Startup Wrap – Saudi startup ecosystem leads regional funding activity

Startup Wrap – Saudi startup ecosystem leads regional funding activity
Yalla Plus has served thousands of entrepreneurs across 11 countries and plans to scale its reach to 100,000 entrepreneurs in 50 countries. (Supplied)
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Updated 25 August 2024
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Startup Wrap – Saudi startup ecosystem leads regional funding activity

Startup Wrap – Saudi startup ecosystem leads regional funding activity
  • Resal, a Saudi-based e-gifting platform, has successfully raised $9 million in a series A round to fuel its growth

RIYADH: Saudi Arabia’s startup ecosystem continues to see robust growth, with a diverse range of sectors attracting significant investment. 

Companies across food technology, fintech, and loyalty platforms have secured funding to accelerate their expansion, both domestically and internationally. 

Resal, a Saudi-based e-gifting platform, has successfully raised $9 million in a series A round to fuel its growth. 

The round was backed by prominent investors, including Derayah Ventures Fund, Al-Wafrah AlThanya Investment Co., and Venture Souq FinTech Fund, as well as ADDiriyah Asset Management, Nomad Holdings, Bugshan Investment Group, and several family offices, alongside angel investors. 

Founded in 2016 by Fouad Al-Farhan and Hatem Kameli, Resal provides digital solutions designed to connect merchants, companies, and individuals through a unified platform. 

The company offers services that facilitate the management and exchange of loyalty points, prepaid cards, and vouchers across various sources. 

The latest funding will be used to accelerate Resal’s business expansion within Saudi Arabia. 

“Our success in securing these investments is a significant testament to the investors and partners’ belief in Resal’s role and its team’s efforts in developing an effective digital ecosystem that contributes to providing innovative solutions in loyalty programs, digital rewards, and alternative payments, in alignment with Saudi Arabia’s Vision 2030,” Kameli, the company’s CEO, said. 

He further claimed that the company recently doubled its sales growth and has increased the number of beneficiaries to more than 1.5 million users and over 1,000 entities and organizations across more than 15 sectors.  

Saudi Arabia’s Yalla Plus secures $2.7m seed funding for POS innovation 

Yalla Plus, a Saudi food tech startup, has closed a $2.7 million seed investment round led by Merak Capital. 

The round also saw participation from Khwarizmi Ventures, Isometry Capital, and a mix of regional and international angel investors. 

Established in 2022 by Abdullah Al-Rabeh and Bader Al-Nasser, Yalla Plus provides an integrated point-of-sale system that encompasses payment management, customer feedback processing, and delivery solutions. 

The company has reportedly served thousands of entrepreneurs across 11 countries and plans to scale its reach to 100,000 entrepreneurs in 50 countries, spanning the Middle East, Europe, and Southeast Asia. 

Mithu raises $500k pre-seed to aggregate loyalty programs 

Saudi-based Mithu, a loyalty platform aggregator, has raised $500,000 in a pre-seed funding round led by Web3 venture builder Adaverse. 

Founded in early 2024 by Mohsin Qureshi and Asif Ali, Mithu aims to streamline loyalty programs by consolidating them into a single, gamified app. 

It is designed to boost customer engagement, particularly in the food and beverage sector. 

Mithu claims to have already secured agreements with around 200 restaurants in Riyadh. The company’s gamification strategy is positioned to help businesses increase customer retention through enhanced loyalty interactions. 

Asas secures $320k for AI-driven developer-sharing platform 

Saudi Arabia’s Asas Specialized Information Technology has raised $320,000 in a pre-seed round for its flagship product, Resquad AI. 

The round was backed by angel investors, and the investment will be used to expand the company’s operations within the Kingdom. 

Founded by Abdullah Abdulaziz Al-Jafaari in 2024, Resquad AI facilitates flexible collaboration among software development firms by allowing them to share developers with other companies or external clients. 

Asas plans to enhance its platform and drive growth in the Saudi IT sector with the new capital. 

UAE-based Meteora Developers acquires property crowdfunding platform Maisour 

UAE-based real estate developer Meteora Developers has acquired Emirati property crowdfunding platform Maisour in a multimillion-dollar deal. 

Founded in 2022 by Praveen Sharma, Meteora has developed a diverse real estate portfolio across the UAE. 

