RIYADH: Sahara International Petrochemical Co., also known as Sipchem, has initiated the world’s largest calcium chloride operation at their factory.
Based in Saudi Arabia, the Khair Inorganic Chemical Industries Co., also known as InoChem, will operate a greenfield of soda ash and calcium chloride industrial complex spanning over 800,000 sq. meters of land in Ras Al-Khair, according to the Saudi Exchange.
Sipchem, which owns 30 percent of InoChem’s capital, will continue the trial until the testing of the plant equipment is completed and its efficiency is confirmed.
The project’s total cost is estimated at SR2.9 billion ($783 million), with an annual production capacity of 300,000 tons of soda ash and 348,000 tons of calcium chloride in various grades, densities, shapes, and sizes. The production employs the latest advanced technologies and equipment.
The plant is also the first soda ash producer in the Gulf Cooperation Council countries and the largest in the Middle East and North Africa region.
The financial impact will be calculated at the beginning of commercial operations. Any material development will be announced in accordance with relevant laws and regulations.
InoChem is a Saudi closed joint-stock company founded in 2016 by a partnership between the public and private sectors.
TUNIS: The escalation of violence between Israel and Hamas has sparked concerns about its potential impact on the world economy. As the international community watches this tragic spectacle unfold, the question arises: Could this be the pivotal moment when the “Global South” asserts itself as a formidable geo-economic force?
The UN General Assembly vote on Oct. 26 showed a divided international community. The US found itself in a small minority, aligning with Israel against the motion. The EU, often seen as a staunch US ally, exhibited a scattered stance. Meanwhile, most developing countries favored a ceasefire, except India, which leaned toward Israel with an abstention.
History suggests that even when the US faces criticism for its foreign policy decisions, it does not necessarily hinder its ability to engage in global trade or negotiations. The aftermath of George W. Bush’s Iraq war in 2003 saw a decline in global opinion of the US, yet it did not isolate the country economically.
Moreover, the US has displayed resilience in launching and participating in major trade agreements despite geopolitical controversies. The Trans-Pacific Partnership in 2008, which included nations leaning economically toward China, and the ongoing negotiations in the Indo-Pacific Economic Framework this week underscore the US commitment to its trade engagements.
The global economy is still recovering from the pandemic’s economic shock, and the true costs are only now becoming evident.
Ryan O’Grady, CEO of KI Africa
Nevertheless, experts warn that the current conflict has the potential to disrupt the world economy and, in a worst-case scenario, push it into recession. If Israel’s army were to engage with militias in Lebanon and Syria that support Hamas, the conflict could spill over into a regional war.
Such an escalation could lead to a spike in oil prices, with estimates suggesting they could soar to $150 a barrel, significantly impacting global growth. The interconnectedness of the global economy means that disruptions in the Middle East can send shockwaves throughout the world, affecting inflation, economic stability, and even geopolitical relationships.
In the midst of the ongoing conflict in Gaza, the international community faces an uncertain economic future. As the situation unfolds, the world anxiously awaits a resolution that could potentially bring stability and prosperity to the region and beyond.
The recent annual meetings of the International Monetary Fund and the World Bank in Marrakech occurred against the grim backdrop of escalating conflict between Israel and Hamas in Gaza. Originally convened to address critical challenges in development finance, the persistent war in the Middle East has cast a pervasive shadow of uncertainty over the global economic landscape.
The recent meetings of the International Monetary Fund and the World Bank in Marrakech occurred against the backdrop of escalating conflict between Israel and Hamas in Gaza. Originally convened to address critical challenges in development finance, the persistent war in the Middle East has cast a pervasive shadow of uncertainty over the global economic landscape.
IMF Managing Director Kristalina Georgieva warned that the war was “darkening the horizon” for an already weakened global economy. Concerns about potential disruptions in oil supply and their impact on the global economy were raised, particularly as the International Energy Agency closely monitors the situation.
Against the backdrop of the IMF’s cautious growth projections, which maintain a 3 percent forecast for the current year but signal a dip to 2.9 percent in 2024, indicating the fragile state of the global economy, the realm of global oil prices witnessed significant turbulence.
Initially responding to the conflict with a surge, these prices reflected the heightened uncertainties introduced by geopolitical tensions. However, subsequent stabilization brought relief, as limited disruptions in oil supply alleviated concerns.
