Public Investment Fund Launches the ‘Saudi Real Estate Refinance Company’

Riyadh – The Public Investment Fund (PIF) has announced the establishment of the Saudi Real Estate Refinance Company (SRC), in line with Saudi Vision 2030 objectives to improve the performance of the real estate market, increase its contribution to GDP, and raise the rate of home-ownership among Saudis to 52% by the end of 2020.

Demand for real estate financing in the Kingdom is expected to increase from SAR280 billion in 2017 to SAR500 billion in 2020.

Launched in partnership with the Ministry of Housing, and under the chairmanship of Majed al-Hogail, the Minister of Housing, the new company is designed to stimulate housing sector development in the Kingdom by injecting liquidity into the real estate market.

SRC is anticipated to refinance up to SAR75 billion for the Kingdom’s housing sector over the next five years, reaching SAR170 billion by 2026.

The company will act as an intermediary access point for investors, aligning the liquidity, capital, and risk management requirements of real estate mortgage companies, with the risk acceptability and return on equity to meet investor targets.

It endeavors to create stability and growth in the Kingdom’s housing sector by injecting liquidity into the secondary mortgage market, improving standards, and facilitating access to local and international financing sources.

SRC will adopt a strategy of acquiring mortgage funds to increase financial capabilities and broaden the activities of real estate financing companies. It will also work on linking the investment capital of foreign and local investors with the range of opportunities available in the Kingdom’s growing housing market.

In addition, the company’s activities will include issuing bonds as securities, supported through real estate mortgage contracts over the short and long term, to real estate financing companies. SRC is considered a leading new initiative for the Kingdom’s housing sector, launched in line with the highest international standards.

SRC has been granted a license to undertake real estate refinancing activities by the Saudi Arabian Monetary Authority (SAMA).

Speakers Controlling $22 Trillion in Asset Value Expected at Saudi Future Investment Initiative

Investment

Riyadh – Saudi Arabia’s Public Investment Fund (PIF), one of the world’s most important sovereign wealth funds, said that prominent speakers from the investment sector have confirmed tat they will be attending the “Future Investment Initiative.”

Held in Riyadh, throughout October 24-26, the PIF-organized Future Investment Initiative is a pioneering new global investment event that will connect the world’s most powerful investors, business leaders, thought leaders and public officials with groundbreaking innovations defining the future.

According to a Future Investment Initiative press release, major asset managers such as Colony NorthStar Executive Chairman Thomas Barrack, Apollo Global Management Chairman and CEO Leon Black, First Eastern Investment Group Chairman and CEO Victor Chu, and BlackRock Chairman and CEO Larry Fink were among the confirmed speakers.

It is estimated that the speakers at Future Investment Initiative control a combined asset value of $22 trillion.

Over the past five years, sovereign wealth funds have significantly increased their exposure to emerging markets, while at the same time moving away from investment in foreign government bonds. While this partly reflects geopolitical instability, it is also a recognition that high yield returns are more readily available in the private sector.

Alternatively, unlisted and private investment portfolios, often in emerging technologies, are becoming increasingly popular with managers. The growth of funds in the Middle East and Asia enables managers from these regions to increasingly drive the global investment agenda.

The highly collaborative and interactive program has been carefully structured to allow investment leaders to discuss a range of topics pertinent to the current and future trends.

The program will also explore how investors can reconcile the demands to consider the environmental, social and governance benefits alongside the traditional returns drivers. Another key focus area will be how to meet transparency requirements and actively build trust with public constituents. Participants will also gain insights directly from global sovereign wealth fund leaders on how they can adapt to new technology driven strategies.

The investment themes have been developed through three key content pillars: Shifting centers of power; the new investment paradigm; and innovation for a better world.

The Future Investment Initiative will be hosted under the patronage of Custodian of the Two Holy Mosques King Salman bin Abdulaziz, and under the leadership of Crown Prince Mohammed bin Salman, who is also the Chairman of PIF’s board.

Asset managers speaking at the Future Investment Initiative will be joined by speakers represent a range of sovereign wealth funds and pension funds including: Russian Direct Investment Fund CEO Kirill Dmitriev and Khazanah Nasional Berhad Malaysia Director and CEO Azman Mokhtar.

Leading GCC sovereign wealth funds will also be represented.

Saudi Capital Market Authority Sets up Committee to Supervise Listed Companies Audits

Saudi

Riyadh – In line with the announced national capital market authority strategy, the affiliated Saudi body established on Sunday the Listed Companies and Capital Market Institutions Auditors Supervision Division.

