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Economic impact of New Murabba: Riyadh’s futuristic urban marvel

Drawing inspiration from the Najdi architectural style, the cube shaped structure will add a new dimension to the Riyadh skyline. (Supplied)
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Updated 14 December 2024
Reem Walid
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Economic impact of New Murabba: Riyadh’s futuristic urban marvel

  • Project set to transform capital by creating a new city district that acts as a portal to a whole new experience
Updated 14 December 2024
Reem Walid

RIYADH: Amid Saudi Arabia’s bold quest to break free from its oil dependency, transformative giga-projects are emerging as game changers, paving the way for a vibrant, diversified economy.

One development that stands out is the New Murabba project, which is set to transform Riyadh by creating a new city district that acts as a portal to a whole new experience.

Launched in 2023 by Crown Prince Mohammed bin Salman, New Murabba will cover 19 sq. km., creating a dynamic new city area in the Kingdom’s capital.

This project promises an exceptional blend of living, working, and entertainment, developing over 25 million sq. m. to include residential units, hotels, retail spaces, and community amenities. 

The sheer scale and ambition of this development are consummate with Vision 2030 and its far-reaching transformation of the Kingdom.

Amer Lahham, Partner of public sector practice at Kearney Middle East and Africa

Spearheaded by the New Murabba Development Co., it will also feature convenient transportation options and a prime location just 20 minutes from the airport.

“New Murabba is a bold project that will further Saudi’s vision in creating a vibrant economic ecosystem, attracting investments across sectors, emphasizing sustainable urban planning, creating advanced technical jobs, and further enriching cultural landscape of the Kingdom,”  said Karim Shariff,  head of Bain and Co.’s Europe, Middle East, and Africa Construction, Building Products, Real Estate and B2B Services sector.

“The opportunity to create an innovative integrated ecosystem is a one of a kind,” Shariff added.

New Murabba will see real estate distributed across 18 communities, with an estimated population exceeding 400,000. 

New Murabba is a bold project that will further Saudi’s vision in creating a vibrant economic ecosystem.

Karim Shariff, head of Bain and Co.’s Europe, Middle East, and Africa Construction, Building Products, Real Estate

This destination will serve as a model for urban planning, boasting seamless transportation and sustainable infrastructure.

It will accommodate over 100,000 homes, 9,000 hotel rooms, and 500,000 sq. m. of retail space. It will also feature various entertainment venues, educational institutions, health care facilities, and a 45,000-seat stadium.

The downtown area will be designed to ensure that green spaces and essential services are accessible within a 15-minute radius.

Central to the project is the Mukaab — designed to be a premier destination featuring a variety of retail, cultural, and tourist attractions, as well as residential and hotel accommodations, commercial areas, and recreational amenities.

Drawing inspiration from the Najdi architectural style, the cube shaped structure will add a new dimension to the Riyadh skyline. 

New Murabba aims to establish a central hub to drive innovation and provide a platform for attracting businesses and talent.

Camilla Bevilacqua, Partner at Arthur D. Little

Camilla Bevilacqua, partner at international management consulting firm Arthur D. Little, said: “The main objective of New Murabba is to enhance Riyadh’s competitiveness and create an iconic and enduring landmark that will help position Riyadh on the global map as one of the best cities to live and work in. New Murabba aims to establish a central hub to drive innovation and provide a platform for attracting businesses and talent.”

Amer Lahham, partner of public sector practice at Kearney Middle East and Africa added that “the sheer scale and ambition of this development are consummate with Vision 2030 and its far-reaching transformation of the Kingdom.”

He went on to say: “The anchor structure, the cube, can become a symbol of the capital, Riyadh, and the significant effect Vision 2030 has had on the city’s urban landscape and skyline. 

“As such, the development is promising to be one of Riyadh’s main touristic attractions, becoming a main contributor to the city and Kingdom’s tourism and hospitality sector.”

Opportunities created by New Murabba

The project is set to bring about several economic opportunities for local businesses and the broader Riyadh economy.

“New Murabba has the potential to become a hub for innovation and collaboration, serving as a magnet and launchpad for sectors like the creative industry. This will have a direct and indirect positive impact on Riyadh’s economy,” Arthur D. Little’s Bevilacqua said.

