SYDNEY: Virgin Australia sold 10 percent of its business to Singapore Airlines while agreeing to buy a 60 percent stake in Tiger Airways Australia as it upped the ante in its battle with Qantas.
In a slew of announcements, the country’s second-biggest airline after the Flying Kangaroo also said it was making a Aus$98.7 million ($ 101.9 million) takeover offer for Perth-based Australian regional carrier Skywest.
Virgin agreed to pay Aus$ 35 million ($ 36 million) for its holding in Tiger, the loss-making subsidiary of Singapore’s Tiger Airways, while Singapore Airlines bought its stake for Aus$ 105 million.
“The transactions overall represent a monumental shift for Virgin Australia which, if approved, will see a more even playing field in Australian aviation,” Macquarie analysts said in a note.
“They arguably create a replica of Qantas.”
Virgin chief executive John Borghetti said the deals were designed to accelerate the airline’s growth and increase competition in Australia, where the domestic market has long been dominated by Qantas.
The acquisitions of Tiger and Skywest would boost Virgin’s presence in the budget and regional markets, “enabling us to fast-track our expansion in these areas and become a stronger competitor.”
“These transactions will bring important benefits to Australia, driving growth in jobs, tourism and competition,” said Borghetti, adding that he planned to make the carrier Australia’s “airline of choice in all markets.”
If the Tiger and Skywest deals receive regulatory and shareholder approvals, Virgin will expand its fleet to 139 aircraft and employ more than 9,000 workers.
Australia has a lucrative domestic market and global airlines have been deepening ties with local carriers to access it.
Last month, Qantas and Emirates announced a major global alliance which opens up Qantas’s domestic network of more than 50 destinations and nearly 5,000 flights per week to the Dubai-based airline.
Singapore Airlines is a key international competitor to Qantas and CEO Goh Choon Phong said his company taking a stake in Virgin showed “our shared commitment to an alliance that provides a wide range of consumer benefits.”
“Singapore Airlines fully supports the ongoing transformation of Virgin Australia, which has already resulted in a more competitive aviation market in Australia,” he added.
The Singaporean airline, which paid 42.88 cents a share for an issue of 245.6 million stock, a 6.8 percent discount to the last trading price, joins Etihad which also has a 10 percent stake in Virgin.
Richard Branson’s Virgin Group and Air New Zealand are other major equity holders, giving the airline significant financial clout to mix it with Qantas.
Virgin shares closed up 5.4 percent Tuesday at 48.5 Australian cents.
Borghetti described Singapore Airlines as “an important strategic alliance partner” and City Index analyst Peter Esho said Singapore’s move was “a strategic shift down south to back Qantas’ main domestic competitor.”
“As Qantas closes more Asian deals and looks at ramping up its Emirates code share alliance, competitors will be feeling the heat,” he said.
In the Skywest deal, Virgin made a cash and scrip offer for the airline that operates in regional Australia and Southeast Asia, in competition with Qantas’ regional service QantasLink.
Skywest executive chairman Jeff Chatfield said the offer represented a substantial premium to the current share price.
“Based on our advice it is likely that this proposal will take some months to fully play out,” he said in a statement.
Virgin Australia sells stake to Singapore Airlines
Virgin Australia sells stake to Singapore Airlines
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.
THC partners with SIRC to boost sustainability, innovate waste solutions
JEDDAH: Saudi Investment Recycling Co. and the Kingdom’s the Helicopter Co. have partnered to boost sustainability efforts and develop innovative waste management solutions.
The two companies, operating under the Saudi Public Investment Fund, signed a memorandum of understanding that highlights their commitment to advancing sustainable aviation practices and reducing environmental impact, supporting the Kingdom’s transition to a circular economy in line with Vision 2030.
As part of its 2035 goals, SIRC aims to divert 85 percent of industrial hazardous waste from landfills through recycling and treatment.
The waste sector also targets diverting 60 percent of construction and demolition waste, with 12 percent recycled, 35 percent reused, and 13 percent treated.
