Arabian Mills sets its IPO price at the top end of the range

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Israel still wants to normalize ties with Saudi + other Arab states

Good morning, wonderful people. We have a rather busy end to the week today, but before we just head-first into this morning’s top stories, we’re taking the lid off the agenda for this year’s EnterpriseAM Finance Forum happening in Egypt on Tuesday, 24 September.

Headlining the EnterpriseAM Finance Forum: We’ll be joined for the first time on stage by a senior government official, who’s joining us to outline a vision for where we’re going as a community and as an economy. The keynote interview will get underway at 9am sharp, and you won’t want to miss our exclusive networking breakfast from 8am.

Among the topics on the agenda:

Welcome to the hot seat — top industry CEOs set the tone by addressing the biggest (and toughest) questions of the day.
Looking from the outside in — what foreign investors and strategics think about Egypt right now.
The only asset class in town — It’s real estate or nothing. We’ll get into the ins and outs of the industry, how it’s financing itself, which areas (and price points) are next, and more.
Gazing into that crystal ball — The outlook for dealflow in 2025, from M&A and IPOs to securitization, FX and more.
A once in a generation opportunity? — A deep dive into the promise and pitfalls of the emerging energy economy.
Do we really love banking SMEs? — With NBFIs and fintech players staking their claims, banks are starting to take the SME market seriously.
The NBFI panel — The resilience of the Egyptian consumer is the business story of the decade. How are banks and NBFS players building sustainable businesses? What are the opportunities — and credit worries — in the B2B space?

Are you going to be in Egypt and haven’t requested an invitation yet? Do it today — space is limited. Tap or click hereto let us know you’re interested.

** IMPORTANT NOTE — If you’ve already received your invitation on email, you *must* click through to confirm you’re attending.

HAPPENING TODAY-

EFG Hermes’ annual conference is on its final day today in London, giving investors “unique and unparalleled access to leading equities in MENA and key frontier emerging markets.”

MORNING MUST-READ- EnterpriseAM Saudi has exclusive coverage of Tuesday’s panel discussion at the EFG Hermes conference with Saudi Exchange CEO Mohammed Al Rumaih and Capital Market Authority Board Commissioner Abdulaziz Abdulmohsen Bin Hassan. The two discussed the development of Saudi’s capital markets over the past several years and how their institutions are working to encourage further growth and place Saudi as one of the top capital markets globally. The discussion is in this morning’s Spotlight, below.

WEATHER- Expect partially cloudy days in Riyadh and Jeddah today, with a high of 43°C today and a low of 30°C in the capital. Meanwhile, Jeddah will see a high of 39°C, and a low of 32°C.

WATCH THIS SPACE-

#1- Israel wants to revive talks on normalizing diplomatic ties with the Kingdom, after they were derailed by last year’s October 7 attacks, Israel’s Economy Minister Nir Barkat told Bloomberg TV. The country reiterated its desire to expand the Abraham Accords with “moderate” Arab states.

What he said: “I see how the Saudis and other moderate Arab states, including potentially Indonesia and others, are waiting to have a window of opportunity to enter and expand the Abraham Accords — we bless it,” Barkat said.

REFRESHER- While the US had been brokering talks between Saudi Arabia and Israel earlier this year in a bid to counter Iranian influence before the conflict, those efforts are now in limbo. The Kingdom has been clear in its position that it will not normalize ties with Israel without a permanent ceasefire in Gaza and a clear, credible path to Palestinian statehood.

#2- China wants to expedite freetrade talks: China’s Premier Li Qiang called for freetrade talks with the GCC, including Saudi, to be expedited during his visit to Riyadh, Reuters reports. Meeting with GCC Secretary General Jasem al-Budaiwi, Li emphasized the need to revive the long-stalled negotiations, which have been ongoing for nearly 20 years.

The caveat: The Kingdom expressed concerns over the potential influx of cheaper Chinese imports stifling domestic manufacturers.

ALSO- The Kingdom is anticipating more Chinese industrial investments, especially in electronics and AI, a Saudi-Chinese Business Council official told Aleqtisadiah on the sidelines of the China-GCC roundtable meetings. For his part, Li said that China is eyeing investments in the Kingdom’s energy sector, as well as infrastructure.

SPEAKING OF CHINA- Crown Prince Mohammed bin Salman met with the Chinese prime minister to discuss investment, trade, and energy cooperation, state news agency SPA reports. The Chinese official landed in Riyadh on Tuesday to chair the Chinese-Saudi Joint Committee meeting and will visit the UAE too, according to the Chinese Foreign Affairs Ministry.

#3- Deutsche Bank plans to tap into private wealth management in Saudi Arabia across various pools, including family offices, ultra-high-net-worth individuals, special vehicles, and wealth management funds, the lender’s CEO for the Middle East and Africa Jamal Al Kishi told Zawya. “The idea is to tap into … sources that have not been tapped up to this point, at least not effectively and not on a scale,” Al Kishi said.

