Saudi Arabia’s debt capital market still has growth potential, investment minister says

Saudi Arabia’s debt capital market still has growth potential, investment minister says
Saudi Investment Minister Khalid Al-Falih speaks during a panel discussion on the first day of the Capital Markets Forum 2025. Screenshot
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Updated 18 February 2025
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Saudi Arabia’s debt capital market still has growth potential, investment minister says

Saudi Arabia’s debt capital market still has growth potential, investment minister says
  • Khalid Al-Falih said the Kingdom maintains a balanced and diverse set of global relationships at the macro level
  • He also highlighted the strong interest from Asian investors in capital flow into Saudi Arabia

RIYADH: Saudi Arabia’s debt capital market has growth potential, as it accounts for less than 4 percent of gross domestic product, compared to the G20 average of over 40 percent, the investment minister revealed.

During a panel discussion titled “Capital Crossroads: Connecting Global Investment Hubs” on the first day of the Capital Markets Forum 2025, held from Feb. 18-20 in Riyadh, Khalid Al-Falih explained that the Kingdom aims to expand its debt capital market significantly.

This falls in line with the fact that Saudi Arabia’s debt capital market is expected to hit $500 billion by the end of 2025, fueled by the Kingdom’s economic diversification efforts under Vision 2030, according to Fitch Ratings.

In February, Fitch’s latest report highlighted several factors driving this growth, including the government’s need for deficit funding, maturing obligations, and ongoing reforms.

“There is a call for action by our corporates, by our mid-markets to come forward and prepare for raising capital through bonds and sukuks and the debt capital market of Saudi Arabia. Many of them have been doing this in places like London and London has been accommodating and very open for Saudi entities,” Al-Falih said.

“We need to channel global capital into the opportunities not just in the Kingdom but in the region,” he added.

The minister said that King Abdullah Financial District Business Center has already attracted about 600 global companies and that many of them would require professional and financial services as well as raising capital for their regional growth.

“We don’t want them to go and raise that capital internationally. We want them to do it here in Riyadh, aided and enabled by the great Saudi enterprises but also by partnerships from around the world,” Al-Falih said.

He further said that capital markets are a reflection of the broader economy and that the Kingdom maintains a balanced and diverse set of global relationships at the macro level. As one of the world’s largest trading nations, Saudi Arabia has a varied trade balance, with India and China playing key roles in importing from and exporting to the country.

Al-Falih added: “But we continue to trade in a very strong way on goods and services with the Western nations as well as other developing countries in the South. If you look at the investment of the G20 investors in the Kingdom of Saudi Arabia, six of the top 10 are from the East, and the other four are Western countries.”

He also highlighted the strong interest from Asian investors in capital flow into Saudi Arabia.

“The Kingdom in many ways is a connector, as I mentioned, of owners of capital from investors from East and West, and hopefully, we play a significant role in terms of bringing investors, bringing companies together, creating a platform for global cooperation and collaboration which is very much central to how we want to lead going forward to minimize the fragmentation and tension that seems to have emerged the last few years,” the minister said.

During the panel discussion, Al-Falih also tackled how Vision 2030 created a massive shift in the basic economy, with significant growth in non-oil sectors being recorded.

He added that over the past seven to eight years, there have been typical fluctuations in the oil markets, including price changes and variations in Saudi production, which directly impact government revenues and the balance of payments. However, the other sectors, particularly the non-oil economy, have experienced steady and consistent growth of 4 to 6 percent throughout this period.

The minister added: “Sectors that hardly existed are growing at double-digit year on year for the period since Vision 2030, despite COVID and despite micro volatility globally, as I mentioned. You look at tourism, you look at tech, you look at logistics and transportation, all of these are sectors that are drawing a lot of investments and that is reflected in the capital markets, which is the subject of our gathering today.”

The minister also said that over the last two to three years, between 40 and 50 initial public offerings for equity listings have taken place.

“There is still a significant need for this forum and for the capital markets governed by CMA (Capital Market Authority), but really the motor for it and the driver is Tadawul because that is the platform of which everybody works to continue to reflect what is happening in the basic economy, which is diversification and rebalancing of our capital markets,” he said.

Baroness Gustafsson of Chesterton of the Order of the British Empire and the UK’s Minister for Investment, who was also on the same panel, said that bold strategies are needed to drive investment success.

“You have to be quite clear about what it is that you want to accomplish and make that available to investors, and we have done that with our modern industrial strategy, laying out those sort of key sectors that we think are going to be really contributing to the growth of the UK so the investors can align alongside that to make sure they are supporting that,” Gustafsson said.

