Saudi acquisition of Newcastle about more than just profits

Fans react outside the stadium after Newcastle United announced takeover by PIF. (Reuters)
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Updated 07 April 2022
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Saudi acquisition of Newcastle about more than just profits

  • Premier League clubs have recorded collective pre-tax profits just four times since it was launched in 1992
  • Wider business and marketing opportunities for Saudi Arabia are immense

LONDON: Saudi Arabia’s £305 million ($416 million) takeover of Newcastle United FC is a sound financial investment for the Kingdom, but one that should be judged beyond the annual profit and loss accounts of the club in the coming years.

Premier League football is not a particularly profitable business. Even before the pandemic struck, the league’s clubs posted a collective pre-tax loss of £165 million in the 2018/19 season even as revenues passed £5 billion for the first time, according to professional services firm Deloitte.

Unsurprisingly, the pandemic had a major impact on revenues, which slid to £4.5 billion the following year, leaving clubs nursing losses of just below £1 billion.

Premier League clubs have recorded pre-tax profits just four times since it was launched in 1992, all since 2013.

There is also a growing divide in English football. Many of the largest clubs are able to turn a profit while the smaller outfits struggle. Manchester City, owned by Abu Dhabi’s Sheikh Mansour, posted a fifth consecutive annual profit in 2018/19, of £10.1 million, while rivals Manchester United earned £18.88 million. Both posted losses in 2019/20.

However, City’s profit is a drop in the ocean compared with the more than £1 billion it has invested in the club since it acquired it in 2008.

So, if profits are not the motive for Gulf states to plow money into English football, what is?

One of the more obvious answers is branding. Saudi Arabia is in the process of building a number global businesses, including a new airline, and a global name like Newcastle FC would potentially be a great vehicle for the Kingdom’s tourism ambitions.

There have been rumors that PIF is looking to build a portfolio of clubs, with Inter Milan and Marseille both possible targets. The relationships that such investments bring and the opportunities to build more partnerships through corporate hospitality are vast.

But there is more to this deal than marketing. The deal offers Saudi Arabia an opportunity to invest in other related sectors in Newcastle and beyond that fit with its Vision 2030 economic strategy.

Real estate (might there be a new stadium complex), logistic and renewable energy come to mind as potential areas of synergy. Offshore wind is a growing industry off the northeast coast of the UK and the River Tyne is rapidly becoming a hub for the country’s wind industry.

It’s not too much of stretch to imagine the city’s port becoming part of the Kingdom’s growing international logistics network centered on Jeddah Islamic Port.

However PIF leverages its investment in Newcastle, it represents an exciting opportunity for the Saudi Arabia as it remakes its economy for a post-oil world.


Oil Updates — prices gain on US trade optimism, drop in crude inventories

Updated 5 sec ago
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Oil Updates — prices gain on US trade optimism, drop in crude inventories

TOKYO: Oil prices rose around 1 percent on Thursday, buoyed by optimism over US trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in US crude inventories.

Brent crude futures gained 64 cents, or 0.9 percent, to $69.15 a barrel by 8:30 a.m. Saudi time. US West Texas Intermediate crude futures climbed 68 cents, or 1 percent, to $65.93 per barrel.

Both benchmarks were little changed on Wednesday as markets monitored developments in US-European Union trade talks, following President Donald Trump’s tariff deal with Japan. The agreement lowers duties on auto imports and spares Tokyo from new levies in exchange for a $550 billion package of US-bound investment and loans.

“Buying was driven by optimism that progress in tariff negotiations with the US would help avoid a worst-case scenario,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.

“Still, uncertainty over US-China trade talks and peace negotiations between Ukraine and Russia is limiting further gains,” he said, predicting WTI would likely remain range-bound between $60 and $70.

Two European diplomats said on Wednesday that the EU and the US are moving toward a trade deal that could include a 15 percent US baseline tariff on EU goods and possible exemptions, potentially paving the way for another major trade agreement following the Japan deal.

On the supply side, US Energy Information Administration data showed US crude inventories fell last week by 3.2 million barrels to 419 million barrels, exceeding analysts’ expectations in a Reuters poll for a 1.6 million-barrel draw.

Gasoline stocks also fell by 1.7 million barrels to 231.1 million barrels, nearly double the expectations for a 908,000-barrel draw. Distillate stockpiles, including diesel and heating oil, rose by 2.9 million barrels in the week to 109.9 million barrels — still near their lowest seasonal level since 1996, ANZ analysts said in a note.

“This suggests demand over the northern hemisphere summer has been relatively strong,” ANZ said.

Meanwhile, geopolitical tensions remained in focus.

Russia and Ukraine held peace talks in Istanbul on Wednesday, discussing further prisoner swaps, though the two sides remain far apart on ceasefire terms and a possible meeting of their leaders.

