Saudi reclaims GCC projects crown in 2Q

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WHAT WE’RE TRACKING TODAY

PIF’s gaming wager nears EU approval

Good morning, friends, and welcome back from a tense weekend. Residents of Al Kharj and Yanbu were briefly put on alert early Saturday after the Civil Defense fired warnings through the National Early Warning Platform, only to stand everyone down shortly after with word that the threat had cleared. The scare follows Iran’s ballistic missile strike on a US base in the Kingdom, the first time in four months Iran has hit Saudi soil.

In today’s issue: The business of the Kingdom carries on, and 2Q told a striking story. Saudi Arabia reclaimed its spot as the Gulf’s largest projects market, the only GCC country where contract awards rose both q-o-q and y-o-y. The figures rebounded from a 1Q that was the second-lowest quarter in more than five years. That unseats the UAE, which had led the region for two straight quarters.

The war will show up in the earnings, though. Riyad Capital expects 2Q results to split along geopolitical fault lines, with shipping disruptions, travel restrictions, and oil price volatility sorting the gainers from the losers. Worth keeping in mind as the numbers land.

PIF’s EA play out of the woods?

PIF’s gaming wager is about to clear Europe: A consortium led by the Public Investment Fund (PIF) is expected to secure EU approval for its USD 55 bn acquisition of Electronic Arts (EA) under the bloc’s foreign subsidies and merger rules, Reuters reports, citing unnamed sources. The preliminary merger review ends 22 July and the subsidies review on 30 July, with unconditional clearance anticipated for both.

Why it matters: The transaction, backed by PIF, Trump son-in-law Jared Kushner’s Affinity Partners, and Silver Lake, is the largest leveraged buyout on record. EU approval is the last major hurdle facing the transaction.

REMEMBER- The financing is already in place. JPMorgan placed some USD 15 bn in debt to fund the acquisition in March, drawing over USD 50 bn in investor demand despite war-driven volatility and loans trading up on day one. A group of bondholders tried to block the financing but lost their leverage when S&P wouldn’t rate the replacement bonds.

Shifting west

Saudi crude is being pulled away from Hormuz, again. Oil loadings from the Kingdom’s Gulf terminals have dropped as renewed attacks on commercial tankers in the Strait of Hormuz disrupt shipping, Bloomberg reports, citing satellite imagery. Just one tanker berthed at Saudi’s main Gulf export facilities as of Wednesday, after a brief recovery between late June and early July faded. The UN’s shipping agency has warned Hormuz is now too unsafe to transit.

The Red Sea workaround is coming under pressure too. Some 4 mn bpd have been rerouted via pipeline to the Red Sea coast, keeping exports near 4.6 mn bpd, down from 7.3 mn bpd pre-war but far higher than Hormuz alone allows. Those barrels still exit through the Bab Al Mandeb strait on the Red Sea, where the Houthis last week escalated by firing drones and missiles at Abha International Airport and threatening to target Saudi oil facilities if Riyadh returns to war in Yemen.

Why it matters: A simultaneous disruption of both Hormuz and Bab Al Mandeb could tip the global economy into recession, Capital Economics warns. The two waterways are the Kingdom’s only routes to its main Asian customers. The counterargument is Saudi payments should keep the Houthis from major strikes on energy assets, though escalation could push them toward limited actions that stop short of disrupting crude flows.

Not just us: Iraq’s exports have also slowed as tanker shortages force producers to curb output — Baghdad is almost entirely dependent on its Basra Oil Terminal, with no sea alternative. UAE loadings had remained resilient as of Monday, before attacks on two Emirati tankers later in the week. Iran’s own crude loadings appear to have also dropped sharply.

World Cup venue up for co-investment

PIF-owned Roshn is shopping for outside investors for Aramco Stadium, the 47k-seat 2034 World Cup venue in Al Khobar, with JPMorgan running the equity fundraise as the developer seeks to make capital available for other projects, Reuters reports, citing three sources. The stadium is set to be complete by year-end and ready for its first match in January.

Roshn would set up a vehicle to control the leasehold, co-owned with investors who put up capital in exchange for a long-term share of lease payments from Aramco, which operates the stadium under a 25-year concession. It’s the same lease-and-leaseback model Aramco used for its pipeline assets, which drew EIG Global Energy Partners and BlackRock’s Global Infrastructure Partners.

