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Trade minister: French companies committed to increase, diversify investments in Saudi Arabia

Franck Riester, French minister delegate for foreign trade and economic attractiveness (L), at an event with Khalid Al-Falih, Minister of Investment of Saudi Arabia (R). (Supplied)
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Updated 07 April 2021
NOOR NUGALI
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Trade minister: French companies committed to increase, diversify investments in Saudi Arabia

  • Saudi giga projects are a catalyst for French investments, says French Trade Minister Delegate Franck Riester
  • France would be keen to offer its proven expertise to design, build, and manage smart, sustainable cities
Updated 07 April 2021
NOOR NUGALI

RIYADH: With direct investment amounting to more than €3.7 billion ($4.37 billion), France is one of the largest investors in Saudi Arabia. Projects relating to the Vision 2030 program to diversify the Saudi economy offer yet more opportunities for strengthening the bilateral partnership. France is keen to share its expertise in such fields as energy, water, transport, new technology, and aerospace.

For Saudi investors, France’s innovation ecosystem and location make it an ideal gateway for trade with the EU. Franck Riester, French minister delegate for foreign trade and economic attractiveness, touched on these issues and more during an exclusive interview with Arab News.

In particular, the minister said French companies are committed to increasing and diversifying their investments in the Saudi economy and have already identified significant opportunities, from renewable energy to healthcare to tourism.

Q. What are the key objectives of your current visit to Saudi Arabia?

A. France and Saudi Arabia have a long history of rich and fruitful cooperation, which we wish to further develop. I first visited the Kingdom in 2019 as minister of culture for the launch of the breathtaking AlUla project, highlighting the exceptional heritage of Saudi Arabia and the partnership with French cultural organizations.

I am here in Riyadh today to develop the economic relationship between France and Saudi Arabia, especially in the framework of the partnership agreed between President Emmanuel Macron and Crown Prince Mohammed bin Salman during his official visit to France on April 18, 2018.

Our two countries share the same ambition in key sectors such as the ecological transition and technological revolution. This common ground provides for concrete business opportunities. Together with my counterpart, Khaled Al-Falih, with whom I have had the pleasure to exchange regularly, we aim to give shape to the economic component of this partnership by discussing shared investment opportunities in both countries.

My current visit is another step forward in our enduring and flourishing economic relationship, and I already hope to come back to the Kingdom to fully grasp its beauty and potential.




Arab News Assistant Editor in Chief Noor Nugali presenting Minister Riester with a copy of Arab News en Francais 2020 landmark YouGov study on the status of French Arabs (AN photo)

Q. France is one of the largest investors in Saudi Arabia, with direct investment amounting to more than €3.7 billion. Do you see room for growth as Saudi Arabia diversifies its economy under Vision 2030?

A. French companies are committed to increasing and diversifying their investment in the Saudi economy, in line with the priorities of the Vision 2030 especially in renewable energy, hydrogen, water and environment, healthcare, digital economy, smart cities, and of course tourism services and infrastructure.

French companies are renowned all over the world for their know-how and expertise, which make them ideally suited to meet the high expectations of the Vision 2030 program. That includes the tech sector: I am well aware that the French tech ecosystem is not always well identified in the Middle East. And yet, our striving tech scene is one of the most innovative and dynamic in Europe and in the world, now counting 10 “unicorns” and aiming for 25 by 2022.

Q. At a time when many governments are tightening their belts, Saudi Arabia has launched projects across sectors in recent months totaling trillions of dollars. Do you see big opportunities for French companies?

A. Saudi Arabia has made the right call: The time to invest and prepare for the post-COVID-19 world is now. France is on the same page. We have launched a €100 billion recovery and investment plan to support the long-term economic development of our companies, including the green and digital transitions.

I note that France and Saudi Arabia have made the same choices for the future: Our priorities are aligned. Hence, French companies will find huge investment opportunities in those sectors in the Saudi economy.




Metro lines are seen parked at a parking station during an exclusive tour of the Riyadh Metro on April 1, 2021 in the Saudi capital. (AFP)

Q. Will French companies be investing in some of these projects, such as The Line in Neom, or do they primarily see themselves as bidders and executors of project contracts?