“By focusing on high-quality education, the project will attract talent and convert that talent into new business opportunities,” she added.

The partner went on to note that New Murabba could provide a platform for young entrepreneurs to create and commercialize innovative brands, retail concepts, and cutting-edge, entertainment-driven technologies that will generate significant footfall.

New Murabba project impact on economy, job creation

With the introduction of over 100,000 residential units and various commercial spaces, several types of jobs are expected to emerge, thereby impacting the economy as well as the local labor market.

From Bain and Co.’s perspective, Shariff said: “New Murabba project is poised to be a catalyst for economic growth and diversification. We anticipate over 300,000 direct and indirect jobs to be expected across a variety of sectors including construction, hospitality, retail, green technology, mobility, and innovation given the sheer scale of the development.”

He added: “The project will also foster partnerships between local and international firms, encouraging knowledge transfer, investment, and collaborative opportunities.” 

From ADL’s side Bevilacqua said New Murabba will “redefine living standards”, with a focus on integrating nature, health, and wellness to create an environment that attracts residents and visitors alike.

“Driven by unique products developed by creative minds, New Murabba will transform the city’s shopping and leisure experience,” she added.

On behalf of Kearney, Lahham believes that the “futuristic and unique nature” of the project should make for a differentiated product that will further elevate key economic sectors.

The Kearney representative believes New Murabba will result in the creation of a significant number of jobs, adding: “Property management should be an interesting space to monitor in this regard, with the new cube becoming a magnet for a sophisticated workforce that will operate and maintain the anchor asset, The Cube — a complex, highly digitized, experiential structure.”

Topics: New Murabba Riyadh Saudi giga-projects

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Closing Bell: Saudi main index slips to close at 12,409

Updated 02 February 2025
REEM WALID 
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Closing Bell: Saudi main index slips to close at 12,409

  • Parallel market Nomu lost 145.58 points, or 0.47%, to close at 31,105.07
  • MSCI Tadawul Index gained 1.59 points, or 0.10%, to close at 1,54561
Updated 02 February 2025
REEM WALID 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 5.62 points, or 0.05 percent, to close at 12,409.87.

The total trading turnover of the benchmark index was SR5.09 billion ($1.35 billion), as 108 of the stocks advanced and 118 retreated. 

The Kingdom’s parallel market, Nomu, lost 145.58 points, or 0.47 percent, to close at 31,105.07. This comes as 42 of the listed stocks advanced while 43 retreated. 

The MSCI Tadawul Index, however, gained 1.59 points, or 0.10 percent, to close at 1,54561. 

The best-performing stock of the day was Mutakamela Insurance Co., whose share price rose 9.74 percent to SR18.02. 

Other top performers included Allied Cooperative Insurance Group and Saudi Arabian Cooperative Insurance Co. whose share prices gained 8.55 percent to SR16 and 7.71 percent to SR17.88, respectively.

Thimar Development Holding Co. recorded the most significant drop, falling 7.5 percent to SR53.

Saudi Arabian Amiantit Co. also saw its stock prices fall 5.77 percent to SR29.40.

CHUBB Arabia Cooperative Insurance Co. saw its stock prices decline 4.26 percent to SR54.

Multi Business Group Co. announced its annual financial results for the period ending Dec. 31.

According to a Tadawul statement, the company reported a net profit of SR10.5 million last year, reflecting a 19.06 percent increase compared to 2023. 

The growth was driven by an 8 percent rise in total revenues, a 12 percent increase in gross profit, an 8 percent reduction in general and administrative expenses, and a 45 percent decrease in financing costs, despite a 161 percent surge in zakat expenses.

Multi Business Group Co. ended the session at SR18.80, up 10.43 percent.

Edarat Communication and Information Technology Co. announced its annual consolidated financial results for the period ending Dec. 31.

A bourse filing revealed that the firm recorded a net profit of SR24.6 million in 2024, reflecting a 41.98 percent rise compared to the previous year. 

The jump is primarily linked to a 31 percent rise in gross profit, which reached SR45.3 million in 2024, compared to SR34.6 million in 2023. Moreover, administrative expenses, as a percentage of revenue, dropped from 19.07 percent in 2023 to 16.71 percent in 2024, further leveraging the growth in net profit.

