PIF says it's not slowing down

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WHAT WE’RE TRACKING TODAY

Hormuz bypass hits 100%

Good morning, all. We lead today’s issue with the news that the PIF is unfazed by the regional war, with plans to press ahead with international investment plans despite all the uncertainty.

Also in today’s issue: Another gigaproject scrapped, non-oil exports rose in January, and we inked a defense cooperation framework with Ukraine that sets the stage for future investments in the sector.

President Trump made an appearance at the Future Investment Initiative event in Miami, touting US military successes in his keynote speech and controversially hinting at future intervention by declaring that "Cuba is next." The most important message, however, came from PIF governor Al Rumayyan who sought to reassure investors that the fund's global investments are not at risk. We have more on this in today's big story.

MEANWHILE- Attacks on Saudi ground are intensifying: Iran struck Prince Sultan Air Base, wounding 12 US troops and damaging an American E-3 Sentry — an airborne warning and control aircraft — on Friday, a US official told Reuters. The drone and missile strike is at least the second to hit the base during the war, after an earlier one damaged five refueling aircraft, the Wall Street Journal reported.

Iran is threatening any ground invasion would spark more intense retaliation. An official threatened to attack our Yanbu port, as well as the Fujairah oil complex in the UAE if foreign troops “step on to Iranian soil.”

WEATHER- The storm has passed, leaving a post-storm freshness for most of the Kingdom today. Only Tabuk and Al-Jawf in the North and Asir and Najran in the South will see some light residual rain.

Riyadh: 29°C high / 14°C low;
Jeddah: 31°C high / 20°C low;
Makkah: 32°C high / 19°C low;
Dammam: 28°C high / 15°C low.

PSAs

Businesses subject to excise tax must submit their January and February 2026 tax returns by Tuesday, 31 March via the Zakat, Tax, and Customs Authority’s (Zatca) website. Late submissions will incur penalties ranging from 5% to 25% of the unpaid tax, in addition to a 5% monthly fine on any outstanding dues.

From the dept. of reschedules

Riyadh’s Capital Markets Forum has been pushed a year to March 2027, after it was scheduled this April.

It’s not the only major financial event to get axed due to the war: the Dubai Financial Market delayed its own event to December. Dubai Future Finance Week has also been rescheduled to November, alongside other gatherings including TOKEN2049 Dubai, as flight disruptions weigh on attendance.

Watch this space

OIL — East-West pipeline hits full capacity: The Kingdom’s East-West pipeline, which bypasses the Strait of Hormuz, is now pumping at its full capacity of 7 mn bbl / d, a source familiar with the matter told Bloomberg. Exports via the Red Sea port of Yanbu have reached about 5 mn bbl / d, with an additional 700k-900k bbl of refined products, while 2 mn bbl feed domestic refineries.

Why it matters: This bypass is credited with preventing oil prices from hitting catastrophic highs, despite the loss of some 15 mn bbl / d that typically transits Hormuz. Aramco CEO Amin Nasser said earlier this month that the East-West pipeline was expected to reach its full capacity within days.

BUT- The hedge is under fresh scrutiny as Yemen’s Houthi forces enter the conflict, raising concerns of the Red Sea becoming a new maritime front. While no direct attacks on tankers have been confirmed, the group’s history of drone and missile threats in the Bab El Mandeb would be a major threat to the redirected supply chain.

TRANSPORT — Licensed transporters can temporarily move third party goods: The Transport General Authority (TGA) has granted licensed commercial transport players the green light to move goods for third parties until 25 September, it said in a statement. To qualify, vehicles must be registered for public transport, with all its operations recorded via the Logisti platform to maintain transparency and regulatory compliance.

Data point

USD 25 bn — That’s the potential bill for repairing energy infrastructure across the Gulf from the damage of the war, with engineering and construction taking the biggest share, followed by equipment and materials, according to Rystad Energy.

Qatar is in for the headline shock — but the UAE has also seen a fair amount of damage to some of its assets. Damage at Shah gas, Ruwais refinery, and Bab & Habshan fields is less severe but still material, placing them in the moderate disruption bracket where timelines hinge on how quickly operators can mobilize EPC contractors and secure replacement equipment.

