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Lexus invests in new Saudi shownroom
Abdul Latif Jameel Group (ALJ), the exclusive distributor of Toyota, Lexus & Daihatsu in Saudi Arabia, is investing in a SR250m ($66.5m) into a new Lexus centre in the capital, Riyadh, Arab News has reported. The new Lexus centre will provide main services including sales of new and used Lexus cars, service and spare parts. The new facility comprises a 3,000 sq m showroom accommodating around 20 brand new vehicles, a used cars showroom with a capacity of about 15 vehicles, and a service division to accommodate 83 vehicles, which could be services simultaneously. Source: Arab News |
Saudi stock exchange advances slightly
The Riyadh-based Tadawul All Share Index (TASI) finished 0.21% higher at 6,519.76. Arabian Pipes Company was the top gainer, closing 9.96% higher at SR29.80. Saudi Arabia is the largest oil exporting country in the world. Citibank-analyst David Lubin comments in his latest oil study on Saudi Arabia: "Pressure on oil exporting countries to spend seems to have increased recently as a result of the political pressures created by the 'Arab Spring'. The most visible effort to increase spending in the face of political pressure has been Saudi Arabia's, where the authorities have committed to two successive fiscal packages, of $37bn and $80bn respectively: the two add up to some 25% GDP. In addition, higher levels of oil production in Saudi Arabia, to offset that lost from Libya, should boost Saudi GDP growth this year." Oil prices continued to trade above $115 per barrel. Market bellwether SABIC dipped by a quarter percent on profit bookings, closing at SR103.25. Source: Ame Info |
Saudi Arabia pledges to stamp our corruption
A senior Saudi Arabia minister on Monday said the kingdom would leave no stone unturned in its fight against corruption. Prince Nayef bin Abdulaziz, Saudi's second deputy prime minister and minister of interior, made the pledge as he met with the man put in charge of a new anti-corruption unit. Prince Nayef told Mohammad bin Abdullah Al-Sharif, chairman of the National Authority for Combating Corruption (NACC) - announced by King Abdullah last week: "The fight against corruption has wide meanings and implications such as fighting a disease. All doors should be open to you to perform your duties sincerely, faithfully and easily." Prince Nayef said the NACC had been established as an "implantation of a national strategy to protect integrity and fight corruption in the country", state news agency SPA reported. The direct link between the NACC and the Saudi King, it said, reflected the King's support and concern of ensuring that "no challenging obstacles would face the mission of this developmental institute". King Abdullah announced the new commission for combatting corruption earlier this month, as part of a raft of measures including $93bn of handouts to citizens. A series of decrees outlined a boost in welfare benefits, a minimum wage of SR3,000 ($800) for state employees, bonuses for public sector workers and students, and a drive to build new housing. The numbers announced were large: SR250bn ($66.7bn) would be spent on 500,000 housing units and SR16bn ($4.3bn) on more medical facilities. This followed a $37bn package announced last month in an initial move to ease social tensions. Source: Arabian Business |
Saudi Arabia to hold local selections on Sept 22
Saudi Arabia, the Arab world’s largest economy, will hold municipal elections on September 22 as pro-democracy unrest sweeps through the region. Voter registration will open on April 23 and results will be announced within 48 hours, the general elections commission said on Monday. The announcement comes after Saudi King Abdullah on March 18 ordered an increase in spending, including $67bn on housing and funds for the military and religious groups that have backed a ban on domestic protests. A call for a March 11 demonstration in the kingdom failed to materialize after the government deployed troops and senior clerics denounced protests as un-Islamic. More than two months of protests have shaken the Middle East and North Africa as citizens demand civil rights, higher living standards and the ouster of autocratic regimes. In Bahrain, a Saudi neighbour, security forces quelled mainly Shiite demonstrators calling for democracy after Saudi-led troops from the Gulf Cooperation Council entered the country on March 14. Although Saudi Arabia held its first municipal elections in February 2005, the second election was delayed in May 2009. Saudi Arabia is the least democratic country in the Middle East and ranks 160th out of 167 countries worldwide, according to the Democracy Index for 2010 published by the Economist Intelligence Unit. All political parties and organizations are banned in Saudi Arabia. Source: Bloomberg |
Saudi needs $80 bn power investment by 2021, says minister
Saudi Arabia has to invest SAR300bn ($80.2bn) in the power sector over ten years and requires an additional 30 gigawatts over the next 20 years to meet its needs, a government official said on Monday. "Over the next ten years, we need over 300 billion Saudi riyals to be invested ... as we need to add more capacity," Saleh Al Awaji, the country's deputy minister for electricity, told an energy conference in Abu Dhabi. The current available power capacity in Saudi is 50 GW compared with 23,800 MW in 2000, Awaji said, adding the average growth forecast was for eight percent annually. He added an additional capacity of 27 to 30 GW power would be needed over the next 20 years. Although sitting on the world's biggest oil and gas reserves, Saudi Arabia is struggling to keep pace with rapidly rising power demand, as petrodollars have fuelled a region-wide economic boom as well as rapid population growth. "The biggest challenge facing Saudi's power sector is the high rate of demand growth, the need for capital and attracting private investors." Awaji said that about half a million new housing units were coming up in the next three to five years and so a lot of energy would be needed to serve these units. "We need to anticipate measures to reduce the high rate of growth and investigate the major areas of electricity consumption, which is air conditioning," he said. Independent Power Projects (IPP) from 2011 to 2020 will add 12,000 MW of capacity and this is estimated to cost SAR80bn. The kingdom said earlier this month it would step up its use of crude oil for power generation in 2011. Awaji also said the water sector had similar challenges. Ongoing projects in the water sector are valued at SAR120bn currently. "There is still a huge market for investors in the water sector," he said. Source: Reuters |
Social spending spree may push Saudi inflation up
Saudi Arabia may see inflation from massive social spending packages announced over the past month, the kingdom's finance minister said. Ibrahim al-Assaf said, however, that he hoped any impact would be muted from any spending. Saudi Arabia's elderly King Abdullah announced last week $93bn in social handouts, on top of another $37bn announced less than a month earlier, as popular protests sweep across the region. "Any increase in spending could have an impact on inflation," Ibrahim al-Assaf said. "But if there is any impact we hope it is temporary and limited." Saudi annual inflation slowed to a 10-month low of 4.9 percent in February, with growth in housing and transport costs subsiding, though analysts said the slowdown was temporary due to robust global food prices and crude above $100 per barrel. Asked about funding for the spending programme, Assaf said: "The funding will come from the budget." Assaf said earlier in March the kingdom's economy is in "excellent" shape and a rise in oil prices will boost the strong economic and financial position of the world's top oil exporter. Source: Reuters |
Saudi Arabia’s break-even oil price was about $80 a barrel, Saidi syas
Saudi Arabia’s break-even oil price was about $80 a barrel in 2010, the chief economist at Dubai International Financial Centre Authority said. The kingdom uses as much oil domestically as Germany, which has four times as many people, Nasser Saidi said at a conference in Dubai on Monday. The break-even oil price for many countries in the Middle East is about $80-$85 a barrel, making them very vulnerable to fluctuations in prices as it’s easy to increase spending but a lot harder to bring that spending down, he said. Source: Bloomberg |
Yanbu airport gets upgrade
Saudi General Authority of Civil Aviation (GACA) has upgraded Prince Abdul Mohsen Airport in Yanbu into a regional airport, Arab News has reported. "We have also taken this decision considering the growing passenger traffic to Yanbu," GACA said in a statement. Spanning over an area of 8,500 sq m, the airport features new control towers, cargo facilities, security and safety systems, as well as modern aviation and passenger facilities to serve 600,000 travellers annually. Source: Arab News |
Tadawul bourse declines by 0.18%
The Saudi Arabian Tadawul market closed 0.18% lower at 6,508.28. Allianz Saudi Fransi Cooperative Insurance Company was the top gainer, closing 9.94% higher at SR19.90. Petrochemical leader SABIC dipped for the second day straight, closing 0.73% lower at SR102.50. Eighty shares gained, 50 declined and 15 closed flat. Source: Ame Info |
Saudi Arabia has approves mortgage laws modifications
