Derayah Financial’s share price closes 30% higher on Tadawul debut

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Al Watania Poultry draws local, foreign bidders + Saudi to spearhead data center growth in the Middle East?

Good morning, wonderful people. We have a meaty issue for you today, as Derayah Financial’s strong Tadawul debut saw the share price close 30% higher. Meanwhile, Zahid’s consortium is not giving up on South Africa’s Barloworld.

Also in the news well: The PIF launched Al Waha, Saudi Arabia’s first dutyfree retailer. We also have plenty of data in today’s issue, from Gastat’s Industrial Production Index for January, to the state of labor market, sustainable debt issuances and greenfield FDI projects in 2024. Let’s dive in.

When do we eat? Maghrib is at 6:00pm today in Riyadh. You’ll have until fajr prayers at 4:47am tomorrow to wrap up sohour.

WEATHER- Riyadh and Makkah will have partly cloudy skies today, while Madinah is expected to have a sunny, clear day.

Riyadh: 25°C daytime / 16°C overnight
Makkah: 33°C daytime / 18°C overnight
Madinah: 27°C daytime / 15°C overnight

PSAs-

Businesses subject to excise tax must file their January and February tax returns by Saturday, 15 March through the Zakat, Tax, and Customs Authority (Zatca) website, according to a statement. Missing the deadline will result in penalties of 5% of the unpaid tax for every 30 days of delay. Excise tax is imposed on products associated with health risks, including soft and energy drinks, and tobacco products.

WATCH THIS SPACE-

Al Watania Poultry draws local, foreign bidders for acquisition: Almarai, Tanmiah Food, Brazil’s food giant JBS, and Ukraine’s MHP submitted separate non-binding offers to acquire Al Watania, the Middle East’s largest poultry producer, in a transaction valued at up to SAR 2 bn (USD 532 mn), Bloomberg reports, citing sources it said are familiar with the matter. BSF Capital is advising on the potential sale, though talks are ongoing and may not result in a transaction.

IN CONTEXT- The Kingdom nearly doubled its poultry production over the past decade, as part of a push for food self-sufficiency and to address an 80% reliance on food imports that leaves the Kingdom vulnerable to shocks. The Kingdom has earmarked USD 4.5 bn to increase local poultry output, achieving a 72% self-sufficiency rate with over 1 mn tons of poultry meat produced annually. Local chicken production is growing at 6% a year — one of the fastest rates in the world.

We are set to become the Mideast’s data center powerhouse by 2027: The Kingdom is expected to spearhead the Middle East’s data center growth over the next three years, with a compound annual growth rate of 37% through 2027, Bloomberg reports, citing analysis from real estate services firm Jones Lang LaSalle (JLL). This rate is almost twice that of Dubai and Abu Dhabi, and well above the global average of 15%.

Fueling the expansion: The Kingdom’s drive to become an AI hub is fueled by government policies, tax incentives, and economic free zones. The push has attracted major firms like Microsoft, Amazon Web Services, and Equinix to invest in data center capacity, alongside a USD 1.5 bn Groq-Aramco partnership for the world’s largest AI inference node. Saudi Arabia is also planning a USD 100 bn AI project to turn the Kingdom into a technological hub to rival the UAE.

Pushing forward despite global hurdles: Saudi has “the ambition and the capital” necessary to become the region’s data center leader, despite challenges including US restrictions on advanced AI chip exports present challenges, rising energy costs and lengthy construction timelines, Stephen Macdonald, managing partner at Proptech, told Bloomberg.

Edrevel to pour USD 100 mn into Saudi AI education: US-based AI-powered education solutions company Edrevel plans to invest USD 100 mn in Saudi Arabia over the next five years to support AI-based education and workforce training, Asharq Al Awsat reported. The company signed an agreement with Aosha Training and Consulting Company, the Saudi Entertainment Academy, and King Faisal University to develop training programs and improve high school testing methods.

DATA POINTS-

#1- The number of exported containers at our ports increased 18.3% y-o-y in February to 215.5k, while imported containers fell 5% y-o-y to 215.7k, according to the Saudi Port Authority (Mawani). Meanwhile, cargo handling volumes fell 3.66% y-o-y to 22.5 mn tons.

#2- The General Authority for Roads launched 55 projects valued at SAR 4 bn in 2024, a spokesperson told Aleqtisadiah. Road investments have exceeded SAR 36 bn since 2016, spanning 13.2 km.

SPORTS-

Al Ittihad continues to lead the Saudi Pro League with a four-point advantage over Al Hilal, while Cristiano Ronaldo maintains his position at the top of the scoring charts despite Al Nassr sitting fourth in the table.

