Construction + commercial licenses, infrastructure licenses get new regulations

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Leap, Deepfest and the EFG Hermes One on One kick off

Good morning, wonderful people. It’s a mixed bag this morning with a handful of regulatory news, as well as bits and pieces on retail, aviation, financial services — and a touch of golf.

HAPPENING TODAY-

The talked up tech event LEAP 2024 and its co-located AI-focused offshoot Deepfestkick off in 3 hours at the Riyadh Exhibition and Convention Center. The gathering wraps up on Thursday, 7 March. The four-day event is expected to attract more than 1k top executives, investors and industry insiders. It will also provide a pitch and exhibition platform for 600 startups and 1.8k tech exhibitors. Investments worth USD 9 bn were announced during last year’s event, setting the stage for a promising meeting this year. As many as 172k visitors are expected to attend.

Today’s lineup features some of the biggest industry names including IBM Chairman Arvind Krishna, Zoom Video Communications CEO Eric Yuan, Google Managing Director for Global AI Caroline Yap, Airbus Senior VP Grzegorz Ombach, Ericsson President & CEO Borje Ekholm, Plug and Play CEO Saeed Amidi, and Aramco President & CEO Amin Nasser. Sessions include panels and firechats to discuss everything from healthtech and space, to media, smart cities, 4IR, the creative economy, and startups.

ALSO TODAY- A handful of us are in Dubai for EFG Hermes’ One on One, which kicks off today and will run through Thursday. The event will see some 670 investors from 250 global institutions meet face-to-face with senior execs from more than 215 companies in industries spanning from food and fintech to banking and petrochemicals. Companies from 29 countries will be attending.

** If you’re in Dubai and want to have coffee or pitch us on an interview, hit us up on 1x1@enterprisemea.com.

^^ We’ll have coverage of Leap and the One on One starting tomorrow and continuing into next week.

MEANWHILE- Commerce Minister Majed bin Abdullah Al Qasabi will hold talks with his Egyptian counterpart Trade Minister Ahmed Samirin Riyadh today on the sidelines of the Egypt-Saudi Joint Committee meeting, Riyadh Daily reports. The committee will discuss bilateral cooperation in industry, housing, oil, education, and tourism.

WEATHER- Expect clear skies in Riyadh today, with lots of sun in Makkah and Madinah.

Riyadh: 27°C daytime / 16°C overnight
Makkah: 33°C daytime / 22°C overnight
Madinha: 30°C daytime / 17°C overnight

DATA POINTS-

#1- Tadawul outperformed its GCC peers last month, according to a Kamco report (pdf) yesterday. The index gained 7% last month, followed by Qatar Stock Exchange (3.8%) and Dubai Financial Market (3.4%). TASI reported the best monthly return among its peers in GCC, ending the month at its highest close (12.6k points) since June 2022.

Tadawul came in third in terms of YTD gains, rising 5.4% since the start of the year behind DFM and Boursa Kuwait, which topped rankings for YTD gains in the GCC.

#2- The number of SMEs in the country reached 1.3 mn by the end of 2023, according to the latest data from Monshaat (pdf).

Micro-sized firms were king of SMEs in 4Q:

Micro-enterprises accounted for 1.14 mn of all SMEs (up from 1.1 mn in the previous quarter;
Small-sized companies came in at 150.8k (down from 151.2k);
Medium-sized enterprises were at 18.7k (up from 18.2k).

#3- The digital economy contributed 14% to GDP in 2022, according to the latest General Authority of Statistics data (pdf). 48% of companies purchased cloud computing services, with ICT firms accounting for 68% of companies buying the services.

#4- Our date exports to 119 countries grew by 14% y-o-y to SAR 1.5 bn in 2023, Arab News reported yesterday.

OIL WATCH-

The government will extend voluntary oil cuts until June 2024 in a bid to boost prices, an unnamed Energy Ministry source told state news agency SPA yesterday. The source said Saudi would extend its voluntary oil curbs of 1 mn barrels per day (bpd) applied from July last year to June 2024, maintaining production at 9 mn bpd. The move was agreed with several OPEC+ countries, the source said, adding that the voluntary cuts would be scaled back gradually depending on market conditions.

Russia deepens cuts: Russia plans to slash output by an additional 471k bpd until June, according to a statement by Russia’s Deputy Prime Minister Alexander Novak. It will lower output by 350k bpd in April, 400k bpd in May and 471k bpd in June.