What’s next: Operators are expected to prioritize restoring existing output over new builds, funneling work toward contractors and OEMs with regional track records and standing NOC relationships. Near-term activity will center on inspections, engineering, and site prep before shifting into equipment replacement as supply constraints ease.

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The big story abroad

Yemen’s Houthi militia has joined the war. The group fired ballistic missiles at Israel yesterday morning and vowed to keep up attacks as long as US-Israeli strikes on Iran and Lebanon’s Hezbollah continue. More strikes on Israel followed subsequently, consisting of cruise missiles and drones, the Houthis said.

The Strait of Hormuz saw some light traffic yesterday, with ship-tracking data from Bloomberg showing four vessels transiting the waterway to exit the Arabian Gulf.

Also, Iranian strikes caused “significant damage” to a smelter run by Emirates Global Aluminium — the region’s largest aluminum manufacturer. Several employees were injured at the Al Taweelah site in Abu Dhabi, and assessment of the damage is ongoing. The strike prompted a surge in aluminium prices, as the Middle East accounts for some 9% of global supply.

And to make things worse: Bahraini aluminium producer Aluminium Bahrain was also targeted by Iran yesterday, resulting in two minor injuries.

AND- Some oil and gas execs believe that markets are underestimating the impact of the war on energy supply. “This is an attack not only against the Gulf, but it is an attack that is holding the world’s economy hostage,” Kuwait Petroleum Corporation CEO Sheikh Nawaf Al Sabah was quoted as saying at S&P Global’s annual CERAWeek energy conference. Executives warned that fuel shortages in Europe and Asia are imminent if hostilities do not cease, and predicted that oil prices will remain structurally high even after the conflict ends.

War ain’t got nothing on the PIF

The Public Investment Fund is still committed to its international investments, even as the regional war shows no signs it will be resolved any time soon. This was the message Governor Yasir Al Rumayyan reiterated during the Future Investment Initiative event in Miami, the annual invitation-only event that gathered Saudi capital and Wall Street heavyweights over the weekend.

Patience is a virtue: “We measure our returns not in quarters but in decades, and the PIF remains committed to its investments around the world,” Al Rumayyan said. Saudi’s macroeconomic situation remains resilient, allowing it to weather temporary volatility due to the war, he added.

The message seemed to directly address concerns that the rising economic costs would push the sovereign fund to rethink its widespread international investments. Attacks on energy infrastructure are steadily escalating, and the Hormuz Strait is still effectively closed for the fifth week choking a vital corridor for oil and gas shipments. Pundits see the GCC’s wealth funds rerouting capital to their homeland to repair the damages, make up for the short-term hit to revenues, and shield their own citizens from the blow.

Global deals are still being closed: PIF’s Savvy Games is set to buy mobile game maker Moonton from TikTok maker ByteDance in USD 6 bn announced last week.

A look at the portfolio

The domestic pivot changed the calculus a while back: Most of the PIF's assets were held internationally over five years ago. However, the fund has undergone a massive strategic pivot, with some 80% now deployed domestically to drive non-oil economic growth and fund gigaprojects like Neom, Qiddiya, and Diriyah.

Still, the international portion of the portfolio remains significant — and highly diversified. The remaining 20% is held in global equities, infrastructure, technology, aerospace, and video game companies — including stakes in Uber, Electronic Arts, Nintendo, and Heathrow Airport.

A new strategy within “weeks”

The fund is gearing up to unveil its new five-year strategy in the upcoming weeks, Al Rumayyan said. The name of the game is attracting “third-party capital” from domestic and international investors to continue the work, after the PIF laid the foundations in previous phases, he argued.

ICYMI- A reset of the national privatization program in January set new ambitious targets for 2030, including increasing private capital investments to over USD 64 bn, signing more than 220 public-private partnership contracts, and boosting the private sector’s share of GDP to 65%, up from the current 40%.

The fund is reportedly set to refine its 2026-2030 investment playbook by concentrating capital on a tighter group of portfolio companies and scaling them into global champions across sectors. The idea is to pivot away from real estate gigaprojects to refocus on sectors that can deliver faster, more sustainable returns like logistics, mineral development, religious tourism, and AI, while maintaining investment in oil, petrochemicals, and renewables to power the transition.

