JEDDAH: Saudi Investment Bank (Saib) has completed an SR2 billion capital-boosting sukuk issue, the latest lender in the Kingdom to offer such an instrument to enhance its reserves.
The subordinated Islamic bond, which boosts Tier 2 supplementary capital, has a 10-year lifespan and includes an option for the bank to buy back the paper after five years, a statement to the Saudi bourse said.
Pricing of the instrument was at 145 basis points over the six-month Saudi interbank offered rate (Saibor).
The offering will support the bank’s capital base in accordance with Basel III requirements, assist its future growth and diversify funding sources, the statement added.
Sources had told Reuters in March that Saib had picked the investment banking arm of Riyad Bank 1010.SE to arrange the issue, which was slated to take place in the first half of the year.
Saib, the Kingdom’s eighth-largest lender by assets, is the latest bank in Saudi Arabia to issue a capital-boosting sukuk.
While lenders in the kingdom have high capital ratios compared with Western banks thanks the regulator’s conservative stance, a period of sustained lending growth has led many banks to sell such instruments to strengthen their reserves.
National Commercial Bank, the kingdom’s largest lender, sold an SR5 billion riyal subordinated sukuk in February, while Banque Saudi Fransi is planning to complete a deal before the end of this month, sources said in May.
Saudi Investment Bank sells SR2 billion sukuk
Saudi Investment Bank sells SR2 billion sukuk
Oil Updates — crude up, heading for 4th weekly gain as US sanctions hit supply
- Brent and WTI add about 3 percent so far this week
- China GDP tops forecast, but oil refinery output declines in 2024
TOKYO/SINGAPORE: Oil prices rose on Friday and headed toward a fourth consecutive weekly gain as the latest US sanctions on Russian energy trade hit supply and pushed up spot trade prices and shipping rates.
Brent crude futures rose 44 cents, or 0.5 percent, to $81.73 per barrel by 7:43 a.m. Saudi time. US West Texas Intermediate crude futures were up 62 cents, or 0.8 percent, to $79.3 a barrel.
Brent and WTI have gained 2.5 percent and 3.6 percent so far this week.
“Supply concerns from US sanctions on Russian oil producers and tankers, combined with expectations of a demand recovery driven by potential US interest rate cuts, are bolstering the crude market,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“The anticipated increase in kerosene demand due to cold weather in the US is another supportive factor,” he added.
The Biden administration last Friday announced widening sanctions targeting Russian oil producers and tankers, followed by more measures against Russia’s military-industrial base and sanctions-evasion efforts.
Moscow’s top customers China and India are now scouring the globe for replacement barrels, driving a surge in shipping rates.
Investors are also anxiously waiting to see any possible more supply disruptions as Donald Trump takes office next Monday.
“Mounting supply risks continue to provide broad support to oil prices,” ING analysts wrote in a research note, adding the incoming Donald Trump administration is expected to take a tough stance on Iran and Venezuela, the two main suppliers of crude oil.
Better demand expectations also lent some support to the oil market with renewed hopes of interest rate cuts by the US Federal Reserve after data showed easing inflation in the world’s biggest economy.
Inflation is likely to continue to ease and possibly allow the US central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday.
Meanwhile, China’s economic data on Friday showed higher-than-expected economic growth for the fourth quarter and for the full year 2024, as a flurry of stimulus measures came into effect.
However, China’s oil refinery throughput in 2024 fell for the first time in more than two decades barring the pandemic-hit year of 2022, government data showed on Friday, as plants pruned output in response to stagnant fuel demand and depressed margins.
Also weighing on the market was that Yemen’s maritime security officials said the Houthi militia is expected to announce a halt in its attacks on ships in the Red Sea, after a ceasefire deal in the war in Gaza between Israel and the militant Palestinian group Hamas.
The attacks have disrupted global shipping, forcing firms to make longer and more expensive journeys around southern Africa for more than a year.