Maisour, launched in 2021 by Ahmed Nour, Haytham Assaal, and Sari Safi, offers global investors the opportunity to participate in the UAE’s real estate market through fractional ownership. 

With this acquisition, current and future investors on the Maisour platform will gain access to Meteora’s extensive offerings, further expanding their opportunities in the UAE property sector. 

Falcon Gate Ventures launches $100m Web3 innovation fund 

Singapore-based Gate Ventures, the venture capital arm of Gate.io, and the Blockchain Center in Abu Dhabi have teamed up to launch a $100 million fund to promote Web3 innovation globally. 

Named Falcon Gate Ventures, the fund aims to accelerate the adoption of decentralized technologies and infrastructure. 

It will focus on fostering innovation in regions such as the US, Asia, Europe, and the MENA region, targeting key areas of Web3 development. 

Both Gate Ventures and the Blockchain Center intend to leverage their combined expertise to support emerging talents and advance the digital economy. 

Pakistan’s PostEx raises $7.3m to drive expansion into the GCC 

Pakistan-based fintech startup PostEx has secured $7.3 million in a pre-series A round led by Conjunction Capital, alongside Dash Ventures, Sanabil500, VSQ, FJ Labs, and Zayn VC. 

Founded in 2020 by Muhammad Khan, PostEx offers upfront payments to e-commerce businesses while providing a reliable delivery network. 

Prior to this round, the company had raised $8.6 million from investors such as Global Founder Capital, MSA Capital, and Shorooq Partners. 

The company intends to utilize the fresh capital to expand its services into the Gulf Cooperation Council region, further bolstering its fintech and logistics solutions. 

Egypt’s NoorNation secures investment from KBW Ventures for clean energy solutions 

Egypt-based climate tech startup NoorNation has received an undisclosed investment from KBW Ventures, founded by Saudi Prince Khaled bin Al-Waleed. 

NoorNation, which was launched in 2021 by Ragy Ramadan and Mohamed Khaled, focuses on delivering decentralized energy and water infrastructure to off-grid areas across Egypt and Sub-Saharan Africa. 

NoorNation’s flagship product, LifeBox, provides clean energy and safe water to rural communities, farms, and tourism businesses at affordable prices. 

The company has gained recognition for its work, including being named Best Green Tech Startup of the Year in Northern Africa by the Global Startup Awards 2024. This marks KBW Ventures’ first investment in Egypt’s startup ecosystem. 

UAE fintech Yuze raises $30m for SME financial inclusion 

UAE-based fintech startup Yuze has raised $30 million in a funding round led by Osten Investments. 

Founded in 2022 by Rabih Sfeir, Yuze offers business accounts tailored to startups, micro, and small enterprises, with a focus on financial inclusion in emerging markets. 

The company plans to utilize the funds to expand into new markets and aims to reach one million small and medium-sized enterprise and professional customers within the next five years. 

Yuze’s expansion strategy is intended to bridge the financial inclusion gap for underserved businesses across various regions.


Real estate becoming a cornerstone of Saudi Arabia’s economic diversification, experts say

Real estate becoming a cornerstone of Saudi Arabia’s economic diversification, experts say
Updated 36 sec ago
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Real estate becoming a cornerstone of Saudi Arabia’s economic diversification, experts say

Real estate becoming a cornerstone of Saudi Arabia’s economic diversification, experts say

RIYADH: Saudi Arabia’s real estate market has rapidly emerged as a key pillar in the Kingdom’s quest for long-term sustainability and economic growth, benefiting local residents and foreign investors alike, experts have told Arab News.

Under Vision 2030, the Kingdom is reshaping the sector through strategic investments, sweeping reforms, and mega-projects that are not only enhancing the nation’s infrastructure but also creating new opportunities.

A central objective of the initiative is to diversify Saudi Arabia’s economy by developing non-oil sectors, making it more resilient to global market fluctuations.

Real estate, as part of this strategy, is playing an increasingly important role in stimulating growth across the country, with tourism, entertainment, and the hospitality sector all assisting in reshaping the housing and commercial space landscape.

The Saudi government has enacted a series of reforms designed to enhance real estate development and attract private investment.

Key among these is the introduction of the Saudi Real Estate Refinance Co., established in 2017 to provide liquidity to the mortgage market and increase access to financing for homebuyers.

