LONDON: The global halal food and beverage (F&B) market is set to boom in the next five years, driven by new entrants to the market.
The sector is expected to grow from $1.24 trillion in 2016 to reach $1.93 trillion by 2022, according to the “State of the Global Islamic Economy” report.
“Halal food is the largest and most diverse sector of the Islamic economy. New entrants have come into the market, and product offerings have firmly moved beyond being meat-focused to include candy, ready-made meals, snacks and children’s food,” said the report, published by Dubai Islamic Economy Development Center (DIEDC) in conjunction with Thomson Reuters:
It revealed that Muslim spend on food and beverages is growing at nearly double that of global growth — creating significant opportunities for investment and the creation of global halal food brands.
Commenting on the report, Imran Kausar, co-founder of London-headquartered multinational halal food firm Haloodies, told Arab News: “The halal opportunity continues to grow with innovation and consumer-focused brands leading the way. Halal brands that capture a mainstream audience will open halal foods to even larger audiences.”
Food and beverage (F&B) leads Muslim spend by category, followed by clothing and apparel at $254 billion, media and entertainment at $198 billion, travel at $169 billion, and pharmaceuticals and cosmetics at $83 billion and $57.4 billion, said the report.
It notes that established players are expanding at home and abroad through franchising and that multinationals have also made major investments in Muslim-majority markets, anticipating rising demand.
Investment and sovereign wealth funds have been particularly active, and a number of halal investment funds are in development, it said.
Family-friendly halal travel is another growth market with the number of Muslims traveling at an all-time high, and there is corresponding demand for travel that adheres to Islamic values — from hotels and beach resorts, to dining options and airlines.
Halal hotel chains are emerging and family-friendly attractions are being developed in the GCC.
Along with a plethora of new online agencies catering to Muslim tourists, Muslim equivalents of Airbnb have emerged in the UK and globally. Muslim spend on travel was $169 billion in 2016, and is expected to grow to $283 billion by 2022.
Designer brands and boutiques are also developing new modest fashion lines and Ramadan collections.
The reports said: “Start-up modest fashion brands have also been making inroads around the world, particularly for hijabs, gaining traction by spreading the word through social media. Modest athletic apparel is a notably trendy segment, with Nike getting in on the act as well as Danish label Hummel. Muslim spend on clothing was $254 billion in 2016, and is forecast to reach $373 billion by 2022.
Romanna Bint-Abubaker, founder and CEO of global modest fashion brand Haute-Elan.com, told Arab News: “As the first global marketplace for modest fashion, we welcome international brands in producing collections and products for the fastest growing global consumer (Muslims). Our primary issue as a marketplace is the current supply does not meet demand and our consumers are still forced to go to the high street for their basic requirements.”
Global halal food sector set to boom as market grows
Global halal food sector set to boom as market grows
Riyad Bank issues SR-denominated Tier 1 sukuk
RIYADH: Riyad Bank has commenced the issuance of its additional Tier 1 sukuk under its SR10 billion ($2.66 billion) Additional Tier 1 Capital Sukuk Program via a private placement in the Kingdom.
In a statement to Tadawul, the lender, one of the largest financial institutions in Saudi Arabia, said that the terms of the offer and the value of the sukuk would be determined based on market conditions.
The financial institution added that the offering, which commenced on Jan. 7, will run through Jan. 16, with a minimum subscription limit of SR250,000.
Sukuk, also known as an Islamic bond, is a Shariah-compliant debt product through which investors gain partial ownership of an issuer’s assets until maturity.
According to the statement, the bank has mandated Riyad Capital as the sole lead manager in relation to the offer and issuance of the sukuk.
The financial institution added that it will announce any other relevant material developments in due course.
The steady issuance of sukuk happening in the Kingdom falls in line with the views shared by Fitch Ratings in a report in October, which said that the distribution of these Islamic bonds is expected to grow in 2025, driven by US Federal Reserve rate cuts.
