Fed holds rates steady in first meeting of the year

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WHAT WE’RE TRACKING TODAY

THIS MORNING: World Cup stadiums next on the chopping block?

Good morning, ladies and gents. Caution is the name of the game as we bid farewell to January, with the news cycle slowing to a near halt as companies and investors grapple with global and regional developments.

It seems each new day brings more reports on gigaprojects slowing down. This time, the focus is on the Kingdom’s 2034 Fifa World Cup stadium plans, with several venues reportedly put on hold, unnamed sources told Bloomberg. The government is reportedly shifting its approach, moving away from building eight brand-new stadiums towards refurbishing existing ones.

Which stadiums are we talking about? The Line’s planned 350-m-high stadium and a proposed venue in Jeddah’ Qiddiya Coast are likely to be scrapped, the sources said. However, Prince Mohammed bin Salman Stadium in Riyadh’s Qiddiya is apparently moving ahead as planned.

The “comprehensive review” drive gathered pace earlier this year, with the deferral of the 2029 Asian Winter Games, media reports on cuts to Neom’s The Line, and, more recently, Riyadh’s The Mukaab being reportedly put on hold. Reassessing spending priorities is intended to support the Kingdom’s transformation strategy, which now expands beyond flagship engineering gigaprojects to other “ecosystems,” including AI and tourism — in line with what Finance Minister Mohammed Al Jadaan described at Davos as delivering “optimal impact at the right cost.”

WEATHER- The weather is moody today, shifting between fog and rain across Riyadh, Makkah and the Eastern Province.

Riyadh: 21°C high / 13°C low.
Jeddah: 30°C high / 22°C low.
Makkah: 32°C high / 23°C low.
Dammam: 24°C high / 15° low

Watch this space

BUSINESS — Visa has split its Middle East operations into two distinct clusters to comply with Saudi Arabia’s regional HQ rules, Semafor reports. The new Riyadh-based office will now govern Saudi, Bahrain, and Oman, while Dubai remains a hub for the UAE, Kuwait, and Qatar, both falling under Central and Eastern Europe, Middle East, and Africa.

It’s an interesting approach. The RHQ policy was designed to shift regional headquarters away from Dubai and towards the Kingdom. Yet, some companies appear to be adopting a dual-hub approach — maintaining operations in both locations rather than relocating — taking on higher overheads, as functions are duplicated across two headquarters instead of being consolidated, in exchange for maintaining a presence in both markets.

Background: Visa opened its regional headquarters in Riyadh’s King Abdullah Financial District in 2024 and last month appointed Ali Bailoun as group country manager to lead the region. The company is among more than 700 multinationals that have relocated to comply with Saudi Arabia’s regional headquarters program, which requires firms to establish a local HQ to be eligible for government contracts.

ALSO- Goldman Sachs has formed a senior executive team to strengthen its Middle East presence, targeting sovereign wealth funds and asset management to deepen ties with regional investors and governments, Asharq Business reports, citing people familiar with the matter. The team comprises Anthony Gutman, co-CEO of Goldman Sachs International; Zaid Khaldi, CEO for MENA; Mark Nachman, global head of asset and wealth management; and Jared Cohen, head of global affairs.

AVIATION — Budget carrier flyadeal is targeting triple-digit net income within three years, CEO Steven Greenway told Asharq Business without revealing specific figures. Flyadeal is executing a 35% capacity increase for 2026, aiming to transport 12-13 mn passengers this year, with annual growth of 20-30%, Greenway said. The airline also intends to increase Jeddah-Riyadh frequency from 22 to up to 27 daily flights.

New jets inbound: The airline operates 44 aircraft, with the 45th due next week, and plans to add one aircraft per month over the next four years. Its fleet currently consists of Airbus A320s, with A321s joining next year and A330s the year after.

Data point

SAR 12.5 bn — that’s the total value of consumer spending via point-of-sale (PoS) in the Kingdom in the week ending 24 January, down 10.6% w-o-w, according to the Saudi Central Bank’s latest weekly report (pdf). Spending has cooled following the holiday surge at the start of the year, with the number of transactions also dipping 9.7% w-o-w to 213.6 mn.

Major sectors saw significant weekly declines in total value, including restaurants & cafés (down 18.5%), apparel & accessories (down 19.7%), and hotels (down 23.0%).

