BMI cuts Saudi growth forecast cut on prolonged war risk

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WHAT WE’RE TRACKING TODAY

The duality of Hormuz

Good morning, ladies and gents. It has been an interesting weekend, to say the least. It was hard at times to pinpoint whether the world’s most vital maritime corridor was open or closed for business.

What happened? A short-lived de-escalation saw Iran announce it’s reopening the Strait of Hormuz to ships, only to close it hours later in the face of tankers — with reports of shots fired at ships, and tens of tankers sent back.

Why? A 10-day truce in Lebanon was announced over the weekend after direct negotiations with Israeli officials, which prompted Tehran to reopen the strait as long as the ceasefire holds, and sent hopes for new rounds of negotiations and a lasting US-Iran agreement.

BUT- Things deteriorated when the blockade on Iranian ports started choking vital shipments, resulting in Iran resorting to the strait card — again.

Finance Minister Mohammed Al Jadaan warned of the “very fragile” situation on Thursday. Some countries will need significant time to restore oil and gas production capacities, but the bigger problem is convincing insurance companies the strait is safe for passage, he said during the IMF and World Bank spring meetings in Washington.

If tensions don’t calm in Hormuz soon, the energy crisis will become a whole different monster. Head of the International Energy Agency Fatih Birol said that the old oil and gas shipments — the ones that were already heading to their destinations when the war erupted — have just now arrived, so the shortage is not felt yet. “But no new tankers were loaded in March. There were no new deliveries of oil, gas or fuels to ⁠Asian markets. This gap is now becoming apparent. If the Strait of Hormuz is not reopened, we must prepare for significantly higher ⁠energy prices,” Birol added.

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M&A — Gulf investors have ramped up M&A activity despite seven weeks of regional war, defying a broader global slowdown. Regional players have been involved in some USD 47 bn worth of agreements since late February — up more than 120% y-o-y — even as global M&A values slipped 8% over that time, according to data from Bloomberg.

The top tickets: PIF’s Savvy Games Group is set to acquire mobile studio Moonton for USD 6 bn. Last week, Abu Dhabi’s Emirates International Investment took a minority stake in Joe & the Juice at a USD 1.8 bn valuation, while Axight invested in Australia’s La Trobe Financial. QIA and Mubadala also joined a funding round for Whoop.

BANKING — Barclays keeps Saudi license push on track for 2026 HQ launch: Barclays is sticking to its plan to secure a banking license in Saudi Arabia and open a regional headquarters in 2026 even as regional disruptions persist, CEO CS Venkatakrishnan told Bloomberg (watch, runtime: 7:23). The bank is bullish on regional opportunities, highlighting the “strength of the Saudi economy” and the “attractiveness of the UAE” as major selling points that will endure.

Why it matters: The commitment signals that major firms and international banks still think long-term opportunities outweigh the immediate geopolitical risk in the region. Chinese PC maker Lenovo just launched its own Riyadh HQ last week.

Data point: Jeddah port is riding the red sea wave

37.6% — that’s the increase in container volumes at Jeddah Islamic Port in the first half of April, with exports growing 37.6% year on year and imports up 51.2%, a Mawani spokesperson said on X.

Why it matters: The increase points to heavier reliance on Red Sea ports for trade and logistics flows amid Hormuz’s closure. The East-West pipeline depends this corridor to move crude and support exports of around 5 mn bbl / d. Saudi also launched its logistics corridors initiative to position Jeddah, Yanbu, and King Abdullah ports as fallback gateways for Gulf trade, alongside five new freight routes linking Red Sea ports to Arabian Gulf ports.

Sports

A pre-World Cup coaching switch? Saudi Arabia is reportedly preparing to move on from men’s national team head coach, Herve Renard, just two months before our World Cup opener against Uruguay on 15 June, according to The Athletic. Renard has been in charge since 2019, overseeing the national team across two terms that together span about six years, aside from a year away coaching France’s women’s team.

