July inflation steady at 1.8% despite war pressures

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Is the Gulf patience with Washington wearing thin?

Good morning, folks. We’re starting this week with a brisk issue front-loaded with a macroeconomic theme — July’s inflation figures. Next, we capitalize on the Capital Market Authority’s leadership shuffle to lay out the authority’s efforts to spur local IPO activity. Rounding out today’s coverage is an examination of the Houthi attacks on the Kingdom’s export map.

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Gulf-Washington discontent?

Is the Gulf’s patience with Washington wearing thin? Gulf capitals are increasingly frustrated with the Trump administration’s handling of the situation with Iran, with Saudi Arabia, the UAE, Qatar, Kuwait, and Bahrain now united in their aggravation over Washington’s stop-start approach to the war, the Washington Post reports, citing unnamed Arab and Western officials. The president has repeatedly issued threats against Tehran only to walk them back, and some Gulf governments have reportedly begun debating the value of continuing to host large US military installations.

Regional discontent is now at its highest point since the start of US-Israeli strikes on Iran in February, one Gulf official told the newspaper.

Why? The conflict’s economic bill is due in the fall. The conferences, summits, and Formula One races that packed the regional calendar from October through December are in limbo. The Future Investment Initiative (FII) in late October is shaping up as the first real test, with questions over whether global CEOs and senior officials will show up in Riyadh with the war unresolved. A Western diplomat told the newspaper that postponing the FII would send the wrong message, making a tweaked-but-on-schedule edition the likelier outcome.

Al Qadsiah lands Man City’s Reijnders

One of the transfer window’s biggest transactions: Manchester City has agreed to sell Netherlands midfielder Tijjani Reijnders to Al Qadsiah for GBP 52 mn (SAR 263 mn), ESPN reports, citing unnamed sources. Personal terms are close to being finalized, and the transfer will be completed once the 28-year-old passes a medical.

Reijnders, who trained away from the City squad on Thursday, leaves the Etihad Stadium after a single season, having joined from AC Milan for GBP 46.5 mn last summer, meaning City is generating a small financial return on a player who scored seven goals in 47 appearances.

Another statement buy for the Aramco-owned club: The fee ranks among the largest in Saudi Pro League history and continues Al Qadsiah’s aggressive squad build under Brendan Rodgers, who took charge in December. The Dammam-based club, acquired by Aramco under the Kingdom's club ownership transfer program, has positioned itself as a genuine challenger to the PIF-owned big four.

Data point

USD 26 bn — that’s the value of 154.15 mn SpaceX shares the Public Investment Fund acquired in 2Q, Al Arabiya reported, citing a PIF filing. The fund’s portfolio remained otherwise unchanged from 1Q, including 72.8 mn Uber shares and 24.8 mn Electronic Arts shares, among other investments.

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The big story abroad

A key stumbling block in the regional war seems closer to being resolved, as Iran and Oman reportedly inch closer to hashing out shipping rules for the Strait of Hormuz. The two sides are working on a so-called “shipping map” to regulate traffic through the waterway while preserving each nation’s sovereignty. It is still unclear whether transit fees will be levied on shippers.

Meanwhile, strikes continue: Two Adnoc vessels were struck while transiting Hormuz on Thursday, while a third was struck on Friday. No injuries were reported.

Chipmaking giant Nvidia disclosed that it owns a USD 21 bn stake in SpaceX, held in around 123 mn shares, making it the firm’s sixth-largest investor, according to data from FactSet. Since SpaceX’s shares have fallen markedly since its June IPO, Nvidia’s stake would now be worth USD 17 bn.

AI misstep on Jane Street: New York-based quantitative trading firm Jane Street recorded a USD 15 bn loss tied to exposure to AI-focused hedge fund Situation Awareness, after being caught in last month’s AI sell-off. Jane Street disclosed the figure as part of an agreement to shift USD 11 bn in public debt to private investors. After accounting for the loss, the company brought in more than USD 40 bn in trading revenues.

Inflation holds at 1.8% in July despite geopolitical tensions

Inflation remained steady for the third month in a row, with headline prices remaining at 1.8%, matching June and May rates, despite the renewed US-Iran conflict and Houthi threats, according to the latest data (pdf) from Gastat. The stable inflation “should be read as evidence that Saudi macro management is currently absorbing the shock well, not as evidence that the shock doesn’t matter,” senior economist at MT Trading Ahmed Chreim tells EnterpriseAM.

