THIS MORNING: Islamabad says it’s honoring its defense pact with Riyadh

Good morning, friends, and a very happy 4Q to you all. The number to sit with is from Humain, which is directing almost 80% of its capital into building out data center capacity. The PIF-backed company is ramping up its capacity targets, even as the PIF pulls back on funding its portfolio companies and Humain raises outside money.

The labor survey is the antithesis to our chat with Humain’s Tareq Amin, in that the 2Q 2026 headline figures actually aren’t the biggest part of the story. Citizen unemployment barely moved, which is what happens when people leave the labor force rather than find work — participation fell across men, women, and both young cohorts, with women dropping out fastest. Set against a year ago, the picture is still an improvement, so this is one soft quarter in wartime rather than a reversal.

Elsewhere, Dar Global’s net income more than doubling is largely a matter of timing. Two towers hit the point where revenue gets recognized, which is a milestone rather than a surge in demand.

We’re honored to welcome Ahmed M. Sobhy as a guest speaker at the 2026 EnterpriseAM Egypt Forum.

Ahmed Sobhy currently serves as deputy CEO at E-Finance for Financial and Digital Investments (EFIG), overseeing the investment and finance divisions with a focus on the company's growth and expansion into new business areas.

Prior to this role, Sobhy served as chief investment officer at Banque Misr, leading the bank's equities and capital markets investments, including a private equity portfolio valued at USD 3 bn, and playing a pivotal role in the bank's transformation and fintech expansion over nearly six years. Before that, he was Investment Principal at Ezdehar Fund Management, where he led several acquisition and exit transactions, including the strategic minority stake in Dsquares.

Earlier in his career, Sobhy was vice president in the investment banking division at Morgan Stanley & Co., leading M&A transactions exceeding USD 31 bn across the UK, US, and Egypt, and held roles at Swicorp across the MENA region.

Registration is now closed. Thank you to everyone who registered. We look forward to welcoming you on Monday, 5 October.

War watch

Pakistan pledged to defend Saudi Arabia against the Houthis using any means available to it, in accordance with its defense pact with Riyadh and Ankara, the Associated Press reports, citing statements by Pakistani Defense Minister Khawaja Muhammad Asif. “When I say that we are bound by this arrangement to defend Saudi Arabia, that means whatever means are available at our disposal, they’ll be available to Saudi Arabia.”

Islamabad believes that the Houthis and Iraqi militias could now be acting independently, with Asif saying that “some of these proxies, they become rogue.” Pakistan is also pushing for negotiations to end the wider conflict involving Iran and supports reviving a negotiated agreement on Tehran’s nuclear program, Asif said.

Riyadh adds more international allies to its defense discussions: Crown Prince Mohammed bin Salman held brief calls with Russian President Vladimir Putin, Qatar’s Sheikh Tamim Al Thani, and Sudan’s Abdel Fattah Al Burhan and discussed efforts to enhance security and stability. Defense Minister Prince Khalid bin Salman bin Abdulaziz also spoke by phone with Bulgaria’s Defense Minister Dimitar Stoyanov to discuss military and defense cooperation.

REMEMBER- Saudi Arabia has been seeking the support of its foreign partners against Houthi threats. UAE Vice President and Deputy Prime Minister Sheikh Mansour Al Nahyan visited the Kingdom in a reported attempt to mend the rift between the two countries. Meanwhile, France plans to send troops, radar systems, and defense equipment to protect Yanbu and the UK will dispatch a Royal Air Force Voyager to provide defensive air-to-air refueling.

Airspace alert: The European Union Aviation Safety Agency (EASA) advised air operators not to fly at any altitude over part of Saudi airspace, citing the threat of Houthi strikes, according to a safety bulletin. The advisory noted that southern and southwestern parts of Saudi airspace are vulnerable to attack, and that the Houthis retain the intent and capability to strike deeper inside the Kingdom, including in Riyadh, Yanbu, and Tabuk. The advisory is valid until 16 November unless it is revised earlier.

The CMA reforms keep coming

Saudi’s listed companies may soon have to answer to their investors out loud. The Capital Market Authority (CMA) moved on two fronts, approving tougher rules for the firms that audit listed companies, and floated draft rules that would make twice-yearly earnings calls mandatory on the Main Market — part of a push to tighten disclosure and governance.

Earnings calls would become mandatory. Under draft rules whose consultation ends Thursday, 29 October, every Tadawul-listed company would have to hold earnings calls twice a year, each within five business days of announcing results and after the close. Companies would walk through their results, give forward guidance, and take questions, then publish the deck and a recording on their websites. If adopted, the rules kick in with the 2026 annual results.

Auditors face higher bars: Separately, the CMA approved amendments to its auditor-registration rules. Registered accounting firms will need enough audit managers holding SOCPA fellowships or equivalents and proper quality-management systems, and will have to share the CMA’s final inspection findings on a listed company’s audit file with that company’s audit committee.

