Italy and KSA sign USD 10 bn in agreements

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Turkey’s FM is due in town, with USD 6 bn defense agreement on the table

Good morning, ladies and gents, and welcome to a busy hump day issue. Plenty of stories are vying for attention here at home, not least of which is Italy signing a USD 10 bn bundle of agreements with a handful of Saudi companies and entities.

PLUS- New regulations will allow foreign investors to directly buy shares in companies that have assets in the holy cities, as the Capital Market Authority pushes through changes to reel in more foreign investments and boost capital market liquidity.

^^ We have chapter and verse on these stories and more in this morning’s news well, below.

HAPPENING TODAY-

#1- Raoom Trading’s shares closed 5.2% down at SAR 183 apiece on its debut trading session on the main market yesterday, following its transfer from Nomu.

ICYMI- The company’s stock had been suspended since 22 January to prepare for the transition. Raoom Trading received regulatory approval from the Saudi Exchange to transition to the main market earlier this month.

#2- The Model of Care Forum kicks off today at Prince Mohammed bin Salman Nonprofit City. Over the next two days, 25 local and international speakers, 80 exhibitors, and over 1.5k health professionals from 20 public and private health groups will participate, SPA reports. The forum will feature discussions on integrated care, innovation, sustainability, and the future of healthcare, focusing on prevention, AI, digital health, and innovative solutions for patient care and efficiency.

WEATHER- Riyadh is expected to see a high of 18°C and a low of 10°C today, while Jeddah’s mercury will go as high as 29°C and as low as 19°C. Makkah will see a 30°C high and 18°C low.

HAPPENING THIS WEEK-

#1- Shares of Alshehili Company will begin trading on the Nomu parallel market tomorrow, according to a Tadawul statement. The company’s shares will be allowed to fluctuate within a 30% band on the first three days of trading, after which price fluctuations will be capped at 10% as circuit breakers take effect.

REFRESHER- The heavy equipment manufacturer priced its 20% stake IPO at the top of its indicative price range of SAR 80 per share. The pricing would give the company a market cap of SAR 200 mn at listing.

#2- Twareat Medical Center’s (TMC) shares will begin its direct listing on the Nomu parallel market tomorrow, according to a Tadawul statement. TMC issued its registration document in December, setting the price at SAR 12 per share. Shares will be subject to a price fluctuation range of 30% for the first three days, after which the limit will be capped at 10% as circuit breakers take effect.

SOUND SMART- In a direct listing, a company allows its existing shareholders to sell their shares directly on the market without issuing new shares or raising additional capital. This process typically involves fewer regulatory requirements and costs, making it faster and simpler than an IPO.

WATCH THIS SPACE-

#1- Turkey is gunning for USD 6 bn in defense sales to the Kingdom, with the potential agreement including purchases of warships, tanks, and missiles, Bloomberg reports citing unnamed Turkish officials. The agreement could be finalized during a visit by Turkish President Recep Tayyip Erdogan to Saudi Arabia that is slated for March, the source added.

Turkey’s FM Hakan Fidan is scheduled to visit the Kingdom today, Anadolu Agency reported.

What’s on the table: The agreement would see Saudi Arabia join Turkey’s KAAN fifth-generation fighter jet program. The Kingdom could also discuss purchasing Turkey’s Altay main battle tank and missile-defense systems, the Turkish official noted.

Not the first we’re hearing of this: Saudi Arabia kicked off talks with Turkey last month for the potential procurement of 100 KAAN fighter jets by 2030, when Saudi Deputy Defense Minister Khaled bin Hussein Al-Biyari, Air Force Commander Turki bin Bandar, and head of Turkish Defence Industries Haluk Görgün met in Istanbul. Developed by state-owned Turkish Aerospace Industries, the KAAN saw its first test flight in early 2024.

#2- Al Rajhi Capital received the green light from the Capital Market Authority for the public offering of its Al Rajhi Global Sukuk Fund, the authority said in a statement. No details were publicly available on the fund.

DATA POINTS-

#1- Commercial registrations in the administrative and support services sector grew 16% y-o-y in 2024, according to state news agency SPA. Security system services saw 41% growth to 2.5k records, while packaging services grew 34% to 9.8k, travel agencies grew 30% to 10.5k, and tour operators grew 23% to 8.6k.

#2- Real estate funds, including private and public funds and REITs, control 25% of Saudi’s SAR 1 tn in managed assets, Mubasher reported, citing statements by Capital Market Authority Chairman Mohammed Al Quwaiz at the Real Estate Future Forum (REFF). Assets managed by the sector were up 23% in 2024.

ALSO FROM REFF- The Kingdom issued 192 licenses for real estate projects worth SAR 147 bn in 2024, Municipalities and Housing Minister Majid Al Hogail said according to Mubasher. Meanwhile, foreign real estate investors were issued upwards of 1.1k licenses in 3Q 2024, Real Estate General Authority CEO Abdullah bin Saud Al Hamad said according to a separate Mubasher report.

