Good morning. Escalation in the Israel-Iran conflict is looking imminent, casting a big shadow of uncertainty on markets around the world.

“Everyone should immediately evacuate Tehran," US President Donald Trump said in a post on Truth Social that came out at about 4am in the city of 9 mn people, spreading panic across the city and causing alarm across the world’s digital front pages. The news shortly followed Israel issuing evacuation orders to residents of a large part of Tehran, in an indication that was ramping up its attacks on the city as the conflict enters its fifth day. The death toll has now risen to 244 killed in Iran and 24 in Israel. (Financial Times | Bloomberg | Reuters | Associated Press | Guardian)

The Kingdom issued a joint statement with 21 countries from the Arab and Muslim world to condemn Israel’s attacks on Iran and to call for an immediate halt to hostilities, the ruling out of targeting nuclear facilities, and other demands. Cosignotaries included Egypt, UAE, Iraq, Oman, Qatar, Kuwait, and Libya, among others.

Trump’s call for Russia to be readmitted to the G7 is also getting a lot of ink this morning, with the president describing the 2014 decision to kick the country out of the then-G8 as a “big mistake. If Russia had remained in the group, the country wouldn’t have invaded Ukraine in 2022, he claimed. (Reuters | Guardian | New York Times)

HAPPENING TODAY-

Event organizer Time Entertainment will make its debut on the Nomu parallel market today, according to a disclosure to Tadawul. Shares will be allowed to trade within a 30% range for the first three days, before being capped at no more than 10% up or down when circuit breakers kick in.

REFRESHER- The company’s IPO was 1.4x oversubscribed, driving the firm to price its offering at SAR 80 per share, with the four selling shareholders raking in SAR 16 mn in proceeds from offering a 20% stake.

WEATHER- Riyadh is expected to see a high of 46°C and a low of 32°C today, while Jeddah’s mercury will go as high as 37°C and as low as 27°C. Makkah will see a 45°C high and 33°C low.

WATCH THIS SPACE-

#1- Acwa power aims to channel 75-85% of proceeds from its planned capital increase toward funding new projects in the Kingdom, CFO Abdulhamid Al Muhaideb told Al Ekhbariya on Sunday (watch, runtime: 9:23). The renewables giant is leading 70% of projects under the Saudi plan of energy transformation.

The company aims to triple its assets under management to over USD 250 bn, while maintaining net debt at SAR 20 bn, Al Muhaideb said.

Where things stand: Acwa’s current portfolio is valued at SAR 400 bn with over 78 GW of power generation capacity and 9.5 mn cubic meters of desalination capacity, Al Muhaideb added. The company added SAR 34 bn in new projects in 2024, mainly in the Kingdom, alongside Egypt, China, Azerbaijan, and Uzbekistan.

REMEMBER- After securing Capital Market Authority approval in May, Acwa Power is set to hold a shareholder vote on June 30 for its planned SAR 7.1 bn rights offering. The funds are earmarked to fund projects (up to SAR 6 bn), support mergers and acquisitions (up to SAR 1.4 bn), and cover other business purposes (SAR 351 mn).

Major shareholders are all in: The Public Investment Fund and Vision International Investment have already committed to subscribing to their full shares of the rights issue, representing 77.2% (SAR 4.8 bn) of the total offering, according to the prospectus.

#2- The critical role of oil and gas during times of conflict shouldn’t be overlooked, Reuters reported, citing Aramco CEO Amin Nasser as saying at the Energy Asia Conference in Kuala Lumpur. Nasser pointed to historical trends where energy security concerns intensified during global instability, without directly mentioning the ongoing Israel-Iran clashes,

New energy sources supplement rather than replace traditional fuels, Nasser said, noting that achieving net-zero emissions could cost up to USD 200 tn, with renewables falling short of current demand.

ICYMI- Aramco chief called for a “more balanced” global energy strategy back in March, saying that the current strategy of prioritizing renewable and alternative energies — requiring USD 6-8 tn investments annually — could lead to a bleak future. Regulatory restrictions on traditional energy sources should be eased to provide incentives for financial institutions to accelerate growth, while taking into account the needs of developed and developing countries alike, Nasser argued.

#3- The Hong Kong stock exchange will soon open a representative office in Riyadh to build closer ties with the Saudi Exchange, CEO of Hong Kong Exchanges and Clearing (HKEX) Bonnie Chan told Reuters. The exchange plans to attract more companies from the Middle East and Southeast Asia for secondary listings, Chan added.

ICYMI- Assets under management in the Hong Kong-listed Saudi ETF surpassed USD 1.3 bn just 18 months after its 2023 debut, reflecting growing interest from GCC investors in Hong Kong-listed equities and financial products. Shariah-compliant sukuk and an REIT are among several products under review for cross-listing between Hong Kong and Riyadh, Hong Kong’s Securities and Futures Commission Julia Leung said at the Capital Markets Forum held in Hong Kong in June, co-hosted by Tadawul.

#4- Saudi and Iranian authorities put in motion a plan to secure their safe return by land, with the first group of Iranian Hajj pilgrims arrived at the Arar Airport yesterday, state news agency SPA reports. Iranian airspace remains closed on the back of Israeli attacks across Iran.

OIL WATCH-

Israel and Iran’s escalating conflict is placing Middle Eastern oil supplies at serious risk, with key energy infrastructure already under attack, Bloomberg reports, citing a note by RBC Capital Markets’ analyst Helima Croft. Oil is now “clearly in the crosshairs” as both sides have struck facilities crucial to global supply.

Potential scenarios include an Israeli strike on Iran’s Kharg Island, which processes 90% of Iranian crude exports, and retaliatory attacks by Iranian proxies on oil facilities in Iraq, the business news service adds. The White House is reportedly urging Israel to avoid targeting Kharg Island due to the severe impact it could have on global energy markets.

The oil-options market saw a surge in bullish activity yesterday, Bloomberg reported separately. Thousands of August call options betting on crude surpassing USD 80 per barrel traded within hours, with additional high-volume contracts placed on Brent crude reaching USD 100 and USD 101. Brent's timespreads saw some 20k lots exchanged in the first five minutes.

DATA POINT-

Some 82% of Madinah residents are satisfied with the region’s quality of life, according to a survey conducted over 2023-2024 by Madinah Regional Municipality among 75.2k citizens and residents. This marks a 16% increase from the previous survey, attributed to improvements in parks, public services, and infrastructure.

SPORTS-

The Kingdom defeated Haiti 1-0 at their Concacaf Gold Cup debut game on Sunday night in San Diego. Saleh Al Shehri scored the only goal from the penalty spot in the 21st minute, while goalkeeper Nawaf Al Aqidi made four saves to secure the victory. The Green Falcons are scheduled to face the US — who beat Trinidad and Tobago by 5 goals — on Saturday, 21 June at 5am.

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