LONDON/DUBLIN: “I’m here to send you the regards of the Federal Chancellor. I am entitled to tell you we want you in Germany.” This private message from Angela Merkel, delivered by a regional politician to Wall Street bankers last year, is having the desired effect.
Frankfurt, along with Dublin, is emerging on top in the battle to draw highly-paid banking jobs — and the tax revenue that they bring — away from London before Britain’s departure from the European Union in March 2019.
Germany has favored a subtle approach, with Chancellor Merkel saying little if anything in public on what is a sensitive issue at home. Instead she relied on Volker Bouffier, prime minister of the state of Hesse where Frankfurt is located, to take her invitation to New York in November, according to three sources familiar with the discussions.
Irish leaders have been less reticent, but both countries have sent the same welcoming message to US, Japanese and other foreign banks — despite the public unpopularity of bankers that still lingers after the global financial crisis.
While Paris and Amsterdam are set to lure one or two major lenders, Germany and Ireland have so far secured the bulk of commitments from big-name banks.
Even then, the work of lobbyists is not over: they are pushing to host the huge business of clearing deals in euro-denominated securities, now dominated by the British capital.
Banks have been undertaking legal, financial and economic analysis in choosing new bases for their EU business if it can no longer be done from London. But they also need to know the political climate will be favorable.
“Bankers want reassurance that the government wants them,” one senior banking executive told Reuters. “Business does care about political sentiment toward them. There’s a reason: if there are problems you know that government will use its powers to help you.”
The largest global banks in London have indicated that about 9,600 jobs could go to the continent or Ireland in the next two years, though few have yet moved, according to public statements and information from industry sources.
In recent weeks Morgan Stanley, Citi and Bank of America as well as Japan’s Nomura, Mizuho and Sumitomo Mitsui have announced decisions for new EU headquarters, all opting for Frankfurt or Dublin.
These cities’ success follows year-long campaigns, as government agencies and lobby groups staged a charm offensive with the banks unseen since the 2007-09 crisis.
Merkel, who is seeking re-election next month, left city and Hesse officials to do the rounds in New York. That included the one-on-one meetings with senior executives on Wall Street when Bouffier passed on her message.
German taxpayers had to fund a series of bank bailouts during the crisis, and the bad memories remain due to Deutsche Bank. While Germany’s biggest bank did not needed rescuing, it has run up a litigation bill of €15 billion since 2009 due to extravagant market bets and misconduct.
Local officials have had fewer inhibitions than the national politicians. The Frankfurt Main Finance lobby group went on more than 50 trips to foreign banks’ home bases in the past year. “We’ve had indications that two thirds of the major banks’ moves will be to Frankfurt,” lead campaigner Hubertus Vaeth said.
Morgan Stanley, Citi and JPMorgan say Frankfurt will be their EU trading base after Brexit. However, Vaeth said: “The strategy was to be subtle. There was no glee or triumphalism.”
As a medium-sized provincial city, Frankfurt has also been proclaiming its cultural attractions. That involved taking Wall Street firms to the city’s English-language theater and Japanese bankers to see the Eintracht Frankfurt soccer team play.
Ireland has adopted similar sporting tactics. When Dublin hosted an American Football game between Boston College and Georgia Tech last year, government ministers worked the room at a dinner of 500 executives from Boston and Atlanta, including State Street CEO Jay Hooley.
The Irish political welcome has been more evident.
New Prime Minister Leo Varadkar, building on work by his predecessor Enda Kenny, has met several bank bosses and posted a picture on his website of him smiling with Bank of America CEO Brian Moynihan.
Politicians posing with bankers had been close to anathema since a collapse of the Irish financial system forced the country to take an international bailout in 2010, bringing austerity policies which hurt voters badly.
Frankfurt and Dublin make bankers feel wanted in battle for Brexit jobs
Frankfurt and Dublin make bankers feel wanted in battle for Brexit jobs
Saudi Cabinet approves new law to regulate petroleum, petchem sector
RIYADH: Saudi Arabia’s Cabinet has approved a new Petroleum and Petrochemical Law to ensure a reliable and secure supply of products within the Kingdom.
The law, which was approved on Jan. 7, is designed to optimize the use of raw materials in the sector and support the localization of the value chain, according to a report by the Saudi Press Agency.
