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).

CMA Approves Updated Version of Merger and Acquisition Regulations

Riyadh – Saudi Capital Market Authority board issued its resolution to approve the updated “Merger and Acquisition Regulations” which will be effective and in full force as of Thursday.

The updated lists aim to regulate the mergers and acquisitions and make the capital market environment more stable and in accordance with the national transformation program and Vision 2030.

The purpose of these regulations is to regulate acquisitions activities, based on the Authority’s powers as stated in the Capital Market Law and merger activities, based on the Authority’s powers.

In light of that, the list included a number of clarifications about the entities that apply to the regulations including: any person who deals in the exchange, including (without limitation) issuers, shareholders, authorized persons, and any person involved directly or indirectly in participating or giving an advice on any transaction amended by these Regulations, directors of companies which are subject to these Regulations, and any person who seeks the acquisition of, or increase shares in, any company subject to this regulation.

The list also included a regulation concerning deals to sell, dispose of or acquire, or agree to sell, assets of a value equal to 10% of the net asset of the Offeree Company according to the latest reviewed interim financial statements or audited annual financial statements, whichever is later, whether through a transaction or various transactions, buy-back of offeree company’s shares, or enter into contracts otherwise than in the ordinary course of business.

Regarding market safety and protection of contributors, the updated version apply to any person, individually or acting in concert with the others, and thus becomes the owner of 40% of the shares carrying voting rights in the offeree company.

Any person obtaining shares, or have control over them, by a deal or number of deals, in owned or controlled shares, or which is controlled by persons acting in concert with it, that represent 40% or more of a specific class of shares that carry voting rights, may not have control over its shares during the following 6 months of obtaining such percentage without the Authority’s approval and in accordance with the conditions it specifies

Any person obtaining shares by a deal or number of deals that represent 40% or more of shares that carry voting rights of a listed company, shall disclose to the public the following information: the ownership details of such person and persons acting in concert with it, before and after the transaction, purchase method and the price for share, parties of the purchase, purpose of such purchase and the future plans for the offeree company’s activity, shareholders and employees resulting from the purchase.

Gulf Warns EU: Our Foreign Trade is Shifting to Asia

Riyadh – A prominent Gulf official warned the European Union (EU) that Europe’s share of Gulf continues’ foreign trade is declining, decreasing from 24 percent in 1992 to 11 percent last year — the Gulf foreign trade is shifting to Asia.

For 20 years, Gulf countries have been carrying out talks with the EU to sign a free-trade agreement between the two parties. But Europeans insist to include political topics in the negotiations’ program, which is rejected by the Gulf.

The GCC lately suspended trade negotiations with economic countries and blocs for the sake of re-evaluating the outcomes of these talks.

GCC’s Director of the Economic Administration at the General Secretariat Abdul Aziz al-Oaishek affirmed that the EU is still the first commercial partner for GCC with trade exchange worth more than USD183 billion.

Oaishek warned, however, that the share of EU from the Gulf foreign trade continues to decline.

“It declined from 24 percent in 1992 to 11 percent last year,” he said, adding that the majority of GCC states’ trade moved toward Asia.

Oaishek made his statement following the conclusion of the conference on “trade and economic relations between the EU and the GCC countries” in Brussels on Wednesday.

The conference was organized by European Parliament’s Committee on International Trade to discuss necessary mechanisms to increase trade and investment cooperation between the EU and GCC.

Oaishek expressed the GCC keenness to reinforce economic and commercial ties with the EU and he showcased the national transformation plans in the GCC – these plans seek to speed economic diversification and increase citizens’ and private sector contribution to the economy.

Chairperson of EPDAP Michele Alliot-Marie pointed out the need to achieve genuine partnerships between the European and Gulf in industrial development.

Qatar Brings $20 Billion Back Home to Face Boycott Burdens

Qatar

London – Qatar has brought back more than $20 billion to cope with the boycott imposed by the Anti-Terrorism Quartet, which is formed by Saudi Arabia, Egypt, the United Arab Emirates and Bahrain.

Qatari Finance Minister Ali Shareef al-Emadi said that his country has withdrawn more than $20 billion from investment funds and injected them into Qatari banks, in an effort to ease the repercussions of the boycott, the Financial Times reported.

Al-Emadi noted that the deposits brought from Qatar Investment Authority were being used to create a “buffer” and provide liquidity in the banking system as capital outflows in the wake of the crisis have reached more than $30 billion.

However, Qatari minister tried to play down the move, saying it was very natural for his country to bring liquidity from abroad, in the current situation, noting that what Doha has done was a “preventive and proactive action.”

The Financial Times quoted Al-Emadi as saying: “We are not liquidating anything. What we have done is taking some of our liquidity from outside to inside. This is through the Ministry of Finance and the QIA, which is very normal in this type of situation.”

Qatar Central Bank said in July that the volume of foreign deposits in Qatari banks fell significantly after the outbreak of the crisis with the four Arab countries.

Moody’s rating agency said in September that the Arab Peninsula had pumped $38.5 billion into its economy since the beginning of the crisis, in an attempt to protect the sector from the repercussions of the boycott imposed by the four countries.

