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×Overview of key economic events in Saudi Arabia in H1 2022
The Kingdom of Saudi Arabia's flag
Saudi Arabia witnessed several significant events in H1 2022, the most prominent of which was the sharp increase in oil prices to exceed $139 per barrel, due to the geopolitical tensions in Eastern Europe on the Russia-Ukraine war.
This also included Saudi Arabia registering a budget surplus of nearly SAR 57.5 billion in Q1 2022.
Saudi Crown Prince Mohammed bin Salman announced during the six-month period the transfer of 4% of Aramco shares to the Public Investment Fund (PIF) and the launch of Boutique Group, a new hospitality brand that will manage and convert a collection of iconic palaces in Saudi Arabia into ultra-luxury boutique hotels. This is in addition to the establishment of TROJENA mountain tourism destination in NEOM mega city.
In H1 2022, Saudi Arabia further lifted all the pandemic-related lockdown measures and approved the new Companies Law and Real Estate Brokerage Law.
Earlier in June, the Saudi Central Bank (SAMA) raised its reverse repo rate by 50 basis points (bps) to 175 bps from 125 bps, and also lifted its repo rate to 225 bps (2.25%) from 175 bps.
Saudi Arabia’s gross domestic product (GDP) increased by 9.9% year-on-year (YoY) in Q1 2022 — the highest level since 2011.
The following is a round-up of these events:
1- GOSI transfers stakes in 30 Tadawul-listed firms to fully-owned subsidiaries
On Jan. 13, Hassana Investment Co. (HIC), the investment arm of the General Organization of Social Insurance (GOSI), restructured the organization’s stakes in the Saudi Exchange (Tadawul)-listed companies. The changes would be reflected on GOSI’s holdings in 30 firms listed under various sectors on Tadawul.
2- Saudi Crown Prince launches Boutique Group to develop Kingdom’s historical palaces
Saudi Crown Prince announced on Jan. 20 the launch of Boutique Group, a new hospitality brand that will manage and convert a collection of iconic historic and cultural palaces in Saudi Arabia into ultra-luxury boutique hotels. The company will revive the vibrant heritage and culture of Saudi Arabia to create a new and unique hospitality experience.
3- 3.5 mln students return to school in Saudi Arabia
On Jan. 22, as many as 3.5 million students returned to in-person learning in over 13,000 primary schools and 4,800 kindergartens across the Kingdom, almost two years after they closed to prevent the spread of COVID-19.
4- King Salman declares Feb. 22 an official holiday every year to mark 'Founding Day'
On Jan. 27, King Salman bin Abdulaziz Al Saud issued a royal decree declaring Feb. 22 an official holiday across all sectors in observance of the Saudi Founding Day.
5- Crown Prince transfers 4% of Saudi Aramco shares to PIF
On Feb. 13, Saudi Crown Prince announced the transfer of 4% of Aramco shares to PIF.
6- End of corrective period for anti-concealment law violators
On Feb. 16, the National Program to Combat Commercial Concealment (tasattur), under the Ministry of Commerce, announced the end of the grace period for correcting tasattur-related violations.
7- Saudi Cabinet approves license for digital D360 Bank
On Feb. 15, the Saudi Cabinet gave the go-ahead for the Minister of Finance, Mohammed Al-Jadaan, to issue a license to the local digital bank – D360 Bank – to be established with SAR 1.65 billion capital, in line with Article 3 of the Banking Control Law.
8- The Russia-Ukraine Crisis
On Feb. 24, the Russian President Vladimir Putin announced a special military operation to demilitarize and degasify Ukraine, which led to a sharp increase in oil prices.
9- Discovery of new gas fields across the Kingdom
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman announced on Feb. 27 that Saudi Aramco discovered natural gas fields in the central region, the Empty Quarter desert, the northern border and the eastern region.
10- CMA approves amendments to rules on offer of securities to regulate additional option for capital increase
On March 3, the Capital Market Authority (CMA) approved amending the rules on the offer of securities and continuing obligations to regulate an additional option for capital increase.
11- Saudi Crown Prince launches TROJENA mountain tourism hub in NEOM
Earlier in March, Saudi Crown Prince announced the establishment of TROJENA, a new global destination for mountain tourism, in the NEOM mega city.
12- Saudi Arabia lifts pandemic-related precautionary measures
Saudi Arabia lifted all the lockdown measures related to the COVID-19 pandemic starting March 5, 2022.
13- Saudi Crown Prince launches new strategy of Two Holy Mosques Scholarship Program
On March 7, Saudi Crown Prince launched the Two Holy Mosques Scholarship Program’s strategy, which marked the beginning of a new era in the scholarship program that will contribute to enhancing citizens’ competitiveness through upskilling human capital.
14- Oil prices cross $139/barrel
Oil prices soared on March 7 to $139 per barrel as the US and its European allies considered banning Russian oil imports — the world's largest exporter of both crude and refined products.
15- SAMA extends guaranteed financing scheme for another year
SAMA extended a guaranteed financing scheme for micro-, small- and medium-sized businesses for one more year until March 14, 2023.
