Unlocking USD 35 bn

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WHAT WE’RE TRACKING TODAY

Contained inflation expected for 2026, says ENBD

Good morning, friends. We kick off what is shaping up to be a busy news day with a war update after the Defense Ministry said it intercepted three drones entering the Kingdom from Iraqi airspace. The ministry did not specify what the drones were targeting or who launched them, but it asserted its right to respond.

WEATHER- Dusty days: Dust storms are expected to pick up across parts of Najran, Makkah, Madinah, Qassim, Hail, Tabuk, Al Jawf, and the Northern Borders today, with near-zero visibility possible in parts of Riyadh and the Eastern Province.

Riyadh: 38°C high / 25°C low;
Jeddah: 41°C high / 27°C low;
Makkah: 46°C high / 29°C low;
Dammam: 36°C high / 24°C low.

Watch this space

ECONOMY — Saudi Arabia’s inflation is expected to “stay contained” this year, Emirates NBD Senior Economist Daniel Richards wrote in a report (pdf). The outlook is supported by easing housing costs, a strong USD, and regulated fuel prices — factors that could help the Kingdom outperform regional peers even if inflation picks up in the coming months.

Prices are calm for now: The annual headline inflation rate cooled to 1.7% in April, down from 1.8% in March, supported by higher government spending on fuel and food subsidies in 1Q. Higher oil prices from Hormuz’s closure could keep price increases sticky for now.

CAPITAL MARKETS — The first ETF market maker under new Saudi Exchange rules is here. Sab Invest secured approval from the Saudi Exchange to act as a market maker for its Quant EFT, becoming the first entity to do so under the Exchange Traded Funds Market Making Framework, according to a Tadawul disclosure. Under the arrangement, Sab Invest will be required to maintain a minimum order presence of 80%, a minimum order size of SAR 50k, and a maximum spread of 2%.

So… what’s an ETF market maker? They are exchange members tasked with supporting liquidity in listed ETFs by continuously posting buy and sell orders. Under the Saudi Exchange framework (pdf), market makers — in agreement with the fund manager — can choose between three commitment tiers, with requirements tied to spreads, order size, and market presence. To qualify for incentives, including waived trading and regulatory fees, they must meet daily obligations such as maintaining a minimum order size of 50k shares, remaining active for at least 80% of the trading day, and keeping spreads within set limits.

TRADE — The long-awaited freetrade agreement between the UK and Gulf states is nearing completion, with both sides aiming to close an agreement-in-principle “within days,” the Financial Times reports, citing sources it says are in the know. GCC Secretary General Jasem Albudaiwi, who confirmed last week that the parties made “significant progress,” is set to visit London this week, one of the sources said.

What to expect: The two sides aim to cooperate on financial services, health and life sciences, industrial growth using new technologies, creative industries, and education, Country Director for Saudi Arabia at the UK’s Department for Business and Trade Pete Ashby told EnterpriseAM last year. The UK’s luxury automotive and financial services sectors stand to benefit the most from the trade pact, the FT said.

Data point

7.7k — that’s the number of new investment registrations issued in 1Q 2026, up 50% y-o-y, the Investment Ministry said on X. Construction accounted for the largest share with 2.5k registrations (+20%), followed by wholesale and retail trade at 1.6k (surging 213%), and manufacturing and industrial activities with 969 registrations (+42%).

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The big story abroad

We got a raft of business and geopolitical updates this morning. The US and Iran seem no closer to a final resolution, with President Donald Trump warning Tehran that “the clock is ticking.” Iranian media claims that Washington has demanded the removal of the nation’s uranium stockpile without proposing tangible concessions in return. A drone strike on the UAE’s Barakah nuclear power plant has heightened tensions in the region.

Meanwhile, in the world of M&A: French advertising group Publicis Groupe is acquiring data collaboration company LiveRamp in a USD 2.2 bn transaction, expanding its foothold in the AI marketing space. The move will allow the group to create proprietary data for clients and develop intelligent AI agents.

And on Wall Street: Investors are sounding the alarm over an apparent market paradox, where bullish sentiment prevails in stocks while bond yields rise sharply, leading some to believe that a drastic shift is overdue. Despite positive market sentiment over robust first-quarter earnings and AI-related developments, higher yields portend costlier corporate spending and a safe haven to draw investors away from equities.

Is Aramco on a USD 35 bn privatization push?

Aramco is reportedly preparing the biggest privatization drive in its history, lining up asset sales that could fetch as much as USD 35 bn in total, Bloomberg reports, citing people it says are familiar with the matter. The energy giant is moving ahead with the plan despite the regional war that erupted on 28 February, with bankers expecting a steady pipeline of agreements to land in front of global private equity and infrastructure investors in the coming months.

