Saudi Arabia

Saudi Arabian Airlines appoints HSBC to arrange 5 bln riyal sukuk - exec

National carrier Saudi Arabian Airlines (Saudia) has appointed HSBC as the lead arranger for a 5 billion riyal ($1.3 billion) sukuk issue. According to director general Saleh al-Jasser the sukuk would be sold in the second half of the year. Jasser said last month that the sukuk offering would finance fleet expansion, with the carrier aiming to operate 200 aircrafts by 2020.

Full Text of Saudi Arabia’s Vision 2030

The Council of Ministers presents Saudi Arabia’s vision for the future. Saudi Arabia will transform the Public Investment Fund into the world’s largest sovereign wealth fund. They will expand the variety of digital services to reduce delays and cut bureaucracy. Goals by 2030 include increasing non-oil government revenue from SR163 billion to SR1 trillion, raising the country's ranking in the Government Effectiveness Index from 80 to 20, raising the ranking on the E-Government Survey Index from a current position of 36 to be among the top five nations.

Fitch downgrades seven Saudi Arabian banks; revises outlook of four others to negative

Fitch Ratings has downgraded the Long Term Issuer Default Ratings (LT IDRs) of seven Saudi Arabian banks. The affected banks are Al Rajhi Bank (ARB), National Commercial Bank (NCB), Riyad Bank (RB), SAMBA Financial Group (SAMBA), Saudi British Bank (SABB), Banque Saudi Fransi (BSF) and Arab National Bank (ANB). At the same time Fitch has revised the Outlooks on Saudi Hollandi Bank (SHB), Saudi Investment Bank (SAIB), Alinma Bank (Alinma) and Bank Aljazira (BAJ) to Negative from Stable, while affirming their ratings.

Saudi CMA approves Investment Accounts Instructions

The Saudi Capital Market Authority Board approved the Investment Accounts Instructions after publishing the Draft Instructions on the CMA's official website for 30 days, and reviewing the concerned and interested parties' comments and observations. The Investment Accounts Instructions comprise 17 articles regarding several aspects of investment accounts such as the mechanism on how to accept clients, availability of specific data to open an investment account and instructions of opening and operating the investment account. The Instructions also include the specifications to open investment accounts.

Alkhabeer Capital releases GCC 2016 Budgets Report

Saudi's Alkhabeer Capital has released the 2016 edition of its report reviewing GCC governments’ budgets. The report analyses the latest budgets of the region’s governments, the recent reform measures announced and the broader, long-term implications of the political will to improve efficiencies, curb wasteful expenditures and instill fiscal discipline. Citing the emergence of government imperatives in the region to refocus budget priorities and reduce extravagance, Alkhabeer’s report expects expenditure levels in the GCC to reflect a cautious stance on spending as the region adopts unprecedented measures to counter the plunge in oil prices since June 2014.

Saudi national carrier seeks $1.3bn sukuk to expand fleet

National carrier Saudi Arabian Airlines (Saudia) is seeking to raise 5 billion riyals ($1.3 billion) via the first tranche of a sukuk isuance programme in the second or third quarter of this year, its director-general Saleh al-Jasser said. The funds will be used to finance fleet expansion, as the carrier aims to operate 200 aircraft by 2020. Details of the second tranche of the sukuk programme have not been determined, he added. The airline has been spinning off units in the last several years; it is now preparing documentation to hive off its cargo unit in an initial public offer of shares, Jasser said without giving details.

Bank AlJazira rewarded as Best Arabian Giving Foundation in 2015

Bank AlJazira achieved a new reward as the best Arabian donor in 2015 during the “Non-Governmental Giving Foundations in Arabian countries” conference held in Bahrain. The award was received by the Executive Director of the Community Service Programs Dr. Fahad Bin Ali Al-Olayan on behalf of the Chief Executive Officer Mr. Nabil Al-Hoshan. The award was presented by the “Regional Network for Social Responsibility” in collaboration with the United Nations Industrial Development Organization “UNIDO”; Bank AlJazira has been chosen for this award by the conference committee.

