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
UNCCD COP16: Saudi Arabia announces Green Zone to combat land degradation
RIYADH: Saudi Arabia will host a special UN forum to combat desertification with the introduction of a dedicated Green Zone and thematic days for the first time in the event’s history.
As part of its presidency of the UN Convention to Combat Desertification COP16, the Kingdom has announced a dedicated area focused on raising global awareness about land degradation, while enabling key decision-makers from scientific, non-governmental, political, business, and at-risk communities to find and fund lasting solutions.
The Green Zone will host thematic days designed to rally action on critical issues, including agri-food systems and finance, during the conference set to take place from Dec. 2-13 at Boulevard Riyadh City.
This initiative aligns with the Saudi Green Initiative target to turn 30 percent of the Kingdom’s land into nature reserves, plant 10 billion trees, and restore 40 million hectares of degraded land.
“Land degradation, desertification and drought impact almost every corner of the planet, and every living being on it, from the species at risk of extinction to the lives and livelihoods impacted by severe drought,” said Osama Faqeeha, deputy minister for environment at the Ministry of Environment, Water and Agriculture, and adviser to the UNCCD COP16 Presidency.
“Saudi Arabia will host the first-ever UNCCD COP16 Green Zone to mobilize the international community and maximize the opportunity during December’s conference of delivering lasting global change,” he added.
There will also be a Blue Zone, which along with its green counterpart will feature seven thematic days designed to foster action and dialogue among key stakeholders.
Land Day will focus on land restoration initiatives and nature-based solutions, while the Business for Land Forum will bring together international leaders to discuss the economic importance of sustainable land practices.
Finance Day will address ways to close the financing gap in land degradation, along with a special ministerial dialogue and innovations in Sustainable Land Management financing. Governance Day will focus on improving women’s land rights and address policy issues surrounding land tenure and resource governance.
Agri-Food Systems Day will spotlight food security, crop resilience, and sustainable farming. Resilience Day will explore water scarcity, drought resilience, and early warning systems for sand and dust storms.
People’s Day will feature a youth caucus to engage young people, as 1 billion people under 25 in regions dependent on land and natural resources for jobs and livelihoods face significant challenges.
Alfanar Projects, SEC sign $5.33bn deals to support Saudi energy modernization
RIYADH: Energy deals worth SR20 billion ($5.33 billion) have been signed between Alfanar Projects and Saudi Electricity Co. to advance the Kingdom’s power modernization and sustainability efforts.
The agreements, announced during the Energy Localization Forum hosted by the Ministry of Energy, include the construction of the Middle East’s largest High-Voltage Direct Current Converter Station, according to a press release.
This facility, developed in partnership with China Electric Power Equipment and Technology Co., will deliver 7 gigawatts of power between the Central, Western, and Southern regions.
The deals also include projects for battery storage systems, smart distribution centers, and renewable energy integration, aimed at improving grid reliability and supporting Saudi Arabia’s Vision 2030 goals of energy self-sufficiency and sustainability.
Saudi Arabia aims to get 50 percent of its power from renewable energy by 2030, with a total capacity of 130 GW. This includes 58.7 GW from solar and 40 GW from wind, making it the most ambitious renewable energy target in the Gulf Cooperation Council.
Amer Al-Ajmi, executive vice president of sales and marketing at Alfanar Projects, said: “The confidence placed in us by the Ministry of Energy, through its representative, Saudi Electricity Co., affirms our commitment to deliver and execute transformative projects of this scale.”
He added: “At Alfanar Projects, we combine our robust resources, technical expertise, and a highly skilled national workforce to create a sustainable energy infrastructure that supports the Kingdom’s self-sufficiency goals and strengthens its role as a leader in renewable energy.”
The signing ceremony was attended by Saudi Energy Minister Prince Abdulaziz bin Salman, Minister of State Hamad bin Mohammed Al-Sheikh, and Minister of Industry and Mineral Resources Bandar bin Ibrahim Alkhorayef.
Other key representatives included Khaled Al-Ghamdi, CEO of Saudi Electricity Co., and Sabah Al-Mutlaq, vice chairman of Alfanar Co. and managing director of Alfanar Projects, who represented both organizations.
Alfanar Projects is a Saudi-based company developing sustainable energy projects that support economic growth and environmental goals in the Kingdom and beyond.
Earlier this month, Saudi Electricity Co. reported a net profit of SR5.6 billion for the first nine months of 2024, up from SR 4.6 billion last year. The company’s power generation capacity grew by 1.4 percent, with its directly owned capacity rising to 56.9 GW.
Closing Bell: Saudi benchmark index edges up to close at 11,830
RIYADH: Saudi Arabia’s Tadawul All Share Index rose by 0.16 percent or 18.40 points to reach 11,830.38 points on Monday.
The total trading turnover of the benchmark index was SR5.4 billion ($1.46 billion), as 78 of the listed stocks advanced, while 151 retreated.
The MSCI Tadawul Index increased by 1.22 points, or 0.08 percent, to close at 1,487.07.
The Kingdom’s parallel market Nomu also increased, gaining 119 points, or 0.40 percent, to close at 29,596.35 points. This comes as 44 of the listed stocks advanced while as many as 34 retreated.
The index’s top performer, the National Co. for Glass Industries, saw a 9.11 percent increase in its share price to close at SR53.90.
Other top performers included Arriyadh Development Co., which saw a 5.76 percent increase to reach SR27.55, while Almasane Alkobra Mining Co.’s share price rose by 4.41 percent to SR68.70.
