NRG Matters - Saudi Arabia set to double capacity in renewables tenders

Saudi Arabia is preparing for the Middle East’s faster growth in solar and wind projects (Shutterstock) 
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Updated 25 July 2022
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NRG Matters - Saudi Arabia set to double capacity in renewables tenders

RIYADH: Saudi Arabia is set to double the capacity amount in renewables tenders this year and in 2023 in preparation for the Middle East’s faster growth in mostly solar and wind projects. 

This happens as the Kingdom, alongside other crude producers, boosts oil production for export as European countries seek an alternative to Russian fuels.

This could be an incentive to get Saudi Arabia to accelerate renewable installations, said Miguel Brito, low carbon electricity analyst at Platts Analytics.

Through a micro lens

Dubai Electricity and Water Authority has commissioned 287 of 11,000 volts substations in the emirate during the first half of 2022, it said in a statement. 

Located primarily in Al-Merkad, Jabal Ali First, Saih Shuaib 2, Al-Jadaf and Burj Khalifa areas, the stations come as part of DEWA’s efforts to provide infrastructure according to the highest international standards. 

GS Inima has reached a $138 million financial closure for Oman desalination plant, Trade Arabia reported citing a statement. 

The Barka V desalination plant, being developed by Oman Power and Water Procurement, is located 58 kilometers west of the capital Muscat, has a total capacity of 100,000 cubic meters per day. 


Saudi Arabia, Japan strengthen investment ties with strategic MoU

Updated 13 January 2025
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Saudi Arabia, Japan strengthen investment ties with strategic MoU

DUBAI: The Saudi Investment Promotion Authority on Monday signed a memorandum of understanding with Japan’s Mizuho Bank Ltd. in an effort to enhance investment opportunities between the two countries.

The MoU was signed by Assistant Minister of Investment Ibrahim bin Yousef Al-Mubarak and bank CEO Masahiko Kato.

The agreement means the Saudi Investment Promotion Authority will provide its expertise and information to help integrate support services to Japanese companies interested in investing in the Kingdom, according to the Saudi Press Agency.

The memorandum comes within the Vision 2030 framework, which aims to diversify the national economy by attracting foreign investments, supporting economic partnerships with international companies, strengthening bilateral investment relations and long-term partnerships, and opening new qualitative areas for cooperation in the investment and economic fields.

On Sunday, the Saudi Japanese Joint Business Council Meeting convened in Riyadh with Minister of Investment Khalid Al-Falih and Japanese Minister of Economy, Trade and Industry Muto Yoji.

Attending the meeting were more than 80 representatives of companies and entities from both nations.

The Japanese delegation included those from industrial and commercial companies, as well as financial institutions focusing on modern technologies with an interest in the Saudi market.


Oil Updates — crude jumps as new US sanctions to curb Russian supply to China, India

Updated 13 January 2025
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Oil Updates — crude jumps as new US sanctions to curb Russian supply to China, India

SINGAPORE: Oil prices extended gains for a third session on Monday, with Brent rising above $80 a barrel to its highest in more than four months, as wider US sanctions are expected to affect Russian crude exports to top buyers China and India.

Brent crude futures climbed $1.14, or 1.43 percent, to $80.90 a barrel by 10:41 a.m. Saudi time after hitting an intraday high of $81.49, the highest since Aug. 27.

US West Texas Intermediate crude rose $1.20, or 1.57 percent to $77.77 a barrel after touching a high of $78.39, the most since Oct. 8.

Brent and WTI have risen by more than 6 percent since Jan. 8, and both contracts surged after the US Treasury imposed wider sanctions on Russian oil on Friday.

The new sanctions included producers Gazprom Neft and Surgutneftegas, as well as 183 vessels that have shipped Russian oil, targeting the revenue Moscow has used to fund its war with Ukraine.

Russian oil exports will be hurt severely by the new sanctions, pushing China and India, the world’s top and third-largest oil importers respectively, to source more crude from the Middle East, Africa and the Americas, which will boost prices and shipping costs, traders and analysts said.

“Friday’s announcement strengthens our view that the risks to our $70-85 Brent range forecast are skewed to the upside in the short term,” Goldman Sachs analysts said in a note.

“We estimate that the vessels targeted by the new sanctions transported 1.7mb/d of oil in 2024 or 25 percent of Russia’s exports, with the vast majority being crude oil.”

Expectations of tighter supplies have also pushed Brent and WTI monthly spreads to their widest backwardation since the third quarter of 2024. Prompt prices are higher than those in future months in backwardation, indicating tight supply.

RBC Capital Markets analysts said the doubling of tankers sanctioned for moving Russian barrels could serve as a major logistical headwind to crude flows.

Many of the tankers named in the latest sanctions have been used to ship oil to India and China as previous Western sanctions and a price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some of the ships have also moved oil from Iran, which is also under sanctions.

