CHICAGO/NEW YORK: Amazon.com said on Thursday it would build a $5 billion (SR18.75 billion) second headquarters in North America, kicking off a competition between cities and states to offer tax cuts and incentives that could bring 50,000 new jobs.
The largest e-commerce company said it intended to create “HQ2”, a headquarters that would be a “full equal” to its Seattle office, Chief Executive Jeff Bezos said in a statement. The company wants a metropolitan area of more than a million people with an international airport, good education and mass transit.
Amazon was likely to land its second headquarters in a cheaper city than Seattle and score subsidies. The company promised up to 50,000 jobs averaging more than $100,000 in annual compensation over the next 10 to 15 years.
Cities and states immediately began saying they would bid. Dallas, Houston, Toronto, St. Louis, Kentucky and Miami are a few that are committed to bid. Chicago Mayor Rahm Emanuel has made a case for his city in discussions with Bezos, a Chicago spokesman said.
Companies with two headquarters are rare and distance could challenge the management abilities of Bezos and other leaders, but some investors and analysts also saw the geographical diversification as a way to cut costs and risk. It would also make it easier for the conglomerate to break up down the line if it so chooses.
“The company is changing radically and it depends so heavily on disruptive thinking. Moving to a new city and finding a new talent pool is a good idea,” said Antony Karabus, chief executive of HRC Retail Advisory.
Incentives from land to fee cuts to relocation packages will be a major part of the decision, Amazon said.
Local governments have gone to great lengths to secure jobs and investment. Wisconsin’s legislature, for instance, recently voted to give Taiwanese manufacturer Foxconn a $3-billion incentive package to build a $10-billion liquid crystal display factory in the state.
Amazon’s plan will also boost its political leverage at a time when it has been blamed for the decline of bricks-and-mortar retailers. President Donald Trump has criticized Amazon as doing “great damage”, costing jobs in cities and states.
Amazon said it was seeking proposals by October 19 and would select the location next year.
Amazon to build $5 billion second headquarters
Amazon to build $5 billion second headquarters
FIFA World Cup 2034 to bring positive momentum to Saudi Arabia’s stock market
RIYADH: As Saudi Arabia prepares to host the FIFA World Cup in 2034, stock market performance is expected to improve, according to a report.
In its latest analysis, SNB Capital said hosting the major event would also increase the Kingdom’s non-oil gross domestic product by 4 percent to 5 percent in the medium term, estimated between four to eight years.
The firm made this prediction after comparing the growth of the equity markets in South Africa, Russia, and Qatar when they hosted the mega football gala in 2010, 2018, and 2022, respectively.
According to the analysis, hosting the FIFA World Cup in 2034 is expected to significantly impact the Saudi economy, further accelerating the growth driven by Vision 2030 — a national program aimed at diversifying the Kingdom’s economy beyond oil dependence.
“The decision for the host is usually made roughly seven to 12 years in advance. Post announcement, equity markets generally performed well with South Africa showing the strongest return, followed by Qatar and Russia. Therefore, we expect the Saudi market to outperform emerging markets in the coming period,” said SNB Capital.
It added: “FIFA 2034 also reflects positively on the equity market, leading to positive market return, valuation expansion as well as resilience and quick recovery from any potential global market headwinds.”
In the short term, between one to four years, Saudi Arabia will have extensive infrastructure spending, including stadiums, transportation networks, and urban development.
In this period, the infrastructure and construction sectors will be the primary beneficiaries, which include steel, cables, and cement companies in the Kingdom.
In the medium term, between four to eight years, these projects will be near completion, and construction companies will benefit during this period.
In the long term, between eight to 12 years, the tourism and hospitality sectors will receive gains, while the retail industry, including discretionary retailers and car rental companies, is also poised to receive benefits.
In November, experts told Arab News that Saudi Arabia could expect a GDP boost of between $9 billion and $14 billion from the event, as well as the creation of 1.5 million new jobs and the construction of 230,000 hotel rooms developed across five host cities.
