India-US trade talks restart with little sign of compromise

US President Donald Trump has been putting pressure on Indian Prime Minister Narendra Modi to open markets. (AFP)
Updated 12 July 2019
Follow

India-US trade talks restart with little sign of compromise

  • Trump and Modi met in Osaka on the sidelines of a G20 summit in June where they agreed to build ties between the two countries and sort out thorny trade issues

NEW DELHI: India and US trade negotiators will meet on Friday, with few signs of a compromise on a series of protectionist measures taken by the two governments in recent months that have strained ties between the strategic partners.
US President Donald Trump has been putting pressure on India to do more to open its markets, saying this week again on Twitter its high tariffs were “unacceptable.”
Indian Prime Minister Narendra Modi, re-elected in May, has been pushing nationalist policies with higher tariffs on everything from electronic goods to tighter controls on foreign firms in the fast growing e-commerce market to help foster domestic companies and create jobs for millions of youth.
A delegation led by Assistant US Trade Representative (AUSTR) for South and Central Asia, Christopher Wilson, will meet Indian officials to try and re-start negotiations on tit-for-tat tariffs that were put on hold because of India’s election.
“Since India’s election period has now passed, USTR officials are visiting India for relationship-building with Indian government counterparts,” a USTR spokesperson said.
The USTR delegation is likely to meet Commerce Minister Piyush Goyal along with key trade officials on Friday. The delegation is also likely to meet top officials at the IT ministry.
Trump and Modi met in Osaka on the sidelines of a G20 summit in June where they agreed to build ties between the two countries and sort out thorny trade issues.
At Friday’s meeting, New Delhi expects US officials to push against India’s efforts to mandate foreign firms to store more of their data locally, an Indian government official said.
Washington is also expected to seek revisions to foreign investment rules for the e-commerce sector that have forced companies such as Walmart Inc’s Flipkart and Amazon.com Inc. to rework their business strategies in the country.
“The meeting with USTR was meant to set the tone for further talks after a positive G20 discussion. But Trump’s tweet has shown their intention is to continue with a tough stance,” another official said.
India’s trade ministry did not respond to a Reuters email seeking comments on the visit.
One concern among Indian policymakers is that the Trump administration may push for a free trade agreement with India that could dent India’s competitiveness, lead to a flurry of imports and hurt Modi’s “Make in India” plan.
In a recent meeting, Foreign Minister Subrahmanyam Jaishankar told trade ministry officials that “Trump is clearly preparing for a larger game, a larger opening,” according to one of the officials aware of the discussions.


Experts highlight importance of data in capital markets at Saudi forum

Updated 18 February 2025
Follow

Experts highlight importance of data in capital markets at Saudi forum

  • Industry specialists said that real-time data availability is equally crucial for other participants

RIYADH: Accessing and interpreting data effectively is crucial for investors’ success in capital markets, as it enables them to make informed and timely decisions, according to experts. 

During a panel discussion at the Capital Markets Forum in Riyadh on Feb. 18, industry specialists said that real-time data availability is equally crucial for other participants, such as brokers, asset managers, and external institutions.

“What I believe is that data is the new alpha. So, those who master it will not only participate or win in the market, but they will define the market,” said Mehdi Miri, CEO of DirectFN. 

He added: “For investors, data is really about making smart and fast decisions. What investors need to see today is real-time AI-powered data that will help them look into insights and foresight so that they can see market opportunities before the market moves.” 

Miri further said that brokers and banks are using advanced analytics to build their trading and hedging strategies, ultimately improving their execution process. 

Yazeed Al-Domaiji, CEO of Wamid, a subsidiary of Saudi Tadawul Group, highlighted the importance of accessing data while maintaining rules and regulations. 

“Capital markets are driven by data. Data is there from more than 100 years ago. Everybody in capital markets is looking for data, using data to make decisions. As a capital market institution, it is necessary to find the balance of how we can innovate while maintaining the regulations,” said Al-Domaiji. 

He added that Wamid is aiming to play a major role in enabling the capital market industry in the Kingdom as it has announced a recent partnership with Google, with Saudi Arabia having strategic plans to adopt data and artificial intelligence in the sector.

Al-Domaiji said that Wamid is encouraging innovation in the capital market by focusing on two pillars, including data solutions and infrastructure technology. 

“In data solutions, we announced our partnership to launch our project for the data terminal. What we are planning to do is to offer a set of data that suits the demand of the market. We are focussing on satisfying the issuers, the capital market institutions, and the investors through a series of data with easier accessibility and good quality,” said Al-Domaiji. 

