Establishment of new commission set to boost development in Makkah

Time: July 05, 2018

JEDDAH: Development in Makkah will be advanced by the establishment of the Royal Commission for Makkah City and Holy Sites, which will provide investment opportunities, the chairman of the Makkah Chamber of Commerce and Industry, Hisham Kaaki, said on Thursday as he received a British delegation.

Led by Simon Collis, UK ambassador to Saudi Arabia, the delegation visited the chamber to discuss promoting trade and economic relations, and increasing cooperation with businessmen in Makkah.

Economic and trade relations between the two countries were further strengthened by Crown Prince Mohammed bin Salman’s recent visit to the UK, which resulted in $100 billion worth of agreements and investments, said Kaaki.

There are 28 economic agreements between the two countries, more than 300 joint projects, and investments of about $17 billion, he added.

Collis spoke of the UK’s desire to see Saudi Vision 2030 reform plan succeed, “through which it will become possible to increase cooperation in educational fields, financial solutions, tourism, and investments in megaprojects in Saudi Arabia.”

He added: “We will work on developing relations in a direct and effective way to benefit the business field in the two brotherly countries.”

Earlier, Collis met with Makkah Gov. Prince Khaled Al-Faisal. During the meeting, they exchanged cordial talks and discussed issues of common concern.

This article was first published in Arab News

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Saudi expects $40b foreign fund inflows after MSCI — Capital Markets Authority

Time: June 21, 2018

Saudi Arabia could attract 150 billion riyals (Dh147 billion, $40 billion) worth of foreign inflows from both passive and active funds, a Saudi official said, after index provider MSCI decided to add the Saudi bourse to its emerging markets benchmark.

The MSCI move increases the attractiveness of Saudi Aramco’s planned initial public offering, Mohammad Bin Abdullah Elkuwaiz, chairman of Capital Markets Authority (CMA), told a news conference.

The listing depends on the company’s readiness and valuation for the deal, but he added the Saudi bourse operator and CMA are making sure that the necessary framework is in place for the IPO, which Saudi officials have earlier said could raise $100 billion.

This article was first published in Gulf News

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Saudi Arabia’s emerging market upgrade explained

Time: June 17, 2018

I am sure most of you have already heard about the MSCI EM upgrade for Saudi Arabia, but do you actually know what is it really, what does it measure and why all the people have been eagerly waiting for it?
The MSCI Emerging Markets Index is one of the most popular indices created by Morgan Stanley Capital International (MSCI) designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index that consists of indices in 23 emerging economies
Saudi Arabia’s Tadawul Index is not only the region’s largest equities market, but also one of the most diverse, consisting of close to 180 stocks across a range of sectors making it more representative of the real economy compared with regional peers.
As part of its capital market reforms, the Saudi Capital Market Authority (CMA) has opened its equity markets to foreign direct investments in June 2015 through a Qualified Foreign Investor (QFI) program. To make access easier, it reduced the minimum assets under management for QFIs to $500 million from $1 billion and added new types of eligible QFIs, such as sovereign wealth funds and university endowments.
To attract more foreign investors, foreign ownership limits have been raised from 20 percent to 49 percent since September 2016. To further align Saudi Arabia’s capital markets with international standards and to increase transparency and liquidity, the country transitioned to a T+2 settlement cycle, from T+0, for all listed securities and also introduced securities borrowing and lending and covered short selling.
In recognition of Saudi Arabia’s capital market reforms and continued enhancements, MSCI announced it would consider the MSCI Saudi Arabia Index for inclusion in the MSCI Emerging Markets Index, and is expected to communicate its decision on Wednesday 20th June 2018.
But what could potential inclusion mean for Saudi Arabia? Such upgrade will greatly benefit our country in many aspects. The most direct benefit is increased capital inflows. The MSCI EM Index has $1.9 trillion worth of assets benchmarked against it. Inclusion on the index would not only increase the exposure of Saudi stocks to international investors, but also will lead to passive inflows from funds that follow its progress.
The Saudi Central Bank (SAMA) last year issued series of measures to address the lack of liquidity, including discounting lending rates. While the picture has improved, it had slid back by the end of Q1 this year, reducing the ability of banks to lend money. Capital inflows with an MSCI listing will substantially boost liquidity in the economy. Moreover, the inclusion will increase trading volumes by reducing the equity risk premium and so draw in new investors from around the world.
I believe that Saudi Arabia’s growing importance on the world stage will undoubtedly help it to diversify its investors’ base and capital sources, as well as open its market to large institutional foreign investors which have so far been relatively restricted.