“The last round of OFAC (US Office of Foreign Assets Control) sanctions targeting Russian oil companies and a very large number of tankers will be consequential in particular for India,” said Harry Tchilinguirian, head of research at Onyx Capital Group.

JPMorgan analysts said Russia had some room to maneuver despite the new sanctions, but it would ultimately need to acquire non-sanctioned tankers or offer crude at or below $60 a barrel to use Western insurance as per the West’s price cap.
 


Closing Bell: Saudi main index rises to close at 12,126

Updated 12 January 2025
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Closing Bell: Saudi main index rises to close at 12,126

  • Parallel market Nomu gained 12.14 points, or 0.04%, to close at 31,039.53
  • MSCI Tadawul Index gained 1.87 points, or 0.12%, to close at 1,512.01

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 29.22 points, or 0.24 percent, to close at 12,126.97. 

The total trading turnover of the benchmark index was SR4.26 billion ($1.13 billion), as 140 of the stocks advanced and 91 retreated. 

The Kingdom’s parallel market Nomu gained 12.14 points, or 0.04 percent, to close at 31,039.53. This comes as 47 of the listed stocks advanced, while 34 retreated. 

The MSCI Tadawul Index gained 1.87 points, or 0.12 percent, to close at 1,512.01. 

The best-performing stock of the day was Fitaihi Holding Group, which debuted on the main market on Sunday, with its share price surging 6.15 percent to SR4.66. 

Other top performers included Saudi Industrial Investment Group, which saw its share price rise 5.59 percent to SR17.00, and Fawaz Abdulaziz Alhokair Co., whose share price surged 4.88 percent to SR15.46. 

Arabian Pipes Co. recorded the biggest decline, with its share price falling 3.62 percent to SR12.24. 

Maharah Human Resources Co. followed, with its stock price decreasing 2.75 percent to SR6.73. 

Takween Advanced Industries Co. also experienced a drop, with its share price slipping 2.39 percent to SR10.62. 

On the announcements front, Banan Real Estate Co. completed the acquisition of a 45 percent stake in Qimam Noshz Real Estate Development Co., with a total capital of SR71 million. 

According to a Tadawul statement, the stake is to be divided with Banan Real Estate Co. holding 23 percent, while its subsidiary, Al-Aziziah Investment and Real Estate Development Co., holding 22 percent.

Banan Real Estate Co. closed the session at SR6.80, down 0.88 percent. 

Al-Etihad Cooperative Insurance Co. has signed an agreement with AlRajhi Bank to provide bancassurance services and quotations for leased vehicle comprehensive insurance. 

A bourse filing revealed that this partnership is part of the “Lease with a Promise to Own” program. The one-year contract’s revenues are projected to exceed 5 percent of the company’s gross written premiums reported in its 2023 annual financial statements. The financial impact of this agreement is expected to reflect in the firm’s performance starting from the first quarter of 2025. 

Al-Etihad Cooperative Insurance Co. closed the session at SR17.86, up 0.57 percent.

Scientific and Medical Equipment House Co. announced it has been awarded a project tender by the General Directorate of Health Affairs in Najran Region valued at SR99 million. 

According to a Tadawul statement, the project covers the maintenance and repair of medical devices and equipment for several hospitals in the area. The financial impact of the project is anticipated to begin in the second quarter of 2025. 

The firm ended the session at SR51.60, marking a 51.60 percent increase. 


Saudi Arabia ranks 7th globally in IPO proceeds, leads GCC region

Updated 12 January 2025
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Saudi Arabia ranks 7th globally in IPO proceeds, leads GCC region

  • Kingdom accounted for 42 of the 53 IPOs in the GCC in 2024
  • UAE led in terms of proceeds with $6.2 billion

RIYADH: Saudi Arabia led the Gulf Cooperation Council’s initial public offerings market in 2024, earning a global ranking of seventh in total IPO proceeds, according to the latest report from Kamco Invest. 

The Kingdom accounted for 42 of the 53 IPOs in the GCC last year, significantly outpacing its regional peers and aligning with expectations to maintain its leadership in the coming year.

The surge in listings highlights Saudi Arabia’s dominant position in the regional capital markets and its role as a key driver of IPO activity across the GCC. 

The figure represents a sharp increase from 46 IPOs across the GCC in 2023, underscoring continued investor interest and market dynamism. 

 

GCC issuers collectively raised $12.9 billion in 2024, a 19.8 percent increase from $10.8 billion in 2023, despite global IPO markets experiencing their weakest performance since 2009. 

Within the GCC, Saudi companies contributed $4.1 billion, amounting to 31.6 percent of total regional proceeds. 

While the UAE led in terms of proceeds with $6.2 billion, its share of GCC IPO proceeds dropped from 56.3 percent in 2023 to 47.8 percent in 2024. 