Saudi Arabia has approved modifications to the kingdom's mortgage law related to loans, Arab News has reported. According to the new law, the Saudi Arabian Monetary Agency (Sama) will be authorised to issue licenses to companies to register such mortgage agreements between two parties. The draft mortgage law is a package of five laws, including a mortgage registration law, which provides for the use of mortgages in real property financing, including mortgage registration. Source: Ame Info |
Saudi to award Haramian train project within two weeks from March 29, 2011
Saudi Arabia is to announce the winner of the contract for the final phase of works on the Haramain Train project within two weeks, Saudi Gazette has reported, citing an unnamed official source. "The final phase entails the provision of rail tracks, carriages, signal points and electrical fittings," the source said. The Haramain Train project is a 444-km high-speed inter-city rail transport system linking the holy cities of Makkah and Madinah via King Abdullah Economic City in Rabigh and King Abdulaziz International Airport in Jeddah. Source: Saudi Gazette |
Lulu hyper market opens in Riyadh (March 29, 2011)
Abu Dhabi-based EMKE Group has opened its third store in the Saudi capital with a total investment of SR 220m ($58m), Saudi Gazette has reported. The new store is part of a SR 2bn investment plan by the supermarket chain in the kingdom, Yousuf Ali, managing director of EMKE Group, said. The company plans to open Lulu stores in Riyadh's downtown Batha, and one each in Jeddah, Makkah, and Madinah within the next three months, he said. Source: Saudi Gazette |
Saudi mortgage law a boost for contractors, says Shuaa
A top governing council's approval of a mortgage law in Saudi Arabia will lead to formation of specialised mortgage companies and a rise in availability of funds, boosting the prospects of contractors and developers, Shuaa Capital said. The Shura Council's approval of the mortgage law will facilitate bank ownership and repossession of properties, though the proposed law requires a number of steps to be fully implemented, Shuaa said in a note. Dar Al Arkan Real Estate Development Co, Saudi Arabia's largest developer by market value may be a major beneficiary as it is the largest developer of low-to-mid income housing in the Kingdom - the segment with the highest need for funding access, Shuaa Capital said. Developers Emaar Properties, the builder of the world's largest tower Burj Khalifa, Saudi Real Estate and Emaar Economic City are also expected to gain once the mortgage law is implemented. The brokerage said contractors are better placed to benefit as they build for developers as well as the Saudi government. "They (contractors) do not just build housing and offices, but also schools, hospitals... district cooling and roads... all the ancillary facilities that follow housing developments," Shuaa said. The contractors best positioned to benefit from the rise in public and private development spending in Saudi Arabia include companies like - Arabtec Holding, Drake & Scull International, Al Khodari and Sons Co and Mohammad Al Mojil Group, the brokerage said. Arabtec, with 32 percent of its backlog in the kingdom, an established joint-venture with one of the major contractors in Saudi Arabia as well as a long-history of executing mega projects, is well positioned to reap the rewards. Source: Reuters |
Saudi Arabia calls for 28% increase in oil rigs in Kingdom
Top oil exporter Saudi Arabia has unexpectedly called on oilfield service firms to expand the kingdom's oil rig count by nearly 30 percent, according to Simmons & Co, to ensure spare production capacity remains ample as supply uncertainty grows. Saudi state-run oil giant Saudi Aramco met with leading oil service companies including Halliburton over the weekend, unveiling plans to boost the country's rig count this year and next to 118, from around 92 now, Simmons & Co analyst Bill Herbert said on Monday. "Saudi Arabia has been expected to tread water on its production capacity, so this is unexpected," Herbert said from Houston in a phone interview. "The risk premium in the Middle East has risen. Also, with Libyan production falling, Saudi Arabia may feel it has to be ready for higher production capacity." Plans to boost the rig count constitute the most overt evidence that Saudi Arabia, holder of the world's biggest oil reserves, is stepping up investment in the face of crude prices of over $100 a barrel, though it is unclear whether this will expand the kingdom's spare capacity beyond the current total of as much as 3.5 million bpd, or merely prevent it from falling. "It's definitely not for expanding capacity," said Siamak Adibi, senior consultant at FACTS Global Energy in Singapore. "For this year, the majority of new wells to be drilled is just for maintaining existing capacity" of 12.5 million barrels per day, Adibi added, including the neutral zone. Saudi oil-minister Ali al-Naimi has outlined plans to boost the kingdom's crude oil production capacity to 15 million bpd, including mention of specific fields, saying such an expansion would only proceed if warranted by demand. But Simmons & Co founder Matthew R. Simmons, until his death in August 2010, repeatedly questioned the kingdom's ability to boost and sustain production at high levels in the long term, citing geological constraints. More than any other country, Saudi Arabia defines its international role by the ability to rapidly increase oil production to meet growing demand or cover disruptions elsewhere, such as the recent collapse in shipments from war-torn Libya. The kingdom has responded by pumping 500,000 to 750,000 barrels a day more in recent weeks, analysts said. "This is Saudi Arabia's raison d'etre. It must ensure that spare capacity is sufficient or else its importance in the world will be diminished," said oil analyst Peter Beutel of Cameron Hanover in Connecticut. Analysts said a recent Saudi output boost to around nine million barrels a day may have made Aramco apprehensive about its ability to prime the pumps further if the world calls for much greater volumes. "At the start of the year they were producing around 8.5 mln bpd of oil and were sitting on around 3.5 mln bpd of spare capacity. They've had to increase production by between 500,000 and 750,000 bpd after Libya went out of the market so their spare capacity is already way down," said Roger Read, managing director at Morgan Keegan in Houston. A New York-based oil analyst, who tracks Saudi production and requested anonymity, said: "You could see this in one of two ways. Either they realize that 3 million barrels of spare capacity isn't enough, or they realize their capacity isn't actually that high." Saudi Arabia hasn't publicly discussed plans to expand its overall crude capacity since completing a $100bn project to raise it by three million bpd to a "sustainable" 12 million bpd last year, excluding the neutral zone, leading some analysts to conclude that the increase in rig counts responds to decline at older fields. "The decline rate in some large OPEC producers like Iran and Saudi Arabia is not new. It's a challenging issue for these countries, so they just want to drill more wells to keep the same production capacity," Adibi said. Saudi Arabia wants the rig count to rise quickly in the second half of 2011 and the first half of next year, and may use some of them for a $16bn Moneefa project, Herbert said. Aramco is undertaking the Moneefa project to compensate for declines at other fields rather than to boost capacity, with a planned start-up by June 2013 at 500,000 bpd and a ramp-up to 900,000 bpd by 2024. "There will be some new rigs for Moneefa, but they won't go ahead to drill all wells in one year," Adibi from FACTS said. "It will gradually increase production over ten years and it will be offsetting decline from other fields. It's not additional capacity." Halliburton said late on Monday that it would accelerate activity at Moneefa, a project to tap massive offshore heavy crude reserves, following recent discussions with Saudi Arabia. In 2008, the company was awarded a contract to provide drilling and associated work at 93 Moneefa wells off northeast Saudi Arabia. The plans are "manifestly positive" for oil service companies, Herbert said. Schlumberger Chief Executive Andrew Gould privately told analysts on Monday he was encouraged by Saudi Arabia's commitment to expand spare capacity regardless of any pullback in oil prices, an analyst at the Howard Weil oil conference in New Orleans said. Crimped oil activity elsewhere in the Middle East and Africa is likely to hit Schlumberger's first-quarter earnings, Gould said separately. US oil futures fell 14 cents to $103.84 a barrel early on Tuesday, down from a 30-month high near $107 last week. Since January, political unrest in North Africa and the Middle East has helped to lift prices. So far, the kingdom has avoided major domestic unrest, although the upheaval has been threatening the regimes of neighbouring Yemen and Bahrain. "If we did see a significant oil supply shock and Saudi Arabia came out to produce more, that would be the telling factor that they are willing to supply the market in difficult times," said Ben Westmore, a commodities analyst at National Australia Bank, adding that "more exploration goes somewhere at communicating that sort of sentiment." Saudi Arabia is OPEC's top producer and controls more than a fifth of world oil reserves. Source: Reuters |
Saudi nears six week high property stock gain
