A huge weekend for sports in Jeddah kicks off today

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WHAT WE’RE TRACKING TODAY

THIS MORNING: It’s the last day of Leap 2024, Deepfest and the EFG Hermes One on One

Good morning, friends. While things are getting slower in the capital with Leap 2024 wrapping up within a few hours and Ramadan inching closer, it is getting busy over in Jeddah, which is hosting the Bloomberg Power Players Summit alongside the Saudi Grand Prix 2024.

Let’s jump right in.

The lineup today at Leap 2024 includes industry leaders and top global execs, among them:

Careem CEO Mudassir Sheikha;
Nokia Senior VP Mikko Lavanti;
STC GM of infrastructure design Abdullateef Alsenan;
Huawei chief technology officer Jesson Ni;
Google growth manager Amin Siala;
Plug & Play partner Carolin Wais;
PwC Ventures scale lead Patricia Keating;
DHL senior VP Nabil Malouli.

OVER IN JEDDAH-

EVENT #1- The Bloomberg Power Players Summit 2024 in Jeddah today will see top industry execs and top-tier athletes discussing the trends shaping the future of global sports. Today’s lineupincludes some of the industry’s big names:

McLaren Racing CEO Zak Brown;
Formula One Academy managing director Susie Wolff;
Esports World Cup Foundation CEO Ralf Reichert;
Newcastle United FC co-owner Amanda Staveley;
Saudi Pro League COO Carlo Nohra;
SRJ Sports Investments CEO Danny Townsend.

EVENT #2- The Saudi Arabian Grand Prix 2024 kicks off on Saturday at the high-speed Jeddah Corniche Circuit, with track action starting today, and qualifiers beginning on Friday. The Formula One event will see Max Verstappen and Red Bull leading the charge following their victory at the Sakhir season opener in Bahrain last weekend. Find today’s schedule here.

OVER THE WEEKEND- Al Awwal Park Stadium will host the Egyptian Cup final between Al Ahly and Zamalek tomorrow at 8:30 pm KSA.

WEATHER- It’s sunny all around today with clear skies and plenty of sunshine in Riyadh, Makkah and Madinah:

Riyadh: 26°C daytime / 16°C overnight
Makkah: 32°C daytime / 18°C overnight
Madinah: 29°C daytime / 17°C overnight

DATA POINTS-

#1- Saudi-GCC trade rose 13% y-o-y to SAR 55.6 tn in 4Q 2023, Saudi Press Agency SPA reports. Saudi exports to GCC countries came in at SAR 34.3 tn in 4Q 2023, while imports from the GCC were up 10.6% to SAR 21.3 tn. The UAE was the Kingdom’s top trade partner, followed by Bahrain, Kuwait, Qatar, and Oman.

#2- Saudi Arabia and the UAE accounted for over 90% of total green bond issuances in the Arab countries which increased 40% y-o-y to SAR 6.8 bn in 9M 2023, Emirati state news agency Wam reports.

#3- The local digital economy has grown 10% to SAR 460 bn since the launch of Vision 2030 in 2016, Saudi Gazette reports, citing statements by CIT Minister Abdullah Al Swaha.

OIL WATCH-

Aramco raised its flagship Arab Light crude prices to Asian customers by USD 1.7 a barrel to the regional benchmark, Bloomberg reported yesterday. The hike is bigger than traders’ forecasts last week, which saw Aramco maintaining the official selling price of flagship Arab Light crude or making minor upward adjustments by USD 0.1-0.2 per barrel in April.

WATCH THIS SPACE-

#1- An “advanced” industrial license to lure the investors in: The Industry and Mineral Resources Ministry unveiled an “updated version” of the industrial license with multiple incentives in a bid to cut red tape for industrial investors, according to a post on Linkedin by the ministry yesterday. The one-year renewable license covers the establishment, construction and production phases of industrial projects with the aim of reducing the bureaucracy involved in each phase.

Among the benefits: The incentives include tax exemptions on machinery, equipment, production inputs and others. It also allows investors to apply for industrial loans and energy allocations among others.