The Saudi Capital Market Authority (CMA) also founded a committee that includes representatives from relevant government entities and independent experts.

CMA Board of Commissioners Acting Vice Chairman Dr. Abdulrahman Al Barrak pointed out that the importance of this Division and the committee comes in line with the need to improving market transparency and confidence in the financial statements/reports. He underlined its importance in creating a structure that is equivalent to other international capital markets oversight structures, which would support the attraction of foreign investment and cross listing.

This decision was based on the CMA analysis and benchmark of the international best practices relating to oversight of public entities auditors.

The CMA regulates and develops the Saudi Arabian Capital Market by issuing required rules and regulations for implementing the provisions of Capital Market Law. The basic objectives are to create an appropriate investment environment, boost confidence, reinforce transparency and disclosure standards in all listed companies and protect the investors and dealers from illegal acts in the market.

Al Barrak mentioned that the Division and the Committee will be focused on establishing standards and conditions required for the auditors who audit the books of joint stock companies listed on the Exchange and Capital Market Institutes; the registration of certified public accountants licensed by the Ministry of Commerce and Investment and registered in the Certified Public Accountants Register, who are providing audit services to listed companies and who are in compliance with the CMA standards and conditions; supervision and inspection of such auditors within the CMA scope of work; cooperating with the Saudi Organization of Certified Public Accountants to improving the financial reporting quality of listed companies.

It is worth mentioning that the Capital Market Law gave the CMA the right to establish standards and conditions required for auditors who audit the books of entities subject to the control and supervision of the Authority.

CMA will continue to announce other developments surrounding the auditors supervision during the coming period.

Qatar Stuck between Rise in Foreign Debt, Threatened Stake in Gas Markets

Riyadh — Several international economic reports have described Qatar’s current economic status as “threatened to collapse.”

These reports stressed that Qatar’s economy has been facing a very difficult period because investment capitals are not completing their projects and plans; Qatar is heading towards borrowing money despite the rise in the value of foreign debt, which has amounted to 150 percent of the country’s Gross Domestic Product.

The threats that dominate Qatar’s economy are not only related to the investment pause, the decline in purchasing power, nor to the limited competitiveness of Doha’s air force but they have also reached the gas markets.

International news agencies said that Australia now threats Qatar’s Liquified Natural Gas (LNG) production as it is planning to boost exports of LNG by 16 percent from 2018.

On the other hand, Doha is considering raising at least nine billion dollars from international bond markets as the gas-rich nation boycotted by its neighbors seeks to replenish state coffers, news agencies said.

In June, Moody’s confirmed that Qatar’s credit quality would decline if tensions with its Gulf neighbors continue for much longer, raising the country’s debt ratio and hurting banks’ liquidity.

Amid recent indications that Doha is unable to hide the risks its economy has been facing, Qatar’s stock market has been facing in the recent weeks a stage that proves the size of the risks threatening Qatar’s economy with Qatar’s index reached its lowest level in five years.

In this context, Qatar’s central bank has added the equivalent of about $19 billion of previously unreported foreign-currency assets to its total reserves in August based on an International Monetary Fund recommendation, a move that helps offset the impact of the Saudi-led embargo.

Doha has also been facing a major crisis in terms of economic slowdown. Official figures show that Qatar’s economic growth has hit its worst level since the beginning of the global financial crisis.

In addition, there is a high-risk level of liquidity shortage in local banks amid indicators showing Qatar’s central bank’s inability to continue withdrawing from the foreign deposits for so long; since this reveals the volume of financial threats in which Doha’s government won’t be able to face.

Saudi Arabia Launches Internet Quality Measurement Platform ‘Meqyas’

Meqyas instructions flowchart, Asharq Al-Awsat

Riyadh- In a move to increase the efficiency of Saudi internet services, the Saudi Communications and Information Technology Commission announced on Tuesday the launch of a measurement platform, ‘Meqyas.’

Meqyas is an initiative by The Communications and Information Technology Commission (CITC) to establish Internet Quality of Experience Measurement Platform in order to provide internet users in Saudi Arabia with reliable and accurate data concerning broadband and mobile internet services.

The Communications and Information Technology Commission (CITC) has partnered with SamKnows to implement and operate the measurement platform using world-class technologies and tools.

The CITC said that the aim of the initiative is to provide users with information pertaining to the quality of the Internet experience provided to them in a transparent manner, and to increase competition between service providers to improve quality.

These developments come at a time when Internet services in Saudi Arabia are the biggest driver of the telecom sector in the country. Local telecom operators are focusing on improving the quality of their services in this vital sector.