In an interview with Arab News, Sally Menassa, partner at international management consulting firm Arthur D. Little Middle East, said: “The Kingdom’s openness to foreign ownership in real estate, coupled with incentives for international companies, is expected to fuel increased FDI.”

Garvan McCarthy, chief investment officer at consulting firm Mercer, told Arab News the Vision 2030 goal of boosting private sector contributions has led to an increase in real estate activity.

“Reforms in regulations, such as easing foreign ownership restrictions and introducing public-private partnerships, have been undertaken to create a more attractive investment climate,” he added.

Another development is the introduction of the White Land Tax, which imposes a 2.5 percent tax on undeveloped residential land.

This is aimed at increasing the supply of developable areas and encouraging private sector investment in housing projects.

Additionally, government initiatives like Ejar, a rental services app, are enhancing transparency in the rental market and encouraging more investments in the tenancy sector.

Recent investments have been heavily directed toward urban development projects, including modern infrastructure such as roads, airports, and public transportation networks.

These investments are driving up property values in both urban and suburban areas, particularly in newly developed zones that are set to become key economic hubs.

Real estate as a catalyst for homeownership

Another core component of Vision 2030 is the government’s effort to raise homeownership rates among Saudi citizens to 70 percent by 2030.

In pursuit of this goal, Saudi Arabia has launched several initiatives aimed at providing affordable housing solutions and easing access to financing.

The Sakani program aims to make homeownership more attainable for Saudi families by providing financial support, facilitating loans, and subsidizing housing.

This initiative has significantly reduced barriers to homeownership, stimulating residential real estate development.

The residential real estate sector has been growing at a 4.5 percent compound annual growth rate since 2017, with projections indicating it will double by 2028, reaching SR51 billion ($13.5 billion), according to Menassa.

McCarthy added: “Since the introduction of these reforms, homeownership in Saudi Arabia has seen a substantial increase, driven by both governmental support and private sector development.”

The percentage of homeownership has exceeded 63 percent, up from 47 percent in 2016, reflecting the effectiveness of the Sakani program and other related initiatives.

Mega projects shaping the future of real estate

Several landmark real estate projects have become symbols of Vision 2030’s far-reaching impact. These projects are not only reshaping Saudi Arabia’s urban landscape but also positioning the Kingdom as a significant player in the global real estate market.

NEOM

Located in northwestern Saudi Arabia, NEOM is one of the most ambitious projects under Vision 2030. This multi-billion-dollar smart city aims to be a global hub for technology, sustainability, and innovation and provides opportunities for real estate development.

Menassa described NEOM as a “key aspect of this real estate transformation,” noting its role in the broader Vision 2030 agenda.

She pointed out that the development will incorporate smart city technologies, with a focus on industries such as energy, water, and biotechnology, as well as food, advanced manufacturing, and entertainment.

This forward-thinking approach is expected to attract both domestic and international real estate investors looking to capitalize on NEOM’s innovative urban vision.

Qiddiya

Qiddiya, another flagship project under Vision 2030, is positioned to become a global destination for entertainment, sports, and the arts. Situated near Riyadh, this expansive development will feature theme parks, concert venues, sports arenas, and cultural institutions.

The project’s focus on entertainment and tourism is expected to drive significant residential and commercial real estate development in the surrounding areas.

McCarthy added that Qiddiya is poised to transform the region into a vibrant entertainment capital, drawing millions of visitors annually and offering extensive opportunities for investors in hotels, commercial spaces, and residential properties.

The Red Sea

The Red Sea Project is one of the world’s most ambitious tourism initiatives, aiming to develop a luxury tourism destination along Saudi Arabia’s Red Sea coastline. Covering 28,000 sq. km, the project will include 50 hotels, 1,000 residential properties, and a host of leisure facilities.

Menassa pointed out that the project involves “developing real estate in the form of boutique hotels, museums, and cultural venues that enhance visitor experiences while respecting and preserving historical significance.”

This high-end tourism hub is expected to drive growth in the luxury residential and hospitality sectors, contributing significantly to Saudi Arabia’s tourism and real estate markets.

The future of Saudi real estate

As Saudi Arabia moves toward becoming a more diversified and sustainable economy, the real estate sector will continue to play a critical role in this transformation.

