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Inflation cools in April despite war pressures

1

WHAT WE’RE TRACKING TODAY

Saudi economy least affected in Gulf by US-Iran war fallout -IMF

Good morning, wonderful people. Eyes will be on the sky tonight for Dhul Hijjah’s crescent sighting, which will determine when pilgrims — over 850k of whom have already arrived in the Kingdom — will head to Mount Arafat. We can’t wait for the festivities to begin (and of course, the long break).

In today’s issue: Inflation cooled in April as costs of living proved resilient to war pressures, and one more Tadawul IPO is on the way from contractor Mutlaq Al Ghowairi.

Watch this space

ECONOMY — Saudi Arabia is proving to be the least affected country in the Gulf by the fallout from the US-Iran war, IMF Director of the Middle East and Central Asia Department Jihad Azour told AlArabiya during a visit to the region for consultations with leadership and central banks last week.

The East-West pipeline and the Kingdom’s fiscal resilience absorbed the war-induced economic shocks, Azour said. The pipeline helped Saudi Arabia reroute more than 7 mn bbl / d at its maximum capacity reached in March, with some 2 mn bbl / d headed to refineries and 5 mn bbl / d for exports.

A boon for our oil revenues: The New York Times estimates Saudi Arabia has gained about USD 9.2 bn in additional revenues amid global energy price hikes, from 28 Feb until 8 May. This comes despite a y-o-y drop in the numbers of barrels exported by 152 mn. Meanwhile, neighboring producers like Iraq, Kuwait, and Qatar are having a harder time dealing with the strait’s closure.

REMEMBER- The fund projected Saudi’s growth to average 3.1% in 2026, 1.4 percentage points lower than the initial outlook in January, the fund said in its World Economic Outlook report last month. However, growth is expected to pick up pace again to 4.5% in 2027.

Inflation also slowed down in April for the Kingdom to 1.7% y-o-y, Azour noted. We have more on that in today’s big story, below.

Sports

PIF becomes official World Cup supporter: The Public Investment Fund (PIF) has been named as the FIFA World Cup 2026 tournament supporter across North America and Asia, according to a press release. The partnership will see PIF alongside portfolio companies Savvy Games Group and Qiddiya City roll out fan engagement initiatives and tournament experiences.

The sports strategy: The commitment to the sports sector “lies within the tourism, leisure and entertainment ecosystem in PIF’s recently announced 2026-2030 strategy,” the statement said. The fund has recently been cleaning house and reorganizing its sports priorities, pulling the plug on LIV Golf, reviewing Newcastle’s plan, and selling a majority stake in Al Hilal Club Company.

And in other sports news: Japan’s Gamba Osaka bested Al Nassr 1-0 in the Asian Champions League Two final, preventing Cristiano Ronaldo from taking home the trophy, Reuters reports. The upset victory means that the Don is yet to clinch a major trophy since joining the club in 2023.

Data point

USD 12 bn — that’s the value of the Public Investment Fund’s US equity holdings in 1Q 2026, down from USD 12.95 bn in 4Q 2025, which marked their lowest level in five years, Argaam reported, citing US Securities and Exchange Commission data. The fund maintained positions in Lucid Group, Electronic Arts, Uber, and Clarivate, while fully exiting medical technology manufacturer Allurion Technologies.

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The big story abroad

The business pages are focusing on the outcomes of the US-China summit in Beijing, which proved anti-climactic after failing to secure any commitments. It appears that the world’s two largest economies have returned to the familiar status quo that existed before President Donald Trump’s so-called “Liberation Day” in 2025 — a shift some are already labeling a victory for China. Ultimately, the lack of a Trump-driven paradigm shift means a precarious trade standoff remains.

More drama from the Fed: Two Trump-nominated Federal Reserve officials have criticized the Fed board’s decision to temporarily keep Jerome Powell in the position of chair until Kevin Warsh is officially sworn in. Fed board members Stephen Miran and Michelle Bowman slammed the “unlimited timeframe” of the temporary designation.

