Reflecting on the key events that have shaped Saudi Arabia in 2019, it is certain that the Kingdom has achieved a historic turning point in many aspects.
Argaam compiled a list of major milestones across diverse sectors related to the economy, construction, stock markets, banking, finance, transportation, aviation, sports, as well as the new regulations that were introduced by the government to boost domestic and foreign investments.
Perhaps one of the most outstanding events to begin with is the successful initial public offering (IPO) of the world’s largest oil producer, Saudi Aramco, which is considered Saudi Arabia’s and the world’s largest share sale ever breaking the record of both Alibaba in 2014 and Softbank in 2018.
Aramco raised SAR 446 billion from the retail and institutional tranches in its IPO, as it witnessed a 465% oversubscription. It priced the IPO at the high end of the targeted range to give the oil giant a total value of $1.7 trillion.
Also read: Saudi Aramco kick-starts IPO today
On December 11, Aramco started trading on the Saudi Stock Exchange (Tadawul) with the symbol 2222, and a daily price fluctuation limit of 10%. Following the listing, Tadawul announced the fast entry of the oil producer to Tadawul All Share Index (TASI) and Energy Industry Group Index as of Dec. 18.
In turn, the MSCI, a global provider of equity, fixed income, hedge fund stock market indexes, included Saudi Aramco in its indices on Dec. 18. The giant oil producer’s weight on MSCI EM index and MSCI Saudi Arabia Index is estimated at 0.16% and 6.03%, respectively.
Construction and Infrastructure
2) Red Sea Project’s masterplan
In January, The Red Sea Development Company’s board of directors approved the masterplan of The Red Sea Project. The first phase of the project, set to be completed in 2022, includes 14 luxury hotels with over 3,000 rooms that will be built over five islands, in addition to two resorts in the mountains and Sahara areas.
3) Mega tourism project in AlUla
In February, Crown Prince Mohammed bin Salman inaugurated the Sharaan Natural Reserve in AlUla governorate, including a luxurious resort designed by Jean Nouvel, a French architect who designed Louvre Abu Dhabi. The resort is expected to be completed by 2023.
4) New projects in Riyadh
In February, King Salman inaugurated 1,281 projects worth SAR 82 billion in Riyadh region covering infrastructure, transportation, housing, environment and education sectors.
5) ‘Wellbeing’ mega projects in Riyadh
In March, King Salman launched four wellbeing projects, worth SAR 86 billion ($23 billion), in Riyadh.
The projects – King Salman Park, Sports Boulevard, Green Riyadh, and Riyadh Art – complement the Saudi Vision 2030’s ‘Quality of Life’ Program and are aligned with the UN Sustainable Development Goals.
6) Saudi Arabia unveils Diriyah Gate project plan
In November, the foundation stone was laid for Saudi Arabia’s $17.1 billion (SAR 64 billion) Diriyah Gate project, which is being developed by the Kingdom’s Diriyah Gate Development Authority.
Finance and Markets
7) Saudi bonds join JPMorgan Emerging Market Bond Indexes
In January, Saudi Arabia joined JPMorgan Chase & Co.’s Emerging Market Bond Indexes. The inclusion was scheduled to be phased between Jan. 31 and Sept. 30, 2019, and forecast to generate inflows of about $11 billion into the Kingdom’s debt market.
8) MSCI Tadawul 30 Index
MSCI and the Saudi Stock Exchange (Tadawul) announced the launch of the MSCI Tadawul 30 Index (MT30), a tradeable index. The Index targets the top 30 securities of the MSCI Saudi Arabia IMI Index based on free float market capitalization.
9) Tadawul joins FTSE Russel and S&P DJI equity indices
The month of March saw the beginning of the first tranche of Saudi Arabia’s inclusion in the FTSE Russel and S&P DJI Emerging Markets indices.
Read more: Tadawul set to attract SAR 22 bln after inclusion in FTSE, S&P indices
10) Nomu Capped Index launch
In March, the Saudi Stock Exchange (Tadawul) launched Nomu Capped Index (NomuC) as part of enhancement measures.
11) Saudi stocks join MSCI Emerging Markets Index
In May, the biggest global index compiler MSCI began the process of Saudi Arabia’s inclusion on MSCI Emerging Markets Index.
This follows MSCI Inc.’s announcement on May 28 related to adding 30 Saudi securities— representing an aggregate weight of 1.42% in the MSCI EM index on May 28.
Also See: It’s official: Here are the 30 Saudi stocks that joined MSCI EM Index
12) Tadawul achieves global ranking
In July, Tadawul announced in its 2018 annual report that Tadawul All Share Index (TASI) recorded a growth of 8.3% in 2018 year-on-year, putting the exchange among the top global five stock markets in terms of the benchmark index’s percentage growth.
13) Stock market regulations amendments
In September, the Saudi Cabinet amended the regulations governing the Saudi Stock Exchange (Tadawul), including the coordination between the Capital Market Authority (CMA) and Saudi Arabian Monetary Authority (SAMA) in monitoring the securities custody.
14) Foreign companies to list on Tadawul
In October, the Saudi Stock Exchange (Tadawul) allowed, for the first time, foreign companies to list on Tadawul.
