Good morning. The clouds of a regional escalation have largely parted over the gulf, and markets are breathing again after the ceasefire between Israel and Iran went into full effect.

Today’s brisk issue features plenty of updates from the debt markets, with Dar Al Arkan gearing up for a sukuk issuance and Fakeeh Care lining up a hefty credit facility from Alinma, as well as the Finance Ministry closing its June SAR-denominated issuance. Meanwhile, Tadawul is rebalancing its indices, and the Capital Markets Authority approved new listings. Let’s dive in.

HAPPENING TODAY-

Healthcare provider Specialized Medical Co. (SMC) is set to debut on the Exchange’s main market today, according to a disclosure to Tadawul. Shares will be allowed to fluctuate within a 30% range, with a static band of 10% for the first three trading days. Starting from the fourth day, shares will be allowed to trade at a 10% volatility as circuit breakers take effect.

REFRESHER- The firm floated a 30% stake in a secondary offering that was 1.45xoversubscribed by retail investors, bringing in around SAR 542.2 mn in orders. Shares were priced at SAR 25 each, implying a market cap of SAR 6.3 bn at listing and raising SAR 1.9 bn with all net proceeds going to selling shareholders.

WEATHER- Riyadh is expected to see a high of 44°C and a low of 29°C today, while Jeddah’s mercury will go as high as 39°C and as low as 28°C. Makkah will see a 41°C high and 34°C low.

WATCH THIS SPACE-

#1- Jadwa to fully divest from Unipharma? Private equity firm Jadwa Investment is looking to sell its entire 51% stake in United Pharma Group (Unipharma), Bloomberg reported yesterday, citing people it says are familiar with the matter. The company is reportedly targeting a valuation of about SAR 1 bn (USD 267 mn) for the exit.

Already on the road: Jadwa is sounding out strategic investors along with local and international PE firms for its stake in Unipharma, which it acquired in 2020, the sources said. EFG Holding’s investment banking arm EFG Hermes is reportedly advising on the transaction.

ALSO- Jadwa is currently gearing up for a SAR 400 mn raise before the end of the year, bringing its blind pool fund to SAR 1.7 bn in total fundraising, Managing Director Rabie Dagher told Bloomberg. The asset manager is also looking to IPO four of its portfolio companies within the next 18 months, as part of a regional IPO push, and is set to acquire a Saudi fleet management firm in the coming weeks, Dagher added without disclosing details.

#2- Ejada to reset IPO clock as approval window lapses: Al Rajhi Bank-owned Ejada Systems is set to re-submit its IPO request to the Capital Market Authority (CMA), after missing the six-month window to move forward with its planned debut, Bloomberg reported yesterday, citing people it says are familiar with the matter.

REMEMBER- The Riyadh-based tech player originally lined up CMA approval in December to float a45%stake on Tadawul’s main market. The firm had reportedly tapped Goldman Sachs and Al Rajhi Capital as advisors for the offering, which was expected to value the firm at USD 1.5 bn.

IN CONTEXT- Market watchers see conflict-driven market jitters delaying some of the region’slarger IPOs while sparing smaller listings. The near-term outlook, which sees conditions stabilizing, is expected to clear the way for Ejada’s IPO relaunch.

#3- The Ministry of Industry launched the second phase of performance-based incentives for investors, with the submission of applications set to start in August, Deputy Minister for Industrial Affairs Khalil bin Salamah told Asharq Business on Monday (watch, runtime: 6:44). Under the scheme, investors are granted a SAR 50 mn incentive or 35% of the total project cost, provided they localize targeted industries and technologies, including chemicals, food manufacturing, heavy machinery and equipment, and medicine.

Saudi aims to attract investments of no less than SAR 220 bn to locally manufacture heavy machinery and equipment by 2035, Bin Salamah said. The kingdom also seeks over SAR 12 bn in investments to boost the manufacture of electronics and small appliances locally.

Discussions are underway with several aerospace companies to localize aircraft manufacturing, seeking to form foreign-local partnerships and draw foreign investments, Salamah said. Companies involved in discussions include Boeing, Airbus, Leonardo, and Embraer. The country aims to locally manufacture whole aircraft, as well as components and engines.

REMEMBER- The General Authority for Industrial Cities and Technology Zones (Modon) launched a 1.2 mn sqm aviation industrial city at Jeddah’s Modon Oasis in February. The city, dubbted Aero Park I, will include a wide array of ready-built factories equipped to accommodate several firms in the aviation sector.

#4- Canada is in discussions with Saudi Arabia and the UAE to invest in developing the AI sector, as the country needs hardware and capital from foreign investors, Canadian AI Minister Evan Solomon told The Logic on Monday. Ottawa aims to create sovereign AI infrastructure, by forming partnerships and creating an industrial base to dial down its dependence on trade with the US, Solomon said.

ICYMI- Riyadh is ramping up AI investments in North America, with DataVolt planning to invest USD 20 bn in US data centers and energy infrastructure, as part of Saudi Arabia’s USD 600 bn commitment to US investments, set to eventually be rounded out to USD 1 tn.

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THE BIG STORY ABROAD-

The war hawks are circling once again with the headlines this morning dominated by a Pentagon report claiming that the US strikes only pushed Iran’s nuclear program back by a few months. The report from the Pentagon’s intelligence arm Defense Intelligence Agency found that Iran’s nuclear centrifuges could soon be restarted and that the country’s stockpiles of highly enriched uranium were moved out of the sites before the US moved to strike, seeming to contradict Trump’s claims that the sites had been “completely and fully obliterated.”

Trump doubled down on his earlier comments in response to the report, by trading war with Iran for war with CNN and the New York Times, who he accused of trying to “demean one of the most successful military strikes in history.” (Reuters | Bloomberg | Wall Street Journal | Washington Post | New York Times | Associated Press | CNN)

But while the world’s attention was turned to Iran, Israel continued its almost daily massacres of those seeking aid in Gaza, killing at least 40 yesterday, bringing the number of those killed in similar attacks to 500 in just the past two weeks. (Reuters | Guardian)

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