The pattern is hard to miss. Kingdom Holding took 70% of Al Hilal from PIF in April, a US investor acquired Al Kholood last year, PIF has been in discussions over a minority stake in Newcastle United, and now a World Cup stadium. The direction is consistent: PIF is pulling in private capital rather than funding projects directly, a shift driven by a widening budget deficit that reached USD 74 bn last year and softer oil prices. This is the same recalibration behind the Neom pullback, the SPL club sales, and budget cuts of USD 200-400 mn across the Big Four SPL teams that are readying for the courts.

REMEMBER- Riyadh is building or renovating 15 stadiums and 132 training venues across five cities for the 2034 tournament, the first single-nation hosting of the expanded 48-team format.

Back to square one?

The average sovereign risk premium across Middle Eastern governments jumped by roughly 20 basis points to 402 points over Treasury yields in the week since US President Donald Trump effectively ended the interim US-Iran ceasefire, Bloomberg reports. This is the widest the spread has been in almost four years, and it’s on pace for the fastest YTD widening since 2018.

The region had just spent June recovering. As we reported at the time, spreads had tightened meaningfully from their war-era wides. Bahrain returned to public debt markets for the first time since the fighting began, and banks started rushing back into debt markets. Bankers we spoke with then were bracing for a normal summer lull — not a reversal. We’ll be keeping an eye on the pricing of upcoming issuances and how spreads move in the next few weeks.

Data point

1.27 mn — that’s the number of Umrah pilgrims arriving from outside Saudi Arabia since the start of the season, with total Umrah visa arrivals reaching 931.5k as of 12 July, up 22.5% y-o-y, the Hajj and Umrah Ministry said. Pakistan was the largest source with 200k pilgrims, followed by Indonesia (170k) and Iraq (130k).

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The big story abroad

It is an oddly quiet morning on the international front pages, with the latest war updates receiving top billing.

The renewed regional war is showing no sign of slowing down. The US military launched fresh attacks yesterday to “swiftly punish” the Islamic Revolutionary Guard Corps for a strike on Jordan that killed two US soldiers. Tehran announced yesterday that it would no longer adhere to the terms of the interim truce, and launched a round of strikes on Jordan and Kuwait.

Can manual labor relieve Gen Z’s AI job woes? A wave of young content creators is pitching blue-collar jobs to a Gen Z audience increasingly anxious about an unsteady labor market and AI-driven layoffs. The movement is changing conceptions surrounding jobs — in plumbing, carpentry, and welding — that may be more lucrative and secure than most people think.

The final of the 2026 World Cup kicks off tonight, with defending champion Argentina facing off against Spain. England secured its third-place position yesterday after defeating France 6-4. The final starts at 10pm local time.

Saudi Arabia retook the GCC projects crown in 2Q -Kamco

Saudi Arabia reclaimed its spot as the Gulf's largest projects market in 2Q 2026 — the only GCC country where contract awards rose both q-o-q and y-o-y, according to Kamco Invest's GCC Projects Market Update (pdf). Awards jumped 160.4% q-o-q to USD 30.0 bn, rebounding from 1Q’s USD 11.5 bn — the second-lowest quarterly figure in more than five years — and unseating the UAE, which was the GCC’s biggest projects market for the two preceding quarters.

We were the regional outlier: Every other GCC market posted q-o-q declines as the Iran war weighed on activity, dragging total Gulf awards down 25.4% q-o-q to USD 59.4 bn. Monthly contract awards across MENA fell from USD 35.5 bn in February to the USD 16-19 bn range in each of March, April, and May, per Meed data cited in the report. The regional total was still 30% higher than a year earlier — driven largely by Saudi and Oman.

Construction did the heavy lifting. Awards in the sector surged 184.4% y-o-y to USD 14.2 bn, while gas awards more than quintupled to USD 4.4 bn. Transport (USD 7.0 bn) and water (USD 2.5 bn) also posted double-digit growth. Power was the sore spot, as awards collapsed 89.7% y-o-y to USD 648 mn from USD 6.3 bn.

