Saudi Arabia boosts fintech drive with UAE and Bahrain talks

Riyadh by night: The Kingdom is keen to nurture its native fintech ecosystem. (Shutterstock)
Updated 15 July 2018
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Saudi Arabia boosts fintech drive with UAE and Bahrain talks

  • Discussions with central banks in the UAE and Bahrain would help to coordinate the fintech activities of financial centers around the Gulf region
  • The development of a fintech ecosystem is a significant component of Saudi Arabia’s Vision 2030 economic diversification strategy

LONDON: Saudi Arabia is discussing a coordinated approach to the regulation and nurturing of fintech startups with the UAE and Bahrain.

Such discussions form part of the Kingdom’s attempts to boost its nascent fintech ecosystem and to encourage the increased adoption of technology by incumbent lenders.

Discussions with central banks in the UAE and Bahrain would help to coordinate the fintech activities of financial centers around the Gulf region, all of whom are seeking to attract international and domestic entrepreneurs, said Mishari Al-Assailan, the acting head of Fintech Saudi, the division of the Saudi central bank charged with growing the sector in the Kingdom.

“We’re working on establishing some collaborations where we would give different assignments between different central banks and fintech hubs to develop a (common) GCC output when it comes to fintech,” he told Arab News.

Speaking at the “Unlocking the Fintech Scene in Saudi Arabia” event held in London on Friday, Al-Assailan said that it was important to develop a common approach to regulation among the region’s various fintech “sandboxes,” which enable startups to begin operating under a light-touch regulatory model.

“We’re all working today on excelling in our own sandboxes, but then there should be a GCC sandbox that ties into the rest of the Middle East,” he said.

“It’s hard to establish fintech firms (that can enter other markets) unless you have an infrastructure like the US that is quite open. We need to find a proper model for fintechs to jump in, get regulated quickly and if they do get regulated, everyone after them should use the same process.”

Saudi Arabia’s Capital Market Authority earlier this week approved the Kingdom’s first fintech licenses to Manafa Capital and Scopeer — both of which are fully Saudi-owned — to offer crowdfunding investment services on a trial basis.

The development of a fintech ecosystem is a significant component of Saudi Arabia’s Vision 2030 economic diversification strategy, and is seen as essential for broadening the country’s investment base and a transition toward a cashless digital economy.

Fintech initiatives in the Kingdom, however, have thus far trailed similar schemes launched in Bahrain and the UAE. Abu Dhabi Global Market launched its RegLab sandbox in November 2016, while fellow finance hub the Dubai International Financial Center launched “FinTech Hive,” the region’s first fintech accelerator program, in January 2017.

There are at present only about 20 Saudi fintech startups, according to Al-Assailan.

He conceded that the Kingdom had been slow to develop its fintech infrastructure in comparison with others, but expressed confidence that startups would be attracted by the size of the Saudi market.

“People used to go to the UAE and Bahrain because we didn’t have the infrastructure,” he said. “But most of those fintechs in the UAE and Bahrain want to sell into Saudi Arabia, because we have the market and the purchasing power and that by itself is an advantage for us.”

The new emphasis on fintech from Vision 2030 has subsequently made the Kingdom a more attractive destination for startups, according to an American fintech entrepreneur who has previously worked in Saudi Arabia.

“They’re coming late to the party, yes, but I don’t think that the timing is the only factor that will influence the companies that are looking to work in this space,” he said, asking not to be named.

“Obviously the UAE has a very well-developed ecosystem, but my experience is that with Vision 2030 Saudi Arabia now really wants to put its money where its mouth is.”

“The companies that have the really good ideas, if they’re knocking on the right doors, will find the support they need and probably more than you’d get in other countries.”

Fintech segments such as roboadvisory services, robobanking, crowdfunding and payment aggregation all offer significant growth opportunities, according to Al-Assailan.