The catalyst: A BlackRock-led group signed a USD 11 bn lease agreement back in August covering Jafurah Field Gas Plant and the Riyas NGL Fractionation facility. The response from global funds was strong enough to convince executives in Dhahran that there is real appetite for more, the sources told the business information service, adding the new wave of divestments will span energy facilities, infrastructure, and even real estate.

What's on the block: Transactions in the works include a sale-and-leaseback of real estate assets that could include Aramco’s headquarters campus in the Eastern Province, a stake sale in its oil export and storage terminals, and agreements involving gas-fired power plants and its water infrastructure business, according to the business information service. Aramco wants to keep full control of its upstream business but is willing to part with minority stakes in midstream and downstream assets, the sources added.

The thinking has shifted with the war: “Before the spending cuts in megaprojects and the Iran War hit to export volumes, this might have been interpreted as Aramco reducing exposure to non-core assets,” Tellimer's head of emerging market equity and geopolitical strategy Hasnain Malik told the business information service. “But now this is going to be considered as maximizing access to liquidity for Aramco and its sovereign shareholder.”

Why the timing matters for Riyadh: The agreements double as a signal that Saudi Arabia can still pull in foreign capital while Iranian attacks on Gulf cities and infrastructure continue. They also feed into a metric the Kingdom badly needs to move: FDI, which is still running well short of the USD 100 bn annual target set for the end of the decade.

Decentralized water economics

Does Saudi Arabia need to revamp its water strategy? The Kingdom is shifting toward a high-tech circular water economy and exploring innovative desalination methods amid soaring demand and geopolitical pressures.

Some SAR 100 bn were invested over the past seven years to improve the efficiency of Saudi Arabia’s water strategy. The country utilized seawater reverse osmosis as a core desalination technology to reduce energy consumption. It also shifted from simply expanding desalination capacity toward a focus on reducing water losses and improving network efficiency through smart infrastructure and digital monitoring.

That’s great, but is it enough? “Saudi Arabia has become one of the largest markets for water desalination and water distribution projects in the world,” Alexander Sarac, partner for infrastructure projects and energy at Addleshaw Goddard, tells EnterpriseAM. The build-out is less a defensive water-security play and more of a precondition for growth, as Vision 2030 “cannot be achieved without a significant increase in water desalination capacity spread across the country,” Goddard adds.

Demand has been climbing fast since 2015 on the back of new housing, tourism, real estate, and agricultural projects, as well as industrial cooling loads, MENA Economist Hamzeh Al Gaood tells EnterpriseAM. Add in Vision 2030's mandate to cut reliance on non-renewable water sources and push treated wastewater reuse.

Then came the geopolitics. The Iran conflict has “significantly heightened the urgency around water security,” Al Gaood says. Mega-plants are central to GCC water supply but are “highly exposed targets.” If hit or taken offline, the disruption would be widespread, “given the region's heavy reliance on desalination to sustain urban growth and economic activity,” he adds.

BUT- Can we plan everything around war? Critical infrastructure does become a target when conflicts escalate, but “a country such as Saudi Arabia cannot plan its infrastructure purely for war times. It must be able to plan for ‘normal’ periods while planning for backup solutions and contingencies,” Sarac says.

Enter the decentralization thesis

The pitch for smaller, localized systems is to spread production across multiple sites, reduce single-point-of-failure exposure, and score some environmental points along the way. Large desalination plants raise salinity in surrounding waters, which decentralized systems can ease, Al Gaood notes.

The economics, though, aren't quite there yet. Smaller localized systems are “more expensive” today, Sarac says, and make commercial sense mainly in remote areas where transmission is costly, or where they're built for a specific offtaker. “Decentralized solutions can be part of the mix; it is not an either-or.”

Energy is the binding constraint. Desalination is power-hungry, which is exactly why the industry has historically clustered into large plants with reliable grid access, Al Gaood notes. For decentralized systems to scale economically, the underlying technology’s energy efficiency has to improve. That ties into the Kingdom’s broader grid build-out, already being stretched by emerging loads like AI data centers, which will need to absorb a more geographically dispersed pattern of water-related demand.

For new cities, industrial zones, and green urban projects, the end user “only needs water,” Sarac argues. Cost and availability tend to weigh more heavily than technology type, but whether this will change following the conflict remains to be seen, he adds.

The technology side is where the investment story sharpens. Mohamed Askar, Middle East and Africa sales director at Veolia Water Technologies, points to advanced reverse osmosis (RO) as a near-term enabler. But even advanced RO systems “rely on remote monitoring and control for predictive maintenance and performance assurance.” That means distributed plants still need stable energy, specialized maintenance, digital infrastructure, and steady access to membranes and spare parts to run, Askar says.