Georgios Donis is lined up as his successor. The former Greece international currently manages Al Khaleej and has been part of the Saudi coaching scene since 2021.

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The big story abroad

It’s another morning with the regional war dominating the front pages. We have the biggest headlines from over the weekend in the news well, above.

No end in sight for the energy woes: Five LNG tankers bound to cross the Strait of Hormuz had to halt their voyages after Tehran issued warnings, according to ship-tracking data by Bloomberg. And two Indian-flagged vessels carrying crude oil were under fire while traversing the waterway yesterday.

The ongoing conflict has stalled over USD 50 bn in crude oil production in just 50 days, the impact of which is likely to be felt for months or even years to come, according to analysts and calculations made by Reuters. This is equivalent to removing more than 500 mn barrels of crude and condensate from the market, according to Kpler data.

Meanwhile, Trump announced that Israel will no longer strike Lebanon,claiming that the Israelis “are PROHIBITED from doing so by the USA,” in a TruthSocial post on Friday. This followed the announcement of a 10-day truce in Lebanon after direct negotiations with Israeli officials.

Prolonged conflict could drag the Kingdom’s growth to 2% as BMI slashes GCC outlook

Our 2026 economic outlook is getting dimmer the longer the war drags on: The Kingdom’s GDP growth could slow to 2-2.2% in 2026 if the US-Iran war extends through May without a breakthrough, BMI MENA Country Risk Senior Analyst Mariette Kas-Hanna said in a webinar attended by EnterpriseAM. That’s a sharp downgrade from a pre-conflict forecast of 4.8%, which would have marked the Kingdom’s fastest expansion since 2022.

BMI’s outlook is more pessimistic than the IMF, which pegged Saudi Arabia to grow 3.1% this year.

The neighborhood isn’t doing much better: GCC growth estimates for 2026 have been slashed to 1.9%, down from a pre-conflict estimate of 4.8%. The broader Mena growth outlook has also been revised down by 2.9 percentage points to just 1%, making it “the slowest-growing region globally,” Kas-Hanna noted. The IMF is on the same page with a 1.1% forecast for Mena.

It all comes back to Hormuz and its spillover: Kas-Hanna attributed the revision mainly to the region’s heavy exposure to the Strait of Hormuz. “Any sustained disruption [of the Strait] would affect not only energy exports but also non-energy exports, re-exports and imports,” she said. While energy flows may recover relatively quickly, non-hydrocarbon trade could take longer, adding inflationary pressure and potentially causing shortages of key industrial inputs and capital goods, which may disrupt sectors like construction.

BUT- Our oil production offers some cushion: Despite the downgrade, Saudi Arabia remains an outlier, with output down some 23% in March as it rerouted exports through the East-West pipeline, preserving some hydrocarbon revenue, said Fitch’s Head of Mena Country Risk Ramona Moubarak. By comparison, production fell nearly 61% in Iraq and around 50% in Kuwait and Bahrain due to reliance on the Strait of Hormuz, while the UAE saw a 45% drop but maintained some exports via the Fujairah pipeline.

MENA at a standstill: The broader MENA growth outlook has been dragged down by 2.9 percentage points to just 1%, “making it the slowest growing region globally,” Kas-Hanna noted. This aligns closely with recent IMF projections placing MENA growth at 1.1%, though the Fund remains more optimistic about the UAE, forecasting 3.1% growth.

The regional outlook is currently split between a 55% “extend to end” base case and a 45% “extend to escalate” scenario, Moubarak explained. Under the base case, hostilities are contained through April, leading to a diplomatic framework as both the US and Iran seek to avoid the structural costs of a full-scale war, and Brent would average about USD 78 / bbl.

In a more severe escalation scenario, oil prices could spike to as high as USD 150 / bbl in a “level 3” case involving an uncontrolled, prolonged war that inflicts structural damage on energy infrastructure. Under “level 1” and “level 2” scenarios, which would see Houthi-led disruptions in Bab Al Mandeb and temporary closures of key maritime chokepoints, prices would likely range between USD 115-130 / bbl, Moubarak explained.

