Foreign reserves propel Saudi assets to $435bn

The Saudi Central Bank, also known as SAMA. File
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Updated 12 December 2024
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Foreign reserves propel Saudi assets to $435bn

RIYADH: Saudi Arabia’s official reserve assets saw a 2.22 percent year-on-year increase to SR1.63 trillion ($435.41 billion) in October, underscoring the Kingdom’s fiscal resilience.

Data from the Saudi Central Bank, also known as SAMA, revealed that these holdings include monetary gold, special drawing rights, the International Monetary Fund’s reserve position, and foreign reserves. 

The latter category comprises currency and deposits abroad as well as investments in foreign securities, and accounted for 94.34 percent of the total, reaching SR1.54 trillion in October – an annual rise of 2.32 percent.

Special drawing rights rose to SR78.42 billion, marking a 2.09 percent increase and accounting for 4.8 percent of Saudi Arabia’s total reserves. 

Created by the IMF to supplement member countries’ official reserves, SDRs derive their value from a basket of major currencies, including the US dollar, euro, Chinese yuan, Japanese yen, and British pound sterling. SDRs can be exchanged among governments for freely usable currencies when needed. 

In addition to providing supplementary liquidity, SDRs help stabilize exchange rates, act as a unit of account, and facilitate international trade and financial stability. 

The IMF reserve position totaled around SR12.41 billion but recorded an 8.03 percent decline during this period. This category represents the amount a country can draw from the IMF without conditions. 

Gold reserves remained steady at SR1.62 billion, a level unchanged since February 2008. 

Saudi Arabia’s reserve assets, underpinned by substantial foreign exchange reserves and sovereign wealth managed through entities like the Public Investment Fund, serve as a cornerstone of the Kingdom’s fiscal strength. 

These reserves provide the government with a robust financial buffer to navigate economic uncertainties, including fluctuating oil revenues, global financial market turbulence, and geopolitical risks. 

With significant reserve levels, the Kingdom is well-positioned to meet its financing requirements across short, medium, and long-term horizons. 

This financial resilience bolsters Saudi Arabia’s ability to secure favorable borrowing terms from both domestic and international markets, enhancing investor confidence and supporting fiscal sustainability. 

The strategic deployment of these assets aligns with Saudi Arabia’s Vision 2030, which focuses on economic diversification, enhancing non-oil sectors, and ensuring sustainable long-term growth. 

This comprehensive strategy equips the Kingdom to mitigate risks while fostering stability and pursuing its ambitious economic objectives.


Saudis to get more leadership roles as PepsiCo expands, says regional CEO

Updated 31 July 2025
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Saudis to get more leadership roles as PepsiCo expands, says regional CEO

DHAHRAN: Food manufacturer PepsiCo will offer more leadership roles to Saudis, its regional CEO pledged at the inauguration of the SR300 million ($79.97 million) expansion of its Dammam facility.

Speaking to Arab News, Ahmed El-Sheikh explained how the company supports the Kingdom’s Vision 2030 economic diversification plan through three main areas — using local resources, Saudization, and increasing exports.

The announcement came during a visit to the site by Minister of Industry and Mineral Resources Bandar Alkhorayef, who praised the facility’s contribution to job creation, export growth, and the overall development of the food manufacturing sector in Saudi Arabia.

The site serves as a key hub in the region, which supplies local markets and exports products to 20 countries across the Middle East.

The PepsiCo MENAP CEO said: “We’re proud to say that 85 percent of our workforce at the Dammam plant are Saudi nationals, one of the highest rates across any of our facilities in the region. With 280 employees currently, this is just the beginning. We plan to grow even further.”

He added: "As we move toward greater digitization and automation, we’re also opening up more opportunities for Saudis to step into technical and leadership roles.” 

Recent regulatory changes, which have been made possible through collaboration with the Kingdom’s Ministry of Environment and Agriculture, now permit PepsiCo to utilize locally grown potatoes for export.

This development has been described by Alkhorayef as a “significant milestone” for both local farming and policy reform.

“It demonstrates how we’ve been able to work with PepsiCo over the last few years to ensure the entire supply chain, from farming to production and export, is well managed,” the minister told Arab News.

“As a result of our success working as a team, we were able to amend the policy so that PepsiCo can now use Saudi grown potatoes for export,” he added.

Bandar Alkhorayef cutting the ribbon on the Dammam facility. Supplied

Sustainability and resource efficiency were focal points during the visit, and Alkhorayef noted that the Kingdom now holds “a record in terms of water efficiency in potato cultivation,” a development he called inspiring, not only locally, but globally.