DATA POINTS-

#1- Consumer spending in Saudi via point-of-sale (PoS) transactions dropped 4.9% w-o-w for the week ending 7 September at SAR 13.4 bn, according to Sama’s weekly PoS report (pdf). Meanwhile, the number of weekly transactions inched up 0.3% at 213.5 mn transactions.

The breakdown: Food and beverages saw the highest spending during the week at SAR 2.1 bn, followed by restaurants and cafes at SAR 1.9 bn. Meanwhile, Riyadh had the highest value of PoS transactions at SAR 4.6 bn, followed by Jeddah at SAR 1.8 bn.

#2- The Saudi box office sold 8.5 mn tickets in 1H 2024, generating some SAR 421.8 mn in sales, Culture Minister and Governor of the Royal Commission for AlUla Prince Badr bin Abdullah said in a post on X. Two of the box office’s top three films were Saudi productions. Last year, box office sales hit USD 919 mn, up 25% from 2022, with local hits like Mandoob and Sattar leading the charge.

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THE BIG STORY ABROAD-

Two days on and the US presidential debate is still dominating the digital front pages of the international press, with just a spattering of business and tech news trying to fight for ink with an avalanche post-debate analysis and thought pieces from the commentariat.

Now the dust has settled, pundits are trying to figure out who came on top, with the consensus in the international media being that while Kamala Harris had largely come out on top, the debate had not substantially moved the needle in a very close race between the two candidates. Trump campaign donors and Republican strategists are reportedly frustrated with the former president’s “uneven performance,” with one strategist calling the debate “a missed opportunity.” The former president’s claim that immigrants in Springfield, Ohio were eating residents’ pets was one of a number of diversions that drew hand-wringing from some Republican strategists and donors, who lamented the former president’s failure to double down on issues like inflation or the state of the US economy under Joe Biden.

WHILE IN GLOBAL INTEREST RATE SPECULATION- US inflation cooled to 2.5% inAugust, inching toward the 2% inflation rate targeted by the US Federal Reserve. The release of the new inflation data has seen analysts consolidate behind expectations that the Fed will make only a 25-basis point cut at the central bank’s rate-setting meeting next week.

OVER IN TECH NEWS- OpenAI wants to nearly double its valuation to USD 150 bn in new financing round to raise USD 5 bn from investors in order to fund AI development that it hopes will give it an edge over competitors including Google and Meta.

AND IN OUR NECK OF THE WOODS- The prime minister of Libya’s Government of National Accord, Abdul Hamid Dbeibeh, has pledged to end the country’s central bank standoff that saw its oil output cut in half.

CIRCLE YOUR CALENDAR-

The Egypt-UK investment conference is nearly upon us: Our friends at HSBC, together with UK Export Finance and Egyptian-British Chamber of Commerce, are hosting the Egypt-UK Investment and Opportunities Forum in London on Monday, 16 September. The conference will showcase investment opportunities in Egypt across different sectors — including renewable energy, water, automotive, food processing, IT, and AI — to potential investors from the UK. It will also facilitate matchmaking between institutions of both countries, bringing together government representatives, business leaders, and senior executives.

SRMG Academy’s technology journalism course will kick off in Riyadh next Sunday, 15 September. The five-day, TikTok-backed program will run until 19 September.

Fenaa Alawwal cultural center will kick off the contemporary art forum Muntada FAA next Sunday, 15 September at the Diplomatic Quarters in Riyadh. The forum runs until Thursday, 19 September.

Arabian Mills prices IPO at top of range

Arabian Mills set its final IPO price at the top of its initial price range at SAR 66 per share, according to a press release (pdf). The pricing gives the company a market cap of SAR 3.4 bn at listing, and will raise some SAR 1 bn in IPO proceeds. The company is taking a 30% stake to market on Tadawul’s main market in a secondary share sale.

REMEMBER- The IPO drew in strong institutional demand: Arabian Mills’ institutional offering sold out within hours of opening last week and was 132x oversubscribed, with bookbuilding raking in a total of SAR 134.1 bn in orders from both local and international investors.

WHAT’S NEXT- Retail investors will have their turn from Wednesday, 18 September to Thursday, 19 September, during which they can subscribe to a minimum of 10 shares and a maximum of 250k each. The flour milling company is allocating 100% of the offering to institutional investors. This can be reduced to 90% if there is sufficient enough demand from retail investors, who would then be allocated 10% of the sale. Final allocations are scheduled for Thursday, 26 September with refunds from excess subscriptions due by the next week. Other IPO information and documents can be found on the company’s IPO website.

