- OPEC cut its oil demand growth forecast for the first time in over a year, although it’s still double the IEA’s.
- Saudi Arabia revised its investment law to encourage FDI with less red tape and more investor rights [see (1) below].
- Saudi Arabia extended, for a year, its waiver of the expat levy on industrial sector firms.
- Major road contracts were awarded for congested Riyadh, part of what Goldman calls a capex super-cycle.
- The US lifted restrictions on arms sales to Saudi Arabia, several years after it ended Yemen strikes.
- ADGM reported strong growth in registered firms and AUM in H1, with occupancy hitting 93%.
- Etihad Rail released a sustainable finance framework, preparing to issue green bonds.
- Port operators, including DP World and Oman’s Salahah, reported dips in volumes and revenue due to Red Sea disruptions.
- Kuwaiti developer Mabanee canceled the $120m Sharjah Avenues Mall project.
- Qatar’s hydrocarbon output in Q2 was the weakest since 2021, presumably due to LNG maintenance.
- Oman launched a package of IPO incentives, including tax and fee relief [see (2) below].
- Ceasefire talks restarted in Qatar yesterday as the body count in Gaza rose above 40,000.
- Iranian and Hezbollah retaliation against Israel may be on hold pending the outcome of talks.
- Iran’s cabinet nominees include a moderate foreign minister but otherwise disappointed reformists.
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Here are two brief snippets from the report:
(1) Saudi Arabia updates investment law
- The Ministry of Investment unveiled an updated investment law that enhances investor rights, including equal treatment of foreign investors, and replaces licenses with a simpler registration system, starting in early 2025. Argaam has a useful side-by-side comparison with the old law.
- Boosting investment, by both domestic and foreign companies, is essential to the Kingdom’s Vision 2030 diversification objectives.
- Until now, foreign direct investment (FDI) has fallen far short of targets, which has so far fallen short of Vision 2030 targets. FDI was only 1.2% of GDP in 2023 and 0.9% in Q1-24, vs a target of 5.7% by 2030.
- Leading indicators were already suggesting higher FDI levels this year, because of the increase in licenses issued by the Ministry, more multinationals establishing regional HQs in Riyad and announcements of major deals/MoUs. The new law will add to this, although the targets remain challenging.
- Goldman Sachs says that a $1trn capex super-cycle is currently underway, including public and private investment.
(2) Oman provides incentives for IPOs
- The Financial Services Authority launched its Capital Market Incentive Program which seeks to encourage the listing of SMEs and family companies (FSA).
- Companies that list over 25% of their equity and have a valuation of over OR10m ($28m) will receive incentives include a waiving of listing fees, a five-year rebate of two-thirds of their income tax and preference in bidding for government contracts.
- There are also incentives for smaller companies and for companies that convert their structure from limited liability companies to closed joint stock companies, a necessary first step before listing.
- There has been a boom in IPOs in the UAE and Saudi Arabia in recent years, but few in Oman so far, except for privatizations such as oil driller Abraj Energy last year. The hope is that increasing the size and liquidity of the Muscat Stock Exchange should help companies raise financing and grow the economy.
