Saudi Private Sector Output Records Highest Level Since Covid-19 Outbreak

  • 11/4/2020
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Saudi Arabia’s non-oil private sector expanded for the second consecutive month in October as output grew at a solid pace, recording its best performance in eight months, a survey showed on Tuesday. The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) rose to 51.0 in October from 50.7 in September. Output rose at the quickest pace since February, before the coronavirus lockdown, and firms saw higher activity often attributed to increase in sales, new contracts, and resumption of some projects. The overall rate of demand growth had softened in October and part of the slowdown was due to a renewed fall in exports as firms struggled to revive orders with foreign clients. David Owen, an economist at survey compiler IHS Markit, confirmed that sales growth slowed to just a marginal pace, after a renewed upturn in September, that was in part due to a drop in export demand. Owen explained that companies blamed financial problems facing some clients and the slow start of projects for limiting economic recovery since coronavirus restrictions were eased. The expert, however, said that many businesses are hopeful that growth will strengthen in the coming 12 months. In other news, Saudi Arabia’s Fund of Funds Company (Jada) and Alpha Capital signed a new investment agreement. Alpha Capital is a Saudi-based investment company headquartered in Riyadh. In January 2018, it was licensed by the Saudi Capital Market Authority (CMA) to manage investment funds and discretionary portfolios, in addition to arranging and advising activities in the securities business. Jada, on the other hand, was created to promote the development of thriving private equity and venture capital ecosystem, which could in turn finance the growth of SMEs in Saudi Arabia. Speaking about the novel investment agreement with Alpha Capital, Jada CEO Adel Al-Ateeq said that it is the first of its kind for his company. Ateeq, however, reaffirmed that Jada has full confidence in the capabilities of the investment team at Alpha Capital to implement its investment strategy. Jada seeks to partner with private equity and venture capital funds that are focused on the Saudi market and committed to international best practices in governance and fund management.

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