Budget deficit widens in 3Q 2024

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Saudi-US pacts without normalization with Israel on the table?

Good morning, ladies and gentlemen. We have another busy issue for you on this fine Tuesday morning, leading with the latest state budget figures released by the Finance Ministry.

BUT FIRST- Is Washington discussing a security agreement with Riyadh that would bypass the normalization requirement with Israel? That’s what Axios reports, citing three sources as saying that the two countries could lock in “a set of security, technology and economic agreements” before the end of US President Joe Biden’s current term in office. National Security Adviser Musaad bin Mohammed Al Aiban reportedly met recently with US National Security Adviser Jake Sullivan and US Secretary of State Antony Blinken in Washington to discuss the agreements, which Axios said would not include the full defense scope initially discussed.

REMEMBER- A proposed defense pact between the two countries was originally envisioned to see Washington provide security assurances to Riyadh, along with cooperation on the development of a domestic nuclear power industry, as well as on artificial intelligence and other technologies. Saudi Arabia normalizing diplomatic ties with Israel was set as a precondition for the agreements, but the stipulation has caused negotiations to stall in the past several months as Israel continues its assault on Palestine. Saudi has been adamant in its stance that there would be no normalization with Israel without a credible pathway to a Palestinian state.

WEATHER- Riyadh is looking at a high of 32°C and a low of 20°C today. Over in Makkah, the temperature will peak at 36°C and hit a low of 23°C. Meanwhile, Dammam will see a high of 32°C and a low of 23°C.

WATCH THIS SPACE-

#1- Acwa Power is looking to triple its production capacity to 180 GW by 2030, and also increase its desalination production to 8 mn cubic meters per day — making it the world’s largest private desalination company, Argaam quotes its CTO Bart Bosmans as saying. The renewables giant’s investments are split right down the middle in their distribution across local and foreign markets, Bosmans said.

#2- The Saudi Power Procurement Company initiated the bidding process for four battery energy storage projects located in the Makkah, Qassim, and Hail regions, each with a capacity of 500 MW and a storage duration of four hours, according to a statement. The selected bidders will have full ownership and will develop the projects under a build-own-operate model. Each project will be part of a 15-year agreement with the main buyer, the statement read. No details regarding the investment tickets were disclosed. The project is part of the Energy Ministry’s national renewable energy program.

#3- Maaden draws closer to upping its stake in Mosaic + Sabic JV: Saudi Arabian Mining (Maaden) has lined up Capital Market Authority approval for a capital hike to fund its planned acquisition of an additional 25% stake in the Sabic-Mosaic JV Maaden Wa’ad Al Shamal Phosphate (MWSPC), the authority said in a statement. The move will see Maaden issue 111 mn new ordinary shares, bringing its total capital up nearly 3% to SAR 38 bn.

This has been brewing for months: The mining giant inked a share purchase agreement with Mosaic Phosphates BV to buy its entire stake in MWSPC back in April of this year. The agreement also includes Mosaic’s marketing rights, and will bring Maaden’s stake in MWSPC to 85%.

#4- Saudi and Turkey want to drive bilateral trade up to USD 10 bn by 2025, with that figure forecasted to surpass USD 8 bn this year, Turkish outlet TRT World quotes Commerce Minister Abdullah Al Qasabi and Turkish Trade Minister Omer Bolat as saying at the Türkiye-Saudi Arabia Business Forum.

#5- The Public Investment Fund signed an MoU with Mitsubishi UFJ Financial Group (MUFG) to “collaborate on opportunities of mutual interest to both MUFG and PIF,” according to a statement (pdf). The agreement will see MUFG facilitating investments for the PIF, with a focus “on sectors in which MUFG has strong expertise, notably infrastructure and project financing,” and will also see MUFG supporting PIF on potential investments in Japan as part of Saudi Vision 2030.

DATA POINTS-

#1- The Industry and Mineral Resources Ministry issued 28 new mining licenses in August, split between 10 exploration licenses, nine licenses for building material quarries, six surplus mineral raw material licenses, and three reconnaissance licenses.

#2- The Real Estate Development Fund deposited over SAR 8.8 bn in the accounts of Sakani program beneficiaries in 9M 2024, according to the program’s quarterly report. The program is part of a government-run housing initiative that facilitates homeownership for citizens via several financing options, including rent-to-own and mortgage loans.