It was necessary: Higher fiscal pressures — including lower oil prices, rising borrowing, and a widening deficit — were pushing the government to cut back on spending and prioritize time-sensitive projects and high-return sectors. That was back when oil prices were in the USD 60-70 / bbl range.

It’s still early to gauge how the war will change this calculus. Oil prices are already hovering close to the USD 115 mark, giving our budget a short-term relief. However, if the war goes on much longer, Saudi officials and analysts are concerned it could cause significant demand destruction and pressure oil revenues down.

Neom hits the brakes on Trojena

Neom has effectively mothballed the “alpine-in-the-desert” vision for Trojena, terminating contracts for the resort’s central freshwater lake. The move is the latest sign of the Kingdom’s shifting priorities towards gigaprojects, as prestige spending is scaled back in a construction market increasingly choked by Strait of Hormuz logistics and soaring input costs.

What happened: Italy’s Webuild Group said in a statement its USD 4.7 bn contract to build three dams and a freshwater lake with Al Bawani has been terminated, while Malaysia’s Eversendai Corporation confirmed in a bourse filing (pdf) its steel works agreement was also cancelled. Both firms are seeking reimbursement for the cancellations.

Where that leaves Trojena: The cancellation effectively scraps the resort’s primary engineering hook, a 2.8 km artificial lake, and leaves total works at the USD 19 bn Trojena project 30% complete, Webuild said.

Behind the cancellation

Eversendai said it believed the contract termination was “due to the current geopolitical situation in the Middle East”.

We know the war hasn’t been kind to construction: The Strait of Hormuz closure has trapped the Kingdom’s construction sector in rising costs and supply delays, with high energy prices and disrupted logistics driving up steel and cement prices and extending lead times. Craig Finlayson of Currie & Brown had warned EnterpriseAM earlier this month that project survival depends on contract terms. Agreements with escalation clauses may endure rising costs, while others risk forcing contractors to invoke force majeure or exceptional event provisions.

BUT- Trojena was struggling before that: The mountain resort was intended to host the Asian Winter Games 2029, though the event has since been postponed and reassigned to Kazakhstan’s Almaty, following reports of construction hurdles at Trojena that surfaced late last year.

Neom was already on the chopping block: Earlier this year, the Kingdom began scaling back Neom following a comprehensive review after years of delays, design challenges, and cost overruns. The project has come under growing pressure to generate returns as Riyadh tightens spending amid weaker oil revenues, with plans reportedly redesigning Neom to become a smaller, AI- and data center-focused hub.

Non-oil exports jump in January, but trade surplus narrows

Starting the year on a strong note: Non-oil exports, including re-exports, rose 22.1% y-o-y in January, according to data (pdf) from the General Authority for Statistics. The surge was almost entirely fueled by a 95.5% jump in re-exports, particularly in machinery and electrical equipment.

Oil exports experienced a decline of 6.4% during the same period. The share of oil exports within the Kingdom's total export portfolio decreased to 67%, compared to 72.6% a year earlier.

The Kingdom’s merchandise trade surplus fell 17.5% y-o-y in January 2026; meanwhile, merchandise imports rose 6.5% y-o-y, outpacing merchandise exports, which increased by 1.4% y-o-y.

Machinery and electrical equipment led at 24.2% of non-oil exports, up 77.5% y-o-y, while chemical products followed, making up 19.2% of non-oil exports, though they recorded a 3.1% y-o-y decline.

Machinery and electrical equipment dominated imports as well, accounting for 30.3% of the total and increasing by 23.7% y-o-y, signaling continued investment in infrastructure and industrial capacity. Transport equipment and parts ranked second, representing 13.7% of imports and growing by 7.3% y-o-y.

China emerged as the primary destination for Saudi Arabia’s merchandise exports, accounting for 15.1% of the total. This was followed by the United Arab Emirates at 12.9% and India at 9.8%. Other key export destinations included Japan, South Korea, the Kingdom of Bahrain, Singapore, Egypt, Malta, and the U.S.A., with these top ten countries collectively representing 68.6% of the Kingdom’s overall exports.

