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Arab News
23-04-2025
- Business
- Arab News
Saudi Arabia, Ethiopia target key sectors in push to deepen economic ties
JEDDAH: Saudi Arabia and Ethiopia plan to boost economic cooperation in key sectors — including agriculture, manufacturing, and tourism — as officials from both nations met at a forum in Riyadh. The event, organized by the Federation of Saudi Chambers, brought together more than 150 representatives from the public and private sectors of both countries, the Saudi Press Agency reported, and marked the first major gathering since the establishment of the Saudi-Ethiopian Business Council last year. The initiative aligns with Saudi Arabia's strategy to strengthen economic ties with African nations and explore new investment opportunities and markets, recognizing Ethiopia's potential as a favorable investment environment, a key trade gateway to the continent. Ethiopia's State Minister for Trade and Regional Integration Abdulhakim Mulu invited Saudi investors to explore opportunities in key sectors including agriculture, food industries, and tourism, as well as hospitality and manufacturing. He emphasized Ethiopia's rapid economic growth and the government's commitment to improving infrastructure and fostering a favorable investment climate. Federation of Saudi Chambers Chairman Hassan Al-Huwaizi stated that Saudi Arabia is actively working to strengthen its relations with African countries, particularly Ethiopia, which serves as a strategic gateway for Saudi exports to the continent. 'He noted Ethiopia's natural resources and potential in agriculture, food industries, and mining, adding that the limited trade volume, which is merely SR1.3 billion ($347.1 million), indicates untapped investment opportunities,' SPA reported. The Saudi-Ethiopian Business Council was formally approved by the Saudi General Authority for Foreign Trade last year to enhance bilateral trade and investment. Its formation followed agreements reached during a prior forum held on June 5 in Addis Ababa. As both nations seek to deepen their economic engagement, the council is expected to play a pivotal role in unlocking new opportunities, boosting bilateral trade, and fostering a more integrated economic partnership between Saudi Arabia and Ethiopia. According to a 2024 World Bank report, Ethiopia — home to 126.5 million people as of 2023 — is the second most populous nation in Africa and one of the continent's fastest-growing economies, recording a 7.2 percent growth rate in the 2022/2023 fiscal year. Despite this progress, Ethiopia remains one of the world's poorest countries, with a gross national income per capita of $1,020. The country aims to achieve lower-middle-income status by 2025, building on years of infrastructure-driven growth that have helped reduce poverty and improve access to essential services.
Arab News
16-04-2025
- Business
- Arab News
Saudi asset management industry hits $266bn, poised for further growth: Fitch Ratings
RIYADH: Saudi Arabia's asset management industry grew by 20 percent year on year in 2024, pushing the sector's total assets to SR1 trillion ($266 billion) for the first time, according to a new analysis by Fitch Ratings. In its latest report, the ratings agency said the industry is expected to continue attracting steady inflows through 2025 and 2026, with assets under management projected to exceed SR1.3 trillion. Fitch attributed the sector's momentum to several key factors, including a growing investor base, favorable demographics, ongoing economic reforms, strong capital markets, and digital transformation initiatives. Bashar Al-Natoor, global head of Islamic Finance at Fitch, said: 'Saudi Arabia's asset management industry is the largest in the GCC (Gulf Cooperation Council) with AUM having crossed SAR1 trillion, and further growth expected.' He added: 'Almost all mutual funds listed on the Saudi Exchange are Shariah-compliant, indicating strong demand for Islamic products.' An earlier report by Fitch in October noted that growth in 2025 would be further supported by a rising number of high-net-worth individuals seeking asset management services within the Kingdom. The Saudi government aims for the industry's AUM to reach 40 percent of the Kingdom's gross domestic product by the end of the decade. The report also noted that bank-affiliated asset managers in Saudi Arabia accounted for nearly two-thirds of the industry's revenues by the end of 2024. However, Fitch pointed out that international competition is likely to intensify as global players such as BlackRock, Goldman Sachs, and Morgan Stanley, as well as Citigroup and Mizuho Bank, have received regulatory approval to establish regional headquarters in the Kingdom. The analysis highlighted that around half of Saudi Arabia's AUM is held in private funds, followed by discretionary portfolio management and public funds. Private fund assets are primarily concentrated in real estate and equities, while half of the AUM under discretionary portfolio management is invested in local shares. Public fund assets are distributed across money market funds, equities, real estate investment trusts, and debt instruments. Fitch also noted that the combined market capitalization of listed equity markets in the GCC surpassed $4 trillion at the end of 2024, led by the Saudi Exchange. Despite the strong outlook, the report warned of potential challenges, including trade tensions and fluctuations in oil prices. 'The market is not immune from global volatilities, such as those caused by the US government's tariff rises on April 2. Oil price changes are among the key factors that could affect the industry,' Fitch added.
