TASI’s quiet May hid a loud rotation

1

WHAT WE’RE TRACKING TODAY

Mukaab’s next phase to move forward?

Good morning, folks. Tadawul ended a highly volatile May nearly flat, masking a sharp divergence as oil-leveraged cyclicals surged while the banking sector faced a steep sell-off.

ALSO- Some SAR 13.3 bn worth of Makkah-based development projects have been awarded and we dive into the latest trade data, giving us insight into what drove our non-oil export growth last year.

Happening today

Institutional bookbuilding for contractor Mutlaq Al Ghowairi's Tadawul IPO continues today, running through Thursday. The company is looking to raise up to SAR 3 bn, with the price range set at SAR 11-12.5 per share, implying a valuation of up to SAR 10 bn. The offering is the Gulf's first major IPO since the outbreak of the Iran war in late February.

Watch this space

CONSTRUCTION — New Murabba is preparing to send requests for proposals (RFP) to contractors for the next phase of building the Mukaab, a source familiar with the matter tells EnterpriseAM. Early works and excavation at the site have been completed, and a project award is expected next year, the source says.

Reports earlier this year claimed that the Mukaab had been put on hold, save for soil excavation and pilings, to reassess financing and feasibility. The release of new RFPs would signal that New Murabba is going forward with procurement on the project as construction moves beyond site preparation.

The Mukaab — a cube-shaped skyscraper at the center of the Riyadh development planned to rise about 400 meters — is planned as the centerpiece of New Murabba, housing hospitality, retail, entertainment, and commercial spaces. It’s touted to be “the world’s largest building by area,” spanning over 2.6 mn sqm of floor space. The New Murabba district is expected to cost a total of USD 50 bn.

ENERGY — Aramco is raising its liquefied petroleum gas (LPG) selling prices for June, Reuters reports, citing traders. The company increased the price of propane by USD 10 per ton to USD 760 and butane by USD 20 to USD 820 per ton, marking gains of roughly 1-3%. Aramco's monthly LPG prices are widely used as a benchmark for Middle East LPG exports to the Asia-Pacific market.

REMEMBER- LPG prices climbed as Aramco halted its shipments from the Juaymah export facility for May. The facility, which suffered structural damage sustained in late February, accounts for about 3.5% of global seaborne LPG exports. The disruption is tightening the market and pushing buyers — particularly in Asia and India — to seek alternatives.

ENERGY — Another hike: Opec+ members are expected to agree to another production increase for July by some 188k bbl / d when they meet next week, three unnamed sources told Reuters.

This matches last month’s move: The Opec+ producers agreed last month to increase production by 188k bbl / d in June, which marked a step down from May’s 206k bbl / d hike. Hikes may be considered as largely symbolic moves in the near term, owing to the current disruptions to shipping through the Strait of Hormuz.

There’s bad news for the bloc: Even if the Strait of Hormuz reopens quickly, supply disruptions will linger through the end of the year, industry experts warned Opec+, Bloomberg reports. The experts noted that returning to pre-war shipping volumes will take months, echoing comments from Adnoc CEO Sultan Al Jaber, who stated he does not expect a return to normal levels before the first half of 2027.

Data point

SAR 6.3 bn — that’s where residential mortgages granted to individuals by Saudi banks stood in April, inching up 51% m-o-m after three consecutive monthly declines, according to the Saudi Central Bank’s latest monthly bulletin (pdf). Mortgage issuance jumped 49.7% from March and reached its highest level since May 2025, with nearly 9.6k contracts signed. Villas accounted for the largest share of lending at SAR 4.2 bn, followed by apartments at SAR 1.8 bn, and land plots at SAR 356 mn. Meanwhile, residential mortgages extended by financing companies increased 57.7% m-o-m to SAR 265 mn.

Earning well is not the same as investing well — and for most mid-level executives and entrepreneurs, the gap between the two is wider than they’d like to admit. The financial landscape has shifted. Regional markets are opening up, AI is rewriting how portfolios get managed, and Real Estate Investment Trusts (REITs) are entering the conversation.

And the questions that used to feel straightforward — buy or rent, fund the startup or play it safe, finance the car now or wait it out — are harder to answer than ever.

In Issue 2 of EnterpriseAM Money Matters, we get into the decisions that don’t have easy answers, because at this stage, playing it safe is the riskiest move you can make.

Tap or click here to subscribe to the Egypt edition, delivered to your inbox Wednesday, June 3.