According to a report by King Abdullah Petroleum Studies and Research Center, Saudi Arabia’s economic diversification will lead to an increase in high-value industries such as advanced manufacturing, pharmaceuticals, and renewable energy, all of which will drive further demand for commercial real estate.

Menassa observed that the Kingdom’s commercial real estate market size is estimated to grow “at a strong CAGR of around 8.6 percent to 2028.”

McCarthy added: “As Saudi Arabia diversifies into advanced manufacturing, renewable energy, and pharmaceuticals, commercial real estate should benefit from the demand for specialized facilities.”

Moreover, as sectors such as tourism, entertainment, and retail flourish under Vision 2030, demand for hospitality and retail spaces is expected to rise substantially.

The ongoing transformation is positioning Saudi Arabia as a key player in the global real estate and tourism industries, with Riyadh at the heart of its ambitious vision.


Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn

Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn
Updated 08 November 2024
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Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn

Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn

RIYADH: Saudi bank loans reached SR2.85 trillion ($760.84 billion) in September, representing an annual growth rate of 12.16 percent — the highest in 19 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 53.5 percent, with individual loans comprising the remaining figure.

The former category grew by 15.75 percent, outpacing the 8.3 percent annual growth in personal loans, underscoring the increasing demand for business financing across key sectors.

Real estate activities led corporate lending, accounting for 20.37 percent of all business loans and growing by 28.63 percent to reach SR310.83 billion.

The wholesale and retail trade sector followed, constituting 13.07 percent of these loans, with SR199.45 billion in financing. Lending to manufacturing came third, making up 11.78 percent, totaling SR179.83 billion.

Loans to the electricity, gas, and water supply sectors accounted for 11.25 percent of total lending, amounting to SR171.62 billion. This category experienced a growth rate of 29.35 percent.

While professional, scientific, and technical activities represented a small portion of total corporate loans at just 0.63 percent, they posted the highest annual growth rate of 79.6 percent, amounting to SR9.69 billion.

In September, Saudi banks’ loans-to-deposits ratio slightly declined to 79.66 percent, down from 79.71 percent in the same month of 2023, as per data from the SAMA.

The calculation includes loans minus provisions and commissions, providing a clearer view of actual lending capacity.

SAMA has set a regulatory limit of 90 percent for loans-to-deposits ratios, balancing banks’ lending capacity with liquidity stability while supporting economic growth through corporate and individual borrowing.

Compared to other GCC nations, such as the UAE where loans-to-deposits ratios can exceed 100 percent, SAMA’s cap reflects a more cautious approach, prioritizing liquidity stability in the banking sector.

Corporate real estate lending in Saudi Arabia has surged as banks align with Vision 2030’s targets for urban expansion, economic diversification, and investment attraction. 

This focus on real estate as the largest component of corporate lending is supported by robust demand for infrastructure, from commercial and residential developments to giga-projects like NEOM and the Red Sea.

Riyadh is a key beneficiary, attracting regional and international companies, which has increased the need for high-quality office spaces. 

The office market in the Saudi capital has seen a boost from the Regional Headquarters Program, drawing numerous global companies seeking a central base in the Middle East.

The government’s recent regulatory advancements are also pivotal in driving this lending trend. With improved transparency and a structured land registry, investors and developers now have greater confidence in the market.

The General Authority for Statistics recently reported a 2.6 percent annual rise in the real estate price index in the third quarter of this year, highlighting demand for residential and commercial spaces.

Major cities like Jeddah and Riyadh have seen considerable price increases in both land and building categories, driven by strong demand across residential, office, and mixed-use spaces.

The Real Estate General Authority anticipates that Saudi Arabia’s property market, one of the Middle East’s fastest-growing sectors, will reach a market volume of $69.51 billion in 2024 and $101.62 billion by 2029, with a projected compound annual growth rate of 8 percent.

Catalyzing growth in sectors under Vision 2030

Saudi Arabia’s scientific, professional, and technical services sector is driven by a rapid expansion of research, development, and innovation.

The launch of the Saudi Minds Platform by the Research, Development, and Innovation Authority in October is playing a key role in this shift.

This platform creates an advanced digital environment to support the RDI ecosystem, providing resources to researchers, innovators, and institutions.

