Huge tax breaks for companies that move regional HQs to Saudi Arabia

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WHAT WE’RE TRACKING TODAY

Vladimir Putin lands in Riyadh today

Good morning, friends. It’s another packed issue this morning, so we’re going to once more jump straight in with no preamble.

UP FIRST- Russian President Vladimir Putin will land in Riyadh today and visit the UAE on a rare, two-country whistle-stop tour of the region. Expect trade and investment, cooperation on oil production, Israel’s war in Gaza, and the conflict in Ukraine to be on the agenda when Putin sits down with Crown Prince and Prime Minister Mohammed bin Salman.

Sound smart: Putin is the latest world leader to skip COP28 in Dubai. In the UAE, he’ll be heading instead to Abu Dhabi to meet President Sheikh Mohamed bin Zayed Al Nahyan.

Remember: Saudi and Russia recently coordinated a 2.2 mn barrels-per-day production cut at OPEC+, as we discussed earlier this week.

Putin is also welcoming Iranian President Ebrahim Raisi to Moscow. The two are scheduled to meet tomorrow as Russia continues to push on regional diplomacy.

The visit to KSA is getting plenty of ink in the global press: Wall Street Journal | Financial Times | New York Time | Bloomberg.

ALSO- The film industry got a huge shout-out in Variety— arguably the most influential business publication covering Hollywood — as US Ambassador Michael Ratney talked up the “extraordinary explosion” in culture and film in the Kingdom.

The ambassador said international producers can count on help from the embassy as they look to push into the industry.Ratney, who noted that “extraordinary ambition” as being a “defining characteristic of Saudi Arabia,” was speaking at the Red Sea Film Festival in Jeddah, which continues through this weekend.

SMART POLICY- The Kingdom is offering tax incentives to foreign companies that relocate their regional headquarters here, state-run news agency SPA reported yesterday. The Investment Ministry said the tax incentives include a 30-year exemption from corporate income tax as well as withholding tax on each company’s approved activities. The 30-year no-tax windows for the activities of the regional entity incorporated in KSA will open from the day the company’s business license is issued.

Remember: Companies face a 1 January 2024 deadline to move their regional HQ’s to Saudi or run the risk of losing out on government contracts. The plan, a cornerstone of Prince Mohamed’s drive to build a diversified, globally significant non-oil economy, has been in the works since February 2021. At least 200 foreign companies have so far established HQs here, according to Investment Minister Khaled Al-Falih.

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EXPO WATCH- Riyadh Expo 2030 will be a boon to construction and infrastructure players (among others) in the Kingdom, with spending on infrastructure and other components of the event now estimated to be in the USD 92 bn range. That’s according to remarks by Princess Haifa bin Mohammed Al Saud, the vice minister of tourism, who was speaking at the Saudi Green Initiative in Dubai.

Spending highlights: Expect big earmarks designed to turn Riyadh into one of the world’s most sustainable cities, Princess Haifa said, including the decarbonization of urban transport and the inauguration of the King Salman Park.

Sound smart: King Salman Park will be the world’s largest urban park when it opens.

HAPPENING TODAY-

#1- The Council of Ministers is set to approve the state budget for 2024 when it meets later today. The Finance Ministry’s pre-budget statement back in September suggested we’re looking at a modest fiscal deficit, with total spending set to come in at SAR 1.25 bn against revenues of SAE 1.17 bn. That sets up a deficit of just under 2% of GDP.

What to watch for: Ministers are unlikely to pull back from significant spending on infrastructure — and will look at additional measures to encourage private-sector growth. We don’t expect any cuts to outlays for services benefitting citizens and residents.

#2- Institutional investors have until the close of business to place orders for shares in broadcaster MBC’s blockbuster IPO, which got underway with a bang last Thursday as bankers took orders in the first hour sufficient to cover 100% of the offering. Advisors on the transaction said they expect to price the offering at SAR 23-25 per share (pdf), valuing the company at as much as SAR 8.1 bn, according to Enterprise calculations.Some 90% of the offering is earmarked for institutions.