In addition to the development of an ecosystem for startups, Fintech Saudi sees educating the Kingdom’s incumbent banks about the need to embrace technology in line with their counterparts in Europe, the US and elsewhere as important.

“It’s the future and it’s happening whether you like it or not,” he said.

“Banks need to realize that at some point you need to hire more developers than accountants into the bank, and that’s what we’re trying to preach.”

The development of robobanking lending facilities for the Kingdom’s SME sector was a particular priority, he said, given the central role of small businesses in Vision 2030.

“If we develop AI and robo capabilities to automatically approve and assign loans for SMEs and startups, this would boost the economy in a very efficient way,” he said.


Saudia unveils beta version of new Travel Companion platform

Updated 24 April 2024
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Saudia unveils beta version of new Travel Companion platform

RIYADH: The Kingdom’s flagship airline Saudia has launched a beta version of its digital platform, the Travel Companion, powered by advanced artificial intelligence, aiming to transform the industry.

The new initiative, unveiled during a special event, is part of a two-year plan developed in partnership with global professional services firm Accenture.

“This platform, resulting from our ongoing collaboration with Accenture, signifies our forward-looking approach to providing guests with unparalleled convenience and flexibility,” the Director General of Saudia Group, Ibrahim Al-Omar, said. 

The main objective of this launch is to transform how travelers engage with the airline and establish new benchmarks for digital travel.

TC, initially named, offers personalized and tailored solutions to meet individual preferences and needs, providing search results from trusted and authenticated sources and incorporating visual aids in its responses.

The interface is designed as a comprehensive, one-stop solution that enables users to book concierge services, including hotels, transportation, and restaurants, as well as activities and attractions, without the need to switch between multiple platforms.

“This is a beta version. This is not the product. We will keep enhancing and developing it,” Al-Omar stressed.

Moreover, it establishes seamless connections with transportation platforms and various train companies, ensuring a smooth and uninterrupted journey.

Commenting on the new announcement, Chief Data and Technology Officer at Saudia, Abdulgader Attiah, told Arab News: “It’s like having the VVVIP concierge service at your hand. For public, it’s not any anymore VIP service. It’s not a paid service. You have it for free, and it will give you all what all kind of services that VVIP service would provide to you, so it’s your private concierge.”

He added: “We will be the anchor for the travel industry. We are not anymore, an operator for an airline, but with this app, you will be an anchor for all tourism ecosystem in a single app, so everyone can collaborate in this app, and having the links, so you don’t need to communicate with any other party, so through this app, you can communicate to all travel ecosystem.”

In future phases, Saudia plans to add more features, including voice command and digital payment solutions.

“Once we add the complete solution we will add the more services, which is we call it the concierge services; booking for hotels and transportation and the restaurants, all of these ones is done during the, next two years, and this is the complete life cycle of the, vision we have today,” Attiah told Arab News.

He added: “If you want to develop this app, five years back, it would take three, four years. Today, we have developed only in seven, eight months. To that from the inspirational part to having an actual booking, we started back in June and now we are live.”

Attiah also underlined that Saudia is the first airline in the world to implement a GenAI-based chatbot that can perform end-to-end actions, meaning it can not only engage in conversation but also execute tasks or actions based on user requests.

With an always-on Travel Companion available through a telecom e-SIM card provided by Saudia, users can stay connected globally without relying on additional internet providers.

Furthermore, users can purchase data packages for extended use, guaranteeing continuous access to the platform’s services.


Saudi economy witnessing a fundamental shift, says minister

Updated 24 April 2024
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Saudi economy witnessing a fundamental shift, says minister

RIYADH: Since the launch of Vision 2030, Saudi Arabia has witnessed a fundamental shift in its economy and the business environment is transforming with the creation of new sectors, said the Kingdom’s economy minister.

Faisal Al-Ibrahim was speaking at a conference in Riyadh on Wednesday during which he highlighted the fast-evolving business landscape of the Kingdom focused on diversifying its income sources away from oil.

