{"id":85098,"date":"2024-04-07T00:00:00","date_gmt":"2024-04-07T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/04\/07\/riyad-capital-is-eyeing-a-tadawul-ipo\/"},"modified":"2024-04-07T00:00:00","modified_gmt":"2024-04-07T00:00:00","slug":"riyad-capital-is-eyeing-a-tadawul-ipo","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/04\/07\/riyad-capital-is-eyeing-a-tadawul-ipo\/","title":{"rendered":"Riyad Capital is eyeing a Tadawul IPO"},"content":{"rendered":"

Good morning<\/strong>, friends, and welcome to the next-to-last workday of Ramadan. Like others across the Kingdom and the Muslim world, we\u2019ll be looking skyward tomorrow evening to see the Shawwal crescent that signals the end of Ramadan and the beginning of Eid Al Fitr. <\/p>\n

We have a meaty issue for you this morning <\/strong>before we send you off on vacation.<\/p>\n

REMEMBER-<\/strong> Businesses will be off for Eid Al Fitr from Tuesday, 9 April, through Friday, 13<\/a>April<\/a>, while banks and the stock market are from today and back on Sunday, 14 April<\/a>..<\/p>\n

PROGRAMMING NOTE- This is our only issue this week. <\/strong>EnterpriseAM Saudi will be off for the rest of the week for Eid \u2014 we look forward to being back in your inboxes before 7am on Sunday, 14 April. We hope you\u2019re looking forward to a beautiful break with family and friends.<\/p>\n

** Tap or click here to read this section with all of the links <\/strong>to our background stories as well as external sources.<\/p>\n

WATCH THIS SPACE-<\/p>\n

<\/a> #1- IPO WATCH- Riyad Capital may be on the verge of an IPO: <\/strong>PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital<\/a>, the Kingdom\u2019s third largest bank by assets said in a disclosure to Tadawu<\/a> l. Both Riyad Bank and Riyad Capital will conduct \u201can assessment and preparation including determining the size, structure and the other relevant details of the IPO,\u201d the disclosure read without providing further details. The transaction would also require regulatory approval.<\/p>\n

The first spin-off of its kind: <\/strong>An IPO would see Riyad Capital operate as a distinct unit from its parent company, making Riyad Bank the first local lender to spin-off its investment banking unit.. EFG Hermes banking analyst Shabbir Malik tells Reuters<\/a> he believes the bank is pushing with a plan to monetise a unit whose value is \u201cnot [clearly] reflected at the moment.\u201d<\/p>\n

Who owns what? <\/strong>The PIF owns a 21.8% stake in Riyad Bank, while the government holds a 10.4% stake.<\/p>\n

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#2-<\/strong> Saudi is launching a <\/strong>USD 3 bn vehicle to invest<\/a><\/strong> in industries across Iraq. <\/strong>Dubbed the Saudi-Iraq Investment Co, the company will pursue transactions in the \u201cinfrastructure, mining, agriculture, real estate development and financial services\u201d sectors. The company, announced late yesterday, mirrors similar outfits set up to pursue investment in Egypt, Oman, Bahrain, Sudan, and Jordan. <\/p>\n

In context: <\/strong>Saudi in February pledged USD 1.5 bn to help Iraq rebuild<\/a>, including USD 1 bn in finance through the Saudi Fund for Development and another USD 500 mn in export credit. <\/p>\n

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#3- Saudi, GCC funds eye China\u2019s distressed real estate sector: <\/strong>Gulf investment funds are in talks to acquire stakes in distressed Chinese real estate developers, Aleqtisadiah<\/a> reported last week, citing sources close to the matter. Investors from Saudi, Qatar, and Kuwait are in advanced talks, the newspaper writes, saying the transactions could prove interesting entry points into the massive Chinese market.<\/p>\n

Abu Dhabi sovereign wealth fund Mubadala and the Abu Dhabi Investment Authority are <\/strong>already there:<\/strong> They joined a consortium of investors led by Hong Kong-based private equity giant PAG in February<\/a> for a USD 8.3 bn investment in the mall unit of Chinese property giant Dalian Wanda, taking a 60% stake.<\/p>\n

BACKGROUND- The Chinese real estate sector has been hit by crises since the <\/strong>pandemic<\/strong> after a liquidity crunch triggered by a regulatory crackdown on high leverage among developers. Housing starts \u2014 a measure of new residential construction \u2014 fell by over 60% in comparison with pre-pandemic levels, with sales taking a hit on concerns that developers will not be able to complete projects due to a lack in funding, according to the IMF in February<\/a>.<\/p>\n

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<\/a> #4- STC Pay is turning into a digital bank: <\/strong>Saudi Telecom\u2019s e-wallet business STC Pay<\/a> received Saudi Central Bank (Sama) approval to transition into a digital bank and will brand itself as STC Bank, it said in a post on X<\/a> last week. The beta launch will see a number of selected users\u2019 digital wallets upgraded into a full-service bank accounts. STC Bank will offer Shariah-compliant banking services and solutions to its clients, with a full launch of the digital bank planned this year, according to the statement.<\/p>\n

About STC Pay: <\/strong>Established in 2018, STC Pay became the first Sama-licensed fintech company, emerging to become the GCC\u2019s largest e-wallet with 12 mn customers. It recently obtained Sama\u2019s approval to turn into a digital bank.<\/p>\n

