$50 Billion #Saudi Debt Drive Reflects Rising Financial Strain - Bloomberg

$50 Billion Saudi Debt Drive Reflects Rising Financial Strain - Bloomberg

Even as Wall Street heavyweights flock to Riyadh for a Davos-style conference, Saudi Arabia is grappling with low oil prices, budget deficits and challenges attracting foreign investment.

That’s forcing the kingdom to lean heavily on another source of funding: debt.

The Saudi government and entities like its Public Investment Fund have issued around $50 billion in bonds in 2024, according to data compiled by Bloomberg, which includes corporate and sovereign sales in US dollars and euros. That flurry of activity has made the oil-rich country one of the biggest issuers of international debt in emerging markets this year. It’s likely to borrow tens of billions of dollars more in 2025, according to Nadim Amatouri, director of fixed income research at Arqaam Capital.

This week, the kingdom kicks off its annual Future Investment Initiative, an event that will draw global names like Goldman Sachs Group Inc.’s David Solomon, Citigroup Inc.’s Jane Fraser and Alphabet Inc.’s President Ruth Porat. It will offer a look at investor appetite for Saudi Arabia as the country pushes to diversify from oil in the face of rising fiscal challenges.

Crude has been trading well below $100 a barrel, despite the kingdom having cut supply along with other members of the OPEC+ cartel, and hundreds of billions of dollars are being spent on Crown Prince Mohammed bin Salman’s Vision 2030 economic-transformation plan.

International investors have so far been slow to put money into key projects such as the new city of Neom.

Inflows of foreign direct investment were the lowest since 2020 last year and stagnated in the first half of 2024, making debt ever more vital to Riyadh’s ambitious projects and developments.

Most Gulf bourses gain as Iran downplays Israel's strikes | Reuters

Most Gulf bourses gain as Iran downplays Israel's strikes | Reuters

Most stock markets in the Gulf ended higher on Monday as tensions eased after Iran played down Israel's strikes on military targets over the weekend, saying the air attack had caused only limited damage.

The strikes bypassed Tehran's oil and nuclear infrastructure and did not disrupt energy supplies, easing geopolitical tensions in the broader region.

And while that sent oil prices tumbling, the regional equity indexes gained.

Dubai's main share index (.DFMGI), opens new tab advanced 1.3%, led by a 3.6% jump in blue-chip developer Emaar Properties (EMAR.DU), opens new tab and a 2.4% rise in toll operator Salik Company (SALIK.DU), opens new tab.

In Abu Dhabi, the index (.FTFADGI), opens new tab finished 1.1% higher, with National Marine Dredging Co (NMDC.AD), opens new tab surging 9% after reporting a rise in third-quarter net profit, along with a special cash dividend of 2 billion dirhams ($544.53 million).

Separately, Lulu Retail Holdings, which runs one of the Middle East's biggest hypermarket chains, said on Monday it aims to raise up to 5.27 billion dirhams ($1.43 billion) in what is set to be the UAE's biggest initial public offering so far this year.

In the United Arab Emirates, the bourses trade from Monday to Friday unlike other Gulf financial markets which trade from Sunday to Thursday.

Saudi Arabia's benchmark index (.TASI), opens new tab - which gained more than 1.5% on Sunday - eased 0.1%, with the country's biggest lender Saudi National Bank (1180.SE), opens new tab losing 2%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab lost 0.1%, hit by a 1.8% fall in Fawry for Banking Technology and Electronic Payment (FWRY.CA), opens new tab.

Egypt has proposed an initial two-day ceasefire in Gaza to exchange four Israeli hostages of Hamas for some Palestinian prisoners, Egypt's president said on Sunday as Israeli military strikes killed 45 Palestinians across the enclave.

#Qatar Energy takes 50% stake in TotalEnergies solar project in Iraq | Reuters

QatarEnergy takes 50% stake in TotalEnergies solar project in Iraq | Reuters

QatarEnergy, one of the world's top suppliers of liquefied natural gas, said on Monday it had agreed to take a 50% stake in TotalEnergies' 1.25-gigawatt (TTEF.PA), opens new tab solar project in Iraq.

The French energy giant will retain the remaining 50% stake in the project, which is part of Iraq's $27 billion Gas Growth Integrated Project (GGIP), QatarEnergy said in a statement, without disclosing the size of the deal.

The GGIP initiative aims to improve Iraq's electricity supply, including by recovering flared gas at three oilfields and using the gas to supply power plants, helping to reduce Iraq's import bill. It also includes renewable energy projects.

Iraq currently imports between a third and 40% of its supply of electricity and gas from Iran, but continues to suffer from widespread power cuts, especially in the hot summer months when demand for power for cooling surges.

The solar project, which will be developed in phases to come online between 2025 and 2027, will generate up to 1.25 GW at peak using 2 million bifacial solar panels, QatarEnergy said.

It will be able provide electricity to about 350,000 homes in the oil-rich Basra region in southern Iraq, the company added.