What to tune into: League leaders Al Ittihad are set to face Al Riyadh at 10pm on Thursday, while Al Fateh takes on Al Raed at the same time. The action continues with Al Shabab hosting Al Orobah to complete Thursday's fixtures.

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THE BIG STORY ABROAD-

A single story is dominating the headlines this morning: US President Donald Trump’s tariffs sent US markets plunging, the S&P 500 fell 2.7% yesterday, tech stocks saw their biggest day of losses since 2022 — thanks to Tesla shares falling 15%, seeing their worst performance in five years — with the Nasdaq dipping 3.8%, and the Dow Jones dropped 2.1%.

“This big sell-off feels ugly, it feels nasty,” Citigroup’s Drew Pettit said. “We were coming off very high sentiment and very high growth expectations. All of this is just recalibrating to the new risks that are in front of us,” he said. (Bloomberg | CNBC | FT | Reuters | AP | CNN | BBC)

CIRCLE YOUR CALENDAR-

The 2025 Saudi Arabian Grand Prix weekend is scheduled to kick off on Friday, 18 April at the Jeddah Corniche Circuit and wrap up the following Sunday. You can grab your tickets here.

Derayah Financial’s share price closes 30% higher on main market debut

Derayah Financial’s share price rose the maximum 30% on the first day of trading on Tadawul’s main market yesterday, closing at SAR 39.0 apiece, according to market data. Tadawul’s circuit breaker rules allow shares to trade within a ±30% band on the first three days of trading. Starting from the fourth day of trading, that band is capped at no more than 10% up or down before circuit breakers kick in.

REFRESHER- The first brokerage firm to hit the market priced its offering of a 20% stake at SAR 30 apiece, after its institutional order book was 162x oversubscribed.

The firm plans to keep dividend payouts rolling post-IPO: “Over the past three years, we have distributed 60% of net profits as cash dividends to shareholders on a quarterly basis. Currently, we see no fundamental reason to change that approach," said CEO Mohammed Al-Shammasi told Asharq Business.

Derayah’s IPO also minted a new bn’aire: Chairman Taha Al Kuwaiz’s 20% stake in the e-brokerage firm is now worth SAR 1.45 bn following the IPO — which valued Derayah at nearly SAR 7.5 bn at listing, Asharq Business said.

THE IPO PIPELINE AHEAD-

Key Tadawul listings to watch out for in 2025:

The PIF’s Saudi Global Ports has tapped banks including Goldman Sachs and HSBC to arrange an upcoming IPO;
PIF-backed Tabreed District Cooling has also reportedly hired Citigroup and SNB Capital to manage a potential IPO on Tadawul;
Medical procurement firm Nupco — a unit of the PIF — has reportedly tapped Rothschild & Co as financial advisor for its potential Tadawul IPO;
Budget airline Flynas is reportedly looking to go public this year;
BNPL platform Tabby plans to IPO during the 2025-2026 window;
Local tech services firm Ejada Systems has secured approval from the Capital Markets Authority (CMA) last month to take a 45% stake to market.

Zooming out: A total of 38 companies and 22 funds are planning to list across various exchanges in the region this year, signaling continued investor confidence in MENA markets. Saudi Arabia is set to lead the charge with 26 upcoming public offerings.

Saudi industrial production rises 1.3% y-o-y in January

The industrial production index (IPI) grew 1.3% y-o-y in January, marking the fourth consecutive month of overall growth, driven by manufacturing, water supply, sewerage, waste management, and remediation activities, according to a preliminary monthly report (pdf) from the General Authority for Statistics (Gastat). On a monthly basis, the index remained unchanged.

The manufacturing sub-index rose 4.0% y-o-y, on the back of a 4.3% increase in the manufacturing of pet coke and refined petroleum products and a 4.2% rise in chemicals and chemical products. Manufacturing made up 35% of the overall IPI, making it the second-heaviest component after oil and minerals. The sub-index grew 0.3% m-o-m.

Mining and quarrying activity was down 0.4% y-o-y as oil production dipped to 8.92 mn bbl / d, down from 8.96 mn bbl / d in January 2024. The mining and quarrying sector activity made up 61.4% of the overall IPI. The sub-index inched up 0.1% m-o-m.

The index for non-oil activities rose 3.6% y-o-y in January, while the index for oil inched up 0.4% y-o-y. On a monthly basis. Oil activities inched up 0.1%, while non-oil activities dipped 0.2% m-o-m.