#2- Another day, another LNG play by Aramco: Aramco and UAE’s Adnoc are reportedly in talks to invest in US liquefied natural gas (LNG) projects as they look to compete for a market share in the flourishing gas market, Reuters reported yesterday, citing sources aware of the talks. Aramco is looking to invest in the second phase of Sempra Infrastructure's Port Arthur LNG project in Texas, while Adnoc is looking to pour funds into the Rio Grande LNG export facility by US LNG firm NextDecade. It’s unclear if the oil giants are looking into equity stakes or sale and purchase agreements or both.

REMEMBER- Aramco wants to step up its LNG game: Earlier this week, Aramco and Shell were shortlisted among other companies by Singapore’s Temasek Holdings for the sale of its LNG trading firm subsidiary Pavilion Energy’s assets. An acquisition of Pavilion Energy’s LNG assets would help Aramco spur its LNG business, sources told Reuters earlier.

#3- The Justice Ministry has unveiled a model unified construction contract in collaboration with the Saudi Contractors Authority, it said in a post on Linkedin yesterday. The new document falls under the ministry’s Preventative Justice Initiative and aims to digitize and document construction contracts in a bid to promote transparency in the sector. No further details on the official document were provided.

THE BIG STORY ABROAD-

Republican challenger Nikki Hailey drops out of the race for the White House, after Trump and Biden sailed to resounding victories on Super Tuesday. “The time has now come to suspend my campaign,” the former UN ambassador told her supporters, paving the way for a Biden-Trump rematch on 5 November.

MEANWHILE IN OUR NECK OF THE WOODS-Cairo ceasefire talks still in deadlock: Day four of negotiations between Hamas and Egypt-Qatari mediators in Cairo failed to land an agreement on a six-week ceasefire in Gaza yesterday, as pressure mounts on all sides to secure an end to fighting before the start of Ramadan, Reuters wrote.

AND- A cargo ship is on fire and adrift off the coast of Yemen after a Houthi attack on the vessel. Four of those on board are reportedly severely burnt and another four are missing, the newswire reports.

IHG signs a new agreement to add 650 keys to its Saudi pipeline

IHG plans to open 2 hotels in Riyadh: Global hospitality player Intercontinental Hotel Group (IHG) is set to launch two hotels in King Abdullah Financial District (KAFD) in 2027 under an a management agreement signed with PIF-subsidiary KAFD DMC, it said in a statement. There’s no publicly available information about the investment size.

The new hotels: The 400-key InterContinental KAFD will feature five food and beverage outlets, conferencing halls, a fitness center, a spa and a swimming pool, while the 250-key Regent Riyadh KAFD will feature a signature restaurant, two specialty restaurants, a tea lounge, two cafes, a luxury fitness facility, a Regent Spa, a ballroom, meeting rooms, VIP, and bridal suites.

3 Hotels this year: IHG is inching closer to the debut of its 212-key luxury brand Kimpton Riyadh — set to open in June 2024 — under an agreement with KAFD DMC. This is in addition to a franchise agreement with Firdous Abha Hotel Holding to open Hotel Indigo Abha — set to open in December 2025 — which will be under the management of Dubai-based Aleph Hospitality. The hospitality player is also set to bring its hotel brand Voco & Suites to Jeddah, with the 110-key hotel set to open in September 2024 as part of a management agreement signed with Dubai-based investment firm Rusd Capital.

About IHG Hotels: IHG boasts a diverse portfolio of 18 hotel brands and 6k hotels globally. The hospitality player has 2k hotels and 292k rooms in the pipeline.

ALSO IN TOURISM- Red Sea Global announced with luxury hotels operator Four Seasons a new resort at its luxury tourist destination Amaala, according to a statement. The 220-key Four Seasons Resort and Residences Amaala at Triple Bay will comprise rooms, suites and villas, the statement said. RSG is a wholly-owned unit of the PIF.

