Shrinking imports send Saudi trade surplus up in May

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WHAT WE’RE TRACKING TODAY

Tighter financial controls at Al Nassr

Good morning, wonderful people. Start with a number that keeps getting bigger: the Kingdom’s merchandise trade surplus jumped 328.8% y-o-y in May, extending a run that went 219% in March and 100% in April. The imports side is doing more work than the headline suggests, falling 19.5% y-o-y against a comparatively modest 3.9% rise in exports.

ALSO- PIF is placing a bet on the awkward middle of the capital stack. Its Jada Fund of Funds made a first commitment to Growth Catalyst Fund I, a PE fund chasing USD 200 mn to back growth-stage Saudi SMEs — the companies that have outgrown venture money but can't yet reach the public markets.

BUT FIRST- On our war watch: The Houthis say they downed a Saudi reconnaissance drone over Al Jawf province yesterday, releasing footage that appears to show the wreckage, the group's latest claim a day after it said it hit Saudi oil facilities in Jazan and Yanbu. No confirmation from Riyadh or the coalition. Houthi attacks have reduced ship traffic through the Bab Al Mandeb Strait, which saw 11 vessels pass yesterday — the lowest level in months.

PIF to rein in Al Nassr spending?

The Public Investment Fund is imposing tighter financial controls at Al Nassr after the club’s debt exceeded SAR 800 mn, an unnamed source told Arriyadiyah. The liabilities stem mainly from decisions made last season, when the club was among Asia’s biggest spenders on overseas signings in 2025.

PIF’s response runs along three tracks: restricting some of the executive management’s financial powers, bringing in independent financial, commercial, and legal advisors to lift revenues and cut costs, and evaluating takeover offers. The spending clampdown is the immediate lever — the executive management will be barred from signing players or coaches without sufficient funds generated from sponsorships and the club’s own revenues for the new season, the source said.

What’s next? PIF is reviewing two acquisition offers for Al Nassr, with a preference for a partial sale rather than a full exit, Arriyadiyah’s source said.

ALSO- Club chairman steps down: Al Nassr Chairman Abdullah Al Majed announced on Saturday he will leave the role at the end of his statutory term, he said on X. He will not stay on through the automatic extension permitted under Saudi law, citing work commitments.

This is all part of the plan: Al Nassr is one of PIF’s Big Four SPL clubs, all facing collective budget cuts of USD 200-400 mn as the fund tightens spending. The clubs’ boards are assembling legal teams ahead of next season, bracing for contract disputes from players whose salaries can no longer be met in full. PIF has already sold 70% of Al Hilal to Kingdom Holding and is seeking buyers for the rest of its football portfolio.

Airlines pull back

International carriers are extending suspensions and cutting frequencies to Saudi destinations as regional escalation continues, The National reports. The pullback interrupts a recovery that had been building since regional flights were widely grounded at the start of the Iran war in late February.

Who’s flying and who’s not: British Airways has permanently suspended flights to Jeddah and will cut Riyadh service from two daily flights to one from 8 August. Lufthansa Group carriers — Lufthansa, Swiss, Austrian, and Brussels Airlines — have suspended flights to Riyadh and Dammam until 24 October. KLM has suspended Riyadh and Dammam service until 23 August. Air France flights to Riyadh remain suspended until 24 July, ITA Airways until 15 September, and Cathay Pacific until 25 October. Scoot has suspended its Singapore-Jeddah route until 8 August.

The disruption extends well beyond the Kingdom. Carriers are avoiding the airspace of Iran, Iraq, and Israel, along with parts of the Arabian Gulf, with Dubai hit hardest — Singapore Airlines, Cathay Pacific, Air Canada, Finnair, and Philippine Airlines have all pushed resumption dates to late October or beyond. Even carriers that have restored service, like Turkish Airlines, are warning of further cancellations.

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The big story abroad

Last night marked the second consecutive day of quiet following a nearly two-week Campaign of US strikes on Iran. US President Donald Trump reportedly halted the assault to rekindle diplomatic talks, with advisors citing the shortage of viable targets and a growing strain on Washington’s arsenal. Negotiations reportedly involve efforts from Oman and Qatar.