Transportation
15) Hyperloop network
In February, the Kingdom was poised to become the world’s first national customer of Hyperloop One’s breakthrough technology through planning to develop a national hyperloop network. The works at the test track will likely kick off in 2020.
Read: Virgin Hyperloop can boost Saudi Vision 2030 and GDP growth: executive
16) King Abdullah Port
In February, Crown Prince Mohammed bin Salman inaugurated the King Abdullah Port in Rabigh, the Kingdom’s first port to be owned, developed and operated by the private sector.
17) Riyadh Metro
Riyadh’s new six-line metro rail project achieves great progress with the completion of 80% of the work. It is set to open 3 lines by mid-2020 while the other 3 will be inaugurated by year-end.
Sports
18) All eyes on a Saudi female at F4 British championship
In April, Reema Juffali, a 27 year-old race car driver became the first Saudi woman to compete in the F4 British Championship Circuit at the legendary Brands Hatch Indy track in England.
19) Hosting WWE Super Showdown
In partnership with World Wrestling Entertainment (WWE), the Saudi General Sports Authority hosted in June the WWE Super Showdown at King Abdullah Sports City Stadium in Jeddah. The show featured the first-ever match between WWE Hall of Famer Goldberg and Undertaker in which the latter won.
Visa & Residency
20) Special expat residency scheme
In May, Saudi Arabia’s Shura Council approved the draft Distinguished Iqama (residency permit) Law, offering a number of privileges to qualified foreigners. The Iqama holder will have a family status, can obtain visit visa for relatives, recruit domestic workers, and can own properties, means of transport and such other advantages.
Also read: Saudi Arabia issues regulations for new residency scheme
21) Saudi Arabia launches tourist e-visa
In September, Saudi Arabia launched the online application for tourist visa for 49 countries, including the majority of European states, the United States, Canada, Australia, New Zealand and some Asian countries.
Tourists will obtain visa on entry at Riyadh, Medina, Jeddah, and Dammam airports as well as Al Batha border and King Fahd causeway.
Read more: Saudi Arabia welcomes 24,000 tourists since new visa scheme
Aviation
22) New terminal at Jeddah airport
In September, King Salman inaugurated the new King Abdulaziz International Airport (KAIA) terminal 1 in Jeddah. The first phase of the KAIA expansion will handle 30 million passengers annually.
The second and third phases will serve 50 million and 80 million passengers annually by 2025 and 2035, respectively.
Economy
23) Increase in Kingdom’s proven oil & gas reserves
In January, the Ministry of Energy, Industry and Mineral Resources announced an upward revision to the Kingdom’s proven oil and gas reserves, following an independent certification of oil and gas reserves in Saudi Aramco’s concession area conducted by DeGolyer and MacNaughton (D&M) consultants.
24) Euro denominated bonds
In July, the Kingdom issued its debut euro-denominated bonds in 2 tranches of 8 and 20 years, respectively, based on market conditions.
Saudi Arabia would use the proceeds from the debt sale - the first by a Gulf government denominated in euros - for domestic budgetary purposes.
Read more: Saudi Arabia starts marketing debut euro debt sale
25) Oil prices surge after terrorist attack on Saudi Aramco’s facilities
In September, drone attacks against two Saudi Aramco’s facilities in Abqaiq and Hijrat Khurais resulted in a temporary oil production halt. The attacks have reduced the company’s crude oil supply by around 5.7 million barrels per day or about 50 percent of its output, Prince Abdulaziz said. Following the terrorist attacks, Brent crude oil price rose over 19% nearing $72 per barrel before it settled at a 10 percent rise to $66.67 per barrel.
Nymex crude reported an all-time high at $63.34 per barrel (up 16 percent), to settle afterwards at $59.84 per barrel (a 9 percent rise).
26) World Bank’s top 10 improvers
In October, the World Bank Group ranked Saudi Arabia among the world’s top 10 improvers in ‘Doing Business 2020’ report, climbing 30 places. This improvement was attributed to undertaking a record of 8 reforms in the past year.
27) G20 presidency
Early December, Saudi Arabia assumed the G20 presidency leading up to the leaders' summit in Riyadh on November 21-22, 2020.
In the run-up to the leaders' summit, the Kingdom will host more than 100 events and conferences.
28) OPEC, allies agree to further cut output
In the same month, OPEC and its allies agreed to further cut oil production by 500,000 barrels per day (bpd) effective as of Jan. 1, 2020 until March 2020.
The output cut includes 340,000 bpd cut by OPEC and 160,000 bpd reductions by non-OPEC producers.
29) Saudi Arabia announces state budget for 2020
In December, Saudi Arabia announced the state budget for 2020 with estimated revenues of SAR 833 billion, a decline of 9.1% year-on-year (YoY) and public expenditure of SAR 1.020 trillion. Budget deficit is expected to reach SAR 187 billion next year.
In 2019, the Kingdom saw expenditures of SAR 1.048 trillion, a decline of SAR 60 billion compared to estimates of SAR 1.106 trillion.
Write to the authors christine.elcheikh@argaam.com and sunil.kumar@argaam.com
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