Bankers will price the offering by 12 December, and individual investors can place between 14 and 18 December, according to the prospectus (pdf).

#3- It’s day seven of COP28 in Dubai. Discussions today will focus on the shift to sustainable transport, building green infrastructure and cities, and looking at ways to minimize waste in the production-consumption cycle.

Want to go deeper on everything happening over there? Enterprise Climate has got your back.

REMEMBER- KSA is playing an outsized role in Dubai even as top officials including the Crown Prince and energy ministers give COP28 a pass. As we reported yesterday, the Kingdom will not back western countries’ call for a phase-down or phase-out of oil and gas.

The Kingdom’s position on the “energy transition” is clear: It’s not about the mix of fuels used, it’s about reaching zero emissions — itself a key target of the Kingdom’s economic policy, which sees us using proceeds from fossil fuels to build a diverse, green, globally competitive economy.

#4- Lana Medical debuts on Nomu today: Qualified investors will start trading shares of pharma player Lana Medical after it listed 720k shares — good for a 20% stake — on the parallel market Nomu, Tadawul said. Shares will open at SAR 31 a piece. Yaqeen Capital was financial advisor and underwriter for the IPO.

#5- KSA’s RSGT is set to be the first foreign firm to operate a port in Bangladesh today with a concession agreement with the Chittagong Port Authority (CPA) to manage and operate the Patenga Container Terminal in Bangladesh.

Making history: RSGT is the first foreign company to operate a port in Bangladesh as the South Asian country looks to attract investment and shore up its export base. The container terminal was completed last year and was initially set to be operated by the CPA, but Bangladesh’s government opted for a foreign operator instead under a PPP model.

PSA #1- You can no longer get a cold soda at the traffic light: The Municipal, Rural Affairs and Housing Ministry has banned the installation of vending machines alongside the main roads’ traffic lights, to avoid visual distortions, Okaz reported yesterday. Also banned: The sale of energy drinks and tobacco products in self-serve machines.

So where can you find a vending machine? Only in public facilities and parks, event sites, service centers, commercial streets, government facilities, and malls, among others.

PSA #2- It’s set to be another beautiful late-fall day in the Kingdom. Expect a daytime high of 24°C in Riyadh, with a bit more heat and humidity in Dammam (26°C) and Jeddah (32°C).

THE BIG STORIES-

HERE AT HOME- The non-oil private sector continued to grow at a red-hot pace in November despite rising price pressures.

PLUS- Crown Prince and Prime Minister Mohamed bin Salman landed in Qatar yesterday for the Gulf Cooperation Council summit, which Turkish President Recep Tayyip Erdogan attended at the invitation of the GCC.

^^ We have the rundown on both stories in this morning’s news well, below.

ABROAD- No single story has captured the interest of the global business press:

xAI: The plan by Elon Musk’s AI startup to raise USD 1 bn in equity is the big story in the business press — Reuters | Financial Times | CNBC | WSJ .
Gaza:Reuters on why the US is unlikely to stop supplying arms for Israel’s war effort, despite the devastating impact on civilians.
The Donald: The Associated Press and the Washington Post have the latest on the legal woes of the ex-president and frontrunner for the Republican nomination.

WATCH THIS SPACE-

#1- Aramco still wants to go big on blue hydrogen: Tadawul-listed oil giant Aramco wants to be among the world’s top investors in blue hydrogen, according to remarks by Aramco chairman and PIF governor Yasir Al Rumayyan on the sidelines of the Saudi Green Initiative (SGI) in Dubai. “Carbon sequestration is also one of the methods that helps in bringing down emissions and we want to reach carbon zero as quickly as possible,” he said of the company’s plans.

Saudi has ambitious plans to be a globally significant player in green and blue hydrogen, as we noted yesterday in our coverage of Energy Minister Prince Abdulaziz bin Salman’s remarks via video to attendees at the SGI. Bin Salman was speaking at the same time as construction wrapped up on phase one of Neom’s massive green hydrogen plant.