Saudi Arabia's benchmark edged higher, rising for a seventh session in nine, but investors are cautious ahead of first-quarter earnings. The benchmark climbed 0.2 percent to 6,519 points, nearing Sunday's six-week high. Bluechips are mixed. Saudi Telecom Co fell 1.8 percent, but Saudi Electricity Co rose 1.5 percent. The real estate index climbed 0.4 percent to a six-week high, extending gains on renewed speculation Saudi Arabia's long-awaited mortgage law would soon be approved. "Real estate stocks may have an effect for next two days on the mortgage law," said a Riyadh-based trader who asked not to be identified. "I would be cautious on real estate numbers. We could see some weakness. In the long-term, they are good, but people are short-term here." Emaar Economic City rose 0.7 percent and Taibah gained 2.6 percent. Earlier this month, the Saudi king announced $93bn in handouts, which includes SR250bn ($67bn) to be spent on 500,000 new homes, while on Friday the kingdom set up a ministry for housing. Renaissance Services tumbled on fears a subsidiary's $500m London listing may be delayed, weighing on Oman's index. The index slipped 0.5 percent to 6,339 points, a 12 day low. Renaissance fell 6.6 percent, with the company holding an analysts' get-together after Monday's annual meeting. Dubai-based unit Topaz's offering was expected to give it a market capitalisation of about $1.7bn. "During the meeting, the management indicated it will delay the IPO until it receives the implied valuation of $1.5bn," investment bank EFG-Hermes wrote in a research note. "There was a statement from the CEO that the IPO can be deferred till starting next year if the recent events in the Middle East affect the valuation of Topaz." The stock had risen as much as 5.2 percent after the IPO announcement earlier this month, but has now given back these gains. "If the Topaz IPO goes through, we will see a strong comeback for the Oman market," said Adel Nasr, United Securities brokerage manager. Bank Muscat slipped 0.6 percent, but National Bank of Oman added 0.3 percent. UAE markets ended mixed as Dubai gave back early-session gains, with Emaar Properties' surprise dividend providing only a short-term lift. Dubai's index ended lower 0.1 percent at 1,555 points, ending a five-day rally. Emaar Properties climbed 0.3 percent after company shareholders approved a 10 percent cash dividend, its first dividend since 2008. "The dividend announcement came as surprise and the market has taken it positively, but it seems the board was pressured into announcing the payout, rather than this being a discretionary distribution," said Jad Abbas, EFG-Hermes real estate analyst. "Emaar wanted to preserve cash for a rainy day and it has some short-term refinancing risk we can't ignore." Emaar has debt worth AED4.5bn maturing in 2011, Abbas says. "We expect most of this to be rolled over," he added. "2011 should be a relatively good year for Emaar, with a shift towards its international operations." UAE bank earnings should improve this year, said Robert McKinnon, ASAS Capital chief investment officer. "For sectors like real estate I'm less optimistic, but the ones with Saudi Arabia exposure would obviously still stand to benefit." said Robert McKinnon, ASAS Capital chief investment officer. Du rose 1.6 percent. On Sunday, Nomura started coverage of the telecoms operator, giving it a neutral rating and a price target of 3.32 dirhams. Dubai Financial Market ended 2.3 percent lower. Abu Dhabi's index edged higher 0.04 percent to 2,635 points, taking its March gains to 1.8 percent. Most bluechips rose, with Aldar Properties and Sorouh Real Estate gaining 1.3 and 3.3 percent respectively. Qatar's index rose 0.3 percent to 8,399 points. Barwa Real Estate climbed 1.3 percent and Qatar National Bank added two percent. Kuwait's index ended higher for a third day, while volumes remained thin ahead of the end of the first quarter. "The market is very dull, volumes are very low," said a Kuwait based trader on condition of anonymity. "Investors are laying low until results are out." Yet trading is expected to increase later this week because Thursday is the final day of the quarter and traders typically try to boost the valuation of their portfolios, he added. Kuwait's benchmark climbed 0.3 percent to 6,323 points. The index is down 2.4 percent in March. Kuwait Finance House fell 1.9 percent, while Commercial Bank added 1.1 percent and Al Ahli Bank rose 1.6 percent. Source: Reuters March 30, 2011 |
Saudi bad cheque figures decrease by 34%
According to a report by the Saudi Credit Information Company (SIMAA), the number of bad cheques issued in the kingdom fell 34% in 2010, Saudi Gazette has reported. The value of bad cheques written by individuals fell by 32 % from around SR6bn in 2009 to some SR4bn in 2010, while the value of bounced cheques written by companies declined by 22% from the SR 9bn recorded in 2009 to SR 7bn last year, the report said. Source: Saudi Gazette March 30, 2011 |
Tadawul market remains in lackluster mood
The Saudi Arabian Tadawul market added 0.17% to reach 6,519.13. After two days of declining, shares of petrochemical giant SABIC rose by 0.25%, closing at SR102.75. Banks and retail firms overall performed weaker, with Banque Saudi Fransi dipping by 0.62% to close at SR47.80. Eighty-nine shares gained, 42 declined and 14 closed flat. Source: Ame Info March 30, 2011 |
Saudi Investment Bank to raise capital by 22%
Saudi Investment Bank said it plans to increase its capital by 22 percent to SR 5.5 billion ($1.5 billion) by issuing 1 free share for each 4.5 shares. "This will involve the transfer of 1 billion riyals from the leftover profits as of 31, December, 2010," the firm said in a statement. In separate statements on Sunday, the Capital Market Authority said it had added the bank’s new shares, adding one share for each 4.5 shares, and that it will adjust the bank’s share price to 20.15 riyals. Source: Arab News March 30, 2011 |
Saudi's Al-Jazira Bank issued $ 267 million Islamic bond
Saudi's Al-Jazira Bank completed a SR1 billion ($267 million) 10-year Islamic bond sale which was four times oversubscribed, the lender said in a bourse statement on Tuesday. 'Bank Aljazira announces successful completion of its sukuk issuance of SR1 billion on March 29. The issuance subscriptions were four times more than the amount approved by the Saudi monetary agency,' the bourse statement said. Pricing for the sukuk for the first five years will be 1.7 per cent over the six-month Sibor and can be returned in five years, the bank said. Al-Jazira Bank had announced earlier this month that it planned to issue a local currency-denominated Sukuk and said that the local units of HSBC and JP Morgan Chase & Co will be managing the bond sale. Source: Trade Arabia |
NCB Capital assigns "overweight" to Dar Al arkan, Taiba; "Neutral" to Saudi Real Estate
NCB Capital expected the Saudi real estate sector to benefit from several major factors, namely; the higher number of young population, increasing number of families and expanding trade as well as religious tourism. Despite the political unrest in the region, KSA’s realty market is projected to remain strong in the medium and long term. Dar Al Arkan Real Estate Development Co.: According to the report issuer, the developer generates the highest annual return on equity (ROE), compared to peers. However, the stock underperformed the market in FY10, on concerns about the company’s SAR 4 billion debts that will come due on 2012. However, the investment arm of the National Commercial Bank (NCB) confirmed the developer’s ability to fulfill these liabilities from internal cash flows and partial debt re-financing. Accordingly, NCB Capital recommended an "Overweight" on the stock, defining its target price at SAR 11.2. The stock trades at a P/E ratio of 6.5x and a P/B ratio of 0.66x in FY11. Taiba Holding Co. (TIRECO) : Based on its asset portfolio, Taiba Holding is forecasted to report higher revenue and profit margins. In addition, the company plays a major role in the hospitality sector, thanks to its fundamentals. The market value of the company’s real estate portfolio reached SAR 4.7 billion, compared to a book value of SAR 2.9 billion. The stock trades 16% lower than its book value. Accordingly, NCB Capital assigned the stock an "Overweight" rating, and defined its estimate price at SAR 18.8. Saudi Real Estate Co. (SRECO): The realty developer reports solid and stable financial figures, compared to local peers. The stock trades 14% lower than its book value, due to lower ROE. The investment bank placed a "Neutral" recommendation on the stock, and set its strike price at SAR 26.5. In the same vein, Global Investment House (Global) stated that the sector traded in March at a book value 55% lower than average market level, at a P/B ratio of 0.9x, compared to 2.0x for Tadawul. Source: Mubasher |
Saudi Arabia seeks an extra gasoline imports
Saudi Arabia's Aramco is seeking an extra five cargoes of gasoline through tenders in April-June, potentially reducing the Mediterranean supply overhang, traders said on Tuesday. The firm will buy an extra 180,000 tonnes of gasoline through two buy tenders, trade sources said. The first tender is for up to two cargoes a month for May and June and was awarded to BP (BP.L: Quote) and the trading arm of Russian oil company LUKOIL Litasco (LKOH.MM: Quote), a trader said. This was for 91 and 95 ron gasoline for delivery into the Red Sea or the port of Ras Tanura. Saudi Aramco has issued another spot tender for an extra cargo for April, closing on Wednesday, trade sources said. Mediterranean gasoline prices have been pressured below levels for northwest Europe, partly because Libya has halted imports due to port closures and sanctions. A Libyan state-owned gasoline tanker was also seized by rebels in mid-March in a move that further deterred suppliers from supplying the war-torn country. April gasoline prices in the Mediterranean were priced at a discount of around $11 to prices in northwest Europe, trade sources said. "This should help supplies in the Mediterranean since it's very long gasoline because of Libya," said a gasoline trader, referring to the extra Saudi demand. Israel's Oil Refineries Ltd has issued a spot tender to buy two gasoline cargoes for April and May in a move that could further sap regional supplies. Source: Reuters March 30, 2011 |