The extension-line up: Other OPEC+ members announcing the extension of cuts include Iraq, UAE, and Kuwait, including to a statement by OPEC. It said the extension aims to support and balance oil markets.

PSAs-

#1- Charity iftar tables will be allowed in designated areas at mosques across the Kingdom, with imams banned from collecting donations for the communal meals, a circular posted on X by the Islamic Affairs, Dawah and Guidance Ministry said.

#2- Applications for new educational posts from the Education Ministry will opentomorrowthrough unified employment platform Jadarat, Okaz reported yesterday.

WATCH THIS SPACE-

#1- Chile’s Joaquin Niemann won LIV Golf Jeddah in a four-stroke victory, according to a statement yesterday. This is the 25-year-old Australian Open title holder’s second title this year, placing him on top of the season-long Individual Championship standings.

#2- On the lookout for emerging Saudi comedians: The General Entertainment Authority will back a new initiative aimed at supporting new local comedian talents, state news agency SPA reported yesterday. The initiative, dubbed Comedy Factory, will offer workshops, training sessions and competitions geared towards ramping up the local entertainment scene. (You can find the registration link here.)

CIRCLE YOUR CALENDAR-

Jeddah will host the Bloomberg Power Players Summit on Thursday, 7 March. The summit, sponsored by Bloomberg in Saudi with Asharq Business, will be held against the backdrop of the Formula One Saudi Arabian Grand Prix. It will bring together industry leaders in sports, entertainment and technology to identify potential multi-USD investments.

Tickets are on sale for the 2024 Saudi Arabian Grand Prix, scheduled for Jeddah from 7-9 March.

Riyadh will host a World Economic Forum special meeting on 28-29 April.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Cenomi Centers closes another FCY sukuk issuance. PLUS: A separate offering expires today

Our friends at Cenomi Centers have wrapped up a USD 500 mn sukuk saleas the lifestyle centers operator looks to shore up liquidity and refinance a sukuk issuance due to mature in November 2024, it said in a regulatory filing to Tadawul. Sukukholders will need to deposit their investments with the underwriter this Wednesday, 6 March. The FCY issuance, which kicked off last week, is part of the retail giant’s international borrowing program.

Maturity + yield: The five-year USD-denominated issuance carries a 9.5% fixed annual yield, with the option for early redemption as outlined in the offering circular. The issuance is not expected to have any impact on Cenomi’s creditworthiness, according to the filing.

Listing + trading sukuks on TSIE: Cenomi filed an application to the International Stock Exchange seeking permission to list and trade its sukuk certificates on the official list of the exchange.

ADVISORS- Cenomi tapped our friends at HSBC along with Goldman Sachs as joint global coordinators, bookrunners and joint lead managers. ANB capital, Dubai Islamic Bank, Emirates NBD Capital, GFH Financial Group, J.P. Morgan Securities, Kamco Investment, Mashreq, Sharjah Islamic Bank and Warba Bank will act as joint lead managers and bookrunners.

A separate issuance is expiring today: The retail giant is still accepting orders for its USD 500 mn trust certificates until 4 pm GMT today (7 pm KSA), according to an earlier filing.

Boasting a healthy debt profile: The company had debt on the books of about SAR 8.9 bn in 9M 2023, against SAR 27 bn in portfolio value, ultimately resulting in a 33% loan-value ratio which is “quite strong and quite healthy for a real estate company,” CEO Rehill-Erguven said earlier this month.

PIF-owned Helicopter Company goes on a heli-frenzy at heli-expo in California

PIF-owned Helicopter Company buys up helicopters at California expo: The Helicopter Company (THC) — the Kingdom’s first commercial helicopter operator owned by the Public Investment Fund (PIF) — signed a number of agreements with global players for new helicopter orders as it looks to expand its fleet. The agreements were signed during the global helicopter exhibition Heli-Expo in California last week. No financial details on the agreements were disclosed.

THC signed a “historic” framework agreement with Airbus to purchase up to 120 helicopters of different models to be delivered over the next five to seven years, according to a statement from Airbus. The agreement sees an order for eight H125 helicopters to use in aerial work and tourism, along with 10 H145s converted from a previous contract into firm orders. The H145 fleet will be used for emergency medical services and corporate transport. This brings THC’s helicopter fleet from Airbus to 60, with 25 already in service, according to the statement.