ADVISORS- Our friends at HSBC Saudi Arabia are acting as the sole financial advisor, global coordinator, bookrunner, underwriter, and lead manager on the transaction, while Baker McKenzie is counsel, PwC is financial due diligence advisor, EY is auditor, and Euromonitor International is market consultant. Meanwhile, Alrajhi Bank, Saudi Awwal Bank, and Banque Saudi Fransi are the receiving agents.

BlackRock takes minority stake in Saudi-Bahraini crude pipeline

A BlackRock-managed fund acquired a minority stake in the Saudi Bahrain Pipeline Company (SBPC) from Bahrain’s Bapco Energies, according to a joint statement. The transaction was executed by a fund managed by Blackrock’s Diversified Infrastructure team. Bapco will retain a majority stake in SBPC, the statement said. The story was also picked up by Reuters.

What we don’t know: No information was provided on the exact size of the stake acquired, nor how much the fund paid for it. The transaction represents Bapco’s first asset monetization, the statement notes.

About the pipeline: The AB-4 pipeline was commissioned in 2018 to replace its predecessor which connected Saudi and Bahrain for 73 years from 1945. The 112 km-long pipeline connects Aramco’s Abqaiq plants and Bapco’s refineries in Bahrain, and can transport up to 350k bbl / d of crude.

REMEMBER- Investors led by BlackRock Real Assets and Hassana Investment tapped JPMorgan and Standard Chartered in July ahead of a planned bond sale which aims to refinance a USD 13.4 bn bridge loan used by the consortium to acquire 49% of Aramco Gas Pipeline Company in a 2021 USD 15.5 bn lease-and-leaseback agreement.

Aramco deepens ties with Chinese refiners

Aramco signs fresh agreements with two Chinese companies: State-owned oil giant Aramco signed two separate agreements with Chinese refineries Rongsheng Petrochemical and Hengli Group, according to a press release. The agreements bring Aramco closer to expanding the Saudi Aramco Jubail Refinery with Rongsheng, and the acquisition of a 10% stake in Hengli Petrochemical. Aramco is positioning the agreements as boosting its presence in the Asian downstream market.

Aramco inked a development framework agreement with Rongsheng, expanding on a cooperation framework signed in April. This agreement brings the pair closer to “the potential joint development of an expansion of Saudi Aramco Jubail Refinery Company (SASREF) facilities,” the statement notes.

Not Aramco’s first rodeo with Rongsheng: Aramco closed last year the acquisition of a 10% stake in Rongsheng Petrochemical for USD 3.4 bn through its Netherlands-based subsidiary, Aramco Overseas Company.

Aramco also inked a strategic cooperation agreement with Hengli Group, moving it closer to locking down a 10% stake in Hengli Petrochemical. This is a follow-up on an MoU that the pair had signed earlier in March, with the transaction now pending the usual due diligence and regulatory green lights. Hengli’s petrochemical empire includes a 400k bpd refinery, with the firm’s market value in April valuing a 10% stake at up to USD 1.5 bn.

There’s still a lot we don’t know: Aramco’s statement did not disclose further details on investment tickets or project timelines.

What they said: “These agreements reflect our collective intention to elevate our relationships in vital sectors to advance our downstream objectives, contribute to both China’s and Saudi Arabia’s vibrant energy and petrochemicals sectors, and help develop future technology solutions,” Aramco’s Downstream President Mohammed Al Qahtani said.

Sama Water plans to sell 20% stake in Nomu IPO

Jazan-based Sama Water plans to offer a 20% stake (equivalent to 10 mn shares) in an IPO on Tadawul’s parallel market Nomu, the company said in the offering’s prospectus (pdf). The bottled water and ice cube maker lined up the Capital Market Authority’s approval to kick off the offering in June.

This is a secondary offering: The offered shares will be sold by the two substantial shareholders — ِِAbd Allah Tebeqi and Ziad Tebeqi — whose combined stake in the company will be reduced to 80%, down from 100%, after the offering is fully covered. ِِAbd Allah Tebeqi will see his 80% stake reduced to 64%, while Ziad Tebeqi will see his 20% stake reduced to 16%.

The timeline: Qualified investors can start putting down orders for the IPO starting Wednesday, 2 October and until the following Tuesday, 8 October. The final share allocations will be announced on Sunday, 13 October, with any excess subscription fees set to be refunded within two business days. The first day of trading will be determined once the company meets all regulatory requirements. Investors can subscribe to a minimum of 100 shares, and a maximum of c. 2.5 mn shares.

Use of proceeds: The selling shareholders will take home all proceeds from the offering, after deducting SAR 2.4 mn in IPO expenses.

Lock-up period: Major shareholders are restricted from selling their shareholdings for a 12-month period beginning with the start of trading.

ADVISORS- Yaqeen Capital is serving as the financial advisor and lead manager, while Moore is auditor. Al Rajhi Capital, Riyad Capital, Alinma Investment, AlJazira Capital, SAB Invest, Derayah Financial, BSF Capital, SNB Capital, Alistithmar Capital, Albilad Capital, ANB Capital, and Alkhabeer Capital are all receiving agents.