Four Seasons has big plans for Saudi: The new resort joins a growing portfolio by Four Seasons that includes the Four Seasons Hotel Riyadh and planned projects at RSG’s The Red Sea, Jeddah, and Neom. Last month, the RSG said it secured a SAR 2 bn loan from Riyad Bank to develop a Four Seasons resort at its landmark tourist destination, The Red Sea.

Bahrain’s Arcapita closes SAR 1.8 bn KSA Logistics Fund

Bahrain-based Sharia-compliant real estate and private equity player Arcapita has closed a SAR 1.8 bn KSA Logistics Fund III, with participation of unnamed institutional investors and a GCC-based sovereign wealth fund, according to a press release. The raised funds will go towards developing the outfit’s KSA logistics portfolio.

Details: Arcapita has already mobilized a significant portion of the raised funds towards a group of real estate investments in the Kingdom’s manufacturing and warehousing sectors, the statement said. The coming months will see Arcapita implement a pipeline of new assets that are strategically located in Riyadh, Jeddah, and the Eastern Province.

Arcapita is not new to the region’s logistics sector, with some SAR 3.8 bn in industrial warehousing assets under the company’s management in the GCC, Arcapita Deputy CEO Hisham Al Raee said. The group’s investors include pension funds, sovereign wealth funds, and financial institutions, Al Raee added.

Al Rajhi raises USD 1 bn from 5-year sustainable sukuk sale

Al Rajhi Bank has closed USD 1 bn from its USD-denominated sustainable sukuk offering, it said in a disclosure to Tadawul. This is the first time that the leading Islamic lender tapped the debt market this year.

Breaking it down: It sold a total number of 5k bonds at a par value of USD 200k each, according to the disclosure. A document seen by Reuters showed the bank selling the sukuk at 90 bps over benchmark US Treasuries, tighter than an initial price guidance of 120 bps. The sukuk sale saw orders topping USD 2.8 bn.

Where the funds are going: Proceeds will be earmarked to support the bank’s financial and strategic objectives in line with its sustainable finance framework, it said in an earlier this week.

ADVISORS- Al Rajhi Bank hired our friends at HSBC, along with Al Rajhi Capital, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Citigroup Global Markets, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank as joint lead managers and bookrunners for the transaction. Its advisors list also includes Goldman Sachs, KFH Capital Investment, SMBC Capital Markets, Société Générale and Standard Chartered Bank.

Jeddah Central Development breaks ground on megaproject turning city into a global hub

PIF-owned developer Jeddah Central Development broke ground on its Jeddah Central destination which aims to transform the Kingdom’s second largest city into a global destination, state news agency SPA reported yesterday. The project will include four main landmarks, including an opera, oceanarium, museum and a sports stadium. It is expected to open its doors to visitors in 2027.

What we know: The PIF company signed last month four construction contracts worth SAR 12 bn (c. USD 3.2 bn) for the project. They were signed with several local and global players, including a consortium of China Railway Construction Corporation (CRCC)-Saudi and local Samaa Group, China Harbour Engineering Arabia Co, local firm Modern Building Leaders (MBL) among others.

A world class stadium: The consortium between CRCC-Saudi and Samaa Group will build a world-class 45k-seater stadium that will be home to local and international sports events by Fifa and global standards. It is designed by German architectural company German von Gerkan, Marg and Partners (gmp) which designed several designated stadiums for the Fifa World Cup in Qatar, Russia, Brazil and South Africa.

REMEMBER- Big plans for Jeddah are in the works: The Culture Ministry-backed Jeddah Historic District Program signed a contract last month with the PIF’s Al Balad Development Company to open heritage hotels in Jeddah’s historical district of Al Balad. Upon the restoration of the area, the program will hand over the heritage hotels’ management to Al Balad Development Co’s unit Al Balad Hospitality. The contract is part of a bid to turn the area into a global cultural and tourism attraction.

It was a mixed bag at day three of leap

The penultimate day of Leap saw the signing of agreements between local players and tech-powered companies from India, Oman, China, South Korea, and the UAE.

Here’s everything you need to know:

#1- UAE-based cybersecurity firm Rewterz is planning to launch its regional headquarters in Riyadh, according to a press release.