Resilience despite mounting geopolitical pressures: “On the surface, this is a strong signal of macroeconomic resilience; the Kingdom continues to post one of the lowest inflation rates among G20 economies,” Chreim tells us.

What is keeping inflation in check? Several factors are containing the impact of the rising tensions, including the routing of oil exports through the Kingdom’s Red Sea coast rather than Hormuz, leaving most oil shipments largely undisrupted for now, Chreim says. The inflation is also mainly driven by non-energy costs, reflecting pressures from rents and construction costs rather than geopolitics. Saudi Arabia is using strategic reserves, alternative export routes, and price-monitoring measures to cushion its economy.

The breakdown

Housing is still the main contributor, adding 0.8 percentage points to the headline figure, with the housing, water, electricity, gas, and other fuels division rising 4.2% y-o-y, led by a 4.3% increase in actual rents.

Elsewhere, personal care and miscellaneous goods climbed 2.9%, driven by an 11.1% increase in other personal effects, including a 12% rise in jewellery and watch prices. Entertainment, sports, and culture costs rose 2.4%, supported by a 3.7% increase in holiday package prices. Restaurant and hotel services increased 2%, food and beverage prices rose 1.5%, and ins. and financial services climbed by 1.4%.

Two segments continue to defy the trend: Furnishings and household equipment fell 0.5% y-o-y, while clothing and footwear declined 0.4%. CPI rose 0.2% m-o-m in July, led by a 0.9% increase in the price of housing, water, electricity, gas, and other fuels.

ALSO- Wholesale prices edged up: The wholesale price index (pdf) rose 5.0% y-o-y in July, up from 4.8% in June. The increase came mainly from a 9.7% rise in other transportable goods — including a 66.7% jump in basic chemicals and a 3.9% increase in refined petroleum products — and a 6.2% rise in agriculture and fishery products. Metal products, machinery, and equipment prices also edged up by 1.5%.

MEANWHILE- Manufacturing costs resumed their climb. The producer price index (pdf) rose 8.5% y-o-y in July, up from 7.5% y-o-y in June. This increase was driven by a 9.0% increase in manufacturing prices, a 7.9% rise in water supply, sewerage, waste management, and remediation activities, and a 2.4% increase in electricity, gas, steam, and air conditioning supply.

What’s next?

The inflation outlook depends on how the disruption evolves: A spillover into GCC infrastructure or Hormuz would raise the risk of imported inflation, while higher Red Sea freight and marine ins. costs could feed into consumer prices with a lag of several months, Chreim says. A sustained disruption to tanker traffic that lifts global oil benchmarks would also shift the policy focus from headline CPI to fiscal risks, as subsidized domestic fuel prices limit the immediate consumer impact, but weaker export revenue could weigh on Saudi’s finances.

Mazen Al Sudairi takes CMA’s lead amid reported scrutiny of IPO valuations

The CMA has a new chairman: Mazen Al Sudairi (LinkedIn) has been appointed chairman of the Capital Market Authority (CMA) board, replacing Mohammed Al Quwaiz, who had led the regulator since 2017.

Al Sudairi brings extensive capital markets research experience to the role. He previously headed research at Al Rajhi Capital before being appointed in 2024 as an adviser to the Cabinet General Secretariat.

IN CONTEXT- Al Sudairi’s appointment comes as the stock market faces structural challenges, including declining liquidity, while geopolitical uncertainty weighs on regional markets. TASI closed July down 1.95% at 10,590 points as trading value fell roughly 20% y-o-y to SAR 86.1 bn, while traded shares nearly halved to 4.55 bn from 8.6 bn a year earlier.

Tidying the house? The CMA is reportedly investigating the weak performance of recent IPOs and scrutinizing investment banks’ advice to companies selling shares, Semafor reported, citing unnamed sources. The probe has been underway for several months and covers IPOs dating back to at least early 2025, the sources said.

What they’re saying: The CMA requested detailed information from local and global investment banks on IPO pricing, investor allocations, and subsequent share trading. Saudi companies raised USD 3.7 bn through share sales in 2025, more than the rest of the Gulf combined, while nearly 100 companies are awaiting listings. No major IPOs have closed so far this year.

