RIYADH: The “green room” at the Future Investment Initiative in Riyadh is an inappropriate name.
Like the rest of the King Abdulaziz International Conference Center, next to the five-star Ritz Carlton Hotel, the areas reserved for the elite speakers at the adjacent plenary hall is a melange of white marble, gold and the rich browns of teak and mahogany, with plenty of sparkling crystal in evidence too. Anything but green, really.
Last Thursday morning, Mohammed Al-Tuwaijri entered the room with weighty matters on his mind. The minister of economy and planning for Saudi Arabia was the top billing on a panel of luminaries from Jordan, Russia and Britain, considering the question: “Which model for privatization will prevail?”
Al-Tuwaijri, who got the top job in the Kingdom’s economic policy-making apparatus last year in a government reshuffle, is well able to give an expert view on that issue. A lifetime investment banker with experience at some of the biggest global banks in the world, he has been privy to many of the biggest corporate deals in the Middle East and elsewhere. Privatization is, and always has been, a subject on which the investment bankers have particular expertise.
In the green room, he was confident and composed, and declared himself willing to answer virtually any question on a subject crucial to the success of the Kingdom’s Vision 2030 strategy.
You might argue that privatization is at the heart of the strategy. The Vision’s architects recognized that the Kingdom’s essential challenge was to move away from dependence on the government-owned energy sector, and to increase the portion of the economy driven by the private sector. For an economy like Saudi Arabia, with its history of reliance on the public sector to spur economic growth, that is a big challenge.
As an economic policy, privatization has a fairly recent origin. The British prime minister Margaret Thatcher kicked off the modern version in the 1980s with a strategy to sell shares in government-owned companies, including the telecommunications, aviation and energy sectors, and found imitators around the world.
After the end of Communism in 1990, a tsunami of privatization washed over the former Soviet economies. The post-Soviet privatization model certainly ended state ownership of the economy, but also led to abuses and a concentration of economic power in a few hands — the beginning of the Russian “oligarchy.”
China, meanwhile, was undergoing a form of privatization that provided another possible model for encouragement of private enterprise, but all within the context of a centrally commanded structure that ultimately retained state control of business.
On the plenary stage, Al-Tuwaijri showed that he was acutely aware of the variety of models on offer for a would-be privatizer, but also conscious of the need to fit them to the Saudi context. “We look for our own model. We literally mapped the world, historically and geographically. So there is the good, the bad and the ugly experiences of the past.
“Ultimately we look at it from the point of view of what investors really want. They like to see a stable macro economy, growth, developing labor markets, accessible capital markets, transparency, firmness and quality assets. The government is committed to do these things, which are the big guidelines we are adopting here in Saudi Arabia. We also checked with all government entities and Vision 2030 programs, to make sure that in terms of execution and the time to come to market we are also aligned,” he added.
Alignment means ensuring that the interests of government, citizens and investors are synchronized and coordinated, he said, and gave the example of the housing industry, where Saudi Arabia has big plans to build more units for citizens under private auspices, but which also has implications for power and water generation businesses, as well as the financial investors in the projects. A “center of excellence” has been established in the Kingdom to co-ordinate these policies.
So, the broad principles of the privatization plan have been mapped out. But privatization means different things to different people, and can take a variety of forms.
It can occur in the form of the sale of shares to the general public and investing institutions via initial public offering (IPO) on stock markets; or via partnerships between the public sector and private enterprises on the provision of services previously run by the government, the so-called PPP option; or it can take the form of asset sales to private companies, domestic or foreign, by state-owned organizations.
These are complex concepts. Does Al-Tuwaijri believe that Saudi investors are capable of understanding the processes involved?
“A lot of effort has been dedicated to educating the people about privatization — what are the benefits, what it means, what are the processes, the levels of expectations and engagement. Generally, we agreed that the more governance, transparency and top advisers, the better,” he said.
“I think Saudi investors are ready for privatization. We have a history of privatizing state companies going back to the 1970s, in telecommunications, banking and mining. Our private sector is mature enough, strong enough, to understand privatization, but it is not just the domestic market we need to address. The whole world is interested in Saudi Arabia, and we have many potential investors from Asia and Europe interested in our privatizations,” he added.
Some international observers have expressed their frustration that the program of state sales has not yet got underway, more than two years after the Vision 2030 strategy was announced. Al-Tuwaijri was cautious in his response.