Under the partnership, the companies will collaborate on technology-driven operations and expand THC’s services into new sectors that align with sustainability objectives, according to the Saudi Press Agency.
Ziyad Al-Shiha, SIRC CEO, described the partnership as a step toward driving innovation, cutting emissions, and ensuring long-term environmental safety for the sector.
“This collaboration strengthens the Kingdom’s leadership in the global green economy and paves the way for a more sustainable future,” Al-Shiha said, adding that the deal aligns with broader efforts to position Saudi Arabia as a leader in sustainability and green economic initiatives.
Commenting on the collaboration, Arnaud Martinez, CEO of THC, said the initiative is part of his company’s strategy to minimize its carbon footprint.
Martinez added that the agreement is about turning ambitious ideas into tangible achievements that contribute to a sustainable future for aviation and the environment.
THC posted on its X account: “We are pleased to sign a memorandum of understanding with the Saudi Investment Recycling Co., with the aim of enhancing common interests in the waste management and recycling sector, and various environmental sectors in line with achieving the goals of Vision 2030.”
The investment recycling company, the largest industrial waste management company in the Gulf Cooperation Council with a fully integrated platform to handle, store, transport, treat, and safely dispose of the hazardous waste generated by industries, plans to divert 100 percent of municipal solid waste, recycling 81 percent and processing 19 percent for waste-to-energy purposes.
These efforts align with the ambitious targets set by the Waste Management National Regulatory Framework for 2035, including a 13-million-tonne reduction in carbon dioxide emissions, attracting SR6 billion ($1.6) billion in foreign investments, creating 23,000 jobs, and contributing $9.9 billion to the national gross domestic product.
Saudi rent now, pay later firm Rize closes $35m in equity and debt funding
- Company also plans to enhance its technological offerings, including automating leasing processes
- Real estate loans in Saudi banks reached a record SR846.48 billion in the third quarter of 2024
RIYADH: Saudi real estate technology company Rize has closed an SR132 million ($35 million) “Series A” funding round to expand its presence beyond the nation’s capital.
The round included a mix of equity and debt. funding and was led by Raed Ventures, with participation from SEEDRA Ventures, Aqar Platform, JOA Capital, Nama Ventures, and HALA Ventures.
The funding also featured a debt financing partnership with Partners For Growth to bolster Rize’s financial capabilities.
Given the high down payment required for tenants to secure a rental property in the Kingdom, the company has developed a model that enables tenants to pay annual rent in 12 monthly installments, while property owners receive the full amount upfront.
The rise in Saudi Arabia’s real estate financing underscores the sector’s increasing importance in the Kingdom’s economy, creating a strong foundation for innovative solutions like Rize’s “rent now, pay later” model.
“This investment represents a major turning point in our journey and reflects the investors’ confidence in our vision to develop the leasing sector,” said Ibrahim Balilah, CEO of Rize.
Founded in 2021 by Balilah and Mohammed Al-Fraihi, the Riyadh-based company aims to promote sustainability in the Saudi rental market and claims to have facilitated over SR500 million in total rental value through its platform.
The Series A investment will support Rize’s growth strategy, including expanding its presence beyond Riyadh into the Eastern and Western regions of Saudi Arabia.
The company also plans to enhance its technological offerings, including automating leasing processes via its app to improve user experience.
Al-Frahi, co-founder and chief technology officer of Rize, said: “We have worked hard to develop our internal technologies to enable the automation process and make the rental experience smoother. This investment round is a significant step to enhance our technologies and accelerate the company’s growth.”
Aqar Platform, one of the key investors and a major player in the proptech sector, plans to integrate Rize’s RNPL service into its platform, offering tenants more flexibility in payment options.
The collaboration is expected to enhance the leasing process and provide innovative solutions for users.
Omar Al-Majdouie, co-founder at Raed Ventures, said: “We believe in Rize’s ability to bring about a transformative change in the real estate leasing sector, not only by offering innovative services but also by enabling digital transformation in this important field.”
