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Aster GCC is “tripling down” on Saudi with asset acquisitions

1

WHAT WE’RE TRACKING TODAY

THIS MORNING: Al Nassr vs. Qatar’s Al Rayyan today

Good morning, wonderful people. We’ve been blessed with a calmer Monday as we bid farewell to September, while also changing the pace from a flurry of IPO news to a more debt-centric news day.

HAPPENING TODAY-

#1- A business delegation led by Federation of Saudi Chambers (FSC) Chairman Hussein Al Huwaizi is heading to Azerbaijan and Georgia today to kick the tires on potential business ventures and sign trade agreements, the FSC said in a post on X. The delegation, which includes 65 business leaders from different sectors, is scheduled to meet with public and private sector officials to look at trade and investment prospects.

#2- Monsha’at and Baha University are hosting a talk on prospects for commercial innovation in Al Baha today from 5:30-7pm, with contributions from local business leaders, according to a post on X. You can register for the talk here.


WEATHER- A cloudy Riyadh will see a high of 39°C today and a low of 25°C. Meanwhile, Jeddah’s mercury will hit a high of 36°C, and a low of 28°C.

PSAs-

Owners of 239.3k properties in Riyadh, Medina, and Buraidah have until 2 January, 2025 to register their plots through the real estate registry platform to receive their property number and title deed, according to state news agency SPA.

Separately, a registration period for 43.5k properties in Riyadh and Diriyah will run from 27 October-30 January. Property owners in four Riyadh neighborhoods and 13 Diriyah neighborhoods must also complete registration through the online platform or a visit to a service center with a title deed that meets regulatory standards, the Real Estate General Authority said in a statement.

WATCH THIS SPACE-

#1- Local tourism player Almatar Travel Group is planning to IPO on Tadawul’s main market by 4Q 2025, CEO and co-founder Aimen Saleh Basalamah told Argaam. Basalamah did not provide any details on the expected size of the IPO, or how much capital the company is looking to raise by going public. Almatar also plans to expand to Kuwait and the UAE next year with a revamped model tailored to meet the needs of those markets.

#2- Fifty local companies have lined up to invest in Azerbaijan’s energy, food, and logistics sectors as Baku looks to ramp up Saudi investment activity in the country to USD 4 bn-worth of investments from a total of 80 companies, Executive Director of the Azerbaijan Export and Investment Promotion Agency Yusif Abdullayev told Aleqtisadiah during the Gulf-Azerbaijan Economic Forum.

#3- The Health Ministry fined three airlines at Prince Mohammed bin Abdulaziz International Airport in Medina for violating health regulations, according to state news agency SPA. The airlines violated protocols for disease vector control by failing to spray aircraft with pesticides as required for flights arriving from areas affected by infectious diseases. Neither the value of the fine nor the identities of the airlines affected were disclosed.

DATA POINTS-

The King Salman Energy Park has lined up a total of USD 3 bn in expected investments from 60 investors, the industrial city said in a post on X. Spark currently has seven tenants that are operating facilities, with another 14 awaiting facilities that are under construction. The industrial city is the first in the world to receive a LEED Silver certification.

SPORTS-

Al Nassr is set to take on Qatar’s Al Rayyan today at Riyadh’s Al Oula Park Stadium in matchday 2 of the AFC Champions League, with Cristiano Ronaldo back in the lineup and new coach Stefano Pioli looking to extend his victory streak, state news agency SPA reports.

Over in Dubai, the UAE’s Al Wasl will face off against Saudi’s Al Ahli at Zabeel Stadium in another AFC Champions League match, as both teams look to build on their opening-round victories in the tournament, state news agency SPA reports.

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***

THE BIG STORY ABROAD-

It’s another morning with escalations in the region dominating headlines: Israel attacked Yemen’s Houthis yesterday, launching a wave of airstrikes on Ras Issa and the port city of Hodeida that killed four and wounded an additional 29 according to the Houthi-run health ministry. Commenting on Israel’s ongoing attacks on its allies, Iranian President Masoud Pezeshkian said that Israel should not be allowed to attack countries in the Iran-linked “axis of resistance” without consequence, saying that “a decisive reaction is necessary” and condemning Israel’s targeting of what he called “civilian infrastructure” in Hodeida.

