Egyptian expat remittances reach $2.7bn in May: CBE

Remittances from Egyptians living abroad have risen again. Shutterstock
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Updated 09 July 2024
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Egyptian expat remittances reach $2.7bn in May: CBE

RIYADH: Remittances from Egyptians living abroad have continued their upward trajectory for the third consecutive month, rising by 26.6 percent to reach $2.7 billion in May. 

According to data from the Central Bank of Egypt, this marks a year-on-year growth of 73.8 percent, up from $1.6 billion.

Additionally, the monthly increase from April’s figure reached $2.2 billion, driven by economic reform measures introduced on March 6, including a currency devaluation of approximately 35 percent in response to a significant interest rate hike. 

This came as the International Monetary Fund projected Egypt’s foreign cash revenues to surge by $13.7 billion from five key sources this year, marking a 14.6 percent increase from the previous year. 

Net private transfers from abroad are anticipated to increase to around $23.1 billion in 2023-2024, up 5.5 percent from $21.9 billion in 2022-2023. The projections suggest these transfers will continue rising to $24.6 billion in 2024-2025. 

This anticipated growth is largely attributed to a landmark agreement signed in February by the UAE, represented by a private consortium led by ADQ, a sovereign investment fund based in Abu Dhabi. The agreement outlined a $35 billion investment in Ras El-Hekma, a region on the Mediterranean coast 350 km northwest of Cairo, marking the single largest foreign direct investment in Egypt to date. 

The IMF forecasted in May that foreign cash inflows from these five sources, including proceeds from commodity exports, tourism revenues, Suez Canal revenues, private transfers, and net foreign direct investment, will total around $107.3 billion for the fiscal year 2023-2024, up from approximately $93.6 billion in 2022-2023. 

Despite this positive outlook for the current fiscal year, the IMF expected a decline in foreign cash inflows for the next fiscal year, projecting a drop to approximately $91.2 billion, below the levels of 2022-2023. 

Specifically, the international firm predicted a decrease in commodity export revenues to $33.2 billion for the current fiscal year, down from $39.6 billion last year, a 16.2 percent decline, with a subsequent rise to $35.6 billion next year.  

Tourism revenues are expected to fall to around $12 billion in 2023-2024, down from $13.6 billion in 2022-2023, an 11.8 percent decrease, before increasing to about $12.6 billion in 2024-2025. 

Suez Canal revenues are projected to decline to $6.8 billion this fiscal year, compared to $8.8 billion last year, a 22.7 percent decrease, with an expected rise to approximately $10 billion next year.  

Net foreign direct investment inflows are projected to surge to around $32.2 billion this year, a significant increase from $9.7 billion in the previous fiscal year, marking a 232 percent rise. However, a decline to $8.4 billion is expected next year. 


Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

Updated 18 July 2024
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Closing Bell – Saudi indexes end week in green, TASI closes at 12,188

RIYADH: Saudi Arabia’s Tadawul All Share Index ended the week in green, gaining 30.71 points, or 0.25 percent, to close at 12,188.32.         

The total trading turnover of the benchmark index was SR8.7 billion ($2.3 billion) as 108 of the listed stocks advanced, while 113 retreated.   

Similarly, the MSCI Tadawul Index also gained 6.61 points, or 0.43 percent, to close at 1,527.   

The Kingdom’s parallel market Nomu dropped 185.57 points, or 0.72 percent, to close at 25,702.34. This comes as 32 of the listed stocks advanced, while as many as 33 retreated.   

The best-performing stock of the day was Saudi Manpower Solutions Co., with the company’s share price surging 6.33 percent to SR9.41.    

Other top performers include Saudi Public Transport Co. as well as Tourism Enterprise Co., whose share prices soared by 5.83 percent and 5.06 percent, to stand at SR18.88 and SR0.83 respectively.    

In addition to this, other top performers included Saudi Industrial Development Co. and National Gypsum Co.  

The worst performer was Al-Baha Investment and Development Co., whose share price dropped by 7.69 percent to SR0.12.     

Others to see falls were Al Sagr Cooperative Insurance Co. as well as Leejam Sports Co., whose share prices dropped by 6.19 percent and 3.12 percent to stand at SR23.34 and SR230, respectively.    

AYYAN Investment Co. and B MBC Group Co. also recorded falls.

On the announcement front, Advanced Petrochemical Co. announced a net loss of SR17 million for the first half of 2024, a significant decline from the SR103 million net profit recorded during the same period in the previous year. 

The company attributed this downturn to several factors, including a 20 percent year-on-year decrease in sales revenue due to scheduled maintenance activities in 2024. 

Advanced Petrochemical posted a SR67 million loss share in its investment in SK Advanced for the current six-month period, compared to a SR43 million loss in the first half of 2023. 

In the second quarter of 2024, the company’s net profit decreased by 30 percent to SR42 million, down from SR60 million in the same period of 2023. This reduction was primarily driven by a 12 percent year-on-year increase in propane prices, despite an overall rise in quarterly revenues. 


UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars

Updated 18 July 2024
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UAE’s debt market soars 11.8% to $281bn in H1, 71.5% dominated by US dollars

  • Emirate’s debt capital markets outstanding are expected to reach $300 billion in the second half of 2025

RIYADH: The UAE’s debt capital market outstanding surged by 11.8 percent annually to $281 billion in the first half of this year, with 71.5 percent of US-denominated dollars, a new report has revealed.
According to data released by the credit agency Fitch Ratings, the country’s debt capital markets outstanding are expected to reach $300 billion in the second half of 2025.
“The DCM structural reforms, the implementation of the Dirham Monetary Framework, and generally resilient investor appetite have led to notable growth over the past five years,” said the Global Head of Islamic Finance at Fitch Ratings, Bashar Al-Natoor.
“However, there are still gaps to address,” he added. “The dirham market remains nascent, the investor base is highly concentrated in banks and most corporates still prefer bank financing over bonds or sukuk.”
Following the UN climate change conference COP28 in the UAE in late 2023, environmental, social, and governance debt issuance in the first half of this year fell 35 percent to $3.3 billion, with sukuk accounting for the vast majority of 67.5 percent.
The Emirates was the third-largest US dollar debt issuer among emerging markets, excluding China, with an 8.9 percent share of the total in the first half of 2024.
Al-Natoor said that despite the growth in Islamic finance, many corporates still prefer traditional bank financing over issuing bonds or sukuk due to perceived complexities in adhering to Shariah standards set by the Accounting and Auditing Organization for Islamic Financial Institutions.
The only countries with a larger percentage than the UAE were Saudi Arabia, with a 17.4 percent share, and Brazil, with 9.4 percent, according to Fitch Ratings.

Sukuk issuance in all currencies increased by 9.8 percent annually, totaling $8.4 billion, outperforming bond issuance, which decreased by 44.3 percent to $39 billion.

Dollar-denominated DCM issuances included a notable share of sukuk at 27.7 percent in the first half, down from 35.3 percent in the same period last year. 

Fitch has assigned ratings to $26.5 billion worth of UAE sukuk, with 94.3 percent maintaining investment-grade status.

Certain UAE banks, both Islamic and conventional, have been restricted from investing in specific sukuk unless they hold them until maturity due to guidelines from the Higher Shariah Authority of the Central Bank.

“We forecast consolidated UAE government debt at 24 percent of GDP (gross domestic product) at end-2024, well below the 49 percent ‘AA’ category median,” the credit rating agency said, adding: “Individual emirates have varied debt profiles; Sharjah stands out with a higher debt burden.”

Abu Dhabi and Dubai are expected to post surpluses, whereas deficits are projected for Sharjah and Ras Al-Khaimah, where Fitch upgraded RAK’s rating to “A+” from “A” in May 2024.


Almarai, 30Export sign deal for nearly $16m export boost strategy

Updated 18 July 2024
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Almarai, 30Export sign deal for nearly $16m export boost strategy

RIYADH: A SR60 million ($15.9 million) deal has been signed between food company Almarai and marketing logistics firm 30Export to boost the former’s foreign trade prospects.

The agreement, overseen by Minister of Industry and Mineral Resources Bandar Alkhorayef and Abdulrahman Al-Thukair, the CEO of Saudi Export Development Authority, was signed by Abdullah Al-Bader, CEO of Almarai Co. and Ali Al-Malki, 30Export.

According to a statement by Thamer Al-Mishrafi, the spokesman of SEDA, this memorandum of understanding will empower the brand in international markets.

This comes as SEDA aims activate all its efforts and capabilities to explore available means of support in order to enhance the penetration of national products and services into targeted global markets.

The project also increases Saudi Arabia’s import-export capacity by improving its connectivity with international trade routes, aliginng with Vision 2030 goal.

The effort aims to diversify national income sources and increase the share of non-oil Saudi exports to at least 50 percent of total gross domestic product by 2030

It also comes as part of the Export Housing initiative launched by SEDA last year, which enables licensed export houses to facilitate the export of high-quality national products to international markets.

These export houses, licensed and qualified by SEDA, play a crucial role as commercial intermediaries, offering a range of services across the export value chain.

“This effort aims to assist local factories in accessing global markets, thereby facilitating the export movement and enhancing the reach of national goods and services to targeted international markets,” Al-Mishrafi said in a statement on X.

Saudi Arabia’s non-oil exports saw an annual rise of 3.3 percent in the first quarter of 2024, fueled by an increase in the value of re-exports.

According to the General Authority for Statistics, while national non-oil exports experienced a slight dip of 5.2 percent, the value of re-expored goods surged by 31.5 percent during the same period.

In October last year, SEDA and Saudi Post, also known as SPL, signed an agreement to promote the “Made in Saudi” brand across various channels locally and internationally.

