Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

It will enhance connectivity options for Gulf countries and neighboring regions through Mobily’s digital network, integrating with Egyptian landing stations in the Mediterranean.
It will enhance connectivity options for Gulf countries and neighboring regions through Mobily’s digital network, integrating with Egyptian landing stations in the Mediterranean.
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Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

Mobily partners with Telecom Egypt to launch 1st Saudi submarine cable

RIYADH: Saudi Arabia’s telecommunications company, Mobily, has entered into a cooperation agreement with Telecom Egypt to establish the first Saudi-owned subsea cable connecting the two nations across the Red Sea.

The agreement includes the installation of the subsea cable, which will be fully owned by Mobily, with landing stations in Duba, Saudi Arabia, and Sharm El-Sheikh, Egypt, as stated by Mobily on X.

This cable will serve as a link between Asia and Africa, creating a route to Europe by connecting Saudi Arabia with Egypt.

It will enhance connectivity options for Gulf countries and neighboring regions through Mobily’s digital network, integrating with Egyptian landing stations in the Mediterranean.

Additionally, it will provide new routes to improve service reliability and meet customer needs within the Kingdom and beyond.

“The new cable represents a significant milestone in strengthening Saudi Arabia's position as a leading international hub for telecommunications services and data traffic, in alignment with the goals of Saudi Vision 2030,” said Salman bin Abdulaziz Al-Badran, CEO of Mobily.

He added: “The signing of the agreement underscores our commitment to expanding our infrastructure and enhancing our capabilities both regionally and internationally, as Mobily’s new cable will connect Saudi Arabia to Egypt and improve communication flexibility between the Middle East and Europe.”

This agreement aligns with Mobily’s strategy to bolster its infrastructure and network capabilities. Building on its previous investments in subsea cables that connect global regions, the new cable will expand Mobily’s international reach and capacity.

“Complementing the newly established landing station in Sharm El-Sheikh, we are developing new crossing routes to connect Sharm El-Sheikh to the Mediterranean Sea,” stated Mohamed Nasr, managing director and CEO of Telecom Egypt.

He further said: “We are confident that this commercial agreement will be a valuable addition to our ongoing efforts to support this critical sector and cater to the rising demand for capacity and connectivity.”

By increasing capacity and expanding its global reach through new collaborations, Mobily is dedicated to enhancing its subsea network infrastructure both domestically and internationally.

“I am pleased with our cooperation with Telecom Egypt, which will enable us to offer the best services to all our customers around the world,” Al-Badran noted.

“Telecom Egypt is dedicated to advancing the international telecommunications infrastructure by enhancing the geographical diversity of the global subsea cable networks,” Nasr added.

This commitment aims to provide cutting-edge digital solutions to customers and support the sustainable growth of the Kingdom’s ICT sector through advanced infrastructure.


Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 
Updated 8 sec ago
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Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

Saudi Arabia, Turkiye sign 10 cooperation agreements at business forum in Istanbul 

RIYADH: Saudi Arabia and Turkiye deepened commercial ties by signing 10 cooperation agreements at an event in Istanbul, advancing strategic initiatives across diverse sectors. 

The Saudi-Turkish Business Forum spotlighted opportunities for joint ventures in agriculture, food, and tourism, along with potential collaborations in advanced manufacturing, construction, and infrastructure. Other key areas included technology, innovation, and logistics, the Saudi Press Agency reported. 

Organized by the Federation of Saudi Chambers and the Foreign Economic Relations Board of Turkiye, the event attracted over 450 companies and several government agencies from both nations. 

This comes as the trade volume between the Kingdom and Turkiye reached SR25.4 billion ($6.76 billion) in 2023, marking a 15.5 percent growth. Saudi exports to Turkiye represented SR15.6 billion, while Turkish imports to the Kingdom accounted for SR9.8 billion.  

Turkish Minister of Trade Omer Bolat said: “Turkiye aims to raise the volume of its bilateral trade with the Kingdom to $30 billion in the medium and long term, and diversify its fields, especially tourism, health, infrastructure, information technology, and the defense industry.”  

The minister praised the strong bilateral relationship, the quality of Turkish products, and the success of the his country’s services sector, encouraging mutual benefit from these strengths. He also highlighted the Kingdom’s transformations across sectors such as mining, health, technology, and communications. 

“Today in Istanbul, I met with my brother, His Excellency the Turkish Minister of Trade Omer Bolat, and we discussed strengthening relations and expanding trade partnerships for the good and interest of the two brotherly countries,” Saudi Minister of Commerce Majid bin Abdullah Al-Qasabi said in a post on X. 

  


SABIC sees turnaround as it reports $266.2bn Q3 profit

SABIC sees turnaround as it reports $266.2bn Q3 profit
Updated 04 November 2024
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SABIC sees turnaround as it reports $266.2bn Q3 profit

SABIC sees turnaround as it reports $266.2bn Q3 profit

RIYADH: Petrochemical firm Saudi Basic Industries Corp. reported a net profit of SR1 billion ($266.27 million) for the third quarter of 2024, a marked improvement from a loss of SR2.87 billion in the same period last year.

