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.

Public Investment Fund to Establish Recycling Sector Company

Saudi Arabia’s Public Investment Fund (PIF) announced on Monday planning to establish the Saudi Recycling Company, a new waste management government enterprise aiming to support and operate the PIF’s investments in domestic recycling sector projects.

“Aligned with the Kingdom’s Vision 2030 goal to safeguard the country’s environment by improving recycling across the Kingdom, the new company will develop and operate projects designed to increase landfill diversion rates and recycle waste, creating alliances with private sector companies to achieve the highest international standards,”PIF said in a statement published on the Saudi state-owned press agency (SPA).

Preliminary studies have indicated that the Kingdom currently recycles around 10 percent of recyclable waste matter, with 90 percent disposed through landfill sites, causing damage to the environment, and not making full use of the potential of recyclable materials. More than 40 percent of recyclable materials in the Kingdom are produced in three major cities: Riyadh, Jeddah, and Dammam.

Recyclable materials in the Kingdom amount to 50 million tons, and the new plan offers the opportunity to recycle around 85 percent of this material, utilizing it as a source of alternative energy to be used in manufacturing.

The company will play a key role in achieving the strategic goals of Vision 2030 in preserving the environment and developing and protecting the natural resources by developing innovative solutions to preserve the quality of life within the Kingdom. The company’s scope of operations will cover all recyclable materials, as well as each stage of the value chain.

In addition to its core activities, the company will increase public awareness through campaigns and initiatives designed to introduce the concepts of recycling, its sustainability and importance.

Aramco, Saudi Public Investment Fund to Found ‘Super Contractor’

Saudi

London – Saudi Arabia’s Public Investment Fund (PIF) and Saudi Aramco are planning to set up a “super contractor” in partnership with local and international contractors.

MEED reported on Saturday that Aramco, PIF, a local contractor and an international contractor, will each own a 25 percent stake in the new entity.

Among the companies interested in this partnerships are: Al-Muhadib Contracting, El-Seif Engineering Co., Al-Rashid Trading & Contracting Co., and Nesma & Partners Contracting Co.

According to MEED, the new entity will replace distressed contractors, particularly Saudi Binladin Group and Saudi Oger, which have suffered financial difficulties in recent years and have been forced to scale back their operations.

The new entity is expected to take over major projects announced by the Public Investment Fund such as the Red Sea Project and Jeddah Downtown.

The new company will be responsible for the construction projects, which were assigned to Aramco. The construction sector will be separated from the mother company, and it is expected to recruit about 15,000 employees and employees.

Aramco plans to sell about 5 percent of the giant oil company, the cornerstone of Saudi Vision 2030, as a major reform plan led by Crown Prince Mohammad bin Salman, aimed at diversifying the Saudi economy away from oil.

Aramco has signed five memorandums of cooperation with Russian hydrocarbon giants during the Russian-Saudi Investment Forum. The agreements include: a trilateral MoU with the Saudi Public Investment Fund and Russian Investment Fund, for direct investments in the energy and industry sectors.

A MoU with the Russian Energy Giant Gazprom (cooperation in the field of Gas), and another memorandum with LITASCO (cooperation in trade); a MoU with Gazprom (for cooperation in the field of technology, research, and development); and finally, an agreement with Sibur and the Russian Direct Investment Fund (RDIF) (for strategic marketing of petrochemicals). These MoUs will allow all parties to jointly assess the potential for joint investments and marketing in petrochemical projects in both countries.

Sibur, biggest petrochemicals company in Russia, and the RDIF, inked on Thursday a memorandum of understanding with Aramco on the possible cooperation opportunities in Russia and Saudi Arabia.

In a statement, Sibur said both companies are planning to assess perspectives of the Russian and Saudi petrochemical markets, and to likely expand the cooperation in this sector.

Dmitry Konov, chairman-Mgmt Board at Sibur Holding said: “This partnership with one of the biggest Saudi petrochemicals companies will allow Sibur to develop its expertise and sales, along with studying the Middle Eastern market.”

Russian Energy Minister Alexander Novak said on Wednesday that Sibur would sign a $ 1.1 billion deal to build a plant to produce gas chemicals in Saudi Arabia.

Saudi Arabia Signs Deal to Purchase S-400 Air-Defense System

Saudi

Moscow — Saudi Arabia has agreed to purchase Russian S-400 surface-to-air missile systems, the TOS-1A, the AGS-30 and the Kalashnikov AK-103.

A memorandum of understanding was signed between Russia’s state company for exporting military products Rosoboronexport and state-owned Saudi Arabian Military Industries as well as other agreements.

Under the guidance of Crown Prince Mohammed bin Salman, the two parties signed these agreements, which are expected to play a pivotal role in the growth and development of the military systems industry in Saudi Arabia.

The MoU focuses on localizing the manufacturing and sustainment of advance armament systems in the Kingdom of Saudi Arabia in line with the objectives of Saudi Vision 2030.

Educational and training programs for Saudi citizens will also take place according to the agreement, to ensure the sustainability and development of the military industries sector in Saudi Arabia.

These agreements are expected to have tangible economic contributions and create hundreds of direct jobs. They will also transfer cutting-edge technologies that will act as a catalyst for localizing 50 percent of the Kingdom’s military spending as targeted by Vision 2030; which was launched by the Crown Prince, Deputy Prime Minister and Minister of Defense.

The Public Investment Fund of Saudi Arabia announced in March establishing a new national company for military industries, Saudi Arabian Military Industries, which represents a significant component of Vision 2030 and a transitional point in the development of military products and services that meet the highest international standards.