Meanwhile, on Wall Street: Although the Big Tech and AI equity rally seems as strong as ever, there is a very big asterisk, investors tell Bloomberg. Driven by optimism surrounding the AI boom, many investors are selling off government bonds, which is pushing yields higher. This spike in yields — combined with inflation risks and concentrated stock gains — could soon make corporate borrowing more expensive for tech companies while simultaneously making bonds a more attractive alternative to equities.

Speaking of which… could AI-related job cuts target entry-level jobs? Upwards of 40% of CEOs intend to slash junior roles and shift their workforce composition toward mid and senior-level roles, according to a global survey by Oliver Wyman. This appears to stem from AI agents’ ability to take on functions traditionally associated with junior positions, namely writing code and evaluating sales leads.

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2

ECONOMY

Inflation cools in April

Prices continued to show resilience against the war’s inflationary pressures in April. The annual headline inflation rate cooled to 1.7% in April, down from 1.8% in March, according to the latest data (pdf) from Gastat.

What’s keeping the lid on inflation? Readings remain stable at well under the 2% level, as higher oil prices could be keeping price increases sticky for now, analysts told us earlier in April. The government also ramped up spending on fuel and food subsidies in 1Q, which may have helped keep inflationary pressures at bay.

Will we feel it later? “Although energy subsidies mitigate much of the inflationary impact of the war being felt globally, and in parts of the Gulf, the secondary impacts of this are likely to be somewhat inflationary even in Saudi Arabia, with a lag” Justin Alexander, director of Khalij Economics and GCC analyst for GlobalSource Partners, tells EnterpriseAM. The government may have absorbed some of the higher logistical costs in the short term, but an upward trend is likely as the wave starts hitting businesses and consumers, Alexander adds.

Hormuz is still closed, and we’re reaching the tipping point. “We are now getting to a critical stage for some global reserves of fertilizers and gases used in production and manufacturing (like Helium), which will create a compounding effect on inflation if not dealt with,” MENA Economist Hamzeh Al Gaaod tells us.

The breakdown

Housing costs led the y-o-y uptick, rising by 3.8%, driven by a 4.8% increase in rentals. Still, housing cost inflation has been slowing since last year as the government has been actively working to boost housing availability, including imposing taxes on undeveloped lands and a freeze on rent increases in the capital. Most recently, it introduced a vacant property tax system.

Meanwhile, prices for personal care and miscellaneous goods jumped 6.3% y-o-y, driven by a 22.5% surge in jewelry and watch prices. Ins. and financial services increased by 2.3% y-o-y, pushed by a 4.0% increase in ins. premiums. Transport prices and restaurant and hospitality services rose by only 1%, and food and beverage prices slightly inched up 0.6% y-o-y.

A few segments even saw deflation: Furniture and household equipment saw a 0.5% y-o-y decline, and clothing and footwear also edged down 0.3%.


ALSO- Wholesale pressure remained flat, with the wholesale price index rising 3.3% y-o-y in April, similar to March’s reading, according to separate Gastat data (pdf).

AND- Manufacturing costs saw a sharp increase in March. The producer price index posted a 5.5% y-o-y surge in March, the highest uptick since the survey began in January 2024, according to Gastat data (pdf). The sharp acceleration was fueled by a 5.9% rise in manufacturing prices, a 0.2% rise in the prices of electricity, gas, steam, and air conditioning supplies, alongside a 10.8% increase in water, sewerage, and waste management services.

The surge makes sense: Slower delivery times due to the switch from Hormuz to trucks, and increased shipping prices due to rising ins. and fuel costs, are likely starting to pass to manufacturing prices, Al Gaood says.

3

IPO WATCH

Contractor Mutlaq Al Ghowairi is coming to Tadawul

MutlaqAl Ghowairi heads to market with a sizable backlog: Infrastructure firm Mutlaq Al Ghowairi Contracting Company (MGC) plans to list 30% of its share capital on Tadawul, putting 240 mn shares up for grabs, representing 30% of the firm’s share capital, according to a press release (pdf) and prospectus (pdf). The firm has been looking to list before its CMA approvals expire in June.