QatarEnergy last year joined a consortium to implement the GGIP project with a 25% stake, while TotalEnergies and Iraq's Basra Oil Company held the remaining 45% and 30% stakes, respectively.

#Saudi Finance Firm United International’s IPO Fully Covered in Minutes - Bloomberg

Saudi Finance Firm United International’s IPO Fully Covered in Minutes - Bloomberg

Saudi Arabian financial services firm United International Holding Co. had demand for all shares in its up to 990 million riyal ($264 million) initial public offering minutes after subscriptions opened, indicating continued demand for listings in the region.

Books were covered throughout the price range of 120 to 132 riyals per share, according to the terms of the deal seen by Bloomberg News. Its parent United Electronics Co. — known as Extra — is selling 7.5 million shares, or a 30% stake in the firm. Local funds agreed to subscribe to 15.6% of the offer, according to a separate announcement Monday.

HSBC Saudi Arabia is the financial advisor, lead manager and bookrunner on the offering, while EFG Hermes KSA is the joint-bookrunner. The subscription period for institutional investors will end on Nov. 4, while the offer will be open to retail investors on Nov. 19 and Nov. 20.

The deal came on a busy day for new share sales in the Middle East. Grocer Lulu Retail Holdings Plc, which is looking to raise $1.43 billion from its Abu Dhabi IPO, also had demand for all stock on offer soon after books opened. In Oman, OQ Exploration & Production declined in its trading debut after a record $2 billion share sale.

United International is one of a handful of private companies listing in the Middle East this year. Food delivery service Talabat and IT services firm Alpha Data are also planning listings in the United Arab Emirates, while buy-now-pay-later firm Tabby is considering plans to list in Saudi Arabia.

The Saudi firm is one of the largest providers of Shariah-compliant consumer finance services in the kingdom through its units — Tas’heel Finance and Procco Financial Services, according to its website.

Share sales in Riyadh have raised $15.8 billion so far this year, mainly driven by Saudi Aramco’s bumper $12.3 billion secondary sale.

Lulu Retail seeks to raise up to $1.43 bln in #UAE's biggest IPO this year | Reuters

Lulu Retail seeks to raise up to $1.43 bln in UAE's biggest IPO this year | Reuters

Lulu Retail Holdings, which runs one of the Middle East's biggest hypermarket chains, said on Monday it aims to raise up to 5.27 billion dirhams ($1.43 billion) in what is set to be the UAE's biggest initial public offering so far this year.

The conglomerate, which runs more than 240 grocery stores in six Gulf countries, is offering 2.582 billion shares, equal to a 25% stake at an indicative price range of 1.94-2.04 dirhams per share, it said in a statement.

Books were covered multiple times within hours of opening as demand from investors exceeded the overall deal size, according to a person familiar with the matter who asked not to be identified.

Two sources involved in the IPO had previously told Reuters the offering could raise between $1.7 billion and $1.8 billion.

Founded in 1974 by Indian businessman Yusuff Ali, Lulu joins other grocery firms that have listed, such as United Arab Emirates-based Spinneys (SPINNEYS.DU), opens new tab this year and Saudi grocery retailer BinDawood Holding (4161.SE), opens new tab in 2020, amid a retail spending boom in the region.

Lulu Retail said cornerstone investors that had individually committed to subscribe to the offering included Abu Dhabi Pension Fund, the Emirates International Investment Company (EEIC) and the sovereign wealth funds of Bahrain and Oman.
They will invest about $205 million in total, it added.

The price range implies a market capitalisation of between $5.46 billion-$5.74 billion at the listing on the Abu Dhabi Securities Exchange, which is expected on Nov. 14, Lulu Retail said.

The Gulf region accounted for the vast majority of the 30 IPOs that took place in the Middle East and North Africa region over the first nine months of the year, which raised an overall $5 billion, according to LSEG data.

The #Saudi factories powered by women

The Saudi factories powered by women

When Rawan al-Harbi graduated in 2017, she had expected to end up working in the female-dominated education sector. Instead, she found an opening at Johnson Controls Arabia, an air-conditioning plant in King Abdullah Economic City, 100km to the north of Jeddah. 

“At the beginning it was a bit hard. It’s a far-out location and everything is new,” the 29-year-old said on the factory floor. “But I got used to it.” 

Today she is one of more than a dozen Saudi women working in the electrical and control department, sitting on workbenches across the room from male colleagues. 

As the men solder components, the women cut and crimp the colourful wires that go into rooftop units and chillers used to cool big buildings frazzled by the desert sun. 

The scene would have been unthinkable a decade ago. 

Many freedoms accorded to women elsewhere remain forbidden in Saudi Arabia. Women are still required to obtain the consent of their male guardian to get married in most cases, and it remains difficult for them to initiate divorce. Rights groups have also criticised the practice of men receiving a larger share of the proceeds of inheritances than women. 

But Crown Prince Mohammed bin Salman’s push to diversify the economy and modernise society has made the female presence in many aspects of daily life increasingly common. That includes spaces such as factories, once exclusively the preserve of men.