“The other aspect that you need is that capability. So, that exists in both terms of the sort of innovation capability. So, we have got some of the best academic institutions in the world with world-class expertise that are going out solving these really complicated world problems,” she added.

Organized by the Saudi Tadawul Group and held under the patronage of the Minister of Finance and Chairman of the Financial Sector Development Program Committee, Mohammed Al-Jadaan, the forum will convene top policymakers, business leaders, and industry experts to discuss key trends and developments shaping the nation’s capital markets. 

With a strong focus on the evolving financial landscape, the event is held under the theme “Powering Connections,” and is set to unlock investment opportunities, foster strategic partnerships, and further position the Kingdom as a key player in the global capital markets ecosystem.


How KSA is blending compliance and innovation to build a global startup hub 

How KSA is blending compliance and innovation to build a global startup hub 
Updated 15 August 2025
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How KSA is blending compliance and innovation to build a global startup hub 

How KSA is blending compliance and innovation to build a global startup hub 

RIYADH: Saudi Arabia is advancing an ambitious strategy to position itself as a global hub for technology startups, striking a balance between regulatory reform and an unprecedented wave of innovation.   

As the Kingdom races to diversify its economy and reduce dependence on oil, entrepreneurs and legal experts say the country is reaching a pivotal moment in its efforts to create a business environment that is both competitive and predictable. 

Feras Mousilli, managing partner at Lloyd & Mousilli, described the pace of change as remarkable.   

Feras Mousilli, managing partner at Lloyd & Mousilli. Supplied

“The regulatory landscape in Saudi Arabia is evolving at an impressive pace and the government’s proposed regulations show a clear intent to support its Vision 2030 goals: reduce barriers, increase clarity, and compete globally for tech innovation,” he told Arab News in an interview.   

Yet as new frameworks take hold, founders continue to grapple with the friction that arises when rapid innovation meets complex compliance requirements. 

In recent years, the Saudi Central Bank and the Capital Market Authority have emerged as key architects of this transformation.

Through sandbox environments and tiered licensing, regulators have created mechanisms for startups to test their ideas with fewer constraints.   

Among the most consequential reforms is the introduction of open banking frameworks, which mandate financial institutions to share Application Programming Interfaces with third-party fintech firms, opening the door to greater competition and inclusion. 

APIs are a set of rules and protocols that allow different software systems to communicate and exchange data. 

For founders such as Hisham Al-Falih, the shift has been both sweeping and hard-won.   

Al-Falih, founder of Lean Technologies. Supplied

“I’d say that the things that have kind of maybe changed the most this year are the introduction of new regulations,” said Al-Falih, founder of Lean Technologies, in an interview with Arab News. 

“In Saudi Arabia, the central bank has been continuing its mission and its plan of rolling out open banking,” he added. 

“This is obviously a multiyear effort, and it’s culminating now with the introduction of the PIS, the Payments Initiation Service, which is expected to go live soon,” Al-Falih said. 

He recalled that when Lean Technologies launched in 2019, few policymakers had a roadmap for modern fintech.   

“None of these regulatory kind of bodies really adopted open banking and had plans for it,” he said.   

“And so there’ve been years of discussions and conversations and back and forth with a variety of industry bodies to get to where we’re getting to today.” He added that Lean has worked closely with regulators to help shape the emerging framework. 

Beyond fintech, the Kingdom has implemented comprehensive reforms to the legal framework governing all businesses.   

In February, the government passed a new Investment Law establishing a unified framework for foreign and domestic investors, with enhanced protections and simplified procedures.   

At the same time, a revised Companies Law introduced the Simple Joint Stock Co., designed to make it easier to incorporate and operate a startup. 

Companies were required to update their Articles of Association by Jan. 18, marking a nationwide effort to align corporate governance with international norms. 

These changes coincide with record-breaking momentum in the broader startup ecosystem. 

In 2025, Saudi Arabia was recognized as the fastest-growing startup environment in the world, according to the Global Startup Ecosystem Index, which reported Riyadh had climbed 60 places to rank 23rd globally.   

Venture funding has accelerated sharply, achieving a 49 percent compound annual growth rate from 2020 through 2024, with artificial intelligence startups emerging as a priority.   

Riyadh’s growth was catalyzed by a policy-driven approach that prioritized both scale and specialization.   

According to the 2025 Global Startup Ecosystem Report by Startup Genome, more than 200 fintech companies now operate in the Kingdom, supported by the Saudi Central Bank’s regulatory sandbox and Fintech Saudi’s market-building efforts.   

