Good morning, friends. We have a nice, compact issue for you this morning with a couple of M&As leading the news well, including Budget Saudi’s SAR 455 mn acquisition of Autoworld (our friends at EFG Hermes advised) and Kingdom Holding’s bid to take over what will become the world’s tallest tower in Jeddah.

BUT FIRST- The Capital Market Authority and Tadawul Group were not impacted by the global IT outage that happened over the weekend, with each issuing statements (here and here) assuring investors they are monitoring their systems to ensure their security and efficiency.

ICYMI- A routine software update pushed by global cybersecurity firm CrowdStrike to its Falcon Sensor software on Friday threw some 8.5 mn machines running Microsoft Windows into boot loops. The glitch affected dozens of institutions worldwide — including Saudi companies, airports, and government agencies — among many others.

FACT CHECK- Saudi Arabia was not involved in Israel’s strike on Yemen’s Hodeidah Port on Saturday, Defense Ministry spokesperson Turki Al Maliki said in a post on X. The Kingdom “has no relation or participation in targeting Hodeidah, and the Kingdom will not allow its airspace to be violated by any party,” Al Maliki said.

Background: Israel targeted what it claims are Houthi military positions near the port, resulting in the deaths of at least three people and injuring 87 others. This attack followed a drone strike by the Houthis on Tel Aviv on Friday.

Brace for fallout: Continued escalation could further disrupt major oil shipping routes and heighten geopolitical tension risks in our neck of the woods, potentially leading to volatility in global oil markets and intensified inflationary pressures.

WATCH THIS SPACE-

#1- Housing Ministry gets a new(ish) name: King Salman issued a royal decree changing the name of the Municipal, Rural Affairs, and Housing Ministry to the Municipalities and Housing Ministry, state news agency SPA reported.

#2- Officials head to Brazil and Chile amid global mining push: A delegation led by Industry and Mineral Resources Minister Bandar Al Khorayef will be in Brazil and Chile for more than a week starting today to look at potential investments in mining and manufacturing, SPA reports. The delegation will meet with government officials as well as execs from top mining, aviation and food companies — including Vale, Minerva Foods, JBS, BRF SA, Codelco, Antofagasta, and others — in both countries. The delegation’s trip to South America wraps up on Tuesday, 30 July.

A focus on lithium: The visit to Chile, the world’s second-largest producer of lithium, comes as the Kingdom continues to invest in green energy and after policymakers identified it as a key national priority.

Why it matters: Lithium is a critical component of both modern consumer electronics and the green transition, factoring into everything from rechargeable batteries for phones and computers to electric vehicles and grid storage. Al Khorayef said in April that Saudi will continue to source lithium from abroad as part of its plans for the nascent EV sector as securing domestic supplies were still at an early stage.

#3- Tadawul-listed Sipchem wants to open new markets in Europe, India, South Asia and the broader Middle East, CEO Abdullah Al Saddoun told Al Arabiya TV (watch, runtime: 12:41). The Khobar-based petrochemical firm is looking to double its production capacity over the next seven years as it grows offshore sales.

What he said: “We are opening new markets, and increasing sales in Europe, the Middle East, India, and South Asia. Sipchem is always looking to break into new markets, given our proximity to both the Asian and European economies through two of our affiliates: Sipchem Singapore and Sipchem Europe.”

#4- New rules on fair competition in the pipeline: The General Authority for Competition has referred a draft national competition policy to the relevant authorities for approval, Aleqtisadiah reports, citing an unnamed government source. Officials think the policy will unify government efforts to establish competition rules. The draft policy includes a revision of new and existing regulations and an evaluation of overall economic policies, the source said. The policy aims to level the playing field for the private sector and improve the investment climate in the Kingdom.

#5- Saudi, Egypt talk energy cooperation: Energy Minister Prince Abdulaziz bin Salman met in Riyadh with Egypt’s newly-appointed Oil Minister, Karim Badawi, according to a statement from the Egyptian ministry. The two talked about energy cooperation and will set up committees to “work on priority areas of cooperation and identify the mechanisms for implementing them.”

#6- Aramco extends project management contract with Dar: Aramco signed an agreement with Sidara ’s Dar Al Handasah Consultants, extending a contract from 2019 under which Dar has been providing consultancy and project management services for Aramco’s existing and new infrastructure projects, according to a statement. The five-year extension was awarded to Dar in December 2023 and is eligible for a further three-year extension.

SPORTS-

FROM THE RUMOR MILL- Is ManCity’s De Bruyne finalizing his move to Al Ittihad? That’s what the Daily Mail claims, citing sports journalist Rudy Galetti as saying that Manchester City midfielder Kevin De Bruyne has reportedly agreed on personal terms to move to Saudi Pro League club Al Ittihad and that the two clubs are in ongoing discussions to settle the final terms of the transfer. However, sports journalist Fabrizio Romano dismissed the claims as “fake news,” without providing further detail.

REFRESHER- Earlier last month, De Bruyne had said he was “open to everything,” signaling he could agree to a move to a Saudi club. The 33-year-old pointed to his being in a late stage in his career, as well as the attractive financial packages on offer from Saudi, as important pull factors to consider. The Belgian superstar joined the Premier League Club nearly a decade ago at a price of EUR 55 mn. Ever since, De Bruyne has secured six Premier League titles in his nine seasons with ManCity, which completed the treble in 2023.