BACKGROUND- Aramco refuted reports earlier this year that it was putting its blue hydrogen plans on hold, stressing that its goal of producing up to 11 mn tons of blue ammonia by 2030 remained unchanged. The clarification after CEO Amin Nasser commented on challenges developing offtake agreements with markets including the European Union, South Korea, and Japan.

Sound smart: Blue hydrogen is carbon-neutral even though the energy input to make it is natural gas — to qualify as “blue,” the production process has to involve a carbon capture apparatus. Green hydrogen is also carbon-neutral, but the energy input comes from a renewable source, like solar or wind.

#2- The Chinese could be getting into lithium in Yanbu: A delegation from China’s Ganfeng Lithium discussed possible investments in Yanbu Industrial City with the Royal Commission for Jubail & Yanbu, Al Eqtisadiah reported yesterday. The Chinese company is one of the world's biggest lithium companies with a focus on lithium carbonate — a key component in phones, laptops, electric vehicles, and renewable energy storage technologies. Best known for its importance in the making of rechargeable batters, lithium carbonate is also used in some medical applications as well as glass and ceramics, depending on its grade.

Adios Mexico, Marhaba KSA? Ganfeng Lithium execs were visiting KSA one month after it decided to indefinitely postpone its plans to begin mining lithium in Mexico on the back of a spat with the Mexican government. Mexican mining authorities say the Chinese company failed to comply with minimum investment requirements in the country.

WHISPERS-

The PIF will not be taking a stake in Italy’s Pirelli, Reuters reported yesterday, citing statements by the tire maker’s executive vice chairman, Marco Tronchetti Provera. “It’s what you see, there’s nothing more,” he said in reference to the Italian company's new JV with the PIF. “There isn’t going to be anything else,” he added.

Background: The PIF and Pirelli signed a joint venture agreement worth USD 550 mn in October for a tire manufacturing facility in the Kingdom that is set start production in 2026. The PIF will hold a 75% in the JV, while Pirelli will hold the rest.

CIRCLE YOUR CALENDAR-

Calling all gearheads, The Riyadh Motor Show kicked off yesterday and will continue until Saturday at Riyadh’s Kingdom Arena.

The 2024 Saudi Games continue today:

Today’s finals: jujitsu and para table tennis;
Also today: beach volleyball, chess, futsal for the hearing impaired, handball, mixed martial arts, padel, sailing, table tennis, and tennis.

The Red Sea Film Festival continues through Saturday, with Hollywood and European A-listers set to attend. Among them: Johnny Depp, Will Smith, Sharon Stone, and Alessandra Ambrosio.

The Fintech Tour will continue until Wednesday, 13 December. The fintech-focused gathering includes more than 15 events, presentations, and meetups involving key local and international speakers in eight cities across the country.

The International Arabian Horse Show kicks off on Wednesday, 13 December and continues through Saturday, 16 December at the King Abdulaziz Center for Purebred Arabian Horses’ headquarters in Riyadh.

Metallica is coming to Riyadh on Thursday, 14 December as part of the eclectic music festival Soundstorm. Soundstorm runs 14-16 December with a lineup that also includes Pharrell Williams, Chris Brown and Her, DJs Tiesto and David Guetta, Black Eyed Peas, and others.

Cycling fans have just 9 days left until the Arab Road Cycling Championship comes to Riyadh, with the event running 15-23 December.

Tickets are on sale for the 2024 Saudi Arabian Grand Prix with less than 100 days to go until the racetrack roars to life in Jeddah from 7-9 March. Grandstand, premium hospitality, and general admission tickets are now available.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

Non-oil private sector on a tear even as cost pressures rise –PMI

The non-oil private sector continued to grow at a red-hot pace in November despite price pressures “accelerating to their highest” in nearly 1.5 years, according to the Riyad Bank Saudi Arabia PMI out yesterday. Demand was strong and new orders grew at the fastest rate since June as participating companies landed “new customers and greater investment spending,” the report said (pdf).

