Good morning, friends. It’s a busy morning for you, with everything from rumors of M&A to a big power plant award and what could be a very important week for trade and investment ties with our partners in the United States. Let’s jump right in.

HAPPENING TODAY-

Shares of automotive oil manufacturer Neft Alsharq will start trading on parallel market Nomu today. Neft’s offering of a 20% stake was oversubscribed as it priced its IPO at the top range of SAR 3.60 per share.

What to expect today: Shares will be allowed to trade within a ±30% band in daily price fluctuation limits and a ±10% band in static price fluctuation limits.

WEATHER- Riyadh will see a daytime high of 45°C and a nighttime low of 31°C. In Makkah the mercury will peak at 43°C before dropping to a more balmy 30°C, while the temperatures in Medinah will hit 43°C during the day and 27°C at night.

HAPPENING TOMORROW-

Yaqeen Capital shares will also start trading on Nomu, Tadawul said in a statement. Yaqeen Capital — which is itself a top advisor on Nomu IPOs — is selling a 20% stake. The Riyadh-based advisor, brokerage house, and asset manager priced its shares at SAR 40 apiece.

ADVISORS- Alinma Investment is quarterbacking the transaction as the sole lead manager and financial advisor.

HAPPENING THIS WEEK-

It’s a big week for Saudi business and trade ties with the US and the UK, with two major events coming up:

#1- A Saudi delegation is in Washington for a meeting of the Saudi-US Trade and Investment Council, which kicked off on Sunday and will conclude this Friday, 28 June, according to the Saudi Gazette. The delegation, led by Saudi General Authority of Foreign Trade (SGAFT) Deputy Governor Abdulaziz Alsakran, will also include reps from the Public Investment Fund as well as the commerce, energy, investment, education, tourism, and industry ministries. Some 20 Saudi agencies will attend, according to an SGAFT statement.

Our friends at the US Chamber of Commerce will be organizing a private-sector meeting on the sidelines of the government-to-government TIFA meeting, we’re told. The US Chamber is also organizing the SelectUSA Investment Summit, according to SGAFT.

Also on the agenda: The Saudi delegation is scheduled to participate in several meetings and workshops to discuss potential investments, boosting trade, and supporting tech in Saudi. The agenda also includes a US-Saudi forum titled “Investing in Our Shared Future.”

Background: The council, part of the US trade and investment framework agreement (or “TIFA”) system, is designed to improve trade and investment ties by removing barriers and promote business and investment between the two countries.

#2- The Saudi British Joint Business Council (SBJBC) is hosting three separate events to strengthen cooperation between the two countries, including two Sector Working Groups in a roundtable format on real estate and infrastructure, as well as green finance today. The roundtables will bring together businesses from the UK and Saudi to discuss potential cooperation as well as challenges.

#3- Meanwhile, the Sports Investment and Innovation Forum will bring together 100 delegates tomorrow to discuss the development of sports in Saudi, including hosting major tournaments, overseas acquisitions, and potential UK-Saudi partnerships. The UK-Saudi Sustainable Infrastructure Summit, which gathered 200 policymakers, industry leaders, and financial professionals to talk gigaprojects, urbanization, green tech, and financing sustainable infrastructure, took place yesterday.

M&A WATCH-

Is Kuwait Finance House mulling a play for Saudi Investment Bank? That’s the crux of a brief report by Bloomberg, which cites “people familiar with the matter” as saying KFH is exploring the acquisition of a “significant stake.” Saudi Investment Bank shares were down 1.7% in trading yesterday; Bloomberg’s story appeared last night after the market close.

WATCH THIS SPACE-

#1- Saudi is expected to welcome more Chinese tourists now that the Kingdom has been added to China’s list of countries with “approved destination status.” The ADS label, which comes into effect on Monday, 1 July, according to the Saudi Gazette, means that Saudi is now on the list of countries to which Chinese tour agencies can organize group trips. The Saudi Tourism Authority has also worked to facilitate visas, improve air connectivity, and ensure Chinese tourists will be able to access travel information on Visit Saudi in Mandarin, Tourism Minister Ahmed Al Khateeb said.

Why it matters: Making it easier for Chinese tourists to come on packages will help fast-track Saudi’s goal to make China its third-largest source of tourists by 2030.

#2- Are Iran and Bahrain starting to patch things up? Iranian state-owned media reported that the two countries have begun talks that could see Bahrain unfreeze Iranian assets, paving the way for the resumption of diplomatic relations. Reuters has the story.

