Moody’s upgrades 6 Saudi GRIs to Aa3, citing strong sovereign support

Moody’s upgrades 6 Saudi GRIs to Aa3, citing strong sovereign support
Moody’s upgraded the Kingdom’s credit rating to Aa3 with a stable outlook in November. Shutterstock
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Updated 27 November 2024
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Moody’s upgrades 6 Saudi GRIs to Aa3, citing strong sovereign support

Moody’s upgrades 6 Saudi GRIs to Aa3, citing strong sovereign support

RIYADH: Moody’s has upgraded the ratings of six major government-related institutions in Saudi Arabia, including the Public Investment Fund, to Aa3 from A1.

The move reflects strong sovereign backing and stable credit linkages to the government. 

The agency also assigned the Aa3 rating to Saudi Aramco, Saudi Basic Industries Corp., and Saudi Electricity Co., as well as Saudi Power Procurement Co., and Saudi Telecom Co. 

Moody’s assigns an Aa3 rating to companies with high quality, low credit risk, and strong ability to repay short-term debts, providing an assessment of the creditworthiness of borrowers, including governments, corporations, and other entities that issue debt. 

“The rating action is a direct consequence of the sovereign rating action and reflects the credit linkages between the Government of Saudi Arabia and each of the six entities,” said Moody’s. 

It added: “While several of these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors.” 

The strong ratings received by these firms is an indication of Saudi Arabia’s robust economic stability, following Moody’s upgrade of the Kingdom’s credit rating to Aa3 with a stable outlook in November. 

In May, Fitch Ratings upgraded Saudi Arabia’s credit rating to A+ with a stable outlook. 

PIF




File/AFP

The upgrade of PIF’s long-term issuer rating to Aa3 from A1 aligns with the Saudi government’s rating action and reflects the strong credit linkage between the sovereign wealth fund and the Kingdom, according to Moody’s. 

The report also noted that PIF is expected to receive strong and extraordinary support from the Saudi government whenever needed. 

“PIF is closely interlinked with the Kingdom because it is one of the main vehicles of the Kingdom to execute its Vision 2030; PIF continues to receive contributions from the Kingdom via asset transfers; and given the fund’s investment focus and concentration in domestic markets,” added the US-based agency. 

According to the analysis, PIF’s rating is in line with that of the Saudi government, meaning the fund’s rating could be downgraded if the sovereign rating declines. 

In July, PIF’s consolidated financial statement revealed that the fund generated SR331 billion ($88.3 billion) in revenue in 2023 from its diverse investment portfolio, reflecting over 100 percent growth compared to 2022. 

Saudi Aramco




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The report indicated that Aramco’s rating upgrade reflects the high likelihood of extraordinary support from the government if needed. 

The US-based agency also noted that the energy company has access to nearly all of Saudi Arabia’s vast hydrocarbon resources and significant petrochemical operations. 

Earlier in November, Aramco reported a net profit of SR103.37 billion for the third quarter of 2024, surpassing analyst expectations, which had projected a median net income of SR101.06 billion. 

SABIC




File/AFP

According to Moody’s, SABIC’s rating upgrade is due to its strong reliance on the government and the high probability of receiving government support in the event of financial distress. 

The report also highlighted the company’s strong global position in the petrochemical and fertilizer markets as another key factor behind the credit rating upgrade. 

In the third quarter of this year, SABIC reported a net profit of SR1 billion, a turnaround from the net loss of SR2.87 billion in the same period last year. 

SEC 

Describing SEC as the “dominant vertically integrated electricity utility in Saudi Arabia,” Moody’s stated that the company served over 11.23 million customers as of Sept. 30, 2024. 

“SEC’s rating reflects the significant credit linkages between SEC and its ultimate shareholder, the Government of Saudi Arabia. All of SEC’s assets are in Saudi Arabia and the company benefits from supportive government policies,” said the US-based agency. 

In the third quarter of this year, SEC reported a net profit of SR4.7 billion, a 19.8 percent increase compared to the same period last year. 

SPPC

Moody’s stated that SPPC has a clear public policy mandate that aligns its interests and objectives with those of the government. 

