Egypt’s net foreign assets jump in January/node/2592269/business-economy
Egypt’s net foreign assets jump in January
Egypt completed the sale of $2 billion in international bonds on Jan. 29 in its first dollar-denominated international bond issuance in four years. Shutterstock
CAIRO: Egypt's net foreign assets jumped by $2.74 billion in January, boosted apparently by the sale of $2 billion in dollar-denominated bonds, central bank data showed.
NFAs climbed to the equivalent of $8.70 billion from $5.96 billion at the end of December, according to Reuters calculations based on the official central bank currency rates. The increase followed three months of decline late last year.
Egypt completed the sale of $2 billion in international bonds on Jan. 29 in its first dollar-denominated international bond issuance in four years.
Egypt had been using NFAs, which include foreign assets at both the central bank and commercial banks, to help prop up its currency since as long ago as September 2021. NFAs turned negative in February 2022 and only returned to positive territory in May last year.
Egypt needed to pay dollars in December as Egyptian pound treasury bills held by foreign investors matured and nearly $1 billion in International Monetary Fund loan repayments and payments for natural gas imports came due, bankers, brokers and analysts said.
Foreign assets increased in January at both the central bank and commercial banks, but foreign liabilities rose at both as well.
Saudi Arabia’s PIF-backed SIRC launches solid waste plant at Jeddah Port
Updated 28 sec ago
REEM WALID
RIYADH: Saudi Investment Recycling Co. has launched the first solid waste treatment plant inside Jeddah Islamic Port, marking a significant step toward sustainability and a circular economy.
The Public Investment Fund-owned firm will operate the facility through its subsidiary, Reviva, to enhance operational efficiency and safety, according to a statement.
The initiative aligns with Saudi Arabia’s Vision 2030 goal of achieving net-zero emissions by 2060 and integrating environmental, social, and governance principles into the economy.
It also supports Reviva’s mission to divert 85 percent of industrial waste from landfills through treatment and recycling while promoting the use of reprocessed materials.
Reviva CEO Nasser Al-Mutairi described the plant’s launch as a strategic step reflecting SIRC’s commitment to innovative, sustainable waste management solutions. The facility enables on-site treatment of solid and non-compliant waste per international standards, eliminating the need for external transport.
The CEO further highlighted this directly reduces environmental impact and supports the shift away from landfills, reinforcing the principles of a circular economy while enhancing financial and environmental sustainability.
Reviva leads the industrial hazardous waste sector, advancing recycling practices and landfill diversion to meet the Kingdom’s sustainability goals. Its core services include integrated environmental solutions and services, recycling and waste management solutions such as oil and water recovery, byproduct recycling, industrial maintenance, and environmental testing and studies.
The project is part of SIRC’s broader strategy to expand investment in the recycling sector and build an integrated waste management infrastructure. It also creates job opportunities and increases private sector involvement in waste management initiatives.
Additionally, SIRC is developing integrated environmental projects at Jeddah Islamic Port, including specialized sites for hazardous waste treatment from cargo ships.
These efforts aim to improve marine waste management, promote sustainability, and strengthen Saudi Arabia’s position as a global leader in waste management and recycling.
Saudi Arabia leads GCC fixed income markets to hit $147.9bn in primary issuances: Markaz
Updated 38 min 19 sec ago
Nirmal Narayanan
RIYADH: Primary debt issuances of bonds and sukuk across the Gulf Cooperation Council region rose 55.1 percent in 2024 to $147.9 billion, according to an analysis.
In its latest report, Kuwait Financial Center, also known as Markaz, said that Saudi-based issuances led the GCC region last, raising $79.5 billion through 79 offerings, representing a rise of 51.4 percent in value compared to 2023.
The study added that the Kingdom contributed to 53.7 percent of the overall primary debt issuances in the GCC.
Saudi Arabia’s debt market has expanded significantly in recent years, drawing investor demand for debt instruments due to rising interest rates.
In February, the Kingdom raised €2.25 billion ($2.36 billion) through a euro-denominated bond sale, including its inaugural green tranche, as part of its Global Medium-Term Note Issuance Program.
The Kingdom’s National Debt Management Center completed its riyal-denominated sukuk issuance for February at SR3.07 billion ($818 million).
The nation also raised sukuk worth SR3.72 billion in January, SR11.59 billion in December and SR3.41 billion in November.
