Brookfield’s Saudi fund reaches first close

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WHAT WE’RE TRACKING TODAY

Riyadh is planning for another 456 sq km of growth

Good morning, friends. We've spent weeks on whether Saudi oil can get out through two pressured straits. The under-asked question is what that same squeeze does to imports, given more than 80% of the Kingdom's food arrives by sea through Jeddah and Dammam. We put that to Dr. Robert Mogielnicki of PoliSphere Advisory.

On the capital side, the money keeps arriving. Brookfield's PIF-anchored Middle East private equity fund hit a USD 2 bn first close, with other institutions joining the sovereign fund and Brookfield committing USD 500 mn of its own. With three fronts live around the Kingdom, a USD 2 bn first close is its own read on how outside managers are pricing Saudi risk.

BUT FIRST- A third front in the Iranian-backed offensive campaign cracked open yesterday. The Defense Ministry says its air defenses intercepted and destroyed several drones fired from Iraqi territory, aimed at oil facilities in the Eastern Province and Riyadh, and blamed Iran-backed militias operating out of Iraq. On top of the Houthi blockade in the Red Sea and the Hormuz squeeze, that's three vectors pointed at the Kingdom at once.

The timing is its own story: The drones landed just as Iraqi PM Ali Al-Zaidi is due in Riyadh for talks with the Crown Prince. The Kingdom reserves the right to respond "at the appropriate time and place," and calls upon Iraq’s government to take necessary measures to prevent launching further attacks, Defense spox Turki AlMaliki said.

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A northeastern expansion for Riyadh?

Riyadh is planning for another 456 sq km of growth. The Royal Commission for Riyadh City (RCRC) completed an initial master plan for a stretch of land northeast of the capital, connected to King Khalid International Airport, Wadi Al Sulai, and the Dammam and Janadriyah highways, state news agency SPA reports. The plan targets a phased expansion with integrated residential communities, daily services, and a mix of residential, economic, recreational, and natural zones.

Worth noting: The RCRC stressed this is an early planning phase, not the launch of an executive project. Plans for each area will follow in subsequent phases.

Riyadh’s development pipeline remains deep. Work is continuing on King Salman International Airport, a USD 3 bn mixed-use district in King Salman Park, and a wave of residential projects aimed at delivering the 830k housing units the capital needs by 2034 to keep pace with population growth. This comes as commercial, retail, and industrial space face their own supply crunch.

Data point

Over SAR 1 tn — that’s the combined investment portfolio of Tadawul’s 10 listed banks at the end of 2Q 2026, crossing the SAR 1 tn mark for the first time, according to Al Arabiya Business calculations based on bank disclosures. The total rose 4.9% y-o-y from SAR 958.5 bn, with SNB alone holding 32% of the sector’s investments at SAR 322.2 bn. Riyad Bank posted the fastest growth at 26.5%, reaching SAR 92.5 bn.

Destination Sahel is back for a second edition — and this year, it's not just about the beach.

Gulf sovereign wealth funds are pouring billions into the North Coast, Gulf buyers keep showing up despite regional headwinds, and a new 400km master plan could reshape the whole coastline before summer’s out.

Over this season’s series, stay tuned to see who's really buying Sahel, where the money's coming from, and what could still go wrong.

Plus, the hotels, restaurants, and openings worth checking out this summer.

Tap or click here to subscribe to the Egypt edition, coming out in your inbox, tomorrow, Wednesday, July 29.

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The big story abroad

As the lull in direct US-Iran hostilities continues, US President Donald Trump said that both sides are engaged in "good talks" and a pact remains within reach, though he warned that military strikes will resume if negotiations falter. Meanwhile, Saudi Arabia, Jordan, and Iraq reported drone attacks yesterday.

Big Tech’s lenders are sweating: Credit risk for Big Tech appears to have inclined, as prices for credit default swaps — used to wager against corporate debt — have recently hit record highs for the likes of Alphabet, Amazon, Meta, Nvidia, Oracle, and others, LSEG data shows. Credit markets dislike instability, with the unpredictability surrounding the speed and cost of funding AI straining investor confidence, Sona Asset Management’s John Aylward said.

Asset management giant BlackRock closed a USD 12.5 bn bond sale, the proceeds of which will fund a Meta data center campus in Texas. The loan’s structure enables the Facebook parent to secure off-balance-sheet funding, alleviating concerns over excessive leverage and reassuring investors.

And in the fashion world: IPO hopeful Shein may face a battle in its planned Hong Kong listing, as its prospectus indicated tapering growth and a sudden drop in popularity. Although the fast fashion player saw topline rise 8% in 2025, its net income dropped 39% in the same period, recent US tariff developments and new EU import fees are weighing on sales and costs.

