Houthis attack energy facilities + civilian locations

Good morning, friends. Every headline number in today’s issue is a good one, but not one of them means what it looks like on the surface.

The through-line is distribution, not direction. Corporate earnings, ins. earnings, non-oil growth — three separate prints, three flattering top lines, and the same story sitting underneath each. While the gains are there, they’re actually rather narrow — concentrated in the largest companies, the largest insurers, and the parts of the non-oil economy the state is paying for. Averages are doing a lot of work this morning.

The question we’ll carry through the rest of the issue is what happens when the concentration stops working — when the state’s contribution plateaus, or when the strong insurers finish taking market share from the weak ones and there’s nobody left to take it from.

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Britain’s Gulf trade push picks up speed

Britain wants to get its long-awaited GCC trade agreement over the line within weeks. The UK’s new Trade Minister Anas Sarwar told The National that London is ready to sign the Gulf agreement, while discussions with Abu Dhabi over what comes next are also underway. His message: “We’re not going to wait. Those conversations have already begun.”

The GCC leg is nearly there: The agreement, which the two sides wrapped up in May after almost four years of negotiations, is now awaiting signature and domestic approval. The UK estimates it could increase trade with the bloc by 19.8% in the long run and eliminate USD 784 mn in annual tariffs on British exports at current trade levels — USD 486 mn from day one.

Riyadh and Abu Dhabi are getting extra attention: Sarwar chose Saudi Arabia and the UAE for his first trip outside Europe as the Iran war pushes energy and supply-chain security higher up London’s agenda. “It’s not a coincidence that we’re here in the Gulf,” he said. Talks covered investment in energy, AI data centers, ports, aviation, and defense, with Sarwar looking for capital to flow both ways — more Gulf money into the UK and more UK investment into the region.

REMEMBER- The UAE had already been angling for more. We reported last month that the UAE was pushing for a bilateral CEPA beyond the GCC agreement, with the UK government telling us it had launched a consultation on deepening ties. A separate track has plenty to work with: UK-UAE trade reached GBP 25 bn in 2025 — almost half the GBP 53 bn traded between Britain and the GCC as a whole — while the UAE-UK Sovereign Investment Partnership has delivered more than GBP 30 bn of investment commitments into Britain since 2021.

Bringing it home

Saudi Arabia is looking to bring outsourced work back home. The Kingdom plans to shift private-sector jobs and services currently handled abroad to local providers, Federation of Saudi Chambers Secretary-General Sultan Al Musallam tells Asharq Business. The plan covers IT, call centers, shared services, accounting, HR, data analysis, operations and maintenance, and consultancy. The aim is to create jobs, transfer knowledge and technology, and strengthen local operational capabilities.

Beleaguered

LIV Golf filed for Chapter 11 bankruptcy protection yesterday, marking the latest blow to the formerly Saudi-funded league, according to a filing (pdf) submitted by its New Jersey-based subsidiary. LIV’s filing reveals USD 500 mn to USD 1 bn in liabilities and assets valued between USD 100 and 500 mn, including mns of USD in unpaid debts to top players.

No more state backing: The Public Investment Fund (PIF) extended under USD 100 mn in debtor-in-possession financing to the league earlier this month — the last contribution from the fund. This followed the PIF’s decision in May to pull the plug on the breakaway golf league it had bankrolled for four years.

Any takers? Private equity firm BC Partners is evaluating an acquisition of LIV’s assets valued at USD 300 mn — squarely within the league’s USD 250-350 mn asking price. The proposal reflects the capital needed to keep the league afloat, though it falls short of PIF’s total investment.

SRC readies rated RMBS debut

SRC takes Saudi mortgages to the sukuk market: The Saudi Real Estate Refinance Company (SRC) is preparing to issue SAR 431.3 mn in Islamic sukuk backed by residential mortgages it bought from lenders including SNB and Arab National Bank, according to a Fitch report on the potential transaction.

