Good morning. Hopes for a de-escalation of hostilities between Israel and Iran were shot down overnight, as the regional war took a sharp turn with Washington entering into direct confrontation with Tehran.

Otherwise, it’s a calm morning in the Kingdom: Leading this morning’s news well is Specialized Medical Company’s retail offering as it gears up for listing on the main market, the PIF establishing new companies and divisions to lead the infrastructure and AI push, and new regulations from the Central bank capping credit card fees amid other changes.

THE BIG STORY ABROAD-

The US struck Iranian nuclear sites a few hours ago, in the first public US attack on Iranian soil since the Iran-Israel escalation began.

The strikes — which targeted facilities at Fordow, Natanz, and Isfahan — are dominating the headlines across the globe this morning, with President Trump saying in a televised address that the sites had been “totally obliterated” (watch, runtime; 4:12). “Iran, the bully of the Middle East, must now make peace. If they do not, future attacks will be far greater, and a lot easier,” Trump warned.

No radiation leaks were detected in the Kingdom following the strikes, our Nuclear and Radiology Regulatory Commission said in a post on X.

UN Secretary-General António Guterres called out the action as a “dangerous escalation in a region already on the edge,” and further warned that without a diplomatic solution the conflict could further spiral out of control. Criticism also came from within the ranks of the Republican Party, with a select few, including Kentucky Representative Thomas Massie, who criticized the strike without congressional approval as unconstitutional. (Washington Post | Reuters | Associated Press | Financial Times | Bloomberg)

AND- Columbia University graduate and pro-Palestine activist Mahmoud Khalil has been released on bail after a federal judge called his three-month detention in the immigration facility unconstitutional. Khalil, who has become a symbol of Trump’s crackdown on both foreign residents and those who have voiced pro-Palestinian support, was reunited with his son and wife and vowed to carry on advocating for Palestinian rights. (Reuters | New York Times | Bloomberg | Guardian)

OVER IN BUSINESS WORLD- Trump is once again flirting with the possibility of firing US Federal Reserve chair Jerome Powell, saying in a post on Truth Social that, “Maybe, just maybe, I’ll have to change my mind about firing him?” The comment is the latest in a string of criticisms Trump directed towards Powell, attacking him for not lowering interest rates, which were kept steady for a fourth meeting last week. (Reuters)

HAPPENING TODAY-

#1- The subscription period for Naf Company for Feed Industry’s IPO on the Nomu parallel market will run from today until Thursday, 26 June, Tadawul said on X. Qualified investors will be able to book between 10 and 90k shares each, with final allocations slated for Monday, 30 June.

ICYMI- The animal feed production company is floating a 20% stake, or 400k shares, standing to raise some SAR 30.4 mn in proceeds, with a market cap of SAR 152 mn at listing.

#2- Real estate marketing firm Hawyia Auctions will ring the opening bell on Nomu today, Tadawul said on X. The company is taking a 12% stake — 2.4 mn shares — to market at SAR 13 apiece in a secondary offering that was 310% covered.

WEATHER- Riyadh is expected to see a high of 42°C and a low of 28°C today, while Jeddah’s mercury will go as high as 37°C and as low as 28°C. Makkah will see a 42°C high and 31°C low.

HAPPENING TOMORROW-

The three-day Saudi Industry Forum (SIF) kicks off tomorrow at the Dhahran Expo in Dammam. The event will host public and private sector representatives to discuss industrial policy, sustainable manufacturing, and investment prospects while introducing new technology relevant to the chemicals and mining sectors.

HAPPENING THIS WEEK-

The two-day Tech-ecO-SystemSummit (ToSS) kicks off on Tuesday, 24 June in Riyadh. The event, held under the theme “For Tomorrow”, brings together more than 30 speakers and 150 attendees across over 15 industries to discuss market insights, emerging technologies, and potential JVs.

PSAs-

#1- It might be time to change your passwords: Some 16 bn login credentials spread across 30 massive datasets were discovered, with records reportedly tied to accounts on platforms including Facebook, Google, and Apple, cybersecurity outlet Cybernews said. The leak dates of the passwords remain unknown.

The exposed records appear to have been collected via infostealer malware that target user computers, not a centralized breach at any of the affected companies, the outlet added.

#2- Don’t forget May VAT returns: Businesses subject to VAT whose annual supplies of goods and services exceed SAR 40 mn must file their May tax returns by Monday, 30 June, the Zakat, Tax, and Customs Authority (Zatca) said in a statement on Thursday. Late submissions may incur fines ranging from 5% to 25% of the declared taxes.