Saudi Arabia Telling Foreign Banks to Disclose Finances

Saudi Arabia’s investment banking regulator is telling international banks to publicly disclose financial statements for the first time as the kingdom seeks to boost transparency. The Capital Markets Authority is requiring financial institutions it regulates to publish the information on their websites from April 1. The CMA has said firms must also disclose senior executives’ pay and significant risk factors. The only banks which need to disclose financial statements now are the 12 publicly traded domestic lenders regulated by the Saudi Arabian Monetary Authority. The disclosure will give insight into how much money banks are making amid a slowdown in economic growth, as well as the cost of employing top executives.

Moody's downgrades Saudi banking system to negative

Saudi Arabia's banking sector is to feel the brunt of cheap oil and the resulting government spending cuts, according to a new report by Moody's. The credit rating agency has downgraded the banking industry from stable to negative as GDP growth is predicted to slow to just 1.5 per cent in 2016, more than half of the previous year. As a result, the agency has predicted loan growth to slow down to between 3 per cent and 5 per cent for 2016, down from from 8 per cent in 2015 and 12 per cent the year before. Asset risk is also expected to rise as a result of the deteriorating operating environment. Meanwhile, capital buffers are likely to remain solid with the sector's average tangible common equity (TCE) ratio remaining broadly stable.

SAR 3.6 Billion Financing for Jeddah Economic City Project

Alinma Jeddah Economic City Fund has secured shari'a compliant financing of up to SAR 3.6 Billion from Alinma Bank on December 10 2015. Formulating the financial model of the project with Alinma Bank was finalized based on a financing strategy that fulfills the project's needs in accordance with the first business plan covering the first phase of the project which is expected to take five years. The objective of the financing is to provide funding to build and develop the infrastructure for phase one of Jeddah Economic City project and to continue the construction of Jeddah Tower.

GFH Capital acquires market leading bread and sweets producer in Saudi Arabia

GFH Capital has agreed to acquire a market leading bread and sweets producer in the Kingdom of Saudi Arabia (KSA) for a transaction value of US$50 million. The Company was established in 1984 and is a leading industrial scale producer of bread and sweets, employing 300 staff and supplying to over 3,000 clients across the Kingdom through its distribution network. The Company has reported strong, consistent growth year after year with revenues increasing at a CAGR of 11% between 2010 and 2014. The company is expected to maintain this level of growth over the investment period. GFH’s strategy is focused on investing in cash yielding opportunities in defensive sectors that have sound growth potential.

Madinah governor opens SR52m 'Charity City'

Madinah Gov. Prince Faisal bin Salman launched on Monday a 14-story complex costing SR52 million that would house all the region's charities. Speaking at the opening, Prince Faisal, who is also chairman of the Charitable Society for Social Services, said the complex would have state-of-the art facilities that would streamline services to the needy. Abdul Barie bin Awadh Al-Thibaiti, secretary general of the society, said the new building would generate much-needed funds for charitable activities. He said the 30-year-old organization helps more than 6,000 students a year on a five-year budget of SR33 million.

CMA staff attend course on ‘Islamic Economics’

As part of the training programs provided internally by Capital Market Authority (CMA), Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has held the 2nd batch of the training course “Essentials of Islamic Economics and Finance” to CMA’s management team members and employees, on March 21-22, 2016, in Riyadh. The course was delivered by Sheikh Dr. Yousef Al-Shubaili and Dr. Sami al Suwailem. AAOIFI’s active institutional membership includes more than 13 regulatory and supervisory authorities (for capital markets, insurance and finance) and central banks. AAOIFI provides its technical and professional services to a number of supervisory and regulatory bodies across the globe.

Fitch ranks Saudi banking system 4th globally

The international rating agency Fitch ranked the Saudi banking system fourth-best and the strongest banking system in the world, after Australia, Canada and Singapore, said Governor of the Saudi Arabian Monetary Agency Dr. Fahd Al-Mubarak. In a speech during the Islamic Banking and Finance Conference organized by Makkah-based Umm Al Qura University, he said that financial activity compatible with the provisions of Islamic law is witnessing a remarkable growth at the international level, with an average ratio estimated at 17% per annum.