A. French companies have great ambition to be major partners in the giga-projects, among them, Neom, and more broadly the Red Sea Project, Amaala, Qiddiya, and AlUla projects. Unique in their scope, these projects act as a catalyst for French investments across many areas, covering new technology and innovative solutions, tourism and entertainment, arts, and culture. The unmatched track records of our industrial and technological flagships speak for themselves. Our companies offer a full array of expertise, from the early stages of any given project to its final implementation. They are used to partnering with foreign companies. I am therefore highly confident in their ability to meet the expectations of the Kingdom.

Q. The recently announced Saudi Green and Middle East Green initiatives call for cooperation to tackle the environmental challenges facing Saudi Arabia and the wider region. As a minister of a country that facilitated the landmark Paris Climate Agreement, what is your take?

A. We welcome and support the crown prince’s initiative. It is essential that Saudi Arabia becomes a regional and global beacon in the fight against climate change. The Green initiative sends a very positive signal in the perspective of the upcoming COP26. In recent years, France has been strongly committed to making globalization more sustainable. I believe that greening international trade is key to reach this goal, hence the need to put environmental considerations at the heart of the multilateral rules which organize trade. It is a priority we defend at the WTO with our European partners. 




French companies are committed to increasing and diversifying their investment  in the Saudi economy, in line with the priorities of the Vision 2030 especially in renewable energy, Franck Riester said. (Supplied)

Q. According to the UN Development Program’s top energy expert, Saudi Arabia could be the leader of the energy revolution of tomorrow. Do you see any role for French expertise and knowhow in such a revolution?

A. Absolutely. The French-Saudi partnership in the energy sector is deep-rooted and mutual trust in terms of expertise and innovation is high. French companies and researchers are working hard to develop with their partners the energy technologies of tomorrow, which will enable us to put the energy transition at the core of the world economic recovery, of our industrial diversification and our common strategies for massive decarbonization of our energy mixes.

For example, French firms have already had great success in accompanying Saudi Arabia with ambitious plans to massively develop renewable energies. Many more concrete joint projects are to come in the field of decarbonized energies, as we are allocating massive means in France to green our economy.

Q. Not many countries have a minister delegate for foreign trade and economic attractiveness. What do you consider to be the highlights of France’s economic attractiveness?

A. Foreign trade and economic attractiveness are two sides of the same coin: It means we implement a pro-business agenda making our economy, and the companies based in our country, more competitive, innovative, and ready to take on the world. This strategy is already bearing tangible results: In 2019, France became the leading country in Europe for inbound foreign investment, for the first time ever — and stayed strong in 2020 despite the global shock on foreign direct investment (FDI).

Investors choose France because of its core assets: A central geographical situation within the EU, a highly qualified workforce, world-class infrastructure, available and cheap energy, and a strong internal market. France is the number one country in Europe for FDI in research and development and in the industrial sector. The €100 billion “France Relance” stimulus package will make it the first green economy and innovation ecosystem in Europe. We work hard to make Saudi companies willing to expand to Europe elect France as their HQ and production hub.




Franck Riester said French companies are committed to increasing and diversifying their investments in the Saudi economy and have already identified significant opportunities. (AFP/File Photo)

Q. French expertise has traditionally been in such sectors as energy, water, transport, innovation, new technology, and aerospace. Are we missing out anything that Saudi Arabia could benefit from?

A. I am convinced that French expertise in healthcare and the dynamism of the health-tech ecosystem could greatly contribute to the Kingdom’s ambitious goals regarding the health sector, and set the foundations for a sustainable relationship between our countries. I know our companies are willing to go in that direction.

France is also one of the world’s leading agrifood exporters. Our products are renowned for their high quality, in both taste and health, as well as for their traceability. Finally, regarding Saudi Arabia’s strong ambitions in terms of urban development, France would be keen to offer more of its proven expertise and best technologies to design, build, and manage smart and sustainable cities, while meeting high environmental and quality standards.