Earnings snapshot: Sama Water’s net income grew 36.1% y-o-y to SAR 9.2 mn in FY 2023. Meanwhile, revenues inched up 3.4% at SAR 87.4 mn.

A snapshot of Saudi’s top 10 banks’ performance in 2Q 2024

Aggregate net income at Saudi’s 10 top listed banks grew by 4.3% in 2Q 2024, hitting SAR 19.5 bn, according to global consulting firm Alvarez & Marsal’s (A&M) Saudi Arabia Banking Pulse 2Q report (pdf).

Meet the banks: Saudi National Bank (SNB), Al Rajhi Bank, Riyad Bank, Saudi Awwal Bank (SAB), Banque Saudi Fransi (BSF), Arab National Bank (ANB), Alinma Bank, Bank Albilad, Saudi Investment Bank (SIB), and Bank Aljazira (BJAZ) were included in the second quarter line up. A&M’s quarterly Baking Pulse report gives the rundown on the financial performance of the top 10 listed banks in the Kingdom by assets, highlighting their income, profitability, size, liquidity, risk, and capital.

Operating income rose by 1.9%, driven by a 2.5% boost in net interest income (NII) and a 1.4% increase in fees and commissions. Cost efficiency improved, as operating expenses grew by 1% — slower than the increase in operating income. Meanwhile, a 27% drop in impairment charges also contributed to the uptick in net income.

Despite the rise in NII, net interest margins (NIM) fell by 2 basis points to 2.94%. Seven out of the 10 banks surveyed reported a drop in NIM. The spread between yield on credit and cost of funds remained static q-o-q at 5.0% as both measures increased 1.0%. Despite the slight NIM contraction, other profitability measures showed stability or growth, with return on equity growing 0.7 percentage points to 16.8%, and return on assets staying steady at 2.0%.

Loans and advances were up 3.2% q-o-q, surpassing deposit growth (2.3% q-o-q). The uptick in loan book growth drove a 0.8% q-o-q increase in the loan-to-deposit ratio to 97.8%. Corporate lending was the primary driver for the bump in L&A, growing 7.2% q-o-q. The category now accounts for 56% of total loans and advances.

Meanwhile, there was moderate increase in retail credit (+1.5% q-o-q), which now contributes 43% to total loans and advances. The report expects corporate loans to accelerate further in the upcoming interest rate cycle reversal, as businesses snap up cheaper loans to finance megaprojects.

Cost of risk also improved: Aggregate cost of risk improved by 11 basis points q-o-q to 0.28% in the second quarter on the back of a 27% improvement in impairment charges at SAR 1.8 bn. Half of the banks considered saw their cost of risk improve, with Riyad Bank leading the pack with a 38 basis points q-o-q decrease to 0.2%. Meanwhile Alinma and Albilad saw their cost of risk bump up 11 basis points at 0.69% and 0.31%.

Tadawul’s Al Rumaih + CMA’s Bin Hassan on the growth story of Saudi capital markets

How the Tadawul and Capital Market Authority are positioning Saudi capital markets as a global leader: Over the past several years, the MENA region’s capital markets “have transformed quite significantly — from small, locally driven outfits to major global hubs that are becoming a growing constituent of the MSCI Emerging Market Index,” EFG Holding Group CEO Karim Awad said at the EFG Hermes Annual Conference in London earlier this week. This transformation has been most apparent in Saudi and the UAE, Awad noted, “where even amid global and regional turmoil, their capital markets have shown remarkable resilience with the recent IPO flow that is among the most active globally.”

Saudi capital markets in particular have seen marked growth underpinned by a growth and regulatory strategy geared towards placing the Kingdom as a leading global capital market, Saudi Exchange CEO Mohammed Al Rumaih and Capital Market Authority (CMA) Board Commissioner Abdulaziz Abdulmohsen Bin Hassan said in a fireside chat at the conference.

“You name the metric, it’s seen double- or triple-digit growth in the past five years,” Bin Hassan says, pointing to qualified financial investors, asset management, the debt market, and the number of financial institutions.

It was about finding out what investors were lacking in terms of incentives — and delivering on that, said Bin Hassan. “Back in 2017, there was a big constraint on the qualified financial investors themselves. Since then, the CMA worked on relaxing the regulations itself to have more qualified financial investors. So, for example, now you don't have to be a financial institution,” he said. Instead, regulators now allow any institution that meets the minimum requirement of USD 500 mn in assets under management to access the Saudi market. Regulators also made it easier for non-resident foreign investors to enter Tadawul’s parallel market, Nomu, without meeting QFI requirements, Bin Hassan noted.