ON TOURISM- Licensed hotel buildings increased to 4k in 2024, up from 2.3k in 2023, Tourism Minister Ahmed Al Khateeb said, according to Mubasher. The number of hotel rooms across the country reached 475k, up from 280k, with plans to hit 675k by 2030.

** We have more from REFF in today’s issue.

OIL WATCH-

Saudi Arabia’s Arab Light crude could see a price hike for Asian buyers in March on the back of higher demand from China and India, as US sanctions on Russia continue to tighten supplies, traders told Reuters. Saudi Arab Light crude is expected to be priced at a minimum of USD 3.5 a barrel — its highest since January 2024.

SPORTS-

#1- Al Nassr has reportedly kicked off talks with Bayer Leverkusen for striker Victor Boniface, sports reporter Fabrizio Romano said in a post on X. The club is also considering Jhon Durán — who Aston Villa is less eager to part with.

#2- UFC Saudi Arabia is down one fight: The UFC Saudi Arabia middleweight bout between André Muniz and Ikram Aliskerov was canceled due to visa issues with Muniz, according to Forbes. Muniz announced on Instagram that neither he nor the UFC were informed in time to resolve the issue, and the fight will be rescheduled for a later date.

This is the second time their bout has been called off, with a previous cancellation in June 2024. UFC Saudi Arabia will kick off as scheduled on 1 February in Riyadh.

#3- Saudi Sports for All Federation (SFA) will run two major events back to back, with the SFA Expo scheduled to take place between 5-7 February, and the Riyadh Marathon on 8 February, according to a press release. The last edition of the SFA Expo attracted some 12k visitors, while Riyadh Marathon’s previous iteration attracted more than 20k runners from 125 countries.

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THE BIG STORY ABROAD-

Two stories are dominating headlines in the foreign press this morning:

#1- China’s response to ChatGPT, DeepSeek, wiped USD 1 tn off of US stocks yesterday, with the prospect of a cheaper and much less energy-intensive AI chatbot rattling markets and raising questions around the US’ alleged AI dominance. The startup was later hit by a cyberattack, which prompted its developers to limit registrations. We have more in Planet Finance, below. (Reuters | FT | Bloomberg)

#2- Hundreds of thousands of Palestinians returned to northern Gaza after months of displacement, following Israel’s opening of military checkpoints after a 24-hour delay caused by claims that one of the Israeli hostages meant for release had not returned. Late night talks on Sunday shored up the agreement, making way for the opening of the routes yesterday and for more hostage transfers later this week. (Reuters | Guardian | FT | Bloomberg)

Italy and KSA sign USD 10 bn in agreements

Italy and Saudi Arabia inked a raft of agreements worth USD 10 bn during Italian Prime Minister Giogria Meloni’s trip to the Kingdom, Reuters reports. The two sides signed 26 MoUs across sectors including construction, renewable energy, cultural exchange and digital technologies, at a roundtable meeting attended by government officials and private sector players, state news agency SPA reports.

SACE SIGNS A RAFT OF AGREEMENTS

Italy’s state export credit agency Sace signed agreements worth USD 6.6 bn, to facilitate bilateral trade and investment, according to a statement.

#1- Sace signed a USD 3 bn multi-currency facility agreement with Neom, backed by nine international banks including HSBC, Banco Bilbao Vizcaya Argentaria, Bank of China, Crédit Agricole CIB, Agricultural Bank of China, Citibank, China Construction Bank, JP Morgan Chase and Bank of America. The partnership will allow Neom to leverage services from Italian firms for its infrastructure, urban development, construction and transport projects.

REMEMBER- Sace had previously pledged USD 3 bn in loan guarantees to Neom — paving the way for Italian firms to win development contracts for the megaproject.

#2- Acwa Power signed multiple agreements with Sace to provide a USD 100 mn credit line to Acwa Power in exchange for promoting Italian businesses. Up to USD 500 mn in support to facilitate exports from Italy is also in the cards.

ALSO- Acwa Power signed an MoU with Italian natural gas operator Snam to explore collaboration on a green hydrogen supply chain from Saudi Arabia to Europe, according to a statement. The two sides will be “evaluating the development of an ammonia import terminal in Italy to facilitate the delivery of green hydrogen through the SoutH2 Corridor.”

#3- Sace also signed an MoU with the Saudi Electricity Company (SEC) to explore credit guarantees to SEC for new sustainable projects to develop the Saudi electricity system in collaboration with Italian EPC and O&M service providers, according to a press release.

#4- The Arab Bank for Economic Development in Africa will collaborate with Sace to identify prospects for the development of partnerships and joint initiatives in Africa.

ALSO FROM THE ROUNDTABLE-

#1- A new Strategic Partnership Council: Meloni and Crown Prince Mohammed bin Salman signed an agreement to establish a new Strategic Partnership Council to strengthen ties between the two countries, state-press agency SPA reports.

