MUMBAI: India’s three main stock exchanges said on Friday they would stop licensing their indexes and securities or providing data to foreign exchanges, saying such agreements had led trading to migrate outside of the country.
Foreign markets now offer dollar-based derivative contracts based on Indian indexes, shares and other securities under licensing agreements with Indian exchanges, allowing overseas investors to gain exposure to Asia’s third-largest economy without having to trade onshore.
Those licensing agreements will now be terminated with immediate effect, subject to notice periods, the National Stock Exchange, BSE and Metropolitan Stock Exchange said in a joint statement late on Friday.
The most popular of these contracts has long been the SGX Nifty 50 index futures offered by the Singapore Exchange under a licensing agreement with the National Stock Exchange, India’s biggest exchange. It tracks the NSE’s main index of its top 50 shares, the Nifty 50 index.
The actions would prevent SGX from offering the contract to overseas investors, who would be forced to unwind contracts and buy into domestic derivatives to gain exposure to India, a country that has become an emerging market darling, but has had disputes with foreign funds over taxes and regulations.
“The volumes in derivative trading based on Indian securities including indices have reached large proportions in some of the foreign jurisdictions, resulting in migration of liquidity from India, which is not in the best interest of Indian markets,” the Indian exchanges said in the statement.
The latest move will not apply to exchange-traded funds or similar products, the three stock exchanges said.
Although foreign investors have pumped more than $77 billion into India since 2012, exchanges have long felt they are missing out, because derivatives have been popular in Singapore, which is seen as offering lower tax and a more certain regulatory regime.
The action comes as SGX this week introduced trading in single-stock futures contracts for Nifty 50 components, which had raised fears it would significantly take away liquidity from India. SGX had previously focused on index derivative contracts.
In a statement late on Friday, SGX said it would “take all measures to maintain orderly trading and clearing of SGX India equity derivatives.”
The exchange added it would also work to develop “viable solutions for international investors into India,” including exploring opportunities in a financial center India is keen to develop in the Western state of Gujarat.
India regulators have been cracking down on trading of offshore derivatives, as they seeks to attract foreign investors to the Gujarat International Finance Tech city, replicating some of the global exchanges and offering dollar-based derivative contracts, lower taxes and easier regulations.
India already taxes equity investments held for less than a year at 15 percent and has a securities transaction tax, which makes it more expensive than most other major Asian countries.
Indian bourses to stop licensing index, stock prices to foreign exchanges
Indian bourses to stop licensing index, stock prices to foreign exchanges
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: Saudi Arabia’s Public Investment Fund has completed its inaugural murabaha credit facility worth $7 billion, as part of its medium-term capital-raising strategy.
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.
Closing Bell: Saudi main market gains to close at 12,105 points
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Monday, gaining 34.87 points, or 0.29 percent, to close at 12,104.69.
The total trading turnover of the benchmark index was SR6.43 billion ($1.71 billion), as 137 of the listed stocks advanced, while 94 retreated.
The MSCI Tadawul Index also increased by 1.07 points, or 0.07 percent, to close at 1,510.91.
The Kingdom’s parallel market Nomu dropped, losing 190.29 points, or 0.61 percent, to close at 30,864.09. This comes as 36 of the listed stocks advanced, while 43 retreated.
Al Majed Oud Co. was the best-performing stock of the day, with its share price surging by 5.62 percent to SR158.
Other top performers included SAL Saudi Logistics Services Co., which saw its share price rise by 5.42 percent to SR276, and Riyadh Cables Group Co., which saw a 5.17 percent increase to SR158.80.
Al Mawarid Manpower Co. and Astra Industrial Group also saw a positive change, with their share prices surging by 5.17 percent and 5.05 percent to SR114 and SR195.40, respectively.
United International Holding Co. saw the steepest decline of the day, with its share price easing 2.45 percent to close at SR183.40.
Zamil Industrial Investment Co. and Nayifat Finance Co. both recorded falls, with their shares slipping 2.43 percent and 2.43 percent to SR36.15 and SR14.44, respectively.
National Co. for Learning and Education and Saudi Electricity Co. also faced losses in today’s session, with their share prices dipping 2.27 percent and 2.25 percent to SR197.80 and SR16.54, respectively.
On the announcement front, the Saudi Exchange announced the listing and trading of shares for Almoosa Health Co. on the main market starting Jan. 7.
During the first three days of trading, daily price fluctuation limits will be set at plus or minus 30 percent, while static price fluctuation limits will also apply.
