KARACHI: Pakistan International Airlines expects to attract “more favorable valuation” from investors after the national carrier posted an annual profit for the first time in more than two decades ahead of a second attempt by the government to sell the airline, CEO Amir Hayat said this week.
Islamabad’s attempt to privatize PIA last year fell flat when it received only a single offer, well below the asking price of more than $300 million. The cash-strapped government of Prime Minister Shehbaz Sharif is struggling to privatize several loss-making public enterprises, including PIA, as part of conditions under a $7 billion International Monetary Fund’s loan program approved last year.
This week, PIA reported Rs9.2 billion ($33.1 million) earnings from its operations last year ended December and made a net profit of Rs26.2 billion ($93.3 million) in 2024, a development described by analysts as “good optics” for the privatization push.
“This landmark operational profit of 26 billion rupees fundamentally strengthens PIA’s position in the context of the government’s privatization plan,” Hayat told Arab News in a written response to questions.
“It demonstrates the inherent value and turnaround potential of the airline, making it a significantly more attractive proposition for potential investors.”
He said the results would positively influence investor confidence and potentially lead to a “more favorable valuation” during the privatization process.
Pakistan had offloaded nearly 80 percent of the airline’s legacy debt and shifted it to government books ahead of the privatization attempt. The rest of the debt was also cleaned out of the airline’s accounts after the failed sale attempt to make it more attractive to potential buyers, according to the country’s privatization ministry.
The airline has for years survived on government bailouts as its operational earnings were eaten up by debt servicing costs.
Officials say offloading the debt burden and recent reforms like shedding staff, exiting unprofitable routes and other cost-cutting measures led to the profitable year.
Hayat said the latest profit was because of “a comprehensive reforms program” executed over the past few years.
“Key drivers include maintaining strict financial discipline by implementing stringent cost control measures across the board, scrutinizing every expense, creating operational efficiencies in every aspect of flight operations, reducing ground times, and enhancing fuel efficiency,” Hayat said.
Other measures included route optimization by curtailing non-productive routes and capitalizing on profitable ones, and revenue enhancement by creating opportunities in neglected segments such as cargo, ancillary sales and codeshares and alliance partnerships.
“We view this profit not as a one-off anomaly, but as the foundational result of deep, structural changes within the airline,” Hayat added.
While the aviation industry remained vulnerable to external variables like fuel prices and geopolitical factors, PIA had developed internal mechanisms that provided a “strong basis for continued positive performance.”
“Our clear intent and strategy are geared toward maintaining profitability moving forward and our budget for 2025 is already planned on net profitability,” the PIA CEO said.
Muhammed Sohail, the chief executive officer at Topline Securities, said the latest profits would provide “good optics to attract more investors” to buy the airline.
Ahead of the attempt to sell the airline last year, PIA had faced threats of being shut down, with planes impounded at international airports over its failure to pay bills and flights canceled due to a shortage of funds to pay for fuel or spare parts.
CEO says PIA’s first annual profit in decades to attract ‘favorable valuation’ from investors
https://arab.news/j4anq
CEO says PIA’s first annual profit in decades to attract ‘favorable valuation’ from investors
- Islamabad’s attempt to privatize PIA last year fell flat when it received a single offer, well below asking price of over $300 million
- This week, PIA reported $33.1 million earnings from operations last year ended December, made net profit of $93.3 million in 2024
Oil Updates — prices soar more than 9% after Israel strikes Iran, rattling investors
SINGAPORE: Oil prices surged more than 9 percent on Friday, hitting their highest in almost five months after Israel struck Iran, dramatically escalating tensions in the Middle East and raising worries about disrupted oil supplies.
Brent crude futures jumped $6.29, or 9.07 percent, to $75.65 a barrel by 06:15 a.m. Saudi time after hitting an intraday high of $78.50, the highest since Jan. 27. US West Texas Intermediate crude was up $6.43, or 9.45 percent, at $74.47 a barrel after hitting a high of $77.62, the loftiest since Jan. 21.