The Qatar Investment Authority (QIA) have reduced its holdings in Credit Suisse, the Swiss bank; Rosneft, the Russian energy company; and Tiffany & Co.

But Al-Emadi told The Financial Times that these moves were linked to the country’s investment strategy, not because of the crisis.

Qatar Investment Authority (QIA), which was set up by the government in 2005 to manage the benefits of oil and natural gas, is estimated at $300 billion. Before the eruption of the crisis with Qatar, the Authority was one of the active funds that own shares in major companies such as Volkswagen and Barclays.

King Salman Sends Message to Bouteflika

A soldier patrols in front of the OPEC headquarters in Vienna

Kuwait- Prime Minister of the Republic of Algeria Ahmed Ouyahia received a message sent by Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud to President Abdelaziz Bouteflika of the People’s Democratic Republic of Algeria. It was conveyed by Minister of Energy, Industry and Mineral Resources Khalid al-Falih who was received in Algiers.

Falih reviewed with the Prime Minister areas of cooperation and joint work between the two countries, including cooperation in the efforts to rebalance the oil markets.

He and his accompanying delegation also met with Algerian Minister of Energy Mustapha Qaitouni. During the meeting, they discussed the latest developments in the world oil markets – the two countries stressed the need for adhering to oil production cuts.

They also discussed preparations related to the scheduled meeting between OPEC and non-OPEC producing countries in November in Vienna, as well as possible ways to make the meeting a success and emphasize trust in producers’ efforts.

Further, reliable sources revealed to Asharq Al-Awsat that Falih will visit three oil producing countries besides Algeria.

Last month, Falih visited Kazakhstan and discussed with his UAE and Kazakhstan counterparts the possibility of keeping the extension of oil output cut deal an option to be discussed in the upcoming meeting in November.

UAE Energy Minister Suhail bin Mohammed al-Mazroui said on Wednesday he was hopeful that the meeting will help re-balance the market in 2018. OPEC Secretariat will present a couple of suggestions to be evaluated under the framework of reaching balance in the market.

Egypt Inaugurates Mediterranean Union Investment Forum of Renewable Energy

Egypt

Cairo – Mediterranean union investment forum of renewable energy began in Egypt on Wednesday aiming to launch several opportunities in the field of renewable energy in the Euro-Mediterranean region, enhance cooperation on energy and climate actions, and create a more active involvement of the private sector in the regional-European-Mediterranean collaboration.

Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker el-Markabi, Egyptian Minister of Investment and International Cooperation Sahar Nasr inaugurated on Wednesday the forum at the presence of Portuguese Secretary of State for Energy Jorge Seguro Sanches, Secretary General of the Union for Mediterranean (UfM) Fathallah Sijilmassi, official representatives, international financial institutions and private sector investors.

Minister Nasr said that the Electricity Ministry reforms in the energy field, including feed-in tariffs, contribute in attracting the investors to invest in the renewable energy, as well as in attracting a number of development partners such as the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

She added that a renewable energy strategy has been followed through diversifying energy sources and allocating subsidies for the field.

“Renewable energy projects include providing job opportunities and contributing to achieving the sustainable development goals,” according to Nasr.

Nasr stressed that there are huge regional cooperation opportunities, human and natural resources and huge markets that qualify the region to integrate more with the European partner.

On the other hand, the Minister of Electricity said that the energy strategy will link between Egypt, Asia, Africa, and Europe.

Minister Markabi highlighted the importance of the role played by the private sector and the Euro-Mediterranean cooperation in the fields of renewable energy and energy efficiency.

60 Saudi Firms Seek Investment Opportunities in Baghdad International Fair

60 Saudi Firms Seek Investment Opportunities in Baghdad International Fair

Riyadh- Saudi Export Development Authority is part of the Saudi pavilion at the Baghdad International Fair in its 44th session, from October 21 to 30, with 60 companies from various industrial and service sectors.

The Saudi Export Authority is seeking through the exhibition to discover market opportunities for Saudi products in Iraq and to facilitate export procedures to Iraq in cooperation with the relevant authorities.

Secretary-General of the Saudi Export Development Authority Saleh al-Salami said that the Authority’s participation in the Baghdad International Fair comes from its role in encouraging Saudi products to reach the international markets.

He pointed out that the gross domestic product of Iraq amounted to about 643 billion riyals in 2016, the service sector was the largest share of them by 57 percent, and 38 percent for the industrial sector, while agriculture accounted for five percent.

The highest sectors in terms of the value of imports in Iraq are food products, according to the data of 2016, amounting to 21 billion riyals, followed by heavy equipment and electronics by about 20.3 billion riyals and then building materials by more than 15.8 billion Saudi riyals, which makes Iraq a market opportunity and a good export destination for Saudi products, Salami added.

Salami confirmed that the decision to head towards the Iraqi market was the result of a discussion sessions held by the Saudi Export Authority with a group of exporters to discuss the major challenges they have been facing, to find effective solutions to overcome them and reach means to facilitate the arrival of the Saudi product to the Iraqi market.