Meanwhile, Israel’s brutal assault on Lebanon continued, with at least 105 people killed in Israeli strikes over the course of the day, according to the Lebanese Health Ministry. Hezbollah supporters and allies continued to mourn the loss of the group’s leader Hassan Nasrallah, while Israeli military officials vowed to “keep hitting Hezbollah hard.”

The strikes have led to what Lebanese Social Affairs Minister Hector Hajjar called a “humanitarian catastrophe” yesterday, underlining the difficulty the Lebanese caretaker government is having addressing the needs of the nearly 1 mn people that have been displaced since the conflict’s escalation.

AND IN BUSINESS NEWS- Former Japanese Defense Minister Shigeru Ishiba’s election as head of the country’s ruling Liberal Democratic Party has sent jitters through Japan’s stock market, as insiders express concern about his support for heavier corporate and investment income taxation.

CIRCLE YOUR CALENDAR-

Intersec Saudi Arabia will open its doors tomorrow, where experts in the security, safety and fire protection industries will convene to address the role of AI and VR in the sector. The event wraps up on Thursday, 3 October.

The 2024 Saudi Games are coming back next Thursday, 3 October at Riyadh’s Boulevard City, with musical performances from The Saudi Arwa and Abdulwahab kicking off the annual sporting competition, according to a post on X. The event will see upwards of 9k male and female athletes compete in 52 sports. The two-week event runs from until 17 October. You can grab tickets here.

The three-day 6 Kings Slam event at Riyadh’s Venue kicks off on Wednesday, 16 October, featuring all-star players competing for the largest purse in tennis history. The matches will see face offs between tennis champs Novak Djokovic, Rafael Nadal, Jannik Sinner, Carlos Alcaraz, Daniil Medvedev, and Holger Rune (watch, runtime: 5:15). The final and third-place match will be held on Saturday, 19 October. Book your tickets here.

The Professional Fighters League’s (PFL) Battle of the Giants is coming to Riyadh on Saturday, 19 October. Headlining the card, MMA superstar Francis Ngannou will face PFL heavyweight champion Renan Ferreira for the title of inaugural PFL Super Champion. Meanwhile, women’s featherweight champion Cris Cyborg will square off against Larissa Pachecho for the World Title Fight in the co-main event. Expect fireworks with additional matchups featuring Johnny Eblen vs. Fabian Edwards and A.J. McKee vs. Paul Hughes.

The two-day Multilateral Industrial Policy Forum will kick off in Riyadh on Wednesday, 23 October. The forum will address global industrial challenges, focusing on topics like industrial policy, clean energy, and advanced manufacturing tech. The forum is organized by The Industry and Mineral Resources Ministry in partnership with UNIDO. The Kingdom will also host the UNIDO General Conference in 2025.

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2

M&A WATCH

Aster GCC eyes USD 250 mn in healthcare assets in Saudi expansion

Aster GCC is looking at acquiring USD 250 mn (SAR 937.8 mn) worth of assets as it looks to expand in Saudi, Managing Director and group CEO of Aster’s GCC unit Alisha Moopen tells Bloomberg. The company — a subsidiary of Dubai-based Aster DM Healthcare — is eyeing medical centers and hospitals that should be completed over the next 3-5 years, Moopen said. “We are not only doubling down, we are tripling down on Saudi,” she added.

More on Aster’s Saudi drive: Aster currently operates Riyadh’s Aster Sanad Hospital — its only hospital here — which now has a 200-bed capacity after adding 50 earlier this month. The healthcare provider is looking to boost its Saudi portfolio to more than 1k beds, 180 pharmacies, and 24 medical centers within the next three to five years, the business information service reported. Aside from Aster’s current Riyadh-based hospital, the outfit is also looking to ramp up its pharmacies to 20 within the next few months.