The CITC explained that the Internet measurement platform is influenced by several factors, such as the efficiency of the service provider’s network tower, the distance from the supplying modem, the router’s internal settings, and the number of users and devices tapping into the same point simultaneously.

It is noteworthy that ‘Meqyas’ is a different system of tools for users measure the quality of the internet provided them, and enables to follow the levels of quality at different time periods on a weekly basis, monthly, annually and according to international standards.

Meqyas aims to provide internet subscribers in Saudi Arabia with reliable and accurate data concerning broadband and mobile internet performance across the country.

More so, the CITC recently announced the number of mobile subscriptions in the country has reached 43.6 million, according to the latest statistics.

On the other hand, the communications commission had launched its electronic bulletin on monitoring the latest developments in the ICT sector in the Kingdom by the end of the second quarter of 2017.

The bulletin included the number of subscriptions to telecommunications services, which reached about 43.6 million– 3.75 million lines represent the number of fixed line lines, while subscriptions to broadband services through mobile networks with a total definition amounted to about 25.2 million subscriptions.

The number of subscriptions to broadband services over fixed telecommunication networks reached 3.2 million, including DSL, fixed wireless connections, fiber optics and other wired lines.

As for the number of Internet users in the Kingdom, CITC said in its bulletin that the number of Internet users in the country reached 24 million users.

Saudi telecoms listed on the local capital market posted a remarkable growth in profits for the first half of 2017, with earnings growth of about 13 per cent compared to the first half of last year.

Saudi Arabia Establishes ‘Fund of Funds’ for Small Enterprises

Saudi Arabia Establishes ‘Fund of Funds’ for Small Enterprises

Riyadh- The Public Investment Fund (PIF) has announced the establishment of the Fund of Funds, a new investment vehicle designed to provide small and medium-sized enterprises (SMEs) with access to capital by investing in venture capital and private equity funds.

The Fund of Funds will also support the creation of a thriving private equity and venture capital ecosystem in the Kingdom.

The Fund will empower the private sector and increase its contribution to national GDP by encouraging venture capital and private equity investments. With a capital of SAR4 billion, the Fund is aligned with the Saudi Vision 2030 objective of facilitating private sector growth and supporting the development of SMEs in creating job opportunities, promoting innovation, and increasing exports as per the commercial by-laws, to support and encourage investment in SMEs.

The Fund of Funds’ vital role will be reflected in its contributions to national GDP, estimated to be around SAR400 million by the end of 2020, and the provision of more than 2,600 jobs. Its contribution to GDP is expected to increase to SAR8.6 billion by the end of 2027, creating around 58,000 jobs.

The PIF is expected to be one of the most capable global funds to diversify investment tools, and therefore achieve profits and contribute to attaining financial resources to the country’s economy.

The Saudi PIF was established in 1971 to provide financing support for projects of strategic significance to the national economy before it expanded its role to include other aspects.

Saudi Economy on New Threshold of Growth following Diversification of Investments

Investment

Riyadh – The mega projects in Saudi Arabia announced by the Public Investment Fund (PIF) have become a new frontier on the country’s investment map.

These mega projects, announced by one of the world’s biggest investment funds, carry great opportunities for investment, diversification of the economy, creation of thousands of jobs for Saudi youth, localization of the tourism industry and enhancement of their contribution to the GDP.

These major developments come at a time when Saudi Arabia is preparing to launch the Future Investment Initiative (FII), which is a pioneering new global investment event that will connect the world’s most powerful investors, business and intellectual leaders and public officials with groundbreaking innovations that are defining the future.

The initiative, which is hosted and organized by PIF in line with Saudi Arabia’s Vision 2030, will be sponsored by Custodian of the Two Holy Mosques King Salman bin Abdulaziz, and its activities will be launched from the Kingdom’s capital, Riyadh, between October 24 and 27.

In this context, PIF announced that it is preparing to launch “Rou’a Al Haram” (Haram Vision), a development company set to increase capacity for pilgrims and visitors to the Grand Holy Mosque performing the annual Hajj or Umrah.

“Rou’a Al Haram” will act as a catalyst for developing the areas around the holy sites and improving the quality of services in the local hospitality sector.

The company’s establishment is in line with Vision 2030, which aims to provide an opportunity for the largest possible number of Muslims to perform the Hajj and Umrah and to enrich and deepen their experience through the development of the two Holy Mosques. The number of people visiting Makkah for the pilgrimages is expected to reach more than 30 million by 2030.