IN CONTEXT- Non-oil sector growth in the Kingdom recorded its best performance since September 2014 in January, with the country seeing the fastest increase in total new orders since June 2011. The seasonally adjusted headline PMI figure rose to 60.5, up from 58.4 in December — which was its first slowdown since August despite a record increase in sales and new orders back then — staying well above the 50.0 growth threshold.

Utilities had contrasting figures: The sub-index for electricity, gas, steam, and air conditioning supply activity dropped 1.7% y-o-y in January (down 9.4% m-o-m), while water supply, sewage, and waste management and remediation activities were up 12.8% (up 8.7% m-o-m).

Zahid Group pursues new takeover talks with South Africa’s Barloworld

A consortium led by Zahid Group is set to enter a new round of negotiations to acquire a controlling stake in South African construction equipment outfit Barloworld as part of a standby offer, after Barloworld shareholders rejected its initial offer for a full takeover over the pricing, Zahid Group Director of Investments Augostino Sfeir told Bloomberg. The initial offer failed to meet the 75% approval threshold among Barloworld shareholders, triggering a standby offer by the Zahid consortium at the same price.

Is this a creeping takeover in the making? The consortium is currently looking to acquire “as many shares as possible so that its stake exceeds 50%” in Barloworld, the business information service notes. This strategy suggests that the consortium could be angling for what’s called a “creeping takeover,” where the bidder starts accumulating shares over time until it has a majority stake that would then allow it to exert more pressure over minority shareholders to sell their shares.

What they said: “We are moving forward with the transaction even if we do not take the company private, we think a majority shareholding will allow us to implement more efficient processes in the business,” said Sfeir. “The standby offer has now opened, and we would like to conclude it within 30 trading days.” Zahid expects to acquire an additional 32% stake from shareholders in line with a vote at a previous extraordinary general meeting, he added.

No change in price, but lower premium: The offer price will remain at ZAR 120 a share, valuing the company at USD 1.25 bn, said Sfeir. While this was a 30% premium to the share price at the time of the initial offer in December, it’s currently only a 14% premium given the share price rose 7% up to ZAR 105 apiece on yesterday’s close.

Sweetening the pot for Barloworld’s biggest shareholders: Discussions with shareholder Public Investment Corp. — which had previously rejected the offer — will also include options to further invest in Black-ownership requirements, said Sfeir.

Shareholder Silchester International Investors could be left out of the new negotiations: Zahid will not give in to any of the points raised by Silchester in the first rejection which included raising the price to ZAR 130 apiece, and excluding the CEO from the negotiations, citing a conflict of interest. “The CEO forms part of our localization efforts, which is aligned with Caterpillar’s strategy, and he has a track-record of performance,” he said. “As long-term shareholders ourselves, we wanted the CEO to be able to continue to take care of operations and manage the business during a critical time like this,” said Sfeir.

Saudi Arabia’s labor market hits record 12 mn participants in 3Q 2024

The Kingdom’s labor market grew 2.6% q-o-q in 3Q 2024 to a record 12 mn participants, with women accounting for 13% of the total, according to CI Capital’s Saudi Labor Market report (pdf). Saudi nationals’ participation rate rose 0.7 percentage points q-o-q to 51.5%, with women accounting for 36.2%, up 0.8 percentage points.

We’re ahead of schedule: Having surpassed its Vision 2030 target of 30% female workforce participation in 2Q 2020, the Kingdom set a new target of 40% by 2030. Additionally, a new unemployment target of 5% for nationals by 2030 was set, as the 7% goal is expected to be reached this year.

REMEMBER- The overall unemployment rate for locals and expats declined 0.5 percentage points y-o-y to 3.7% in 3Q 2024, according to Gastat’s labor market report. Local unemployment fell 1 percentage point y-o-y to 7.8%, while expat unemployment was down 0.1 percentage points, reaching 1.4%. Female unemployment fell 3 percentage points y-o-y to 13.6% during the quarter, while unemployment for men remained unchanged from last year at 4.7%.

The private sector localization push: In 3Q 2024, the private sector saw a 1.8% q-o-q increase in Saudi workers to reach 2.36 mn out of 11.4 mn total private sector employees. This growth is expected to accelerate due to the Human Resources and Social Development Ministry’s localization efforts in 269 professions. The education sector has been a key driver, contributing to 40% of new Saudi women hires and 27% of all new Saudi hires in 3Q 2024, following the implementation of the 50% Saudization requirement for private schools.