From the fourth trading day onward, the daily fluctuation limits will revert to plus or minus 10 percent, and the static limits will no longer be enforced.
In a separate development, Almujtama Alraida Medical Co. announced the signing of a credit facility agreement with Alinma Bank worth SR45 million.
Alinma Bank saw a 0.17 percent decrease in its share price on Monday to settle at SR29.90.
The financing package includes an SR35 million revolving facility aimed at purchasing goods and an SR10 million revolving facility for capital expenditures.
The credit facilities have a duration of three years and are secured by a promissory note. The objective of the financing is to support working capital requirements and fund capital expenditures, the company stated.
Meanwhile, Mufeed Co. revealed the awarding of an SR41.5 million project focused on the development of concept, content, and execution of events aimed at reviving the Kingdom’s cultural and historical heritage.
The contract, which is set to be signed on Jan. 20, will involve a legal entity as the counterparty.
The project entails organizing unique activities designed to showcase and enhance the Kingdom’s rich historical and cultural narratives.
Mufeed Co. saw a 2.93 percent increase in its share price by the close of Monday’s trading session to reach SR73.80.
Saudi Arabia’s expat remittances up 19% to $3.21bn: SAMA
RIYADH: Expatriate remittances from Saudi Arabia rose to SR12.03 billion ($3.21 billion) in November, marking an 18.73 percent increase compared to the same month of 2023, new data showed.
Figures from the Kingdom’s central bank, also known as SAMA, indicated that remittances sent abroad by Saudi nationals totaled SR6.17 billion, reflecting a 22.71 percent increase during this period.
Saudi Arabia rising remittance flows underscore its growing prominence as a global economic hub and a premier destination for expatriate workers.
According to the latest Saudi government census released in May 2023, expatriates comprise 41.6 percent of the Kingdom’s population. Among the largest expatriate communities are 2.12 million Bangladeshi nationals, followed by 1.88 million Indians and 1.81 million Pakistanis.
These sizable populations highlight the scale of remittance transfers from the Kingdom, driven by competitive salaries, tax-free income, and comprehensive employee benefits.
This dynamic has positioned Saudi Arabia as a major contributor to remittance-dependent economies, supporting millions of families in South Asia, the Middle East, and Africa.
The Kingdom ranked second in the 2024 InterNations Working Abroad Index, reflecting its appeal to professionals across sectors such as finance, health care, and technology.
The Vision 2030 initiative, aimed at diversifying the economy and boosting investment, has spurred unprecedented growth in job opportunities, particularly as new industries emerge and existing sectors expand.
Expatriates in Saudi Arabia often benefit from attractive compensation packages that include housing allowances, health insurance, children’s education funding, and annual flights home.
With limited personal living expenses and no income tax, expatriates enjoy significant disposable income, enabling them to remit substantial amounts to their home countries.
According to World Bank data, the Kingdom ranks among the most affordable countries for remittance transfers, thanks to competitive fees and streamlined processes.
Digitalization is reshaping how remittances are managed, further enhancing efficiency and accessibility. Saudi Arabia’s fintech landscape, buoyed by the Vision 2030 Financial Sector Development Program, has introduced a range of innovations.
Mobile banking apps, online payment gateways, and partnerships with global remittance platforms have simplified transactions. Services such as the Saudi Payments Network, or Mada, and the adoption of blockchain technology by local banks have improved transfer security and speed.
Additionally, increased competition in financial services has driven down costs, making transfers more affordable compared to global standards.
The growing reliance on digital channels aligns with the Kingdom’s broader push toward a cashless economy. Remittance platforms integrated with mobile wallets and QR-based payments have democratized financial access, especially for lower-income workers.
As Saudi Arabia continues to implement Vision 2030’s transformative agenda, remittance flows are expected to remain robust.
The Kingdom’s focus on diversifying its economy, creating a business-friendly environment, and investing in technology will likely attract even more expatriates.
With stronger remittance infrastructure and growing digital adoption, the ease, affordability, and volume of transfers will further enhance the global economic impact of expatriate labor in Saudi Arabia.
Saudi Arabia’s e-commerce sector sees 10% growth, official figures reveal
RIYADH: Saudi Arabia’s e-commerce sector saw its upward momentum continue in the fourth quarter of 2024, with 40,953 businesses now registered across the Kingdom— a 10 percent increase year on year.
The latest data from the Ministry of Commerce revealed that Riyadh led with 16,834 registrations, followed by Makkah with 10,314, and Eastern Province with 6,488. In the Madinah and Qassim regions, e-commerce enrollments reached 1,952 and 1,324, respectively.
