Budget deficit widens in 1Q 2025 amid lower oil demand. PLUS: Non-oil activity growth slowed in April

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Crown Prince to hold GCC leaders summit with Trump -Axios

Good morning. It’s a meaty Tuesday issue, heavy on macro data and big updates from the Saudi IPO market that seems to be showing no signs of slowdown, even as uncertainty engulfs global markets.

In this morning’s news well: Our deficit widened in 1Q as lower oil demand weighed down in revenues, and non-oil activity expanded at a slower rate in April as new orders slow down. The IPO scene saw Flynas publish a prospectus for its long-awaited IPO, while United Carton Industries’ IPO raked in more than SAR 75 bn in orders.

BUT FIRST- Thank you very much to our new friends who braved midday traffic to join us yesterday for our inaugural reader lunch at the Four Seasons Riyadh at Kingdom Centre. It was wonderful to talk shop and share a laugh. All of our readers will benefit from the deeper insights that gathering like this will help us bring to future daily reports.

We enjoyed yesterday so much that we’re going to make this a quarterly thing. We’ll soon set a date for our next quarterly reader lunch and will invite folks to drop us a note if they’re interested in attending. Thank you to everyone who reached out and asked to join us — we’ll look forward to meeting many more of you as the months go by.

** Want to talk over something that interested you in this morning’s report? Or do you have a question, comment, or story idea? Hit “reply” to this email — we read every note we receive.

WEATHER- It's another dusty day in the Kingdom. Ongoing storms are expected to keep up in Jazan, Asir, Al-Baha, and Makkah with a chance of light rain in Riyadh, Qassim, the Eastern Province, Northern Borders, and Al-Jawf.

Riyadh is expected to see a high of 37°C and a low of 27°C today, while Jeddah’s mercury will go as high as 32°C and as low as 24°C. Meanwhile, Makkah will see a 36°C high and 25°C low.

PSAs-

Businesses subject to withholding tax must file their April tax returns by Sunday, 11 April via Zatca’s website, according to a statement. Late submissions will face a 1% penalty for every 30 days of delay.

WATCH THIS SPACE-

#1- Crown Prince Mohammed Bin Salman plans to invite all GCC leaders to a 14 May summit with US President Donald Trump, Axios reports, citing a US official and two Arab sources.

What we (reportedly) know: The summit is expected to be held after discussing US-Saudi bilateral relations, but before Trump visits Qatar and the UAE. While official details are pending, the GCC-US summit will bear a broader regional focus.

On the itinerary: The visit to the region highlights Trump’s administration's push to deepen economic ties with Gulf countries while providing a platform to outline and rally support for US policy in the Middle East. While details are yet to be fleshed out, a set of topics are expected to top the agenda, chief among them are investment, arms transfers, and AI, in addition to regional issues like the Israeli-Palestinian conflict and the Iran-US negotiations over Tehran’s nuclear program.

Of particular interest to Saudi: The US has put on the table a USD 3.5 bn arms transfer agreement to equip Riyadh with air-to-air missiles, receiving the green light from the Defense Department last Friday. Meanwhile, Riyadh captured the US attention with a potential investment worth USD 600 bn announced earlier this year, which Trump would like to see go up to USD 1 tn.

In the backdrop: Trump is not expected to visit Israel as there are no major diplomatic breakthroughs in sight, particularly with respect to a Gaza ceasefire or hostage release, sources told Axios. The visit coincides with the ongoing US-Iran nuclear agreement talks, which Gulf countries have backed, urging continued US engagement.

BACKGROUND- Trump’s first presidential trip in 2017 also began in Saudi Arabia with a large Arab and Muslim leaders’ summit. Former US president Biden held a similar summit with Gulf, Iraqi, Jordanian, and Egyptian leaders during his 2022 visit.

#2- India is reportedly weighing tax breaks for the Public Investment Fund (PIF) to encourage up to USD 100 bn in investment across the infrastructure and energy sectors, the Financial Express reports, citing unnamed sources. Saudi officials have requested exemptions for investments in infrastructure assets, including refineries.

