Good morning, everyone, and happy THURSDAY. Market jitters caused by oil price volatility and US tariffs caught up with our trade data in April, leading oil exports to drop to a nearly 4-year low, while non-oil exports remained on a growth trajectory. Meanwhile, Specialized Medical Company saw a muted debut on Tadawul’s main market yesterday, following in the footsteps of Flynas and United Carton.

ALSO- S&P revised our GDP growth forecasts for the next few years, and the Capital Markets Authority is out with its statistical bulletin for 1Q 2025. Let’s dive in.

WEATHER- Riyadh is expected to see a high of 43°C and a low of 29°C today, while Jeddah’s mercury will go as high as 40°C and as low as 29°C. Makkah will see a 42°C high and 34°C low.

⚠️Get ready for summer: Temperatures in parts of Jazan, Najran, Riyadh, Eastern Province, Qassim, Hail, and the Northern Borders rose by an average of 8°C this June, the National Center for Meteorology said in a report (pdf). July is forecast to see an additional increase of up to 1°C, with August predicted to be the hottest month, likely bringing temperatures up by as much as 1.2°C in parts of Al Jawf, Hail, Qassim, Tabuk, and the Eastern Province.

WATCH THIS SPACE-

#1- Dar Al Arkan kicks off int’l sukuk issuance: Tadawul-listed property developer and operator Dar Al Arkan Real Estate Development has opened books on its five-year USD-denominated senior unsecured sukuk, with initial price thoughts (IPTs) in the 7.75% area, Zawya reported yesterday.

The details: The Reg S-compliant sukuk will be listed on both the London Stock Exchange and Nasdaq Dubai, with a fixed rate paid semi-annually. The Shariah-compliant notes, which are structured as an Ijara-commodity Murabaha, are expected to be rated B1 by Moody’s.

ADVISORS- Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Alkhair Capital, Al Rayan Investment, Arqaam Capital, Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, JP Morgan, Mashreq, Sharjah Islamic Bank, Standard Chartered Bank, and Warba Bank are joint lead managers and bookrunners on the transaction.

#2- BSF looks east for USD multi-mn syndicated loan: Banque Saudi Fransi (BSF) is looking to tap Asian lenders for a USD 750 mn 5-year syndicated loan to cover its general corporate expenses, Bloomberg reported yesterday, citing people it says are familiar with the matter. The facility is said to carry a margin of 95 bps over SOFR and includes an accordion feature that would allow the Tadawul-listed lender to upsize the financing amount after signing.

ADVISORS-BSF reportedly mandated Mizuho Bank and Sumitomo Mitsui Banking as lead arrangers and bookrunners on the potential transaction.

#3- Red Sea subsidiary lines up IPO: Tadawul-listed Red Sea International is preparing to list its electrical contracting arm, Fundamental Installation for Electrical Work (First Fix), the parent company said in a disclosure to the bourse yesterday. It is unclear whether First Fix intends to IPO on Tadawul’s main or parallel market, with further developments to be announced at a later stage. The potential offering is still pending regulatory and general assembly approval.

ALSO- One more Tadawul listing on the way: Car rental company Cherry Trading got the green light from the Capital Markets Authority (CMA) for listing a 30% stake on the main market, the CMA said in a statement.

ICYMI- Tadawul is sitting on a packed IPO pipeline: The main market is set to welcome a handful of IPOs in the near future, including Marketing Home Group, Dar Al Majed,and Ejada Systems, among many others. Meanwhile, the CMA has cleared Naf Company for Feed Industry, Qudra for Communications and IT, the National Signage Industrial Company, Wajd, and Hamad Mohammed Bin Saedan Real Estate to list on Nomu.

#4- Aslak buys more time to close Al Raeda share swap: Tadawul-listed United Wire Factories (Aslak) extended its MoU to acquire 40% of Jeddah-based Al Raeda Industrial Investment by way of a share swap, according to a disclosure to the exchange released yesterday. Aslak now has until the end of the year (Wednesday, 31 December) to wrap up due diligence procedures, and square away regulatory requirements.

IN CONTEXT- The pair inked a non-binding MoU for the potential buyout late last year, which will see Aslak receive Al Raeda shares in exchange for issuing new shares to the latter’s selling shareholders at SAR 29.7 a piece.

#5- Small grocery stores are now banned from selling tobacco, dates, meat, fruits and vegetables, under new rules issued by Municipalities and Housing Minister Majid Al Hoqail, Saudi Gazette reported on Tuesday. These items can be sold in supermarkets and hypermarkets, though meat sales require a separate license. The decision takes effect immediately, with a six-month grace period for existing shops.

DATA POINTS-

#1- Consumer spending via point-of-sale (PoS) transactions in the Kingdom was down 1.5% w-o-w in the week ending 21 June, reaching SAR 10.9 bn, according to the Saudi Central Bank’s weekly report (pdf). The number of weekly transactions also fell 0.6% w-o-w to SAR 202.5 mn during the week.

The details: Food and beverages made up the bulk of consumers’ spending during the week in terms of value, but experienced a 7.2% fall w-o-w to SAR 1.6 bn. Restaurants and cafés came in second place, but also fell 14.3% w-o-w to just over SAR 1.5 bn. This was followed by gas stations spending, which dropped 5.1% w-o-w to just SAR 813.5 mn, and healthcare, which increased 16.8% w-o-w to SAR 712.6 mn.

Riyadh had the highest value of PoS transactions at just over SAR 3.9 bn, followed by Jeddah at just under SAR 1.6 bn.

#2- The Social Development Bank distributed some SAR 4.3 bn in financing in 1H 2025 to 43k citizens across the Kingdom, with SAR 1.8 bn going to 18k freelancers and productive families, SAR 1.5 bn to 5k SMEs, and SAR 1 bn in social financing to 20k citizens, state news agency SPA reported yesterday. Some 40k fresh savings accounts were opened during the same period as well.

#3- The Interior Ministry’s Absher platform processed over 42.6 mn digital transactions in May, according to a statement released on Tuesday. ِThe Absher Individuals app saw 39.4 mn operations, topped by digital wallet document reviews (31.7 mn transactions), while the Absher Business platform saw 3.1 mn operations.

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THE BIG STORY ABROAD-

Two big stories are getting plenty of ink in the foreign press this morning: Nato’s agreement to hike security spending, and the latest around Iran, from how much damage the US’ strikes on its nuclear facilities actually inflicted to what’s next for the nuclear agreement.

From the Hague, Nato agreed to increase spending to 5% of GDP — up from 2% as of this year — and renewed their “ironclad commitment” to security in a show of strength that pushes back against Russia. The move to hike spending is understood to be great news for US President Donald Trump, who has been calling on his European allies to increase spending on security. Trump also met with Ukrainian President Volodymyr Zelenskiy on the sidelines of the summit, as he looks to secure more US weapons. (Bloomberg | Reuters | Financial Times | Guardian | New York Times)

Over in Iran, speculation continues around the extent of damage on its nuclear facilities following the US’ attacks on three of its sites, with Trump asserting that the intelligence report from a day earlier was inconclusive and that the damage was actually severe. Iran’s Foreign Ministry spokesperson Esmail Baghaei later said the sites were “badly damaged” in a TV interview. It’s still unclear how badly they were hit, with some sources saying the nuclear program was set back only a few months’ time, and others — namely, Israel — saying it’s years. (Bloomberg | Reuters)

ALSO- Trump said Iran and the US will meet next week, saying a nuclear agreement could be on the table but that it might not be necessary given the damage that had already been inflicted on Iran’s nuclear program. (Bloomberg | NYT | Axios)

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