LUXEMBOURG: Moody's has cut the ratings of 11 European banks and said it would cut again if Greece ditched the euro, kicking off a long-awaited round of downgrades for major European institutions.
Moody's Investors Service said yesterday it had taken action against five Dutch banking groups, three French banks and one each from Belgium and Luxembourg.
Investors shrugged off the news after central banks from major economies had indicated they were prepared to take steps, including coordinated action, to stabilize markets in the wake of Greece's election on Sunday. The benchmark FTSEurofirst 300 index was up 0.7 percent at 0835 GMT.
Still, the downgrades will only add to pressure on European Union leaders to sort out the region's debt crisis.
Moody's was expected to downgrade some of the world's biggest banks by the end of June, which would widen the gulf in prospects between the strongest banks and weaker rivals. Bank of America Corp, Citigroup and Morgan Stanley are among those whose ratings could be affected.
Yesterday, Moody's cut four Dutch banks by two notches with one moved a single step lower. It kept a negative outlook for Dutch bank and insurer ING Bank, one of those cut two notches, meaning the rating could be cut again.
ING shares were up 2.8 percent, while SNS Reaal, whose banking unit was also downgraded, rose 3.9 percent, buoyed by the better tone in the broader market.
"Today's actions reflect Moody's view that Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond," it said.
The agency said there were heightened risks for creditors amidst elevated uncertainty and downside risks to the economic outlook and fragile investor confidence in Europe.
Moody's agency said it had cut the ratings by two notches to Aa2 for Rabobank Nederland, to A2 for ING, to A2 for ABN AMRO Bank, and to Baa2 for LeasePlan Corporation.
The long-term debt and deposit ratings for SNS Bank, owned by SNS Reaal, were cut one notch to Baa2.
Short-term ratings for all the groups were unchanged.
Moody's said while it had factored in an increased risk of Greece leaving the euro area, this was not its central scenario. "If a Greek exit became Moody's central scenario, further rating actions on European banks could well be needed."
Moody's said the negative outlook for ING took into account the bank's funding structure, which relies substantially on wholesale funds and a significant amount of non-domestic deposits. ING received 10 billion euros in state aid during the 2008 financial crisis.
It was subsequently forced to separate its banking and insurance businesses and sell off various assets to meet European Commission requirements for state aid. The disposal could also help to raise money to repay state aid.
Moody's also cut ratings for French groups Banque Federative du Credit Mutuel, BPCE and CIC, and also KBC from Belgium, and Banque et Caisse d'Epargne de l'Etat from Luxembourg.
"To date, we have taken actions on banks in Germany, Austria, Spain, Italy, Portugal, Sweden, Norway, Denmark and Finland," it said.
Moody’s cuts ratings of 11 European banks
Moody’s cuts ratings of 11 European banks
Pakistan raises over $4.2 billion in bond auction, launches first 15-year zero coupon issue
- Muhammad Aurangzeb calls it a major step toward making Pakistan’s financial system resilient
- He says the country is introducing new, smart ways of borrowing by giving investors more options
KARACHI: Pakistan raised more than Rs1.2 trillion ($4.2 billion) in a government bond auction on Wednesday, including the launch of its first-ever 15-year zero coupon bond, in a move the finance ministry said marked a shift toward longer-term and more diversified debt instruments.
The new zero coupon bond, which does not pay periodic interest but offers a lump sum at maturity, garnered strong investor demand and raised over Rs47 billion ($164.5 million).
The instrument is part of the government’s broader debt management strategy aimed at reducing short-term refinancing risk, encouraging Islamic finance and expanding the country’s long-term investment landscape.
“This is a major step forward in making Pakistan’s financial system stronger and more resilient,” the country’s finance minister, Muhammad Aurangzeb, said in a statement.
“We are introducing new, smart ways of borrowing that reduce risk and give investors more options,” he added. “Our aim is to manage public debt responsibly, promote Islamic finance and attract more long-term investment to support the country’s economic growth.”
The ministry noted the auction saw declining yields across other government securities, reflecting market optimism over moderating inflation and expectations of lower interest rates.