Output rose thanks to a “marked” upturn in sales and job creation continued, even if it slowed a bit from October’s nine-year high.

In numbers: The headline PMI dropped to 57.5 in November down from October’s four-month high of 58.4.

If it dropped, why is the economy still going? The PMI is a gauge, and anything above 50.0 means that business conditions are improving and the (non-oil, private-sector) economy is growing.

Then why did the headline index dip? S&P, which produces the PMI for Riyad Bank, writers that it was thanks to “moderations in the rate of staff and inventory growth, as well as a sharp reduction in delivery times” — not because private-sector growth is cooling.

Non-oil exports fell 13% y-o-y in 3Q 2023, according to figures released by Gastat (pdf) earlier. “The weak performance in exports can be primarily attributed to the petrochemical sectors as this sector represents more than 29% of non-oil exports.” said Naif Al-Ghaith, chief economist at Riyad Bank. Input prices experienced an uptick in November, rising at their quickest rate since June 2022 and propping up the price of final goods and services – an increase that was partially offset by competitive pressures.

Luckily, new orders and output levels are on a roller-coaster that only goes up: The two biggest contributors to the headline index were up in November, with the sub-index for new orders reaching 66.3 from 66.1 a month earlier, marking the highest reading in five months on the back of good market conditions and higher investment spending. Output levels also rose sharply, with the sub-index hitting 61.2 in November from 60.1 in October on the back of higher sales.

Prospects are still looking good: “Firms anticipate a continuous increase in output, fuelled by a robust inflow of new projects… This bodes well for Saudi Arabia’s economic growth and suggests a favorable environment for businesses in various industries.” Al-Gaith added.

AROUND THE REGION- Private-sector optimism in Egypt hit a record low on inflation and currency woes, according to the PM there. In the UAE, robust demand conditions spurred rapid inventory growth in November, with the PMI down fractionally to 57.7 in November from 57.0 the month before.

Barn’s plans IPO next year as it eyes global expansion

KSA’s first home-grown coffee brand might be IPO-ing: Specialty coffee brand Barn’s is planning go to market with an initial public offering in 2024, World Coffee Portal reported yesterday, citing statements by brand owner Al Amjaad Group CEO Mohamed Al Zain at the coffee chain’s annual franchise meeting in Jeddah.

Details are still scant: Al Zaid did not provide details on the planned IPO or how much it is planning to raise from the offering. However he said it would pave the way for the public “to move from loyal customers to investors in the company’s success.”

Heading to the main market, not Nomu? Given the size of the company’s branch network alone, we’d expect turnover and governance to be in place to allow it to list on Tadawul, rather than the regulation-light parallel market Nomu, which targets smaller businesses at an earlier stage of growth.

Big growth plans: Barn’s is targeting 1k stores globally by 2030, driven by expansions in the Mideast and planned ventures into the UK, US, and Malaysia, according to the report.

About Barn’s: Founded in 1992, Barn’s operates over 550 stores across the kingdom, with more than 70% of the stores franchised. It is the kingdom’s second largest operator behind US brand Dunkin’, according to the report.

BACKGROUND- The kingdom’s IPO market picked up pace starting this summer and has continued to perform well despite jitters in regional capital markets sparked by Israel’s war with Hamas.

Sound smart: IPOs in Saudi Arabia raised USD 3.2 bn (not including the in-progress MBC offering). That’s down 53% y-o-y, according to data compiled by Bloomberg. Saudi IPOs still account for over a third of all proceeds from listings in Europe, the Middle East and Africa, according to the data.

This year’s home run (so far): Drugmaker Jamjoom Pharma pulled off the largest IPO on Tadawul since Aramco’s listing. Sellers raised SAR 1.26 bn. Regional broadcaster giant MBC Group is seeking to raise north of SAR 830 mn from the sale of a 10% stake. In the first hour of bookbuilding last week, bankers brought in more orders than shares available for the IPO, signaling a robust demand.

