South Africa, Saudi Arabia seek to boost trade following pandemic dip
Saudi South African Business Council pledges to boost cooperation in infrastructure development, agriculture, mining and energy, tourism
Updated 17 September 2021
DEEMA AL-KHUDAIR
JEDDAH: South Africa and Saudi Arabia are looking to boost trade between the two countries following a pandemic-hit year that saw imports from the Kingdom fall to a four-year low in 2020.
South African imports from Saudi Arabia slid to $2.69 billion in 2020 from $3.66 billion in 2019 and $5.41 billion in 2018, according to data from the UN Comtrade database. The vast majority of that was made up of oil and fuels ($2.27 billion or 84 percent in 2020), followed by fertilizers at $145.3 million and plastics at $124.5 million.
South Africa imports approximately 40 percent of its oil from Saudi Arabia, according to the EIA.
Far fewer goods went the other way, with Saudi Arabia importing $347.8 million from South Africa last year, down from $423.8 million in 2019 and $423.0 million in 2018.
The Saudi South African Business Council under the umbrella of the Federation of Saudi Chambers, held the Saudi South African business webinar on Thursday, co-organized with the Johannesburg Chamber of Commerce.
The two countries have committed to strengthen their ties by working more closely in sectors such as infrastructure development, agriculture, mining and energy, tourism, and other areas.
“Despite the progress in our relations, we look forward to expanding the scope of our cooperation with South Africa in line with our respective capabilities,” said Chairman of the Saudi-South African Business Council Hisham Al-Amoudi. “The Saudi market has the capacity to host more South African investments, namely in mining, health care, small to medium enterprises (SMEs), agriculture and information technology, among others.”
Al-Amoudi said that a number of measures must be taken to achieve this, including activating the agreements and memorandum of understanding (MOUs) signed between the two countries, increasing activities of the Saudi South African Business Council, “developing programs that support our goals, and enhancing our overall dialogue on topics of mutual interest.”
South African President Cyril Ramaphosa made a state visit to the Kingdom in 2018 to meet King Salman and the Crown Prince Mohammed bin Salman to assess relations, focusing primarily on strengthening economic linkages between South Africa and Saudi Arabia.
Saudi Arabia and South Africa are both G20 countries, and the Crown Prince has met with the South African President on the sidelines of the G20 Summit in Argentina.
“Saudi Arabia is also a large investor in South Africa, especially in the area of renewable energy,” said Al-Amoudi.
“We seek to work with our South African friends to facilitate the access of Saudi products to the South African market, and enhance the Saudi-South African balance of trade,” he said. “I hope that these initiatives will elevate a strong relation to a higher level,” he added.
Saudi Arabia standardizes USB Type-C charging ports for electronic devices
Updated 7 sec ago
Reem Walid
RIYADH: As part of an initiative to improve user experience and reduce electronic waste, Saudi Arabia will adopt a unified charging standard for electronic devices, mandating USB Type-C ports. The new regulation, which took effect on Jan. 1, follows a decision by the Communications and Space Technology Commission in partnership with the Saudi Standards, Metrology, and Quality Organization.
The goal of this unification is to streamline charging and data transfer technology across the Kingdom, ensuring higher-quality technical products and enhancing consumer convenience.
CST and SASO have estimated that the new policy will reduce the local demand for various types of charging ports by over 2.2 million units each year. It will also save consumers more than SR170 million ($45.2 million) annually and support the Kingdom’s sustainability goals by cutting electronic waste by nearly 15 tonnes per year.
The first mandatory phase includes mobile phones, tablets, digital cameras, e-readers, portable video game consoles, headphones, earphones, loudspeakers, keyboards, computer mice, portable navigation systems, and wireless routers. A second phase, beginning on April 1, will expand the mandate to include laptop computers.
Aramco raises diesel prices in Saudi Arabia to $0.44 per liter
Updated 01 January 2025
Nirmal Narayanan
RIYADH: Saudi Aramco has increased diesel prices in Saudi Arabia to SR1.66 ($0.44) per liter, effective Jan. 1, 2025, marking a 44.3 percent rise compared to the start of 2024.
According to the latest update on Aramco’s website, the company has kept gasoline prices unchanged, with Gasoline 91 priced at SR2.18 per liter and Gasoline 93 at SR2.33 per liter.
The annual review of diesel prices is part of Aramco’s pricing mechanism, implemented in 2022. This year marks the fourth review under the system. In January 2024, the Kingdom raised diesel prices to SR1.15 from SR0.75 per liter, continuing its gradual adjustments.