Saudi Aramco asked to provide pand for housing, Gazette reports
Saudi Aramco, the world’s biggest oil company, has been asked by Jubail City’s local council to provide land for its employees so that they can build their own houses, Saudi Gazette reported, citing Jubail’s governor. The land would help solve the industrial city’s housing problem, Abdulmuhsin al-Otaishan said yesterday after a council session, the newspaper reported. Saudi Arabia’s King Abdullah ordered a $67 billion spending package on March 18 as protests calling for better employment opportunities and democracy engulfed the Middle East. Source: Bloomber |
Petrochemical stocks lift Saudi index to 7-weeks high
The Saudi index gained 0.9 percent to close at a seven-week high, lifted by gains in the petrochemical sector after a jump in oil prices. The all-share benchmark closed at 6,623 points, its highest close since February 14, while the petrochemical sector index gained 1.5 percent points. Petrochemical giant Saudi Basic Industries Corp (SABIC) closed 0.7 percent higher and Saudi Fertilizers Co. (Safco) climbed 1.2 percent. Saudi Telecom added 1 percent after saying that it submitted an offer for Syria's third mobile licence. US crude oil futures finished Friday with strong gains, jumping more than 1 percent after robust US labour market data suggested healthy demand for fuel would continue. Source: Reuters April 3rd 2011 |
Saudi Telecom submits offer for Syrian Mobile licence
State-run Saudi Telecom (STC) has submitted an offer for a mobile licence in Syria, the company said on Saturday, one of the few countries in the region with low mobile penetration and promising growth chances. STC is one of five firms to qualify for the Syria licence auction, along with Qatar Telecom, Turkcell, France Telecom and the UAE's Etisalat, although the latter two have dropped plans to bid. "(STC) announces that it submitted on Wednesday, March 30, its technical and operational offer... The offers that are qualified by Syria's (telecommunication) ministry will enter the final (financial) phase of the auction on April 27," the company said in a statement on the bourse website. Syria, with a mobile penetration of about 30 percent in 2007, started a tender in September to sell the third mobile operator licence. The two current cellphone operators in Syria are South Africa's MTN and Syriatel, which is mostly owned by Syrian businessman Rami Makhlouf. STC faces increased competition from Etihad Etisalat (Mobily) and Zain Saudi in its home market, the biggest Arab economy. An industry source told Reuters in October that STC could be among the strongest contenders, especially after ties between the Damascus government and Riyadh improved last year. France Telecom has said it decided not to submit a bid for Syria's third mobile phone licence given the terms, with the price the main concern, given that the radio wave frequencies on offer were of lower quality and would have required a denser, and therefore more expensive, network build-out. Source: Arabian Business |
Kingdom steps up role in global energy security
Saudi Arabia holds the key to global energy security. It plays an extremely significant role in balancing the overall demand and supply. With many in the Western world continuing to be skeptical of the Saudi potential and capacity, at least in the longer run, eyes continue to remain focused on Riyadh. And any move by Riyadh is viewed critically. A Reuters report, citing Simmons & Co. analyst Bill Herbert, raised eyebrows last week when it said that Saudi Arabia is planning to boost the number of oil rigs in operation by almost 30 percent to 118 from a current level around 92. The report said Saudi Aramco met leading oil service companies including Halliburton over the weekend to discuss plans to boost the rig count to 118. Simmons’ Herbert said Saudi Arabia wanted the rig count to rise quickly in the second half of 2011 and the first half of next year. It was also suggested that Aramco might use some of the rigs for the $16 billion Manifa offshore heavy crude project, scheduled to start up by June 2013 at 500,000 bpd and to be ramped up to 900,000 bpd by 2024. Oil service company Halliburton said late on Monday it would accelerate its activity at Manifa. The Manifa project has been running one rig, but it originally targeted 10 rigs, according to analysts at Houston energy research firm Tudor Pickering Holt. Halliburton won the offshore portion of the Manifa heavy-oil project in 2008 to provide directional drilling, cementing, logging and other services for 93 wells in the Gulf waters off the north-eastern portion of Saudi Arabia. The Saudi move to increase the number of rigs came amidst increasing outage of the "sweet crude" from Libya. And true to its role in balancing the global energy demand — supply equation, media reports now confirm that Riyadh has stepped in to fill in the gap. Media reports indicate Aramco has sold three shipments of light, sweet crude for March and April delivery: Two to Austrian oil company OMV AG and one to the UK’s BP. Each order was for a Suezmax tanker, which can carry up to one million barrels of crude oil. Until the uprising, Libya was exporting about 1.3 million barrels a day, mostly to European refiners. However, the quality of the Libyan oil, made it difficult for them to replace it. Aramco is reportedly offering Arab extra-light crude in the spot market, to compensate the Libyan loss. That sort of oil previously had been available only through long-term contracts. In fact, the reports also emphasize that in order to replace the sweet Libyan crude, and Aramco had to produce a new blend of superlight crude meet the urgent needs of the European refiners. Arab extra light and the superlight blend versions are lighter than Libyan oil. Running between 0.5 percent and 0.8 percent, their sulfur contents are low enough to be considered sweet, but are higher than certain Libyan oil blends, which have sulfur contents of 0.01 percent and 0.07 percent. The report that rig activity in Saudi Arabia was to increase by around 30 percent generated quite an uproar. Eyebrows were raised. Some questioned how quickly Riyadh could be able deliver that additional volume. At least one analyst interpreted it as an indication of limited supplies in the Riyadh’s armory of oil reserves. Tudor Pickering said in a research note "either they have less dry powder (we believe less than three million barrels a day), or they are more concerned about longer-term regional unrest impacting supplies, or both." And while doubting the long term prospects of Saudi crude, Tudor Pickering asked in the note, "With Saudi producing 8.3 million barrels a day pre-Libyan disruptions, why would Saudi accelerate a heavy-oil development if they really had 4.2 million barrels per day of spare capacity?" Simmons & Co. founder Matthew R. Simmons, until his death in August 2010, repeatedly questioned Saudi Arabia’s ability to boost and sustain higher production in the long term, citing geological constraints. Other commentators have also doubted the extent of Saudi spare capacity and said it would be tested to the limit if protest movements across the Middle East caused further supply disruption. "The real risk is that the remaining spare capacity cannot accommodate an escalation in disruption right now in our view," Goldman Sachs wrote in a note dated March 7. Earlier, at the onset of Libyan uprising, Goldman had commented that Libyan disruption could absorb as much as half of OPEC’s spare capacity. The Saudi move needs to be seen with a different prism. The move is not in desperation, as some want the world to believe, it is a move by the global central bank of oil, which is more than once in past has been expected to fill in the gaps in supply. RBC Capital Markets analyst Kurt Hallead believes that Saudi Arabia is "looking to increase oil production capacity in an effort to offset lost production in Libya, create a larger spare capacity cushion and stem a spike in global oil prices." Another commentator contended that Saudi Arabia, rivaled only by Russia in terms of world oil production, was seeking to enlarge the amount of spare capacity it has and thus help blunt a potential further spike in global prices. Before that crisis erupted, the Kingdom retained spare capacity of about four million bpd — three-quarters of a global surplus of about 5 million bpd. However, the need to make up for the shortfall in Libyan crude has eroded that crucial margin. The planned deployment of more rigs shows the Kingdom is trying to build up more spare capacity — a point noted by Herbert of Simmons & Co. "Meeting Libya’s shortfall has got OPEC’s spare capacity down to uncomfortable levels, particularly on a one- to two-year forward view," he added. "The risk premium in the Middle East has risen. Also, with Libyan production falling, Saudi Arabia may feel it has to be ready for higher production capacity," he added. Low spare capacity has helped increase market volatility, many times in recent history. In order to ensure stability, this needs to be avoided. And who else can do it better than Riyadh? The call on Saudi oil is rising and the move by Aramco needs to be seen in this perspective. One cannot help underlining this fact. Source: Arab News |