Saudi dairy company acquires logistics service provider Etmam for SAR 182 mn

Almarai grabs Etmam Logistics for SAR 182 mn: Almarai — the Gulf's largest dairy company — acquired frozen storage provider and distributor Etmam Logistics in a SAR 182 mn transaction, according to Tadawul filing yesterday.

Sorry, bankers: No external finance needed: Almarai’s internally generated cashflows are set to fully finance its acquisition of Etmam, which is still subject to regulatory approval.

What’s in it for the leading dairy producer: The takeover falls under Almarai’s expansionplans to include a range of frozen products across the kingdom. It will help boost its poultry production, allowing it expand its product offering and push deeper into the frozen food segment.

REMEMBER- Almarai made an entry to the frozen bakery segment this year: The dairy company is investing some SAR 405 mn over the course of two years to increase its fresh bakery capacity and enter the frozen bakery market in the kingdom, it said in October.

Almarai has been making headlines in recent months: In October, the kingdom’s leading food-processor Savola Group — Almarai’s largest shareholder — confirmed reports that it is reviewing options for USD 5.3 bn stake in Almarai in what could be one of the region’s biggest M&A transactions. However, talks are at an early stage and Savola may decide against the sale, Bloomberg reported at the time, citing people in the know.

TAIBA FINALIZES PROCEDURES TO ACQUIRE DUR-

IN OTHER M&A NEWS- Taiba Investments has completed necessary procedures for its acquisition of Dur Hospitality, the company said in a disclosure to Tadawul yesterday. Tadawul’s said earlier this week it would delist all of Dur’s shares as the transaction goes ahead.

Background: Shareholders of both Dur and Taiba approved the merger on November 30, following Taiba’s shareholders’ approval of a SAR 1 bn capital increase to acquire Dur’s 100 mn shares, Argaam reported at the time.

New regulations give the CMA more leeway to protect investors if a financial services company goes bankrupt or files for liquidation

New regulations give the regulator more leeway to protect investors if a financial services company goes bankrupt or files for liquidation. A financial services company that wants to file for bankruptcy or liquidation will need to follow new rules from the Capital Market Authority (CMA) before it can file court proceedings, CMA said as it approved yesterday the amendments (pdf) to regulations for companies operating in capital markets.

The essential rundown:

The CMA can approve or reject bankruptcy requests from companies operating in capital markets if they hold client funds and / or assets or manage investment funds;
CMA has the authority to take any action its sees fit to protect clients;
Approval is required: Companies that hold investor funds or assets or are managing investment funds will have to get written approval from CMA ahead of filing for court protection in a bankruptcy or liquidation scenario;
Notification is enough for some companies: Companies that don’t hold investor funds or assets and are’t managing investment funds are only required to notify the authority 30 days ahead of starting their bankruptcy procedures in court. (CMA can still withhold approval obligatory if it thinks it necessary.);
Neither clients funds nor their assets can be rolled into the bankruptcy holdings. All client funds are exempt from the provisions governing the suspension of claims as stipulated in the insolvency law;
CMA can hire a third party to take action to protect clients. The company filing for bankruptcy will need to carry the full costs of the third party.

The Saudi Fund for Development signs a USD 100 mn development finance agreement with Tajikistan

The Saudi Fund for Development (SFD) inked a USD 100 mn development finance agreement yesterday with Tajikistan to fund the construction of the Rogun hydropower project in the landlocked Central Asian country, according to two separate statements (here, and here). The 3.6 GW project is set to provide renewable energy to meet local demand.

Where the funds are going: The loan will finance the construction of a 335-meter-high clay core rockfill dam on the Vakhsh River in the Rogun district. The dam will have six turbines of 600 MW each with a total installed capacity of 3.6 GW. The loan will also finance the construction of four hydraulic tunnels for diversion and drainage, providing flood protection. The project aims to "enhance energy, food, and water security, and foster sustainable development in the country,” according to the SFD.

