FDI inflows fell again y-o-y in 3Q 2024

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Happy new year, folks

For the last time in 2024: Good morning, wonderful people. The news cycle here in the Kingdom pays no mind to the holiday season, giving the last issue of the year a healthy amount of substance and flavor.

** A QUICK PROGRAMMING NOTE- EnterpriseAM KSA will be off for the rest of the week as we take a publication holiday to gear up for 2025. We’ll be back in your inboxes at the usual time on Sunday, 5 January.

Until then: We wish you all a very happy new year and hope you enjoy ringing in 2025.

HAPPENING TODAY-

The new pay grade scheme for engineers in the public sector comes into effect today. The new system places engineers on a salary scale depending on where they fall within four categories — engineer, associate engineer, professional engineer, and consulting engineer.

Who’s eligible? The new salary scale targets engineers with bachelor’s degrees from accredited universities in the Kingdom or abroad, who are currently employed under the public employee pay grade. Accreditation from the Saudi Council of Engineers is also required.

WEATHER- Riyadh will see a high of 24°C and a low of 13°C today, while windy Jeddah will see a high of 27°C before tapering off to 21°C. Makkah is looking at a partly cloudy day with a 27°C high and 20°C low.

PSAs-

Taxpayers now have until 30 June, 2025 to benefit from Zatca’s fines and penalties waiving initiative after the Finance Ministry extended the initiative which was set to expire today, according to a statement from Zatca. The initiative waives penalties for late registration, payment delays, late filings, VAT corrections, and e-invoicing violations. Penalties for tax evasion and fines already paid are excluded.

WATCH THIS SPACE-

#1- PMG becomes the first Portuguese firm to establish RHQ in the Kingdom: Portuguese healthcare infrastructure company PMG is set to establish its regional headquarters in Riyadh, becoming the first Portuguese firm to set up an offshore branch in the Kingdom, according to a statement from the Federation of Saudi Chambers. The company specializes in building healthcare and research labs.

#2- European investors can now access Saudi government bonds through State Street Global Advisors’ newly-introduced ETF, the Financial Times reports. The SPDR JPMorgan Saudi Arabia Aggregate Bond Ucits ETF targets USD- and SAR-denominated liquid forms of government and quasi-government debt, including sukuk. The Ireland-domiciled ETF has been registered for sale in France, Italy, Spain, Germany, and the UK.

REMEMBER- Tokyo has a counterpart: Mizuho Financial Group launched the One ETF FTSE Saudi Arabia Index on the Tokyo Stock Exchange earlier this month. The USD 100 mn ETF allows Tokyo-based traders to invest in the Kingdom.

#3- Acwa Power secured a 1 GW renewables portfolio in China, marking the renewables giant’s first foray into the country, according to a disclosure to Tadawul. The portfolio includes both solar and wind projects. Acwa will hold full or partial ownership stakes in the portfolio assets with unnamed “leading Chinese renewable partners,” and is now “in advanced stages” to complete the investments.

REMEMBER- Acwa Power said earlier this month that it aims to secure a 1.3 GW pipeline of renewables developments in China by yearend, with plans to invest up to USD 50 bn by 2030 in renewables, green hydrogen, and desalination. The company is aiming to reach 4-6 GW of capacity by 2025 and to add 5-6 GW annually thereafter.

#4- Asas Makeen gets Nomu IPO clearance: Riyadh-based developer Asas Makeen Real Estate Development and Investment can now proceed with its plans to sell a 10% stake on Tadawul’s parallel market Nomu, after the Capital Market Authority signed off on the IPO, according to a statement. The approval is valid for six months.

#5- Syria’s newly appointed Foreign Minister Asaad Al Shaybani accepted an invitation from FM Faisal bin Farhan to visit the Kingdom, Al Shaybani said in a statement circulated by Syrian state news agency Sana. The visit — the exact timeline for which has not been disclosed — would be Shaybani’s first state visit as a representative of Syria’s post-Assad transitional government.