GE to broaden public-private partnerships in Kingdom
RIYADH: GE will explore further opportunities for broadening public-private partnerships in Saudi Arabia, the new president & chief executive officer for operations in the Kingdom and Bahrain, Walid Abukhaled, a Saudi national, said. Nabil Habayeb, GE’s president & CEO for the Middle East and Africa region, said: "Saudi Arabia is one of the key markets for GE in the Middle East region, where our ’company to country’ approach delivers tailored solutions that meet the Kingdom’s requirements for long- term sustainability and economic competitiveness. A trusted partner in achieving the Kingdom’s ambitious social and economic growth strategies, GE’s appointment of Walid, who brings in- depth insights on the Saudi market, perfectly complements our development goals." Abukhaled said: "Among the most competitive nations in the world today, Saudi Arabia offers an unmatched landscape of economic growth opportunities across diversified sectors. With energy resources as the backbone, the Kingdom is focused on infrastructure development that ensures all-round socio-economic welfare, as highlighted by the massive investment plans recently announced." He added that "GE’s strong competencies across energy, water, aviation and healthcare, make it an ideal partner for Saudi Arabia as it moves to the next realm of growth. My focus will be to establish stronger public private partnerships and Saudization, while also working toward empowering the Saudi youth through education, knowledge transfer and engagement that bring tangible benefits for the Kingdom and GE." GE has invested heavily in Saudi Arabia, building local competencies in aviation, healthcare, oil & gas, water and transportation, among others. The company has its largest operation in the Middle East region in Saudi Arabia, where GE has over 800 employees and seven offices and facilities in key locations. Some of GE’s key initiatives in the Kingdom that also highlight the focus on local partnership include the GE Saudi Water & Process Technology Center with blending plant for water treatment chemicals; the 125,000 sq ft Power Technology Center in Dammam in partnership with Ali A Tamimi & Sons Co. for latest in repair technology for gas turbines; ’GET Water’ fleet of mobile water treatment systems in partnership with Al Tamimi Group; a Sales, Service & Training Center in Al-Khobar by Saudi Arabian Sensing Solutions Company, joint company formed by GE Sensing and the Tamimi Group and a non-destructive testing application center in Dammam in partnership with Abdullah Fouad Holding Co. and GE Measurement & Control Solutions. Bringing more than 21 years of experience in the industry, Abukhaled joins GE from BAE Systems where he was most recently the director of Portfolio Management & chairman of BAE Systems Saudi Arabia Operations Board. In that role, he was appointed as chairman of the Board for "Aircraft Accessories & Components Company" and Board Directors for "Advance Electronics Company", "International Systems Engineering" Company and "Saudi Development & Training Company", all of which carry the status of being economic offset companies. He began his career in 1990 as a graduate engineer and has held a variety of technical support, field operations, communications, sales & marketing, strategy and various executive positions. Abukhaled is considered as one of the most respected new generation Saudi business leaders. He is well-known as a public speaker addressing the key issues effecting global companies operating in Saudi Arabia. Source: Saudi Gazette |
Kingdom largest solar plant to rise in Dhahran
JEDDAH: The largest solar power plant of Saudi Arabia will be built in Dhahran by Belectric and Sun & Life. The 10 megawatts Photovoltaic Carport System is situated at the recently built North Park offices of Saudi Aramco and will cover all of the 4,500 parking spaces, the company said in a statement Saturday. Belectric, world market leader in Engineering, Procurement and Construction (EPC) of solar power plants, executes the North Park Project in cooperation with Sun & Life, Regional Solar Pioneer in the Middle East, a subsidiary of Acwa Holding, Saudi Arabian Leader in developing private Power and Water generation projects infrastructure and utilities projects. More than 120,000 CIS (Copper Indium Selenide) photovoltaic modules will be installed, supplied by the Japanese Thin Film Leader Solar Frontier (Showa Shell Sekiyu K.K.). Belectric was awarded the project by the Saudi Arabia based company Al Yamama, the project principal, building Saudi Aramco’s Northpark complex including offices and the carpark. Belectric and Sun & Life intend to enhance their cooperation to a full-scale joint venture in EPC contracting of solar power plants, and manufacturing of Balance of System components in Saudi Arabia. Belectric is known for its global track record and innovative design providing best system performance at a very competitive cost for solar power plants. "We are very proud to be awarded this project. The clear benefits of the thin-film photovoltaic modules combined with our enhanced plant technologies and project engineering are the contributing factors to drive a solar power plant reliable and efficient under hot climate conditions," said Bernhard Beck, CEO of Belectric. The large-scale power plant will produce electricity and feed it in to the public grid by the end of 2011. "Sun & Life is looking forward to work with Belectric not only to deliver this Iconic project, but also to combine both Group’s strengths and track records to develop the solar energy industry, and localize Technologies in the region. With the latest developments Solar and renewable resources become one of the best choices for energy," said Abdullah Taibah, CEO of Sun & Life. Source: Saudi Gazette |
Shoura to discuss media firms becoming joint-stock companies
RIYADH: The Cultural and Information Affairs Committee of the Shoura Council is scheduled to hold a meeting Sunday under the chairmanship of Muhammad Ridha Nasrallah to discuss converting press organizations into joint-stock companies. The Council of Saudi Chambers of Commerce has nominated a number of personalities concerned with investment and information to attend the meeting. The Committee Chairman has invited a number of Shoura Council members, who are specialists in law and have experience in investment and information and are concerned with the subject, to attend the joint meeting. Source: Saudi Gazette |
Dar Al Arkan and Abdulmosen Al Hokair Group sings a memorandum of understanding
Mr. Al Dakheel: the concept of residential neighborhoods undergoes the quality of services provided Dar Al Arkan Real Estate Development Company has signed a Memorandum of Understanding with Abdulmuhsin Al Hokair Tourism and Development Group whereby the latter leases, for ten years, an 8,000 square meters space at Alqasr project's mall developed by Dar Al Arkan in Riyadh city. The leased space will by used exclusively for establishing a world-class amusement and electronic games park. The Memorandum was signed on the sidelines of the Saudi Travel and Tourism Investment Forum 2011 organized under the theme of: "Tourism for all - a partnership for a sustainable development". The Memorandum was signed by Mr. Abdulrahman Al Dakheel, Head of Property Management, on behalf of Dar Al Arkan, and Mr. Majid Al Hokair, CEO, on behalf of Abdulmuhsin Al Hokair Group. Mr. Abdulrahman Al Dakheel cited that the signing of this Memorandum comes within the context of Dar Al Arkan's strategy to attract major companies and service providers to serve the inhabitants of Alqasr project and adjacent neighborhoods, denoting the concept of comprehensive urban development that goes beyond the mere development of residential neighborhoods to the quality of services provided for their inhabitants which provides for all economic, social, psychic, health and security prerequisites. Moreover, Mr Al Dakheel expressed his pleasure for the presence of Al Hokair Group with its extensive expertise extending over three decades in tourism and amusement industry in Alqasr Mall which targets the project's twenty to twenty five thousand residents adding to one million commuters living in the proximity. Mr. Al Dakheel considered the signing of the Memorandum of Understanding an important step towards the establishment of partnership between the two outstanding trading brands in the Kingdom and Gulf area. He further added that Al Hokair Group is an esteemed company in tourism and amusement industry in the Middle East extending its investments in that sector over many Arab countries, serving more than ten million visitors per annum. The area to be occupied by Al Hokair Group's park at Alqasr Mall, according to Mr. Al Dakheel, will include the first indoor snow village of its type in Riyadh city that will be an exciting place for the pleasure of the mall shoppers, adding to a wide range of games and other means of attraction. Mr. Al Dakheel ensured that the inauguration of Alqasr Mall which accommodates "Al Hokair", "Carrefour" and other giant companies with their renowned brands, will signify a vital trading event in the city of Riyadh. This, he believes, is part of Dar Al Arkan's plan to make Alqasr Mall a center of attraction for families and shoppers of different ages and nationalities. Mr. Al Dakheel stated that Dar Al Arkan is developing Alqasr Mall on an area of 235,000 square meters in Alsuweidi district in the center of Riyadh, an area that suffers of a scarcity of central shopping facilities of a quality, where the areas of southern and western Riyadh have a roam for only 15% of the totality of shopping centers in the capital city of Saudi Arabia, whereas the north and east of the city are served by 85% of those centers. Alqasr Mall, which consists of three upper stories, accommodates more than 300 stores, restaurants' area, family amusement area of 10,000 square meters, in addition to a two-storey parking area with a capacity of 2,000 vehicles. The mall will also have eight see-through glass elevators. The mall facades are creatively well-designed and equipped with moving lightening devices that allow for advertisement on a four-hundred meters panel. Furthermore, the mall has wide corridors of 9 to 18 meters, and equipped with the most advanced security and safety devices arranged with the most outstanding specialized world companies. Source: Zawya |