SNB Capital estimates that the total cost of hosting the World Cup in Saudi Arabia will be around $26 billion. This cost is considered relatively low, as much of the required infrastructure investment is already part of the Kingdom’s Vision 2030 plans. Additionally, hosting the World Cup follows Expo 2030, another major global event.
In the previous editions of the tournament, Qatar spent a staggering $243 billion, while expenses to host the event in South Africa came in at $7.2 billion.
Brazil’s 2014 hosting involved a spend of $19.7 billion, while Russia invested $16 billion in 2018.
Earlier this month, the bid evaluation report released by FIFA showed that Saudi Arabia is set to deliver a World Cup in 2034 that saves $450 million on costs.
The bid evaluation report added that revenue from ticket and hospitality will surpass FIFA’s baseline projections by 32 percent, or $240 million.
FIFA added that online and licensing revenue streams are forecast to outperform by $7 million, compared to baseline figures.
SNB Capital also echoed similar views and said that the World Cup is expected to improve the outlook of broadcasting and event management companies.
The analysis revealed that FIFA 2034 will boost Saudi Arabia’s tourism sector, leading to higher revenues from the industry.
The event is also expected to create permanent and temporary jobs across various sectors in the Kingdom, reducing unemployment and boosting disposable income.
“A successful hosting of the World Cup will also leave a legacy of high-quality infrastructure which will help Saudi to cater to the potential pickup in tourism demand beyond 2034,” added SNB Capital.
Oil Updates — crude retreats on demand concerns after Fed signals slower easing ahead
LONDON: Oil prices fell in Asian trade on Thursday after the US Federal Reserve signaled it would slow the pace of interest rate cuts in 2025, which could slow economic growth and reduce fuel demand.
Brent futures fell 47 cents, or 0.6 percent, to $72.92 a barrel by 8:15 a.m. Saudi Time. US West Texas Intermediate crude fell 39 cents, or 0.6 percent, to $70.19.
The declines reversed most of the benchmark contracts’ gains from Wednesday when prices settled higher as US crude stocks fell and the US Federal Reserve cut interest rates by 25 basis points as expected.
Prices weakened after US central bankers issued projections calling for two quarter-point interest rate cuts in 2025 on concerns about rising inflation. That was half a point less than they had anticipated as of September.
Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.
“The demand-supply balance going into 2025 continues to look unfavorable and predictions of more than 1.0 million bpd demand growth in 2025 look stretched in our opinion. Even if OPEC+ continues to withhold production, the market may still be in surplus,” DBS Bank’s energy sector team lead Suvro Sarkar said.
Meanwhile, although demand in the first half of December rose year-on-year, volumes remained lower than expected by some analysts.
JP Morgan analysts said in a note that global oil demand growth for December so far was 700,000 barrels per day less than it had expected, and for the year-to-date, global demand had risen by 200,000 bpd less than it had forecast in November 2023.
Official data from the Energy Information Administration on Wednesday showed US crude stocks fell by 934,000 barrels in the week to Dec. 13, compared with analysts’ expectations in a Reuters poll for a 1.6 million-barrel draw.
While the drawdown was less than expected, the market found support in the data as US crude exports rose by 1.8 million bpd last week to 4.89 million bpd.
SAMA cuts benchmark interest rate to 5% in line with US Federal Reserve move
RIYADH: Saudi Arabia’s central bank lowered its benchmark interest rate to 5 percent, its third cut this year, aligning with the US Federal Reserve’s recent decision to reduce rates by 25 basis points.
The Saudi Central Bank, also known as SAMA, reduced its repurchase agreement rate to 5 percent and the reverse repurchase agreement rate to 4.5 percent, it said in a statement. The move is aimed at maintaining monetary stability amid shifting global economic conditions.
The move aligns with the US Federal Reserve decision, which similarly cut rates by 25 basis points, bringing its target range to 4.25–4.5 percent.
