Good morning, friends. It’s another relatively calm but still interesting day, giving our issue less on the hard news side and a little bit more meat, with a couple of industry reports to sink your teeth into.

BUT FIRST- We have big news for you this morning: EnterpriseAM UAE is now available in Arabic, with the first issue sent shortly after this one. Tap or click here to subscribe and get EnterpriseAM UAE in Arabic directly to your inbox everyday before 8am.

⚠️WEATHER WARNING- Severe thunderstorms and rain across the Kingdom today and tomorrow: The General Directorate of Civil Defense issued warnings for heavy rain, flooding, and strong winds between Friday and Thursday in Makkah, Madinah, Al Baha, Asir, Jazan, and Najran. Lighter showers will hit Jeddah, Riyadh, and the Eastern Province, while flash floods have already struck Madinah.

HAPPENING TODAY-

#1- The agricultural products marketing festival kicks off today in Al Qurayyat, state newsagency SPA reports.

#2- Another day, another franchise tour: Small and medium enterprises regulator Monsha’at will hold a franchise tour today and tomorrow at King Khalid University in Abha, it said in a statement. This is one of the stops of the larger tour which kicked off in Khobar earlier this month, and is set to have 14 stops in total, featuring 15 companies that want to drum up interest in their franchises.

HAPPENING THIS WEEK-

Property owners in six districts in Makkah have until this Thursday, 29 August to register their properties on the Real Estate Registry platform (RER), according to a post on X. Applications can be submitted via RER’s online portal which provides a set of services including deed transfers. Registration requires a valid title deed.

WATCH THIS SPACE-

#1- A digital currency in the works? The Saudi Central Bank (Sama) is currently studying a digital currency for financial institutions, after joining mBridge to test its pilot project for central bank digital currencies (CBDC), Aleqtisadiah reports, citing unnamed Sama sources. Previously, Sama and the Central Bank of UAE tested the technical feasibility of a CBDC through joint experiments involving six commercial banks from both countries.

What’s mBridge? The project aims to develop a multi CBDC platform for instant cross-border payments. Launched in 2021, it is a collaboration between the Bank of International Settlements Innovation Hub, the central banks and financial institutions of Thailand, UAE, China, and Hong Kong.

#2- Modon wants to bring more Egypt investments to the local food industry: The Saudi Cities Authority (Modon) is looking to establish joint ventures (JVs) with the Egyptian-Swiss Group, according to El Taameer. Ali Al Omari, deputy executive director of Modon, pitched investments in the largest food industry cluster in Jeddah during a visit to the group’s production lines in Egypt, the news outlet reports.

About the Egyptian-Swiss Group: The company has a pasta production plant in Egypt’s 10th of Ramadan industrial city, a tomato paste factory, and a flour mill. This is in addition to wheat silos with a storage capacity of 50k tons.

By the numbers: Egyptian-Swiss has doubled its pasta exports to Saudi Arabia over the past two years. The Kingdom was also the second-largest importer of Egyptian processed foods in 2023, with imports valued at USD 400 mn — or 8% of Egypt’s total sector exports that year.

Saudi-UAE consortium backs out of plan to redevelop central Cairo landmark building: A consortium of Saudi Egyptian Developers (SED) and the UAE’s Al Shafar General Contracting (ASGC) Group has backed out of an agreement to work on the USD 5 bn redevelopment of Egypt’s former National Democratic Party (NDP) headquarters in central Cairo due to increased construction costs following the EGP float, Asharq Business reports, citing an unnamed official within the consortium. The redevelopment plan came with a price tag of USD 5 bn to be invested in a 7-star, 220-meter high hotel, residential buildings, and a multi-storey garage

The why: The consortium’s share in its partnership with the Sovereign Fund of Egypt — which was tied to land and building prices — was altered following the currency’s depreciation and the resulting surge in raw material and energy prices.

The two companies could still end up developing the project if their shares in the project are adjusted, the consortium source noted.

Four fresh food and livestock projects are up for grabs in Al Baha: The National Agricultural Services Company issued tenders for four three-year agricultural and livestock development projects in Al Baha, state news agency SPA reports. Interested investors can submit their applications through the Furasonline portal.

DATA POINTS-

#1- PIF-owned Red Sea Global has installed around 760k solar panels to fully power the first phase of its flagship Red Sea Project destination, according to the company’s annual sustainability report last week.

#2- Jeddah Season 2024 received more than 1.7 mn visitors throughout the 52 days of the festival, SPA reported. The festival kicked off on 28 June and wrapped on 17 August.

#3- The Kingdom secured the 15th spot in the global ranking for container handling, Mawani reports, citing a Lloyd’s List report. Three Saudi ports have been listed among the top 100 ports globally, with Jeddah Islamic Port in 32nd place, King Abdullah Port (#70), and Dammam Port (#82).

MARKET WATCH-

STC shares get a boost from dividend plans: Saudi Telecom Group’s (STC) share price were up 9.9% to SAR 43.7 at yesterday’s close, following the board’s approval of a three-year plan to pay dividends at SAR 0.55 per share every quarter starting in 4Q 2024. This marks STC’s biggest price jump in a single day since 2008, on the basis of the closing price, Bloomberg reports. The telecom giant is mulling more payments to shareholders through special dividends after assessing its financial position, future outlook, strategic investments, and capex needs.