SABIC attributed its positive results to various factors, including higher income from operations by SR797 million, bolstered by a heightened gross profit margin offset by raised operating costs.

The company’s revenue rose 3 percent year on year to SR36.88 billion, primarily driven by increased average selling prices despite a slight decrease in sales volume.

The firm also benefited from gains related to divesting its Functional Forms business and favorable currency exchange fluctuations.

According to the London Stock Exchange Group, the third quarter profit missed analyst forecasts of SR1.6 billion, as reported by Reuters.

A notable factor was SABIC’s reduced losses from discontinued operations, amounting to SR3.3 billion, mainly stemming from a fair value reassessment of the Saudi Iron and Steel Co., known as Hadeed.

The reclassification of Hadeed as a discontinued operation will continue until the completion of its sale, which was previously announced by the company.

When compared with the second quarter of 2024, however, net profit fell from SR2.18 billion due to a lower gross profit of SR194 million, attributed to softer selling prices and higher feedstock costs.

The quarter also saw a rise in operating expenses by SR223 million and a decline in profits from associates and joint ventures by SR313 million, following a fair value assessment related to the firm’s agreement to sell its shares in Alba, announced in September.

Despite these challenges, SABIC’s total revenue for the first nine months of 2024 reached SR105.28 billion, with a net profit of SR3.43 billion, a sharp turnaround from the SR1.04 billion loss in the same period last year.

This was aided by reduced discontinued operation losses and lower Zakat expenses by SR1.05 billion, stemming from regulatory-driven provision adjustments in June.


Saudi Vision 2030 to catalyze banking sector growth: Moody’s

Saudi Vision 2030 to catalyze banking sector growth: Moody’s
Updated 04 November 2024
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Saudi Vision 2030 to catalyze banking sector growth: Moody’s

Saudi Vision 2030 to catalyze banking sector growth: Moody’s
  • Rating agency said development of planned mega projects in Saudi Arabia will play important role in generating huge business and lending opportunities for banks
  • Kingdom’s housing program has been a driver of credit growth for the banks over the last five years

RIYADH: Saudi Arabia’s Vision 2030 program to diversify the economy could accelerate the country’s banking sector development in the coming years, according to an analysis by Moody’s. 

In its latest report, the US-based credit rating agency said the development of planned mega projects in Saudi Arabia will play an important role in generating huge business and lending opportunities for banks. The infrastructure required to host major events like the Asia Cup in 2027, the Asian Winter Games in 2029, Expo 2030, and the FIFA World Cup in 2034 is expected to support this growth further.

Vision 2030 aims to reduce the Kingdom’s decades-long dependence on crude revenues and steadily bolster its presence in other sectors like tourism, technology, and real estate. 

“Planned mega projects to diversify the economy include the tourism, real estate, and infrastructure sectors, and the government provides the country’s banks the opportunity to help fund them,” said Abdulla Al-Hammadi, assistant vice president and analyst at Moody’s Ratings. “One part of Saudi Vision 2030 is a plan to raise home ownership to 70 percent by 2030 from 47 percent in 2016.”

The report said the Kingdom’s housing program has been a driver of credit growth for the banks over the last five years, with household mortgages reaching SR607 billion ($161.67 billion) at the end of 2023, up from SR110 billion in 2016. They now comprise around 24 percent of total banking sector loans.

“Given these mortgages were secured at a fixed rate during a time of low interest rates and that tenures are often for 25 to 30 years, this could place some pressure on margins in the sector. We believe that larger banks will be hit hardest due to their dominant position in the Saudi mortgage market,” said Al-Hammadi. 

If deposit development continues to lag loan growth, banks could also face growing funding shortages. Given the nature of mortgage fixed-rate loans, it may be challenging for financial institutions to offload them in the still-developing secondary markets.

The agency said Saudi banks could also face challenges in this run, which include insufficient deposit growth to meet the growing credit demand associated with Vision 2030 infrastructure and development projects. 

“A challenge is that availability of deposit growth is lagging behind accelerated credit growth at Saudi banks, while the home-ownership push has packed the banks with long-term, fixed-rate mortgages that tie up funds. 

“The banks will need to tap more confidence-sensitive market funding. This could entail foreign deposits, interbank syndications, and debt issuance, particularly Islamic bonds or sukuk,” said Al-Hammadi.

According to the report, reliance on short-term foreign funding will be riskier than long-term, such as senior unsecured debt and additional tier one, since long-term allocations will better match these banks’ long-term loans.