The details: The proposed package includes a tax holiday of up to 10 years, depending on the nature and structure of the investments. India is also reportedly considering measures to simplify the process for PIF to claim tax exemptions for income generated from dividends, interest, and capital gains linked to infrastructure investments. PIF may receive treatment similar to the Abu Dhabi Investment Authority, which enjoys preferential tax benefits in India, according to the outlet.

The stumbling block: Saudi Arabia’s investment in two Indian oil refineries is reportedly stalled on terms of an agreement to supply crude oil to the facilities. Saudi wants to supply 50% of the refineries' needs at official prices, while India wants a 20% share at discounted rates.. This delay risks derailing projects tied to the broader USD 100 bn investment pledge.

REMEMBER- Saudi Arabia and India recently agreed to deepen cooperation across key sectors, including energy. The two sides also agreed to kick-off talks on a bilateral investment treaty.

#3- Our friends at United International Holding (UIHC) changed their name on the Saudi Exchange to Tasheel, according to a disclosure to Tadawul. The new trading name for the eXtra subsidiary and operator of Tasheel Finance aims to simplify recognition and use for its shareholders.

ICYMI- Tasheel saw its estimated 1Q 2025 net income grow 10.4% y-o-y to SAR 57.8 mn, while revenue was up 24.8% y-o-y at SAR 174 mn over the same period, driven by higher consumer finance revenues.

#4- Private healthcare provider Specialized Medical Company (SMC) plans to invest SAR 3 bn to build three hospitals in northern Riyadh, CEO Bassam Shaheen told Al Arabiya. The first hospital, SmC3, is scheduled for completion in 4Q 2027, with the other two set to be completed in the following two years.

Financing breakdown: The expansion will be funded through loans, facilities, and internal cash flows, without requiring new capital from shareholders. The company has already secured SAR 3.6 bn in long-term loans and short-term bank facilities. Revenues and net income margins are projected to double once all three hospitals are operational, with the company aiming to maintain its dividend payout ratio at 40–50% of earnings.

ICYMI-SMC published the prospectus for its IPO on Tadawul's main market earlier this week through a secondary share sale of 75 mn ordinary shares, representing a 30% stake. The offering will be available to both institutional and retail investors, with institutional bookbuilding scheduled for 11-15 May and retail subscription for 28-29 May. Existing major shareholders will retain a 66% stake and receive all proceeds from the sale, after covering IPO expenses of SAR 41 mn.

#5- Port-operator Red Sea Gateway Terminal International is mulling a bid to build and run a farm-fresh food terminal at South Africa’s Durban port, Bloomberg reported. The concession, which spans 25 years, will see the development of 15 berths over 145 hectares, handling over 7 mn tonnes of cargo annually.

The drivers: The development will build upon South Africa’s huge citrus exports, which comes second worldwide after Spain and are shipped to the Middle Eastern countries among others.

Red Sea Gateway is also eyeing investment opportunities across Africa, with special focus on multipurpose terminals shipping mining and food products, the firm’s director of Global Investments Gagan Seksaria told Bloomberg.

#6- CMA suspends Mekyal’s licenses: The Capital Market Authority (CMA) suspended Mekyal Financial Technologies’ license to carry out arranging activities in the security sector and revoked a temporary permit that allowed it to market investment in debt instruments, according to a statement. The CMA said it has concerns about the accuracy and reliability of the company’s disclosures.

ALSO FROM THE CMA- Nama Ventures Capital met all the requirements to begin managing investment activities in the securities sector, following the issuance of a license in September 2024, the authority said in a separate statement.

DATA POINTS-

The Kingdom climbed 28 spots in the Open Data Inventory ranking to land in the 41st place globally, up from 69th in 2024, according to a report by Open Data Watch. It also rose to the 9th spot among G20 countries, up from the 15th. The Kingdom saw a 16-point improvement in its data coverage score and a 15-point rise in data openness, reflecting a 143% overall score increase since 2017.

OIL WATCH-

Wall Street analysts slashed their oil price forecasts in response to Opec+’s decision to accelerate production in June, with the group raising increments for the second month in a row to add 411k barrels per day (bbl / d) for June.

