Huge International Demand for Saudi Government Bonds

Huge International Demand for Saudi Government Bonds
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Huge International Demand for Saudi Government Bonds

Huge International Demand for Saudi Government Bonds

The Saudi Finance Ministry announced Thursday pricing its fourth international bond, attracting massive orders- three and a half folds its value.

The ministry confirmed in a statement the completion of the $7.5 billion bond sale. “The issuance received significant interest from international investors, with the orderbook peaking at $27.5 billion,” it said.

The country is rated A1 by Moody's and A+ by Fitch.

The strong response to the Saudi government bonds reflects the high confidence in the country’s economy. It also shows the investors’ trust in economic reforms the kingdom is working on.

Saudi Arabia has become one of the biggest emerging market issuers, having sold $52 billion in international bonds since its debut in 2016. It plans to boost borrowing this year, along with state spending.

The Kingdom’s 2019 budget revealed a record spending worth SAR1.106 trillion ($295 billion) which is a 7 percent growth rate compared to 2018. According to the figures, the expected revenues in 2019 are estimated at SAR975 billion ($260 billion) with a nine percent growth rate compared to last year.

The budget has proven the solidity of the country’s economy in which the announced figures showed a rise in the spending volume, going in tandem with Saudi Vision 2030 and related national programs.

Saudi Vision 2030 aims at diversifying the economy and achieving stability, economic and financial sustainability, as well as stimulating the private sector and improving the living standards of citizens.



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)
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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.