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The big story abroad

Trump is doubling down on threats to strike Iran, saying on Tuesday that another “armada” is heading toward the country and hoping that Tehran will “make a deal” with Washington before an attack begins. The threats sent Brent and US crude up roughly 1% to a four-month high, with oil prices also propped up by a weakening USD.

We want no part in this: Crown Prince Mohammed bin Salman told Iran’s President Masoud Pezeshkian over the phone that the Kingdom will not allow its airspace or territory to be used for military actions against Tehran or any other party.

Big Tech earnings also dominated the news, with Meta, Microsoft, and Tesla all beating net income and revenue expectations. Meta reported a stronger forecast for first-quarter revenue, pushing its shares up 10% in extended trading, while Microsoft fell over 6% on disappointing cloud growth. Meanwhile, Tesla’s plans to spend USD 20 bn this year to build AI capabilities sent the stock up some 1% despite the company logging its first annual decline in revenue last year.

ALSO- The UK is seeking a reset with China amid tensions with the US, with Prime Minister Keir Starmer to be joined by execs from top banks and manufacturers when he lands in China today.

S&P sees overall lending growing by 10% this year

S&P projects overall bank sector lending to grow by 10% in 2026, bolstered by a lower interest rate environment and a massive corporate appetite for credit, S&P Global Associate Director of Financial Institutions Ratings Zeina Nasreddine told EnterpriseAM.

Saudi banks are expected to extend USD 65-75 bn in new corporate loans, primarily fueling the utilities and real estate sectors. Mortgages constitute roughly half of the retail lending by banks, which is expected to expand to USD 20 bn in 2026, after it grew 5% to USD 18 bn in the 11 months ending in November.

Liquidity & funding: Despite the government supporting credit growth by injecting deposits, S&P expects the loan-to-deposit ratio to climb above the 113% recorded in November. Banks will continue to resort to external debt to bridge the funding gap, Nasreddine noted.

Lower interest rates are set to boost mortgage lending: Saudi interest rates are expected to see a 50 bps decline this year in line with two quarter-point Fed cuts penciled in by the end of 2026. “The lower rates should stimulate mortgage lending, though corporate lending is expected to remain the dominant force in overall credit growth”, Nasreddine told us.

Profitability pressures: With 50% of bank lending tied to floating rates, interest margins are expected to tighten. However, S&P expects this to be offset by a slight decrease in funding costs, which should help counterbalance the decline in asset yields. “Considering strong lending growth (around 10%) and a slightly higher cost of risk, we project a slight decline in return on assets (ROA) compared to last year,” according to Nasreddine.

Sama is getting more “hands-on” with banks

Sama is also “tightening the screws” on asset management with the recent mandate requiring banks to submit annual liquidation plans for real estate assets acquired through debt settlements with defaulting customer. Nasreddine argues the move could be seen as a proactive exercise in hands-on supervision that aligns with international standards.

“The repossessed assets from debt settlements are currently small — less than 1% of assets — as reported in banks’ financial statements,” Nasreddine told us. “Banks have reported income from the sale of these assets, which points to active management.”

IN CONTEXT- The directive is part of Sama’s broader hands-on supervisory strategy, following last year’s implementation of a 1% countercyclical buffer requirement, set to take effect in May 2026.

Alinma and Aljazira post 2025 Earnings

Alinma Bank

Alinma Bank posted a 9.7% increase in net income to SAR 6.4 bn in 2025, beating Bloomberg analysts’ expectations of SAR 6.1 bn, on an 8.8% increase in operating income despite lower exchange income and dividend income, according to disclosure to Tadawul. Income from financing grew 6% y-o-y to SAR 15 bn, while income from investments surged 18.2% y-o-y to SAR 2.4 bn.

ALSO- The bank’s board recommended a 20% capital hike to SAR 30 bn via a bonus share issuance, it said in a separate disclosure. The SAR 5 bn capital increase will be funded from the bank’s statutory reserve and retained earnings, with shareholders receiving one bonus for every five shares held.