AND- The Saudi Arabian Football Federation (Saff) launched the inaugural Regional Under-13 Championship in Taif with top talent from 14 cities and provinces taking part, according to a press release (pdf). The 14 regional teams include Al Ahsa, Jazan, Najran, Al Jouf, Hail, Al Qassim, Eastern region, Riyadh, Jeddah, Asir, Al Madinah, Makkah, Hafar Al Batin, and Tabuk. Saff has a target to nurture 4k young talents by 2025. It runs until Tuesday, 30 July.

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THE BIG STORY ABROAD-

US President Joe Biden has ended his reelection campaign, releasing a statement on X saying that the decision is “in the best interest of [his] party and the country” and adding that he will “focus solely on fulfilling [his] duties as President for the remainder of [his] term.”

He quickly endorsed Vice President Kamala Harris, saying his selection of Harris as his running mate in 2020 was “the best decision [he’s] made.” Harris soon after expressed her “intention to earn and win this nomination” in an X post.

The narrative this morning is that Democrats are closing ranks around Harris as their candidate. She has built-in advantages: Because she’s already on the ticket, she’ll inherit the Biden-Harris campaign’s USD 96 mn war chest. Several of the figures tipped as potential Biden successors have already backed her, including North Carolina Governor Roy Cooper, California Governor Gavin Newsom, and Transport Secretary and 2020 presidential hopeful Pete Buttigieg, Reuters reports. As of dispatch time, some 117 democrats have rallied behind Harris, according to a WaPo tracker, including Democratic party chairs from all states

But she could still face a challenge at the Democratic National Convention, scheduled for 19 August in Chicago. Some are still calling for an open primary where anyone can throw their hat in the ring.

Unchartered territory: This is the first time since 1968 that a sitting president has not run for re-election and a candidate is selected outside of primaries and caucuses.

What happened? Biden made the decision and pushed his letter out on social media before telling most on his team. He made the move after a long meeting with a very small handful of trusted advisors. Want the inside story? Reuters | Politico | New York Times | Axios have more.

Trump has already spoken out, saying he thinks Harris will be “easier to beat” than Biden.

CLOSER TO HOME- Israel said it shot down a missile launched from Yemen yesterday, in a continuation of escalated violence from the Houthis after Israel’s first public strike against the Yemeni Houthis. The Houthis have so far launched attacks on Tel Aviv and Eilat, and have vowed to resume attacks on Israel.

ALSO HAPPENING OVER THE WEEKEND- The International Court of Justice has ruled that Israel’s occupation of Palestinian territory is unlawful and that its actions and policies are “tantamount to the crime of apartheid," the court said in its latest non-binding opinion (pdf)

Little wonder, then that geopolitical tensions are now topping sovereign wealth funds’ and central banks’ concerns for the coming decade, trumping inflation, according to a survey.

HAPPENING THIS WEEK-

The World Trade Organization will hold a general meeting in Geneva starting today and the Bank of Canada will meet tomorrow to review interest rates. Canada was the first G7 economy to cut interest rates in the current cycle.

Benjamin Netanyahu is in Washington tomorrow and the opening ceremonies for the 2024 Paris Olympic Games take place on Friday.

PSA-

Don’t forget to file your VAT returns before the month is out: The Zakat, Tax and Customs Authority is once again reminding businesses with annual revenues of goods and services exceeding SAR 40 mn to file VAT for June by no later than Wednesday, 31 July, state news agency SPA reported. Businesses with annual revenues of goods and services less than SAR 40 mn should also submit VAT returns for 2Q 2024 by the same deadline.

WEATHER- Prepare for another hot day in Riyadh: The capital will see a daytime high of 46°C and low of 32°C today. It’s almost as hot in Makkah, where the mercury will peak at 43°C during the day before dropping to 30°C at night. Meanwhile, Jeddah, the coolest of the three, is looking at a high of 39°C and an overnight low of 32°C.

CIRCLE YOUR CALENDAR-

The Crawford vs Madrimov boxing showdown will take place on Saturday, 3 August at the Los Angeles BMO Stadium. The event is the highlight of the Los Angeles Riyadh Season Card which features five other bouts. You can check them out here.

Aramco is set to release its 1H 2024 results on Tuesday, 6 August, according to its website. You can tune into the audio webcast of its earnings call here. The oil giant’s net income dipped a bit more than 14% in 1Q 2024 to SAR 102.3 bn.

Cybersecurity training event SANS Riyadh Cyber Leaders August 2024 will run from Sunday, 18 August to Thursday, 22 August at the Hyatt Regency Riyadh Olaya.

The eight-week Esports World Cup runs until Sunday, 25 August Riyadh’s Boulevard City. The world’s top esports clubs are competing for a pool of USD 60 mn — the largest purse in esports.

The TotalEnergies CAF Super Cup Final 2024 between Egyptian rivals Al Ahly and Zamalek will be held in Riyadh on Friday, 27 September. The venue and kick-off time of the match will be announced at a later date.

This year’s edition of security-focused expo Intersec Saudi Arabia will run from Tuesday, 1 October to Thursday, 3 October at the Riyadh International Convention and Exhibition Center.

International food and beverage expo InFlavour is returning to Riyadh on Tuesday, 1 October. The three-day event — which will be organized in collaboration with the Environment, Water and Agriculture Minister, Tahaluf, Pepsico, Al Rabie, Arasco and Nadec — will take place in Riyadh’s Front Exhibition and Conference Center.