As the sole licensed principal buyer of electricity in Saudi Arabia, the company has significant credit linkages with the government, which played a crucial role in the latest rating action. 

Moody’s also noted that the rating reflects SPPC’s low business risk profile, its monopoly position in the Kingdom, and its ability to maintain a strong liquidity profile despite high working capital seasonality. 

stc

According to the report, the rating upgrade of stc – the leading integrated telecommunications and ICT operator in Saudi Arabia – reflects the company’s strategic importance to the government, as well as the state’s high level of control through PIF. 

Moody’s added that stc generates over 90 percent of its revenue in the Kingdom and plays a key role in supporting the government’s technological and digital ambitions, a crucial goal outlined in Vision 2030. 

Affirming stc’s dominance in the Saudi market, the company reported a net profit of SR11.23 billion in the first nine months of this year, a 2 percent increase compared to the same period in 2023.


Global Markets — shares rise as US consumer holds up, yen weak ahead of Japan vote

Global Markets — shares rise as US consumer holds up, yen weak ahead of Japan vote
Updated 18 July 2025
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Global Markets — shares rise as US consumer holds up, yen weak ahead of Japan vote

Global Markets — shares rise as US consumer holds up, yen weak ahead of Japan vote

LONDON/SYDNEY: Global shares edged higher on Friday as robust US economic data and corporate earnings this week tempered tariff concerns for now, while the yen headed toward a second successive weekly loss ahead of a crunch legislative election in Japan on Sunday.

Stronger-than-expected US retail sales and jobless claims suggesting modest improvement in economic activity helped to push the S&P 500 and the Nasdaq to close at record highs on Thursday.

Asian and European shares followed suit with gains on Friday, with Asian shares outside Japan up 0.9 percent, while European stocks were last up 0.4 percent. Wall Street futures were also up around 0.1 percent.

A solid start to earnings season in the US — with companies including streaming giant Netflix beating forecasts — was also supporting investor confidence, said Eren Osman, managing director of wealth management at Arbuthnot Latham.

“We’re pretty constructive on the (US) macro backdrop ... We do see some scope for slowing growth, but not for anything material and that’s giving the markets quite a nice bounce,” Osman said, adding the potential full impact of US tariffs was still in focus.

Alphabet and Tesla are among the companies reporting half-year results next week, which will further test the market mood.

The dollar was broadly flat against the yen at 148.65 but was down nearly 1 percent this week after polls showed Prime Minister Shigeru Ishiba’s coalition was in danger of losing its majority in the upper house election on Sunday.

Data on Friday showed Japan’s core inflation slowed in June due to temporary cuts in utility bills but stayed above the central bank’s 2 percent target. The rising cost of living, including the soaring price of rice, is among the reasons for Ishiba’s declining popularity.

“If PM Ishiba decides to resign on an election loss, USDJPY could easily break above 149.7 as it would usher in an initial period of political turbulence,” said Jayati Bharadwaj, head of FX strategy at TD Securities, adding: “JPY could reverse the recent dramatic weakness if the ruling coalition wins and is able to make swift progress on a trade deal with Trump.”

In currency markets, the US dollar index slipped 0.1 percent to 98.365, but was heading for a second successive weekly gain, bouncing from a 3-1/2 year low hit over two weeks ago.

Fed Governor Christopher Waller said on Thursday he continues to believe the central bank should cut interest rates at the end of this month, though most officials who have spoken publicly have signalled no desire to move.

Treasury yields were slightly lower. Benchmark 10-year US Treasury yields dropped 2 basis points to 4.44 percent, two-year yields also edged 2 bps lower to 3.90 percent.


Saudi bank loans hit $845bn as corporate lending booms

Saudi bank loans hit $845bn as corporate lending booms
Updated 18 July 2025
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Saudi bank loans hit $845bn as corporate lending booms

Saudi bank loans hit $845bn as corporate lending booms

RIYADH: Saudi banks’ total outstanding loans reached SR3.17 trillion ($844.7 billion) at the end of May, an annual increase of 16.28 percent, according to the latest official data.

Figures released by the Saudi Central Bank, also known as SAMA, show that this marks one of the fastest annual credit expansions in recent years, underscoring strong economic momentum in the Kingdom.

