Emerging markets grapple with new global realities at AlUla

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WHAT WE’RE TRACKING TODAY

Updated diversification plan in the works, Jadaan says

Good morning, wonderful people, and welcome to the 500th issue of EnterpriseAM Saudi. We’re celebrating the milestone of having written to you for 500 mornings during a busy week for the Kingdom, as it hosts a slew of high-profile events, shows, and visits.

Our focus today is on AlUla Conference for Emerging Market Economies, as the first day saw finance ministers, central bankers, and global policymakers debate the new realities of a rapidly-changing global landscape. The consensus? Emerging markets need to put up their defenses, manage their debts, shore up their reserves, and forget about relying on a stable global economy for their own growth.

Happening today

#1- The UK’s Prince William begins a three-day visit to Saudi Arabia today, his first trip to the Kingdom. The British royal is being deployed at the UK government’s request to strengthen high-priority ties with Crown Prince Mohammed bin Salman, a royal source told the BBC.

What to expect: Updates on the imminent UK-GCC freetrade agreement and potential progress on the Kingdom joining the development and production of the Tempest stealth fighter jet under the UK-Japan-Italy Global Combat Air Program.

#2- Riyadh hosts the Public Investment Fund’s Private Sector Forum today and tomorrow at the King Abdulaziz International Conference Center. The forum highlights multi-bn USD investment windows across 13 priority sectors, such as tourism and renewable energy.

#3- The World Defense Show continues today and runs through Thursday, 12 February in Riyadh, bringing together defense officials, military leaders, and industry executives from across the globe. The event will be inaugurated by Defense Minister and Vice Chairman of the GAMI Board Prince Khalid bin Salman.

What went down during day one: GE Aerospace and the Middle East Propulsion Company inked three agreements aimed at boosting the Royal Saudi Air Force’s operational readiness. In addition, US planemaker Boeing is looking to manufacture aircraft parts in Saudi Arabia for local use and exports, the company’s Senior Vice President Brendan Nelson told Asharq Business.

WEATHER- Thunderstorms bringing heavy rain, hail, and gusty winds are forecast over parts of the Eastern Region, with fog settling in low-lying areas. Dust-filled winds will sweep across Al Jouf and the Northern Borders.

Riyadh: 29°C high / 14°C low;
Jeddah: 32°C high / 21°C low;
Makkah: 33°C high / 22°C low;
Dammam: 28°C high / 15°C low.

Watch this space

ECONOMY — The Kingdom is preparing an updated strategy for the USD 2 tn economic diversification agenda, Finance Minister Mohammed Al Jadaan told Bloomberg on the sidelines of the AlUla Conference for Emerging Markets, which kicked off yesterday in Riyadh.

What we know: The government started internal discussions this week on how to communicate priorities for the next five years, with tourism, manufacturing, logistics, and technology as central pillars, although the minister stopped short of saying when the revised strategy would be formally released.

IN CONTEXT- A “comprehensive review” of Saudi’s project pipeline is underway, gathering pace earlier this year, with the deferral of the 2029 Asian Winter Games, media reports on cuts to Neom’s The Line, and, more recently, reports that Riyadh’s Mukaab has been put on hold. “We continue really to reprioritize, rework our policies, making sure that we enhance as we go to ensure that we enable the private sector to lead the economy,” Al Jadaan said.

The government expects the deficit to narrow to 3.3% this year from 5.3% in 2025, while total financing needs are projected at around USD 58 bn in 2026. “We have quite a wide network of channels that we can tap in case we need more than what we have planned for,” Al Jadaan said.

** We have more insights from the conference in our Big Story Today, below.

INVESTMENT WATCH — Investcorp Saudi Arabia and SNB Capital launched a strategic partnership framework focused on wealth management, investment banking, and asset management. The firms intend to source and execute high-value agreements in Saudi Arabia and abroad, focusing on private equity and real assets.

DEVELOPMENT FINANCE — The Islamic Development Bank launched a new fund aimed at supporting 27 countries classified as “the least developed,” the bank’s President Muhammad Al Jasser told Asharq Business on the sidelines of the AlUla Conference for Emerging Market Economies. The fund will focus on nations that are least capable of financing infrastructure projects and will utilize its own developmental assessment standards.

Data point

USD 101 mn — that’s how much Saudi clubs spent on contracting international players during the January 2026 window, down 51.4% y-o-y from USD 208 mn but still the second-highest winter spending on record, Asharq Business reports, citing Fifa data. The Kingdom was the seventh-largest spender on signing foreign players globally, leading Arab clubs in both spending and earnings during the winter window.