Aljazira Bank

Tadawul-listed Aljazira Bank saw its net income rise 22.3% y-o-y to SAR 1.5 bn in 2025, driven by a 18% increase in total operating income, it said in a disclosure to Tadawul. Aljazira’s total income from financing grew 13.9% y-o-y to SAR 6.7 bn, while total income from investments fell 9.2% y-o-y to SAR 1.9 bn.

ALSO- Aljazira’s board greenlit a SAR 638.1 mn dividend payout for 2H 2025 at SAR 0.5 per share, the bank said in a separate disclosure. The distribution date is set for Wednesday, 18 February.

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Saudi Cable names Fares Al Rajhi managing director; Khashoggi retains CEO role

The Saudi Cable Company tapped Fares bin Mansour Al Rajhi (bio) as its new managing director, it said in a Tadawul disclosure. Al Rajhi succeeds Khalid Khashogji (LinkedIn), who stepped down from the role to focus on the company’s next phase while retaining his positions as CEO and board member

Al Rajhi has over 20 years of experience in corporate management, business development, and overseeing commercial and industrial entities. He has served as CEO of Dukhoon Al Wataniyah Trading Company, Nafaes Dukhoon Perfumes Company, and Aqdar wa Namaa Real Estate Company, and held board positions at Tourism Enterprise (Shams), Methanol Chemicals (Chemanol), Qabas Al Taqnia Trading Company, Company of World Box Factory, and Al Hekaliyah Construction Company.

Why it matters: This leadership shuffle marks Saudi Cable’s shift from survival to recovery. After the Jeddah Commercial Court approved its exit from financial restructuring last month, the company is signaling to its creditors that it is moving toward independent operations. Amid a nine-year Zakat settlement and a SAR 108 mn loan rescheduling, the split of CEO and MD roles allows Khashogji to focus on strategic priorities and debt capitalization, while Al Rajhi rebuilds operational capacity to achieve the company’s break-even target.

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Saudi National Bank upsizes five-year term loan on Asian interest

Saudi National Bank (SNB) upsized its latest syndicated term loan to USD 1.5 bn, Zawya reports. The facility, originally launched at USD 1 bn in December, was upsized after attracting 37 banks. The five-year loan carries all-in pricing of 104.7 bps, based on a margin of 90 bps over SOFR. DBS and MUFG acted as mandated lead arrangers.

Lenders from Greater China are putting up nearly two-thirds of the cash: Chinese institutions led the pack, with 12 banks contributing USD 676 mn, joined by 11 Taiwanese lenders. Expect to see more Saudi issuers adding Taipei and Beijing to their roadshows as they look to diversify funding bases away from traditional Western heavyweights.

ALSO- The Saudi National Bank’s board recommended the distribution of SAR 6.9 bn in dividends for 2H 2025 at SAR 1.15 apiece, it said in a Tadawul disclosure. The distribution date will still be determined.

MIS secures Shariah-compliant financing from ANB

Al Moammar Information Systems (MIS) renewed a SAR 1.8 bn Shariah-compliant credit facility with the Arab National Bank (ANB), it said in a Tadawul disclosure. Backed by a promissory note and valid until 31 July 2026, MIS will use the funds to finance new project contracts and issue letters of credit and guarantees.

Why it matters: MIS is building up its war chest as it moves to execute a SAR 1.9 bn AI data center contract for PIF-backed Humain — worth some 155% of the company’s 2024 revenues.

ALSO- MIS has executed a subscription agreement to increase the capital of Vision Bank, the Kingdom’s third Sama-approved digital bank. The capital raise will double Vision Bank’s capital to SAR 3 bn from SAR 1.5 bn, with MIS subscribing SAR 23.8 mn based on a pre-money valuation of SAR 3.2 bn.

AND- MIS acquired a 15% stake in the insurance platform Eltizam, valued at SAR 19.5 mn, it said in a separate disclosure.

Declic bags USD 1 mn in a seed funding round

Saudi-based AI-powered social events app Declic raised USD 1 mn in a seed funding round led by Dubai-based advertising firm VidMatic Digital DMCC, Declic co-founder and CEO Alice Othmani said in a LinkedIn post. The company, which has launched in Tunisia and Morocco, will use the proceeds to support its next phase of growth across GCC markets.