“This decision is in line with SAMA’s mandate of preserving monetary stability in the context of global developments,” SAMA said.
The reduction follows a more aggressive 50-basis-point cut in September and reflects a recalibration of policy as inflationary pressures ease. The move is expected to lower borrowing costs, providing relief after two years of elevated rates designed to curb inflation.
Central banks across the Gulf Cooperation Council, whose currencies are largely pegged to the dollar, mirrored the Fed’s move despite relatively stable inflation levels in the region.
The UAE cut its overnight deposit facility rate by 25 basis points to 4.4 percent, while Oman trimmed its repo rate by the same margin to 5 percent. Qatar opted for a slightly deeper reduction, lowering its three main rates by 30 basis points. Bahrain reduced its overnight deposit rate by 25 basis points to 5 percent.
In a separate statement, the Central Bank of Kuwait announced on Wednesday that it had adopted a “gradual and balanced approach” to monetary policy, reducing its discount rate by 25 basis points to 4 percent, effective Sept. 19.
Over the past two years, the US Federal Reserve has aggressively raised interest rates to combat inflation, significantly tightening monetary policy to stabilize prices.
Although inflation in the US has edged closer to the Fed’s 2 percent target, it remains slightly elevated, leaving consumers burdened by high costs.
The GCC economies, particularly Saudi Arabia, stand to benefit from the recent rate cuts. Lower borrowing costs are expected to bolster the Kingdom’s non-oil sectors, a key pillar of Vision 2030. Industries such as construction, real estate, and services, which have already experienced robust growth, are likely to gain additional momentum.
Moreover, cheaper credit could accelerate investments in infrastructure and technology — two critical components of Saudi Arabia’s economic diversification strategy.
Saudi Arabia’s ACWA Power launches $3bn renewable projects in Uzbekistan
- ACWA Power has been significantly involved in Uzbekistan’s renewable energy sector in recent years
- Uzbekistan aims to generate 40 percent of its electricity from renewable sources by 2030
JEDDAH: Saudi utility giant ACWA Power launched three renewable projects in Uzbekistan, including wind, solar, and battery storage, marking a $3 billion investment in the country’s energy transition.
On Dec. 18, Uzbekistan’s President Shavkat Mirziyoyev and the Kingdom’s Minister of Energy, Prince Abdulaziz bin Salman, who joined virtually, inaugurated the projects.
The initiatives include the Bash and Dzhankeldy Wind Power Plants with a total capacity of 1,000 megawatts and a transmission line, the Samarkand 1 and 2 solar projects with 1,000 MW of solar power and a 1,000 MWh battery energy storage system, and the Tashkent BESS Project, which consists of a 500 MWh BESS.
Uzbekistan aims to generate 40 percent of its electricity from renewable sources by 2030, a critical milestone in its broader plan to achieve 20 gigawatts of clean energy capacity by the decade’s end.
Mohammad Abunayyan, the chairman of ACWA Power’s board of directors, who also chairs the Saudi-Uzbek Business Council, emphasized the significant progress in his company’s collaboration with the Uzbek government, highlighting its role as a key strategic investor in the country’s rapidly growing clean energy sector.
Abunayyan said: “Today’s groundbreaking highlights the multitude of large-scale foreign direct investments and commendable efforts by Uzbekistan to strengthen the potential of the country’s energy system and capacity. It also paves the way for the commencement of ACWA Power projects that are expected to yield widespread benefits for Uzbekistan’s key regions and communities.”
Prince Abdulaziz commended the robust relationship between the Kingdom and Uzbekistan and said the alliance has nurtured deep collaboration across multiple sectors, with a particular focus on energy, which has brought mutual benefits to both nations, according to a statement from the company.