On the imports side, China also ranked first as the Kingdom’s main merchandise source, accounting for 31.0% of total imports. The United Arab Emirates followed at 7.7%, with the U.S.A. at 6.9%. The remaining top ten import sources were India, Germany, Italy, Japan, Switzerland, France, and South Korea, which together represented 70.8% of Saudi Arabia’s total imports for the month.

Riyadh turns to Kyiv for drone defense

Riyadh, Kyiv form tighter defense ties to counter Iran’s attacks: Saudi Arabia and Ukraine signed a defense cooperation framework on Friday that lays the foundation for future joint investments, tech exchange, and defense procurement, Ukrainian President Volodymyr Zelenskyy said on Telegram. The MoU was signed during an unannounced visit by Zelenskyy, who met Crown Prince Mohammed bin Salman to align their defense capabilities, Reuters reports.

A new security paradigm

For the Kingdom, Ukraine offers a pragmatic solution to an expensive security gap. For years, Riyadh has relied on US-made Patriot and Thaad interceptors, costing USD 3 mn per missile, to down USD 20k Iranian Shahed drones — an economic mismatch that has become unsustainable with the scale of attacks the past month.

The pitch: Ukraine’s layered defense system costs just USD 2k per interceptor drone and can down nearly 1k UAVs in a single day with a 95% success rate, offering fast access to battle-tested rapid-response technologies, Bloomberg reports.

Meanwhile, Ukraine is looking for new defense partners: The Ukrainian leader is leveraging four years of anti-drone warfare expertise to secure Gulf funding and technology, saying Ukraine can produce about 2k drone interceptors daily with sufficient financing. The visit comes amid reports the US may redirect weapons earmarked for Ukraine to the Middle East as Iran tensions strain munitions stockpiles, pushing Kyiv to diversify defense ties.

Ukraine already has takers in the Gulf: Kuwait has already deployed Kyiv’s technology, Bloomberg reports citing a source familiar with the matter. Meanwhile, Zelenskyy paid similar visits to the UAE and Qatar over the weekend, signing defense agreements.

ALSO- This month, Kyiv deployed over 220 experts to advise Middle East countries, including Saudi Arabia, on countering drone attacks, holding workshops and briefing the Saudi General Staff while sharing practical air defense experience.

SRMG’s bottom line swings to loss in 2025

Saudi Research and Media Group (SRMG) swung to a net loss of SAR 366.3 mn in 2025, down from a net income of SAR 201.7 mn a year earlier, hit by weaker revenues, higher provisions and impairments, and increased admin and marketing costs for new broadcasting projects, it said in a disclosure to Tadawul on Thursday. Revenue fell 18.1% y-o-y to SAR 2.7 bn, dragged by declines in public relations, advertising, printing and packaging, and other segments, partly offset by growth in visual and digital content from major sports broadcasts.

New maritime service connects Dammam and Bahrain

Saudi adds Bahrain shuttle link: The Saudi Ports Authority (Mawani) has launched a new maritime link between King Abdulaziz Port in Dammam and Bahrain’s Khalifa Bin Salman Port through MSC’s Gulf Shuttle service. The route offers a capacity of up to 3k TEUs and gives Gulf cargo another short-sea option as conflict-related disruption continues.

The Bahrain shuttle is not a first. Mawani added another MSC Gulf Shuttle service at Dammam last week with links to Sharjah, Abu Dhabi, and Umm Qasr, with a handling capacity of up to 3k TEUs.

A wider wealth gap?

The ongoing war didn’t feature much in Larry Fink’s latest annual letter, but what did is AI — unsurprising given the amount of developments in that space since he wrote his last letter, when energy infrastructure and pragmatism took precedence.

Another topic that’s once again absent? ESG and climate — topics that featured prominently in his older letters but not since last year, as the AI infrastructure narrative begins to push them further into the margins and bring the more balanced concept of “energy pragmatism” into focus.