The growth falls in line with Saudi Arabia’s ongoing transition toward a diversified, digitally-driven economy, with e-commerce playing a crucial role. The Kingdom now ranks among the top 10 countries globally in expansion of this sector.
These figures align with the nation’s goal to increase modern commerce and e-commerce’s share of the retail sector to 80 percent by 2030, as well as the government’s aspiration to raise online payments to 70 percent by the same year.
The Ministry of Commerce’s latest quarterly report further revealed that the logistics sector recorded an 82 percent surge in the issuance of records in the fourth quarter compared to the same period of 2023 to reach 16,561 registrations.
The capital led the list with 8,074 registrations, followed by Makkah with 4,235 and Eastern Province with 2,038. The Madinah and Qassim regions recorded 486 enrollments each.
Regarding application development, the report showed that the sector witnessed a 36 percent year-on-year jump in the issuance of records to reach 15,775 registrations in the final quarter of 2024, compared to the corresponding quarter of 2023.
Riyadh topped the list with 9,647 registrations, followed by Makkah with 3,191 and the Eastern Province with 1,590.
The Kingdom’s fintech solutions sector also recorded a 12 percent year-on-year increase with the issuance of 3,152 records in the fourth quarter of 2024, compared to the same period a year earlier.
The bulletin also underscored significant growth across various promising sectors, aligning with Saudi Arabia’s Vision 2030 goals.
Notable expansions were observed in several key fields, including cloud computing services, manufacturing solar panels and their parts, and real estate activities.
Growth was also seen in organizing tourist trips, entertainment events, conferences, and trade fairs.
These developments reflect the Kingdom’s strategic focus on fostering innovation and sustainable growth across diverse industries.
The ministry’s quarterly business sector bulletin provides an overview of the latest developments in the nation’s commercial environment, highlighting Saudi Arabia’s economy’s continued growth and diversification.
Jordan’s total FDI reaches $1.3bn, reflecting strong investor confidence
RIYADH: Jordan’s foreign direct investment inflows rose 3.7 percent year on year in the third quarter of 2024, reaching $457.8 million, according to preliminary data from the balance of payments.
This figure represents 3.2 percent of the nation’s gross domestic product, reflecting sustained investor confidence despite economic headwinds in the region, the Jordan News Agency reported.
For the first nine months of 2024, total FDI inflows amounted to $1.3 billion, or 3.3 percent of GDP, slightly down from $1.6 billion in the same period of 2023.
However, the 2024 figure surpassed cumulative FDI levels seen in both 2021 and 2022, signaling long-term growth momentum.
While foreign investment in Jordan has traditionally focused on energy, tourism, real estate, manufacturing, and services, the country launched its Economic Modernization Vision in 2022 to boost growth. The plan targets $60 billion in investments and 1 million jobs over the next decade, with key sectors including ICT, health care, tourism, real estate, mining, and agriculture.
The latest data showed that Arab nations contributed nearly half of Jordan’s FDI inflows in the first three quarters of 2024, accounting for 49.1 percent. Among these, Gulf Cooperation Council countries led with 31.7 percent.
EU nations accounted for 11.5 percent, with the Netherlands and France contributing 4.9 percent and 3.5 percent, respectively.
Non-Arab Asian countries made up 7.2 percent, led by China at 2.5 percent and followed by India at 2.1 percent. The remaining 32.2 percent came from various global regions.
The financial and insurance sector was the top recipient of FDI, attracting 15.7 percent of total inflows. Manufacturing attracted 7.7 percent, followed by information and communication with 7.5 percent, mining and quarrying at 7.3 percent, and transportation and storage at 7.0 percent. Wholesale and retail trade accounted for 6.1 percent.
Notably, real estate and land investments by non-Jordanian individuals made up 14.9 percent of total FDI, highlighting the ongoing appeal of Jordan’s property market.
Jordan’s strong FDI performance reflects its strategic efforts to enhance its investment climate and capitalize on its position as a regional business hub.
Economic experts projected Jordan’s growth to range between 2.5 percent and 3 percent in 2025, driven by an improved business environment and increased investments, according to the Jordan News Agency report last month.
This aligns with the country’s average growth rate of 2.5 percent over the past decade, as reported by the World Bank, providing a solid foundation for expansion.
Recent government measures, such as reducing penalties for unlicensed vehicles and offering tax cuts for electric cars, aim to boost financial and social stability, addressing economic challenges and attracting further investment.
