IMF’s Azour welcomes review of gigaprojects, says it is “natural”

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Flynas, cybersecurity authority among those hit by global CrowdStrike glitch

Good morning, everyone. We have a packed issue for you this morning, so we’re going to jump straight in:

Saudi companies, airports, and government agencies were among the untold dozens of institutions worldwide hit this weekend by what may be the world’s largest IT outage. The National Cybersecurity Authority, Flynas, and several domestic airports were among joined their global peers in facing technical and operational disruptions on Friday they said in separate statements posted on X (here, here and here).

Not impacted here at home: The Saudi Central Bank Sama, the Saudi Data and AI Authority, and the Human Resources and Social Development Ministry were spared from the global computer crash, according to separate posts on the social media platform (here, here and here).

Blue Screens Of Death for everyone: A routine software update pushed by global cybersecurity firm CrowdStrike to its Falcon Sensor software threw some 8.5 mn machines running Microsoft Windows into boot loops. Airlines and some other companies were particularly hard-hit: Microsoft’s Azure platform went down for some late on Thursday.

The irony: CrowdStrike bills itself as the fastest way for IT pros to detect threats to their infrastructure. It serves more than 29k major global companies and institutions, including more than half of the Fortune 1000.

Who was impacted: Many airports and airlines around the world grounded flights and did manual paperwork. Some broadcasters were off air, hospitals canceled procedures, and banking services were offline in many countries, Bloomberg reports. Emergency services were also hit in some countries.

The status now: Things are starting to unsnarl as technicians push out fixes, Reuters notes. Windows users who have been impacted have to reboot their machines and manually delete CrowdStrike’s botched update — a process that requires hands-on access to each device, according to Financial Times. It’s a process that could take days for businesses with large fleets of impacted devices and not enough IT staff, experts told FT.

Y2K redux: The tech failure is now being described as one of the biggest tech failures ever and is raising questions about the fragility of the world’s fundamental IT architecture. “This is basically what we were worried about with Y2K,” cybersecurity expert Troy Hunt wrote in an X post Friday, “except it’s actually happened this time.”

REGIONALLY- the failure impacted some of electronic systems in the UAE and had a limited impact on flight operations.

HAPPENING TODAY-

#1- The new Saudization rate for engineering comes into effect today, state news agency SPA reported. The regulation, which was announced in January, stipulates that private companies employing five or more engineers must have Saudi citizens account for at least 25% of their engineering headcount

Background: The Human Resources and Social Development Ministry first set in 2020 a 20% Saudization target for engineering professions.

#2- It’s a law week by Monsha’at: Small and medium enterprises regulator Monsha’at will hold a series of events in Riyadh, Madinah, Jeddah, and Al Khobar to raise awareness about regulations for small businesses, according to a statement. You can check out extra resources and workshops here.

WEATHER- It’s going to be hot. But you know that… Riyadh will see a daytime high of 46°C and nighttime low of 32°C today. It’s almost as hot in Makkah, where the mercury will peak at 45°C during the day before dropping to 33°C at night. Meanwhile, Jeddah, the coolest of the three, is looking at a high of 42°C and an overnight low of 31°C.

WATCH THIS SPACE-

#1- Nomu-listed snacks-maker Fesh Fash has pulled the plug on its transition to Tadawul’s main market, it said in a disclosure to Tadawul after falling short of liquidity requirements. It said it will reconsider a transition again after meeting requirements for the move.

Dig deeper? While the company did not provide further details, the checklist for a transition from Nomu to Tadawul includes being on the parallel market for two years and having an average market cap of SAR 200 mn in the last six months ahead of an upgrade to the main market among others.

Need more background? You can find all the requirements for making the move to the main market from Nomu here.

#2- The National Transport Safety Center is investigating a fire during the takeoff of a Cairo-bound Nile Air flight from the King Fahd International Airport in Dammam, it said in a statement on X. All 186 passengers and eight crew members on board the Airbus A320 were safely evacuated. The fire reportedly originated in the aircraft’s wheel system.

#3- The Human Resources and Social Development Ministry is reportedly investigating allegations that workers may have been mistreated by staff of e-commerce player Noon. The New York Times’ The Athletic has the story.

AND- The Financial Times has a long take on the Kingdom’s courting of foreign filmmakers.

DATA POINTS-

#1- Real estate brokerage law is already reaping fruit: The number of real estate transactions grew by 17% to 3.5 mn at a value of SAR 605 bn since the implementation of the real estate brokerage law in January of last year, Argaam reported, citing statements by Real Estate General Authority CEO Abdullah Al Hammad. Residential transactions accounted for nearly half of total real estate sales during the period, up 18% to 2.9 million at a total value of SAR 305 billion.