DATA POINTS-

#1- Loan guarantees provided to SMEs from Kafalah, the Kingdom’s small and medium enterprise loan guarantee program, reached SAR 14.1 bn between 2006 and 1Q 2024, state news agency SPA reports, citing a Kafalah statement. The guarantees backed SAR 19.5 bn in total loans from the program’s inception, with some 4.7k SMEs benefiting. Meanwhile, the program provided over SAR 1.7 bn in guarantees — backing total loans of SAR 2.3 bn — for 872 SMEs operating in Madinah.

SMEs operating in the Hajj and Umrah sectors have also received loan guarantees of over SAR 21.8 bn — backing SAR 162 mn loans — under the program.

DIVE DEEPER- Want to know more about the program and how the Kingdom defines SMEs? We’ve got you covered.

#2- Riyadh is the fourth most-expensive city in the Middle East and ranks 90th worldwide, according to the latest Mercer data. Jeddah came in fifth in the region and 97th overall, while Dubai was the most expensive city in the GCC and number fifteen globally.

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THE BIG STORY AT HOME-

Tour operators in “a number of [the Kingdom’s] brotherly countries” deceived unregistered pilgrims who were attempting to take part in the annual pilgrimage without Hajj permits, state news agency SPA reported, citing statements by Interior Ministry spokesman Talal bin Shalhoub. He said the tour operators facilitated visas that were not intended for Hajj and encouraged them to stay in Makkah for two months prior to the season.

Some 1.3k pilgrims, most of them without valid Hajj visas, died during this year’s pilgrimage. Extreme heat played a role in the majority of those deaths, according to officials. More Egyptians died than did any other nationality with 672 confirmed dead and another 25 are missing as of earlier this week. The rise in fatalities led the Egyptian government to crack down on tourism operators who facilitated the travel of pilgrims who lacked hajj permits, rescinding the licenses of 16 tourism companies.

THE BIG STORY ABROAD-

The big business story this morning: Nvidia shares have now slid more than 16% since Thursday, when their rise briefly made the company the most valuable in the world ahead of Apple and Microsoft. The company’s shares tumbled 7% yesterday, helping drag the Nasdaq down 1.1% for the day. (The Dow Jones Index, which doesn’t include Nvidia, was up 0.7%.) That’s left traders reading sheeps’ entrails running technical analysis in search of a support line. Want to go deeper? Check out the Financial Times | Wall Street Journal | Bloomberg.

Climate change is still getting big play on the front pages of major global business news sites. Bloomberg looks at Saudi’s heat-preparedness after some 1.3k pilgrims died on Hajj this year and a heat dome remains parked over the US and parts of Canada. Dubai, meanwhile, will spend USD 8 bn upgrading its drainage system after rains paralyzed the emirate in April.

KEEP AN EYE ON the global logistics system, where an uptick in Houthi attacks on Red Sea shipping, drought in central America, and worker strikes in the United States, Canada, and Germany have “intensified upheaval in shipping.” Read: ‘It’s all happening again.’ The supply chain is under strain in the New York Times.

Briefly noted: The US and UK press are trumpeting that Wikileaks founder Julian Assange isset to be freed after striking a plea bargain with the United States. And former European Investment Bank President Werner Hoyer is under investigation for corruption.

ELECTION WATCH- French Prime Minister Gabriel Attal takes on his two top challengers in a debate today, with President Emmanuel Macron warning of “civil war” if the far-right or far-left win at the ballot box. The two-step parliamentary election process starts on Sunday.

Up next: Rishi Sunak and Labour leader Keir Starmer face off in a debate tomorrow, while Joe Biden and Donald Trump will clash on Thursday.

CIRCLE YOUR CALENDAR-

The International Chemistry Olympiad — a competition for the world’s brightest chemistry students — will kick off in Riyadh on Sunday, 21 July. The three-day annual event is set to take place in King Saud University and will see teams of four students and two mentors from around the world undergo practical and theoretical assessments in chemistry.

The inaugural Aussie Expo in Riyadh will open its doors to visitors from Monday, 21 October to Tuesday, 22 October at the KAFD Conference Centre in Riyadh. Held under the theme “Accelerating Partnerships, Unlocking New Opportunities,” the one-day event will showcase potential investments between Saudi and Australia in agriculture, mining, technology, infrastructure, healthcare and education sectors. It is organized by Australian conglomerate Trademark Group of Companies seeking the entry of Australian firms to Saudi and the GCC.

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