“We spoke about market conditions, and in Saudi Arabia we needed to bring the economy back into sustainable growth. That has been achieved now. There was also a need to have a legal structure for privatization, and to develop labor policies. Privatization has a great many implications for labor practices.
And of course the capital markets had to be ready, with the emerging markets status in prospect.
“Could we press a button on some of these assets today? The answer is yes. Are we being optimal if we pressed the button today? Maybe not,” he said.
Nonetheless, there is a shortlist of assets that are at the head of the pipeline for sale between now and the end of the first quarter of 2019. Al-Tuwaijri identified assets in the grain and silo business, in education, health care and in the desalinization industry that were all ready to come to market in that time frame.
Some time ago, Al-Tuwaijri gave an estimate of $200 billion of the total value of the Saudi privatization plan, excluding the $100 billion target from an IPO of Saudi Aramco. He said that was still achievable, depending on what is included in the sell-off portfolio and the state of global markets.
“You have to look at whether you include the Public Investment Fund assets within that or not. Do we include the ‘opportunity discovery,’ which is not today immediately in the program? We’re talking to some of the government entities, the payments systems in the Saudi Arabian Monetary Authority, some of the assets the Ministry of Finance hold. These are also ongoing opportunities that may be very attractive to the private sector,” he said.
So far in the panel discussion the biggest issue in the privatization universe had not been approached: The IPO of Saudi Aramco.
“The company (Aramco) is absolutely ready, in terms of financial statements, to the best global standards and requirements of global listing venues,” Al-Tuwaijri said, adding that the forthcoming acquisition of Saudi Basic Industries Corporation (SABIC) and “potentially other” deals would enhance the Aramco growth strategy.
“But it goes back to the question of alignment. The government has all the right in the world to time that IPO so that it is optimal in terms of value and shareholder benefit,” he said.
Saudi Minister of Economy and Planning Mohammed Al-Tuwaijri: ‘The whole world is interested in Saudi Arabia’
Saudi Minister of Economy and Planning Mohammed Al-Tuwaijri: ‘The whole world is interested in Saudi Arabia’
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- For an economy like Saudi Arabia, with its history of reliance on the public sector to spur economic growth, that is a big challenge
- Saudi investors are ready for privatization
Saudi Arabia opens first phase of Sports Boulevard
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JEDDAH: Saudi Arabia has opened the first phase of Sports Boulevard, marking a major milestone in Riyadh’s transformation into a global athletics and lifestyle destination.
The project, led by the Sports Boulevard Foundation, is now 40 percent complete, with 83 km of the route set to be accessible to visitors starting Feb. 27, according to the Saudi Press Agency.
Chaired by Crown Prince Mohammed bin Salman, the board of directors of the SBF announced the launch of the phase, which includes five key destinations: Wadi Hanifah, the Promenade, a section at the intersection of Prince Mohammed bin Salman bin Abdulaziz Rd. and Prince Turki bin Abdulaziz Al-Awwal Rd., as well as the Princess Nourah bint Abdulrahman University internal loop, and the first phase of Sands Sports Park.
The initiative, launched by King Salman in March 2019, aligns with the country’s Quality-of-Life Program, outlined in Saudi Vision 2030, by creating greener, more sustainable cities that encourage participation in activities like walking, cycling, and horse riding. It also aims to transform Riyadh into one of the world’s most livable cities by blending sports with cultural, artistic, and environmental opportunities.
The Sports Boulevard, closely overseen by the crown prince, stretches across Riyadh, connecting Wadi Hanifa in the west to Wadi Al-Sulai in the east via Prince Mohammed bin Salman Road.
At over 135 km in length, it will become the world’s largest linear park. The project includes pathways for pedestrians, cyclists, and amateur athletes, as well as horse trails and various other sports facilities.
The urban facades follow the distinctive design guidelines outlined in the Sports Boulevard’s design code.
The first completed destination of the project, Wadi Hanifah, is located in western Riyadh. Stretching 13.4 km, it runs from Al-Olab Dam in the north to Jeddah Road in the south, passing through the Diriyah Gate project.
Wadi Hanifah features pedestrian pathways, cycling and equestrian trails, green spaces, and designated rest areas. A key feature is the Cycling Bridge, which connects Wadi Hanifah to the Promenade.
Located at the intersection of King Khalid Road and Prince Mohammed bin Salman Road, the bridge offers two distinct paths: a 1 km pedestrian walkway and a 771-meter cycling track.