#2- The Transport General Authority (TGA) has revamped its logistics one-stop shop ‘Logisti’in a bid to streamline logistics activities including obtaining relevant licenses, it said in a statement. Some of the services provided by TGA’s online portal will be also offered on Logisti.

ALSO- Saudi Ports Authority Mawani launched a new system dubbed Port CommunitySystem (PCS), offering features including a unified single window gateway, document conversion services, real-time visibility and advanced analytics.

#3- Aramco Digital and Intel to launch an Open Radio Access Network (ORAN) Development Center in Saudi, Aramco Digital CEO Tareq Amin said in a post on LinkedIn.

ALSO- The company inked a USD 12.3 mn MoU with Indian tech Company LTIMindtree to establish a new digital and IT services joint venture, LTIMindtree said in a post on LinkedIn.

MEANWHILE- Aramco’s tech arm will jointly work on developing AI technologies including an Arabic large language model — Arabic AI — with South Korean Naver, Korea JoongAng Daily reports.

#4-China’s tech player Honor is set to invest USD 100 mn in the local AI and technology sectors, state news agency SPA reports.

#5- Oman Broadband and Dawiyat Integrated Telecommunications inked an MoU to enhance connectivity between the two countries by developing a fiber optic network, Oman state news agency reports.

#6- Local IT company Watad inked an MoU with UAE-based Stellaria to provide space and satellite solutions, it said in a post on X.

Saudi Electricity results

Saudi Electricity’s net income fell 32.3% y-o-y to SAR 10.2 bn in 2023, while revenues rose 4.5% y-o-y to SAR 75.3 bn over the same period, it said in an earnings release (pdf) yesterday. On a quarterly basis, the company extended its losses in 4Q 2023 to SAR 2 bn, while its revenues were up 12.4% y-o-yto SAR 18.4 bn, according to data seen by Argaam. The Public Investment Fund is a majority shareholder in SEC with a 74.3% stake.

Driving the plunge: SEC attributed its bottom line decline in 2023 to rising financing costs in the face of rising global interest rates and higher operating and maintenance costs among others. Such factors were offset by increases in operational revenue and lower net provisions for outstanding invoice. The increase in topline came on the back of an uptick in demand and subscriber base and higher revenues from subsidiary Dawiyat.

Some highlights during the year: SEC said it has obtained approval to expand the Rabigh plant, which will contribute an additional 1.2 GW of capacity. A consortium led by SEC also signed power purchase agreements (PPAs) for Taiba 1 and Qassim 1 power stations at investments worth SAR 14.6 bn. Both plants have a combined capacity of 3.6 GW. It also grabbed a 25% stake in the Electric Vehicle Infrastructure Company in a transaction valued at SAR 254 mn. The EV-focused company is a joint stock company that is wholly owned by the PIF.

SEC’s BoD has proposed a dividend payout of SAR 2.9 bn at SAR 0.7 per share for 2023, it said in a separate disclosure to Tadawul. The distribution date is yet to be announced.

Tasnee names Fawaz Alfawaz as new CEO

Tasnee names new CEO: The National Industrialization (Tasnee)’s BoD named Fawaz Alfawaz (Linkedin) as its new CEO following the resignation of Mutlaq Al Morished (Linkedin) from his position to retire, it said in a disclosure to Tadawul yesterday. Alfawaz has been Tasnee’s Chief Financial Officer since 2015. He boasts over 30 years of experience in the petrochemicals industry and is currently chairman of the Saudi Logistics Company (SAL). He also sits on the board of Saudi Chemical Holding Co. and the Industrialization Energy Services Company (TAQA).

Lucid says fundraising inevitable

There’s no single story dominating coverage of Saudi in the foreign press, but TheFinancial Times is out with an interview with the CEO PIF-backed EV startup Lucid Motors on the inevitability of fundraising for its business. The company cannot depend on the “bottomless wealth” of its Saudi owner and therefore needs to raise funds this year. “It’s inevitable we need to raise in the future, it’s just a question of when,” CEO Peter Rawlinson told the salmon-colored paper. “We need to pick our moment.”