It said the average maturity of domestic debt had also risen from 2.7 years to 3.75 years, easing near-term repayment pressure.
The ministry noted the investor base was also broadening, with more participation from pension funds and insurance companies in addition to commercial banks.
It maintained the diversification helps distribute financial risk and deepen Pakistan’s local capital markets.
Officials also informed additional savings instruments for ordinary citizens, particularly Shariah-compliant bonds, are in development to foster retail investment and financial inclusion.
Despite ongoing global economic uncertainty, the ministry said the auction results reflect renewed investor confidence in Pakistan’s economic direction and reform efforts.
Closing Bell: Saudi main index slips 1.15% to close at 10,591
- MSCI Tadawul Index decreased by 11.84 points to close at 1,366.6
- Parallel market Nomu lost 254.4 points to end at 26,203.84 points
RIYADH: Saudi Arabia’s Tadawul All Share Index declined on Wednesday by 122.69 points, or 1.15 percent, to end at 10,591.13.
Total trading turnover of the benchmark index was SR6.22 billion ($1.66 billion), with 18 stocks advancing and 231 declining.
The MSCI Tadawul Index also decreased by 11.84 points, or 0.86 percent, to close at 1,366.6
The Kingdom’s parallel market, Nomu, reported drops, losing 254.4 points, or 0.96 percent, to close at 26,203.84 points. This comes as 30 stocks advanced while as many as 55 retreated.
Among the top gainers, BAAN Holding Group Co. rose 1.6 percent to SR36.85, while Advanced Petrochemical Co. added 1.26 percent to end at SR28.1.
Dallah Healthcare Co. and Naseej International Trading Co. gained 1.05 percent and 0.94 percent, respectively, closing at SR115.4 and SR74.90.
Saudi Tadawul Group Holding Co. also rose 0.87 percent to close at SR162.
Among the worst performers, National Co. for Learning and Education led losses with a decline of 7.53 percent to close at SR140.
Saudi Marketing Co. followed, shedding 7.04 percent to settle at SR15.32, while Ataa Educational Co. fell 5.85 percent to SR61.20.
Arabian Pipes Co. ended the session down 5.46 percent at SR5.54, and Saudi Reinsurance Co. edged 5.13 percent lower to SR42.55.
On the announcements front, Saudi National Bank announced its intention to fully redeem its SR4.2 billion Tier-1 capital sukuk at face value on June 30, marking the fifth anniversary of its issuance.
The sukuk, which was issued on June 30, 2020, with a total value of SR4.2 billion, will be redeemed at 100 percent of the issue price in accordance with its terms and conditions.
The bank confirmed that all necessary regulatory approvals for the redemption have already been obtained.
SNB closed Wednesday’s session 0.43 percent lower to reach SR34.35.
Saudi Arabia’s low-cost carrier flynas made its stock market debut, opening at SR77.50 and climbing to SR84.10 before retreating to a low of SR69.90. The stock closed at SR77.30, 3 percent below its IPO price of SR80.
Saudi Arabia ranks 17th globally in competitiveness index as it outshines economic heavyweights
- Listing driven by strong governance, infrastructure upgrades, diversification, and regulatory reforms
- Kingdom placed behind China in 16th and ahead of Australia in 18th place
JEDDAH: Saudi Arabia has maintained its spot in the top 20 of the World Competitiveness Ranking, ahead of global heavyweights like the UK, Germany and France.
The Kingdom secured 17th position on the list, driven by strong governance, infrastructure upgrades, diversification, and regulatory reforms.
Issued by the International Institute for Management Development’s World Competitiveness Center, the ranking is widely recognized as a benchmark for evaluating how effectively countries utilize their resources to drive long-term economic growth.
Saudi Arabia was placed just behind China in 16th and ahead of Australia in 18th place.
Although this marks a slight drop from 16th in 2024, Saudi Arabia’s 2025 ranking represents a significant improvement from 32nd in 2023 and 24th in 2022, underscoring its rising economic stature.