The strategic target of the company is to become among the top 25 military industry companies worldwide by 2030 to transform the kingdom into a strong partner in the military sector on the world level.

It is expected to contribute to the GDP with more than QAR14 billion (USD3.733 billion).

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 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.

PIF, SoftBank to Launch Robotic Systems Initiative

The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017.

Riyadh- The Public Investment Fund (PIF) and Japan’s Softbank Group plan to jointly study how robots can be used more effectively in government, business and society. In the coming months, PIF and the Japanese technology firm will establish partnerships for the project with companies, academics and government bodies across the world.

“Technology forms an integral part of achieving Saudi Arabia’s Vision 2030, and this project reflects the kingdom’s ambition to play an important role in helping to shape the future of the robotics sector. We are delighted to be partnering with SoftBank, already a global leader in the robotics industry, on this initiative,” said Saudi Crown Prince and PIF chairman Mohammed bin Salman.

Softbank and PIF said robots represent 0.7 percent of the global industrial workforce, or 69 robots per 10,000 employees, but there was no international agreement on the methodology for measuring the continued growth of the industry.

There are expectations that spending on robotics and related services will climb from more than $90 billion in 2016 to $188 billion by 2020. The project will explore the development of standardized measurements for robot power, performance and intelligence.

The ongoing evolution and adoption of autonomous environments have the potential to foster significant economic and social well-being, and also hold the power to affect a range of changes that humanity will need to be prepared for.

Global regulation will need to be evolved and it is essential to building better understanding of the impact on social well-being, work environments across different sectors and future job markets.

Masayoshi Son, chairman & CEO of SoftBank Group Corp., said: “The real world applications of robotics industry are rapidly moving from theory to reality, and this shift is creating a pressing need to improve, future-proof and standardize areas relating to regulation and measurement. By taking a leadership role, Saudi Arabia will undoubtedly support its own efforts to diversify and modernize its economy.”

The partnership with SoftBank builds on the Memorandum of Understanding signed between PIF and SoftBank in October 2016 in relation to the SoftBank Vision Fund.

SAMI … an Addition to the Saudi Economy

Military

Riyadh – Saudi Arabia is close to introducing an addition to the national economy following the Public Investment Fund’s (PIF) announcement on Wednesday of the establishment of the Saudi Arabian Military Industries (SAMI), a new national military industries company.

The Kingdom is on a mission to reinforce national industries in the military sector, targeting localizing 50 percent of Saudi Arabia’s military procurement spending by 2030

Saudi Arabia is one of the top five countries in security and defense expenditure. This makes the establishment of SAMI a significant step towards increasing the contribution of the military industries sector to the GDP.

The establishment of SAMI is a unique step that underpins PIF’s role in diversifying income sources – the fund has already commenced injecting tens of billions to the state’s treasury and has also started actual investment in technology and technical fields.

The company is expected to directly contribute with around SAR14 billion in the Kingdom’s GDP in 2030, invest over SAR6 billion in research and development, create over 40,000 job opportunities and more than 30,000 indirect opportunities as well as create hundreds of SMEs.

Commenting on this step, engineer Khalid al-Ghamdi affirmed that establishing SAMI will bring an addition to the national economy.

“Saudi Arabia was and still is an international military and economic force. Establishing this company will increase its power,” he told Asharq Al-Awsat.

Ghamdi called on SMEs to benefit from SAMI through introducing new investments that are more vital and innovative.

The company represents an important component of Saudi Vision 2030 and a transitional point in the growth of Saudi military industries in which the kingdom will become a sustainable platform for providing military products and services.

SAMI will establish companies through joint ventures with global original equipment manufacturers (OEMs), as well as cooperate with local military companies. The firm will seek to create new business units to ensure that the company is aligned with the latest advances in the military industries sector.

Alabbar: E-commerce Noon Launch on Track

Mohamed Alabbar had said the website would launch with up to 20 million products.

Dubai- Dubai businessman Mohamed Alabbar has confirmed that the e-commerce site Noon “is on track to launch this year.” He said in a statement that “all the feedback we received from our early customers has allowed us to test and refine our technology and fulfillment model.”

He continued: “Noon will lead the way in regional e-commerce. We aim to deliver a market-leading customer experience by leveraging great supplier relationships, reliable technology, robust payment systems, and highly scalable fulfillment infrastructure.”

Alabbar further added that the company is currently establishing strategic partnerships with an “extensive range of regional retailers, distributors, and global brands.”

“These partnerships will allow Noon to provide its customers with a broad catalog of product across categories. With Noon, we aim to deliver an e-commerce platform that creates long-term economic value, truly relevant to the region and supports its home-grown enterprises,” Alabbar continued.

The company is backed by a $1bn initial investment from Gulf investors and the Saudi Public Investment Fund.

As per its original intentions, Noon plans to soon launch across the Middle East region. It aims to grow online sales in the region from 2 percent of the total market ($3 billion), to 15 percent ($70 billion) in the future.

Alabbar said: “Following the launch of Noon, our permanent operational base will be in Riyadh, and we are currently scaling up our resourcing and operations there. This allows us an excellent opportunity to bring into the organization some of best new young Saudi talent working in this field.”

“Noon has the potential to cause a change in the e-commerce market in the region. I would like to thank our partners, the Public Investment Fund (PIF) of Saudi Arabia, for their continued support and guidance through this process, and our highly dedicated team of experts from a variety of fields, now working around the clock as we translate our vision into reality.”