Separately, foreign oil tankers were temporarily barred from loading at Russia’s main Black Sea ports due to new regulations, two industry sources said on Wednesday, effectively halting exports from Kazakhstan through a consortium partly owned by US energy majors.

The US energy secretary said on Tuesday that the US would consider sanctioning Russian oil to end the war in Ukraine. Meanwhile, the EU on Friday agreed its 18th sanctions package against Russia, lowering the price cap for Russian crude. 


Saudi non-oil exports climb 6% to $8.29bn: GASTAT 

Updated 1 min 28 sec ago
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Saudi non-oil exports climb 6% to $8.29bn: GASTAT 

RIYADH: Saudi Arabia’s non-oil exports, including re-exports, reached SR31.11 billion ($8.29 billion) in May, marking a 6 percent increase compared to the same month in 2024, official data showed. 

Preliminary figures released by the General Authority for Statistics showed that the UAE remained the top destination for the Kingdom’s non-oil products, with exports to the Emirates amounting to SR9.54 billion in May. 

India was the second-largest non-oil trade partner, importing goods worth SR2.78 billion, followed by China at SR2.03 billion, Bahrain at SR989.1 million, and Turkiye at SR924.7 million. 

The rise in non-oil exports supports the goals of Vision 2030, which aims to diversify Saudi Arabia’s economy and reduce its reliance on oil revenues. 

In its latest report, GASTAT stated: “Non-oil exports in May, including re-exports, recorded an increase of 6 percent compared to May 2024, while national non-oil exports, excluding re-exports, decreased by 1.8 percent.” 

It added: “Moreover, the value of re-exported goods increased by 20.5 percent during the same period.” 

In a separate release in May, GASTAT noted that the Kingdom’s gross domestic product grew by 2.7 percent year on year in the first quarter, driven by robust non-oil activity. 

Commenting on the GDP figures at the time, Minister of Economy and Planning Faisal Al-Ibrahim — who also chairs GASTAT’s board — highlighted that the contribution of non-oil activities to the Kingdom’s economic output reached 53.2 percent, a 5.7 percent increase over previous estimates. 

He added that the country’s economic outlook remains strong, buoyed by structural reforms and high-quality, state-led projects across various sectors.

Other major destinations for Saudi Arabia’s non-oil shipments in May included Egypt, which received goods worth SR585.1 million, followed by Belgium at SR756.6 million, and Kuwait at SR736.9 million. 

Exports to the US stood at SR730.3 million, while shipments to Singapore and Jordan totaled SR689.3 million and SR642.8 million, respectively. 

Departure locations

Among seaports, the King Fahad Industrial Port in Jubail handled the highest volume of outbound non-oil goods, valued at SR3.52 billion, followed closely by the Jeddah Islamic Sea Port at SR3.35 billion.

Ras Al Khair and Jubail Sea Ports facilitated non-oil exports worth SR2.37 billion and SR2.36 billion, respectively. 

On land, the Al-Batha Port processed non-oil exports worth SR2.18 billion. Al-Hadithah and Al-Wadiah ports recorded outbound shipments of SR864.4 million and SR460.2 million, respectively. 

King Abdulaziz International Airport led all air terminals, handling SR4.22 billion in non-oil exports in May — a 258 percent increase compared to the same month last year. 

Machinery and chemicals lead the way

“Among the most important non-oil exports are machinery, electrical equipment and parts, which constituted 23.7 percent of the total non-oil exports, recording a 99.8 percent increase compared to May 2024,” GASTAT noted. 

Chemical products came in second, accounting for 22.8 percent of total non-oil exports and growing 0.4 percent year on year. 

The strength of Saudi Arabia’s non-oil private sector was further affirmed by Riyad Bank’s Purchasing Managers’ Index, compiled by S&P Global, which showed that the Kingdom’s headline PMI rose to 57.2 in June, up from 55.8 in May. This reading indicates a strong improvement in business conditions, exceeding the long-run average of 56.9. 

A PMI score above 50 signals expansion, while a figure below that mark indicates contraction. Saudi Arabia’s June PMI also outpaced that of its regional peers, with the UAE and Kuwait recording 53.5 and 53.1, respectively. 

Merchandise exports 

According to GASTAT, the Kingdom’s total merchandise exports in May declined 14 percent year on year to SR90.44 billion.

The drop was primarily due to a 21.8 percent fall in oil exports, which caused the share of oil in total exports to drop from 72.1 percent in May 2024 to 65.6 percent this year. 

China was the top destination for Saudi Arabia’s overall merchandise exports, with shipments valued at SR12.66 billion. The UAE followed at SR10.13 billion — a 37.5 percent jump compared to the previous year — while exports to India reached SR8.07 billion. South Korea, Japan, and the US imported SR7.44 billion, SR5.99 billion, and SR3.68 billion worth of goods, respectively. 