The financial organization added that the total value of primary issuances in the GCC region during the fourth quarter of 2024 stood at $21.2 billion, representing a rise of 33.33 percent compared to the same period in 2023.
Regional outlook
According to the report, Saudi Arabia’s Arab neighbor UAE held second in primary debt issuances of bonds and sukuk in 2024, raising $38.5 billion through 109 issues, marking an increase of 28.1 percent compared to 2023.
Markaz added that the UAE also accounted for 26 percent of the overall primary debt issuances in the GCC region.
Qatari entities were the third largest issuers in terms of value, with $15.8 billion administered through 74 offerings, representing 10.7 percent of the total in the region.
Bahrain followed by raising $6.9 billion through 10 issuances in 2024, marking a rise of 29.1 percent compared to the previous year.
Kuwaiti entities raised $3.9 billion in 2024 through 9 issuances, an annual growth of 358.6 percent.
Omani recorded the lowest value of issuances during the year, with $3.4 billion raised through 15 offerings, representing 2.3 percent of the market.
Issuances by type
GCC corporate primary issuances increased by 45.5 percent year on year in 2024, reaching $79.7 billion, according to the report.
Corporate offerings accounted for 53.9 percent of the total in 2024, continuing the trend from 2023, when they made up 57.5 percent of the market.
Government-related corporate entities raised a total of 17.4 billion last year, representing 21.7 percent of all corporate issuances.
The study added that total GCC sovereign primary issuances increased by 68.2 percent annually in 2024 to reach $68.2 billion.
Sovereign issuances also accounted for 46.1 percent of the total market size in the GCC region during 2024.
In December, a report released by Kamco Invest also highlighted the growth of the debt market in the region, underlining that Saudi Arabia is expected to witness the greatest share of bond and sukuk maturities in GCC, reaching $168 billion from 2025 to 2029.
Kamco Invest also noted that the maturities in the Kingdom will be led by bonds and sukuk issuances by the government, which is expected to reach $110.2 billion during the period.
Conventional issuances in GCC increased by 79.4 percent year-on-year in 2024 to reach $78.9 billion, according to the analysis.
Markaz added that sukuk offerings increased by 34.4 percent year-on-year in 2024, resulting in a total value of $69 billion.
“As for issuer preferences, 2024 saw an increased appetite for conventional bond issuances in the GCC, representing 53.3 percent of total issuances for the year, compared to 46.1 percent in 2023,” said Markaz in its release.
Issuances by sectors
The analysis revealed that government issuances led the market in 2024, raising $68.2 billion through 46 issuances, representing 46.1 percent of the total.
The financial sector followed with $51.3 billion raised through 203 offerings, accounting for 24.7 percent of the overall market size.
In the energy sector, $20.3 billion was raised through 28 issuances, while the remaining sectors represented a small portion of the market at just 5.51 percent.
Maturity, size, and currency profile
According to the report, primary issuances with a tenure of less than five years accounted for 36.5 percent of the GCC debt capital markets in 2024, valued at 54 billion through 215 issuances.
Primary issuances with five to 10-year tenors followed, raising $51.3 billion through 43 offerings, accounting for 34.7 percent of the total.
Issuances with 10 to 30 years represented 22.2 percent of the market in 2024, with their value hitting $32.8 billion through 20 offerings.
In terms of size, issuances worth $1 billion or greater raised the largest amount, totaling 69.3 billion in 2024, through 43 offerings. It also represented 46.9 percent of the total amount issued in the GCC last year.
On the other hand, issuances sized between $500 million and $1 billion raised $50.5 billion through 59 transactions.
“The highest number of issuances was under $100 million issue size, where there were 129 issuances that raised a total amount of $7.2 billion during 2024,” added Markaz.
The release added that US dollar-denominated sukuk issuances led the GCC bonds and sukuk primary market in 2024, raising a total of $99.7 billion through 190 issuances, also representing 66.9 percent of the total value in the region.
The second largest issued currency was the Saudi riyal, which raised a total of $33.9 billion through 21 issuances.
In December, a report issued by Fitch Ratings said that the debt capital market in the GCC region hit the $1 trillion outstanding mark by the end of November.
In February, another report by Fitch added that Saidi Arabia is expected to play a crucial role in driving US dollar debt and sukuk issuance in 2025 and 2026, as the Kingdom’s financial institutions and corporations increasingly turn to international debt markets to diversify funding sources, with banks alone anticipated to issue over $30 billion in dollar-denominated debt this year.