Goldman Sachs lowered Brent crude forecasts by USD 2 to USD 3 a barrel to average USD 60 a barrel for this year and USD 56 a barrel 2026, while pegging West Texas Intermediate at USD 56 a barrel in 2025 and USD 52 a barrel next year, Reuters reports.

MEANWHILE- Morgan Stanley pegs Brent prices to average USD 62.50 a barrel in 3Q and 4Q on the back of Opec’s latest announcement, with the surplus expected to rise by 400k bbl / d and hit 1.1 mn barrels in 2H of this year. Barclays dropped its Brent oil rate forecast by USD 4 a barrel to USD 66 for 2025 and by USD 2 to USD 60 for 2026, Reuters reports.

The rationale: “Our key conviction remains that high spare capacity and high recession risk skew the risks to oil prices to the downside, despite relatively tight spot fundamentals,” Goldman Sachs analysts said in a note seen by Bloomberg.

REMEMBER-Brent crude fell some 4.6% to USD 58 a barrel following the meeting, while West Texas Intermediate was near USD 56, plummeting some 3.8%.

All eyes on Saudi: “The key to knowing how far the Saudis will take what is starting to look like a price war is the nation’s tolerance for low oil prices over time,” said head of Morgan Stanley’s commodities strategy department Warren Patterson.

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THE BIG STORY ABROAD-

Israel plans to step-up its war on Gaza: Israel’s cabinet approved plans yesterday to control large parts of Gaza indefinitely and relocate Palestinians to “sterile zones” all across the territory at the same time as it takes over aid distribution. Israeli officials signalled the intensive plan will be implemented only if a ceasefire failed to materialize by the time US President Trump leaves the region after his anticipated gulf summit in mid-May.

Houthis are not backing down: Despite intensifying strikes by the US and allies, the militant group announced a “comprehensive” aerial blockade on Israel, promising to repeatedly target key airports and urging international airlines to cancel all flights to Israeli airports.

ALSO- OpenAI listened to widespread criticism and decided to halt plans to turn for-profit. The plan would have spun the ChatGPT maker into an independent entity from the nonprofit that currently holds a controlling stake, which raised concerns of subverting governance safeguards that are supposed to keep AI tech development in check.

AND- Trump is threatening tariffs (what else is new?) that could reach 100% on films made outside of the US, a move that could significantly hurt movie production in many regions, including the Middle East.

Budget deficit widens in 1Q 2025 amid lower oil demand

The state budget widened modestly to SAR 58.7 bn in 1Q 2025 from SAR 57.7 bn the previous quarter, according to the Finance Ministry’s quarterly budget performance report (pdf). Total government revenues came in at SAR 263.6 bn for the quarter, down 10% y-o-y, while expenditures rose 5% y-o-y to SAR 322.3 bn.

Non-oil revenue was up slightly, but lower oil demand and rising trade protectionism pushed down oil revenues, Saleh Sultan, former chief economist at FinMin, told Asharq Business.

REMEMBER- The budget deficit was earlier expected to come in at 2.3% of GDP (SAR 101 bn) in 2025. The recent drop in oil prices has led some analysts to pencil in a deficit of 6% of GDP — or more — for the year.

The Kingdom said last year it is willing to accept (modest) fiscal deficits as the price of pursuing long-term diversification goals, framing it as wanting to avoid “overheating” the national economy.

THE BREAKDOWN-

Oil revenues accounted for some 57% of total government income in the first quarter of the year, totaling SAR 149.8 bn (a drop of c. 18% y-o-y) Meanwhile, non-oil revenues made up the remaining 43%, coming in at a combined SAR 113.8 bn, up roughly 2% compared to the same period last year.

Total expenditures for 1Q rose approximately 5% y-o-y to SAR 322.3 bn. Compensation for government employees remained the largest spending category at SAR 146.1 bn, about 45% of total spending and up 6% y-o-y. Spending on goods and services followed at SAR 64.6 bn, accounting for 20% of the total and also up 6% y-o-y.

