DUBAI: London has some very definite advantages in the contest to stage any global element of the forthcoming initial public offering of Saudi Aramco, but whether Saudi Arabian policymakers will be convinced that the UK capital is the place for the flagship share sale — potentially the biggest IPO in history — remains to be seen.
So strong is the claim of the London Stock Exchange (LSE) that for a while it looked like a straight two-horse race between it and the much bigger New York Stock Exchange for the prestigious and money-spinning offering.
That has been complicated over the past few months by the fact that other alternatives have emerged to a big global IPO: An “exclusive” offering on the Tadawul in Riyadh; the emergence of rival venues like Hong Kong and the other New York exchange Nasdaq; and the possibility of a private sale of shares to Chinese or Russian investors; or several combinations of these options.
But London is still in the race, and the official visit by Saudi policymakers this week could be a final opportunity to “kick the tires” of the LSE as a suitable venue for arguably the most important single transaction in the Kingdom’s history. LSE officials can advance several plausible arguments why it should stage the Aramco IPO.
David Hodson, veteran oil executive and financier and managing director of Dubai-based Blue Pearl Management, said: “The big thing London has going for it is that it is not New York. It is a less aggressive investment venue in all respects.”
This was echoed by a senior American investment banker, speaking on condition of anonymity, who said: “New York presents a range of problems, with Sarbanes-Oxley (US investor protection laws), as well as JASTA (anti-terrorism financing legislation) and the whole system of class actions.”
It has become almost accepted wisdom that Aramco would find itself enmired in litigation if it were to list on Wall Street. Although there are some who do not think this is necessarily the case — pointing to the hundreds of billions of dollars of Saudi assets in the US so far left untouched by the hungry lawyers of Manhattan — there is a general feeling, shared by some of Aramco’s advisory team, that listing there would just be asking for trouble.
“The London legal system is different in many respects,” said the banker. There is no British equivalent of the JASTA laws, disclosure and regulatory requirements are looser (especially for oil companies) and, while there is a system of ‘no win, no fee’ litigation, it is not as well-organized or aggressive as in the US, with its armies of class action lawyers.
The gentler legal and regulatory rules in the UK reinforce another advantage London has: It badly wants, even needs, to stage the IPO. Certainly, listing Aramco would talk to the post-Brexit narrative, which sees the world outside the EU as a gigantic opportunity for Britain.
Anti-Brexit campaigners would maintain that this is delusional, but if LSE won Aramco it would certainly allow the British government to claim that there is indeed life after the EU, and advance its cause to continue to be regarded as the capital of the European financial scene.
City veteran Martin Gilbert, co-chief executive of Standard Life Aberdeen, said: “It would obviously be a big and welcome coup if the UK was successful given the competition.”
London has other attractions too. It is not as big as New York — the two exchanges there has a combined market capitalization more than six times that of LSE — but it has a reputation as a truly global exchange, especially reflecting the commodity and energy sector. For example, two of the big members of Aramco’s peer group — BP and Shell — are listed on LSE.
David Ramm, the corporate partner at the London office of global law firm Morgan Lewis, believes London has an advantage in its international appeal. “The LSE reaches a broader and more diverse global network of potential investors than any other exchange, including New York,” he said.
“I suspect that there may also be a view at Aramco that the LSE and its investors may currently be more receptive to foreign listings, especially from the Middle East, than more domestically or the US focused exchanges,” Ramm added.
The London market authorities have gone out of their way to make the LSE more receptive. Last year the regulators proposed to introduce a new category of listing on the market, dubbed the “sovereign IPO,” as a way of allowing governments and other state-linked investors to issue and trade shares on international exchanges without adhering to stricter IPO rules on related party transactions and governance.
While these proposals met with some criticism from a portion of the London investment community and politicians — on the grounds that London was lowering its governance standards to accommodate the Saudis — the British government, the regulators and most financial professionals would welcome the changes if they were to attract the biggest IPO in history.
The changes required for the “sovereign IPO” regime have not yet been finally agreed, but any hint that Aramco was seriously leaning toward London would likely hurry them through without too much delay.
Ellen Wald, Middle East expert and author of upcoming book “Saudi Inc”, said: “The flexibility the LSE has shown will likely appeal to Aramco. The LSE would make sense as one of the exchanges for an Aramco listing because it is a big, stable and prestigious exchange with access to a large number of global investors and capital.