***You’re reading EnterpriseAM Saudi, your essential daily roundup of business, economics, and must-read news about Saudi, delivered straight to your inbox. We’re out Sunday through Thursday by 7am Riyadh time.

EnterpriseAM Saudi is available without charge thanks to the generous support of our friends at Tas’heel and Hassan Allam Properties.

Want to send us a story idea, request coverage, ask for a correction, or otherwise get in touch? Reach out to us on [email protected].

DID YOU KNOW that we also cover Egypt, the UAE, the MENA logistics industry, and the MENA <> India corridor?

Were you forwarded this email? Tap or click here to get your own copy of EnterpriseAM Saudi delivered every weekday.
***

The big story abroad

Where do the ceasefire negotiations between the US and Iran currently stand? After Tehran said it suspended negotiations with Washington due to Israel’s recent ramp up of its assault on Hezbollah in Lebanon US President Donald Trump claimed that he brokered a truce after talks with Tel Aviv and the Iran-backed group and that US-Iran negotiations are progressing at a “rapid pace.” Lebanon later announced a partial ceasefire, despite reports of ongoing strikes by Hezbollah.

Meanwhile, in the AI world: Anthropic has confidentially submitted paperwork for its IPO which could happen as early as this fall, potentially putting the startup ahead of OpenAI and its listing schedule. The Claude maker did not disclose the number or price of shares to be offered.

Another tech player is looking to raise funds for AI investment: Alphabet will sell USD 80 bn worth of stock to fund investments in computing infrastructure to meet customer demand for AI products. The company intends to source the funds via underwritten offerings, a USD 10 bn investment from Berkshire Hathaway, and selling Class A and Class C shares.

A new strategy for the golden arches? McDonald’s has launched its new growth strategy to attract diners, which will include higher-quality food, restaurant upgrades, consumer-led innovation, and improved customer service. The strategy comes at a time where consumers are demanding more value for their money and competitors upgrade their offerings, CEO Chris Kempczinski said.

TASI’s quiet month hid a loud rotation

TASI closed almost exactly where it started in May. The main market’s index ended the month at 11,187.66, down a slim 0.55%, with SAR 125.5 bn changing hands across 269 traded names and total market cap holding near SAR 9.94 tn. The flat headline hides an unusually messy story underneath — oil-leveraged cyclicals ripped higher, while the banks — usually the index’s ballast — got dumped.

What the headline missed: May was dominated by the Strait of Hormuz disruption and a spike in regional war risk, which dragged the whole market onto the crude tape regardless of what individual companies were doing. “You had roughly half the market behaving like a commodity derivative and the other half quietly doing its job,” Aseel Al Aranki, research and analysis department manager at River Prime, tells EnterpriseAM.

The problem? Investors only saw the headline number, and the domestic story was drowned out. Banks, telecoms, healthcare, construction, and services names held up fine on the fundamentals. “On any normal month, TASI is not the pure oil play that outsiders assume it is. The long-run correlation between TASI returns and crude oil is positive but modest,” she says.

But May wasn’t a normal month. Some 10.5 mn bbl / d regional production was shut in. “In that kind of environment, you're no longer just watching oil. You're watching whether missiles land near Saudi infrastructure. Those are two very different conversations,” Al Aranki added.

Where the action was: Energy and materials names led the gainers. Petro Rabigh topped the board, up 40.84% to SAR 14.83, followed by Middle East Specialized Cables (+35.64%), Steel Pipes (+30.39%), Arabian Pipes (+24.96%), and East Pipes (+23.75%). On the downside, healthcare provider Care led the fallers with a 13.91% decline, while Saleh Al Rashed (-13.12%), media group SRMG (-12.65%), Almajed Oud (-12.24%), and Tadco (-11.44%) rounded out the bottom five.

Banks took the biggest hit

Saudi Awwal Bank (SAB) fell 8.7%, Saudi National Bank dropped 6.1%, and even sector heavyweight Al Rajhi — still the most-traded stock by value at SAR 9.55 bn — slipped 3.6%. Al Aranki points to three pressures arriving at once

#1- Margins: Six of the nine major banks have trimmed their net interest margin guidance, squeezed between falling loan yields and stubbornly high competition for deposits, while loan growth cooled from 9.6% in January to 8.8% in February. “When volume slows and margins compress simultaneously, there’s nowhere to hide,” she said.

