BENGALURU: InterContinental Hotels Group (IHG) said it agreed to buy a 51 percent stake in luxury brand Regent Hotels and Resorts for $39 million in cash as part of its plan to go more upmarket to tap customers willing to pay top prices.
IHG, which operates the Crowne Plaza and Holiday Inn brands as well, said it would have the right to buy the remaining stake in a phased manner from 2026.
IHG has missed out on customers willing to pay more for greater exclusivity and intends to grow the Regent brand to over 40 hotels from six in global gateway city and resort locations over the long term.
A top IHG executive said in February the group was looking to buy one or two small luxury brands that do not have many physical hotels, as it did when it bought Kimpton Hotels for $430 million in 2014.
These brands would be more upscale than InterContinental hotels, allowing IHG to drive more revenue from the $60 billion global luxury hotels sector.
IHG also said following an extensive refurbishment pegged to start in early 2020, InterContinental Hong Kong would become a Regent Hotel in early 2021.
Regent was founded in 1970 as a luxury hotel brand by hotel industry veteran Robert Burns.
InterContinental Hotels buys majority stake in Regent Hotels
InterContinental Hotels buys majority stake in Regent Hotels
UAE and India emerge as top destinations for Saudi Arabia’s non-oil goods
RIYADH: Saudi Arabia’s Arab neighbor UAE was the favorite destination for the Kingdom’s non-oil goods in September, with exports to the Emirates amounting to SR6.54 billion ($1.74 billion), official data showed.
According to the General Authority for Statistics, Saudi Arabia exported mechanical and electrical equipment worth SR3.10 billion to the UAE in September, followed by transport parts and chemical products valued at SR1.64 billion and SR375.8 million, respectively.
Bolstering the exports of non-oil goods is a crucial goal outlined in Saudi Arabia’s Vision 2030 economic diversification agenda, with the Kingdom steadily reducing its decades-long dependence on crude revenues.
Earlier this month, speaking at the World Investment Conference, Saudi Arabia’s Minister of Economy and Planning Faisal Alibrahim said that non-oil activities now account for 52 percent of the Kingdom’s gross domestic product.
He also added that this sector of the economy has been growing at 20 percent since the launch of the Vision 2030.
In September, Saudi Arabia’s outbound shipments of plastic and rubber products to the UAE stood at SR345.9 million, followed by live animals and animal products at SR149.6 million.
India was another major destination for Saudi Arabia’s non-oil products over the period, with the Asian nation receiving inbound shipments worth SR2.35 billion from the Kingdom.
Chemical products and allied industries worth SR1.21 billion were imported from Saudi Arabia by India.
Other major non-oil exports to the country were plastic products and jewelry valued at SR438.4 million and SR345.5 million, respectively.
China held the third spot for Saudi Arabia’s non-oil exports, with the Asian giant receiving inbound shipments from the Kingdom valued at SR1.73 billion in September.
Other top destinations for Saudi Arabia’s non-energy products over the month were Singapore, which imported goods valued at SR1.39 billion, Turkiye at SR973.4 billion, and Belgium at SR964.7 billion.
Egypt imported non-oil goods worth SR862.8 billion from the Kingdom, followed by the US and Jordan at SR743.2 billion and SR733.1 billion, respectively.
Overall, Saudi Arabia’s non-oil exports increased by 22.8 percent year on year in September, reaching SR25.95 billion.
Affirming the progress of Saudi Arabia’s non-oil business activities, the Kingdom’s purchasing managers’ index rose to a six-month high of 56.9 in October, beating the September rating of 56.3 and the August level of 54.8.
According to the Riyad Bank Saudi Arabia PMI report, any readings above 50 indicate expansion of non-oil business activities, while levels below 50 signal contraction.
In October, a report released by Moody’s also projected that Saudi Arabia’s non-hydrocarbon real gross domestic product is set to grow between 5 percent and 5.5 percent from 2025 to 2027, driven by increased government spending.
GASTAT revealed that non-oil exports worth SR16.52 billion were sent to other countries through sea from Saudi Arabia, while outbound shipments via land and air totaled SR4.96 billion and SR4.46 billion, respectively.