According to Fitch, interest rates are expected to be at 3.5 percent in 2025, resulting in a boost in sukuk issuances in the short term.
In December, Fitch Ratings affirmed Riyad Bank’s long-term issuer default rating at A- with a stable outlook.
The US-based agency said that the A- rating of the financial institution is attributed to the support it receives from Saudi Arabia’s government.
The report added that Saudi authorities’ strong ability and willingness to support domestic banks irrespective of size, franchise, funding structure, and level of government ownership also played a crucial role in the strong rating of Riyad Bank.
According to Fitch, an A- rating denotes expectations of low default risk and a strong ability to pay financial commitments.
In October, Riyad Bank announced that its net profit for the first nine months of 2024 reached SR7.06 billion, representing a rise of 16 percent compared to the same period of the previous year.
In December, an analysis by Kamco Invest projected that Saudi Arabia is expected to witness the greatest share of bond and sukuk maturities in the Gulf Cooperation Council region from 2025 to 2029 to reach $168 billion.
Oil Updates — prices dip as demand optimism fades
BEIJING/SINGAPORE: Oil prices eased on Tuesday, extending losses into a second consecutive session after last week’s rally, although concerns about tighter Russian and Iranian supply amid widening Western sanctions checked losses, according to Reuters.
Brent futures edged down 8 cents, or 0.1 percent, to $76.22 a barrel by 07:52 a.m. Saudi time, while US West Texas Intermediate crude fell 15 cents, or 0.19 percent, to $73.42.
Both benchmarks slid on Monday, after rising for five days in a row last week to settle at their highest levels since October on Friday amid expectations of more fiscal stimulus to revitalize China’s faltering economy.
“This week’s weakness is likely due to a technical correction, as traders react to softer economic data globally that undermines the optimism seen earlier,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, referring to bearish economic news from the US and Germany.
Also dragging on oil prices is the rising supply from non-OPEC countries that, coupled with weak demand from China, is expected to keep the oil market well supplied this year.
Market participants are waiting for more data this week, such as the US December nonfarm payrolls report on Friday, for clues on US interest rate policy and oil demand outlook.
“The move higher in crude oil prices appears to be running out of momentum,” ING analysts wrote in a note.
“While there has been some tightening in the physical market, fundamentals through 2025 are still set to be comfortable, which should cap the upside.”
Worries over tightening Russian and Iranian supply amid sanctions, however, kept a floor under oil prices.
The uncertainty has translated into better demand for Middle Eastern oil, reflected in a hike in Saudi Arabia’s February oil prices to Asia, the first such increase in three months.
Money managers raised their net long US crude futures and options positions in the week to Dec. 31, the US Commodity Futures Trading Commission said on Monday.
Saudi Arabia issues $12bn three-part bond: NDMC
CAIRO: Saudi Arabia issued a $12 billion three-tranche bond, selling $5 billion, $3 billion and $4 billion in tenors of three, six and 10 years respectively, the National Debt Management Center said on Tuesday.
The total order book reached around $37 billion, equalling an over-subscription of three times the issuance, NDMC said in a statement.
The transaction is part of NDMC’s strategy to diversify the investor base and meet the Kingdom’s financing needs, it added.
Lucid beats estimates for EV deliveries as price cuts, cheaper financing spur demand
- Company handed over 3,099 vehicles in the fourth quarter ended Dec. 31
- For 2024, production rose 7% to 9,029 vehicles, topping Lucid’s target of 9,000 vehicles
LONDON: Lucid Group beat expectations for quarterly deliveries on Monday, as the Saudi Arabia-backed maker of luxury electric vehicles lowered prices and offered cheaper financing to drive demand, sending its shares up more than 6 percent.
The company handed over 3,099 vehicles in the fourth quarter ended Dec. 31, compared with estimates of 2,637, according to six analysts polled by Visible Alpha. That represented growth of 11 percent over the third quarter and 78 percent higher than the fourth quarter a year earlier.
Production rose about 42 percent to 3,386 vehicles in the reported quarter from a year earlier, surpassing estimates of 2,904 units.