“We continue to think about and work on how we can make it easier for investors,” Bin Hassan said.

The same rationale applied to encouraging new paper in the market, according to Al Rumaih, who looked at the growth in the volume of listings on the Tadawul over the past several years. “Last year, we had 35 listings. As of today, we’ve had 35 listings year-to-date, and we expect that figure to surpass 50 by the end of 2024. That’s compared to 2018, when we had maybe five listings over the course of the year,” Al Rumaih said.

In addition to the growth in volume, listings today also have much more diversification in terms of industries, sizes, and markets, as well as instruments such as ETFs, close-ended funds, and REITs, Al Rumaih noted. The growth in listing activity came on the back of the CMA-led Financial Sector Development Program, which focused on growing the number of listings in Saudi.

“If you look back to 2017, we had around 100 listed companies. For an economy like Saudi Arabia, that’s a very small figure,” Al Rumaih said.

The program focused first and foremost on addressing why companies were disinterested in going public, Al Rumaih said. “They had a valid reason — a lot of disclosure without a lot of benefits. Although the liquidity was always there, there were no tools for companies to get the liquidity they needed to grow their businesses.” Back in 2017, Saudi capital markets lacked the diversified investor base it currently has. Fast forward to today, most companies that previously had zero foreign investors now have 5-10% of their shares in the market held by foreign investors.

Then there was the creation of Nomu: Some companies did want to list, but wanted fewer requirements, which is why regulators set up Nomu and also looked at different ways to enter the market, such as introducing direct listings — which cut down on listing time and costs, Al Rumaih noted.

It’s been half a decade of substantial growth, but there’s still more potential to tap into: So far this year, there are more than 50 listing applications under review, “so this pipeline is very healthy and will continue to grow as we are opening up more ways for companies to become listed,” Al Rumaih said. Moving forward, regulators “continue to think about and work on how we can make it easier for investors,” Bin Hassan said. “We’re aiming to not just be one of the financial centers of the world, but also to be one of the most important ones.”

The CMA is set to announce today a fresh strategy for the next three years outlining plans to further develop the country’s capital markets, Bin Hassan said. Among the priorities moving forward as regulators work on “continuously improving and developing the market” is increasing efficiency, adopting the best international practices, and improving infrastructure, Bin Hassan and Al Rumaih said.

That potential also lies in debt capital markets, which remains underdeveloped: “If we talk about equity markets — ETFs, asset management, etc — we’re relatively mature there, but the most important thing we’re working on at the CMA with our partners in the financial sector is the debt capital market (DCM),” Bin Hassan said. By developing the country’s debt market, the value of becoming a listed company will also grow, Al Rumaih noted. “So by being a listed company, you would have more — or better — access to funding, which is essential to a company in a growth stage,” Al Rumaih said.

The Saudi debt market, valued at around SAR 700 bn, is very big — “but similar to the equity markets a few years ago, we are way below the benchmark when comparing the market to the size of the economy,” Al Rumaih said. Whereas G20 countries see their debt markets representing 30-40% of GDP, Saudi’s debt market represents 18% of the Kingdom’s total GDP, leaving “room to grow,” he noted.

What’s holding companies back from tapping debt markets to finance growth plans? Regulations are a core factor, Al Rumaih said, noting that these regulations are being revamped “to reduce the requirements and redundant information, especially if you are a listed company, which should provide the advantage of being known to the investors.” Regulations should allow access to the debt market to be a short, easy, and cost-effective process, he said. “The debt market is very important to us because it is very important to the economy.”

In addition to regulatory changes, there are also new systems being introduced: “Coupled with the revamp of the offering and listing rules, we are planning to introduce the capital management system, which we’ve tested in the parallel market to great success. What we expect is that the companies using the CMS can access a good pool of liquidity in a very cost-efficient way,” Al Rumaih said. Officials expect that these changes will help companies “look at the debt market as the main source of funding and maybe replicate the success that we are having in the equity market” within the next 2-3 years, he said.

Meanwhile, regulators are also pushing forward with ESG performance standards: While the CMA has been supporting the implementation of ESG regulations, but “it’s still the beginning,” Bin Hassan said. The CMA is working with the Supreme Committee for Investments on putting together standardized ESG regulations that would provide investors with greater clarity, he said. “We think in the next few years you’re going to see a more developed ESG landscape in the Kingdom itself as part of its overall vision,” Bin Hassan said.

Vision 2030 — which encompasses sustainability as a key pillar — was an important driver for the Tadawul to also push for sustainability among companies, Al Rumaih said. “We found that the majority of companies are already sustainable — they are already following the corporate governance code, which is one of the best in the world, and they’re working towards more environmentally-friendly ways of doing business.” After publishing guidelines on ESG reporting two years ago, some 8% of listed companies disclosed their ESG practices, while that number has grown to 30% this year, Al Rumaih said. The surrounding ecosystem has also developed to encourage more ESG reporting, with more consultants now available to support in implementing ESG practices and reporting on them, Al Rumaih said. “We are very optimistic about the future of the economy being more sustainable and how our companies are reacting to it.”