King Fahad Industrial Sea Port in Jubail was the main exit point for Saudi Arabia’s non-energy exports with goods valued at SR3.54 billion.
Al Bat’ha Port handled non-oil outbound goods worth SR1.78 billion, while exports worth SR802.8 million passed through Al Hadithah Port.
Among airports, King Khalid International and King Abdulaziz International handled non-hydrocarbon export goods worth SR2.33 billion and SR1.89 billion, respectively.
Saudi Arabia’s overall merchandise exports
GASTAT, in its report, revealed that Saudi Arabia’s overall merchandise exports in September stood at SR88.56 billion, representing a decline of 14.9 percent compared to the same period of the previous year.
According to the authority, oil exports witnessed a fall of 24.5 percent year on year in September.
“Consequently, the percentage of oil exports out of total exports decreased from 79.7 percent in September 2023 to 70.7 percent in September 2024,” said GASTAT.
To stabilize the market, Saudi Arabia cut its oil production by 500,000 barrels per day in April 2023, a reduction now extended until December 2024.
China was the Kingdom’s most important trading partner in September, with exports to the Asian nation amounting to 13.91 billion, followed by Japan and the UAE at SR7.98 billion and SR7.49 billion, respectively.
The strong flow of Saudi exports to China signifies strong bilateral relations between both nations, with the Kingdom being the largest trading partner of China in the Middle East since 2001, and bilateral trade between the nations reaching $107.23 billion in 2023.
China and Saudi Arabia are strategic partners in various other sectors like energy and finance, as well as the Belt and Road Initiative.
In September, Saudi Arabia’s exports to South Korea amounted to SR6.87 billion, followed by the US at SR3.27 billion, Egypt at SR2.89 billion and Singapore at SR2.70 billion.
Imports in September
GASTAT revealed that Saudi Arabia’s overall imports in September reached SR69.8 billion, representing an increase of 15 percent compared to the same month of the previous year, while the surplus of the merchandise trade balance decreased by 56.9 percent during the same period.
In September, Saudi Arabia imported goods worth SR17.99 billion from China, led by mechanical appliances and electrical equipment valued at SR8.29 billion.
The authority added that Chinese imports of transport equipment and base metal products amounted to SR2.37 billion and SR1.66 billion, respectively.
Saudi Arabia also imported plastic and rubber products from China valued at SR976.6 million, followed by textiles at SR955.6 million.
China was closely followed by the US and Germany with imports from these nations to the Kingdom in September stood at SR5.39 billion and SR3.45 billion, respectively.
In September, Saudi Arabia imported goods worth SR3.42 billion from the UAE, and SR3.21 billion from India.
Italian imports to the Kingdom amounted to SR2.50 billion, while inbound shipments from Japan and Indonesia stood at SR2.34 billion and SR2.08 billion, respectively.
GASTAT said that inbound shipments worth SR43.07 billion reached the Kingdom via sea, while imports valued at SR18.07 billion and SR8.73 billion came via air and land, respectively.
King Abdulaziz Sea Port in Dammam was the primary entry point for goods in September through sea, with imports valued at SR19.65 billion, representing 28.1 percent of the total inbound shipments.
The report revealed that Jeddah Islamic Sea Port handled incoming shipments valued at SR12.54 billion, followed by Ras Tanura Sea Port at SR4.78 billion.
King Khalid International Airport in Riyadh welcomed inbound shipments worth SR8.57 billion.
Through land, Al Bat’ha Port and Riyadh Dry Port handled imports valued at SR3.51 billion and SR3.09 billion, respectively.
Arab stock markets see growth in trading activity with a 16.35% surge in value: AMF
RIYADH: Arab stock markets experienced a boost in trading values in October, with a monthly increase of 16.35 percent, according to the latest report by the Arab Monetary Fund.
The AMF’s monthly bulletin showed that the total trading values soared to $97.1 billion, up from $83.5 billion in September.
This surge came despite a slight overall dip of 0.57 percent in market capitalization, which ended the month at $4.27 trillion.
The gains were not universal, however, as 10 stock exchanges recorded increases in trading value, while four saw declines.