Iran’s response? Tehran will also hold fire as long as the US does not renew its assault, a senior Iranian official told Reuters, reiterating that the Islamic Republic's policy remains “attack for attack.”

Houston, we have a rival: Europe’s The Exploration Company is seeking at least USD 300 mn in funding — a round that could push its value to USD 2 bn — to build reusable space capsules capable of challenging Elon Musk’s SpaceX. Among the suitors is the European Commission-backed Scaleup Europe Fund. Talks remain ongoing and no final decisions have been made.

Private equity’s brewing showdown: Bain Capital and Carlyle are the final bidders vying to acquire wealth management and advisory firm Wealth Enhancement, whose owners are targeting a valuation of around USD 7 bn. As a leading PE-backed registered investment adviser, Wealth Enhancement is riding a wave of industry consolidation as it competes with banks to manage portfolios of wealthy clients.

Chinese memory chipmaker CXMT’s shares jumped 472% on their Shanghai debut this morning, following the company’s IPO — the second-largest in China’s history — that raised CNY 66.6 bn. The company is the world’s fourth-largest maker of dynamic random-access memory, possibly serving as China’s ticket to reducing its reliance on foreign suppliers.

Oil exports drove a 329% trade surplus surge in May while non-oil trade contracted

Saudi Arabia’s merchandise trade surplus surged 328.8% y-o-y in May, on the back of rising oil exports and a sharp drop in imports, according to data (pdf) from the General Authority for Statistics, outpacing the 100% increase of April and March’s 219% spike. Merchandise exports rose 3.9% y-o-y, while imports fell 19.5%.

The oil sector carried the export side: Oil exports rose 19.5% y-o-y, pushing the share of oil within total exports to 75.6%, up from 65.7% a year earlier.

The geopolitical context: The surplus still reflects the war premium in energy markets. Brent averaged around USD 107 per barrel in May, off its March peak above USD 120 but still elevated. Our Red Sea rerouting kept oil volumes flowing while the Strait of Hormuz remained disrupted, supporting the trade balance even as non-oil trade contracted on shipping disruptions and higher logistics costs. These numbers predate the current wave of escalations targeting Saudi refineries, airports, and shipping routes.

Non-oil exports, including re-exports, fell 26.1% y-o-y during the month. Re-exports dropped 24.4%, dragged by a 32.4% decline in machinery and electrical equipment re-exports, which made up 46.2% of the total. The ratio of non-oil exports to imports slipped to 33.8%, compared to 36.8% in May 2025.

Machinery and electrical equipment remained the largest non-oil export category, accounting for 22% of the total, though the segment fell 31.6% y-o-y. Plastics, rubber, and their articles followed at 17.6% of non-oil exports, down 28.2% y-o-y.

On the import side, machinery and electrical equipment also held the top position at 26.4% of total imports, down 28.0% y-o-y. Mineral products followed as the second-largest category at 11.9%, rising 65.7% y-o-y — the one major import line to grow during the month.

Who were our top trading partners? China remained Saudi Arabia’s top export destination in May 2026, taking 12.3% of the Kingdom’s merchandise exports, followed by South Korea (9.6%) and the UAE (7.5%). China also led import sources at 22.0%, ahead of the US (10.7%) and Egypt (8.4%).

Jada Fund of Funds backs Growth Catalyst Fund I

The PIF-owned Jada Fund of Funds has made its first commitment to Growth Catalyst Fund I, a private equity fund targeting USD 200 mn to back growth-stage Saudi SMEs. It’s a bet on the thinnest part of the Kingdom's capital stack, where companies that have outgrown venture funding still can't reach the public markets.

The fund targets founder-led, upper-middle-market companies, mainly in Saudi Arabia, with growth-stage deals as its core strategy and flexibility to invest in pre-IPO firms, a Jada spokesperson told EnterpriseAM. Jada declined to disclose the size of its commitment.

Why it matters: Saudi Arabia built one of the region's largest venture capital markets, but companies past the startup phase routinely struggle to raise growth equity before an IPO. The fund “is well positioned to meaningfully participate in bridging the SME financing gap,” the spokesperson said, calling private equity a strategic asset class in Jada's portfolio.

DATA POINT- The Kingdom’s SME financing gap is estimated to be somewhere between SAR 300-500 bn.

