Saudi Arabia

Leaders of world’s most powerful countries come together for Saudi-led virtual summit

Leaders of the most powerful countries in the world will today come together in a virtual summit organized by the Saudi Arabia G20 presidency to tackle the accelerating coronavirus crisis. Among world leaders expected to participate in the meeting are US President Donald Trump and Chinese President Xi Jinping, Russian President Vladimir Putin and German Chancellor Angela Merkel. The World Health Organization, the UN, the International Monetary Fund and the World Bank are among the international organizations that will take part, as well as other development organizations. Saudi Arabia’s efforts at global coordination will continue after the virtual summit. Another forum of G20 finance ministers is planned for next month, as well as a virtual gathering of G20 health ministers.

Covid-19: Saudi delivery app raises funds as virus lockdown boosts demand

A grocery delivery app in Saudi Arabia has raised funds to expand across the Middle East as lockdown measures related to the coronavirus boost demand for online shopping. The Nana app raised $18 million from investors including venture capital fund STV and Middle East Venture Partners. Dubai-based start-up ecosystem enabler Wamda also participated in the investment round, along with Saudi Venture Capital Company (SVC), Impact46 and Watar Partners. Nana founder Sami Alhelwah said the penetration of online grocery shopping in the region is very low and the target is to expand across the region and beyond groceries into other products. Nana wants to become the Amazon of the Middle East and wants to be one of the first technology companies listed in Saudi Arabia.

Saudi billionaire's charity adds second donation to help global polio fight

Prince Alwaleed Bin Talal Al Saud has joined Bill Gates and other leading figures to announce the first round of funding to a major global initiative to end polio. Alwaleed Philanthropies’ donation of $2 million to the Global Polio Eradication Initiative (GPEI) will support the creation of action plans to expand access to polio vaccination and help reach children everywhere. Alwaleed Philanthropies has also worked with key partners such as Gavi, the Vaccine Alliance, the Bill & Melinda Gates Foundation, the Carter Center and UNICEF to tackle Guinea Worm disease, river blindness, measles and rubella, amongst other preventable and treatable diseases. The GPEI pledging event launched a fundraising push to fill the $3.27 billion funding gap. So far, $2.6 billion has been raised.

Saudi based Alinma Investment stuns the market with their Sukuk Bond ETF launch

Alinma Investment has recently launched its Sukuk Bond ETF in order to provide a low risk investment vehicle for the end investor. The world is currently awash with volatility and there has never been a better time to reap the benefits of a well-diversified multi-asset model portfolio. Until the recent launches of Sukuk Bond ETFs, it had proven very difficult to construct a Model Portfolio for GCC based investors, but this is no longer the case and it is not out of the question that this opening up of the Saudi Arabia Government Bond market could prove a key step going forward for other investors outside of the region. Alinma’s stunning ETF launch has more than a USD300 million in seed, so this fund is already large enough to be used by institutional investors across the globe.

Saudi's Fawaz Abudulaziz Alhokair secures $800mln Islamic finance

Saudi-listed retail group Fawaz Abdulaziz Alhokair Company has signed a Murabaha facility and a revolving credit facility agreement with a syndicate of Saudi banks. The $800 million debt facility is composed of two tranches, including a $650 million Murabaha to be fully utilized in refinancing existing debt, and a $150 million revolving standby credit facility to finance the business’ operational and expansion needs. The Murabaha matures in 7 years, while the revolving credit facility’s tenure is 3 years. The banks participating in the loan agreement are: Al Rajhi Banking and Investment Corporation, the National Commercial Bank, Samba Financial Group, Arab National Bank, Mashreqbank, Abu Dhabi Islamic Bank.

Saudi art organisation acquires vast collection of Middle Eastern art from Dubai's bankrupt Abraaj firm

The private Saudi art organisation Art Jameel has bought a vast collection of works by leading artists commissioned by the now defunct, Dubai-based private equity firm Abraaj. The collection had been planned to go on long-term loan to Art Jameel’s Dubai space, Jameel Arts Centre, before the financial company went bankrupt in 2018. It will now be managed as part of the Art Jameel Collection and part will be housed at the centre in Dubai. The 29 pieces, created over ten years from 2008 as part of the annual Abraaj Group Art Prize, are by artists from the Middle East, North Africa and South Asia including Kader Attia, Shezad Dawood, Rana Begum and Wael Shawky.

