Closing Bell: Saudi main market slips to close at 12,105
Updated 23 July 2024
Arab News
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, losing 69.22 points, or 0.57 percent, to close at 12,105.54.
The total trading turnover of the benchmark index was SR6.8 billion ($1.8 billion) as 55 of the listed stocks advanced, while 173 retreated.
The MSCI Tadawul Index also dropped 10.49 points, or 0.69 percent, to close at 1,512.94.
The Kingdom’s parallel market Nomu gained 123.53 points, or 0.47 percent, to close at 26,164. This comes as 33 of the listed stocks advanced, while 32 retreated.
Sumou Real Estate Co. was TASI’s best-performing stock as the company’s share price surged 9.98 percent to SR47.95.
Other top performers included Kingdom Holding Co. as well as Perfect Presentation for Commercial Services Co., whose share prices soared by 9.93 percent and 4.04 percent, to stand at SR7.86 and SR15.96 respectively.
Other top gainers included Nayifat Finance Co. and Gulf Union Alahlia Cooperative Insurance Co.
Miahona Co. was the worst performer, wth its share price dropping by 6.82 percent to SR39.60.
Nama Chemicals Co. and Jadwa REIT Saudi Fund saw their share prices drop by 3.39 percent and 3.22 percent to SR27.10 and SR12.02, respectively.
Other poor performers included Rasan Information Technology Co. and National Medical Care Co.
On the announcements front, First Mills Co. reported a net profit of SR45.5 million in the second quarter of the year, representing a rise of 30.3 percent compared to the same period in 2023.
Revenue also saw an annual increase of 13 percent in the second quarter of this year to reach SR242.3 million.
The company announced that it will distribute cash dividends of SR1.55 per share to shareholders for the first half of 2024.
The total dividend distribution amounts to SR86.03 million, to be allocated across 55 million shares.
Saudi telecom Etihad Etisalat Co., also known as Mobily, reported a 33 percent increase in profits, reaching SR661 million in the second quarter of 2024, compared to SR497 million in the same period last year.
The company attributed the rise in net profit to higher operating profits and a 26.2 percent reduction in financing expenses, which decreased to SR130 million due to a reduced debt portfolio.
Lower zakat and income tax expenses also contributed to the improved financial performance, it added.
Saudi Telecom Co. also reported a 9 percent increase in profits, reaching SR3.3 billion in the second quarter, compared to SR3.0 billion in the same period last year.
The company attributed the rise in net profit to a revenue increase of SR828 million, which was partially offset by a SR272 million rise in the cost of revenues, resulting in a gross profit increase of SR556 million.
Operating expenses decreased by SR48 million, and zakat and income tax expenses fell by SR23 million, it added.
Qatar’s industrial production rises by 6% in July, driven by mining sector growth
National Planning Council reported a month-on-month increase of 5.5% in the mining sector in July
Non-energy private sector continued to grow at the beginning of the second half of 2024
Updated 58 min 20 sec ago
MIGUEL HADCHITY
RIYADH: Qatar’s industrial production index rose by 6 percent in July, reaching 103.2 points, driven by the mining sector, official data showed.
The National Planning Council reported a month-on-month increase of 5.5 percent in the mining sector in July, primarily due to higher production of crude oil, petroleum, and natural gas. Other mining and quarrying activities also grew by 11 percent.
In the manufacturing sector, the index increased by 7.6 percent in July compared to the previous month. The growth was led by refined petroleum products, which rose by 13.3 percent, followed by basic metals at 12.4 percent, and chemicals and chemical products at 7.2 percent.
This comes as Qatar’s non-energy private sector continued to grow at the beginning of the second half of the year, according to the latest Purchasing Managers’ Index survey from the Qatar Financial Center, compiled by S&P Global. The PMI registered 51.3 in July, down from June’s 23-month high of 55.9 but still indicating overall improvement in business conditions.
Qatar’s monthly IPI is a key indicator of industrial sector performance, measuring output across mining, manufacturing, electricity, and water supply.
Each sector has different weights in the index, with mining and quarrying at 82.46 percent, manufacturing at 15.85 percent, electricity, gas, steam, and air conditioning supply at 1.16 percent, and water supply at 0.53 percent.
The July data also revealed a 4 percent decline in the IPI compared to the previous year. The mining sector experienced a 5 percent year-on-year decline due to reduced crude oil and natural gas output, despite a 3.6 percent increase in other mining and quarrying activities.
The manufacturing sector saw a slight annual decline of 0.3 percent, driven by decreases in basic metals and cement.
Meanwhile, the electricity and gas sector saw a 7.2 percent rise in electricity production compared to June and an 8.2 percent increase compared to July 2023. The water supply sector grew by 6.5 percent month-on-month and 0.5 percent year-on-year.