Adding a nuanced layer to the economic landscape, Said Skounti, a Morocco-based researcher at the IMAL Initiative for Climate and Development, shared his insights on the aftermath of the IMF meetings. Despite the initial optimism and aspirations for transformative changes in international finance throughout the year, Skounti’s observations highlight that the meetings concluded without conclusively addressing key challenges.
This perspective from Skounti provides a critical lens through which to understand the gaps between expectations and outcomes in the realm of global financial deliberations.
Our focus should pivot away from allocating funds to projects of marginal impact on both the population and the environment.
Abderrahim Ksiri, Moroccan policy expert
“Member states of the IMF agreed to increase contributions and grant Africa a third seat on the executive board, a move seen as a step toward better governance. However, the distribution of quotas determining voting power saw no change, underscoring the persistent challenges in achieving equitable representation,” Skounti told Arab News. Also, away from the concluded Zambia debt restructuring agreement, “calls for larger-scale debt cancellation, advocated by NGOs and African leaders, received limited attention,” he added.
In regions like the Middle East and Africa, where abundant investment opportunities beckon across various sectors, building resilient partnerships becomes imperative for businesses to thrive amid global uncertainties. However, against the backdrop of these challenges, the intended focus of the IMF and World Bank Meetings in Marrakech aimed to address critical challenges in development finance.
The Gaza conflict casts a pall over these economic discussions. As the world witnesses the ongoing violence in the Middle East, the global economy remains on edge, shrouded in uncertainty about the future. The implications for businesses, the looming potential for wider regional conflict, and the overarching economic consequences all hang delicately in the balance.
“The global economy is still recovering from the pandemic’s economic shock, and the true costs are only now becoming evident. Simultaneously, multiple wars are unfolding, impacting crucial aspects such as the cost of food and fuel,” remarked Ryan O’Grady, the CEO of KI Africa, an investment firm, to Arab News. In advocating for a focus on supporting the stability of supply chains, ensuring long-term and affordable loans, and fostering collaboration on regional integration, O’Grady emphasizes the necessity of navigating these challenges to foster a resilient global economic environment.
Amid these complexities, the IMF and World Bank actively seek to enhance collaboration with the private sector. They offer investment guarantees and mechanisms to mitigate risks associated with investments in African markets. This proactive approach is anticipated to reduce the cost of capital, rendering projects more competitive and cost-effective in the pursuit of economic stability.
Fears have also grown that oil prices may influence the willingness of richer countries to assist climate-ravaged nations, potentially slowing down the transition away from hydrocarbon production. At the same time, the ongoing Gaza crisis, marked by the devastating impacts on water infrastructure, mass displacement, and the heightened susceptibility of Palestinians to climate change, provides an avenue for amplifying voices emphasizing the imperative of safeguarding vulnerable communities across the world, particularly in the context of environmental ramifications.
“Our focus should pivot away from allocating funds to projects of marginal impact on both the population and the environment,” Abderrahim Ksiri, a Moroccan policy expert, told Arab News.
“Comprehensive consideration of climate-related factors in the financing of development projects across various industries is essential for addressing the challenges posed by climate change and ensuring a sustainable future,” he added.
RIYADH: Saudi Arabia aims to emerge as a leader in the regional aviation sector within 10 years and to achieve this ambitious goal it has introduced a raft of measures to ensure an environment for sustainable growth and investments.
The latest in a series of those measures is the introduction of a new aviation policy that redefines the role of the General Authority for Civil Aviation allowing it to increase its focus on enhancing the competitiveness of the Saudi aviation sector.
Commenting on the Saudi Aviation Strategy, a GACA spokesperson Ibtisam Al-Shehri told Arab News: “We are committed to achieving our goals under the Saudi Aviation Strategy and ensuring the aviation sector plays its role in the transformation of the Kingdom under Vision 2030.”
He said all stakeholders, particularly GACA, were highly motivated to ensure the successful implementation of these reforms and “see Saudi Arabia’s aviation sector lead the region by 2030.”
The International Air Transport Association also welcomed the aviation authority’s proactive approach to engaging with industry stakeholders to help shape and upgrade new aviation regulations.