The SAMA data revealed that business loans now comprise 55.35 percent of all bank credit, up from 52.87 percent a year ago.

Corporate lending surged 21.73 percent year on year to SR1.75 trillion, far outpacing personal lending, which rose around 10 percent to SR1.41 trillion.

This shift highlights how companies have become the dominant force in Saudi Arabia’s lending landscape, as banks pivot from consumer finance to funding large projects and enterprises.

The Kingdom’s credit boom stands out within the region. Across the Gulf Cooperation Council countries, most banking sectors are expanding on the back of post-pandemic economic growth and government spending, but Saudi banks are leading the pack in loan growth.

A Kamco Invest report published in May found the Kingdom posted the region’s highest year-on-year loan growth in the first quarter of 2025, outpacing other Gulf markets.

This growth was broad-based across sectors — including construction, real estate, education, and transport — whereas some neighboring countries saw more subdued or narrowly focused increases.

The UAE, the region’s second-largest banking market, is also seeing solid credit expansion supported by its own infrastructure and economic reforms.

Gulf banks in general benefit from strong capitalization and government backing, which has kept credit flowing. The International Monetary Fund projects GCC economies to grow around 3.5 percent in 2025, with Saudi Arabia, the UAE, and Qatar driving non-oil growth.

This trend aligns with the Kingdom’s Vision 2030 diversification plan, which emphasizes infrastructure, industry, and non-oil sectors. It also indicates that after a decade of mortgage-fueled expansion, banks are rebalancing portfolios toward commercial lending in response to market demand and government priorities.

This “structural hand-off” means business lending is now the engine of Saudi banking — a significant change after years when consumer mortgages dominated credit creation.

Real estate dominates; education and transport soar

Within corporate lending, real estate developers remain the single largest borrower group according to SAMA data. Real estate activities accounted for 21.35 percent of outstanding corporate credit, totaling approximately SR374 billion in May.

This segment grew by a remarkable 37.7 percent annually, reflecting heightened demand for housing, commercial infrastructure, and mega-project development across the Kingdom.

Saudi Arabia’s ambitious construction boom — from new housing in major cities to giga-projects like NEOM, the Red Sea tourism resorts, and large mixed-use developments — has driven banks to significantly increase financing for land purchases, building, and property development.

According to a March report by real estate consultancy JLL, Saudi Arabia’s real estate sector is set for sustained growth, driven by Vision 2030 diversification goals and robust non-oil economic expansion.

The construction sector recorded $29.5 billion in project awards in 2024, while the property market is forecast by the Real Estate General Authority to reach $101.6 billion by 2029, growing at a compound annual rate of 8 percent. 

Grade-A office demand in Riyadh surged, with vacancy falling to just 0.2 percent by the end of 2024 and average rents reaching $609 per sq. meter.

JLL noted that 326,000 sq. meters of leasable space was delivered in 2024, with an additional 888,600 sq. meters in the pipeline for 2025. The firm added that Jeddah is emerging as a competitive alternative, attracting regional and international firms, while rising office and logistics rents in both Riyadh and Jeddah indicate strong commercial demand.

The report also highlighted real estate tailwinds from upcoming mega-events like the 2030 FIFA World Cup and Expo 2030, which are expected to inject significant capital and further boost infrastructure development across the Kingdom.

Other major sectors in banks’ corporate portfolios include wholesale and retail trade, around 12.2 percent of corporate credit, utilities like electricity, water and gas of 11 percent, and manufacturing at 11 percent.

Each of these recorded healthy double-digit growth, supported by increased public and private investment and industrial reforms.

This includes lending to the utilities sector growing to SR196 billion, as Saudi Arabia expands power grids, renewable energy projects, and water infrastructure to meet rising demand.

Manufacturing loans — about SR191 billion — reflect ongoing expansion in petrochemicals, metals, and consumer goods production under diversification initiatives.

Crucially, some of the fastest growth rates were seen in smaller, emerging segments, highlighting shifting priorities. 

Education sector credit, though making up only 0.55 percent of corporate loans, jumped by over 48 percent year on year to around SR9.58 billion.