In a report released last month, Standard Chartered forecasted that Qatar is poised to restore government revenues to pre-2014 oil price shock levels and double its economy by 2031.
The UK-based bank attributed this recovery to Qatar’s strategic position in the global energy market and its ongoing efforts toward economic diversification.
Saudi Arabia’s capital market institutions post 27% rise in operating revenue to $1.1bn: CMA
Updated 16 September 2024
Dayan Abou Tine
RIYADH: Saudi Arabia’s capital market institutions reported a 27 percent surge in operating income in the second quarter of 2024 – reaching SR4.1 billion ($1.1 billion).
Data released by the Kingdom’s Capital Market Authority indicated that the standout performer was asset management, contributing the largest revenue share at 31 percent, totaling SR1.28 billion — a 22 percent rise compared to the same period last year.
Investments followed closely, accounting for 30 percent of income at SR1.21 billion, which marked a 15 percent decline from the previous year.
Dealing activities ranked third, generating SR603.67 million, representing a 15 percent share and a 22 percent year-on-year increase.
Meanwhile, investment-banking revenues soared by 66 percent, reaching SR406.18 million and comprising 10 percent of total income.
The combined net profit, reflecting earnings after all expenses, zakat, and taxes, decreased by 3 percent to SR2.05 billion, down from SR2.13 billion in the same quarter last year.
This decline was largely driven by a rise in non-operating expenses, significantly impacting the bottom line.
On the trading front, the Saudi market led with SR900.35 billion, capturing 94 percent of the total traded value by local capital market institutions.
In contrast, US markets accounted for just 6.1 percent, totaling SR58.56 billion. The remaining share was distributed among other markets, including those in the Gulf Cooperation Council and the wider Arab world, Asia, and Europe.
According to the report, these institutions saw a significant boost in their aggregate balance sheet, with total assets climbing 29 percent to nearly SR73.25 billion, up from SR56.83 billion in the same quarter of 2023.
Liabilities surged by 68.73 percent year-on-year, reaching SR27.79 billion. Meanwhile, shareholders’ equity grew by 13 percent compared to the previous year, totaling SR45.42 billion.
According to a KPMG report, the Saudi stock exchange has swiftly evolved from a local market with limited options into the world’s 10th-largest by market capitalization.
This remarkable growth is largely attributed to reforms implemented by Tadawul and the Capital Market Authority, aligning with Vision 2030’s goals of economic diversification.
The report highlighted that increased foreign investment has significantly bolstered these reforms.
The Kingdom’s capital markets have remained resilient despite global economic uncertainties, such as high inflation and geopolitical tensions.
In 2022 alone, they attracted SR50.8 billion through initial public offerings and rights issues. This surge in market activity is fueled by improved liquidity, heightened investor confidence, and the government’s push for privatization and economic expansion, all supported by favorable oil prices.
Saudi Arabia’s CMA launched a strategic plan for 2024-2026 to enhance its debt market and asset management industry, highlighted during the September Debt Markets and Derivatives Forum held in Riyadh.
The plan includes over 40 initiatives focused on increasing market transparency, introducing special-purpose acquisition companies, and facilitating Saudi depositary receipts to attract local and international investors.
Key goals include boosting the stock market’s value to 80.8 percent of gross domestic product by 2025 and expanding the debt market to 24.1 percent of GDP. The strategy also emphasizes regulatory reforms, fintech growth, and improved investor protection to establish the Kingdom as a leading global financial hub in line with Vision 2030.
ADX imposes mandatory insider trading blackout ahead of Q3 results
Restriction prohibits board members, executives, and employees with insider information from trading shares until earnings are fully disclosed.
Rule designed to ensure transparency and prevent insider trading ahead of major financial disclosures
Updated 16 September 2024
Nirmal Narayanan
RIYADH: A mandatory 15-day blackout on insider trading has been enforced by the Abu Dhabi Securities Exchange, effective Sept. 16, as companies prepare to release their third-quarter 2024 financial results.
The restriction, in line with Securities and Commodities Authority regulations, prohibits board members, executives, and employees with insider information from trading shares until the earnings are fully disclosed.
According to a report by state news agency WAM, the decision follows Article 14 of the Securities and Commodities Authority Board of Directors’ Decision No. 2/R of 2001, which outlines regulations on trading, clearing, settlement, transfer of ownership, and custody of securities.
The rule is designed to ensure transparency and prevent insider trading ahead of major financial disclosures.
Insider trading involves the buying or selling of a publicly traded company’s stock by individuals who possess non-public, material information about the company. This practice is not allowed because it gives an unfair advantage to people with inside information, which can affect the fairness of the market and reduce trust among investors.
The report also stated that the resolution will be shared with the SCA, all listed companies, ADX departments, accredited brokers, and investors.