Basil M.K. Al-Ghalayini is the Chairman and CEO of BMG Financial Group.

This article was first published in Arab News

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British finance expert: Major foreign investments on its way to Saudi Arabia

Time: June 12, 2018

Saudi Arabia has attracted the attention of many major investors and investment portfolio managers in the world after wide-scale economic reforms took place. Amid expectations that these reforms would lead to long-term economic revival and attract more foreign investments in various sectors, including the Saudi stock market.

Ross Teverson, Head of Strategy, Global Emerging Markets – ‎Jupiter Fund Management, said he expects that the Saudi economy would witness a significant improvement during the coming period due to the reforms Saudi Arabia made. He also asserted in an interview with Al Arabiya English, that the Saudi stock market would attract more foreign investments over the coming period.

“We believe that Saudi Arabia took several steps in the right direction,” told Al Arabiya English, indicating that “the energy and fuel process had went down in an unrealistic way, this is what encouraged Saudi Arabia to diversify its economic resources. Which would be positively reflected on the Saudi economy on the long term. Although it might have some pressure on the consumer on the short term, but overall we believe that the changes in Saudi Arabia were positive ones.”

Teverson, who spoke to Al Arabiya English in London, added that: “Promoting the Saudi Stock Market (Tadawul) to an emerging market in and important and big step. We aspire to list the prospect market in the Morgan Stanley index for emerging markets.”

“I am certain that it would lead to a lot of positive impacts, contribute in enhancing the investments and attract more international investors of corporates and companies,” Teverson said.

Regarding the Saudi Vision 2030, Teverson said: “What Saudi Arabia witnesses of economic and developmental transformation and drastic changes as part of the efforts exerted to achieve the ambitious and goals of the 2030 Saudi Vision which aims to create diversified and sustainable economy is a crucial step.”

The British financial expert linked between the economic giant; China and the changes taking place in Saudi Arabia, “There are interesting similarities between Saudi Arabia and China, Saudi Arabia will host the G20 Summit in 2020. During my last visit to Saudi Arabia, I went to the King Abdullah Financial Center where the summit will be held, the region is witnessing many projects that reminded me of a lot of Beijing or Shanghai, where the political will formed the main motive to complete the projects quickly.”

“It is obvious that Saudi Arabia started to follow some indicators of China’s fixed asset investment model by injecting investment into infrastructure projects to overcome some challenges that may hinder economic growth.” He added.

Teverson concluded saying: “Prince Mohammed bin Salman’s recent anti-corruption campaign will have a positive impact on enhancing transparency on the long term.”

This article was first published in Al Arabiya English  

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Saudi Arabia ready to buck trend of falling foreign direct investment

Time: May 28, 2018

As a source of external finance, foreign direct investment has emerged to play a crucial role in promoting economic growth, strengthening local economies, and improving the competitiveness of countries in the global economy. Nations like China, India, Malaysia, South Korea and Thailand are classic examples in this regard.

Global flows of FDI have increased significantly over the last few decades. Major factors behind this phenomenon are the increasing number of cross-border mergers and acquisitions, trends toward privatization, and growing competition among host countries to attract FDI.

FDI inflows have made a considerable impact on the Saudi economy, both directly and indirectly, by playing a major role in stimulating growth potentials and providing stability to the Kingdom’s economy.

However, a downward trend is noticeable in the sector of FDI flows in recent years, according to the World Investment Report 2017. After Turkey and the UAE, Saudi Arabia is considered the third largest FDI recipient in Western Asia, where estimated data showed FDI inflows fell by 8.5 percent in 2016 compared to the previous year, totaling $7.45 billion, which is the lowest FDI figure since 2014.