Expat participation is on the up: Saudi Arabia’s population grew 4.7% y-o-y to 35.3 mn in 2024, with expats — who make up 44% of the population — contributing to 76% of this increase. The number of Saudis rose 2% y-o-y to 19.6 mn. In the labor market, the number of expat participants increased by 24k q-o-q to a record 9.2 mn (76% of total participants), mainly due to the construction sector, which brought in 28% of new hires. Although expat wages remain 0.4x that of Saudis, the wage gap has been narrowing in recent years.

How much are people making? Real wages averaged SAR 5.9k (down 12.2% y-o-y), with Saudi nationals earning SAR 9.9k (up 2.6%), Saudi women earning SAR 7.8k (down 5.1%), and non-Saudis earning SAR 4.1k (down 6.6%).

Spotlight on Riyadh: Riyadh’s labor market participation rose 0.3% q-o-q to 5.68 mn in 3Q 2024. Saudi citizens comprised 23% of the capital city’s labor market, reaching 1.3 mn. The unemployment rate in Riyadh saw a marginal drop of 0.1 percentage points q-o-q to 5% — the lowest rate in the Kingdom.

Saudi Arabia issued USD 5.6 bn in sustainable bond issuances in 2024, ranking second in MENA

Saudi Arabia and the UAE are expected to continue leading the way with sustainable bond issuances in the Middle East in 2025, with total sustainable issuance in the region projected to range between USD 18-23 bn, according to an S&P Global report (pdf). The two countries accounted for more than half of last year’s issuances, which totaled USD 22.6 bn.

Renewable energy projects, especially solar, will dominate demand as GCC countries continue to prioritize energy efficiency and diversification from oil. Projects like sustainable water management, clean transport, and pollution control have also been popular in both Saudi Arabia and the UAE.

New types of bonds will also increase in popularity: Blue and transition bonds issuances are predicted to increase due to exposure to water scarcity and hydrocarbons. Sustainable sukuk will also continue to grow, S&P Global expects.

ICYMI- Last month, The Finance Ministry tapped HSBC, JPMorgan, and Societe Generale as global coordinators for its EUR-denominated first green bond issuance. The offerings may include a seven-year green sukuk and a 12-year conventional sukuk. Additional details on yields and offering size were not disclosed. Proceeds will go toward financing the Kingdom’s green financing framework, unveiled in March last year.

IN CONTEXT- The government is looking to tap green bond sales for the first time, unveiling a green financing framework that identifies eight types of green projects to be funded through the sale of the bonds. The Kingdom’s first push into green bonds comes as part of efforts to boost its clean energy transition away from fossil fuels, which remains the cornerstone of the economy.

SAUDI ARABIA’S 2024 ISSUANCES AT A GLANCE-

The Kingdom’s sustainable bond issuances in 2024 hit USD 5.6 bn, coming in second place in MENA despite a 27% y-o-y decline in issuance value. Financial institutions and adaptation-focused projects played a bigger role in local issuances compared to other countries in the region, the report noted. Sustainable sukuk accounted for the bulk of Saudi Arabia’s 2024 sustainable bond issuance, coming in at 78% of the total, with the remaining 12% coming from other sustainable bonds, according to the report.

Who were the top issuers last year? Al Rajhi Bank issued two USD 1 bn sustainability sukuks, while other major issuers included Saudi National Bank (USD 850 mn), Arab Petroleum Investments Corp. (USD 750 mn), Riyad Bank (USD 750 mn), Saudi Investment Bank (USD 750 mn), and the Public Investment Fund (PIF)’s USD 500 mn green bond.

THE REGIONAL PICTURE-

Despite dominating the regional market, UAE issuances declined amid post-COP normalization, S&P says: The UAE’s sustainable bond issuances declined by 28% y-o-y to reach USD 7.4 bn in 2024, as peak demand after COP28 in Dubai eased, along with a higher interest rate environment. Green bonds were the most popular, with around 60% of issuances focused on energy. Other prevalent sectors included logistics, real estate, and tourism and hospitality. Meanwhile, sustainable sukuk represented 30% of the UAE’s total sustainable issuances last year.

Financial institutions dominated issuances in the UAE, led by Dubai Islamic Bank’s USD 1 bn sustainable sukuk, followed by Taqa’s USD 850 mn green bond issuance, and First Abu Dhabi Bank’s USD 800 mn bonds. The Emirate of Sharjah issued the largest sustainable sovereign bonds in the UAE at USD 750 mn and USD 545 mn. The region’s only social bond was issued by the National Bank of Ras Al Khaimah, amounting to USD 600 mn. Beyond sovereign and banking issuances, the biggest sustainable issuances were Masdar’s USD 1 bn green bonds and Aldar’s USD 500 mn green sukuk.

