Is Aramco eyeing a USD 10 bn share sale?

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Oil Ministry’s strategy to focus on price management in 2024-2025, but its long-term outlook on demand is unchanged -report

Good morning, wonderful people, and happy almost-weekend.It’s a busy morning for business news, from word that Aramco could be mulling another blockbuster share sale to a USD 8 bn Neom housing contract, and insight into the minds of Saudi shoppers and homebuyers.

Let’s jump right in.

SMART POLICY- The Oil Ministry’s priority for 2024 and 2025 will be price management, Reuters writes a day after Aramco said it would cap its maximum sustained production capacity at 12 mn barrels of oil per day (about 1 mn bpd below the target toward which it had been working since 2020).

But that doesn’t mean that the ministry’s long-term view on oil demand has changed. Instead, the decision to cap investment in production capacity reflects a view by policymakers that the current “vast spare capacity was enough to supply markets during crises and further investments in new fields would make no economic sense.”

In context: The new maximum capacity target is 12 mn bpd — and we’re currently pumping about 9 mn.

SOUND SMART- Cabinet members including Finance Minister Mohamed Al Jadaan have for months now flagged that they’re pacing out investmentin some high-profile megaprojects, as we’ve previously reported. There’s no backing away from critical investments, and we’ll run modest deficits as necessary, but officials have no interest in digging a particularly large hole in the budget for the sake of a couple of years.

AND- A separate Reuters poll of more than three dozen analysts sees oil prices staying flat this year. OPEC+ production cuts and tensions in the Red Sea will prop-up pricing, as will turmoil in Libya that has taken production capacity off the board. On the other hand, the International Energy Agency sees total supply rising this year thanks to the US shale industry, Canada, Brazil and Guyana.

OPEC’s production cuts are now registering: Total output fell 410k bpd to 23.3 mn in January, the biggest dip since July.

WATCH THIS SPACE- Aramco could raise the price of its flagship Arab Light crude for Asian clients next month as market fundamentals recover despite continuing tensions in the Red Sea, Reuters writes after polling traders.

MEANWHILE- Get ready for weather over the coming 48 hours. The national weather center is warning (pdf) that we can expect blowing dust and some rainfall in Riyadh today, snowfall in Tabuk and Al Jouf, and moderately heavy winds in Jeddah. Dammam, meanwhile, will escape with scattered clouds.

Riyadh: 24°C daytime / 12°C overnight
Jeddah: 24°C daytime / 17°C overnight
Dammam: 24°C daytime / 15°C overnight

FOREIGN POLICY-

#1- Are we or aren’t we members of the Brics? South African Foreign Minister Naledi Pandor says Saudi, Iran, Ethiopia, Egypt and the UAE are now full members of the alliance, Bloomberg reported yesterday. Argentina rejected the invitation to join the bloc, Pandor said.

But, but, but… Officials in Riyadh said as recently as two weeks ago that it wasn’t a sure thing that the Kingdom would join the alliance, noting that the 1 January date for accession was not a deadline. No Saudi official has publicly commented in Pandor’s remarks as of dispatch time this morning.

#2- Riyadh will play host to the United Nations Convention to Combat Desertification (UNCCD) COP16 from 2-13 December, a statement by the UNCCD read yesterday. The event is set to be the largest-ever meeting of the UNCCD’s 197 members and the first in the Middle East. COP16 will focus on “mobilizing governments, businesses and communities worldwide to accelerate action on land restoration and drought resilience as a cornerstone of food, water and energy security,” the statement read.

DATA POINTS-

#1- Net inflows of foreign direct investment into Saudi dropped 10% q-o-q in 3Q 2023 to SAR 11 bn, data from the General Authority for Statistics showed yesterday. Total FDI inflows fell 14.4% q-o-q in Q3, while total outflows of FDI were down 22.5% q-o-q to SAR 5 bn.

SOUND SMART- Yesterday’s data dump is the first time Gastat has released FDI numbers since it moved to a new methodology for FDI calculation back in October. The approach, approved by the IMF, takes into account the standards of the Washington-based lender’s balance of payments manual. It will pave the way for “investors to make investment decisions based on reliable results that support decision-makers and policymakers,” according to officials.

#2- Saudi-based issuers topped the GCC bond and sukuk market in 2023, raising USD 52.5 bn in 69 issuances, a report by the Kuwait Financial Center (Markaz). Issuers in the Kingdom accounted for more than 55% of total debt raised in the GCC last year.

#3-The General Authority for Competition (GAC) has issued a non-objection on 13 “economic concentration requests” since the beginning of the year, M&A Unit Head Talal Alhogail told Asharq News in an interview (watch,runtime: 3:00). Most were for manufacturers looking to go ahead with mergers or acquisitions.

Another 20 M&As are now under review, Alhogail added, in sectors including pharma, steel, and cement.

Some color: Alhogail sees foreign appetite for acquisitions in fashion and healthcare (hospitals and pharmacies).