The Kingdom is currently embarking on a radical transition, sending a message to the world that it is open for business. Vision 2030 and its programs aim primarily at creating an investment environment geared to attracting foreign companies, building vital partnerships, and expanding business endeavors, as FDI is considered one of the most effective ways to diversify the economy and provide employment for younger generations.

Under the Saudi Vision 2030, the Kingdom wants to raise the inward FDI contribution to GDP to the international level of 5.7 percent from the current 3.8 percent, which would require an inward FDI average growth of 21 percent annually in nominal terms. Saudi Arabia also aims to be in the list of top 20 nations in the World Bank’s “ease of doing business index” by 2020. It is currently ranked number 92 in the index of 190 countries.

The government seeks foreign investment that explicitly promotes economic development, transfers foreign expertise and technology to Saudi Arabia, creates jobs for Saudi nationals, and expands Saudi’s non-oil exports.

The Saudi Arabian General Investment Authority plays an important role in creating an environment conducive to investment in the Kingdom. SAGIA has been striving since 2004 to place the country among the top 10 most competitive nations.

Foreign investors are no longer required to take local partners in many sectors and may own real estate for company activities. They are also allowed to transfer money from their enterprises outside of the country and can sponsor foreign employees. The continuous efforts of SAGIA, along with the Financial Sector Development Program and the newly announced giga-projects will definitely speed up the attraction of foreign investments.

Other private initiatives are also underway. The BMG Economic Forum, planned for July 11 at the London Stock Exchange, has the theme of “Investing in the Saudi Vision,” where multinational companies and global emerging fund managers will be invited to hear the investment rationale of the giga-projects, which include Neom city, Qiddiya and the Red Sea developments.

This article was first published in Arab News

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Makkah forum targets investment surge in Saudi Arabia

Time: 06 May 2018

Saudi Prince Khaled al-Faisal bin Abdul Aziz al-Saud, governor of Mecca, attends the 2010 Jeddah Economic Forum in the coastal Saudi city on February 13, 2010. The four-day forum is attended by experts, officials and businessmen from around the world. AFP PHOTO/OMAR SALEM / AFP PHOTO / Omar Salem

JEDDAH: Makkah Gov. Prince Khaled Al-Faisal will open the first Makkah Economic Forum on Sunday.

The two-day event, under the theme “From Vision to Prosperity: Invest in Makkah,” will be held at the Jeddah Ritz-Carlton. The forum is organized by the province in cooperation with the Jeddah, Makkah and Taif chambers of commerce.

Nine sessions at the forum will focus on the most important themes of Vision 2030. More than 60 leading local, regional, and international speakers and experts will take part.

The sessions will explore investment opportunities in the Makkah province as part of Vision 2030’s aim to increase private sector contribution to the GDP from 40 percent to 65 percent.

The forum aims to increase private sector participation and attract more foreign direct investments to drive economic growth.

Investment options will be discussed in breakout sessions between investors and public and private sector representatives.

The forum will also feature the launch of an electronic platform to showcase investment opportunities in the region.

Two sessions offering a “Dialogue with the Minister,” will give investors a chance to discuss investment and economic issues with ministers.

Forums will run throughout the year with workshops, seminars and panel sessions involving local, regional and international experts.

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Spotlight on Qassim as Saudi business hub

Time: April 25, 2018

JEDDAH: Saudi Arabia’s central Qassim region had the potential to become one of the Kingdom’s leading economic hubs, Minister of Commerce and Investment Majid bin Abdullah Al-Qasabi told a meeting of business leaders in Buraidah on Monday.
The meeting at the King Fahd Cultural Center was organized by the Committee for the Development of Investment in Qassim and the region’s chambers of commerce in conjunction with the Biban Al-Qassim Forum.
Al-Qasabi urged stakeholders to identify the issues that needed to be addressed to ensure Qassim’s economic transformation, saying that small and medium-sized businesses held the key to growth in the region.
“Today’s reality is based on the culture of keeping up with the latest developments, accountability and evaluation,” he said.
“The ministry has a clear vision and strategy, as well as a large number of investment-targeted programs and initiatives that aim to facilitate and improve the business environment and help the Kingdom become one of the world’s top 10 economies.”
Vision 2030 has opened new horizons for innovative projects that will create thousands of jobs.
The chairperson of the Chamber of Commerce and Industry in Qassim, Abdul Aziz Al-Hameed, said the private sector needed more reassurances to take chances and invest in large projects. The secretary-general of the Chamber of Commerce and Industry in Qassim, Saud bin Abdul Karim Al-Fadda, said the meeting aimed to encourage businessmen and entrepreneurs to develop their projects and achieve their ambitions to build a prosperous economy.
The secretary of the Committee for the Development of Investment in Qassim, Yusuf bin Abdullah Al-Arini, said the region was home to 313 factories with a capital of SR14 billion ($3.7 billion). The region’s competitive advantages included its location, motivational work environment, transport network, industrial and commercial cities and free services provided by the Chamber of Commerce and Industry.

