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Saudi Arabia Braces for Launching Energy City ‘SPARK,’ Set to Boost GDP by 6%

Saudi Iktva Forum and Exhibition 2018, Omran Haider
Saudi Iktva Forum and Exhibition 2018, Omran Haider
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Saudi Arabia Braces for Launching Energy City ‘SPARK,’ Set to Boost GDP by 6%

Saudi Iktva Forum and Exhibition 2018, Omran Haider
Saudi Iktva Forum and Exhibition 2018, Omran Haider

Saudi Arabia is preparing to launch the King Salman Energy Park (SPARK), a company managed by Saudi Aramco, with a $1.6 billion worth of investments allocated for funding its infrastructure.

One of the Saudi Iktva Forum and Exhibition 2018 key organizers, Ahmed Al Ghamidi, said SPARK will create some 100,000 job opportunities for Saudi youth and will contribute some $6 billion to gross domestic product (GDP) each year.

Held November 26-27 the Forum offered presentations, workshops and panels on best practices in navigating such areas as regulatory requirements, financing, R&D and talent development.

The city, which will be developed over 50-square km of land allocated for energy-related industries. SPARK will help localize over 300 new industrial and service facilities, and create a global industrial hub for energy-related manufacturing services.

Facilities offered include a dry port, shared services, a commercial and residential area, and highly specialized training centers.

Ghamidi, addressing an audience at the Aramco-soinsored Iktiva Forum, said that SPARK will not only promote localization but also emerge as the beating heart of Gulf Cooperation Council countries. Designed according to world-class standards, the city is strategically located only 40 km away from the oil giant, Aramco headquarters in Damam, and an hour’s drive away from the King Fahd International Airport.

The city is also being erected in proximity to major highways, railways and ports, namely the King Abdul-Aziz Seaport and the GCC Highway & Railway.

“We are working closely with government and non-government organizations to ensure services at the city are provided,” Ghamidi noted saying that SPARK will also host a livable community.

Up to 60 percent of SPARK’s first phase construction contracts, covering a stretch of 13 square kilometers, have been reserved by major international companies, such as the world leading oil and gas technology provider Schlumberger.

Saudi Aramco also plans for two thirds of the city to be an industrial zone to promote local content. The city will also include specialized training centers, a logistics and dry port, shared services and commercial and residential areas.

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Markets Wary as Trump Returns to the White House 

US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)
US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)
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Markets Wary as Trump Returns to the White House 

US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)
US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)

Financial markets swayed and wobbled at the beginning of Donald Trump's second US presidency after he made a softer start on China than many had anticipated, but then signaled punitive tariffs on North American neighbors within hours.

A wave of relief that swept across markets - as his speech and slew of executive orders imposed no new trade levies - was stopped in its tracks when Trump told reporters in the White House's Oval Office that he was thinking about 25% tariffs on Mexico and Canada from Feb. 1.

The dollar, which had slipped, reversed course to hit five-year highs on its Canadian counterpart.

Hong Kong shares rose, battery stocks fell and the trading day was a neat reminder of both the rollercoaster that markets rode through Trump's first term and how, this time, investors feel more sanguine about the risks.

"Prepared remarks and what's off the cuff - both of them will move markets," said Tai Hui, chief market strategist in Asia at J.P. Morgan Asset Management, at a briefing in Singapore.

"Rather than basing all our investment decisions on what is announced...we just have to maybe take a step back and just absorb," he said.

"What was said on the campaign trail...and what is now being studied and researched and implemented there's still going to be a significant gap."

Trump had vowed to immediately impose steep tariffs of 10% to 20% on global imports into the US and 60% on goods from China, but a memo he issued after taking office only directed agencies to research and investigate the US trade deficits.

The dollar hit a five-year high of 1.452 Canadian dollars before steadying around C$1.44. It rose but stayed below last month's highs on the Mexican peso.

Treasuries rallied and S&P 500 futures rose 0.2%. European futures slipped 0.4%. Chinese stocks and the yuan tentatively rose.

"Tariffs are necessarily an overhang," said Vis Nayar, chief investment officer at Eastspring Investments in Singapore.

"I think we should expect volatility. But there is hope that there is some pragmatism. We have to assume that he's not going to do anything that just brings up US inflation without paying attention to that."

PRO-BUSINESS, BUT AT A COST

Trump enters office with an ambitious agenda spanning trade, immigration, tax cuts and deregulation which has the potential to boost US corporate profits but which could also reignite inflation and put upward pressure on interest rates.

In his inaugural speech, Trump pledged to bolster the US oil, gas and power industries and to crack down on immigration.

He pardoned supporters who attacked the Capitol four years ago. He also withdrew from the Paris climate pact and declared an emergency to clear the way for more oil and gas production.

Battery stocks in South Korea fell after he revoked an order that had sought to ensure half of new cars sold in the US after 2030 were electric vehicles. A US holiday on Monday means that US equities will react on Tuesday.

"Most of what he has been talking about will help spur growth and corporate profits," said Jack Ablin, chief investment officer at Cresset Capital.

"But many will come at a cost. We will need to see a lot of earnings growth to make up for even a minor increase in interest rates that could follow higher tariffs" and other proposals, he said.

Cryptocurrency markets, which have soared in the run-up to Trump taking office, came under pressure as the lack of any instant crypto-friendly announcements stirred some disappointment. Bitcoin, which came close to $110,000 on Monday was trading around the $100,000 mark and a Trump-branded memecoin that hit almost $75 on the weekend fell to $36.

During the first year of Trump's first administration, the S&P 500 rose 19.4%, following a 5% rally in his first 100 days.

For the entirety of his first term, the S&P 500 rose nearly 68%, but saw bouts of volatility, stemming in part from a trade war Trump fought with China.

"The big question on investors' minds right now is going to be 'how' -- how will he cut costs and lower inflation and lower interest rates," said Josh Strange, president of Good Life Financial Advisors of NoVA, a financial advisory firm.