The investment reflects Jada's strategy of backing emerging Saudi fund managers while expanding the institutional capital available to the Kingdom's private markets, CEO and Managing Director Bandr Alhomaly said in a statement seen by EnterpriseAM.

What's next: Growth Catalyst, led by founder and CEO Turki Al-Dayel, plans to grow established SMEs through their next expansion phase before exiting via IPOs, strategic sales or secondary transactions.

Sulaiman Al Habib, Sabic Agri-Nutrients post 2Q earnings

Sulaiman Al Habib grows as new hospitals ramp up

Dr. Sulaiman Al Habib Medical Services Group reported a 12.1% y-o-y increase in its net income to SAR 662.7 mn in 2Q 2026, according to a Tadawul disclosure. Revenue rose 18.4% y-o-y to SAR 4 bn over the same period, carried by higher patient volumes and occupancy across the hospitals and pharmacies segments, alongside contributions from recently opened hospitals, the group said. Ramp-up costs at those new sites partly offset the gains.

REMEMBER- The company had approved a SAR 2 bn expansion plan in October 2025 to build two new hospitals. The projects include a SAR 991 mn, 160-bed integrated hospital in Riyadh and a SAR 988 mn, 145-bed integrated hospital in Dammam.

The half-year read told a similar story. Net income edged up 1.6% y-o-y to SAR 1.2 bn, while revenue climbed 13.8% to SAR 7.4 bn, with the gap largely reflecting the fixed costs of recently opened hospitals still working toward full utilization.

Dividends: The company decided to distribute SAR 465.5 mn in dividends for 2Q 2026, equivalent to SAR 1.33 per share, according to another disclosure. The amount will be distributed on 17 August.

Weaker volumes eat into Sabic Agri-Nutrients’ earnings

Sabic Agri-Nutrients saw its 2Q net income fall 64.2% y-o-y to SAR 379 mn, as weaker volumes outweighed firmer prices, according to a Tadawul disclosure. Revenue dropped 26.7% y-o-y to SAR 2.4 bn over the same period. The company tied the fall to lower sales volumes, driven by supply-chain problems and a smaller contribution from an associate and a joint venture, partly offset by higher average selling prices.

The market whipsawed through the quarter: Fertilizer prices peaked early in the second quarter of the year as importers competed to replace stranded Middle East supply. This was paired with disruption to upstream products including natural gas, ammonia, and sulfur weighing on global nitrogen and phosphate production, Sabic said in an earnings release (pdf). Conditions eased later in the quarter as China’s introduction of export quotas pulled urea prices back to pre-crisis levels, and the US-Iran ceasefire freed most of the vessels stranded in the Arabian Gulf to reach global markets. Phosphate prices stayed elevated on high raw-material costs.

For 1H, net income fell 21.4% y-o-y to SAR 1.6 bn with revenue down 16.9% y-o-y to SAR 5.3 bn.

Dividends: The company will distribute SAR 1.67 bn in dividends for 1H 2026, at SAR 3.5 per share, it said in a separate disclosure. The distribution date is set for Monday, 10 August.

New rules for schools

Saudi Arabia approved the executive regulations for its new General Education Law, completing one of the Kingdom’s most sweeping overhauls of K-12 education governance in a decade, according to a royal decree published on Umm Al Qura.

One regulator, one rulebook: The legislation establishes a general education affairs council, chaired by the education minister, bringing together government agencies, regulators, and private-sector representatives under the same governance structure. The council will oversee strategy, admission policies, teacher regulations, private and virtual schools, and the academic calendar, replacing a fragmented decision-making process that previously required approvals from different bodies.

Facing higher standards: The law introduces stricter accreditation requirements and gives the Education Ministry greater oversight of licensing, ownership transfers, school operations, and international curricula.

The bigger picture: The overhaul replaces regulations dating back to 1969 and creates a unified legal framework governing education from nursery through Grade 12.

Malaa joins the payments field

Sama licensed Malaa Company for Information Technology to provide payment account information services, one of the offerings tied to open banking, according to an announcement. The move brings the total number of licensed payment service providers in Saudi Arabia to 33.

