Aramco book is fully covered in first hours, will close on Thursday

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Opec+ will phase out voluntary production cuts starting this fall

Good morning, friends. Saudi dominates global business headlines this morning with word that Aramco’s blockbuster share sale was fully covered just hours after the order window opened yesterday — and news that Opec+ will start phasing out voluntary production cuts this fall.

PLUS- We have the rundown on three new reports for you this morning, one each real estate, education, and the obstacles execs say are blocking business transformation. All of that and more in this morning’s news well, below.

OIL WATCH-

Opec+ could start pumping more oil this fall: OPEC+ decided to extend crude oil production cuts during its meeting in Riyadh yesterday, it said in a statement. The alliance will keep in place current production cuts of 3.66 mn barrels per day (bbl / d) until the end of this September, before beginning to “phase out the cuts of 2.2 mn bbl / d over the course of a year from October 2024 to September 2025,” Reuters reports.

The bottom line: “We are waiting for interest rates to come down and a better trajectory when it comes to economic growth … not pockets of growth here and there,” Saudi Energy Minister Prince Abdulaziz bin Salman said.

This is aligned with what pundits had penciled in: Reuters and the New York Times were among those expecting some or all of the cuts to be extended.

The next checkpoint: The group is scheduled to meet again on Sunday, 1 December 2024.

BACKGROUND- Brent crude prices have been falling “amid a fragile economic outlook in top consumer China and doubts about the pace of interest-rate reductions in major industrialized economies,” Bloomberg writes. Brent crude has fallen some 11% since early April, to trade at USD 81.11 a barrel.

IN CONTEXT- Opec+ has largely stuck to a total of 5.9 mn bbl / d worth of cuts, Reuters notes, in a bid to prop up prices against a backdrop of waning demand from China and higher US shale production .

HAPPENING TODAY-

The two-day Global Project Management Forum 2024 wraps today at the Fairmont Riyadh. Today’s lineup includes discussions fo project performance, emotionally intelligent leaders, and data-driven decision making, to name a few.

WEATHER- Expect it to be much of the same in Makkah today, with more wind and a daytime high of 45°C that will give way to a low of 31°C. Riyadh is also in for a windy day with a high of 44°C and a low of 29°C, while Jeddah is getting a cooler high of 38°C and low of 28°C.

WATCH THIS SPACE-

#1- PIF-owned Riyadh Air is looking to expand its partnership network and is set to close an agreement in the coming days with a major southeast Asian carrier, Bloomberg reports, citing people it says are familiar with the plan. Riyadh Air is also working towards securing agreements with an Indian long-haul flight carrier as well as a US airline, according to Bloomberg, which stopped short of naming the carriers Riyadh Air is speaking with.

#2- The Industry and Mineral Resources Ministry earmarked two sand and gravel ore complexes in Asir’s Bisha for mining activities, according to state news agency SPA. One complex is located east of the Gulf, while the other lies north of Al Shaqiqa, it said.

BACKGROUND- The Industry and Mineral Resources Ministry announced plans earlier this year for an incentive program to encourage exploration. It has gold and phosphate in mind, among others. The nation’s untapped mineral resources could be worth as much as USD 2.5 tn, or 90% more than the last forecast in 2016, officials said in January.

#3- Al Safi Danone was fined SAR 1.3 mn for environmental damage in Al Kharj, the National Center for Environmental Compliance said on X. Al Safi Danone reportedly engaged in activity that led to soil pollution, impairing its usability, or ruined its natural properties without taking appropriate precautions, the center said. The dairy and juice producer will also be required to repair the damage it caused.

DATA POINT-

The real estate loan portfolios of commercial banks grew 13.4% y-o-y in 1Q 2024 to SAR 800.5 bn, according to SAMA’s April 2024 Monthly Statistical Bulletin (pdf). The volume of real estate loans to individuals — which account for 78.1% of total real estate loans granted — reached a record high of SAR 625.2 bn by the end of the quarter, rising 10.3% y-o-y, while loans were issued to corporate clients rose 26% y-o-y to reach SAR 175.2 bn.

