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Datacom aims to ride Saudi Arabia’s tech wave 

Datacom’s commitment to AI governance, risk management, and ethical practices underscores its dedication to responsible AI development. (SPA)
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Updated 01 October 2024
Nour El-Shaeri 
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Datacom aims to ride Saudi Arabia’s tech wave 

  • Firm offers innovative AI solutions tailored to local requirements
Updated 01 October 2024
Nour El-Shaeri 

CAIRO: Technological infusion across all sectors has boosted Saudi Arabia’s position as a catalyst of change, attracting players from all over the globe. 

Datacom, under the leadership of CEO Dawood Moya, aims to be a significant contributor to this by establishing itself as a trusted partner for digital transformation, artificial intelligence, automation, and process intelligence within the public services, financial services industry, and oil and gas sectors. 

In an interview with Arab News, Moya shared that Datacom plans to become a critical player in Saudi Arabia, aspiring to be one of the core partners for governmental bodies and industry leaders. 

Moya said: “Our aim is to stay for a long term in Saudi Arabia and become one of the core partners for governmental bodies and FSI and oil and gas companies. Datacom will become the key driver in elevating the AI capabilities and make the Kingdom as one of the leading countries in AI.” 

Becoming a partner 

Datacom’s strategy for the Saudi market includes developing innovative AI solutions tailored to local requirements, collaborating with local universities and research institutions to foster AI talent. 

The company aims to leverage its AI expertise to generate significant impacts for organizations and citizens in the Kingdom. 

A significant aspect of Datacom’s expansion strategy involves education and training. 

“Datacom aims to invest in training AI professionals and experts locally,” Moya said.

By creating AI curriculums, training programs, workshops, and certifications, Datacom hopes to raise AI awareness and promote acceptance. 

Additionally, the company plans to collaborate with the Saudi government to develop AI-friendly policies and regulations, focusing on AI governance and ethics. 

Partnerships play a crucial role in Datacom’s approach, with the company already working with over five ministries across Saudi Arabia “developing highly sophisticated AI solutions, which are unique, innovative and effective to enhance the ministries services performance,” Moya said. 

Datacom is also committed to understanding local needs and culture, developing AI solutions that respect data sovereignty requirements, and establishing sector-specific Centers of Excellence to drive AI adoption. 

Looking forward, Datacom has set ambitious growth objectives for the next year, prioritizing Saudi Arabia within its expansion strategy. 

“Saudi Arabia is the main priority for Datacom. Even when our headquarters is right now based in Ajman, UAE, for different reasons, our focus is Saudi Arabia and UAE, in this order of priorities,” Moya stated. 

The company is offering a portfolio of customized AI solutions, including digital humans with generative AI capabilities, innovative data analysis solutions, and tailored AI ethics and governance models based on Saudi regulations. 

Datacom plans to adapt to and comply with evolving regulations in Saudi Arabia by partnering with the Saudi Authority for Data and Artificial Intelligence, the National Cybersecurity Authority, and other governmental bodies. 

The company’s commitment to AI governance, risk management, and ethical practices underscores its dedication to responsible AI development. 

The strategic importance of the Saudi market for Datacom is underscored by the Kingdom’s substantial investment in AI, its economic transformation, government support, and technological adoption, Moya highlighted. 

This investment, along with robust policies and a tech-savvy population, creates a conducive environment for AI growth and innovation. 

“We established our office 6 months ago, thanks to the support of our local partnership network, who identify us as a technology disruptor in the market,” Moya shared. 

The company plans to register its local entity before the end of 2024, further solidifying its presence in the Kingdom. 

Business fundamentals 

The company’s business model is centered on reselling disruptive technologies rather than developing software. 

Moya explained, “Our business model is based in our operations. We are not software developers, but resellers of the most disruptive technologies we are able to identify, thanks to our experience, know-how, and international presence in the technology segment.” 

