MSCI adds Saudi to emerging-market indexes

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Twenty-six China A shares will be added to the MSCI China Index, while 30 equities from Saudi Arabia and eight Argentine securities are set to join the MSCI’s emerging-market stocks benchmarks, in steps that could potentially draw billions of dollars of investor inflows.

MSCI, which announced the additions of Saudi Arabia and Argentina last June, said the stocks will join its indexes as of the close of trading on May 28. Argentina will account for 0.26% of the MSCI Emerging Markets index, while Saudi Arabia will have a 1.42% weight. China A shares will be left with a 1.76% weight in the broad developing-nation gauge, it said. The China gauge will have 31 additions in total, including five that are not A shares.

Kuwait stocks, which had been on the firm’s watch list for a potential upgrade, weren’t included.

MSCI is the world’s biggest index compiler and its emerging-markets index is the most important for the asset class, with as much as $1.8 trillion in assets benchmarked to it as of June 2018.

The stocks are being added at a time when developing-nation assets are in the midst of a sell-off tied to increased Sino-American trade tensions, with Chinese shares in particular in the firing line.

Saudi Arabia’s stocks have also suffered from geopolitical tensions, trimming gains fueled by expectation for MSCI’s decision. The Tadawul All Share Index slumped 3.6% on Monday, the most since the killing of journalist Jamal Khashoggi in October.

Source:https://www.arabianbusiness.com/stocks/419900-msci-adds-saudi-to-emerging-market-indexes

Kuwaiti stocks end longest rising run in three years

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Traders taking profit from Kuwait’s longest-winning streak since at least 2016 sent the nation’s main stock index falling by the most in the Middle East.

The gauge declined 0.4%, led by Kuwait Finance House and Mobile Telecommunications Co. While a favourable deposit shift for lenders in the country may boost second quarter margins from lows in the previous quarter, they will stay below 2018 and might slow profits, said Edmond Christou, a financial analyst with Bloomberg Intelligence.

Still, “the implementation of the Kuwait government’s multiyear development plan, which has been essential for the acceleration of infrastructure projects and supporting the delivery of Vision 2035, will drive private-sector credit growth,” Christou wrote in a report. “The National Bank of Kuwait has gained the most from infrastructure financing thanks to its scale and capabilities.”

Equity gauges in Saudi Arabia, Dubai and Abu Dhabi advanced, while those in Bahrain and Oman fell as investors track second quarter results throughout the region.

Source:https://www.arabianbusiness.com/stocks/423806-kuwaiti-stocks-end-longest-rising-run-in-three-years

Kuwait gives initial approval for $160m Jaber Al-Ahmed bridge contract

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Kuwait’s Central Agency for Public Tenders has all-but approved a potential $160 million contract with South Korean construction conglomerate Hyundai for operating and maintaining the Jaber Al-Ahmed bridge.

The Ministry of Public Labour said in a statement that the five-year contract is worth 29-$32m (KD9-10) per year, according to a report by the Kuwait News Agency.

The deal includes maritime dredging works and regular examination of all construction materials for all maritime and land causeways. It covers sewage and rainwater networks, maintenance of buildings, power installations, air-conditioning sets, cleaning and landscaping.

Works also include studying the marine environment and effects on sea creatures.

The final phase of inking the deal will involve the Audit Bureau, Fatwa and Legislation Department and the National Assembly.

The causeway, which stretches for over 30km across Kuwait Bay to Sabbiya, is a key project as part of the country’s development strategy 2035.

Source:https://www.arabianbusiness.com/construction/424467-kuwait-gives-initial-approval-for-160m-jaber-al-ahmed-bridge-contract

Kuwait working with Saudis on resuming neutral zone oil output

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Kuwait said it’s working with Saudi Arabia to resume oil production in the neutral zone between them that has been shuttered for at least four years.

Saudi Minister of State for Energy Prince Abdulaziz Bin Salman visited Kuwait Wednesday. The two sides will discuss a resumption after the “completion of all technical issues required,” Tareq Al-Mezrem, a Kuwaiti government spokesman, told Kuwait’s state-run KUNA news agency.

The zone can produce as much as 500,000 barrels a day, equal to about 4% of the countries’ combined output last month. No timeline for a resumption was given, nor was it clear if the additional production would be offset by lower output elsewhere. Both countries are subject to quotas set by the Organization of Petroleum Exporting Countries.

The two sides have resolved the major issues and those outstanding are technical in nature, according to a person familiar with the discussions, who asked not to be identified because the matter is private. The talks are the most advanced they’ve ever been, the person said.