The Dammam plant sources 100 percent of its potatoes from Saudi farms, and uses local materials for secondary packaging, with 70 percent of primary packaging now locally sourced, a percentage PepsiCo aims to push to full localization.

PepsiCo operates in the Kingdom across 86 locations and employs nearly 9,000 people through direct and partner operations.

The company has opened a new regional headquarters in Riyadh’s King Abdullah Financial District, which will oversee operations across the Middle East, North Africa, and Pakistan, aligning with Saudi Arabia’s Regional Headquarters Program.

Further investment is also planned, and El-Sheikh said: “In addition to the SR300 million we’ve just invested in the Dammam plant, we’re preparing to open a state-of-the-art R&D facility in Riyadh in just two months’ time.” 

The center will cost SR30 million and serve as a hub for product and packaging innovations in the Gulf Cooperation Council region, according to a statement from PepsiCo released in April. 

When it comes to employment, Alkhorayef stressed that Saudization is driven by data and standards.

“This plant is a great example. It has around 85 percent Saudization, and female participation is about 22–23 percent, with more than 25 percent women in the plant workforce itself. That’s a significant achievement.”

He added that the government takes a comprehensive approach to measuring local content, and went on to say: “But measurement is not the goal, it’s a baseline. The real goal is to use it as a foundation to increase both local sourcing and hiring.”

The Dammam plant is one of PepsiCo’s most advanced in the region, and features energy efficient heating, ventilation, and air conditioning systems, solar panels generating 510 megawatt-hour yearly, and uses recycled water in its processing systems.

These investments align with the sustainability goals in the Kingdom’s National Industrial Strategy.


Closing Bell: Saudi stock market ends the week in green 

Updated 31 July 2025
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Closing Bell: Saudi stock market ends the week in green 

RIYADH: Saudi Arabia’s Tadawul All Share Index ended the week on Thursday with a slight gain, rising 5.89 points, or 0.05 percent, to close at 10,920.27. 

The total trading turnover reached SR4.38 billion ($1.16 billion), with 417.32 million shares traded. A total of 111 stocks advanced while 136 declined. 

The MSCI Tadawul 30 Index also edged higher, adding 2.66 points, or 0.19 percent, to finish at 1,409.74. 

On the Kingdom’s parallel market Nomu, the index advanced by 115.90 points, or 0.43 percent, closing at 26,924.98. Of the listed companies, 47 gained while 31 declined. 

Sport Clubs Co. led the gainers, climbing 9.97 percent to SR11.25. They were followed by Al Babtain Power and Telecommunication Co., which rose 5.03 percent to SR56.40, and Bupa Arabia for Cooperative Insurance Co., which added 4.27 percent to close at SR168.60.

Miahona Co. and Saudi Azm for Communication and Information Technology Co. were also among the top performers, gaining 4.23 percent and 3.85 percent, to close at SR27.10 and SR29.66, respectively. 

Saudi Steel Pipe Co. recorded the steepest decline of the session, falling 4.02 percent to SR51.30. It was followed by Yamama Cement Co., which dropped 3.8 percent to SR32.88, and Halwani Bros. Co., down 3.19 percent to SR42.42. 

Arab Insurance Cooperative Co. and Astra Industrial Group also posted losses of 2.92 percent and 2.57 percent, respectively. 

On the announcement front, Umm Al-Qura Cement Co. reported a 6.6 percent year-on-year decline in revenue for the first half of 2025, with sales amounting to SR122.5 million compared to SR131.2 million in the same period last year. 

Net profit also dropped, falling 30.8 percent to SR20.8 million from SR30.1 million over the same period. 

The company attributed the decline in revenue to a decrease in the average selling price per tonne. 

The fall in net profit was linked to the lower sales value and a reduction in other revenues, despite a decline in general and administrative expenses, financing costs, and zakat. 

Shares of Umm Al-Qura Cement Co. closed at SR15.61 on Thursday, down 0.32 percent. 

Almarai Co. confirmed the completion of its acquisition of Pure Beverages Industry Co., following its initial agreement signed on June 15. 

The company stated that the transaction reinforces its strategy to expand its beverage portfolio and strengthen its market presence, while supporting future growth plans. 

Almarai added that the acquisition was finalized with no change to the previously disclosed cost of SR1.04 billion. 

Shares of Almarai Co. closed at SR47.90 on Thursday, down 0.04 percent. 