Imports climb 

Saudi Arabia’s imports in May reached SR80.93 billion, up 7.8 percent year on year, GASTAT reported.

Machinery, mechanical and electrical equipment topped the import list at SR24.03 billion, followed by transport equipment at SR9.20 billion and chemical products at SR7.64 billion.

Base metal imports stood at SR7 billion, while mineral products totaled SR4.84 billion. 

By region, Asia remained the Kingdom’s largest trade partner, contributing SR47.59 billion in imports — a 17.8 percent rise from a year ago.

Imports from Europe and the Americas amounted to SR19.85 billion and SR8.83 billion, respectively. Africa supplied SR3.78 billion worth of goods, while imports from Oceania totaled SR778.8 million. 

China led all countries as the top source of imports, with SR23.36 billion worth of shipments in May, a 23.3 percent year-on-year increase. The US followed with SR6.04 billion, ahead of the UAE at SR5.07 billion, India at SR3.69 billion, and Japan at SR3.61 billion. 

Sea routes were the dominant entry channel for imports, accounting for SR47.39 billion — a 7.1 percent increase year on year. Air and land routes handled SR24.33 billion and SR9.20 billion worth of inbound goods, respectively. 

King Abdulaziz Sea Port in Dammam led all seaports with SR21.37 billion in imports, followed by Jeddah Islamic Sea Port at SR17.49 billion and Ras Tanura Port at SR1.50 billion. 

Among land entry points, Al-Batha Port managed SR3.92 billion worth of goods, while Riyadh Dry Port and King Fahad Bridge processed SR2.56 billion and SR830.5 million, respectively. 

By air, King Khalid International Airport in Riyadh received SR11.17 billion in imports. King Abdulaziz International Airport and King Fahad International Airport handled SR8.85 billion and SR4.28 billion, respectively.


Closing Bell: Saudi main index rises to close at 10,983

Updated 23 July 2025
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Closing Bell: Saudi main index rises to close at 10,983

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Wednesday, gaining 140.73 points, or 1.30 percent, to close at 10,983.93.

The total trading turnover of the benchmark index was SR5.34 billion ($1.42 billion), as 207 of the stocks advanced and 46 retreated.  

Similarly, the Kingdom’s parallel market Nomu gained 38.14 points, or 0.14 percent, to close at 26,778.15. This comes as 43 of the listed stocks advanced while 35 retreated.  

The MSCI Tadawul Index gained 21.53 points, or 1.55 percent, to close at 1,411.73.  

The best-performing stock of the day was Sport Clubs Co., whose share price surged 18.60 percent to SR11.03. 

Other top performers included Middle East Specialized Cables Co., whose share price rose 7.56 percent to SR33.56, as well as Tourism Enterprise Co., whose share price surged 5.88 percent to SR1.08.

SICO Saudi REIT Fund recorded the most significant drop, falling 5.13 percent to SR4.07.

Obeikan Glass Co. also saw its stock price fall 3.22 percent to SR38.84.

Saudi Azm for Communication and Information Technology Co. also saw its stock prices decline 3.21 percent to SR26.50.

On the announcements front, Bank Albilad has announced its interim financial results for the period ending on June 30. According to a Tadawul statement, the firm recorded a net profit of SR1.46 billion during the first six months of the year, reflecting an 11.5 percent rise compared to the same period a year earlier. This climb is primarily attributed to a 9 percent increase in net income, driven by a rise in total operating income.

Dividend income, net gain on fair value through statement of income instruments, and other operating income have decreased. Total operating expenses increased by 7 percent, primarily driven by higher general and administrative costs, salaries and employee benefits, as well as depreciation and amortization. Despite this, there was a decline in net impairment charges for expected credit losses.

Bank Albilad ended the session at SR25.78, up 3.20 percent.

The Saudi Investment Bank has also announced its interim financial results for the first half of the year.

A bourse filing revealed that the company recorded a net profit of SR 1.01 billion for the period ending June 30, up 9.3 percent year over year.

This jump is primarily linked to an increase in total operating income. The Saudi Investment Bank ended the session at SR14.05, up 1.28 percent.

Yanbu Cement Co. also announced its condensed consolidated financial results for the six-month period ending on June 30.

According to a Tadawul statement, the firm recorded a net profit of SR51.5 million during the first half of 2025, reflecting a 47.4 percent decrease compared to the same period a year earlier.

The drop in net profit for the current period compared to last year is mainly due to lower domestic sales revenues driven by a decline in average selling prices, reduced margins from export sales, higher financing costs, and increased general and administrative expenses.

Yanbu Cement Co. ended the session at SR18.32, down 0.05 percent.


