Saudi Arabian Monetary Agency’s (SAMA's) foreign reserve assets increased by $2 billion to reach $730 billion in January, according to researchers.
The increase follows four consecutive monthly declines, which totaled 8 $11.9 billion since reaching a peak of $741 billion in August, said Jadwa Investment’s latest chart book.
“The decline in the previous four months was likely caused by the fall in oil export revenues, while government spending was kept at an elevated level,” said the Jadwa economists.
Brent reached $62 per barrel at the end of last month, partially supported by bullish sentiment as a result of month-on-month declines in the US oil rig count although this did not prevent crude stockpiling in the US, which meant WTI’s gains in February were more modest.
“Looking forward, we expect the rebound in oil prices is likely to improve Saudi oil export revenues in coming months,” stated the Jadwa team led by Fahad M. Alturki, chief economist and head of research.
The Tadawul All-Share Index (TASI) rose by 4.9 percent, month-on-month, in February as investor sentiment was boosted by Brent oil stabilizing around the $60 per barrel mark.
Saudi crude production remained unchanged, month-on-month, in January but production declined in both Libya, due to a resumption in civil conflict, and in Iraq, due to logistical reasons, added the Jadwa report. A rise in the official selling prices (OSPs) to Asian customers led to a decline in Saudi crude exports in December, month-on-month.
TRADE
China replaced the US as the largest source for Saudi imports during 2014, according to the report.
It said the imports from China grew from 7 percent in 2004 to 14 percent in 2014 a share of total Saudi imports, while the rest of the major trade partners saw their export shares to Saudi decline during the same period.
Nonoil exports for December declined slightly compared to the previous month, but remained unchanged, year-on-year.
New letters of credit opened indicate that import growth is likely to be mild in coming months, said the report.
Jadwa’s chart book for March also stated that broad money supply growth fell in January, owing to slow growth in bank deposits. Year-on-year growth in total deposits for both the private sector and the government slowed. The downward trend affected both demand and time and savings deposits.
Slower growth occurred to both demand and time and savings deposits, which grew by 10.2 percent and 12.2 percent year-on-year respectively.
“We believe that this trend is likely to reverse in coming months due to the recently announced fiscal package, ” said the report.
INFLATION
Data for January shows that CPI slowed for the fifth consecutive month to 2.2 percent, year-on-year, according to the chart book.
It said that foodstuffs continued to slow, year-on-year, for the fourth consecutive month to reach 2.1 percent, while housing inflation accelerated to 2.7 percent, year-on-year.
Core inflation slowed to 2 percent year-on-year in January, down from 2.3 percent yea-on-year in the previous month. Most components of the core index recorded a mild slowdown.
BANK LENDING
According to the report, bank lending to the private sector posted a healthy rise in January, resuming its monthly growth following a decline in the previous two months. The share of credit with short-term maturities continued its gradual decline. Healthy growth in lending coupled with a monthly decline in deposits led to an increase in the loan-to-deposit ratio.
Short-term lending declined as a proportion of the total to 49 percent in January, compared to 53 percent during the same period last year. This could indicate that liquidity in the private sector is further improving, as companies shift from financing day-to-day operations to financing longer-term capital expenditure.
STOCK MARKET
The TASI rose by 4.9 percent, month-on-month, in February. The Saudi benchmark stock index was up 5.2 percent since the end of 2014, although its performance in February was still at the lower end when compared to most global indices. This was the TASI’s second consecutive monthly rise since September 2014.
Market turnover averaged SR9.7 billion per day in February, up 20 percent month-on-month, the highest turnover average since August 2014. Banks and petchem stocks saw the largest turnover by sector, with the smaller sectors seeing higher turnover to market capitalization,
The TASI’s price to earnings (PE) trended upwards in February to 18.5, rising above the two year average of 17.2. The TASI’s PE remains on the higher side when compared to major and regional indices but dividend yield is comparatively better than many emerging market indices.
Eight out of 15 sectors recorded positive performance in February. The energy sector was the best performer as it benefitted from fresh calls for reforms in subsidies. Real estate and industrial investment benefitted from improved sentiment over oil prices.
The worst performing sector was hotels, which was affected by seasonality, according to the report.
The cement sector was down due profit-taking, telecoms is still suffering from previous regulatory issues and hotels was affected by seasonality.