Oman joins World Free Zones Organization to shore more foreign investment

Updated 31 July 2025
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Oman joins World Free Zones Organization to shore more foreign investment

  • Membership will support efforts to improve operational efficiency and develop more targeted marketing strategies
  • It will also help improve competitiveness of territories OPAZ oversees

RIYADH: Oman’s free zones are set to attract greater foreign investment after signing up to a global network designed to boost the economic areas.

The Public Authority for Special Economic Zones and Free Zones said its membership in the World Free Zones Organization will help improve the competitiveness of the territories it oversees, including industrial cities and free zones, while opening new channels to promote them as flexible and investor-ready destinations with advanced infrastructure.

Free zones are designated areas that offer businesses incentives such as tax exemptions, full foreign ownership, and simplified customs procedures. These districts are designed to attract investment, boost exports, and support economic diversification by providing a competitive and flexible environment for companies to operate.

They are increasingly central to economies in the Middle East, with hubs like Dubai’s Jebel Ali, Riyadh’s Special Integrated Logistics Zone, and Egypt’s Suez Canal Economic Zone driving trade and investment.

“Through this international partnership, the authority seeks to expand its network of economic relations and benefit from the latest global trends in the management and development of special economic zones, free zones, and industrial cities,” Oman News Agency reported.

This comes as Oman’s special economic zones attracted $43.16 billion in investments during the first half of 2023, driven by major projects in Sohar, Salalah, and Duqm, supported by a favorable investment climate fostered by OPAZ and the government’s diversification strategy.

By joining the organization, which brings together more than 1,600 zones and economic institutions from over 140 countries, the authority will be able to exchange expertise and strengthen its operational capabilities to keep Oman’s zones competitive globally.

The membership will also support efforts to improve operational efficiency and develop more targeted promotion and marketing strategies to attract high-value projects, ONA said.

The body currently oversees 23 operating special economic zones, free zones, and industrial cities across Oman. These districts attracted cumulative investments totaling approximately 21 billion Omani rials ($54.5 billion) by the end of 2024, reflecting their growing appeal to investors.

The World Free Zones Organization is a network that includes free zones, multinational corporations, and industry stakeholders committed to fostering global trade and investment.

Across the wider Middle East and North Africa region, free zones have become critical enablers of economic diversification and foreign direct investment.

The UAE is home to some of the most prominent examples, including Jebel Ali Free Zone, which hosts more than 9,000 companies, and Abu Dhabi’s Khalifa Industrial Zone, which supports large-scale manufacturing and logistics operations.

In Saudi Arabia, the King Abdullah Economic City and the Special Integrated Logistics Zone in Riyadh have emerged as strategic hubs supporting Vision 2030 objectives, while Egypt’s Suez Canal Economic Zone has attracted global interest as a key gateway for trade and industry.


UAE-led AI pact aims to narrow digital divide in Global South

Updated 31 July 2025
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UAE-led AI pact aims to narrow digital divide in Global South

RIYADH: Artificial intelligence adoption in the Global South is set to accelerate under a new UAE-led partnership with Malaysia and Rwanda aimed at expanding ethical AI use and knowledge sharing. 

The agreement, signed under the World Economic Forum’s Center for the Fourth Industrial Revolution global network, builds on an initiative launched by the UAE and Rwanda at the 2024 WEF Annual Meeting in Davos, according to a press release. 

The partnership comes amid rising global concern that emerging technologies could exacerbate inequality. The UN estimates the AI market will reach $4.8 trillion by 2033, warning that without inclusive frameworks, the Global South risks being left behind. 

Gobind Singh Deo, minister of digital in Malaysia, said his country “is proud to join forces with the UAE and Rwanda in this visionary initiative to bridge global AI expertise and accelerate digital transformation for a more inclusive and sustainable future.” 

He added: “This partnership involving Malaysia Center4IR, C4IR UAE, and C4IR Rwanda reflects our collective goal for a future that is driven by responsible AI innovation.” 

Singh Deo expressed hope that the C4IR Network AI Fellowship Program, developed through the collaboration, would act as a crucial bridge connecting AI leaders and experts across continents. 

“By sharing knowledge, exchanging talent, and co-creating solutions, we aim to address the critical challenges and harness the immense potential of AI for the benefit of not only our nations, but the wider global community,” he added. 

The memorandum of understanding was witnessed by UAE Minister of State for Artificial Intelligence Omar Al-Olama and Malaysia’s Singh Deo. It aims to deepen South-South collaboration on technology policy, research, and skills development. 

With Malaysia now joining, the expanded C4IR AI Fellowship Program will support talent exchange, joint innovation, and responsible governance frameworks led by Global South countries. 

“This expanded partnership will help the Global South to unlock greater value from AI and Fourth Industrial Revolution applications,” said Khalfan Belhoul, CEO of Dubai Future Foundation. 