Fitch said that banks in Saudi Arabia have significantly expanded their international DCM activities since 2020, aligning with their growth strategies and foreign currency requirements. Additionally, corporations are diversifying their funding sources, moving beyond traditional bank loans.
Last month, the agency, in a separate report, projected that the Kingdom’s debt capital market is expected to hit $500 billion by the end of 2025, fueled by the nation’s economic diversification efforts under Vision 2030.
Key factors driving this growth include the government’s need for deficit funding, maturing obligations, and ongoing reforms, according to the analysis.
Oil Updates — crude recovers as upbeat Chinese manufacturing data increases some optimism
Updated 03 March 2025
Reuters
SINGAPORE: Oil rose on Monday as upbeat manufacturing data from China, the world’s biggest crude importer, led to renewed optimism for fuel demand, although uncertainty about a Ukraine peace deal and global economic growth from potential US tariffs loomed.
Brent crude climbed 36 cents, or 0.5 percent, to $73.17 a barrel by 7:39 a.m Saudi time while US West Texas Intermediate crude was at $70.10 a barrel, up 34 cents, or 0.5 percent.
Prices rose after official data on Saturday that showed that China’s manufacturing activity expanded at the fastest pace in three months in February as new orders and higher purchase volumes led to a solid rise in production. Investors are eyeing China’s annual parliamentary meeting, which starts March 5, for further measures to support its battered economy.
IG market analyst Tony Sycamore said one of the possible drivers for rising prices was that “the China NBS manufacturing PMI moved back into expansionary territory over the weekend.”
However, he cautioned that the country’s economic outlook may not be inspiring, with another round of tariffs on exports to the US set to start on March 4.
Analysts from Goldman Sachs were somewhat more positive about the data, saying in a note it suggests stable to slightly better economic activity in China in early 2025, although the imposition of the extra 10 percent US tariff may prompt retaliatory measures.
Last month, Brent and WTI posted their first monthly declines in three months as the threat of tariffs from the US and its trade partners shook investors’ confidence in global economic growth this year and reduced their appetite for riskier assets.
Overall sentiment improved after a summit on Sunday where European leaders offered a strong show of support for Ukrainian President Volodymyr Zelensky and promised to do more to help his nation, just two days after US President Donald Trump clashed with him, and Zelensky cut short a visit to Washington.
Zelensky said on Sunday that he believed he could salvage his relationship with Trump but that talks needed to continue behind closed doors. He added that he remained ready to sign a minerals deal with the US, and he believed the White House would be ready as well.
“It’s unclear where the US now stands, making a peace deal seem more distant than a week ago,” ING analysts led by Warren Patterson said in a note. “This is altering energy-market hopes for an easing of sanctions.”
In addition, ongoing attacks at Russian refineries have raised concerns about its refined products exports, with another plant in the Russian city of Ufa reportedly on fire.
For 2025, analysts are holding their oil price forecasts largely steady, with Brent averaging at $74.63 a barrel, as they expect any impact from further US sanctions to be balanced by ample supply and a possible peace deal between Russia and Ukraine, a Reuters poll showed.
Although the US is urging Iraq to resume exports from the semi-autonomous Kurdistan region, eight international oil firms operating there said on Friday they would not restart shipments through Turkiye’s port of Ceyhan due to a lack of clarity on commercial agreements and guarantees of payment for past and future exports.
Closing Bell: Saudi main index edges down 0.63% to close at 12,035
Updated 02 March 2025
Reem Walid
RIYADH: Saudi Arabia’s Tadawul All Share Index closed lower on Sunday, dropping 76.45 points, or 0.63 percent, to settle at 12,035.45.
The benchmark index’s total trading volume reached SR3.45 billion ($922 million), with 37 stocks advancing and 209 declining.
Nomu, the Kingdom’s parallel market, gained 177.88 points, or 0.57 percent, to close at 31,582.35. Of the listed stocks, 26 advanced, while 61 saw declines.
The MSCI Tadawul Index fell by 2.59 points, or 0.17 percent, to close at 1,512.22.
The top performer of the day was Saudi Cable Co., whose share price surged by 5.79 percent, reaching SR131.60.
