Jan 2020 review: How did Saudi Arabia kick off the new decade?

 

Looking back at the key events that marked the very beginning of a new decade, it is certain that Saudi Arabia is constantly moving forward in the process of transforming itself into an industrial powerhouse and a global leader in various sectors in line with Vision 2030.

 

Argaam takes a look at the most significant events that took place in the Kingdom in January to begin 2020 on a strong foothold.

 

Finance and Markets

 

1) Financials

 

A number of companies listed on the Saudi Stock Exchange (Tadawul) disclosed their financials for fiscal year (FY) 2019, with the majority reporting an increase in earnings including United Electronics Co. (eXtra), United Wire Factories Co. (Aslak), Advanced Petrochemical Co., Saudia Dairy & Foodstuff Company ( SADAFCO), National Commercial Bank (NCB), Savola Group, and National Company for Learning and Education (NCLE).

 

However, some other companies recorded a drop in net profit such as Saudi Basic Industries Corp. (SABIC), Almarai Co., Yanbu National Petrochemical Co. (Yansab), Saudi Industrial Investment Group (SIIG), National Petrochemical Co. (Petrochem), and Saudi Telecom Co. (STC).

 

2) REITs

 

The REIT funds listed on Tadawul showed an impressive performance for the fourth quarter of 2019 including MEFIC REIT Fund, Al Mashaar REIT Fund, Al Maather REIT, Mulkia Gulf REIT, and Derayah REIT Fund.

 

3) Derivatives trading

 

Tadawul announced that the Capital Market Authority (CMA) approved the derivatives exchange trading and membership rules and procedures.

 

4) Appointments & resignations

 

A number of companies made new appointments in their board of directors and executive management, including The National Shipping Company of Saudi Arabia (Bahri), Maharah Human Resources Co., Mouwasat Medical Services Co. (Mouwasat), and Rabigh Refining and Petrochemical Co. (Petro Rabigh). Elsewhere, Jabal Omar Development Co.’s chairman resigned.

 

Real Estate

 

5) Sakani program

 

The Ministry of Housing’s Sakani program signed a number of agreements with real estate and contracting firms to build 6,089 diverse housing units and develop nearly 19,000 residential land plots.

 

6) King Abdullah Economic City

 

King Abdullah Economic City (KAEC) signed a contract worth more than SAR 38 million for construction works in the Ajdan residential project. The first phase of the project spans across 179,000 square meters and includes 542 apartments.

 

Transportation

 

7) Jeddah Metro

 

Jeddah Metro Co. completed locating expropriation and relocation services as all engineering and architectural designs were finished. The project is expected to offer approximately 89,000 vacancies, and reduce 3 million trips per day by private vehicles.

 

8) Helicopter Company

 

The Helicopter Company, Saudi Arabia’s first national commercial helicopter operator, announced its plan to acquire 50 helicopters by 2025.

 

Economy

 

9) G20 Summit

 

The official Inception Event of G20 2020 Riyadh summit was held from Jan. 15-17, representing the global business community across all G20 member states and economic sectors.

 

10) International Note Issuance

 

The Ministry of Finance announced, through the National Debt Management Center, the receipt of investors’ subscriptions to its 6th international issuance under the Kingdom’s Global Medium-Term Note Program. The issuance was more than 4 times oversubscribed, with total orders amounting to over $23 billion.

 

11) Foreign companies

 

Saudi Arabian General Investment Authority (SAGIA) announced that new foreign companies setting up operations in Saudi Arabia climbed by 54% YoY to 1,131 businesses in 2019, the largest increase in 10 years.

 

12) Startups

 

Saudi Arabia closed 71 startup deals worth SAR 251 million in 2019, the highest in the past 5 years, supported by government initiatives, accelerator programs and a surge in investors, according to MAGNiTT.

 

Energy

 

13) Saudi Aramco Energy Ventures

 

Saudi Aramco Energy Ventures (SAEV), the corporate venturing subsidiary of state-owned Saudi Aramco, announced its plan to launch a new SAR 1.88 billion fund this year.

 

14) Renewables Ministry of Energy’s Renewable Energy Project Development Office (REPDO) issued the request for qualifications (RFQ) for round three of the National Renewable Energy Program (NREP), which comprises 4 solar photovoltaic (PV) projects with a total capacity of 1,200 megawatts.

 

15) Solar water

 

NEOM signed an agreement with UK-based Solar Water Plc. to build the first-ever solar dome desalination plants, in northwest Saudi Arabia.

 

16) Petrochemicals

 

The Royal Commission at Yanbu signed an agreement to allocate a 2 million square meter-land plot in Yanbu Industrial City for the Saudi Poly Chem Co. project at a total value of over SAR 21 billion. The project aims to convert coal to petrochemical and chemical products, and is expected to create more than 1,500 jobs.

 

17) Aramco-SABIC deal

 

The European Union (EU) antitrust regulators will decide by Feb. 27 whether to clear Saudi Aramco’s $69.1 billion (SAR 259.1 billion) acquisition of Saudi Basic Industries Corp (SABIC), according to a European Commission filing.

 

18) Samsung wins Aramco deal

 

Samsung Engineering secured a $1.85 billion (SAR 6.79 billion) contract from Saudi Aramco for its Hawiyah Unayzah Gas Reservoir Storage (HUGRS) project.

 

Telecom

 

19) STC-Vodafone deal

 

Saudi Telecom Co. (STC) signed a non-binding memorandum of understanding (MoU) worth $2.39 billion (SAR 8.97 billion) with Vodafone Group to acquire the latter’s 55% stake in Vodafone Egypt.

 

Write to Paromita Dey at paromita.d@argaam.com and

Christine El Cheikh at christine.elcheikh@argaam.com