The debt situation: Total public debt came in at SAR 1.33 tn as at the end of the quarter, with domestic debt amounting to SAR 738.25 bn, while external debt reached SAR 477.67 bn. Debt issuances during the quarter totally SAR 114.86 bn, including SAR 54.04 bn in external debt.

Saudi Arabia’s Non-oil activity grows at a slower rate in April as new orders slow down

Non-oil business activity in the Kingdom grew at its slowest rate in eight months in April, in a slowdown that was primarily driven by a drop in new order growth, according to the Riyad Bank Saudi Arabia PMI (pdf). The seasonally adjusted headline figure came in at 55.6 in April, dipping from a reading of 58.1 in March.

The new orders subindex fell to 58.6 in April, down from 63.2 in March, marking the third consecutive month of decline for the Kingdom, according to Reuters. The rate of growth in new orders slowed to an eight-month low, driven by a combination of global economic uncertainty, which impacted client spending, and rising competitive pressures.

“The deceleration was largely driven by weaker demand growth and a significant easing in new order inflows amid a more challenging global environment,” National Bank of Kuwait's Issa Hijazeen told EnterpriseAM.

MEANWHILE- Hiring growth accelerated to its fastest pace since October 2014. “This surge in employment is a response to rising sales and increased business activity, prompting firms to expand staffing capacities,” Riyad Bank Chief Economist Naif Al Ghaith said. “Private sector firms expanded their workforce at the joint-fastest rate in over a decade, underlining confidence in long-term business prospects,” Hijazeen said.

Firms’ purchasing activity saw a steep increase, this time growing at a three-month high as companies looked to lock in high volumes of inputs in stock over anticipation of a rise in demand and activity over the near future, according to the report. This, in turn, caused additional pressures on input prices, with input cost inflation rebounding from March’s 43-month low. Output prices also rose as a result, albeit at a modest rate, with higher operating costs cited as the primary reason for increased prices.

“Business activity among non-oil companies has soared at the outset of the second quarter, driven by higher sales, new project approvals, and strong tourist numbers. While output growth remains robust, it is somewhat tempered by global economic uncertainties and competitive pressures affecting client spending,” Al Ghaith said.

Flynas is taking a 30% to Tadawul’s main market

Flynas announces Tadawul IPO: Budget carrier Flynas Company is taking a 30% stake to Tadawul’s main market, according to a prospectus (pdf). The issuance will see a combination of issuing new shares and selling existing shares.

Where will the money go? Proceeds from 17.43 mn newly issued shares will go to the company for expanding its fleet and network. Meanwhile, proceeds from selling 33.83 mn existing shares will go to selling shareholders and partially fund the employee incentive program. Offering expenses, estimated at SAR 100 mn, will be deducted from the proceeds.

The details: Some 51.26 mn ordinary shares will be up for grabs in the offering open to institutional investors, with a 20% clawback good for some 10.5 mn shares for retail investors provided there is sufficient demand.

Books open soon: The airline is set to announce the price range by 12 May, in tandem with opening the orderbook for institutional investors which will run through 18 May. Retail investors subscriptions are set to open on 18 May, with final allocation planned for 3 June.

Post-IPO structure: Flynas’ three substantial shareholders — National Flight Services Company, Kingdom Holding Company, and Nasser Ibrahim Rashid Al Rashid — will retain majority ownership, holding a combined 62.84% stake post-offering, down from 84.91%. Shares of substantial shareholders will be subject to a six-month lock-up period from the first day of trading.

A snapshot of earnings: Flynas reported a net income of SAR 492.6 mn for the first nine months of 2024, while revenue reached SAR 5.9 bn. Dividend distributions are currently restricted under terms of a loan agreement with the Saudi Industrial Development Fund (SIDF) until the loan is repaid.

Flynas is set to be the first airline in the region to go public in almost two decades, and the third regional airline to ever go public after UAE’s Air Arabia and Kuwait’s Jazeera Airways IPOs in the 2000s. The company received approval from the Kingdom’s Capital Market Authority (CMA) in March to proceed with the IPO, having initially planned to make its market debut last year.