Other notable performers included Elm Co., whose share price rose by 4.24 percent, closing at SR1,110, and Middle East Pharmaceutical Industries Co., which saw a 1.96 percent increase, closing at SR135.40.
On the downside, SAL Saudi Logistics Services Co. experienced the largest decline, falling by 9.98 percent to SR220.20.
Batic Investments and Logistics Co. also saw a significant drop of 9.76 percent, closing at SR3.05, while Al-Baha Investment and Development Co. saw its stock price fall by 7.32 percent, ending at SR0.38.
On the announcements front, Saudi Tadawul Group Holding Co. reported its annual financial results for the year ending Dec. 31, 2024. The company posted a net profit of SR621.8 million, reflecting a 59.4 percent increase compared to 2023. This growth was driven by a 34.8 percent rise in operating revenues, an 18.3 percent increase in operating expenditures, a 59.4 percent increase in earnings per share, a 50.3 percent rise in gross profit, and a 72.4 percent jump in operational profit.
Saudi Tadawul Group Holding Co. ended the session at SR213, down 0.47 percent.
Retal Urban Development Co. also reported its annual results for the year ending Dec. 31, 2024. The company posted a net profit of SR266.12 million in 2024, marking a 31.51 percent increase from the previous year.
This increase was driven by a 32 percent rise in gross profit to SR499.65 million, along with a surge in equity-accounted investment results, totaling SR71.10 million. This performance came despite higher general and administrative expenses and increased finance costs.
Retal Urban Development Co. ended the session at SR16.06, up 0.25 percent.
Al-Rajhi Co. for Cooperative Insurance announced its financial results for the year ending December 31, with a net profit of SR332.3 million in 2024, reflecting a 1.3 percent increase compared to 2023. The increase is attributed to higher insurance service results before Re-takaful and a decrease in insurance service results for the year, alongside an uptick in operating expenses, a drop in total comprehensive income, and a rise in gross written premiums.
Al-Rajhi Co. for Cooperative Insurance closed at SR165, down 2.04 percent.
Shatirah House Restaurant Co. (BURGERIZZR) reported its financial results for the year ending Dec. 31, 2024, showing a net profit of SR8.44 million, a decrease of 31.25 percent compared to 2023.
Despite a 7.3 percent increase in gross profit, the decline in net profit was attributed to a 10 percent rise in selling expenses, a 26.9 percent increase in administrative expenses, and other factors.
Shatirah House Restaurant Co. closed the session at SR21.50, down 2.85 percent.
Saudi, UAE drilling giants team up to accelerate international expansion
Arabian Drilling, Shelf Drilling bid for 3 tenders under new strategic alliance
Updated 02 March 2025
Nour El-Shaeri
RIYADH: Saudi-based Arabian Drilling and the UAE-headquartered Shelf Drilling have entered three global tenders as part of their strategic alliance to expand international operations.
The partnership, formalized through a memorandum of understanding signed in early February, seeks to leverage Arabian Drilling’s fleet of rigs alongside Shelf Drilling’s extensive expertise to accelerate global expansion and unlock new market opportunities.
Talking to Arab News, Ghassan Mirdad, CEO of Arabian Drilling, emphasized that the partnership aligns with the company’s long-term ambitions to expand beyond the Kingdom.
“When we go back in time to when we were listed, part of our strategy was to grow outside of Saudi Arabia; it was clearly the intention to grow in the land market, not the offshore,” he said. “However, with the suspension of rigs, we had to accelerate the expansion out of Saudi Arabia.”
Ghassan Mirdad, CEO of Arabian Drilling.
The alliance provides Arabian Drilling with the necessary framework to establish a presence in global markets without having to build operations from scratch. “And this (alliance) is the license to operate outside of Saudi,” Mirdad added.
He further underscored the increasing demand for offshore drilling worldwide. “Today, I can easily name on top of my head four or five countries that are in desired need of offshore jack-ups.”
Mirdad noted that while entering these markets independently would require significant investment, partnering with an international player like Shelf Drilling facilitates market access. “With this alliance, automatically we have the license to operate in all of these rigs, we have the local knowledge that Shelf has, and it gives us access to all the tenders,” he said.
Greg O’Brien, CEO of Shelf Drilling, confirmed that the alliance has already begun executing its objectives by bidding for project proposals across different regions.
“We have participated in three different opportunities. We have a longer list of target opportunities,” O’Brien told Arab News.