The report highlighted startups such as Lean Technologies, Rasan, and Tamara as examples of companies attracting substantial regional and international capital, with major financial institutions serving as early adopters and anchor clients. 

In addition to fintech, the report praised the Kingdom’s progress in cybersecurity, noting that Riyadh-based firms like Mozn and sirar by stc are developing artificial intelligence-powered solutions for identity verification, fraud detection, and compliance. 

Saudi Arabia has emerged as the leading hub for venture capital activity in the Middle East and North Africa, raising $860 million in the first half of the year — a 116 percent year-on-year increase — supported by sovereign initiatives and rising foreign investor interest.  

According to regional venture platform MAGNiTT, the Kingdom recorded 114 VC deals during the period, representing a 31 percent increase from the same time in 2024, and continuing its momentum from the previous year, when it secured the largest volume of funding in the region for the second consecutive year.  

This surge in venture activity is further underpinned by structural reforms and policy incentives.  

As of mid-2025, Saudi Arabia’s Ministry of Investment had issued 550 Startup Investment Registrations, known as Riyadi licenses, reflecting a 118 percent annual growth.   

While Saudi Arabia’s ambition to become a digital-first economy is undisputed, Mousilli cautioned that rapid change can overwhelm young companies.   

“The challenge comes when compliance is so burdensome or complex that it diverts resources away from core growth,” he said.   

“For example, in fintech, a startup may spend months navigating licensing or anti-money laundering requirements — before they’ve even validated their product-market fit.”   

As a result, he noted, some founders default to “we’ll deal with it later,” exposing themselves to legal risk. 

The Kingdom has signaled that it wants to avoid this trap. Regulators are increasingly adopting risk-based supervision models that calibrate oversight according to the size and systemic impact of each company.   

“The most effective regulators understand that a small startup doesn’t need the same oversight as a multinational bank,” Mousilli said. “Saudi Arabia is beginning to adopt this risk-based approach, which is a positive sign.” 

To complement the regulatory overhaul, the government has introduced new compliance mandates around ultimate beneficial ownership disclosures, enhanced anti-money laundering protocols, and environmental, social, and governance reporting, reinforcing transparency and investor confidence.   

The Digital Government Authority reported that digital transformation readiness exceeded 74 percent in 2025, underscoring a push to digitize public services and reduce administrative delays. 

For founders, this shift is not merely regulatory — it is cultural. Al-Falih said that collaborative policymaking has become a defining characteristic of the Saudi tech sector.   

“We’ve been working closely with the Central Bank and the associated parties in the ecosystem to provide our feedback, our notes on how their framework is being written, and to obviously engage with them in a productive way,” he said. 

In the view of many entrepreneurs, these conditions are creating fertile ground for growth. “I would argue that the region has some of the best regulations and infrastructure set up,” Al-Falih said. “And so we will be one of the more successful parts of the world to introduce these technologies.” 

Still, legal experts caution that unresolved issues — such as the enforcement of intellectual property rights, clarity in employment law, and the efficiency of dispute resolution — remain on investors’ radar.   

Mousilli observed that, despite the progress, Saudi Arabia will need to maintain its momentum to consolidate its gains. “The frameworks are improving, but clarity and consistency, especially in implementation, remain key areas to watch and develop,” he said. 

Yet for those building the next generation of technology companies, the convergence of regulatory ambition and economic transformation is unmistakable.   

As Al-Falih put it: “This is one of the best times to be alive and one of the best times to be a member of the tech community in the GCC.” 


Global Markets — Asia markets recover after hot US price data

Global Markets — Asia markets recover after hot US price data
Updated 15 August 2025
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Global Markets — Asia markets recover after hot US price data

Global Markets — Asia markets recover after hot US price data

SINGAPORE: Stocks in Asia made an uneven recovery as traders assessed the policy options facing the world’s central banks, after an unexpected spike in producer price data in the US renewed inflation concerns.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 percent after a report on Thursday from the Bureau of Labor Statistics which showed the Producer Price Index increased 0.9 percent in July on a month-on-month basis, well above economists’ expectations.

The report prompted traders to rein in expectations of how quickly the Federal Reserve would be able to cut rates at its September meeting without stoking further inflation.

“What it did was to get rid of all the chat about a 50 basis point cut,” said Mike Houlahan, director at Electus Financial Ltd in Auckland.

The market is currently pricing in a 92.1 percent probability of a 25 basis point rate cut at its meeting next month, compared with a 100 percent likelihood of a cut on Thursday, according to the CME Group’s FedWatch tool. The chance of a jumbo 50 basis point cut fell to zero from an earlier expectation of 5.7 percent a day ago.