The Power and Water Utility Co. for Jubail and Yanbu also recorded a positive trajectory, with share prices rising 3.26 percent to reach SR57. CATRION Catering Holding Co. also witnessed positive gains, with 3.20 percent reaching SR129.
East Pipes Integrated Co. for Industry was TASI’s worst performer, with the company’s share price dropping by 3.78 percent to SR137.40.
Arabian Pipes Co. followed with a 3.68 percent drop to SR109.80. Alkhorayef Water and Power Technologies Co. also saw a notable drop of 3.31 percent to settle at SR140.
Elm Co. and MBC Group Co. were among the top five poorest performers, with Elm Co.’s share declining by 3.24 percent to settle at SR1.127.60 and MBC Group’s falling by 3.18 percent to sit at SR44.15.
On Nomu, Shalfa Facilities Management Co. was the best performer, with its share price rising by 14.03 percent to reach SR95.90.
Sure Global Tech Co. and Mohammed Hasan AlNaqool Sons Co. also delivered strong performances. Sure Global Tech Co. saw its share price rise by 13.24 percent, reaching SR83.80, while Mohammed Hasan AlNaqool Sons Co. recorded a 12.20 percent increase, standing at SR43.70.
Osool and Bakheet Investment Co. also fared well with 9.81, and Banan Real Estate Co. increased 7.73 percent.
Alqemam for Computer Systems Co. shed the most in Nomu, with its share price dropping by 12 percent to reach SR88.
Natural Gas Distribution Co. experienced a 5.87 percent decline in share prices, closing at SR54.50, while Horizon Educational Co. dropped 5.66 percent to settle at SR75.
Raoom Trading Co. and Lana Medical Co. were also among the top decliners, with Raoom Trading Co. falling 5.26 and Lana Medical Co. declining 4.89 percent.
Pakistan Stock Exchange may gain at least 27% by end of 2025 — Bloomberg
- Benchmark KSE-100 Index forecast to increase to 127,000 points by Dec. 2025, a 34% rise, from 94,704 points it closed on Friday
- Key index advanced as much as 0.6% on Monday, taking gains to more than 50% this year, the second best performer globally
ISLAMABAD: Pakistan’s stocks are expected to advance by more than a quarter by the end of next year as the nation’s economy shows improvement under a loan program with the International Monetary Fund and the currency stabilizes, Bloomberg reported on Monday, quoting two brokerage houses.
The benchmark KSE-100 Index is forecast to increase to 127,000 points by December 2025, or a 34% rise, from the 94,704 points it closed last Friday, according to Topline Securities Ltd. in a report announced on Nov. 16. Arif Habib Ltd. targets the index to reach 120,000 points, a gain of 27%.
“The stage is set for a potential market re-rating with declining interest rates, a stable rupee, and improving macroeconomic indicators,” Karachi-based brokerage Arif Habib commented in a report.
Pakistan’s economy has stabilized with inflation easing from record levels that has allowed the central bank to cut the interest rate for four straight meetings to 15 percent, the lowest in two years.
The key index advanced as much as 0.6% on Monday, taking its gains to more than 50% this year, the second best performer globally, according to data compiled by Bloomberg.
The equity market will be offering a 37% return including 10% dividend yield by the end of 2025 because of economic stability and falling bond yields, Karachi-based Topline said in a separate report.
Pakistan is also increasingly attracting the attention of foreign investors, particularly in its debt and equity markets, said Arif Habib.
Saudi commercial records surge 68% in 20 months
RIYADH: Saudi Arabia has seen a remarkable 68 percent growth in commercial records over the 20 months since the implementation of its New Companies Law, according to a recent government report.
The law, which took effect on Jan. 19, 2023, introduced significant reforms aimed at simplifying business processes and fostering a more dynamic corporate environment. By the end of the third quarter of 2024, the number of commercial records had risen to 389,413, up from 230,762 before the law’s introduction, the Ministry of Commerce reported.
Among the law’s key innovations are streamlined processes for setting up joint-stock companies, the ability for shareholders to participate remotely, and improved financing options, including allowing limited liability companies to issue debt instruments. These changes have reshaped the corporate landscape by simplifying company formation and offering flexible financing avenues.
The law also encourages broader ownership by easing the purchase of shares and equity stakes. Notably, it introduces a simplified joint-stock company model and includes provisions for non-profit organizations. Other reforms include allowing sole proprietorships to transition into any company type, modernizing rules for corporate mergers and transformations, and permitting company splits.
Small and micro enterprises are exempt from the requirement of an external auditor, reducing their compliance burdens. Additionally, the law enhances digital services, enabling remote shareholder meetings and decision-making, and removes restrictions across all stages of company formation, operation, and exit.
The reforms also introduce a family charter to govern family-owned businesses and simplify the process for foreign companies to operate in the Kingdom, creating a more flexible and investor-friendly environment.
In its September report, the International Monetary Fund praised the reforms for improving access to financing, reducing fees, and strengthening governance, which has helped attract record levels of foreign investment. The IMF also noted that the reforms have contributed to the growth of non-oil sectors and increased employment.
The IMF further highlighted that the rise in non-oil revenues underscores the effectiveness of these reforms, which have also led to better compliance and alignment of customs procedures with international best practices.
In addition, in September, Saudi Arabia approved new laws related to commercial registration and trade names, further streamlining business operations and improving the overall business environment.
These changes were approved at a Cabinet session in Riyadh on Sept. 17, chaired by Crown Prince Mohammed bin Salman.