And helicopters from the Italians: THC also placed an order for 20 AW139 intermediate twin-engine helicopters from Italy’s state-owned defense and aerospace Leonardo for use in emergency medical service and search and rescue operations, Leonardo said in a statement. Deliveries for the multi-mission helicopters are expected next year and 2026. They also announced a multi-year framework agreement for over 130 aircraft, with some orders made during the first half of this year and deliveries within five to seven years.

Upon deliveries of the AW139s, THC will be among top operators of the multi-mission helicopters globally with 50 choppers in its arsenal, according to the statement.

And that’s not all: The THC also signed a MoU with US-based Bristow Group subsidiary Bristow Arabia Aircraft & Maintenance Service to “work together on advanced air mobility (AAM) initiatives as well as other collaborative vertical lift endeavors,” according to a statement by Bristow Group.

About the helicopter operator: Launched in 2019, the THC was set up to provide private transport among cities and a range of missions, including emergency services, search and rescue and others. It aims to boost its fleet to 60 by 2025 after growing its fleet to 30 within three years of its establishment.

New regs. for obtaining construction, commercial licenses

Municipal licensing procedures law gets exec regs outlining license validity rules: Homeowners along with business owners and event organizers will have to abide by the new executive regulations of the municipal licensing procedures law. The move aims to outline and streamline the procedures for issuing, renewing, and modifying new and existing construction and commercial licenses.

New validity rules: Licenses for all types of construction — excluding buildings — have a maximum validity of 12 months, while the older rules had a validity of 1-3 years, according to the regulations published in the National Gazette. The validity of permits for the construction of buildings remains unchanged from the old rules (pdf) at three years. These types of licenses can be renewed for one additional year or to multiple terms of equal durations to the original validity.

Commercial licenses have a validity period of 1-5 years depending on the requested duration, while activities that fall under sectors of healthcare, hazardous materials, and service centers will have a permit validity of 12 months. The older version didn’t stipulate a specific validity period, but rather left it in the hands of the relevant government institutions under which the supervision of the activity falls to make decisions in accordance with their own rules. Street vendors have to renew their permits every 12 months.

Riyadh Infrastructure Projects to issue, oversee infrastructure projects in town

The Riyadh Infrastructure Projects Centerwill be tasked with the issuance of licenses and oversight of infrastructure projects in the capital, as per rules governing the sector published in the official gazette Umm Al Qura last week. The rules, which were approved by the Cabinet over the summer, aim to improve the quality of life, enhance urban landscape and ensure spending efficiency.

Scope + responsibilities: With the new rules, the center becomes the main authority to issue licenses for infrastructure projects before commencement of work. The center’s scope of authority allows it to amend, renew, withdraw, revoke or cancel licenses whether temporarily or permanently, along with fees collection.

Ironing out the details:License duration and fees are determined based on type of works with permits valid for a duration ranging from a month to up to 300 days. The fees range from SAR 0.1-SAR 20 depending on activities. The set infrastructure works include those for roads and highways.

A look at violations + penalties: The rules outlined two types of violations, with minor violations including failure to put signs with the name of the project/contractor on the site’s barriers. It set serious violations as working without permits, failure to renew licenses, shutting down roads, causing damage to public property and others. Penalties range from SAR 1k up to SAR 50k depending on the severity of the violation, with violators getting only one day as a correction period. Contractors can appeal the penalties within 60 days of receiving a notification order through specialized administrative courts, with penalties not enforced until the appeals period has passed.

More earnings: Zain KSA, Bawan, Obeikan Glass report financial results

ZAIN KSA-

Telecom operator Zain KSA’s net income grew 2.3x y-o-y to SAR 1.3 bn in 2023, it said in a disclosure to Tadawul. Revenues were up 9% y-o-y to a record high of SAR 9.9 bn over the same period on the back of growth in B2B, 5G sector, digital products line and fintech subsidiary Tamam.

Dividends: The board of directors has proposed a dividend payout of SAR 449 mn at SAR per share for 2023, it said in a separate disclosure.

BAWAN CO-

Industrial group Bawan Co’s net income fell 16.5% y-o-y to SAR 136 mn in 2023mainly due to lower income from its metal and wood segments and a net loss of SAR 2.5 mn from discontinued operations from its concrete segment, it said in a disclosure to Tadawul. Revenues dipped 0.4% y-o-y to SAR 3.4 bn over the same period.