DATA POINTS-

#1- Tourist spending in the Kingdom grew 27.3% y-o-y in 3Q 2024 to SAR 25.1 bn, while locals traveling abroad spent 21.8% more y-o-y during the same quarter, recording SAR 26.3 bn, Arab News reports, citing central bank data.

#2- Saudi banks’ investments in treasury bonds reached SAR 586.6 bn in November, adding SAR 6.4 bn m-o-m, according to Argaam.

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THE BIG STORY ABROAD-

It’s a mixed bag in the international business press on the last morning of the year, with no single story dominating the front pages. Among the stories getting top billing this morning:

A court in South Korea approved issuing an arrest warrant for impeached President Yoon Suk Yeol for imposing martial law in the country at the beginning of the month. The warrant marks the first for an incumbent president in South Korea. (Reuters | The Guardian | Bloomberg)

Hackers breached the US Treasury and gained access to “certain unclassified documents” by remotely accessing some Treasury employees’ workstations, the Treasury Department said in a letter to Congress yesterday. The hack — which the department classified as a “major cybersecurity incident” — was carried out by a Chinese state-sponsored actor. (Bloomberg | New York Times | Financial Times)

Net FDI inflows drop again in 3Q 2024

Net foreign direct investment (FDI) in the Kingdom totaled SAR 16 bn in 3Q 2024, dipping 24% y-o-y, according to the General Authority for Statistics’ (Gastat) latest FDI report (pdf). Total FDI inflows for the quarter also slipped 21% y-o-y to SAR 18 bn, but are up from the SAR 11.7 bn recorded in 2Q 2024.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

Falling short: Third quarter figures put FDI inflow through the first nine months of the year at USD 14.5 bn, placing it below comparable figures for last year and only halfway towards meeting the government’s USD 29 bn 2024 target, Bloomberg notes. To meet its yearly target, “Saudi Arabia would need one of its biggest quarterly hauls ever for foreign investment” in 4Q 2024, the business information service said.

Outflows continue to trend upwards: FDI outflows rose 27% y-o-y at SAR 2 bn, building on the 14.1% rebound seen in 2Q.

REMEMBER- The Kingdom is targeting USD 100 bn in FDI per year as part of Vision 2030 and managed to bring in an estimated USD 19 bn in 2023 after averaging USD 17 bn per year between 2017-2022. Investment Minister Khalid Al Falih expressed cautious optimism on Saudi’s FDI goals earlier this year, noting that "all leading indicators are pointing upwards, all lights flashing green."

Almoosa Health’s Tadawul IPO retail tranche was 5.1x oversubscribed

Almoosa Health’s retail offering was 5.1x oversubscribed, logging orders worth SAR 1.4 bn, according to a press release (pdf). The hospital operator allocated 20% (2.7 mn shares) of its offering to the retail tranche, which saw 396k local and international investors book shares at SAR 127 apiece. Retail subscribers will be allocated a minimum of six shares apiece, with rump shares to be distributed on a pro-rata basis, the statement said. Almoosa priced its offering at the top of the guidance range at SAR 127 after its institutional tranche was 103x oversubscribed.

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REFRESHER- The Al Ahsa based hospital operator is taking a 30% stake to market in a combined offering that’s shaping up to be Saudi’s second-largest IPO of the year, following Fakeeh Care’s USD 764 mn Tadawul debut. Almoosa secured anchor investments for 22% of the offering, with another 33% earmarked for public funds.

Use of proceeds: Net proceeds — after deducting an estimated SAR 52.4 mn in offering-related expenses — will be distributed to selling shareholders Abdulaziz bin Abdullah Almoosa Investment and Abdulaziz Abdullah Almoosa Charity. The remainder is earmarked for financing the company’s growth plans and repaying outstanding debt.