IPO plans are still in the making: “It’s a good time to build before we take the company public, but the end goal is in the next few years to look at a listing,” Moopen told Bloomberg. Aster DM Chairman and Managing Director Azad Moopen had said earlier this year that the GCC unit was looking at a dual listing in Saudi and the UAE within the next three to five years.

REMEMBER- Parent company Aster DM Healthcare spun off its GCC assets into a separate unit after a consortium led by Dubai-based private equity firm Fajr Capital snapped up 65% of its Gulf business earlier this year for USD 1 bn.

3

DEBT WATCH

Sulaiman Al Habib secures SAR 1.3 bn loan from Al Rajhi Bank

Sulaiman Al Habib Medical Services Group has inked a SAR 1.3 bn Shariah-compliant loan agreement with Al Rajhi Bank, it said in a filing to Tadawul. The company will use the financing to invest in healthcare developments across the country.

What we know: The financing agreement runs for 13 years, and is guaranteed by a promissory note. There are no related parties to the agreement.

Where the funds are going: The funds will be channeled into company projects including Al Hamra Hospital, Women’s Health Hospital, Sehat Al Kharj Hospital, and the Medical Centers affiliated with Al Marakez Al Awaliyah for Healthcare, according to the disclosure.

4

DEBT WATCH

Riyad Bank closes USD 750 mn AT1 USD-denominated sustainable sukuk issuance

Riyad Bank closed its USD 750 mn additional tier 1 capital USD-denominated sustainable sukuk issuance, with settlement scheduled for Thursday, 3 October, according to a disclosure to Tadawul. Proceeds will be directed toward shoring up the bank’s tier 1 capital and supporting general banking activities, while the sukuk will be tradable on the London Stock Exchange’s International Securities Market.

The details: The notes carry a 5.5% annual return and are callable after five years. The bank issued 3.75 sukuk at USD 200k each.

IN CONTEXT- The issuance comes as part of the bank’s international additional tier 1 capital sukuk program that was established earlier this month after being approved by the bank’s board in August. Additional tier 1 (AT1) capital is a component of tier 1 capital that is held by banks to shore up their financial resilience. AT1 instruments can usually be converted into equity when a trigger occurs, such as when a bank’s capital falls below a certain threshold.

ADVISORS- HSBC, Kamco Investment, Merrill Lynch, Mizuho, Morgan Stanley, Riyad Capital, SMBC Nikko Capital Markets, Standard Chartered, and Warba Bank served as joint lead managers and bookrunners on the offer.

REMEMBER- Saudi Arabia led sustainable sukuk issuances in the GCC during 1H 2024, accounting for 42% of the region’s issuances. Al Rajhi Bank kicked off a USD 1 bn AT1 sustainable sukuk issuance in May, while Saudi National Bank sold USD 4.1 bn of five-year, USD-denominated sustainable sukuk in February.

5

MOVES

Gulf Ins. Group renews terms for CEO + board chair, vice chair

The General Assembly of Gulf Ins. Group (GIG) renewed the terms of its CEO and board of directors from 1 August, 2024 through to 31 July, 2028, according to a disclosure to Tadawul. Khalid Abdulaziz Al Shuwaier (Linkedin) will retain his position as CEO, a posting he has held since January 2022. Yousef Saleh Abalkhail will remain chairman of the board, extending his nine years in the position. Meanwhile, Bijan Khosrowshahi will continue as vice chairman.

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ALSO ON OUR RADAR

Saudi’s first program for gas storage and reproduction through gas injection goes live

ENERGY-

#1- The Aramco-developed Hawiyah Unayzah gas reservoir is now operational through the injection of processed natural gas to reproduce 2 bn cubic feet of natural gas per day, the Energy Ministry said on X. The project looks to manage seasonal fluctuations in demand, replace liquid fuels, and curb carbon emissions.


#2- Warsan WtE plant reaches full commercial operation: The Warsan waste-to-energy (WtE) plant, developed by Belgian construction developer Besix in partnership with Swiss-based WtE cleantech company Hitachi Zosen Inova (HZI), Dubai Municipality, investment firm Dubal Holding, UAE-based conglomerate Tech Group, and Japan’s Itochu Corporation, has officially commenced full commercial operations, according to a press release from last week.