Sarac is blunter: “It is just not feasible to move from large scale to decentralized overnight. Building isolated systems for specific regions requires a different planning approach and will come at a cost,” he says.

Beyond desalination, the Kingdom is also widening its water-source mix, tapping underground reserves, exploring water access further north including from Syria and Iraq, and investing in less energy-intensive desalination technology, Al Gaood says.

BlueFive clinches 42% of Gulf General Ins.

BlueFive Capital locks in binding 42% stake in GGI: Abu Dhabi-based investment firm BlueFive Capital signed a binding share subscription agreement to take a 42% stake in struggling Tadawul-listed Gulf General Cooperative Ins. (GGI) as part of a major financial restructuring for the insurer, according to a pres s release (pdf).

The mechanics: GGI will first cut its share capital to SAR 124 mn from SAR 300 mn by cancelling 17.6 mn shares to wipe out the bulk of its accumulated losses. It will then issue 17.6 mn new ordinary shares at par value to bring its capital back up to SAR 300 mn. BlueFive (or an entity it controls) will subscribe to 12.6 mn of those new shares, representing a 42% post-restructuring stake. The remaining 5 mn shares will go to GGI’s existing substantial shareholders to convert a SAR 50 mn outstanding shareholder loan into equity.

In the works for a while: The transaction follows a non-binding offer from BlueFive in November to participate in a capital increase at GGI, under which it had proposed taking up all new shares with pre-emptive rights suspended for existing shareholders.

This is a bailout for GGI: The company’s net losses for 2025 widened to SAR 120.5 mn from SAR 94.2 mn the previous year, while revenues slipped 22.4% to SAR 321.8 mn on lower results from ins. services and investment income and higher reins. and operating costs. As of 1Q 2026, GGI’s accumulated losses reached SAR 272.8 mn, equal to 91% of its share capital. That, along with a low solvency ratio, raised serious doubts about GIG’s going concern position.

For BlueFive, it’s a regional consolidation play: BlueFive Capital launched BlueFive Ins. in November, a new arm targeting consolidation, digitization, and specialization across a fragmented GCC ins. sector. GGI’s acquisition is expected to serve as a platform for a broader buy-and-build strategy targeting smaller ins. and reins. providers in the region.

What’s next: The move still needs to clear final regulatory hurdles and get the green light from shareholders.

ADVISORS- SNB Capital and A&O Shearman advised BlueFive, while GIB Capital and AS&H Clifford Chance counselled GGI.

Sico BSC’s new group deputy CEO

Regional investment bank Sico BSC appointed Yousif Bucheeri (LinkedIn) as its new group deputy CEO. Bucheeri takes the reins of Sico’s investment banking, research, brokerage, and alternative advisory business lines across Bahrain, the UAE, and Saudi Arabia, bringing over 15 years of expertise in GCC alternative investments and real estate finance.

PLUS: The Arabian Company for Agricultural and Industrial Investment (Entaj) has appointed Ahmed Abu Sharakh as acting CEO effective today, according to a disclosure to Tadawul. He will take over from outgoing CEO Raja Al Harbi, who resigned due to personal reasons, the disclosure said.

A bit about the new CEO: Abu Sharakh brings over 28 years of experience — he held executive and leadership titles across major companies, including Kraft Foods, Savola Group, and Fine Hygienic.

Ades secures North Sea extension, defense pact for Saudi Chemical, Amlak extends SAR 1.1 bn loan

Ades locks in longer-term Dutch North Sea rig pact

AdesHolding extended its one-year Dutch North Sea contract with Tenaz Energy into a three-year firm commitment, according to a press release (pdf). The extended contract keeps two additional one-year options and carries a total potential contract value of SAR 832.24 mn (USD 221.93 mn). The contract began in mid-November 2025 and was initially structured as a one-year firm term with two optional one-year extensions.

Adding the Netherlands to an Africa- and Asia-focused year: Ades partnered this year with Seplat Energy to provide offshore drilling services in Nigeria for SAR 347.6 mn (USD 92.7 mn), after agreeing to deploy premium rigs for the West African Exploration for SAR 2.73 bn, and providing similar services in Thailand for Valeura Energy under an SAR 345 mn contract.

REMEMBER- Diversified revenue streams, expansion into new markets, and international rig redeployments are Ades’ game plan for 2026, CEO Mohamed Farouk said in its 1Q results.