Friday’s gains were the largest intraday moves for both contracts since 2022 after Russia invaded Ukraine, causing energy prices to spike.
Israel said it targeted Iran’s nuclear facilities, ballistic missile factories and military commanders on Friday at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon.
“This has elevated geopolitical uncertainty significantly and requires the oil market to price in a larger risk premium for any potential supply disruptions,” ING analysts led by Warren Patterson said in a note.
Several oil traders in Singapore said it was still too early to say if the strike will affect Middle East oil shipments as it will depend on how Iran retaliates and if the US will intervene.
“It’s too early to tell but I think the market is worried about shutting off of the Strait of Hormuz,” one of the traders said.
MST Marquee senior energy analyst Saul Kavonic said the conflict would need to escalate to the point of Iranian retaliation on oil infrastructure in the region before oil supply is materially impacted.
He added that Iran could hinder up to 20 million barrels per day of oil supply via attacks on infrastructure or limiting passage through the Strait of Hormuz, in an extreme scenario.
Iran’s Supreme Leader Ayatollah Ali Khamenei said Israel will receive “harsh punishment” following Friday’s attack that he said killed several military commanders.
US Secretary of State Marco Rubio on Thursday called Israel’s strikes against Iran a “unilateral action” and said Washington was not involved while also urging Tehran not to target US interests or personnel in the region.
“Iran has announced an emergency and is preparing to retaliate, which raises the risk of not just disruptions but of contagion in other neighbouring oil producing nations too,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“Although Trump has shown reluctance to participate, US involvement could further raise concerns.”
In other markets, stocks dived in early Asian trade, led by a selloff in US futures, while investors scurried to safe havens such as gold and the Swiss franc.
Closing Bell: Saudi Arabia’s main index declines to close at 10,840
RIYADH: Saudi Arabia’s Tadawul All Share Index closed lower on Thursday, falling 164.08 points, or 1.49 percent, to end the session at 10,840.94.
Trading turnover on the main index reached SR5.34 billion ($1.42 billion), with only 14 stocks recording gains while 238 declined.
The Kingdom’s parallel market, Nomu, also saw a downturn, losing 425.57 points, or 1.56 percent, to close at 26,798.14. A total of 28 stocks advanced while 63 retreated. The MSCI Tadawul 30 Index slipped 13.42 points, or 0.95 percent, to finish at 1,392.04.
SEDCO Capital REIT Fund emerged as the session’s best performer, with its share price rising 0.88 percent to SR6.85. Fawaz Abdulaziz Alhokair Co. followed with a 0.71 percent gain to SR19.84, while Tihama Advertising and Public Relations Co. rose 0.67 percent to SR15.10.
On the downside, Al-Omran Industrial Trading Co. recorded the steepest loss, falling 9.15 percent to SR26.30. AYYAN Investment Co. dropped 7.35 percent to SR12.60, and Al Taiseer Group Talco Industrial Co. declined 7.26 percent to SR40.85.
On the announcements front, the Saudi National Bank announced plans to issue US dollar-denominated notes under its Euro Medium-Term Note Program.
According to a Tadawul filing, the issuance will be conducted through a special purpose vehicle and will be offered to eligible investors in Saudi Arabia and globally.
The bank has appointed Abu Dhabi Commercial Bank PJSC, DBS Bank Ltd., Emirates NBD Bank P.J.S.C., Goldman Sachs International, HSBC Bank plc, J.P. Morgan Securities plc, Mashreqbank psc, and Mizuho International plc as joint lead managers and book-runners.
SNB Capital Co., SMBC Bank International plc, and Standard Chartered were also mandated. The proceeds from the offering will be used to enhance Tier 2 capital, support general corporate purposes, and advance SNB’s strategic goals.
Final terms of the issuance will be determined based on market conditions. SNB shares edged up 0.14 percent to close at SR34.70.