The Promenade spans 4 km and follows the Sports Boulevard’s urban design code, which draws inspiration from Salmani architecture. It features dedicated cycling paths for both professionals and amateurs, expansive green spaces, water features, walking trails, children’s playgrounds, and a variety of retail outlets.
At the intersection of Prince Mohammed bin Salman bin Abdulaziz Road and Prince Turki bin Abdulaziz Al-Awwal Road, a 300-meter area features the Arts Tower — an installation inspired by the high-voltage electricity towers that once lined Prince Mohammed bin Salman Road. The figure’s geometric panels reflect sunlight, creating reflections, and serving as a distinctive landmark and focal point for visitors.
The Sands Sports Park, the fifth completed destination in the first phase, is located southeast of King Khalid International Airport. It offers dedicated cycling paths, mountain bike trails, BMX tracks, and scenic hiking and equestrian trails.
At its core is the Najdi Flower, a signature 45-km cycling route for professionals. Over 350,000 sq. meters of sand dunes have been rehabilitated to enhance the park’s natural landscape.
The park also features retail outlets and specialized centers for bicycle rentals and accessories. Future phases will introduce additional sports facilities and buildings, further enhancing the visitor experience.
The news agency reported that the SBF had previously opened the Prince Turki bin Abdulaziz Al-Awwal Road Underpass to improve traffic flow and mobility in Riyadh. Construction is also ongoing at other project destinations, including those beyond the Promenade, the Urban Wadi Destination, the King Abdulaziz Road Underpass, and the Abi Bakr Al-Siddiq Road Underpass.
SPA concluded that these developments are progressing according to the approved project schedule.
As part of the broader Sports Boulevard project, the SBF announced in December it had launched a SR3.5 billion ($933 million) real estate investment fund to develop Urban Wadi High Rises, spanning 40,000 sq. meters with a gross floor area exceeding 207,000 sq. meters.
SBF signed agreements with Riyadh Development Co., Turkiye’s FTG Development, and Jadwa Investment to establish the fund, which aims to transform Riyadh’s urban landscape.
Closing Bell: Saudi main index slips to 12,233 amid mixed market performance
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RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Wednesday, losing 68.58 points, or 0.56 percent, to close at 12,232.65.
The total trading turnover of the benchmark index was SR5.80 billion ($1.54 billion), as 95 stocks advanced, while 141 retreated.
The MSCI Tadawul Index also decreased by 10.34 points, or 0.67 percent, to close at 1,532.52.
Nomu, the Kingdom’s parallel market, rose, gaining 13.50 points, or 0.04 percent, to close at 31,286.23. This comes as 43 stocks advanced, while 33 retreated.
The best-performing stock was CHUBB Arabia Cooperative Insurance Co., with its share price surging by 10 percent to SR47.85.
Other top performers included Naseej International Trading Co., which saw its share price rise by 9.64 percent to SR104.60, and East Pipes Integrated Co. for Industry which saw a 4.11 percent increase to SR162.
Saudi Telecom Co. was also among the top performers with a 3.58 percent increase to reach SR46.30. Jamjoom Pharmaceuticals Factory Co. also increased by 3.11 percent to reach SR172.20.
The biggest decliner of the day was Saudi Ceramic Co., with its share price dropping 5.29 percent to SR28.65.
Yanbu National Petrochemical Co. fell 4.21 percent to SR35.25, while Saudi Industrial Investment Group dropped 3.33 percent to SR17.42.
Arriyadh Development Co. dropped 3.23 percent to SR33, while Saudia Dairy and Foodstuff Co. declined 3.03 percent to SR306.80.
On the announcements front, Almoosa Health Co. reported a 22.8 percent year-on-year revenue growth in 2024, reaching SR1.20 billion, driven by increased patient volume, higher outpatient revenue, an expanded specialty mix, and a strategic focus on high-end tertiary care.
The company’s fourth quarter revenue rose 21.7 percent year on year, reflecting strong performance across all segments.
Almoosa Health maintained profitability despite rising costs, with the cost of revenue increasing by 23.6 percent for 2024 and 25 percent in fourth quarter due to business expansion and increased patient volumes.
Almoosa Health Co.’s share price dropped 1.12 percent on Wednesday to settle at SR159.20.
In other financial disclosures, stc reported key financial highlights for 2024, with revenues reaching SR75.9 billion, a 5.7 percent increase from 2023.
