Good morning, friends. It’s another busy morning for capital markets. The Kingdom has closed a USD 5 bn sukuk with heavy investor appetite, it’s the last day for retail investors to ask for a piece of fintech player Rasan’s initial public offering, and Aramco looks set to go to market with a blockbuster USD 10 bn sale of existing shares sometime between today and Sunday.

UP FIRST- Aramco looks ready to pull the trigger any moment now on blockbuster secondary sale. The Wall Street Journal expects the oil giant to go ahead with a USD 10-20 bn sale “as soon as this week” while Bloomberg claims that it will be a USD 10 bn sale and that the formal launch of the transaction will come on Sunday.

The prospect of a sale has already attracted “informal interest” from investors, Bloomberg notes. Aramco will boost its dividend this year by as much as 30% over 2023 thanks to a performance-based payout despite a 14% year-on-year drop in net income in 1Q 2024, making the company an attractive dividend play.

The oil giant’s shares + Tadawul are down ahead of the offering: A strong pipeline of IPOs and expectations that the Aramco sale will absorb market liquidity has seen Tadawul investors holding onto cash for fresh paper. Less liquidity in the market coupled with expectations that Opec+ will extend voluntary oil cuts when it meets next week pushed Aramco’s shares to their lowest level in over a year, Bloomberg reported. Aramco shares are down just about 12% YTD, closing at SAR 29.05 yesterday, which is below its 2019 offering price of SAR 32.00.

What the pundits are saying: “Saudi Aramco’s share price has been under pressure from an oil production level that is limited around 9 mn barrels a day due to the ongoing OPEC+ cuts,” said Salih Yilmaz, senior industry analyst at Bloomberg Intelligence. “It continues to demand a higher price-to-earnings valuation versus international oil major peers.”

BACKGROUND- Reuters reported last week that Aramco could proceed with the sale in June, with the newswire seeing the oil giant put on a full roadshow to market the offering rather than doing an accelerated book build. The PIF increased its stake in Aramco to 16% in March as news of the potential sale surfaced. If the offering goes ahead, it would be one of the world’s largest offerings in recent years. Aramco raised USD 29.4 bn on Tadawul in 2019 in what remains the biggest IPO in history.

IN OTHER CAPITAL MARKETS NEWS this fine morning: The two-day bookbuilding window for the retail tranche of Rasan’s IPO wraps up today with a maximum of 2.3 mn shares up for grabs. Rasan priced its IPO on Tadawul’s main market at SAR 37 per share, pegging it at the top of its initial price range, after the institutional offering drew strong demand with a 129.1x oversubscription rate. The fintech startup is taking a 30% staketo themarket.

Rasan is one of four high-profile IPOs in the market right now that have together generated a combined SAR 659 bn in demand from investors here and abroad. Fakeeh Care, Saudi Manpower Solutions, and Miahona are also nearing the finish line on share sales, with other would-be issuers set to come into the market as the year grinds on.

WHISPERS-

#1- Saudi Arabia is in the lead to capture ownership of a new men’s professional tennis tournament, Bloomberg reports, as the Kingdom pushes deeper into tennis. The PIF already has the naming rights to the men’s and women’s tour rankings and Saudi will host the women’s WTA season-ending tournament for three years starting this fall.

PIF-back Surj Sports Investment is in advanced talks with the ATP on commercial terms, timing, and the venue for the men’s tournament.

#2- Is Crown Prince and Prime Minister Mohamed bin Salman attending the G7 summit in Italy next month? That’s the suggestion from Reuters, which quotes an unnamed source as saying the Crown Prince could be among those invited to attend the 13-15 June summit in Puglia. UAE President Sheikh Mohammed bin Zayed Al Nahyan is confirmed as participating.

#3- HSBC is making a play in the private banking space, having hired 100 bankers last year for a push to “cater to the growing number of mn’aires and bn’aires moving to the Middle East,” Bloomberg writes, citing comments by Aladdin Hangari, who leads HSBC’s private banking push in our part of the world.

WATCH THIS SPACE-

#1- The Saudi Water Partnership Company (SWPC) is gearing up to launch a SAR 2 bn water reservoir project in the Eastern province, with a storage capacity of 5 mn cubic meters to supply desalinated water to Dammam, Khobar, Qatif, Saihat, Dhahran, Safwa, and Al Ahsa, Aleqtisadiah reports citing unnamed company sources. SWPC said on Monday that it had reached financial close for its SAR 1.5 bn Juranah Independent Strategic Water Reservoir in Makkah.

#2- Poland’s LOT Airlines will begin operating three weekly flights between Riyadh and Warsaw beginning Tuesday, 4 June, the General Authority of Civil Aviation said on X.