#2- Development cooperation: Saudi’s Fund for Development also signed an MoU with Italy’s National Promotional Institution to enhance social and economic development cooperation, and develop sectors contributing to sustainable development goals, SPA reports.

#3- Aerospace and defense: Italian multinational security firm Leonardo inked an MoU with the Investment Ministry and the General Authority for Military Industries to “discuss, develop and evaluate” investments and partnerships in the aerospace and defense sectors, according to a press release.

Future cooperation: Solar and wind energy, sustainable tourism, and advanced construction techniques were highlighted as sectors for future cooperation during the roundtable discussion. Italian companies also discussed their interest in ramping up their investments in the Kingdom, contributing to total foreign investments in Saudi projected to reach SAR 11.8 tn over the next six years, SPA reported. Meloni also cited defense, energy cooperation and sport among the sectors set to see further cooperation, and expressed support for the Kingdom joining the GCAP fighter jet program.

Strong ties: Italy ranked as Saudi’s second-largest European trade partner in 2023 and tenth overall, with USD 10.8 bn in trade volumes, Asharq Alawsat reports. Saudi imports from Italy stood at USD 5.78 bn, while exports to the country were valued at USD 4.92 bn — including USD 737 mn in non-oil exports, the outlet said.

Capital Economics draws three potential scenarios for Saudi Arabia’s public debt trajectory

Saudi Arabia’s public debt could reach higher levels than previously expected by 2030: London-based research outfit Capital Economics sees the Kingdom’s debt-to-GDP ratio reaching 50% by 2030 and 60% by 2033, with the firm expecting oil prices to see a more significant dip than the government has pencilled into its plans, Capital Economics’ James Swanston said in a report seen by EnterpriseAM.

IN CONTEXT- The forecast comes following the approval of the Kingdom’s borrowing plan for FY 2025 earlier this month, which outlined a requirement for some SAR 139 bn in new public debt — and a subsequent USD 12 bn international bond issuance from the Finance Ministry, which was 3x oversubscribed. The government’s targeted amount for new public debt is intended to bridge an anticipated SAR 101 bn budget deficit penciled in for the new fiscal year, in addition to covering some SAR 38 bn required to meet principals’ repayments for loans maturing during the period.

The gov’t doesn’t see deficits as an inherently bad thing: As long as the returns on public spending exceed the cost of borrowing, deficits of SAR 100-140 bn can be beneficial, Finance Minister Mohammed Al Jadaan told Al Arabiya late last year. The Kingdom looks to benefit from the interest rate reversal to increase borrowing, signalling fiscal expansion in 2025, 2026, and 2027.

Capital Economics isn’t as confident, however: “As things stand, the Saudi government debt burden stands at 29.6% of GDP and doesn’t appear concerning – this is far lower than the EM average of around 70%. But if we’re right in expecting oil prices to fall back in the coming years, and by more than the government has pencilled into its plans, the budget deficit will widen and the debt ratio will resume its rise,” Swanston writes.

The firm laid out multiple possible scenarios, which it constructed based on different possible levels of oil prices by the end of the decade.

In its central scenario, Capital Economics sees oil prices gradually falling back from USD 80 / bbl today to around USD 55 pb by 2027-2030 — which, in turn, would push the Kingdom’s public debt-to-GDP ratio to 50% of GDP by 2030 and 60% by 2033.
If oil prices were to dip even further to USD 40 / bbl, Saudi’s public debt-to-GDP ratio would more than double to nearly 90% by 2030.
If the Kingdom’s oil output was increased to 12 mn bbl / d (35% higher than today) and oil prices were USD 40 / bbl, the debt-to-GDP ratio would go up to 80% by the end of the decade.

ICYMI- Oil prices are expected to be “weak” in 2025: A Reuters poll conducted in October sees oil prices remaining “broadly weak” at a USD 76.8 / bbl average this year, down from an average of USD 83 / bbl in 2024, according to the Finance Ministry’s budget statement for FY 2025 (pdf). Meanwhile, S&P Global sees oil prices reaching an average of USD 75 / bbl over the next two years, the firm’s Global Head of Islamic Finance Mohamed Damak told Al Arabiya earlier this month.

The solution, for Capital Economics, is to slash the Kingdom’s public spending: “The overarching message for the Saudi government is that if it is to live with lower oil prices, fiscal policy will need to be kept tight in order to prevent a rapid climb in public debt,” Swanston wrote. “Under our central scenario, a fiscal squeeze equivalent to at least 4% of GDP would be required to stabilise the debt-to-GDP ratio at 40% by 2030.” It seems the kingdom has no other option but slashing its public debt with the government indicating that it won’t be raising taxes to meet the shortfall.

Far less optimistic than other forecasts: Credit rating agency Moody’s sees the Kingdom’s public debt hitting 35% of GDP in 2030, up from 26% of GDP at the close of 2023 — a much more conservative estimate than Capital Economics’ forecast, and far lower than the EM average of around 70%.