The company’s net profit surged 85.7 percent to SR24.7 billion in 2024. It also announced a fourth-quarter dividend distribution of SR0.55 per share, in line with its approved dividend policy, along with an additional cash dividend of SR2 per share.
Rasan Information Technology Co. reported strong financial results for the fiscal year 2024, with revenue increasing 39.8 percent year on year to SR358.3 million, up from SR256.2 million in the previous year.
The company attributed this growth to a 25 percent rise in insurance policy sales, particularly in medical insurance, which saw a 69 percent increase despite a decline in average written premiums.
Additionally, the launch of new products, expanded cross-selling initiatives, and a strengthened network of strategic partners contributed to revenue growth.
Its net profit for 2024 more than doubled, increasing 106.2 percent to SR94.7 million, compared to SR46.0 million in 2023.
The company credited this profit growth to an 8.6 percentage point increase in gross profit margin, which reached 66.5 percent in 2024.
Rasan’s share price dropped by 0.91 percent on Wednesday to settle at SR87.
Halwani Bros. Co. reported a 9.8 percent year-on-year increase in revenue for 2024, reaching SR969.1 million, compared to SR882.7 million in the previous year.
The company attributed this growth to higher sales in Saudi Arabia, increased export sales, and geographical expansion through enhanced sales channels and restructuring of the sales department.
Its net profit rebounded significantly, reaching SR44.7 million, compared to a net loss of SR98 million in 2023.
The company credited this turnaround to higher domestic and export sales, a better sales mix, reduced selling and administrative expenses, and a SR5.4 million boost from the reversal of certain provisions.
Halwani Bros. Co.’s share price dropped 0.18 percent on Wednesday to settle at SR56.60.
First use of sustainable aviation fuel in Saudi Arabia to be at Red Sea International Airport
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RIYADH: Sustainable aviation fuel will be used in Saudi Arabia for the first time after a deal was struck for airplanes using Red Sea International Airport.
An agreement between Red Sea Global, daa International, and Arabian Petroleum Supply Co. will see the airport supplied with a 35 percent SAF blend, cutting direct aircraft emissions by up to 35 percent.
The deal marks a significant step in reducing aviation-related carbon emissions in the Kingdom, according to a press release.
This aligns with the company’s goal to power all operations at the Red Sea with renewable energy. It has already installed over solar panels capable of producing 400 megawatts, which is expected to offset up to 600,000 tonnes of carbon dioxide equivalent annually.
John Pagano, Group CEO of Red Sea Global, said that by introducing SAF to the Kingdom, the company is significantly reducing guests’ personal carbon footprints from the moment they arrive and even after they depart.
“More than this, we’re supporting the wider aviation sector to start making choices that are better for the environment,” he added.
SAF is a lower-carbon alternative to traditional jet fuel, designed to reduce greenhouse gas lifecycle emissions. It can be produced from renewable sources, waste-derived materials, or synthesized from clean hydrogen and captured carbon dioxide.
In accordance with international standards set by the International Civil Aviation Organization and the International Air Transport Association, SAF must be blended with conventional Jet A1 fuel.
Aviation fuel significantly impacts sustainability, with the industry contributing about 2.5 percent of global carbon emissions annually.
SAFs can reduce emissions by up to 80 percent but currently account for less than 0.1 percent of jet fuel used by major US airlines.
Challenges include high production costs and limited availability, hindering widespread adoption.
“Introducing sustainable aviation fuel at Red Sea International Airport marks a significant milestone in our commitment to environmental stewardship and sustainability. This groundbreaking initiative not only reduces carbon emissions but also aligns with our broader mission to protect the Red Sea’s unique and fragile ecosystem,” said Michael White, chief commercial officer at RSI.
RSG’s commitment to sustainability extends beyond aviation fuel. Its subsidiary air operator, Fly Red Sea, will exclusively refuel its seaplane fleet with SAF and lower-carbon aviation fuel.
Additionally, RSG has committed to planting and restoring 50 million mangroves by 2030 to enhance carbon sequestration and biodiversity in collaboration with the National Center for Vegetation Cover.
The Red Sea welcomed its first guests in 2023, with five hotels now open. RSI has been receiving regular domestic flights since September 2023, and international flights began in April with a twice-weekly route to Dubai International Airport.