Edarat ended the session at SR671, up 1.55 percent.

The National Shipping Co. of Saudi Arabia announced its interim financial results for the period ending Dec. 31. According to a Tadawul statement, the firm recorded a net profit of SR2.16 billion in 2024, up 34.45 percent compared to 2023. 

The rise is owed to a surge in gross profit by SR627 million and an increase in the firm’s share in results of equity accounted investees by SR166 million. The increase in net profit was partially reduced by a decline in other income and a rise in general and administrative expenses compared to the same period last year.

National Shipping Co. of Saudi Arabia ended the session at SR29.95, down 0.67 percent.

Bank AlJazira has announced its annual financial results for the period ending Dec. 31. A bourse filing revealed that the firm recorded a net profit of SR1.23 billion in 2024, up 20.69 percent compared to 2023.

The bank ended the session at SR18.68, down 3.08 percent.

Saudi Awwal Bank also announced its annual financial results for the same period. According to a Tadawul statement, the firm recorded a net profit of SR8.07 billion in 2024, up 15.25 percent compared to 2023. This rise is due to a surge in total operating income, partially offset by a jump in total operating expenses and tax charges.

The bank ended the session at SR36.40, up 1.95 percent.

Topics: Saudi Arabia Tadawul Closing Bell TASI MSCI Tadawul Index TASI Nomu Saudi stock market Saudi Stock Exchange (Tadawul) Tadawul All Share Index (TASI)

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Saudi Electricity to settle $1.5bn in historical obligations to the state

Updated 02 February 2025
REEM WALID 
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Saudi Electricity to settle $1.5bn in historical obligations to the state

  • Disputed amounts are related to technical discrepancies in quantities, prices, and handling costs of fuel and electric power
  • Second resolution was issued to include the settlement liability amount in the Mudaraba instrument
Updated 02 February 2025
REEM WALID 

RIYADH: The Saudi Electricity Co. will settle its historical obligations to the state, totaling SR5.687 billion ($1.5 billion), following an executive panel approving a final settlement of the disputed legacy amounts.

The panel, which included a ministerial committee for restructuring the electricity sector and SEC, said the disputed amounts are related to technical discrepancies in quantities, prices, and handling costs of fuel and electric power.

A working team was formed from the ministries of energy and finance and the Saudi Electricity Regulatory Authority, in coordination with relevant authorities, to study the disputed transactions totaling SR10.3 billion.

This is part of the government’s continued efforts to enhance service levels for citizens and residents, supporting the goals of Saudi Vision 2030.

Global credit ratings agency Moody’s assigned the SEC an Aa3 rating in November, which it gives to companies with high quality, low credit risk, and a strong ability to repay short-term debts. It provides an assessment of the creditworthiness of borrowers, including governments, corporations, and other entities that issue debt.

The Tadawul statement said the committee issued a second resolution to include the settlement liability amount in the Mudaraba instrument, as per the terms of the agreement between SEC and the Ministry of Finance, within 30 days of receiving the resolution letter from the Minister of Energy.

The Mudaraba instrument is a long-term, unsecured financial tool with a profit margin tied to the regulatory weighted average cost of capital. Its profit is paid only if dividends are declared on ordinary shares. It follows Islamic Shariah principles, is treated as equity in SEC’s financials, and does not change shareholder ownership or rights.

The bourse filing said the SEC expects no significant impact on its dividend distribution.

It added that following the resolution, SEC will amend the Mudaraba agreement with the Ministry of Finance to include this amount in the Mudaraba instrument, bringing the total to SR173.607 billion.

Reclassifying the settlement amount into the Mudaraba instrument strengthens the company’s capital and prepares it for large-scale investments, reinforcing its role as a reliable electricity provider in the Kingdom.

The financial impact of the resolution is projected to be reflected in the 2024 financial statements.