ADVISORS- Our friends at EFG Hermes are underwriters and bookrunners on the transaction, alongside Banque Saudi Fransi Capital, which is also acting as lead manager and financial advisor. PwC is acting as financial due diligence advisor as well as market consultant, while Latham and Watkins is providing counsel. Moelis is advising selling shareholders.

Saudis are flying more this winter season

International flight searches originating in Saudi increased 33.6% this winter compared to last year, according to a statement (pdf) from travel app Wego. The report did not disclose which months were assigned to the winter or summer seasons and did not supply further details on its methodology.

Airfare costs were 25.5% cheaper this winter compared to this year’s summer peak travel season, and were down 3% y-o-y, according to the platform’s data.

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Where to? Wego search data pointed to Egypt, Pakistan, and India as the most popular winter destinations for Saudi-based travelers, followed by Turkey and the UAE. The trends reflect the large number of expatriates in Saudi choosing to travel back to their home countries for year-end holidays. Geographical proximity, cultural similarities, and accessibility also increased Turkey and the UAE’s appeal to Saudi-based year-end travelers, the travel app said.

Looking further afield: Saudi-based travelers also sought more distant destinations this winter, with Thailand, Indonesia, and the Philippines emerging as the most popular headings in Southeast Asia, while travelers to Europe preferred the UK, Azerbaijan, and Italy. Some of these destinations offer visa exemptions or simplified procedures for Saudis, with Thailand, Indonesia, the UAE, the Philippines, and Turkey not requiring a visa for entry, and Pakistan, India, Azerbaijan, and the UK only requiring an e-Visa or Electronic Travel Authorization (ETA).

Manara’s stake acquisition in Reko Diq mining project gets Pakistani cabinet approval

Major breakthrough in Saudi’s Reko Diq acquisition plans: Saudi Arabia reportedly secured approval from Pakistan’s cabinet to acquire a 15% stake in the Reko Diq copper-gold mining project for USD 540 mn, according to unconfirmed reports from Pakistani media outlets

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Background: PIF-backed Manara Minerals — a joint venture between the Public Investment Fund and Ma’aden — reportedly submitted an offer to acquire the stake in August, with reports at the time suggesting the offer could be worth USD 1 bn. A feasibility study on the planned acquisition was set to be completed by this month.

More on the sale: The 15% stake in Reko Diq will be acquired via direct transactions that are structured in two tranches. The first installment will involve a USD 330 mn payment for a 10% share in the mine, with the second seeing a USD 210 mn payment for another 5%. Additionally, the Saudi Fund for Development has pledged USD 150 mn to support mining in Balochistan while Saudi’s government has also expressed an interest in further mining investments in Chagai District, where the Reko Diq mine is located.

About Reko Diq: The project is 50% owned by Barrick Gold, 25% by Pakistan's federal government, and 25% by Pakistan’s Balochistan province. Currently in the feasibility phase, production is expected to kick off 2028. The estimated total project cost is between USD 6 bn and USD 6.5 bn, requiring USD 3 bn to USD 3.5 bn in debt financing.

SAR to reroute freight trains away from urban areas in Al Ahsa

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LOGISTICS-

Saudi Arabia Railways will reroute freight trains in Al Ahsa out of the urban areas starting 28 January, the national railway operator said in a post on X. The move aims to ease traffic congestion in Al Ahsa cities.

M&A WATCH-

Al Khaleej Training extends Adhwaa Al Hedeya’s acquisition deadline: Al Khaleej Training and Education pushed back the deadline for finalizing the acquisition agreement it signed to obtain an 80% stake in Adhwaa Al Hedeya Schools to 31 March, after it was due to expire today, it said in a disclosure to Tadawul.

REMEMBER- The share-swap acquisition was greenlit by the General Authority for Competition in September. The agreement will see Al Khaleej boost its capital by 34.9% to give the selling shareholder, Ethraa Holding, a 25.8% stake in Al Khaleej.