Zain staff become eyes for the blind

Zain employees will offer accessibility aid to the blind: Zain Group and Be My Eyes — a visual assistance app for blind and low-vision individuals — have partnered up to have 16 volunteering events over the year, where up to 100 Zain employees at a time will assist users through the app, according to a press release. Zain employees will volunteer on the Be My Eyes platform, responding to video calls from blind users to assist with tasks such as reading documents, identifying objects, or describing their environment.

Nahdi Holding acquires additional 3.1% stake in Nahdi Medical

M&A WATCH-

Nahdi Holding, a substantial shareholder in Nahdi Medical, is acquiring an additional 3.1% stake (4 mn shares) in Nahdi Medical from Sedco Holding, another majority shareholder, according to a filing to Tadawul. The transaction saw wholly-owned Sedco subsidiary Second Development Investment sell down its position in Nahdi Medical for SAR 500 mn.

TECH-

Stc Group plans to launch an AI lab in partnership with the Research, Development, and Innovation Authority (RDIA) under a new agreement, RDIA said in a post on LinkedIn. The lab aims to help accelerate the launch of AI products and services to the market.

ALSO FROM STC- PIF-owned New Murabba will leverage the telecom giant’s digital solutions for the USD 50 bn downtown ’s communications and information technology infrastructure under a partnership agreement signed between them, Stc said in a statement.

Aramco taps Cerebras to use its AI systems: Aramco signed an MoU with US-based AI hardware developer Cerebras Systems to use its CS-3 systems to build and deploy large language models (LLMs), according to a press release. Aramco plans to use these AI systems to enhance local industries, enterprises, and universities. The investment ticket was not disclosed.

SDAI + OECD partner to track AI incidents in Arabic: The Saudi Data and AI Authority (Sdaia) has signed an MoU with the Organization for Economic Co-operation and Development (Oecd) to integrate its AI Incidents Monitor (AIM), to track AI data in Arabic, according to a press release. The partnership will help improve AI monitoring by working with local entities to add regional data to OECD's existing database and improve how AI developments are monitored in the Middle East.

The Environment, Water and Agriculture Ministry launched the Namaa AI service which will act as the ministry’s communication channel to solve complaints and support farmers in identifying and treating agricultural pests, the ministry said in a post on X.

FINTECH-

Investment platform Ajdar Fintech received the go-ahead to experiment with offering and investing in debt instruments as part of a fintech license, according to a Capital Market Authority statement.

CONSTRUCTION-

Madinah set to get two new shopping malls: The Madinah Regional Municipality approved the construction of two shopping malls, one in Al Sekka Al Hadid and the other in Al Fath, state news agency SPA reported. The value of the projects was not disclosed.

US Fed may reconsider larger rate cut as inflation persists

US Fed looks more likely to go for a smaller rate cut as inflation persists: US consumer prices rose 0.2% in August, matching July's increase, while the annual CPI advanced 2.5%, the smallest rise since February 2021, according to Bureau of Labor Statistics figures (pdf). The index grew 0.3% without counting volatile items like food and energy — the most in four months.

The persistent growth points to the likelihood of a smaller rate cut at the Fed’s meeting next week, analysts say. Traders now see an 85% chance of a quarter-point cut next week, according to CME Group’s FedWatch.

Start slow, and upsize later? “The Fed may start rate cuts a lot like how they started the hikes: 25 bps at first and then have the option to upsize the cuts as necessary,” chief economist at Annex Wealth Management Brian Jacobsen told Reuters.

Market reax: US markets exhibited cautious movements following the latest inflation data, dipping slightly before paring gains on the back of a tech rally. The S&P 500 fell 0.3%, before closing up 1.1%, while the Nasdaq rallied 2.17%.

ALSO WORTH KNOWING-

UK-based private equity group Intermediate Capital Group closed a EUR 15.2 bn (USD 16.8 bn) European direct-lending fund, the largest of its kind in Europe, providing loans to private-equity backed companies. (Bloomberg)

The UK economy stagnated in July, with no growth for the second consecutive month as construction and manufacturing sectors declined. The Bank of England is anticipated to keep interest rates steady at 5% next week, with a potential cut in November. (Financial Times)

THE MARKETS THIS MORNING-

Asian markets tracked Wall Street’s gains, with the Nikkei up 3% and Topiz up 2.48% this morning. South Korea’s Kospi also opened up 1.2%, while the small-cap Kosdaq gained 2.5%. Meanwhile, Wall Street futures opened lower.

