Good morning, friends, and a happy last week of 2025. The news cycle is dominated by our trade surplus sustaining the momentum in October on the back of recovering oil exports and a boom in re-exports, even as non-oil export growth slows down.

Geopolitics also took a front seat over the weekend. Defense Minister Khalid bin Salman urged the Southern Transitional Council’s forces to “let reason prevail” and withdraw from newly seized territories in Yemen’s largest governorates, Hadhramaut and Mahra.

The statement came a day after the council rejected Saudi calls to withdraw, accusing the Kingdom of launching airstrikes on separatist positions in Hadhramaut.

BACKGROUND- Is the Yemen alliance collapsing? Forces of the Southern Council took over large swaths of territory in the two provinces from the internationally-recognized government earlier this month, upsetting a coalition that has been going on for years against the Iran-allied Houthis.

A confrontation in the cards? “Any military movements that violate these [de-escalation] efforts will be dealt with directly and immediately in order to protect civilian lives and ensure the success of restoring calm,” said Brigadier General Turki al Maliki, the spokesman for the Saudi-led Coalition Forces to Restore Legitimacy in Yemen.

Why it matters to Riyadh: Hadhramaut shares borders with the Kingdom and acts as a critical security buffer. The province holds most of the country’s oil reserves and is considered — along with Mahra — a gateway to the Indian Ocean.

PSAs-

The Municipalities and Housing Ministry is seeking public feedback on the draftregulations for WhiteLand Law violations (pdf). The new rules require all outstanding fines to be settled before any land ownership can be transferred. Fines — capped at 100% of the fee value — must be paid within 30 days of notification, though taxpayers retain the right to challenge decisions in administrative court. The draft is open for public consultation on the Istitlaa platform until 11 January 2026.

ICYMI- Riyadh will issue invoices for idle land fees starting 1 January.

Watch this space

LABOR — Saudi is mandating digital salary payments for some 4 mn domestic workers starting next year, effectively expanding the Wage Protection System to the household level through the Musaned platform.

Digital payments make Saudi more attractive for skilled labor: The move “limits [banknote]-handling risks and simplifies audits,” Chief Business Officer at Tasc Group Anil Singh tells EnterpriseAM, adding the digital pivot “improves trust, consistency, and employee confidence — factors that increasingly influence talent attraction,” Singh said. Workforce expectations are evolving, and reliable and transparent wage practices set employers apart from competitors, Singh added.

Beyond compliance, the move creates a digital trail that integrates the shadow economy into the financial system, forcing a sizable part of the remittance market (a significant portion of which is driven by expat labor) onto digital rails. Saudi was the world’s second-largest sender of remittances in 2024, with USD 45.7 bn in outflows representing 5% of all global remittances.

Setting a regional standard: “The move could set a precedent for other Gulf countries [...] reshaping workforce management strategies across borders,” Singh notes, adding that we are seeing a trend of "regulatory convergence" where successful compliance models in one Gulf state are rapidly replicated in others. If the UAE or Qatar follow suit, we are looking at the digitization of large inflows through multiple remittance corridors, including MENA-India.

IPO WATCH — Ladun Investment is hitting the brakes on its move to TASI, less than a month after it submitted the request to the Capital Markets Authority. The real estate developer Ladun Investment announced it has withdrawn its application to transfer from Nomu, citing incomplete regulatory requirements.

It could be purely about the red tape, but the ground’s shaky as well. IPO hopefuls and companies looking to upgrade to the main market have been playing it safe recently, with a few upcoming listings cancelled amid a downturn in both TASI (down 12.6% YTD) and NomuC (down over 26%).

Data point

114.6% — the y-o-y increase in Saudi e-commerce sales via Mada cards in 3Q. Quarterly sales hit a record SAR 88.3 bn, up from SAR 41.1 bn in the same quarter last year, according to the Saudi Central Bank’s (Sama) monthly bulletin (pdf). Meanwhile, October sales reached a record SAR 30.7 bn, a 68% y-o-y increase.

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The big story abroad

Geopolitics dominated the weekend as businesses around the world downed tools for Christmas. The big story in our part of the world has to be Israel’s surprise recognition of Somaliland.

Israel became the first UN member state to formallyrecognize Somaliland'sindependence on Friday, a move that could affect the security architecture of the Red Sea and give Addis Ababa the legal cover it needs to proceed with its contested 50-year port lease at Berbera. Israeli leader Benjamin Netanyahu framed the recognition as an expansion of the Abraham Accords, with Somaliland’s leader, Abdirahman Mohamed Abdullahi, saying his enclave would join the framework.

Some 21 nations including Saudi Arabia, Egypt, Turkey, and Jordan joined in condemning Israel’s move. A joint statement warns of a “dangerous precedent” that threatens the security of the Red Sea and the Horn of Africa, with the group explicitly rejecting any link between the recognition and broader regional schemes including the forced displacement of Palestinians. The Arab League and the African Union have also condemned Israel’s actions.

The diplomatic fallout moves to New York tomorrow. That’s when the UN Security Council will convene for an emergency session at Somalia’s request.

MEANWHILE- Ukraine’s Volodymyr Zelenskyy will meet Donald Trump in Florida today to close gaps on a 20-point draft deal he says is “90% ready.” The sticking points remain Donetsk territory and security assurances for Ukraine, the Wall Street Journal writes. Russia pummeled the Ukrainian capital for nearly 10 hours ahead of the meeting, the New York Times reports.

AND- Traders in Western markers will start work tomorrow hoping the Santa rally extends through the second trading day of January.