OIL WATCH-

Oil prices were up nearly 3% yesterday following Opec+’s decision to postpone itsoutput hike and markets buckled up for the US presidential elections, Reuters reports. Brent crude futures were up 2.7% to USD 1.98 per barrel (bbl), while West Texas Intermediate rose 2.9% to USD 71.47 / bbl, the newswire said.

Markets aren’t doing as bad as everyone thinks, Opec says: “There is a bit too much doom and gloom and pessimism in terms of the demand outlook,” Opec Sec-Gen Haitham Al Ghais told CNBC on the sidelines of the ADIPEC forum in Abu Dhabi (watch, runtime: 03:50). The group is pegging oil demand growth at 1.9 mn bbl / d this year, which exceeds pre-pandemic averages and the post-pandemic recovery rate of 1.2 mn bbl / d, Al Ghais said, citing China’s recent stimulus package and strong performance in the US economy as driving factors.

The Kingdom’s crude oil production slipped 9.3% y-o-y in 2023 to 3.5 bn bbl, with exports also down 9.6% at 2.4 bn barrels, according to the latest oil and gas statistics (pdf) from the General Authority for Statistics. Gasoline production fell 2.6% y-o-y in 2023 to 224 mn bbl, while kerosene and jet fuel output rose 2.7% to 57 mn bbl.

Meanwhile, total fuel exports declined 10.3% y-o-y in 2023 to 67 mn bbl, while imports jumped 25.9% to 88 mn bbl.

SPORTS-

#1- World no.1 Aryna Sabalenka is still on a tear at the WTA Finals in Riyadh, beating Italy’s Jasmine Paolini 6-3, 7-5 yesterday in her penultimate group stage match. Meanwhile, China’s Qinwen Zheng rebounded from her loss to Sabalenka earlier this week, beating Kazakhstan’s Elena Rybakina in a three-set match (7-6, 3-6, 6-1).

Coming up today: The US’ Jessica Pegula plays against the Czech Republic’s Barbara Krejčíková at 2:30pm, followed by Iga Swiatek vs. Coco Gauff at 5pm.

#2- English golfer Charley Hull secured a three-shot victory at the Aramco Ladies Team series in Riyadh, marking her first title in two years and a return to form after multiple runner-up finishes, BBC Sports reports.

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THE BIG STORY ABROAD-

It’s election day in the US of A, which means very few other stories will top headlines in the international press. Donald Trump and Kamala Harris were both in Pennsylvania overnight, where each candidate pushed final messaging in a bid to secure what is widely seen as one of the most critical swing states in the election. Meanwhile, both candidates’ campaigns continued to work on boosting voter turnout in the last stretch before today’s vote, with each taking different approaches, the New York Times notes. The Financial Times, the Wall Street Journal, Reuters, and Bloomberg also have coverage of the final campaigning push.

Speaking of (unorthodox) methods of boosting turnout: Elon Musk’s USD 1 mn daily voter giveaway — designed to encourage voter turnout — is being allowed to proceed after a Pennsylvania judge ruled that the contest was not designed as an “illegal lottery.” Reuters, Bloomberg, and Axios have more.

What we can expect: Politico has rundowns of each of Harris’ and Trump’s paths to securing the vote, while the Financial Times looks at what each outcome would mean for Trump.

REMEMBER: The Electoral College, not the popular vote, ultimately decides who becomes president. Each state is allocated electors equal to its congressional representation (senators plus representatives). Voters in each state choose electors, pledged to presidential candidates. Taking the popular vote in a state usually means a candidate gets all its electoral votes (except in Maine and Nebraska). A candidate needs 270 of 538 electoral votes to take the presidency. Bloomberg also goes deeper.

BELOW THE FOLD- Israel killed another 16 Palestinians in Gaza’s Beit Lahiya and Zawayda in airstrikes yesterday. Meanwhile, Tel Aviv has also limited aid trucks’ entry into Gaza even further, bringing the daily average to 30 — equivalent to “only 6% of the commercial and humanitarian supplies that used to enter Gaza before the war,” according to UNRWA head Philippe Lazzarini. Reuters has the story.

CIRCLE YOUR CALENDAR-

The Saudi Rail Conference and Exhibition will take place on 20-21 November at the Riyadh International Convention and Exhibition Center. The event will showcase developments in the railway sector and provide insights from over 150 local and international speakers.

The two-day Impact Makers Forum (ImpaQ) is set to open its doors on 18 December, bringing together media influencers, industry experts, and digital content creators in Riyadh’s Mayadeen Hall.