REFRESHER- The broker regulations cover licensing and training, advertising rules, brokerage contracts, and the recording of transactions. The regulations were released in July 2022 and came into effect in January 2023.

#2- Saudi chemical exports dropped 14% y-o-y to SAR 5.8 bn in April 2024, Argaam reported. The exports were also down 15% from March 2023. China was the top importer of Saudi chemical products in April, with imports totaling SAR 840 mn to account for 14.6% of total chemical exports. India followed with imports worth SAR 712.1 mn, while UAE came in third at SAR 495 mn. The Kingdom’s imports of chemicals were up 10% y-o-y in April to SAR 6 bn.

OIL WATCH-

Opec+ is likely to keep its oil output policy unchanged on Thursday, 1 August when its joint ministerial monitoring committee meets online, Reuters reported, citing three unnamed sources. One of the sources said the meeting would be a “pulse check” for the market after the oil cartel agreed to an extension of cuts at its last meeting in June.

In context- Opec+ kept in place last month current production cuts of 3.66 mn barrels per day (bbl / d) until the end of this September, before beginning to phase out the cuts of 2.2 mn bbl / d over the course of a year from October 2024 to September 2025.

SPORTS-

Pierre-Emerick Aubameyang has joined newly promoted side Al Qadsiah, with the Aramco-owned club tying down the former Arsenal, Dortmund, and Barcelona player to a contract that runs until 2026, according to a statement. Aubameyang is joining Al Qadsiah from Marseille after just one season with the French club. No details were provided on the transfer value or the player’s wage, but media reports have suggested that the Gabonese international signed with Al Qadsiah for a fee of EUR 9-10 mn with a salary of EUR 20 mn per season.

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THE BIG STORY ABROAD-

The big story this morning is unquestionably the global IT outage that’s been compared to the Y2K bug that worried IT pros a generation ago. We have the details above.

MEANWHILE- Calls for Joe Biden to bow out of the US presidential race continue to gather steam as the octogenarian candidate remains publicly defiant in the face of media and party skepticism. Leaks in and out of Washington — including reports that former president Barack Obama is now calling into question Biden’s ability to win in November — reflect the Democratic Party’s increasing concern with Biden’s candidacy.

What happens next? It’s anyone’s guess, but the New York Times suggests that:

Biden’s advisors wouldn’t want to give Benjamin Netanyahu the satisfaction of Biden dropping out before Netanyahu addresses the US Congress on Wednesday;
Some are looking at possible dates and venues for Biden to announce he’s not seeking a second term;
Party grandees including former House speaker Nancy Pelosi favor an open primary where more than one potential candidate can put themselves forward as potential candidates.

IN THE REGION- Israeli jets struck Houthi targets in Yemen and the International Court of Justice has ruled that Israel’s occupation of Palestinian territory is unlawful and that its actions and policies are “tantamount to the crime of apartheid," the court said in its latest non-binding opinion (pdf)

CIRCLE YOUR CALENDAR-

The Crawford vs Madrimov boxing showdown will take place on Saturday, 3 August at the Los Angeles BMO Stadium. The event is the highlight of the Los Angeles Riyadh Season Card which features five other bouts. You can check them out here.

Aramco is set to release its 1H 2024 results on Tuesday, 6 August, according to its website. You can tune into the audio webcast of its earnings call here. The oil giant’s net income dipped a bit more than 14% in 1Q 2024 to SAR 102.3 bn.

Cybersecurity training event SANS Riyadh Cyber Leaders August 2024 will run from Sunday, 18 August to Thursday, 22 August at the Hyatt Regency Riyadh Olaya.

The eight-week Esports World Cup runs until Sunday, 25 August Riyadh’s Boulevard City. The world’s top esports clubs are competing for a pool of USD 60 mn — the largest purse in esports.

The TotalEnergies CAF Super Cup Final 2024 between Egyptian rivals Al Ahly and Zamalek will be held in Riyadh on Friday, 27 September. The venue and kick-off time of the match will be announced at a later date.

This year’s edition of security-focused expo Intersec Saudi Arabia will run from Tuesday, 1 October to Thursday, 3 October at the Riyadh International Convention and Exhibition Center.

IMF’s Azour says a review of gigaprojects is both welcome and natural

A potential recaliberation of some of gigaprojects is getting a thumbs up from the IMF: The International Monetary Fund would welcome a downsizing or longer delivery time for some of the planned gigaprojects under Vision 2030, says Jihad Azour, the IMF’s chief for the Middle East and Central Asia. Azour was speaking on Bloomberg’s Horizons Middle East and Africa (watch, runtime: 7:13).