By promoting knowledge exchange, international collaboration, and access to funding, the platform fosters a thriving scientific landscape, which, in turn, stimulates demand for financial services, driving lending growth in this sector.

As Saudi Arabia intensifies its efforts toward Vision 2030, investments in innovation and technology are expected to continue to fuel further growth in the RDI-driven economic landscape.


Startup Wrap – Saudi VC space continues to play pivotal role in SMEs growth as Biban 24 delivers deals

Startup Wrap – Saudi VC space continues to play pivotal role in SMEs growth as Biban 24 delivers deals
Updated 08 November 2024
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Startup Wrap – Saudi VC space continues to play pivotal role in SMEs growth as Biban 24 delivers deals

Startup Wrap – Saudi VC space continues to play pivotal role in SMEs growth as Biban 24 delivers deals

RIYADH: Saudi Arabia’s venture capital ecosystem continues to boost the regional startup space, with one company plowing $20 million into the early stage-focused Booster IV fund.

Saudi Venture Capital Co. announced it was pouring the money into the fund, which is managed by Beco Capital and focuses on investments across the Gulf region.

Booster IV aims to support high-growth or disruptive startups, targeting companies from the seed stage up to series A. 

The fund’s investment strategy spans various sectors with a strong emphasis on Saudi Arabia and the broader Gulf region, and currently oversees $495 million in assets across four funds.

“Our investment in Booster IV, managed by Beco Capital, aligns with our fund investment program and our strategy to support funds that back early stage startups in Saudi Arabia,” said Nabeel Koshak, CEO and board member of SVC.

Established in 2018, SVC is a subsidiary of the SME Bank, part of Saudi Arabia’s National Development Fund.

The company is dedicated to stimulating and sustaining financing for startups and small and medium-sized enterprises, supporting them from the pre-seed stage up to pre-IPO through funding and co-investments in high-potential startups.

Saudi’s BIM Ventures and Japan’s SBI Holdings launch $2bn-targeted BIM Capital

Supplied.

Saudi Arabia-based venture studio BIM Ventures and Japan’s SBI Holdings have launched a joint venture aiming to drive growth across Saudi Arabia and the broader Middle East.

BIM Capital’s investment strategy spans private equity, venture capital, debt funds, and real estate development, with a target of attracting over $200 million in foreign direct investment and managing assets exceeding $2 billion.

The firm will leverage its expertise to identify high-growth sectors, with a particular emphasis on technology ventures, emerging industries, and real estate development, offering investors access to innovative, transformative opportunities.

Mush Social raises $1.2m in pre-seed funding led by Nifal Consulting

Saudi-based Mush Social has closed a $1.2 million pre-seed funding round led by Nifal Consulting, with support from Nahr Al-Jazeera Holding and angel investors.

Founded in 2022 by Abdulhadi Al-Asmi, Mush Social operates a social platform where users can earn points and own virtual assets through its interactive map feature, potentially monetizing their online interactions.

The funds will support the development of advanced technologies to enhance user value from their engagements on the platform.

Ayen acquires Egyptian contech Elmawkaa in seven-figure deal

The deal will see Ayen integrate Elmawkaa’s construction materials marketplace into its property evaluation platform. Supplied

Saudi property tech company Ayen has acquired Egyptian construction technology firm Elmawkaa in a seven-figure Saudi riyal transaction.

Founded in 2018 by Abdulrahman Al-Mulqi, Ali Al-Mohsen, and Aymen Al-Sarory, Ayen provides data-driven property evaluation solutions.

The acquisition will integrate Elmawkaa’s construction materials marketplace into Ayen’s platform, strengthening its market position across the Gulf Cooperation Council region.

Elmawkaa, established in 2017, offers a digital marketplace for competitive quotations on building materials, aimed at streamlining procurement for construction companies.

Aramco Ventures backs IOTA Software’s $10.4m series A2 round

Aramco Ventures has joined a $10.4 million Series A2 funding round for IOTA Software, a cloud-native platform for industrial performance optimization, led by Altira Group with participation from Oxy Technology Ventures and Second Avenue Partners.

The funds will enable IOTA to expand its engineering, product, and customer success teams, enhance its technology infrastructure, and strengthen marketing efforts. IOTA’s platform aggregates business and operations data to aid decision-making across industrial sectors.

