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    Food Africa and pacprocess MEA attract over 25,000 trade visitors to the trade fair duo in Egypt

    Pacts worth over OMR 33 million signed to establish agricultural, fisheries projects

    Pacts worth over OMR 33 million signed to establish agricultural, fisheries projects

    Egypt’s food industries contribute 24.5% of GDP

    Egypt’s food industries contribute 24.5% of GDP

    $36mln contract for construction of Duqm fisheries complex

    $36mln contract for construction of Duqm fisheries complex

    Ministry signs agreement to support Oman’s honey industry

    Ministry signs agreement to support Oman’s honey industry

    Local, Italian companies partner up to establish food retail chain in Egypt

    Local, Italian companies partner up to establish food retail chain in Egypt

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      Food Africa and pacprocess MEA attract over 25,000 trade visitors to the trade fair duo in Egypt

      Profits at top Saudi banks jump 17.6% in Q1

      Profits at top Saudi banks jump 17.6% in Q1

      GCC can create 600,000 tech jobs and add US$255 billion to GDP by 2030

      GCC can create 600,000 tech jobs and add US$255 billion to GDP by 2030

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      What will Qatar do with its World Cup infrastructure after FIFA 2022 ends?

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      New study reveals that UAE is most competitive economy in the Arab world

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      Oman Construction Equipment Industry to 2028

      $36mln contract for construction of Duqm fisheries complex

      $36mln contract for construction of Duqm fisheries complex

      What will Qatar do with its World Cup infrastructure after FIFA 2022 ends?

      What will Qatar do with its World Cup infrastructure after FIFA 2022 ends?

      Madayn working on major Oman industrial city projects

      Madayn working on major Oman industrial city projects

      Foundation stone laid for new 700-bed hospital is Salalah, Oman

      Foundation stone laid for new 700-bed hospital is Salalah, Oman

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      Iraq set to award new Faw Port deals

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        Suez Canal expects US$3.5 billion in revenues in H1

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        UAE and Egypt’s consortium to buy African renewables firm Lekela Power

        Fitch revises Saudi Aramco’s outlook to positive from stable

        Fitch revises Saudi Aramco’s outlook to positive from stable

        Investments in renewables in Egypt reach LE6 bn: Official

        Investments in renewables in Egypt reach LE6 bn: Official

        Egypt signs 8 gas exploration contracts worth $934mn over 15 months

        Egypt signs 8 gas exploration contracts worth $934mn over 15 months

        JGC lands $3.7bn Iraq refinery upgradation project deal

        JGC lands $3.7bn Iraq refinery upgradation project deal

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          Coronavirus: UAE conducting human trials for Covid-19 vaccine

          Coronavirus: UAE conducting human trials for Covid-19 vaccine

          COVID-19 vaccine could be available by autumn: Oxford University

          GSK to develop plant-based COVID-19 vaccine with Canada’s Medicago

          Egyptian COVID-19 drug to be on market in two weeks: Health Ministry

          Egyptian COVID-19 drug to be on market in two weeks: Health Ministry

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          UAE sends medical aid to Iraq to fight COVID-19

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          UAE launches phase III trial of inactivated Covid vaccine

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          COVID-19 vaccine could be available by autumn: Oxford University

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          Food Africa and pacprocess MEA attract over 25,000 trade visitors to the trade fair duo in Egypt

          Qatar has ‘solid’ line-up of infrastructure, hospitality projects to prepare for large influx of visitors in 2022: OBG

          Qatar has ‘solid’ line-up of infrastructure, hospitality projects to prepare for large influx of visitors in 2022: OBG

          Saudi to be among world’s big leisure tourism hubs by 2030

          Saudi to be among world’s big leisure tourism hubs by 2030

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          Qatar’s hospitality sector peaks despite turbulent 2020

          Accor inks deal to manage first Swissôtel-branded hotel and residential project in Qatar

          Accor inks deal to manage first Swissôtel-branded hotel and residential project in Qatar

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          Staycations to stimulate Qatar’s hospitality sector

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          Food Africa and pacprocess MEA attract over 25,000 trade visitors to the trade fair duo in Egypt

          Pacts worth over OMR 33 million signed to establish agricultural, fisheries projects

          Pacts worth over OMR 33 million signed to establish agricultural, fisheries projects