The 2025 Dakar Rally in Saudi is set to bring 14 days of racing to the Bisha and Shubaytah deserts, with its 12 stages taking place between 3-17 January. Scrutineering will start on the first day of the new year and close the following day, with the prologue to all the racing tacked on to the end of that on 3 January. All racing will conclude on Friday, 17 January.

Saudi Arabia records budget deficit in 3Q 2024

The state budget closed with a SAR 30.2 bn deficit in 3Q 2024, widening from SAR 15.3 bn in 2Q, despite shrinking by 15% compared to last year, according to the Finance Ministry’s quarterly budget performance report (pdf). Total government revenues grew 20% y-o-y to SAR 309.2 bn, while expenditure rose 15% to SAR 339.4 bn.

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On a 9M basis: The Kingdom recorded a budget deficit of SAR 58 bn during the first nine months of the year, well within the ministry's earlier forecasts. Government expenditures came in at SAR 1 tn with revenues clocking in at SAR 956.2 bn in 9M 2024.

REFRESHER- The government continues to double down on diversification plans and gigaprojects while staying clear of “overheating” the national economy. Officials have also said that they’re willing to accept modest fiscal deficits as the price of pursuing long-term diversification.

Oil revenues accounted for 62% of total government income in 3Q 2024, at a total of SAR 190.9 bn — rising 30% y-o-y. Meanwhile, non-oil revenues made up the remaining 38%, coming in at a combined SAR 118.3 bn, up 6% compared to the same period last year.

THE BREAKDOWN-

Total expenditures for 3Q 2024 rose 15% y-o-y to reach SAR 339.4 bn, with most sectors seeing considerable growth in public spending aside from grants, which fell 9% y-o-y. Subsidies doubled y-o-y to SAR 7.4 bn. Employee compensation accounted for the lion’s share of public spending at SAR 138.6 bn.

The Kingdom’s biggest expenses in 9M: Employee compensation clocked in at SAR 416 mn — the largest line item during the period — followed by goods and services usage at SAR 219 bn and financing expenses at SAR 32.8 bn. Total expenditure rose 13% y-o-y to SAR 1 tn in the first nine months of the year.

Digital Research Company is taking a 20% stake to Nomu

Digital Research Company (DRC) is taking a 22.5% stake ( 337.5k shares) to the Nomu parallel market, it said in a prospectus (pdf). The market researcher lined up Capital Market Authority approval for the move in September.

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More details on the offering: The 337.5k shares on offer are composed of 150k existing shares and 187.5k newly-issued shares. Existing shares included in the offering will be primarily pooled from the six majority shareholders who will be selling down their collective stake to 61.9% from 77.2%.

Use of proceeds: SAR 2.6 mn of proceeds will go towards covering IPO-related expenses. Net proceeds will be partly distributed to selling shareholders and partly retained by the firm. The firm will commit its share from the offering’s proceeds towards financing the procurement of SAR 15 mn in operational assets. The company will deploy its own liquidity to assets to fill funding gaps If the company’s allocation of offering proceeds fails to meet the funding target. Surplus proceeds will be diverted towards bolstering working capital.

Lock-up period: Major shareholders will be restricted from executing any transactions on their shares for 12 months from the first day of trading.

IPO timeline: Qualified investors can book shares between Monday, 25 November and Sunday, 1 December with a minimum subscription limit of 10 shares and a maximum of 84,360 shares. The final allocation is slated for Wednesday, 4 December, and excess funds will be refunded by Sunday, 8 December. The first day of trading will be announced once all regulatory requirements have been met.

Earnings snapshot: DRC reported a net income of SAR 3.2 mn in 1H 2024, down 6.5% y-o-y according to Argaam. The company logged SAR 27.7 mn in revenues during the same period, marking a 22.6% increase. The company’s net income came in at SAR 10.5 mn in FY 2023, while revenues were SAR 54.3 mn, according to audited financials published in the prospectus.

About DRC: Established in 2014, the company specializes in market research, data analytics, and consulting.

ADVISORS- Value Capital is quarterbacking the transaction as financial advisor and bookrunner. Receiving agents include SNB Capital, Al Rajhi Capital, BSF Capital, Alnima Investment, Riyad Capital, Aljazira Capital, Alistithmar Capital, Albilad Capital, ANB Capital, SAB Invest, Derayah, Yaqeen Capital, Alkhabeer Capital, and Sahm Capital.