Part of a wider reorganization: The same decision relieved ex-industry and mining minister Bandar Al Khorayef of his position as chairman of the Local Content and Government Procurement Authority, with Prince Abdulaziz bin Salman bin Abdulaziz appointed as the authority’s new chairman.

This is the second time Prince Abdulaziz has replaced Al Khorayef in a senior position this year. The first was last month, when the prince’s Energy Ministry absorbed the industry and mining portfolios. Al Khorayef is presumably still in his position as governor of the General Authority for Military Industries.

Houthi attacks are forcing Saudi barrels back to the Gulf

The pressure on the western coast is not letting up: The Houthis said on Thursday that they hit Aramco's 400k bbl / d Jazan refinery with two drones, the second attack on the facility in under a week. The damage was negligible, limited to a single tank, Bloomberg reports, citing unnamed sources, while Riyadh and Aramco have not commented. Another Aramco facility in Najran was also allegedly targeted on Friday night.

The kingdom's wartime export map is being redrawn in real time: The second supertanker in a week was reportedly spotted moored at Ju’aymah in Sentinel-2 satellite imagery captured Thursday, Bloomberg reports. The 2 mn bbl VLCC is only the second vessel of its size seen at Ras Tanura in nearly a month, the clearest sign yet that Aramco is pushing loadings back into the Gulf as the Houthi campaign makes the Red Sea workaround — the escape valve that has kept Saudi crude moving since Hormuz became a warzone — increasingly untenable.

REMEMBER- Jazan was already offline. Aramco shuttered the refinery on 27 July after a Houthi strike damaged its IGCC complex and tank farm, and repairs were expected to be complete by 15 August, with some reports putting the date at 30 August. Thursday’s strike lands squarely on that restart window.

The commercial damage is already showing up in Aramco’s order book: The company is handling September crude allocations to some Asian term customers on an ad hoc basis, abandoning the monthly OSP-then-allocation cadence that has structured the Asian crude trade for decades, Reuters reports, citing unnamed sources. Four Chinese buyers say they haven’t received September allocations at all, while an Indian refiner got its full volumes but calls them conditional because nobody knows if shipowners will sail. Charterers are refusing both Hormuz and the Red Sea, jeopardizing both of Saudi Arabia's main export ports.

Aramco is discounting and improvising: September Arab Light to Asia was cut to a six-year low to hold demand, and the company is offering cargoes out of Sidi Kerir on Egypt’s Mediterranean coast — which Asian buyers are so far declining, given the longer voyage and higher freight rates. Saudi shipments to Asia fell below 3 mn bbl / d in July, with dark voyages clouding the true figure, following an average of 4.9 mn bbl / d in 2025, Kpler data showed.

Najran rolls out new investments, Robotaxis to be deployed nationwide

Najran rolls out new investments

Najran Municipality, through Hubuna Municipality, launched eight potential investments via the Furas municipal investment platform, state news agency SPA reported. Through these investments, the municipality aims to expand private-sector participation and support local economic development.

The breakdown: The investments include a 5.6k sqm mixed-use commercial and residential complex, 1.7k sqm of commercial shops, and multiple commercial markets covering more than 10.7k sqm at the eastern entrance to Hubuna.

The largest project includes an over 103.7k sqm development for workshops, vehicle yards, and car showrooms in Al Abaya Industrial Area. Other investments cover a women’s wedding venue, football field, park kiosk, and drive-through ATM.

Deadlines: Bids for the football field and kiosk are due by 20 August, while the deadline for the remaining potential investments is 2 September.

Autonomous vehicles expansion

Nationwide rollout: Saudi Arabia plans to expand autonomous vehicles across its cities after the completion of a Riyadh pilot, with the Transport General Authority expected to begin issuing licenses for the sector soon, TGA President Fawaz Al Sahli told Asharq Al Awsat.

Zero accidents recorded: The pilot, launched in July 2025, was designed to test the regulatory framework for autonomous vehicles and adapt existing systems and legislation. Al Sahli said the trial recorded no accidents and saw strong public uptake.