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Twitter: @NoorNugali

Topics: business economy Saudi Arabia France Investment Editor’s Choice

Saudi Rasan to offer 30% shares for IPO on Tadawul

Updated 05 May 2024
Arab News
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Saudi Rasan to offer 30% shares for IPO on Tadawul

Updated 05 May 2024
Arab News

RIYADH: Saudi-based fintech Rasan Information Technology Co. is set to offer 22.74 million shares for an initial public offering on the Kingdom’s main market.

The company, along with its subsidiaries, will list the shares, which represent 30 percent of its issued share capital, on Tadawul through the sale of 17.4 million existing ordinary shares as well as 5.3 million new ordinary shares, according to a statement.

While the existing ordinary shares account for 23 percent of the company’s issued share capital, the new ordinary shares represent 7 percent.

This comes following the Capital Market Authority’s approval in March of the fintech firm’s application for registering its share capital and offering the total number of ordinary shares, with a nominal value of SR1 ($0.27) per share.

Moreover, the offering proceeds after deducting IPO-related expenses will be distributed to the selling shareholders equally based on their shareholding in the existing ordinary shares.

The remaining proceeds are set to be distributed to the company in order to expand its current operations and products, market and develop new products, as well as finance the general purposes of the firm and its subsidiaries.

The final price of the offer shares, which account for the existing and new ordinary shares combined, will be determined by the existing shareholding and the company, in consultation with the financial advisers, following the book-building process and prior to commencement of the subscription period for individual subscribers.

The financial advisers include Saudi Fransi Capital and Morgan Stanley Saudi Arabia.

Topics: IPO Tadawul

Saudi Aramco raises June’s Arab light crude price to Asia

Updated 05 May 2024
Arab News
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Saudi Aramco raises June’s Arab light crude price to Asia

Updated 05 May 2024
Arab News

RIYADH: Saudi Aramco raised June’s official selling price for the flagship Arab light crude it sells to Asia, according to an official statement.

Differentials for the flagship Arab Light grade were priced at Platts Dubai/DME Oman +$2.90 per barrel, up from +$2 a barrel in April.

This was the highest OSP in five months and largely in line with expectations, based on a firmer market structure and higher spot premiums last month for tradable Middle East grades such as Oman, Al Shaheen and Upper Zakum.

The higher OSPs also came after the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, maintained the first quarter round of voluntary cuts into the second quarter, while the global crunch on supplies of sour crude also underpinned Middle East grades.

Arab Medium was increased by $1 per barrel to +$2.35 per barrel, while Arab Heavy was hiked $1.10 a barrel to +$1.60 per barrel.

For Northwest Europe, the Arab Light OSP was set +$2.10 per barrel over ICE Brent futures, up from +$0.30/b while Medium was hiked from minus $0.40/b to +$1.10/b. Both grades were hiked to reflect the relative weakness in Brent compared to sour barrels.

Arab Light for April to the US Gulf was kept unchanged at +$4.75 per barrel over ASCI, while Medium was at +$5.45/b and Heavy at +$5.10/b, respectively, both slightly lower on the month.

Topics: Saudi Aramco OSP Brent arab light China

Hong Kong, Chinese investors set eyes on Saudi market

Updated 05 May 2024
Reina Takla
MANAL AL-BARAKATI
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Hong Kong, Chinese investors set eyes on Saudi market

  • A delegation of business leaders is set to explore diverse sectors in the Kingdom
Updated 05 May 2024
Reina Takla MANAL AL-BARAKATI

RIYADH: Hong Kong and Chinese companies are gearing up for substantial investments in the Saudi market, marking a significant step toward strengthening economic ties, a top official said. 

A delegation of 30 business leaders from Hong Kong and mainland China is set to explore diverse sectors in the Kingdom, propelled by the ambitious Vision 2030 outlined by Saudi leadership, King Leung, global head of financial services and fintech at Invest Hong Kong, said in an interview with Arab News. 

Explaining the reason for his visit to Riyadh, Leung said: “I’m bringing a delegation of 30-plus executives across different disciplines to explore ways to do business in Saudi Arabia. This is not just about attracting inbound (investment), but also helping mainland Chinese companies use Hong Kong as a base to springboard to key markets like Saudi Arabia.” 