About Flynas: Established in 2010 and converted to a joint-stock company in 2017, the Riyadh-based company is the Kingdom's first budget carrier and the largest independent airline in the Kingdom by revenue and passengers. The company operates domestic and international routes with a fleet primarily consisting of Airbus A320neo aircraft. Flynas has significant fleet expansion plans, including firm orders for 195 narrow-body and 15 wide-body Airbus aircraft, according to the prospectus.

ADVISORS- Goldman Sachs Saudi Arabia, BSF Capital, and Morgan Stanley Saudi Arabia are joint financial advisors and underwriters. BSF Capital is also serving as lead manager. Bookrunners include Emirates NBD Capital KSA, Goldman Sachs Saudi Arabia, Al Rajhi Capital, BSF Capital, Citigroup Saudi Arabia, ANB capital, and Morgan Stanley Saudi Arabia. Receiving agents include BSF Capital, Al Rajhi Capital, SNB Capital, and Riyad Capital, among others.

United Carton Industries’ IPO rakes in over SAR 75 bn in orders

UCIC IPO orders exceed SAR 75 bn: Packaging manufacturer United Carton Industries Company (UCIC) set its final offer price for its Tadawul IPO at SAR 50 apiece, the top of the previously announced guidance range, according to a press release (pdf). Strong demand from institutional investors saw the book-building process close with orders totalling around SAR 75.8 bn (USD 20.2 bn), making the offering over 126 times oversubscribed.

Proceeds + market cap: The pricing sees the offering raising approximately SAR 600 mn, based on our calculations. (calculated from 12 million shares at SAR 50 each) in proceeds for the selling shareholders. The company’s market cap will stand at SAR 2 bn upon listing.

REFRESHER- UCIC is taking a 30% stake to the main market in a secondary offering, whereby selling shareholders will rake in all of the proceeds from the sale after deducting SAR 24 mn in offering-related expenses. The IPO will see three of UCIC’s five substantial shareholders sell down their position to a combined 70% stake, down from 100%. Their shares will remain on lock-up for a period of six months from the first day of trading.

What’s next? A two-day retail subscription period is due to kick off on Monday, 12 May. Retail investors will be allowed to subscribe to up to 2.4 mn shares, representing 20% of the total offering. The final allocation is slated for Sunday, 18 May.

ADVISORS- Al Rajhi Capital is quarterbacking the transaction as lead manager, financial advisor, bookrunner, and underwriter. Receiving agents include Al Rajhi Capital, SNB Capital, Saudi Fransi Capital, Riyad Capital, Albilad Investment Company, Aljazira Capital, Alistithmar Capital, Derayah Financial, Alinma Capital, ANB Capital, Yaqeen Capita, Alkhabeer Financial Company, Al Awal Investment, Sahm Capital Financial Company, and GIB Capital.

Sedco Capital plans SAR 1 bn Riyadh office parks buy. PLUS: Dar Wa Emaar, NHC to develop SAR 750 mn housing project

Sedco Capital eyes SAR 1 bn Riyadh office parks: The Saudi Economic and Development Securities Company (Sedco Capital), being the manager of the Sedco Capital REIT Fund, plans to acquire four office parks in Riyadh for a total of SAR 1.03 bn, it said in a disclosure to Tadawul. The agreements are pending due diligence.

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More details: The potential acquisitions come on the heels of two non-binding MoUs signed on 1 May. The first MoU covers a single office park valued at SAR 650 mn — currently in the final stages of completion. The second MoU involves three office parks — also nearing completion — with a combined value of SAR 380 mn.

ICYMI- Sedco Capital REIT Fund signed an MoU last February to purchase a SAR 750 mn portfolio of diversified assets from unnamed sellers. The fully developed assets amount to a total land area of 152.1k sqm spread across Riyadh, Al Khobar, Dammam, Hafar Al Batin, Al Ahsa, and Abha.

IN OTHER REAL ESTATE NEWS-

Dar Wa Emaar + NHC to develop housing project: Dar Wa Emaar Real Estate Investment and Development partnered with the National Housing Company (NHC) to develop a 616-unit residential project valued at SAR 750 mn over a 410k sqm plot, Saudi Gazette reports.