Foreign investors can now buy shares of listed companies that own real estate assets in the holy cities

Foreign investors can now directly buy shares and convertible debt instruments in Tadawul-listed real estate companies with assets in Makkah and Madinah, under the Capital Market Authority’s (CMA) regulatory update (pdf) to the Law of Real Estate Ownership and Investment by Non-Saudis. The move unlocks the option for non-Saudi investors to directly gain exposure to the high-demand property investment market in the holy cities. This comes amid a country-wide push to appeal to more foreign investors, boost capital markets’ liquidity, and lock in additional sources of FDI. The story was picked up by Bloomberg and Reuters.

The change applies to listed real estate firms that either own public or private assets within the holy cities, which grants foreign investors the right to own stocks in four major property developers namely PIF-backed Taiba Investments, Jabal Omar Development, Makkah Construction & Development, and Knowledge Economic City (KEC), according to an SNB Capital note seen by EnterpriseAM.

IN CONTEXT- The CMA greenlit rules, in 2021, allowing non-Saudis to subscribe to real estate funds investing within Makkah and Madinah, but up until now direct investment in company shares or debt instruments was not allowed. Non-muslims remain prohibited from owning property in the holy cities, despite the gradual relaxation of ownership rules in other parts of the Kingdom.

The caveat: Foreign ownership is capped at 49% of a company’s total shares or convertible debt instruments. Meanwhile, foreign strategic investors are entirely excluded from ownership.

What the pundits are saying: SNB Capital believes this change will unlock the value of these high-quality assets, enhance funding channels for future projects, and boost liquidity — potentially paving the way for inclusion in major global indices, the note said. Notably, while Makkah and Jabal Omar are already part of the FTSE Saudi Index, none of these stocks are currently included in the MSCI Index, the note reads.

A potential upside revaluation of assets in the holy cities? Other stocks with assets in Makkah and Madinah — such as Seera Group Holding, Dar Al Arkan Real Estate Development, Jadwa REIT Al Haramain Fund, and SICO Saudi REIT — could also benefit from the potential revaluation of assets in the holy cities, SNB Capital said. Additionally, this shift could fuel investor appetite for new IPOs, mirroring the impact of a similar exemption granted to real estate funds, including REITs, in 2021, according to the note.

Market reax: Stocks of the obvious benefactors from the decision were the main movers on Tadawul yesterday, with all of them closing c. 10% up on market close.

Private investment in the Saudi tourist sector hit SAR 14.2 bn last year, up 12 bn y-o-y

Private investment in our tourism sector hit SAR 14.2 bn in 2024, up from 12 bn the year before, Tourism Minister Ahmed Al Khateeb said in an interview with Bloomberg. Some 40% of the funding came from foreign investors, with Europe and the US putting up the largest contributions.

What’s next? Discussions with investors from countries including China, South Korea, and Malaysia are already underway, with a focus on key areas such as gigaprojects, shopping centers, and hotels, the business information service said.

Investors are intrigued: “International investors have started to show a great interest to come and invest in Saudi Arabia in a time where some regions are stable or declining. They see that our ambitious plans are unlocking the value of this sector after it was closed for many decades,” Al Khateeb said.

Ambitious targets: Saudi Arabia has been open to leisure tourists since 2019, and plans to reel in 70 mn foreign visitors annually by 2030, up from 30 mn in 2024. The sector aims to secure USD 80 bn in private investment by the end of the decade to help achieve this goal, contributing to the Kingdom’s larger diversification agenda.

ICYMI- Tourism accounted for 5% of our GDP last year, a share the Kingdom is targeting to raise into 10% by 2030, backed by USD 500 bn in sustainable tourism projects such as AlUla and the Red Sea, Al Khateeb mentioned at Davos.

NHC signs SAR 30 bn agreements at Real Estate Future Forum

The National Housing Company (NHC) inked SAR 30 bn worth of real estate agreements at the Real Estate Future Forum (REFF) in Riyadh, according to Mubasher. The signed initiatives look to boost local content, innovation, and sustainability in the local real estate sector.

Agreements signed at the REFF include:

An MoU with the Industry and Mineral Resources Ministry to bolster supply chains and local content in real estate development;
An MoU with King Abdulaziz City for Science and Technology and Al Saif Company to advance off-site construction techniques;
Supply chain services agreements with a host of real estate firms — including Retal, Dar Wa Emaar, and Al Raed Real Estate Development — to enhance project efficiency and quality;
Open purchase agreements with Al Zamil Air Conditioners Factory for air conditioning supply chains;
Strategic collaboration to launch a logistics city in Khuzam with CETIC Construction and Alrawaf Contracting (Linkedin) to strengthen supply chains in the real estate sector and support future projects;
An MoU with Saudi Media Academy to provide specialized training programs for developing national media talent (Linkedin).