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THE BIG STORY ABROAD-

It’s an unusually busy Monday morning, with a handful of stories fighting for a spot on the front pages.

IPO WATCH- Fast-fashion retailer Shein will soon file a prospectus with the UK’s Financial Conduct Authority ahead of its anticipated London IPO, which could value the company at over USD 64 bn. This is Shein’s second attempt at going public after it tried to make its debut in New York but faced regulatory hurdles due to its ties to Beijing. (FT | Reuters)

ELECTION SEASON is in full swing: Mexico could welcome its first female president. Mexicans headed to the polls yesterday to cast their ballots in a historic presidential race, with two female candidates in the lead — leftist former head of government of Mexico City Claudia Sheinbaum and conservative Xochitl Gálvez. Results should be announced shortly. (Reuters | CNN | AP)

ALSO- South Africa’s African National Congress is scrambling to conclude coalition talks and has a few “very difficult” days ahead, one political analyst told Sky News. As we noted yesterday, the ANC lost its parliamentary majority for the first time since the fall of white rule. President Cyril Ramaphosa called yesterday for unity and said he would not step down despite the loss at the polls, Politico reports.

AND- The US presidential elections are fast approaching and a Reuters poll breaks down where each of the leading candidates — Joe Biden and Donald Trump — stand among voters in comparison to this time four years ago, when they went head- to-head for the first time.

All this election talk got you overwhelmed? We have everything you need to know about the upcoming elections this year in an Enterprise Explains published late last year.

IN LOGISTICS- The economic fallout of ships diverting away from the Red Sea to avoid Houthi attacks is still receiving coverage, with Bloomberg’s daily supply chains newsletter — Supply Lines — dedicating yesterday’s issue to the topic.

PSAs-

#1- It’s time to steer clear of Makkah if you’re not a resident or don’t have a Hajj permit. Rules barring non-resident expats and citizens from Makkah and designated areas around the city came into effect yesterday, state news agency SPA said in a reminder. The rules — which were announced last month — will impose a SAR 10k fine and could lead to expats being deported and banned from entering the Kingdom. The rules will remain in effect until Thursday, 20 June.

#2- Importing goods for an expo? You can now get zero-duty imports with ATA carnets: The Zakat, Tax, and Customs Authority (Zatca) is now accepting temporary admission carnets (ATA carnet), Zatca said in a statement. ATA carnets simplify customs procedures for the temporary import of goods for purposes including trade shows, exhibitions and events and ensure zero duty and tax treatment. Anything brought into the Kingdom under an ATA carnet needs to leave Saudi within one year.

CIRCLE YOUR CALENDAR-

The #Growth Summit is set to kick off this Wednesday, 5 June, bringing together marketing, product and growth experts at the InterContinental in Riyadh. You can request your invite here.

The Global EV and Mobility Tech Forum will open its doors on Wednesday, 10 July to Thursday, 11 July at the Riyadh International Convention and Exhibition Center. The event will bring together policymakers, NGOs, and startups.

The Conference on Arbitration and Dispute Resolution in Energy, Oil, and Gas will be held in GCC countries for the first time in 2025, coming off the signing of a partnership between the GCC Commercial Arbitration Center, the Scottish Arbitration Center, and the International Conference on Law, according to state news agency SPA. The conference will bring together experts in international arbitration to discuss the legal, geopolitical, economic, and security aspects and challenges related to energy disputes in the GCC.

Aramco’s blockbuster share sale sells out within hours, putting the treasury on track to raise as much as SAR 43.5 bn

Investors cover Aramco secondary offering within hours: Aramco’s blockbuster follow-on offering was fully covered “hours” after kicking off yesterday, Bloomberg reports, citing a document it saw. The oil giant’s offering attracted demand “on the full [transaction size] within the price range,” Reuters reports, citing one of the banks working on the offering. Aramco had set a price range of SAR 26.70-29.09, meaning it could raise as much as SAR 43.5 bn.