Market winners: exceptional growth in trading value
Oman’s Muscat Securities Market emerged as the top performer, registering a 185.03 percent increase in trading value. The market’s total value jumped to $515.7 million in October, compared to just $180.9 million in September.
Tunisia followed closely with a 161.66 percent rise, driven by robust investor activity, while Abu Dhabi’s financial market saw trading values almost double, with a 97.56 percent increase to reach $18.52 billion.
Other notable performers included Iraq, where trading values climbed by 52.57 percent, and Qatar, Oman, and Casablanca each recording double-digit percentage increases.
Smaller but meaningful gains were observed in Kuwait at 13.89 percent and Saudi Arabia at 4.69 percent.
Despite the widespread rises, Bahrain, Damascus, and Beirut faced steep declines in trading value. Bahrain was the worst hit, experiencing a 65.57 percent drop, followed by Damascus with a 50.13 percent decline and Beirut with a 43.86 percent dip.
Index movements: Iraq takes the lead
The performance of individual market indices highlighted the uneven landscape across the region.
Iraq Stock Exchange: The standout performer with a 12.39 percent rise in its index, reflecting strong market sentiment and heightened investor interest.
Damascus Securities Exchange: Achieved a 6.99 percent increase in its index, maintaining its growth streak.
Dubai Financial Market: Recorded a 1.94 percent uptick, signaling stability in the UAE’s financial sector.
Muscat Securities Market: Saw a modest index increase of 0.83 percent, correlating with its strong performance in trading value.
Indices in several major markets experienced declines:
Saudi Stock Market: The index fell by 1.67 percent, reflecting cautious investor sentiment.
Egypt’s EGX30: Dropped by 2.94 percent, despite improved trading values.
Casablanca: Declined by 1.42 percent.
Palestine: Down 1.27 percent.
Market capitalization: Mixed signals amid trading gains
Despite the surge in trading activity, the overall market capitalization across Arab stock markets contracted slightly by 0.57 percent, settling at $4.27 trillion.
The Saudi market led the decline, shedding $23.86 billion in capitalization, while Abu Dhabi’s market lost $12.27 billion. Tunisia and Palestine also reported decreases.
Oman stood out among the gainers, achieving an 11.85 percent increase in market capitalization, followed by Damascus at 6.42 percent and Iraq at 6.08 percent, underlining their robust performances during the month.
External influences shape regional performance
The markets’ performance mirrored global trends, with major international indices reflecting mixed results.
The MSCI Emerging Markets Index declined by 1.54 percent, while the S&P 500 and FTSE also posted slight losses of 0.99 percent and 1.54 percent, respectively.
These fluctuations were compounded by ongoing regional challenges, including interest rate adjustments. Several Arab central banks lowered interest rates in September, boosting liquidity and supporting trading activity.
Geopolitical tensions also had an impact, with uncertainty in the Middle East, including potential disruptions in oil trade through the Red Sea, impacting investor sentiment.
Energy market dynamics saw volatile oil prices, influenced by production adjustments from OPEC+ and global demand concerns, add another layer of complexity.
A resilient outlook for Arab markets
October’s results underscored the resilience and adaptability of Arab stock markets amid global and regional challenges.
While trading values surged, the market still faces external pressures, such as global economic uncertainty, oil market fluctuations, and geopolitical risks.
Nonetheless, the substantial recovery in trading activity highlighted the potential for sustained growth and development in the region’s financial sector.
As the year progresses, market watchers will closely monitor how Arab exchanges navigate these challenges, balancing internal reforms with external influences to maintain momentum.
This performance sets the stage for a promising end to 2024, with opportunities for further investment and regional financial integration.
Saudi corporate lending fuels bank loans growth to near 2-year high of 12.46%
RIYADH: Saudi Arabia’s bank loans reached SR2.88 trillion ($768.93 billion) in October, a 12.46 percent annual growth and the highest in 20 months, official data showed.
According to figures from the Saudi Central Bank, also known as SAMA, this growth reflects strong corporate and personal lending trends, driven by the Kingdom’s expanding economic activities.
Corporate loans were the main driver, surging 15.77 percent to SR1.54 trillion. This increase highlights the significant contribution of the real estate, wholesale, retail, and manufacturing sectors to the Kingdom’s economic dynamism.