The details: The offering will be split into two tranches targeting institutional and retail investors. Institutional investors will initially get first dibs on all 240 mn shares. However, financial advisors can scale that back to 168 mn shares (70% of the offering) if retail demand is sufficient. The minimum ticket size here is 25k shares, capped at 40 mn. Retail investors could get up to 72 mn shares, equivalent to 30% of the IPO.

This is a secondary sale, meaning MGC itself won’t receive any proceeds from the IPO. Instead, the net proceeds — after slicing off SAR 150 mn in IPO expenses — will go straight to the selling shareholders on a pro rata basis. The major shareholders will be subject to a six-month lock-up period.

The equity sell-down is driven entirely by the firm’s two largest backers. Majority owner Mutlaq Al Otaibi is trimming his dominant stake to 32% from 52.5%, while Terad Al Ghowairi is paring his position to 15.7% from 22.5%.

The timeline:

  • Institutional book-building: 31 May-4 June;
  • Retail subscription: 15-17 June;
  • Final allocation: 22 June;
  • Refunds (if any): by 23 June;
  • Listing on Tadawul: shortly after, pending the usual regulatory box-ticking.

MGC in a nutshell: The Riyadh-based company started in 1977 as Mutlaq Al Ghowairi Contracting Establishment, founded by Mutlaq Al Otaibi with an initial capital of SAR 200k. It focuses on EPC infrastructure work, including utilities, roads, railways, water networks, and pipelines. Ahead of its planned listing, the company expanded its capital base to SAR 800 mn in 2024 from SAR 1 mn in 2023, largely through retained earnings. It says it delivered more than 80 projects over the past five years and now employs over 4.7k people.

Earnings point to strong revenues mixed with margin compression: MGC pulled in SAR 202 mn in net income on revenues of SAR 967 mn in 1Q 2026, yielding a net margin of 21%. Looking back, annual revenues have been quite healthy, bouncing back from a mild dip in 2024 (SAR 3.2 bn) to peak at SAR 3.6 bn in 2025. The bottom line, however, has felt the pinch of rising costs. Net income has steadily shrunk over the last few years, dropping from SAR 1.5 bn in 2023 to SAR 1.2 bn in 2024, and sliding down to SAR 819 mn in 2025.

Backed by a solid pipeline: The company had a SAR 10.6 bn backlog at end-March, equal to a 2.7x backlog-to-revenue ratio. The business is heavily tied to water infrastructure, which made up 84.2% of 2024 revenue. A large chunk of its backlog — about 68% — is linked to the water transmission segment.

Going forward: “From 2026 and onwards, our strategy is to consolidate our core market strength in our home market and deepen our activity where we have proven expertise across water, transportation, and urban development. We are actively expanding into new sectors such as power and energy,” said CEO Omar Al-Dalbahi.

The listing will test the market’s appetite for infrastructure plays: While the Kingdom boasts a sizable gigaproject and utilities pipeline, the contractor sector has historically been lightly represented on Tadawul, with many industry players facing tight margins and project reprioritization. This listing serves as a bellwether for whether investors believe the sector can rebound amid Saudi Arabia’s project reshuffling and geopolitical headwinds.

Getting the ball rolling on Tadawul: Several local firms are gearing up for listing in the upcoming period, with Ninja preparing for a potential IPO that could raise USD 1 bn by late 2026 or early 2027. Dar Al Balad for Business Solutions is also targeting USD 55 mn in its IPO, while Arabian Dyar is eyeing a listing before CMA approvals expire in June.


ADVISORS- Al Rajhi Capital and Morgan Stanley Saudi Arabia are acting as joint financial advisors, global coordinators, bookrunners, and underwriters. ANB Capital and Emirates NBD are also serving as joint bookrunners and underwriters, while Albilad Capital and Arqaam Capital are additional joint bookrunners. Al Rajhi Capital is also acting as lead manager, and Moelis & Company Saudi Limited is the independent advisor.