Institutional book-building continues through Thursday, and foreign appetite could be significant. Both local and foreign investors subscribed to the offering, Bloomberg reports, citing three people with knowledge of the transaction. It remains unclear “how much of the demand came from overseas,” the business information service said. The offering is Regulation S compliant, making it easier for global institutional investors to take part, according to the prospectus (pdf).

What’s next: The final allocation of shares and the offering’s final price will both be announced on Friday, 7 June, the oil giant said (pdf). Trading of newly sold shares will begin next Sunday, 9 June. Excess subscription amounts will be returned on Tuesday, 11 June.

The pitch: Buyers can expect part of a USD 124 bn dividend, which Bloomberg Intelligence expects will amount to a dividend yield of 6.6%. Aramco is set to boost its dividend this year by as much as 30% over 2023 thanks to a performance-based dividend, despite a 14.4% y-o-y dip in net income in 1Q 2024 to SAR 102.3 bn on lower crude oil sales.

BACKGROUND- The government is taking an additional 0.64% stake to market, or 1.5 bn ordinary shares, Aramco said in a statement on Thursday. The institutional tranche of the sale will account for at least 90% of the shares on offer, while no more than 10% will be allocated to retail investors for the transaction. The three-day subscription period for retail investors starts today and wraps this Wednesday, 5 June, for a minimum of 10 shares each with no upper limit.

ADVISORS- SNB Capital is lead manager. HSBC, BofA, Citi, Goldman Sachs, JP Morgan, Morgan Stanley, Meryll Lynch, and SNB Capital will act as joint global coordinators, bookrunners and financial advisors. Our friends at EFG Hermes KSA will act as domestic bookrunners alongside Al Rajhi Capital, Riyad Capital, and Saudi Fransi Capital. Meanwhile, M. Klein and Company and Moelis will act as independent financial advisors. Meryll Lynch will act as the stabilization manager. White & Case is legal counsel to Aramco, while PwC is auditor. Receiving agents include, Alinma Bank, Alrajhi Banking and Investment Corporation, Arab National Bank, Banque Saudi Fransi, Riyad Bank, Saudi Awwal Bank, Saudi National Bank.

Rasan’s retail offering was 12.8x oversubscribed

The retail tranche of fintech startup Rasan’s IPO was 12.8x oversubscribed, it said in a filing to Tadawul. The company’s debut on Tadawul’s main market will see it selling a 30% stake through an offering of existing and new shares, after it priced the IPO at SAR 37 per share.

The breakdown: Retail investors were allotted 10% of the total offering, and will receive three shares each out of the total 2.3 mn shares allocated to the retail tranche. Institutional investors are receiving the remaining 90% of the shares on offer.

Proceeds + market cap: The offer price will allow the fintech outfit to raise SAR 841 mn from the IPO, and values the company at SAR 2.8 bn post-listing, according to our calculations. Some SAR 40.4 mn will be deducted from the proceeds to cover the offering’s expenses, according to the prospectus (pdf).

Rasan’s services include ins. aggregator Tameeni, B2B leasing ins. platform Treza, automotive auction platform Awal Mazad, and car repair workshop Warshti. With offices in the Kingdom, the UAE, and Egypt, the company claims to have more than 8 mn customers, 60 partners, and 10 products, according to its website.

ADVISORS- Saudi Fransi Capital is quarterbacking the transaction as financial advisor, lead manager, bookrunner and underwriter. Morgan Stanley Saudi Arabia is also acting as financial advisor, bookrunner, and underwriter. Receiving banks include Banque Saudi Fransi and AlRajhi Bank. Latham & Watkins is Rasan’s legal advisor, while White & Case was appointed as legal advisor to the lead manager, financial advisors, underwriters, and bookrunners. PwC is financial due diligence advisor and marketing consultant and EY is serving as auditor.