Real estate activities led the charge, representing 20.29 percent of corporate lending and growing by 27.37 percent to SR312.4 billion.
Wholesale and retail trade accounted for 13 percent of corporate lending, reaching SR200.63 billion with an annual growth rate of 9.06 percent.
The manufacturing sector, a key component of Vision 2030’s economic diversification goals, represented 11.68 percent of lending at SR180.05 billion.
Meanwhile, electricity, gas, and water supplies contributed 11.32 percent to the total, growing significantly by nearly 30 percent to reach SR174.57 billion.
Notably, professional, scientific, and technical activities, though holding a smaller 0.54 percent share of corporate credit, witnessed the most significant surge, with a 53.55 percent growth rate to SR8.27 billion.
On the personal loans side, which includes various financing options for individuals, the sector grew 8.89 percent annually to SR1.34 trillion. This expansion underscores the continued confidence in consumer lending and the Kingdom’s economic diversification strategies.
In October, Saudi banks’ loans-to-deposits ratio also increased to 80.73 percent, up from 79.69 percent in the same month of 2023, as per data from the SAMA.
The calculation includes loans minus provisions and commissions, providing a clearer view of actual lending capacity.
SAMA has set a regulatory limit of 90 percent for loans-to-deposits ratios, balancing banks’ lending capacity with liquidity stability while supporting economic growth through corporate and individual borrowing.
Compared to other GCC nations, such as the UAE where loans-to-deposits ratios can exceed 100 percent, SAMA’s cap reflects a more cautious approach, prioritizing liquidity stability in the banking sector.
Saudi Arabia’s corporate and real estate lending are experiencing unprecedented growth, fueled by a combination of favorable economic conditions, government initiatives, and strategic investments under Vision 2030.
As the Kingdom accelerates its transformation, the demand for financing across key sectors, particularly real estate, has surged, reflecting its rapid urbanization and infrastructure development.
The Saudi Central Bank’s decision to mirror the US Federal Reserve’s policies, reducing interest rates by 50 basis points in September and an additional 25 basis points in November, has created an attractive borrowing environment.
This rate adjustment is anticipated to further boost real estate lending, allowing developers and individuals to capitalize on lower financing costs.
Real estate development remains central to Saudi Arabia’s economic diversification goals. Under Vision 2030, initiatives to position Riyadh as a global business hub and the Regional Headquarters Program have significantly increased demand for commercial real estate.
These efforts are complemented by giga-projects like NEOM and Red Sea Global, which are redefining urban landscapes with sustainable and energy-efficient designs.
The Public Investment Fund’s commitment to green building practices, with over $19.4 billion allocated to eligible green projects, underscores the alignment between real estate growth and environmental sustainability.
In October, PIF highlighted its green bond investments, including $6.3 billion earmarked for green building projects. These investments aim to set new standards in energy efficiency, saving up to 20 percent of energy compared to conventional buildings and avoiding thousands of tons of carbon emissions annually.
Projects such as NEOM’s sustainable water infrastructure further illustrate how the Kingdom is integrating advanced sustainability measures into its development agenda.
Wholesale and retail market
The growing share of wholesale and retail trade lending by Saudi banks reflects the sector’s pivotal role in the Kingdom’s economic evolution.
This expansion is underpinned by a combination of government incentives, private sector dynamism, and increased consumer demand.
The Saudi government has actively encouraged the growth of this sector through measures like tax exemptions, financing initiatives, and technology transfer programs.
These policies have created a fertile ground for local entrepreneurs and attracted foreign companies eager to capitalize on Saudi Arabia’s business-friendly environment.
Consumer demand is a key driver, with rising interest in diverse products such as electronics, apparel, and food items.
The emergence of e-commerce platforms has further revolutionized the sector, enabling online retailers to reach broader audiences with ease, thereby increasing market participation.
According to data from 6Wresearch, such initiatives have heightened competition, lowered prices, and benefited both consumers and traders, adding to the sector’s momentum.
The sector’s importance is also evident in employment trends.