What he said: We are “almost at a midpoint in the Vision 2030,” Azour said, saying that “those recalibrations are part of the classical revision of any medium-term strategy.” He said the IMF “welcomed … that the authorities have looked at their investment program and recalibrated some of those.” The IMF said non-oil growth is being driven by increasing demand, the impact of structural reforms, and improving employment indicators, including a doubling of women’s participation in the economy and a drop in unemployment.

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BACKGROUND- A government committee led by Crown Prince and Prime Minister Mohammed bin Salman is reportedly wrapping up a review of gigaprojects with a view to trimming spending at some. This comes as officials continue to hammer the idea of preventing the economy from overheating on the back of its economic diversification push while also saying they’re willing to accept modest fiscal deficits as the price of pursuing long-term diversification.

In context: Azour was speaking after the IMF cut its forecast for Saudi economic growth to 1.7% this year, down 0.9 percentage points from its earlier forecast of 2.6% in April, as we reported last week.

Production cuts main culprit for IMF’s downgrade of Saudi’s GDP growth: Azour said in the Bloomberg interview that the primary reason the fund’s downgrade was the ongoing oil production cuts. “We had to revise technically the growth for the oil sector, and for the non-oil sector, I would say, the level of growth is still higher than the global growth. 3.7 percent is our expectation for the non-oil sector this year, and in the medium term, we expect the non-oil sector to grow at above 4 percent,” he said.

Watch this space? Azour’s remarks have been picked up by Arab News, the daily published by media giant SRMG, which has close ties to the government.

AND- Speaking of the economy… Economy Minister Faisal Alibrahim discussed the state of play during a meeting with IMF Managing Director Kristalina Georgieva in Washington, state news agency SPA reported. They discussed global and regional economic developments and cooperation prospects between the Kingdom and the Washington-based lender.

Aramco concludes a USD 6 bn int’l bond sale

Aramco closes first bond sale in three years, lining up USD 6 bn — USD 1 bn more than it had originally targeted. The state-owned oil giant has completed the sale of USD-denominated 10-year, 30-year and 40-year senior unsecured notes, it said in a press release. The three-part issuance, which saw it raise a total of USD 6 bn in proceeds, will be listed on the London Stock Exchange as part of Aramco’s global medium term note program.

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A strong comeback: The sale marks the oil giant’s return to the international debt market, ending a three-year break since it raised USD 6 bn in a three-tranche sukuk issuance back in 2021.

Strong investor appetite: The offering was more than 6x oversubscribed in comparison to the original target of a USD 5 bn offering, suggesting there was demand for north of USD 30 bn worth of bonds. Demand was primarily driven by “a diverse base of investment-grade focused institutional investors,” according to the press release.

REFRESHER- Orders for the three-tranche bond offering by investors topped USD 31.5 bn, luring in USD 11 bn for each of the 10-year tranche and the 30-year tranche, with the 40-year tranche drawing in over USD 9.5 bn in demand.

Yield + Maturity: The 10-year tranche will offer its holders an annual yield of 5.25%, that is at 105 basis points (bps) over US Treasuries. Meanwhile, the 30-year tranche carries a yield of 5.75% at a 145 bps premium, and the 40-year tranche a yield of 5.875% at a 155 bps premium.

What they said: “Our order book exceeded USD 33 bn at its peak, reflecting Aramco’s exceptional financial resilience and fortress balance sheet. Achieving a negative issue premium across all tranches is a testament to our unique credit proposition,” Aramco Executive Vice President for Finance and CFO Ziad Al-Murshed said.

ICYMI- The spreads narrowed from initial guidance of 140 bps over US Treasures for the 10-year tranche and 180 bps and 195 bps for the 30-year and 40-year tranches, reflecting strong investor appetite, according to IFR, Reuters reported earlier.

Where’s the money? Aramco will earmark the proceeds of the bonds for “general corporate purposes” and could include additional purposes in the final terms of the issuance, it said earlier. The proceeds could be used “to refinance existing borrowings and contribute to its investment program,” Bloomberg reported earlier.

IN CONTEXT- Saudi Arabia had sold over USD 33 bn worth of debt this year — topping China as the biggest issuer of international debt among emerging markets — to close its SAR 81 bn budget deficit from project spending. Recent debt sales include USD 5 bn worth of FCY-denominated sukuk with three-, six-, and 10-year tranches in May, and a USD 12 bn USD-denominated sovereign bond sale back in January.