Speaking at the event titled “Industrial policies to promote economic diversification,” the top official said there have been fundamental changes in the legislative and economic regulations to promote sustainable development since the launching of the Vision 2030 plan.

He said the Kingdom’s efforts to diversify its economy have led to the creation of new sectors due to the initiation of several megaprojects such as NEOM, the Red Sea, and others. 

 “We stand at a crossroads to change the global economy,” Al-Ibrahim said.

He stressed the need for strategies to ensure a flexible and sustainable economy.

“The presence of foreign investments will develop competitiveness in the long term,” the minister affirmed.

The minister also highlighted how the Kingdom was working in the medium term to focus on transforming sectors that represent a technological shift.

Saudi Arabia is keen on achieving development in the medium term by balancing short-term profits and promoting long-term success, Al-Ibrahim highlighted.

Since the launch of the vision, the Ministry of Economy and Planning has conducted several economic studies aimed at diversifying the economy by developing objectives for all sectors, raising complexity levels, and studying emerging economies to enhance the Kingdom’s capabilities.  

 


Saudi Arabia closes April sukuk issuance at $1.97bn

Updated 24 April 2024
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Saudi Arabia closes April sukuk issuance at $1.97bn

RIYADH: Saudi Arabia has completed its riyal-denominated sukuk issuance for April at SR7.39 billion ($1.97 billion), representing a rise of 66.44 percent compared to the previous month. 

The National Debt Management Center revealed that the Shariah-compliant debt product was divided into three tranches. 

The first tranche, valued at SR2.35 billion, is set to mature in 2029, while the second one amounting to SR1.64 billion is due in 2031. 

The third tranche totaled SR3.51 billion and will mature in 2036. 

“The Kingdom also plans to expand funding activities during the year 2024, reaching up to a total of SR138 billion from what has been stated previously in the Annual Borrowing Plan, with a portion of this amount already covered up to date,” said NDMC in a press statement. 

It added: “This step comes with the aim of capitalizing on market opportunities to achieve proactive financing for the coming year and utilizing it to bolster the state’s general reserves or seize additional opportunities to enhance transformative spending during this year, thereby accelerating strategic projects and programs of Saudi Vision 2030.” 

In March, NDMC concluded its second government sukuk savings round for March, with a total volume of requests reaching SR959 million, allocated to 37,000 applicants. 

The center added that the financial product, also known as Sah, offers a return of 5.64 percent, with a maturity date in March 2025. 

Earlier this month, Fitch Ratings, in a report, said that global sukuk issuance is expected to continue growing in the coming months of this year, driven by funding and refinancing demands. 

The credit rating agency noted that various other factors like economic diversification efforts by countries in the Gulf Cooperation Council region and development of the debt capital market will also propel the growth of the market in the future. 

In January, another report released by S&P Global revealed that sukuk issuance worldwide is expected to total between $160 billion and $170 billion in 2024, driven by higher financing needs in Islamic nations.

The report noted that higher financing needs in some core Islamic finance countries and easing liquidity conditions across the world are two crucial factors which will drive the growth of the market this year. 


Closing Bell: TASI edges down to close at 12,355 points 

Updated 24 April 2024
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Closing Bell: TASI edges down to close at 12,355 points 

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Wednesday, losing 128.72 points, or 1.03 percent, to close at 12,355.69.    

The total trading turnover of the benchmark index was SR8.45 billion ($2.25 billion) as 41 of the listed stocks advanced, while 187 retreated.   

Similarly, the MSCI Tadawul Index decreased by 14.78 points, or 0.95 percent, to close at 1,548.62. 

Also, the Kingdom’s parallel market Nomu dipped, losing 365.84 points, or 1.37 percent, to close at 26,326.12. This comes as 17 of the listed stocks advanced, while 45 retreated. 

The best-performing stock of the day was Al-Rajhi Co. for Cooperative Insurance as its share price surged by 9.87 percent to SR138.