Rebound in oil prices to boost Saudi export revenues
Rebound in oil prices to boost Saudi export revenues
WEF panel offers first impressions of Donald Trump’s new order
- Experts contemplate how the president’s ‘America First’ doctrine will mesh with the WEF’s globalist ethos
- Davos panelists predict a lighter touch on tech regulation, more protectionism, and greater unpredictability
LONDON: While world leaders, business titans, and policymakers gathered in Davos, Switzerland, for the opening of the World Economic Forum’s 55th annual meeting on Monday, all eyes were on Washington, where Donald Trump was being inaugurated for his second term.
This dual spectacle underscored the contrast between two seemingly opposing worldviews: Trump’s “America First” doctrine and the WEF’s globalist vision of “Collaboration for the Intelligent Age.”
The timing of Trump’s inauguration on the forum’s opening day seemed almost poetic. Experts noted the symbolic clash between the Davos elite, often described as the architects of a “new world order,” and Trump’s unapologetic brand of populism.
“Thank you to the World Economic Forum for having us, but most of all for having an exquisite sense of humor by asking us to say what’s going to happen in the Trump administration,” Sam Jacobs, editor-in-chief of Time magazine, quipped during the forum’s first panel, titled “First Impressions: Inauguration Day.”
This year’s conference invites participants to explore ways to tackle shared challenges like climate change, technology, and economic inequality through global collaboration. Yet, as economics writer Kate Andrews observes, it is “an idea that means little to nothing if the world’s largest economy — and leader in AI development — is not on board.”
Indeed, Trump’s policies are expected to pivot sharply from the multilateralism championed by the WEF. He has already signaled a return to “America First” economics, emphasizing trade protectionism and other barriers, which are likely to reverberate across the global economy.
Adding to this is his close alignment with US tech leaders, including Meta CEO Mark Zuckerberg, Tesla and X owner Elon Musk, and OpenAI CEO Sam Altman. Their collective support suggests that Trump’s new administration will embrace a less regulated approach to tech innovation, particularly in artificial intelligence, diverging from the more cautious frameworks championed by both former president Joe Biden and the WEF.
“I think the technology race is one that is going to be instrumental in that economic conversation,” Mina Al-Oraibi, editor-in-chief of UAE’s The National, told the panel, highlighting Trump’s likely focus on countering China’s influence in tech and trade.
Still, not all experts see Trump’s policies as a stark departure from those of his predecessor. Patrick Foulis, foreign editor of The Economist, noted that Trump’s strategies could echo some elements of Biden’s economic doctrine.
“Trump, in one sense, represents continuity, and in some sense, he’s actually the intellectual author of the Biden policy. But I think we have very, very solid grounds to doubt his ability to apply over a sustained period of time that kind of strategy,” he said during the panel.
The goal, Foulis argues, is for Trump to “exert more influence over the world economy,” relying less on incentives and more on coercive measures like debt manipulation, tariffs, and tech controls.
In what some view as an olive branch, WEF President and CEO Borge Brende said Donald Trump planned to deliver a 45-minute video address to the forum on Thursday.
The complex relationship between Trump and the WEF remains a study in contrasts. While Trump’s “America First” doctrine appears to run counter to the WEF’s globalist ethos, his presence — or lack thereof — consistently draws attention.
Despite ideological differences, Trump’s influence remains too significant for the forum to overlook. His pivotal role in brokering the recent Gaza ceasefire underscores his relevance on the global stage.
“We’re meeting here in Davos with a ceasefire finally in place in Gaza and after a terrible, devastating war over 15 months. It has changed the region, and in some ways, it changed the world. And Trump 2.0 actually facilitated the ceasefire,” Al-Oraibi said, adding that the “Trump factor” was instrumental in bringing a deal that the Biden administration failed to pull off.
“Trump clearly said there had to be a ceasefire before inauguration. And that moment crystallizes what people are expecting under a Trump administration. That comes with many lessons from its first stint at the White House, but also lessons learned about what can be possible in the Middle East.”
Over the past year, the Middle East has experienced seismic changes, including Hezbollah’s diminished influence in Lebanon and the fall of the Bashar Assad regime in Syria. Experts predict that while Trump’s foreign policy will in some ways build on Biden’s, the focus will be more on targeted economic strategies rather than broad hegemonic goals.
“I see the Trumpian agenda essentially as a more comprehensive and forceful expression of American power on a much more limited geographic scope,” said Foulis.
While Trump’s foreign policy appears increasingly selective and driven by economic interests rather than purely hegemonic ambitions, Al-Oraibi believes the Middle East will remain central to US priorities, particularly as attention on Gaza and Palestine shows little sign of waning.
“The fact that the ceasefire was put in place just before the inauguration of Donald Trump shows that they realize this is not something that they want hanging over their heads from day one, but it is a long road ahead,” she said, adding that the administration may want to take advantage of the momentum to bring about a solution to the Palestinian question and possibly promote a two-state solution.