“Guided by our leadership, the UAE is committed to building and strengthening global collaboration to achieve inclusive, sustainable development through technology and knowledge sharing,” he added. 

Crystal Rugege, managing director of the Rwanda Center for the Fourth Industrial Revolution, noted that the strategic partnership complemented Rwanda’s flagship initiatives, including the AI Innovation Lab and the Global AI Summit on Africa, thereby enhancing efforts to promote cutting-edge research, knowledge transfer, and capacity building. 

“By strengthening responsible AI governance and accelerating practical AI adoption, we are committed to empowering Rwanda, our partner countries, and the global AI ecosystem to fully leverage AI for sustainable and inclusive development,” she added. 

The Global Center for the Fourth Industrial Revolution Network brings together public and private sector partners to harness emerging technologies while managing their risks. It promotes the responsible use of these technologies through a global network of independent centers.


Middle East air cargo capacity rises 1.5% despite falling demand

Updated 31 July 2025
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Middle East air cargo capacity rises 1.5% despite falling demand

  • Performance reflects broader slowdown in global air cargo
  • Slowdown attributed to rising protectionism, including new US tariffs

RIYADH: Middle Eastern air cargo capacity grew 1.5 percent year on year in June, even as regional demand contracted by 3.2 percent due to geopolitical tensions and airspace disruptions. 

The rise in available cargo space, measured in available cargo tonne-kilometers, came amid route disruptions over parts of Iran, Iraq, Israel, and Lebanon. These factors drove the region’s second consecutive monthly contraction in cargo volumes, according to the International Air Transport Association’s latest air cargo market report.

The performance reflects a broader slowdown in global air cargo, with IATA’s mid-year forecast projecting 0.7 percent volume growth, down from 11.3 percent in 2024. 

The slowdown is attributed to rising protectionism, including new US tariffs and the rollback of de minimis exemptions on low-value imports, which could dampen e-commerce-related air freight. 

“The June air cargo data made it very clear that stability and predictability are essential supports for trade,” said Willie Walsh, IATA’s director general. 

“Emerging clarity on US tariffs allows businesses greater confidence in planning. But we cannot overlook the fact that the ‘deals’ being struck are resulting in significantly higher tariffs on goods imported into the US than we had just a few months ago,” he added. 

While the full economic impact of these trade cost barriers remains to be seen, Walsh said governments must step up efforts to make trade simpler, faster, cheaper, and more secure through digitalization. 

The Asia-North America and Africa-Asia trade lanes each contracted by 4.8 percent, while Middle East-Europe declined by 4.5 percent. In contrast, trade between Europe and Asia expanded by 10.6 percent, maintaining 28 consecutive months of growth. 

“Overall, air cargo demand grew by a modest 0.8 percent year-on-year in June, but there are very differing stories behind that number for the industry’s major players,” Walsh said. 

Trade tensions dragged North American traffic down 8.3 percent and left European growth at 0.8 percent, but Asia-Pacific defied the trend with a 9 percent expansion. 

“Meanwhile, disruptions from military conflict in the Middle East saw the region’s cargo traffic fall by 3.2 percent,” added Walsh. 

When it came to passenger numbers, Middle Eastern carriers saw a 0.4 percent year-on-year decrease in demand. Capacity increased 1.1 percent year on year, and the load factor was 78.7 percent – a 1.2 percentage point drop compared to June 2024.

According to the IATA, military conflict particularly impacted traffic on routes to North America — down 7 percent year on year — and Europe, which saw an annual reduction of 4.4 percent.

“In June, (global) demand for air travel grew by 2.6 percent. That’s a slower pace than we have seen in previous months and reflects disruptions around military conflict in the Middle East,” said Walsh. 

Despite the challenging backdrop, some fundamentals remain supportive. Global industrial production rose 3.2 percent year on year in May, and goods trade increased by 3.5 percent. 

Jet fuel prices in June were 12 percent lower than a year ago, easing cost pressures for carriers. 

While the global Purchasing Managers’ Index recovered to 51.2, signaling expansion, new export orders remained in contraction at 49.3. 

Adding to the complexity of the regional dynamic, Middle East airlines are simultaneously expected to post the world’s highest net profit margin in 2025 at 8.7 percent, according to IATA’s June industry forecast presented at its 81st annual general meeting in New Delhi. 

The region is projected to generate a net profit of $6.2 billion, up from $6.1 billion in 2024, and is expected to earn $27.20 per passenger, outpacing all global peers despite demand volatility and regional instability.