Other top performers include Al Sagr Cooperative Insurance Co. and First Milling Co., whose share prices soared by 6.38 percent and 5.63 percent, to stand at SR35.85 and SR78.80, respectively. 

In addition to this, other top performers included Batic Investments and Logistics Co. and Saudi Research and Media Group. 

The worst performer was Al-Baha Investment and Development Co., whose share price dropped by 7.14 percent to SR0.13. 

Other weak performers were National Co. for Learning and Education as well as Arriyadh Development Co., whose share prices dropped by 5.95 percent and 5.91 percent to stand at SR148.60 and SR22.60, respectively. 

Moreover, other subdued performers also include Red Sea International Co. and AYYAN Investment Co. 

On the Kingdom’s parallel market Nomu, the best-performing stock of the day was Osool and Bakheet Investment Co., as its share price surged by 12.05 percent to SR40.90. 

Other top performers on Nomu include Arabian Plastic Industrial Co. and Lana Medical Co., with their share prices soaring by 7.42 percent and 3.59 percent, respectively, reaching SR37.65 and SR41.85. 

The worst performer was Jahez International Co. for Information System Technology, whose share price dropped by 5.88 percent to SR32.

Other weak performers were Alhasoob Co. as well as Aqaseem Factory for Chemicals and Plastics Co., whose share prices dropped by 3.61 percent and 3.38 percent to stand at SR64.10 and SR62.80, respectively. 

On the announcements front, HSBC Saudi Arabia, serving as sole financial advisor, joint bookrunner, underwriter, and lead manager, has announced the intention of Dr. Soliman Abdel Kader Fakeeh Hospital Co., known as Fakeeh Care Group, to proceed with its initial public offering on the main market of Saudi Exchange. 

According to a statement, the offering will include 49.8 million ordinary shares, with 19.8 million existing shares and 30 million new shares upon completion.  

This offering is set to represent 21.47 percent of the company's share capital post-capital increase.  

Saudi Exchange and the Capital Market Authority approved the listing and IPO, respectively, with the pricing of shares to be determined after the book-building period. 


Ministry tenders contract for expansion of Prince Faisal bin Fahd Stadium

Updated 24 April 2024
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Ministry tenders contract for expansion of Prince Faisal bin Fahd Stadium

RIYADH: Saudi Arabia’s Sports Ministry has tendered a contract to boost the capacity of Riyadh’s Prince Faisal bin Fahd Stadium to 45,000 seats up from its current 22,188.

The expansion project comes as the Kingdom prepares to host the Asian Football Confederation Asian Cup in 2027, reported MEED. 

This initiative aligns with Saudi Arabia’s plan to build sports stadiums under its SR10.1 billion ($2.7 billion) capital projects program. 

The ministry requested proposals on April 8 and expects to receive bids on June 14.

In April, the ministry also tendered an early works contract for the expansion and development of the Prince Mohammed bin Fahd Stadium in Dammam.

At the time, the scope of the contract included the stadium’s decommissioning, demolition, and bulk excavation, as well as the relocation and setting up of related facilities.  

In July 2023, the ministry invited firms to submit pre-qualification documents for the main construction contracts for the schemes in the capital projects program. 

The undertakings, which are set for completion before the 2027 AFC Asian Cup, entail increasing the capacity of King Fahd Stadium in Riyadh to 92,000 seats and boosting the seating capacity of Prince Mohammed Bin Fahd Stadium to 30,000 seats. 

It also includes increasing the seating capacity of the Prince Saud bin Jalawi Stadium in Al-Kahir to 45,000 and building a sustainable New Riyadh Stadium north of the city with 45,000 seats.

Another main element of the ministry’s projects program is the construction of as many as 30 new training grounds and facilities in proximity to the stadiums that will be used for the 2027 competition. 

Construction on the projects is expected to start in July 2024 and scheduled to be completed by December 2025.

A total of 18 facilities will be ready in time for the 2026 AFC Women’s Cup.