Saudi Arabia's economy to grow 5.5% on higher oil output
The Saudi Arabian economy is likely to expand 5.5 percent this year on higher oil output and state spending, Banque Saudi Fransi said Monday, raising its earlier forecast of 4.2 percent. "The rise in oil output, coupled with greater state spending commitments has also heightened the prospects for higher GDP growth this year," chief economist John Sfakianakis of the Riyadh-based bank wrote in an emailed report. The bank also increased its inflation forecast to 5.6 percent from 5.1 percent on account of higher public expenditure. Saudi Arabia, the world’s biggest oil supplier and a Group of 20 member, is increasing spending on social security and housing amid popular uprisings in the Arab world. The country pledged to help ensure adequate crude supply to the market after violence curbed exports from Libya and raised output to 8.87 million barrels a day in February, a 3.3 percent increase from January, the Organization of Petroleum Exporting Countries said in a March 11 monthly report. Banque Saudi Fransi raised its 2011 state expenditure forecast by 25 percent to SR842.4bn ($225bn), the report said. "The revised forecast also constitutes overspending of 45 percent on the expenditure target set out in this year’s budget, which would be the fastest pace of overspending in three decades." King Abdullah, who returned to the kingdom on February 23 after three months of medical treatment, announced a SR40bn ($10.7bn) increase in housing spending and allocated 1 billion riyals for the social-security budget. Later that month, Abdullah made temporary state employees permanent and ordered government organizations to advertise jobs, state television reported. In the latest measure, the government said yesterday it will offer 4,000 plots of land suitable for building housing units in the northern province of Hail. Crude has climbed almost 19 percent this year, trading as high as $108.78 a barrel today. Source: Bloomberg |
Saudi consumer firms to gain from welfare spend, Alembic HC says
Saudi Arabia's consumer sector should benefit most from the country's social spending packages, AlembicHC said, and expects positive revenue surprises in 2011. Last month, Saudi Arabia's King Abdullah announced $93bn in social handouts, the second benefits package to be unveiled within a month, and included SR250bn ($67bn) to be spent on 500,000 new homes. AlembicHC, which upgraded Herfy Food Services Co a notch to "overweight," expects thirteen percent year-over-year revenue growth at the company in 2011 driven by 20 restaurant openings and higher third-party processed meat sales. The brokerage named Jarir Marketing Company as its top Saudi consumer pick. The stock was among the worst performing MENA consumer names in 2010 with the market discounting continued margin compression on overstated concerns, it added. On Almarai Co, the Gulf's biggest dairy firm by market value, the brokerage said share price performance could remain muted in the short term as the first quarter is likely to be relatively weak. AlembicHC maintained "overweight" ratings on Jarir, Almarai and Abdullah Al Othaim Markets Co, and "neutral" on Fawaz Abdulaziz Alhokair Co. Source: Arabian Business |
Saudi PMI eases in March, inflation remains high
Business activity in Saudi Arabia's non-oil private sector eased to a three-month low in March, while input price inflation remained near February's series record pace, a survey showed on Monday. The SABB HSBC Saudi Arabia Purchasing Managers' Index (PMI), which measures activity in the OPEC member's manufacturing and services sectors, fell to 62.8 in March from 63.4 in February. The seasonally adjusted index for the world's top crude exporter is still holding well above the 50 mark that separates growth from contraction. Purchase price inflation eased to the weakest level in three months in March, though its rate remained substantial, which companies linked to higher fuel and raw material costs. Saudi Arabia's private sector firms increased their charges in March to defend profit margins from rising input costs, the survey showed. Output price inflation was solid and the most pronounced in nine months. The kingdom's consumer inflation slowed to a ten-month low of 4.9 percent in February. Finance Minister Ibrahim Al Assaf said last month that the country may see some temporary inflation from increased social spending. The survey of more than 400 private companies also showed new orders rising to 72.4 in March from 71.7 seen in the previous month to near January's series high. The survey series began in August 2009. Saudi Arabia is currently undergoing multi-billion dollar projects to upgrade its infrastructure and has rolled out three consecutive record budgets, including for 2011. It also plans to spend an estimated $130bn to ease social tensions, building new homes and hospitals. Source: Reuters |
Oil price jump evens out state spending
JEDDAH: Saudi state expenditure is forecast to grow by 24.5 percent to SR842.4 billion in 2011, a marked increased of 34.5 percent rise over 2010 figures, Banque Saudi Fransi said in its latest report on the Kingdom’s economy released Monday. It said the revised forecast "also constitutes overspending of 45 percent on the expenditure target set out in this year’s budget, which would be the fastest pace of overspending in three decades." The report, prepared by the bank’s economic research team headed by its chief economist Dr. John Sfakianakis, said that despite a jump in projected expenditures this year, Saudi Arabia should manage to produce a respectable fiscal surplus owing to a rise in oil prices in the first quarter to $94 a barrel for US crude and $105 for Brent. It added that the Kingdom’s oil production has also climbed in the last three months "to compensate for a shortfall in output by OPEC producer Libya. We have raised our full-year oil price forecast to $92 a barrel for Saudi crude and expect that, on average, the Kingdom will pump 8.9 million barrels per day of oil this year, 9.1 percent higher than 2010 output." As a consequence of the more favorable energy market environment, Saudi Arabia should achieve fiscal revenues of SR904.1 billion, enabling it to post a surplus of SR61.7 billion, or 3.1 percent of GDP. The Kingdom’s store of net foreign assets hit a record level of SR1.67 trillion ($444.88 billion) as of the end of January, easing slightly in February, giving the government a great deal of leverage to fund social programs for its citizens without incurring debt. Still, extraordinary fiscal outlays will temper the pace of foreign assets growth, and we expect the end-year total to reach $465 billion. The rise in oil output, coupled with greater state spending commitments, has also heightened the prospects for higher GDP growth this year. "We expect Saudi Arabia’s economy will expand 5.5 percent in 2011 in real terms, up from a previous forecast of 4.2 percent, with most of the new growth resulting from a direct increase in oil output. Government-steered growth of the non-oil sector growth is also a key factor to consider. We anticipate government sector GDP will rise 5.6 percent this year, its third straight year of growing more than 5 percent." With all of the new cash circulating in the economy, inflationary pressures are likely to accrue, particularly toward the second half of the year, and could lead to a rise in the overall inflation rate from our previous forecast of 5.1 percent. Coupled with high global food prices, the two-month salary bonuses granted to employees of the public sector, as well as many in the private sector, will enhance citizens’ spending power. Meanwhile, pressure to speed up home construction with SR250 billion in new state financing could raise the cost of building materials and other inputs in the coming months and years that would lead to inflation rate of 5.6 percent for 2011, the report noted. The report further said that for 2011, the cost of the recently unveiled social program is unlikely to exceed SR1.8 billion, adding that the measure "should be accompanied with attempts to train and locate jobs for citizens drawing on the scheme through job centers." Striving to improve the pay scale of employees in the public sector, King Abdullah, Custodian of the Two Holy Mosques, also ordered the minimum wage for civil service employees to be raised to SR3,000 from SR2,185. Commenting on the block of initiatives that would cost the state at least SR485 billion ($129.28 billion) in total over several years, BSF said in the report that "it is still unclear how this SR815 raise will affect the entire pay scale, which for general public service personnel ranges as high as SR20,250 depending on tenure and position. Assuming all employees receive an average raise of SR500 per month, the pay increase would cost approximately SR5.3 billion in 2011 and add at least SR7.08 billion to the full-year wage bill in 2012 and subsequent years. If the pay raises are higher, at SR815 across the board for instance, the cost would rise to SR8.7 billion in 2011 and SR11.54 billion in 2012." The report noted that the Saudi 2011 budget in December, one of the key features was an attempt to minimize overspending. The budget called for a 7.4 percent increase in state expenditures to SR580 billion – among the slowest rates of budget expansion in a decade during which public spending more than doubled. However, "this restrained fiscal scenario has taken a U-turn since then with a string of new social and economic initiatives for citizens. Source: Saudi Gazette |
