#SaudiArabia Seeks New IPOs to Attract Foreign Investors - Bloomberg

Saudi Arabia Seeks New IPOs to Attract Foreign Investors - Bloomberg

Saudi Arabia aims to increase potential public offerings as it seeks to diversify its economy away from oil and develop its financial sector.

“We are doing almost 30% from last year,” said Mohammed Al-Rumaih, chief executive officer of the Saudi stock exchange in an interview with Bloomberg Television, referring to the increase in numbers.

Asked about the pipeline for initial public offerings in the kingdom, Al-Rumaih said that like last year they were from different industries.

Saudi Arabia’s stock exchange saw about 15 firms list last year, with food and beverage the top category. It has already seen companies raise more than $1 billion this year. IPOs are a key part of the kingdom’s plan to diversify investment and draw in stronger revenues from outside the oil industry.

Al-Rumaih expects more listings from telecom and other tech companies in the future.

#SaudiArabia Hospital Operator SMC Claws Back Dividends During IPO Process - Bloomberg

Saudi Arabia Hospital Operator SMC Claws Back Dividends During IPO Process - Bloomberg

Specialized Medical Co., which operates hospitals in Saudi Arabia, is set to close the institutional books for its initial public offering after existing shareholders agreed to return recently paid dividends and the company issued a revised prospectus.

The dividends, totaling 200 million riyals ($53 million), will be returned to the company by the end of June, SMC said in a second prospectus issued on May 25. The firm also announced a reset of the institutional order book, and held a call with investors two days later.

At least two investors have withdrawn their orders while at least one other still intends to buy shares, according to people familiar with the matter, who declined to be identified by name.

Institutional investors have until 5 pm Riyadh time today to revise or cancel orders. No new bids will be accepted. The retail subscription period will be June 15 and 16.

An SMC spokesperson said that, as disclosed in the second supplementary prospectus, shareholders “decided to reverse the dividends for the general benefit of the IPO.” The spokesperson added that the company remains confident about the listing and that the “institutional tranche continues to attract strong interest, in line with recent IPOs.”

A spokesperson for the Saudi Capital Market Authority, the regulator, said all its decisions related to listings are published through its official channels and referred further questions to SMC.

Dividends paid in the fourth quarter last year were disclosed in audited financial statements, the company said in its May 27 presentation to investors. Dividends paid in the first quarter this year were not disclosed “due to a technical interpretation issue.” The regulator “requested formal alignment across all documentation, prompting this procedural update,” the company said in the presentation, part of which has been seen by Bloomberg News.

Existing SMC shareholders are offering a 30% stake, or 75 million shares, at a price range of 24 to 25 riyals apiece. The top end of that range implies a market value of about 6.2 billion riyals.

The Company for Cooperative Insurance — known as Tawuniya — agreed to subscribe to 5.9 million shares, or roughly 2.35% of the company’s post-offer equity, as a cornerstone investor. SMC said Tawuniya’s allocation remains unchanged. The offering was fully covered within hours of the subscription period opening, Bloomberg News reported earlier this month.

SMC is working with SNB Capital and EFG Hermes on the IPO. Representatives for SNB declined to comment, while EFG didn’t immediately respond to requests for comment.

#SaudiArabia’s PIF Said to Explore Tech Unit IPO - Bloomberg

Saudi Arabia’s PIF Said to Explore Tech Unit IPO - Bloomberg

Saudi Arabia’s Public Investment Fund is exploring an initial public offering of a wholly-owned technology firm, according to people familiar with the matter, as the kingdom steps up efforts to raise cash for its economic diversification drive.

Banks have been invited to pitch for roles on a potential share sale of Saudi Information Technology Co., or SITE, the people said, asking not to be named discussing private information. The deliberations are at an early stage and details such as the size and timing of the offer are still under discussion, the people said.

A representative for the PIF declined to comment.

The sovereign wealth fund is the main vehicle for Crown Prince Mohammed bin Salman’s Vision 2030, a plan expected to cost nearly $2 trillion. Technology is a key pillar in that effort to reduce the Saudi economy’s reliance on oil.

The kingdom’s tech ambitions were underscored earlier this month during a visit by US President Donald Trump. Saudi Arabia launched Humain, a new PIF-backed company focused on artificial intelligence software and infrastructure. Meanwhile, Nvidia Corp. and Advanced Micro Devices Inc. announced plans to supply semiconductors to Humain for a major data center project.

Saudi Arabia’s finances are under pressure from lower oil prices. Goldman Sachs Group Inc. recently warned the budget deficit could balloon to $67 billion.