Oil Updates – crude gains more than $1 after OPEC+ delays output hike

Oil Updates – crude gains more than $1 after OPEC+ delays output hike
Updated 04 November 2024
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Oil Updates – crude gains more than $1 after OPEC+ delays output hike

Oil Updates – crude gains more than $1 after OPEC+ delays output hike
  • Brent up 1.9 percent, WTI up 2 percent
  • OPEC+ delays December output hike by one month

BEIJING/SINGAPORE: Oil prices extended gains on Monday, rising more than $1 on a decision by OPEC+ to delay by a month plans to increase output, while the market braced for a week that spans a US presidential election and a key meeting in China.

Brent futures rose by $1.39 per barrel, or 1.9 percent, to stand at $74.49 a barrel by 10:22 a.m. Saudi time. US West Texas Intermediate crude rose by $1.41 a barrel, or 2.0 percent, to stand at $70.90.

On Sunday, OPEC+, which includes the Organization of the Petroleum Exporting Countries plus Russia and other allies, said it would extend its output cut of 2.2 million barrels per day for another month in December, with an increase already delayed from October because of falling prices and weak demand.

The grouping had been due to increase output by 180,000 bpd from December.

“While the delay until January does not change fundamentals significantly, it does potentially leave the market having to rethink the strategy of OPEC+,” ING analysts said in a note.

The delay bucked the expectations of some in the market for OPEC+ to deliver the planned hike in output, they added.

“This delayed supply increase means that maybe the group are more willing to support prices than many believe,” they said.

The group is set to gradually unwind the 2.2-million-bpd cut over the coming months, while another 3.66 million bpd of production cuts will stay until the end of 2025.

Brent and WTI posted weekly declines last week of about 4 percent and 3 percent, respectively, as record US output weighed on prices. But both contracts edged up on Friday on reports that Iran could launch a retaliatory strike on Israel within days.

On Thursday, US news website Axios said Israeli intelligence suggested that Iran was preparing to attack Israel from Iraq within days, citing two unidentified Israeli sources.

It is questionable whether the price uptrend will be sustained as previous initial positive reaction to the delayed output hike and geopolitical tension have eventually fizzled off, said Yeap Jun Rong, a market strategist at IG.

For now, oil prices may stay in a broad consolidation range, with any upside likely to find some resistance at the level of $78.50, he added.

Markets await Tuesday’s US presidential election, with polls showing Democratic Vice President Kamala Harris and Republican former President Donald Trump neck-and-neck.

And on Thursday, economists expect the US Federal Reserve to cut interest rates by 25 basis points.

In China, the Standing Committee of the National People’s Congress meets from Monday to Friday and is expected to approve additional stimulus to boost the slowing economy, though analysts say the bulk may go to help cut local government debt. 


Pakistan set to deliver fourth consecutive rate cut today to revive economy

Pakistan set to deliver fourth consecutive rate cut today to revive economy
Updated 04 November 2024
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Pakistan set to deliver fourth consecutive rate cut today to revive economy

Pakistan set to deliver fourth consecutive rate cut today to revive economy
  • All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates next week
  • Policymakers continue efforts to revive a fragile economy as inflation eases off recent record highs

KARACHI: Pakistan’s central bank is expected to cut its key interest rate further at its policy meeting today, Monday, with policymakers continuing their efforts to revive a fragile economy as inflation eases off recent record highs.
The central bank, the State Bank of Pakistan, has slashed the benchmark policy rate to 17.5 percent from an all time-high of 22 percent in three consecutive policy meetings since June, having last reduced it by 200 basis points in September.
All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates. Two expect a 150 bps cut, twelve predict a 200 bps reduction, and one forecasts a 250 bps cut.
Economic activity has stabilized since last summer when the country came close to a default before an eleventh hour bailout by the International Monetary Fund (IMF).
The IMF, which in September gave a boost to Pakistan’s struggling economy by approving a long-awaited $7 billion facility, said that the South Asian nation had taken key steps to restore economic stability with consistent policy implementation under the 2023-24 standby arrangement.
While the economy has started to gradually recover, and inflation has moved sharply down from a multi-decade high of nearly 40 percent in May 2023, analysts say further rate cuts are needed to bolster growth.
Mustafa Pasha, Chief Investment Officer at Lakson Investments, said rates must drop under 15 percent and hold below that for six months to have a material impact.
The IMF in its latest October report forecast Pakistan’s gross domestic product growth at 3.2 percent for the fiscal year ending June 2025, up from 2.4 percent in fiscal 2024.
The government expects annual inflation to have come in at 6-7 percent last month and slow further to 5.5-6.5 percent in November.
However, inflation could pick up again in 2025, driven by electricity and gas tariff hikes under the new $7 billion IMF bailout, and the potential impact of taxes on the retail and wholesale sector proposed in the June budget.
Ahmad Mobeen, senior economist at S&P Global Market Intelligence, said that while lower rates will offer some relief to the manufacturing sector, the benefits may be limited due to “elevated input costs, driven by high electricity and gas tariffs, combined with global supply and shipping constraints.”