ADVISORS- Citi, Goldman Sachs International, HSBC, JP Morgan, Morgan Stanley, and SNB Capital were active joint bookrunners. Passive joint bookrunners for the issuance were Abu Dhabi Commercial Bank, Anb capital, Bank of China, BofA Securities, BSF Capital, Emirates NBD Capital Limited, First Abu Dhabi Bank, GIB Capital, Mizuho, Mufg, Natixix, Riyad Capital, SMBC Nikko, and Standard Chartered Bank.

Nearly half of fund managers are bullish Saudi equities, survey finds

Investment fund managers’ outlook on the Saudi market grew more optimistic in 2Q 2024 with bullish views rising to 47% from 41% in the preceding quarter, Argaam reported, citing a survey of fund managers by SNB Capital. Meanwhile, neutral views by investment fund managers for the quarter decreased to 44% from 48% while bearish views decreased to 9% from 11%.

Some 54% of managers plan to increase their exposure to Saudi equities, while 38% expect their exposure to remain “broadly unchanged.” Managers are cutting their allocation to cash so they can load up on equities, SNB Capital noted, saying that 85% of respondents currently have cash at less than 10% of assets under management.

Driving appetite: The perception of that the market is undervalued, a sentiment held by 20% in 2Q up and just 11% in the preceding quarter.

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Market drivers: Fund managers expect interest rates and inflation to remain key market drivers, with 85% of those surveyed forecasting one rate cut this year. Oil prices are projected to stay between USD 80-90 per barrel in line with current levels, according to the survey.

Fund managers see the banking sector as a top performer this year, with the ins. sector next in line. The Kingdom’s tourism industry is also viewed with optimism on the back of ongoing efforts by the government to boost tourist arrivals. Managers are less optimistic about healthcare than the previous quarter, but still expect it to be a source of IPO flow. The majority of fund managers see the petrochemicals sector as the weakest-performing sector this year.

PIF offers GBP 1 mn to up stake in Selfridges to 50%

The Public Investment Fund (PIF) has reportedly offered up to GBP 1 mn to take an additional 40% stake of embattled UK department store Selfridges from Austria outfit Signa, Bloomberg reported yesterday, citing documents it says it has seen. The sovereign fund already owns a 10% stake in Selfridges. The remaining 50% of Selfridges is owned by Thai multinational retail conglomerate Central Group.

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Ironing out the details: The PIF has offered to buy the remaining stake from Signa’s flagship property unit, the documents showed, with the fund currently undergoing due diligence with advisors. It would also lower some of its claims against Signa as part of the potential agreement, according to the document.

Insolvency: Signa, which was founded by self-made bn’aire Rene Benko, declared insolvency along with parts of the property empire last year. Benko himself filed for personal insolvency at an Austrian court earlier this year.

We knew a play for Selfridges was ongoing: Central Group was reportedly in talks with PIF as the Thai outfit looked to boost its Selfridges stake.

Acwa Power offloads a 35% stake in 2 wind projects in Uzbekistan

Acwa Power sells down its stake in Uzbek projects: Renewables giant Acwa Power has offloaded a 35% stake in its Bash and Dzhankeldy 1 GW wind projects in Uzbekistan to China Southern Power Grid ’s global investment arm China Southern Power Grid International for SAR 596 mn (c. USD 159 mn), Acwa said in a statement. The total investment ticket for both projects — the 500 MW Dzhankeldy wind farm and the 500 MW bash wind plant — is around USD 1.3 bn.

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Acwa has bigger wind projects in the country: The company signed a SAR 18.2 bn (c. USD 4.9 bn) power purchase agreement with the National Electric Grid of Uzbekistan (Negu) to develop a new 5 GW wind farm — set to become the largest in Central Asia — in May. It also signed a SAR 985 mn (c. 262.6 mn) power purchase agreement to develop the 200 MW Nukus 2 wind project in April, and a USD 2.4 bn agreement with the National Electric Grid of Uzbekistan for a 1.5 GW wind energy farm in January 2024. Acwa has a total of 15 projects in Uzbekistan for around USD 13.9 bn.

Hydrogen is on the list too: Acwa also began construction on its green hydrogen production facility — expected to be commissioned in December 2024 — in Tashkent last year. The plant will be connected to an existing ammonia production plant in Tashkent and will generate 3k tons of green hydrogen annually during its initial production phase.

Home ownership is on the rise in Saudi Arabia, beating a target set by the government for 2023

The percentage of Saudi households that own a home in the Kingdom hit 63.75% last year, beating the government’s target of 63% for the year, according to the Housing Program’s annual report (pdf). The share of Saudi families owning homes is up 16.7 percentage points from 2016 — the year that marks the start of the Kingdom’s economic diversification strategy.