Outlining the potential for co-investment between the two nations, he said: “Definitely, it’s going to be a huge number,” a sentiment that echoes the palpable excitement among Hong Kong investors who are eager to tap into the vast opportunities offered by the Saudi market. 

The convergence of interests between Hong Kong and Saudi Arabia is underpinned by a notable synergy observed between businesses in both regions, the executive said, with an eye on forging strategic partnerships. 

Hong Kong delegates, including private sector leaders and venture capitalists, are eager to explore avenues for collaboration that align with the objectives of Vision 2030. 

“All these things that we are now finding out allow business leaders to see that some businesses from Hong Kong actually have very, very good synergy with Vision 2030 in your country.”  

“It’s hard to quantify the exact number, but definitely, it’s going to be (a) huge number. I have to say these investments cut across different sectors, where you can imagine the market size is enormous,” he said, emphasizing the allure of megaprojects such as NEOM and the King Salman Park, which are set to transform the Saudi investment landscape. 

These projects not only serve as magnets for investment but also catalyze growth in ancillary sectors such as financial services and consumer products, the head of financial services emphasized. 

“These are megaprojects. So, all these things are going to really attract a lot of business activities, of course, initially in construction. But once you have all this construction coming in, then you need the other peripheral sectors to service them, like financial services, consumer products, and payments. So, all these things present a lot of opportunities that really get our delegates and investors from Hong Kong and China very excited,” he further explained. 

Another testament to the nation’s favorable investment ecosystem is its “impressive GDP growth and low debt ratio,” factors that instill confidence among investors. 

Among the sectors garnering attention are green energy and advanced manufacturing, the delegate said, affirming that Saudi Arabia is “paving the way for the future” of clean energy. 

Hong Kong-based companies, armed with cutting-edge technologies, are eyeing opportunities to contribute to Saudi Arabia’s sustainable development goals. 

“I understand that your country is also paving the way for the future, including adopting green energy now. So, one green energy company that I have been talking to in mainland China, they have been in the green hydrogen space for some time, and they are evaluating to put a green hydrogen factory in Saudi Arabia.” 

Thus, projects such as the green hydrogen factory, poised to harness solar power for hydrogen production, exemplify this collaborative spirit. 

“Now, of course, the reason why they’ve done that, part of it, is because the way they generate hydrogen is to use solar power. So they need to go to a place where this is something in abundance. Now, at the same time, you also have some highly visionary, highly capable investment vehicles from the PIF and other funds,” he noted. 

Furthermore, the burgeoning fintech ecosystem in Saudi Arabia presents fertile ground for collaboration between Hong Kong and the Kingdom.  

Fintech companies from Hong Kong are eager to leverage their expertise to enhance banking services and drive digital transformation initiatives in the Kingdom, the executive noted, adding, “In our delegation, we have roughly, I’ll say between 10 to a dozen or so fintech companies that are very keen to see if they can bring the business and set up in Saudi Arabia so that they’re able to service the banks here.” 

On the opposite end, recognizing the potential for synergy, banks from Saudi Arabia are contemplating establishing a presence in Hong Kong to bolster their trade and financial services, he said. 

This strategic move aims to capitalize on Hong Kong’s strategic position as a gateway to the Chinese market, thereby facilitating closer economic ties between Saudi Arabia and China. 

“Of course, we would love to see some Saudi companies set up in Hong Kong. In fact, two of the significant meetings we had were with banks, and now these banks are interested in setting up a presence in Hong Kong,” the official said. 

“This is because of the close trading relationships, and they would like to have a presence in Hong Kong to serve, for example, Chinese customers. This way, they can facilitate services like trade finance and various other services handled by the headquarters in Riyadh,” he added. 

This comes after a pivotal moment in strengthening the economic ties between Hong Kong and Saudi Arabia, marked by the signing of a memorandum of understanding between Invest Hong Kong and the Ministry of Investment of Saudi Arabia last year. 

As a result of this agreement, delegates from Hong Kong have been afforded unique insights into Saudi Arabia’s macroeconomic landscape, grand vision, and burgeoning investment opportunities, further fueling their enthusiasm for collaboration and investment in the Kingdom. 