Desert dispute
Years of negotiations have so far failed to bring about a resolution. The two Gulf nations have held a number of private meetings since 2015, at one point even coming close to signing an agreement before pulling back at the last minute over wording in the final documents regarding contentious sovereignty issues.

The neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015. The barren strip of desert straddling Saudi Arabia and Kuwait – a relic of the time when European powers drew implausible ruler-straight borders across the Middle East – can pump about as much as OPEC-member Ecuador.

It’s not clear whether the neutral zone will add much oil to global markets in the near term because OPEC has extended production cuts into early 2020. Saudi Arabia and Kuwait split the crude produced from the neutral zone within their respective OPEC output quotas.

The neutral zone, spread over 5,700 square kilometres –an area a bit smaller than Delaware — was created by a 1922 treaty between Kuwait and the fledgling Kingdom of Saudi Arabia. In the 1970s, the two nations agreed to divide the area and incorporate each half into their territory, while still sharing and jointly managing the petroleum riches. The region contains two main oil fields: the onshore Wafra and the offshore Khafji.

The disagreement between Saudi Arabia and Kuwait started on the Wafra field, which is operated by Chevron Corp., the second-largest energy company in the U.S. In 2009, Saudi Arabia extended the original 60-year-old concession of the field, giving the American company rights over Wafra until 2039. Kuwait was furious over the announcement and claims Riyadh never consulted it about the extension.

The importance of the fields is now higher due to the impact of sanctions on Venezuela and Iran, which has tightened the supply of so-called sour-heavy crude — precisely the kind of oil that the neutral zone produces. U.S. diplomats had been pressing both sides to reach an agreement.

SOurce:https://www.arabianbusiness.com/energy/424543-kuwait-working-with-saudis-on-resuming-neutral-zone-oil-output

KIPCO raises over $312 million from rights issue

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Kuwait Projects Company (KIPCO) has revealed that it has raised $312.3 million in equity from its latest rights issue.

The board of directors approved the capital increase in January, with the aim of growing KIPCO’s businesses through continuing to invest in its core portfolio companies, which include Qurain Petrochemical Industries Company, Kamco, Kuwait Hotels Company, OSN, United Networks and American University of Kuwait.

The rights issue saw a 17 percent oversubscription in the 452,748,662 new ordinary shares that were on offer, with the amount raised representing an approximate 29.3 percent rise on KIPCO’s former issued share capital. KIPCO’s issued share capital now stands at $657m (KD200m).

The offer price was set at 210 fils per issue share.

KIPCO’s last capital increase was in 1996. KAMCO Investment Company acted as the issuance advisor and subscription agent.

In November KIPCO hired bankers to sell its 60.50 percent stake in OSN.

Source:https://www.arabianbusiness.com/banking-finance/424547-kipco-raises-over-312-million-from-rights-issue

UAE’s Masdar, EDF secure financing for Saudi wind farm project

A consortium of EDF Renewables and Abu Dhabi Future Energy Company (Masdar) has completed the financing of the Dumat Al Jandal utility-scale wind project in Saudi Arabia, with the backing of Saudi and international banks.

With an installed capacity of 400 megawatts (MW), the Dumat Al Jandal project will be Saudi Arabia’s first wind farm and the largest in the Middle East.

Led by EDF Renewables and Masdar, a subsidiary of Mubadala Investment Company, project construction will begin shortly and commercial operations are due to start in the first quarter of 2022, a statement said.

Vestas is the contracted wind-turbine technology provider and responsible for the engineering, procurement and construction (EPC) contract while TSK will be responsible for the balance of plant, and CG Holdings will provide the substations and high-voltage solutions, it added.

“We are delighted to take part in the first wind project in the country, which is set to be the most powerful wind farm in the Middle East. This new step reflects the quality of our partnership with Masdar, which has enabled us to jointly submit the most competitive bid. Wind power is now representing a renewable and economical solution in the energy mix,” said Bruno Bensasson, EDF Group senior executive president responsible for Renewable Energies, and chairman and CEO of EDF Renewables.

“This new project demonstrates our ambitions in the country and represents another step forward under the EDF Group’s Cap 2030 strategy, which aims to double its renewable energy capacity by 2030 – both in France and worldwide – to 50GW.”

“The award of Saudi Arabia’s first and the Middle East’s largest wind farm during Abu Dhabi Sustainability Week in January was a momentous occasion for our company and our partners,” added Mohamed Jameel Al Ramahi, CEO of Masdar.

“It also illustrated the depth of Saudi Arabia’s commitment to realise its bold strategy to substantially increase the contribution of renewables in its total energy mix to 27.3GW by 2024, from wind as well as solar energy. The over-subscribed financing of the Dumat Al Jandal project further illustrates the confidence of local and international lenders, and the investment community, in the economy of the Kingdom and its potential as a hub for highly cost-effective renewable energy development.”