US stock futures were up 0.2 percent in Asian trading and on track for a fourth day of gains after a choppy trading session on Wall Street on Thursday. The yield on the US 10-year Treasury bond was down 2 basis points at 4.2732 percent.

The two-year yield, which is sensitive to traders’ expectations of Fed fund rates, slipped to 3.7233 percent compared with a US close of 3.739 percent.

The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, retraced some gains after the PPI data release, last trading down 0.2 percent at 98.026.

The Nikkei rebounded 1.6 percent to near a new record high, following a sell-off on Thursday that marked the index’s biggest decline since April 11 and snapped a six-day winning streak. Japanese GDP data released on Friday showed the economy expanding by an annualised 1.0 percent in the April-June quarter, beating analyst estimates. The dollar weakened 0.5 percent against the yen to 147.09.

Australian shares were last up 0.7 percent, while stocks in Hong Kong were down 1.1 percent.

The CSI 300 rose 0.8 percent after the release of weaker-than-expected Chinese economic data for July, including retail sales and industrial production, stoked speculation of fresh stimulus. Markets in India and South Korea are closed for public holidays.

Cryptocurrency markets stabilised after a new record for bitcoin of $124,480.82 on Thursday proved fragile and promptly crumbled after falling short of its next key milestone. The digital currency was last up 0.8 percent, recovering some ground, while ether gained 1.7 percent.

“Bitcoin's failure to conquer the $125,000 resistance signals another consolidation phase,” said Tony Sycamore, a market analyst at IG in Sydney.

In commodities markets, Brent crude was down 0.3 percent at $66.63 per barrel ahead of a meeting in Alaska between US President Donald Trump and Russian leader Vladimir Putin.

“The first meeting doesn’t seem like a major market-moving event - it’s more to set up a second meeting, which will likely be more important,” said Marc Velan, head of investments at Lucerne Asset Management in Singapore. “If a ceasefire is reached, expect a positive reaction in the euro and a weaker dollar; the opposite if a ceasefire fails.”

Gold was slightly lower as the markets digested the path of inflation-adjusted interest rates, which typically move in the opposite direction from bullion prices. Spot gold was trading up 0.3 percent at $3,343.94 per ounce. 

In early European trades, the pan-region futures were up 0.5 percent, German DAX futures were up 0.5 percent, and FTSE futures gained 0.5 percent.


Aramco inks $11bn Jafurah gas deal with BlackRock-led consortium

Aramco inks $11bn Jafurah gas deal with BlackRock-led consortium
Updated 15 August 2025
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Aramco inks $11bn Jafurah gas deal with BlackRock-led consortium

Aramco inks $11bn Jafurah gas deal with BlackRock-led consortium

RIYADH: Saudi Aramco signed an $11 billion lease-and-leaseback agreement with a consortium led by Global Infrastructure Partners, part of BlackRock, for midstream assets tied to its Jafurah gas development.

Under the deal, the newly formed Jafurah Midstream Gas Co. will lease development and usage rights for the Jafurah Field Gas Plant and Riyas NGL Fractionation Facility, then lease them back to Aramco for 20 years, according to a press release. 

The company will collect a tariff from Aramco, which retains exclusive rights to receive, process and treat raw gas from the field.

The transaction secures one of the largest foreign direct investments in the Kingdom’s energy sector and builds upon the strong existing relationship between Aramco and BlackRock. In 2022, BlackRock co-led a consortium of investors in a separate minority investment in Aramco Gas Pipelines Co.

In a press statement, Amin H. Nasser, Aramco president and CEO, said: “Jafurah is a cornerstone of our ambitious gas expansion program, and the GIP-led consortium’s participation as investors in a key component of our unconventional gas operations demonstrates the attractive value proposition of the project.” 

He added: This foreign direct investment into the Kingdom also highlights the appeal of Aramco’s long-term strategy to the international investment community. As Jafurah prepares to start phase one production this year, development of subsequent phases is well on track.” 

As part of the deal, Aramco will own 51 percent of JMGC, while the GIP-led group will hold the remaining 49 percent. The transaction, free of production volume restrictions, is expected to close once customary conditions are met.

Jafurah, the Kingdom’s largest non-associated gas field, holds an estimated 229 trillion cubic feet of raw gas and 75 billion stock tank barrels of condensate. The field is central to Aramco’s plan to boost gas production capacity by 60 percent between 2021 and 2030 to meet rising demand.

Bayo Ogunlesi, GIP’s chairman and CEO, said: “We are pleased to deepen our partnership with Aramco with our investment in Saudi Arabia’s natural gas infrastructure, a key pillar of global natural gas markets.” 