TASI	11,766	-1.8% (YTD: -1.7%)
MSCI Tadawul 30	1,463	-1.9% (YTD: -5.6%)
NomuC	25,764	+0.6% (YTD: +5.0%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	6.5% repo	5.5% reverse repo
EGX30	30,486	+1.3% (YTD: +22.5%)
ADX	9,323	-0.9% (YTD: -2.7%)
DFM	4,346	-0.9% (YTD: +7.1%)
S&P 500	5,554	+1.1% (YTD: +16.4%)
FTSE 100	8,194	-0.2% (YTD: +6.0%)
Euro Stoxx 50	4,764	+0.3% (YTD: +5.4%)
Brent crude	USD 70.61	+2.1%
Natural gas (Nymex)	USD 2.28	+0.4%
Gold	USD 2,542.40	-0.03%
BTC	USD 57,360.4	-0.4% (YTD: +36.1%)

THE CLOSING BELL: TADAWUL-

The TASI fell 1.8% yesterday on turnover of SAR 6.2 bn. The index is down 1.7% YTD.

In the green: Al Baha (+5.6%), Mesc (+5.2%) and Al Istithmar Reit (+5.1%).

In the red: Sfico (-10.0%), Artex (-5.1%) and Red Sea (-5.1%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.6% yesterday on turnover of SAR 40.9 mn. The index is up 5.0% YTD.

In the green: Leaf (+18.8%), Qomel (+6.9%) and Edarat (+6.7%).

In the red: Meyar (-4.5%), Fad (-4.4%) and Al Hasoob (-4.0%)

CORPORATE ACTIONS-

Saudi Enaya Cooperative Ins. has received the go-ahead from the Capital Market Authority for a SAR 150 mn capital hike, the authority said in an announcement. The move would bring the company’s total capital to SAR 380 mn by way of rights issue as per the board’s earlier recommendation.

The board of Nomu-listed Qomel recommended a 100% capital hike to SAR 70 mn through issuing bonus shares, according to a disclosure to Tadawul. The move will be financed by capitalizing SAR 32.6 mn from the balance of share premium and by SAR 2.4 mn from retained earnings and comes in a bid to boost the outfit’s plans for strategic growth and strengthen its financial base.

Savola Group’s rights issue was 94.2% covered, with 565 mn shares subscribed for SAR 5.7 bn, according to a disclosure to Tadawul. The remaining 35.1 mn rump shares will be offered to institutional investors, with shares allocated based on the highest bids. Riyad Capital and ANB Capital will underwrite any shares that remain unsubscribed after the rump offering, which runs next Sunday and Monday, 15-16 September.

Petrol Nass Factory Company has completed its liquidity plan and met the liquidity requirements for Nomu, according to a disclosure to Tadawul. The liquidity provider, Yaqeen Capital, has sold all shares to meet requirements to qualified investors in Nomu.

Al Baha Investment and Development Company submitted a request to the Capital Market Authority to reduce its capital by 26.5% to SAR 218.3 mn, by reduction of shares at a rate of one share for every four shares, according to a disclosure to Tadawul. The reduction is meant for covering SAR 78.7 mn in accumulated losses.

The Arab National Bank completed the purchase of 5 mn shares valued at SAR 98.3 mn for its employees shares program, as of yesterday, it said in a disclosure to Tadawul. The shares are worth SAR 19.7 a piece.

Saudi reopens embassy in Syria

The Kingdom has officially reopened its embassy in Damascus following a 12-year hiatus, Saudi Gazette reports. The move signals a fresh start for Saudi-Syrian relations after years of strain and marks the latest in a series of steps aimed at reestablishing ties that included the appointment of Faisal bin Saud Al Mujfel as ambassador in May — the first Saudi envoy to Syria since 2012 — and the resumption of flights connecting both countries in July.

CALENDAR

SEPTEMBER

8-12 September (Sunday-Thursday): International Artificial Intelligence Olympiad (IAIO), Riyadh.

9-12 September (Monday-Thursday): EFG Hermes London Conference, Emirates Stadium, London.

10-12 September (Tuesday-Thursday): Saudi Sports Show, Riyadh.

10-12 September (Tuesday-Thursday): Global AI Summit, Riyadh.

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

16 September (Monday): The Federation of Saudi Chambers’ meeting on iron and steel, Riyadh.

16-17 September (Monday-Tuesday): MEP International Conference 2024, Hilton, Jeddah.

16-17 September (Monday-Tuesday):Building Envelope Design and Insulation Conference (Bedic) 2024, Hilton, Jeddah.

15-19 September (Sunday-Thursday): SRMG Academy Technology Journalism Workshop, Riyadh.

15-19 September (Sunday-Thursday): Muntada FAA, Riyadh.

16-19 September (Monday-Thursday): Foodex Saudi, Riyadh.

17-19 September (Tuesday-Thursday): EV Auto Show, Riyadh.