The PIF’s football exit begins

The last sports play by the Public Investment Fund is here. Kingdom Holding Company (KHC) is snapping up 70% of Al Hilal Club Company’s capital in a binding agreement with the PIF.

How much are we talking? KHC will pay SAR 840 mn, valuing the club’s equity at SAR 1.2 bn and its enterprise value at SAR 1.4 bn, the company said in a disclosure.

This was in the works for a while: News of the negotiations first broke out in September 2025, with KHC Chairman Prince Alwaleed bin Talal said to be gunning for 75% of the club at a higher valuation of some SAR 2 bn.

The context

The fund is moving on from its investment in the top SPL club after it “helped drive the efforts to transform Saudi Arabia’s sports sector and increase its value proposition for investors,” said Head of MENA Investments Yazeed Al Humied in the statement.

REMEMBER- The PIF took control of Al Ittihad, Al Ahli, Al Nassr, and Al Hilal in June 2023 and shored up spending on transfers, eyeing privatization at a later stage.

Al Hilal has been the star of the pack: The club reported total revenues of USD 340 mn (SAR 1.27 bn) for the 2024-2025 season, the highest figure ever for a Saudi sports organization. Sponsorship and partnership revenues went up by 16.5% compared to the previous season following the club’s victory against Manchester City in the Fifa Club World Cup.

Why it matters for KHC: The numbers suggest Al Hilal is already a well-oiled machine that won’t require big spending to start yielding returns..

Who’s next? Negotiations for an Al Ittihad buyout are reportedly in early stages with a flurry of interested investors, including b’naire brothers Abdullah and Mohiuddin Saleh Kamel, Asharq Al Awsat reported back in December. The same goes for Al Nassr and Al Ahli, with nothing expected to be finalized soon.

A breakout year for renewables

Renewable energy made a killer year last year, with the Kingdom’s installed renewable capacity surging 87% to 12.3 GW, up from 6.6 GW, according to a recent report by the International Renewable Energy Agency (pdf). The increase, which marks the largest addition in the region, is almost entirely solar.

Part of a global push: 692 GW were added last year, making up 85.6% of all new capacity additions. The Middle East’s capacity (excluding Egypt) rose 28.9% from 43.8 GW in 2024 to 56.4 GW in 2025

The world is becoming a solar-heavy system: Globally, solar snatched the lion’s share of 510 GW — around 73.7% — while wind added 159 GW. Regionally, solar jumped 48% from 26.4 GW to 38.9 GW — since it’s relatively fast and cheap, on the back of the growing relationship between the Middle East and Chinese manufacturers dominating across panels, inverters, and upstream units — while wind capacity stayed flat at 1.9 GW.

How the region is doing

Oman and Qatar rose as the underdogs: Oman’s capacity increased to 1.7 GW from 722 MW, a 138% increase, adding 1 GW entirely from solar. Qatar rose to 1.7 GW from 824 MW, again with solar accounting for all additions.

UAE is playing a steady expansion game: Capacity rose to 7.9 GW, adding 1 GW during the year.

Along with Iran: Total capacity rose from 12.9 GW to 13.9 GW, with hydropower dominating the system, but remaining flat at 12.8 GW, while solar jumped from 782 MW to 1.78 GW.

Bahrain is picking up the pace, while Kuwait is benchwarming: Bahrain’s renewable capacity rose 66.7% to 115 MW, while Kuwait recorded no growth remaining flat at 114 MW.

Egypt is Africa’s striker: Total renewable capacity rose from 7.7 GW to 9.3 GW — a 20% increase. Wind capacity surged from 2.2 GW to 3 GW, while solar grew from 2.6 GW to 3.3 GW — showing parallel expansion across both segments.