Islamic Development Bank starts marketing dollar #sukuk

Saudi Arabia’s Islamic Development Bank began marketing a five-year dollar sukuk at high-40s basis points over mid-swaps. The bank has hired Citi, Dubai Islamic Bank, HSBC, Islamic Corporation for the Development of the Private Sector, LBBW, Natixis and Standard Chartered Bank to arrange the potential debt sale. The issuance is under Islamic Development Bank’s $25 billion trust certificate issuance programme and is expected to be of benchmark size. Benchmark size generally means upwards of $500 million.

Saudi Arabia's Riyad Bank starts marketing 10-yr dollar #sukuk

Saudi Arabia’s Riyad Bank has started marketing 10-year dollar sukuk at around 225 basis points over mid-swaps. The Tier 2 subordinated sukuk sale is part of a $3 billion issuance programme. The bank hired JPMorgan, Riyad Capital and Standard Chartered to lead the deal. First Abu Dhabi Bank and HSBC are also involved in arranging the potential debt sale.

Riyad Bank planning USD #sukuk under new programme

Saudi Arabia's Riyad Bank is planning to issue an international Tier 2 U.S. dollar sukuk under a new programme. Funds raised from the first issuance under the new programme will diversify the bank's sources of finance, strengthen its capital base, support the expansion of its credit business and other activities. Riyad Bank has mandated J.P. Morgan, Riyad Capital, Standard Chartered Bank, First Abu Dhabi Bank and HSBC as joint lead managers for the upcoming sukuk. Fitch rated the sukuk programme BBB+(EXP)'/'F2(EXP).

Saudi SRC buys $67mln mortgage portfolio from Bank Aljazira

The Saudi Real Estate Refinance Company (SRC), a subsidiary of the Saudi Public Investment Fund signed an agreement with Bank Aljazira to buy a SAR 250 million mortgage portfolio. The two entities signed a memorandum of understanding (MoU) that allows SRC to buy more mortgage portfolios from the bank. SRC seeks to inject more liquidity into the Saudi mortgage sector through the acquisition of mortgage portfolios. Bank Aljazira’s net profit increased by 3.8% to SAR 256.9 million in Q3-19, compared to SAR 247.4 million in Q3-18.

Experts say the odds are against gold dinar

Prime Minister Dr Mahathir Mohamad brought an idea of a gold dinar as an international reserve currency for Muslim countries in preference to the US dollar as the dollar was sometimes unstable. Nazari Ismail, a professor of economics at Universiti Malaya thinks, that the idea is not reliable, as countries as Saudi Arabia, Qatar, Pakistan and Indonesia would be not interested in the prime ministers proposal.

Saudi hardware retailer and wholesaler signs 100 mln riyals Islamic financing

The Saudi Company for Hardware has signed 100 million riyals ($26.67 million) worth of Islamic financing. The finance was obtained from the Gulf International Bank in a five-year Shariah-compliant facilities. SACO Hardware posted 14.64 million riyals in net profit for July-September, a decrease of some 40% compared to the same quarter in 2018.

Dr. Mabid Al-Jarhi, IsDB Prize Laureate, Delivers Lecture on Gains of Switching from Conventional to Islamic Finance

Winner of the 2019 Islamic Development Bank (IsDB) Prize in Islamic Economics, Dr. Mabid Al-Jarhi, has delivered a lecture on the gains of switching from conventional to Islamic Finance. He argues that mainstream economics has many limitations, and therefore economists need to be able to identify the weaknesses and propose alternative frameworks. The principles of Islamic Economics provide such a framework. Prohibiting interest on money is not sufficient from an Islamic Finance point of view. Financing through trade contributes to addressing the inefficiency arising from search for trade partners. Together, prohibition of interest and financing through trade would improve allocation of resources in the economy. Dr. Al-Jarhi warns that there is a lot to be done to have a proper Islamic financial system in place. Proper regulations and governance are neccessary to address other kinds of inefficiencies arising from partnership of equity financing.