This approach leverages Datacom’s expertise and extensive network to introduce cutting-edge solutions to the Saudi market. 

The motivation behind founding Datacom was to bridge a significant gap in the implementation of AI technologies. 

“We clearly identified a gap in the know-how of the implementation of AI technologies. Our team is composed by senior experts in the technology field,” Moya highlighted. 

The company has not yet reached profitability but has set a target to achieve this milestone in 2024.  

To gauge success, Datacom utilizes several key performance indicators. 

“We are using performance indicators like: Cost of lead, percentage of conversion rate, percentage of closure rate, Churn Rate,” Moya said.  

Regarding funding, Datacom is privately funded and does not have immediate plans to secure additional finance. However, when asked if the company remains open to potential investment opportunities, he said: “We are open to have conversations with investors that would align with our mission and vision. I’m sure that we can give answers to many questions that are still unanswered, and the Arab world is a window of opportunities, due to the exciting moment that is living, and the support that the regional governments are providing to accelerate that momentum.” 

A booming market 

Moya assessed the current market landscape in Saudi Arabia, noting the significant opportunities presented by the government’s dedicated AI strategy and industry push. 

Forecasting the industry’s evolution, Moya emphasized the rapid growth expected in the Saudi AI market. “We believe that the Saudi Arabia artificial intelligence market is poised for significant growth, and several trends are shaping its evolution,” he explained. 

“The Saudi Arabia AI market was valued at $3.11 billion in 2023 and is projected to grow at a CAGR (compound annual growth rate) of 42.6 percent between 2024 and 2030. This growth is driven by investments in developing AI solutions across different sectors,” Moya said. 

He added that sectors such as health care, public services, and retail are seeking AI solutions to enhance productivity and efficiency. “Retail companies, for example, use AI to gain consumer insights and optimize promotions and pricing.” 

“Arabic focused NLP (natural language processing) and IDP (intelligent document processing) solutions are the initial solutions deployed in Saudi Arabia,” Moya said. 

“As Saudi Arabia continues its privatization initiatives, AI investments will play a crucial role. The country’s rapidly expanding economy and surging foreign investments contribute to this trend,” he added.
 

Topics: startups Datacom Investment Start-up of the Week

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Saudi Arabia’s private debt market targets over $1.77bn by Q3 2024: report

Updated 24 November 2024
Reem Walid
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Saudi Arabia’s private debt market targets over $1.77bn by Q3 2024: report

Updated 24 November 2024
Reem Walid

RIYADH: Saudi Arabia’s private debt market is experiencing significant growth, with eight active funds targeting to raise over $1.77 billion in capital by the third quarter of 2024, according to a new report.

This growth is driven by a sharp rise in investor confidence, with 97 percent of Middle East-based institutional investors now viewing the Kingdom as the most promising market for private debt in the coming year, up from 82 percent in 2023, based on Preqin survey data.

The report, titled “Territory Guide: The Rise of Private Debt Funds in Saudi Arabia 2024,” was published in collaboration with Saudi Venture Capital Co. It highlights the increasing interest from both regional and global investors, fueled by the positive outcomes of the Kingdom's Vision 2030 reforms.

The findings align with the fact that Saudi Arabia accounts for up to 27.5 percent of private debt fund transactions in the Middle East and North Africa region between 2016 and the third quarter of 2024.

In 2022, private debt funds focused on Saudi Arabia raised a record $335 million in total capital, a sharp rise from the $32 million raised by a single fund in 2003.

“This first-of-its-kind report highlights the emergence of private debt funds as a key asset class in Saudi Arabia, driven by the Kingdom’s Vision 2030 and its ambition to diversify the economy,” said Nabeel Koshak, CEO and board member at SVC.

“At SVC, we continue our commitment to support the development of such reports that provide policymakers, investors, and founders with insights and data to inform strategic decisions and policies to nurture the private capital ecosystem further,” Koshak added.