PIF-anchored Brookfield Middle East Partners raises USD 2 bn at first close

Brookfield Asset Management’s PIF-anchored Brookfield Middle East Partners (BMEP) private equity fund reached a USD 2 bn first close, with other institutional investors joining the sovereign wealth fund, according to a press release. Brookfield is also committing USD 500 mn of its own capital to the fund.

Where will the money go? Brookfield Middle East Partners will invest across Saudi Arabia and the wider GCC, with at least 50% of capital earmarked for the Kingdom. Targets include buyouts, minority growth equity, and other prospects across financial services, business services, consumer, industrials, technology, and healthcare.

REMEMBER- PIF and Brookfield agreed to create the fund back in October 2024. As part of the arrangement, Brookfield will also launch its Brookfield Academy in the Kingdom to develop local investment talent.

Brookfield’s Saudi footprint is growing fast. Its local unit, Brookfield Arabia for Business Services, received CMA approval last month to manage investments and run funds in the Kingdom. In May 2025, it launched a USD 1 bn joint with Lunate focused on residential real estate in the Middle East, with a focus on the UAE and Saudi Arabia.

The PIF pattern: The fund is the latest example of PIF using its relationships with global asset managers to channel international capital into the domestic economy rather than just deploying Saudi money abroad. In the past month alone, PIF signed USD 24.5 bn in MoUs with the World Bank Group and US EXIM to draw outside capital into its portfolio companies, alongside a USD 2 bn co-investment agreement with I Squared Capital targeting infrastructure and district cooling.

AGSI’s Robert Mogielnicki on the import side of Saudi’s blockade

Whether Saudi oil can get out has been the primary concern of the double-strait squeeze, but the quieter question is what that same squeeze does to what comes in. Both of Saudi Arabia’s saltwater exits are under pressure at once — the Strait of Hormuz throttled since February, Bab Al Mandeb under a declared Houthi blockade since 20 July — and more than 80% of the Kingdom’s imported food arrives by sea, through Jeddah and Dammam. We put the import side of the blockade to Dr. Robert Mogielnicki, founder of PoliSphere Advisory and non-resident fellow at the Arab Gulf States Institute. Edited excerpts from our conversation:

EnterpriseAM: More than 80% of the Kingdom’s imported food comes through Jeddah and Dammam. With both coasts now under threat, how exposed are those food imports and how much flexibility does the system actually have?

Robert Mogielnicki: Enhancing food security has been a longstanding priority for the Saudis, but clearly there are urgent concerns around getting critical imports into the country. I’d say the situation reflects more potential constraint management than crisis at this time. Saudi Arabia has used previous shocks, especially from the coronavirus pandemic, to increase its food security resilience.

E: For businesses and investors watching their exposure to Saudi ports and trade, what should they be focused on right now?

RM: Houthi actions in the Red Sea and the Iran war implications for the Strait of Hormuz have linkages, but the two theaters have their own set of complicated dynamics at play. While the linkages are important, understanding the varying interests at stake and motivations of key actors is really what’s critical.

Any operator or investor who wants a simple, easy answer will struggle to put that information to good use. That said, the scope and scale of Houthi behavior in the Red Sea alongside the trajectory of the Iran war are the most important regional issues to watch from a scenario-tracking perspective.

So many red lines have been crossed and unprecedented events witnessed in the Middle East recently. Geopolitical significance and impact these days tend to be less about the events themselves, and more about how they unfold and where they are headed.

E: Saudi ports have quietly served neighbors with no Red Sea or Hormuz alternative of their own. Now that the Kingdom is directly involved in the conflict and both straits are contested, what’s the ripple effect on the wider Gulf?

RM: Saudi Arabia’s geography will ensure the country continues to be a key part of other Gulf countries’ critical infrastructure buildout. But renewed Houthi tensions will push other Gulf countries to maximize their domestic capabilities, as reliance on external actors comes with its own risks. Meanwhile, alternative Levant energy export routes stand to grow in importance for as long as the Houthis remain actively disruptive.

Petro Rabigh returns to the black in 2Q

Earnings season is in full swing with Petro Rabigh, Saudi Tadawul Holding, and Sadafco reporting their quarterly results.

Petro Rabigh returns to the black

Petro Rabigh recorded a net income of SAR 2.7 bn in 2Q, compared to a loss of SAR 1.4 bn in the same period last year, according to a Tadawul filing. Revenue jumped 416% y-o-y to SAR 20.4 bn in the quarter on the back of higher sales volumes and improved selling prices, as well as favorable market conditions. The company also reported lower financial costs during the quarter following the early repayment of long-term loans and a dip in benchmark interest rates.

IN CONTEXT- The company explained that “the revenue during the same quarter of last year was significantly lower due to a comprehensive, scheduled periodic maintenance across all operational facilities and production units at the company’s complex, which lasted approximately 60 days and resulted in lower production and sales volumes.”