Talco’s retail tranche was 17.4x covered

The retail component of Altaiseer Group Talco Industrial Company’s (Talco) IPO on Tadawul’s main market was 17.4x oversubscribed, financial advisor Alinma Investment said in a statement yesterday. The company offered 1.2 mn shares (equivalent to 10% of the total offering) to retail investors. Talco had priced its IPO at SAR 43 per share after the institutional tranche of the sale closed last month 68.5x oversubscribed.

The specifics: Each subscriber received one share, with the remaining shares allocated on a pro-rata basis based on investor demand, resulting in an average allocation factor of 2.5%, the statement read. Remaining shares were distributed individually, starting with the investors who had the highest demand, it added.

BACKGROUND- Talco is taking a 30% stake (12 mn shares) to the main market in a secondary share sale, allocating 90% of its stake to institutional investors, while retail investors have the remaining 10%. Talco’s nine major shareholders reduced their combined stake to 65.09% from 92.99%.

ADVISORS- Alinma Investment is quarterbacking the transaction as financial advisor, lead manager, bookrunner and underwriter, while Stat Law Firm is acting as counsel. PwC is Talco’s financial due diligence advisor. Front & Sullivan is serving as market consultant, while KPMG is acting as the company’s auditor. The receiving agents are Alinma Bank, Al Rajhi Bank, and Riyad Bank.

Commercial rent jumps with fresh appetite for Saudi office space

Growing demand for office space is driving commercial rent to new highs and underscores the market’s yawning supply gap, according to Knight Frank’s Summer 2024 Saudi Arabia Commercial Market Review (pdf). Initiatives like the government’s regional headquarters program — which is working to lure foreign investors into setting up shop in Riyadh — have thrust into the spotlight the short supply of prime offices, propping up the price tag on commercial real estate in Riyadh. Space is also tight in Jeddah and the Dammam metropolitan area (DMA).

Rent is up everywhere everywhere you look: Grade A rents in Riyadh rose 8% y-o-y to SAR 2k per sqm in 1Q 2024, while Grade B rents rose 26% y-o-y to SAR 1.2k per sqm. In Jeddah, the price of Grade A offices were up 23.5% to SAR 1.2k per sqm compared to 2021 levels, while those in Grade B grew 2% y-o-y to SAR 790 per sqm. Grade A rents in DMA saw a 2% uptick to SAR 1k per sqm, while Grade B rents were up 1.6% y-o-y to SAR 625 per sqm.

REMEMBER- Rent has been the big culprit behind inflation: A 9.4% y-o-y increase in villa rental prices led to a 10.4% y-o-y hike in the price of the overall rent sector in April. Riyadh’s office market was tight in 1Q 2024, buoyed by a 4.4% growth in the non-oil sector. Grade A offices saw an occupancy rate of 98% during the quarter as demand continues to pick up pace on the back of the Kingdom’s diversification plan and regional headquarters program.

Meanwhile, occupancy rates remain largely unchanged: Occupancy rates in Riyadh’s Grade A offices grew 1% y-o-y to 98% by the end of the first quarter of the year, while those of Grade B offices in the capital were up 8% y-o-y, with higher prices pushing businesses “to settle for a less-than-ideal space,” Partner and Head of Research, Faisal Durrani said in a press release. In the Grade A market, occupancy was down 2 percentage points y-o-y to 93% in Jeddah, and up 5% y-o-y to 85% in Dammam.

What the pundits are saying: “What is extraordinary about the market dynamics is the sheer shortage of prime office options, with vacancy rates as high as 98% in Riyadh,’” Durrani said. “On the global stage, many cities in the Gulf, including Riyadh, Jeddah, Dubai and Abu Dhabi stand out for the near-record low levels of prime office vacancy, which stands in contrast to many other global gateway locations,” he said.