Household mortgages climbed to SAR 607 bn in 2023

Saudi banks’ credit is projected to rise on the back of a heightened push for funding megaprojects coupled with a growing appetite for homeownership, according to a recent report from rating agency Moody’s. The firm sees the government’s wide-reaching economic transformation plans providing ample business and lending prospects for the domestic banking sector.

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Big projects call for hefty loans: The government is looking to tap Saudi banks for financing major developments like Expo 30 and the FIFA World Cup 2034 as well as infrastructure projects. “Planned mega projects to diversify the economy include the tourism, real estate, and infrastructure sectors, and the government provides the country’s banks the [chance] to help fund them,” Moody’s assistant VP and analyst Abdullah Al Hammadi said.

Homeownership gains, mortgage booms: Household mortgages climbed to SAR 607 bn last year, marking a sixfold increase over the last eight years. This is in line with the Vision 2030 target of raising home ownership to 70% by 2030, compared to 47% in 2016. Mortgages have been a major driver of credit growth in Saudi banks over the last five years, now accounting for some 24% of total banking sector loans, according to the report.

A margin squeeze may be in the cards: “This could place pressure on margins,” Al Hammadi said, noting the fixed-rate nature of these mortgages with tenors of about 25-30 years. “We believe that larger banks will be hit hardest due to their dominant position in the Saudi mortgage market,” he added.

Foreign deposits + sukuk are set for a comeback: Moody’s also flagged a potential funding crunch, with deposit growth trailing behind credit expansion. “The banks will need to tap more confidence-sensitive market funding. This could entail foreign deposits, interbank syndications, and debt issuance, particularly Islamic bonds or sukuk,” said Al Hammadi.

Opting for a long-term strategy is key: “Reliance on short-term foreign funding is riskier,” the report noted, advocating for longer-term debt like senior unsecured bonds and Tier 1 allocations to align with banks' loan portfolios and support Vision 2030’s infrastructure push.

Medical firm Balsm Alofoq issues prospectus for Nomu IPO

Balsm Alofoq Medical is taking a 25% stake (250k newly-issued shares) to Tadawul’s parallel market Nomu in an offering that is open to qualified investors, the firm said in its prospectus (pdf). The firm lined up capital market approval for the move back in September.

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Use of proceeds: SAR 2.35 mn of the offering’s proceeds will go towards covering IPO-related expenses. Net proceeds from the sale will be channeled towards funding the company’s expansion plans — expected to cost SAR 24.9 mn — including the procurement of medical equipment and the development of warehouses. The company will turn to alternative financing such as bank loans if the offering proceeds fail to meet the targeted funding, while surplus funds will be allocated towards boosting working capital.

Timeline: Qualified investors can book a maximum of 62,490 shares and a minimum of 10 shares during the subscription period which runs between Sunday, 1 December and Thursday, 5 December. The final allocation is slated for Tuesday, 10 December and any excess funds will be refunded by Thursday, 12 December. The first day of trading will be announced once all regulatory requirements have been met.

Post-IPO structure + lockup: The outfit’s three major shareholders — Khamis Abdallah Al Harbi, Ghadeer Khamis Al Harbi, and Raghad Khamis Al Harbi — will see their ownership diluted from a combined 88.75% stake down to 71%. They will not be able to sell down their positions for a period of 12 months from the first day of trading.

A snapshot of FY 2023: The company logged SAR 4.2 mn in net income last year, up from the SAR 3.5 mn it posted for 2022, according to audited earnings results published in the prospectus. Revenues came in at SAR 18 mn for the year, up from SAR 17 mn in 2022.

About Balsm Alofoq: Founded in 2012, the Buraidah-based company specializes in the operation of hospitals, clinics, one day surgery centers, medical laboratories, and the wholesale of medical devices, according to the prospectus.

ADVISORS- Yaqeen Capital is quarterbacking the transaction as financial advisor and lead manager. Receiving agents include Alistithmar Capital, Alinma Investment, SNB Capital, Al Jazira Capital, Riyad Capital, ANB Capital, Albilad Capital, Al Rajhi Capital, Saudi Fransi Capital, SAB Invest, Alkhabeer Capital, Sahm Capital, among others.

Sabic, STC, Bupa Arabia, SAL Saudi Logistics Services, Ades Holding, and Mouwasat report earnings

SABIC-

Aramco petrochem subsidiary Sabic reported SAR 1 bn in net income in 3Q 2024, recovering from a SAR 2.8 bn loss in the same quarter last year, the company said in an earnings release (pdf) and a disclosure to Tadawul. Sabic attributed the reversal to higher margins and gains from divestments and FX changes. Revenues grew 2.5% y-o-y to SAR 36.9 bn over the period as improved average selling prices offset a slight drop in sales volumes.