Dividends: The board has proposed a dividend payout of SAR 51 mn at SAR 0.85 per share for 2023, it said in a separate disclosure. Investors can cash out on Monday, 29 April.

OBEIKAN GLASS-

Glass manufacturer Obeikan Glass Co.'s net income fell 64% y-o-y to SAR 64 mn in 2023, while revenues dropped 21.6% y-o-y to SAR 394 mn over the same period, it said in a disclosure to Tadawul.

OPEC production caps lead the conversation on Saudi Arabia

Surprising no one, the extension of voluntary production caps by OPEC+ members led by the Kingdom and Russia dominated coverage by the foreign press. The extension of cuts got ink from Bloomberg | Reuters | The Financial Times | AFP | CNBC and others.

Meanwhile, Niemann’s four-stroke victory at LIV Golf Jeddah got coverage from Associated Press | BBC | Sky Sports.

STC + Extend launch two new separate funds. PLUS: Capital Markets, Debt, Infrastructure, Construction, Healthcare

FINANCIAL SERVICES-

#1- STC has launched a capital investment arm, Tali Ventures, to invest inearly-stage startups that align with the telecoms giant’s growth and innovation strategies, state news agency SPA reports. The fund will support startups in AI, fintech, ICT, cloud-based services, IoT, and cybersecurity. Tali’s current portfolio includes network equipment solutions company Nile Co, inventory management Rewaa platform, and India-based fintech player NearbyPay.

#2- Extend unveils SAR 100 mn investment fund for SMEs: Advertising services provider Extend launched a SAR 100 mn fund with investment management firm Rasanah Capital to invest in small and medium sized enterprises operating in digital media and production, arts and arabic culture, it said in a Linkedin post earlier this week. The launch of the fund aims to “accelerate strengthening the Kingdom’s position as a hub for Arabic culture on a global scale.”

There’s also an academy: Extend has partnered with French design institute Intuit Lab School and creative technology platform Peaksource Group to launch the Extend Academy, according to a separate post. The specialized academy will offer educational and training programs for media, strategic planning, analysis and report preparation. The academy targets training 200 students annually, with about 40 graduates in each track.

ENERGY-

Masco Group to build 60 MW solar plant in Republika Srpska:Local contractor Masco Group could set up a 60 MW solar plant in Republika Srpska under an MoU with the government in the Serbian entity within Bosnia and Herzegovina, Sarajevo Times reported earlier this week. The project — which is valued at EUR 70 mn — will be built on property owned by Srpska’s Internal Affairs Ministry.

Masco Group already has projects in the pipeline: The company currently has a hydrogen extraction facility underway in Srpska, Sarajevo Times writes. The Serbian entity is also looking to collaborate with Masco Group on road infrastructure projects and the use of hydrogen as a fuel for heavy machinery.

CAPITAL MARKETS-

Al Rajhi Capital will act as a market maker for Edarat Communication and Information Technology’s shares on parallel market Nomu, according to a Tadawul disclosure.

DEBT WATCH-

Egypt’s non-bank financial services provider Contact Financial Holding plans to expand to Saudi in 2025, its CEO Said Zater told Asharq Business in an interview (watch, runtime: 5:26) yesterday. He said his company was currently studying costs for expansion in Saudi and demographics related to Egyptian expats residing there to unroll its services.

INFRASTRUCTURE-

Gas Arabian Services (GAS) secured two pipeline contracts worth a combined SAR 598 mn from the Saudi Power Procurement Company (SPPC), it said in two separate Tadawul disclosures (here and here). GAS will carry out engineering, procurement and construction (EPC) works on the Taiba GAS pipeline and the Qassim GAS Pipeline.

HEALTHCARE-

Some 95 Sri Lankan nurses will be posted in government hospitals across the Kingdom starting in May 2024, while the next phase of recruitment kicks off in August as part of the government’s push for hiring enough talent to meet the growing demand, Arab News reports. This number is expected to reach 1k nurses in the next 12 months.

Fed’s Jerome Powell expected to fend off hopes of an imminent rate cut

The Fed is in no hurry to cut rates: US Federal Reserve Chief Jerome Powell is widely expected to deliver a hawkish message on interest rates to the US House and Senate in a semiannual monetary policy testimony on Wednesday and Thursday, writes Bloomberg.

The why: The Fed is worried that the “danger of moving too soon is that the job’s not quite done,” Powell told CBS in early February (watch, runtime: 13:20). US inflation data released later in the month validated his concerns that inflationary pressures persist, showing that underlying inflation rose in January by the most in eight months, up 0.4% from the month before and 2.8% on an annual basis, according to the Fed’s preferred core personal consumption expenditures price index.