#2- An uneven 1Q: The sector’s headline income looked healthy (up 11%), but SAB and Banque Saudi Fransi’s corporate-segment earnings fell, and the top three lenders are now generating around two-thirds of all corporate income — a concentration that makes investors twitchy, according to Al Aranki.

#3- Indirect credit risk: banks with heavier exposure to construction and project finance got repriced as Hormuz-related supply disruptions fed through to corporate borrowers. That, Al Aranki argues, explains why SAB (a more commercial-lending-heavy book) fell harder than Al Rajhi, whose sticky retail deposit base offered some shelter.

What to watch

June hinges on Hormuz: If traffic resumes gradually this month, the oil, shipping, and petchem trade that powered May could deflate just as fast. The EIA sees Brent drifting toward USD 89 / bbl by 4Q, a roughly 16% slide.

Al Aranki flags where that could bite hardest — petrochemicals, whose feedstock edge narrows as energy costs normalize, and Aramco, as a softer Brent revives the dividend-sustainability math. The safer ground is the domestic consumer complex — telecom, healthcare, and food retail. “These trade on Saudi demographics and disposable income, not the crude price,” Al Aranki says.

The bigger risk? Saudi Arabia has deep reserves and ready access to debt markets, but TASI is priced partly on the belief that Vision 2030 has bottomless backing and that Aramco's dividend is untouchable. The single biggest risk into 2H is that one or both of those narratives gets tested, according to Al Aranki. “Narratives under pressure are enough to reprice an entire market, even when the underlying economy remains sound.”

Mega Makkah awards

Makkah redevelopment push gathers pace: The Royal Commission for Makkah City and Holy Sites awarded SAR 13.3 bn worth of projects under its Developed Districts program, according to a statement on X. The projects span six sites across South Jurhum, Al Khalidiyah, Al Hajlah, East Hindawiyah, South Hindawiyah, and West Hindawiyah, covering more than 2.7 mn sqm.

IN CONTEXT- The redevelopment pipeline is expanding as Saudi Arabia opens the door to foreign property ownership in designated areas of Makkah and Madinah, a move expected to widen the investor pool. A Knight Frank survey found that 41% of global investors are interested in Makkah, with demand for the holy cities particularly strong among Muslim investors.

The breakdown

#1- Khalidiyah redevelopment: A consortium of Ladun Investment and Al Ayuni Investment and Contracting was awarded the Khalidiyah informal settlement redevelopment project. The project has a targeted sales value of more than SAR 6 bn, with contract signing expected on 9 June. The consortium will establish a closed-ended real estate fund to handle infrastructure works, subdivide the land into plots, and market them for sale. The scope includes master planning, engineering design, utility networks, roads, parks, and public spaces.

#2- Hindawiya West and South expansion: Makkah Construction and Development, Umm Al Qura for Development and Construction (Masar), and Al Rajhi United Real Estate were tapped for the Hindawiya West and South sites, spanning a combined 1.2 mn sqm with an initial estimated cost of SAR 6 bn. The project will be executed through a closed-ended real estate fund and will extend the Masar destination through new infrastructure development, with property owners offered either in-kind units or monetary compensation.

Who does what? Masar will lead the consortium and oversee development management, Makkah Construction will provide funding for property-owner compensation, and Al Rajhi United will serve as the technical partner responsible for delivering the development works.

#3- East Hindawiya mixed-use project: Dar Al Majd Real Estate, First Avenue Real Estate Development, and Rikaz Real Estate will develop the 235k sqm East Hindawiya site. The contract for the SAR 2 bn project is expected to be signed on 10 June and will be developed through a real estate fund managed by Jadwa Investment. The scheme will include residential, commercial, office, and hospitality assets. First Avenue holds a 45% stake in the consortium, followed by Dar Al Majd at 35% and Rikaz at 20%.

Why it matters

Makkah rebuild turns fund-driven: The projects point to a shift toward fund-based urban redevelopment, where private-sector consortiums finance and deliver large regeneration schemes. The structure helps speed up execution while channeling institutional capital into high-demand areas of Makkah.

Re-exports boom, non-oil exports lag in 2025

Non-oil exports rose, but re-exports did the heavy lifting: The Kingdom’s non-oil exports increased 18.9% y-o-y in 2025, according to data (pdf) from the General Authority for Statistics. But the growth came almost entirely from re-exports, which jumped 64.4% y-o-y, while domestic non-oil exports were essentially flat, slipping 0.1%.