          Egypt’s food industries contribute 24.5% of GDP

          Egypt’s food industries contribute 24.5% of GDP

          $36mln contract for construction of Duqm fisheries complex

          $36mln contract for construction of Duqm fisheries complex

          Ministry signs agreement to support Oman’s honey industry

          Ministry signs agreement to support Oman’s honey industry

          Local, Italian companies partner up to establish food retail chain in Egypt

          Local, Italian companies partner up to establish food retail chain in Egypt

          Trending Tags

          • Business & Economy
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            • Business
            • Communication
            • Digital
            • Economy
            • Finance
            • Trade
            • Transport & Logistics

            Food Africa and pacprocess MEA attract over 25,000 trade visitors to the trade fair duo in Egypt

            Profits at top Saudi banks jump 17.6% in Q1

            Profits at top Saudi banks jump 17.6% in Q1

            GCC can create 600,000 tech jobs and add US$255 billion to GDP by 2030

            GCC can create 600,000 tech jobs and add US$255 billion to GDP by 2030

            What will Qatar do with its World Cup infrastructure after FIFA 2022 ends?

            What will Qatar do with its World Cup infrastructure after FIFA 2022 ends?

            New study reveals that UAE is most competitive economy in the Arab world

            New study reveals that UAE is most competitive economy in the Arab world

            Top 10 listed companies in the Middle East

            Trending Tags

            • CES 2017
            • Election Results
            • eSports
          • Construction
            • All
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            • Real Estate
            Oman Construction Equipment Industry to 2028

            Oman Construction Equipment Industry to 2028

            $36mln contract for construction of Duqm fisheries complex

            $36mln contract for construction of Duqm fisheries complex

            What will Qatar do with its World Cup infrastructure after FIFA 2022 ends?

            What will Qatar do with its World Cup infrastructure after FIFA 2022 ends?

            Madayn working on major Oman industrial city projects

            Madayn working on major Oman industrial city projects

            Foundation stone laid for new 700-bed hospital is Salalah, Oman

            Foundation stone laid for new 700-bed hospital is Salalah, Oman

            Iraq set to award new Faw Port deals

            Iraq set to award new Faw Port deals

            Trending Tags

            • Energy
              • All
              • Oil & Gas
              • Power & Electricity
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              Suez Canal expects US$3.5 billion in revenues in H1

              Suez Canal expects US$3.5 billion in revenues in H1

              UAE and Egypt’s consortium to buy African renewables firm Lekela Power

              UAE and Egypt’s consortium to buy African renewables firm Lekela Power

              Fitch revises Saudi Aramco’s outlook to positive from stable

              Fitch revises Saudi Aramco’s outlook to positive from stable

              Investments in renewables in Egypt reach LE6 bn: Official

              Investments in renewables in Egypt reach LE6 bn: Official

              Egypt signs 8 gas exploration contracts worth $934mn over 15 months

              Egypt signs 8 gas exploration contracts worth $934mn over 15 months

              JGC lands $3.7bn Iraq refinery upgradation project deal

              JGC lands $3.7bn Iraq refinery upgradation project deal

              Trending Tags

              • Healthcare
                Coronavirus: UAE conducting human trials for Covid-19 vaccine

                Coronavirus: UAE conducting human trials for Covid-19 vaccine

                COVID-19 vaccine could be available by autumn: Oxford University

                GSK to develop plant-based COVID-19 vaccine with Canada’s Medicago

                Egyptian COVID-19 drug to be on market in two weeks: Health Ministry

                Egyptian COVID-19 drug to be on market in two weeks: Health Ministry

                UAE sends medical aid to Iraq to fight COVID-19

                UAE sends medical aid to Iraq to fight COVID-19

                UAE launches phase III trial of inactivated Covid vaccine

                UAE launches phase III trial of inactivated Covid vaccine

                COVID-19 vaccine could be available by autumn: Oxford University

                COVID-19 vaccine could be available by autumn: Oxford University

              • Hospitality

                Food Africa and pacprocess MEA attract over 25,000 trade visitors to the trade fair duo in Egypt

                Qatar has ‘solid’ line-up of infrastructure, hospitality projects to prepare for large influx of visitors in 2022: OBG

                Qatar has ‘solid’ line-up of infrastructure, hospitality projects to prepare for large influx of visitors in 2022: OBG

                Saudi to be among world’s big leisure tourism hubs by 2030

                Saudi to be among world’s big leisure tourism hubs by 2030

                Qatar’s hospitality sector peaks despite turbulent 2020

                Qatar’s hospitality sector peaks despite turbulent 2020

                Accor inks deal to manage first Swissôtel-branded hotel and residential project in Qatar