The quarter’s big tickets — the Ministry of Defense’s USD 4.6 bn contract to Al Bawani for its new headquarters, the USD 1.3 bn Sheikh Jaber Al-Sabah Road project in Riyadh awarded to a JV of Al Rashid Trading & Contracting Company and Turkiye’s IC Ictas, and Diriyah Company’s USD 727 mn award for the Waldorf Astoria superblock, which went to Hassan Allam Construction Saudi and UCC Saudi.

What’s next: The Kingdom accounts for more than half of the GCC’s USD 2.05 tn pipeline of planned and unawarded projects — and 63% of the region’s power projects in planning or execution, including the USD 6 bn KA-CARE nuclear reactor package 1, out to bid this year.

Geopolitics to split 2Q fortunes for Saudi corporates

Saudi firms’ 2Q earnings are expected to diverge along geopolitical fault lines, with shipping disruptions, travel restrictions, and oil price volatility separating the gainers from losers, according to Riyad Capital’s 2Q earnings preview (pdf).

Banks lead the pack: Sector net income is forecast to rise 6% y-o-y to SAR 21.6 bn, supported by 10% growth in fee and commission income, 7% in financing, and 8% in deposits. Al Rajhi is expected to top the group with a 14% y-o-y rise in net income to SAR 7 bn. Albilad is forecast to post the fastest financing growth at around 14%.

Petrochemicals are still in the red, but less so. The sector’s aggregate net loss is expected to narrow to SAR 936 mn from SAR 3.6 bn a year earlier, though revenue is forecast to fall 40% y-o-y to SAR 27.5 bn on higher feedstock costs and shipping disruptions. Two exceptions stand out: Yansab, with net income projected to surge 419% y-o-y to SAR 231 mn, and SIIG, expected to reach SAR 143 mn from SAR 20 mn. SABIC is still forecast to lose SAR 308 mn, but that’s a significant improvement from a SAR 4.1 bn loss in 2Q 2025.

Telecoms look softer, but the comparison is misleading. Sector net income is projected to decline 4% y-o-y to SAR 4.6 bn, largely because STC’s year-ago results included a one-off favorable zakat and tax impact. Strip that out and earnings would be up. STC is expected to report an 8% y-o-y decline in net income to SAR 3.5 bn. Solutions and Elm are forecast to hold steady at a combined SAR 1 bn.

Energy and utilities are climbing, with the majority of companies in Riyadh Capital’s coverage expected to have net income growth in the quarter ranging from 11% to 26% y-o-y. Saudi Electricity Company is the largest contributor at SAR 3.8 bn, up 24% y-o-y. Marafiq posted the fastest growth at 26% to SAR 138 mn. The exception is Arabian Drilling, which is expected to slip to a SAR 42 mn loss from SAR 7 mn net income a year ago after offshore rig suspensions.

Transportation takes the hardest hit. Sector net income is forecast to end the quarter in the green after recording a SAR 515 mn loss during 2Q 2025 as Flynas cuts its losses by two thirds. Flynas is expected to be the weakest performer with a SAR 298.8 mn loss on lower operating capacity and higher fuel costs. Lumi, Budget Saudi, and Theeb are all expected to have lower bottom lines. The one bright spot is SAL, with net income expected to grow 7% y-o-y to SAR 174.1 mn on higher cargo volumes and improved pricing.

Cement’s volumes are up, bottom lines are down. Sales volumes for the sector are expected to rise around 3% y-o-y on seasonality and stronger demand, led by Yamama and Saudi Cement. But a 36% decline in clinker exports and mixed selling prices are forecast to drag net income down 6% y-o-y to SAR 351 mn and revenue down 2% to SAR 1.7 bn.

Healthcare stays steady: Mouwasat and Dr. Sulaiman Al Habib are expected to post combined net income growth of 2% y-o-y to SAR 791 mn, with revenue rising 8% to SAR 4.5 bn.

Aramco VP Abdullah Al Suwailem is now Samref’s chairman

Abdullah bin Saleh Al Suwailem (LinkedIn) is now chairman of the Saudi Aramco Mobil Refinery Company (Samref), the company said on X. Al Suwailem, who has served on Samref's board since 2024, brings more than 30 years of experience in the refining and petrochemicals industry and currently serves as Saudi Aramco’s senior vice president of Western Region Manufacturing.