According to a report by DataSaudi, the wholesale and retail trade sector employed over 1.64 million people in the second quarter of 2024, making it one of the largest employers in the Kingdom, alongside construction and manufacturing.
This employment surge highlights the sector’s contribution to economic stability and growth.
However, challenges persist. Intense competition, pricing pressures, and the entry of international brands partnering with local retailers are sparking pricing wars that could erode profit margins for some players, according to 6Wresearch.
Despite these hurdles, ongoing government support and initiatives like Vision 2030 promise to create new investment opportunities, reinforcing the wholesale and retail trade sector as a cornerstone of Saudi Arabia’s economic future.
Almoosa Health’s IPO to drive expansion and innovation in Saudi healthcare: CEO
RIYADH: Almoosa Health Co.’s upcoming initial public offering is poised to drive significant growth and innovation in Saudi Arabia’s healthcare sector, said the company’s CEO.
In an interview with Arab News, Malek Almoosa emphasized that the IPO will attract capital for expansion and advanced technologies, enabling the company to strengthen its market position and broaden its services.
The CEO said Almoosa Health is well-positioned to capitalize on Saudi Arabia’s rapidly evolving health care sector, which is expected to grow at a 6.5 percent compound annual growth rate to reach SR360 billion ($95.83 billion) by 2030.
“The Kingdom’s health care infrastructure and utilization are still maturing and continue to lag global benchmarks, offering plenty of headroom for growth and investment in the sector,” he said.
The company plans to issue 13.3 million shares, including 9.3 million new offerings and 4 million existing shares. This will represent 30 percent of the company’s post-IPO capital.
“Our IPO plays an important role in attracting capital for investment in expansion and cutting-edge technology that will grow our footprint and our offering,” said Almoosa.
The public listing, a partly primary offering, is relatively rare in the Saudi market. It not only positions the company to reduce its leverage and enhance financial flexibility but also extend its regional reach.
“With a public listing, we also enhance our market positioning, attracting more business partnerships and broadening our patient demographic, and facilitating geographic expansion in the Eastern Province, where we are the leading health care provider,” he said.
Almoosa Health has already secured strong investor interest, with cornerstone commitments from Tawuniya and Al Fozan Holding Co., subscribing to 4.1 percent and 2.5 percent, respectively, of the company’s post-offering capital.
Listing on Tadawul
The company said its decision to list on Tadawul aligns with its foundation and strategic direction. “We are, through and through, a Saudi organization that has grown with the Kingdom, and we wouldn’t have considered listing on any other financial market,” Almoosa said.
By becoming part of the region’s largest and most liquid stock exchange, the company aims to enhance its capital-raising capabilities, visibility, and credibility.
“Our decision to list on the Saudi Exchange reflects our strategic direction to harness local market insights, access a broad investor base, and continue to align with the Kingdom’s Vision 2030 health care objectives,” said Almoosa.
Expanding capacity
The CEO stated that funds raised would primarily support Almoosa Health’s expansion strategy, adding: “We have a clear growth strategy, planning to add around 700 beds by 2028, resulting in four hospitals with 1,430 beds and five primary care centers.”
He explained that proceeds from 21 percent of the 30 percent offering would go to the company to finance expansion plans, covering capital expenditures, working capital, general corporate purposes, and partial debt repayment, while the remaining 9 percent would go to the selling shareholder.
The company plans to open two major hospitals: Almoosa Specialist Hospital in Al Hofuf by 2027, with 300 beds and 200 clinics, and another in Al Khobar by 2028, featuring up to 400 beds and several centers of excellence.
“We have already acquired the land and commenced excavation work for both,” Almoosa revealed.
In addition, five primary care centers are planned in Al Ahsa, Al Khobar, and Dammam between 2025 and 2027.
The CEO noted that this expansion aligns with the company’s vision of becoming a “trusted provider of world-class health care” in Saudi Arabia’s Eastern Province.
“Our ambitious expansion plan is designed to make that vision a reality, growing our footprint, widening our offering, and investing in the best technology in the market.”
Eastern Province, where Almoosa operates, is emerging as a hub for energy and petrochemical industries, driving demand for health care services.
With a capacity of 730 beds and services spanning primary, acute, and rehabilitative care, Almoosa serves nearly 1 million patients annually. The company’s integrated care model includes pharmacy, home health care, and telemedicine.