The petrochem giant’s 3Q results fell below analyst expectations of a SAR 1.6 bn bottomline, Reuters reported citing LSEG data. Net income was also lower than the previous quarter’s SAR 2.18 bn gain. Higher feedstock prices and lower selling prices continue to weigh on earnings, Bloomberg notes. “Overcapacity continues to weigh on the market,” CEO Abdulrahman Al Fageeh said, adding that utilization rates are below long run averages.

On a 9M basis: Sabic reported SAR 3.4 bn in net income for the first nine months of the year, overturning the previous year’s SAR 1.04 bn loss. Revenues fell 1.2% to SAR 105.3 bn during the period as a bump in selling prices was offset by declining sales volumes.

Looking ahead: Sabic has pared down capex guidance for the year to USD 3.3-3.9 bn, down from an earlier USD 5-5 bn floor, Bloomberg said. This comes as Sabic and parent company Aramco cut plans for a new Saudi refining hub, with the pair shifting downstream investments to assets in Asia in a bid to lock-in future demand for Saudi crude. Aramco is set to report its third quarter results today.

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STC-

Stc’s net income fell 5.3% y-o-y to SAR 4.6 bn in 3Q 2024, it said in a disclosure to Tadaw ul. The decline was attributed to higher operating expenses and reduced other income, partially offset by a SAR 1.5 bn withholding tax reversal. Meanwhile, revenues grew 3.4% y-o-y to SAR 18.6 bn for the same period.

On a 9M basis: The company’s bottom line grew 1.9% y-o-y to SAR 11.2 bn, with revenues up 3.9% to SAR 56.6 bn, reaching an all-time high for the period, according to its earnings release (pdf). The increase was driven by gains from Stc’s commercial, mobility, and residential segments as well as its subsidiaries, which compensated for declines in the business, carriers, and wholesale units.

BUPA ARABIA FOR COOPERATIVE INS.

Bupa Arabia for Cooperative Ins. reported a net income of SAR 356.3 mn in 3Q 2024, a 29.4% increase y-o-y, driven by gains from ins. services (up 35.7%) and net investments (up 22.9%), despite a 32.7% rise in other operating expenses, it said in a disclosure to Tadawul. Meanwhile, revenues rose 11.2% y-o-y to SAR 4.6 bn.

On a 9M basis:The company’s bottom line grew 34.1% y-o-y to SAR 1.1 bn and its revenues increased 15% to SAR 13.5 bn.

ADES HOLDING-

Egypt-born Ades Holding’s net income rose 132.7% y-o-y to SAR 203.3 mn in 3Q 2024, with higher depreciation costs due to the rolling out of new rigs in Saudi, Kuwait, and India limiting the company’s net income growth, according to an earnings release (pdf) and a disclosure to Tadawul. Revenues were up 45.8% y-o-y to SAR 1.6 bn over the same period.

On a 9M basis: The company’s net income increased 114.2% y-o-y to SAR 606.3 mn during the first nine months of the year on the back of revenue growth and higher profitability that were partly offset by higher depreciation costs. Revenues grew 51.3% to SAR 4.6 bn over the period, due to newly deployed and reactivated onshore and offshore rigs across different locations.

Ades had a busy 3Q: The company secured 10-year renewals from Aramco for two of its Saudi onshore rigs, Ades 13 and Ades 14, at some SAR 946 mn, last month. Ades Holding subsidiary Ades International Holding also directly acquired two jack-up rigs in Southeast Asia from Vantage Drilling in a transaction valued at USD 190 mn, earlier in September.

SAL SAUDI LOGISTICS SERVICES-

SAL’s net income increased 34.1% y-o-y to SAR 155.5 mn in 3Q 2024, it said in a disclosure to Tadawul and press release (pdf). Revenues were up 0.4% y-o-y to SAR 367.3 mn, fueled by growth in cargo handling revenue, though this was offset by a decline in the logistics division due to changes in project timing.

On a 9M basis:The company’s bottom line grew 57.8% y-o-y to SAR 519.4 mn and its revenues increased 17.2% to SAR 1.2 bn, driven by higher air cargo volumes and the company's expansion into the logistics business, alongside effective cost management.