Meanwhile, Yaqeen Capital Co. announced it has deposited proceeds from the sale of fractional shares following a recent capital increase. A total of 308 shares were sold, generating SR3,451.76, with an average price of SR11.23 per share. The proceeds have been distributed to eligible shareholders via their investment-linked accounts.
Saudi-UK ties deepen as 400+ leaders boost investment partnerships in London
JEDDAH: Saudi-UK business ties are set to grow as more than 400 leaders from various sectors gathered in London to explore cross-border investment opportunities and strengthen economic partnerships.
Minister of Investment Khalid Al-Falih led the Kingdom’s delegation at the UK-Saudi Investment and Partnership Summit held on June 11 at Mansion House in London’s financial district.
The Kingdom and the UK are strengthening economic ties, with bilateral trade hitting $21.6 billion in 2023 and a shared target of $37.5 billion by 2030, driven by the UK-GCC Free Trade Agreement negotiations and the UK’s GREAT Futures campaign.
Investment flows remain strong, with Saudi Arabia investing over $21 billion in the UK since 2017, including $3.5 billion in the northeast, while UK foreign direct investment in the Kingdom reached $13 billion by 2023.
Organized by the UK-British Joint Business Council and hosted by the City of London Corp., the summit was supported by the Saudi Ministry of Investment and the UK Department for Business and Trade, the Saudi Press Agency reported.
According to Al-Falih, the Kingdom and the UK share a bold vision for global leadership and a longstanding legacy of international trade.
“More than 30,000 UK British professionals reside in Saudi Arabia, and British investment in the Kingdom exceeds £14 billion, reflecting the bright future of the partnership between the two countries,” the minister said in a post on his X handle.
Al-Falih delivered the keynote speech, highlighting investment opportunities in infrastructure, financial services, and the green economy, as over 400 leaders gained insights into evolving markets and emerging investment trends.
The minister also engaged in a high-level ministerial dialogue with UK Investment Minister Baroness Poppy Gustafsson, highlighting the evolution of the strategic relationship and the countries’ shared outlook for the future.
“Today, I met with our UK partners— including Baroness Poppy Gustafsson, minister of investment; His Excellency Ambassador of the UK to Saudi Arabia Neil Crompton; and the Rt Hon. Lord Mayor of London, Alastair King— to discuss enhanced investment cooperation and partnership between our great nations,” Al-Falih said in a post on X.
In a separate post, the Saudi minister said: “At the historic Mansion House in the City of London, I spoke to an elite group of global investors, inviting them to explore the exceptional opportunities offered by Saudi Arabia. I shared insights into our future investment prospects, particularly in mutually prioritized sectors.”
In his speech, the minister discussed progress under the Mansion House Accord — a UK-led initiative to unlock up to £50 billion ($63.5 billion) in domestic investment from pension funds into high-growth sectors.
Panel discussions addressed joint development priorities aligned with Saudi Arabia’s Vision 2030 and the UK’s industrial strategy, Invest 2035 — the UK government’s 10-year plan to provide certainty and stability for investments in high-growth sectors driving national growth.
Key topics included expanding public-private partnerships, mobilizing capital for large-scale infrastructure and real estate projects, supporting venture capital ecosystems, and harnessing frontier technologies such as deep tech, space, and clean innovation.
The Saudi Ministry of Investment noted that the summit agenda was designed to encourage practical dialogue, facilitate cross-border investment flows, and accelerate economic diversification through sustainable, forward-looking partnerships.
The London meetings followed the launch of the UK-Saudi Sustainable Infrastructure Assembly in May, a platform uniting companies, policymakers, and experts from both countries to shape the future of investment in infrastructure.
The assembly is part of the UK government’s “Great Futures” campaign, which promotes bilateral cooperation in trade, investment, tourism, education, and culture. A concluding meeting is planned for the Future Investment Initiative in Riyadh this fall.