The new legislation will replace the existing Petroleum Products Trade Law and is expected to achieve several key objectives, including regulating petroleum and petrochemical operations. It aims to accelerate the sector’s growth, foster economic development, and encourage increased investment in the industry.
Upon the law’s approval, Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman expressed gratitude to the Cabinet, emphasizing that the law would help establish a robust legislative framework for the Kingdom’s energy sector. He added that the new directive would facilitate the optimal use of petroleum and petrochemical resources.
The law will regulate the use, sale, purchase, and transportation of petrochemical products, as well as oversee the operation of distribution stations and petrochemical facilities, the Saudi Press Agency report noted.
In addition to the Petroleum and Petrochemical Law, the Cabinet approved several other agreements on Jan. 7. These include a memorandum of understanding for cooperation between Saudi Arabia’s Ministry of Justice and Singapore’s Ministry of Law, an MoU on health cooperation with Morocco’s Ministry of Health and Social Protection, and an MoU to strengthen digital government collaboration between Saudi Arabia’s Digital Government Authority and Qatar’s Ministry of Communications and Information Technology.
The Cabinet also endorsed an air services agreement between Saudi Arabia and Eswatini, a Southern African nation.
Furthermore, the Cabinet reviewed ongoing development programs and projects aimed at diversifying the Kingdom’s economy, exploring new revenue streams, and maximizing the use of available resources.
EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program
EV maker Lucid becomes first global automotive manufacturing company to join ‘Made in Saudi’ program
- Aims to increase industrial sector’s contribution to GDP to at least 20% by 2025
- Move seeks to attract additional investments, enhance non-oil exports, and create sustainable job opportunities
RIYADH: Electric vehicle manufacturer Lucid Motors has become the first global automotive company to join the Kingdom’s “Made in Saudi” program as the country continues strengthening its industrial capabilities.
The milestone grants Lucid the right to use the “Saudi Made” label on its products, symbolizing the nation’s focus on quality and innovation.
The strategy aims to increase the industrial sector’s contribution to the gross domestic product to at least 20 percent by 2025, tripling the current industrial base.
It also seeks to attract additional investments, enhance non-oil exports, and create sustainable job opportunities, aligning with Vision 2030’s economic diversification goal.
“This is a step that represents a strong push to enhance the image of the national industry and attract investments and global companies, which consolidates the Kingdom’s position as a global center for innovative manufacturing,” Minister of Industry and Mineral Resources Bandar Alkhorayef said in a post on his X account.
In a separate statement, the minister said that Lucid Motors’ inclusion in the program underscores Saudi Arabia’s strategic transformation toward creating a fully integrated electric vehicle manufacturing ecosystem.
The minister added that this initiative aligns with the objectives of the National Industrial Strategy, which focuses on empowering promising sectors and attracting high-value investments in advanced industries.
Lucid’s participation in the program follows the launch of its first international manufacturing plant in Saudi Arabia in Sept. 2023.
Located in King Abdullah Economic City, the facility is the Kingdom’s first-ever car manufacturing plant and represents a key milestone in its efforts to build a domestic automotive industry.
The facility can currently assemble 5,000 Lucid vehicles annually during its first phase. Once fully operational, the complete manufacturing plant, including the assembly line, is expected to produce up to 155,000 electric cars per year.
Saudi Arabia is aggressively promoting the adoption of electric vehicles as part of its Vision 2030 strategy, which aims to achieve net-zero carbon emissions by 2060.
A critical target of the initiative is for 30 percent of all vehicles in Riyadh to be electric by 2030, contributing to a broader goal of reducing emissions in the capital by 50 percent.
To support the transition, the Public Investment Fund — a major backer of Lucid Motors — has been instrumental in establishing a domestic EV manufacturing sector.
In addition to its stake in Lucid Motors, PIF has launched Ceer, the Kingdom’s first locally branded electric vehicle manufacturer, as part of its efforts to bolster the industry.
Infrastructure development is also a core focus, with the Kingdom planning to deploy 5,000 fast chargers across Saudi Arabia by 2030 to facilitate the adoption of EVs.
Consumer interest in EVs is steadily growing, with over 40 percent of Saudi consumers considering purchasing an electric vehicle within the next three years, according to a 2024 report by London-based professional services network PwC.