More about the project: The project features four- and five-bedroom units ranging from 200 to 300 sqm and carrying a minimum tag price of SAR 797k. Nearly 28% of the land is set aside for parks and green spaces, and residents will have access to a wide array of services and amenities.

Ades Holding net income down in 1Q 2025

ADES HOLDING-

Ades Holding reported a 2.1% y-o-y decline in net income to SAR 196.7 mn in 1Q 2025, according to an earnings release (pdf). Revenue also fell 4% y-o-y to SAR 1.47 bn, reflecting lower activity levels as three new onshore rigs are being deployed to Kuwait and offshore rigs are being redeployed from the Kingdom to Nigeria, Thailand, and Brazil.

What they said: The dip was expected as the company begins its expansion phase and reaffirmed the company’s 2025 EBITDA forecast, CEO Mohamed Farourl told Asharq, noting that operations are driven by production levels rather than oil prices. The company will distribute 60% of its 2025 net income as dividends, he added.

ALSAIF STORES-

AlSaif Stores for Development and Investment saw its net income rise 12.6% y-o-y to SAR 35.16 mn in 1Q 2025, according to a disclosure to Tadawul. Revenue declined 15.1% y-o-y to SAR 229.26 mn during the quarter, weighed down by weaker sales and a shift in promotional strategy.

MAKKAH CONSTRUCTION-

Makkah Construction and Development saw its net income rise 32.7% y-o-y to SAR 150 mn in 1Q 2025, driven by higher hotel, towers, and mall revenues during Ramadan, as well as higher returns on financial assets, according to a disclosure to Tadawul. Revenue grew 27.6% y-o-y to SAR 236 mn during the same period, pushed up by higher occupancy rates and room prices, especially during the last nine days of Ramadan, and higher rental values at the company’s mall.

HERFY FOOD-

Herfy Food Services recorded a net loss of SAR 18.6 mn in 1Q 2025, down from SAR 448k in the same period last year, it said in a disclosure to Tadawul. The decline was attributed to lower sales, reduced other income, and higher general, administrative, and zakat expenses, despite decreases in selling, marketing and finance costs. Revenue fell 7.1% y-o-y to SAR 268.6 mn, impacted by Ramadan falling entirely within the quarter.

PIF’s Neo Space Group taps Aurélien Fougerard as CSO

PIF-owned space services provider Neo Space Group (NSG) has appointed Aurélien Fougerard (LinkedIn) as Chief Strategy Officer, according to a press release. Fougerard, formerly a Partner in Boston Consulting Group’s Aerospace & Defense and Private Equity practices, also held roles at Bain & Company and Archery Strategy Consulting, bringing over 16 years of experience across aerospace, defense, energy, and private equity. He will oversee the development and execution of NSG’s global strategic agenda, focusing on accelerating growth, driving innovation, and delivering long-term value across all business units.

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Unified attorney fee contract rolled out via Nafith platform

REGULATION WATCH-

The Justice Ministry launched Nafith, a unified code for attorney fees to regulate the lawyer-client relationship, the Saudi Gazette reports, citing Justice Minister Waleed Al Smani. The new platform is part of a larger framework of instruments, aiming to minimize disputes and promote contractual equity.

The details: The introduced unified contract covers a host of legal services, such as advice, court proceedings, and drafting of documents. The contract documents transactions, including payment of fees, exchanges of documents, and official notifications between parties. The agreement also secures the law firm’s entitlement to agreed-upon fees and the client’s right to reclaim their assets once fees are settled.

Part of a bigger plan: The Justice Ministry and the Saudi Bar Association announced a collaboration to reform the Kingdom’s law systems last December in a bid to empower lawyers and facilitate access to services. Key initiatives include simplifying processes through the creation of an automated process to renew lawyer licenses within 15 days.

RETAIL-

Cenomi to rebrand malls as Westfield: Cenomi Centers signed a 10-year franchise agreement — renewable for an additional 10 years — with France-based Unibail-Rodamco-Westfield to bring the Westfield brand to its shopping centers in the Kingdom, according to a press release.