London has presented a persuasive investment case for why Aramco should chose it rather than any other global venue. But in the end, other factors — like geopolitical and foreign policy considerations, as well as personal relations between top policymakers — are just as like to decide the venue for the Aramco.
Hodson summed it up: “The final decision on where to list will be as much a political and strategic call as a financial one.”
London’s best argument for staging Aramco IPO: It is not New York
London’s best argument for staging Aramco IPO: It is not New York
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Saudi Arabia, Egypt strengthen industrial ties with new initiatives
RIYADH: Saudi Arabia and Egypt are advancing efforts to strengthen their industrial and economic partnership, as officials emphasized the importance of trade facilitation, industrial integration, and government-backed support.
Speaking at the Saudi-Egyptian Industrial Forum in Riyadh, Minister of Industry and Mineral Resources Bandar Alkhorayef announced that the Saudi Export-Import Bank has completed SR1.3 billion ($346.5 million) in operations, highlighting the strong bilateral relationship between the two nations.
“The industrial strategy emphasizes the importance of industrial integration with other countries, especially Egypt,” he stated, noting that cooperation pathways include industry, mining, and trade, as well as supply chains, human resources, research, and innovation.
He highlighted the vital role of government agencies in supporting exporters and importers from both countries.
Bandar Al-Ameri, chairman of the Saudi-Egyptian Business Council, highlighted that trade between the Kingdom and Egypt increased by 28 percent in 2024, citing the strengthening economic partnership between the business communities of the two nations.
Al-Ameri pointed to the signing of a bilateral investment protection agreement as a strategic achievement and emphasized Egypt’s role as a major economic partner and gateway to African markets.
Hassan Al-Hwaizy, chairman of the Federation of Saudi Chambers, welcomed the Egyptian delegation, stating that Saudi-Egyptian economic relations are based on genuine partnership rather than figures alone.
He called for enhancing cooperation in industry and trade and encouraged the establishment of joint projects, specifically to serve African markets.
Vice Minister of Industry and Mineral Resources for Industrial Affairs Khalil Ibn Salamah explained that the industrial partnership focuses on five strategic sectors, including pharmaceuticals, automotive, construction materials, textiles, and food industries.
He emphasized the strategic alignment between the industrial initiatives of both countries and urged Egyptian manufacturers to seize the opportunities available in the Saudi market, noting the Kingdom’s target to establish 24,000 new factories over the next decade.
The Saudi-Egyptian Industrial Forum, held in Riyadh under the patronage of the Saudi Minister of Industry and Mineral Resources, gathered more than 300 leaders and investors from the Saudi and Egyptian industrial sectors.
Organized by the Federation of Saudi Chambers in cooperation with the Federation of Egyptian Industries, the forum focused on strengthening strategic cooperation and promoting pathways for industrial integration.
The event also showcased available investment opportunities in priority sectors under the Kingdom’s National Industrial Strategy, emphasizing the growing Saudi-Egyptian industrial base, which aims to expand investments in the pharmaceutical, automotive, construction materials, textiles, and food industries.
Saudi debt capital market nears $500bn mark amid global uncertainty
- Kingdom’s sukuk dominance and Vision 2030 progress fuel 16 percent annual growth, Fitch Ratings reports
RIYADH: Saudi Arabia’s debt capital market continued its upward trajectory in the first quarter of 2025, defying global challenges and uncertainties.
The market reached $465.8 billion by the end of March, marking a 16 percent year-on-year increase, with sukuk accounting for 60.4 percent of the total, according to Fitch Ratings.
The Kingdom’s debt market is poised to surpass $500 billion in outstanding value by the end of 2025, driven by strong economic fundamentals, diversified funding strategies, and continued progress under Vision 2030.
Fitch Ratings, in its latest report, noted that the sector’s further expansion this year will be supported by increased fiscal deficits, heightened project financing needs, and regulatory initiatives aimed at boosting non-oil economic growth.
“Saudi entities were the largest US dollar debt issuers among emerging markets (excluding China) in the first quarter of 2025. The country also led global dollar sukuk issuance and was the largest debt capital market issuer in the GCC,” said Bashar Al-Natoor, global head of Islamic finance at Fitch Ratings.
He added: “We expect lower oil prices and increasing deficits will drive issuance in 2025 and 2026. Banks, corporates and projects are likely to seek more diverse funding through the DCM, enhancing market development. We rate about 80 percent of the outstanding US dollar Saudi sukuk market, with almost all investment-grade and no defaults.”