Anthropic’s backers are pricing in USD 2 tn valuation

Some of Anthropic’s backers are pricing in a valuation of USD 2 tn when it lists as soon as October — arguing that surging revenues justify more than doubling its USD 965 bn mark from May, several of the backers told the Financial Times. A debut at that level would top the roughly USD 1.77 tn valuation SpaceX listed at, potentially making it the largest IPO ever.

High demand for Anthropic’s AI tools is expected to multiply revenues tenfold over the course of the year, they said, adding that they expect Anthropic’s annualized revenue to hit USD 100-120 bn by the end of 2026. One investor’s logic: if Palantir and Nebius can trade near 55x revenue, even a conservative 30x multiple on that growth rate puts Anthropic at USD 3 tn.

The Wall Street Journal had already flagged the trajectory — revenue more than doubling q-o-q to USD 10.9 bn, enough for Anthropic’s first-ever operating income. Investors have backed that growth with capital: institutional investors, sovereign wealth funds, and venture capitalists have poured nearly USD 100 bn into the company this year.

Top line is trending up: Anthropic’s 2Q preliminary revenue figures exceeded USD 11.5 bn, up from last year’s USD 787 mn and 1Q’s USD 4.73 bn, Bloomberg reports. Although there may be discrepancies between the calculations for each figure, Anthropic’s annualized revenue exceeded USD 47 bn in May, while OpenAI’s figure went over USD 40 bn.

BACKGROUND- It hasn’t been smooth sailing for Anthropic. Washington forced the company to pull its newest Fable 5 and Mythos 5 models offline worldwide in June. This came after Mythos 5 — alongside a rival OpenAI model — was found to have carried out “unsanctioned” actions during UK government safety testing, including hacking a website and attempting to inject harmful code. Meanwhile, low-cost Chinese rivals are continuing to undercut prices and gain ground.

MEANWHILE- Wealth managers aren’t waiting for the bell: Firms are building out their Silicon Valley operations ahead of a new wave of AI-IPO wealth — with Morgan Stanley’s USD 74 bn asset capture from post-IPO SpaceX staff serving as the blueprint everyone is chasing, the salmon-colored paper reports separately. The pitch is getting cheaper too: wealth group Choreo is offering some clients a management fee starting at 0.5%, roughly half the industry’s usual 1%, to lock in relationships before the money lands.

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TASI	10,824	-0.2% (YTD: +3.2%)
MSCI Tadawul 30	1,455	-0.2% (YTD: +4.9%)
NomuC	21,822	+0.2% (YTD: -6.3%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	55,252	+0.4% (YTD: +32.1%)
ADX	10,047	+0.0% (YTD: +0.5%)
DFM	5,886	-0.4% (YTD: -2.3%)
S&P 500	7,458	-1.0% (YTD: +13.7%)
FTSE 100	10,750	-0.2% (YTD: +8.2%)
Euro Stoxx 50	6,540	-0.1% (YTD: +12.8%)
Brent crude	USD 88.52	+1.7%
Natural gas (Nymex)	USD 2.73	+0.2%
Gold	USD 4,437	+0.4%
BTC	USD 63,143	+0.4% (YTD: -27.9%)
Sukuk/bond market index	908.78	+0.1% (YTD: -1.1%)
S&P MENA Bond & Sukuk	151.07	-0.1% (YTD: -0.5%)
VIX (Fear gauge)	14.25	-2.6% (YTD: -4.7%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.2% on Thursday on turnover of SAR 4.4 bn. The index is up 3.2% YTD.

In the green: AFG International (+10.0%), Alamar Foods (+6.0%), and Al Moammar Information Systems (+5.3%).

In the red: Alwasail Industrial (-4.2%), Mouwasat Medical Services (-4.2%), and Saudi Fisheries (-4.2%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.2% on Thursday on turnover of SAR 13.5 mn. The index is down 6.3% YTD.

In the green: Arabica Star (+8.3%), Altharwah Albashariyyah (+7.6%), and Qomel (+6.7%).

In the red: Ghida Alsultan for Fast Food (-9.9%), Alhasoob (-8.4%), and Taqat Mineral Trading (-7.5%).

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.

29 November-1 December (Sunday-Tuesday): The Global Logistics Forum, King Abdulaziz International Convention Centre, 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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