Established in 2000, ADX facilitates the trading of various securities, including shares from public and private companies, debt instruments, exchange-traded funds, derivatives, and other financial instruments approved by the UAE’s SCA.
On Aug. 30, WAM reported that ADX has become the most active and liquid ETF market in the Middle East and North Africa region, with notable value and volume since the start of the year.
ETF trading on the exchange totaled 1.86 billion dirhams ($506.46 million) in the first eight months of 2024. The trading volume for ETFs on ADX reached approximately 450.7 million units, with 19,853 transactions recorded.
Earlier this month, ADX also welcomed the listing of $1 billion in green bonds issued by Abu Dhabi Future Energy Co., known as Masdar.
The green bonds are split into two tranches: the first, valued at $500 million, has a fixed interest rate of 4.87 percent and matures on July 25, 2029; the second tranche, also $500 million, offers a 5.25 percent interest rate and matures on July 25, 2034.
WAM reported that the bond issuance witnessed strong demand from both international and domestic investors, with subscription orders peaking at $4.6 billion, representing an oversubscription of 4.6 times.
SMEs account for 90% of Saudi industrial and mining sectors: Minister
Minister of Industry and Mineral Resources, Bandar Alkhorayef made the announcement during a dialogue session at an event organized by Monsha’at
During the Industry and Mineral Resources Pioneers week, officials highlighted the impact of pioneering projects in the sector
Updated 16 September 2024
MANAL AL-BARAKATI
RIYADH: Small and medium enterprises constitute 90 percent of Saudi Arabia’s industry and minerals companies, revealing that the sector is not “exclusive” to top players, according to a senior official.
The comments by the Kingdom’s Minister of Industry and Mineral Resources, Bandar Alkhorayef, were made during a dialogue session at an event organized by the General Authority for Small and Medium Enterprises, known as Monsha’at, the Saudi Press Agency reported.
During the Industry and Mineral Resources Pioneers week, officials highlighted the impact of pioneering projects in the sector, underlining how industrial technical applications, often led by SMEs, effectively resolve challenges in large-scale industries, SPA said.
In recent years, the Saudi government has launched several initiatives to bolster SMEs’ presence and participation in various sectors, including industry and mining.
These undertakings, spearheaded by entities such as Monsha’at, focus on providing a range of support services, including financing, licensing facilitation, and business development support.
Programs like the SME loan guarantee program – known as Kafalah – and the Saudi Venture Capital Co. are designed to enhance access to capital, mitigating one of the significant challenges faced by smaller companies.
Other examples of SMEs demonstrating innovative capabilities in the sector include improving mine preservation, environmental safety, and productivity.
This reflects the broader trend within Saudi Arabia, where SMEs increasingly leverage technology and innovation to address complex industrial challenges.
In an interview with Alekhbariya, the minister said due to facilitating regulation efforts in the Kingdom, “opening a factory is easier than opening a restaurant.”
He added that the government is “working on building factories and leasing them to investors to support them and ease the burden on them,” as part of its goal to bolster entrepreneurs and sustain their projects.
The Saudi government’s support extends beyond facilitating market entry for SMEs. There is a concerted effort to ensure the long-term sustainability of these enterprises, helping them navigate the industry landscape and overcome operational hurdles.
The mining sector, in particular, presents a wealth of opportunities, and the ministry has identified over 100 initiatives and incentives designed to empower entrepreneurs and SME owners within this space.
This focus on creating a supportive ecosystem is intended to encourage more entrepreneurs to explore the untapped potential of the mining sector.
The initiatives are part of a broader strategy to cultivate a vibrant SME sector capable of contributing significantly to Saudi Arabia’s economic growth and diversification.
By providing the necessary tools, resources, and regulatory support, the government aims to harness the full potential of SMEs, ensuring they remain a driving force in the country’s industrial and economic development.
As Saudi Arabia continues to transform its economic landscape, the empowerment and growth of SMEs will remain at the forefront of this journey.
EV Auto Show 2024: Riyadh set for key exhibition, spotlighting Saudi green goals
Exhibition is a central event for the Kingdom’s expanding EV ecosystem
Attendees will have the chance to explore a variety of EVs, charging solutions, and green technologies
Updated 16 September 2024
MANAL AL-BARAKATI
RIYADH: The rapidly evolving transport sector in Saudi Arabia is set for a significant boost with the return of the EV Auto Show to Riyadh, taking place from Sept. 17 to 19.
Hosted at the Riyadh International Convention and Exhibition Center, this three-day event aligns with Saudi Arabia’s Vision 2030, emphasizing its commitment to electric vehicles and sustainable technology.
The exhibition is a central event for the Kingdom’s expanding EV ecosystem. It brings together key stakeholders, including automotive manufacturers, charging solution providers, policymakers, and consumers, to discuss the future of mobility in the region.