During the Arab Air Carriers Organization annual general meeting in Riyadh, IATA Director General Willie Walsh said: “(Air) traffic in the Middle East grew by 26.1 percent compared to the previous year. For cargo, data shows that the region is already over 2 percent up on 2019 levels.”
New aviation policy redefines the role of the General Authority for Civil Aviation allowing it to increase its focus on enhancing the competitiveness of the Saudi aviation sector.
The recently announced aviation strategy seeks to attract $100 billion worth of investments by 2030. In a statement, GACA emphasized that these pivotal reforms are aimed at bolstering competitiveness, enhancing transparency, and bringing to fruition the objectives outlined in the Saudi Aviation Strategy.
It emphasized that the policy framework is set to create fresh opportunities for investors and operators by leveling the playing field to stimulate increased competition.
The policy overhaul will encompass regulations governing airports, ground services, air cargo, and air transport services.
According to GACA’s media briefing, the airport regulations will cover matters related to ownership, earnings, quality of service, and investments.
The authority will recategorize airports into three main groups based on their size and capacity: major airports, which handle over 10 million passengers or more than 125,000 tons of freight; mid-sized airports, serving between 3 and 10 million passengers or handling 25,000 to 125,000 tons of freight; and small-scale airports, accommodating less than 3 million passengers or handling under 25,000 tons of freight.
The regulatory environment we are putting in place enables airlines to grow, innovate, and provide the best possible service to passegers.
Ibtisam Al-Shehri, GACA spokesperson
Freight refers to goods being transported in large quantities from one place to another, often by various modes of transportation including airplanes.
Furthermore, GACA’s policy specifies who can own and control airports. As per the new plan, the Saudi government or government-owned entities can own the land and airport facilities, but foreign investors can now also serve as airport operators without any restrictions.
Under the new plan, GACA will assume the role of a regulator that will only step in if and when needed. Decisions will be finalized in this regard following thorough consultation with airport user groups. The contours of the new policies will take shape after a careful review of the input from different stakeholders.
Al-Shehri said: “We have consulted with airlines on our reforms to ensure that the regulatory environment we are putting in place enables airlines to grow, innovate, and provide the best possible service to passengers.”
Ground services and cargo
The new rules regarding ground services, including baggage handling, freight, and mail handling, aim to establish a competitive sector with enhanced productivity and service quality, along with regulations on pricing and quality.
GACA also reportedly took measures to curb malpractices and eliminate the risk of any kind of manipulation while deciding which ground and ancillary services should be economically regulated.
Reforms concerning stakeholders and service providers involve defining the roles and responsibilities of each party, reducing government involvement with investors, and streamlining interactions with clear areas of responsibility.
The new policy also introduces standards to ensure global service quality, and commitments to key performance indicators, clarifies the airport’s role, and outlines escalation mechanisms for service providers and users.
GACA President Abdulaziz Al-Duailej emphasized the alignment of these changes with global practices and their potential impact.
He said: “GACA’s transformation of Saudi Arabia’s aviation economic regulations will drive further investment, growth, and performance across the aviation sector.
These changes will create more competition, choice, and value for passengers and consumers.
Abdulaziz Al-Duailej, GACA president
“The regulations will enable the realization of the Saudi Aviation Strategy, which is mobilizing $100 billion in investment from public and private sector sources by 2030. These changes will create more competition, choice, and value for passengers and consumers.”
Regulations for air transport have been streamlined to align with global best practices, according to GACA.
The reforms for national carriers include the approval of airline marketing agreements, a process for allocating international traffic rights on constrained routes, and criteria for wet-lease approval and renewal.
Wet leasing, defined by EU regulations, involves operating an aircraft under the lessor’s Air Operator Certificate.
Scheduled foreign carriers will benefit from streamlined local office requirements and the removal of bond requirements, while general-purpose charters will no longer require economic approval for series charters and will see the removal of local office and bond requirements.
General aviation operators will enjoy more flexibility as restrictions on “empty leg” flights are eliminated, improving international flight network connectivity.
An empty leg flight occurs when a chartered jet, initially flown to a specific location without passengers, returns without any booked passengers to its home base.
Al-Shehri said: “The totality of these measures has the effect of optimizing costs for operators and investors while improving transparency in commercial transactions and providing the flexibility for market participants to innovate.”