“The one thing that is clear is the US remains the most important superpower,” she said. “Yet there’s still so much that can go wrong.”
Besides foreign and economic policy, the panel also explored how Trump’s new administration might handle energy and climate issues — both pillars of forum discussions. While a rollback of Biden’s green policies is expected, experts believe the energy transition has become too entrenched to reverse completely.
“If for Trump, that energy transition can be reframed as a nationalist cause, so something that benefits the American economy, I don’t think he’s going to oppose it,” said Jacobs.
As speculation builds around the consequences of Trump’s return to the Oval Office, many experts caution that lessons from his first term may only partially apply this time around.
What is certain, according to Jacobs, is that a Trump 2.0 presidency promises to be “200 times more unpredictable, and more volatile than the first term,” emphasizing that the real focus should be on “where points of tension emerge” rather than specific policies.
For the WEF, Trump’s presence offers both challenges and opportunities. As the world grapples with interconnected crises, Davos prides itself on providing a platform for critical dialogue. The stakes are high, however, and Trump’s return to power adds another layer of complexity to an already transformative moment in world history.
Saudi Arabia committed to embracing sustainability-driven growth in tourism sector, minister says at WEF
- Ahmed Al-Khateeb spoke in Davos ahead of launch of briefing paper on the future of travel and tourism sector
- He said Saudi Arabia continues to place a strong emphasis on supporting SMEs and entrepreneurs
DAVOS: The tourism sector in Saudi Arabia, which has undergone a transformative shift in recent years, must continue to grow with sustainable practices front and center, according to the country’s tourism minister.
Speaking at a media briefing on Monday attended by Arab News at the World Economic Forum’s annual meeting in Davos, Ahmed Al-Khateeb said it was vital the tourism industry embraced a sustainable agenda if it was to continue its upward trajectory without impacting natural environments and the communities living in them.
The Kingdom has been working with major global organizations, including the WEF, UN Tourism, and the World Travel and Tourism Council in order to achieve this, the minister said.
Al-Khateeb was speaking ahead of the launch of a WEF briefing paper on the future of the travel and tourism sector, as well as a new whitepaper from the Ministry of Tourism on investments in the sector, which showcases Saudi Arabia’s position as one of the fastest-growing tourism destinations globally.
He emphasized that the Kingdom was approaching sustainability from three key perspectives: environmental, economic and social. He added that focusing on the environment alone would not garner satisfactory results.
He said: “People travel to explore other peoples and cultures and to enjoy nature and the environment. If we don’t protect the environment, presented by nature, people will not travel. We need to ensure sustainability across all sectors — environmentally, economically, and socially.
“In 2019 we commissioned a study with the WTTC and Oxford Intelligence to analyze the sustainability of our industry, which revealed that our sector contributes to about 8 percent of global greenhouse gas emissions.
“While this isn’t as high as initially feared, it’s still a concern. If we don’t come up with the right tools to reduce this in the best-case scenario, or at least maintain this, with the very high and fast growth of our industry in the next decade, we’re afraid this number will double to 15 or 16 percent in the worst-case scenario.”
The Kingdom has already begun addressing these concerns by launching campaigns to reduce food and water waste, in conjunction with hospitality chains like Hilton and Marriott. And in 2023 it spearheaded initiatives such as the Sustainable Tourism Global Center, working with international organizations like the UN and the WTTC to promote responsible tourism practices worldwide.
From the economic perspective, Al-Khateeb highlighted how important small and medium-size enterprises were to the sector, making up 80 percent of the global tourism industry.
Ensuring the viability of these SMEs was crucial as the sector grows, especially thanks to their job-creation potential, he said. This was increasingly the case for women, including in Saudi Arabia where a milestone 25 percent of tourism sector jobs in 2023 were held by females, he added.
Saudi Arabia continues to place a strong emphasis on supporting SMEs and entrepreneurs, which includes initiatives to train and support the next generation of tourism leaders, with 100,000 Saudis being trained annually through a partnership with UN Tourism, Al-Khateeb said.
He added: “We’ve funded over 1,500 small businesses through the Saudi Tourism Development Fund over the past two years, and we continue to make the sector more attractive as a viable business opportunity for entrepreneurs.
“I am very optimistic. We want to further promote the sector, for it to prosper and to grow. We want to make this sector more important in Saudi Arabia, and we took a decision to invest in the sector to open it up.”
With the value of the global tourism industry expected to grow to $11 trillion by 2030, Al-Khateeb said that Saudi Arabia recognized the importance of both government and private sector collaboration, adding: “(Governments) design, but (the private sector) implement, they invest, they take the risk.”