MOUWASAT-

Mouwasat Medical Services’ net income fell 4.3% y-o-y at SAR 149.6 mn in 3Q 2024, on the back of higher debt provision formations and costs, according to a disclosure to Tadawul. Revenues came in at SAR 710.7 mn over the same period, marking a 10.9% increase compared to 3Q 2023.

On a 9M basis:The company’s bottomline remained basically unchanged y-o-y during the first nine months of the year at SAR 473.9 mn, while revenues were up 9.9% at SAR 2.1 bn.

After SEIC capital injection, Social Impact Capital launches MTO for Egypt’s CIRA Education

M&A WATCH-

Leading Egyptian education provider CIRA Education majority shareholder Social Impact Capital (SIC) has submitted a mandatory tender offer to acquire up to an additional 48.78% of CIRA, according to a statement (pdf) from Egypt’s Financial Regulatory Authority. SIC currently holds a 51.2% stake in the country’s leading private education company. The offer is currently being reviewed by the FRA.

All part of PIF’s plan to take over CIRA: The Saudi Egyptian Investment Company — a wholly-owned subsidiary of the Public Investment Fund — said in May that it would buy into SIC. SIC used the cash injection to launch its mandatory tender offer for the rest of CIRA’s shares.

We’ve seen this movie before: PIF has a proven track record of turning national players into regional champions, with the global growth of born-in-Egypt driller Ades Holding being a case in point. Since acquiring Ades and taking it private, PIF has helped Ades land contracts in Saudi Arabia and new markets, refine its strategy, and go public again on Tadawul.

REAL ESTATE-

Sico Capital, the Saudi subsidiary of Bahraini investment bank Sico BSC, launched a USD 250 mn residential real estate fund, which has already acquired three projects in Riyadh, according to a press release.

TELECOM-

Mobily will deploy the first Saudi submarine cable connecting the Kingdom with Egypt in partnership with Telecom Egypt, Egypt’s state-run telecom operator, according to a Telecom Egypt statement. The cable, which is fully owned by Mobily, will run across the Red Sea and will be anchored at the Kingdom’s Duba landing station and its counterpart in Egypt’s Sharm El Sheikh. The project aims to enhance connectivity between Asia and Africa, and open access to potential connections to Europe.

TOURISM-

PIF-owned IT solutions firm Elm agreed to develop an e-platform for the Jeddah Historic District Program to monitor excavation and infrastructure projects in the area and automate the processing of municipal licensing requests, state news agency SPA reports. The partnership between Elm and the Culture Ministry-run program also includes establishing a project coordination office, operating a beneficiary communication center, and equipping a monitoring and control room.

DEBT WATCH-

#1- Glass manufacturer Obeikan Glass secured a SAR 50 mn shariah-compliant loan from Riyad Bank to finance its working capital needs, according to a filing to Tadawul. The loan will carry a three-year tenor.

#2- Middle East Pharma Industries (Avalon Pharma) obtained SAR 30 mn in a one-year shariah-compliant loan from Saudi Awwal Bank to fund its operations, it said in a disclosure to Tadawul.

#3- National Environmental Recycling (Tadweer) has lined up SAR 50 mn in a shariah-compliantloan from the Saudi Export-Import bank, it said in a filing to Tadawul. The one-year financing agreement will help it shore up liquidity to fund its working capital requirements.

M&A WATCH-

Asyad Group subsidiary Wafi Energy has finalized the purchase of a 77.4% majority stake in Shell Pakistan Limited, raising its total ownership to 87.8%, according to a press release. The Shell brand will continue operating in Pakistan through retail and brand licensing agreements, with SPL serving as the exclusive licensee, Dawn reports.

This has been in the works for a while: Plans for the sale of Shell's assets in Pakistan were first made in June last year under the global energy giant’s plan to “high-grade its mobility network.” It later agreed in November to sell its majority interest in Shell Pakistan to Asyad’s Wafi Energy. The acquisition got the greenlight from Pakistan’s competition authority in July.

HOSPITALITY-

Albilad Capital acquired the 359-key Mövenpick Hotel and Residences in Riyadh’s Al-Ghadir district for around SAR 1 bn through its Albilad Hospitality Fund I, it said in a statement. The fund’s annual return on investment is expected to clock in at around 8.7% on average over the next 3 years.

STARTUP WATCH-

Edafa Ventures acquired a 35% stake in Cairo-born social networking platform BusinessLobby for an undisclosed sum, according to a LinkedIn post. No further details were given.