As part of Vision 2030, Saudi Arabia launched the National Competitiveness Center in 2019, with the organization now working with 65 government bodies to drive reforms centered on productivity, sustainability, inclusiveness, and resilience.
According to the World Competitiveness Center, the Kingdom needs to “continue efforts to promote renewable energy and reduce carbon emissions” and “carry on enhancing overall competitiveness across multiple pillars.”
Improvement will also come if Saudi Arabia continues to “invest even more in human capital development across all economic sectors” and push ahead with “ongoing government endeavors to achieve the targets in the Saudi 2030 vision.”
The IMD report is one of the world’s most comprehensive competitiveness benchmarks, evaluating 69 countries across four pillars: economic performance, government efficiency, business efficiency, and infrastructure.
The ranking shows that GCC countries continue to demonstrate their growing economic strength and regional importance, with the UAE leading the group, securing fifth place globally, reflecting its diversified economy and strategic initiatives to attract investment.
Qatar follows in ninth place, supported by substantial infrastructure development and robust financial resources.
Bahrain was ranked 22, Oman came in at 28, and Kuwait was placed at 36, showing steady progress through structural reforms and sectoral investment despite ongoing challenges.
These rankings underscore the GCC’s ambition to strengthen global economic resilience and competitiveness.
Switzerland, Singapore, and Hong Kong lead the ranking, while Canada, Germany, and Luxembourg saw the most notable improvements among the top 20 economies.
Saudi focus
According to the IMD, Saudi Arabia has made progress in several key economic areas, although some aspects still require improvement.
On the economic performance indicator, the Kingdom ranks 17th globally with a score of 62.3. Its domestic economy scored 59.2, placing it 25th worldwide, an improvement of six positions from the previous year.
International trade advanced three places to 29th with a score of 56.0, while global investment climbed four spots to 16th with a score of 57.8, signaling increased investor confidence.
However, the employment sector declined slightly, dropping three positions to 29th with a score of 55.6.
Inflationary pressures impacted the prices indicator, which fell eight places to 19th despite maintaining a relatively strong score of 60.7.
These mixed results reflect Saudi Arabia’s ongoing efforts to strike a balance between growth and economic stability amid global and domestic challenges.
Public finance indicators remain solid, with a score of 69.5, placing the Kingdom 13th globally, despite a modest three-position drop.
Tax policy holds steady at 67.6 points and 12th place, with a similar three-rank decline. The institutional framework experienced a more pronounced decline, dropping seven places to 27th with a score of 58.6, indicating potential areas for reform.
In contrast, business legislation improved, rising two places to 13th with a score of 67.6, indicating regulatory progress. The societal framework remains a key challenge, ranking 55th with a score of 44.2, representing a nine-position decline, which highlights the need for continued social and structural development to support economic goals.
Saudi Arabia ranked 12th globally in business efficiency with a strong score of 81.4. Productivity and efficiency showed further strength, scoring 66 and placing the Kingdom 15th, up six spots.
The labor market remains a key strength, ranking 9th despite a four-place drop, with a score of 64.2. The finance sector gained three ranks to 19th with 63.4 points, while management practices rose to 17th with a score of 64.
Attitudes and values remain a significant national asset, ranking third globally with a score of 81.6, reflecting a strong culture of resilience and ambition.
Infrastructure continues to show marked improvement. Basic infrastructure ranks seventh globally with a score of 67.6, up two positions. Technological infrastructure rose 10 places to 23rd with a score of 59.5, and scientific infrastructure improved nine spots to 29th with a score of 52.1.
Health and environment indicators gained slightly, moving up one place to 47th with a score of 47.5. Education declined marginally, down one position to 39th with a score of 55.4, signaling an area for continued focus.
Riyadh Air to launch new destination every 2 months as 787 deliveries near
- Carrier is awaiting delivery of its initial aircraft to commence services
- Riyadh Air secured necessary landing slots for its first destinations
RIYADH: Saudi Arabia’s Riyadh Air is gearing up to introduce a new international destination every two months once it begins operations, as the carrier prepares to receive its first Boeing 787 aircraft.