This was the highest growth of any sector, fueled by a national drive to expand and modernize educational institutions. Saudi Arabia is encouraging more private investment in schools, universities, and training centers as part of Vision 2030’s human capital development goals.

Transport and logistics is another booming area. Loans for transportation and storage climbed 43 percent year on year, reaching SR68 billion.

This reflects Saudi Arabia’s push to become a global logistics hub, building new ports, airports, railways, and warehouses. Huge projects such as the expansion of Riyadh’s King Salman International Airport and the launch of a new national airline, as well as improvements in roads and shipping infrastructure, require significant funding.

The government’s National Transport and Logistics Strategy envisions $150 billion of investments in transport infrastructure by 2030, with 80 percent of these coming from the private sector via public-private partnerships and privatizations in airports and roadways.

Banks are playing a key role by lending to contractors and logistics firms involved in these ventures. The result is that transport and logistics finance has seen one of the sharpest upticks across all industries, second only to education in growth rate.

Going forward, Saudi lenders are expected to maintain a delicate balance, financing aggressive growth in the corporate sector while guarding against liquidity and risk pressures.


Oil Updates — crude extends gain on Iraq outages, tight market supports

Oil Updates — crude extends gain on Iraq outages, tight market supports
Updated 18 July 2025
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Oil Updates — crude extends gain on Iraq outages, tight market supports

Oil Updates — crude extends gain on Iraq outages, tight market supports

SINGAPORE: Oil prices extended gains on Friday, underpinned by supply concerns following drone attacks on northern Iraqi oilfields and tight market fundamentals amid healthy summer demand.

Brent crude futures climbed 29 cents, or 0.40 percent, to $69.81 a barrel as of 7:51 a.m. Saudi time, US West Texas Intermediate crude futures advanced 27 cents, or 0.42 percent, to $67.81 a barrel.

Four days of drone attacks on oilfields in Iraqi Kurdistan that shut down half the region’s output have supported prices, pushing both contracts up $1 on Thursday.

Additionally, seasonal travel demand has propped up the market. In the first two weeks of July, global oil demand has averaged 105.2 million barrels per day, up by 600,000 bpd from a year earlier and largely in line with forecast, JPMorgan analysts said in a research note.

“Crude prices have been broadly stable this week, with no significant moves as the impact of OPEC+ supply increases has been offset by strong seasonal demand in the US,” said LSEG’s analyst Anh Pham.

US crude inventories fell a larger-than-expected last week as exports rose, government data on Wednesday showed.

Demand in Asia also firmed as refineries came back from maintenance amid peak seasonal demand.

Near-term oil fundamentals are likely to remain supportive, with the market set to remain fairly tight through this quarter, before becoming better supplied from the last three months of the year, ING analysts said in a note on Friday.

Still, the uncertainty around US tariff policy, which appears unlikely to be settled until after August 1, is weighing on the market. Plans by major oil producers to remove output cuts will also add to supply as the seasonal Northern Hemisphere summer demand ends. For this week, both Brent and WTI were down more than 1 percent.

Oil output in the semi-autonomous Kurdistan region has been slashed from about 280,000 bpd to between 140,000 bpd and 150,000 bpd, two energy officials said.

Officials pointed to Iran-backed militias as the likely source of attacks this week on the region’s oilfields, although no group has claimed responsibility.

Despite the attack, Iraq’s federal government said on Thursday that Iraqi Kurdistan will resume oil exports through a pipeline to Turkiye after a two-year halt.


Jordan tourism revenues climb 11.9% in H1 despite regional headwinds

Jordan tourism revenues climb 11.9% in H1 despite regional headwinds
Updated 17 July 2025
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Jordan tourism revenues climb 11.9% in H1 despite regional headwinds

Jordan tourism revenues climb 11.9% in H1 despite regional headwinds
  • Saudi Arabia led the region with a 148% rise in international tourism revenue in 2024
  • Spending by Jordanians on outbound tourism rose 3.3% year on year

RIYADH: Jordan’s tourism revenues rose 11.9 percent year on year in the first half of 2025 to reach $3.67 billion, underscoring the sector’s resilience amid geopolitical tensions in the region. 