Arab News
23-02-2025
- Business
- Arab News
Saudi Real Estate Refinance Co. raises $2bn in debut international sukuk
RIYADH: The Saudi Real Estate Refinance Co., a Public Investment Fund subsidiary, has priced its first international sukuk issuance, raising $2 billion, boosting the local economy and attracting foreign investment. SRC's sukuk issuance supports Saudi Arabia's Vision 2030 goals, including expanding the mortgage market, promoting homeownership, and attracting global investment. According to a press release, the issuance — guaranteed by the Saudi government — was oversubscribed six times, reflecting strong investor confidence and demand from over 300 institutional investors worldwide. 'This marks a significant milestone in integrating the Saudi economy with global markets, attracting foreign direct investment, enhancing liquidity, and developing the secondary mortgage market in Saudi Arabia,' said the Minister of Municipalities and Housing and Chairman of SRC. The sukuk, structured in two tranches with three- and ten-year maturities, is part of SRC's $5 billion international sukuk program. The issuance will be listed on the International Securities Market of the London Stock Exchange, strengthening Saudi Arabia's connection to global capital markets and enhancing liquidity in the Kingdom's mortgage finance sector. Majid Al-Hogail said the successful listing underscores Saudi Arabia's commitment to developing its housing finance ecosystem. He highlighted Saudi Arabia's ambitious plans to expand the mortgage finance sector to SR1.3 trillion ($346.6 billion) by 2030, up from SR800 billion in 2024 and just SR200 billion in 2018. The minister said mortgage financings now represent 23 percent of total bank assets, aligning with Vision 2030's 70 percent homeownership rate target by the end of the decade. By the end of 2023, the homeownership rate had already reached 63.7 percent, surpassing initial projections. SRC CEO Majid Al-Abduljabbar described the sukuk issuance as a testament to global investor confidence in Saudi Arabia's economy. 'The listing of the sukuk program on the LSE not only strengthens SRC's global presence and strategy to attract a diverse base of international investors, but also solidifies the company's position as a key player in the mortgage finance market, paving the way for new strategic partnerships and high-quality international investments,' Al-Abduljabbar said. SRC holds strong credit ratings from top agencies, including Fitch with an 'A+' and a stable outlook, S&P with an 'A' and a positive outlook, and Moody's with an 'A2' coupled with a positive outlook. 'These ratings reinforce the company's strong position in launching its first international sukuk program, which aligns with global sukuk market standards and best practices in Islamic finance,' the statement added. The company, established by PIF in 2017 under the supervision of the Saudi Central Bank, has been working to provide liquidity to mortgage lenders and facilitate access to affordable housing finance in Saudi Arabia. 'SRC plays a key role in achieving the objectives of the Housing Program under Saudi Vision 2030, which aims to increase homeownership rates among Saudi citizens,' the company said. In January, SRC, in partnership with Hassana Investment Co., launched the region's first residential mortgage-backed securities to diversify the financial market and attract local and international investors. The initiative supports the Kingdom's growing real estate market, driven by increasing mortgage lending and strong demand for housing, aligning with Saudi Arabia's long-term economic development objectives.