Warburg AI secures $250k in seed funding for financial AI solutions

UAE-based Warburg AI has raised $250,000 in seed funding from undisclosed investors.

Founded in 2024 by Ben Pfeffer, Lancelot De Briey, and Madiyar Ismagulov, Warburg AI develops adaptive artificial intelligence and machine learning tools for financial institutions, with a focus on algorithmic trading, real-time risk management, and asset optimization.

The capital will be directed toward product development and expansion of its customer solutions team.

Brands.io raises seed funding to expand AI-focused domain services

UAE’s Brands.io, an AI-driven domain name provider, has raised an undisclosed amount in seed funding from unnamed investors.

Founded in 2024 by Chetan Gera, Brands.io offers customized domain names tailored for AI companies. 

The investment will fuel platform development, add technical features, and support the company’s expansion into Europe, the Middle East, and Africa, with a strong focus on strengthening its GCC presence.

NorthLadder raises $10m in series B for expansion in pre-owned electronics market

NorthLadder aims to capitalize on the increasing demand in the expanding pre-owned smartphone market. Supplied

UAE-based NorthLadder, a trade-in platform for pre-owned electronics, has raised $10 million in a Series B funding round led by stc Group’s corporate venture capital arm, tali ventures, with additional contributions from the Dutch Founders Fund and Crescent Ventures.

Founded in 2021 by Mihin Shah and Sandeep Shetty, NorthLadder offers a secure platform for reselling pre-owned devices, addressing growing demand in this sector.

With the new capital, NorthLadder plans to enhance its technology and expand its presence, particularly in Europe.

CE-Ventures co-leads $10m funding round for CrossBridge Bio’s cancer therapies

UAE-based CE-Ventures, the corporate venture capital arm of Crescent Enterprises, has co-led a $10 million funding round for CrossBridge Bio, a Houston-based biotech firm focused on developing dual-payload antibody drug conjugates for targeted cancer treatments.

The round also included participation from TMC Venture Fund, Portal Innovations, Alexandria Ventures, and several pre-seed investors.

The investment will support the advancement of CrossBridge Bio’s lead candidate, CBB-120, which targets solid tumors.

Additionally, the funding will enable the company to expand its pipeline of dual-payload ADCs and further develop its proprietary linker technology, which it claims could bring a new level of precision to cancer therapy.

Saudi Arabia’s signature startup event Biban 24 sees deals to support SMEs

Biban 24, Saudi Arabia’s premier event for startups and SMEs, saw over $5 billion in agreements and financing initiatives signed during the first three days.

Organized by the General Authority for Small and Medium Enterprises, or Monsha’at, the Riyadh-based forum secured more than 40 agreements and numerous financing portfolios aimed at bolstering Saudi Arabia’s SME sector in alignment with Vision 2030 goals.

These deals, amounting to more than SR18 billion ($4.79 billion) on the first day, SR1.35 billion on the second,  and SR580 million on day three,  included partnerships with leading Saudi banks, international memoranda of understanding, and investment opportunities designed to enhance access to funding and expand support networks for SMEs.

The event, themed “A Global Destination for Opportunities,” underscores Monsha’at’s commitment to creating a conducive environment for SMEs to thrive, positioning them as key drivers of economic diversification.


Saudi Central Bank lowers benchmark rate by 25 bps following US Fed decision

Saudi Central Bank lowers benchmark rate by 25 bps following US Fed decision
Updated 08 November 2024
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Saudi Central Bank lowers benchmark rate by 25 bps following US Fed decision

Saudi Central Bank lowers benchmark rate by 25 bps following US Fed decision

RIYADH: Saudi Arabia’s central bank has implemented its second interest rate reduction of 2024, lowering the benchmark by 25 basis points to 5.25 percent.

This adjustment mirrors the recent US Federal Reserve decision, which also cut rates by the same amount to a target of 4.5 - 4.75 percent.

In a statement, the central bank – also known as SAMA – said: “In light of global developments, and in accordance with the Central Bank’s objective of maintaining monetary stability, it has decided to reduce the Repurchase Agreement rate by 25 basis points to 5.25 percent, and the Reverse Repurchase Agreement rate by 25 basis points to 4.75 percent.​”

Unlike the higher September cut of 50 basis points, this move is a strategic recalibration of monetary policy, aimed at easing high borrowing costs that have been sustained to combat inflation over the past two years.