The deal attracted significant interest from global investors, with co-investors from Asia and the Middle East participating. Aramco said the agreement will help optimize its asset portfolio and capture additional value from Jafurah’s development.


Oil Updates — prices maintain gains ahead of Trump-Putin summit 

Oil Updates — prices maintain gains ahead of Trump-Putin summit 
Updated 15 August 2025
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Oil Updates — prices maintain gains ahead of Trump-Putin summit 

Oil Updates — prices maintain gains ahead of Trump-Putin summit 

NEW YORK: Oil prices nudged higher on Friday to fresh one-week highs after US President Donald Trump warned of “consequences” if Russia blocked a Ukraine peace deal, injecting concerns about supply. 

Sentiment was also boosted by strong economic data out of Japan, which is among the largest global crude importers. 

Brent crude futures gained 16 cents, or 0.2 percent, to $67.00 a barrel by 03:17 a.m. Saudi time. US West Texas Intermediate crude futures were up 14 cents, also 0.2 percent, to $64.10. 

All eyes are on Friday’s meeting of Trump and Russian leader Vladimir Putin in Alaska, where a ceasefire in the Ukraine war is at the top of the agenda. A continued conflict between Russia and Ukraine supports oil markets by limiting the supply of Russian oil. 

Trump, however, also said he believes Russia is prepared to end the war in Ukraine. 

Fresh Japanese government data released on Friday showed the economy expanded an annualised 1.0 percent in the April-June quarter, compared with a median market forecast for a 0.4 percent increase. 

The rise in gross domestic product translated into a quarterly increase of 0.3 percent, compared with a median estimate of a 0.1 percent increase. Strong economic activity typically spurs oil consumption. 

Prospects of higher-for-longer US interest rates, however, kept oil prices from rising further. 

Higher-than-expected inflation data and weak jobs numbers out of the US raised concerns that the Federal Reserve would keep interest rates high, usually a dampener of oil consumption.


Closing Bell: Saudi main index ends the week in green at 10,833

Closing Bell: Saudi main index ends the week in green at 10,833
Updated 14 August 2025
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Closing Bell: Saudi main index ends the week in green at 10,833

Closing Bell: Saudi main index ends the week in green at 10,833
  • Parallel market Nomu gained 282.36 points to close at 26,615.66
  • MSCI Tadawul Index edged up 0.72% to 1,401.67

RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Thursday, gaining 70.12 points, or 0.65 percent, to close at 10,833.59.

The total trading turnover on the main index reached SR4.37 billion ($1.16 billion), with 174 stocks advancing and 74 declining.

The Kingdom’s parallel market Nomu gained 282.36 points to close at 26,615.66. The MSCI Tadawul Index edged up 0.72 percent to 1,401.67.

The best-performing stock on the main market was Thimar Development Holding Co., which jumped 10 percent to SR40.04. 

Saudi Industrial Development Co. rose 9.96 percent to SR33.12, while Saudi Printing and Packaging Co. gained 5.6 percent to SR12.63.

Elm Co. posted the sharpest drop, falling 3.40 percent to SR881. Theeb Rent a Car Co. declined 3.03 percent to SR62.35, Nice One Beauty Digital Marketing Co. dropped 2.62 percent to SR24.13, and Al Mawarid Manpower Co. decreased 2.59 percent to SR 128.1.

On the announcements front, Group Five Pipe Saudi Co. posted a substantial increase in its net profit for the first half of the year, supported by strong sales growth, the company said in a filing on Wednesday.

According to the firm’s financial disclosure on the Saudi Exchange, net profit for the six months ending June 30 reached SR125.18 million, a significant rise from SR9.2 million recorded during the same period in 2024. This marks a year-on-year jump of over 1,259 percent.

The increase in profit was primarily driven by volume growth and lower production costs.

Group Five Pipe Saudi Co.’s share price traded 29.95 percent higher to close at SR38.96.

National Signage Industrial Co., also known as Sign World, has set the price range for its initial public offering between SR12 and SR15 per share, according to a statement issued by Yaqeen Capital, the company’s financial adviser and lead manager.

The offering consists of 1.5 million ordinary shares, representing 20 percent of Sign World’s post-listing issued share capital. The entire stake is allocated to qualified investors as part of the book-building process.

Yaqeen Capital said the bidding and book-building period for qualified investors will commence on Aug. 17 and close on Aug. 24.

Qualified subscribers may apply for a minimum of 10 shares and up to a maximum of 374,990 shares.