SMEs account for 90% of Saudi industrial and mining sectors: Minister

Minister of Industry and Mineral Resources Bandar Alkhorayef speaking during the Industry and Mineral Resources Pioneers week. SPA
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Updated 01 October 2024
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SMEs account for 90% of Saudi industrial and mining sectors: Minister

  • Minister of Industry and Mineral Resources, Bandar Alkhorayef made the announcement during a dialogue session at an event organized by Monsha’at
  • During the Industry and Mineral Resources Pioneers week, officials highlighted the impact of pioneering projects in the sector

RIYADH: Small and medium enterprises constitute 90 percent of Saudi Arabia’s industry and minerals companies, revealing that the sector is not “exclusive” to top players, according to a senior official.

The comments by the Kingdom’s Minister of Industry and Mineral Resources, Bandar Alkhorayef, were made during a dialogue session at an event organized by the General Authority for Small and Medium Enterprises, known as Monsha’at, the Saudi Press Agency reported.

During the Industry and Mineral Resources Pioneers week, officials highlighted the impact of pioneering projects in the sector, underlining how industrial technical applications, often led by SMEs, effectively resolve challenges in large-scale industries, SPA said. 

In recent years, the Saudi government has launched several initiatives to bolster SMEs’ presence and participation in various sectors, including industry and mining. 

These undertakings, spearheaded by entities such as Monsha’at, focus on providing a range of support services, including financing, licensing facilitation, and business development support. 

Programs like the SME loan guarantee program – known as Kafalah – and the Saudi Venture Capital Co. are designed to enhance access to capital, mitigating one of the significant challenges faced by smaller companies.

Other examples of SMEs demonstrating innovative capabilities in the sector include improving mine preservation, environmental safety, and productivity.

This reflects the broader trend within Saudi Arabia, where SMEs increasingly leverage technology and innovation to address complex industrial challenges.

In an interview with Alekhbariya, the minister said due to facilitating regulation efforts in the Kingdom, “opening a factory is easier than opening a restaurant.” 

He added that the government is “working on building factories and leasing them to investors to support them and ease the burden on them,” as part of its goal to bolster entrepreneurs and sustain their projects.

The Saudi government’s support extends beyond facilitating market entry for SMEs. There is a concerted effort to ensure the long-term sustainability of these enterprises, helping them navigate the industry landscape and overcome operational hurdles. 

The mining sector, in particular, presents a wealth of opportunities, and the ministry has identified over 100 initiatives and incentives designed to empower entrepreneurs and SME owners within this space. 

This focus on creating a supportive ecosystem is intended to encourage more entrepreneurs to explore the untapped potential of the mining sector.

The initiatives are part of a broader strategy to cultivate a vibrant SME sector capable of contributing significantly to Saudi Arabia’s economic growth and diversification. 

By providing the necessary tools, resources, and regulatory support, the government aims to harness the full potential of SMEs, ensuring they remain a driving force in the country’s industrial and economic development. 

As Saudi Arabia continues to transform its economic landscape, the empowerment and growth of SMEs will remain at the forefront of this journey.


Nintendo shares rise on Saudi Public Investment Fund report

Updated 10 sec ago
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Nintendo shares rise on Saudi Public Investment Fund report

  • Nintendo’s shares jumped 4.44% to end at 8,087 yen
  • Kingdom has built up a stake of 8.6% in Nintendo as part of a $38-billion push