He added: “The private sector is very important in our industry: It’s run by the private sector and we believe and we know in Saudi Arabia how important it is. That’s why we invited the private sector for the first time to join the G20 meetings held in Riyadh, and since then they have been joining all of them.”
‘Unlock the full potential of human capital by making healthcare an utmost priority,’ Saudi minister tells WEF
- Faisal Alibrahim said healthy, resilient and productive human capital is the backbone of economic vitality
- Participating in a session at Saudi House, he said health was a major part of Saudi Arabia’s Vision 2030 agenda
DUBAI: Healthy, resilient, and productive human capital is the backbone of economic vitality, Faisal Alibrahim, the Saudi minister of economy and planning, told a panel discussion at the World Economic Forum in Davos on Monday.
“However, we see an interesting story where we invest billions in energy, education and other solutions, but the investments in healthcare seem to be taking a second priority,” he added.
Part of Saudi House, a centralized hub serving as a meeting point for government officials, business leaders and other stakeholders at the forum, the panel was moderated by Faisal J. Abbas, editor-in-chief of Arab News.
It featured health experts such as Dr. Sania Nishtar, CEO of Gavi, the Vaccine Alliance; Sir Jeremy Farrar, chief scientist at the World Health Organization; Rayan Fayez, deputy CEO of NEOM; and Dr. Nouf Al-Numair, secretary-general of the Saudi Ministerial Committee for Health in All Policies.
Alibrahim said health was a major part of Saudi Arabia’s Vision 2030 agenda and it was “important for us to unlock the full potential of human capital in the Kingdom by making healthcare our utmost priority.”
Al-Numair said: “Saudi Arabia has taken concrete and very clear steps to adopt health in all policies.”
The initiative started “by issuing a royal decree that puts public health as a priority in all laws and regulations to prevent diseases and to increase the life expectancy of our population,” she added.
One of the committee’s policies is reducing the amount of salt and bread in foods, aimed at curbing hypertension, which affects cardiovascular health and, in turn, mortality.
“Eventually, (this) will increase the life expectancy in our population, so we have a clear understanding of what success looks like, which is linked to certain KPIs,” said Al-Numair.
A significant part of health is prevention and one of the most important tools for prevention is vaccination, Nishtar told the panel.
Although “there is a lobby of naysayers,” she added that her experience across countries has been varied with some showing a strong demand for vaccines.
“We are looking at our resource envelope, and we’re trying to raise more money, because the demand (for vaccines) from countries is so huge,” she said.
The WHO’s Sir Farrar called for a more horizontal structure with health and science built into different verticals — such as education and transport — along with a “governance structure, which ensures an inclusive voice for every ministry and every constituency.”
“Then, you have the opportunity to not have health as seen through the lens, frankly, of illness, but to have health seen through the lens of well-being,” he said.
He also asserted the need for countries to be able to adopt such a structure “either to address inequalities within the countries or inequalities between the countries.”
Health and well-being are a core part of the 15 sectors NEOM has identified as the “economic engines” of the futuristic city, said Fayez.
He said: “A lot of people hear about NEOM as this mega project or giga project, but it’s important to highlight that it is not the real estate or the infrastructure alone that makes NEOM.”
He explained that NEOM’s healthcare strategy is driven by four principles — prevention when possible, world-class treatment when needed, use of technology and sharing with the globe.
Saudi banking sector poised for stability with 10% lending growth: S&P Global
- Mortgage lending in the Kingdom is set for growth, supported by lower interest rates
- Credit losses are expected to range between 50 and 60 basis points over the next 12 to 24 months
RIYADH: Saudi Arabia’s banking sector is set to maintain profitability this year, with lending projected to grow by 10 percent, driven by corporate loans linked to Vision 2030 projects, according to a new analysis.
In its latest report, S&P Global said that stable credit growth, fueled by lower interest rates and a supportive economic environment, will underpin the sector’s performance.
The Saudi Arabia Banking Sector Outlook 2025 report projects that credit growth will bolster banks’ profitability, stabilizing the return on assets at 2.1 to 2.2 percent — aligning with its 2024 estimates.
The growth is. part of the Kingdom’s spending on Vision 2030 programs, which has increased at an annual rate of 33.8 percent since the initiative’s inception, revealed Saudi Finance Minister Mohammed Al-Jadaan in a statement in November.
“We expect Saudi banks will continue resorting to international capital markets to help fund growth related to Vision 2030,” said Zeina Nasreddine, credit analyst at S&P Global Ratings. “Banks are poised for stable profitability in 2025 as the volume effect compensates for lower margins.”