The details: The facility processes 5.67k tons of municipal waste daily, generating up to 220 MW of clean energy, enough to power 135k homes. It also recycles residual materials, such as ash into cement kiln dust, contributing to Dubai’s circular economy. Besix will now enter its 35-year operations and maintenance period following full operations.

Operations began last year: Hitachi Zosen Inova and Besix inaugurated the project in June 2023 and oversaw the first electricity transmission from the plant in Warsan to Dubai’s power grid in July 2023.

DEBT WATCH-

The Agricultural Development Fund (ADF) approved over SAR 6 bn in loans by the end of 3Q 2024 and aims to hit SAR 7 bn by year-end, spokesperson Habib Al Shammari told Aleqtisadiah. Meanwhile, a separate fund for international investments is funding new projects and expansions to existing projects abroad to boost food security and secure supplies of basic crops such as wheat, corn, and alfalfa. The fund has so far invested in projects in Sudan, Ukraine, and Romania, with contracts exceeding SAR 1 bn.

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PLANET FINANCE

Risky assets rally as central banks pivot to easing

Wall Street's enthusiasm for risky assets is on the rise, fueled by glocal policy-easing, Bloomberg reports. Emerging-market equities, stocks closely tied to the economic cycle, and speculative technology investments are experiencing renewed interest as central banks in China and Europe — as well as the US Federal Reserve — begin to cut rates after holding them at decade highs for years-.

The biggest winners: The S&P 500 is on track to reach its best first three quarters since 1997, with a 20% YTD gain. Meanwhile, BlackRock’s momentum ETF hit record highs, up nearly 30% for the year, while the Societe Generale index is “flashing hot,” reaching its highest level in over a year, with the gauge only reaching those levels 5% or so of the time.

More signs of bulls in the market: Hedges are underperforming, while Goldman Sachs basket of most-shorted stocks is up 17% year-to-date, the business information service said.

Still, stretched valuations pose risks, market watchers warn, with some stressing the need for “tactical caution.” Momentum indicators suggest the current euphoria may be difficult to sustain in the short term.

CLOSER TO HOME- DFM's impressive growth faces headwinds from geopolitical risks, analysts warn: The Dubai Financial Market General Index surged 12% in 3Q 2024, reaching its highest level since 2014, driven by strong performances from companies like Emirates NBD Bank, Dubai Electricity and Water Authority, and Salik, Bloomberg reports. However, analysts warn that geopolitical risks and the challenge of finding appealing valuations may dampen future gains. In Abu Dhabi, the market advanced 5%, its best quarter since March 2022, while Saudi Arabia’s Tadawul All Share Index climbed about 6%, marking the best quarter of the year so far.

Despite favorable earnings and a tourism-driven economy bolstering the market, investor sentiment remains cautious. Tellimer's emerging market equity strategist in Dubai notes that stocks will now be “more sensitive to any setbacks than further good news.” Reflecting this caution, HSBC strategists have shifted their stance on the UAE and Saudi Arabia from overweight to neutral, citing heightened geopolitical risk and low oil prices as potential headwinds. However, some analysts such as Daman Investment’s Divye Arora believe valuations remain attractive, with major Dubai companies offering appealing dividend yields exceeding 5% for 2025 amid declining bond yields.

MARKETS THIS MORNING-

Asian markets are having a rough start to the week, with Japan’s Nikkei down 4% in the wake of the ruling Liberal Democratic Party election on Friday. South Korea’s Kospi and the Kosdaq also fell around 0.5%. Meanwhile, Wall Street futures are flat going into the final day of 3Q 2024.