TOKYO: Nintendo shares jumped more than four percent Monday after a top official of Saudi Arabia’s sovereign wealth fund was quoted as saying it was mulling hiking its stake in the Japanese gaming giant.
Riyadh has built up a stake of 8.6 percent in Nintendo as part of a $38-billion push into gaming under Crown Prince Mohammed bin Salman’s Vision 2030 program to diversify away from oil.
It also has stakes in “Resident Evil” maker Capcom, Activision Blizzard, Electronic Arts, and Scopely, the US mobile games company behind “Monopoly Go!.”
“There are always opportunities,” Prince Faisal bin Bandar bin Sultan, vice-chair of Saudi Arabia’s Savvy Games — a subsidiary of the Public Investment Fund — told Kyodo News in an interview published Saturday.
He added, however, that the fund had no intention of raising stakes without the consent of the firms concerned.
“It’s important to keep the communication going so you get there in the right way,” he said. “We don’t want to rush into anything.”
Nintendo’s shares jumped 4.44 percent Monday to end at 8,087 yen ($54.48).
Saudi Arabia aims to create 250 gaming companies and studios on its soil, 39,000 game-related jobs, be in the top three of professional gamers per capita and to produce a blockbuster “AAA” game by 2030.
Savvy has already bought esports tournament organizer ESL Gaming and platform FaceIt. Riyadh last year hosted the eSports World Cup that saw 2,500 gamers battle for $60 million in prize money.
“There’s a lot we want to do to get it done and to reach our targets at 2030,” Prince Faisal told AFP in an interview in May.
“But we also want to make sure that we are taking the time to study things, to look at things. And make sure we’re making the right steps and not just throwing cash out there to see what hits,” he had said.


UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 

Updated 46 min 7 sec ago
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UAE-Jordan trade projected to reach $8bn after CEPA signing, minister says 

RIYADH: Bilateral trade between the UAE and Jordan is projected to increase to $8 billion by 2032, up from $4.2 billion in 2023, following the signing of a Comprehensive Economic Partnership Agreement, said a top official. 

UAE Minister of State for Foreign Trade Thani bin Ahmed Al-Zeyoudi emphasized that the CEPA, signed on Oct. 6, will create growth opportunities for businesses, young entrepreneurs, and startups in both nations. 

He noted that the agreement followed a series of negotiations and coordination meetings held in a short period, as reported by the state news agency WAM. 

The UAE has been actively strengthening its trade ties globally to enhance non-oil trade, in line with its economic diversification efforts, and in September the Emirates concluded talks to sign CEPAs with New Zealand and Australia, while also planning negotiations with Japan for a similar agreement. 

“The agreement will come into effect later this year after its ratification, and will mark the culmination of a long-standing, deep-rooted relationship between the two brotherly countries and their peoples,” Al-Zeyoudi told WAM after signing the CEPA with Jordan. 

Mutual investments between the UAE and Jordan are estimated at around $22.5 billion, with the the Gulf country being the largest international investor in its Middle Eastern neighbor at $4 billion, accounting for 14 percent of the Emirates’ total foreign direct investment, stated the minister. 

He added that promising areas of investments that both countries can explore include tourism, hospitality, real estate, and renewable energy, as well as transport, logistics, manufacturing, pharmaceuticals, and food security. 

Non-oil trade between the UAE and Jordan exceeded $4.2 billion in 2023, reflecting a 37.9 percent increase compared to 2021 and a 47.7 percent rise from 2019. 

The CEPA follows a $2.3 billion agreement signed last month to develop a 360-km railway network linking Jordan’s Aqaba port to its mining hubs at Al-Shidiya and Ghor Al-Safi. 

According to a press release, the project will be developed and operated by UAE’s Etihad Rail and is part of a $5.5 billion investment package agreed upon by the two countries in November 2023. 

The UAE has previously signed CEPAs with countries including India, Turkiye, Indonesia, and Cambodia, all expected to support the the country’s economy, which is projected to grow by 4 percent this year, according to a report from its the central bank last month. 


Oil Updates – prices dip after strongest weekly rise in over one year

Updated 17 min 18 sec ago
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Oil Updates – prices dip after strongest weekly rise in over one year

  • Brent crude futures fell 28 cents, or 0.36%, to $77.77 per barrel
  • US West Texas Intermediate crude futures slipped 19 cents, or 0.26%, to $74.19 per barrel

SINGAPORE: Oil prices fell on Monday, after posting their steepest weekly rise in more than a year last week, as oversupply concerns amid softer demand countered the worries over a wider Middle East conflict disrupting exports in the key oil-producing region.