Westfield Riyadh secures bigger backing + Islam’s oldest mosque is getting a facelift

Boosting funding for mall in Riyadh: Cenomi Centers has increased the shariah-compliant murabaha for its flagship Westfield Riyadh project from SAR 1 bn to SAR 2.7 bn, after the project’s special purpose vehicle reached financial close and signed an upsized facility with Riyad Bank, according to a Tadawul filing.

Where the money goes: The proceeds will fund the completion of Westfield Riyadh, a lifestyle and retail destination being developed through Durrat Al Raed Investment Company, the special purpose vehicle established under the Riyad Real Estate Development Fund. The fund is managed by Riyad Capital Company, with Cenomi Centers as its sole unitholder.

Why it matters: Westfield Riyadh will feature a 38k-sqm skylight, 27 meter floor to ceiling heights, and promises 220k sqm of grass leasable area, as well as Saudi Arabia’s first LEED Gold certified shopping mall. The project is expected to attract 24 mn visitors annually while generating more than SAR 5 bn in annual retail spending once stabilized.

Quba Mosque to grow tenfold in major expansion project

Islam’s oldest mosque is getting a facelift: The Madinah Region Development Authority (MRDA) has put out a tender to expand Quba Mosque — the first mosque built in Islam, dating back to 622 AD — with bids due by the end of August, according to a Meed report. Jasara was tapped as project management consultant, while London-based HKA was brought in to advise on procurement and delivery and Dar Al Omran prepared the expansion design.

The details: The project aims to increase the mosque’s footprint tenfold from its current 5k sqm to 53k sqm, and lift its capacity from 12k to 66k worshipers. The project also covers the restoration of 57 historical sites in the surrounding area as well as the creation of three dedicated pathways, part of a broader effort to deepen Madinah’s cultural and spiritual infrastructure.

Jeddah Islamic and Al Khomrah undergo major expansion

Jeddah Islamic Port has launched what it says is the world’s largest truck staging area, according to an announcement on X. The new logistics zone covers more than 1 mn sqm and is designed to streamline truck traffic and improve cargo handling efficiency at the port. The facility has the capacity to accommodate more than 40k trucks a day.

Mawani will also develop seven logistics centers at the port and Al Khomrah, worth around SAR 1 bn, in collaboration with local and foreign companies, according to another statement. The projects will cover more than 444k sqm and will support warehousing, cargo consolidation, and re-exporting. The agreements also include a SAR 40 mn expansion of Maersk’s logistics center at Jeddah Islamic Port, adding 60k sqm of container yard capacity.

The SEC’s transparency push could expose Gulf money behind activist hedge funds

Some of the Gulf’s most discreet investors may soon find themselves in the public eye. The US Securities and Exchange Commission (SEC) said in an updated interpretation on 13D filings and proxy statements last week that activist hedge funds must disclose the identities of clients backing company-specific campaigns — a shift that could pull Gulf family offices out of the shadows of America’s activist-investing scene.

SOUND SMART- Activist funds often raise money through “sidecars,” special-purpose vehicles that let outside investors back a single campaign without joining the fund’s broader portfolio — or having their names attached to it.

And what’s changed? Under the SEC’s new interpretation, clients investing more than USD 500 in certain vehicles used to solicit votes must be named in regulatory filings.

Why family offices like the structure: Sidecars let investors shape a specific outcome — a boardroom shake-up, a breakup, a sale — while keeping the rest of their public-market exposure untouched and their name off it, The National cites IQ-EQ’s Peter Unwin as saying.

Why it matters for the Gulf: North America accounts for 50% of Middle Eastern family-office portfolios, according to UBS’s Global Family Office Report 2026. That being said — being permanently identified as the foreign capital behind a campaign to replace management, break up a company, or force a sale could invite political and media scrutiny in both Washington and the Gulf, lawyers and experts told The National. The requirements are particularly sensitive where private wealth and state interests are perceived to overlap.

But this is guidance, not law: “This is not a new rule, but just guidance on the interpretation,” Insead’s Ben Charoenwong told The National. The SEC could reverse course without completing a formal rulemaking process, while sophisticated investors may shift back into larger pooled funds or avoid structures that name them as co-investors.

