development and expressed optimism for mutually beneficial outcomes.

He highlighted China’s ongoing commitment to forging stronger ties with Arab nations through initiatives such as signing memorandums of understanding and conducting seminars and training programs.

These developments align with China’s broader global strategy, particularly the Belt and Road Initiative, a major element of its international cooperation efforts.

Launched in 2013 by Chinese President Xi Jinping, the BRI aims to enhance global connectivity and foster cooperation in areas such as infrastructure, trade, finance, and cultural exchange, drawing inspiration from the ancient Silk Road.

Over the past decade, the BRI has expanded its scope to include over 150 countries and 30 international organizations, supporting projects ranging from railways and ports to green energy and digital infrastructure. The ongoing collaboration between China and Arab countries, particularly in the housing and construction sectors, reflects the growing strength and scope of the BRI’s global ambitions.

Topics: Arab-China trade ties Housing

Saudi Arabia’s KACARE signs MoUs to propel energy innovation and empower women

Saudi Arabia’s KACARE signs MoUs to propel energy innovation and empower women
Updated 18 December 2024
Reem Walid
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Saudi Arabia’s KACARE signs MoUs to propel energy innovation and empower women

Saudi Arabia’s KACARE signs MoUs to propel energy innovation and empower women
Updated 18 December 2024
Reem Walid

RIYADH: Saudi Arabia’s King Abdullah City for Atomic and Renewable Energy has signed new agreements to advance innovation, localize solutions, and empower women. 

The first memorandum of understanding, inked with King Saud University, will focus on developing and localizing innovative technologies in the energy sector, the Saudi Press Agency reported. 

The agreement also emphasizes building human capacity through training programs and the exchange of expertise, with a particular focus on technical and advisory services. 

This partnership supports Saudi Arabia’s Vision 2030, which aims to increase the Kingdom’s use of renewable energy and promote sustainability. 

It also aligns with Saudi Arabia’s goal of 50 percent of its electricity coming from renewable sources by the end of the decade.

In addition to these technological advancements, the MoU includes the development of educational programs and scholarships to help meet the growing demand for skilled professionals in the energy sector. 

The agreement also includes joint research initiatives in renewable energy, atomic energy, hydrogen technologies, and artificial intelligence applications within the energy field. This will provide valuable opportunities for students and researchers to contribute to the Kingdom’s energy transformation, the SPA report added.

KACARE also signed a second MoU with the Saudi Women and Energy Association, further reinforcing the Kingdom’s commitment to empowering female workers in the sector. 

This agreement focuses on launching comprehensive initiatives and programs aimed at supporting women to become leaders and innovators in energy. It includes training and development opportunities, such as the WE Spark program, which is dedicated to training women in renewable energy. 

This program is in partnership with King Abdullah University of Science and Technology and seeks to equip women with the skills necessary to excel in a rapidly evolving industry. 

The MoU also includes conducting studies to assess women’s participation in the energy sector. The research will identify key challenges and propose solutions to enhance women’s roles, ensuring equal opportunities in the workplace and supporting their development into leadership positions. 

In a further effort to empower women in the energy industry, KACARE signed another MoU with Princess Nourah University. This agreement aims to enhance female competencies in renewable energy through tailored training programs for female students pursuing engineering degrees. 

It also seeks to improve the capabilities of faculty members in providing specialized programs in solar energy, as well as upgrading infrastructure to support hydrogen production plants and solar photovoltaic energy projects. 

Topics: King Abdullah City for Atomic and Renewable Energy (KACARE) Saudi Women and Energy Association energy

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GCC debt capital market hits $1tn, poised for continued growth: Fitch Ratings

GCC debt capital market hits $1tn, poised for continued growth: Fitch Ratings
Updated 18 December 2024
Nirmal Narayanan
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GCC debt capital market hits $1tn, poised for continued growth: Fitch Ratings

GCC debt capital market hits $1tn, poised for continued growth: Fitch Ratings
  • Saudi Arabia leads the region followed by the UAE and Qatar
Updated 18 December 2024
Nirmal Narayanan

RIYADH: The debt capital market in the Gulf Cooperation Council region has surpassed the $1 trillion mark in outstanding debt as of November, fueled by strong oil revenues, according to a recent analysis.

Fitch Ratings’ latest report highlights the growth trajectory of the GCC’s DCM, with expectations that it will remain one of the largest issuers of emerging-market dollar-denominated debt in 2025 and 2026.

The DCM refers to markets where securities like bonds and promissory notes are traded, offering governments and companies a means of securing long-term funding.

Saudi Arabia leads the region’s DCM, followed by the UAE and Qatar. In September, Fitch projected that the Kingdom’s DCM would exceed $500 billion in outstanding debt, driven by the financing needs for mega-projects under the Kingdom’s Vision 2030 and its broader economic diversification strategy.