Brent crude futures fell 28 cents, or 0.36 percent, to $77.77 per barrel by 9:45 a.m. Saudi time. US West Texas Intermediate crude futures slipped 19 cents, or 0.26 percent, to $74.19 per barrel.

Brent rose by more than 8 percent last week, the biggest weekly gain since January 2023, while the WTI contract gained 9.1 percent week-on-week, the most since March 2023, on expectations that Israel could strike Iranian oil infrastructure in response to an Iranian missile attack on Israel on Oct. 1.

However, as the Israeli response is still developing, some investors likely sold futures to lock in their gains from the recent climb.

“Technical profit-taking seems to be the most logical explanation,” Priyanka Sachdeva, senior market analyst at Phillip Nova, said on the softening in oil prices.

Still, oil markets are bound to experience tailwinds amid fears of Israel’s retaliation on Iran, as the potential mass-scale escalation of conflict in the Middle East has countered mounting demand-side pressures, Sachdeva said.

Israel bombed Hezbollah targets in Lebanon and the Gaza Strip on Sunday ahead of the one-year anniversary of Hamas’ Oct. 7 attacks on Israel that triggered the current war between Israel and the Iranian-backed militant groups. Its defense minister also said all options were open for retaliation against Iran.

Hezbollah rockets hit Israel’s third-largest city of Haifa, police said early on Monday, and Israeli media reported 10 injured in the country’s north.

ANZ Research cautioned that despite the rally in oil prices last week, the impact of the conflict on oil supply will be relatively small.

“We see a direct attack on Iran’s oil facilities as the least likely response among Israel’s options,” it said.

“Moreover, we have seen a diminished impact of geopolitical events on oil supply. This has led to a significantly smaller geopolitical risk premium being applied to oil markets in recent years, and OPEC’s 7 million barrels per day of spare capacity provides a further buffer.”

OPEC and its allies including Russia and Kazakhstan, a grouping known as OPEC+, has millions of barrels of spare capacity since it has been cutting production in recent years to support prices amid weak global demand.

The producer grouping has enough spare oil capacity to compensate for a full loss of Iranian supply if Israel knocks out that country’s facilities, but it would struggle if Iran retaliates by hitting the installations of its Gulf neighbors, according to analysts.

At its last meeting on Oct. 2, OPEC+ kept its oil output policy unchanged including a plan to start raising production from December.

Combined with the uncertain pace of economic recovery in top crude importer China, the production hike can easily shield the market from supply disruptions and continues to limit the upside in oil prices, said Phillip Nova’s Sachdeva.


Closing Bell: Saudi main index slips to close at 11,769

Updated 06 October 2024
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Closing Bell: Saudi main index slips to close at 11,769

  • Parallel market Nomu lost 259.40 points, or 1.04%, to close at 24,655.96
  • MSCI Tadawul Index lost 22.10 points, or 1.48%, to close at 1,474.92

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 188.50 points, or 1.58 percent, to close at 11,769.04.

The total trading turnover of the benchmark index was SR6.20 billion ($1.65 billion), as 19 of the stocks advanced and 213 retreated. 

The Kingdom’s parallel market Nomu lost 259.40 points, or 1.04 percent, to close at 24,655.96. This comes as 17 of the listed stocks advanced while 48 retreated. 

The MSCI Tadawul Index lost 22.10 points, or 1.48 percent, to close at 1,474.92. 

The best-performing stock of the day was Al-Baha Investment and Development Co., whose share price rose 7.14 percent to SR0.30. 

United Wire Factories Co. and Kingdom Holding Co. were among the other top performers.

The worst performer was Saudi Ceramic Co., whose share price dropped 7.26 percent to SR28.75. 

Other worst performers were Elm Co. and Arab Sea Information System Co.

Announcements

Almarai Co. has announced its interim condensed consolidated financial results for the period ending on Sept. 30. According to a Tadawul statement, the firm recorded a net profit of SR1.88 billion in the first nine months of the year, reflecting a 12.15 percent surge compared to the same period in 2023.