He added: “On the infrastructure side, we are helping the capital market to increase the access of institutional investors, especially for the HFTs (high-frequency trading). So, today, in Saudi Arabia, HFT trading is around 25 percent of the daily average trading.” 

Miri further said that data has become a strategic asset over time, and it is not just a global trend but a local and regional reality. 

“Data is a strategic asset. When we talk about monetization, data is a business in itself. This is a Spotify moment for data, where we are bringing and converging raw data into an on-demand revenue-generating machine,” added Miri. 

He said the capital market currently demands data that are not just numbers but enriched pieces of information, which should give foresight on what to do next. 

Miri also underscored the vitality of personalizing the data and integrating them into one single platform for better efficiency and quick decision-making. 

Regarding the future outlook of the importance of data in capital markets, Miri said: “Further down the road, if you have the data and if you have the liquidity, this could be the new asset class. A few decades ago, no one was thinking about carbon trading. In the future, we will be talking about data trading. Obviously, we have to balance it with data protection and regulation.” 

Underscoring the importance of datasets, Al-Domaiji added that data will become the “new currency for the capital market” in the future. 

Doug Peterson, special adviser and member of the board of directors at S&P Global, stressed the importance of data privacy and said: “The first question you have to ask from a governance standpoint is how I am going to protect my data. Do you want your data to be the one that is used in a model that is being built? Once it is there, that model is going to be using your data forever, and you are going to get paid for it.” 

He added: “I am really encouraged by what is happening in the Saudi market. We are very pleased at S&P Global to start building the local presence, because we think this is one of the most important markets in the future.” 

Katharine Furber, global head of emerging markets trading product at Bloomberg LP, said that fixed income space is seeing huge potential in the usage of data. 

“In the fixed income space, of course, it is the sell side indication, which indicates the desire to buy or sell a bond. But also trading data, and by trading data, I do not just mean what did they trade at what price. They want to build a rich story around the trade to learn as much as possible, which includes how many counterparties they asked on the trade; whether or not those counterparties responded to the trade request,” said Furber. 


ADNOC Drilling eyes $1bn in investments, Gulf expansion plans

Updated 18 February 2025
Follow

ADNOC Drilling eyes $1bn in investments, Gulf expansion plans

RIYADH: UAE’s ADNOC Drilling is projecting significant growth, expecting over $1 billion in investments for 2025. The company also has plans to expand its operations into Oman and Kuwait, an official revealed.

In an interview with Arab News at the Capital Markets Forum, Youssef Salem, the company’s chief financial officer, discussed the expansion strategy, emphasizing the confidence ADNOC Drilling has in the long-term, robust plans of operating companies in these countries.

“For example, Kuwait Oil Co. is going to 4 million barrels of production capacity of oil per day, also launching for the first time their offshore operations. Similarly with Oman, a lot of tenders for new rigs to upgrade their drilling field,” he explained.

Salem shared that the firm’s expansion into these Gulf nations, along with its existing operations in Jordan, is based on establishing strong relationships with local operators. ADNOC Drilling has already pre-qualified with these entities and is focusing on organic growth through partnerships and joint ventures with established regional companies.

Regarding the financial impact of the investments, Salem noted that Kuwait is currently a large market with plans to expand to 200 rigs, while Oman is also growing its market to 100 rigs. “So, these two markets combined are almost three times the size of the UAE rig market, and hence, we see it as a very substantial opportunity,” he added.

Salem pointed out the ongoing shift in ADNOC Drilling’s revenue sources. “Today, if you look in general, the vast majority of our revenues come from the UAE. That is something that is evolving. For example, on the Enersol side, which is our global investment, we expect by next year to have around 7 percent of our net income to come from these global operations.”

The CFO elaborated on the company’s anticipated growth in 2025, with expectations of the onshore segment potentially crossing $2 billion, the offshore segment reaching over $1.4 billion, and oil field services surpassing $1.2 billion—an approximate 50 percent year-on-year growth.

“So, in 2025, we are expecting the onshore to potentially cross $2 billion, the offshore to cross $1.4 billion, and the oil field services to cross $1.2 billion, another almost 50 percent year-on-year growth,” Salem said.

He also revealed that the company plans to invest more than $1 billion in 2025.

“Out of that, $350 million to $550 million will be in additional rigs and oil field service equipment inside the UAE on our roadmap to reach 151 rigs by 2028,” he said.