Almunajem seeks 20.3% of Al Jouf

Almunajem Foods is raising its stake in Al Jouf Agricultural Development to up to 20.29%. The company signed a binding subscription agreement to take 4.5 mn new shares at SAR 52.5 each, a total of SAR 236.25 mn, through a capital increase with pre-emptive rights suspended, according to a Tadawul disclosure. Almunajem already holds 8.3% in Al Jouf Agricultural. The agreement also provides for a reconstitution of Al Jouf Agricultural's board upon completion.

Approvals pending: CMA, Tadawul, and Al Jouf Agricultural shareholder approval are still required.

REMEMBER- Almunajem first announced its intention to become a strategic investor in Al Jouf Agricultural in February.

DeepSeek halts its USD 74 bn round weeks after a record raise

DeepSeek reportedly paused the second fundraising round that would have valued it at roughly USD 74 bn, telling prospective backers over the weekend they won’t be signing the agreements they expected in the coming days, Bloomberg reported Saturday. The company says talks may resume.

The timing is the tell. DeepSeek didn’t need the money in a hurry: it closed its first outside round only in June, raising USD 7 bn at about USD 50 bn in one of China's largest-ever startup financings, backed by Tencent, battery maker CATL, and a state-run national AI fund. The follow-on, targeting a pre-money valuation of at least CNY 480 bn, opened weeks later at a step-up aggressive even by US megaround standards, then stalled almost as fast.

The trigger, Bloomberg’s sources say, was founder Liang Wenfeng’s frustration over leaked online accounts of his remarks to first-round investors. In a transcript neither DeepSeek nor Bloomberg has authenticated, Liang reportedly argued that China’s real gap with the US in AI is computing power, not talent, and dwelt on the sector’s dependence on Nvidia chips.

The pause is a wobble, not a wall. DeepSeek is preparing an IPO on Shanghai's STAR Market, possibly this year, giving it a route to capital that runs through neither private backers nor another leaked-transcript risk.

What to watch: Whether DeepSeek revives the raise, presses ahead with the listing, or lets both ride while it builds out compute. It was chasing the follow-on to fund data centers and chips as its push into AI agents lifts demand, so the money still has somewhere to go.

MARKETS THIS MORNING-

Asia-Pacific markets traded lower this morning, signaling a volatile week ahead as investors await key interest rate decisions from the Federal Reserve, Bank of Japan, and Bank of England. A wave of big tech earnings is also on deck, with investors watching closely for clear returns on massive AI infrastructure spending.

TASI	10,767	-0.3% (YTD: +2.6%)
MSCI Tadawul 30	1,444	-0.4% (YTD: +4.1%)
NomuC	22,002	-0.3% (YTD: -5.6%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	53,418	-1.0% (YTD: +27.7%)
ADX	9,828	-0.1% (YTD: -1.7%)
DFM	5,787	-0.2% (YTD: -4.3%)
S&P 500	7,412	+0.1% (YTD: +8.3%)
FTSE 100	10,736	+0.9% (YTD: +8.1%)
Euro Stoxx 50	6,281	+1.1% (YTD: +8.4%)
Brent crude	USD 91.06	-5.9%
Natural gas (Nymex)	USD 2.81	-2.1%
Gold	USD 4,149	+0.5%
BTC	USD 65,473	+1.7% (YTD: -25.3%)
Sukuk/bond market index	904.19	0.0% (YTD: -1.6%)
S&P MENA Bond & Sukuk	150.20	+0.2% (YTD: -1.1%)
VIX (Volatility Index)	18.58	-0.6% (YTD: +24.3%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.3% yesterday on turnover of SAR 2.4 bn. The index is up 2.6% YTD.

In the green: Tadco (+10.0%), United Carton Industries (+6.5%), and Amak (+4.3%).

In the red: East Pipes (-5.9%), Alwasail Industrial (-4.8%), and Jarir Marketing (-4.4%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.3% yesterday on turnover of SAR 14.5 mn. The index is down 5.6% YTD.

In the green: Dar Almarkabah (+8.3%), WSM for Information Technology (+5.8%), and Shmoh Almadi (+5.1%).

In the red: Al Razi Medical (-10.9%), Paper Home (-9.4%), and National Building and Marketing (-6.8%).

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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