Pilgrims start arriving to KSA ahead of Hajj season

Good morning, ladies and gents. We’re less than five weeks away from the Hajj season, and pilgrims have already started arriving in the Kingdom.

War is the backdrop for the holy season this year, for the first time in decades. The US advised its Muslim citizens to reconsider Hajj this year, while the UK, Australia, India, Indonesia, and others issued less severe cautionary advisories.

It’s too early to tell: The extent to which security fears and regional travel disruptions will affect the Hajj season will depend on developments as we move closer to Eid Al Adha.

Today’s big story is a positive one: Real estate prices declined for the second quarter in a row, a reversal from the sharp trend that weighed on home affordability in the past few years and signaling that the flurry of real estate reforms might be working as intended. Let’s dive in.

Happening today

#1- It’s day two of the Sports Investment Forum held in Riyadh. The first day saw a number of agreements signed, including a SAR 1 bn agreement for developing for the planned Dammam Sports City in the Eastern Province, involving the Sharqia Development Authority, Dammam Valley, and the Ministry of Investment, Aleqtisadiah reports. Dammam is also getting SAR 15 mn in sporting events, the Sharqia Development Authority said at the forum.

#2- Syrian President Ahmed Al Sharaa is in town as part of a wider Gulf tour, Syrian state-run news agency Sana reports. During his time in the Kingdom, he is expected to meet with Crown Prince Mohammed bin Salman to discuss ways to boost ties.

WEATHER- Rain is settling in: Northern Borders and Al-Jawf can expect moderate to heavy thunderstorms, while Medina, Hail, Qassim, Riyadh, and the Eastern Province continue to see moderate to heavy rainfall with potential for flash floods, hail, and dust-kicking winds.

• Riyadh: 32°C high / 20°C low;
• Jeddah: 33°C high / 25°C low;
• Makkah: 36°C high / 26°C low;
• Dammam: 30°C high / 23°C low.

Watch this space

INVESTMENT WATCH — Sudanese-Saudi investment in the works? Preparations for a Sudanese-Saudi business forum to be held in Riyadh this June are underway, Sudanese government officials told the Sudan Tribune. Some 100 strategic partnership projects totaling over USD 50 bn are in the cards, spanning sectors like agriculture, energy, minerals, infrastructure, and technology, the outlet says.

The news came as Crown Prince Mohammed bin Salman met with Sudan’s Army Chief Abdel Fattah Al Burhan in Jeddah yesterday, where the two discussed “ensuring Sudan's security and stability,” state news agency SPA reports.

Business could be booming — but defense is another matter. Pakistan reportedly put a USD 1.5 bn defense agreement to supply weapons and jets to the Sudanese army on hold after Saudi Arabia declined to finance the agreement, two Pakistani security sources and a diplomatic source told Reuters. The agreement — which had been in its final stages earlier this year — comes as Islamabad looks to boost arms exports following increased visibility of its systems after last year’s clashes with India.

Shifting dynamics: The move might be reflecting a recalibration of the Kingdom’s regional strategy to support the armed forces in the North African country, where fighting between the army and the Rapid Support Forces has created one of the world’s worst humanitarian crises, the news outlet says.

More agreements at risk? The Sudan agreement is not the only one under scrutiny. A separate USD 4 bn defense agreement with Libya’s eastern-based forces is also reportedly in jeopardy as Saudi Arabia reassesses its involvement in the region.

Data point

5.9% — that’s how much the Kingdom’s Operating Revenues Index rose y-o-y in February, according to Gastat’s Short-Term Business Indicators report (pdf). The annual increase was driven mainly by gains in mining and quarrying (6.5%), wholesale and retail trade and motor vehicle repair (9.1%), construction (5.1%), and financial and ins. activities (15.5%). The only sector to contract was electricity, gas, steam, and air conditioning, which fell 13.7% y-o-y.

ALSO- The Employees Compensation Index increased 9.8% y-o-y. Meanwhile, issued building permits dropped 18.8% y-o-y, even as construction compensation rose 7.6% annually.

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The big story abroad

US-Iran talks are reportedly on track for later this week in Islamabad. Tehran will reportedly dispatch a negotiating team today, though it remains unclear who will lead it. US President Donald Trump said the two-week ceasefire will expire on Wednesday evening Washington time and that an extension is unlikely.

Meet Apple’s new CEO: After much speculation about who would lead the iPhone maker after CEO Tim Cook steps down, Apple’s board of directors has named John Ternus, the current senior vice president of hardware engineering, to lead the tech giant starting in September. Cook will become executive chairman of the board.

In other tech news: Amazon and Anthropic will spend over USD 100 bn on AI infrastructure over the next 10 years, as per a new agreement to secure up to 5 GW of new capacity to train and run Claude — the hottest AI application at the moment.

AND- Warsh faces the Senate. The Senate confirmation hearing for Fed Chair nominee Kevin Warsh is scheduled for today, marking the first major test for the Trump nominee. We will be closely watching what he says about reshaping monetary policy amid a shifting global economy. Warsh is expected to navigate a narrow path between the White House’s push for lower rates and Wall Street’s fears regarding Federal Reserve independence.

What to expect: Warsh is expected to tell senators that the Fed’s independence is not “particularly threatened when elected officials… state their views on interest rates,” according to remarks seen by the Financial Times. He will also emphasize the importance of the Fed’s independence in setting rates to keep inflation in check.