Topics: Saudi Electricity Co. (SEC) Saudi Arabia

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Saudi Arabia’s military spending surges to $75.8bn in 2024, says GAMI chief
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Saudi Arabia’s military spending surges to $75.8bn in 2024, says GAMI chief

Updated 02 February 2025
Nadin Hassan
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Saudi Arabia’s military spending surges to $75.8bn in 2024, says GAMI chief

  • Kingdom strengthens global defense presence with $78 billion military budget for 2025
Updated 02 February 2025
Nadin Hassan

RIYADH: Saudi Arabia’s military spending has increased at an annual rate of 4.5 percent since 1960, reaching $75.8 billion in 2024. This accounts for 3.1 percent of global defense spending, according to a senior official.

Speaking at the fourth Global Strategies in Defense and Aerospace Industry Conference in Antalya, Turkiye, Ahmed bin Abdul Aziz Al-Ohali, governor of the General Authority for Military Industries, noted that global military expenditure now totals $2.44 trillion.

Al-Ohali emphasized that Saudi Arabia has earmarked around $78 billion for the military sector in its 2025 budget. This allocation represents 21 percent of the total government spending and 7.19 percent of the country’s gross domestic product.

The governor reiterated that the work of GAMI is aligned with Saudi Vision 2030, which seeks to build a prosperous, diversified, and sustainable economy by reducing dependence on oil revenues and fostering growth in industry and innovation.

“In the presence of His Excellency Prof. Haluk Gorgun, chairman of the Defense Industries Authority of Turkiye, and leaders of Turkish military industry companies, I discussed Saudi Arabia’s ongoing transformation toward a more diversified and innovation-driven economy,” Al-Ohali stated.

He further added: “I also emphasized the promising investment opportunities within Saudi Arabia’s military industries sector and the strategic partnerships between our two countries, with the goal of localizing over 50 percent of military spending by 2030.”

The governor underscored GAMI’s commitment to developing a sustainable military industries sector that not only strengthens military readiness but also makes a significant contribution to the national economy.

To achieve its localization goals, the authority has introduced several initiatives designed to attract both foreign and domestic investments in the defense sector.

Al-Ohali highlighted that GAMI has rolled out a range of incentives to encourage investment and expand military industries, helping companies meet localization targets.

“A total of 74 supply chain opportunities have been created within the military industries sector, with 30 priority opportunities identified, representing about 80 percent of future expenditures on supply chains,” he noted.

The authority is also offering support and facilitation to small and medium-sized enterprises specializing in military industries, both domestically and internationally.

“The aim is to establish a resilient and robust military industrial base that will not only bolster national security but also contribute significantly to the Kingdom’s economic diversification,” Al-Ohali added.

In November of last year, Al-Ohali mentioned at the Local Content Forum that Saudi Arabia had localized 19.35 percent of its military spending, a significant increase from just 4 percent in 2018. The Kingdom plans to exceed 50 percent by 2030.

He also pointed out that the number of licensed entities in the military industries sector had risen to 296 by the third quarter of 2024.

Saudi Arabia continues to solidify its position as a key player in the global defense sector, with strategic partnerships and industrial development playing a pivotal role in achieving the goals outlined in Vision 2030.

Topics: GAMI SaudiVision2030 localization

Saudi Arabia launches February ‘Sah’ savings with 4.94% return

Updated 02 February 2025
MOHAMMED AL-KINANI
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Saudi Arabia launches February ‘Sah’ savings with 4.94% return

  • Minimum subscription amount is SR1,000 and the maximum total issuance per user during the program period is SR200,000
  • Kingdom aims to raise savings rate among residents from 6% to the international benchmark of 10% by 2030
Updated 02 February 2025
MOHAMMED AL-KINANI

JEDDAH: Saudi Arabia has launched the second round of its subscription-based savings product, Sah, for 2025, offering a competitive return of 4.94 percent for February.

Issued by the Ministry of Finance and organized by the National Debt Management Center, the Sah bonds are the Kingdom’s first savings product designed specifically for individuals. 

Structured within the local bond program and denominated in Saudi riyals, Sah offers attractive returns to promote financial stability and growth among citizens.

The product aligns with the Financial Sector Development Program under Saudi Vision 2030, which aims to raise the savings rate among residents from 6 percent to the international benchmark of 10 percent by the end of the decade.