MEANWHILE- Qatar had the region’s largest issuance with a USD 1.5 bn sovereign green bond issuance. The second-largest issuances were Dubai Islamic Bank’s USD 1 bn sustainability sukuk, Al Rajhi Bank’s two USD 1 bn sustainability sukuks, and Qatar’s second sovereign green bond worth USD 1 bn. Saudi National Bank’s USD 850 mn sustainability sukuk and Abu Dhabi National Energy Company’s USD 850 mn green bond ranked third.

OTHER REGIONAL TRENDS WORTH NOTING-

Sustainable bonds represented 25% of total issuances done by regional corporate and financial institutions, compared with a 9% global average;
Financial institutions achieved a new sustainable issuance record of USD 12.6 bn in 2024, while sovereign sustainable issuances declined by 56% y-o-y to USD 1.7 bn;
The share of sustainable sukuk amounted to more than 35% of regional sustainable bond issuance in 2024, compared to 26% in 2023.

Saudi Arabia attracted USD 22 bn in greenfield FDI projects during 2024

The value of its announced greenfield FDI projects fell 28% y-o-y in 2024 to USD 22 bn, reaching its third-highest level on record, according to a report (pdf) from Emirates NBD. The communications sector led in project value, followed by renewables, metals, and electronic components.

Top investors: Most of FDI during the year came from China, the UK, US, and UAE. China’s total contribution fell sharply to USD 5.8 bn from USD 17 bn, normalizing after a sharp tick in 2023 that saw several large-scale projects announced. China still accounted for the second and fourth largest investments during 2024, with Zhuoyue New Energy investing USD 3.5 bn in biofuels production, and JinkoSolar allocating USD 1 bn for a solar cell and module plant, according to the report.

The single largest investment came from the Seattle-based Amazon Web Services’ USD 5.3 bn investment into cloud infrastructure. Meanwhile, the UK’s Vedanta committed USD 2 bn for copper projects in the Kingdom.

Saudi’s FDI push: The Kingdom is targeting USD 100 bn in foreign direct investment per year as part of Vision 2030, after averaging USD 17 bn per year between 2017-2022 and managing to bring in an estimated USD 19 bn in 2023.

REGIONALLY- The GCC saw a 26% y-o-y decline in the total value of greenfield FDI projects in 2024, despite the number of projects announced inching up by around 1%. In terms of total value of projects, Saudi took the top spot, accounting for 54%, followed by the UAE at 36%.

Nahdi Medical’s net income down 8.1% in 2024, Riyadh Cables up 57.6%

NAHDI MEDICAL-

NahdiMedical’s net income fell 8.1% y-o-y to SAR 820.7 mn in FY 2024, weighed down by a rise in operating expenses on the back of continued investment in new sale points, sales digitization, and geographic expansion, according to a disclosure to Tadawul.

MEANWHILE- Revenues were up 8.4% y-o-y at SAR 9.4 bn during the period, “supported by the growth of Nahdi’s pharmacy business, increased prescription flow, expanded ins. partnerships, and a broader product assortment,” CFO Mohammed Alkhubani said in an earnings release (pdf).

On a 4Q basis: Nahdi’s net income decreased 7.4% y-o-y to SAR 157.9 mn in 4Q 2024, as rising operating expenses offset an increase in gross income. Meanwhile, the company’s revenue inched up 6.7% to SAR 2.4 bn over the same quarter on the back of growth in its retail, healthcare and UAE businesses.

Looking ahead: The company will focus on investing in digital platforms and the UAE market as it looks to strengthen its retail presence in 2025, added Alkhubani. Nahdi currently has 1.2k pharmacies in the Kingdom and 25 in the UAE.

ALSO- Nahdi will distribute SAR 390 mn in dividends for 2H 2024 at SAR 3 per share, it said in a separate disclosure. Distribution is scheduled for 25 March.

RIYADH CABLES GROUP-

Riyadh Cables’ net income grew 57.6% y-o-y to SAR 816.9 mn in 2024, it said in a disclosure to Tadawu l. The company reported 15.1% y-o-y revenue growth during the year to SAR 9 bn.

ALSO- The company will distribute SAR 299.4 mn in dividends for 2H 2024 at SAR 2 per share, it said in a separate disclosure. The eligibility and dividend distribution dates will be announced later, it added.

ARABIA INS. COOPERATIVE-

Arabia Ins. Cooperative Company reported a 50.1% decline in net income to SAR 30.1 mn in FY 2024, due to lower net ins. results and a drop in other income streams, according to a disclosure to Tadawul. The company’s ins. revenues fell by 17.2% to SAR 694.7 mn, pulled down by declines in the motor and medical ins. segments that were partially capped by growth in the engineering segment.