This is the third investment made by Edafa in an Egyptian startup this week: The Saudi VC recently acquired a USD multi-mn “strategic stake” in Egypt-based corporate solutions app TaskedIn, and a 25% stake in Cairo-based edtech player Bonyan.

Election jitters and Fed rate decision set to shake Wall Street this week

Traders gear up for an all-nighter as US elections loom: Wall Street is bracing for a long, volatile night as traders prepare for the results of the US presidential election today, with trading desks in Hong Kong and Singapore ready to support overnight activities. As one portfolio manager put it, “5 November is going to be a blindfolded mud-wrestle in a minefield,” pointing out the uncertainty revolving around the elections this time around.

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Everybody is preparing for the big night: Major banks like JPMorgan and Goldman Sachs are staffing up to ensure their trading desks are ready to handle high volumes and volatility throughout the election night. “We will stay as long as we need — if that’s 2 am, it’s 2 am. If we have to sleep over, we will,” said Glen Capelo of Mischler Financial Group.

Focus on bonds and currencies: The ICE BofA Move index — a key measure of expected volatility in the US bond market — surged by 40% last month, while the CME index of implied volatility across major currencies hit its highest level since early 2023.

What happens if who wins? Traders have been putting their money on former president Donald Trump winning for weeks, pushing up stocks, currencies, and crypto, all while bond yields were on the rise. After a poll showed that the Democratic Party’s Kamala Harris has a lead over Trump in Iowa, the Bloomberg USD Index dropped to its lowest since August, yields on 10-year Treasuries fell, and BTC slipped. Traders are eyeing the return of popular “Trump trades” — going long on the USD and short on bonds — with plans to either capitalize on or swiftly unwind these positions, depending on how the results go. But if Harris pulls the rug from under Trump’s feet, Trump trades could reverse, leaving behind dramatic swings in the market overnight.

Lessons from the past: Traders are revisiting the 2016 elections, when markets initially misread the results of the polls, pushing US futures to swing widely. This time, hedge funds are scaling back risks and preparing for any unexpected moves. “Equity markets collapsed after Trump was elected [in 2016], but that lasted a day, then they rallied,” noted Ed Al Hussainy of Columbia Threadneedle Investments. Traders are adopting a neutral stance to shore up their liquidity. “We’ve spent a lot of time cleaning up our inventory and our own positions in order to be as neutral as possible to approach the event from the perspective of providing that intermediation,” Citi’s Vikram Prasad said.

It's not just the Oval Office that matters, as market reactions also hinge on Congressional outcomes. A Republican sweep could trigger inflation and higher bond yields, as Trump’s plans to cut tax and import tariffs could very much reverse the course on inflation and increase US national debt, while a divided Congress may limit policy shifts, offering some balance.

Ongoing market volatility could extend beyond today, as Wall Street braces for potentially delayed or contested election results. Such scenarios could lead to a prolonged market uncertainty, making it difficult for traders to navigate. There’s also the Federal Reserve’s upcoming rate decision on Thursday, where a second consecutive rate cut is widely expected, with one survey showing that 98% of traders are banking on a 25 bps cut by the end of this week. The Fed’s decision will play a key role in shaping post-election market dynamics, as traders balance election outcomes with potential shifts in monetary policy.

Market reax: It was a sea of red across US markets with the Dow Jones ending the first trading day of the week down 0.6%, the S&P 500 dipping 0.3%, and the Nasdaq falling 0.3%.

The story is all over international press: Bloomberg | FT | CNBC.

MARKETS THIS MORNING-

Asian markets are mixed at dispatch time as investors sit awaiting the results of the US presidential election and the Federal Reserve’s decision when it meets later this week. Japan’s Nikkei is up 1.3% and South Korea’s Kospi is down 0.5%.

TASI	12,039	-0.1% (YTD: +0.6%)
MSCI Tadawul 30	1,512	0.0% (YTD: -2.5%)
NomuC	28,063	+2.8% (YTD: +14.4%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.5% repo	5.0% reverse repo
EGX30	30,650	-0.6% (YTD: +23.1%)
ADX	9,331	-0.2% (YTD: -2.6%)
DFM	4,585	-0.8% (YTD: +12.9%)
S&P 500	5,713	-0.3% (YTD: +19.8%)
FTSE 100	8,184	+0.1% (YTD: +5.8%)
Euro Stoxx 50	4,852	-0.5% (YTD: +7.3%)
Brent crude	USD 75.12	+2.8%
Natural gas (Nymex)	USD 2.78	+4.4%
Gold	USD 2,746	-0.1%
BTC	USD 68,072	-1.2% (YTD: +60.7%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.1% yesterday on turnover of SAR 6.2 bn. The index is up +0.6% YTD.

