عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Saudi's Public Investment Fund Takes $11 Bln in its First Loan

Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
TT
TT

Saudi's Public Investment Fund Takes $11 Bln in its First Loan

Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser
Buildings are seen in Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser

Saudi Arabia's sovereign wealth fund says it has taken its first loan, a $11 billion borrowing from global banks as it tries to expand its investments.

The Saudi Public Investment Fund made the announcement in a statement on Monday.

“This is the first step in incorporating loans and debt instruments into PIF’s long-term funding strategy,” the fund’s managing director Yasir al-Rumayyan said in a statement. He added that the PIF would “develop into one of the most prominent users of banking services in the region”.

The PIF, which is to play a leading role in Saudi Arabia’s drive to develop non-oil industries, said it would use the loan for “general corporate purposes”.

Saudi Crown Prince Mohammed bin Salman, Deputy Prime Minister and Minister of Defense, has talked about using the PIF to help diversify the economy of the Kingdom, which relies heavily on money made from its oil sales.

The PIF program outlines Saudi objectives in local and international investments that enable the diversification of the Kingdom’s sources of development and growth.

The three-year program (2018 until 2020) includes around 30 initiatives which set a goal to increase PIF's asset portfolio to SAR1.5 trillion ($400 billion) by 2020.

Most Viewed

 
 
Business

Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
TT
TT

Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)

As Saudi companies start reporting their Q2 financial results, experts are optimistic about the transport and logistics sector. They expect a 10% annual growth, with total net profits reaching around SAR 900 million ($240 million), driven by tourism and an economic corridor project.

In Q1, the seven listed transport and logistics companies in Saudi Arabia showed positive results, with combined profits increasing by 5.8% to SAR 818.7 million ($218 million) compared to the previous year.

Four companies reported profit growth, while three saw declines, including two with losses, according to Arbah Capital.

Al Rajhi Capital projects significant gains for Q2 compared to last year: Lumi Rental’s profits are expected to rise by 31% to SAR 65 million, SAL’s by 76% to SAR 192 million, and Theeb’s by 23% to SAR 37 million.

On the other hand, Aljazira Capital predicts a 13% decrease in Lumi Rental’s net profit to SAR 43 million, despite a 44% rise in revenue. This is due to higher operational costs post-IPO.

SAL’s annual profit is expected to grow by 76% to SAR 191.6 million, driven by a 29% increase in revenue and higher profit margins.

Aljazira Capital also expects a 2.8% drop in the sector’s net profit from Q1 due to lower profits for SAL and Seera, caused by reduced revenue and profit margins.

Mohammad Al Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that the sector’s continued profit growth is supported by seasonal factors like summer travel and higher demand for transport services.

He predicts Q2 profits will reach around SAR 900 million ($240 million), up 10% from Q1.

Al Farraj highlighted that the India-Middle East-Europe Economic Corridor (IMEC), linking India with the GCC and Europe, is expected to boost sector growth by improving trade and transport connections.

However, he warned that companies may still face challenges, including rising costs and workforce shortages.