IN CONTEXT- These moves are part of a wider CMA drive to tidy up the market under new chairman Mazen Al Sudairi, which also includes draft rules to overhaul IPO underwriting and book building after a string of listings drew heavy oversubscription then slid once trading began.

Folk Maritime hits pause on ship purchases

PIF’s shipping line is sitting tight until vessel prices cool. Prices for new and second-hand vessels have climbed too high, so the Folk Maritime is holding off until the market cools, CEO Paul Hestbaek told Asharq Business.

None of that changes the bigger plan of roughly doubling the fleet within three to four years. It runs six ships today, owning half, and is funding its growth through shareholder equity and loans, with Hestbaek sizing the investment only as “a large amount.” By 2030, Folk is aiming for 15-20% of the trade crossing the Red Sea, the Gulf, the Indian Ocean, Southeast Asia, and East Africa.

REMEMBER- Folk Maritime spelled out this plan when we sat down with Hestbaek last November. The PIF-owned line built its Red Sea feeder network first and is now growing its own regional shipping operation into its main business by 2028, for which it aims to more than double its then-five Saudi-flagged ships and double its container fleet. He flagged even then that new vessels take up to four years to build, which has kept Folk leaning on second-hand tonnage for its near-term needs, the same market now pricing it out.

Diverted

A flydubai flight from Dubai to Tel Aviv made an emergency landing in Saudi Arabia yesterday after an “altercation” on the plane’s flight deck, a spokesperson said in a statement. Flight FZ1073, a Boeing 737, diverted to Tabuk after transmitting a 7500 transponder code, which signals “unlawful interference,” according to Flightradar24 data cited by Gulf News. The airline confirmed that on-duty crew aboard the flight secured the aircraft before landing safely in Tabuk.

What we know: All passengers and crew are safe and accounted for, with two replacement aircraft sent to relieve them, and the incident hasn’t affected other scheduled flydubai operations. “At this early stage, the underlying reasons and motives behind this event are unknown and remain subject to a formal investigation. We urge all parties to refrain from premature speculation while authorities gather the facts,” the airline said.

Pre-budget figures are in

The state budget is projected to run a deficit of roughly 3.6% of GDP for FY 2027, with expenditures pencilled in at around SAR 1.39 tn and revenues at SAR 1.2 tn, according to a Finance Ministry statement. Expenditures and revenues are expected to reach around SAR 1.54 tn and SAR 1.35 tn by 2029, respectively.

Macro trends: The Kingdom’s real GDP is projected to decline by 3.6% in 2026 as a 21.8% contraction in oil activities outweighs a 3.2% growth in non-oil activities amid “economic and geopolitical developments.” The ministry also indicated that non-oil activities grew by 1.8% in 1H, while full-year 2026 inflation is estimated at 2.1%.

For the whole picture: We’ll take a closer look at the ministry’s pre-budget statement for FY 2027 (pdf) next week.

Consider them merged?

Paramount’s PIF-backed USD 110 bn merger with Warner Bros. Discovery can now proceed, after a California federal judge approved an agreement settling a challenge brought by 12 state attorneys general, Bloomberg reports. The transaction could be finalized within days, per regulatory disclosures.

ICYMI: The antitrust suit filed in July claimed the acquisition would harm competition, cinemas, television distributors, and audiences. Paramount settled the challenge last week with commitments to release 30 films a year, invest an extra USD 1.5 bn in US production over the next five years, and establish new cable distribution agreements.

PIF clinches US media foothold: The merger is backed by nearly USD 24 bn in commitments from Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad, and the Qatar Investment Authority. The Gulf funds are set to hold minority, non-voting stakes in the combined company.

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The big story abroad

US President Donald Trump has revealed plans for South Korea to invest around USD 200 bn in US energy projects, including eight nuclear power plants and a 6-GW energy facility in Texas. The plans include a USD 54 bn pipeline for the Alaska LNG project, which would carry natural gas to a liquefaction facility for shipping to Asian markets — though Seoul cautioned that the pipeline project would proceed only if certain commercial and legal conditions are met.

Bond market turns back the clock: The yield on the 10-year US Treasury note rose by more than half a percentage point in September to 5.3%, its highest level since 2007, as US government bonds posted their worst month in four years. Investors warn the market is caught in a “vicious loop” of selling — a sell-off initially driven by US public debt and inflation concerns has pushed yields to levels that force some funds to sell Treasuries, sending borrowing costs even higher.

And in the AI world: As Google begins its rollout of its flagship AI model — Gemini 4 Argon — some of its employees are reportedly questioning its efficacy, Bloomberg reports, citing people with direct access. Despite strong benchmark scores, the model struggles with certain tasks when put into practice, the people said. However, a Google employee familiar with the model's development said there is "large consensus" internally that Gemini 4 is at the frontier, and Google said it would be inaccurate to say the model underperforms in areas such as coding.