She told Arab News: “Over the coming months, we want to highlight the contribution and importance of the sector to the Kingdom, celebrate key milestones in the sector’s progress under the Saudi Aviation Strategy, as well as celebrate the talent and people that are driving this transformation across the sector.”
What is in it for passengers?
The new aviation policy aligns with GACA’s recently approved passenger protection guidelines, set to take effect on Nov. 20.
The new rules will focus on supporting passengers in cases of delayed or canceled flights, reservation issues, or changing the ticket class. Some refunds may reach up to 150-200 percent of the ticket fare.
The guidelines also address the rights of passengers with special needs, along with ensuring compensation of SR6,568 ($1,751) in case of lost luggage and up to SR6,568 in case of damaged luggage.
In this context, Al-Shehri told Arab News: “The enhanced competitive environment will attract new investment and market participants, thereby providing a wider range of choices for passengers and improving the quality of service experienced at airports and airlines.”
“These new economic regulations follow GACA’s enhancement of passenger rights regulations earlier this year, which introduced the most comprehensive protections in the region,” she added.
Earlier this year, Saudi national airlines issued refunds totaling SR58 million to passengers during 2021-22. GACA clarified that these refunds primarily addressed issues such as delays or loss of luggage, flight cancellations, and delays.
Recently, Saudi Arabian Oil Co. successfully converted used cooking oil into certified sustainable aviation fuel through one of its joint ventures.
In a statement, Saudi Aramco Total Refining and Petrochemical Co. announced it had used the foodstuff as a renewable feedstock in its low-pressure hydrodesulfurization unit, resulting in the production of certified sustainable aviation fuel.
SAF is a liquid fuel that reduces carbon dioxide emissions by up to 80 percent, according to IATA.
KARACHI: Pakistan’s equity market and securities watchdog are all set to launch a one-window digital platform to issue online-only broker licenses in a bid to attract new investors, including venture capitalists (VCs), fintechs, and other startups, said a senior stock exchange official on Thursday.
The Securities and Exchange Commission of Pakistan (SECP) approved a regulatory framework for online-only brokers earlier this year in May by amending the Pakistan Stock Exchange (PSX) Rulebook.
The platform, named Online-Only Broker License, is designed to ensure customer onboarding, trade execution and provision of support services through electronic means only.
“This is an opportunity to set up a unique and different business model for the brokerage industry,” Raeda Latif, head of marketing and business development at PSX, told Arab News on the sidelines of an event to comprehensively explain the initiative.
Latif explained that investors interested in fintechs providing payment solutions and looking to expand their presence in Pakistan’s domestic investment environment can opt for this license.
“They can set up their own businesses,” she added. “Even VCs can invest in potential startups or [fund] entrepreneurs who are looking to establish their business in the brokerage industry.”
The PSX official remarked that the platform would be “very agile” and provide a lean model, allowing companies to conduct their entire business digitally, including reaching out to investors, placing orders, executing trades and closing accounts.
The online brokers would require a PSX Trading Right Entitlement Certificate (TRE) by submitting a fee of Rs1.25 million and demonstrating a minimum net worth of Rs7.50 million.
They will also have to pay Rs50,000 to secure a license from the SECP.
Latif noted that recently, over 80 percent of investor accounts at PSX had been opened online, with 60 percent from various small cities in the country.
Speaking at the occasion, PSX managing director Farrukh H. Khan said the stock exchange would also facilitate the auction of government debt securities like treasury bills and Pakistan Investment Bonds (PIBs), allowing the general public to invest in them by using small amounts.
“With the auction of the government debt securities, the common man will be able to invest and trade in the securities with small investments,” he told the media.
Khan informed the PSX and the State Bank of Pakistan (SBP) would jointly float debt securities soon.
Currently, the government debt securities are only auctioned by the SBP through a network of about 10 banks working as primary dealers, which the SBP also regulates.
The PSX chief said that all 200 stockbrokers and some 40 Pakistani banks would participate in the buying and selling of government debt securities at the bourse after the initiative was implemented.
Khan also maintained that Pakistan’s equity market was performing well, trading at new all-time highs following recent policy measures taken by the government to fulfill the International Monetary Fund’s conditions and an expected fall in interest rates.