Sports

Australian left-hander Elvis Smylie clinched the LIV Golf Riyadh title on his league debut, finishing 24 under par with a final-round 8-under 64 to edge Jon Rahm by one stroke, LIV Golf said in a statement. The 23-year-old earned USD 4 mn from the USD 20 mn purse and helped Ripper GC capture the team title, with the squad posting a league-record 69-under total.

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The big story abroad

Global headlines are focused on Asian markets’ broad rally, riding the wave of incumbent Japanese Prime Minister Sanae Takaichi’s landslide victory in snap elections yesterday. In anticipation of Takaichi’s reflationary agenda — more spending and tax cuts — markets responded bullishly, sending Japan’s Nikkei climbing 4.2% to an all-time high.

Gold rebounded on the news: Partially boosted by Takaichi’s victory, gold rose above USD 5k per ounce, jumping as much as 1.7% in early trading and recovering half of the losses it sustained since dropping from a historic high late last month. Helping the recovery is also promising backing from the likes of Deutsche Bank, Goldman Sachs, and the Chinese central bank.

Super Bowl LX is getting plenty of attention this morning after the Seattle Seahawks won the game with 29 points, securing their second-ever title. The defeated Patriots lost their chance at their seventh title.

Emerging markets grapple with new global realities at AlUla

Finance ministers, central bankers, and global policymakers gathered in the Kingdom yesterday for the AlUla Conference for Emerging Market Economies. Slowing growth, rising debt, and a fragmented geopolitical landscape shaped the conversation as the realization settles in that emerging markets can no longer rely on the stability of global financial markets for their own growth.

The global reset

Fragmentation and uncertainty were the buzzwords this year. Most speakers agreed that protectionism and geopolitical factors are actively hindering technology diffusion and talent mobility, leading the global economy to grow by just 3.3% in 2025, down from a pre-pandemic average of 3.7%.

We are now in a world of “sweeping transformations in geopolitics, technology, and trade,” IMF Managing Director Kristalina Georgieva said in her opening remarks. More shocks are to come, Georgieva warned, noting that many nations will have to face them with “depleted fiscal buffers.”

EMs stood their ground

Emerging markets now account for nearly 60% of global GDP in purchasing power terms and 70% of global growth, Finance Minister Mohammed Al Jadaan said yesterday, adding that “the 10 emerging economies in the G20 alone account for more than half of the world's growth.”

What underpinned the resilience? Independent central banks and clearer inflation targets, Georgieva said. Central bank governors, including Poland’s Adam Glapinski, echoed the sentiment, saying that institutional independence allowed for hiking interest rates to battle inflation at a time when the decision was unpopular with the markets, society, and political lobbies.

Regional cooperation is also becoming more vital, Georgieva added, saying that lowering barriers and deepening integration can help preserve trade as an engine of growth. She cited the GCC, ASEAN, and the African Continental Freetrade Area as leaders in this trend.

The debt trap

Growth in emerging markets remains threatened by the “debt cliff”: Half of all low-income countries are currently in, or at high risk of, a debt crisis, Al Jadaan said, highlighting the need for more “disciplined debt management” to weather the new headwinds. China’s Finance Minister Lan Fo’an echoed the sentiment, warning that tightening global liquidity has restricted consumption and investment in emerging markets.

Saudi Central Bank Governor Ayman Mohammed Alsayari urged central banks to build reserves as a strategic shield by deploying countercyclical policies that protect domestic growth from a hostile global financial system. The Kingdom built policy buffers to absorb financial shocks, Alsayari argued, citing the accumulation of reserves during periods of economic growth. Primarily funded by oil receipts, these reserves allowed Saudi to "support balance of payment needs strategically" and smooth economic activity during downturns, he added.

Still, reserves alone are not enough, Alsayari noted, as countries must foster “greater financial market depth,” specifically in debt capital markets and money market funds. This depth allows emerging markets to “diversify the structure of the funding base,” reducing reliance on external or volatile funding sources, he added.

What’s next?

The consensus in AlUla seems to be that the next decade is a sprint. Supply-side shocks are now the norm rather than the exception, and winners will be the economies that build institutional buffers and stop waiting for the old rules of globalization to return.