The Saudi minister also praised the economic cooperation between the two countries, particularly in the context of Saudi Vision 2030 and Uzbekistan Strategy 2030. He stressed their shared goals of economic development, diversification, renewable energy, and sustainable growth, as well as the Kingdom’s growing investment in Uzbekistan’s electricity sector amid the country’s energy transition.
In October, ACWA Power announced it signed a letter of intent with the Asian Infrastructure Investment Bank to secure $150 million for the development of three wind power plants in Uzbekistan, namely the Kungrad 1, 2, and 3 plants in the Karakalpakstan region.
The company, listed on the Saudi Stock Exchange, said in a press release that the financing will support the three facilities, each with a capacity of 500 MW.
The financing term is set at four years and will be backed by an institutional guarantee from ACWA Power.
Uzbekistan is a key foreign market for ACWA Power, which has been significantly involved in the country’s renewable energy sector in recent years.
The company’s current portfolio in Uzbekistan includes 11.6 GW of power, with 10.1 GW from renewable sources, along with the country’s first green hydrogen project, which has an annual capacity of 3,000 tonnes.
Since the partnership began, four major projects worth approximately $3 billion have been successfully implemented, with an ongoing portfolio of initiatives valued at $15 billion, ACWA Power said in the statement.
Saudi Arabia unveils enhanced e-guide to boost exports
JEDDAH: The Kingdom’s businesses now have access to an enhanced support system through the newly launched electronic guide by the Saudi Export Development Authority.
SEDA has introduced the first digital version of its Export Incentive Service, or Incentives, which provides a comprehensive overview of key benefits, application procedures, and eligibility criteria aimed at promoting exports.
The initiative is designed to help Saudi companies expand into global markets by offering nine distinct incentives that adhere to World Trade Organization regulations, according to the Saudi Press Agency.
This launch is part of SEDA’s ongoing efforts to enhance the export environment, raise awareness of export practices, develop human capital within the sector, and create new opportunities for Saudi exporters.
Additionally, the program seeks to address the challenges faced by exporters through collaboration with both public and private sector stakeholders. By supporting these efforts, the program aligns with the Kingdom’s Vision 2030 goals of diversifying sources of national income.
The guide caters to the specific needs of exporters, covering a wide range of activities, including e-commerce platform registration, product certification, participation in international trade shows, marketing, advertising, product registration, and facilitating visits to potential buyers. It also offers legal consultations and specialized training.
A notable feature of the program is its cost-sharing component. The initiative compensates companies for a portion of the costs associated with entering new markets, offering reimbursement ranging from 50 percent to 75 percent, depending on specific terms and conditions.
In the third quarter of 2024, Saudi Arabia’s non-oil exports reached SR79.48 billion ($21.17 billion), marking an impressive 16.76 percent increase compared to the same period in 2023, according to data from the General Authority for Statistics.
Notably, the Kingdom’s exports to the UAE amounted to SR19.58 billion, followed by India at SR6.78 billion and China at SR6.48 billion.
Chemical products led the Kingdom’s non-oil exports, representing 25.5 percent of total shipments, with a 5.3 percent year-on-year increase. Plastic and rubber products followed, accounting for 24.9 percent of exports, reflecting an 8.9 percent growth compared to the previous year.
In addition to the export incentives program, SEDA recently introduced another initiative exempting industrial inputs from customs duties.
Developed in collaboration with the Ministry of Industry and Mineral Resources, this service provides industrial companies with customs duty exemptions on inputs used to produce export goods. This move aligns with Vision 2030’s broader goal of diversifying the economy and increasing non-oil exports.
The service covers industrial inputs, such as raw materials, labor, fuel, equipment, and buildings, enabling Saudi manufacturers to reduce costs associated with production for export. By improving cost efficiency, the initiative aims to enhance the global competitiveness of Saudi industries.
Together, these programs are designed to diversify income sources, enhance non-oil exports, and promote sustainable growth, offering innovative solutions tailored to the needs of exporters while supporting the competitiveness of the Kingdom’s industrial sector.