The bigger signal here is scrutiny, not just disclosure: The SEC’s unexpected interpretation signals greater scrutiny of what investors pushing for boardroom changes must disclose about their clients, lawyers who work on investor activism told Reuters. Companies targeted by activists say they need that information to defend themselves, while hedge funds argue disclosure could expose proprietary strategies and encourage copycats.

Sovereign wealth isn’t the one sweating: Ziemba Insights’ Rachel Ziemba told The National that Abu Dhabi Investment Authority, Mubadala, and Qatar Investment Authority tend to back management they already trust rather than join activist campaigns. The pressure falls instead on family offices and private investors running single-company sidecars.

TASI	10,720	+0.2% (YTD: +2.2%)
MSCI Tadawul 30	1,428	+0.2% (YTD: +2.9%)
NomuC	22,239	-1.5% (YTD: -4.5%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	52,928	+0.7% (YTD: +26.5%)
ADX	9,782	0.0% (YTD: -1.6%)
DFM	5,814	-1.4% (YTD: -3.9%)
S&P 500	7,458	-1.0% (YTD: +8.9%)
FTSE 100	10,600	+0.3% (YTD: +6.7%)
Euro Stoxx 50	6,231	-0.8% (YTD: +7.5%)
Brent crude	USD 88.10	+4.6%
Natural gas (Nymex)	USD 2.91	+1.9%
Gold	USD 4,019	+0.7%
BTC	USD 64,814	+1.4% (YTD: -26.0%)
Sukuk/bond market index	910.24	+0.1% (YTD: -1.0%)
S&P MENA Bond & Sukuk	151.44	+0.1% (YTD: -0.3%)
VIX (Volatility Index)	18.77	+12.2% (YTD: +25.6%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.2% on Thursday on turnover of SAR 3.4 bn. The index is up 2.2% YTD.

In the green: Abo Moati for Bookstores (+7.9%), Saudi Industrial Development (+5.2%), and Mutakamela Ins. (+4.8%).

In the red: Electrical Industries (-6.4%), Naseej International Trading (-4.6%), and Al Etihad Cooperative Ins. (-3.8%).

THE CLOSING BELL: NOMU-

The NomuC fell 1.5% on Thursday on turnover of SAR 15 mn. The index is down 4.5% YTD.

In the green: Bena Steel Industries (+7.4%), Osool and Bakheet (+7.1%), and Dar Almarkabah (+6.2%).

In the red: Almuneef Company (-9.8%), Naas Petrol (-9.1%), and Rimath Hospitality (-8.3%).

CALENDAR

AUGUST

30 August-1 September (Sunday-Tuesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center.

31 August-3 September (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

8-10 September (Tuesday-Thursday): The WTM Spotlight Riyadh, Riyadh Front Exhibition & Conference Center (RFECC), Riyadh.

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

28 September-1 October (Monday-Thursday): The International Conference on Theory and Practice of Electronic Governance (ICEGOV), Prince Sultan University, Riyadh.

OCTOBER

25-26 October (Sunday-Monday): The Global Proptech Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

26-29 October (Monday-Thursday): The Future Investment Initiative, King Abdulaziz International Conference Center, Riyadh.

28-29 October (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

28-29 October (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

30 October-1 November (Friday-Sunday): The New Global Sport Conference, Sofitel Hotel & Convention Centre, Riyadh.

NOVEMBER

11-12 November (Wednesday-Thursday): Aluminum Arabia, The Arena, Riyadh.

16-19 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre (Malham), Riyadh.

29 November-1 December (Sunday-Tuesday): The UN Trade and Development Global Supply Chain Forum, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;

2027

FEBRUARY

1-3 February (Monday-Wednesday): Energy Regulators Regional Association annual conference, Riyadh.

MARCH

21-25 March (Sunday-Thursday):The World Water Forum, Riyadh.

22–24 March (Monday-Wednesday): Capital Markets Forum, Four Seasons Hotel, Riyadh

APRIL

26-29 April (Monday-Thursday): World Energy Congress, Riyadh.

JUNE

1-3 June (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

Signposted to happen sometime in 2027:

The Ocean Race finishes in Amaala on the Red Sea;
Riyadh-Kudmi transmission line to be completed;
Aero Middle East and Sand & Fun takes place in Thumamah Airport, Riyadh.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

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