Faisal Sultan, vice president and managing director for the Middle East at Lucid Motors, expressed the company’s pride in joining the program, saying: “We are delighted to join the ‘Made in Saudi’ program and have the honor of using the ‘Saudi Made’ label, which represents quality and excellence.”
He added: “We are committed to embodying the values of this national identity, such as sustainability, innovation, and excellence. With the increasing focus on electric vehicles in the Kingdom, we aim to deliver an advanced and unique experience to our customers.”
The minister said that Saudi Arabia has emerged as a central hub for electric vehicle production, supported by modern infrastructure, incentivizing policies, and a highly skilled workforce.
He also said that major players like Lucid Motors strengthen the Kingdom’s position as a global center for future-focused industries while contributing to increased local content, non-oil exports, industrial localization, and knowledge transfer.
Launched in March 2021, Saudi Arabia’s Made in Saudi program promotes domestic products and services, encouraging local consumption and boosting non-oil exports.
The move aligns with Saudi Arabia’s broader industrial strategy, which aims to increase the sector’s gross domestic product contribution to 20 percent by 2025 and drive investments in advanced industries.
It also supports Vision 2030’s goal of reducing the nation’s reliance on oil by fostering high-value sectors like electric vehicle manufacturing.
Closing Bell: Tadawul maintains upward momentum, closes at 12,113
- Parallel market Nomu dropped 54.97 points, ending the session at 30,809.12
- MSCI Tadawul Index rose by 3.48 points to reach 1,514.39
RIYADH: Saudi Arabia’s Tadawul All Share Index extended its upward trajectory for the second consecutive day on Tuesday, rising by 8.60 points, or 0.07 percent, to close at 12,113.29.
The benchmark index recorded a total trading turnover of SR7.71 billion ($2.05 billion), with 124 stocks advancing, while 110 saw declines.
In contrast, the Kingdom’s parallel market, Nomu, dropped 54.97 points, ending the session at 30,809.12. The MSCI Tadawul Index also gained ground, rising by 3.48 points to reach 1,514.39.
The standout performer of the day was Almoosa Health Co., which made its debut on the main market. The stock surged by an impressive 14.96 percent, closing at SR146. Other notable gainers included Al Mawarid Manpower Co. and Saudi Reinsurance Co., whose share prices climbed by 10 percent and 9.23 percent, closing at SR125.40 and SR63.90, respectively.
On the flip side, Al-Baha Investment and Development Co. saw its share price fall by 4.44 percent, ending the day at SR0.43.
On the announcements front, Filling and Packing Materials Manufacturing Co. announced it had signed a Shariah-compliant credit facility agreement worth SR50 million with Al Rajhi Bank to finance its working capital.
According to a statement on Tadawul, the 12-month credit facility is backed by a promissory note covering its entire value. FIPCO clarified that there are no related parties involved in the agreement. The company’s stock inched up by 0.44 percent, closing at SR45.70.
Meanwhile, LIVA Insurance Co. revealed it had received a Baa2 insurance financial strength rating with a stable outlook from Moody’s. The rating reflects the company’s strong capital adequacy, solid asset quality, and conservative investment strategy, alongside moderate reserve risk.
LIVA emphasized that the rating underscores Moody’s confidence in the company’s enhanced underwriting discipline and its ability to maintain profitability and growth within the Saudi market. A Baa2 rating is considered medium-grade, indicating a company’s acceptable ability to meet short-term debt obligations. LIVA’s stock gained 0.57 percent, closing at SR17.60.
Saudi Arabia eases domestic worker quotas for HR firms
- Only firms with 3,000 workers or fewer now have to meet the threshold
- Firms with more than 15,000 workers are fully exempt from any domestic worker quota
RIYADH: Human resources firms in Saudi Arabia have welcomed the reform of a rule that required 30 percent of all employees to be domestic workers.
The change to the law, announced by the Ministry of Human Resources and Social Development, means that only firms with 3,000 workers or fewer now have to meet that threshold.
Those with a workforce ranging from 3,001 to 10,000 workers will instead be obligated to maintain a reduced quota of 20 percent, with that level dropping to 10 percent for companies with staffing levels between 10,001 to 15,000.
Firms with more than 15,000 workers are fully exempt from any domestic worker quota.
This policy shift is expected to balance supply and demand in the support workers sector, improving its legislative environment.
It comes at a time when Saudi Arabia’s human resources management market is experiencing rapid growth, and prior to this decision market research firm Horizon Grand View Research projected the sector would expand by a compound annual growth rate of 11.1 percent from 2024 to 2030.