Issuance in the first quarter of 2025 surged by 202.4 percent compared to the previous quarter, reaching $37.3 billion. Environmental, social, and governance debt made up 9 percent of dollar-denominated DCM issuance during the period.
The expansion of Saudi Arabia’s asset management industry, whose assets under management have now exceeded SR1 trillion, is also playing a key role in supporting the growth of the Kingdom’s debt capital market.
Saudi momentum
In an interview with Arab News on the sidelines of the Fitch on Saudi Arabia event held in Riyadh, Al-Natoor lauded the Kingdom debt market for weathering global economic challenges.
“I think that by itself is something that’s very notable, because there is a lot of turbulence and there is a lot of uncertainties, and despite that, we’ve still seen the market growing,” Al-Natoor said, adding that he expected to see continued growth.
He went on to say that a range of bodies — including government, corporates, financial institutions and banks — are involved with developing the debt capital market, then funding the maturities that are coming.
“All of these are drivers, and key drivers for further growth, growth of the debt capital market,” he said.
Al-Natoor noted that several factors, including the need to diversify funding sources and the ambitious project underway in the Kingdom, are acting as key drivers of growth for Saudi Arabia’s debt capital market from the issuer side.
On investor appetite, he said: “We’re having a vibrant market in the first quarter where it shows that local investor, regional investor and international investor, of course, at varying degrees, are still interested in the market, so there is an investor appetite in that.”
He cautioned, however, that the Saudi market is not insulated from global volatility.
“Of course the appetite of the investors, maybe some uncertainties, will have a toll on the market itself. However, the actual fundamentals of the market growth are still intact, and the market is still expected to grow in the future,” Al-Natoor said.
According to Fitch, the Kingdom’s budget deficit is forecasted to widen to 5.1 percent of gross domestic product in 2025, up from 2.8 percent in 2024, with oil prices expected to average $65 per barrel.
Government debt is projected to rise to nearly 37 percent of GDP by the end of 2026, from 29.9 percent in 2024.
Foreign investor participation in government local issuances increased to 7.7 percent at the end of the first quarter, compared to 4.5 percent at the end of 2024.
About 94.2 percent of rated Saudi sukuk remain within the “A” category, with almost all issuers maintaining stable outlooks.
Looking ahead, Al-Natoor said: “We don’t have specific numbers, but we do expect that the growth momentum to continue in 2025 and 2026 maybe step further.”
He added that changes to “global scenery” could have an impact on appetite and liquidity in this area, which may lead to a “toll on the growth” of debt capital markets that lasts into next year.
Al-Natoor noted that government entities and banks are currently the primary drivers of debt issuance in Saudi Arabia.
While major corporations such as Aramco and the Public Investment Fund have also begun tapping into the debt capital market, their participation has not significantly shifted the overall market structure.
He suggested that although more corporate issuers may gradually enter the market, the dominant role of government and banks in issuance activity is expected to remain unchanged in the short to medium term.
“The actual strategy of diversifying funding is to take it down the chain from the government to banks to corporates to projects to infrastructure and so the actual long-term ambition is to involve more of these,” he said.
Al-Natoor continued: “However, over the short to medium term, we do expect that the government and the banks will play a big role.”
He added that it will take time until “the momentum goes down the chain.”
Economic resilience
In a separate interview with Arab News, Paul Gamble, head of Middle East and Africa Sovereigns at Fitch Ratings, highlighted that Saudi Arabia’s non-oil economy showed resilience despite global uncertainty.
“If you look at the experience of 2024, we saw pretty good non-oil growth at a time of really heightened geopolitical tensions in the region,” Gamble said.
Regarding Saudi Arabia’s Vision 2030 economic transformation, Gamble stressed the importance of separating reform-driven non-oil GDP expansion from government spending-driven growth.
“You have to balance the domestic reform angle — labor market reforms, social reforms, business environment reforms — against the element of non-oil growth that’s driven by government spending and GRE (government-related entities) spending,” he said.
Gamble cautioned that if oil prices remain low and government capital spending is cut significantly, it could impact private sector confidence.
He noted: “For the moment, we’re still looking for pretty healthy non-oil growth. Our forecast is 4.2 percent for non-oil growth this year for Saudi Arabia.”
Discussing fiscal pressures, Gamble said: “We’ve revised down our oil price forecast to $65 a barrel, which widened our budget deficit forecast for Saudi Arabia to 5.1 percent of GDP. That will continue to put debt on an upward trend.”