Why Fink’s letter matters: He’s the co-founder of the world’s largest asset manager, with some USD 14 tn. His annual letter to shareholders is now regularly read and scrutinized by the world’s top investors and traders.

So, what about AI? Fink mentions its potential, yes, but also its potential downside. He argues that asset ownership remains the driving line in wealth creation, and that AI risks amplifying that gap unless more people gain access to markets. “Companies with the data, infrastructure, and capital to deploy AI at scale are positioned to benefit disproportionately” from the AI boom, Fink cautions.

And the solution? More investing, Fink says. “When market capitalization rises but ownership remains narrow, prosperity can feel increasingly distant to those on the outside,” he explains.

Financial education is part of it, but so is widening the avenues for participation. Early-stage investing accounts for children is an option and can often lead to wider economic growth further down the line. Better social security systems, tweaked for longer-term investments and wider access to tokenization, are others. His argument? The growth of the individual should come with the growth of a country. “[Y]our future and your nation’s future become linked. You help finance its growth. It helps finance yours,” he writes.

Yes, but: The letter fails to acknowledge that it’s not just the lack of access to capital markets that’s stopping people from investing, but also the lack of access to capital itself, as the Financial Times ’ Simon Mundy writes.

You can read the full letter here, and read what others are saying on: Bloomberg | Reuters | The Wall Street Journal | CNBC.

TASI	11,090	+0.1% (YTD: +5.7%)
MSCI Tadawul 30	1,496	+0.1% (YTD: +7.8%)
NomuC	22,719	+0.7% (YTD: -2.5%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	47,002	-1.0% (YTD: +12.4%)
ADX	9,597	-0.1% (YTD: -4.0%)
DFM	5,511	-0.1% (YTD: -8.9%)
S&P 500	6,369	-1.7% (YTD: -7.0%)
FTSE 100	9,967	-0.1% (YTD: +0.2%)
Euro Stoxx 50	5,506	-1.1% (YTD: -4.9%)
Brent crude	USD 112.57	+4.2%
Natural gas (Nymex)	USD 3.03	+3.3%
Gold	USD 4,524	+2.6%
BTC	USD 66,755	+1.1% (YTD: -23.8%)
Sukuk/bond market index	920.19	+0.9% (YTD: +0.1%)
S&P MENA Bond & Sukuk	148.74	-0.4% (YTD: -2.1%)
VIX (Volatility Index)	31.05	+13.2% (YTD: +107.7%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.1% on Thursday on turnover of SAR 5.4 bn. The index is up 5.7% YTD.

In the green: Saleh Alrashed (+10.0%), Yansab (+7.2%), and Kingdom Holding (+6.9%).

In the red: Amak (-3.0%), Rasan (-2.5%), and Arabian Drilling (-2.5%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.7% on Thursdayon turnover of SAR 17.8 mn. The index is down 2.5% YTD.

In the green: Riyal (+20.0%), Almodawat (+16.2%), and Digital Research (+14.3%).

In the red: Paper Home (-8.3%), Tharwah (-6.0%), and KnowledgeNet (-5.5%).

CORPORATE ACTIONS-

Saudi Arabian Refineries Company’s board recommended 66.7% capital hike via a rights issue to fund investment projects, it said in a disclosure to Tadawul on Thursday. The SAR 300 mn increase is still pending regulatory and shareholder approval. Alinma Capital was tapped as financial advisor.

CALENDAR

MARCH

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

APRIL

20-22 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

28 April (Tuesday): GC Summit Saudi Arabia, Riyadh.

MAY

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

19-21 May (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

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

JUNE

15-17 June (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

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

21-24 June (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

22-24 June (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

JULY

6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

AUGUST

31 August-3 Sep (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

9-10 September (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

9-10 September (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

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

23 September (Wednesday): Saudi National Day.

OCTOBER

12-15 October (Monday-Thursday): World Energy Congress, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

NOVEMBER

24-28 November (Tuesday-Saturday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
September: Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center;
November: The UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;
SkyMove Air Cargo MENA, Riyadh;
The Intervision international music competition will take place in Saudi Arabia.

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;
Capital Markets Forum takes place in March in Riyadh.

Signposted to happen sometime in 2Q 2027:

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

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