Al Waleed tops list of wealthiest Arabs
JEDDAH: Forbes Middle East revealed in its sixth edition, the list of the 34 wealthiest Arabs of 2011. The total sum of their wealth accumulates to $127 billion, in comparison to $115.3 billion last year. Alwaleed Bin Talal remains on the top of the list. The list is considered the main indicator of wealth and where it is distributed throughout the economic sectors of the world. Saudi Arabia, Egypt, Lebanon, UAE and Kuwait had the highest number of billionaires throughout the MENA region, with Saudi Arabia and Egypt leading the way with the highest number of billionaires, with 8 billionaires each. New entries to the list were Yassin Yusuf and Mohamed Mansour from Egypt of which Mohamed Mansour ranked highest with a $2 billion fortune and positioned him 595th worldwide and 17th among the richest Arabs. Mohamed Al Fayed also entered the list for the first time with a fortune of $1.2 billion and were ranked 32nd among Arabs and 993rd worldwide. Nassif Sawiris’s $5.6 billion fortune has granted him the first place on the Egyptian list of billionaires and 7th place in the Arab world and 182nd place globally. With 6 billionaires Lebanon ranked in second place with the wealth concentrated to two main families: the Al-Mikati family and the Al Hariri family. Prime Minister Nagib Mikati’s net fortune amounted to $2.8 billion ranking him first on the Lebanese list, 10th among Arabs and 409th globally. Source: Saudi Gazette |
Saudi banks to "perform well" on higher lending, oil prices
JEDDAH: Commercial banks in Saudi Arabia are projected to perform well through the year because of higher lending, lower provisions and stronger oil prices. They earned nearly SR4.9 billion in the first two months of 2011, SR2.5 billion of which were obtained in January. "Saudi banks will perform well through 2011 and their income could exceed that in 2010 as credit is expected to pick up and economic conditions have largely improved," the Riyadh-based Jadwa Investments said. National Commercial Bank, meanwhile, forecast that lending is expected to continue recovery as Saudi economy expands with planned infrastructure and economic projects worth SR2.5 trillion. The bank study said lending by Saudi banks bounced back during 2010 after a 1.1 percent drop in 2009 following a 3.8 percent growth in the Saudi real GDP last year against 0.16 percent in 2009. The growth helped restore banking confidence. Moreover, a sharp rise in T-bills showed that banks have the ability to redirect their lending to extending or providing credit for existing and new clients, but added that they are still reluctant to reach the same level of credit growth. "As government expenditure on infrastructure projects increases, demand for credit will be driven upwards. The government announced SR580 billion in spending for 2011 (of which capital expenditure is expected to be around 44 percent), although actual expenditure is projected to ruse to SR677 billion in 2011," it said. "Demand for bank credit is expected to increase 8.8 percent in 2011, with an estimated SR2.5 trillion worth of projects being on hold or in the planning phase as of February." Jadwa further said In 2010, the net income of Saudi banks stood at around SR26.1 billion, slightly lower than the 2009 earnings of nearly SR26.8 billion. The profits totaled around SR29.9 billion in 2008 and peaked at SR30.2 billion in 2007. Balance sheets showed the Kingdom’s banks have allocated more than SR20 billion for loan loss provisions over the past two years. Provisions in the third quarter of last year surged by nearly 27 percent to SR3.1 billion compared with the previous quarter and about 30 percent over the same period of 2009, Jadwa’s data showed. The banks’ performance would improve as economic growth further improves, seen at more than five percent in 2011. Another factor is a projected pick up in lending following a slowdown of nearly two years because of the 2008 global fiscal crisis and regional debt default problems. In 2010, domestic credit rebounded by around 5.2 percent but growth remained far below the boom period of 2007 and 2008, when growth topped 30 percent. Source: Saudi Gazette |
Shoura urges Saudia to resume full operations at domestic airports
RIYADH: The Shoura Council urged Saudi Arabian Airlines Monday to resume full-scale operations at domestic airports no longer serviced by other local carriers. The call was made when members discussed ways and means of improving the air transport industry in the Kingdom. The Monday's session was chaired by Shoura Council Chairman Dr. Abdullah Al-Asheikh. Shoura Council Secretary General Muhammed Al-Ghamdi said the members were keen on improving the airline’s performance so it could be a more attractive investment company in the Kingdom. When Sama Airlines flew to various domestic destinations, Saudi Airlines reduced its frequency of flights at those airports. However, it was pointed out that when SAMA ceased operations, those airports have been affected by irregular local flights. Suggesting an alternative, the councils said the services of other airlines from the Gulf region could be solicited if the national carrier cannot cope with the demand. According to Al-Ghamdi, the air transport industry must be developed by improving facilities at the domestic airports, particularly their navigational systems, maintenance, flight operations, safety and security. Saudi Arabian Airlines currently carries nearly 20 million passengers annually to about 100 destinations. It is predicted that the number of pilgrims visiting the holy cities of Makkah and Madinah will increase to 30 million within a few years. Source: Arab News |
Kingdom's firms continue to face rising input costs
RIYADH: The Saudi British Bank (SABB) has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers' Index (PMI) for March 2011 - a monthly report issued by the bank and HSBC. It reflects the economic performance of Saudi Arabian nonoil producing private sector companies and establishments through the monitoring of a number of variables, including output, new orders, exports, input prices, output prices, quantity of purchases, stocks and employment. Saudi Arabian nonoil private sector companies continued to benefit from favorable business conditions in March. Solid market demand boosted new order levels and led to another strong rise in output. There were indications that increased activity in the construction sector had supported domestic demand. However, firms continued to face sharply rising input costs and subsequently output prices increased at a stronger pace. Registering 62.8 in March, the headline PMI was down on February's reading of 63.4. Nevertheless, the latest figure was consistent with a considerable improvement in operating conditions across the Saudi nonoil private sector. Favorable economic conditions and increased activity in Saudi Arabia's construction industry were noted as key reasons for stronger market demand in March, according to panelists. Overall incoming new work rose at a sharp and accelerated pace on the month. Although foreign demand remained solid, new export business growth slowed since February. Rising levels of new work put pressure on capacity during March. Despite another solid rise in employment, backlogs accumulated at a modest pace. Reports indicated that, in some cases, technical difficulties had caused delays to production processes. In light of current inflows of new work, and in anticipation of further improvements in demand in the near future, the Kingdom's nonoil private sector firms raised buying activity and input stocks at marked rates in March. Despite stronger demand for inputs, supplier delivery times continued to shorten during March, and at a faster rate. Panelists cited efficient service and competition amongst suppliers as the principal reasons for faster deliveries. Purchase price inflation eased during the latest survey period to the weakest for three months. Nevertheless, the rate of increase remained substantial, which companies linked to higher fuel and raw material costs. Respondents made particular reference to increased prices for oil, metals, food and construction-related items. In contrast, staff costs rose at the fastest rate since last December as employees were rewarded for better company performance. Source: Arab News |
Kingdom, UK vow stability in oil market