The Kingdom pivots to quality growth as diversification enters new phase -PwC

Saudi Arabia is turning a new economic leaf, moving away from spending big to spending smart, prioritizing “quality,” according to PwC Middle East’s Saudi Economy Watch. Even though the non-oil sector currently makes up 56% of our SAR 4.7 tn economy, PwC warns that the “linkage” to oil remains uncomfortably tight. To break this oil cycle, the government is now pivoting toward an “export-oriented” strategy to build economic resilience.

Now for the hard part

The “easy” phase of diversification — driven by gigaprojects construction, domestic consumption, and massive public-sector capital injection — is reaching its limit as fiscal conditions tighten. With softer oil prices reducing projected 2025 revenues by over 13%, the government is getting more selective.

We’re moving from a “build it and they will come” model to a “produce it and sell it to the world” framework. For the private sector, this is a nudge to move up the value chain. While construction and retail provided quick Ws, they didn’t build the “transferable capabilities” needed to survive a down-cycle. The victors of the next decade will be firms that integrate into global supply chains — moving from basic assembly to engineering, R&D, and specialized services.

The cost of the oil link

The data point that matters: PwC estimates the elasticity of Saudi non-oil GDP to oil prices at 0.05, meaning a sustained 10% drop in oil prices over three years would shave roughly SAR 430 bn off cumulative non-oil GDP compared with baseline growth projections.

At the sector level, some are safer from oil than others.“Technology and tourism are probably the least elastic sectors and have already implemented many projects, so they are not seeking new finance,” MENA economist Hamzeh Al Gaaod tells EnterpriseAM. “Newer projects are more likely to face reduced market liquidity due to their funding sources' ties to oil markets,” he added.

Looking ahead

The payoff: PwC's growth model suggests that shifting to this productivity-led model could boost non-oil GDP by an estimated 5.5% and total factor productivity by 10% by 2035.

The pivot needs a workforce to match: The Kingdom’s next phase will depend on a labor market equipped with professionals skilled in digital and AI technologies, the report said, amid rising demand for engineers and tech specialists in growing sectors such as manufacturing, energy, and automation. Logistics and metals extraction are among the sectors where the Kingdom holds a competitive advantage, making them prime targets for localizing expertise, Al Gaaod explained.

Luberef, Americana report 2025 earnings

Luberef reports a net income of SAR 855 mn

Saudi Aramco Base Oil Company (Luberef) saw its net income fall 12% y-o-y to SAR 855.3 mn in 2025, it said in a Tadawul disclosure. The bottom line, though in line with expectations, was pressured by weaker base oil sales despite improved crack margins. Revenues fell 19.3% y-o-y to SAR 8.1 bn during the year, reflecting lower sales volumes of base oils and by-products following a scheduled turnaround at the Yanbu facility.

Dividends: The company’s board recommended a SAR 588.9 mn dividend payout at SAR 3.5 apiece for 2H 2025, Luberef said in a separate disclosure. The distribution date is yet to be announced.

Americana reels in bottom line of USD 219 mn

ADX- and Tadawul-listed F&B giant Americana Restaurants reported a net income of USD 219.1 mn in FY 2025, up 38% y-o-y, with revenues growing 14.2% y-o-y to USD 2.5 bn, according to an earnings release (pdf). Management attributed this growth to like-for-like sales climbing 9.7%, fueled by a combination of menu innovation, brand partnerships, and high operational performance across major markets.

A busy year: The company opened up 216 new stores last year to bring the total number of restaurants under its umbrella to 2.7k across 12 markets.

Al Yamamah reports SAR 37.6 mn in net income in 4Q 2025

Al Yamamah Steel Industries posted a 719% y-o-y increase in net income to SAR 37.6 mn in 4Q 2025, according to a disclosure to Tadawul. Management attributed the increase to a 34.3% jump in electricity sales and a 77.9% increase in renewables sales during the three-month period. Meanwhile, revenue rose 2.8% y-o-y to SAR 498.2 mn, primarily fueled by the renewable energy sector — where volume jumped 77.9% and value increased 85.6%.

Arabian Drilling taps new CEO

Arabian Drilling named Fahad AlBani (LinkedIn) as its CEO, effective 10 February, the company said in a disclosure to Tadawul. AlBani takes over from Ghassan Mirdad (LinkedIn), who stepped down for personal reasons.

About AlBani: AlBani has nearly three decades of experience in drilling and upstream operations, most recently serving as vice president of unconventional gas operations at Saudi Aramco.

20 new high-speed trains coming our way. PLUS: Who knew camels needed passports?