The Dumat Al Jandal wind farm will supply electricity according to a 20-year power purchase agreement with the Saudi Power Procurement Company, a subsidiary of Saudi Electricity Company.

The wind farm will be located 560 miles north of Riyadh, in the Al Jouf region of Saudi Arabia.

The Renewable Energy Project Development Office (REPDO) of the Saudi Ministry of Energy, Industry and Mineral Resources (MEIM) awarded the $500 million Dumat Al Jandal wind farm in January following a call for tenders in August 2017.

The winning consortium submitted the most cost-competitive bid of $21.3 per megawatt hour (MWh).

Source:https://www.arabianbusiness.com/energy/424335-uaes-masdar-edf-secure-financing-for-saudi-wind-farm-project

UAE’s Masdar, EDF secure financing for Saudi wind farm project

Scion Industrial Engineering Pvt. Ltd.

A consortium of EDF Renewables and Abu Dhabi Future Energy Company (Masdar) has completed the financing of the Dumat Al Jandal utility-scale wind project in Saudi Arabia, with the backing of Saudi and international banks.

With an installed capacity of 400 megawatts (MW), the Dumat Al Jandal project will be Saudi Arabia’s first wind farm and the largest in the Middle East.

Led by EDF Renewables and Masdar, a subsidiary of Mubadala Investment Company, project construction will begin shortly and commercial operations are due to start in the first quarter of 2022, a statement said.

Vestas is the contracted wind-turbine technology provider and responsible for the engineering, procurement and construction (EPC) contract while TSK will be responsible for the balance of plant, and CG Holdings will provide the substations and high-voltage solutions, it added.

“We are delighted to take part in the first wind project in the country, which is set to be the most powerful wind farm in the Middle East. This new step reflects the quality of our partnership with Masdar, which has enabled us to jointly submit the most competitive bid. Wind power is now representing a renewable and economical solution in the energy mix,” said Bruno Bensasson, EDF Group senior executive president responsible for Renewable Energies, and chairman and CEO of EDF Renewables.

“This new project demonstrates our ambitions in the country and represents another step forward under the EDF Group’s Cap 2030 strategy, which aims to double its renewable energy capacity by 2030 – both in France and worldwide – to 50GW.”

“The award of Saudi Arabia’s first and the Middle East’s largest wind farm during Abu Dhabi Sustainability Week in January was a momentous occasion for our company and our partners,” added Mohamed Jameel Al Ramahi, CEO of Masdar.

“It also illustrated the depth of Saudi Arabia’s commitment to realise its bold strategy to substantially increase the contribution of renewables in its total energy mix to 27.3GW by 2024, from wind as well as solar energy. The over-subscribed financing of the Dumat Al Jandal project further illustrates the confidence of local and international lenders, and the investment community, in the economy of the Kingdom and its potential as a hub for highly cost-effective renewable energy development.”

The Dumat Al Jandal wind farm will supply electricity according to a 20-year power purchase agreement with the Saudi Power Procurement Company, a subsidiary of Saudi Electricity Company.

The wind farm will be located 560 miles north of Riyadh, in the Al Jouf region of Saudi Arabia.

The Renewable Energy Project Development Office (REPDO) of the Saudi Ministry of Energy, Industry and Mineral Resources (MEIM) awarded the $500 million Dumat Al Jandal wind farm in January following a call for tenders in August 2017.

The winning consortium submitted the most cost-competitive bid of $21.3 per megawatt hour (MWh).

Source:https://www.arabianbusiness.com/energy/424335-uaes-masdar-edf-secure-financing-for-saudi-wind-farm-project

Saudi Aramco said to hold first investor earnings call in August

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Saudi Aramco has invited analysts and investors to join its first investor earnings call next month as it prepares an initial public offering, according to an Aramco email seen by Reuters.

In the July 21 email, Aramco investor relations said that “Saudi Aramco will be holding its first investor earnings call in August to coincide with the publication of our H1 2019 financial results.”

Saudi Arabian energy minister Khalid Al-Falih has previously said that the kingdom wants the listing to go ahead in 2020 or 2021.

According to a recent report from Bloomberg, a number of banks originally associated with Aramco’s plans – including Evercore Inc, HSBC Holdings, JP Morgan Chase & Co and Morgan Stanley – are having internal discussions about whether to re-pitch for a role as the kingdom restarts preparations for the listing.

Citing people familiar with the discussions, the banks are aware that there could be business and political consequences if they don’t put themselves forward for a role, and that most are likely to decide to do so.