This article was first published Arab News

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Al Tamimi’s first bespoke forum discusses attracting foreign investment in the Kingdom

Apr 24, 2018

RIYADH: The first bespoke forum in Saudi Arabia by Al Tamimi and Company, the largest law firm in the Middle East, discussed business developments with a focus on foreign investment and the legal framework as a plan to achieve Vision 2030.
As the Kingdom undergoes extensive business, economic and social developments to undertake one of its greatest transitions ever with the National Transformation Program and Saudi Vision 2030, the maiden event shed light on best practices related to legal compliance for businesses operating and looking to enter the Saudi market.
It provided an opportunity to gain further insights on legal developments in the Kingdom surrounding privatization efforts and setting up and sustaining businesses in the Kingdom, as well as on cyber-security, financial cyber-crime and security measures.
Speaking at the opening session in a panel addressing Vision 2030’s goal of privatization and attracting Foreign Direct Investment (FDI), Khalid Abdullah Al-Hussan, the CEO of Tadawul, said: “Tadawul has implemented reforms to ensure a secure, transparent and efficient market that is aligned with global market standards and practices.
“We have been facilitating the participation of international investors in the Saudi market and expanding access to international investors through the Qualified Foreign Investor program in cooperation with the Capital Market Authority, which was launched in 2015 and has been continuously updated since then to further ease qualification requirements.”
With the ease of doing business, there is a tremendous interest in local as well as foreign investment, he said, adding that the agency is moving in the right direction to attract FDI.
In a reply, he pointed that Saudi Arabia is an emerging market, and international investors see both the public and private sector as good opportunities.
Joining him in the panel, Ibrahim Alsuwail, deputy governor of investor services at the Saudi Arabian General Investment Authority (SAGIA), said: “If we compare foreign investments in 2016, 2017 and 2018, we have noticed a definitive growth over the past 15 months.
“This includes direct investments from foreign entities, the opening of international branches of key organizations in the Kingdom and the strengthening of partnerships between local and foreign companies, which showcases the strengths of the Saudi economy and the importance of Vision 2030 in attracting international attention as well as investments.”
He said SAGIA is overseeing what the government entities and private sector can do with the Saudi chamber to enhance the business climate, adding that SAGIA is committed to supporting efforts increasing business opportunities for local as well as foreign investors.
“We are doing every bit to help investors with the ease of doing business in the Kingdom,” he said.
Ahmed Kattan, deputy minister of labor policy, said the government was determined to develop the labor market with a focus from being labor-intensive to capital-intensive, increase Saudi presence as well as increase women’s participation in the labor market.
He noted that the Ministry of Labor does not interfere in the local affairs of the companies as long as they fulfill the Saudization objective under the Nitaqat program.
Earlier, Essam Al Tamimi, senior partner and founder of Al Tamimi, said: “Our firm has over 10 years of experience in the Kingdom. We have grown to establish a deep-rooted understanding of the legal and legislative developments within the Kingdom to support clients across various sectors.
“This event gives us the opportunity to promote the knowledge-sharing requirements that are vital to the success of business coming in and operating in the Saudi market.”
Grahame Nelson, Al Tamimi’s head in Saudi Arabia, said: “As new and improved legislation is injected into the Kingdom’s business infrastructure, it has become vital that organizations are aware, as well as prepared to adopt and comply, in order to succeed.”
The panelists at the concluding session discussed cyber-security and financial cyber-crime, how to deal with it, and how information security breaches damage business.
Throughout the forum there was a clear focus on the importance of greater awareness of the developments of the legal structure in the Kingdom as an integral component to the facilitation of welcoming new businesses and industries.