For 2024, production rose 7 percent to 9,029 vehicles, topping the company’s target of 9,000 vehicles. Annual deliveries grew 71 percent to 10,241 vehicles.
Lucid, backed by Saudi Arabia’s sovereign wealth fund, started taking orders for its Gravity SUV in November, in a bid to enter the lucrative SUV sector and take some market share from Rivian and Tesla.
Rivian on Friday topped analysts’ estimates for quarterly deliveries and said its production was no longer constrained by a component shortage. But Tesla reported its first fall in yearly deliveries, in part due to the company’s aging lineup.
Demand for EVs, already squeezed by competition from hybrid vehicles, could face another challenge as President-elect Donald Trump is expected to reverse many of the Biden administration’s EV-friendly policies and incentives.
The company also raised $1.75 billion in October through a stock sale that CEO Peter Rawlinson believes will provide Lucid with a “cash runway well into 2026.”
Lucid, whose stock was down about 28 percent in 2024, is scheduled to report its fourth-quarter results on Feb. 25.
Saudi Arabia’s PIF completes $7bn inaugural murabaha credit facility
- Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions
- Facility builds on PIF’s recent success with sukuk issuances over the past two years
RIYADH: The Saudi Public Investment Fund has closed its first Murabaha credit facility, securing $7 billion in funding. This is a key step in the fund's plan to raise capital over the next several years.
The Shariah-compliant financing is backed by a syndicate of 20 international and regional financial institutions, according to a press release.
A murabaha credit facility is a financing structure compliant with Islamic principles, where the lender purchases an asset and sells it to the borrower at an agreed profit margin, allowing repayment in installments. This structure avoids interest, adhering to Shariah laws.
“This inaugural murabaha credit facility demonstrates the flexibility and depth of PIF’s financing strategy and use of diversified funding sources, as we continue to drive transformative investments, globally and in Saudi Arabia,” said Fahad Al-Saif, PIF’s head of the Global Capital Finance Division and head of Investment Strategy and Economic Insights Division.
The facility builds on PIF’s recent success with sukuk issuances over the past two years, further bolstering its financial strength and commitment to best practices in debt management.
Rated Aa3 by Moody’s and A+ by Fitch, both with stable outlooks, PIF continues to solidify its position as a global financial powerhouse.
The fund’s capital structure is supported by four main funding sources, including contributions from the Saudi government, asset transfers, retained investment earnings, and financing through loans and debt instruments.
PIF’s strategy focuses on financing initiatives that contribute to economic growth in Saudi Arabia and internationally.
The $7 billion murabaha credit facility is expected to bolster PIF’s liquidity, supporting its investments both locally and globally.
By diversifying its funding sources through a Shariah-compliant structure, PIF looks to enhance its financial partnerships while complementing its existing financing tools, such as sukuk issuances.
This aligns with its medium-term capital strategy, ensuring flexibility, competitive financing terms, and risk mitigation.
Earlier in January, the National Debt Management Center also secured a Shariah-compliant revolving credit facility worth SR9.4 billion ($2.5 billion).
The three-year facility, supported by three regional and international financial institutions, is designed to meet the Kingdom’s general budgetary requirements.
Aligned with Saudi Arabia’s medium-term public debt strategy, the arrangement focuses on diversifying funding sources to meet financing needs at competitive terms.
It also adheres to robust risk management frameworks and the Kingdom’s approved annual borrowing plan.
PIF has been actively engaging in credit arrangements to support its investment initiatives and the Kingdom’s Vision 2030 economic diversification plan.
In August 2024, PIF secured a $15 billion revolving credit facility for general corporate purposes, replacing a similar facility agreed upon in 2021.
In addition to the revolving credit facility, PIF has diversified its financing instruments by issuing a $2 billion seven-year Islamic sukuk earlier in 2024 and planning to issue bonds in pounds sterling.
These efforts are part of PIF’s strategy to leverage a variety of funding sources to support its expansive investment activities.