RIYADH: Saudi Arabia’s outstanding debt capital market will see further growth after an 18.4 percent annual increase in the third quarter of 2023, according to research by Fitch Ratings.
The agency said the total sector size hit $358.8 billion, with 62 percent as sukuk and the rest in bonds.
The Kingdom’s debt capital market growth is expected to be supported by the diversification of funding and the development of capital markets in Saudi Arabia.
Bashar Al-Natoor, global head of Islamic finance at Fitch, said “ambitious giga-projects and capital market development initiatives” were also fueling the sector’s expansion.
He added: “We expect continued initiatives to diversify funding – not only by the sovereign, but also by banks, corporates and projects that are likely to seek alternative channels like DCM”.
In a press note, Fitch said the corporate funding culture in Saudi Arabia is still geared mostly towards bank financing, but this is gradually changing.
“Saudi riyal issuance was almost solely dominated by sukuk across all sectors over the past five years, and the government only issues local-currency debt in sukuk format,” it added.
Saudi Arabia accounted for 25.1 percent of the global US dollar sukuk market in the third quarter of the year.
The Kingdom has the largest debt capital market in the Gulf Cooperation Council, with 69.4 percent of the sukuk market.
It also has 23.4 percent of the US dollar global environmental, social, and governance sukuk market.
Sukuk issuances stood at $12.3 billion in the three months to the end of September, down 2.1 percent on the previous quarter.
Bonds issuances were $1.4 billion – up 16.8 percent on the second quarter of the year.
Some 90 percent of issuances in the three months to the end of September were in sukuk format.
Fitch rates $46.7 billion of Saudi outstanding sukuk, 97.1 percent of which are investment-grade.
The press note said: “Liquidity available to the banking sector has tightened, and we expect deposits to remain the main source of funding for Saudi banks in the longer term.
“However, all banks are expected to continue diversifying their funding bases through wholesale funding, including issuing sukuk and bonds.
“We also expect (the) corporate segment to reduce reliance on bank financing and issue more debt.”
LONDON: Global oil benchmark Brent remained stuck below $80 a barrel on Friday, but recouped some losses a day after sinking 5 percent to a four month-low on growing worries about burgeoning supply and cooling demand, according to Reuters
Brent futures rose $1.34, or about 1.7 percent, to $78.76 a barrel by 4:49 p.m. Saudi time. US West Texas Intermediate crude was at $74.1, up $1.2, also roughly 1.7 percent.
Both benchmarks have lost around a sixth of their value over the last four weeks, and are on track for their fourth straight week of losses.
“Oil prices are down slightly this year despite demand exceeding our optimistic expectations,” Goldman Sachs analysts said in a note.
“Non-core OPEC (Organization of the Petroleum Exporting Countries) supply has been much stronger than expected, partly offset by OPEC cuts.”
For 2023, the US, which makes up two-thirds of growth from those not part of the OPEC and its allies collective known as OPEC+, is forecast to deliver annual gains of 1.4 million barrels per day – boosting production to a fresh annual high, the International Energy Agency said in its latest report.
Prompt monthly spreads for both contracts have flipped to contango, a structure that indicates nearby prices are lower than those in future months reflecting healthy supply. .
Oil’s decline this week was mainly triggered by a steep rise in US crude inventories and production sustaining at record levels, while signs of thawing demand in China also triggered concerns.
But the precipitous drop on Thursday had some analysts questioning whether the selloff was overdone, particularly in light of escalating tensions in the Middle East that could disrupt oil supplies and the US vowing to enforce sanctions against Iran.
Another factor contributing to negative sentiment on Thursday was the number of Americans filing new claims for unemployment benefits increasing, and a slight contraction in industrial production figures.
“Poor numbers maybe, but not disastrous, however it was enough to tip the balance and carnage ensued with sell stops cascading with triggers,” said John Evans of oil broker PVM.
On the bright side, from a demand perspective, inflation in the euro zone appears to be thawing. On Friday, the EU’s statistics office confirmed annual inflation slowed sharply.
With Brent below $80 a barrel, a barrage of analysts now expect OPEC+ to extend their voluntary cuts into 2024.
“It has become clearer that the oil balance for the remainder of this year is not as tight as initially expected,” ING analysts said in a note.
“As things stand, the market is still expected to return to surplus in 1Q24.”