Good morning, friends. It’s another calm day for business in the Kingdom, as reports of gigaproject delays continue to dominate the coverage of Saudi in the foreign press.

The latest victim is reportedly the Mukaab. Construction work on the flagship development in the center of the new Murabba district in Riyadh has been mostly suspended, signalling the slowdown is starting to hit projects in the capital.

ALSO- Big banks are reporting healthy earnings in 2025, with Saudi National Bank and Al Rajhi Bank exceeding analyst expectations.

WEATHER- Don’t open your windows just yet. Dusty winds are still stirring in Riyadh, Al Jouf, Tabuk, Northern Borders, with medium to light showers expected over the capital, Makkah, Madinah, Al Baha, the Eastern Province, Qassim, and Asir.

  • Riyadh: 24°C high / 10°C low.
  • Jeddah: 30°C high / 20°C low.
  • Makkah: 31°C high / 21°C low.
  • Dammam: 22°C high / 10°C low.

Watch this space

DEBT — Fitch Ratings sees the country’s debt capital market (DCM) reaching USD 600 bn in outstanding value by 2026, cementing the Kingdom’s position as the heavyweight of emerging market debt.

In a record-breaking 2025, Saudi Arabia emerged as the dominant force in emerging market debt issuance (excluding China), capturing an 18% share of all USD-denominated issuances and a massive 26% of the ESG USD market. While total outstanding DCM grew 21% to USD 520 bn last year — with sukuk maintaining a lion’s share of 62% — the real shift is structural: foreign participation in domestic primary markets more than doubled to 10%.

It’s about liquidity squeeze at home: Local banks are increasingly turning to subordinated sukuk to tap into USD markets as domestic SAR liquidity remains tight. The National Debt Management Center is now targeting up to 50% of sovereign funding from private markets, signaling a clear pivot toward a sophisticated, global investor base. The risk? Any major shift in shariah compliance standards or a sustained dip in oil prices could sharpen the cost of this massive borrowing spree.

PIF — The Public Investment Fund (PIF) is looking to enlist prominent families and businesses as partners in future investment prospects, Bloomberg reported, citing unnamed sources it said are familiar with the matter. The Investment Ministry and other government entities have stepped up outreach to family offices, wealth managers, and domestic businesses, aiming to encourage local capital to play a bigger role alongside global investors in financing the Kingdom’s economic transformation.

The pool of potential capital is large. “There are big portfolios. The wealth is sizable,” said Ayth Al Mubarak, CEO of the National Center for Family Businesses, pointing to the long-standing dominance of family-owned firms, which account for nearly 95% of the Kingdom’s private sector. That pool could widen further as the government looks to give smaller families access to gigaprojects that were once largely reserved for the state.

Why it matters: The push comes as the PIF seeks fresh funding amid tighter fiscal conditions, rising debt, and a more constrained global capital environment. By mobilizing domestic families and businesses — which collectively control hundreds of bns of USD — the fund aims to deepen local participation in its dealmaking while easing pressure on public finances. The timing is driven, in part, by a pullback from banks as liquidity tightens, pushing local companies to look beyond traditional lenders and opening space for family offices to step in through co-investing or new funds.

REAL ESTATE — Khuzam Digital Valley emerged as a new hub for AI, cloud computing, and secure digital infrastructure at the Real Estate Future Forum, Al Arabiya reported. Developed by the National Housing Company’s (NHC) digital arm NHC Innovation, the 200k sqm project is designed to host data centers and advanced technology firms spanning AI, cloud, telecoms, utilities, energy, and digital services.

Momentum is also building around real estate tokenization. Regulatory and technical frameworks are in the final stages, with nine companies already piloting property coding and application processes, Municipalities and Housing Minister Majid Al Hogail told Asharq Business. The Kingdom plans to open its real estate tokenization market to global investors by June 2026, including enabling foreign Muslims to own property in holy cities via secure digital platforms.

The broader housing pipeline remains robust. Riyadh alone is set to receive 300k housing units over the next three years, supported by 100 mn sqm of serviced land, Hogail said. At the center of this expansion is the NHC, which plans to inject 300k units into the market in its next phase, CEO Mohammad Albuty told Al Arabiya. The company aims to supply over 80k new units this year alone.

ALSO IN REAL ESTATE — Emaar Economic City will ride the wave of the ForeignProperty Ownership Law, with its King Abdullah Economic City (KAEC) project being “especially well suited” for non-Saudi owners, CEO Abdulaziz Alnowaiser told Asharq Business. In light of the new ownership paradigm, KAEC is attractive to potential foreign buyers due its close proximity to holy sites and existing outside urban centers with heavy ownership restrictions, Alnowaiser said. Emaar Economic City will soon start international marketing campaign efforts to court foreigners.

Data point

SAR 1.05 tn — that’s the value of foreign direct investment in the Kingdom by the end of 3Q 2025, marking a 10% increase y-o-y and accounting for 33% of Saudi’s total foreign investment, Argaam reported, citing Saudi Central Bank data.

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The big story abroad

Global trade is dominating headlines for the second morning running after the EU and India signed a trade agreement, paring down reciprocal tariffs on most goods. The move can be understood as a strategic buffer against volatile trade announcements by Washington. Markets will be watching closely Trump’s reaction to the news.

The EU is slashing or eliminating tariffs on 96.6% of goods bound for India, with its eyes doubling exports to India by 2032. Brussels will stagger these cuts over seven years, reaching zero tariffs on key commodities, like base metals, marine products, and textiles. In return, New Delhi is gradually cutting tariffs on EU-sourced cars, lowering them to 10% from as high as 110%, and fully axing duties on car parts in five to ten years. Other tariffs on machinery, pharma products, and chemicals are also getting mostly canceled.

Trump unfazed by USD slide: The greenback continued its slide on Tuesday, spurred on by comments made by US President Donald Trump, indicating a lack of concern about the currency’s decline —- “the USD is doing great,” he said in response to a question about the currency’s fall. The USD hit its lowest level in four years after a 1.3% dip yesterday, extending its 2026 losses to 2.6%.

AND IN MARKET NEWS- The S&P 500 closed at a fresh high yesterday, with investor optimism about the wave of upcoming Big Tech earnings fueling the rally. Meta, Microsoft, and Tesla will be out with their earnings today and Apple will follow suit tomorrow.

ALSO IT’S FED DAY- The US Federal Reserve will conclude its first policy meeting of 2026 today and markets are expecting a hold. Markets are also closely watching for Trump’s pick for Fed Chair Jay Powell’s replacement, with his nomination expected sometime this week.

WATCH THIS SPACE- Saudi Arabia yesterday said that it would not allow its airspace or territory to be used in an attack on Iran, Reuters reports. The news, delivered on a call between Crown Prince Mohammed bin Salman and Iran’s president, came a day after the UAE made a similar statement.

In context: Trump said last week that an “armada” was steaming toward Tehran.

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