Bashar Al-Natoor, global head of Islamic Finance at Fitch Ratings, noted that the DCM had grown by 11 percent year on year, reaching the $1 trillion milestone by the end of November 2024. Of this, approximately 40 percent is in the form of sukuk.

“The market is set for further expansion in 2025, driven by the need to finance government initiatives, maturing debt, fiscal deficits, diversification efforts, and ongoing regulatory reforms,” Al-Natoor explained. “We rate about 70 percent of GCC US dollar sukuk, of which 81 percent are investment-grade, with no defaults.”

The report also forecasts that the Federal Reserve is likely to cut rates by 125 basis points to 3.5 percent by the fourth quarter of 2025. This is expected to prompt most GCC central banks to follow suit, creating a more favorable funding environment.

However, Fitch warned that ongoing geopolitical instability in the Middle East could hinder the region’s DCM growth. “While four out of six GCC sovereigns maintain investment-grade ratings with stable outlooks, any escalation in regional conflicts could pose risks,” the agency stated.

Fitch also flagged potential risks related to Sharia compliance, particularly concerning AAOIFI Standard 62, which governs the structure of Islamic finance transactions. The guidelines cover a range of issues, including Shariah-compliant issuance requirements, asset backing, ownership transfers, investment structures, and trading procedures.

The DCM landscape in the GCC remains uneven. While Saudi Arabia and the UAE boast the most developed markets, Qatar, Bahrain, and Oman follow, with Kuwait having the least mature market. Kuwait is reportedly working on updating its liquidity law to facilitate borrowing in capital markets, though the timeline for this reform remains unclear.

Topics: Debt market GCC

Middle East and Africa resilient as global deal volume falls 8.7%

Middle East and Africa resilient as global deal volume falls 8.7%
Updated 6 min 44 sec ago
Nour El-Shaeri 
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Middle East and Africa resilient as global deal volume falls 8.7%

Middle East and Africa resilient as global deal volume falls 8.7%
Updated 6 min 44 sec ago
Nour El-Shaeri 

RIYADH: Transactions in mergers and acquisitions, private equity, and venture financing fell during the first 11 months of the year, with the Middle East and Africa experiencing the smallest decline in deal activity.

According to a new report from GlobalData, while worldwide deal volume dropped 8.7 percent year-on-year to 45,921 transactions compared to 50,308 during the same period in 2023, the Middle East and Africa region saw a relatively modest 5 percent decline. 

This contrasts with sharper decreases in regions such as North America and South and Central America, highlighting the Middle East and Africa’s comparative stability amid broader global challenges. 

Meanwhile, mergers and acquisitions and private equity transactions experienced smaller declines of 2.8 percent and 3 percent, respectively. 

Aurojyoti Bose, lead analyst at GlobalData, attributed the overall decline in global deal activity to a steep drop in venture financing, which fell 18.7 percent year-on-year.

“Even though all deal types experienced decline, the overall setback was primarily driven by a massive fall in the number of venture financing deals,” Bose said. 

The broader global slowdown in deal activity was felt across major markets. North America, which accounted for approximately 40 percent of worldwide deals, saw a significant 12.5 percent decline in overall deal activity, contributing heavily to the international contraction. 

Europe recorded an 8.8 percent decline, while Asia-Pacific and South and Central America saw decreases of 3.6 percent and 17.5 percent, respectively. 

The subdued environment extended to several major markets globally. Among the hardest-hit countries, China and France experienced year-on-year declines of 21.9 percent and 21 percent, respectively. 

The US, the largest single market for deals, saw an 11.7 percent drop, while Canada and Germany recorded declines of 18.9 percent and 12.1 percent, respectively. 

Other countries reporting notable decreases included Italy with 6.8 percent, the Netherlands with 13.8 percent, and Spain with 14.2 percent, as well as Sweden with 9.7 percent, and Singapore with 15 percent. 

In the travel and tourism sector specifically, a total of 649 deals were announced globally between January and November, representing a 5.9 percent year-on-year decline compared to 690 deals in the same period of 2023. 

While the Middle East and Africa saw an 18.2 percent drop in deal volume in the sector, North America registered a steeper decline of 31 percent. 

South and Central America followed with a 20 percent decrease, and Asia-Pacific experienced a smaller drop of 2.3 percent. 

In contrast, Europe stood out as the only region to record growth, with deal volume increasing by 15.9 percent during the same period. 

Considering regional conflicts such as the changes in Syria’s regime, the conflict in Yemen, and Israel’s war on Lebanon and Palestine, the 18.2 percent drop in travel and tourism deal volume in the Middle East and Africa is relatively moderate. 

This performance suggests resilience in the region’s travel and tourism sector, which continues to attract investment despite these significant challenges. 

“The travel and tourism sector deal activity showcased a mixed trend across the different deal types during the specified timeframe. And similarly, the trend across different regions and key markets remained a mixed bag during the review period,” Bose said.

Topics: Mergers and Acquisitions private equity VENTURE CAPITAL

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