“Rou’a Al Haram” will raise the level of development in the areas surrounding the Grand Holy Mosque, making it among the best examples of development worldwide.

In addition, it will support job creation and investment as part of a wider plan to diversify the national economy.

Initial preparation works are currently underway, with construction due to start in 2018. The first phase of the project is anticipated to be launched in 2024.

The projects will create around 160,000 job opportunities by 2030, with an estimated annual contribution to GDP of eight billion Saudi riyals.

In addition, PIF announced the establishment of the “Rou’a Al Madinah” company, which will deliver projects designed to increase capacity for pilgrims and visitors to the Prophet’s Mosque, while also enriching spiritual and cultural experiences across the holy city of al-Madinah.

Preliminary estimates indicate that the total number of annual visitors to al-Madinah will increase to 23 million by 2030.

The company aims to develop a 1.3 million square meter site no more than 1,000 meters away from the east wing of the Prophet’s Mosque.

The project will see the development of 500 new housing units and 80,000 hotel rooms, increasing hotel capacity to receive 240,000 guests per day, in addition to increasing the number of prayer areas to accommodate 200,000 worshipers per day.

Saudi Domestic Sukuk: Indication of Financial Solidity

Riyadh- The Saudi Finance Ministry announced on Monday that the third domestic sukuk issuance reached 350 percent in a record rate, while the first issuance was at 297 percent and the second at 300 percent.

These figures indicate the solidity of the Saudi financial and banking sectors, and show the mounting demand on domestic sukuk in a remarkable manner.

The government received more than 24 billion riyals (USD6.4 billion) in bids for its third riyal-denominated Islamic bond sale, according to a statement of the Ministry of Finance.

The Sukuk issuance was divided into three tranches as follows: 2.4 billion riyals (USD640 million) from a five-year tranche, 3.9 billion riyals (USD1.04 billion) from seven-year notes and 700 million riyals (USD186.6 million) through a 10-year tranche.

This high turnover follows a mid-August announcement by the finance ministry that the Saudi riyal-dominated domestic sukuk goes in tandem with the market conditions.

This step follows the success of the Debt Management Office in completing the establishment of the Saudi riyal sukuk program when domestic banks completed internal requirements for the program.

Thirteen licensed commercial banks qualified for the domestic sukuk program, revealed the Debt Management Office. The banks are: Alinma, Alawwal Bank, Al Rajhi Bank, Arab National Bank, Bank AlBilad, Bank AlJazira, Banque Saudi Fransi, Gulf International Bank, Riyad Bank, Samba Financial Group, Saudi Investment Bank, National Commercial Bank and Saudi British Bank.

Once the Saudi riyal-dominated sukuk program was established, financial institutions competed two months ago to submit investment applications in the first issued domestic sukuk in the local market.

Saudi Arabia, with its global economic weight, issued earlier international bonds that attracted international institutions, proving the confidence of international investors in the Saudi economy.

Saudi Arabia to Launch Future Investment Initiative

Riyadh- The Public Investment Fund of the Kingdom of Saudi Arabia (PIF) on Monday announced the launch of the Future Investment Initiative (FII) under the patronage of Custodian of the Two Holy Mosques King Salman. Hosted and organized by PIF, the Kingdom’s main investment arm and one of the world’s leading sovereign wealth funds, the FII will take place from October 24 to 26 in Riyadh.

This inaugural FII will be held under the leadership of Crown Prince Muhammad Bin Salman, Deputy Premier, Minister of Defense, Chairman of the Council of Economic and Development Affairs (CEDA) and Chairman of PIF.

It will be a game-changing platform exploring the new trends, opportunities, challenges and emerging industries that will shape the world economy and investment environment over the coming decades. The invitation-only event will bring together internationally-renowned business and investment leaders. A number of high-profile speakers have already been confirmed, covering major investors and global financial institutions.

They include Chairman and CEO of BlackRock Larry Fink, Group Chief Executive of HSBC Stuart Gulliver, President and CEO of Siemens Joe Kaeser, CEO of Bank of China Tong Li, Chairman and CEO of SoftBank Group Masayoshi Son, and CEO of Virgin Galactic George Whitesides.

The attendees will also include established players, new innovators and creators across key sectors that will shape the future global economy.

“The Future Investment Initiative (FII) will provide an unprecedented opportunity for many leaders and influencers around the world to better understand the future of the global investment landscape,” said Yasir Bin Othman Al-Rumayyan, Managing Director of PIF.

“It will also act as a platform to showcase the PIF’s redefined investment mandate and strategy, as it progresses towards becoming the world’s largest sovereign wealth fund,” he added.