New Saudi offices in the UK, including those of the Public Investment Fund subsidiaries, NEOM, and Elm, alongside 52 UK firms establishing regional headquarters in Riyadh, further highlight expanding cross-border engagement.
Both nations also collaborate in areas such as energy, financial services, education, and green technologies. London has become a preferred hub for Saudi capital, with $69.9 billion raised since 2022 — $13.8 billion of which targeted sustainable finance.
Bahrain’s Islamic finance industry projected to surpass $100bn in 3 to 5 years
RIYADH: Bahrain’s Islamic finance industry is likely to surpass $100 billion within the next three to five years, according to global credit rating agency Fitch Ratings.
This growth will be fueled by the need for diversification and funding, partly addressed through sukuk, as well as a favorable regulatory environment and ongoing mergers and acquisitions, according to a statement.
This aligns with Bahrain’s banking sector assets to GDP ratio, which was estimated at 516 percent in 2024, indicating a highly concentrated and competitive market that presents significant challenges for both Islamic and conventional banks.
The debt capital market is primarily made up of government-issued sukuk and bonds, with limited participation from corporations and financial institutions.
This is also reflected in the fact that as of the first three months of 2025, Bahrain’s Islamic finance industry was valued at over $80 billion, with Islamic banking assets making up 78 percent, sukuk accounting for 19.2 percent, and the remaining 2.8 percent coming from Shariah-compliant investment funds and takaful firms.
The newly issued Fitch statement said: “Sukuk are substantial to Bahrain’s DCM (debt capital markets), comprising 32.5 percent of DCM outstanding (all currencies) as of end-1Q25 … In 2024, sukuk issuances grew by 36.2 percent yoy (year-over-year), with sovereign issuers representing about 90 percent of Bahrain’s sukuk issuances.”
It added: “Bahrain has notable access to the global DCM, with US dollar-denominated DCM comprising about 70 percent of the total, and dollar-denominated sukuk comprising nearly 90 percent of sukuk outstanding. The anticipated lower oil prices … upcoming government debt maturities and sizeable investors, including Bahraini and other GCC (Gulf Cooperation Council) Islamic banks, could encourage sukuk issuance.”
The statement further indicated that the agency rates 80 percent of the country’s US dollar sukuk outstanding as of the end of the first quarter of 2025, with 94.6 percent in the “B” rating category and 5.4 percent in the “BB” rating category.
It further disclosed that most sukuk issuers carry negative outlooks, reflecting Fitch’s downgrade of Bahrain’s outlook from stable to negative in February. The country has maintained its payment record on sukuk and bonds, with only one issuer launching ESG sukuk and no ESG bonds issued from the country.
“Bahrain continues to host Islamic finance industry setting bodies like the AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) and IIFM (International Islamic Financial Market). The draft AAOIFI Shariah Standard 62 has had no impact on Bahraini Islamic banks’ or sukuk ratings so far. However, there is a lack of clarity around the standard’s final scope and implementation,” the statement said.
It added that in the first quarter of 2025, Bahraini Islamic banks’ domestic assets saw an annual rise of 7.5 percent, outpacing conventional banks’ 3.4 percent.
They also increased their share of domestic banking assets to 41.4 percent in what was a 1 percentage point rise from the same quarter of 2024.
Fitch said this was partly due to Ahli United Bank’s conversion to an Islamic bank.
Islamic banks’ foreign assets decreased by 7.6 percent, while conventional banks’ increased by 6 percent, reducing the former’s share of total industry assets to 25.4 percent from 26.1 percent in the first quarter of 2024.
The Central Bank of Bahrain has introduced a draft netting law that includes Islamic derivatives, sukuk, digital asset derivatives, and carbon credit derivatives under qualified financial contracts — aimed at strengthening market participants’ confidence.
In June 2024, the CBB also launched a Shariah-compliant commodity Murabaha facility to help Islamic banks better manage surplus liquidity.
Bahrain’s Islamic finance projections come as other countries in the region also report relatively strong performance in the sector.