The Capital Market Authority approves the capital increase request for Bank Albilad through the issuance of bonus shares

The CMA Board has issued its resolution approving Bank Albilad’s request to increase its capital from SAR 5,000,000,000 to SAR 6,000,000,000 through issuing one bonus share for every 5 existing shares owned by the shareholders. Such increase will be paid by transferring an amount of SAR 468,000,000 from the “Retained Earnings” account and SAR 532,000,000 from the “Statutory Reserve” account to the Bank’s capital. Consequently, the Bank’s outstanding shares are increased from 500,000,000 to 600,000,000. The bonus shares eligibility is limited to the shareholders who are registered in the shareholders registry at the close of trading on the day of the extraordinary general assembly.

Saudi billionaire donates two-thirds of his wealth to charity

A Saudi billionaire has donated two-thirds of his wealth to charity. Forbes Magazine estimates the wealth of Saudi business tycoon Shaikh Suleiman bin Abdulaziz Al Rajhi at $7.7 billion. Al Rajhi has worked as a porter, cleaner, cook, café servant and office boy in a bank. Forbes magazine has ranked him as the Arab world's fifth richest man. He is the founder of Al-Rajhi Bank, the largest Islamic bank in the world, and one of the largest companies in Saudi Arabia.

Rawabi Vallianz Offshore Services issues SR1b sukuk

RAWABI Vallianz Offshore Services (RVOS), an equally-owned joint venture between Rawabi Holding and Vallianz Holdings Limited, has appointed Alinma Investment Co., Saudi Fransi Capital, Saudi Hollandi Capital and GIB Capital LLC as Joint Lead Managers and Book-Runners for its first issuance of a SR1 billion Shariah - compliant sukuk. The sukuk were sold through a private placement to sophisticated investors in full and are to be used to partially finance the marine assets of RVOS over a period of five years. Rawabi Holding provides a range of products and services in the fields of oil and gas, petrochemicals, engineering and construction, power and manufacturing in the Kingdom of Saudi Arabia and the Middle East. Vallianz Holdings Limited is a provider of offshore support vessels and integrated marine solutions to the oil and gas industry.

Saudi Arabia’s Credit Rating Cut Two Levels

S&P dropped a bombshell on Thursday, downgrading the sovereign credit rating for Saudi Arabia by two notches. The ratings agency also slashed credit rating for Brazil, Kazakhstan, Bahrain and Oman as the pain from low oil prices continues to undermine the economic and financial foundations of commodity exporters around the world. The decision to cut Saudi Arabia’s rating was the most striking decision though. As the world’s largest oil-producer, sitting on some of the largest reserves in the world, Saudi Arabia has been a bastion of financial stability for a long time. But it is also has a highly undiversified economy, dependent on oil for nearly all of its export earnings and budget revenues. Last October, S&P cut Saudi Arabia’s rating one level.

Saudi Arabia Said to Ease Lending Rules to Boost Liquidity

Saudi Arabia is reportedly easing rules on bank lending to stimulate growth in the largest Arab economy. Banks were told they can lend the equivalent of 90 percent of their deposits, up from an earlier limit of 85 percent, by the Saudi Arabian Monetary Agency on Sunday. The move followed a request from the country’s committee of treasurers to ease liquidity constraints. Saudi Arabia is seeking to revive its economy and stimulate credit as the slump in oil and government spending strain the banking system. The three-month Saudi Arabia Interbank rate rose to 1.73 percent on Feb. 3, its highest in about seven years. Bets for a devaluation of the riyal reached their highest in about two decades in January, even after the country pledged to keep its currency peg.

Endowment forum to focus on huge untapped resource

Minister of Islamic Affairs Saleh Al-Asheikh inaugurated Sunday the 3rd Endowment Forum in Riyadh. On the first day of the two-day event, sessions were held on endowment management systems and on endowments and their application. On Monday, sessions covered topics such as the reality of endowment in Saudi Arabia, international experiences in endowment, as well as the institutional structure of endowment. In addition to the discussion sessions, other activities included an exhibition and consultation service on endowments along with workshops on establishing endowments, modern trends in using endowment revenues, factors of successful investment, and the reality of charitable association endowments in the Kingdom.

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