Sunday, 12 May 2024

Consulting firms’ grip on #Saudi economy sparks local misgivings

Consulting firms’ grip on Saudi economy sparks local misgivings

In 2022 Saudi Arabia’s energy minister gave a rare public display of distaste for the role of management consultants who had become virtually indispensable to his own ministry. 

“The institution has no cadre to keep it sustainable,” complained Prince Abdulaziz bin Salman, half-brother of Crown Prince Mohammed bin Salman, during a talk in Riyadh in November 2022. “No future outlook safeguarded by people who take it from start to finish.” 

For most of its history, the energy ministry’s operations and planning have relied on a mix of employees seconded from state oil company Saudi Aramco and embedded consulting firms. 

But some officials fear Saudi ministries have become over-reliant on western consultancies, from the Big Four of Deloitte, EY, KPMG and PwC to more specialist strategy consulting firms, as disgruntlement grows about the outsiders’ ever-growing role in running the country. 

“I’ll be in a lot of meetings where Minister X or Deputy Minister X is presenting a strategy,” said one Saudi professional who has worked both in the government and at a top consulting firm. “And the first thing that they’ll say is: ‘Ahlan wa sahlan, welcome, and I would like to let you know that consulting firm Y prepared this presentation’ . . . They don’t even take ownership of it.” 

Riyadh’s use of consultants has expanded since the crown prince’s 2016 launch of an ambitious programme to steer the Middle East’s biggest economy away from its dependence on oil revenues. 

To meet demanding deadlines and tackle novel challenges, from creating a Red Sea tourist destination to establishing high-tech industries, ministries enlisted even more help from foreign consulting firms including McKinsey, Boston Consulting Group and PwC’s Strategy&.

Most Gulf bourses rise; Egypt drops | Reuters

Most Gulf bourses rise; Egypt drops | Reuters


Most stock markets in the Gulf ended higher on Sunday, amid rising oil prices, while the Saudi index slid after some weak corporate earnings.

Oil prices, a catalyst for the Gulf's financial markets, rose on Friday on stronger Chinese economic data and the ongoing Middle East conflict, with Brent settling at $84.24 a barrel.

The Qatari benchmark index (.QSI), opens new tab was up 0.1%, supported by a gain of 0.7% in Industries Qatar (IQCD.QA), opens new tab and a 0.8% rise in Qatar Islamic Bank (QISB.QA), opens new tab.

Saudi Arabia's benchmark index (.TASI), opens new tab slipped for a second straight session and ended 0.6% lower, weighed down by losses in almost all sectors.

ACWA (2082.SE), opens new tab slid 4.7%, after the private utility firm reported on Thursday a 54% decrease in its first quarter net profit sequentially. However, its quarterly profit inched up 9.8% year on year.

Among other fallers, Mobile Telecommunication Company Saudi Arabia (7030.SE), opens new tab known as Zain KSA, fell 1.5% after it posted a 94.1% decline in its quarterly net profit.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab dropped 3.3%, with most of its constituents posting losses, led by real estate, materials and healthcare stocks.

Talaat Mostafa Group (TMGH.CA), opens new tab slipped 6.3% and Abu Qir Fertilizers (ABUK.CA), opens new tab lost 5.2%. However, Abu Dhabi Islamic Bank Egypt (ADIB.CA), opens new tab gained 2.4% after it reported 110% surge in its quarterly net profit.

#Dubai: Property prices rise for 15th consecutive quarter, affordable segment leads

Dubai: Property prices rise for 15th consecutive quarter, affordable segment leads

Property prices in Dubai rose for the 15th consecutive quarter during the January-March 2024 period, mainly driven by affordable and mid-market communities.

Analysts say that Discovery Gardens, Sports City and Dubailand apartments saw the highest increase in prices as demand from residents and foreign investors continued to keep the prices higher.

The city is seeing villa owners renovating older units and reselling at notably higher prices to keep up with the demand.

“There are no signs of capital values slowing down yet, with city-wide sales prices rising for the 15th consecutive quarter. City-wide sales prices are up by 20 per cent year-on-year and 66 per cent higher than the first quarter of 2020 (pre-Covid19),” said Prathyusha Gurrapu, director and head of research and consultancy at Cushman & Wakefield Core.

Gurrapu also added that the price rise for apartments is moderate, particularly in the prime sub-markets including Palm Jumeirah, City Walk, Downtown Dubai and Dubai Marina, where sales price increases have moderated to below 20 per cent year-on-year.

Property rallies that started after the Covid-19 pandemic continued in 2024, as prices are still much more affordable than most cities around the world, attracting a large number of investors.

#Saudi Fintech Firm Rasan, Holders Seek Up to $224 Million in IPO - Bloomberg

Saudi Fintech Firm Rasan, Holders Seek Up to $224 Million in IPO - Bloomberg

Rasan Information Technology Co. and its shareholders are looking to raise as much as 841 million riyals ($224 million) in one of the first initial public offerings by a fintech firm in Saudi Arabia.

The price range was set at 35 riyals to 37 riyals per share, according to a statement on Sunday. Rasan is selling 5.3 million new shares in the Riyadh IPO, while its shareholders are offering 17.4 million shares. The operator of insurance platform Tameeni will be valued at as much as 841 million riyals in the offering. Bookbuilding for institutional investors will run until May 16.

Rasan is the fourth company to launch an IPO in Saudi Arabia in recent weeks. The kingdom’s stock exchange expects the burst of activity to continue, with more than 10 companies waiting in the wings, its chief executive officer said on Thursday.

The offerings have been well received by investors, showing continued appetite for share sales in what’s been a busy IPO market over the past few years. Hospital group Dr. Soliman Abdul Kader Fakeeh Hospital’s offering — shaping up to be the kingdom’s biggest IPO of 2024 — was sold out in less than an hour. Water treatment firm Miahona’s offer was covered 170 times by institutional investors.

The kingdom’s technology sector, however, hasn’t seen too many listings. Food delivery firm Jahez’s heavily oversubscribed offering in late 2021 was an exception.

Apart from Rasan, buy-now-pay-later company Tabby and online cosmetics retailer Nice One are the technology firms eying IPOs, Bloomberg News has reported. Like some of its Gulf peers, Saudi Arabia is trying to diversify its stock exchange beyond banks and industrial companies that have typically dominated it.

Founded in 2016, Rasan is the kingdom’s largest insurance aggregator, operating platforms such as Tameeni and Treza. It had revenues of 256 million riyals in 2023 and income of 46 million riyals.

Saudi Fransi Capital and Morgan Stanley are acting as joint financial advisers, bookrunners and underwriters for the IPO.