Refresher: The Fed embarked on an aggressive monetary tightening policy in March 2022 in the wake of soaring inflation triggered by the Ukraine war. Interest rates are currently at a 22-year high at 5.25-5.5%, which marks their highest level since 2001.

Down	TASI	12,555.20	-0.6% (YTD: +4.9%)
	MSCI Tadawul 30	1,609.62	-0.9% (YTD: +3.8%)
	USD : SAR (SAMA)	3.75 Sell	3.75 Buy
	Interest rates	6% repo	5.5% reverse repo
	EGX30	29,058.33	+0.3% (YTD: +16.7%)
	ADX	9,278.91	+0.3% (YTD: -3.1%)
	DFM	4,356.61	+1.1% (YTD: +7.3%)
	S&P 500	5,137.08	+0.8% (YTD: +7.7%)
	FTSE 100	7,682.50	+0.7% (YTD: -0.7%)
	Euro Stoxx 50	4,894.86	+0.4% (YTD: +8.3%)
	Brent crude	USD 83.55	+2%
	Natural gas (Nymex)	USD 1.84	-1.3%
	Gold	USD 2,095.70	+2%
	BTC	USD 62,961.15	+1.6% (YTD: +180.8%)

THE CLOSING BELL-

The TASI fell 0.6% yesterday on turnover of SAR 12.6 bn. The index is up 4.9% YTD.

In the green: AlRajhi Takaful (+9.9%), Saudi Steel Pipe (+9.9%) and Avalon Pharma (+7.6%).

In the red: Zain KSA (-6.3%), Amiantit (-4.3%) and Hail Cement (-4.1%).

Gaza dominates talks at the GCC ministerial meeting with regional counterparts

Foreign Minister Prince Faisal bin Farhan took part in joint ministerial meetings between GCC countries and counterparts from Egypt, Morocco and Jordan in Riyadh, state news agency SPA reported yesterday (here, here and here). The ministers discussed developments in Gaza and reiterated the urgency of an immediate ceasefire for the war-torn strip. Bilateral relations and means to strengthen them further were also discussed.

Al Durra gas field only owned by Saudi and Kuwait, says GCC: Gulf Cooperation Council (GCC) ministers said the Al Durra gas field and its natural resources are only jointly owned by the Kingdom and Kuwait, according to a joint communique following the conclusion of the GCC ministerial meeting in Riyadh. Saudi and Kuwait have repeatedly affirmed their joint ownership, while Iran claims it has the rights to the field, which it names Arash. Talks to agree on a border demarcation between the two parties collapsed last year.

CALENDAR

MARCH

7 March (Thursday): Bloomberg Power Players Summit, Jeddah.

7-9 March (Thursday-Saturday): 2024 Saudi Arabian Grand Prix, Jeddah.

10 or 11 March: First day of Ramadan (tbc based on sighting of the crescent moon).

11 March (Monday): Flag Day (national holiday)

APRIL

10 April (Wednesday): Eid al-Fitr (tbc based on the start date of Ramadan)

14-21 April (Sunday-Monday): IMF and World Bank spring meetings, Washington, DC

28-29 April (Sunday-Monday): World Economic Forum’s Special Meeting, Riyadh.

29 April-1 May: Future Hospitality Summit at Al Faisaliah Hotel, Riyadh.

MAY

2-5 May (Thursday-Sunday): TownhallExpo, Riyadh.

19-21 May (Sunday-Tuesday): Saudi Energy Convention, Riyadh.

21-23 May (Tuesday-Thursday): The Saudi Food Show, Riyadh.

Signposted to happen sometime in May:

Global Trade Review (GTR): KSA
Saudi Energy Convention

JUNE

5 June (Wednesday): World Environment Day.

Signposted to happen sometime in June:

Eid Al-Adha (national holiday)

AUGUST

12-15 August (Monday-Thursday): The Saudi Food Expo, Riyadh

SEPTEMBER

11-12 September (Wednesday-Thursday): The Saudi Event Show, Riyadh.

23 September (Monday): National Day (national holiday)

DECEMBER

2-13 December (Monday-Friday): Conference of the Parties (COP16) to the United Nations Convention to Combat Desertification, Riyadh.

Signposted to happen sometime in 2024:

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