16- Saudi Crown Prince launches new NDF strategy
On March 14, Saudi Crown Prince launched a new strategy for the Kingdom’s National Development Fund (NDF).
17- Saudi Arabia says guiltless of oil supply shortage
On March 21, Saudi Arabia said the Kingdom is not responsible for shortages in the global energy market for previously warning that missile attacks on oil installations by Iranian-backed Houthi rebels in Yemen would disrupt supply.
18- Tadawul Group receives CMA nod on new fee structure for subsidiaries
Saudi Tadawul Group Holding Co. (Tadawul Group) said the CMA approved on March 26 the new fee structure for the services provided by the group’s subsidiaries – Tadawul, Securities Depository Center (Edaa) and Securities Clearing Center (Muqassa). The new fee structure is related to the shares’ buy and sell commissions, as well as units of Real Estate Investment Traded (REITs) funds, Exchange-Traded Funds (ETFs), Closed-End Funds (CEFs) and tradable rights.
19- Tadawul Group finalizes roll-out of post-trade enhancements.
The Saudi Tadawul Group Holding (Tadawul Group) announced the completion of the roll-out of new enhancements through its subsidiaries to develop the post-trade services infrastructure.
20- Raising number of pilgrims to one million for 2022 Hajj season.
Saudi Arabia decided to raise the number of pilgrims from inside and outside the Kingdom to one million this year 2022, with the quota allocated to each country and in accordance with health requirements.
21- Merger between SIIG and Petrochem.
Delisting National Petrochemical Co.’s (Petrochem) shares as of April 12, following the merger deal with Saudi Industrial Investment Group (SIIG).
22- A Royal Decree to establish Taif, Al-Ahsa development commissions.
King Salman bin Abdulaziz Al Saud, issued a royal decree on establishing two commissions for the development of Taif and Al-Ahsa regions.
23- Saudi Arabia posts budget surplus of SAR 57.5 billion in Q1 2022
Saudi Arabia posted revenue of SAR 278 billion and expenditure of SAR 220.5 billion in the first quarter of 2022, with a surplus of SAR 57.5 billion.
24- Launching Saudi Coffee Co.
Saudi Public Investment Fund (PIF) launched Saudi Coffee to invest SAR 1.2 billion in the sector over the next decade.
25- Lucid Motors inks contract to build new facility in Saudi Arabia
US electric vehicle (EV) manufacturer Lucid Group Inc., which is partially owned by Public Investment Fund (PIF), signed a contract to construct a new manufacturing plant in King Abdullah Economic City (KAEC).
26- Prince Alwaleed sells 16.87% stake in Kingdom Holding to PIF
Kingdom Holding Co. (KHC) announced that major shareholder and founder, Prince Alwaleed bin Talal, signed, on May 19, an agreement with the Public Investment Fund (PIF) to sell 625 million shares, representing 16.87% of the company’s share capital.
27- Establishment of Health Holding Co. and the organization of National Health Insurance Center
Minister of Health Fahad Al-Jalajel, announced the Cabinet's approval for the establishment of Health Holding Co. and the organization of National Health Insurance Center.
28- Saudi GDP hits highest since 2011 in Q1 2022
Saudi Arabia’s real gross domestic product (GDP) rose by 9.9% year-on-year (YoY) in Q1 2022, the highest since 2011.
29- Lifting COVID-19 precautionary, preventive measures
Saudi Arabia decided to lift COVID-19 precautionary and preventive measures, as of June 13.
30- SAMA hikes reverse repo, repo rates
The Saudi Central Bank (SAMA) raised its reverse repo rate from 50 basis points (bps) to 175 bps. It also lifted its repo rate to 225 bps from 100 bps.
31- HRSD Ministry issues decisions to localize some jobs
Saudi Arabia’s Ministry of Human Resources and Social Development (HRSD) issued six decisions to localize some jobs and activities related to licensed aviation, optics, customer service, regular inspection activities, outlets of postal and parcel delivery services, and outlets of seven business activities across the Kingdom.
32- launching single stock futures
The Saudi Exchange (Tadawul) announced plans to launch single stock futures (SSFs) contracts, as of July 4, which will be cleared by the Securities Clearing Center Co. (Muqassa).
33- Saudi Cabinet approves Companies and Real Estate Brokerage Laws
Saudi Arabia’s Cabinet, headed by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, approved, on June 28, the Companies Law and Real Estate Brokerage Law. It also approved the regulatory framework for public transport projects.
34- Crown Prince unveils national priorities for research, development, innovation in the next two decades
Saudi Crown Prince Mohammed bin Salman announced the national aspirations and priorities for the research, development and innovation sector in the Kingdom over the next two decades, which keen on four priorities.
35- OPEC+ agrees to boost oil production by 648,000 bpd in August
OPEC+ agreed to increase oil production gradually starting from May 2022 by 432,000 barrel per day (bpd) to reach 648,000 bpd in July and August.
36- Saudi PIF launches aircraft leasing company
The Public Investment Fund (PIF) launched the Aircraft Leasing Co. (AviLease), which will initially focus on sale-and-leaseback transactions (SALTs) with airlines as well as fleet management services and direct orders from aircraft manufacturers.
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