The PIF is leaning on asset sales to help finance Vision 2030’s sweeping initiatives. In addition to SITE, the fund is also preparing listings for a medical procurement company, a port operator and a district cooling firm. Prince Mohammed has previously said the PIF should divest some of its holdings as they mature as a way to finance new investments.

Debt markets are another key funding source. The Saudi government, the PIF and its subsidiaries have raised about $23 billion through bond sales so far this year. State-backed oil giant Aramco also tapped the market for $5 billion earlier this week.

SITE, founded in 2017, offers services including cybersecurity, cloud computing and systems integration, according to the wealth fund’s website.

#Dubai real estate prices likely to face double-digit fall after years of boom, Fitch says | Reuters

Dubai real estate prices likely to face double-digit fall after years of boom, Fitch says | Reuters

Dubai's real estate market prices are likely to face a double-double-digit fall in the second half of the year and in 2026, ratings agency Fitch said in a report on Thursday, marking a sharp turn after years of a post-pandemic boom.

A spike in deliveries in 2025 and 2026 to a planned 210,000 units, doubling from the previous three years, is likely to cause a record increase in supply and push prices down by no more than 15%, the agency said.

The possible drop would follow a rise of around 60% in residential units prices between 2022 and the first quarter of this year in Dubai, where massive infrastructure spending, generous income tax policies and relaxed social and visa rules lured thousands of foreigners after the COVID-19 pandemic, including Russians amid war in Ukraine.

Real estate plays a vital role for the economy of the emirate, the Gulf's hub for business and tourism, with sector transactions worth 761 billion dirhams ($207.22 billion) last year, rising 36% in volume, according to Dubai government data.

In the past, Dubai suffered painful corrections akin to the property crash in 2009 which required a $20 billion Abu Dhabi-led bailout.

The government has since taken measures to deleverage and strengthen the sector, and consolidated major state-owned real estate developers.

It has also pursued an economic reboot anchored in what it hopes is sustainable growth, including a 10-year plan known as D33, to double output and become one of the world's top four financial centres.

Fitch said on Thursday that banks and homebuilders can tolerate a decrease in prices.

It noted that while real estate remains the largest component in UAE banks' lending books, banking sector exposure to firms operating in real estate had dropped to 14% of total gross loans at end of last year from 20% three years earlier.

The attractiveness of properties in prime locations, which include palm tree-shaped artificial island Palm Jumeirah, together with delays in project completion would also help mitigate pricing pressure.

#Dubai's stock index snaps five-day winning streak as Fitch flags property woes | Reuters

Dubai's stock index snaps five-day winning streak as Fitch flags property woes | Reuters

Most Gulf stock markets settled lower on Thursday, with Dubai's main index (.DFMGI), opens new tab snapping five consecutive sessions of gain, after ratings agency Fitch warned that the real estate prices of the emirate are likely to face a double-digit fall in the second half of this year and 2026.

The agency said that a rise in deliveries in 2025 and 2026 to a planned 210,000 units is likely to cause a record increase in supply and push prices down by no more than 15%.

In Dubai, real estate development company Emaar Properties (EMAR.DU), opens new tab, known for its notable works like Dubai Marina, Dubai Creek Harbour and the Dubai Mall, was down 1.48%. The index was down 0.61%.

Real estate plays a crucial role in the economy of Dubai, a hub for business and tourism for most Gulf regions.

Meanwhile, oil prices rose on Thursday after a U.S. court blocked most of U.S. President Donald Trump's tariffs, with markets keeping a close eye on possible new sanctions curbing Russian crude flows and an OPEC+ decision expected later this week on an output hike in July.

The ruling bolstered the global market's risk appetite. However, analysts have warned that the reprieve may only last temporarily as The White House quickly appealed the decision and could take it to the Supreme Court.

Saudi Arabia's benchmark stock index (.TASI), opens new tab settled down 0.56%. Real state companies in the kingdom also took a hit, with Makkah Construction and Development (4100.SE), opens new tab losing 5.65% and Jabal Omar (4250.SE), opens new tab was down 4.52%.

"The Saudi bourse remained relatively volatile after rebounding from its low. While a rise in oil prices could provide support, the downside risks weigh on sentiment," said Hani Abuagla, Senior Market Analyst at XTB MENA.

"The market remained on a downtrend overall, but could find support from successful initial public offerings."

In Abu Dhabi, the benchmark index (.FTFADGI), opens new tab finished flat.

Qatar's benchmark stock index (.QSI), opens new tab settled down 0.72%, with Vodafone Qatar (VFQS.QA), opens new tab losing 2.91%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab , finished up 0.62%. Real estate company Emaar Misr (EMFD.CA), opens new tab was down 2.32% and Telecom Egypt (ETEL.CA), opens new tab finished 2.33% lower.