In the green: Burgerizzr (+10.0%), Retal (+9.6%) and Al Baha (+7.1%).

In the red: Epcco (-6.8%), SRMG (-4.2%) and APC (-4.0%).

THE CLOSING BELL: NOMU-

The NomuC rose 2.8% yesterday on turnover of SAR 93.1 mn. The index is up 14.4% YTD.

In the green: Jahez (+12.9%), Paper Home (+8.9%) and Al Hasoob (+8.7%).

In the red: Meyar (-7.1%), Taqat (-6.6%) and NGDC (-4.6%)

CORPORATE ACTIONS-

#1- Walaa Cooperative Ins. has issued a prospectus (pdf) for a SAR 467.5 mn rights issue at SAR 11 per share to boost capital. The capital increase — which represents nearly 50% of current capital — is intended to support the company’s expansion plans and to maintain its credit rating. The funds will be funneled towards investments and to increase its statutory deposit as per Sama regulations. Unsubscribed shares will be grouped into a rump offering for institutional investors.

ADVISORS- Walaa tapped Aljazira Capital as financial advisor, lead manager, and underwriter for the sale. Khaligyoun Legal Advisors is stepping in as legal advisor while Crowe Solutions and El Sayed El Ayouty will serve as auditors.

#2- Saudi Top’s board tapped Wathiq Financial Company as a financial advisor to manage its transition from Nomu to Tadawaul’s main market, it said in a disclosure to Tadawul. The move is still subject to CMA approval and to fulfilling requirements for the upgrade.

#3- SAL Saudi Logistics Services’ board greenlit a SAR 116 mn dividend distribution at SAR 1.45 per share for 3Q 2024, to be distributed by Saturday, 30 November, it said in a disclosure to Tadawul.

#4- Saudi Telecom Company (Stc) will distribute SAR 2 bn in dividends at SAR 0.4 per share for 3Q 2024, it said in a disclosure to Tadawul. Distribution is set for Tuesday, 26 November.

CALENDAR

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.

5-9 November (Tuesday-Saturday): Biban24 Forum, The Front Exhibition and Conference Center, Riyadh.

11 November (Monday): Last day for qualified investors to subscribe to Mufeed's 10% stake (pdf) on Nomu.

11-14 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Center.

11-22 November (Monday-Friday): The Diplomatic Conference to Conclude and Adopt a Design Law Treaty, 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.

11-13 November (Monday-Wednesday): Saudi Intermobility Expo 2024, Jeddah.

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.

20-21 November (Wednesday-Thursday): The Saudi Rail Conference and Exhibition, Riyadh International Convention and Exhibition Center, Riyadh.

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.

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

4-5 December (Wednesday-Thursday): Zakat, Tax and Customs Conference, 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.

18-19 December (Wednesday-Thursday): Impact Makers Forum (ImpaQ), Mayadeen Hall, Riyadh.

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

31 December (Tuesday): Last day for taxpayers to benefit from Zatca’s fines and penalties waiving initiative.

2025

1Q: BinDawood Holding expected to close 100% acquisition of Zahrat Al Rawdah Pharma

Saudi and Turkey plan to raise their bilateral trade volume to USD 10 bn

JANUARY 2025

1-17 January (Wednesday-Friday): 2025 Dakar, Bisha and Shubaytah.

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

4-5 February (Tuesday-Wednesday): The RLC Global Forum, Riyadh.

6 February (Thursday): Property registration deadline for owners in several districts of seven Qassim cities.

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.

19-21 February (Wednesday-Friday): Saudi Media Forum, Riyadh.

22 February (Saturday): Founding Day.

MARCH 2025

31 March- 3 April (Monday-Thursday): Eid Al Fitr.

MAY 2025

31 May-5 June (Saturday-Thursday): Hajj.

JUNE 2025

6-9 June ( Friday-Monday): Eid al-Adha.

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

JULY 2025

31 July (Thursday): Deadline for companies with SAR 2.5 mn or more in 2022/2023 revenues to integrate e-invoicing solutions with Fatoora.

SEPTEMBER 2025

23 September (Tuesday): Saudi National Day.

2026

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

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

2027

The World Water Forum takes place in Riyadh.

The Ocean Race finishes in Amaala on the Red Sea.

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