Almoosa acknowledged challenges in the sector, including talent shortages. “In a region where world-class practitioners are hard to come by, we educate, develop, and retain the most talented professionals,” he said, emphasizing the company’s focus on patient experience and competitive advantage.
Technology adoption
Almoosa pointed out that technology is at the core of the company’s strategy to enhance patient care and operational efficiency.
Its specialist hospital in Al Ahsa integrates advanced health IT systems to enhance patient care and operational efficiency. He revealed that innovations such as Tesla 3 MRI for high-resolution imaging and automated systems in laboratories and pharmacies underscore its commitment to cutting-edge solutions.
“We’ve been recognized for our advanced use of health IT, with HIMSS Stage 7 Accreditation reflecting exceptionally high levels of technology adoption,” said Almoosa.
With its IPO, Almoosa Health aims to play a pivotal role in shaping the healthcare landscape of Eastern Province and beyond, meeting the growing demand for high-quality, integrated services.
Moody’s upgrades ratings for 11 Saudi banks
RIYADH: Eleven banks in Saudi Arabia have seen their long-term deposit and senior unsecured ratings upgraded by Moody’s thanks to a strong operating environment.
The ratings agency also attributed the decision – which affects institutions including Saudi National Bank, Al Rajhi Bank, Riyad Bank – to the higher capacity of the Kingdom’s government to support the banks in case of need.
Earlier in November, Moody’s changed the issuer rating of the Saudi government from Aa3 from A1 and its outlook to stable from positive.
Other banks to be affected by the latest change include Saudi Awwal Bank, Banque Saudi Fransi, and Alinma Bank, as well as Arab National Bank, Bank AlBilad, and the Saudi Investment Bank.
Bank AlJazira and Gulf International Bank — Saudi Arabia also saw changes.
The agency also changed the outlook to stable from positive on the long-term deposit ratings of all the banks except for Al Rajhi Bank, which already held that rating.
“Credit conditions for banks in Saudi Arabia are improving as economic diversification momentum remains robust,” said Moody’s in a press release, adding: “We expect non-hydrocarbon private sector GDP to continue expanding by about 4-5 percent in the coming years – among the highest in the Gulf Cooperation Council region and an indication of continued progress in diversification that will reduce the Kingdom’s exposure to oil market developments and long-term carbon transition over time.”
The agency also announced it had upgraded the Baseline Credit Assessments of Saudi National Bank, Saudi Awwal Bank, and Gulf International Bank — Saudi Arabia, and affirmed the BCAs of the remaining eight banks.
The continued increase in employment in the Kingdom, including the growing participation of women in the workforce, will support demand for banking services, according to Moody’s.
“In this context, we expect credit growth in the banking system to remain robust, particularly to high quality borrowers related to the execution of the giga-projects, which will in turn support asset quality and profitability for all banks across the system, albeit to varying degrees,” said the report.
When it came to the likelihood of government support, Moody’s changed its assessment to “very high” from “high” for Alinma Bank, Bank AlBilad, the Saudi Investment Bank and Bank AlJazira.
The report said this shift “reflects the vital role the banking system plays in supporting the diversification agenda.”
It added: “The government’s economic diversification plan continues to progress and will, over time, further reduce Saudi Arabia’s exposure to oil market developments. Additionally, the stability and resiliency of the banking system support investor confidence, private domestic or foreign investment which is critical to government’s diversification plan and in our view increases the likelihood for government support in case needed.”
In its analysis of Saudi National Bank – the largest such institution across the GCC region – Moody’s said its balance sheet is well diversified across retail, corporate and treasury and underpins its strong and improving asset quality with nonperforming loans to gross loans at 1.6 percent as of September.
“The bank’s liquid buffers remain healthy and sufficient to moderate concentration risk on government deposits which is a common feature for all banks in Saudi,” the report added.
Regarding the decision to affirm Al Rajhi Bank’s BCA at a3, Moody’s said this “reflects the bank’s dominant domestic Islamic retail franchise and our expectation that the improved operating conditions will support in maintaining the bank’s financial performance.”