Our take

The regional disruptions may pressure renewables in the short-term: Solar and wind buildouts are heavily dependent on predictable supply chains. Solar remains reliant on imported hardware mainly from China, while wind components are a logistics headache even in stable times. These components all move through the same trade arteries now being hit by ins. premiums, rerouting, and vessel hesitation, with delays creating sequencing problems across installation schedules.

BUT- It makes the case in the long-term: The disruptions exposed the vulnerability of an energy system still structurally anchored to fossil fuel chokepoints. Every supply disruption, shipping scare, and oil-price spike reinforces the economic case for accelerating clean energy at home.

Jarir Marketing delivers robust 1Q performance

Jarir Marketing reported a 16.7%y-o-y increase in net income to SAR 253.5 mn in 1Q 2026, it said in a Tadawul disclosure. The growth was supported by higher sales, which helped offset rising selling, marketing, general, administrative, and non-operating expenses. Revenues climbed 14.4% y-o-y to SAR 3 bn, driven by stronger performance across most segments, particularly smartphones.

LIV Golf sparks debate over Saudi sports spending reset

LIV Golf’s funding uncertainty is fueling debate over Saudi Arabia’s evolving sports strategy, with multiple outlets linking the move to a broader recalibration of spending under Vision 2030 and sports’ priority in the new PIF portfolio.

LIV caught in broader spending recalibration: LIV’s sustainability was called into question, with the Financial Times framing the move as a sign of tighter capital discipline at PIF, as the league’s recurring losses and weak audience growth have left its model structurally vulnerable despite heavy spending on star players and global branding. This could place LIV Golf in the pile of several investments cut or paused as PIF scales back spending, part of a broader Vision 2030 recalibration that extends to gigaprojects like Neom, the Wall Street Journal writes.

LIV’s funding cut could also signal tighter spending across sports, the Athletic argues, raising questions about PIF’s commitment to the sector in its new five-year plan, and pointing to the Kingdom’s narrower approach to tennis — by ending its hosting of the Next Gen ATP and WTA Finals — and a shift toward localizing Saudi football and reduced international transfer spending as signs of a renewed take on sports.

Aya bags SAR 26 mn in a Series A round led by Raed Ventures

Fashion platform Aya secured SAR 26 mn in a Series A round led by Raed Ventures, with participation from Nuwa Capital, Sanabil Investments, Khwarizmi Ventures, Joa Capital, according to a press release. The round follows a USD 1.6 mn seed round in 2025.

Use of proceeds: The fresh funds will be used to support Aya’s next stage of expansion, including entry into new product categories and the rollout of its model across broader fashion and lifestyle verticals.

About the company: Founded in 2024 by Munira Al Kadi (LinkedIn) and Abdulrahman Al Ammar (LinkedIn), Aya is a fashion marketplace focused on forecasting fashion trends and providing local producers with demand insights.

Is the war over? Markets seem to think so…

US stocks surged Friday fueled by optimism over a Lebanon ceasefire and Iran’s (temporary) declaration that the Strait of Hormuz was fully operational. The Nasdaq climbed 1.5%, marking its 13th straight gain and its longest winning streak in decades. The S&P 500 climbed 1.2%, crossing the 7.1k threshold for the very first time.

Closer to home, the DFM also ended the week in the green. Dubai’s main share index climbed around 1% to a six-week high at Friday’s close, driven by gains in real estate and financial stocks. Abu Dhabi’s index was flat.

Asian markets retreated on Friday, failing to follow Wall Street’s momentum. Investor sentiment across the Asia-Pacific region was weighed down by a cautious outlook on the conflict in our neck of the woods. Japan’s Nikkei shed 1.8% on Friday, while South Korea’s Kospi slipped 0.6%.

What’s behind this? It appears that investors are “moving beyond this conflict,” Ameriprise Financial’s chief market strategist Anthony Saglimbene told CNBC. “I think the market has walked back the worst-case scenarios, and it sees a path for the US and Iran to end the conflict and the Strait of Hormuz to remain open. As long as that remains the most likely path, then markets will discount it.”