Oman ranked third, with state-backed privatizations raising $2.5 billion, or 19.3 percent of total GCC proceeds. 

 

The majority of Saudi IPOs occurred on the Nomu–Parallel Market, which hosted 28 of the Kingdom’s listings. 

The main market recorded 14 IPOs, including standout listings such as Dr. Soliman Abdel Kader Fakeeh Hospital, which was oversubscribed 119 times and garnered orders worth $91 billion.

Other notable listings included Almoosa Health, Miahona Utilities, and Nice One Beauty Digital Marketing. 

The strong demand was driven by a local investor base and underscored the resilience of Saudi capital markets despite challenges such as declining oil prices and geopolitical tensions. 

 

The report said that sectors such as health care, materials, and professional services were among the most active in Saudi IPOs, reflecting strong fundamentals and investor confidence in these industries. 

Globally, the GCC ranked fourth in IPO proceeds, trailing China, the US, and Japan, demonstrating its growing importance as a financial hub. 

Looking ahead to 2025, Saudi Arabia is expected to further dominate, with 31 IPOs in the pipeline, according to Kuwait-based asset management company Kamco Invest. 

The Kingdom’s Public Investment Fund is set to play a pivotal role with upcoming listings of Saudi Global Ports, Nupco, and Tabreed District Cooling, among others. Several private companies, including flynas, Tabby, and Ejada Systems, are also preparing IPOs. 

 

Oman plans to privatize up to 30 assets in the coming years, with Asyad Group and Oman Electricity Transmission Co. expected to go public in 2025. 

In the UAE, major listings are anticipated from hotel operator FIVE and real estate companies under Dubai Holding, alongside Dubizzle Group and Alpha Data. 

Despite external headwinds like geopolitical tensions and rising economic pressures, the GCC IPO market has proven resilient, with a robust pipeline of offerings across various sectors. 


Oman’s import price index up 1.1% in Q3 2024

Updated 12 January 2025
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Oman’s import price index up 1.1% in Q3 2024

  • Largest price hike was recorded in miscellaneous manufactured goods category, which rose by 11%
  • Mineral fuels and related materials saw a significant decrease of 22.2%

RIYADH: Oman’s general index of import prices saw an increase of 1.1 percent in the third quarter of 2024 compared to the same period in 2023, according to data from the National Center for Statistics and Information.

The largest price hike was observed in the miscellaneous manufactured goods category, which rose by 11 percent. This was followed by beverages and tobacco (up 6.7 percent), and food and live animals (up 5.7 percent).

Other notable increases included machinery and transport equipment (5.3 percent), chemicals and related materials (4.3 percent), raw materials (4.3 percent), manufactured goods primarily categorized by material (1.6 percent), and vegetable and animal oils, fats, and waxes (0.9 percent).

In contrast, the category of mineral fuels and related materials saw a significant decrease of 22.2 percent.

This increase in import prices aligns with Oman’s overall rise in imports, which grew by 10.8 percent, reaching 8 billion Omani rials ($20.8 billion) by June 2024, up from 7.2 billion rials in the same period of 2023.

Additionally, the general index of import prices declined by 4.8 percent when compared to the second quarter of 2024. This drop was largely due to decreases in the prices of beverages and tobacco (-22.4 percent), mineral fuels and related materials (-11.6 percent), and chemicals and related materials (-10.8 percent).

The miscellaneous manufactured goods category also saw a reduction of 10.2 percent, while machinery and transport equipment dropped by 3.9 percent. However, the raw materials category saw a 32 percent increase, vegetable and animal oils, fats, and waxes rose by 9.2 percent, and food and live animals increased by 3.5 percent.

Lending trend

Oman’s banking sector experienced a 4.2 percent year-on-year growth in the total balance of credit granted by the end of November 2024, reaching 32.2 billion rials.

According to the Central Bank of Oman, credit to the private sector grew by 5.1 percent, totaling 26.8 billion rials during the same period. This growth reflects the central role of the banking sector in providing credit within the Omani economy, especially given the limited access the private sector has to debt capital markets. In 2022, private sector credit represented 55.4 percent of the country’s gross domestic product, a trend consistent with data from the International Monetary Fund.

Further breakdowns of the credit data revealed that the largest share (45.3 percent) of the private sector credit went to individuals, followed closely by non-financial companies at 45.1 percent. The remaining 9.6 percent was divided between financial firms (6.1 percent) and other sectors (3.5 percent).

In terms of deposits, the total balance in Omani banks grew by 10.8 percent, reaching 31.5 billion rials by the end of November. Of this, private sector deposits increased by 9.2 percent, amounting to 20.6 billion rials.

The breakdown of private sector deposits revealed that the individual sector held the largest share at 49.7 percent, followed by the non-financial corporate sector at 30.6 percent, and the financial corporate sector at 17.1 percent. Other sectors accounted for 2.6 percent.