PIF launches Al Waha, Saudi Arabia’s first dutyfree retailer

TRADE-

The Kingdom gets its first dutyfree retailer: The Public Investment Fund (PIF) set up the Al Waha DutyFree Company, the first Saudi-owned dutyfree operator, according to a statement. The move comes as the Kingdom looks to capitalize on the rising number of tourists visiting the country and its healthy portfolio of global events to be hosted locally over the next 10 years — including the 2027 Asian Cup, Expo 2030, and the 2034 World Cup.

REMEMBER- Saudi Arabia plans to reel in 70 mn foreign visitors annually by 2030, up from 30 mn in 2024. The sector aims to secure USD 80 bn in private investment by the end of the decade to help achieve this goal, contributing to the Kingdom’s larger diversification agenda.

RENEWABLES-

Acwa launches renewables innovation center in China: Renewables giant Acwa Power has opened an innovation center in Shanghai that will focus on photovoltaics, wind, energy storage, green hydrogen, and seawater desalination, according to a press release. The company invested USD 2.8 mn in the first phase, which includes an R&D center and a green energy laboratory.

Others want in: Acwa signed an MoU with Gulf Renewables Laboratory and Shanghai Jiao Tong University during the center’s opening ceremony to bring in their “technical expertise” on future projects. The company hopes that the center will foster collaboration with Chinese partners and other private and public entities.

REMEMBER– Acwa Power secured a renewables portfolio in China that includes USD 312 mn in solar and wind investments in January. The renewables giant will develop a 132 MW solar photovoltaic (PV) portfolio and a 200 MW wind energy project in the country.

STARTUP WATCH-

Local e-commerce platform Aya closed a USD 1.6 mn seed funding round led by Khwarizmi Ventures, with contributions from Raed Ventures, Joa Capital, Fena Holdings, Turki Alrajhi, and a group of angel investors, according to a press release. The funds will be used to accelerate the company’s product development, broaden its market presence, and improve its platform. No further details were provided on the funding round.

About Aya: Aya is a fashion marketplace founded in 2024 that specializes in forecasting fashion trends and informing local producers about demand trajectory.

LOGISTICS-

Global transport firm FedEx temporarily suspended its Economy Parcel and Freight Services into Saudi Arabia, effective immediately, without offering further details, according to a statement. The suspension impacts select countries including Egypt, the UAE, Kuwait, South Korea, Japan, China, Hong Kong, Taiwan, India, Belgium, Denmark, the UK, Italy, Slovakia, the Netherlands, Spain, Poland, and Brazil.

FedEx said it aims to resume the services as soon as possible, without disclosing a potential timeline. The last-mile shipping giant launched its international economy service in the Kingdom in 2023 in an effort to cap costs for local SMEs.

DIGITIZATION-

NWC upgrades its revenue assurance system with AI: The National Water Company signed an agreement with Portugal-based business efficiency solutions provider Effy Business to deploy an AI-powered revenue assurance system to overhaul its finance and general administration sector, according to a post on X. No timeline or investment ticket was disclosed.

HOSPITALITY-

AlephHospitality opened Four Points by Sheraton Jeddah hotel in the Rabwah District, it said in a press release. The 112-key hotel is located 15 minutes away from King Abdulaziz International Airport, offering a variety of services as well as access to downtown, financial districts, and top attractions.

Not the last one: Aleph Hospitality, in partnership with Marriott International and Ashaad Company, is set to launch the 510-key hotel Sheraton Al Khobar Al Hamra, Al Khobar’s first Sheraton brand, located near the King Fahd Causeway by 2028.

US trade war could trigger more expansionary monetary and fiscal policies globally

The ongoing US trade war might push global economies to tweak their monetary and fiscal policies to account for tariff shocks, Fitch Solutions said. Last week, US President Donald Trump imposed 25% tariffs on Canada and Mexico and doubled tariffs on Chinese imports to 20%. He also announced plans to apply 25% tariffs on EU imports, and plans to place additional 25% tariffs on all steel and aluminum imports starting this week.

It’s all about inflation and interest rates: To counteract economic slowdowns caused by tariffs, central banks may consider lowering interest rates, but their ability to do so varies across countries. The flexibility of monetary policy depends on how closely inflation aligns with targets and whether interest rates have room for adjustment compared to pre-pandemic levels.