Earlier this month, Saudi Aramco reportedly held talks with a group of investment banks to discuss potential roles.

Source:https://www.arabianbusiness.com/banking-finance/424381-saudi-aramco-said-to-hold-first-investor-earnings-call-in-august

$494bn construction projects active in Kuwait

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Construction projects worth more than $494 billion are currently active in Kuwait, according to new research by ProTenders.

Of these, projects worth $15.5 billion (3.1 percent) are on hold, the consultancy said in a statement.

Projects in the design stage are valued at $243.5 billion (49.3 percent) while another $63 billion (12.8 percent) are in the planning stage while $140.9 billion worth of projects are in the construction phase, making up 28.5 percent of the total.

Of the project under construction, most (44 percent) are in the oil and gas sector while infrastruction projects make up 21.9 percent and the urban buildings sector make up 34.1 percent, ProTenders data showed.

Total upcoming projects in Kuwait are worth $337.7 billion, with the large majority in the urban buildings sector (72.7 percent). Oil and gas makes up 12 percent and infrastructure 15.4 percent.

ProTenders said the top five developers in the Gulf country are currently the Secretariat of the Supreme Council for Planning and Development with $125 billion worth of projects, followed by the Kuwait Authority for Partnership Projects ($50.5 billion), Kuwait National Petroleum Company ($45.8 billion), the Ministry of Public Works ($30.2 billion) and Kuwait Oil Company ($23.7 billion).

Source:https://www.arabianbusiness.com/construction/421873-revealed-494bn-construction-projects-active-in-kuwait

Saudi Arabia, Kuwait make breakthrough in neutral zone oil talks

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Neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015

Saudi Arabia and Kuwait are the closest in years to restoring oil output from the neutral zone shared by the neighboring nations after making a breakthrough in recent talks, according to people familiar with the matter.

While Kuwait and Riyadh haven’t yet reached a final agreement, in a recent meeting the Middle East nations made significant progress in resolving sovereignty issues that have thwarted negotiations in the past, the same people said, asking not to be named discussing diplomatic talks.

The neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015. The barren strip of desert straddling Saudi Arabia and Kuwait – a relic of the time when European powers drew implausible ruler-straight borders across the Middle East – can pump about 500,000 barrels a day, as much as OPEC-member Ecuador.

After a meeting in June in Riyadh, both sides are drafting new documents ahead of further talks, the people said. The next meeting may be held in Kuwait this month, one of the people said. If both sides finalize some technical details, production will be able to resume from the fields of Khafji and Wafra, one of the people said.

Still, it’s not clear whether the neutral zone will pump much oil immediately even if both nations reach a final deal because the Organization of Petroleum Exporting Countries extended its production cuts into early 2020. Saudi Arabia and Kuwait split the crude pumped from the neutral zone within their respective OPEC production quotas.

The two Gulf nations have held a number of private meetings since 2015, at one point even coming close to signing an agreement before pulling back at the last minute over wording in the final documents regarding contentious sovereignty issues. This time around, however, the talks appear to have entered a fresh phase, with both sides keen to find a final resolution, the people said, without providing details.

A spokesman for Saudi Arabia’s Energy Ministry declined to comment. Kuwait’s state oil company didn’t immediately respond to a request for comment.

Given the complexity of reaching an agreement, talks could still break down. Still, in a sign that officials are hoping the progress will continue, Kuwaiti lawmaker Adnan Abdul Samad said in mid-June after a parliamentary panel meeting with Oil Minister Khaled Al-Fadhel that officials were discussing the possibility of resuming output in the joint owned fields.

The neutral zone, spread over 5,700 square kilometres – an area a bit smaller than Delaware – was created by a 1922 treaty between Kuwait and the fledgling Kingdom of Saudi Arabia. In the 1970s the two nations agreed to divide the area and incorporate each half into their territory, while still sharing and jointly managing the petroleum riches. The region contains two main oil fields: the onshore Wafra and the offshore Khafji.

The importance of the fields is now higher due to the impact of sanctions on Venezuela and Iran, which has tightened the supply of so-called sour-heavy crude – precisely the kind of oil that the neutral zone produces. US diplomats had been pressing both side to reach an agreement, so far without success.

The disagreement between Saudi Arabia and Kuwait started on the Wafra field, which is operated by Chevron Corp, the second-largest energy company in the US In 2009, Saudi Arabia extended the original 60-year-old concession of the field, giving the American company rights over Wafra until 2039.

Kuwait was furious over the announcement and claims Riyadh never consulted it about the extension.

Source:https://www.arabianbusiness.com/energy/423392-saudi-arabia-kuwait-make-breakthrough-in-neutral-zone-oil-talks