The details: The agreement will see up to eight of Cenomi’s malls rebranded as Westfield centers, beginning with three major sites in Riyadh, Jeddah, and Dammam. While Cenomi will retain full ownership and operation of the malls, URW will support leasing, operations, marketing, and retail media as part of the agreement.

ENERGY-

Arabian Drilling has secured a 10-year contract extension with Aramco, valued at SAR 1.07 bn, to provide two fully staffed land rigs for drilling operations in the Kingdom, according to a disclosure to Tadawul. No further details were disclosed.

REMEMBER- Last November, the company locked in a SAR 290 mn, five-year extension for one of its land rigs with Aramco.

TECH-

Neom Investment Fund backs MemryX to advance edge AI infrastructure: Neom Investment Fund (NIF) made an undisclosed strategic investment in US-based edge AI semiconductor provider MemryX to accelerate the deployment of edge AI accelerators, essential to Neom’s digital infrastructure, according to a press release.

About the tech: The MX3, MemryX’s flagship AI accelerator, offers high-efficiency, low-latency performance with significantly lower power use than traditional GPUs, supporting edge applications like smart video, industrial systems, and autonomous infrastructure vital to Neom’s digital ecosystem.

M&A WATCH-

Walaa Ins. received approval from the Dubai Financial Services Authority (DFSA) to acquire 88% of Dubai-based Aspire Underwriting Agency, following an earlier clearance from the Kingdom’s Ins. Authority, according to a disclosure to Tadawul.

ICYMI- Tadawul-listed Walaa Ins. received the green light from the Ins. Authority earlier this month to move ahead with the acquisition, valued at SAR 68 mn.

Chinese exporters are looking to third countries to bypass US tariffs

Chinese exporters are rerouting shipments through third countries in an attempt to avoid the steep US tariffs of up to 145% imposed on incoming Chinese goods, the Financial Times reports. The tactic — known as place-of-origin washing — conceals where shipments actually come from by shipping goods to another country, repackaging them, and then issuing a new certificate of origin before being sent to the target market.

Social media sites in the world’s factory are full of posts advertising export washing services, indicating that this hard-to-quantify issue may be larger than we think. “The US has imposed tariffs on Chinese products? Transit through Malaysia to ‘transform’ into Southeast Asian goods,” the salmon-colored paper quotes one online advert as saying.

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Some of these third countries are already fighting back, including South Korea, which uncovered USD 21 mn worth of falsely labeled products — the majority of which came from China — in the last month alone. Vietnam and Thailand are also ramping up efforts to introduce stricter measures to prevent this practice.

But the problem seems to be getting worse, with South Korea’s customs agency “seeing a sharp increase in recent cases…because of the US government’s trade policy change.”

There are also other schemes exporters are using to get around US tariffs, including putting higher cost items with lower cost items in a bid to falsely claim a lower overall shipment cost, a shipping consultant told the paper.

The practice is also causing concern for US importers, as they will be the ones having to pick up the tab if US customs picks up on a mislabeled shipment. One senior executive at a major Amazon seller said they had seen altered origin documents and are now reluctant to work with Chinese suppliers.

MARKETS THIS MORNING-

Asian markets are in the green this morning — the Shanghai Composite is up 0.6% and the Hang Seng is up 0.4%. Korea’s Kospi is closed in observance of Vesak Day and Japan’s Nikkei is closed as the country observes Greenery Day.

TASI	11,423	+0.1% (YTD: -5.1%)
MSCI Tadawul 30	1,455	+0.3% (YTD: -3.6%)
NomuC	28,143	+0.5% (YTD: -10.6%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	32,212	-0.4% (YTD: +8.3%)
ADX	9,566	-0.1% (YTD: +1.6%)
DFM	5,345	+1.0% (YTD: +3.6%)
S&P 500	5,650	-0.6% (YTD: -3.9%)
FTSE 100	8,596	+1.2% (YTD: +5.2%)
Euro Stoxx 50	5,283	0.0% (YTD: +7.9%)
Brent crude	USD 60.23	-1.7%
Natural gas (Nymex)	USD 3.57	+0.6%
Gold	USD 3,341	+0.6%
BTC	USD 94,898	+0.6% (YTD: +1.4%)
Sukuk/bond market index	913	0.0% (YTD: +1.2%)
S&P MENA Bond & Sukuk	143.7	-0.2% (YTD: +2.7%)
VIX (Fear gauge)	23	+2.2% (YTD: +39.4%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.1% yesterday on turnover of SAR 5.2 bn. The index is down 5.1% YTD.