SPORTS-

#1- Al Hilal extended the contract of its manager Jorge Jesus for another year on Tuesday after the team was crowned champion of the Saudi Pro League without a single defeat.

#2- A Christmas showdown between Usyk and Fury in Riyadh: A rematch between Oleksandr Usyk and Tyson Fury was set for Saturday, 21 December, General Entertainment Authority Chairman Turki Al Sheikh said in a post on X. Usyk became the first four-belt undisputed heavyweight champion in history after beating Fury earlier this month in Riyadh on a split decision in a fight that went well into the night.

The rematch is getting widespread coverage: Reuters | The Guardian | BBC | Sky Sports.

#3- Saudi’s Falcons Esports locked in the Apex Legends “superteam” after signing ImperialHal, Zer0, and Genburten, according to a post on X. Previously divided between the top two teams of TSM and Dark Zero, the players are widely regarded the best in the game globally with an impressive pedigree of four Split Playoffs trophies and three ALGS Championships between them. The trio will debut in the upcoming ALGS Split 2 North America & EMEA tournament on 1 June to qualify for Split 2 Playoffs and is expected to play in Riyadh’s Esports World Cup in July.

DATA POINTS-

The Saudi space industry generates around SAR 2 bn in revenues every year, a small fraction of the global industry, which is worth the equivalent of about SAR 1.6 tn annually, Aleqtisadiah reports, citing unnamed Saudi Space Agency sources.

ICYMI- The Public Investment Fund launched a commercial satellite and space company named Neo Space Group earlier this week. The Kingdom could be running space tourism trials later this year, Saudi Space Agency CEO Mohammed Al Tamimi said at the Future Aviation Forum last week. “Within a window of 60 days from now, there will be an announcement to do some trials here in Saudi Arabia about space tourism,” he said.

PSA-

WEATHER- Riyadh’s skies are looking clear with a daytime high of 43°C and a low of 29°C, while the mercury in Makkah is rising even more to peak at 49°C with the low at 30°C. Jeddah is on the windy side with a daytime high of 39°C and a low of 29°C.

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THE BIG STORY ABROAD-

It’s a mixed bag on global front pages this morning as a number of stories captivate the attention of the business pages.

No verdict on Trump’s criminal hush-money trial. Jurors ended their first day of deliberation last night without reaching a verdict. The 12-person jury has to reach an unanimous agreement over a verdict, or else the judge will declare it a mistrial. Jurors deliberated for five hours and sent two notes asking questions of the judge. (Politico | AP | Bloomberg)

Speaking of The Donald: Will Elon Musk get a cabinet post if there’s a Trump White House v2? The two are now “friendly” and sources tell the Wall Street Journal that Musk could well be in line for an advisory role if there’s a remake of the Agent Orange Show.

MEANWHILE- BHP has abandoned its bid for mining group Anglo American after Anglo American refused to extend takeover talks. “We were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost and … we were not able to access from Anglo American key information required to formulate measures to address the excess risk they perceive,” BHP CEO Mike Henry said in a statement (pdf).

AND IN TECH- Gemini now speaks Arabic. Google’s Gemini and Gemini Advanced are now available to Arabic-speaking users — Gemini 1.0 Pro is available as a standalone Android app or as a tab in the Google app on iOS. The more advanced Gemini flavour, which is “capable of coding, logical reasoning, following nuanced instructions and collaborating on creative projects,” can be accessed for EGP 699.99 a month. Download it yourself: Google’s Play Store or Apple’s App Store.

Two notable firsts for women: Claudia Sheinbaum, who has a PhD in energy engineering, looks set to become Mexico’s first woman president when voters go to the polls this coming Sunday. And Yale has named Maurie McInnis, the respected historian, its next president. She’ll be the first woman to hold the job on a permanent basis.

ALSO WORTH READING THIS MORNING- From the Baby Boom to the Baby Bust, an op-ed by the FT’s Martin Wolf, details the challenges that come with falling fertility rates.

AND on the downside of working from home — US workers are increasingly lonely as they make fewer work friends with their workday dominated by virtual meetings and faceless chats.

CIRCLE YOUR CALENDAR-

The two-day Global Project Management Forum will open in Riyadh on Sunday, 2 June, bringing together project managers and stakeholders for talks on the project management ecosystem and emerging technologies.

The #Growth Summit is set to kick off on Wednesday, 5 June, bringing together marketing, product and growth experts at the InterContinental in Riyadh. You can request your invite here.

The Global EV and Mobility Tech Forum will open its doors on Wednesday, 10 July to Thursday, 11 July at the Riyadh International Convention and Exhibition Center. The event will bring together policymakers, NGOs, and startups.

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