17-19 September (Tuesday-Thursday): Hotel & Hospitality Expo, Front Exhibition & Conference Center, Riyadh.

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam.

18-19 September (Wednesday-Thursday): IDC Saudi Arabia CIO Summit 2024, Riyadh.

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

24-25 September (Tuesday-Wednesday): CX & Loyalty Summit & Awards, Riyadh.

24-26 September (Tuesday-Thursday) Saudi Infrastructure Expo, Riyadh International Convention and Exhibition Center, Riyadh.

24-26 September (Tuesday-Thursday): Smart Cities Saudi Expo 2024, Riyadh Front Exhibition & Conference Center.

25-26 September (Wednesday-Thursday): Kingdom Business and Luxury Travel Congress, Crowne Plaza Riyadh RDC Hotel and Convention.

26 September-5 October (Thursday-Saturday): AlUla Skies Festival, AlUla.

27 September (Friday): CAF Super Cup Final 2024, Riyadh.

29 September-1 October (Sunday-Tuesday): Jeddah Construct Expo, Jeddah.

29 September (Sunday): Start of Digital Chip Design Technologies training program.

OCTOBER

1-3 October (Tuesday-Thursday): Intersec Saudi Arabia 2024, Riyadh.

5-7 October (Saturday-Monday): Middle East Education & Training Exhibition 2024, Jeddah.

12 October (Saturday): Riyadh Season.

12 October (Saturday): Shakur Stevenson x Joe Cordina, Riyadh.

12-14 October (Saturday-Monday): Global Logistics Forum, Riyadh.

15-16 October (Tuesday-Wednesday): Solar & Storage Live KSA, Riyadh.

16-17 October (Monday-Tuesday): Global Airport & Aviation Forum, Jeddah.

19 October (Saturday): Battle of the Giants, Mayadeen Hall, Riyadh.

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh.

21-22 October (Monday-Tuesday): Aussie Expo, King Abdullah Financial District Conference Center, Riyadh.

21-23 October (Monday-Wednesday): Global Health Exhibition 2024, Riyadh.

23-24 October (Wednesday-Thursday): UNIDO’s Multilateral Industrial Policy Forum (MIPF), Riyadh.

26 October (Saturday): Donor Conference to Support Refugees in Sahel and Lake Chad Regions, TBD.

27-28 (Sunday-Monday): The Global PropTech Summit, Movenpick Hotels & Resorts, Riyadh.

29-31 October (Tuesday-Thursday): Future Investment Initiative Conference, Riyadh.

30 October-3 November (Wednesday-Sunday): Hia Hub 4.0, Riyadh.

31 October (Thursday): No-visa travel for Saudis to Montenegro on charter flights expires.

NOVEMBER

2-9 November (Saturday- Saturday): WTA Finals, Riyadh.

4-7 November (Monday-Thursday): Saudi Build, Riyadh.

26-28 November (Tuesday-Thursday): Saudi Electricity Expo, Riyadh.

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh.

11-12 November (Monday-Tuesday): Expenditure Efficiency Forum, The Hilton, Riyadh.

11-14 November (Monday-Thursday): Cityscape Global, Riyadh.

16 November (Saturday): Latino Night at Riyadh Season, Riyadh.

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Dammam.

19-20 November (Tuesday-Wednesday): The Women's Economic Forum 2024, Dammam.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam.

23 November (Saturday): Red Sea 600, Jeddah Yacht Club and Marina.

25-27 November (Monday-Wednesday): World Investment Conference, Riyadh.

26-28 November (Tuesday-Thursday): Future Power Expo, Riyadh.

29 November-2 December 2024 (Sunday-Wednesday): World Sailing Youth Match Racing World Championship, Jeddah Yacht Club and Marina.

DECEMBER

1 December (Sunday): Opec+ to meet.

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh.

3-5 December (Tuesday-Thursday): The International Business Exchange – IBEX EVENTS, Riyadh.

11 December (Wednesday): Billboard Arabia Music Awards (BBAMAs), King Abdullah Financial District, Riyadh.

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

5-8 December (Thursday-Sunday): World Sailing Women’s Match Racing World Championship, Jeddah Yacht Club and Marina.

11 December (Wednesday): FIFA Congress, which will decide the hosting countries for the FIFA World Cup 2030 and 2034

15-19 December (Sunday-Thursday): Internet Governance Forum, King Abdulaziz International Conference Center, Riyadh.

23-26 December (Monday-Thursday): Aqarat Expo, Riyadh.

Signposted to happen sometime in 2024:

The AFC Champions League Elite

2025

JANUARY 2025

14-16 January (Tuesday-Thursday): Future Minerals Forum, King Abdulaziz International Conference Center, Riyadh.

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

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

FEBRUARY 2025

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

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

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

JUNE 2025

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

2026

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

2027

The World Water Forum takes place in Riyadh.

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