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Bringing it closer to 2030 targets: This puts homeownership closer to the 70% target for 2030, according to the report.

Some snapshots:

Over 96k families were provided with financial assistance to buy homes under the government’s housing initiative Sakani;
Over 20k families benefited from ownership options under the developmental housing program;
Some 10.9k signed contracts for off-plan site sales;
Refinancing in real estate financing portfolios has reached SAR 36.5 bn by the end of 2023 across 87 portfolios;

How the gov’t is doing it: The government has rolled out several initiatives, including the Housing Ministry’s Sakani program, zero-interest mortgages from the Real Estate Development Fund, and a lower tax of 5% on real estate sales, and a 2.5% tax on undeveloped land. PIF-owned Saudi Real Estate Refinance Company has acquired mortgages worth c. SAR 26.7 bn, representing 5% of local banks’ mortgage lending book.

Lots of pressure on developers: Developers need to ramp up supply to meet growing demand, as the country’s population is on track to grow, with the share of expats rising to 50% from a current 42% by 2030, according to a recent report by S&P Global. Riyadh is poised to see the fastest population growth, putting more pressure on the capital’s already-tight real estate market, where “new supply will likely not meet the incremental demand.”

Housing Ministry rolls out new residential and commercial building regulations

The Municipal, Rural Affairs, and Housing Ministry has rolled out updated residential construction regulations for villas, residential, commercial, and administrative buildings, according to its Residential Building Construction Requirements Regulation (pdf).

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An overview: The guidelines cover general rules such as compliance with local regulations, parking standards, building facades, and setbacks — as well as specific guidelines for each type of residential and commercial buildings. They also mandate hiring only ministry-accredited engineers and contractors to carry out construction work.

Bigger villas? The regulations allow for the building of additional basement floors for residential villas, increasing permissible building area for their ground and first floor to 75% from an earlier 70% or total land area. Floors in villas could also be divided into two separate residential units provided that a parking space is available for each unit.

A focus on parking space: Each residential villa spanning an area of 400 sqm or less must provide a parking space within the residence, while bigger villas must provide two parking spaces. Multi-story residential buildings would also be allowed to use the ground floor for parking spaces without counting that in the total number of permitted floors.

BACKGROUND- The guidelines dovetail with the draft regulations on building code violations introduced by the government earlier this year. It aims to enforce building standards by categorizing violations and imposing penalties — such as fines or suspensions — on those who fail to adhere to the building code.

Al Ashghal Al Moysra’s Nomu IPO was 4.3x covered

Contractor Al Ashghal Al Moysra’s Nomu offering was 4.3x covered, according to a filing to Tadawul. The company has priced its shares at the top of the range for SAR 50 a piece, which could see it raise up to SAR 24 mn in IPO proceeds, and give it a post-listing market cap of SAR 120 mn, according to our calculations.The subscription period for qualified investors wrapped up last week.

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What’s next? The final allocation of shares is set to take place today.

REFRESHER- The company is taking a 20% stake to market in a secondary offering. Proceeds from the sale will go directly to the selling shareholders after some SAR 3.2 mn are used to cover IPO-related expenses.

ADVISORS- Yaqeen Capital is serving as the financial advisor and lead manager, while Al Rajhi Capital, Riyad Capital, Alinma Investment, AlJazira Capital, Alawwal Invest, Derayah Financial, Saudi Fransi Capital, SNB Capital, Alistithmar Capital, Albilad Capital, ANB Capital are all receiving agents.

Allianz Saudi Fransi Cooperative Ins. appoints Abdulrahman Aldokheel as CEO

The board of Tadawul-listed Allianz Saudi Fransi Cooperative Ins. has appointed Abdulrahman Aldokheel (Linkedin) as its CEO effective today, according to a disclosure to Tadawul. The appointment follows the resignation of outgoing CEO Anuj Agarwal (Linkedin) earlier this month due to “personal reasons,” ending a three-year run in the position.

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Aldokheel is an industry veteran who has previously held posts at MedGulf Saudi Arabia, Buruj Cooperative Ins., and Tawuniya.

Saudia places big flying taxi order for private aviation arm

AVIATION-

#1- Saudia makes largest flying taxis order in the region: National carrier Saudia Group formalized an agreement with Germany-based air taxi developer Lilium to purchase up to 100 flying air taxis, according to statements by Saudia and Lilium (here and here). It signed a binding sales agreement for 50 aircraft with options for an additional 50. It’s the largest reported firm order yet by an airline that plans to add the aircraft to its fleet, according to the statement. The framework agreement was signed in October 2022. No financial details were disclosed but Lilium Co-Founder Daniel Wiegand told Reuters that the value of the whole order was estimated at USD 700 mn.