“The Authority strives to provide all tools and means that contribute to overcoming the obstacles that hinder the arrival of the national product to compete internationally in order to develop Saudi non-oil exports in the Iraqi market in particular and international markets in general.”

A statement issued by the Saudi Export Development Authority said that its participation at the Baghdad International Fair this year under the slogan of ‘industries that transcend borders and bring peoples closer,’ is one of the most important participations that will contribute to the establishment of economic trade relations between Saudi Arabia and Iraq.

Saudi Research and Marketing Group Acquires Controlling Stake in ‘Argaam’

Prince Badr bin Farhan with Ghassan al-Shibl, Rashid al-Owain and Islam Zween

Riyadh– As part of its plan to expand its range of specialized content and develop digital publishing initiatives, Saudi Research and Marketing Group (SRMG) acquired a controlling stake in the Argaam Investment and Trading Company.

Argaam is a financial news portal that runs an online economic and financial information service and provides real-time updates on financial markets and macroeconomic trends in Saudi Arabia and the region.

SRMG acquired 51 percent of Argaam for $10 million in an attempt to expand its operations, at a time when Saudi Arabia is diversifying its economy and opening up to more foreign investments and as a part of the National Transformation Plan (NTP) 2020 and Vision 2030.

Following the acquisition, SRMG Chairman Prince Badr bin Abdullah Al Saud said it will help pave the way to a “brighter future” for the digital content industry in Saudi Arabia. He added that Argaam was very successful in various fields, mainly because it was one of the most prominent digital experiments in creating content for finance, business, and market movement in Saudi Arabia and the Gulf.

He added that this acquisition will also help promote means of development and alleviate it into higher levels.

Sources at the group revealed that this acquisition was done based on several strategic elements including its compatibility with Argaam’s content platforms which will generate a comprehensive performance within an environment that will raise Argaam into international levels.

Managing director and chief executive of SRMG Ghassan al-Shibl pointed out that the acquisition of one of the most important economic websites in Saudi Arabia and the Arab world is a continuation of the group’s strategy to expand its specialized content portfolios in the world of finance, business, market economics and different media platforms.

Shibl added that Saudi Arabian data has become a “strategic commodity” for potential investors weighing their options on how to invest in the Kingdom.

The acquisition also reflects an anticipated rise in demand for information on Saudi Arabia’s economy and financial markets as the country ramps up non-oil growth and diversifies its economy under its Vision 2030 strategy, according to Shibl.

The acquisition comes after SRMG signed a deal with the New York-headquartered Bloomberg LP to launch Bloomberg al-Arabiya, a new multi-platform Arabic-language business and financial news service.

The agreement includes the publishing of Bloomberg Businessweek magazine in Arabic as well as a 24/7 television and radio network. The Bloomberg al-Arabiya team will be headquartered in the Gulf, and managed by SRMG with support from Bloomberg.

Saudi Research and Marketing Group is one of the leading investment companies in the industry of media and publishing and other fields linked to it in the Middle East. Established in 1987, SRMG is based on an investing comprehensive approach.

Oil Edges Higher on Gains as Geopolitical Threats Intensify in Kirkuk, Iran

Oil

London – As a number of geopolitical problems unfold, oil prices maintained gains on Tuesday, while Goldman Sachs said oil production from Iraq’s Kurdistan region was likely to be jeopardized by the standoff with Iraq.

Despite the fears of the Kurdistan region referendum affecting oil output, the banking company said the conflict between the United States and Iran remains a bigger long-term threat to global supplies.

Brent crude futures LCOc1 gained 6 cents, or 0.1 percent, to settle at $57.88 per barrel, while US crude CLc1 gained 1 cent to settle at $51.88. Both contracts traded up nearly 1 percent and down over 1 percent during the day.

“In the case of Iran, there are likely no immediate impacts on oil flows and there remains high uncertainty on potential reintroduction of US secondary sanctions. If they are, we expect that several hundred thousand barrels of Iranian exports would be immediately at risk,” analysts at Goldman Sachs said in a research note published Tuesday.

“In the case of Kurdistan, the 500,000 barrel-per-day (bpd) Kirkuk oil field cluster is at risk with initial reports that 350,000 bpd has shut in, although this remains unclear,” Goldman analysts said.

On the other hand, Iraqi Oil Minister Jabar al-Luaibi announced plans to construct a new refinery in the oil-producing region of Kirkuk, which has become the scene of open conflict between Baghdad and the Kurdistan Regional Government.

The Iraqi government also plans to increase oil production from the region to more than a million barrels per day, with a foreign oil company to be contracted to implement the plan, according to the minister.

More so, Russia’s TASS news agency had cited Russian Energy Minister Alexander Novak on Tuesday as saying that Russian oil companies may continue working in Iraq despite continued tension there.

Iraq is second-largest oil producer at the Organization of the Petroleum Exporting Countries.

After a strong rally in the previous session, geopolitical tensions edged oil prices higher on Tuesday morning. Brent crude rose 0.6 percent to $58.16 a barrel while US oil futures hovered near the $52 level in lunchtime trade.

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.