Riyadh Air, fully owned by the Public Investment Fund, is awaiting delivery of its initial aircraft to commence services, according to CEO Tony Douglas.
Speaking to Bloomberg, he said the airline requires two jets to initiate a round-trip route to each new destination, adding that the Saudi carrier aims to connect to 100 cities by 2030 as part of its long-term growth strategy.
This aligns with the Kingdom’s National Aviation Strategy, which targets doubling passenger capacity to 330 million annually from over 250 global destinations and increasing cargo handling to 4.5 million tonnes by 2030.
The carrier currently has four Boeing 787 Dreamliners in different stages of assembly at Boeing’s facility in Charleston, South Carolina. Operations are expected to begin once the first two aircraft have been delivered.
Riyadh Air had initially planned to launch services in early 2025, but delays in aircraft handovers from Boeing have pushed back the timeline.
“The fact that these are in production probably brings my blood pressure down,” Douglas said. “I will actually not believe they have been delivered until the day after they have been delivered.”
Douglas also said Riyadh Air has secured the necessary landing slots for its first destinations, though he did not disclose which cities.
At the Paris Air Show this week, the airline announced an order for up to 50 Airbus A350 long-range jets, with deliveries expected to begin in 2030.
Riyadh Air has also placed orders for 60 Airbus A321neo narrowbody aircraft and as many as 72 Boeing 787s, including options.
Commenting on the Airbus order, Douglas said the decision was based on the aircraft’s capabilities and favorable commercial terms when compared with Boeing’s 777X model. “It was a very close call,” he said.
The airline’s growth strategy reflects the Kingdom’s ambition to transform Riyadh into a global travel hub and position Saudi Arabia as a major player in international aviation.
Riyadh Air aims to contribute to the broader Vision 2030 goals by enhancing connectivity and promoting tourism across the Kingdom.
Saudi-based TIME Entertainment makes Nomu market debut
- Listing underscores company’s maturity and readiness for future expansion
- TIME Entertainment specializes in producing large-scale live events across various sectors
RIYADH: TIME Entertainment Co., a Saudi-based full-service live events and experiences management company, has officially begun trading on the Nomu parallel market, marking a significant step in its growth trajectory.
Chairwoman Ameera Al-Taweel described the listing as a strategic milestone that underscores the company’s maturity and readiness for future expansion.
TIME’s listing comes as part of broader efforts by Saudi Arabia to expand investor participation in the Nomu market. In 2024 alone, Nomu has seen 28 IPOs and three direct listings, raising about SR1.1 billion ($293 million).
“We have built a Saudi business model within the live events sector that meets global standards. The events sector is vast and diverse. Our experience represents a successful model that has been built based on a global vision, capped with a Saudi identity, and is distinguished by specializing in producing and organizing major live events managed by a multi-skilled team of some of the best events professionals globally.” Al-Taweel said in a statement.
Al-Taweel also highlighted the company’s role as a trusted partner to government, semi-government, and private sector clients. “We believe that we represent a national choice that executes major global events and constantly works,” she added.
CEO Obada Awad said the company is guided by a strategy rooted in sustainable growth and market responsiveness.
“We also place significant emphasis on sustainable operational improvement and diligent work to develop and launch premium and quality services that add real value to the market,” he said.
TIME Entertainment specializes in producing large-scale live events across sectors such as sports, entertainment, culture, tourism, and conferences. It offers end-to-end production and management services, in addition to creative and consultancy expertise.
The company is also focused on crafting distinctive narratives grounded in Saudi culture and heritage, with the aim of sharing them with global audiences. Its goal is to deliver innovative, artistically rich, and high-quality experiences.
Saudi Arabia’s entertainment sector is rapidly emerging as a key pillar of the Kingdom’s economic diversification agenda. As the country moves away from its traditional reliance on oil, strengthening the entertainment industry is seen as critical to driving growth across multiple sectors.
A recent report by consultancy AlixPartners found that 33 percent of Saudi consumers plan to increase spending on out-of-home entertainment — well above the global average of 19 percent — highlighting strong local demand.