Despite the hike, diesel prices in Saudi Arabia remain lower than those in many neighboring Arab countries. In the UAE and Qatar, a liter of diesel is priced at $0.73 and $0.56, respectively, while in Bahrain and Kuwait, it costs $0.42 and $0.39 per liter.
Aramco’s website also lists the current price of kerosene at SR1.33 per liter and LPG at SR1.04 per liter.
On Dec. 31, Aramco announced reductions in the official selling prices for propane and butane for January 2025. The price of propane was reduced by $10 per ton, while butane saw a $15 per ton cut compared to the previous month.
Aramco’s OSPs for LPG are key benchmarks for contracts supplying the product from the Middle East to the Asia-Pacific region.
Additionally, the energy giant reduced pricing for its Arab Light crude oil for Asian buyers in January 2025. The OSP for Arab Light was cut by 80 cents, bringing it to $0.90 per barrel above the regional benchmark. Arab Extra Light and Super Light grades saw reductions of 60 cents and 70 cents per barrel, respectively, while Arab Medium and Heavy grades experienced cuts of 70 cents per barrel.
These adjustments reflect Aramco’s ongoing efforts to align its pricing strategy with market dynamics while supporting its broader energy goals.
RIYADH: Saudi Arabia’s fintech ecosystem is expanding further with the Saudi Central Bank, or SAMA, granting licenses to two new service providers.
Tal Finance has been authorized to offer debt-based crowdfunding solutions, making it the 12th company in the Kingdom to provide such services. This addition brings the total number of finance companies licensed by SAMA to 62, highlighting the increasing role of alternative financing solutions in Saudi Arabia.
Meanwhile, SAMA has granted a license to Hiberbay Ink Al-Saoudia for IT Systems to deliver e-wallet services, increasing the total number of payment service providers in Saudi Arabia to 27. This move is aimed at promoting digital payment solutions and accelerating the Kingdom’s shift toward a cashless economy.
These developments align with Saudi Arabia’s Vision 2030 objectives to bolster the digital economy, expand financial inclusion, and increase the share of cashless transactions to 70 percent by 2025.
SAMA’s efforts are also tied to the Financial Development Sector strategy, which aims to have 525 active fintech companies operating in the Kingdom by 2030.
“Managing the transformation of the financial sector is a cornerstone of Vision 2030,” SAMA said in a statement, highlighting its focus on innovation and efficiency.
Through these initiatives, the central bank seeks to foster financial stability, stimulate economic growth, and position Saudi Arabia as a global fintech leader.
The fintech sector is expected to play a pivotal role in driving foreign investment, projected to contribute 20 percent of total foreign inflows. This growth is fueled by Saudi Arabia’s tech-savvy population, which is embracing consumer fintech innovations like buy now, pay later services.
In an interview with Arab News in December, Arjun Singh, partner and global head of fintech at Arthur D. Little Middle East, highlighted the natural evolution of Saudi Arabia’s consumer finance landscape, driven by an expanding array of financial products tailored to the diverse needs of its growing market.
He added that the Saudi BNPL market is poised to grow from $1.4 billion in 2024 to $2.8 billion by 2029, reflecting a compound annual growth rate of over 10 percent.
SAMA’s recent licensing activity underscores its commitment to supporting innovation while ensuring financial stability and efficiency. As the Kingdom’s fintech landscape expands, these developments are expected to drive significant economic and technological progress.
Rise in market cap is driven by a robust economy, foreign investments, and a rise in initial public offerings
Stock market in the UAE is one of the biggest in the region, standing next to Saudi Arabia
Updated 01 January 2025
Nirmal Narayanan
RIYADH: Dubai and Abu Dhabi have reached a combined market cap of stock markets, reaching 3.90 trillion dirhams ($1.06 trillion) by the end of the year, representing an annual rise of 7.14 percent.
The rise in market cap is driven by a robust economy, foreign investments, and a rise in initial public offerings, according to a report by Emirati state news agency WAM.
The stock market in the UAE is one of the biggest in the region, standing next to Saudi Arabia, with a market capitalization of SR10.2 trillion ($2.72 trillion), as of Dec.31.
According to data from the London Stock Exchange, the Gulf Cooperation Council region witnessed 48 IPOs in 2024, raising a total of $12.1 billion.
LSEG revealed that 38 IPOs happened in Saudi Arabia, followed by seven in the UAE, two in Oman, and one in Kuwait.
WAM added that the Abu Dhabi Securities Exchange witnessed a 1.01 percent year-on-year rise in market capitalization to reach 2.99 trillion dirhams by the end of 2024.
The market capitalization of Dubai Financial Market reached 906.9 billion dirhams by the end of the year, representing a 31.9 percent rise compared to the end of 2023.