Corporate debt soars to record highs in 2024 amid investor appetite and favorable spreads

A bumper year for corporate debt: Global corporate debt issuances hit an all-time high of USD 7.93 tn this year, growing more than 33% y-o-y, the Financial Times reports, citing LSEG data. Companies jumped to tap debt markets amid increased investor appetite, which boosted supply and lowered corporate borrowing costs compared to government debt.

Tight credit spreads are making corporate debts attractive. Spreads on 10-year investment grade corporate bonds tightened to their lowest level since 2005 last Thursday, falling to 86 basis points above US treasuries from 116 bps by the end of 2023, according to S&P data cited by the Wall Street Journal.

Big companies saw the opportunity: Many corporates raced to the debt market this year to capitalize on the favorable spreads, with investment grade companies issuing a total of USD 1.66 tn in debt until 10 December, according to data from Dealogic. Among the issuers was Facebook parent Meta, which sold USD 10.5 bn of investment grade bonds in August, marking its largest-ever issuance.

Companies aimed to secure their borrowing needs early this year, anticipating market turbulence around the US elections in November. Donald Trump's re-election further lowered spreads, as markets anticipated tax cuts that would boost corporate earnings. This prompted companies to lock in favorable rates by borrowing for the next year as well.

The trend is expected to continue in 2025: Borrowing activity “will remain steady” into next year as companies move to refinance their low-cost debts, Marc Baigneres, global co-head of investment-grade finance at JPMorgan, told the FT. Financing acquisitions and capital investments will also fuel corporate issuances next year, amid an expected easing of both M&A regulation and monetary policy under Trump, advisors told WSJ.

MARKETS THIS MORNING-

Asian markets are in the red this morning, following the sell-off on Wall Street. Japan’s Nikkei fell 1.0% in early trading, and Shanghai Composite fell 0.1%. Meanwhile, Wall Street futures are inching up in overnight trading.

TASI	12,001	+0.9% (YTD: +0.3%)
MSCI Tadawul 30	1,506	+0.8% (YTD: -2.9%)
NomuC	31,513	+1.5% (YTD: +28.5%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	29,325	-0.9% (YTD: +17.8%)
ADX	9,416	+1.0% (YTD: -1.7%)
DFM	5,153	+0.5% (YTD: +26.9%)
S&P 500	5,907	-1.1% (YTD: +23.8%)
FTSE 100	8,121	-0.4% (YTD: +5.0%)
Euro Stoxx 50	4,869	-0.6% (YTD: +7.7%)
Brent crude	USD 74.39	+0.3%
Natural gas (Nymex)	USD 3.89	-1.1%
Gold	USD 2,621.2	+0.1%
BTC	USD 92,382	-1.1% (YTD: +117%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.9% yesterday on turnover of SAR 5.2 bn. The index is up 0.3% YTD.

In the green: Saudi Re (+10.0%), SIDC (+9.0%) and Walaa (+7.4%).

In the red: AlKhaleej Trng (-3.3%), Sisco Holding (-2.9%) and Care (-2.1%).

THE CLOSING BELL: NOMU-

The NomuC rose 1.5% yesterday on turnover of SAR 54.3 mn. The index is up 28.5% YTD.

In the green: Future Care (+20.0%), Dar AlMarkabah (+11.8%) and Azm (+11.1%).

In the red: Leen Alkhair (-9.6%), Purity (-7.1%) and Mulkia (-6.5%)

CORPORATE ACTIONS-

Salama Cooperative Ins. share issuance was 86.9% subscribed: Investors subscribed to 8.69 mn shares at SAR 10 apiece in Salama Cooperative Ins. offering of 10 mn shares, bringing the subscription rate to 86.9% and raising SAR 86.9 mn in proceeds, the firm said in a disclosure to Tadawul. Rump shares will be put on offer to institutional investors, with remaining unsubscribed shares allocated to the offering’s underwriter Alawwal Capital at the SAR 10 offering price.