The Central Bank in Egypt also lowered its overnight interest rates last week by a less-than-expected 100 basis points.

#SaudiArabia to ‘take stock’ of spending after oil price drop

Saudi Arabia to ‘take stock’ of spending after oil price drop

Saudi Arabia’s finance minister said the kingdom would “take stock” of its spending priorities as it grappled with a sharp drop in oil revenue and the global tumult triggered by US President Donald Trump’s tariffs. 

Mohammed al-Jadaan told the Financial Times that Riyadh planned to maintain its current pace of government spending — despite widening budget and current account deficits, and rising debt — as it seeks to support ambitious development plans. 

But he said Saudi Arabia would use the period of lower oil prices, as well as the uncertain global outlook, to evaluate how it managed the vast array of development projects under Crown Prince Mohammed bin Salman’s $1tn plans to diversify the economy and boost non-oil growth. 

“We’re not going to waste the crisis. People think that what’s happening in the world is a crisis, but our economy is doing very well,” Jadaan said. “It’s a chance to look at things — if there’s an opportunity to do something bold, do it.” 

A “crisis provides us an opportunity to take stock and consider”, he said. “Are we rushing [projects]? Are there unintended consequences? Should we delay? Should we reschedule? Should we accelerate?” 

Jadaan said the prime focus was to avoid falling into the “trap of booms and busts” that had long plagued the oil-dependent kingdom. “We are very aware of how important it is that we don’t go procyclical, but countercyclical,” he said. “Instead of working to just balance the books, by design we are making sure that we spend in support of the growth.”

Even before the slump in oil prices this year — Brent crude is trading at about $64 a barrel, after averaging $82 last year — Riyadh was recalibrating its spending after almost a decade of frenzied activity as it attempted to manage its massive financial commitments and prevent the economy overheating. 

The Public Investment Fund, which is responsible for the development of the country’s megaprojects, is also going through a “similar, very prudent exercise of making sure that they also recalibrate”, said Jadaan, who sits on the $940bn sovereign wealth fund’s board. 

The FT reported last month that the new chief executive of Neom, the PIF’s flagship $500bn development, was conducting a comprehensive review of the scope and priority of its futuristic projects. 

The government budgeted a slight decrease in its expenditure this year compared with last. Sectors being prioritised include tourism, manufacturing, logistics, renewable energy and technology, with the state’s petrodollar-fuelled spending the key driver of economic activity. 

Riyadh has been enduring the twin hit of falling oil prices and reduced exports, pumping at its lowest levels since 2011 after voluntarily cutting crude production as the de facto leader of Opec+. The cartel is starting to unwind those cuts and gradually raise output, but that risks putting more pressure on prices. 

An 18 per cent drop in oil revenue in the first quarter of this year, compared with the same period in 2024, underlined the challenges the kingdom faces. The fiscal deficit swelled to $15.6bn in that period, the highest quarterly deficit since 2021. 

That suggested the finance ministry would miss its target of narrowing the budget deficit to 2.3 per cent of GDP this year. 

The IMF forecasts the budget deficit will widen above 4 per cent of GDP this year and next, estimating Riyadh’s break-even oil price — the level it needs to balance its books — to be $92 a barrel. 

Jadaan said he would not be worried about the deficit widening to 3 per cent, 4 per cent, or “occasionally” 5 per cent of GDP as long as government spending supported non-oil growth — a key metric of its diversification plans. 

Jadaan said other factors that would cause the government to slow down would be to protect its foreign reserves and ensure the cost of debt remained “reasonable”. 

The kingdom, already one of the biggest emerging market issuers of debt this year, will have to borrow more to fund the gap. 

Its debt-to-GDP ratio is relatively low at 26 per cent, and Jadaan said he did not see “any reasonable scenario” that “would make us even come close to” the ministry’s ceiling of 40 per cent.

“There will possibly be more deficit than we anticipated in the budget, but not significant,” Jadaan said. “We still have plenty of room in our fiscal buffers, ample foreign reserves [and] significant government reserves.” 

He still expects GDP growth to meet the forecast of 4.6 per cent for the year, driven by non-oil activities, up from 1.3 per cent in 2024. The IMF, however, forecasts 3 per cent growth, a slight downward revision from an earlier estimate. 

But Jadaan said what made the government feel “comfortable” was the fact that “a lot of the targets have been reached or on track to be achieved”. 

“That gives us a lot of confidence,” he said. “But we aren’t complacent.”