ALSO- Hotel rates are mirroring heightened demand: An increase in corporate travel, business conferences, and international sports events are pushing up hotel prices in Riyadh, according to Knight Frank. Average daily rates in the capital grew 26.8% y-o-y to SAR 982, while occupancy rates dipped around 4 percentage points y-o-y to 67%.

Education in GCC is improving, but more is needed -World Bank

The quality of education in GCC countries has steadily improved over the last 10 years, albeit at a slower pace compared to other OECD countries, according to the World Bank’s Gulf Economic Update (pdf). Primary and secondary education in reading, math and sciences saw significant strides in most GCC countries, led by gains in Qatar and Bahrain. However, learning outcomes continue to fall short of global standards, especially considering the region’s level of income.

THE HOMETOWN ANGLE: Progress in the Kingdom’s math and science achievement at the fourth-grade level faced a setback in 2015, before bouncing back in 2019, the report showed, without providing further detail. Additionally, the rate at which Saudi eighth-graders progressed in both subjects as well as their expected learning outcomes relative to years of schooling are below average compared to other countries in the GCC. Students aged 15 saw a modest dip in reading scores by the equivalent of 0.8 years between 2018 and 2022.

Why it matters: “Human capital is a key element to increasing economic growth in the long run, but all its potential contribution to GCC economies will not be fully released until quality of education is improved,” the report read. The report argues that education drives economic growth when it effectively translates into human capital which then contributes to the overall GDP.

The contribution of human capital to GDP growth in the Arab world lags behind that of advanced economies, where a 1% uptick in human capital typically translates to a 0.9% boost in GDP. In the GCC, a 1% increase in human capital results in an 0.5% bump in GDP due to education not effectively translating into human capital.

Students in the GCC realize only 62% of their full potential productivity due to low quality of education, the report read, with reference to the World Bank’s Human Capital Index (HCI). GCC countries check two of the three HCI dimensions, namely child survival and adult survival, while falling short on education. While they are expected to attain 12.7 years’ worth of learning over their schooling period, GCC students’ expected learning time comes out to 8.6 years.

Students in the region also underperform when it comes to international learning assessments. The report states that one-fifth of fourth graders in the GCC fail to reach the minimum reading proficiency standard, while countries such as Singapore and Ireland see over 67% of fourth graders achieving high proficiency benchmarks.

ZEROING IN- There’s a big gender gap in learning outcomes: Girls tend to significantly outperform their male counterparts in the region, with four GCC countries ranking among the top seven countries with the largest gender disparities, including Saudi, Oman, Bahrain, and the UAE.

Okay, so what’s the holdup? Limited school readiness, outdated instructional and pedagogical practices — such as an emphasis on rote memorization, a lack of focus on problem-solving, collaborative teamwork and digital skills — as well as disparities in preschool enrollment rates, which remain relatively low, were all cited as reasons for the lag.

Moving forward: The World Bank suggests investing in early childhood education, focusing on quality programs, supporting and adequately training teachers, as well as leveraging the power of learning assessments to speed up the improvement of education in the GCC, until it is at par with other economies within its income-level. The report expects this will take several decades.

Resource availability + resistance to change are holding back Saudi’s business transformation -PwC

Saudi executives see resource availability and resistance to change as the primary obstacles to pushing ahead with business transformation, according to a PwC report (pdf). More than two thirds (70%) of those polled also identified data availability as a constraint, while 55% said resource capability is an obstacle, and 50% pointed to digital limitations. Meanwhile, financial constraints were cited as a concern by 30% of respondents.

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This more or less squares up with concerns among global and regional executives, PwC says: “In a PwC global survey, within Europe and North America transformation executives, across diverse sectors, decision-making emerged as one of the primary hurdles in executing organizational transformations, spanning from employees to the C-suite level,” the global accounting firm said. On a global and regional level, executives primarily cited developing a clear strategy, data availability and quality, resistance to change, governance, and efficiency across resources and operations as their main issues.

