Saudi Arabia

Private sector participation in Saudi Healthcare picks up pace

Saudi Arabia has recently undertaken initiatives to increase private sector participation in its healthcare sector and improve competency of its healthcare workforce. The country has also highlighted key segments of focus in the healthcare sector. Saudi Arabia’s growing population with expected increase in average age and rising lifestyle related diseases are indicative of the uptrend in demand for healthcare in the country. As the Saudi Healthcare sector is predominantly operated by Ministry of Health (MoH), the demand could overload public...

Changing consumer habits amid COVID-19 accelerates decline of Saudi Arabia bank branches

Bank branches operating in Saudi Arabia have reduced by 4.6% y/y in Q2 2021 to 1,969 branches (SAMA). The number of branches had been on a year-on-year declining trend since Q3 2020, with the current quarter posting the highest decline. The number of ATMs has also decreased by 9% y/y in Q2 2021. Operational considerations and uptake of digital banking, accelerated by COVID-19, seem to have contributed to the trend. Total Bank Branches in Saudi Arabia Source: SAMA According to...

Filling the gap in ESG framework: Saudi Arabia

Saudi Arabia's sovereign wealth fund has asked banks to help it develop an environmental, social and governance (ESG) framework, as per a recent article in Reuters. According to the article, development of ESG framework was likely a precursor for a multibillion dollar bond sale, which would be the Saudi wealth fund's first. ESG has been one of the hottest topics in the world of finance. There is ample demand from investors for ESG compliant instruments but due to lack of...

Foreign investment in Saudi stock market up by 150%

It is reported that the foreign investment in the Kingdom's stock market increased by more than 150 percent by the end of Q2 2021, compared to late 2018. Banking, basic materials, energy and communications attracted the most foreign investment. This can be attributed to the Saudi Arabia’s efforts to develop the financial market and expand the institutional investment base. The value of foreign investment in Saudi Stock Market was USD 73.6 billion in 2021Q2 comprising mainly of Qualified Foreign Investors...

Saudi Arabia eases regulation to support SMEs and Entrepreneurs

Saudi Arabia will exempt small and medium enterprises (SMEs) from commerce fees register for three years as the country plans to boost the number of start-ups in the economy. Fees will start in the fourth and fifth year, but at a reduced rate of SAR 500 (USD 133) for entrepreneurs and SAR 200 for entrepreneurs with a capital of less than SAR 375,000 and whose employees do not exceed five in number. This initiative was taken to support and reduce...

Following a year of distress, Saudi Arabia economy back on growth path

Saudi Arabia economic growth as evidenced by its real GDP grew by 1.5% in Q2 2021 as compared with the same period last year, registering its first quarterly economic expansion since the start of COVID-19 pandemic early last year. Economic growth in Saudi Arabia was led by 10% increase in the non-oil sector (Q2, 2021 yoy basis), according to data from the General Authority for Statistics. While the government sector saw 0.7% growth, the oil sector recorded a decline of...

Saudi Arabia Banking Sector – The worst might not be over yet

COVID-19 pandemic has pressurized banking asset quality and increased the demand for credit. As signs of normalcy returns, banks face the challenging task of managing the asset quality while expanding balance sheets. The strength of a country’s banking sector is often reliant on its underlying economic conditions. As is the case for Saudi Arabia, which has the second largest banking industry in the GCC by total assets, with roughly 29% of the region’s total banking assets. According to estimates from...

Estimating Corporate CapEx in Saudi Arabia

COVID-19 has been a double whammy for the Saudi Arabian economy. First, the lockdown and curfew measures has affected the economic activity. Second, because of global lockdown, oil prices fell with the demand for oil falling sharply. Therefore, the output of Saudi corporate sector is also expected to be very much low for the year 2020 if not beyond. Average Fixed Capital Assets held by Saudi Listed Companies(2015-2019) Saudi listed companies held fixed capital assets measured by the average outstanding...

How has liquidity in Saudi Tadawul fared during COVID-19?

Liquidity is one of the key indicators of a stock market and is a fundamental requirement for market efficiency. In recent years, Saudi Arabia’s equity market has implemented reforms, such as relaxation of foreign ownership and has achieved milestones such as inclusion in key indices including the MSCI Emerging Market Indices. With the listing of Saudi Aramco, it has also become one of the top 10 markets globally, by market capitalization. Given the market’s importance in GCC and globally, the...

Saudi Arabia’s move towards a cash less economy propelled by COVID-19

Let us look at the usage of cash in Saudi Arabia, the largest economy in the GCC. The question is whether usage of cash is going up or going down, are people moving towards a cash less economy as is being talked about by some of the influential thinkers who believe in the digital economy. Digital technologies have brought about great ease of investing in financial securities and quick conversion to cash of such assets. With such technological developments, it...