Machinery and electrical equipment were the main drivers, accounting for 50.1% of all re-exports after nearly doubling during the year.

The takeaway: The numbers point to a logistics story more than a manufacturing one. Re-exports grew much faster than domestically produced exports, suggesting Saudi’s logistics and trade infrastructure is maturing faster than its export manufacturing base.

Oil still dominates, but its share is shrinking: Merchandise exports increased 2.1% y-o-y over the year, while oil exports saw a decrease of 4.0%. The share of oil exports within the total export portfolio fell to 68.7%, down from 73.1% a year earlier.

Imports outpaced exports: The Kingdom’s merchandise trade surplus narrowed by 19.2% y-o-y in 2025 as imports rose 8.8%, outstripping export growth. Even so, the ratio of non-oil exports to imports improved to 38.5% from 35.3% in 2024.

Chemicals remain the largest non-oil export, accounting for 22.5% of the total non-oil exports in 2025, rising 4.7% y-o-y. Machinery and electrical equipment were close behind at 22.4% of the total, posting a 91.8% increase.

On the import side, machinery and electrical equipment held the top position, making up 29% of total imports after rising 24.6% y-o-y. Transportation equipment and parts ranked second, making up 13.6% of imports and increasing 3.6% y-o-y.

China remains Saudi Arabia's top trading partner: China was the Kingdom's largest export destination in 2025, accounting for 14.6% of merchandise exports, followed by the UAE at 10.0% and India at 9.4%. On the import side, China maintained a wide lead, supplying 27.5% of Saudi imports. The US followed at 8.2%, while the UAE accounted for 5.7%.

Keir names CFO as acting CEO amid restructuring plans

Nomu-listed telecom contractor Keir International tapped CFO Yaman Aydin to serve as acting CEO, effective yesterday, according to a Tadawul disclosure. Aydin brings more than 20 years of experience in financial management and accounting, including CFO roles across regional markets. He assumed the role following the resignation of Abdulaziz Al Shahrani.

Aydin steps into the driver’s seat at a critical moment: Keir is currently buried under SAR 148.4 mn in accumulated losses, representing 123.7% of its capital. Shareholders have already approved transferring the company's entire SAR 13.5 mn statutory reserve and SAR 41.7 mn share premium balance to absorb a portion of the red ink. The company is now weighing capital restructuring measures, tighter collections, and cost-cutting efforts ahead of a shareholder meeting on 1 November to consider its continuation.

BinDawood snags Vaza Food, Al Ramz now full owns Qurtuba 2 fund

BinDawood finalizes Vaza Food acquisition

Retail giant BinDawood Holding officially completed its acquisition of a 51% stake in Vaza Food Company for SAR 217.9 mn, according to a Tadawul disclosure.

What’s next: The closing of the Vaza transaction marks the first half of BinDawood’s broader push into upstream food processing, which includes the pending takeover of the UAE’s Wonder Bakery. This follows a busy expansion period for the retailer, which has recently absorbed pharmacy chain Zahrat Al Rawdah, kids toy distributor Toy Triangle, and marketing tech firm Mirror Mirror to diversify revenue away from pure-play grocery retail.

Al Ramz to take full control of Qurtuba 2 project fund

Al Ramz Real Estate signed agreements to acquire the remaining 77% stake in the Al Ahli Aleen Enbar Real Estate Fund for SAR 133 mn, raising its ownership from 23% to 100%, according to a Tadawul filing. The fund owns the Qurtuba 2 mixed-use development in Riyadh, planned to include around 1.8k residential units and 250 commercial and office units on a 130.4k sqm site. The transaction will be funded through Al Ramz's own resources and credit facilities and remains subject to regulatory and contractual approvals.

Mega-IPOs may be rewriting the rulebook

A wave of mega AI IPOs is approaching the market, and it is already reshaping how public listings are structured, who gets access to them, and how the indices that track them compete for relevance. SpaceX, Anthropic, and OpenAI are all gearing up for listings that are poised to be historic in size and involvement — and major index providers are having to rewrite the rules to compete for listings of that size.

The most immediate structural shift comes from SpaceX itself. The company is allocating 30% of its listed shares to retail investors — a figure that dwarfs the typical retail allocation in a major IPO, Bloomberg reports. The move is a deliberate strategy by founder and CEO Elon Musk, who is banking on his personal following to drive demand. Some individual investors are reportedly planning to put in as much as USD 20k, describing SpaceX as a “visionary” company worth backing from day one.