Attendees will have the chance to explore a variety of EVs, charging solutions, and green technologies. The show will feature interactive seminars and panel discussions, allowing participants to engage with industry experts and innovators.
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As Saudi Arabia aims to manufacture and export over 150,000 electric cars by 2026, such events are vital for advancing the shift toward clean technology and sustainable energy sources.
The show also serves as a platform for knowledge exchange, focusing on advancements in battery technology, charging infrastructure, and regulatory developments.
This exchange is crucial for overcoming current challenges and accelerating the Kingdom’s transition to electric mobility.
Shift in perception
Saudi Arabia’s EV market is growing, fueled by government initiatives, public-private partnerships, and increasing consumer interest.
Ravi Ravichandran, president of Ford Middle East, told Arab News: “The electric vehicles market in Saudi Arabia is undergoing rapid expansion, largely driven by the Kingdom’s Vision 2030, which seeks to diversify the economy beyond its traditional reliance on hydrocarbons.”
He noted a rise in consumer interest in EVs, citing a recent survey that shows 40 percent of Saudi consumers are considering purchasing one within the next 12 months. This reflects a growing shift away from traditional internal combustion engine vehicles.
Among those surveyed, hybrid vehicles were the most popular choice, followed by plug-in hybrids and pure battery EVs.
Ravi Ravichandran, president of Ford Middle East. Supplied
Ravichandran added that nearly one third of Saudis are already exploring the EV market. He also highlighted that 81 percent of respondents reported an improved view of electric vehicles over the past year, with many now perceiving them as sleek, enjoyable to drive, and technologically advanced. This indicates a positive shift in public perception.
Infrastructure development
A significant challenge in promoting EV adoption is the development of a comprehensive charging infrastructure.
The Ford executive highlighted that “range anxiety” remains a significant issue for consumers who worry about the availability of charging stations for long trips or daily commutes.
To address this, he added: “The Saudi government, along with regional stakeholders, is actively working to build a robust charging network.”
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Electromin is a key player in expanding the charging infrastructure across the Kingdom.
Mark Notkin, chief innovation officer at Electromin, told Arab News: “The widespread implementation of fast charging services across Riyadh hinges on several key factors including governmental incentives, EV adoption rates, regulatory approvals, and partnerships with the private sector.”
These factors will influence the timeline for making fast charging facilities widely available.
Electromin has already installed over 100 chargers across Saudi Arabia, all operated by the company and accessible via its app. The company is focusing on increasing the availability of fast charging services in high-traffic areas, including major malls in Riyadh and Jeddah.
Mark Notkin, chief innovation officer at Electromin. Supplied
Localization and talent development
An essential component of developing a sustainable EV ecosystem is the localization of talent in the infrastructure sector.
Vision 2030 is driving companies to invest in training and hiring local professionals.
Notkin said: “The localization rate of Saudi employees in the EV infrastructure sector is rising, driven by Vision 2030. Companies are increasingly training and hiring local talent in roles such as project management, marketing, and operations.”
This growing localization is expected to continue as the sector expands, contributing to job creation and fostering technological expertise in the Kingdom.
Ravichandran also highlighted the job creation potential, and said: “The expansion of EV manufacturing, charging infrastructure, and related services will generate significant new job opportunities, playing a crucial role in Saudi Arabia’s economic diversification.
“As more local talent is employed in the EV sector, this will in turn foster the transfer of advanced technologies, particularly in battery production, charging solutions, and software development.”
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Increasing consumer awareness about the benefits of EVs is essential for widespread adoption.
However, misconceptions continue to pose barriers. Ravichandran said: “Nearly one-third of Saudis mistakenly believe EV batteries cannot be recycled, half think EVs require routine oil changes, and one-quarter incorrectly assume that EVs still need fuel to operate.”
These misconceptions highlight the need for “targeted education to inform the public about the realities of owning and maintaining an electric vehicle.”
Efforts are underway to enhance consumer understanding of the long-term cost savings associated with EVs. “Consumers need to understand the long-term cost savings, such as reduced fuel consumption and lower maintenance expenses,” said Ravichandran, adding: “Unlike traditional internal combustion engine vehicles, EVs have fewer components to maintain, making them a more cost-effective and reliable option over time.”
Future outlook
Looking ahead, the Saudi EV market is expected to undergo significant evolution over the next five to 10 years, driven by key developments and innovations.
Ravichandran believes that a “pivotal focus will be on accelerating the rollout of advanced charging infrastructure, with particular emphasis on integrating cutting-edge technologies to enhance convenience and efficiency for customers.”
He also highlighted advancements in local manufacturing capabilities, predicting that innovations in EV production processes and materials will likely drive down costs and increase competitiveness.