The fund isn’t new to Tajikistan: The SFD has previously financed 13 development projects worth over USD 290 mn in Tajikistan in sectors of healthcare, education, energy, water sanitation, and road infrastructure.

About SFD: The state-owned fund was established by a Royal Decree in 1975 to provide soft loans and grants to promote sustainability in developing countries. SFD has funded more than 800 development projects worth USD 20 bn in over 100 countries.

Call for Gaza ceasefire + unified visa top news out of GCC meeting

Turkish President Recep Tayyip Erdogan joined Arab leaders for yesterday’s Gulf Cooperation Council meeting in Doha, the latest sign of warming ties between Turkey and our corner of the woods. Crown Prince and Prime Minister Mohammed bin Salman led the Saudi delegation.

The big outcomes of the gathering, per a a joint statement issued afterward:

#1- The summit renewed calls for an immediate ceasefire in Gaza and cheered Qatar, Egypt, and the United States for a ceasefire agreement brokered last week.

#2- Condemnation of Israel: GCC member states plus Turkey again condemned Israel’s war on Gaza and denounced recent statements by several Israeli politicians as racist and extremist. The summit also condemned the Israeli government’s arming of West Bank settlers.

#3- The council condemned Israel’s bid to assert sovereignty over East Jerusalem.

#4- Work in progress projects:

Unified tourist visa: Member states are still working on polishing a Shengen-style unified tourist visa that would allow tourists to enter the six member states using a single unified visa starting sometime between in 2024 or 2025;
Transforming into a union: There’s ongoing efforts to transition the GCC from just a cooperation bloc to a political union as agreed 12 years ago.

Wondering why someone wasn’t at COP28 on Tuesday? They were in Doha. The kingdom’s delegation included intelligence chief Khalid bin Ali Al Humaidan, Public Investment Fund Governor Yasir Al Rumayyan, Energy Minister Prince Abdulaziz bin Salman along with the ministers of foreign affairs, defense, finance, commerce, economy and planning, media, investment, sports.

Putin’s visit dominates headlines this morning

Conversation on the Kingdom in the global press is largely dominated this morning by talk of Russian leader Vladimir Putin’s visit today, as we note in this morning’s What We’re Tracking Today, above.

Shout-outs from the Financial Time: Saudi is one of just three countries in which the OECD says K-12 educational outcomes improved “because outcomes improved for disadvantaged students.” The salmon-colored newspaper also gave Saudi Arabia props for opening up to more western law firms. The true extent of damage to schools from Covid-19 or US law firms fine-tune global expansion ambitions.

Is the Royal Saudi Airforce looking at Rafales? That’s the claim in Bloomberg, which says defense officials have been in talks for months with Dassault Aviation to buy Rafales instead of Eurofighter Typhoons.

More tick-tock on oil: US crude oil output set a record high for the second consecutive month in September, posing a significant challenge to the kingdom and its OPEC partners, as they slash their own production in an attempt to salvage falling oil prices, Reuters writes.

The Indian press is happy that Saudi Arabia is offering Indian nationals 48-hour turnaround times on new visa applicant — and the ability to perform umrah on business and tourism visas.

More news on the electricity grid, hotels, and RSG

HOSPITALITY-

Jabal Omar receives license to operate second tower of landmark Makkah hotel: Jabal Omar Development Co. — one of the kingdom’s largest-listed property developers — has obtained a license from the Tourism Ministry to operate the second tower of its landmark Jabal Omar Address hotel in Mecca with a five-star rating, the company said in a disclosure to Tadawul yesterday.

By the numbers: The second tower is home to 742 rooms and suites, executive lounges, and other facilities. Jabal Omar expects revenues from the second tower will land on its top line starting in 2024.