The first half tells a similar story: The company recorded a SAR 4.1 bn net income during the first six months of the year, reversing the SAR 2.1 bn net loss seen a year earlier.

What’s next: The company will begin commissioning several projects this quarter aimed at increasing production capacity and improving product quality, CFO Fahad Almuhaisin said.

Saudi Tadawul sees 2Q net income fall

Saudi Tadawul Group’s net income dipped 4.3% y-o-y in 2Q 2026 to SAR 92.1 mn, it said in a Tadawul disclosure. Revenue was almost flat compared to the same quarter last year, coming in at SAR 322.6 mn.

The 1H picture: The group’s bottom line fell 31.9% y-o-y to SAR 147.7 mn in 1H 2026, while its revenue slid 4.6% to SAR 617.1 mn, as a 9.1% drop in the average daily traded value weighed on trading-related income.

The segment breakdown: Capital markets revenue fell 13.8% y-o-y to SAR 170.2 mn during the six-month period, reflecting lower trading activity. Revenue from the data and technology services segment rose 11.8% to SAR 133.3 mn, driven by revenues from co-location services and Direct Financial Network Company.

Costs bite Sadafco

Saudia Dairy and Foodstuff Co. (Sadafco) reported a 25% y-o-y decline in net income to SAR 88.2 mn in 2Q 2026, while revenue decreased 2.6% to SAR 750 mn, according to a Tadawul disclosure. The company’s Polish subsidiary Mlekoma dragged the company’s top-line down — its sales nearly halved to SAR 62 mn as lower prices and volumes outweighed 6.9% y-o-y growth in Sadafco’s core business. Higher raw material costs, shipping surcharges tied to regional maritime disruptions, inflation, and higher fuel prices added to the strain.

The half-year read tells the same story, with the net income sliding 30.2% y-o-y to SAR 170.3 mn and revenue down 2.6% to SAR 1.5 bn.

Saudi game developer Ash Games raises USD 1.5 mn

Saudi game developer Ash Games raised USD 1.5 mn in a seed round, led by Merak Capital and Impact46 through the Merak Gaming Fund, according to a press release. The fresh funds will allow the company to scale its production pipeline and bring Saudi-developed games to a broader global audience. It will also help it expand its development capabilities and its team.

About the company: Founded by Anas Bakhsh (LinkedIn), Yaser Alahmadi (LinkedIn), and Saud Bakolka (LinkedIn), Ash Games develops action-adventure titles for PC and consoles inspired by Saudi Arabia’s history and folklore. Its flagship title, Nomad, an action-adventure roguelite game based on Ancient Arabian mythology, is slated for a 2027 release. The studio’s second game, Azooma Escape, is a stealth-comedy game inspired by everyday Saudi life.

Trump’s 2027 minerals deadline runs into US supply reality

US industry struggles to meet 2027 deadline: US President Donald Trump may struggle to end US reliance on Chinese critical minerals in just over five months, as domestic mining and processing companies remain far from meeting demand. That leaves his plan to ban federal purchases of rare earths, magnets, tungsten, molybdenum, and tantalum from China, Russia, Iran, and North Korea facing a significant supply shortfall.

REMEMBER- Since returning to the White House, Trump has made critical minerals a priority, channeling tens of bns of USD into roughly 150 mining and processing companies to reduce China’s grip on supply chains for defense and other strategic industries, but he has repeatedly granted waivers because domestic supply has been unable to catch up with demand. Trump criticized those exemptions in a May 10 post on his Truth Social platform, insisting federal agencies should buy American-made products “with no exceptions,” and last week, he signed an executive order making it more difficult for defense contractors to obtain waivers.

A supply gap too large to close: US demand for the most widely used rare earth magnets reached about 48k metric tons in 2025, while domestic production totaled only 300 metric tons, according to Arthur D. Little consultancy. Even with new projects, US capacity is expected to reach just 5k metric tons by the end of this year. But US investment in rare earths has been hampered by persistently low Chinese mineral prices, which Washington says undermines the economic viability of domestic projects. Beijing maintains that it complies with WTO rules and is committed to market stability.

US projects still years away: Building a domestic critical minerals supply chain has proven more difficult than Washington anticipated, with technical hurdles and shifting Pentagon requirements delaying several flagship projects. Reuters reported that Pentagon-backed Ucore Rare Metals pushed back its RapidSX refining project following changes to Defense Department specifications. Some production is now expected no earlier than 2027.

Separately, MP Materials is still calibrating its refining equipment ahead of producing magnets for General Motors, while its Pentagon-dedicated magnet plant is due to open in 2028. MP Materials has spent years calibrating its solvent extraction processing equipment — what CEO Jim Litinsky called a “painstaking process.” Other companies — including ReElement Technologies, USA Rare Earth, and Energy Fuels — are also expanding processing capacity, though most projects are not expected to reach full scale until 2028-2030.