“Last year, our leader at Invest Hong Kong signed an MoU with MISA. That MoU brought us even closer together. They have been very kind to bring in leaders from different aspects to educate us about your country, from macroeconomic data to the grand vision from leaders in both the public and private sectors,” he said.  

Leung said they also shared insights into projects that have already gained significant traction. “All in all, our delegation was super impressed by the progress made by the country,” he concluded. 

 

 

Topics: SaudiVision2030 Investment China Hong Kong ties economy

Japan keen to forge partnerships with Saudi Arabia in the field of IT, says minister

Updated 05 May 2024
Nada Hameed
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Japan keen to forge partnerships with Saudi Arabia in the field of IT, says minister

Updated 05 May 2024
Nada Hameed

JEDDAH: Lauding Saudi Arabia’s efforts in developing giga-projects and the ongoing digital transformation in the country, a top Japanese official expressed his country’s willingness to strengthen collaboration with the Kingdom in the field of information technology.

Speaking to Arab News, Japanese Minister for Digital Transformation Taro Kono described his recent visit to one of the crown jewels of Vision 2030, NEOM, as truly remarkable.

The minister said that “he had the opportunity to fly over the project and witnessing it firsthand was truly remarkable.”

Since the launch of Vision 2030, Saudi Arabia has been in overdrive to diversify its economy away from oil and emerge as a hub of tourism, entertainment, technology, and renewable energy. On its road to transformation, the Kingdom is forging strategic partnerships with its global allies to achieve its target and work on mutually beneficial arrangements.

“I heard a lot about NEOM and The Line, I saw that the progress made was very impressive. And we heard the vision from the CEO. And it’s very convincing. So I was very glad that I came to NEOM this time. It was a very short (trip), but I think it was worth it,” the minister told Arab News.

NEOM, often referred to as the “city of the future,” is a $500-billion megacity project situated in the northwest region of Saudi Arabia. Encompassing 26,500 sq. km, the project aims to become a global leader in technology, innovation, and tourism through futuristic urban design and sustainable energy solutions.

Talking about Saudi Arabia’s demography, the minister said it is “a very young country” where the majority of the people are under the ages of 30-35. “And I see the Kingdom becoming more vibrant. And projects like NEOM” show that the country is swiftly moving forward.

Acknowledging the Kingdom’s success in adapting to the latest technologies, particularly related to cybersecurity, Kono praised the country’s leadership and its vision. He expressed his eagerness to forge a partnership with his Saudi counterpart to “learn from the Kingdom’s success.”

“I think the Kingdom is building up its resilience against any malicious attacks in cyberspace. So, I believe it is very ready to take a bold step forward. And I had a meeting with Saudi Minister of Communications and Information Technology Abdullah Al-Swaha and I think there’s a lot to learn from the Kingdom,” the Japanese minister said, adding that he had instructed his team to get in touch with their Saudi counterparts to learn from their approach.

Kono, however, stressed the need to develop non-English datasets to train artificial intelligence and proposed collaboration between Japan and Saudi Arabia in this regard.

While Japan has historically led in hardware technology, the minister admitted a lag in digital technology investment. Recognizing this gap, he signed a memorandum of cooperation with Al-Swaha to learn from Saudi Arabia’s IT advancements.

He said that although Japan excelled in analog technology during the 20th century, admittedly, they have fallen behind in investing in digital technology.

Their discussions reportedly included topics such as E-ID utilization, where Kono hopes to collaborate on developing mutual use cases to propel Japanese progress. He added: “I think the Kingdom and Japan could work together to advance in the field of IT software AI, so very much looking forward to that.”

With shared visions such as Vision 2030 and upcoming events like Expo 2025 in Osaka and Expo 2030 in Riyadh, the two countries have maintained a strong relationship for nearly seven decades.

Kono believes there is immense potential for collaboration between the two countries, particularly in joint projects for Expo 2025 in Osaka and Expo 2030 in Riyadh. “I am looking forward to continue working closely with the Kingdom,” he added.

Expo 2025 is scheduled to be held in Osaka, Japan. It will be held for 184 days This will be the third time for the Japanese city to host the event. Earlier Osaka hosted the global event in 1970 and then in 1990.