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Putting the flying air taxis to good use: The eVTOL jets will mainly be used to transport Hajj and Umrah pilgrims and travelers to sports and entertainment events in Riyadh, according to the statement. They will also be used to “explore hard-to-reach” tourist destinations across the Kingdom among others.

What’s next: Saudia said it expects to receive the first jets in 2026 with the air shuttle’s operations managed and run by its subsidiary Saudia Private, according to the statement. Its chief marketing officer Khaled Tash told Reuters that the first 50 planes are set to be delivered by 2029.

#2- Indian budget carrier Akasa Air will begin operating 12 direct flights weekly connecting Jeddah with Mumbai starting today, according to a statement. It marked its inaugural flight to Jeddah from Mumbai last week and launched two weekly direct flights connecting Jeddah with Ahmedabad yesterday. Saudi is Akasa Air’s second international destination after Doha earlier this year.

M&A WATCH-

Jadwa Investment has taken home a 60% stake in homegrown restaurant chain Tikkaway, marking its first acquisition in the food and beverage sector here, according to a statement. The transaction was executed by the Riyadh-based investment firm’s Jadwa Food and Beverage Opportunities Fund, the statement read, without disclosing details about its value.

By the numbers: Tikkaway currently has 20 branches in Riyadh, Jeddah, Dammam and others with plans to double its branches to 40 across the Kingdom in the upcoming two years.

Been there, done that: This is Jadwa Investment’s second acquisition in the food and beverage sector after it acquired late last year Dubai-based food and beverage operator Blackspoon Group, owner of the Allo Beirut, an “all day Lebanese diner” chain of restaurants, among others. Blackspoon has 10 branches and three brands, including its flagship Lebanese restaurant.

REAL ESTATE-

#1- Another Trump Tower in the Gulf: Dar Global, the international arm of Dar Al Arkan, signed an agreement with the Trump Organization to build a Trump Tower in Dubai, according to a statement. The tower’s design and location will be unveiled later this year, the statement read. It will now be owned or sold by the Trump Organization, but the name and mark will be used by Dar Al Arkan under license.

Background- This is the Trump Organization’s third venture in the region with Dar after the two companies signed an agreement to build a Trump Tower in Jeddah earlier this month and unveiled a USD 500 mn Trump International hotel project in Oman last month.

#2- More real estate projects with China: The National Housing Company signed an agreement with Chinese state-owned construction company China State Construction Engineering Corp (Cscec) to build 20k housing units across the Kingdom, it said in a post on X. No further details were provided.

Not Cscec’s most recent venture here: Earlier this month, a consortium comprising local contractor El Seif Engineering Contracting and Cscec were awarded a SAR 7.8 bn contract to develop a mixed-use district in the north of Diriyah. Construction work is set to begin starting Q3 this year.

WASTEWATER MANAGEMENT-

Marafiq joins Miahona, Besix to build water treatment project in Riyadh: Tadawul-listed Power and Utility Company for Jubail and Yanbu (Marafiq) is joining a consortium that includes Miahona and Besix to bulid a SAR 1.5 bn independent sewage treatment plant in Al Haer in Riyadh, according to two separate disclosures to Tadawul (here and here). Marafiq will take a 35% stake in the project, while Miahona is set to retain a 45% holding.

Marafiq’s shareholders include the PIF, the Royal Commission for Jubail and Yanbu, Sabic, and Saudi Aramco Power Company.

What’s next: The project is expected to hit financial close in Q3 2024 with operations expected to start in Q1 2027, according to Marafiq.

TRANSPORT-

The Saudi Public Transport Company (Saptco) has been awarded a SAR 93 mn contract to operate the public transport network in Al Ahsa, it said in a disclosure to Tadawul. Saptco will operate the network connecting the cities of Al Mubarraz, Al Hofuf, Al Jafr and Al Amran in the governorate for five years.

E-PAYMENTS-

A partnership with Saudi Awwal Bank will see China-based UnionPay to grow its footprint here in Saudi. The agreement will expand coverage of payments via UPI cards across stores, ATMs and online shopping websites. State-owned UnionPay is China’s largest provider of bank card services.

REGIONAL HQ-

British engineering and development consultancy Mott Macdonald has obtained a regional headquarters license from the Investment Ministry, according to a statement. It secured the license after opening its new office in Riyadh in September, allowing it to “expand its business by continuing to engage directly with government entities” in Saudi. It is among the first 40 British firms who have obtained such licenses from the ministry, according to the statement.