Where do developed economies stand? The European Central Bank and central banks in Australia and Canada may have more capacity to cut rates due to inflation remaining near target. The US and UK stand in a middle position, with some ability to adjust rates but with inflation concerns potentially limiting aggressive reductions. Japan, facing an inflation rate of 4%—double its target—and a minimal policy rate spread, has little room for monetary easing. Meanwhile, China’s policy rate is already far below its 2015–2019 average, significantly reducing its ability to introduce further cuts.

For emerging markets, monetary policy flexibility is closely tied to economic stability. Countries with strong current account balances can lower interest rates with fewer concerns about currency depreciation or capital outflows. However, nations such as Brazil, Romania, and Poland face challenges due to above-target inflation and weaker external conditions, making interest rate cuts more difficult.

Governments looking to respond through fiscal measures such as increased spending or tax cuts face significant limitations. Resources have been strained by recovery efforts following the covid-19 pandemic and the surge in energy prices caused by the Russia-Ukraine war. Countries such as Germany, South Korea, and Australia, with relatively lower debt and manageable deficits, have more room to implement fiscal stimulus. In contrast, nations like France, Italy, Japan, and the UK, which are burdened with high government debt and fiscal deficits, have little flexibility to maneuver.

MARKETS THIS MORNING-

The sell-off on Wall Street extended to Asian markets, with Japan’s Nikkei falling 1.7%, while Topix fell 2%, and South Korea’s Kospi is down 1.5%. China was not spared, with the CSI 3000 falling 0.2% and Hong Kong’s Hang Seng index down 0.9% in early trade.

Wall Street futures indicate a lower open later today, as concerns over a potential recession continue to drag down stocks.

TASI	11,745	-0.8% (YTD: -2.4%)
MSCI Tadawul 30	1,487.1	-0.5% (YTD: -1.5%)
NomuC	31,031	-1.0% (YTD: -1.4%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	31,137	0.0% (YTD: +4.7%)
ADX	9,393	-0.6% (YTD: -0.3%)
DFM	5,136	-1.7% (YTD: -0.4%)
S&P 500	5,613	-2.7% (YTD: -5.1%)
FTSE 100	8,600	-0.9% (YTD: +5.2%)
Euro Stoxx 50	5,387	-1.5% (YTD: +10.0%)
Brent crude	USD 69.3	-1.6%
Natural gas (Nymex)	USD 4.5	+2.0%
Gold	USD 2,894	-0.7%
BTC	USD 79,081	-4.3% (YTD: +9.7%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.8% yesterday on turnover of SAR 5.3 bn. The index is down 2.4% YTD.

In the green: Derayah (+30%), RIBL (+4.5%) and Alujain (+3.6%).

In the red: AlBaha (-8.1%), Rasan (-7.8%) and Riyadh Cables (-7.7%).

THE CLOSING BELL: NOMU-

The NomuC fell 1.0% yesterday on turnover of SAR 40.7 mn. The index is down 1.4% YTD.

In the green: NBM (+9.5%), Al Mohafaza for Education (+7.6%) and Horizon Food (+5.6%).

In the red: AlRashid Industrial (-11.1%), Balady (-9.5%) and Sure (-9.5%).

CORPORATE ACTIONS-

The Capital Market Authority approved capital increase requests for four companies, including WSM for Information Technology, Bank Albilad, Raoom Trading, and Qomel Company through capitalization and bonus share issuances, it said in multiple statements.

#1- Bank Albilad secured approval for a 20% capital increase to SAR 15 bn via a bonus share issuance, at the rate of one share for every five existing shares. The increase will be funded using SAR 1.5 bn from retained earnings and SAR 1 bn from statutory reserves. The move — which got board approval last month — aims to bolster the bank’s solvency while retaining resources in operational activities.

#2- Raoom Trading got the green light to double its capital to SAR 125 mn via bonus share issuance at the rate of one to every share, funded by SAR 62.5 mn from retained earnings.

#3- Qomel Company was also cleared to double its capital to SAR 70 mn via bonus share issuance, funded through SAR 32.6 mn from share premium and SAR 2.4 mn from retained earnings.

#4- WSM for Information Technology will increase its capital to SAR 21.5 mn, by transferring SAR 2 mn from retained earnings.

Emaar, the Economic City increased its planned PIF debt conversion to SAR 4.12 bn from SAR 3.97 bn to include interest and fees through December 2024, it said in a filing to Tadawul. The revised terms were formalized in an addendum agreement, with the conversion subject to shareholders’ approval and regulatory clearance. The move is part of Emaar’s capital optimization plan.