The way forward? It’s all about a “holistic approach” that relies on digitization and digital solutions to navigate a dynamic and quickly growing business environment in the Kingdom, PwC says.

The report also suggests that generative AI — which uses neural networks to learn data and generate it as well — could also be an important emerging technology to help drive transformation and “excellence in business strategy.” Businesses could use genAI to leverage a deep analysis of market data in “solidifying their industry leadership.” It could also be used to grant businesses agility and proactivity, through utilizing “industry-specific knowledge and insights.”

GenAI is also a useful tool for automating routine tasks, which allows for higher productivity and enables companies to look further ahead during their day-to-day operations towards strategic growth and client relationships.

The World Rally Championship will return to the Middle East after a 14-year hiatus

We have a couple of big sports stories out this morning, including news that Saudi will host the FIA World Rally Championship, as well as the outcome of an important boxing match in Riyadh.

MOTORSPORTS-

Saudi Arabia will host an edition of the FIA World Rally Championship (WRC) for 10 years starting 2025, which will mark the first time the tournament comes to the Kingdom, according to a statement from WRC. Next year’s Saudi edition of WRC will also mark the championship’s return to the Middle East after it was last held in Jordan in 2011, the statement notes.

What we know: The long-term agreement was struck at the Rally Italia Sardegna and will see Saudi host a championship round in WRC’s 12-rally calendar under the name “Saudi Rally,” reports state-run news agency SPA. This agreement is still subject to the approval of the FIA World Motor Sport Council. No financial details were made public, and it’s unclear whether the Saudi Rally will be an addition to the calendar or replace an existing one.

Saudi is becoming a motorsports hub, with the Kingdom now boasting a calendar that includes Formula 1, Formula E, Extreme E, the Dakar Rally, as well as the newly added WRC.

What they said: “It has been over a decade since the FIA World Rally Championship last visited the region,” said FIA President Mohammed Ben Sulayem. The championship will be a “great [chance] for national and regional drivers to showcase their talents on the world stage,” he said.

IN OTHER SPORTS NEWS-

Daniel Dubois secured the International Boxing Federation interim world heavyweight title, after he beat Croatia’s Filip Hrgovic in a fight that could become a world championship title if Oleksandr Usyk — Ukraine's undisputed world champion — relinquishes his title or is stripped of it by the sanctioning body, reports ESPN.

The fight was part of the historic 5 vs 5 event held in Riyadh Season, which saw boxing’s two biggest promoters Eddie Hearn and Frank Warren face off their fighters yesterday. “Riyadh now is the capital of world boxing,” Warren told Arab News.

Dubai’s Growdash raises seed round as it eyes expansion to Saudi this year

Dubai-based Growdash, a business intelligence and analytics platform for restaurants, has raised AED 6.8 mn (SAR 6.9 mn) in a seed round, according to a press release. The company said it aims to enter the Saudi market later this year and is looking to become a “first mover” in central eastern Europe.

Who’s in? The round was led by Oryx Fund, Hambro Perks’ Mena-focused VC, and Oraseya Capital, part of Dubai Integrated Economic Zones Authority. Abu Dhabi-based Hub71 also participated in the round, along with existing investors TPN Investments, and GCC Angels, and angels including AngelSpark, Mohamed Zourob, and Abdullah Mohamad.

Where the money’s going? “With our seed financing, we will accelerate our product roadmap, doubling-down on machine learning and building new, innovative features that align with our product methodology,” Growdash’s chief experience officer Enver Sorkun said.

Backghround on Growdash: Founded in 2022 by former Talabat employees Sean Trevaskis (LinkedIn) and Enver Sorkun (LinkedIn), the company provides restaurant analytics and business intelligence to more than 300 restaurant brands across 4k locations in the UAE, Kuwait, and Qatar.