Companies affected by the changes issued statements on Tadawul welcoming the new rules, with Mawarid Manpower Co. stating that “this decision will have an impact on the company’s business, as it will alleviate the company’s obligation to recruit a specific percentage of the total workforce.”
Similarly, Saudi Manpower Solutions Co., also known a SMASCO, highlighted that “this decision aims to achieve a balance between supply and demand, thereby improving the legislative environment for the support (domestic) workers sector.”
Maharah Human Resources Co., which employs over 15,000 domestic workers, said that “it is not required currently to comply with any percentage for the household workers out of the total workforce.”
The company highlighted the cost-saving benefits of the new system, noting that “it is expected that this decision will have an impact on the company’s long-term business, as it will alleviate the company’s obligation to recruit a specific percentage of the total workforce and reduce recruitment costs for household resources to ensure compliance with previous percentages.”
Additionally, the firm stated that the amendment “gives the company the ability to increase the workforce in the corporate sector to meet the growing demand without any constraints limiting that.”
The reform reflects Saudi Arabia’s broader efforts to modernize labor laws and streamline operations across key sectors.
Saudi Arabia sees 45% annual growth in domestic flight bookings: report
- Domestic room night bookings also saw 39% yearly growth
- Cities such as Makkah, Riyadh, Jeddah, Al-Khobar, and Madinah remain key attractions
RIYADH: Saudi Arabia recorded a 45 percent annual growth in domestic flight bookings in 2024, fueled by the Kingdom’s expanding tourism offerings and increased connectivity through low-cost carriers.
According to Almosafer’s latest travel trend report, domestic room night bookings also saw 39 percent yearly growth. Additionally, combined domestic flight and hotel reservations contributed over 40 percent to the overall travel market, an 11 percent yearly increase.
The growth in domestic travel is largely driven by a broader range of destinations, accommodation options, and experiences that continue to attract leisure visitors to explore their home country. Family and group travel have been key contributors to this upward trend, with bookings in these segments surging by over 70 percent.
Commenting on the trends, Muzzammil Ahussain, CEO of Almosafer, said: “These travel trends align seamlessly with the government’s vision to enhance in-destination value and increase domestic tourism as part of Vision 2030.”
Cities such as Makkah, Riyadh, Jeddah, Al-Khobar, and Madinah remain key attractions.
However, emerging destinations like Abha, Al Jubail, and Jazan, as well as Tabuk and Hail, are gaining momentum due to their distinct offerings, including mountain views, beaches, landscapes, and desert experiences.
“The growth of domestic tourism and the rise of family and group trips, with a focus on unique accommodation experiences and rich in-destination activities, showcase the success of the national agenda of building a thriving leisure tourism sector that contributes significantly to the economy,” Ahussain added.
Almosafer’s report highlights a notable shift in traveler preferences for accommodations. While luxury remains prominent, with 36 percent of room nights booked in five-star properties, budget-friendly stays in three-star or lower hotels now represent 35 percent of total bookings — a segment that has grown 100 percent for families and groups.
Alternative accommodations such as vacation rentals and hotel apartments have also gained traction, with family bookings rising 90 percent and group reservations increasing 60 percent, reflecting growing demand for flexible and affordable lodging options.
Low-cost airlines have also played a crucial role in the domestic travel boom. Increased capacity, expanded connectivity, and additional routes have made budget carriers more accessible to cost-conscious travelers.
While flight bookings grew by 45 percent, the average order value decreased by 7 percent, demonstrating how expanded options are enabling travelers to secure more cost-effective deals.
In-destination activities have become a cornerstone of travel value, with visitors increasingly opting for guided tours, adventure sports, and cultural experiences.
Booking behavior also evolved in 2024, with mobile platforms dominating the market. App bookings grew by 67 percent and accounted for 76 percent of total bookings, while web reservations contributed 17 percent, reflecting 7 percent growth.
Retail bookings, though representing a smaller 7 percent share, remain relevant for complex and higher-value itineraries as travelers seek in-person assistance for personalized planning.
Flexible payment options have further transformed the travel market. Buy now, pay later plans have gained popularity, while Apple Pay accounted for 44 percent of all domestic bookings processed in 2024, reflecting the growing adoption of digital payment methods.