Zelensky, delegation landed in Jeddah yesterday for US talks

Ukrainian President Volodymyr Zelensky and his delegation arrived in Jeddah yesterday for his scheduled meeting with Crown Prince Mohammed bin Salman, state news agency SPA reported. The story also got ink in Bloomberg | Washington Post

MEANWHILE-The Ukrainian team will remain in the Kingdom for talks with US Secretary of State Marco Rubio on a proposed ceasefire with Russia, covering the Black Sea, long-range missile strikes, and the release of prisoners, Associated Press reported citing sources it said are in the know. Discussions will also reportedly include signing an agreement backed by US President Donald Trump, granting the U.S. access to Ukraine’s rare earth minerals.

CALENDAR

MARCH

1-30 March: Ramadan.

13 March (Thursday): Final allocation of shares for Umm Al Qura for Development and Construction’s Tadawul IPO.

16 March (Sunday): Surplus refunds for Umm Al Qura for Development and Construction’s Tadawul IPO.

17 March: Settlement date for Saudi National Bank’s USD-denominated Formosa bonds.

18-19 March (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

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

31 March (Monday): Deadline for applying to theReal Estate General Authority’s Regulatory Sandbox Program.

31 March (Monday): Deadline for applying to the World Intellectual Property Organization (WIPO) Global Awards 2025

APRIL

7-9 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

3-20 April (Thursday-Sunday): AFC Asian U17 Cup.

13-14 April (Sunday-Monday): Human Capability Initiative (HCI) Conference, King Abdulaziz International Conference Center, Riyadh.

13-16 April (Sunday-Wednesday): EdgeX HCI, The Ritz Carlton, Riyadh.

14-16 April (Monday-Wednesday): Future Hospitality Summit, Mandarin Oriental Al Faisaliah, Riyadh.

17-23 April (Thursday-Wednesday): 11th edition of the Saudi Film Festival, Dhahran.

18-20 April (Friday-Sunday): Saudi Arabian Grand Prix, Jeddah Corniche Circuit, Jeddah.

21-24 April (Monday-Thursday): Saudi Food Exhibition and Conference, Riyadh.

22-23 April (Tuesday-Wednesday): AAM Middle East, Riyadh.

23-25 April (Wednesday-Friday): Construction and Real Estate Development Exhibition, Jazan.

25 April- 4 May (Friday-Sunday): AFC Champions League Elite Finals

28 April- 30 April (Monday-Wednesday): Automechanika Riyadh, Riyadh International Convention and Exhibition Center, Riyadh.

MAY

May: The World Intellectual Property Organization (WIPO) Global Awards 2025 announces its results.

6-7 May (Tuesday-Wednesday): Federal Open Market Committee meeting.

12-15 May (Monday-Thursday): Saudi Smart Manufacturing, Riyadh International Convention & Exhibition Center.

13-14 May (Tuesday-Wednesday): Global EV & Mobility Technology Forum, The Arena, Riyadh.

19-20 May (Monday-Tuesday): Tech-ecO-System Summit (ToSS), Riyadh.

23 May (Friday): Guns N’ Roses Show, Riyadh.

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

JUNE

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

17-18 June (Tuesday-Wednesday): US Federal Reserve’s Federal Open Market Committee meeting.

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

30 June (Monday): Deadline for Cancellation of Fines and Exemption of Financial Penalties Initiative by the Zakat, Tax and Customs Authority (Zatca).

JULY

July: The World Intellectual Property Organization (WIPO) Global Awards 2025 awards ceremony, Geneva.

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

29-30 July (Tuesday-Wednesday): Federal Open Market Committee meeting.

AUGUST

5-17 August (Tuesday-Sunday): Fiba Asian Cup.

SEPTEMBER

15-17 September (Sunday-Tuesday): Money 20/20 Middle East, Riyadh.

17-18 September (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

23 September (Tuesday): Saudi National Day.

OCTOBER

28-29 October (Tuesday-Wednesday): Federal Open Market Committee meeting.

NOVEMBER

3-9 November (Monday- Sunday): WTA Tour Finals.

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front Convention & Exhibition Centre, Riyadh.

27-30 November (Thursday-Sunday): The World Rally Championship (WRC), Jeddah.

DECEMBER

1-4 December (Monday-Thursday): International Conference on Nuclear Emergencies, Riyadh.

4-13 December (Thursday-Saturday): Red Sea International Film Festval, Jeddah.

December: The Fortune Global Forum 2025, Riyadh.

9-10 December (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

2026

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

8-12 February (Sunday-Thursday): World Defense Show, Riyadh.

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.

Riyadh-Kudmi transmission line to be completed.

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