A new NHC subsidiary + IPO plans: The company launched its new digital arm, NHC Innovation, to manage the company’s digital gateways, according to a post on X. The company manages 10 digital platforms serving 20 mn users and handling 500 mn operations per year, with SAR 250 bn in financial transactions in 2024. NHC is currently mulling IPOs of multiple companies, including NHC Innovation, Al Batty told Alarabiya.

NHC has big plans for this year: The state-owned home developer has a SAR 70 bn housing projects pipeline lined up for 2025, Mubasher reported, citing NHC CEO Mohammed Al Batty. NHC’s real estate portfolio, including partner holdings, is expected to surpass SAR 200 bn by the year’s close. The developer is also on track for its 2025 targets as it aims to hit the milestone of delivering upwards of 300k housing units across 17 locations by the year’s end, Mubasher separately quotes Al Batty.

Riyadh in the crosshairs: 50% of new home developments lined up for the year will be situated in the capital, with 70k new housing units earmarked this year, Al Batty added.

The Kingdom’s startup funding drops 70% y-o-y in 2024

Saudi Arabia relinquished its MENA startup funding lead in 2024, raising USD 700 mn across 186 transactions, dropping 70% y-o-y, according to Wamda’s 2024 Investments in MENA report (pdf). Last year’s tally places the Kingdom behind the UAE, which drew in USD 1.1 bn — almost half of regional funding — across 207 transactions.

The drop in numbers is partly explained by a disparity in debt funding: 2023’s tally was buoyed by USD 1 bn in debt. Excluding this, the drop in investment numbers narrows from 70% to 44% y-o-y. Debt accounted for just USD 34.3 mn of investments in our startup scene last year.

The standout sectors: SaaS startups attracted the most capital in the Kingdom, securing USD 177 mn across 27 transactions. Fintech followed closely with USD 171 mn across 24 startups, while mobility startups raised USD 86 mn from four agreements. The majority of investments were driven by local venture capital firms and government-backed programs to bolster the tech sector in keeping with the diversification agenda.

Saudi investors were also the most active in the region, accounting for 175 agreements and surpassing the UAE (98), Egypt (57) and the most active foreign investor, the US (100). Among Saudi-based investors, PIF-backed Sanabil 500 ranked second in MENA with 14 agreements.

ON THE REGIONAL FRONT-

The MENA region’s total startup investments declined by 42% y-o-y to USD 2.3 bn in 2024 across 610 transactions. Rounds taking place without debt amounted to USD 2 bn, while debt-enabled transactions reached USD 331 mn.

The most popular sectors in 2024 for venture investors: The fintech sector accounted for 30% of total investments in the region in 2024, with USD 700 mn injected into 119 fintech startups — followed by web3 at USD 260 mn, and e-commerce at USD 253 mn in investments.

Early stage investments accounted for the bulk of investments last year with a total exceeding USD 1.2 bn across 300 startups and ranging from pre-seed to Series A stages. The later stages reached a total of USD 332 mn across 10 transactions, while only two startups secured pre-IPO rounds with a value of USD 143.3 mn.

The B2B model took the lead with USD 1.2 bn in investments across 325 startups, followed by the B2C field with USD 717 mn, with the hybrid model amounting to USD 311.7 mn and direct-to-consumer to USD 25.5 mn.

How do these figures compare? Wamda’s estimate for total investments in the region was higher than Magnitt’s, with total startup investments amounting to USD 1.5 bn, marking a 29% y-o-y decline in comparison to 2023. Both reports agree that early-stage investments are becoming more appealing to investors than late-stage rounds.

New petroleum law requires companies, exporters to obtain license

Petroleum and petrochemical operations now require a license: The Kingdom’s new Petroleum and Petrochemical Law requires companies to obtain a license for all operations in the sector, Saudi Gazette reports. The new law — approved by the council of ministers earlier this month — replaces the old Petroleum Products Trade Law, aiming to attract investments, support industry localization, and prevent illegal practices like smuggling and false reporting.

The details: The new law stipulates sales and purchases of petroleum products must be priced at the global prices. Establishing petrochemical facilities will also need prior approval from the Energy Ministry, with inspectors holding expanded powers to monitor facilities, investigate violations, and seize items suspected of breaching regulations.

The Energy Ministry may also deny or revoke export licenses for violators, according to the provisions of the law. Violations include “Supplying the ministry or the public with false or misleading information or data related to petroleum or petrochemical operations or materials; … tampering with storage levels for the purpose of liquefying or selling it or disrupting the security and reliability of petroleum and petrochemical supplies,” according to Saudi Gazette.

Unlicensed exporters of petroleum product could face up to five years in prison, and a fine up to SAR 30 mn or twice the value of the seized products at global prices, as well as confiscation of illegally traded materials.