Talgo to add trains to Mecca-Madinah-Jeddah line

Spain's Talgo will manufacture 20 high-speed trains for Saudi Arabia Railways (SAR) for the rail line connecting Makkah, Madinah, and Jeddah under a EUR 1.3 bn order. Talgo will also handle maintenance for its entire SAR fleet of 55 trains — 35 previously supplied units and the 20 new additions — through 2033, with an option to extend the term until 2038.

A note on capacity: The trains will enter service in 2029 and will raise the capacity of the Makkah-Madinah railway network by 60% to 30 mn seats annually, SAR CEO Bashar Al Malik told Asharq Business.

Camels with credentials

The Kingdom launched the camel passport initiative to better organize and digitize the country’s camel sector, the Environment, Water, and Agriculture Ministry said on X last week. The program will record each camel’s identity, ownership, breed, and health history, linking the information to a verified national database.

Camels are no small market: Saudi Arabia has over 2.2 mn camels and around 80k owners, making us one of the world’s top camel-owning countries.

Egypt’s Noor City is getting a university, courtesy of EEP

Egyptian real estate developer Talaat Moustafa Group (TMG) signed an agreement with the Egypt Education Platform (EEP) to establish a private university in its Noor City project in East Cairo, according to a joint press release (pdf) and another disclosure (pdf) from TMG. The total investment for the university is estimated at EGP 8 bn. The project marks EEP’s first venture into higher education.

The details: TMG is providing a 216k sqm land plot for the institution in return for an equity stake in the project and a long-term share of its recurring revenue. Phase one is slated to launch by 2029.

That’s not all: EEP will manage two new Noor City schools and handle operations under a management agreement, while TMG is providing the land and capital for construction.

ADVISORS: Our friends at EFG Hermes acted as the sole financial advisor for the partnership.

Trump-era crypto optimism unwinds

Retail crypto traders were back on uneasy ground last week after a sharp sell-off briefly dragged BTC below its post-election levels, reigniting fears of a fresh “crypto winter,” Bloomberg reports. BTC sank 13% in a single session last Thursday to around USD 60k — its steepest daily drop since the 2022 FTX collapse — before clawing back above USD 70k a day later. Even with the rebound, the cryptocurrency still ended the week down roughly 30%, unsettling investors who had assumed political backing and Wall Street adoption had made the market more resilient.

The immediate trigger was US President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair, a move that cooled demand for risk-sensitive assets, including BTC and precious metals, Reuters argued. But analysts say the downturn was already in motion. “This contraction has been underway for several months and remains ongoing,” Kaiko research analyst Thomas Probst said, warning that thinning liquidity is making price swings sharper and more erratic.

The reversal marks a clear break from the Trump-fueled optimism that once pushed BTC past USD 125k, driven by expectations of a more crypto-friendly US administration, strong ETF inflows, and progress on industry-backed legislation. Those hopes have faded. Money has flowed out of crypto funds in recent months, the Trump-linked World Liberty Financial coin has lost much of its value, and key bills remain stalled in the US Senate — despite earlier bank forecasts calling for BTC to hit USD 300k by year-end.

For retail investors, the sell-off has cracked the idea that crypto now has a reliable price floor. With US policymakers ruling out direct intervention and Treasury officials dismissing calls to backstop BTC with public funds, traders are once again exposed to the asset class’s defining risk: volatility driven as much by narrative as fundamentals.

History suggests the pain can spill into the real economy. Prolonged downturns have often triggered layoffs, stalled innovation, and weaker confidence across the sector.

However, veterans argue the pattern is familiar. Every previous crypto winter has eventually given way to a new peak, albeit after long periods of losses and consolidation. “There are several things signifying that we are very close to a bottom, if not having achieved it,” said James Butterfill of CoinShares, signalling that the worst of this slump is over — even as investors brace for a longer chill.

MARKETS THIS MORNING-

Asia-Pacific markets are a sea of green in early trading this morning as investors react to Japanese Prime Minister Sanae Takaichi's victory, which also sent gold soaring after ending last week in the red. Japan’s Nikkei and South Korea’s Kospi are leading gains.

