IsDB Tackles Growth Challenges of Members with Seven-Item Plan

Jeddah Islamic Port and IsDB President Muhammad Al Jasser. (Asharq Al-Awsat)
Jeddah Islamic Port and IsDB President Muhammad Al Jasser. (Asharq Al-Awsat)
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IsDB Tackles Growth Challenges of Members with Seven-Item Plan

Jeddah Islamic Port and IsDB President Muhammad Al Jasser. (Asharq Al-Awsat)
Jeddah Islamic Port and IsDB President Muhammad Al Jasser. (Asharq Al-Awsat)

International financial institutions stand out in times of crises, such as recession and inflation the global economy is now facing. These problems emerged from disruptions in global supply chains as production declined after the coronavirus pandemic.  

Disruption in global supply chains and lowered production rates have caused international borrowing rates to rise and debts to jump to record levels. All this occurred amid warnings of a hunger and energy crisis threatening the world.  

These causes and results are inseparable from accelerating geopolitical changes, which feed the instability of financial indicators worldwide. All these factors make it difficult for financial institutions to make financing decisions amid increasing pressures on low-income countries and the suffering of developing countries.  

Attention turns to the Islamic Development Bank (IsDB), which serves 57 member countries, meaning that any projects and operations conducted by the institution affect one in five of the world's population.  

Speaking to Asharq Al-Awsat, IsDB President Muhammad Al Jasser stressed that the Bank plans to confront development challenges worldwide.  

“The Bank’s plans to meet the challenges of development in the world target seven items. This includes mitigating the adverse effects of multiple crises, enhancing resilience, supporting countries to create sustainable infrastructure, and helping human capital,” Al Jasser said.  

“The IsDB works with partners and stakeholders to develop trade routes, attract investment flows, forge innovative partnerships and establish business relationships that enable contribution to regional and global value chains,” he added.  

On April 4, 2020, the IsDB board approved the Bank’s Strategic Preparedness and Response Program to support member countries in preventing, containing, mitigating, and recovering from the pandemic.  

The program envisages a holistic approach in the short, medium and long term, accommodating priorities beyond the immediate and emergency response to the health sector, while putting member states back on the path of economic recovery through restoring livelihoods, building resilience and kick-starting economic growth.  

The IsDB has committed more than $4.5 billion to respond to the pandemic and to restore the economic recovery of member states.  

“The outlook for global economic growth and recovery in the medium term is characterized by significant uncertainty and deflationary risks,” warned Al Jasser.  

“While the negative effects of the pandemic are still hanging over many economies, the conflict in Eastern Europe and the devastating floods in a number of member states have set back prospects for a rapid recovery,” he added.  

Regarding IsDB’s position and plans to deal with capital in this critical economic situation, Al Jasser said: “We look forward to expanding our sustainable financing activities, including developing our cooperation with (Nasdaq Dubai), the international stock exchange in the region.”  

He pointed out that the IsDB listed on Nasdaq Dubai on April 29 sukuk at a value of $1.6 billion. 



4 Factors Behind the Decline of Saudi Stock Market in H1 2025

Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
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4 Factors Behind the Decline of Saudi Stock Market in H1 2025

Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 

Financial analysts and market specialists have identified four main factors driving the decline of the Saudi stock market during the first half of 2025. Speaking to Asharq Al-Awsat, they pointed to heightened geopolitical tensions in the region, ongoing trade disputes and tariffs between the United States, China, and Europe, oil price volatility, and persistently high interest rates. Collectively, these pressures have squeezed liquidity and weighed heavily on market performance.

Despite the downturn, analysts expect the market to gradually recover over the second half of the year, supported by potential global interest rate cuts, stabilizing oil prices, easing economic uncertainty, and forecasts of robust growth in Saudi Arabia’s GDP and the non-oil sector, alongside continued government spending on major projects.

The Saudi stock market recorded notable losses in the first six months of 2025, with the benchmark index retreating 7.25%, shedding 872 points to close at 11,163, compared to 12,036 at the end of 2024. Market capitalization plunged by around $266 billion (SAR 1.07 trillion), bringing the total value of listed shares to SAR 9.1 trillion.

Seventeen sectors posted declines during this period, led by utilities, which plummeted nearly 32%. The energy sector fell 13%, and basic materials dropped 8%. In contrast, telecom stocks advanced around 7%, while the banking sector eked out a marginal 0.05% gain.

Dr. Suleiman Al-Humaid Al-Khalidi, a financial analyst and member of the Saudi Economic Association, described the first-half performance as marked by significant swings. “The index rose to 12,500 points, only to lose nearly 2,000 points before recovering to about 11,260,” he said.

He attributed the volatility to several factors: regional geopolitical strains, oil prices dipping to $56 a barrel, and high interest rates, which constrained liquidity. He noted that financing costs for traders now range between 7.5% and 9%, historically elevated levels.

“The Saudi market posted the steepest decline among regional exchanges despite record banking sector profits, which failed to translate into stronger overall index performance,” he observed.

Looking ahead, Al-Khalidi anticipates three interest rate cuts totaling 0.75 percentage points by next year, which would bring rates down to about 3.75%. “That should encourage a recovery in trading activity, improve liquidity, and support an upward trend in the index toward 12,000 points, potentially reaching 13,500 if momentum builds,” he added.

Meanwhile, Mohamed Hamdy Omar, economic analyst and CEO of G-World, described the downturn as largely expected, citing external pressures and prolonged trade tensions between the US, China, and Europe. “Retaliatory tariffs dampened investor confidence globally, and Saudi Arabia was no exception,” he said.

Lower oil revenues also strained state finances, leading to a budget deficit of SAR 58.7 billion in the first quarter, further tightening liquidity. Trading volumes fell over 30% year-on-year.

Omar pointed out that changes to land tax regulations and heightened regional security risks also weighed on sentiment. Nonetheless, he expects gradual improvement in the second half of 2025, driven by anticipated rate cuts, rebounding oil prices, and continued large-scale public investments.

He stressed the need for vigilance: “Saudi Arabia remains among the most stable markets, thanks to proactive regulation and policies designed to attract foreign capital and bolster investor confidence.”