The Investment Ministry could set up shop in Brazil to boost trade. Plus: Real estate, manufacturing, capital markets

INVESTMENT WATCH-

#1- The government is considering opening an Investment Ministry office in Brazil to help boost trade between the two countries, Arab News reported yesterday. The plans were announced during the Saudi-Brazilian Business Forum earlier this week. No further details were provided on the plans. Bilateral trade between Saudi and Brazil reached USD 6.7 bn last year, Brazilian group LIDE President Joao Doria Neto told Arab News. LIDE organized the forum in partnership with the Federation of Saudi Chambers.

ALSO- Brazilian planemaker Embraer is in talks with the Kingdom for the sale of up to 50 military transport aircraft C-390 to the Saudi Royal Air Force, Arab News reported, citing statements by the aircraft maker VP Caetano Spuldaro. He did not provide further details on the negotiations.

#2- Plastic Zahrat Al Waha is set to start the commercial operations of its first printing and packaging production line by the end of 1H 2024 in a bid to diversify its product portfolio and boost its plastic market share, Chairman Ahmed Al-Theyab told Argaam. There’s no publicly available information about the size of investment. The company’s also planning to export to Central and South African markets, with its exports amounting to 4% of total sales in 4Q 2023.

#3- Alhokair Group has signed an MoU with New Rest that will see both companies establish a catering and site management joint venture, targeting clients in the aviation and procurement industries, Alhokair said in a disclosure to Tadawul. Shares of the SAR 100k JV are evenly divided between Alhokair Group and New Rest.

REAL ESTATE-

Real estate developer Enma AlRawabi has inked a SAR 1 bn lease agreement with Riyadh Schools Holding for a school campus in Riyadh for a period of 25 years, it said in a filing to Tadawul.The first year will cost Enma some SAR 29.33 mn in rent, and will be followed by incremental payments over the course of the leasing period.

MANUFACTURING-

Petrochemical manufacturer Sipchem saw its shipping costs surge 15%-18% as Red Sea disruptions forced longer route diversions, CEO Abullah Al Saadoun told Al Arabiya Business (watch: runtime: 1:36). 35% of the company’s exports are traditionally transported via the Red Sea route and were thus impacted by the recent disruptions, Al Saadoun added.

The silver lining: Sipchem’s European sales saw some benefits from Red Sea disruptions due to its large stocks in Italy, Spain, the Netherlands, Belgium, and Germany, boosting its competitiveness as a supplier in those markets when compared to those further afield in Asia, he explained.

M&A WATCH-

Almunajem Foods signed a binding share purchase agreement to acquire a 17% stake in Balady Poultry from existing shareholders, it said in a disclosure to Tadawul yesterday. The self-financed transaction is valued at SAR 134 mn.

CAPITAL MARKETS-

Etihad Atheeb sold 877k unsubscribed shares in the rump offering of its rights issueshares, reeling in SAR 76 mn in proceeds, it said in a regulatory filing to Tadawul. The issued shares will be deposited into shareholders’ accounts tomorrow.

UBS CEO blames European regulations for giving US banks the upperhand

UBS chief slams European banking regs: Swiss banking giant UBS CEO Sergio Ermotti criticized European regulators for intentionally hindering European banks and allowing US rivals to get ahead in a podcast interview with Nicolai Tangen, CEO of Norwegian sovereign wealth fund Norges Bank Investment Management.

“Europe did everything they could have done to not allow banks to be bigger or successful” following the financial crisis, said Ermotti, who is overseeing the UBS takeover of embattled Swiss rival Credit Suisse. “There’s a political desire to not allow banks to become too big” in Europe, Ermotti added. By contrast, US policymakers wanted banks "to be the leading force going forward in the financial services industry, so they allowed them to grow," he argued.

A fragmented regulatory environment is a prime culprit: The absence of capital market and banking unions “has prevented the creation of strong and alternative players," Ermotti said.