According to data from the Central Bank of Jordan, the growth came despite a slight setback in June, when monthly revenues fell 3.7 percent to $619.2 million, state-run Petra news agency reported. 

 Turki Faisal Al-RasheedDespite this, Jordan’s performance reflects a broader tourism surge across the Middle East, with a May release by the World Travel & Tourism Council showing the sector added $341.9 billion to gross domestic product and 7.3 million jobs in 2024, with projections of $367.3 billion and 7.7 million jobs in 2025. 

Saudi Arabia led the region with a 148 percent rise in international tourism revenue in 2024, according to its Ministry of Tourism, while Oman, the UAE, and Qatar continued to attract strong visitor flows through investment, connectivity, and major events. 

Citing the central bank data, Petra said: “Tourism revenues from Asian visitors surged by 42.9 percent during the first half of the year, while revenues from European tourists increased by 35.6 percent, Americans by 25.8 percent, Arabs by 11.5 percent, and other nationalities by 43.0 percent.”  

It added: “Conversely, revenues from Jordanian expatriates visiting the Kingdom registered a modest decline of 0.8 percent over the same period.” 

Spending by Jordanians on outbound tourism rose 3.3 percent year on year in the first half of 2025, reaching $999.7 million, despite a 22.7 percent decline in June alone, when spending fell to $195.6 million. 

This comes on the back of a strong start to 2025, with Jordan welcoming 1.51 million visitors in the first quarter — a 13 percent increase from the same period last year — while receipts rose 8.85 percent to 1.22 billion Jordanian dinars ( $1.72 billion), according to the Ministry of Tourism and Antiquities’ first-quarter report. 

The recovery was further supported by the return of air connectivity, which had nearly disappeared in 2024. New agreements with European carriers expanded the number of low-cost direct routes to 25 this year, including 20 to Amman for the summer and five to Aqaba in the winter. These routes are expected to bring in around 270,000 travelers, the report added. 

Looking ahead, the ministry said it is developing a new National Tourism Strategy for 2025–2028, building on the previous plan and aligning with the country’s Economic Modernization Vision. 

The updated roadmap aims to diversify source markets, including China, India, Russia, Africa, and Southeast Asia, and promote high-potential segments such as medical, wellness, faith-based, adventure, and meetings, incentives, conferences, and exhibitions, or MICE, tourism. 


EU pledges $46.4bn for MENA renewables, borders, and migration

EU pledges $46.4bn for MENA renewables, borders, and migration
Updated 17 July 2025
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EU pledges $46.4bn for MENA renewables, borders, and migration

EU pledges $46.4bn for MENA renewables, borders, and migration

JEDDAH: Renewable energy, border security, and migration pathways in the Middle East and North Africa will receive €42.5 billion ($46.4 billion) from the EU from 2028, it has been announced.

This doubled financial commitment, under a new funding instrument, aims to enhance stability and cooperation in the region.

Speaking during a press conference in Brussels on July 17, EU Commissioner for Democracy and Demography Dubravka Suica said the increased budget reflects the bloc’s strategic shift toward deeper cooperation with countries in region.

“This is a strong financial toolbox, with which we will invest in stability, security and prosperity, through mutually beneficial partnerships with our Southern neighbors in the Middle East, North Africa and the Gulf,” she said, emphasizing that the Mediterranean is not only a region of challenges but also one of opportunities.

Suica further noted that the EU will support partner countries in addressing the underlying causes of socio-economic fragility, which she said are central to political instability and radicalization.

She added that the bloc will also confront the challenges of the green transition by investing in renewable energy projects, benefiting citizens on both sides of the Mediterranean.

“These increased funds will enable us to respond more effectively to an increasingly volatile geopolitical context right at our doorstep,” the commissioner said.

She stressed that the stability and prosperity of the Mediterranean are directly linked to Europe’s own.

“Their safety is our safety. Their success is our shared success. Their protection of borders is also ours.”

Suica described the Multiannual Financial Framework as an instrument that will strengthen the union, both internally and internationally.

“This new framework enables us to better protect our interest on a global stage and protect our values and interests in an increasingly complex geopolitical context,” she concluded.