About Declic: Founded in 2024 by Alice Othmani (LinkedIn), Pritesh Prajapati (LinkedIn), and Paul K, Declic, Declic operates a single platform combining event discovery, ticketing, and community features for in-person and virtual events, with a subscription-based model alongside pay-per-event options.

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Fed says no rate cut this time around

The Federal Reserve held interest rates steady at its meeting yesterday, putting on hold a monetary easing cycle that saw three consecutive rate cuts late last year. The key rate remains unchanged at 3.5-3.75%.

“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the Fed said in a statement.

The AI effect: When asked about the divergence between strong GDP growth and a soft labor market during the press conference, Fed Chair Jerome Powell said it may be down to increased productivity, and that AI may have played a role. He cautioned that reading the labor market is difficult because of the unusual situation where both the demand and the supply of labor have fallen, due to lower immigration and slower job growth.

Powell is facing a barrage of attacks from the Trump administration. The war between the White House and the Fed turned into a legal showdown this month as Powell publicly attacked a DOJ probe into HQ renovations his office ordered, calling it a “pretext” for President Trump to force interest rate cuts.

Trump has been adamant in demanding rate cuts to stimulate the economy, while the Fed remained reluctant to accelerate the easing pace amid fears of stoking inflation, which “remains somewhat elevated,” the Fed’s statement said. Yesterday’s decision to hold the rates unchanged saw two dissents, both from Trump appointees.

The tussle saw Powell make rare political statements during the press conference. He advised the Fed chair set to replace him to stay out of elected politics and engage with Congress members on both sides of the aisle. Powell’s tenure is set to end later this year, unless Trump follows through with his wild threats and fires the independent institution’s head.

Powell also confirmed he will attend the hearing for the legal case against Fed Governor Lisa Cook, calling it “the most important legal case in the Fed’s 113-year history.” The Supreme Court will decide whether Trump can fire a Fed governor, with the ruling set to have wide implications on the Fed’s independence.

What’s next? Markets are pricing in two rate cuts this year starting in July, which means the two remaining meetings in Powell’s term are expected to stay the course.

MARKETS THIS MORNING-

Asia’s stock markets are trading mixed this morning. Shanghai Composite is staying marginally in the green, while Japan’s Nikkei and Hong Kong’s Hang Seng are slightly inching down. Meanwhile, Wall Street futures are in the red following a sharp rise in spot gold prices over the USD 5.5k mark.

TASI	11,458	+0.7% (YTD: +9.2%)
MSCI Tadawul 30	1,544	+0.7% (YTD: +11.3%)
NomuC	23,855	+0.4% (YTD: +2.4%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	47,786	-0.1% (YTD: +14.24%)
ADX	10,394	+0.4% (YTD: +3.8%)
DFM	6,514	+0.8% (YTD: +7.6%)
S&P 500	6,979	+0.4% (YTD: +1.9%)
FTSE 100	10,154	-0.5% (YTD: +2.4%)
Euro Stoxx 50	5,933	-1.0% (YTD: +2.5%)
Brent crude	USD 68.91	+0.8%
Natural gas (Nymex)	USD 3.76	+0.8%
Gold	USD 5,552.00	+4.0%
BTC	USD 88,085.71	-1.2% (YTD: +0.3%)
Sukuk/bond market index	917.82	+0.1% (YTD: -0.2%)
S&P MENA Bond & Sukuk	151.61	-0.1% (YTD: +8.0%)
VIX (Volatility Index)	USD 16.35	0.0% (YTD: +9.4%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.7% yesterday on turnover of SAR 6.3 bn. The index is up 9.2% YTD.

In the green: Build Station (+9.0%), Alramz (+6.4%) and Bupa Arabia (+5.6%).

In the red: CGS (-4.3%), Alaseel (-4.0%) and NGC (-3.1%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.4% yesterday on turnover of SAR 19.5 mn. The index is up 2.4% YTD.

In the green: Mulkia (+13.8%), Taqat (+8.1%) and Service Equipment (+7.6%).

In the red: Anmat (-8.9%), TMC (-7.7%) and Horizon Educational (-6.6%).

CALENDAR

JANUARY

26-28 January (Monday-Wednesday): Saudi Franchise Expo (SFE), Riyadh Exhibition and Convention Centre, Riyadh.

26-28 January (Monday-Wednesday): Real Estate Future Forum, Four Seasons Hotel, Riyadh.