ELECTRICITY-

Another day, another new transmission project for Riyadh: Keir International inked its second contract with Saudi Electricity Company (SEC) subsidiary National Grid SA to install high-voltage underground cables, it said in a disclosure to Tadawul yesterday. The SAR 48 mn contract will see the company provide high-voltage underground cables connecting Al Aridh Bulk Supply Point (BSP) with the 132 KV network in Riyadh.

That’s two for two: National Grid awarded Keir last month a SAR 253.2 mn contract to connect Al Nazim Bulk Supply Point with the same 132 KV network in Riyadh.

SUSTAINABILITY-

RSG wants to make the kingdom’s fishing industry sustainable: Multi-project developer Red Sea Global (RSG) — which is owned by the PIF — signed a MoU with the National Livestock and Fisheries Development Program (NLFDP) to ensure environmentally and economically sustainable fishing practices in the Kingdom, it said in a statement earlier this week. The agreement will see RSG and NLFDP collaborating to ensure sustainable fishing in the kingdom for both marine life and fishermen, especially around the RSG’s regenerative tourism destinations, The Red Sea and Amaala.

FMCG-

PIF’s Halal Products, Malaysian HDC ink agreement to boost the halal industry: The Halal Products Development Company (HDPC) — a wholly owned subsidiary of the PIF — signed a strategic partnership agreement with Malaysia’s Halal Development Corporation Berhad to boost the growth of the halal industry locally and globally, the HDPC said on X.

Moody’s issues negative outlook for global banks + BTC is up again

UP FIRST- BTC is up again, breaking past the USD 44k barrier for the first time since 2022as investors pile into the cryptocurrency amid optimism that regulators in the United States will sign off on spot BTC exchange-traded funds, CNBC reports.

AND- Asian markets are bouncing back this morning after yesterday’s broad-based selloff. European and North American markets are set to follow later today, futures suggest.

GLOBAL BANK GLOOM-Banks across the world are in for a bumpy 2024 -Moody’s: Rating agency Moody’s has issued a negative outlook for the global banking sector in 2024, citing slower growth, rising default risk, and weaker financial performance.

#1- Slower growth: Growth will slow down as interest rates stay high “even as major central banks begin to cut rates.” This will limit business prospects and therefore limit loan growth across banks’ portfolios, which will prevent them from reaping the benefits of higher rates. “Elevated rates for the most part will lead to higher funding costs and greater asset risks among existing borrowers.”

#2- Bad loans: Financial conditions will reduce borrowers’ liquidity and income, making them unable to meet loan payments. That paired with higher debt-servicing costs will deteriorate loan performance among banks.

#3- Weaker profits: Moody’s believes that banks’ “profitability gains from the last two years will likely start to subside but remain sound,” citing higher funding costs and weaker loan demand due to heightened rates.

The news got attention from: Reuters and the Financial Times.

TASI	11,143.83	-0.4% (YTD: +6.4%)
MSCI Tadawul 30	1,433.85	-0.5% (YTD: -28.4%)
USD : SAR (SAMA)	3.75	-
Interest rates	6% repo	5.5% reverse repo
EGX30	25,128	-0.5% (YTD: +72.1%)
ADX	9,520.07	-0.2% (YTD: -6.8%)
DFM	3,978.20	-0.2% (YTD: +19.3%)
S&P 500	4,567.18	-0.1% (YTD: +19%)
FTSE 100	7,489.84	-0.3% (YTD: +0.5%)
Euro Stoxx 50	4,452.77	+0.9% (YTD: +17.4%)
Brent crude	USD 77.06	-1.2%
Natural gas (Nymex)	USD 2.71	+0.6%
Gold	USD 2,036.30	-0.3%
BTC	USD 44,036.83	+4.6% (YTD: +145.4%)

THE CLOSING BELL-

The TASI fell 0.4% yesterday on turnover of SAR 5.86 bn.The index is up 6.4% YTD.

In the green: Enaya (+9.9%), Liva (+8.6%) and Amana Insurance (+8.3%).

In the red: DWF (-9.8%), Naseej (-7.5%) and Americana (-2.9%).