Saudi Chemical signs five-year TNT supply agreement

Saudi Chemical unit secures TNT supply agreement: SaudiChemicalCompany Holding subsidiary Saudi Chemical Company inked a five-year agreement with the National Company for Mechanical Systems to supply military materials including trinitrotoluene (TNT), according to a Tadawul disclosure. The agreement covers initial annual quantities based on purchase orders, with a maximum contract value of SAR 742 mn (USD 198 mn).

Amlak keeps SAR 1.1 bn Saib loan in place until 2028

Amlak International Finance renewed its SAR 1.1 bn shariah-compliant loan with the Saudi Investment Bank (Saib) through January 2028, according to a Tadawul disclosure. The facility will support the company’s growth plans and expand its financing capacity, and is backed by assigned receivables and a promissory note.

REMEMBER- The company secured SAR 250 mn in a shariah-compliant loan from Emirates NBD KSA last August. The four-year facility is similarly geared toward supporting Amlak’s operations and boosting its client financing.

The great retreat

Two of the world’s smartest money managers just looked at the blue-chip US equity market and said no thanks. The Public Investment Fund (PIF) and Warren Buffett’s Berkshire Hathaway filed their quarterly US equity disclosures with the SEC on Friday, 15 May, and what they had in common was more interesting than what they bought.

Berkshire Hathaway’s first 13F under its new CEO Greg Abel shows a firm in active retreat from broad US equity exposure. Berkshire exited 16 positions entirely in 1Q 2026 — including full sales of Amazon, Visa, Mastercard, and UnitedHealth — while buying USD 15.94 bn in stocks against USD 24.09 bn in sales.

The marquee additions were a new USD 2.65 bn stake in Delta Air Lines, reversing Buffett’s 2020 airline exit, and a near-tripling of the Alphabet Class C position to roughly 58 mn shares. Even after that rebalancing, Berkshire’s cashpile sat at USD 397 bn at quarter-end — the firm's way of saying it can't find enough stocks worth buying at current prices. Berkshire has been a net seller for 14 quarters in a row.

Read against Berkshire’s filing, PIF tells a similar story, though the two funds got there differently. According to PIF’s first 13F filing of the year, the fund now holds just four US-listed positions — Uber (USD 5.24 bn), Electronic Arts (USD 5.06 bn), Lucid Group (USD 1.69 bn), and Clarivate (USD 20.9 mn) — for a combined USD 12 bn, marking their lowest level in five years, Argaam reports. Visa, Mastercard, and Amazon were already gone from PIF’s book before this quarter.

ICYMI- PIF’s portfolio of US holdings peaked at USD 56.7 bn across 36 positions at the end of 2021, and has been contracting ever since. The PIF also recently cut its international allocation target to 20% in April, down from 30%, signaling a broader shift toward deploying more sovereign capital at home.

Why it matters: PIF’s latest filing adds more weight to something markets have slowly been picking up on. Gulf sovereign money is increasingly being called home. As regional governments ramp up domestic spending — with defense and reconstruction costs from the Iran war also looming — broad exposure to US mega-caps appears to matter less than it once did.

MARKETS THIS MORNING-

Asia-Pacific markets are down in early trading this morning, triggered by fears of further escalations in the ongoing regional war after US President Donald Trump told Iran to “get moving.”

TASI	10,968	-0.3% (YTD: +4.6%)
MSCI Tadawul 30	1,468	-0.3% (YTD: +5.9%)
NomuC	22,834	-0.7% (YTD: -2.0%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	52,364	-1.5% (YTD: +25.2%)
ADX	9,678	-0.3% (YTD: -3.2%)
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 110.33	+1.0%
Natural gas (Nymex)	USD 2.99	+1.0%
Gold	USD 4,549	-0.3%
BTC	USD 77,862	-0.4% (YTD: -11.1%)
Sukuk/bond market index	909.79	-0.6% (YTD: -1.0%)
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 0.3% yesterday on turnover of SAR 2.9 bn. The index is up 4.6% YTD.

In the green: Arabian Shield (+7.3%), Enaya (+7.0%), and Kingdom Holding (+6.4%).

In the red: Gulf Ins. Group (-4.9%), Rasan (-4.3%), and Marafiq (-4.2%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.7% yesterday on turnover of SAR 13.8 mn. The index is down 2.0% YTD.

In the green: Horizon Food (+8.6%), Future Vision (+8.0%), and Apico (+7.7%).

In the red: Riyadh Steel (-10.0%), Multi Business (-9.1%), and Alhasoob (-8.8%).

CALENDAR

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

8-10 September (Tuesday-Thursday): The WTM Spotlight Riyadh, Riyadh Front Exhibition & Conference Center (RFECC), Riyadh

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:

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.

2027

FEBRUARY

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

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