                Accor inks deal to manage first Swissôtel-branded hotel and residential project in Qatar

                Staycations to stimulate Qatar’s hospitality sector

                Staycations to stimulate Qatar’s hospitality sector

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              Saudi Arabia returns to the bond market

              Oxford Business Group

              August 17, 2015
              in Finance
              0

              The recent return to the bond market by Saudi Arabia marks a significant shift in government policy as the world's biggest oil exporter taps capital markets to cover budgetary shortfalls and balance drawdowns of foreign reserves.

              The SR15bn ($4bn) issue in mid-July was the first sovereign bond offered by the Kingdom since 2007, with senior officials hinting at further forays into the market. The bonds  – seven- and 10-year conventional issues with yields of 2.57% and 2.88%, respectively  – were sold to quasi-sovereign Saudi institutions, according to press reports.

              Budget backdrop
              The bond issue coincides with the first projected budget deficit since 2009, prompted by weaker oil revenues and sustained outlays on capital works and investment programmes.

              Earnings from crude exports could decline further, with shipments down 10% in May despite near-record production, according to official data released on July 20. Exports in May were the lowest in five months, averaging 6.94m barrels per day (bpd), down 800,000 bpd from the previous month.

              Saudi Arabia hopes to close some of this gap by boosting sales of domestically refined oil products, notably diesel, with the country now tied with Royal Dutch Shell as the fourth-largest refiner in the world.

              Development costs
              Ample oil revenues have traditionally financed state spending, with Saudi Arabia allocating SR4.4trn ($1.2trn) for development projects in the past five years alone – 30% of which went to capital works programmes, according to data from the Saudi Arabian Monetary Agency (SAMA) in June.

              While public spending accounted for 40% of GDP last year, totalling around SR1.1trn ($293.3bn), public debt levels eased to 1.6% of GDP and foreign reserves stood at 97% of GDP, putting the Kingdom in good stead to seek debt financing with its recent issue.

              According to Fahad Al Mubarak, governor of SAMA, the bond will provide additional coverage for this year’s budget deficit, which he told local media on July 9 was expected to exceed the projected SR145bn ($38.7bn). A mix of foreign reserves and bond issues would be used to meet the shortfall, he explained, with SR244bn ($65.1bn) in reserves withdrawn year to date.

              Though SAMA has not indicated a timeline for further issuances or how much it hopes to raise on the bond market, Fahad Alturki, chief economist at Jadwa Investment, told local media the country could be looking to borrow up to SR200bn ($53.3bn) this year.

              Private sector opening
              Analysts see a number of positives in the policy shift towards higher debt levels, particularly given the Kingdom’s low debt exposure at present.

              John Sfakianakis, Middle East director for fund manager Ashmore Group, said the initial step into the bond market, and the ones that are flagged to follow, would serve to broaden Saudi Arabia’s capital market, setting benchmarks for future issues and paving the way for the private sector to offer bonds of its own when looking to raise capital.

              “In general, regulators want to encourage companies to issue bonds as alternatives to bank loans, which currently dominate corporate fundraising,” he told OBG. “This would spread corporate risk beyond the banking system, making the financial sector more healthy as a whole, while also providing channels for a growing investment industry.”

              While the first bond offering was on a limited subscription to government and semi-government funds, it is likely further issues will target a broader market, providing Saudi banks with long-term investment outlets with solid returns.

              Credit positive
              Moreover, Saudi Arabia’s strong credit profile should allow it to raise debt fairly easily, according to a Jadwa Investment report from the first quarter. “The government is now expected to issue debt as part of its deficit financing strategy. This change of strategy comes as the Kingdom takes advantage of its solid credit profile, which has been affirmed by the major rating agencies,” the report noted.

              Saudi Arabia has maintained its “AA-” credit rating from S&P amidst downgrades for other oil-producing nations, though its outlook was revised to stable in December and negative in February, with S&P citing the country’s dependence on oil revenues.

              Efforts to diversify the economy and boost non-oil growth could help to assuage these concerns, as corporate debt issues fund private sector expansion. Jadwa Investment expects the broader economy to grow by 3.3% this year, with the non-oil private sector forecast to post a more robust performance, at 5%.
              Oxford Business Group
              17 August

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