Riyadh Cement shares were basically flat in their first day of trading on Tadawul’s main market, closing up 0.05% at SAR 34.85. It was the company’s first day on the main market after upgrading from Nomu.

Fast fact: This brings the number of Tadawul-listed companies to 214, while the number of Nomu-Listed firms currently stands at 75, according to Argaam.

CORPORATE ACTIONS-

Nomu-listed Watani Steel will shutdown operations starting Friday, 15 December for a period of 20-25 days to perform scheduled maintenance, according to a Tadawul filing yesterday. This is not expected to have an effect on the company’s sales — it has inventory on hand to satisfy customer demand, having made the shutdown part of its 2024 business plan.

CALENDAR

DECEMBER

4-7 December (Monday-Thursday): FIABCI Global Leadership Summit, Riyadh.

5 December (Tuesday): Taxcom Middle East, Riyadh.

5-6 December (Tuesday-Wednesday): Education Investment Saudi, Riyadh.

6 December (Wednesday): Book-building process for MBC institutional investors wraps up.

6-7 December (Wednesday- Thursday): Collection and Recovery Middle East Summit, Riyadh.

12 December (Tuesday): Announcement of the final MBC share price.

13-16 December (Wednesday-Saturday): The 6th International Arabian Horse Show, Riyadh.

16 December (Saturday): end of Noor Riyadh show, segment “The Bright Side of the Desert Moon, Riyadh.

18-20 December (Monday-Wednesday): Smart Grid Conference, Riyadh.

19-20 December (Tuesday- Wednesday): Saudi Airport Exhibition, Riyadh.

19-21 December (Tuesday-Thursday): International Digital Signage Expo 2023, Riyadh.

2024

JANUARY

9-11 January (Tuesday-Thursday): Future Minerals Forum, Riyadh.

14-17 January (Sunday-Wednesday): The International Exhibition for construction and building materials (Saudi Projects), Jeddah.

28-31 January (Sunday-Wednesday): Saudi Franchise Expo 2024, Jeddah.

FEBRUARY

4-6 February (Sunday-Tuesday): SIMEC International Expo, Riyadh.

5-7 February (Monday-Wednesday): Saudi HORECA 2024, Jeddah.

12-14 February (Monday-Wednesday): The International Petroleum Technology Conference (IPTC), Riyadh.

22 February (Thursday): Founding Day (national holiday)

26-29 February (Monday-Thursday): Big 5 Construct Saudi, Riyadh.

26-29 February (Monday-Thursday): FM EXPO SAUDI, Riyadh.

26-29 February (Monday-Thursday): Stone and Service Saudi Arabia, Riyadh.

MARCH

2 March (Friday): end of Noor Riyadh show, segment “Refracted Identities, Shared Futures”, Riyadh.

4-6 March (Monday-Wednesday): International Conference on Sand and Dust Storms in the Arabian Peninsula, Riyadh.

4-7 March (Monday-Thursday): LEAP 2024, Riyadh.

11 March (Monday): Flag Day (national holiday)

Signposted to happen sometime in March:

Ramadan

APRIL

Signposted to happen sometime in April:

Eid Al-Fitr (national holiday)

MAY

19-21 May (Sunday-Tuesday): Saudi Energy Convention, Riyadh.

21-23 May (Tuesday-Thursday): The Saudi Food Show, Riyadh.

Signposted to happen sometime in May:

Global Trade Review (GTR): KSA
Saudi Energy Convention

JUNE

5 June (Wednesday): World Environment Day.

Signposted to happen sometime in June:

Eid Al-Adha (national holiday)

SEPTEMBER

11-12 September (Wednesday-Thursday): The Saudi Event Show, Riyadh.

23 September (Monday): National Day (national holiday)

DECEMBER

2-13 December (Monday-Friday): Conference of the Parties (COP16) to the United Nations Convention to Combat Desertification, Riyadh.

Signposted to happen sometime in 2024:

The AFC Champions League Elite

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