He added: “Oil prices were broadly unaffected, and metrics like tourism inflows and private sector confidence remained strong.”
In the wider Gulf region, Gamble said: “From a rating perspective, four GCC sovereigns have stable outlooks. Bahrain and Oman are exceptions.”
He explained that Bahrain faces significant fiscal challenges at current oil prices, while Oman benefits from past deleveraging efforts and non-oil economic development, supporting its positive outlook.
Saudi aviation surpasses localization goals, boosts women in leadership
JEDDAH: Saudi Arabia’s aviation industry exceeded its 2024 Saudization target, reaching 14,317 national employees — 124 percent of its 2025 goal — as the Kingdom accelerates efforts to become a global aviation hub.
The General Authority of Civil Aviation said women hold 17 percent of leadership roles across airports, airlines, and ground services.
The initiative is part of a broader labor market strategy to boost Saudization, a program launched in 2011 to increase domestic employment in the private sector through industry-specific quotas.
It has helped reduce Saudi unemployment from 12.8 percent in 2018 to 7.1 percent by mid-2024, surpassing the Vision 2030 goal of 8 percent. The Kingdom has set a new target of 5 percent unemployment by 2030.
In an official release, Abdulaziz bin Abdullah Al-Duailej, GACA’s president, noted that the authority had succeeded in its “Saudization of Aviation Jobs” initiative, achieving notable results in 2024.
He emphasized that this progress reflects the depth and inclusiveness of the Vision (2030) and embodies the Kingdom’s comprehensive development across all sectors, the release added.
His comments coincided with the release of the 2024 annual report on Saudi Vision 2030, which showed that the Kingdom had achieved 93 percent of its strategic goals over the past nine years.
According to the annual report, Saudi Arabia’s airports handled 128 million passengers in 2024, marking a 45.8 percent increase since the launch of Vision 2030 in 2016, while air cargo volumes topped 1.2 million tonnes.
GACA president stated that the authority achieved 100 percent of its key performance indicators and initiatives under the Vision Realization Programs. Saudi Arabia ranked 17th globally in the International Air Transport Association’s Air Connectivity Index — surpassing the 2024 target by two ranks.
According to the press release, GACA, during the 1445 Hajj season, launched the Kingdom’s first aerial taxi trial and granted licenses for cutting-edge aviation technologies.
“Several new terminals were opened, and expansions were made to various regional airports as part of the Kingdom’s efforts to adopt future-forward solutions and enhance sustainability in air transport,” it added.
The GACA chief further highlighted the sector’s advancements since the launch of the National Aviation Strategy, including the privatization of airports, the development of King Salman International Airport, the establishment of Riyadh Air, and the ordering of 548 new aircraft.
Closing Bell: Saudi main index edges up 0.24% to close at 11,784
RIYADH: Saudi Arabia’s Tadawul All Share Index increased on Monday, gaining 28.42 points, or 0.24 percent, to close at 11,784.63.
The total trading turnover of the benchmark index was SR6.4 billion ($1.7 billion), as 86 of the stocks advanced and 154 retreated.
The MSCI Tadawul Index rose 1.09 points, or 0.07 percent, to close at 1,498.77.
The Kingdom’s parallel market, Nomu, dropped 149.32 points, or 0.52 percent, to close at 28,420.71. This comes as 33 stocks advanced while 46 retreated.
TASI’s top performer was Umm Al Qura for Development and Construction Co., which surged by 9.84 percent to reach SR25.90.
Other top performers included Al-Babtain Power and Telecommunication Co., whose share price rose 6.73 percent to SR47.55, as well as Saudi Reinsurance Co., whose share price surged 6.14 percent to SR51.
Riyadh Cables Group Co. was also among the top performers, increasing 5 percent to SR130.20.
Despite reporting financial gains, Nice One Beauty Digital Marketing Co. was the worst performer, with its stock price falling 3.85 percent to SR37.50.
Allied Cooperative Insurance Group also saw its stock price decline 3.85 percent to SR14.48. Arabian Internet and Communications Services Co. also dropped to SR290, a 3.33 percent decrease.
On the announcements front, Nice One Beauty Digital Marketing Co. reported a notable rise in its interim financial results for the three-month period ending March 31.
The company posted a 29.96 percent increase in sales year on year, reaching SR324.97 million, compared to SR250.05 million in the same quarter of the previous year.