TASI

12,272

-0.8% (YTD: +2.5%)

MSCI Tadawul 30

1,532

-1.1% (YTD: -1.2%)

NomuC

25,611

+0.3% (YTD: +4.4%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.5% repo

5.0% reverse repo

EGX30

31,459

+0.6% (YTD: +26.4%)

ADX

9,469

-0.5% (YTD: -1.1%)

DFM

4,521

-0.1% (YTD: +11.4%)

S&P 500

5,738

-0.1% (YTD: +20.3%)

FTSE 100

8,321

+0.4% (YTD: +7.6%)

Euro Stoxx 50

5,067

+0.7% (YTD: +12.1%)

Brent crude

USD 71.98

+0.5%

Natural gas (Nymex)

USD 2.90

+5.4%

Gold

USD 2,668

-1.0%

BTC

USD 65,858

+0.3% (YTD: +55.7%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.8% yesterday on turnover of SAR 6.2 bn. The index is up 2.5% YTD.

In the green: Bin Dawood (+6.0%), Thimar (+5.7%) and Americana (+5.3%).

In the red: Dallah Healthcare (-5.0%), Halwani Bros (-5.0%) and Astra Industrial (-3.1%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.3% yesterday on turnover of SAR 25.2 mn. The index is up 4.4% YTD.

In the green: Osool and Bakheet (+8.5%), Al Qemam (+7.4%) and Naas Petrol (+4.9%).

In the red: Leaf (-10.4%), Naseej Tech (-8.4%) and Al Naqool (-5.4%)

8

DIPLOMACY

Faisal bin Farhan highlights Palestinian’s plight and calls for two-state solution in UN speech

Palestine was at the forefront of Foreign Minister Prince Faisal bin Farhan’s speech at the UN General Assembly, during which he reiterated the Kingdom’s condemnation of Israel’s “heinous” recent and historic crimes against the Palestinians, according to state news agency SPA. The minister also criticized the lack of accountability for Israel’s aggression. The Kingdom’s top diplomat encouraged UN member states to recognize the state of Palestine, highlighting decisions by Norway, Spain, Ireland, Slovenia, and Armenia to do so, and to join a multinational coalition to adopt a two-state solution formed by Saudi Arabia earlier this week.

Farhan called for international efforts to stabilize Lebanon and protect its sovereignty, while also appealing for de-escalation in Sudan, Yemen, Syria, Afghanistan, and the Red Sea, emphasizing the need for diplomatic resolutions to end ongoing conflicts in the region.

The minister also discussed bilateral relations with foreign counterparts on the sidelines of the General Assembly, holding talks with Venezuela’s Foreign Minister Iban Eduardo Gil Pinto and Canada’s Foreign Minister Mélanie Joly, state news agency SPA reported here and here.


KSrelief + WHO launch USD 10 mn healthcare initiative in Ukraine: King Salman Humanitarian Aid and Relief Center (KSrelief) and the World Health Organization (WHO) are launching a USD 10 mn initiative to support healthcare access in hard-to-reach areas of Ukraine, according to a press release. The 18-month agreement will see the pair provide life-saving medical care, essential medicines, and preventive health measures, to some 411k individuals, focusing on areas suffering where healthcare access is severely restricted.

Saudi mining push draws US expertise at MINExpo: Industry and Mineral Resources Minister Bandar Alkhorayef attended MINExpo 2024 in Las Vegas, where he met with top US executives to explore partnerships and tap FDI for the Kingdom’s mining sector, he said in a post on X. AlKhorayef also discussed prospects for collaborations in aerospace with JetZero and SpaceX while visiting California, the minister said in a separate post.

Also on the agenda: Alkhorayef’s US tour saw the minister meet with mining and heavy equipment executives, including bosses from Thiess, Weir Group, Sandvik, Hexagon, and Caterpillar, to advance collaborations in mining, manufacturing, and the localized production of heavy equipment in the Kingdom, Arab News reports.


OCTOBER

1 October (Tuesday): MEPRA KSA Leadership Majlis, Madareem Crown Hotel, Riyadh

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.

3-23 November (Sunday-Sunday): NEOM Beach Games, Neom.

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.

28 November-14 December (Thursday-Saturday): Noor Riyadh, 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.

29-30 January (Wednesday-Thursday): Global Labor Market Conference, 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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