ALSO- The Trump administration launched the USD 12 bn Project Vault in February to build a strategic stockpile of critical minerals for US manufacturers. In April, officials acknowledged they will need to buy minerals from “anywhere in the world, including China”. Experts say partnerships with Japan, South Korea, and other allies could serve as a bridge until the domestic projects ramp up.

China’s dominance: While the US holds reserves of most critical minerals, it lacks sufficient mining and refining capacity — meaning it could take years to get the required infrastructure in the ground to compete, minerals industry analyst Chris Berry noted. Now, China controls more than 80% of the global minerals refining industry, giving Beijing influence over the supply chain. This month, the IEA warned that industries worth USD 6.5 tn could face disruption if China tightens rare earth exports, as it has done several times this year.

MARKETS THIS MORNING-

Asia-Pacific markets opened lower this morning as Wall Street’s selloff in semiconductor and AI-infrastructure stocks spilled into Asian equities. South Korea’s Kospi led losses, dropping 8.0%, while Japan’s Nikkei fell 3.8%. “The latest selloff in chipmakers shows that doubts over spending, returns and valuations are still deepening rather than fading,” Vantage Global Prime’s Hebe Chen said.

TASI	10,769	0.0% (YTD: +2.7%)
MSCI Tadawul 30	1,442	-0.1% (YTD: +4.0%)
NomuC	21,962	-0.2% (YTD: -5.7%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	53,634	+0.4% (YTD: +28.2%)
ADX	9,845	+0.2% (YTD: -1.5%)
DFM	5,844	+1.0% (YTD: -3.4%)
S&P 500	7,413	0.0% (YTD: +8.3%)
FTSE 100	10,782	+0.4% (YTD: +8.6%)
Euro Stoxx 50	6,282	0.0% (YTD: +8.4%)
Brent crude	USD 88.36	-8.7%
Natural gas (Nymex)	USD 2.74	-0.9%
Gold	USD 4,135	0.0%
BTC	USD 63,851	-2.4% (YTD: -27.1%)
Sukuk/bond market index	905.33	+0.1% (YTD: -1.5%)
S&P MENA Bond & Sukuk	150.20	+0.2% (YTD: -1.1%)
VIX (Volatility Index)	18.67	+0.5% (YTD: +24.9%)

THE CLOSING BELL: TADAWUL-

The TASI remained flat yesterday on turnover of SAR 4.4 bn. The index is up 2.7% YTD.

In the green: Tabuk Agricultural Development (+10.0%), Dar Albalad (+6.0%), and Marafiq (+5.2%).

In the red: Arabian Cement (-5.9%), Arabian Drilling (-3.9%), and Al Rajhi Company for Cooperative Ins. (-3.7%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.2% yesterday on turnover of SAR 9.4 mn. The index is down 5.7% YTD.

In the green: Yaqeen Capital (+5.2%), Sahat Almajd (+4.7%), and Adeer Real Estate (+4.3%).

In the red: Mufeed (-9.4%), Dar Almarkabah (-7.6%), and Al Razi Medical (-5.4%).

CALENDAR

AUGUST

30 August-1 September (Sunday-Tuesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center.

31 August-3 September (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

8-10 September (Tuesday-Thursday): The WTM Spotlight Riyadh, Riyadh Front Exhibition & Conference Center (RFECC), Riyadh.

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

28 September-1 October (Monday-Thursday): The International Conference on Theory and Practice of Electronic Governance (ICEGOV), Prince Sultan University, Riyadh.

OCTOBER

25-26 October (Sunday-Monday): The Global Proptech Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

26-29 October (Monday-Thursday): The Future Investment Initiative, King Abdulaziz International Conference Center, Riyadh.

28-29 October (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

28-29 October (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

30 October-1 November (Friday-Sunday): The New Global Sport Conference, Sofitel Hotel & Convention Centre, Riyadh.

NOVEMBER

11-12 November (Wednesday-Thursday): Aluminum Arabia, The Arena, Riyadh.

16-19 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre (Malham), Riyadh.

29 November-1 December (Sunday-Tuesday): The UN Trade and Development Global Supply Chain Forum, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;

2027

FEBRUARY

1-3 February (Monday-Wednesday): Energy Regulators Regional Association annual conference, Riyadh.

MARCH

21-25 March (Sunday-Thursday):The World Water Forum, Riyadh.

22–24 March (Monday-Wednesday): Capital Markets Forum, Four Seasons Hotel, Riyadh

APRIL

26-29 April (Monday-Thursday): World Energy Congress, Riyadh.

JUNE

1-3 June (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

Signposted to happen sometime in 2027:

The Ocean Race finishes in Amaala on the Red Sea;
Riyadh-Kudmi transmission line to be completed;
Aero Middle East and Sand & Fun takes place in Thumamah Airport, Riyadh.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

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