The Makkah defense pact holds its first committee talks in Istanbul

Good morning, wonderful people. Saudi’s venture capital market may be coming out of its summer lull as major events like Leap kick off today, offering a platform to redeploy dry powder after months of cautious repricing. Meanwhile, construction activity took a breath in July as persistent input costs throttled project awards — a stark reminder of the cost pressures still shaping the Kingdom’s economic momentum.

Happening today

The Leap Tech Conference kicks off in Riyadh today and runs through Thursday, 3 September, at the Riyadh Exhibition and Convention Center. The conference will highlight data center, cloud, and chip investments alongside Agentic AI and Arabic-first tech, while addressing talent shortages as a major topic.

Makkah pact holds first defense talks

Officials from Turkey, Saudi Arabia, and Pakistan meet in Istanbul today for the first committee meeting under the Makkah defense pact, Reuters reports, citing a Turkish Foreign Ministry source. Foreign and defense ministers and chiefs of staff from all three countries will attend, with talks covering defense capabilities, military interoperability, and joint defense production.

New members? Turkey said the pact is open to expansion, naming Egypt as a potential candidate, and reports suggest Bangladesh has also been invited to join.

REMEMBER- Modeled on Nato’s collective-defense principle, the Makkah Joint Defence Agreement, signed earlier this month, commits its three Sunni-majority members to treat an armed attack on any one of them as an attack on all. It binds together a nuclear-armed state (Pakistan), Nato’s second-largest army (Turkey), and the world’s top oil exporter (Saudi Arabia) — a bloc that took shape as the Iran war missile fire across the Gulf left members questioning how much they can lean on Washington for security.

Egypt’s REIF pipeline gets a Saudi entrant

A Saudi-Egyptian consortium is setting up a real estate investment fund (REIF), branded Asl, spanning Egypt and KSA — and plans to deploy up to SAR 1 bn (c. USD 266.7 mn) in its first year, through Asl Holding, with a focus on real estate and hospitality, Chairman Haitham El Sherbiny told Al Arabiya. The plan lands a week after Asl Holding acquired Egyptian developer Zurich Developments and Saudi contractor Alkayan, which between them carry a stated investment value of roughly EGP 50 bn. Neither transaction’s price has been disclosed.

What’s still being set up: Asl Holding is in the final stages of securing Egypt’s Financial Regulatory Authority (FRA) approval to become a holding company in Egypt — a vehicle to develop and manage the acquired companies’ projects, CEO Ahmed Attia said. That approval is separate from the fund itself, which would need its own FRA license before it can raise money.

IN CONTEXT- Six licensed REIFs held combined net assets of roughly EGP 12.6 bn at the end of 2Q 2026, up from EGP 9 bn a quarter earlier, with the FRA reviewing more than 20 new applications on top of the 23 already pending, an FRA official told EnterpriseAM earlier this month.

The plan: Asl Holding is targeting 1k new hotel keys over three years and weighing a move into the Red Sea, bringing in international operators to run the rooms. Its portfolio spans seven projects across New Damietta, New Mansoura, Sheikh Zayed, and New Cairo, where it holds a 35-feddan plot. A Fifth Settlement launch is due in October and a second Sheikh Zayed project before year-end.

BACKGROUND- The state is counting on private money for almost all of its tourism buildout, with hotel acquisitions and partnerships expected to do much of the heavy lifting on new capacity. Of the EGP 118.5 bn in tourism and antiquities investment planned for FY 2026/27, private investors are expected to put up EGP 117.8 bn — 99% of it — according to a government document seen by EnterpriseAM. The market added some 6k rooms in 1H 2026 alone.

Data point

SAR 3.36 tn — that’s Saudi Arabia’s M3 money supply in July, up 8.2% y-o-y, according to the latest Statistical Bulletin (pdf) from Sama. The largest contributors to the money supply were demand deposits (43%), time and savings deposits (42%), other quasi-cash deposits (8%), and banknotes in circulation outside banks (7%). Total liabilities were around SAR 5.75 tn.

SOUND SMART- M3 is the broadest measure of all the money in a country. It includes physical currency, current accounts, and other money that can be quickly mobilized (what econ-nerds call M2), as well as time deposits, money market funds, and the like.

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The big story abroad

In the first US strike on Iran in over a month, US forces targeted two Iranian rocket launchers on Larak Island in the Strait of Hormuz. US officials called the action a preemptive strike, reporting that Iranian forces were preparing to deploy sea mines into the waterway. Iran responded by launching missiles toward Jordan, though they were reportedly intercepted.

In the M&A scene: Ins. broker and consulting firm Aon is closing in on an agreement to acquire KKR-owned ins. broker USI for around USD 17 bn, expanding Aon's ability to serve midsize businesses. The move — the latest in a spate of big exits for KKR — is projected to be accretive to earnings per share starting in 2028.

Shein’s value shrinks pre-IPO: China’s fast fashion giant Shein is on track to go public tomorrow at a valuation amounting roughly one quarter of its 2022 value of USD 100 bn. The decline coincides with ebbing investor enthusiasm for Chinese consumer IPOs, as high-profile AI debuts stole the market's attention over the past year.