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Moody's Changes Saudi PIF's Outlook to Positive

The Flag of Saudi Arabia is displayed on the Kingdom Center as Saudi celebrates Flag Day, in Riyadh, Saudi Arabia, March 11, 2023. (Reuters)
The Flag of Saudi Arabia is displayed on the Kingdom Center as Saudi celebrates Flag Day, in Riyadh, Saudi Arabia, March 11, 2023. (Reuters)
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Moody's Changes Saudi PIF's Outlook to Positive

The Flag of Saudi Arabia is displayed on the Kingdom Center as Saudi celebrates Flag Day, in Riyadh, Saudi Arabia, March 11, 2023. (Reuters)
The Flag of Saudi Arabia is displayed on the Kingdom Center as Saudi celebrates Flag Day, in Riyadh, Saudi Arabia, March 11, 2023. (Reuters)

Moody's has changed its outlook on Saudi Arabia’s Public Investment Fund (PIF) from "stable" to "positive" and affirmed its long-term issuer and senior unsecured ratings at A1.

According to the performance evaluation, the rating reflects PIF's standalone creditworthiness as expressed by a BCA of A1.

Moody's took several factors into account when issuing the Fund's rating, namely the size of the asset under management supported by the sustainable growth of the Fund's investment returns, the high quality of the Fund's investment portfolio, sector diversification with investments across several different sectors both locally and internationally.

Also, among the agency's rating criteria is the firm's financial profile with very low leverage, very high-interest coverage, and an excellent liquidity profile.

In October 2022, PIF issued the first green bonds, including the first 100-year maturity, alongside two other tranches.

Last February, the Fund was set to raise $5.5 billion through its second sale of green bonds in four months, for which orders topped $32.5 billion.

PIF aims to be the most significant global sovereign Fund in a few years.

However, its primary goal is to help in developing the national economy, diversify income sources, and localize modern knowledge and innovative technologies.

It established economic partnerships that contribute to deepening the role of Saudi Arabia on the regional and global scene.

PIF is interested in supporting the role of the private sector and recently announced three initiatives as part of its efforts to enable further and empower private sector businesses.

The first is the Local Content Growth Program (MUSAHAMA), which aims to increase the share of local content spending in PIF's domestic portfolio to 60 percent by the end of 2025.

The second is the Suppliers Development Program, which will support the development and upskilling of local suppliers and vendors to meet the growing requirements of PIF's portfolio companies.

The Private Sector Hub is a dedicated channel that shares supplier and investment opportunities with the private sector. The hub is live, boasts more than 100 opportunities, and will be continuously enhanced and updated.

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Business

Fire, Smoke Upend Western Canada’s Summer Tourism Season

A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
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Fire, Smoke Upend Western Canada’s Summer Tourism Season

A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)

Severe wildfire seasons are increasingly hurting western Canada's lucrative tourism industry, with some visitors beginning to avoid the busy late-summer months due to concerns about uncontrolled blazes, smoke-filled skies and road closures.

After a scorching start to July, nearly 600 wildfires are now ablaze across British Columbia and Alberta, including a huge fire that this week devastated the picturesque tourist town of Jasper in the Canadian Rockies.

Dozens of communities, including popular holiday spots in British Columbia's Kootenay region, are under evacuation orders and several highways are closed.

This year's surge in wildfire activity comes after Canada endured its worst-ever year for wildfires in 2023, when more than 15 million hectares (37 million acres) burned, including parts of the city of West Kelowna in the heart of British Columbia's wine region.

Ellen Walker-Matthews, head of the Thompson Okanagan Tourism Association, said the industry was seeing a lot more last-minute travel decisions instead of booking in advance.

"It's a huge blow. July and August are traditionally the busiest months in the region," said Walker-Matthews, adding that while her region has been relatively unscathed by wildfires this summer, some visitors are choosing to avoid interior British Columbia altogether.

The members of the British Columbia Lodging and Campgrounds Association are reporting a 5-15% drop in bookings from a year ago, with the biggest declines coming from the hotter Okanagan and Cariboo regions, said Joss Penny, who heads the association.

"The concern is that this is something we have to live with and we have it every year now," said Penny.

Although wildfires in Canada's forests are natural and common, scientists say drier, hotter conditions fueled by climate change are leading to more volatile and frequent blazes.

'SMOKEY SKIES'

Some events, like the Salmon Arm Roots and Blues Festival, usually held in August, have now been rescheduled to earlier in the summer to avoid what is now seen as peak smoke season. The festival, which was cancelled last year due to nearby wildfires, was this year moved to July to benefit from "less smokey skies."

Wildfires and extreme climatic events are prompting tourists to "change their plans not just temporarily, but permanently," said Elizabeth Halpenny, a tourism researcher and professor at the University of Alberta, noting that seasonal workers in the sector are often the hardest hit as they have few protections during a bad season or amid a cataclysmic fire.

Tourism contributed C$7.2 billion to the British Columbia economy in 2022, and C$9.9 billion to Alberta in 2023, according to the latest government data.

Jasper National Park is one of Canada's premier tourist destinations, with more than 2 million visitors a year flocking to see its pristine mountain landscapes and abundant wildlife, including grizzly bears, moose and elk.

Kelly Torrens, vice-president of product at international tour company Kensington Tours, described western Canada as a bucket-list destination. But the company now has 49 trips that were supposed to pass through Jasper this season in limbo. Six others were forced to evacuate the park when the fire hit.

Parks Canada has cancelled all camping reservations within Jasper National Park until Aug. 6 and with potentially 50% of the town's structures destroyed by fire, the cleanup and rebuild could take years.

Halpenny is among those hedging their bets.

"I've booked a campsite stay in the mountain parks but at the same time, I booked a campsite out on the prairie somewhere and that's my backup plan because I don't want to miss out on my vacation with my family."