Earlier this month, a report from Qatar-based Bait Al Mashura Finance Consultations showed that Qatar’s Islamic finance sector continued its upward trajectory in 2024, with total assets rising 4.1 percent year on year to 683 billion Qatari riyals ($187.5 billion).
The analysis showed at the time that Islamic banks held the largest share, with 87.4 percent of total Islamic finance assets.
In April, S&P Global Ratings said in its outlook report that Saudi Arabia is poised to play a key role in propelling the growth of the global Islamic finance industry in 2025, underpinned by non-oil economic expansion and robust sukuk issuance, according to a new analysis.
The Kingdom’s banking system growth, supported by Vision 2030 initiatives, is expected to contribute significantly to the expansion of Islamic banking assets next year, the S&P report said at the time.
Uzbekistan keen to collaborate with Saudi Arabia on environmental protection: top official
RIYADH: Uzbekistan’s cooperation with Saudi Arabia on ecology and environmental protection is steadily progressing, with the Central Asian nation aiming to deepen this partnership through the exchange of knowledge and innovation, a top official said.
Speaking to Arab News on the sidelines of the Tashkent International Investment Forum, Uzbekistan’s Minister of Ecology, Environmental Protection and Climate Change Aziz Abdukhakimov said that the country wishes to collaborate with the Kingdom to develop effective solutions to issues including dust and sand storms.
Saudi Arabia is spearheading climate action efforts across the Middle East, with ambitions to plant 10 billion trees, rehabilitate 40 million hectares of degraded land, and reduce carbon emissions by more than 278 million tonnes per year.
“Our cooperation with the Kingdom of Saudi Arabia in the field of ecology and environmental protection is both dynamic and built on the principles of mutual respect and cooperative spirit. Within the framework of the Intergovernmental Commission between our two countries, we maintain a regular and constructive dialogue, exchanging views on the current state of cooperation and discussing long-term priorities between our environmental agencies. We also explore new avenues of cooperation,” said Abdukhakimov.
He added: “We envision cooperation between our national parks and protected natural areas. Saudi Arabia currently has over 70 protected areas, covering nearly 18 percent of its territory. By sharing expertise in ecosystem preservation and species protection, we can strengthen conservation efforts on both sides.”
The minister further said that such collaborations will allow the exchange of expertise in preserving unique ecosystems and rare species of flora and fauna.
Abdukhakimov added that Uzbekistan’s Central Asian University of Environmental and Climate Change Studies is seeking to establish academic partnerships with institutions in the Kingdom, including King Saud University and King Abdulaziz University, for the exchange of scientific knowledge and innovations in the environmental field.
“Our cooperation with Saudi Arabia is built on a foundation of trust, mutual interest and a shared responsibility for sustainable development. We look forward to deepening this partnership in the years ahead,” said the minister.
The minister further said that Uzbekistan sees great opportunities for broader regional cooperation through the Middle East Green Initiative, which offers a valuable platform for environmental innovation, joint research, and investment in green infrastructure - particularly in areas like desertification control, sustainable land management and cross-border technology transfer.
He also invited Saudi partners to participate in the international Eco Expo Central Asia exhibition to be held in Tashkent from June 19 to 21, as well as the 20th CITES COP20 Conference, which will take place in Samarkand from Nov. 24 to Dec. 5.
Uzbekistan’s environmental agenda
During the interview, Abdukhakimov told Arab News that Uzbekistan is currently facing several severe environmental challenges, both globally and regionally, including climate change, desertification, and land degradation.
“These issues are the legacy of decades of unsustainable natural resource use and ineffective environmental management and a bitter lesson that we learn,” he said.
To address these challenges, the Uzbek government, under the leadership of President Shavkat Mirziyoyev, is taking various measures, including a push for a green economy, a transition to environmentally friendly transportation, and the development of alternative and renewable energy sources.