Upon full completion in 2030, the Red Sea will feature 50 resorts, offering up to 8,000 hotel rooms and over 1,000 residential properties, alongside marinas, golf courses, entertainment venues, and leisure facilities.
Egypt wants to move state-owned enterprises to its sovereign wealth fund, minister says
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ABU DHABI: Egypt aims to move state-owned enterprises to be managed by the country’s sovereign wealth fund, to maximize the return on state assets, Investment Minister Hassan El-Khatib said on Wednesday.
Egypt has been divesting state assets under a program to boost the role of the private sector, a requirement imposed by the International Monetary Fund for an expanded $8 billion loan.
“I want to move the state-owned enterprises in batches to the (sovereign wealth) fund to manage, to maximize the return on, say, state assets,” Khatib told the Investopia 2025 conference in Abu Dhabi.
Egypt’s $12 billion sovereign wealth fund was established in 2018 in an aim to foster private sector partnerships and help foreign investment to flow into state-owned companies. But the government and military have been hesitant to relinquish control over some assets.
However, the government has been trying expedite the program, seeking to sell stakes in at least 10 companies in 2025, including two military-owned companies.
“I see we have a lot of good companies. As we move them, get the private sector to run them, have the proper governance, partner with the private sector, list in some cases. So the perception of the sovereign wealth fund will be maximization of yield on the return value and the valuation,” Khatib added.
Saudi residential transactions up 35% over 5 years: Knight Frank report
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RIYADH: Residential transaction values in Saudi Arabia surged 35 percent over the past 5 years to reach SR164.8 billion ($43.94 billion), according to a report from Knight Frank.
The findings showed that these deals, which accounted for 61.5 percent of all real estate agreements by total value, registered a 38 percent increase in the number of sales to just under 202,661 during the same period.
This falls in line with the Kingdom’s Vision 2030 goal to reach a 70 percent homeownership rate by 2030. It also aligns well with Saudi Arabia’s commitment to supporting access to affordable, quality housing for all citizens.
“Undoubtedly, the next big area of focus for developers will be on creating new and additional sources of demand, which may soon materialize in the much-anticipated change in foreign ownership laws,” Partner and Head of Research in the Middle East and North Africa region Faisal Durrani said.
“We continue to march toward an eventual and much-anticipated easing in international ownership laws in the Kingdom. The recent change in investor rules allowing international investors to access the property markets in the Holy Cities through listed companies, announced in January, will help to begin addressing the pent-up demand from international investors hungry to access real estate markets in the Kingdom’s Holy Cities,” he added.
The study further revealed that several factors have contributed to the growth of residential real estate transactions in Saudi Arabia in recent years. In 2023, over 96,000 families benefited from the Kingdom’s Housing Program, which provides access to affordable home financing options. By the first half of 2024, another 55,000 families had gained from this initiative.
The release further revealed that despite record-high prices in cities like Riyadh, 45 percent of affluent Saudis are still eager to buy a home this year.
It also indicated that while the domestic homeownership rate is nearing the government’s 70 percent target for 2030, rising borrowing costs and escalating house prices are dampening demand.
Knight Frank’s survey, conducted with YouGov and covering 1,037 households in the Kingdom — including 100 Saudi-based expats — highlighted a reduced interest in property purchases among first-time and current homeowners.
“What we are experiencing now is an organic slowing in demand as the 70 percent home ownership target approaches and as residential values start to peak in the current cycle. The rampant house price growth across the country, too, is curbing the appetite to purchase,” Regional Partner in Strategy and Consulting in Saudi Arabia at Knight Frank, Harmen de Jong, said.
“This has been evidenced by our survey results, as among our respondents, just 33 percent plan to buy a home or upgrade their accommodation in 2025, which is down on the 40 percent figure we recorded in 2023, which underscores the success the authorities have had in boosting home ownership levels,” he added.
The analysis unveiled that first-time buyers’ demand for home purchases has decreased to 29 percent, down from 40 percent in 2023 to 84 percent in 2022.
The property firm highlighted that the government’s initiatives to increase homeownership among Saudi nationals, which reached 63.7 percent by the end of 2023, are now bringing the target of 70 percent by 2030 within close reach.
In Riyadh, apartment prices have increased by 75 percent over the past five years, while villa prices have risen by 39 percent during the same timeframe.
The high-interest-rate environment, with current levels at 5 percent compared to 1 percent in 2021, is further contributing to the growing factors reducing demand.