Waleed Al-Barrak, principal at SEEDRA Ventures, compared Rize’s growth trajectory to that of successful regional fintech leaders, like Tabby and Tamara.
“Rize is transforming the Saudi rental market and redefining the standards of how people rent. Its extraordinary growth mirrors the success stories of industry leaders,” Al-Barrak said.
Real estate loans in Saudi banks reached a record SR846.48 billion in the third quarter of 2024, reflecting a 13.29 percent year-on-year increase, according to data from the Saudi Central Bank.
The growth was driven by retail and corporate lending, with corporate loans jumping 22 percent to SR189.6 billion, while lending to individuals accounted for 78 percent of the total at SAR 656.88 billion, growing at 11.02 percent annually.
Real estate loans now make up nearly 30 percent of the total loan portfolio of Saudi banks, which stood at SR2.85 trillion by the end of the third quarter.
UAE’s money supply M1 increases 1.5% to $247.7bn
RIYADH: The UAE’s M1 money supply saw a monthly rise of 1.5 percent at the end of October, reaching 909.9 billion dirhams ($247.7 billion), according to the latest figures released by the country’s central bank.
The summary report revealed the rise was primarily driven by a 14.9 billion dirhams increase in monetary deposits, which offset a 1.3 billion dirhams decline in currency circulating outside banks.
M1 supply includes liquid money that can be used for spending or transactions. It consists of cash, including coins and paper bills, and funds in checking accounts that are readily accessible for daily transactions.
The UAE’s M2 money supply, which includes M1 and quasi-monetary deposits, rose by 0.9 percent, reaching 2.27 trillion dirhams at the end of October, up from 2.25 trillion dirhams in September.
This growth was driven by an increase in M1 and a 7.5 billion dirhams rise in quasi-monetary deposits.
The country’s M3 money supply, which encompasses M2 and government deposits, grew by 1.3 percent, reaching 2.75 trillion dirhams at the end of October, compared to 2.72 trillion dirhams in September.
The report highlighted that the increase was largely attributed to the expansion of M2 and a 13.8 billion dirhams rise in government deposits.
The M3 money supply is calculated by adding government deposits held at banks operating in the UAE and the Central Bank to the M2 money supply.
The UAE’s monetary base saw a slight decline of 0.1 percent, falling to 743 billion dirhams at the end of October from 743.5 billion dirhams in September.
The decrease was primarily driven by a 11.4 percent drop in banks’ and other financial corporations’ current accounts and overnight deposits with the central bank.
This decline overshadowed increases in currency issuance by 0.8 percent, reserve accounts by 0.05 percent, and monetary bills and Islamic certificates of deposit by 6.2 percent.
The UAE’s gross banking assets, including bankers’ acceptances, grew by 1.3 percent, reaching 4.46 trillion dirhams at the end of October, up from 4.4 trillion dirhams in September.
The UAE’s gross credit rose by 0.6 percent, reaching 2.17 trillion dirhams at the end of October, compared to 2.16 trillion dirhams in September.
This increase was driven by a 0.6 percent rise in domestic credit and a 0.7 percent increase in foreign credit.
Domestic credit growth was driven by a 0.2 percent increase in lending to the government sector, a 3.0 percent rise in lending to the public sector, and a 0.1 percent increase in lending to the private sector, which outweighed a 1.8 percent decline in credit to non-banking financial institutions.
The country’s total bank deposits climbed by 1.5 percent, reaching 2.80 trillion dirhams at the end of October, up from 2.76 trillion dirhams in September.
This growth was driven by a 1.2 percent rise in resident deposits and a 4.7 percent increase in non-resident deposits.
The increase in resident deposits was attributed to higher deposits from the government sector by 2.3 percent, government-related entities by 3.6 percent, and the private sector by 1.1 percent, which offset a 13 percent decline in funds from non-banking financial institutions.