David Dawkins, lead author of the report at Preqin, commented: “Global investment firms are not alone in closely watching the growth and evolution of Saudi Arabia’s nascent private debt industry.”

Dawkins also noted: “For other developing economies in the Middle East and beyond, Saudi Arabia’s success in this area will strengthen the impetus for improving transparency to secure the capital needed for sustainable growth in a net-zero world.”

The study further revealed that among all private debt funds with investments tied to Saudi Arabia that concluded between 2016 and the third quarter of 2024, mezzanine funds accounted for 50 percent of total exposure, with direct lending and venture debt funds closely following at 30 percent and 20 percent, respectively.

Support for startups and small to medium-sized enterprises in the Kingdom is also reflected in the high proportion of venture debt, which represents 75 percent of all funds in the market with Saudi Arabia exposure.

The report also highlighted that private debt marked its second consecutive year as the asset class with the highest proportion of Middle Eastern investors intending to increase their investments in the coming year. Nearly 58 percent of investors expressed this sentiment, up from 50 percent in 2023.

The percentage of investors considering private debt the most promising asset class in the region rose by 12 percentage points, from 31 percent in 2023.

Private debt is expected to further bolster Saudi Arabia’s growing entrepreneurial community as the nation advances toward its Vision 2030 goals. Since 2018, new regulatory frameworks have been implemented, ushering in an era of increased transparency and equity within the private debt sector, closely aligned with the Kingdom’s broader investment vision.

Topics: debt Capital

Closing Bell: Saudi main index rises to close at 11,864 

Updated 24 November 2024
Reem Walid  
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Closing Bell: Saudi main index rises to close at 11,864 

Updated 24 November 2024
Reem Walid  

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 24.38 points, or 0.21 percent, to close at 11,864.90. 

The benchmark index recorded a trading turnover of SR4.22 billion ($1.12 billion), with 124 stocks advancing and 99 declining. 

The Kingdom’s parallel market Nomu also posted gains, climbing 345.06 points, or 1.13 percent, to close at 30,885.34, as 49 stocks advanced and 32 declined. 

The MSCI Tadawul Index increased by 4.74 points, or 0.32 percent, to close at 1,491.56. 

The best-performing stock of the day was Arabian Contracting Services Co., whose share price surged 9.97 percent to SR167.60. 

Other notable gainers included Saudi Reinsurance Co., rising 4.97 percent to SR45.45, and Saudi Public Transport Co., which climbed 3.98 percent to SR23.00.     

Al-Baha Investment and Development Co. led the decliners, falling 6.06 percent to SR0.31. Aldrees Petroleum and Transport Services Co. dropped 4.33 percent to SR123.60, and Batic Investments and Logistics Co. declined 3.23 percent to SR3.59. 

Leejam Sports Co. announced the opening of four new fitness centers. These include a men’s center and the first ladies’ center in Al-Rass city, Qassim Province, as well as the first men’s and ladies’ centers in Al-Qunfidah city, Makkah Province.  

Branded under “Fitness Time” and “Fitness Time - Ladies,” the centers will feature state-of-the-art facilities, high-spec sports equipment, and modern designs. 

The financial impact of these openings is expected to reflect in the fourth quarter of 2024. Despite the announcement, Leejam Sports Co. closed the session at SR180, down 0.34 percent. 

Obeikan Glass Co. reported a net profit of SR29.89 million for the nine months ending Sept. 30, a 58.3 percent drop from the same period in 2023. The decline was attributed to lower average selling prices due to global market conditions and increased administrative expenses related to a new investment in a subsidiary, Saudi Aluminum Casting Foundry.  

The stock ended at SR49.60, down 1.59 percent. 

United Mining Industries Co. announced the issuance of two exploration licenses for gypsum and anhydrite ore from the Ministry of Industry and Mineral Resources. The company plans to conduct studies to determine the availability of raw materials, with financial impacts to be announced upon completion.  