26-28 January (Monday-Wednesday): IFAT Saudi Arabia, Riyadh Front Exhibition & Conference Center, Riyadh.

28 January (Wednesday): Data Center Nation Riyadh, Riyadh.

28-30 January (Wednesday-Friday): Jeddah International Travel and Tourism Exhibition (JTTX), Jeddah.

FEBRUARY

2-4 February (Monday-Wednesday): Saudi Media Forum, Riyadh.

2-4 February (Monday-Wednesday): Women Leaders Summit and Awards KSA, Riyadh.

2-13 February (Monday-Friday): 2026 Asian Road Cycling Championship and Paralympic Cycling, Qassim.

3-4 February (Tuesday-Wednesday): RLC Global Forum Annual Meeting, Riyadh.

4 February (Wednesday): Michelin Guide’s Restaurant Celebration, Four Seasons Hotel, Riyadh.

5 February (Thursday): Deadline to submit bids for EPC contract for Ras Mohaisen-Baha-Makkah Independent Water Transmission System.

5-7 February (Thursday-Saturday): LIV Golf 2026 season opener, Riyadh Golf Club, Riyadh.

8-12 February (Sunday-Thursday): World Defense Show, Riyadh International Convention and Exhibition Center, Riyadh.

8-9 February (Sunday-Monday): AlUla Conference on Emerging Market Economies (ACEME), Maraya Hall, AlUla.

9-10 February (Monday-Tuesday): Global Games Show Riyadh 2026, Malf Hall, Riyadh.

9-14 February (Monday-Saturday): Asian Racing Conference, Crowne Plaza Riyadh RDC Hotel & Convention Centre, Riyadh.

11 February (Wednesday) Digital Transformation Summit Saudi Arabia (DTS), Riyadh.

11-14 February (Wednesday-Saturday): JeddaDerm, Jeddah.

13-14 February (Friday-Saturday): Jeddah E-Prix 2026, Jeddah.

15-17 February (Sunday-Tuesday): The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front & Exhibition Center.

16 February (Monday): King Salman Stadium design-and-build contract prequalification submission deadline.

16 February (Monday): First day of Ramadan (TBC).

22 February (Sunday): Founding Day.

26 February (Thursday): Title deed registration deadline for 142.8k properties across 104 neighborhoods in Hail.

MARCH

12 March (Thursday): Deadline for real estate registration for 253.2k properties in 499 neighborhoods across Riyadh, Qassim, Makkah, and Hail.

18-23 March (Tuesday-Monday): Eid Al-Fitr holiday (TBC).

21 March (Saturday): Fanatics Flag Football Classic, Kingdom Arena, Riyadh.

31 March (Tuesday): Zatca’s 23rd E-invoicing integration wave deadline.

APRIL

6 April (Monday): Procurement and Supply Chain Futures Forum, Al Faisaliah Hotel, Riyadh.

6-7 April (Monday-Tuesday): Real Estate Supply Chain Forum, Al Faisaliah Hotel, Riyadh.

12-15 April (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

13-16 April (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center – Malham.

20-22 April (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Al Faisaliah Hotel, Riyadh.

20-22 April (Monday-Wednesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center.

21 April (Tuesday): GC Summit Saudi Arabia 2026, Saudi Arabia.

22-23 April (Wednesday-Thursday): The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah.

27-29 April (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

MAY

3-5 May (Sunday-Tuesday): Sports Investment Forum (SIF), Riyadh.

3-9 May (Sunday-Sunday): The Global Sustainability Expo, The Arena Riyadh Venue.

5-6 May (Tuesday-Wednesday): SkyMove Air Cargo MENA, Riyadh.

24-28 May (Sunday-Thursday): Eid al-Adha holiday.

JUNE

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

SEPTEMBER

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

OCTOBER

26-29 October (Monday-Thursday): World Energy Congress, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production in 2026.
November: UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.
November: The Esports Nations Cup, Riyadh.
The Intervision international music competition will take place in Saudi Arabia.
6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

Signposted to happen sometime in 2027:

The World Water Forum takes place in Riyadh.
The Ocean Race finishes in Amaala on the Red Sea.
Riyadh-Kudmi transmission line to be completed.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

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