Aramco’s secondary offering + OPEC’s extended production cuts lead the conversation on Saudi

The two big stories on Saudi in the foreign press this morning are oil giant Aramco kicking off its secondary offering yesterday (Bloomberg | Reuters | CNBC) and OPEC+’s meeting in Riyadh, which saw the group decide to begin winding down production cuts in 3Q 2024 (AP | CNBC | Reuters | Bloomberg). We have chapter and verse on both stories above.

AND- Saudi plays heavily in Bloomberg’s look at Trump-administration Treasury Secretary Steve Mnuchin. The business information service let its inner isolationist out of its cage as it declared that Mnuchin is “ chasing Wall Street glory with his war chest of foreign money.” Mnuchin is believed to be managing funds for everyone from the Public Investment Fund to the UAE’s Mubadala, and Japan’s SoftBank.

Aramco signs multiple steel pipe supply agreements

MANUFACTURING-

#1- Group Five Pipe will manufacture and supply spiral welded steel pipes to Aramco under a SAR 1.3 bn contract, it said in a disclosure to Tadawul yesterday. The contract runs for 12 months.

#2- East Pipes Integrated Company for Industry inked multiple steel pipes manufacturing and supplying contracts with Saudi Aramco worth SAR 1.7 bn, it said in a filing to the exchange. The contract is set to be fulfilled over 19 months.

AVIATION-

PIF-backed budget airline Flynas has launched its first direct flight to Najaf in Iraq from Dammam’s King Fahd International Airport, the General Authority for Civil Aviation said in a post on X.

BANKING-

Perfect Presentation (2P) has secured a SAR 135 mn Sharia-compliant loan from Alinma Bank, which it earmarked for financing new project awards, 2P said in a disclosure to Tadawul. The facility runs until 1 June 2025.

HEALTHCARE-

Gulf Union Al Ahlia Cooperative Ins. is set to provide health ins. coverage to the employees of local consultant Saeed Raddad Group under a freshly-inked agreement, it said in a filing to Tadawul. The one-year arrangement — which is valued at over 5% of the company’s gross premiums for 2023 — started on Sunday, 1 June and will include ins. packages for the employees’ family members.

Corporate earnings in emerging markets fell short of analyst expectations in 1Q 2024

The two biggest stories on Planet Finance this morning are out of Saudi Arabia: Aramco’s blockbuster USD 12 bn share sale sold out in hours — and Opec+ has said it will start phasing voluntary oil production cuts later this year. We have the rundown on both stories above in the news well and in What We’re Tracking Today.

Other stories making the rounds on an otherwise quiet(ish) news morning:

#1- EMs fall short in 1Q earning results: Nearly half of the companies in the MSCI Emerging Market Index missed analyst expectations with their 1Q 2024 results. Blame China’s slow economic recovery, rising wage costs and other expenses, sluggish consumer spending, and tighter monetary policy, Bloomberg writes.

How bad is it? MSCI EM companies’ average profits are down 10% quarter-on-quarter, marking eight “quarters of misses” for the average EM company, writes the outlet, according to its reading of MSCI index and earning estimates.

The worst performers: Industrial companies, financial institutions, tech firms, and real estate developers.

#2- Are Elon and Jamie Dimon besties again? That’s the Wall Street Journal ’s contention, noting that the Tesla / X boss and JPMorgan chief “spoke at an exclusive JPMorgan summit, opening the door to their working together again” after “years of feuding.”

#3- Chipmaker Nvidia looks set to surpass Apple in market value to become the world’s second-most valuable company behind tech giant Microsoft. Nvidia’s stock has tripled in value over the past year, and accounted for more than a third of the S&P 500’s gains in 2024. (Reuters)

MARKETS THIS MORNING-

Asian markets are solidly in the green in early trading this morning. Of the major benchmarks we follow, only the Shanghai Composite is flat. US and European stock futures were up slightly overnight as western markets look forward to the first trading day in June. (Anybody else wondering where the first five months of the year went?)