TASI	11,217	+0.3% (YTD: +6.9%)
MSCI Tadawul 30	1,513	+0.3% (YTD: +9.1%)
NomuC	23,887	+0.1% (YTD: +2.5%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	50,035	+0.6% (YTD: +19.6%)
ADX	10,563	+0.2% (YTD: +5.7%)
DFM	6,691	+0.2% (YTD: +10.7%)
S&P 500	6,932	+2.0% (YTD: +1.3%)
FTSE 100	10,370	+0.6% (YTD: +4.4%)
Euro Stoxx 50	5,998	+1.2% (YTD: +3.6%)
Brent crude	USD 67.60	-0.7%
Natural gas (Nymex)	USD 3.21	-6.2%
Gold	USD 5,044	+1.3%
BTC	USD 70,386	+1.5% (YTD: -19.7%)
Sukuk/bond market index	918.96	+0.2% (YTD: 0.0%)
S&P MENA bond & sukuk	151.93	0.0% (YTD: 0.0%)
VIX (Volatility Index)	17.76	-18.4% (YTD: +18.8%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.3% yesterday on turnover of SAR 3.0 bn. The index is up 6.9% YTD.

In the green: Oasis (+7.1%), Medgulf (+5.3%), and Jahez (+4.7%).

In the red: Abo Moati (-3.6%), Tawuniya (-2.9%,) and CMCER (-2.7%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.1% yesterday on turnover of SAR 9.1 mn. The index is down 2.5% YTD.

In the green: Mulkia (+9.2%), Time (+9.0%), and FAD (+8.0%).

In the red: Jamjoom Fashion (-7.6%), HKC (-7.5%), and Naseej Tech (-5.2%).

CALENDAR

FEBRUARY

2-13 February (Monday-Friday): Asian Road Cycling Championship and Paralympic Cycling, Qassim.

8-12 February (Sunday-Thursday): World Defense Show, Riyadh International Convention and Exhibition Center, Riyadh.

8-9 February (Sunday-Monday): AlUla Conference for Emerging Market Economies (ACEME), Maraya Hall, AlUla.

9-10 February (Monday-Tuesday): Global Games Show Riyadh, Malf Hall, Riyadh.

9-10 February (Monday-Tuesday): Private Sector Forum, Riyadh.

9-14 February (Monday-Saturday): Asian Racing Conference, Crowne Plaza Riyadh RDC Hotel & Convention Center, Riyadh.

10 February (Tuesday): Deadline for businesses subject to withholding tax to file their January tax returns via Zatca’s website.

11 February (Wednesday) Digital Transformation Summit Saudi Arabia (DTS), Riyadh.

11-14 February (Wednesday-Saturday): JeddaDerm, Jeddah.

13-14 February (Friday-Saturday): Jeddah E-Prix, Jeddah.

15-17 February (Sunday-Tuesday): The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front & Exhibition Center.

16 February (Monday): King Salman Stadium design-and-build contract prequalification submission deadline.

16 February (Monday): First day of Ramadan (TBC).

22 February (Sunday): Founding Day.

26 February (Thursday): Title deed registration deadline for 142.8k properties across 104 neighborhoods in Hail.

MARCH

12 March (Thursday): Deadline for real estate registration for 253.2k properties in 499 neighborhoods across Riyadh, Qassim, Makkah, and Hail.

18-23 March (Tuesday-Monday): Eid Al-Fitr holiday (TBC).

21 March (Saturday): Fanatics Flag Football Classic, Kingdom Arena, Riyadh.

31 March (Tuesday): Zatca’s 23rd E-invoicing integration wave deadline.

APRIL

6 April (Monday): Procurement and Supply Chain Futures Forum, Al Faisaliah Hotel, Riyadh.

6-7 April (Monday-Tuesday): Real Estate Supply Chain Forum, Al Faisaliah Hotel, Riyadh.

12-15 April (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

12-15 April (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

13-16 April (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

20-22 April (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

20-22 April (Monday-Wednesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center.

21 April (Tuesday): GC Summit Saudi Arabia, Riyadh.

22-23 April (Wednesday-Thursday): The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah.

27-29 April (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

MAY

3-5 May (Sunday-Tuesday): Sports Investment Forum (SIF), Riyadh.

3-9 May (Sunday-Sunday): The Global Sustainability Expo, The Arena Riyadh Venue.

5-6 May (Tuesday-Wednesday): SkyMove Air Cargo MENA, Riyadh.

24-28 May (Sunday-Thursday): Eid al-Adha holiday.

JUNE

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

SEPTEMBER

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

23 September (Wednesday): Saudi National Day.

OCTOBER

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

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
November: The UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia;
November: The Esports Nations Cup, Riyadh;
The Intervision international music competition will take place in Saudi Arabia;
6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

Signposted to happen sometime in 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.

Signposted to happen sometime in 2Q 2027:

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

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