He noted that while the alliance is taking an aggressive approach to exploring international prospects, the financial impact of these tenders will likely not be seen until late 2025 or early 2026 due to the time required for rig mobilization and contract execution.
Strategic rationale
As an international offshore extraction contractor, Shelf Drilling operates in multiple regions and continues to seek expansion opportunities while optimizing costs.
O’Brien highlighted that maintaining operational efficiency is a priority, particularly in a competitive market.
Greg O’Brien, CEO of Shelf Drilling.
“We have 14 rigs right now, all but one of those are contracted, and that one we expect to have contracted really soon, and we see additional opportunities to deploy newer, more capable rigs in other markets where we have a footprint like West Africa and Southeast Asia,” he said.
The alliance allows Shelf Drilling to expand its capacity without significant capital expenditure on new assets.
“This alliance with Arabian Drilling gives us access to a few additional rigs that we believe we can deploy in the contract opportunities and markets that we know well without having to buy other assets,” O’Brien stated.
For Arabian Drilling, the alliance is a critical step in its broader international growth strategy.
The company, which operates 36 rigs, has three currently suspended. O’Brien explained that these three rigs share similarities with those used by Shelf Drilling, making their international deployment more seamless.
By leveraging Shelf Drilling’s established presence in key markets, Arabian Drilling can re-enter the global scene more efficiently.
Opportunities and plans
Several international markets present promising opportunities for new contracts, with West Africa emerging as a key target region.
“India, Southeast Asia, West Africa are markets we know extremely well. West Africa is a place that has a decent number of new projects that are incremental to existing activity in that region, and it’s not quite as competitive,” O’Brien said.
“Southeast Asia holds great opportunities as well, but we see a better opportunity margin in West Africa,” he added.
Mirdad acknowledged that the alliance’s initial three rigs would not be sufficient to meet the growing demand for offshore drilling services.
“When we looked at the opportunities, we, as Arabian Drilling, looked at each other and realized we don’t have enough rigs,” he said.
He indicated that the company is actively considering further expansion. “The three rigs are not enough. So, I’m very upbeat to giving the market some good news in the short term,” Mirdad said.
When asked about plans for additional rig deployment, he explained that the alliance is a long-term strategic move rather than a short-term fix.
“In the first instance, it might seem like we’re doing this alliance to secure these three rigs, which is true, but this alliance is not a short-term fix; it is long-term.”
He further highlighted that with a strong balance sheet and growing international demand, Arabian Drilling is well-positioned to explore additional rig deployments beyond the initial three.
Financial outlook and growth strategy
When asked about the financial impact of the alliance, Mirdad stated that Arabian Drilling’s strong balance sheet allows it to focus on growth rather than relying solely on financial maneuvers to expand.
“Our relations with the banks are really good, so access to cash is not a problem for growth, but this is a great avenue for us and Shelf to grow and not to miss out on any international opportunities,” he said.
O’Brien added that current oil prices remain at levels that support offshore rig demand, strengthening the alliance’s financial rationale.
He emphasized that while the primary goal is to establish a broader global footprint, the venture is designed to generate long-term profits for both companies.
“The alliance will definitely aim to generate profit and revenue for both companies, and the approach will be opportunity-specific,” O’Brien said.
Global industry trends and long-term demand
O’Brien highlighted that the alliance aligns with global trends in the shallow-water drilling market, particularly as demand for offshore rigs remains strong.
“There are about 425 jack-ups around the world, the Middle East is the biggest market, and Saudi Arabia is the largest market for offshore shallow water drilling, but there is stable demand in other parts of the world,” he said.
He pointed out that the supply of jack-up rigs in markets outside the Middle East has remained relatively stagnant and is expected to decline in the coming years.
This presents an opportunity for drilling contractors to capitalize on increasing demand.
“The supply side in other markets has been flat and would most likely be declining in the years to come, which is a good thing for a drilling contractor,” he added.
O’Brien expressed confidence in long-term global oil demand, which will likely drive continued demand for drilling services.
“We believe oil demand will continue to grow around the world for the next five to 10 years, or even more,” he said.
Mirdad further explained that new jack-up rigs are rarely built, leading to a gradual phasing out of older rigs and creating a supply gap in the offshore drilling market.
“That means that you’ll have demand but not enough rigs available,” he added.