ICYMI: The ins. player issued a prospectus for the rights offering last October as it moved to hike its capital by 50% to SAR 300 mn after obtaining approval from the Capital Market Authority. Net proceeds of the issuance will go towards supporting growth plans and maintaining a central bank-imposed solvency margin requirement, after deducting an estimated SAR 11.3 mn in offering costs. Shareholders will not receive any of the offering’s proceeds.

ADVISORS- Salama tapped Alawwal Capital as financial advisor, lead manager, and underwriter, with Al Nefaie Investment stepping in as an additional lead manager.

Yanbu National Petrochemical Company (Yansab) will distribute SAR 562.5 mn in dividends at SAR 1 apiece for 2H 2024, according to a disclosure to Tadawul. Eligible shareholders will be able to cash-in starting Sunday, 16 March.

CALENDAR

DECEMBER

31 December (Tuesday): Last day for taxpayers to benefit from Zatca’s fines and penalties waiving initiative.

31 December (Tuesday): Engineers in the public sector will be subject to a new pay grade scheme.

1Q: BinDawood Holding expected to close 100% acquisition of Zahrat Al Rawdah Pharma

1Q: Roshn expected to raise SAR 2.6 bn from international bank

JANUARY 2025

1-17 January (Wednesday-Friday): 2025 Dakar, Bisha and Shubaytah.

5 January (Sunday): Launch day for Riyadh Metro line 3.

7-9 January (Tuesday-Thursday) Saudi Tourism Forum, Riyadh Front, Riyadh.

9 January (Thursday): Deadline to submit applications for the Saudi Capital Market Awards.

12 January (Sunday): Launch ceremony of the standard incentives for the industrial sector.

13-16 January (Monday-Thursday): Hajj Conference and Exhibition, Superdome, Jeddah.

14-16 January (Tuesday-Thursday): Future Minerals Forum, King Abdulaziz International Conference Center, Riyadh.

15-16 January (Wednesday-Thursday): The International Learning and Technology Conference, Effat University, Jeddah.

18 January (Saturday): Deadline for companies to amend status under the New Companies Law.

21 January (Tuesday): Data Center Nation, Mandarin Oriental Al Fasisaliah, Riyadh.

21-23 January (Tuesday-Thursday): The International Exhibition for Material Handling, Equipment, Warehouse Supplies, Forklifts & Heavy Equipment, Riyadh International Exhibition Center.

21-23 January (Tuesday-Thursday): Saudi International Exhibition for E-Marketing and E-Commerce, Riyadh International Convention and Exhibition Center.

25 January (Saturday): The opening of the 2025 Islamic Arts Biennale, Western Hajj Terminal of King Abdulaziz International Airport, Jeddah

27-29 January (Monday-Wednesday): Real Estate Future Forum, Four Seasons Hotel, Riyadh.

27-29 January (Monday-Wednesday): Saudi Franchise Expo, Riyadh International Convention and Exhibition Center.

28-29 January (Tuesday-Wednesday): Federal Open Market Committee meeting.

28-29 January (Tuesday-Wednesday): Sustainability Forum Middle East, Riyadh.

29-30 January (Wednesday-Thursday): Global Labor Market Conference, Riyadh.

31 January (Friday): Deadline for businesses to update their registered customs items.

FEBRUARY 2025

1 February (Saturday): UFC event, The Venue, Riyadh.

2 February (Sunday): Flyadeal launches direct flights to Karachi, Pakistan, departing from Riyadh and Jeddah twice a week.

3-5 February (Monday-Wednesday): Saudi International Marine Exhibition (SIMEC), Riyadh.

4-5 February (Tuesday-Wednesday): The RLC Global Forum, Riyadh.

4-5 February (Tuesday-Wednesday): Capital Markets & ESG Finance, Hilton Riyadh Hotel & Residences.