RIYADH: Saudi Arabia and the United Kingdom have pledged to stabilize the oil market after oil prices hit all-time high in the UK in a surge that increases pressure on oil consumers globally. The pledge to check prices and to ensure greater understanding between consumers and producers was made following talks between Ali Al-Naimi, minister of petroleum and mineral resources, and Chris Huhne, the UK Energy and Climate Change secretary, in Riyadh on Tuesday. "Al-Naimi and myself shared common views that there is no shortage of supply and hence there is no reason behind the soaring oil prices, which hover round $115 to $120 a barrel today," said Huhne, addressing a press conference. British Ambassador Sir Tom Phillips was also present. Huhne ruled out the possibility that strained relations between the GCC and Iran, which have further worsened in recent weeks, would have affected the oil market. "The GCC and Tehran have had no fraternal relations even in the past," he said, calling on international energy markets to recognize that the high oil price does not reflect the realities of supply and demand in the market. Huhne flew to Riyadh on Tuesday on a dual mission to address soaring oil prices and discuss how British firms can help the country develop its renewable energy base. Asked whether political unrest in the region and the disruption in war-torn Libya could have led to the increase in prices, Huhne said everyone should do more to stop crude prices rising. The Kingdom has increased its oil output, but OPEC as a group has not changed its ceiling. In a statement released earlier, Huhne denied that there was a global shortage of oil and insisted that consumer demand could be met despite problems in the Middle East. "There is no shortage of supply, and yet the price has remained high," he said. Asked about the impact of a weaker pound that has declined 17 percent in value in the past two years, he said that the increase in oil prices should not be linked with Britain. The Bank of England is taking all necessary measures to check inflation, he added. On his arrival in Riyadh, Huhne also met Hashim Yamani, chief of the King Abdullah City for Atomic and Renewable Energy, to discuss opportunities for UK companies as Saudi Arabia looks to expand its renewable energy sector. He also spoke about Britain’s safety review in response to the Japanese nuclear crisis that will delay approvals for new reactors to be built in the UK. Huhne will fly to Abu Dhabi Wednesday to present the case for international collaboration in the development of carbon capture and storage technologies at the second Clean Energy Ministerial Forum, which begins Wednesday. The UK is thought to have significant potential for storing carbon dioxide from power stations under the North Sea, and the industry is predicted to grow to over £10 billion by 2025. Source: Arab News |
Kingdom may open its skies to foreign airlines
JEDDAH: Assistant Minister of Defense and Aviation Prince Fahd bin Abdullah has suggested that foreign airlines may be allowed to operate domestic flights in the Kingdom. The minister, who is also vice chairman of the General Authority for Civil Aviation, told a Jeddah forum that in order to allow foreign airlines to enter the Saudi market, certain conditions would need to be met. "We currently have 27 airports and we need to have a solid foundation with further economic rules and security standards," Al-Riyadh newspaper quoted Prince Fahd as saying. Prince Fahd also said the Kingdom currently has no rules to regulate ticket prices and has left them to the discretion of individual airlines. He added that ticket prices to his knowledge have not changed. The Shoura Council has commissioned a study on allowing Gulf airlines to operate within the Kingdom. "There is great demand for domestic operated flights, especially as demographics are strong and Saudi Arabia cannot meet rising demand," said John Sfakianakis, chief economist at Banque Saudi Fransi. "Opening up the market should help competition and improve services and supply of flights," he added. In January, the Association for Consumer Protection urged authorities to open Saudi skies to Gulf airline companies, stating that due to the growth in the Kingdom’s population, more airlines should be allowed to operate domestic routes in Saudi Arabia. In the past, many Gulf airlines such as Bahrain Air, Emirates, Etihad and Qatar Airways have shown an interest in operating domestically in Saudi Arabia, but have not been allowed to. Currently, Saudi Arabian Airlines is the main provider of domestic flights in the Kingdom alongside the low cost carrier Nasair. Nasser Ibrahim Al-Tuwaim, acting chairman of the Consumer Protection Association (CPA), said allowing other airlines to operate in the Kingdom is necessary to break the monopoly Saudia currently has on domestic routes. Al-Tuwaim added that his call for the Kingdom’s skies to be opened up is part of a three-point plan to combat increasing prices. Industry sources say that in order to end the monopoly and open Saudi skies to Gulf and foreign airlines, there needs to be a set of regulations for all carriers to level the playing field and avoid any unfair treatment. In August last year, low-cost carrier SAMA airlines was forced to lay off employees and suspend operations due to high operating costs and low revenues resulting from what they claim was unfair treatment concerning fuel prices. Sources at both Nasair and SAMA said that because Saudia receives a government fuel subsidy and private airlines do not, they had to pay 10 times more than Saudia. Arab News contacted GACA for a comment on Prince Fahd’s statements, but there was no response. Source: Arab News |
Wastewater reuse gains importance in Kingdom
JEDDAH: As Saudi Arabia faces an increasing demand for water to support its rapid population and economic growth, General Electric held the Saudi "Used to Useful" Water Reuse Summit to explore water reuse solutions that can support the Kingdom and the region in securing a sustainable water supply for the future. Saudi Arabia’s advanced treated water reuse capacity is growing at more than 30 percent annually and is expected to reach 2.2 million cubic meters per day by 2016, from a current level of 260,000 cubic meters per day. Discussions focused on water reuse policy, removing barriers to water recycling, enabling water reuse, the economics of water reuse and innovations in water technologies. "The GE Saudi Water Reuse Summit reflects GE’s active response to the Kingdom’s call for more public private sector initiatives to collaborate on identifying energy and water solutions tailored to the country’s needs," said Joseph Anis, GE Energy’s president and CEO for the Middle East. "This is part of GE’s’s ongoing and long-term commitment to support Saudi Arabia in achieving its energy ambitions, and a sustainable water future for the Kingdom and the region." Held under the patronage of Eng. Abdullah Bin Abdul Rahman Al Hussayen, Minister of Water and Electricity, Saudi Arabia, the GE Saudi "Used to Useful" Summit is a close collaboration between the Ministry of Water and Electricity, the National Water Company and leading Saudi water organizations. It featured industry and government global leaders who gathered in Riyadh to discuss the growing role of water reuse and share their experiences on the required technologies and enabling policies that can support the Kingdom in its mission to protect this precious resource. Wastewater reuse is increasingly gaining attention as a sustainable way to manage scarce water supplies and several Middle Eastern countries are evaluating stringent reuse goals. For example, Saudi Arabia has mandated a target of 11 percent of its water use to come from treated wastewater, which is suitable for domestic and industrial uses such as landscaping. "With the Kingdom of Saudi Arabia being one of the fastest growing economies in the Middle East, wastewater and water reuse issues need to be addressed now, in order to sustain this rapid growth," said Eng. Abdullah Bin Abdul Rahman A-Hussayen, Minister of Water and Electricity, Saudi Arabia. "GE has been a reliable energy partner to Saudi Arabia for almost 80 years, delivering power generation and water technology to support our energy needs. To achieve water security, we are keen for this Summit to produce innovative water solutions to support us meet our water objectives." During the Water Reuse Summit, GE and recognized specialists presented and shared research and case studies from around the world that describe the multifaceted nature of the water scarcity challenge. GE also presented its research on various incentive policies and structures to increase water reuse and recycling in a white paper entitled Creating Effective Incentives for Water Reuse and Recycling. The white paper also highlights the critical role played by a stable and well-defined regulatory structure towards increasing the adoption of water reuse in any country. GE has been active in Saudi Arabia for almost 80 years, supplying technology and service solutions to help the Kingdom meet its energy infrastructure needs, including power generation and water management. In addition, GE’s suite of broad portfolio of technology solutions and services are also instrumental in helping boost usable water supplies in the region. GE’s solutions cover a breadth of needs including desalination, municipal, utility, industrial wastewater, process chemicals and separation, product water and residential products. Source: Saudi Gazette |
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