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#5- Aramco, and Shell are going head-to-head in negotiations for Temasek\u2019s <\/strong>Pavilion Energy LNG <\/strong>assets<\/strong>, Reuters<\/a> reported last week. The interest in the assets, which could bring in over USD 2 bn, comes as Aramco looks to increase its exposure to LNG after marking its entry<\/a> into the business with a minority stake acquisition in MidOcean Energy last year. Aramco wants to boost its total natgas production by over 60% by 2030.<\/p>\n

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<\/a> #6- Five investors were hit with SAR 44.9 mn in fines and orders for repayment <\/strong>after an appeals committee by the Capital Market Authority (CMA) upheld a finding they had engaged in insider trading in the listing of Watani Steel, the market watchdog said in a statement<\/a>. The CMA said four of the investors executed a number of transactions before and after the listing of Watani Steel, raising their ownership in the steel producer without a required disclosure to Tadawul and shareholders. The fifth investor was also engaged in influencing the company\u2019s share price on WhatsApp.<\/p>\n

OIL WATCH-<\/p>\n

Aramco has hiked the <\/strong>official selling price (OSP) of its flagship Arab Light <\/strong>crude oil to <\/strong>Asian<\/strong> buyers in May<\/strong>, Bloomberg<\/a> reported on Friday, citing a price list it has seen. The oil giant raised OSP for Asian buyers by USD 0.3 to USD 2.00 premium to the Oman\/Dubai average. The raise, which is the second consecutive for the grade, beat expectations of a USD 0.1 hike forecast by refiners and traders earlier. It comes amid tighter Middle Eastern crude markets, OPEC+ voluntary production cuts and an increased consumption by several producers in the region. Reuters<\/a> also had coverage.<\/p>\n

HAPPENING TODAY-<\/p>\n

Pakistani PM Shehbaz Sharif is in town for talks with Crown Prince <\/strong>Mohammed bin <\/strong>Salman<\/strong>, the Pakistani Foreign Affairs Ministry said in a statement<\/a> on Friday. This is Sharif\u2019s first foreign visit since he was reelected PM<\/a> in March.<\/p>\n

REMEMBER- <\/strong>Saudi has been among key backers of the crisis-hit Pakistan, which is struggling from depleted foreign reserves. The Kingdom has extended the term<\/a> of a USD 3 bn in deposit at the State Bank of Pakistan for an additional year, maturing in December this year. The country also received last year USD 2 bn<\/a> in financial assistance from the Kingdom to shore up finances.<\/p>\n

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** So, when do we eat?<\/strong> Maghrib prayers are at 6:12pm in Riyadh and you have until 4:18 am to hydrate and caffeinate ahead of fajr.<\/p>\n

WEATHER THIS WEEK-<\/strong>Look for a mix of showers and thunderstorms in the <\/strong>capital city <\/strong>through Wednesday evening.<\/p>\n

DATA POINTS-<\/p>\n

#1- Some<\/strong> 20 mn worshipers visited<\/strong> Madinah during the first three weeks of <\/strong>Ramadan<\/strong>, Arab News<\/a> reported yesterday, citing official data.<\/p>\n

#2- More than SAR 664 mn worth of zakat has been transferred through t<\/strong>he Zakat, Tax <\/strong>and Customs <\/strong>Authority (Zatca)\u2019s e-service Zakaty <\/strong>since its launch in 2017, Zatca said in a statement<\/a> on Friday.<\/p>\n

PSAs- <\/p>\n

#1- Miners can apply to the Industry and Mineral Resources Ministry\u2019s <\/strong>Exploration <\/strong>and Enablement Program (EEP) <\/strong>until 31 May<\/strong>, the ministry said in a post on X<\/a> on Friday. The news comes after the ministry unveiled fresh incentives<\/a> worth SAR 685 mn to boost mineral exploration here. The program is being rolled out in collaboration with the Investment Ministry and aims to reduce early-stage risk for exploration companies. Miners can apply through the Taadeen<\/a> platform, with awardees set to be announced by the end of July this year. <\/p>\n

#2- The <\/strong>Interior Ministry is rolling out a 50% reduction in traffic fines incurred before <\/strong>Thursday, 18 April<\/strong>, it said in a statement on X<\/a> last week. It said motorists should pay accumulated fines within six months to benefit from the initiative.<\/p>\n

<\/a> #3- New rules for contracts with domestic workers: <\/strong>The Human Resources and Social Development Ministry has introduced a new initiative aimed at regulating contractual arrangements for domestic workers, it said in a statement<\/a> last week. The new regulations center on termination of employment for staff who go AWOL within the the first two years of their arrival in Saudi. <\/p>\n

SPORTS-<\/p>\n

<\/a> WHISPERS- Romelu Lukaku could be the latest addition to the Saudi Pro League: <\/strong>Chelsea FC Chairman and American bn\u2019aire Todd Boehly has been in talks to sell the striker, currently on loan at Roma, to a Saudi Pro League club during the upcoming summer transfer window, according to Belgian reports picked up by Asharq Al Awsat<\/a>. Boehly met with local officials in March in a bid to offload some Chelsea players<\/a> to the Kingdom.<\/p>\n

\u26bd This weekend\u2019s matches:<\/strong><\/p>\n