Saudi insurer Malath to capture greater efficiencies in managing Sharia Compliance

Malath Insurance announced today the assignment of Shariyah Review Bureau (SRB) certification and Sharia audit services to help maintain and supervise Sharia compliance. Malath offers comprehensive solutions covering classes of insurances like property, engineering, construction, health and medical for its retail and corporate customers. It currently has about 336 employees and 5 offices throughout Saudi Arabia. Malath CEO Fawaz A. Al Hijji believes that bringing Shariyah Review Bureau on board will strengthen trust in stakeholders and will provide significant scale with low input costs for certifying and auditing Sharia compliant products and investments.

SAMA updates actuarial regulations for insurance sector

The Saudi Arabian Monetary Authority (SAMA) has updated actuarial regulations of insurance and reinsurance companies and is calling on the public and interested parties to provide their comments and views on the draft project. The regulator seeks to protect policyholders as well as develop and regulate the performance of actuaries in addition to the development of promising career and professional opportunities for young Saudis. Saudi Arabia said that actuary plays an important role in the design and pricing of products, in addition to work on financial reports and risk management and internal audit.

#Saudi Arabia's new bankruptcy law faces key test in the courts

Saudi Arabia's new legislation is part of broader efforts to overhaul the economy, create employment and wean off the economy from reliance on hydrocarbons. Simeon Djankov, World Bank Senior Research Director and Founder of the Doing Business Report, said the bankruptcy law was passed and now investors are eager to see whether the courts actually understand how to implement it. Djankov believes the merit of the law should become clearer in about a year after courts handle initial cases. Only three cases were settled using the new bankruptcy law and around a dozen more are expected to be resolved over the next year. Resolving insolvency was an area of improvement for Saudi Arabia, climbing 30 places to 62nd in the World Bank report.

Gulf Bonds Go From Haven to Hazard as Saudi Strikes Stun Market

Money managers poured into the Gulf region till Saturday’s unprecedented attack on Saudi Arabia’s key oil facilities. That drove record gains for bonds in August as they sought refuge in securities boasting an average credit score of A+ amid global trade tensions. According to a Bloomberg Barclays index, Saudi Arabian bonds handed investors the biggest loss, about triple that of Qatari securities. The strikes in Saudi Arabia could escalate into a showdown, with the kingdom and U.S. on one side, and Iran and proxy groups from Yemen to Lebanon, on the other. Iranian-backed Houthi rebels in Yemen claimed responsibility for the assault and warned that oil installations in the Arab nation remain a target.

#Saudi Arabia warns against dealing in #cryptocurrencies

Saudi Arabia’s Ministry of Finance has warned against dealing or investing in digital currencies including cryptocurrencies as they are not recognised by legal entities in the Kingdom. The finance ministry stated that digital currencies are outside the scope of the regulatory framework and are not traded by financial institutions in Saudi Arabia, adding that such cryptocurrencies have been associated with fraudulent activities and attract suspicion. The use of Saudi Arabia’s name, national currency or emblem by any entity for digital currencies marketing will be subject to legal actions.

#Saudi peer-to-peer funding platform signs with SRB

Saudi peer-to-peer funding platform Raqamyah has assigned the Shariyah Review Bureau (SRB) to manage the Sharia compliance affairs of its crowd-funding technology. Raqamyah founder Ammar Bakheet said the company was developing faster ways of connecting funders with SME’s and also enact the spectrum of SAMA’s regulations in the Kingdom. Shariyah Review Bureau, founded in 2004 in Saudi Arabia and licensed by Central Bank of Bahrain in 2007 provides Sharia advisory services from setting up Sharia Boards to Sharia certification and Sharia audits. SRB founder Yasser S Dahlawi said the collaboration with Raqamyah makes SRB the preeminent choice of Sharia Advisor for P2P firms seeking to offer crowd-funding opportunities in the Kingdom.

Lendo enlists SRB for Sharia supervisory services

Saudi-based Lendo has engaged Shariyah Review Bureau (SRB) to help support its Shariah supervisory function by overseeing its offerings, crowdfunding structures and operations. Lendo has been working to acquire its license in Saudi Arabian Monetary Authority’s sandbox regulation while continuing to focus on developing peer to peer funding practices in light of Shariah compliance. Lendo CEO Osama Al Raee expects Shariyah Review Bureau to contribute to the further optimization and improvement in Sharia supervisory oversight and optimize their Sharia risk management system. SRB founder Yasser S Dahlawi said the focus will be to evaluate and optimize existing Sharia control procedures and business processes to ensure well-grounded Sharia structural guarantees.

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