Its stock closed at SR39.60, up 0.26 percent.

Topics: TASI Tadawul Stock Market

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Morgan Stanley receives approval to establish regional HQ in Saudi Arabia

Updated 24 November 2024
Nirmal Narayanan
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Morgan Stanley receives approval to establish regional HQ in Saudi Arabia

Updated 24 November 2024
Nirmal Narayanan

RIYADH: US-based investment bank Morgan Stanley has been granted approval to establish its regional headquarters in Saudi Arabia, as the Kingdom continues to attract international investment.

This move aligns with Saudi Arabia’s regional headquarters program, which offers businesses various incentives, including a 30-year exemption from corporate income tax and withholding tax on headquarters activities, as well as access to discounts and support services.

Saudi Investment Minister Khalid Al-Falih confirmed the progress of this initiative in October, stating that the Kingdom has successfully attracted 540 international companies to set up regional headquarters in Riyadh—exceeding its 2030 target of 500.

“Establishing a regional HQ in Riyadh reflects the growth and development of Saudi Arabia and is a natural progression of our long history in the region,” said Abdulaziz Alajaji, Morgan Stanley’s CEO for Saudi Arabia and co-head of the bank’s Middle East and North Africa operations, according to Bloomberg.

Morgan Stanley first entered the Saudi market in 2007, launching an equity trading business in Riyadh, followed by the establishment of a Saudi equity fund in 2009.

This approval follows a similar move by Citigroup earlier this month, with the bank also receiving approval to establish its regional headquarters in Saudi Arabia.

Fahad Aldeweesh, CEO of Citi Saudi Arabia, emphasized that this development would support the firm’s future growth in the Kingdom.

Goldman Sachs, another major Wall Street bank, also received approval in May to set up its regional headquarters in Saudi Arabia.

Prominent international firms that have already established regional headquarters in Saudi Arabia include BlackRock, Northern Trust, Bechtel, PepsiCo, IHG Hotels and Resorts, PwC, and Deloitte.

In addition, a recent report from Knight Frank noted that Saudi Arabia's regional headquarters program has led to increased demand for office space in Riyadh, with the city’s office stock expected to grow by 1 million sq. meters by 2026.

In August, Kuwait’s Markaz Financial Center echoed this sentiment, predicting a significant uptick in the Kingdom’s real estate market during the second half of the year, driven by the regional headquarters program.

Topics: Regional HQ program

QatarEnergy strengthens global footprint with offshore expansion in Namibia 

Updated 24 November 2024
MIGUEL HADCHITY 
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QatarEnergy strengthens global footprint with offshore expansion in Namibia 

Updated 24 November 2024
MIGUEL HADCHITY 

RIYADH: QatarEnergy has expanded its portfolio through a new agreement with TotalEnergies to increase its ownership stakes in two offshore blocks in Namibia’s Orange Basin. 

According to a press release, the state-owned energy firm will acquire an additional 5.25 percent interest in block 2913B and an additional 4.7 percent interest in block 2912 under the new deal, subject to customary approvals.  

Once finalized, QatarEnergy’s share in these licenses will rise to 35.25 percent in block 2913B and 33.025 percent in block 2912.  

Saad Sherida Al-Kaabi, Qatar’s minister of state for energy affairs and CEO of QatarEnergy, said: “We are pleased to expand QatarEnergy’s footprint in Namibia’s upstream sector. This agreement marks another important step in working collaboratively with our partners toward the development of the Venus discovery located on block 2913B.” 

TotalEnergies, the operator of both blocks, will retain 45.25 percent in block 2913B and 42.475 percent in block 2912. Other partners include Impact Oil & Gas, which holds 9.5 percent in both blocks and the National Petroleum Corp. of Namibia, which owns 10 percent in block 2913B and 15 percent in block 2912.   