That kind of retail-first allocation is unusual at this scale, and if SpaceX’s listing proves successful, it could set a template for how other mega-IPOs approach the retail-institutional split going forward.

Index providers are rewriting the rules to compete

The prospect of listings this large has also put major index providers under pressure. The S&P 500 is seeking feedback on a proposal to fast-track the inclusion of mega-IPOs into its flagship indices, while the Nasdaq 100 and FTSE Russell are similarly shortening their usual waiting periods. The concern driving this is straightforward: if a company the size of SpaceX sits outside a major benchmark, the benchmark begins to look incomplete — and potentially less useful to the investors who rely on it.

But the rule changes needed to attract these firms are drawing scrutiny. NYSE President Lynn Martin says that “some of the rules that have been changed to woo some of the large companies [...] are questionable.” A note from Seyffart and Du Boff picked up by Bloomberg says opponents to those changes are pointing to the waiving of minimum float requirements and voting rights protections as particular areas of concern for market integrity. Nasdaq President Nelson Griggs, however, has pushed back, insisting that no rules were broken in securing the SpaceX listing.

What this means for retail investors

The combination of SpaceX’s large retail allocation and the indices’ push for faster inclusion creates a situation where retail investors will gain exposure to these companies quickly — whether they choose to or not. Once included in major indices, firms like SpaceX will automatically feature in the mutual funds and ETFs held by mns of ordinary investors, Bloomberg explains.

The question is whether that exposure will pay off. IPO expert and economist Jay Ritter cautions that it is “difficult for an investor to come out ahead in a three-year period,” given the sky-high valuations these AI-era firms are commanding at listing. SpaceX’s own valuation rests heavily on projections of significant future revenue growth — context worth noting given the company posted a USD 4.9 bn loss last year.

The bigger picture

For institutional investors, the key question is whether a successful SpaceX IPO triggers a broader wave — normalizing large-scale, smooth transitions from private to public markets for firms that have spent years growing outside public view. For index providers, the stakes are existential in a different way: the rule changes they are making now will define what kind of companies they can attract and what kind of market integrity standards they are willing to bend to get them.

MARKETS THIS MORNING-

Asia-Pacific markets are down in early trading this morning as continued geopolitical tension and the uncertainty surrounding an already shaky ceasefire between the US and Iran drag stocks down. South Korea’s Kospi is down 3% and Japan’s Nikkei is down 1.8%.

TASI	11,010	-0.6% (YTD: +5.0%)
MSCI Tadawul 30	1,466	-1.0% (YTD: +5.7%)
NomuC	22,959	+0.1% (YTD: -1.5%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	52,854	+0.4% (YTD: +26.4%)
ADX	9,651	-0.5% (YTD: -3.4%)
DFM	5,775	+0.3% (YTD: -4.5%)
S&P 500	7,600	+0.3% (YTD: +11.0%)
FTSE 100	10,339	-0.7% (YTD: +4.1%)
Euro Stoxx 50	6,035	-0.3% (YTD: +4.1%)
Brent crude	USD 95.15	+0.2%
Natural gas (Nymex)	USD 3.19	+0.2%
Gold	USD 4,513	+0.1%
BTC	USD 71,190	-3.7% (YTD: -18.8%)
Sukuk/bond market index	920.50	+0.7% (YTD: +0.1%)
S&P MENA Bond & Sukuk	151.63	-0.4% (YTD: -0.2%)
VIX (Volatility Index)	16.05	+4.8% (YTD: +7.4%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.6% yesterday on turnover of SAR 7.6 bn. The index is up 5.0% YTD.

In the green: Jahez (+10.0%), Saudi Industrial Development (+9.9%), and Kingdom Holding (+9.9%).

In the red: Dallah Health (-5.2%), Sabic (-3.9%), and Yansab (-3.5%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.1% yesterday on turnover of SAR 27.4 mn. The index is down 1.5% YTD.

In the green: Lana Medical (+14.8%), Naseej Tech (+12.6%), and Balsm Medical (+6.5%).

In the red: Digital Research Company (-8.4%), Alqemam (-7.7%), and Alshehili Metal (-6.6%).

CALENDAR

JUNE

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.

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

11-12 November (Wednesday-Thursday): Aluminum Arabia, The Arena, Riyadh.

16-19 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre (Malham), Riyadh.

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.

Sections

About

Privacy & Support

Get EnterpriseAM daily