This article was first published in the Arab News

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Abdul Latif Jameel and Kosei Aluminium to produce wheels and components in Saudi Arabia

Time:  April 18, 2018

A key contribute to the development of the manufacturing industry in Saudi Arabia is being explored by a joint venture between  Abdul Latif Jameel and Japanese company Kosei Aluminum. This progress is a key priority of Saudi Vision 2030. The joint venture would also explore the potential of exporting the products globally.

Both companies have signed a Memorandum of Understanding (MoU) with to explore the feasibility of a joint venture that would manufacture aluminum wheels and components in Saudi Arabia.

During a visit by the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud in March 2017, Saudi Arabia and Japan agreed to deepen existing bilateral relations between the two countries and establish a solid strategic partnership, as part of the Saudi-Japan Vision 2030.

This MoU, signed in Tokyo, Japan, will now see both companies study the potential of utilizing Saudi Arabia’s rich aluminium deposits and competitive energy costs through a joint venture.

Fady Mohammed Abdul Latif Jameel, Deputy President & Vice Chairman, Abdul Latif Jameel International said: “This MoU has the potential to develop into an exciting joint venture, which would bring manufacturing and skills to Saudi Arabia, while contributing to the country’s domestic automotive industry.”

The feasibility study is expected to begin in 2018, and be completed by 2019

This article was first published in Gulf News

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Protecting creativity in Saudi Arabia

Time: April 17, 2018 

 

In 1982, Saudi Arabia joined the World Intellectual Property Organization after it recognized that intellectual production was important in stimulating global economic expansion and the growth of new technologies.

Over time, developing and developed countries are setting strict rules on intellectual property, not only for security or to ban infringements, but also to encourage talented artists to be more creative in the knowledge that their creations will be safe under the strict rules.

Thus, Saudi Arabia has enacted the laws and regulations that guarantee the protection of the rights of authors, inventors, industrial design and trademarks owing to their great impact on the recent economic, cultural and social developments. Examples of such regulations are copyright law, trademarks law, and patents and trade names law. More emphasis will be placed on copyright law because of its significant impact on the content industries.

Any interested person who would like to share and produce his creative production to the public will have the right and proper understanding of the copyright. He needs to be aware of it to implement these terms in order to protect his work and to promote the culture of intellectual creativity.

The copyright is a kind of intellectual property that provides and gives exclusive usage and control of the rights to its own creator. On the other hand, if there is any copyright infringement of the protected object or right, the law will be sure to compensate the damaged party.

Saudi copyright law has become increasingly complex over the years to respond to a sophisticated communications’ environment. In this high-tech age, there are many new ways of producing creative works, and many ways of imitating or exploiting them without the creator’s permission. The photocopier, sound recorder, videocassette recorder, and personal computer digital reproduction of creative objects are just a few examples of modern devices that help creators to communicate with their audiences, but that also make it harder to control unauthorized use.

The owner of a copyright under Saudi law has the exclusive rights to reproduce his work and to manufacture and distribute copies of it. The copyright law provisions criminalize any act of issuing, copying, selling, renting, distributing, importing or exporting any classified work without permission of the owner.

As for the penalties, the violator will be penalized with a fine not exceeding SR10,000 ($2,666) or with closure of the establishment engaged in the violation for a period not exceeding 15 days, or both penalties, as well as compensation to the copyright owner for any losses or damages resulting from this infringement.

If an infringement happens again, the violator will be penalized with an increase in the fine, or the establishment may be suspended for a period not exceeding 90 days, or both penalties may be applied together.

Awareness of the importance of copyright in Saudi Arabia is improving. The role of the Internal Information Agency at the Saudi Ministry of Culture and Information needs to be more influential in taking the lead in raising awareness about intellectual property concepts. Also, the Saudi Chamber of Commerce is required to take action in raising this awareness.

This article was first published in Arab News

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