The analysis aligns with data from the Saudi Central Bank, which reported a 13.33 percent year-on-year increase in bank loans to SR2.93 trillion ($782 billion) in November, the highest growth rate in 22 months. Corporate loans were the main driver, rising 17.28 percent to SR1.58 trillion.
S&P Global’s report also said that mortgage lending in the Kingdom is set for growth, supported by lower interest rates and expanding demographics driving demand in the residential real estate sector.
Credit losses are expected to range between 50 and 60 basis points over the next 12 to 24 months, supported by banks’ strong provisioning buffers.
External funding needs will persist due to Vision 2030 investment requirements, though recent mortgage-backed securities initiatives could provide some relief, the agency said.
“NIM (Net interest margin) is expected to drop by 20- 30 bps by the end of 2025 relative to 2023 as SAMA follows the Fed’s rate cuts to maintain its currency peg,” said S&P Global.
The report anticipates nonperforming loan formation will remain slow in 2025, with NPLs increasing to 1.7 percent of systemwide loans by the end of the year, up from 1.3 percent in September, owing to fewer write-offs.
S&P Global said that Saudi banks are well-capitalized, ensuring their creditworthiness, adding that earnings generation is sufficient to support asset growth, with the dividend payout ratio expected to average 50 percent in 2025.
Saudi Arabia is projected to witness an average gross domestic product growth of 4 percent between 2025 and 2027, compared to 0.8 percent in 2024.
The US-based agency further said that Vision 2030 initiatives are anticipated to drive medium-term non-oil growth, fueled by increased construction activities and a growing services sector supported by rising consumer demand and an expanding workforce.
The report also highlighted the Kingdom’s booming tourism sector, with growth in the hospitality industry driven by improved visa processes and enhanced leisure options.
Closing Bell: Saudi main index closes in the green, reaches 12,379
RIYADH: Saudi Arabia’s Tadawul All Share Index edged higher on Monday, rising by 47.67 points, or 0.39 percent, to close at 12,379.54.
The benchmark index saw a total trading turnover of SR6.3 billion ($1.7 billion), with 116 of the listed stocks advancing, while 117 declined.
The MSCI Tadawul Index also gained 5.22 points, or 0.34 percent, to finish at 1,551.75. In contrast, the Kingdom’s parallel market, Nomu, ended the day lower, losing 281.88 points, or 0.89 percent, to close at 31,318.24, with 43 stocks advancing and 45 retreating.
Thimar Development Holding Co. emerged as the best-performing stock of the day, with its share price jumping 10 percent to SR51.70.
Other notable gainers included Arabian Pipes Co., which saw a 6.37 percent increase to SR13.36, and Middle East Specialized Cables Co., which rose by 4.95 percent to SR47.75.
Saudi Reinsurance Co. and ACWA Power Co. also posted solid gains, with their share prices surging by 4.82 percent and 4.41 percent, respectively, to SR58.70 and SR435.20.
Alamar Foods Co. saw the sharpest decline, with its share price dropping 3.33 percent to SR78.50. Nice One Beauty Digital Marketing Co. and Naseej International Trading Co. also recorded losses, with their shares slipping 2.91 percent and 2.60 percent, respectively, to SR56.80 and SR97.30.
Saudi Industrial Investment Group saw a 2.40 percent dip, closing at SR17.90, while Riyadh Cables Group Co. dropped 2.34 percent, settling at SR141.80.
Meyar Co. secured SR5.5 million in financing from Riyadh Bank to support its business expansion and enhance operational efficiency.
According to a bourse filing, the five-year financing agreement is part of the bank’s guarantee and bills program. The funds will be used to expand Meyar’s operations, develop production lines, and strengthen supply chains to boost overall efficiency. The investment aligns with the company’s strategic goals of increasing productivity and scaling its operations.
On the market, Meyar saw a 5.06 percent increase in its share price, reaching SR70.60.
Saudi Top Trading Co. announced the completion of construction at its West Coast Factory, which is set to begin trial production in the first quarter of 2025.
Located at the Rabigh PlusTech Park, the factory will start receiving raw materials, including polymer scrap, rubber, and synthetic wax, from Rabigh Refining and Petrochemical Co. This development follows a memorandum of understanding signed with Petro Rabigh in December 2022.
Under the MoU, Saudi Top Trading secured a 30-year lease on a site to produce 50,000 tonnes annually of polymer compounds, rubber, and waxes. With construction now completed, Saudi Top Trading is poised to enhance its production capabilities and leverage its partnership with Petro Rabigh.