Catrion Catering Holding signs off on leadership shuffle

Catrion Catering Holding’s board of directors approved the appointment of Mohammed Hassan Al Shuhail as the company’s new CEO, effective 1 February, according to a disclosure to Tadawul. Al Shuhail succeeds Wajdy Mohammed Al Ghabban (Linkedin), who will now become managing director of the board following his nine-year tenure as CEO.

Catrion also tapped Mohammed ‎Abdulaziz Al Sarhan as board chairman with Fahad Abdullah Moussa (Linkedin) as vice chairman, according to a separate disclosure. Al Sarhan currently chairs the boards of Al Bahri and Al Muzaini Real Estate Development, while Moussa serves as a board member on SAL, Saudia Cargo, and Fourth Milling Company.

Sener to revamp masterplans for Saudi airports

AVIATION-

#1- Spain’s Sener tapped to upgrade masterplans for five airports: Airports operator Matarat Holding awarded the Spanish engineering firm Sener a contract to update the master plans for the Yanbu, Tabuk, Al-Baha, Al Jouf, and Al Gurayat airports, Sener said in a statement. The contract will see Sener analyze traffic, tourism potential, facility needs, and environmental impacts while forecasting future demand and investment needs. An airport’s master plan aims to chart a framework for its short- and long-term development needs. The contract value wasn’t disclosed.

#2- Riyadh Air received an operational certificate from the General Authority of Civil Aviation for its first Boeing 787-9 RX7000 full-flight simulator, according to a press release. The simulator, which comes ahead of the plane’s scheduled commercial launch this year, will support pilot training by offering a realistic and responsive environment for skill development.

STARTUP WATCH-

Homegrown digital coupon and gift card solutions platform Foz raised SAR 2 mn (USD 533k) in a pre-seed funding round, which the startup will use to expand its services in the Kingdom and regionally, Waya reports. The funding will also back the company’s plans to expand its local and international partnerships to scale up its offerings.

About Foz: Foz offers businesses cost-effective marketing tools, such as digital coupons with discounts that could reach over 50% on various products and services, helping companies boost their sales and attract new customers.

LOGISTICS-

UAE-based logistics firm Aramex deployed its automated robotic sorting system at Jeddah Islamic Port, Arab News reports. The system, which has three feeding lines, feature 120 robotic guided vehicles that can process up to 4k shipments per hour, giving it a daily capacity of 96k shipments. Aramex, which launched its regional HQ in the Kingdom in March, plans to launch a drone delivery project by the end of February.

AUTOMOTIVE-

EVIQ partners with BYD to expand Saudi EV charging: The Electric Vehicle Infrastructure Company (EVIQ), a JV between the PIF and the Saudi Electricity Company, partnered with BYD’s agent in Saudi Arabia Al-Futtaim Electric Mobility to build public high-speed EV charging stations at BYD Al-Futtaim Electric Mobility locations across the Kingdom, according to a press release. The collaboration also includes offering charging packages to BYD customers for easier access to charging services.

ICYMI- EVIQ plans to deploy over 5k chargers across the Kingdom by 2030.

ENERGY-

Saudi Arabia sealed a contract with Iraq to supply it with 1 GW of electricity as part of Iraq’s broader plan to import 3.2 GW of electricity from neighboring countries this summer, Zawya reports, citing remarks given by Iraqi Electricity Ministry Spokesman Ahmed Mousa to the state-run Iraqi News Agency. The plan will see Iraq secure its electricity needs with support from Iran, Turkey, Jordan, and the GCC grid in a bid to address power shortages.

TELECOMS-

Zain KSA has become a strategic sponsor for Italy’s FC Internazionale Milano, offering home packages with special edition Inter-themed 5G routers, according to a press release. The six-month agreement will provide Inter fans with advanced 5G experiences through routers featuring the club’s logo.

Chinese AI model threatens US dominance with a fraction of the cost

DeepSeek causes US tech rout: A China-based AI startup has thrown US dominance in the AI field into doubt after it developed competing technologies on a much smaller budget than its American counterparts, the Financial Times reports. US giant Nvidia stock price fell almost 17%, wiping USD 589 bn in market cap in the biggest one-day drop ever recorded for a US company. Tech-heavy indexes took a hit, too: the Nasdaq Composite was down 3%, while S&P fell 1.5%.

A fraction of the cost: DeepSeek spent only USD 5.6 mn training its R1 model, which “performed similarly for around one-fourth of the cost,” Anthony Poo, co-founder of a Silicon Valley-based startup, told the Wall Street Journal. Silicon Valley’s tech giants spend between USD 100 mn and USD 1 bn training each model, according to estimates from Dario Amodei, CEO of US-based AI startup Anthropic.

How DeepSeek achieved it: DeepSeek’s founder, Liang Wenfeng, used proceeds from his hedge fund High-Flyer to finance DeepSeek’s research and development activities, attracting China’s top AI talent with the highest salaries offered in the country. With little more than 2k Nvidia H800 chips — US firms used tens of thousands — they developed the model while sometimes skipping steps US developers thought essential.