In the green: Mouwasat (+10.0%), Cenomi Retail (+9.9%) and Saudi Re (+9.7%).

In the red: Masar (-3.5%), Sipchem (-2.8%) and Ssp (-2.6%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.5% yesterday. The index is down 10.6% YTD.

In the green: Tadweeer (+10.0%), Almuneef (+9.6%) and Qomel (+7.0%).

In the red: Food Gate (-9.8%), Fad (-7.5%) and Neft Alsharq (-6.0%).

CORPORATE ACTIONS-

Saudi Reins. Company (Saudi Re) received approval from the Ins. Authority to raise its capital to SAR 1.7 bn from SAR 1.16 bn by issuing bonus shares, it said in a disclosure to Tadawul. The SAR 539.8 mn capital increase will be funded through retained earnings. The move is pending clearance from other regulators and must be completed within the next 12 months.

Al Rajhi Takaful's BoD has recommended a share buyback of up to 300k shares for its employee long-term incentive program, it said in a disclosure to Tadawul. The repurchase will be financed through internal resources and retained as treasury shares.

CALENDAR

MAY

May: World Intellectual Property Organization (WIPO) Global Awards 2025 announces finalists.

4-8 May (Sunday-Thursday): Adeer Real Estate Nomu IPO offering period.

5 May (Monday): Opec+ meeting.

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

9 May (Friday): PFL Mena Season 2 Kick-off.

11-13 May (Sunday-Tuesday): Future Hospitality Summit, Mandarin Oriental Al Faisaliah, Riyadh.

12-14 May (Monday-Wednesday): 2025 Saudi Giga projects Summit, Riyadh.

12-14 May (Monday-Wednesday): Saudi Food Show 2025, Riyadh Front Exhibition and Conference Centre, Riyadh.

12-15 May (Monday-Thursday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

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

29 May (Thursday): 2024-2025 academic year ends.

JUNE

4-9 June (Wednesday-Monday): Hajj.

6-10 June (Friday-Tuesday): Eid Al Adha.

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

24-25 June (Tuesday-Wednesday): Tech-ecO-System Summit (ToSS), Riyadh.

30 June (Monday): Cancellation of Fines and Exemption of Financial Penalties Initiative by the Zakat, Tax and Customs Authority (Zatca) deadline.

JULY

July (Second week): World Intellectual Property Organization (WIPO) Global Awards 2025 awards ceremony, Geneva.

7 July-24 August (Monday-Sunday): Esports World Cup, Riyadh.

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

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

AUGUST

7 July-24 August (Monday-Sunday): Esports World Cup, Riyadh.

5-17 August (Tuesday-Sunday): 2025 Fiba Asia Cup, Jeddah.

SEPTEMBER

15-17 September (Monday-Wednesday): Money 20/20 Middle East, Riyadh.

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

23 September (Tuesday): Saudi National Day.

OCTOBER

1-3 October (Wednesday-Friday): Saudi Green Building Forum, Riyadh.

7-8 October (Tuesday-Wednesday): Global EV & Mobility Technology (GEMTECH) Forum, Riyadh.

17 October (Friday): Saudization for private healthcare roles enters its second phase.

22-23 October (Wednesday-Thursday): Private Capital Forum, Riyadh.

25-27 December (Saturday-Monday): The Fortune Global Forum 2025, Riyadh.

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

NOVEMBER

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

23-26 November (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh.

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

27-30 November (Thursday-Sunday): World Rally Championship Saudi Arabia 2025, Jeddah.

30 November (Sunday): Zatca 21st E-invocing integration wave deadline.

DECEMBER

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

1-4 December (Monday-Thursday): 61st ISOCARP World Planning Congress, Riyadh.

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

31 December (Wednesday): Zatca 22st E-invoicing integration wave deadline.

2026

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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