The increase in consolidated profits attributable to the company’s shareholders in the current period compared to last year is due to higher revenue growth, disciplined cost control, a favorable product mix, and stabilized commodity costs.

Al-Etihad Cooperative Insurance Co. has announced that it is signing a contract with the Ministry of Human Resources and Social Development to ensure the financial dues of non-Saudi workers in the private sector per the agreed terms and conditions and the insurance policy approved by the Insurance Authority.

A bourse filing revealed that the one-year SR391 million contract provides insurance coverage for the financial dues of non-Saudi workers in the delinquent entities of the private sector, in cooperation with several Saudi insurance and reinsurance companies, and in accordance with the agreed terms and conditions for one year. This will commence from the date of signing the agreement with the Ministry of Human Resources and Social Development and after obtaining the final approval of the Insurance Authority.

The policy represents the cooperation between the Ministry of Human Resources and Social Development and the Insurance Authority to protect the financial rights of non-Saudi workers in delinquent entities according to the ministry’s classification.

The insurance cover includes wages, unpaid dues, and a return ticket to the worker’s home country within the agreed-upon cover limits and following an agreed set of terms and conditions.

It is expected that the financial impact of this agreement will be reflected in the company’s financial performance starting from the fourth quarter of the year.


EVIQ, Ceer partner to enhance Saudi EV infrastructure

Updated 06 October 2024
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EVIQ, Ceer partner to enhance Saudi EV infrastructure

  • Initiative will establish a comprehensive charging network to support widespread electric vehicle adoption
  • Kingdom aims to convert 30% of vehicles in Riyadh to electric by 2030

JEDDAH: Saudi Arabia’s Electric Vehicle Infrastructure Co., EVIQ, has formed a strategic partnership with the Kingdom’s first EV brand, Ceer, to expand the nation’s charging infrastructure and promote sustainability. 

EVIQ, a joint venture between the Public Investment Fund and the Saudi Electricity Co., aims to bolster the electric vehicle ecosystem by collaborating with manufacturing brands and local partners to implement installation and maintenance operations.  

This initiative will establish a comprehensive charging network to support widespread electric vehicle adoption. 

EVIQ CEO Mohammad Baker Gazzaz highlighted the agreement’s significance in supporting the electric vehicle sector in Saudi Arabia.   

“This partnership will help encourage the wider adoption of electric vehicles, making them a seamless and convenient choice for drivers in the Kingdom. We look forward to fruitful cooperation with Ceer to achieve a more environmentally friendly and sustainable future for the Kingdom.” 

Saudi Arabia aims to convert 30 percent of vehicles in Riyadh to electric by 2030, part of a larger strategy to cut emissions in the capital by 50 percent and achieve carbon neutrality by 2060.  

The Kingdom is also targeting the production of approximately 300,000 vehicles by 2030, seeking a 50 percent share of car sales in the Gulf Cooperation Council countries by 2025. 

Ceer CEO James DeLuca emphasized that the partnership extends beyond building an electric vehicle industry. “We are also committed to providing an exceptional experience for electric vehicle owners in the Kingdom. We are pleased to partner with EVIQ to ensure a comfortable and seamless driving experience for electric vehicles in the Kingdom,” he said.   

The partnership signifies a major step toward realizing the Kingdom’s vision of developing an automotive industry and promoting sustainable transportation.  

By aligning Ceer’s commitment to advanced Saudi electric vehicles with EVIQ’s goals of building an effective network, this collaboration paves the way for a smooth transition to electric mobility. 

Last year, EVIQ announced plans to install over 5,000 fast chargers across 10,000 locations throughout the Kingdom.  

This strategic initiative not only enhances Saudi Arabia's electric vehicle infrastructure but also aligns with broader economic and environmental objectives, paving the way for a sustainable future and diversified economy. 

Ceer is investing significantly in research and development to produce competitive electric vehicles, with government support through incentives and regulations designed to foster industry growth.