What makes this one notable: Dubbed Sukuk Saudi Real Estate Refinance Company RMBS-2, it would be the first Saudi-backed residential mortgage-backed securities (RMBS) transaction to carry a published credit rating. SRC was first cleared to launch unrated RMBS transactions in August 2025.

The issuance is the securitization end of a mortgage-buying spree. SRC — set up in 2017 to pool mortgages from local banks, repackage them, and sell them on to investors in support of Saudi Arabia’s homeownership drive — signed in April an SAR 3 bn agreement to buy a residential mortgage portfolio from Al Rajhi Bank, on top of an SAR 10 bn arrangement for two other Al Rajhi portfolios in November 2025. Bringing a rated RMBS to market is how it turns those portfolios back into funding, recycling capital to buy more.

Data point

SAR 1.83 tn — that’s where Saudi Arabia’s official reserve assets stood at the end of August 2026, up 6.7% y-o-y, according to Saudi Central Bank (pdf). The reserves fell 0.27% m-o-m, a second consecutive monthly decline. Foreign exchange reserves rose 7.2% y-o-y to SAR 1.73 tn, while Special Drawing Rights fell 2% y-o-y to SAR 79.4 bn.

War watch

Iran-backed Houthi militants attacked several energy facilities and civilian locations in Saudi Arabia, targeting Abha, Najran, Jazan, and Khamis Mushait, injuring 73 civilians, the energy and foreign ministries said in separate statements. The group said its missiles and drones hit Aramco facilities, setting off fires and forcing a “temporary halt” in operations, Bloomberg reports.

ICYMI- Aramco’s oil facilities in Jazan were reportedly struck on Monday, with the damage still being assessed. This is the third major attack on Jazan in about six weeks. The Houthis claimed a drone strike on the refinery on 9 August, which came after missiles and drones struck the same plant on 27 July.

Riyadh is signaling retaliation: The Kingdom will take “all necessary operational measures” to deter the group and neutralize the risks it poses, Riyadh-led coalition spokesman Turki Al Maliki tells Al Arabiya (watch, runtime 1:08), calling the attacks a violation of Saudi sovereignty.

Markets are pricing this all in: Jazan is home to a 400k bbl / d refinery whose terminal already paused shipments in August, and the Abha and Najran facilities sit on Aramco’s nationwide oil and gas distribution system, which primarily serves domestic demand, according to a 2025 Aramco prospectus. Brent is approaching USD 100 as traders build in a higher risk premium. “Markets are increasingly pricing a prolonged Mideast conflict,” Goldman Sachs analysts tell Bloomberg, raising their forecasts on the assumption shipping disruptions persist into 2027.

REMEMBER- If Hormuz and the Red Sea both congest, the Suez Canal cannot absorb a wholesale rerouting, and the alternative around southern Africa is slower and costlier, S&P Global Ratings head of Emerging Markets Credit Research Zahabia Gupta previously told us.

The big story abroad

The regional conflict is flaring up once again. US forces destroyed five Iranian oil carriers in retaliation for two ballistic missile strikes launched by the Islamic Revolutionary Guard Corps at a US Navy warship over the past two days, US Central Command said. Iranian state media reported that the Islamic Republic launched missiles toward US targets in Jordan.

In the AI world: Qualcomm announced a long-term partnership with Amazon, which could purchase up to USD 60 bn in Qualcomm’s AI data center chips to boost the Semiconductor player’s presence in AI infrastructure, a relatively new field for the chip giant. The agreement grants Amazon USD 4 bn in warrants that vest with product purchases, allowing it to buy shares at USD 161.26 each.

Speaking of which: AI coding startup Cognition AI — which builds autonomous agents that plan and deploy software with minimal human input — raised USD 2 bn in a Series E funding round led by new investors Andreessen Horowitz and Accel. The round brings the firm’s valuation to USD 48 bn, nearly doubling its USD 26 bn valuation in May, when it raised USD 1 bn.