The collaboration agreement was rolled out within the framework of the National Strategy for Transport and Logistics and the National Strategy for Industry.

Both parties also introduced joint services to support the national economy’s transformational goals in light of the Saudi Vision 2030.


Trump Organization announces deal to build Dubai tower

Updated 18 July 2024
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Trump Organization announces deal to build Dubai tower

DUBAI: The Trump Organization on Thursday announced a deal to partner with a Saudi developer to build a high-rise tower in the UAE business hub of Dubai, its latest project in the Gulf.
Trump Tower Dubai will target “the Dubai luxury market,” real estate developer Dar Global said in a press release, adding that the location and design would be unveiled by the end of the year.
The development will include a Trump hotel and branded residential units, said Dar Global, the international subsidiary of Saudi developer Dar Al-Arkan.
The announcement came a little over two weeks after Dar Global announced a separate deal with the Trump Organization to build a high-rise tower in the Saudi coastal city of Jeddah.
It is also developing a Trump hotel and luxury villas in the capital of neighboring Oman, with completion expected in 2028, according to the firm’s website.
Former President Donald Trump entrusted the management of his real estate empire to his sons after taking office in 2017, although he held onto his shares in the Trump Organization.
His foreign business dealings prompted critics to sound the alarm about possible conflicts of interest, including in a 2022 Congressional report that found the foreign governments of six countries — the UAE among them — spent more than $750,000 at a Trump-owned hotel in Washington while trying to influence his administration in 2017 and 2018.
Trump, the presumptive Republican nominee in this year’s presidential election, cultivated close ties with Arab Gulf states during his term, choosing Saudi Arabia for his first foreign trip.
“We are proud to expand our presence in the region further through the launch of our iconic Trump Tower Dubai,” Eric Trump, the former president’s son and executive vice president of the Trump Organization, said in a statement.


UAE energy startups secure $30m in H1: IEA data

Updated 18 July 2024
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UAE energy startups secure $30m in H1: IEA data

RIYADH: Investor confidence in UAE’s energy startups surged as they secured $30 million in the first half of 2024, surpassing the $24 million raised throughout 2023, an analysis showed.

In its latest report, the International Energy Agency revealed that companies in energy storage and batteries received the largest share of total financing, accounting for approximately 33.3 percent, followed by solar energy firms at 25 percent.

This increase in funding for startups in the renewable energy sector highlights the UAE’s efforts to accelerate its energy transition journey, aligning with its goal to achieve net-zero emissions by 2050.

The IEA report revealed that UAE wind energy firms accounted for 8.3 percent of the overall financing received in the first half of this year, while companies operating in other renewable and clean energy technologies collectively made up the remaining 33.3 percent.

The report also noted that the total number of startup companies operating in the UAE’s energy sector reached about 54 by the end of 2023.

Of these, 21 companies are in the renewable sector, followed by 12 firms in energy storage and batteries.

The IEA added that nine startups in the UAE are working in the energy efficiency industry, while another 12 are operating in other energy-related sectors.

Beyond energy initiatives, UAE startups are also focusing on developing technologies to tackle critical challenges such as water security.

In May, Airwater Co., an air-to-water technology firm, announced a strategic investment from Abu Dhabi-based venture capital firm Tau Capital, for an undisclosed amount, indicating sustained investor interest in innovative solutions from the region.

The investment will enable Airwater Co. to expand its manufacturing, infrastructure, and distribution capabilities, with a particular focus on scaling large-scale commercial and industrial atmospheric water generation facilities, as stated in a press release.

Bill Murray, managing director of Tau Capital, stated: “Airwater Co.’s tech-focused approach to water security exemplifies the type of transformative innovation which we at Tau Capital believe is essential for sustainable global development.”

This followed another investment in December 2023, when UAE-based Zeroe secured seed funding from the VOYAGERS ClimateTech Fund, bringing the total raised to $2.3 million.

The funding was aimed at enabling Zeroe to expedite the development of its AI-integrated SaaS platform, which optimizes carbon emission calculations, aiding companies in their transition to net-zero in a more efficient and cost-effective manner, according to a press release.

“We’re excited to be VOYAGERS’ second investment in the region, and we believe this investment confirms our push to be a leading solution in supporting organizations to measure emissions and access sustainable finance,” said Farouk Jivani, co-founder and CEO of Zeroe, in a statement release at that time.

Overall, the UAE was the top-funded ecosystem in the region in the first half of 2024, with 91 startups raising $455.5 million across different sectors, according to a report by Wamda released in July.

In terms of the energy sector, the IEA report noted that US startups received a total funding of $2.29 billion in the first half of this year, closely followed by China at $1.98 billion during the same period.

France received $633 million in funding for startups in the first six months of this year, while companies in India were financed with $248 million.

The IEA revealed that its analysis is based on data from Crunchbase, which references about 3.5 million startups worldwide, including 72,000 energy-related companies.