Chief economists expect global economic conditions to weaken in 2025
DUBAI: More than half of chief economists expect economic conditions to weaken in 2025, according to a World Economic Forum report released on Thursday.
“The growth outlook is at its weakest in decades and political developments both domestically and internationally highlight how contested economic policy has become,” said Aengus Collins, head of Economic Growth and Transformation at the WEF.
The outlook is more positive in the US, with 44 percent of chief economists predicting strong growth in 2025, up from 15 percent last year. However, 97 of respondents in the “Chief Economists Outlook” report said they expected public debt levels to rise, while 94 percent forecast higher inflation.
Europe, on the other hand, remains the weakest region for the third consecutive year, with 74 percent of economists expecting weak or very weak growth.
In the Middle East and North Africa region, 64 percent expect moderate growth while a quarter expect weak growth.
Collins said the global economy was under “considerable strain,” worsened by increasing pressure on integration between economies.
A total of 94 percent of economists predict further fragmentation of goods trade over the next three years, while 59 percent expect the same for services trade. More than 75 percent foresee higher barriers to labor mobility and almost two-thirds expect rising constraints on technology and data transfers.
The report suggests that political developments, supply chain challenges and security concerns are critical factors that will likely drive up costs for both businesses and consumers over the next three years.
Businesses are expected to respond by restructuring supply chains (91 percent), regionalizing operations (90 percent), focusing on core markets (79 percent) or exiting high-risk markets (76 percent).
When the economists were asked about the factors contributing to current levels of fragmentation, more than 90 percent pointed to geopolitical rivalries.
This is largely due to the “strategic rivalry” between the US and China, according to the report, along with other geopolitical disturbances, particularly in Ukraine and the Middle East.
Global fragmentation is likely to result in a more strained global landscape with chief economists expecting an increase in the risk of conflict (88 percent), a more bipolar system (79 percent) and a widening divide between the Global North and South (64 percent).
“In this environment, fostering a spirit of collaboration will require more commitment and creativity than ever,” Collins said.
Australian-Saudi Business Council hosts joint forum to help boost trade
- Event brought together more than 35 participants from both nations to discuss key opportunities for trade and investment
RIYADH: The Australian-Saudi Business Council hosted a joint forum on Thursday to discuss the enhancement of collaboration and trade between the two countries.
Led by Daniel Jamsheedi, the council’s country director, the event brought together more than 35 participants from both nations to discuss key opportunities for trade and investment.
The event, a collaboration with the Federation of Saudi Chambers, aimed to build on the success of the first Australian Pavilion at the Future Minerals Forum in Riyadh this week, and further strengthen the economic partnership between the two countries, organizers said.
Sam Jamsheedi, the president of the council, thanked the federation for the vital role it played in the success of the forum.
“The Federation of Saudi Chambers is one of our key stakeholders and our partner within the Kingdom,” he said.
“As a business council, we appreciate the efforts put in to enable this joint business forum to succeed.”
Closing Bell: Saudi main index rises to close at 12,256
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 43.82 points, or 0.36 percent, to close at 12,256.06.
The total trading turnover of the benchmark index was SR6.14 billion ($1.63 billion), with 104 stocks advancing and 129 retreating.
Similarly, the Kingdom’s parallel market Nomu gained 198.90 points, or 0.64 percent, to close at 31,498.71, as 51 of the listed stocks advanced and 37 retreated.
The MSCI Tadawul Index also rose, gaining 9.13 points, or 0.60 percent, to close at 1,535.78.
The best-performing stock of the day was Shatirah House Restaurant Co., which debuted on the main market. Its share price surged 5.31 percent to SR22.62.
Other top performers included Fourth Milling Co., with its share price rising 4.49 percent to SR4.19, and Saudi Paper Manufacturing Co., whose share price surged 3.36 percent to SR67.70.
Riyadh Cables Group Co. recorded the biggest drop, falling 2.88 percent to SR141.80.
National Co. for Learning and Education also saw its stock price fall 2.73 percent to SR185.40.