Located about 300 km off the coast of the African country, in water depths ranging from 2,600 to 3,800 meters, these blocks host the promising Venus discovery. The Venus field has attracted considerable attention as a significant find that could impact Namibia’s energy future.  

This offshore acquisition complements QatarEnergy’s recent ventures into renewable energy. In October, the company announced a 50 percent stake in TotalEnergies’ 1.25-gigawatt solar project in Iraq.  

The initiative, part of Iraq’s $27 billion Gas Growth Integrated Project, aims to enhance Iraq’s energy self-sufficiency by addressing its reliance on electricity imports and reducing environmental impacts.   

The solar project, set to deploy 2 million bifacial solar panels, will generate up to 1.25 GW of renewable energy at peak capacity, supplying electricity to approximately 350,000 homes in Iraq’s Basra region.  

QatarEnergy will share equal ownership of the project with TotalEnergies, which retains the remaining 50 percent. 

The firm’s dual focus on traditional and renewable energy highlights its strategic approach to meeting global demands while addressing sustainability concerns.  

Its involvement in Namibia’s offshore blocks and Iraq’s shift toward renewable energy highlights a well-rounded portfolio that includes fossil fuels and clean energy investments. 

Topics: qatarenergy

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GCC lending growth hits 3.1% in Q3, Saudi Arabia leads: report

Updated 24 November 2024
Nadin Hassan
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GCC lending growth hits 3.1% in Q3, Saudi Arabia leads: report

Updated 24 November 2024
Nadin Hassan

RIYADH: Listed banks in the Gulf Cooperation Council achieved their highest lending growth in 13 quarters, with loans rising 3.1 percent to $2.12 trillion in the third quarter.

According to a report by Kamco Invest, Saudi Arabia led the surge with a 3.7 percent quarter-on-quarter increase in gross loans, marking its fastest growth in nine quarters.

Qatar followed with a 1.9 percent rise, while Bahrain recorded a 1.2 percent increase.

This growth aligns with the International Monetary Fund’s projection of 3.5 percent nominal gross domestic product growth for GCC nations in 2024, driven by the strong performance of non-oil sectors in the UAE, Qatar, Bahrain, and Saudi Arabia.

The region’s commitment to diversification and long-term infrastructure development continues to drive its financial sector.

 Despite record lending levels, aggregate net income for GCC-listed banks increased marginally by 0.4 percent to $14.9 billion.

While total revenues grew 4.1 percent, supported by a 2.8 percent rise in net interest income and a 6.9 percent increase in non-interest income, higher expenses and impairments weighed on profitability.

Loan impairments rose to a three-quarter high of $2.5 billion, with increases in the UAE, Saudi Arabia, Oman, and Bahrain partially offset by declines in Qatar and Kuwait.

Customer deposits across GCC-listed banks reached a nine-quarter high, rising 3.2 percent to $2.5 trillion.

Saudi Arabia led with a 4.6 percent increase, while the UAE maintained its position as the largest deposit market at $828 billion.

Deposits in Oman and Qatar also saw solid growth, contributing to the region’s overall resilience.

The aggregate loan-to-deposit ratio remained stable at 81.4 percent, with Saudi Arabia reporting the highest ratio of 92.8 percent and the UAE the lowest at 69.3 percent, reflecting its strong liquidity position.

The GCC banking sector’s resilience is further demonstrated by its consistent focus on operational efficiency. The cost-to-income ratio declined slightly to 39.9 percent, highlighting the sector’s ability to manage expenses effectively despite rising costs. 

As the region continues to diversify its economy, the banking sector remains a critical enabler of growth, funding large-scale projects and fostering financial innovation.

While rising funding costs and potential interest rate cuts may pose challenges, the sector’s robust fundamentals and strategic focus on non-oil growth position it for sustainable expansion.

The commitment to balancing economic diversification with financial innovation is expected to drive the sector’s continued success, reinforcing its pivotal role in the GCC’s broader economic landscape.

Topics: GCC Lending banking

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