In terms of trading, the UAE markets attracted more than 449 billion dirhams in value during 2024, with 342.4 billion dirhams on the ADX and 106.7 billion dirhams on the DFM.
According to the report, the total volume of shares traded in UAE markets in 2024 exceeded 142 billion, with 90.16 billion shares traded on the ADX and 51.85 billion on the DFM.
The report revealed that trading in UAE markets took place through more than 7.2 million transactions, with 4.655 million on the ADX and 2.55 million on the DFM.
It was in November that UAE stock markets hit $1 trillion in market capitalization, primarily driven by initial public offerings and strong earnings.
The strong performance of the UAE economy amid economic diversification efforts is also playing a crucial role in boosting the stock market in the Emirates.
In December, Emirates NBD said the UAE’s economy is projected to expand by 5 percent in 2025, driven by accelerated growth in the oil and non-oil sectors.
Last month, the UAE’s Central Bank said that the country’s economy is on a steady growth trajectory, with its real gross domestic product expected to expand by 4.5 percent and 5.5 percent in 2025 and 2026, respectively.
Saudi capital market scales new heights in 2024 with bold future ahead
Updated 01 January 2025
Nadin Hassan
RIYADH: Saudi Arabia’s capital market saw impressive growth in 2024, with record-breaking initial public offerings, significant reforms, and an expanding global presence.
The big question now is whether 2025 can take this momentum even further.
The Kingdom led the Gulf Cooperation Council IPO market last year, with 19 listings in the first half, surpassing the 17 offerings in 2023. These achievements have firmly positioned Saudi Arabia as an emerging financial powerhouse.
“IPOs have been a key driver of growth in Saudi Arabia’s capital market in 2024, reinforcing the Kingdom’s position as a regional leader,” Imad Matar, PwC Middle East deals advisory leader, told Arab News.
Imad Matar, PwC Middle East deals advisory leader. Supplied
Listings such as Nice One Beauty Digital Marketing Co., Almoosa Health Co., and Tamkeen Human Resources highlighted the diversity of sectors supporting Vision 2030.
On the significance of these IPOs, Matar stated: “These listings show the growing ability of Saudi Arabia to attract investments across diverse and high-growth sectors.”
Ali Anwar, managing director and Middle East practice leader of the global transaction advisory group at Alvarez and Marsal, shared insights with Arab News on the government’s proactive efforts to foster a dynamic IPO market.
Ali Anwar, managing director and Middle East practice leader of the global transaction advisory group at Alvarez and Marsal. Supplied
“IPOs in 2024 contributed to the liquidity and depth of the Saudi stock market, bringing fresh capital into the market. This not only increased the size of the market but also provided investors with more investment choices, enhancing the overall appeal of Saudi Arabia’s capital markets,” Anwar told Arab News.
Sustainability at the forefront
Environmental, social, and governance investments played a pivotal role in Saudi Arabia’s market evolution in 2024, closely aligning with the Kingdom’s Vision 2030 agenda.
This transformation was marked by a rise in green bonds and ESG-compliant IPOs, positioning Saudi Arabia in line with global sustainability standards.
“The government’s focus on green energy, sustainable infrastructure, and social responsibility has led to an increase in green bonds, ESG-compliant IPOs, and investments in sectors such as renewable energy, technology, and healthcare,” Matar said.
He added: “These initiatives are driving growth in emerging sectors while furthering Saudi Arabia’s economic diversification efforts.”
Easier business, greater confidence
Regulatory reforms like the New Companies Law and Civil Transactions Law brought significant changes in 2024, streamlining business processes and fostering a more transparent investment environment.
However, what truly proved to be a game-changer was the launch of new financial products, such as options and futures, on Tadawul. These innovative tools are unlocking a wealth of investment opportunities for both local and international investors.
Matar highlighted the introduction of financial instruments like options and futures on Tadawul as a key milestone.
“The introduction of options, both call and put options, has been a significant step. These contracts give investors the right, but not the obligation, to buy or sell assets at a set price within a specified time frame, which adds an extra layer of flexibility,” Matar said.
He further noted: “It’s not just about stocks anymore; options and futures allow investors to hedge, manage risk, and even profit from market movements in ways that were previously unavailable.”
Regulatory reform was not the only factor in improving business processes and creating a more transparent investment environment. When asked, Anwar also emphasized the role of the Capital Market Authority.
“The CMA has continued its efforts to strengthen corporate governance frameworks and transparency, making the market more open and helping investors make informed decisions. These shifts have boosted investor confidence, making Saudi Arabia more attractive to both regional and international capital,” Anwar explained.
