Good morning, wonderful people. Capital markets are dominating today’s issue as we delve deep into TASI’s decline in November and take stock of a flurry of IPO updates, from Cherry’s muted first-day performance, to CGS wrapping up its main market IPO with the retail portion undersubscribed, to EFSIM setting a price range that could see it raise more than SAR 300 mn.

BUT FIRST- We take a little detour to cover Moody’s latest periodic review of Saudi’s credit standing. The verdict? Real GDP growth is forecast to accelerate to 4.5% in 2026, backed by robust growth in the non-oil sector.

ALSO- The finance ministry is gearing up to unveil our FY 2026 budget, likely today. All eyes will be on how spending and borrowing will play out amid weaker oil prices, after the pre-budget statement saw a lowering of revenue projections and an increase in expenditures, while highlighting global risks including geopolitical tensions, protectionist trade policies, supply chain disruptions, and uncertainty over US monetary policy.

HAPPENING TODAY-

Black Hat MEA kicks off today at the Riyadh Exhibition and Convention Center in Malham. The cybersecurity event will host over 45k visitors from 140 countries, 450 exhibitors, and 300 speakers and will feature over 500 hours of content across 12 stages, including live hacking demos, panels, workshops, and interactive sessions, with participants from Google Cloud, Cisco, Haboob, Saudi Information Technology Company, Infoblox, Microsoft, Interpol, Mastercard, and Riot Games.

WATCH THIS SPACE-

#1- PIF to double Japan investments by 2030: The Public Investment Fund (PIF) expects its total commitments in Japan to reach USD 27 bn by the end of 2030, adding to the USD 11.5 bn it has already pumped into the country since 2017, PIF Governor Yasser Al-Rumayyan said on X at the FII Priority Asia Summit in Tokyo.

Big returns: The fund expects investments in Japan to contribute more than USD 16 bn to Saudi’s GDP, Al Rumayyan said.

We’ve been deepening ties with Japan: Japanese banks plan to issue new loans to Saudi companies and develop financial products tailored to the Kingdom’s capital markets, Investment Minister Khalid Al Falih said at the Saudi-Japanese Investment Forum in Osaka. Saudi Arabia is also considering integrating Japanese firms into its special economic zones.

The story also got ink from Bloomberg.

#2- Russia abolishes visas for Saudis: Saudi Arabia and Russia signed an agreement to mutually cancel entry visa requirements for holders of ordinary and official passports, SPA reports. The agreement permits visa-free stays of up to 90 days within a 180-day period for citizens of both countries, while excluding travel for Hajj and Umrah, which remain subject to Saudi procedures. The agreement was signed on the sidelines of the Saudi-Russian Investment and Business Forum..

DATA POINT- Tourist flows between the two countries have surged in 2024, with 52.4k Saudis visiting Russia (a 5x increase) and more than 36k Russians visiting the Kingdom, according to Asharq Business.

#3- Saudi Arabia is reportedly stepping in as mediator between Afghanistan and Pakistan, hosting high-level talks between Afghanistan and Pakistan following recent border clashes along the Durand Line, CNN-News 18 reported (watch, runtime: 2:53).

Who’s involved: A senior Afghan delegation — including Taliban member Anas Haqqani, Deputy Interior Minister Rahmatullah Najib, and Foreign Ministry spokesperson Abdul Qahar Balkhi — is in Riyadh for the discussions, while a Pakistani delegation has also arrived. In October, a similar truce was brokered by Qatar, but that truce shattered almost immediately.

What we stand to gain: Saudi has faced rising threats from the Tehrik-i-Taliban Pakistan militant groups, as well as and narcotics trafficking. Mediating a truce would help the Kingdom stabilize regional tensions, assert its leadership within the Organization of Islamic Cooperation, and position itself as a key mediator in the Muslim world.

OIL WATCH-

Saudi Aramco lifted its December official selling prices for liquefied petroleum gas, as tight global supply pushed benchmarks higher, Reuters reports, citing traders. Propane rose by USD 20 to USD 495 per ton, while butane increased USD 25 to USD 485 per ton.

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THE BIG STORY ABROAD-

European leaders reaffirmed support for Ukraine during President Volodymyr Zelenskiy’s visit to Paris, where he met French President Emmanuel Macron and joined a call with other EU leaders to coordinate positions on a revised US peace. The updated plan, which is still under negotiation, follows two rounds of US-Ukrainian talks and is expected to be reviewed in Moscow this week, where Trump’s special envoy Steve Witkoff will brief Russian President Vladimir Putin. (Reuters | New York Times | BBC | France24)

AND IN BUSINESS NEWS- Global stocks and cryptocurrencies fell yesterday as investors turned cautious ahead of key US economic data and the Federal Reserve’s 10 December policy meeting. The sell-off followed weeks of volatility driven by concerns over AI stock valuations and uncertainty about the economic outlook. (Financial Times | Reuters | Bloomberg)

ALSO- OpenAI has acquired a stake in Thrive Holdings, a private equity firm set up by top OpenAI backer Thrive Capital, in a new agreement that deepens the AI company’s ties with its investors and partners. The arrangement gives OpenAI a “meaningful” share in Thrive Holdings — which acquires and modernizes service firms like accounting and IT providers using AI. (Financial Times | Reuters | Bloomberg | CNBC | New York Times)

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