Additionally, ADNOC Drilling is allocating $700 million to Enersol, its joint venture with Alpha Dubai, which focuses on investing in global energy technology companies, especially those involved in artificial intelligence.

Salem also highlighted the company’s recent acquisitions, noting that ADNOC Drilling completed four acquisitions worth $800 million in the previous year and plans further acquisitions totaling $700 million in 2025.

Discussing the company’s 2024 results, which reached a record revenue of $4 billion, Salem stated: “The onshore segment generated $1.9 billion of revenues from 95 land rigs, which is the largest drilling feed on the onshore side in the Middle East and North Africa. Similarly, the offshore segment generated $1.3 billion of revenue from 47 offshore rigs. Again, the largest, and then the oil field services, which is our fastest-growing segment, growing more than 100 percent year on year.” He also added that the oil field services segment generated $100 million in the fourth quarter and expects further growth in each segment in the upcoming year.

Regarding the forum’s agenda, Salem mentioned: “Tomorrow and the day after, we have two full days of investor meetings. Saudi investors obviously are a very key part of our shareholder register, but also, you have a lot of global investors who are flying into the forum to attend.”

He emphasized that the forum presents a valuable opportunity to engage with global investors.

Salem also spoke about ADNOC Drilling’s stock, saying it is the most covered in the UAE, with 18 analysts tracking it, and holds the highest number of buy recommendations in the Middle East, with 15 advisers endorsing it.

He acknowledged the increasing significance of Saudi Arabia’s financial sector, highlighting that the Kingdom hosts leading banks and noted that Tadawul is recognized for its liquidity and market activity, supported by a robust ecosystem of market makers, brokers, analysts, and investors.

“Similarly, on the Abu Dhabi exchange side in the UAE, one of the fastest growing exchanges across the trillion dollars of market capitalization between the Abu Dhabi exchange and the Dubai financial market,” Salem said, describing the event as the “biggest capital market in the world,” a collaborative gathering where regional exchanges unite.

On ADNOC Drilling’s operations in Saudi Arabia, Salem expressed the company’s deep commitment to its operations in the Kingdom. He explained that ADNOC Drilling operates multiple subsidiaries in close collaboration with Saudi Aramco, such as EV, a subsidiary from Enersol offering smart cameras for 3D visualization beneath wells. He also mentioned NTS, a manufacturing business with a significant facility in Dammam, employing over 100 people to manufacture drilling and service equipment for companies like Schlumberger, Halliburton, and Baker Hughes.

“For us, Saudi Arabia continues to be very strategic for our actual underlying operation, and we continue to find ways to build even deeper relationships,” Salem affirmed.

Regarding a potential dual listing on the Saudi Exchange, Salem shared that the company’s current focus is primarily on the Abu Dhabi Exchange, where they already enjoy significant liquidity, with over $20 million traded daily.

“We have the benefit of having a very liquid stock trading more than $20 million a day. Saudi investors are able to invest on the Abu Dhabi Exchange. We have a lot of the major Saudi sovereign wealth funds, pension funds, asset managers able to invest from here,” he said.

He added: “We do not see any technical limitation to their ability to invest, and we think we can continue to grow the Saudi investor base even more in ADNOC Drilling on the Abu Dhabi exchange.”


Derayah Financial surpasses market growth in Saudi brokerage, asset management, CEO says 

Updated 18 February 2025
Follow

Derayah Financial surpasses market growth in Saudi brokerage, asset management, CEO says 

RIYADH: Saudi investment firm Derayah Financial saw its assets under management soar to SR17 billion ($4.53 billion) in 2024 as it outpaced growth across the sector in the Kingdom, according to its CEO.

Speaking to Arab News at the Capital Markets Forum 2025, Mohammad Al-Shammasi revealed that this rise to a 70 percent year-on-year growth, ranking the company among the top independent firms in Saudi brokerage revenues, with the third-largest market share. 

Saudi Arabia’s asset management industry was set for growth in the second half of 2024 and into 2025, with AUM increasing 13.5 percent year over year to exceed $250 billion by mid-2024, according to a Fitch Ratings report released in October.

The Kingdom has the largest asset management industry in the Gulf Cooperation Council, the fifth-largest in the Organisation of Islamic Cooperation, and the second-largest public Islamic funds market globally. 

“The overall size of the market is actually growing at a very decent growth rate. So, if you look at retail brokerage or digital brokerage, it is historically growing at a 9 percent CAGR year after year,” he said, adding: “On the asset management side, that has been growing at around 14 percent year after year.” 