The theme for Expo 2025 is “Designing Future Society for Our Lives,” focusing on creating a better future through innovation and sustainability. The expo will provide a platform for countries to share their ideas and solutions to global challenges.

Expo 2030 is scheduled to be held in Riyadh. As the first World Expo to be hosted in the Middle East, it presents an opportunity for the region to showcase its cultural heritage, technological advancements, and vision for the future. The theme for Expo 2030 in Riyadh is “The Era of Change: Together for a Foresighted Tomorrow.” It is expected to align with Saudi Arabia’s Vision 2030 goals of diversifying the economy and promoting innovation.

Kono said: “When we had our expo in Osaka for the first time, I was probably seven or eight years old. But it gave us sort of a good, big push for the economy, or not just the economy, for society as well. Expo brings in a lot of our dreams, and dreams we had back then come true. So, this Expo 2025 will hopefully bring in another dream. And I hope it will make a bridge to 2030 and we (Saudi Arabia and Japan) can work together to make our dreams come true.”

Topics: Saudi Arabia Japan Interview IT

Closing bell: Saudi main index rises to close at 12,373 

Updated 05 May 2024
ARAB NEWS 
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Closing bell: Saudi main index rises to close at 12,373 

Updated 05 May 2024
ARAB NEWS 

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 20.78 points, or 0.17 percent, to close at 12,373.11.  

The total trading turnover of the benchmark index was SR5.26 billion ($1.4 billion) as 92 of the stocks advanced, while 129 retreated.  

Similarly, the Kingdom’s parallel market Nomu also rose 332.34 points, or 1.26 percent, to close at 26,790.15. This comes as 27 of the stocks advanced, while as many as 31 retreated. 

Meanwhile, the MSCI Tadawul Index jumped 4.56 points, or 0.29 percent, to close at 1,551.76. 

The best-performing stock of the day was Zahrat Al Waha for Trading Co. whose share price surged 9.97 percent to SR47.45. 

Other top performers include Raydan Food Co. as well as Saudi Cable Co. 

The worst performer was Gulf Insurance Group whose share price dropped by 9.94 percent to SR34.90. 

Other subdued performers included Al-Baha Investment and Development Co. as well as Salama Cooperative Insurance Co. 

On the announcements front, Saudi Tadawul Group Holding Co. has announced its interim financial results for the period ending on March 31. 

According to a Tadawul statement, the company’s net profit hit SR201.5 million in the first quarter of 2024, reflecting a 121 percent surge when compared to a similar quarter last year. 

The increase was mainly driven by a rise in operating revenues, operating expenditures, and earnings per share as well as a climb in gross profit and operational profit. 

Moreover, the National Agricultural Development Co. also announced its interim financial results for the first three months of 2024. 

A bourse filing revealed that the firm’s net profit reached SR101.3 million by the period ending on March 31, up 168 percent in comparison to the corresponding period in 2023. 

The increase in net profits is primarily attributed to a rise in revenue, a decrease in the cost of sales, and a reduction in finance costs, among other factors. 

Furthermore, Gulf Insurance Group also announced its interim financial results for the first quarter of the year. 

According to a Tadawul statement, the company reported a net loss of SR20.2 million, contrasting with a net profit of SR56.6 million in the same period of the previous year. 

This loss is primarily attributed to a decrease in insurance revenue combined with adverse movement in reinsurance contracts. 

Additionally, Saudi Aramco Base Oil Co., also known as Luberef, announced its interim financial results for the period ending on March 31. 

A bourse filing revealed that the firm’s net profit stood at SR239 million at the end of the first quarter of 2024, reflecting a 46.3 percent drop when compared to the same quarter a year ago. 

The decline in net profit for the current quarter compared to the same quarter of the previous year is attributed to a decrease in base oil crack margins. 

Meanwhile, Saudi Cable Co. disclosed its annual financial results for the period ending on Dec. 31. 

According to a Tadawul statement, the company reported a net profit of SR36.5 million in the first three months of 2024, a significant improvement from the net loss of SR584.9 million recorded in the corresponding period a year ago. 

Topics: Saudi Tadawul Group stock

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