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JEDDAH: Saudi energy giant Aramco has raised $3 billion through a dual-tranche sukuk issuance, highlighting strong global investor confidence and reinforcing the Kingdom’s standing in international Islamic finance. 

Priced on Sept. 10, the securities were listed on the London Stock Exchange, the company said. Proceeds will be used for general corporate purposes, supporting Aramco’s strategy to maintain financial flexibility and operational efficiency. 

The new sukuk tranches comprise $1.5 billion maturing in 2030 with a profit rate of 4.125 percent per annum, and $1.5 billion maturing in 2035 at 4.625 percent per annum. 

The issuance follows a similar $3 billion two-tranche sukuk in October, which was six times oversubscribed. That sale included a $1.5 billion tranche maturing in 2029 at 4.25 percent and another $1.5 billion tranche due in 2034 at 4.75 percent. 

Ziad Al-Murshed, Aramco executive vice president of finance and CFO, said: “We believe this successful issuance reflects the confidence of global investors in Aramco’s exceptional financial resilience and robust balance sheet, as we continue to optimize our capital structure.” 

He added: “Our ability to price the offering with a negative new issue premium across both tranches demonstrates Aramco’s unique credit proposition and standing within international capital markets.” 

According to the company’s press release, the offering attracted robust demand from top-tier institutional investors. 

RIYADH: Central banks in Gulf Cooperation Council countries cut interest rates by 25 basis points after the US Federal Reserve lowered its benchmark range to 4 percent to 4.25 percent, its first reduction since December. 

The Saudi Central Bank, also known as SAMA, reduced its repurchase agreement rate to 4.75 percent and its reverse repo to 4.25 percent. The UAE cut the base rate on overnight deposits from 4.40 percent to 4.15 percent, while Bahrain lowered its overnight deposit rate to 4.75 percent from 5 percent. 

With most regional currencies pegged to the US dollar, policymakers across the Gulf mirrored the Fed’s decision.  

Vijay Valecha, chief investment officer at Century Financial, said: “Although rate cuts generally reduce returns from traditional investments like fixed deposits, they may encourage gains in the stock market, especially for growth stocks and dividend-paying companies.”    

He added: “Dovish expectations have put additional pressure on the US dollar, pushing it below 97. A weaker dollar indirectly supports the UAE’s tourism sector by making travel more affordable for visitors from non-dollar regions. However, businesses in the UAE that rely on imports could face increased costs, as a softer dollar typically raises import prices.”  

Repo rates, which represent a form of short-term borrowing primarily involving government securities, underscore the close economic ties and financial dynamics between the GCC countries and the global economic landscape, particularly the US. 

Qatar Central Bank reduced the deposit rate by 25 basis points to 4.35 percent, cut the lending rate by 25 basis points to 4.85 percent, and lowered the repo rate by 25 basis points to 4.60 percent.  

The Central Bank of Oman also decreased its repo rate for local banks by 25 basis points to 4.75 percent. 

The Central Bank of Kuwait cut the discount rate by a quarter percentage point from 4 percent to 3.75 percent, while Jordan’s central bank also mirrored the Fed’s move. 

The rate cut is expected to boost economic activity by reducing financing costs, thereby increasing investment and consumption. 

Its objective is to maintain a balance between fostering sustainable growth across various economic sectors and reinforcing the financial and monetary stability of regulated banking units.  

The Fed’s moves come as recent data show US growth cooling in the first half of the year, with hiring slowing, unemployment edging up, and inflation remaining elevated. 

In a statement, the Fed said it would continue to assess incoming data, the economic outlook and risks before adjusting rates further, while remaining committed to bringing inflation back to 2 percent.   

“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals,” it added. 

The statement further indicated that the committee will base its evaluations on a broad set of data, including labor market trends, inflation dynamics and expectations, as well as financial and global economic developments.