Oversubscribed IPO 

Al-Shammasi also discussed Derayah’s recent initial public offering, which was 162 times oversubscribed, underscoring the firm’s strong market position. “This is a great testament to the company’s performance over the past few years,” he said. 

Founded 17 years ago as a digital challenger in capital markets, Derayah has grown into Saudi Arabia’s third-largest brokerage on of the the largest independent brokers in the region. 

The IPO allows shareholders to sell 20 percent of the company’s shares in a secondary transaction, with 90 percent allocated to corporates and institutions and 10 percent to retail investors. 

“We think this will give us huge credibility in the market,” Al-Shammasi said, adding that the transaction could also pave the way for more fintech companies to list on the Saudi stock exchange. 

The CEO emphasized the strong demand for Derayah’s IPO from investors across Asia, Europe, and the US. “We have seen investors from all over the world submitting bids for our IPO,” he noted. 

Al-Shammasi further assured that Derayah is well-funded for the near future, with a debt-free balance sheet and a track record of generous dividend distributions. “The company does not really need any capital in the near term to continue its strategy and growth plans,” he said. 

“We have a perfect environment to raise money here in the Kingdom, and I’m more than happy to tap the market if we need it,” Al-Shammasi added. 

The CEO also revealed that Derayah has partnered with Alpaca, a significant player in international brokerage, to cater to the growing local fintech sector. The partnership aims to provide fintechs in Saudi Arabia with a localized version of Alpaca’s services while facilitating international investors’ access to the Saudi market. 

“Alpaca operates a lot of brokerage houses, and we believe this partnership will pave the way for international investors to come and trade in the local market,” he explained. 

The Capital Markets Forum 2025, hosted by Saudi Tadawul Group, aims to bring together policymakers, business leaders, and industry experts to discuss trends shaping the Kingdom’s capital markets and position Saudi Arabia as a key player in the global financial ecosystem. 


Muqassa partners with FIS to enhance trade automation and expand clearing services 

Updated 10 min 53 sec ago
Follow

Muqassa partners with FIS to enhance trade automation and expand clearing services 

RIYADH: Saudi clearinghouse Muqassa has announced a partnership with Fidelity Information Services Global to enhance trade automation for market participants. 

In an interview with Arab News during the Capital Markets Forum in Riyadh, Wael Al-Hazzani, Muqassa’s CEO, stated that the collaboration marks a significant step in expanding the firm’s services and improving operational efficiency within the Kingdom’s financial markets. 

“Today we announced our collaboration with FIS, one of the biggest technology providers, to facilitate automation for market participants,” said Al-Hazzani, adding: “This will be part of our solution, hopefully in the second half of this year.” 

The CEO emphasized that while FIS is the first provider, Muqassa intends to partner with additional technology firms. 

“FIS is a big player in this field, and international market participants use it heavily. We are complementing our offering to reach clients familiar with FIS, but this won’t be the last partnership — we will announce others soon,” he said.

 Muqassa, which plays a central role in clearing exchange-traded products and providing risk management, is also expanding its services to the over-the-counter market. 

“Currently, we clear repo transactions traded OTC (over-the-counter), and next in the pipeline are OTC interest rate derivatives,” Al-Hazzani said, adding: “We aim to launch this service in 2025, pending regulatory alignment and technology testing.” 

In addition to enhancing clearing services, Muqassa is advancing its role in the Kingdom’s fixed-income market. The company has increased the number of government sukuk eligible as collateral for clearing members. 

“Previously, only cash was accepted as collateral. Now, all government sukuk can be included in the collateral basket,” Al-Hazzani said.

“This provides relief to clearing members, allowing them to use part of their balance sheet sitting in sukuk instead of cash,” he continued.

Currently, up to 20 percent of a clearing member’s collateral pool can consist of government sukuk, but Muqassa plans to expand this as market liquidity improves. “As the market matures, we are interested in increasing the weight of acceptable sukuk for collateral,” Al-Hazzan added. 

Looking ahead, Muqassa is prepared to accept a broader range of securities as collateral, provided they meet liquidity requirements. 

“By rules and by technology, we are ready to accept any type of security as collateral,” Al-Hazzani said, going on to say: “The key prerequisite is liquidity— there must always be a buyer in the market in case liquidation is needed. As we grow, we will gradually expand the eligible basket of collateral to include equities, bonds, and stocks.” 

While Muqassa’s immediate focus remains on the Saudi market, it has long-term plans to expand regionally. 

“We are still a young company with many initiatives ahead, but our next step will be to explore markets in the GCC and beyond,” Al-Hazzani said.