SPORTS-

#1- Ghanaian midfielder Kwame Bonsu has reportedly joined Al Ain on a freetransfer from Iraq’s Naft Al Basra, according to Ghana Soccernet.

#2- Real Madrid’s left-winger Vinicius Jr hasn’t made up his mind yet on moving to Saudi, putting the decision on hold until the end of the current season, ESPN reported, citing an unnamed source. The New York Times reported earlier this month that Vini Jr had outright turned down offers from the PIF to join the Saudi Pro League.

#3- Liverpool’s goalie Alisson Becker isn’t joining SPL, at least not now: The 31-year-old goalie has reportedly rejected an offer from Al Nassr, according to the Daily Mail. “If it’s in the interest of the club to negotiate me with another club, then it will be a different conversation. I’m open [to Saudi Arabia], but not at present,” the newspaper quotes Becker as saying.

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MORNING MUST READ-

Despite recent momentum, CNY-based oil trades with China still look like a long shot: The economic rationale for the Kingdom moving to a new system that would see oil trade with China conducted in CNY rather than USD remains “weak” at present, despite diplomatic momentum, according to a thought leadership report by S&P Global.

The rationale: Most net oil exporters — including Saudi — have a trade surplus with China. Despite growing trade between the two countries during the past few years, the majority of that volume is from China’s oil purchases. If oil trades were CNY-denominated, the Kingdom would have an excess of CNY after meeting payments for imports of Chinese goods — and a difficult time finding ways to spend that CNY surplus. A large stock of the Chinese currency may incur significant exchange rate risks, especially as it has been historically volatile when compared with the greenback. That risk is multiplied when considering the SAR’s peg to the USD and the resulting FX losses from any currency fluctuations in either the CNY or the greenback.

There are still some channels for CNY payments, including the government’s ambitious mega project pipeline and other projects under Vision 2030, which are set to set back state coffers some USD 1 tn. Chinese investors could be strong contenders to execute some of the work under these projects — and can accept payments in CNY. The government may also tap China-based contractors for upcoming mega-events such as the Asian Winter Games 2029, Expo 2030, and the Fifa World Cup 2034, the report said.

Chinese firms have already made inroads: Some USD 30 bn has been awarded to foreign contracts for projects in the Kingdom, S&P Global said citing consultancy MEED. Six of the ten largest foreign contractors by contract value in Saudi Arabia are Chinese, namely: China Harbour Engineering, China Machinery Engineering, Sinohydro, China Railway Construction, China State Construction Engineering, and China Gezhouba Group, the report said.

Riyadh can also redirect petroyuan flows towards new investments in China, via boosting Aramco’s downstream footprint in the country as well as PIF’s China-based portfolio, S&P also said. Aramco inked a slew of multi-bn USD agreements with Chinese refiners this year, with Aramco petrochemicals subsidiary Sabic also shelling out USD 6.4 bn to develop a refining hub in China’s Fujian. Meanwhile, PIF technology investment subsidiary Alat has piled USD 2 bn into zero-coupon convertible bonds from Chinese PC-maker Lenovo, among a string of other investments by Saudi-based outfits in China.

THE BIG STORY ABROAD-

There are two stories capturing the attention of the global press this morning: An escalation of aggression between Hezbollah and Israel, and Telegram CEO Pavel Durov’s arrest in France.

Israel and Hezbollah exchanged attacks yesterday, with Israel launching “around 100” warplanes into Lebanon in what it said was a preemptive move against an attack from Hezbollah. The group later fired hundreds of rockets into Israel, hitting military targets and killing one Israeli soldier. Hezbollah’s attack was in retaliation for the killing of Fuad Shukr, one of its senior members, in Beirut last month. Although the exchange of fire has raised concerns of regional escalation, both Hezbollah and Israel are “employing the language of containment.” (Reuters | Bloomberg | Financial Times | Wall Street Journal | New York Times | Washington Post)

MEANWHILE IN FRANCE- Telegram founder and CEO Pavel Durov was arrested in France yesterday on several charges, including charges related to the spread of illicit material and misinformation on Telegram due to inadequate moderation and “a lack of cooperation with police.” Telegram said in a statement on X that the platform “abides by EU laws, including the Digital Services Act — its moderation is within industry standards and constantly improving.” (Reuters | Bloomberg | New York Times | Financial Times)

CIRCLE YOUR CALENDAR-

The EFG Hermes London Conference returns: EFG Hermes will hold its annual conference in London on 9-12 September, giving investors “unique and unparalleled access to leading equities in MENA and key frontier emerging markets.”

The Crown Prince Camel Festival runs until Tuesday, 10 September at the Taif Camel Racing Track, featuring 610 rounds of racing and a purse of SAR 56 mn.

The two-day Data Center Xpo summit will kick off in Riyadh on Tuesday, 3 September.

The two-day Kingdom Business and Luxury Travel Congress will kick off on Wednesday, 25 September, at the Crowne Plaza Riyadh RDC Hotel and Convention.

The three-day Global Logistics Forum will kick off on Saturday, 12 October at Riyadh’s King Abdullah Financial District.

The Industrial Hackathon 2024 is scheduled for 10-11 October, the Saudi Industrial Development Fund spokesperson said on X. The hackathon will pit top Saudi talents against each other to showcase their design, production and sustainability solutions for the local manufacturing sector. Contestants will compete for a pool worth a combined SAR 1.4 mn.

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