Aramco commences secondary public offering of 1.55bn shares  

RIYADH: Saudi Arabia launched the May issuance of its Sah savings sukuk, offering retail investors a fixed return of 4.66 percent as the government continues to push savings participation. 

The sukuk, part of the country’s broader local bond program, is issued by the Ministry of Finance and managed by the National Debt Management Center. It is available for subscription from May 4 at 10:00 a.m. until May 6 at 3:00 p.m. local time, the NDMC said in a statement. 

As part of the Vision 2030 Financial Sector Development Program, the initiative aims to boost personal savings by encouraging regular fiscal habits, expanding product access, and promoting financial literacy to support future goal planning. 

The offering, denominated in riyals, also supports the goal of raising the national savings rate from 6 percent to 10 percent by the decade’s end. 

The sukuk carries a one-year maturity and can be purchased in increments of SR1,000 ($266), with a cumulative cap of SR200,000 per individual across all program issuances.  

Allocation is scheduled for May 13, with redemption occurring between May 18 and 20. Payments will be disbursed on May 25.   

The Sah sukuk is accessible through digital platforms operated by SNB Capital, Al Rajhi Capital, and AlJazira Capital, as well as Alinma Investment and SAB Invest. 

The May issuance of the Sah savings product follows the fourth round issued in April, which offered a 4.88 percent return under the Ijarah sukuk structure. Available through the digital platforms of approved financial institutions, the bonds featured a one-year savings term with fixed returns payable at maturity. The minimum subscription was SR1,000, with a maximum cumulative limit of SR200,000 per user across all issuances during the program period.

Sah is Saudi Arabia’s first Shariah-compliant savings instrument for individuals. Structured under the Ijarah model — where returns are derived from leasing-based assets — the product is designed to offer a low-risk, fixed-income alternative with no fees and exemption from Zakat.  

Returns are paid upon maturity, with early redemptions allowed during set windows but without profit entitlement. 

NDMC CEO Hani Al-Madini said in March that Sah that the sukuk serves as a catalyst for private sector cooperation and participation in developing and launching various savings products tailored to diverse demographics. These initiatives could involve partnerships with banks, fund managers, financial technology companies, and more.  

In late February, the NDMC confirmed it would continue using the Ijarah format for future issuances to provide accessible, low-risk savings solutions. 

RIYADH: Saudi-based Al-Etihad Cooperative Insurance Co. has retained its A3 financial strength rating from Moody’s, reflecting the firm’s strong market position and disciplined underwriting. 

Moody’s cited several key strengths supporting the rating, including Al-Etihad’s solid market position as the Kingdom’s eighth-largest insurer, its conservative investment strategy — where high-risk assets represent just 28.2 percent of equity — and its strong capital adequacy.  

The agency also highlighted the company’s five-year average return on capital of 7.7 percent and a healthy combined ratio of 95.2 percent. 

“However, these strengths are partially offset by Al-Etihad’s concentration to the Saudi insurance market which has an elevated level of competition, as well as Al-Etihad’s concentration to motor and medical insurance, which are the Saudi insurance market’s most competitive lines of business,” Moody’s said. 

This marks the second consecutive A3 rating for Al-Etihad since August, when Moody’s initially assigned the grade, citing similar strengths such as asset quality and profitability. At the time, the agency emphasized the insurer’s ability to navigate competitive pressures while maintaining financial resilience. 

Al-Etihad, a mid-tier property and casualty insurer, offers a range of commercial and personal insurance products. The A3 rating places the company in the upper-medium grade category, indicating low credit risk and a strong capacity to meet its financial obligations. In its August update, Moody’s also affirmed Al-Etihad’s Governance Issuer Profile Score of G-2, reflecting its conservative risk management practices and experienced leadership.  

The insurer’s 2023 financial performance further strengthened its standing, with net profits surging 639 percent year-on-year to SR93.89 million ($25.02 million), driven by increased revenues in the motor insurance segment. 

Looking ahead, Al-Etihad’s ability to sustain profitability while effectively managing market risks will be critical to maintaining its current rating. 

Moody’s review did not incorporate explicit support from Al-Etihad’s largest shareholder, Kuwait’s Al Ahleia Insurance, but acknowledged governance benefits from the partnership. The agency’s following assessment will evaluate any material changes in the company’s credit profile. 

For now, the stable outlook signals confidence in Al-Etihad’s strategic direction, even as it faces sector-specific challenges in Saudi Arabia’s evolving insurance landscape. 

The Kingdom’s insurance sector has experienced robust growth, with revenues surging 16.9 percent year on year in the third quarter of 2024, driven by strong demand for motor, medical, and property insurance.  

According to a KPMG report, this expansion is fueled by Vision 2030-driven regulatory reforms, including mandatory health coverage and stricter auto insurance requirements.  

The sector’s net profit before zakat and tax jumped 25.9 percent to SR3.90 billion, while total assets grew 20 percent to SR84.91 billion, reflecting deepening market maturity.  

The Insurance Authority’s 2023 establishment and adoption of IFRS 17/9 standards have further strengthened governance and transparency. 

With S&P Global projecting 10-15 percent revenue growth in 2025, the sector remains a key pillar of Saudi Arabia’s economic diversification.