Muqassa was established as part of Saudi Arabia’s Financial Sector Development Program to enhance market efficiency and attract global investors.

By centralizing counterparty risk management and aligning with global clearing standards, Muqassa aims to support the continued evolution of the Saudi financial market.


Saudi Exchange eyes 50 IPOs as market maturity grows, says top official 

Updated 18 February 2025
Follow

Saudi Exchange eyes 50 IPOs as market maturity grows, says top official 

RIYADH: Saudi Arabia’s stock exchange has a robust pipeline of 50 initial public offerings, a sign of growing confidence in the Kingdom’s capital market, according to a top official. 

Lee Hodgkinson, group chief strategy officer at Saudi Tadawul Group, said the increasing number of private sector listings underscores the maturity of the country’s financial ecosystem. 

The assessment aligns with professional services firm EY, which expects Saudi Arabia to lead IPO activity in the Middle East and North Africa this year. 

“There are more than 50 prospective IPOs registered at the CMA (Capital Market Authority). That is a very healthy pipeline. I’m sure a pipeline that is envied by many of our exchange peers around the world,” Hodgkinson told Arab News on the sidelines of the Capital Markets Forum in Riyadh. 

“The conventional wisdom is almost all of that pipeline must be government-related companies. Actually no, it is the private entities that are coming to market, which I think is a sign of real maturity of the capital markets in the Kingdom,” he added. 

Capital market growth

Saudi Arabia’s capital market is on a steady growth trajectory, with strong momentum expected through 2030, Hodgkinson said. 

“The economic drive in the Kingdom, it’s really quite astonishing, particularly relevant to the rest of the world. So, it really is boom time, and it long might continue,” Hodgkinson noted. 

The executive highlighted the Kingdom’s debt market as a future area of success, driven by ongoing regulatory reforms. 

“If you look at CMA strategy, if you look at the financial services development plan and the whole ecosystem drive, I feel very confident that we’ll see a very powerful debt market really emerging in Saudi Arabia in the coming years,” he said. 

Tadawul Group is working toward establishing Saudi Arabia as a global financial hub bridging the East and the West. As part of this strategy, the exchange is expanding its investor base, particularly among qualified financial investors. 

“We’re looking to internationalize, institutionalize and electronify the business,” he said, adding that three years ago, around 8 to 9 percent of institutional electronic flow came from overseas, which he described as “not a particularly large number of QFIs.” 

Hodgkinson pointed out that today, that volume accounts for 25 percent of the market and noted that they now have over 4,000 QFIs. “The growth of international investors and eyeballs on the Saudi market has exploded,” he added. 

Commodities market expansion

Saudi Tadawul Group is also pushing into the commodities sector, particularly through its investment in the Gulf Mercantile Exchange, formerly the Dubai Mercantile Exchange. 

“The contracts at the moment are about Omani crude oil — it’s the third-largest physically delivered oil contract in the world, mainly attracting clients east of Suez, China and India. We would be driving growth in those products with our partners,” Hodgkinson said. 

Tadawul is also looking to expand into metals, mining, and agriculture — key industries in Saudi Arabia’s economic transformation under Vision 2030. 

“Real economy actors have a lot of risks — production risks, pricing risks, marketing risks. Commodity hedging to us can be very valuable,” Hodgkinson noted. 

He stressed the need for regional benchmarks in commodities pricing, particularly for metals and mining. 

“Saudi Arabia is becoming a very important player in the metals world. I think 20 percent of steel is being imported into Saudi Arabia for construction. And the issue for me is, why should those products be priced overseas?” 

“The South-South connectivity from markets like Brazil, China, and India with Saudi is growing. Why shouldn’t we have products that serve those markets rather than having to price everything in London or New York?” 

Strategic acquisitions

Tadawul Group has been expanding its regional footprint, including a 32.6 percent stake acquisition in GMEX and a 49 percent stake purchase in Direct Financial Network Co. through its subsidiary Tadawul Advanced Solutions Co. 

The GMEX deal makes Saudi Arabia the only G20 nation with a dedicated commodities exchange. “It was a very, very important strategic move for us,” Hodgkinson said. 

The DirectFN acquisition, meanwhile, enhances Tadawul’s technology capabilities and expands its fintech presence in Saudi Arabia and the broader Middle East and North Africa region. 

“It gives us a highly effective and cost-effective technology development center in Sri Lanka. It builds our presence in the Saudi market in the fintech arena. It starts to give us technology and client relationships in other countries in the MENA region,” he added.