Saudi Arabia is also collaborating with Uzbekistan to advance its energy transition journey, which aims to generate 40 percent of its electricity from clean sources by the end of this decade.
Saudi utility giant ACWA Power is the largest foreign player in Uzbekistan’s energy sector, with the company already implementing 19 projects in the country worth a combined value of $5 billion.
Out of these 19 initiatives, eight are focused on renewable energy, which is expected to support the Central Asian nation’s goal to achieve 20 gigawatts of clean energy capacity by 2030.
During the Tashkent Investment Forum, Abid Malik, president of ACWA Power for Central Asia, announced that Uzbekistan will commence producing green hydrogen this month, with an annual production capacity of 3,000 tonnes.
In 2023, Mirziyoyev launched a pilot green hydrogen facility in the Tashkent Region in cooperation with ACWA Power. The $88 million project is being implemented in two phases, with production from the first phase expected to begin this month.
During the forum, Soumendra Rout, ACWA Power’s country head for Uzbekistan, said that the company is planning to invest $5 billion in the Central Asian nation as a part of its broader strategy aimed at increasing its total commitments in the country to $15 billion.
Abdukhakimov added that Uzbekistan, through the nationwide project Yashil Makon “Green Space,” aims to plant 200 million trees annually.
Under the project, Uzbekistan has planted over 850 million tree and shrub seedlings over the past four years.
“We’ve also launched the Uzbekistan–2030 Strategy, where one of the central goals is to ensure a healthy and sustainable environment for all. Furthermore, we’ve declared 2025 the year of Environmental Protection and Green Economy, a vision that reflects our national commitment to ecological priorities,” said the minister.
He added: “In terms of policy, we’ve adopted several strategic documents, including the Concept for Environmental Protection until 2030, the Strategy for Solid Household Waste Management, the Forestry Development Concept, and a comprehensive program to raise environmental awareness among the public.”
Abdukhakimov further added that Uzbekistan is also strengthening institutions for environmental monitoring and control, with the country modernizing its environmental monitoring systems and expanding its meteorological network.
“All of these efforts reflect Uzbekistan’s systematic and science-based approach to solving environmental problems, as well as our growing engagement with the global environmental community. We are determined to build a greener, more resilient future for our people,” he added.
According to the minister, Uzbekistan is actively undergoing a strategic shift from a linear to a circular economic model, where waste is no longer viewed merely as a byproduct but as a valuable resource.
“These initiatives are not only improving our national waste processing capacity but are also creating green jobs, enhancing public health and helping us meet national climate targets under the Paris Agreement,” he added.
Cooperation with regional partners
According to Abdukhakimov, Uzbekistan, like other Central Asian nations, is located in one of the world’s most climate-vulnerable regions.
He added that the average temperature in the region has risen by 1.5 degrees Celsius — twice the global average, while the area of glaciers has decreased by 30 percent in the last 50 to 60 years, resulting in water shortages, land degradation, and reduced crop yields.
“Central Asian countries share not only geographic and ecological systems, but also the risks driven by climate change, such as desertification, drought, and declining agricultural productivity. Uzbekistan views collaboration as the most effective strategy to forge a common, sustainable future,” said the minister.
To ensure regional cooperation, Uzbekistan also hosted the Samarkand Climate Forum in April, where the Regional Green Development Concept was presented.
The minister said that this document serves as a foundation for shaping coordinated climate policy and strengthening regional solidarity in the face of global challenges.
Uzbekistan is also actively engaged in numerous regional initiatives, including the International Fund for Saving the Aral Sea, the Regional Environmental Center for Central Asia, and the CAREC Program, as well as projects with the World Bank, OSCE, and UNESCO.
Abdukhakimov further said that these initiatives will facilitate knowledge exchange, joint management of natural resources, and the mobilization of international funding.
“In all our regional work, we are guided by the principles of solidarity, mutual benefit, and synergy. We believe that only through collective action can we ensure the sustainability, security, and prosperity of our entire region in the face of climate change,” the minister said.