As is the “parochial” mindset of European policymakers: "There is … still a lot of parochial thinking in Europe about big banks," he said. "Each wants to have their own national champions, forgetting that winning the national championships doesn't take you very far [globally]."

TASI	12,562	+0.7% (YTD: +5%)
MSCI Tadawul 30	1,601	+1% (YTD: +3.2%)
USD : SAR (SAMA)	3.75 Sell	3.75 Buy
Interest rates	6% repo	5.5% reverse repo
EGX30	29,743	-3% (YTD: +19.5%)
ADX	9,225	-0.1% (YTD: -3.7%)
DFM	4,248	+0.1% (YTD: +4.6%)
S&P 500	5,105	+0.5% (YTD: +7%)
FTSE 100	7,673	+0.4% (YTD: -0.7%)
Euro Stoxx 50	4,916	+0.5% (YTD: +8.7%)
Brent crude	USD 82.96	+1.1%
Natural gas (Nymex)	USD 1.93	-1.4%
Gold	USD 2,158	+0.8%
BTC	USD 66,382	+5.5% (YTD: +205.9%)

THE CLOSING BELL-

The TASI rose 0.7% yesterday on turnover of SAR 9.2 bn. The index is up 5% YTD.

In the green: Wataniya (+10%), SGS (+10%) and Al Rajhi Takaful (+10%).

In the red: Sasco (-5.7%), SSP (-5.5%) and Al Arabia (-5%).

CORPORATE ACTIONS-

#1- Al Jouf Agricultural Development’s board of directors has approved a dividend payout of SAR 15 mn at SAR 0.5 a share for 2H 2023, it said in a filing to Tadawul. The distribution will be made within 15 working days from the due date of Monday, 15 April.

#2- Almarai fully redeemed its Tadawul-listed RegS USD 500 mn sukuk (Series I) on Tuesday, according to a disclosure to Tadawul.

#3- Nomu-listed Saudi AZM’s board of directors recommended buying back 1 mn shares for the company’s ESOP programs, it said in disclosure to Tadawul. The buybacks would be funded by the company’s own resources.

#4- Aldrees Petroleum is set to hike its capital via a SAR 250 mn bonus share issuance to SAR 1 bn, after receiving regulatory approval from the Capital Market Authority, according to a statement.

#5- Bank Albilad is set to hike its capital to SAR 12.5 bn by issuing bonus shares worth SAR 2.5 bn, after receiving regulatory approval from the Capital Market Authority, according to a statement.

#6- Quencia Capital is now licensed to manage securities investments after receiving a license from the Capital Market Authority, according to a statement.

CALENDAR

MARCH

10 or 11 March: First day of Ramadan (tbc based on sighting of the crescent moon).

11 March (Monday): Flag Day (national holiday)

APRIL

10 April (Wednesday): Eid al-Fitr (tbc based on the start date of Ramadan)

14-21 April (Sunday-Monday): IMF and World Bank spring meetings, Washington, DC

28-29 April (Sunday-Monday): World Economic Forum’s Special Meeting, Riyadh.

29 April-1 May: Future Hospitality Summit at Al Faisaliah Hotel, Riyadh.

MAY

2-5 May (Thursday-Sunday): TownhallExpo, Riyadh.

19-21 May (Sunday-Tuesday): Saudi Energy Convention, Riyadh.

21-23 May (Tuesday-Thursday): The Saudi Food Show, Riyadh.

Signposted to happen sometime in May:

Global Trade Review (GTR): KSA
Saudi Energy Convention

JUNE

5 June (Wednesday): World Environment Day.

Signposted to happen sometime in June:

Eid Al-Adha (national holiday)

AUGUST

12-15 August (Monday-Thursday): The Saudi Food Expo, Riyadh

SEPTEMBER

11-12 September (Wednesday-Thursday): The Saudi Event Show, Riyadh.

23 September (Monday): National Day (national holiday)

DECEMBER

2-13 December (Monday-Friday): Conference of the Parties (COP16) to the United Nations Convention to Combat Desertification, Riyadh.

Signposted to happen sometime in 2024:

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