DeepSeek claims that the R1 model can outperform US counterparts, and the claim is not without merit. The model seems to outperform rival models on many third party tests, according to CNBC. Some believe OpenAI still has an edge, but several companies are already moving to using DeepSeek as a more cost-efficient option, WSJ reported.

US attempts to curb China’s AI advancements through sanctions seem to have had the opposite effect. China-bound Nvidia chips were capped at half speed capacity before Washington banned the export of Nvidia chips to China altogether last year. The move forced DeepSeek’s engineers to maximize the computing power of existing chips with limited resources. DeepSeek had also started stockpiling Nvidia A100 chips before the US imposed sanctions, prioritizing research and resource-pooling to develop models despite limited resources.

All in the open: DeepSeek opted to release its AI model open-source, in a departure from competition-focused US companies, which makes the rise of more and more competitors to rival US tech giants more likely. This approach might cause Silicon Valley giants to reconsider their high-cost strategies — think Trump’s USD 500 bn megaproject Stargate — in order to keep up with the changing landscape.

The regional angle: DeepSeek upending the AI market could have significant ramifications for the GCC’s AI push. Saudi has been looking to both the US and China for AI technologies, after Saudi officials negotiated with the US government to secure Nvidia H200 chips last year and an Aramco fund invested in Chinese startup Zhipu AI. Meanwhile, the UAE started receiving chips from Nvidia last September, including Nvidia’s high-performing H100 chips.

MARKETS THIS MORNING-

Asian markets are slightly inching down this morning, with Japan’s Nikkei down 0.6% and Shanghai Composite down 0.1%. Meanwhile, Wall Street futures are seeing little change after DeepSeek triggered tech sell-off on Monday.

TASI	12,373	-0.1% (YTD: +2.8%)
MSCI Tadawul 30	1,539	-0.4% (YTD: +1.9%)
NomuC	31,014	+0.4% (YTD: -1.5%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	29,742	-1.0% (YTD: 0.0%)
ADX	9,553	-0.1% (YTD: +1.4%)
DFM	5,192	-0.7% (YTD: +0.6%)
S&P 500	6,012	-1.5% (YTD: +2.2%)
FTSE 100	8,504	0.0% (YTD: +4.1%)
Euro Stoxx 50	5,189	-0.6% (YTD: +6.0%)
Brent crude	USD 77.08	-1.8%
Natural gas (Nymex)	USD 3.68	-0.4%
Gold	USD 2771.50	-1.3%
BTC	USD 101,474.50	-3.0% (YTD: +8.4%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.1% yesterday on turnover of SAR 7.2 bn. The index is up 2.8% YTD.

In the green: Jabal Omar (+10.0%), KEC (+9.9%) and MCDC (+9.8%).

In the red: Raoom (-5.2%), Nice One (-4.9%) and Albaha (-4.3%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.4% yesterday on turnover of SAR 47.2 mn. The index is down 1.5% YTD.

In the green: Aldawliah (+11.0%), Knowledge Tower (+9.3%) and Enma Alrawabi (+6.3%).

In the red: Mulkia (-9.9%), Albattal Factory (-6.3%) and Fadeco (-5.9%)

CORPORATE ACTIONS-

Saudi Fisheries Company’s board of directors approved an 83.3% capital reduction to SAR 67 mn, down from SAR 400 mn, by reducing the number of company shares from 40 mn to 6.7 mn by shares cancellation, the firm said in a disclosure to Tadawul. The move comes as part of a capital restructuring to offset accumulated losses.

CALENDAR

JANUARY

27-29 January (Monday-Thursday): Amerigo Vespucci and Villaggio Italia, Jeddah Yacht Club 7 Marina.

27-29 January (Monday-Wednesday): Real Estate Future Forum, Four Seasons Hotel, Riyadh.

27-29 January (Monday-Wednesday): Saudi Franchise Expo, Riyadh International Convention and Exhibition Center.

28-29 January (Tuesday-Wednesday): Federal Open Market Committee meeting.

28-29 January (Tuesday-Wednesday): Sustainability Forum Middle East, Riyadh.

29-30 January (Wednesday-Thursday): Global Labor Market Conference, Riyadh.

31 January (Friday): Deadline for businesses to update their registered customs items.

1Q: BinDawood Holding expected to close 100% acquisition of Zahrat Al Rawdah Pharma

1Q: Roshn expected to raise SAR 2.6 bn from international bank

FEBRUARY

1 February (Saturday): UFC Fight Night: Adesanya vs Imavov, The Venue, Riyadh.

2 February (Sunday): Flyadeal launches direct flights to Karachi, Pakistan, departing from Riyadh and Jeddah twice a week.

2 February: Derayah Financial announces Price Range and begins institutional book building for its Tadawul IPO

3-5 February (Monday-Wednesday): Saudi International Marine Exhibition (SIMEC), Riyadh.