Saudi Arabia launches AI readiness index to accelerate government tech transformation

Updated 23 July 2025
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Saudi Arabia launches AI readiness index to accelerate government tech transformation

  • AI is projected to contribute $235.2 billion to GDP
  • More than 180 representatives participated in the first measurement cycle

RIYADH: Saudi government agencies are set to advance artificial intelligence adoption through a new index that measures readiness and supports the development of innovative, data-driven solutions across key sectors. 

The National Artificial Intelligence Index, inaugurated by the Saudi Data and Artificial Intelligence Authority, is designed to assess the maturity of AI implementation across government entities. 

More than 180 representatives participated in the first measurement cycle, which also aims to provide tailored recommendations and track progress regularly, according to the Saudi Press Agency. 

The initiative supports broader government targets, including ranking among the top 15 countries globally in AI, top 10 in the Open Data Index, and top 20 in data and AI-related publications under the National Strategy for Data and Artificial Intelligence. 

AI is projected to contribute $235.2 billion, or 12.4 percent, to Saudi Arabia’s gross domestic product by 2030, according to estimates by PwC. 

“The index aims to unify government efforts and national priorities in the field of AI and provide the enabling capabilities to enable government agencies to adopt and develop effective and sustainable AI products and solutions that contribute to achieving the goals of Saudi Vision 2030,” SPA said. 

It added: “The index is based on three main pillars, seven main axes, and 23 sub-fields to ensure a comprehensive measurement of government agencies’ AI readiness.” 

This forms part of SDAIA’s broader mandate as the Kingdom’s national authority for data and AI development and regulation. It is intended to strengthen institutional performance and drive public-sector innovation. 

The newly launched index also provides results reflecting the maturity of AI adoption within government agencies, along with the necessary support to enhance their capabilities and further develop innovative solutions that sustain national efforts and expand their impact in priority sectors. 

As part of its continuous efforts to improve institutional excellence, SDAIA was recently awarded two international accreditation certificates by the Global Excellence Assembly, a body that specializes in developing and evaluating institutional excellence models.

The recognition highlights SDAIA’s alignment with international best practices in the design and governance of award models, as well as the transparency and impartiality of its evaluation and selection processes.

SDAIA is also engaging the public to shape the future of digital services. The authority earlier this month launched an electronic consultation to gather public opinion on the Ehsan National Platform for Charitable Work, inviting citizens and residents to share their views on which service is most in need of improvement.


DGCX reports 30% rise in trade volumes in H1 2025

Updated 23 July 2025
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DGCX reports 30% rise in trade volumes in H1 2025

  • Growth attributed to heightened demand for hedging instruments
  • DGCX saw 1.56 million contracts traded with a notional value exceeding $37 billion in 2024

RIYADH: The Dubai Gold and Commodities Exchange witnessed 1 million contracts traded during the first half of this year, representing a 30 percent rise in average daily volumes compared to the same period in 2024.

In a press statement, DGCX attributed the growth to heightened demand for hedging instruments amid global market volatility, with gold contracts and Indian Rupee Quanto products leading the uptick in trading activity. 

According to the report, DGCX’s Shariah-compliant Gold Spot Contract led this growth, with value of trades reaching $46.8 million in the first six months, marking a significant 199.84 percent year-on-year rise. 

Established in 2005 and owned by the Dubai Multi Commodities Center, DGCX plays a pivotal role in Dubai’s status as one of the world’s largest gold trading hubs. 

With over 1,500 member companies operating in the gold and precious metals sector within DMCC, the exchange complements the international district’s broader offering in physical and financial trading infrastructure. 

“DGCX has seen exceptional momentum in the first half of the year, with nearly $47 million traded through our spot gold contract alone,” said Ahmed Bin Sulayem, chairman and CEO of DGCX. 

The statement further said that INR Quanto futures contract, a synthetic contract that enables global market participants to hedge Indian rupee exposure against the US dollar without requiring access to the underlying Indian markets, also continued to attract strong trading interest. 

“This performance not only places DGCX firmly on course to surpass its 2024 results but reinforces its role as a critical pillar in the region’s financial infrastructure,” said Sulayem. 

He added: “As global market conditions grow more complex, the exchange’s rising adoption by Shariah-based investors, bullion traders, and institutional participants alike highlights the growing demand and broad appeal for sophisticated, secure, and transparent hedging tools – a position we expect will get stronger.” 

The statement added that DGCX saw 1.56 million contracts traded with a notional value exceeding $37 billion in 2024, and the exchange is well on track to surpass that figure in 2025. 

In May, DGCX announced its acceptance to join the Arab Federation of Capital Markets’ Business Development Committee. 

In a statement at the time, DGCX said that the appointment reflects the exchange’s expertise in regulatory oversight, risk management, and product innovation, reinforcing its position as a leading regional player in derivatives trading and financial market infrastructure.

The AFCM, established in 1978 as the principal body for Arab stock exchanges, plays a critical role in enhancing collaboration and standardising best practices across the region.