The Shariah-compliant, government-backed sukuk began at 10:00 a.m. Saudi time on Feb. 2 and will remain open until 3:00 p.m. on Feb. 4. Redemption amounts are expected to be paid within a year, as announced by the NDMC on X.

Sah offers fee-free, low-risk returns and is available through the digital platforms of various approved financial institutions. The bonds are issued monthly based on the issuance schedule, with a one-year savings period, fixed returns, and profits paid out at the bond’s maturity.

The minimum subscription amount is SR1,000 ($266), corresponding to the value of one bond, while the maximum total issuance per user during the program period is SR200,000. Returns are paid monthly per the issuance calendar.

The savings period lasts one year with a fixed return, and accrued profits are disbursed at the bond’s maturity. Future returns will be influenced by market conditions on a month-to-month basis.

The product is available to Saudi nationals aged 18 and older, who must open an account with either SNB Capital, Aljazira Capital, Alinma Investment, SAB Invest, or Al-Rajhi Capital.

Last month, NDMC announced the closure of the year’s first issuance with a total amount allocated of SR3.724 billion. It was divided into four tranches, with the first valued at SR1.255 billion to mature in 2029 and the second worth SR1.405 billion, maturing in 2032. The third tranche totaled SR1.036 billion to mature in 2036, while the fourth amounted to SR28 million and matures in 2039.

The initial 2025 issuance concluded on Jan. 7, offering a competitive return of 4.95 percent over its three-day subscription period.

Topics: Saudi Arabia sah bonds Financial Sector Development Program

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Saudi stc Group tops MENA telecom operators with $57.7bn market cap

Updated 02 February 2025
Nirmal Narayanan
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Saudi stc Group tops MENA telecom operators with $57.7bn market cap

  • stc posted a net profit of SR11.23 billion in the first nine months of 2024
  • Company’s Saudi mobile subscriber base grew 7.9% year on year
Updated 02 February 2025
Nirmal Narayanan

RIYADH: Saudi Arabia’s stc Group has emerged as the largest listed telecom operator in the Middle East and North Africa, with a market capitalization of $57.7 billion as of Jan. 28, according to a Forbes analysis.

The ranking places stc ahead of UAE’s e&, the Kingdom’s Etihad Etisalat, also known as Mobily, Qatar’s Ooredoo Group, and UAE’s Emirates Integrated Telecommunications Co., which round out the top five telecom firms in the region by market value. 

The combined capitalization of these five companies stood at $132 billion, representing 84.7 percent of the total market value of the 16 publicly listed telecom operators in the region.

stc’s share price rose 2 percent year on year to SR43.3 ($11.6) as of Jan. 28. On Feb. 2, the stock gained 0.34 percent to trade at SR43.65 as of 12:30 p.m. Saudi time. The company posted a net profit of SR11.23 billion in the first nine months of 2024, marking a 2 percent increase from the same period a year earlier, according to Saudi Exchange data.

The group’s financial arm, STC Bank, recently secured a non-objection certificate from the Saudi Central Bank to commence operations, becoming the first licensed digital financial institution in Saudi Arabia. The approval aligns with the regulator’s push for digital transformation and enhanced competition in the banking sector while ensuring financial stability.

Forbes said that stc’s Saudi mobile subscriber base grew 7.9 percent year on year in the first nine months of 2024, reaching 27.6 million, while fixed-line subscribers rose 2.3 percent to 5.7 million. In contrast, stc Kuwait saw its mobile subscriber base decline 4.2 percent to 2.3 million by the end of the third quarter.

Saudi Arabia’s Public Investment Fund holds a 62 percent stake in stc Group.

Among regional rivals, e& holds the second-largest market capitalization at $41.1 billion, while Mobily ranks third at $12 billion. Mobily’s stock price climbed 14.5 percent year on year to SR58.4 as of Jan. 28, with net profit surging 43 percent to SR2.12 billion for the first nine months of 2024. The company’s subscriber base also expanded 1.5 percent to 11.7 million.

Ooredoo Group ranks fourth with an $11.4 billion market capitalization, followed by Emirates Integrated Telecommunications at $9.8 billion.

Topics: STC mobile Saudi Arabia Saudi Telecom Co. (STC)

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