TASI	11,625	+1.0% (YTD: -2.9%)
MSCI Tadawul 30	1,455	+1.3% (YTD: -6.2%)
NomuC	26,118	+1.9% (YTD: +6.5%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	6.5% repo	5.5% reverse repo
EGX30	26,869	-0,2% (YTD: 7.9%)
ADX	8,862	+1.3% (YTD: +7.5%)
DFM	3,977	+0.2% (YTD: -2.0%)
S&P 500	5,278	+0.8% (YTD: +10.6%)
FTSE 100	8,275	+0.5% (YTD: +8.8%)
Euro Stoxx 50	4,984	0.0% (YTD: +10.2%)
Brent crude	USD 81.11	-0.9%
Natural gas (Nymex)	USD 2.59	+0.6%
Gold	USD 2,346	-0.9%
BTC	USD 67,798	+0.1% (YTD: +60.3%)

THE CLOSING BELL: TADAWUL-

The TASI rose 1.0% yesterday on turnover of SAR 5.6 bn. The index is up -2.9% YTD.

In the green: East Pipes (+8.9%), Shaker (+8.6%) and Mouwasat (+8.6%).

In the red: Astra Industrial (-3.9%), Tasnee (-3.2%) and Maaden (-2.6%).

THE CLOSING BELL: NOMU-

The NomuC fell 1.9% yesterday on turnover of SAR 68.8 mn. The index is up 6.5% YTD.

In the green: Group Five (+10.8%), Riyadh Steel (+5%) and WSM (+3.7%).

In the red: Knowledgenet (-9.4%), Alrasheed (-8.3%) and Miral (-7.9%)

CORPORATE ACTIONS-

The board of Nomu-listed AlBabtain Food approved SAR 1.7 mn in dividends at SAR 0.5 per share for 1H 2023, according to a disclosure to Tadawul. Dividends will be distributed Wednesday, 12 June 2024.

Yanbu National Petrochemical’s board approved a dividend of SAR 562.5 mn at SAR 1 per share for 1H 2024, it said in a disclosure to Tadawul. These are set to be distributed by 20 August 2024.

Shareholders of Seera Group Holding agreed to buy back up to 26.4 mn ordinary shares, after the company’s board said the stock is undervalued, it said in a filing to Tadawul. The self-financed buyback must be completed within the coming year.

CALENDAR

JUNE

2-3 June (Sunday-Monday): Global Project Management Forum, Riyadh.

3-4 June (Monday-Tuesday): Electronic Applications Exhibition, Al Dammam.

4-7 June (Tuesday-Friday): Saudi Sports Show, Riyadh.

4-7 June (Tuesday-Friday): Aqarat Expo, Riyadh.

5 June (Wednesday): GROWTH Summit Riyadh, InterContinental Riyadh, Riyadh.

5 June (Wednesday): World Environment Day.

5 June (Wednesday): Digital Transformation Summit, Riyadh.

6 June (Thursday): Saudi Manufacturing Show, Riyadh.

10 June (Monday): #teamLabBorderless, Jeddah.

10 June (Monday): Deadline to register for school bus services for the upcoming academic year.

20 June (Thursday): Norah premiers in theaters.

14-22 June (Friday-Saturday): Banks and capital markets closed for Eid Al Adha holiday.

JULY

4 July-25 August: (Thursday-Sunday): Esports World Cup, Boulevard Riyadh City, Riyadh.

10-11 July: (Wednesday-Thursday): Global EV & Mobility Tech Forum, Riyadh International Convention & Exhibition Center, Riyadh.

AUGUST

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

SEPTEMBER

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

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

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

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

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

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

OCTOBER

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

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

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

NOVEMBER

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

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

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

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

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

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

DECEMBER

1 December (Sunday): Opec+ to meet

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

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

Signposted to happen sometime in 2024:

The AFC Champions League Elite

2025

FEBRUARY 2024

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

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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