Gulf Cooperation Council central banks align interest rates with the US Federal Reserve due to their currency pegs to the dollar, despite having stable inflation rates.

Both the UAE and Bahrain reduced rates by 25 basis points, while Qatar opted for a slightly larger 30-point cut.

Kuwait, however, took a different approach. Its central bank, which pegs its currency to a basket, rather than exclusively to the dollar, lowered rates by 25 basis points in September to 4 percent but did not announce further cuts in November as of date.

Over the past two years, the US Federal Reserve has aggressively tightened its monetary policy to tackle inflation, driving up interest rates in an effort to bring prices down.

Although inflation has made progress toward the Fed’s 2 percent target, it remains slightly elevated, and high costs persist for consumers.

The labor market has shown signs of cooling, with unemployment inching up but still at low levels. The Fed’s ongoing challenge is balancing inflation control with the need to maintain a healthy, resilient job market.

The decision to cut interest rates could have far-reaching implications for the GCC, particularly for Saudi Arabia’s economy.

The Kingdom’s non-oil sectors, already a key focus under Vision 2030, stand to benefit significantly from the influx of cheaper credit.

Sectors such as construction, real estate, and services, which have seen substantial growth, are expected to experience further acceleration.

Lower borrowing costs could spur investments in infrastructure and technology, both vital to the Kingdom’s diversification away from oil.

Corporate lending is also expected to see a boost, with businesses, especially in capital-intensive industries like real estate, poised to take advantage of more affordable financing.

This could translate into more ambitious expansion plans, particularly for projects aligned with Vision 2030 goals, such as NEOM and the Red Sea Project.

The real estate market in particular could see a further surge as cheaper credit fuels demand for housing. 

Riyadh’s growing population and influx of expatriates are likely to drive this trend, with lower interest rates making mortgages more affordable.


Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes

Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes
Updated 08 November 2024
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Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes

Oil Updates – prices fall more than 1 percent as Hurricane Rafael risk recedes

LONDON: Oil prices fell on Friday on receding fears over the impact of Hurricane Rafael on oil and gas infrastructure in the US Gulf while investors also weighed up fresh Chinese economic stimulus.

Brent crude oil futures lost 93 cents, or 1.23 percent, to $74.70 a barrel by 5:15 p.m. Saudi time. US West Texas Intermediate crude was down $1.05, or 1.45 percent, at $71.31.

The benchmarks have reversed Thursday’s gains of nearly 1 percent, but Brent and WTI are still on track to finish 2 percent up over the week, with investors also examining how US President-elect Donald Trump’s policies might affect oil supply and demand.

Hurricane Rafael, which has caused 391,214 barrels per day of US crude oil production to be shut in, is forecast to weaken and move slowly away from US Gulf coast oilfields in the coming days, the US National Hurricane Center said.

Downward price pressure also came from data showing crude imports in China, the world’s largest oil importer, fell 9 percent in October — the sixth consecutive month to show a year-on-year decline.

“The weakening of oil imports in China is due to weaker demand for oil as a result of the sluggish economic development and rapid advance of e-mobility,” said Commerzbank analyst Carsten Fritsch.

China kicked off a fresh round of fiscal support on Friday, announcing a package that eases debt repayment strains for local governments.

The nation’s economy has faced strong deflationary pressures in the face of weak domestic demand, a property crisis and mounting financing strains on indebted local governments, limiting their investment capability.

“There were no additional stimulus measures targeting domestic demand, hence the disappointment weighing on prices,” UBS analyst Giovanni Staunovo told Reuters.

Prices had risen on Thursday on expected actions by the incoming Trump administration, such as tighter sanctions on Iran and Venezuela, which could limit oil supply to global markets.

“In the short-term, oil prices might rise if the new President Trump is quick on the draw with oil sanctions,” said PVM analyst John Evans.

US Federal Reserve Chair Jerome Powell said on Thursday that Trump’s proposed policies of broad-based tariffs, deportations and tax cuts would have no near-term impact on the US economy, but the Fed would begin estimating the impact of such policies on its goals of stable inflation and maximum employment.

The Fed cut interest rates by a quarter of a percentage point on Thursday.