BACKGROUND- Earlier this year, the government rolled out tax incentives for foreign companies that relocate their regional headquarters to the Kingdom — and state institutions are helping with the push. The incentives are part of a plan that is a cornerstone of Crown Prince and Prime Minister Mohammed bin Salman’s drive to build a diversified, globally significant non-oil economy, and has been in the works since February 2021. Companies that don’t declare Saudi their regional HQ run the risk of losing out on government contracts.

SPACE-

PIF-owned Neo Space Group (NSG) has obtained a permit to offer Earth observation platform services in the Kingdom, according to a statement from the Communications, Space and Technology Commission. The permit awarded to NSG will allow it to establish and operate an electronic platform which it will use to collect and process earth observation data, including monitoring natural terrain, environmental pollution and weather.

About the company: The new commercial satellite and space company was launched in May with a focus on investments in localization, technology, start-ups, and knowledge in the space and satellite sector in the Kingdom.

Akasa Air ALSO ON OUR RADAR Arabian International Healthcare Holding (Tibbiyah) Besix China State Construction Engineering Corp (Cscec) Dar Al Arkan Dar Global eVTOL Jadwa Investment Lilium Marafiq Miahona Mott Macdonald National Housing Company Neo Space Group Nupco Saudi Public Transport (Saptco) Saudia Tikkaway Trump Organization Trump Tower

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PLANET FINANCE

UAE’s Masdar raised USD 1 bn through the the region’s latest green bond issuance

UAE state-owned renewable energy developer Masdar has raised USD 1 bn in its second green bond issuance: The issuance consisted of two tranches worth USD 500 mn each, with five- and 10-year tenors, carrying yields of 4.875% and 5.25%, according to a press release(pdf). The energy giant raised USD 750 mn last year in its debut green bond sale, which it listed on both the London Stock Exchange and the ADX.

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We knew this was in the works: Masdar said in April that it was planning to take a green bond issuance worth between USD 750 mn and 1 bn to market this year to secure funding for its renewable projects in Central Asia, specifically in Uzbekistan and Azerbaijan. This comes as part of a USD 3 bn bonds program aimed at funding clean energy initiatives in the UAE and globally.

The issuance saw strong demand, booking USD 4.6 bn in orders with a 4.6x oversubscription. Some 70% of the allocation went to international investors with the balance going to MENA investors.

ADVISORS: Our friends at HSBC, along with Abu Dhabi Commercial Bank, Citigroup, Credit Agricole, First Abu Dhabi Bank (FAB), Mitsubishi UFJ Financial Group, Natixis, and Standard Chartered Bank acted as joint lead managers and bookrunners.

BACKGROUND- The regional sustainable debt market has been on a tear this year: UAE’s Sharjah government issued EUR 500 mn in sustainability bonds, while Kuwait’s Warba Bank issued USD 500 mn green sukuk, and Qatar’s USD 2.5 green bond attracted USD 14 bn in orders. Al Rajhi also raised USD 1 bn from a 5-year sustainable sukuk sale in March. Meanwhile, Qatar’s QIIB listed USD 500 mn sustainable sukuk issuance on the London Stock Exchange in January, and the UAE sovereign fund Mubadala listed USD 4.5 bn and AED 750 mn green bonds on the ADX.

TASI	12,188	+0.3% (YTD: +1.9%)
MSCI Tadawul 30	1,527	+0.4% (YTD: -1.5%)
NomuC	25,702	-0.7% (YTD: +4.8%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	6.0% repo	5.5% reverse repo
EGX30	28,653	+1.1% (YTD: +15.1%)
ADX	9,246	+0.2% (YTD: -3.5%)
DFM	4,181	+0.3% (YTD: +3.0%)
S&P 500	5,505	-0.7% (YTD: +15.4%)
FTSE 100	8,156	-0.6% (YTD: +5.5%)
Euro Stoxx 50	4,827	-0.9% (YTD: +6.8%)
Brent crude	USD 82.63	-2.9%
Natural gas (Nymex)	USD 2.13	+0.1%
Gold	USD 2,447	-2.3%
BTC	USD 67,061	+0.2% (YTD: +59.2%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.3% at Thursday’s close on turnover of SAR 8.8 bn. The index is up 1.9% YTD.

In the green: Smasco (+6.3%), Saptco (+5.8%) and Teco (+5.1%).

In the red: AlBaha (-7.7%), Al Sagr Ins. (-6.2%) and Leejam Sports (-3.1%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.7% at Thursday’s close on turnover of SAR 39.6 mn. The index is up 4.8% YTD.