6 February (Thursday): Property registration deadline for owners in several districts of seven Qassim cities.

6-8 February (Thursday-Saturday): LIV Golf season opener, Riyadh Golf Club, Riyadh.

8 February (Saturday): Sotheby’s first auction in the Kingdom, Diriyah.

9-12 February (Sunday-Wednesday): LEAP Tech Conference, Malham, Riyadh.

9-12 February (Sunday-Wednesday): DeepFest by Leap, Riyadh.

10-12 February (Monday-Wednesday): Saudi Travel Market, Riyadh International Exhibition Center.

10-13 February (Monday-Thursday): Leap 2025, the Kingdom’s premier tech investment conference.

14-15 February (Friday-Saturday): Formula E, Diriyah.

15-18 February (Saturday-Tuesday): Week one of Big 5 Construct Saudi, Riyadh Front Exhibition & Conference Center.

16-17 February (Sunday-Monday): AlUla Conference for Emerging Market Economies, AlUla.

18 February (Tuesday): The Capital Markets Forum, KAFD Conference Centre, Riyadh.

19-20 February (Wednesday-Thursday): The Capital Markets Forum, The Four Seasons, Riyadh.

19 February (Wednesday): Derayah REIT dividend distribution.

19-21 February (Wednesday-Friday): Saudi Media Forum, Riyadh.

22 February (Saturday): Founding Day.

23-27 February (Sunday-Thursday): Riyadh International Disputes Week, Hilton Riyadh Hotel Granada.

24-25 February (Monday-Tuesday): The Riyadh International Humanitarian Forum, Riyadh.

24-27 February (Monday-Thursday): Week two of Big 5 Construct Saudi, Riyadh Front Exhibition & Conference Center.

MARCH 2025

1-30 March: Ramadan.

18-19 March (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

31 March- 3 April (Monday-Thursday): Eid Al Fitr.

APRIL 2025

14-16 April (Monday-Wednesday): Future Hospitality Summit, Mandarin Oriental Al Faisaliah, Riyadh.

21-24 April (Monday-Thursday): Saudi Food Exhibition and Conference, Riyadh.

22-23 April (Tuesday-Wednesday): AAM Middle East, Riyadh.

7-9 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

MAY 2025

6-7 May (Tuesday-Wednesday): Federal Open Market Committee meeting.

12-15 May (Monday-Thursday): Saudi Smart Manufacturing, Riyadh International Convention & Exhibition Center.

13-14 May (Tuesday-Wednesday): Global EV & Mobility Technology Forum, The Arena, Riyadh.

23 May (Friday): Guns N’ Roses Show, Riyadh.

31 May-5 June (Saturday-Thursday): Hajj.

JUNE 2025

6-9 June ( Friday-Monday): Eid al-Adha.

17-18 June (Tuesday-Wednesday): US Federal Reserve’s Federal Open Market Committee meeting.

26 June (Thursday): 2024-2025 academic year ends.

JULY 2025

31 July (Thursday): Deadline for companies with SAR 2.5 mn or more in 2022/2023 revenues to integrate e-invoicing solutions with Fatoora.

29-30 July (Tuesday-Wednesday): Federal Open Market Committee meeting.

SEPTEMBER 2025

15-17 September (Sunday-Tuesday): Money 20/20 Middle East, Riyadh.

17-18 September (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

23 September (Tuesday): Saudi National Day.

OCTOBER 2025

28-29 October (Tuesday-Wednesday): Federal Open Market Committee meeting.

NOVEMBER 2025

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front Convention & Exhibition Centre, Riyadh.

DECEMBER 2025

December: The Fortune Global Forum 2025, Riyadh.

9-10 December (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

2026

UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.

26-29 October (Monday-Thursday): World Energy Congress, Riyadh.

2027

The World Water Forum takes place in Riyadh.

The Ocean Race finishes in Amaala on the Red Sea.

Riyadh-Kudmi transmission line to be completed.

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