He added: “The CMA has made it easier and quicker for companies to list by introducing more flexible listing requirements for SMEs. The regulatory environment for foreign investors has undergone changes to make Saudi Arabia’s capital market more accessible, making it easier for international investors to buy into the Saudi market.”
Saudi Arabia has also simplified the procedures for companies to introduce various financial products, including exchange-traded funds, sukuk, and structured products, into the market.
By making this process more efficient, the Kingdom has expanded the range of investment opportunities available.
“This has opened up more investment options for both domestic and foreign investors who are looking for a wider variety of financial instruments,” Anwar said.
Foreign investors
Foreign investor participation was crucial in boosting Saudi Arabia’s market liquidity and global integration in 2024.
The Kingdom attracted substantial foreign capital through IPOs, sukuk issuances, and privatization efforts across key sectors such as sports, infrastructure, and tourism.
“In Q2 2024, Saudi Arabia led the GCC IPO market, raising $1.6 billion, accounting for 61 percent of the region’s total IPO activity. Notable listings, such as Dr. Soliman Abdel Kader Fakeeh Hospital, along with average IPO gains of 43 percent, highlight growing investor confidence,” Matar said.
He also highlighted the impressive growth in sukuk issuances, stating: “The Kingdom saw a significant increase in sukuk issuances, raising over $10 billion in Q2 2024, more than quadrupling the previous year. Foreign direct investments also grew, with Q1 2024 inflows rising by 5.6 percent to SR9.5 billion.”
He highlighted that ongoing reforms and privatization efforts in sectors such as sports, infrastructure, and tourism are expected to continue driving this growth. These trends underscore Saudi Arabia’s growing appeal as an investment destination, fueled by ongoing regulatory reforms and the economic diversification goals of Vision 2030.
When asked about the role IPOs played in shaping the market’s performance and attracting foreign investments, Anwar explained that in 2024, the government advanced its strategy of listing state-owned entities or reducing its stake in publicly traded companies.
This shift helped reduce the state’s direct control over certain sectors, fostering greater private-sector participation and competition.
Essentially, the successful IPOs of high-profile companies not only brought in fresh investments but also reflected strong local and international confidence in the country’s economic trajectory.
“Successful IPOs in 2024 demonstrated a high level of investor confidence, both locally and internationally, in Saudi Arabia’s economic future,” Anwar said.
He continued: “IPOs of well-known companies with strong growth prospects not only helped boost the stock market’s performance but also reassured investors that the regulatory environment was becoming more open and investor-friendly.”
Anwar added: “Strong post-IPO performance of many companies signaled the robustness of the market, leading to further interest in upcoming listings and a more vibrant secondary market.”
Outlook 2025
As 2025 begins, Saudi Arabia’s capital market is set to benefit from ongoing diversification, strong IPO activity, and advancements in digital finance.
“In 2025, Saudi Arabia’s capital market is expected to continue its growth trajectory, driven by several key trends and economic opportunities,” Matar said.
He added: “The continued privatization of state-owned assets and strong IPO activity will provide more investment opportunities and strengthen market liquidity.”
By embracing digital transformation through advancements in artificial intelligence, blockchain, and fintech, the Kingdom is modernizing its financial systems to improve efficiency, reduce costs, and streamline processes.
These technological innovations are not only making financial transactions faster and more reliable but also attracting global investors who value transparency and innovation.
At the same time, Saudi Arabia’s commitment to green finance, including the issuance of green bonds and investments in sustainable projects, underscores its dedication to fostering environmentally conscious and socially responsible growth.
“These trends are likely to shape the capital market by enhancing market depth, global integration, and investor confidence,” Matar said.
He added: “By attracting international companies and investors, Saudi Arabia is not only diversifying its economy but also strengthening its financial ties with global markets.”
Anwar also shared a forward-looking perspective: “The Saudi government is likely to continue pushing for the privatization of state-owned assets, as well as encouraging more private sector IPOs.”
He further noted: “Technology, consumer, healthcare, and infrastructure-related entities are likely to dominate new listings in 2025. Foreign investments are likely to continue flowing into Saudi Arabia’s capital markets, supported by the ongoing reforms and market inclusion in global indices.”
Saudi Arabia is also making its financial markets more accessible to international investors by relaxing foreign ownership rules, expanding market entry points, and creating financial products designed to meet global investor needs.
These efforts are expected to attract more foreign investment and participation in the market.
In addition, the government is focusing on supporting small and medium-sized enterprises by implementing policies that simplify and expedite the process for them to raise capital through public listings.
In 2024, Saudi Arabia’s capital market demonstrated resilience, ambition, and a forward-looking vision. With a roadmap shaped by innovation and diversification, 2025 promises to be another defining chapter in the Kingdom’s journey toward global prominence.