In the green: Munawla (+10.1%), Knowledge Net (+7.4%) and Ladun (+6.7%).

In the red: Fesh Fash (-9.5%), Future Care (-6.6%) and Bena (-5.7%)

CALENDAR

JULY

4 July-25 August: (Thursday-Sunday): Esports World Cup, Boulevard Riyadh City, Riyadh.

24 July (Wednesday): Stc shareholders to vote on PIF acquisition of Tawal.

21-30 July (Sunday-Tuesday): International Chemistry Olympiad, King Saud University, Riyadh.

AUGUST

3 August (Saturday): Riyadh Season Card featuring Terence Crawford vs. Israil Madrimov, Los Angeles BMO Stadium.

4 August (Sunday): Last day to apply to the Digital Government Authority (DGA) awards.

12-15 August (Monday-Thursday): The Saudi Food Expo, Riyadh.

18 August (Sunday): New academic year begins.

18-22 August (Sunday-Thursday): SANS Riyadh Cyber Leaders August 2024, Hyatt Regency Riyadh Olaya.

27-29 August (Tuesday-Thursday): Saudi Fashiontex Expo, Riyadh.

SEPTEMBER

2-4 September (Monday-Wednesday): Saudi Warehousing & Logistics Expo, Riyadh.

2-4 September (Monday-Wednesday): Saudi Wood Expo, Riyadh.

3-5 September (Tuesday-Thursday): 24 Fintech, Front Exhibition & Conference Center, Riyadh.

9-11 September (Monday-Wednesday): International Manufacturing Congress, Riyadh.

10 September (Tuesday): Saudi Arabia Investors Forum, Riyadh.

10-11 September (Tuesday-Wednesday): SkyMove MENA, Riyadh.

10-12 September (Tuesday-Thursday): Saudi Sports Show, Riyadh.

10-12 September (Tuesday-Thursday): Global AI Summit, Riyadh.

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

16-19 September (Monday-Thursday): Foodex Saudi, Riyadh.

17-19 September (Tuesday-Thursday): EV Auto Show, Riyadh.

17-19 September (Tuesday-Thursday): Hotel & Hospitality Expo, Front Exhibition & Conference Center, Riyadh.

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam.

18-19 September (Wednesday-Thursday): IDC Saudi Arabia CIO Summit 2024, Riyadh.

24-26 September (Tuesday-Thursday) Saudi Infrastructure Expo, Riyadh International Convention and Exhibition Center, Riyadh.

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

27 September (Friday): CAF Super Cup Final 2024, Riyadh.

29 September (Sunday) - 1 October (Tuesday): Jeddah Construct Expo, Jeddah.

OCTOBER

1-3 October (Tuesday-Thursday): Intersec Saudi Arabia 2024, Riyadh.

5-7 October (Saturday-Monday): Middle East Education & Training Exhibition 2024, Jeddah.

15-16 October (Tuesday-Wednesday): Solar & Storage Live KSA, Riyadh.

16-17 October (Monday-Tuesday): Global Airport & Aviation Forum, Jeddah.

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh.

21-22 October (Monday-Tuesday): Aussie Expo, King Abdullah Financial District Conference Center, Riyadh.

29-31 October (Tuesday-Thursday): Future Investment Initiative Conference, Riyadh.

31 October (Thursday): No-visa travel for Saudis to Montenegro on charter flights expires.

NOVEMBER

2-9 November (Saturday- Saturday): WTA Finals, Riyadh.

4-7 November (Monday-Thursday): Saudi Build, Riyadh.

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

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh.

11-14 November (Monday-Thursday): Cityscape Global, Riyadh.

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Dammam.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam.

25-27 November (Monday-Wednesday): World Investment Conference, Riyadh.

26-28 November (Tuesday-Thursday): Future Power Expo, Riyadh.

DECEMBER

1 December (Sunday): Opec+ to meet.

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh.

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

11 December (Wednesday): FIFA Congress, which will decide the hosting countries for the FIFA World Cup 2030 and 2034

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

Signposted to happen sometime in 2024:

The AFC Champions League Elite

2025

JANUARY 2025

28-29 January (Tuesday-Wednesday): Sustainability Forum Middle East, Riyadh.

FEBRUARY 2025

10-13 February (Monday-Thursday): Leap 2025, the Kingdom’s premier tech investment conference.

14-15 February (Friday-Saturday): Formula E, Diriyah.

JUNE 2025

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

2026

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

2027

The World Water Forum takes place in Riyadh.

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