Saudi Arabia's economic forecast appears promising as major construction projects and innovations stimulate confidence within the stock market. Recently, Kuwaiti company Al-Mabani announced significant development steps with its affiliate's project, 'The Avenues' located in Riyadh, undertaking contracts worth 1.131 billion Riyals (approximately 301.56 million USD).
The company reported on Sunday, as detailed by Asharq Al-Awsat, the first contract was secured with Saudi firm Al-Ghanim International to carry out construction for three towers at the cost of 656 million Riyals (175 million USD). Alongside this, the second contract with Al-Ahmadiya Trading and Contracting involves erecting two additional towers for 475 million Riyals (126.6 million USD). The completion of this expansive project is anticipated between 24 and 33 months from commencement, with the groundbreaking having taken place back in February 2022.
Meanwhile, Bawan Company is also making strides with its United Transformers project, where the board has approved the construction of a high-voltage transformer manufacturing plant. The estimated cost is pegged at 80 million Riyals, marking the first phase of what aims to revolutionize the sectors of electrical manufacturing and innovation. This development was disclosed on February 21, 2025, and is part of Bawan’s broader strategy to diversify and lead within the electrical product market.
The estimated timeline for the establishment of this factory is set for the first half of 2025, with operations expected to begin by the end of 2027, following six months of trial production anticipated to wrap up around the beginning of 2027.
According to the announcements, the financing for Bawan’s project will derive from the company’s own resources paired with bank facilities. The financial impact is projected to be beneficial for Bawan's financial statements, beginning to materialize by the fourth quarter of 2027.
Both companies are signaling their intent to contribute positively to the Saudi economy and stock market, especially as they engage with local firms and innovate their respective sectors. The advancements come at a time when the market exhibits fluctuations driven by various international and regional economic factors.
Market acts have led analysts to observe the potential influence of such large-scale projects on local stock valuations, projecting enhanced investor confidence. The secretary general of the Saudi Contractors Authority has indicated these developments represent not just job creation and economic stability but also active participation by foreign investors.
This is particularly relevant as the Saudi stock market operates within the wider Gulf Cooperation Council (GCC) framework, which has seen its own series of fluctuations influenced by global economic trends. With sectors like construction and manufacturing poised to expand, the medium-term outlook for the Saudi equity market looks promising.
Al-Mabani has already made headlines this year with its move to strengthen its regional presence, showing how inter-GCC investments can reshape the economic landscapes. Analysts suggest this might herald the beginning of a new wave of growth for the construction sector, typically sensitive to global economic sentiments and oil price volatility.
The timing of the projects aligns with Saudi Arabia's Vision 2030 initiative, aiming to diversify the economy away from oil dependency. Large infrastructure projects such as Avenues are part of this transformation, enhancing commercial viability within urban centers.
It's clear from these developments, both Al-Mabani and Bawan's projects are set to have significant upward traction within the Saudi market, enhancing investor sentiment and raising the bar for local and foreign investment opportunities.
Overall, as construction and manufacturing sectors gear up for these substantial investments, all eyes remain on how these projects will affect the broader economic climate and stock market developments moving forward.