4

DIPLOMACY

Saudi, Spain now have a strategic partnership council

Saudi Arabia and Spain move to deepen ties during Madrid talks: Foreign Minister Faisal bin Farhan Al Saud and his Spanish counterpart José Manuel Albares signed an MoU to set up a strategic partnership council, as well as an agreement to waive visas for diplomatic, special, and service passport holders, according to a statement from the Foreign Ministry. The council will cover cooperation in security, defense, trade, investment, culture, and multilateral coordination.

Spain already lends a hand in Saudi infrastructure and defense projects. A Saudi-Spanish consortium built and runs the Haramain High-Speed Railway linking Makkah and Madinah, while Talgo has an order from Saudi Railways for 20 more high-speed trains. On the defense side, Spanish shipmaker Navantia is delivering three additional Avante 2200 corvettes to Saudi Arabia, adding to an earlier batch of five ships.


AND- Another move by the Kingdom to keep things under control: Yemen’s warring parties agreed to a prisoner swap involving 1.75k detainees, including seven Saudis held by the Houthis — the largest exchange since 2015 — the Financial Times reports. “If it wasn’t for Saudi lobbying, diplomatic pressure, patience, and clear signalling they want to de-escalate with the Houthis, this wouldn’t have happened.” said Basha Report founder Mohammed al-Basha.

Why it matters: The move reflects Riyadh’s push to protect its energy infrastructure, reduce disruption risks around the Bab al Mandeb Strait connecting the Red Sea to the Gulf of Aden and the Indian Ocean, and limit potential deeper involvement by the Houthis in the Iran-Israel conflict.

5

ALSO ON OUR RADAR

Natural gas networks open for bids, Stitch raises USD 25 mn

Riyadh, Eastern region compressed natural gas networks open for bids

On the hunt for developers for compressed natural gas distribution networks: The Energy Ministry launched the prequalification process for tenders to develop, own, and operate tanker-based compressed natural gas distribution networks in the Riyadh and Eastern regions, state news agency SPA reports. Interested companies have until 18 June to request prequalification documents, with final submissions due by 30 July. The move comes as the Kingdom is shifting industrial and utility energy consumption away from crude and diesel toward domestic gas.

GCC maintains tariffs on Chinese and Indian tile imports

The GCC is shielding itself against Asian ceramic and porcelain tile imports for another five years. The GCC Bureau of Technical Secretariat for Anti Injurious Practices in International Trade extended anti-dumping duties on ceramic and porcelain tile imports from China and India for five years starting 28 May, Al Eqtisadiah reports, citing a circular from the secretariat. The measure was first introduced in 2020 after complaints from local producers over pricing practices.

How heavy is the tax? Duties on Chinese firms range between 23.5% and 76%, while Indian producers face tariffs of 17.6% to 106%.

Behind the decision: Chinese and Indian producers were flooding the Saudi market with low-priced products, putting pressure on local manufacturers’ sales and capacity, Ceramic and Porcelain National Committee Chairman Taha Khayat said. Saudi’s ceramic and porcelain factories currently produce some 620 mn sqm annually against domestic demand of 300 mn sqm, following years of building up local industrial capacity.

Silicon Valley’s a16z makes first GCC investment in Saudi fintech Stitch

Saudi-based fintech Stitch raised USD 25 mn in a Series A round led by Silicon Valley VC firm Andreessen Horowitz (a16z), marking the US venture capital firm’s first investment in the GCC, according to a press release. Existing backers Arbor Ventures, Cotu Ventures, Raed Ventures, and SVC also participated. The fresh funds will go toward product development and expanding the company’s presence across the GCC and wider MENA region, alongside global growth efforts.

About Stitch: Founded in 2022 by Mohamed Oueida (LinkedIn), Stitch develops cloud-native software for financial institutions, covering lending, cards, payments, and ledger systems. The company currently operates across the GCC, Africa, and Southeast Asia.

6

PLANET FINANCE

What Cerebras’ IPO tells us about the 2026 AI craze

Cerebras’ IPO is the latest signal that the world is AI-obsessed. The IPO priced way above its target range of USD 150-160 — itself up from USD 115-125 initially on soaring demand — at USD 185 per share, and jumped 68% on its debut. As the largest IPO this year, raising USD 5.6 bn with an implied valuation of USD 564 bn, it’s a testament to how big of a theme AI has become across capital markets this year.