This growth was attributed to stronger order volumes, new customer acquisitions driven by efficient marketing campaigns, a broader product range, and improved fulfillment efficiency, with a positive contribution from the seasonal impact of Ramadan.
Net profit rose 10.2 percent to SR24.12 million from SR21.91 million the previous year, supported by higher revenue and reduced selling and marketing expenses, although partially offset by increased operating expenses and zakat charges.
Separately, Banque Saudi Fransi announced its intention to issue US dollar-denominated additional tier 1 capital notes under its Additional Tier 1 Capital Note Program.
This move follows a resolution by the bank’s board of directors on Aug. 19, authorizing executive management to proceed with the issuance.
The offering, expected to be made available to eligible investors in Saudi Arabia and internationally, will have its amount and terms determined based on market conditions.
The issuance aims to enhance BSF’s tier 1 capital and support general banking activities. The bank has appointed Abu Dhabi Commercial Bank PJSC, Citigroup Global Markets, and Credit Agricole Corporate and Investment Bank, as well as Emirates NBD Bank PJSC, HSBC Bank plc, Mashreqbank PSC, Merrill Lynch Kingdom of Saudi Arabia, Mizuho International plc, MUFG Securities EMEA plc, and Saudi Fransi Capital as joint lead managers.
BSF noted that the offer will be subject to regulatory approvals and emphasized that the announcement does not constitute an invitation to purchase or subscribe to securities.
Almasane Alkobra Mining Co. reported strong growth in its interim financial results for the three-month period ending March 31, driven by a significant increase in revenue and net profit.
Sales rose by 63.4 percent year on year to SR219.77 million, compared to SR134.5 million in the same quarter of the previous year.
The company attributed the rise to higher quantities sold for zinc and increased prices for copper, zinc, and gold, despite a decline in copper volumes due to a five-week maintenance shutdown announced earlier on Tadawul.
Net profit surged 265.2 percent to SR55.24 million from SR15.12 million in the same quarter last year, supported by a SR49 million rise in gross profit, improved sales, and lower production costs, despite higher taxes and severance expenses.
AMAK’s share price rose by 1.3 percent to reach SR62.50.
Eastern Province tops Saudi Arabia for FDI, with $97.6bn, says top official
JEDDAH: Saudi Arabia’s Eastern Province is leading the Kingdom in attracting foreign direct investment, with the value of its FDI stock standing at SR366 billion ($97.6 billion) — 42 percent of the country’s cumulative total, according to a senior official.
Speaking at the Jubail Investment Forum 2025, held from April 27 to 28, Minister of Investment Khalid Al-Falih announced that by early 2025, the Eastern Province had issued 5,456 active foreign investment licenses, supporting over 53,000 jobs with a localization rate of 36 percent.
Saudi Arabia is aiming to attract $100 billion in FDI a year by the end of this decade, as it seeks to make significant strides in diversifying its economy and reducing dependency on oil revenues in alignment with its Vision 2030 objectives.
“There are more than 600 investment opportunities available in the region, with a total value exceeding SR330 billion,” Al-Falih said, adding that the “Invest Saudi” platform provides a comprehensive overview of these opportunities to connect local and global investors, according to a post on his ministry’s X account.
FDI inflows into Saudi Arabia increased by 29.39 percent in the final quarter of 2024 compared to the preceding three months to reach SR23.29 billion, according to data from the General Authority for Statistics.
In his speech, Al-Falih said that by early 2025, 34 international companies had been granted licenses to establish their regional headquarters in the Eastern Province, as part of Saudi Arabia’s initiative to attract more firms to the Kingdom.
The licenses cover various sectors, including petrochemicals, energy, and mining, as well as real estate and manufacturing.
The minister highlighted the strategic and competitive advantages of the region, including its prime geographic location, which connects it to six neighboring countries, as well as its abundant natural resources, such as fossil and renewable energy.
He also highlighted the Ras Al-Khair Special Economic Zone, launched in 2023, which aims to support the value chain of maritime industries with a targeted investment of SR26 billion, according to the minister.
“It aims is to localize up to 50 percent of the main shipbuilding components over the next decade,” the minister said, as per the X post.
The Jubail Investment Forum aims to highlight the role of the Eastern Province, particularly the industrial city of Jubail, in supporting Saudi Arabia’s Vision 2030. It also seeks to boost the region’s investment appeal, showcasing the Kingdom’s continuous efforts to cultivate a competitive business environment and provide enticing incentives for investors.