Buruj Cooperative Insurance Co. also saw a drop in its stock price, falling 2.63 percent to SR22.22.
On the announcements front, the Arab National Bank has launched the offer of its SR-denominated additional tier 1 capital sukuk under its sukuk program.
According to a Tadawul statement, the amount, terms, and return on the sukuk will be determined later based on market conditions. The minimum subscription and par value are set at SR1 million.
The targeted investors are institutional and qualified clients in line with the Capital Market Authority’s regulations. HSBC Saudi Arabia and ANB Capital Co. are joint lead managers for the sukuk issuance.
Arab National Bank ended the session at SR21.10, with no change in price.
Tam Development Co. received a purchase order for a project worth SR29.45 million as part of a framework agreement with a government agency announced in March, with a total value of SR200 million.
Tam Development Co. ended the session at SR200, up 3.45 percent.
Saudi Real Estate Co. secured Shariah-compliant banking facilities from Bank Al-Jazira worth SR700 million. The facilities will finance ongoing and new projects, as well as expansion investments.
Part of the financing, up to SR100 million, will support working capital requirements. The loans have a one-year short-term tenure and a maximum of ten years for long-term loans, with promissory notes and real estate mortgages as guarantees.
Saudi Real Estate Co. ended the session at SR27.30, down 2.01 percent.
Saudi Ma’aden awards $921m contracts for its 3rd phosphate fertilizer plant
- Project designed to add 3 million metric tonnes annually to Kingdom’s phosphate production capacity
- Contracts align with Saudi Arabia’s broader strategy to diversify its economy and expand its industrial base
JEDDAH: Saudi Arabian Mining Co. has awarded three contracts worth SR3.45 billion ($921.58 million) for its third phosphate fertilizer plant, reinforcing the Kingdom’s position in the global market.
In a filing with the Tadawul stock exchange, the national mining firm, also known as Ma’aden, named the contractors as China National Chemical Engineering Co., Sinopec Nanjing Engineering and Construction, and Turkiye-based Tekfen Construction and Installation Co.
First announced in 2016, the project is designed to add 3 million metric tonnes annually to Saudi Arabia’s phosphate production capacity. Estimated to cost SR24 billion, the facility is being developed in phases and was initially projected to reach full capacity by 2024, the company said at that time.
The contracts align with Saudi Arabia’s broader strategy to diversify its economy and expand its industrial base. As part of Vision 2030, the Kingdom is capitalizing on its vast reserves of phosphate, gold, copper, and bauxite to reduce its reliance on oil.
Valued at approximately $2.5 trillion, the Saudi mining sector is regarded as the fastest-growing globally and is positioned as the third pillar of its industrial economy.
The three contracts awarded include an SR1.22 billion agreement for general construction at Ras Al-Khair with China National Chemical Engineering. A second contract, worth SR1.36 billion, was awarded to Sinopec’s subsidiary for construction at Wa’ad Al-Shamal. Tekfen Construction secured the third contract at SR877 million, with work at Wa’ad Al-Shamal included.
The development aligns with Ma’aden’s 2016 announcement of a feasibility study for a world-class phosphate fertilizer production complex in Wa’ad Al-Shamal Minerals Industrial City, situated in Saudi Arabia’s Northern Province.
Ma’aden announced significant discoveries of gold and copper in the Arabian Shield region during the Future Minerals Forum 2025 in Riyadh, further advancing its mining ambitions.
The discoveries include extensive gold deposits at Wadi Al-Jaww and copper reserves at Jabal Shayban. Mineralization at these sites extends from shallow depths of 20 meters to depths of up to 200 meters, highlighting their potential for large-scale extraction, the company added.
Ma’aden also unveiled promising developments at its Mansourah-Massarah gold mine, where drilling has revealed high-grade gold mineralization beyond the current pit design.
The financial impact of these discoveries is yet to be determined, Ma’aden said in a statement to the stock exchange.