(Want to know more about Cerebras’ pitch? We dove into that, and how much of it rides on Abu Dhabi’s own AI thesis, in an earlier Planet Finance, here.)

AI stocks have soared this year. Dow Jones’ US semiconductors index, tracking chip heavyweights like Nvidia, Intel, and Qualcomm, is up more than 39% YTD. Over in Asia, South Korea’s tech-heavy Kospi has risen more than 77% this year, while Taiwan’s Taiex has notched fresh records owing to the AI rally.

There’s a contradiction when it comes to how investors view AI, which is likely why there’s also been quite a bit of volatility for AI stocks. As JPMorgan puts it in its latest mid-year outlook (pdf), there’s a discrepancy between private market investors’ demand for equity stakes in AI companies and the public markets’ view on AI firms’ debt rush and concerns that their investments might not pay off.

But JPMorgan thinks AI will be a “driver of durable returns” in the medium term, citing several positive signals for the sector, including the fact that AI will support productivity gains and, in turn, valuations.

More evidence that this will be the year of AI for capital markets: At least one more blockbuster AI IPO is expected, with Elon Musk’s venture SpaceX — which plans to put data centers in space — expected to come to market with what’s looking to be the largest IPO in history. Analysts also assign a 50/50 chance of Anthropic going public this year, and a 1-in-3 chance for an OpenAI IPO.

What to watch: How those major AI firms will trade over time, and whether “public markets validate private market valuations, and even build on them,” JPMorgan says. That “would likely bolster confidence in AI infrastructure spending,” it adds.

TASI

10,995

-0.2% (YTD: +4.8%)

MSCI Tadawul 30

1,473

-0.2% (YTD: +6.2%)

NomuC

22,995

+1.0% (YTD: -1.3%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

4.25% repo

3.75% reverse repo

EGX30

53,155

-0.5% (YTD: +27.01%)

ADX

9,678

-0.3% (YTD: -3.1%)

DFM

5,709

-0.5% (YTD: -5.6%)

S&P 500

7,409

-1.2% (YTD: +8.2%)

FTSE 100

10,195

-1.7% (YTD: +2.7%)

Euro Stoxx 50

5,828

-1.8% (YTD: +0.5%)

Brent crude

USD 109.26

+3.4%

Natural gas (Nymex)

USD 2.96

+2.3%

Gold

USD 4,562

-2.6%

BTC

USD 78,222

-1.1% (YTD: -10.7%)

Sukuk/bond market index

915.1

+0.4% (YTD: -0.5%)

S&P MENA Bond & Sukuk

150.35

-0.6% (YTD: -1.0%)

VIX (Volatility Index)

18.43

+6.8% (YTD: +23.3%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.2% on Thursday on turnover of SAR 5.4 bn. The index is up 4.8% YTD.

In the green: Maharah (+7.4%), Tasheel (+2.8%), and Sedco Capital REIT (+2.7%).

In the red: Emaar EC (-4.5%), Nadec (-4.2%), and Masar (-4.2%).

THE CLOSING BELL: NOMU-

The NomuC rose 1% on Thursday on turnover of SAR 20.2 mn. The index is down 1.3% YTD.

In the green: Ladun Investment (+9.5%), Naba Alsaha (+9.5%), and Apico (+7.7%).

In the red: Alqemam (-28.4%), Albabtin Food (-7.9%), and Ghida Alsultan (-7.3%).


MAY

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

30 August-1 September (Sunday-Tuesday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

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

SEPTEMBER

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

23 September (Wednesday): Saudi National Day.

28 September-1 October (Monday-Thursday): The International Conference on Theory and Practice of Electronic Governance (ICEGOV), Prince Sultan University, Riyadh.

OCTOBER

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

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

28-29 October (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

28-29 October (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

NOVEMBER

25-29 November (Wednesday-Sunday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

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.

2027

FEBRUARY

1-3 February (Monday-Wednesday): Energy Regulators Regional Association annual conference, Riyadh.

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