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Market optimism may prove short-lived, especially considering Tehran’s move to close the contested waterway once again. Ongoing uncertainty masks a harsher reality of fractured supply chains and crippled infrastructure, fueling anxiety among energy producers, logistics providers, and consumers alike, the Washington Post reported over the weekend. “The people closest to the [energy] industry are far more concerned about these disruptions and recognize the length of time it will take for things to return to normal — if they ever do,” oil and gas -cochair at law firm Baker Botts told the outlet.

Even options traders are now racing to position for gains in tech stocks, after earlier sell-offs left them underexposed. Tech stocks, in particular, are currently undervalued, with the premium for the Magnificent Seven narrowing to near eight-year lows in comparison to the broader S&P 500.

A part of this could also be that markets priced in a lot more than what has actually happened earlier in the conflict, CNBC’s Jim Cramer said. The fact that interest rates have not spiked as some had expected has helped reassure investors, he added.

But policymakers believe markets are underestimating the potential fallout of the war — even if it ends soon. When asked if markets need to be more wary, IMF chief Kristalina Georgieva said: “I would argue, yes, because what we see in supply chain disruptions is already quite significant.”

The issue is not just what’s happening right now, but the economic fallout expected after the war concludes, which, according to economists, will be severe. The IMF just last week slashed its global growth forecast by 0.3 percentage points and hiked its inflation forecast by 0.7 percentage points.

TASI	11,554	-0.3% (YTD: +10.1%)
MSCI Tadawul 30	1,555	-0.7% (YTD: +12.1%)
NomuC	23,276	+0.8% (YTD: -0.1%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	51,438	+1.4% (YTD: +23.0%)
ADX	9,921	0.0% (YTD: -0.7%)
DFM	5,987	+1.0% (YTD: -1.0%)
S&P 500	7,126	+1.2% (YTD: +3.9%)
FTSE 100	10,668	+0.7% (YTD: +7.2%)
Euro Stoxx 50	6,058	+2.1% (YTD: +4.6%)
Brent crude	USD 90.38	-9.1%
Natural gas (Nymex)	USD 2.67	+1.0%
Gold	USD 4,880	+1.5%
BTC	USD 75,761	-1.9% (YTD: -13.5%)
Sukuk/bond market index	924.23	+0.7% (YTD: +0.5%)
S&P MENA Bond & Sukuk	152.07	+0.3% (YTD: +0.1%)
VIX (Volatility Index)	17.48	-2.6% (YTD: +20.5%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.3% on Thursday on turnover of SAR 6.4 bn. The index is up 10.1% YTD.

In the green: Nice One (+6.3%), Nofoth (+6.1%), and Marafiq (+5.4%).

In the red: ACC (-4.0%), Amak (-3.7%), and SNB (-3.2%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.8% on Thursday on turnover of SAR 22.9 mn. The index is down 0.1% YTD.

In the green: Aqaseem (+15.3%), Naas Petrol (+9.7%), and Naseej Tech (+8.3%).

In the red: Asas Makeen (-13.6%), Dkhoun (-9.1%), and Multi Business (-7.5%).

CORPORATE ACTIONS-

Our friends at United International Holding (Tasheel) plan to boost their capital by 200% to SAR 750 mn via a bonus share issuance, according to a disclosure to Tadawul (pdf). The SAR 500 mn capital increase will be financed by capitalising SAR 43.9 mn from statutory reserves and SAR 456.1 mn from retained earnings. It will be implemented through the issuance of 47 mn bonus shares to shareholders — equivalent to 1.88 new shares for each existing share — alongside the allocation of 3 mn shares for an employee long-term incentive plan.

CALENDAR

APRIL

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

20-22 April (Monday-Wednesday): Future Aviation Forum, 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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