4-5 February (Tuesday-Wednesday): The RLC Global Forum, Riyadh.

4-5 February (Tuesday-Wednesday): Capital Markets & ESG Finance, Hilton Riyadh Hotel & Residences.

6 February (Thursday): Property registration deadline for owners in several districts of seven Qassim cities.

6-8 February (Thursday-Saturday): LIV Golf season opener, Riyadh Golf Club, Riyadh.

8 February (Saturday): Sotheby’s first auction in the Kingdom, Diriyah.

9-12 February (Sunday-Wednesday): LEAP Tech Conference, Malham, Riyadh.

9-12 February (Sunday-Wednesday): DeepFest by Leap, Riyadh.

10-12 February (Monday-Wednesday): Saudi Travel Market, Riyadh International Exhibition Center.

10-13 February (Monday-Thursday): Leap 2025, the Kingdom’s premier tech investment conference.

14-15 February (Friday-Saturday): Formula E, Diriyah.

15-18 February (Saturday-Tuesday): Week one of Big 5 Construct Saudi, Riyadh Front Exhibition & Conference Center.

16-17 February (Sunday-Monday): AlUla Conference for Emerging Market Economies, AlUla.

18 February (Tuesday): The Capital Markets Forum, KAFD Conference Centre, Riyadh.

19-20 February (Wednesday-Thursday): The Capital Markets Forum, The Four Seasons, Riyadh.

19 February (Wednesday): Derayah REIT dividend distribution.

19-21 February (Wednesday-Friday): Saudi Media Forum, Riyadh.

21-22 February (Friday-Saturday): The Saudi Cup, Riyadh.

22 February (Saturday): Founding Day.

22 February (Saturday): Dazn Boxing event: Beterbiev vs Bivol II, Riyadh.

23-27 February (Sunday-Thursday): Riyadh International Disputes Week, Hilton Riyadh Hotel Granada.

24-25 February (Monday-Tuesday): The Riyadh International Humanitarian Forum, Riyadh.

24-27 February (Monday-Thursday): Week two of Big 5 Construct Saudi, Riyadh Front Exhibition & Conference Center.

MARCH

1-30 March: Ramadan (TBC).

18-19 March (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

31 March- 3 April (Monday-Thursday): Eid Al Fitr.

APRIL

2 April (Wednesday): New Commercial Registration Law and Trade NameLaw to take effect.

7-9 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

3-20 April (Thursday-Sunday): AFC Asian U17 Cup.

14-16 April (Monday-Wednesday): Future Hospitality Summit, Mandarin Oriental Al Faisaliah, Riyadh.

18-20 April (Friday-Sunday): Saudi Arabian Grand Prix, Jeddah,

21-24 April (Monday-Thursday): Saudi Food Exhibition and Conference, Riyadh.

22-23 April (Tuesday-Wednesday): AAM Middle East, Riyadh.

25 April- 4 May (Friday-Sunday): AFC Champions League Elite Finals

MAY

6-7 May (Tuesday-Wednesday): Federal Open Market Committee meeting.

12-15 May (Monday-Thursday): Saudi Smart Manufacturing, Riyadh International Convention & Exhibition Center.

13-14 May (Tuesday-Wednesday): Global EV & Mobility Technology Forum, The Arena, Riyadh.

23 May (Friday): Guns N’ Roses Show, Riyadh.

31 May-5 June (Saturday-Thursday): Hajj.

JUNE

6-9 June ( Friday-Monday): Eid Al Adha.

17-18 June (Tuesday-Wednesday): US Federal Reserve’s Federal Open Market Committee meeting.

26 June (Thursday): 2024-2025 academic year ends.

JULY

31 July (Thursday): Deadline for companies with SAR 2.5 mn or more in 2022/2023 revenues to integrate e-invoicing solutions with Fatoora.

29-30 July (Tuesday-Wednesday): Federal Open Market Committee meeting.

AUGUST

5-17 August (Tuesday-Sunday): Fiba Asian Cup.

SEPTEMBER

15-17 September (Sunday-Tuesday): Money 20/20 Middle East, Riyadh.

17-18 September (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

23 September (Tuesday): Saudi National Day.

OCTOBER

28-29 October (Tuesday-Wednesday): Federal Open Market Committee meeting.

NOVEMBER

3-9 November (Monday- Sunday): WTA Tour Finals.

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front Convention & Exhibition Centre, Riyadh.

27-30 November (Thursday-Sunday): The World Rally Championship (WRC), Jeddah.

DECEMBER

1-4 December (Monday-Thursday): International Conference on Nuclear Emergencies, Riyadh.

December: The Fortune Global Forum 2025, Riyadh.

9-10 December (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

2026

IFAT Exhibition and Conference, Riyadh

UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.

8-12 February (Sunday-Thursday): World Defense Show, Riyadh.

26-29 October (Monday-Thursday): World Energy Congress, Riyadh.

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.

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