THIS MORNING: PIF’s five-year strategy inches closer to the light

Good morning, wonderful people, and happy THURSDAY. We’re sliding into the weekend with a packed issue — starting with the Public Investment Fund moving forward with its long-awaited 2026-2030 strategy, which shows signs of a mature approach to the fund’s structure and the Kingdom’s overall priorities.

The PIF will focus on shoring up domestic competitiveness, ramping up private sector participation, and catalyzing local investments under its new five-year plan.

The strategy, which its board of directors approved yesterday, will divide PIF investments into three portfolios, as the fund looks to improve its asset management and boost its long-term returns:

• The vision portfolio integrates investments across strategic sectors to create greater value across portfolio firms, creating more avenues and attracting global capital. This portfolio will focus on tourism, travel and entertainment, urban development, advanced manufacturing, industrials and logistics, clean water, water and renewables infrastructure, and Neom;
• The strategic portfolio focuses on managing strategic assets to boost financial returns while growing portfolio companies into competitive players;
• The financial portfolio manages “direct and indirect investments in global markets” with a focus on generating sustainable returns, implementing a more diversified strategy for global investments, and deepening international partnerships.

The focus is now on the long game, as the fund looks to balance global investments with domestic growth. Building on its previously announced commitments, the fund is focusing 80% of its capital allocations on local investments to drive non-oil economic growth, with the rest going to global equities, infrastructure, technology, aerospace, and video game companies. International investments will grow in USD terms, but will account for a smaller share of PIF’s portfolio moving forward, Governor Yasir Al Rumayyan said, according to Reuters.

But prioritizing local investments isn’t happening at any cost: Priorities for Neom are being reassessed under a restructuring plan aimed at ensuring long-term financial viability and phased execution, Al Rumayyan said. This includes letting go of an imperative to complete The Line by 2030, he said, but maintained that the project is not being canceled.

Taking on new importance: Oxagon, which Al Rumayyan said must be completed by the end of the decade. The industrial city within Neom is designed to focus on manufacturing and industrial development, and will house a global port and data centers — all of which are critical, Al Rumayyan said.

WATCH THIS SPACE- PIF plans to sell its stake in one Saudi sports club within the next couple of days, Al Arabiya quotes Al Rumayyan as saying, noting that the fund’s primary objective is to gradually exit club investments after helping improve financial sustainability, planning to retain minority stakes in some clubs rather than majority ownership.

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Sign of the times

Consumer spending via points-of-sale (PoS) in the Kingdom fell in every major city last week — and luxury spending took the biggest hit. The total value of PoS spending fell 9.1% w-o-w in the week ending 11 April to SAR 13.4 bn, with the number of transactions falling at a more marginal 1.5% clip to 242.8 mn, according to the Saudi Central Bank’s latest weekly report (pdf).

Jewelry took the biggest hit, plunging 25.2% w-o-w to SAR 414 mn. This was mirrored by a sharp 18.8% drop in hotel spending, signaling a significant pull-back in discretionary leisure spending. Education spending fell at a similar pace as the cycle of tuition and fee payments comes to a close. Books and stationery spending also fell 19.9%.

Logistics and movement: Transportation and auto rentals saw spending value drop 12.4% and 19.8% respectively, suggesting a lull in domestic travel and equipment leasing.

Transaction values fell across every city in the Kingdom during the week, while Riyadh once again recorded the highest overall value at SAR 4.66 bn (down 6.2% w-o-w), followed by Jeddah at SAR 1.85 bn (down 7.6% w-o-w).

Watch this space

DEBT — Saudi Arabia is extending a new USD 3 bn loan to Pakistan to allow Islamabad to make good on an equivalent loan repayment to the UAE, Pakistan’s Finance Minister Muhammad Aurangzeb said in a post on X. The Kingdom will also extend its existing USD 5 bn deposit “for a longer period” than its current year-to-year structure.

A timely cushion: The support comes after Islamabad failed to roll over its loan from the UAE for the first time in seven years, leaving it with a month-end repayment deadline and adding pressure on foreign exchange reserves of about USD 16 bn — enough for roughly three months of imports, Bloomberg notes. The UAE reportedly pushed for a short rollover of under a year, which Pakistan rejected.

Coinciding with Pakistani Prime Minister Shehbaz Sharif’s arrival in Jeddah yesterday, to begin a four-day regional tour of Saudi Arabia, Qatar, and Turkey aimed at strengthening diplomatic ties amid rising Middle East tensions and US-Iran-related regional diplomacy.

More help may be on the way: The country is also expecting approval of a USD 1.2 bn tranche from the IMF under its USD 7 bn bailout program, which would further strengthen its financial position.

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The big story abroad

The US-Iran ceasefire lives another day with no news of a breakthrough. White House officials signaled confidence that a diplomatic resolution is within reach. Talks brokered via Pakistan are “productive and ongoing,” White House press secretary Karoline Leavitt said, but denied reports that Washington formally asked to extend the truce.

Stocks went on a tear yesterday, suggesting traders think that the end of the war is nigh. The S&P 500 closed nearly 1% higher yesterday, hitting a new all-time high as it extended a two-week rally that began just before the current ceasefire came into effect. CNBC has some color here.

And oil steadied in response to unconfirmed reports a ceasefire extension, with Brent crude settling near USD 95.

In less-welcome news: US President Donald Trump renewed his threat to sack Federal Reserve Chair Jay Powell. Trump wants Powell out on 15 May, when his term as Fed chair comes to an end, even if Kevin Warsh — who Trump has named as Powell’s successor — hasn’t been confirmed by Congress by that date. Tradition would have Powell stay on until a success is in place.

Trump also said he’s not going to call off a Justice Department probe of Powell’s renovation of the Fed’s DC headquarters. Folks are also holding their breath to see if Powell steps down from the board when he exits as chair — while his term at the head of the table runs out on 15 May, he isn’t required to leave the board until January 2028.

Also in the US of A: JPMorgan Chase, Goldman Sachs, and Citigroup are all doing largeshare buybacks, as are Bank of America and Morgan Stanley. The biggest US banks have spent a combined USD 33 bn on the buybacks, the FT reports, amid strong 1Q earnings.