#3- Umrah visa applicants must now upload confirmed hotel bookings to the NusukMasar, the Hajj and the Tourism ministries said on X earlier this month. Umrah operators are also required to limit bookings to hotels approved by the Ministry of Tourism.

WATCH THIS SPACE-

#1- Americana mulls buying Five Guys operator: Tadawul and ADX-listed F&B giant Americana Restaurants is reportedly in early talks with Dubai private equity firm Fajr Capital to acquire Dubai-based Cravia, Bloomberg reports, citing people it says are familiar with the matter. Cravia — the Middle East operator of Five Guys, Cinnabon, and Zaatar w Zeit — runs 78 outlets and employs more than 2k staff across the region.

The move would expand PIF-backed Americana’s already deep bench of global franchises — which includes KFC, Pizza Hut, and Krispy Kreme — and mark its first major M&A play since a wave of brand boycotts, job cuts, and restructuring caused the stock to lose some 60% of its value over the last two years.

#2- Direct flights to Russia may be coming soon, with national airlines Saudia, flynas, flyadeal, and Riyadh Air are in discussions to offer direct flights connecting the Kingdom to Russia in the near future, Transport and Logistics Service Minister Saleh Al Jasser told Aleqtisadiah on the sidelines of the St. Petersburg International Economic Forum last Friday.

DATA POINTS-

#1- Consumer spending via point-of-sale (PoS) transactions in the Kingdom was down 21.3% w-o-w in the week ending 14 June, reaching SAR 11.1 bn, according to the Saudi Central Bank’s report (pdf). The number of weekly transactions also fell 10.7% w-o-w to just under 203.8 mn during the week.

The details: Restaurants and cafés made up the biggest chunk of spending in terms of value over the week, despite a 12.4% fall w-o-w to SAR 1.8 bn. Food and beverages came in second place but also fell 18.7% w-o-w to just over SAR 1.7 bn. This was followed by gas stations spending, which dropped 6% w-o-w to just under SAR 857.5 mn, and healthcare, which fell 18% w-o-w to SAR 610 mn.

Riyadh had the highest value of PoS transactions at just under SAR 3.6 bn, followed by Jeddah at SAR 1.6 bn.

#2- Saudi imports of electrical appliances increased 28.5% y-o-y to SAR 221 bn in 2024, driven by growing commercial activity, diversified marketing channels, and higher purchasing power, Aleqtisadiah reports, citing data by the General Authority for Statistics (Gastat). Some 10 countries exported 81% of the year’s total appliances to the Kingdom, with China at the top (41.4%), followed by the US (10.9%), Germany (5.4%), and Italy (5.3%).

OIL WATCH-

Opec+ producers should raise output to meet rising summer demand, Reuters quoted Russian Deputy Prime Minister Alexander Novak as saying at an economic forum in St Petersburg. The group would not alter its strategy in response to the Israel-Iran conflict unless actual supply disruptions occur to avoid alarming the market, Novak added. Energy Minister Prince Abdulaziz bin Salman shared a similar stance, saying that the group would “only react to realities.”

What if the risks turn real? If disruptions do occur, Saudi Arabia, Russia, and the US could act jointly to stabilize oil markets “if needed,” Russia’s investment envoy Kirill Dmitriev told the newswire. The three countries had previously partnered to cut oil output and calm markets in 2020 during US President Donald Trump’s first term in office.

REMEMBER- Opec+ is set to meet again on 6 July to decide on August outputs. Saudi Arabia has been leading a sharp acceleration in Opec+ to output hikes since April, with the cartel announcing a long-delayed plan to gradually return 2.2 mn bbl / d of oil to the market over 18 months and then proceeding to accelerate these output hikes at triple the initially expected rate. The group’s last meeting on 31 May saw a decision to further add 411k bbl / d in July, the third increase in a row.

ALSO- Asian oil refiners are reportedly turning to the Middle East for more term crude shipments in August and September, following the surge of spot premium prices to above USD 3 a barrel on Thursday, Reuters reported on Friday, citing sources it said are in the know.

Better prices in uncertain times: With spot premiums rising to their highest in four months — due to escalating tensions between Israel and Iran, refiners are turning to term contracts, which offer better value as the Middle East official selling prices remain lower than spot levels, a source told the newswire. Indian refiners are also reportedly securing more July-loading term barrels from the region, in anticipation of lower Russian supplies.

SPORTS-

Al Hilal held Real Madrid to a 1-1 draw in the Club World Cup last Wednesday, with Rubén Neves tying the match from the penalty spot. The Blue Power is now set to face RB Salzburg — group leader after beating Pachuca 2-1 — for a shot at the top of Group H tomorrow at 1am at the Audi Field in Washington, DC.

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