WHISPERS-

#4- PIF-backed jet lessor AviLease will “slow its growth” this year as it seeks a safe approach to acquisitions after its USD 3.6 bn acquisition of Standard and Chartered’s aviation finance leasing business in 2022, Reuters reported yesterday, citing statements by CEO Ted O’Byrne. “We’re not trying to grow for the sake of growing. This year we expect to, I won’t say take a pause, but slow the growth, the glide path, so that we can consolidate the operation,” he told an aviation forum in Dublin.

SPORTS-

#1- Coach Roberto Mancini in hot water: Saudi Football Federation head Yasser Al Misehal said coach Roberto Mancini leaving the pitch before the end of a penalty shootout in the Asian Cup was “completely unacceptable,” according to local media. His statements come as Mancini apologized for his exit, claiming that he thought “it was finished.” The Green Falcons exited the tourney after losing 2-4 to South Korea, as we reported yesterday.

#2- Football GOATs and rivals Lionel Messi and Cristiano Ronaldo will face off on the same pitch today when Inter Miami meets Al Nassr in the Riyadh Season Cup at 9pm KSA. The clash has seen ticket prices for platinum seating soar to USD 11.2k, according to Al Arabiya. However, fans can still catch the action without breaking the bank with regular ticket prices starting at USD 200.

#3- The national cricket team is in Thailandto compete in the cricket ACC T20 Men’s Challenger Cup today where it will play against Cambodia at 4:30am KSA. They will also play Bhutan and Indonesia as they look to secure a spot in the ACC T20 Men Premier Cup in Oman.

THE BIG STORY ABROAD-

Two big stories are vying for your attention this morning, one of them in our neighborhood, and one in the US of A.

#1- Is Egypt about to devalue its currency? Speculation is rampant in Cairo that the Sisi administration is closing in on a much larger financing agreement with the International Monetary Fund, giving it as USD 9 bn or more in funding over a multi-year period in return for a commitment to reforms including devaluing (or floating) its embattled currency.

Egyptian shares closed sharply down yesterday as traders “adopted a ‘sell the fact’ mood, with equities being sold off as rumors about an impending pound depreciation intensify,” Bloomberg writes, citing Dubai-based Emre Akcakmak, a portfolio manager at East Capital International.

EnterpriseAM Egypt has reported that an IMF delegation in Cairo has extended its stay until today in the hope of reaching a staff-level agreement. The news comes as Egypt’s central bank moved to sop up excess local-currency liquidity in the market amid long lines at banks, reminding financial institutions yesterday of longstanding limits on cash withdrawals for both companies and individuals.

#2- The US Federal Reserve has left rates unchanged — and signaled that a rate cut in March is unlikely. It’s the fourth meeting in a row to see the Fed leave rates at a nearly 23-year high of 5.25%-5.50%. “Based on the meeting today, I would tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting,” Fed boss Jay Powell said at a presser after the meeting.

SAMA and the Central Bank of the UAE, which maintain pegs to the USD,have both left their benchmark rates unchanged.

The story is on every front page this morning: Reuters | FT | CNBC | WSJ | Associated Press | NYT | Bloomberg.

#3- On the issue of regional tensions and the Red Sea:

Iran has threatened a “decisive response” if the US strikes its “territory, or its interests or citizens abroad,” Iran’s UN Ambassador Amir Saeid Iravani said, according to Iranian state media. The statement came as the US Navy launched another attack against Houthi infrastructure in Yemen.
The European Union is set to send ships into the Red Sea by mid-February, Reuters writes, in a bid to help deter Houthi attacks on shipping. EU forces will not participate in attacks on Houthi positions, the bloc’s foreign policy chief added.

MORNING MUST READ-

It hurts — physically and psychically — to make Tom Friedman a Morning Must Read, but… The New York Times columnist has articulated what he sees as a three-pronged “Biden Doctrine” that he believes will shortly become the core of American foreign policy toward our part of the world.

Why you should care: Friedman is now seen in Western policymaking circles as relevant in a way that he hasn’t been in more than two decades, thanks to his columns in the wake of the Hamas attack on Israel and the latter’s invasion of Gaza.

Based on his reporting, Friedman thinks the three points of the so-called Biden Doctrine will be:

Aggressively contain Iran, including “robust military retaliation against Iran’s proxies and agents in the region” for stepping out of line.
Create a Palestinian state: “An unprecedented US diplomatic initiative to promote a [demilitarized] Palestinian state — NOW” is in the works, he thinks.
“A vastly expanded US security alliance with Saudi Arabia, which would also involve Saudi normalization of relations with Israel,” would be the capstone.

READ:A Biden Doctrine for the Middle East is forming. And it’s big.

CIRCLE YOUR CALENDAR-

Filipino exporters are coming to town next month: A business-matching tour will kick off on Saturday, 10 February, where a group of Filipino exporters of food, beverage and personal care products will tour Riyadh, Jeddah, and Dammam to market their businesses, Arab News reports.

The AlUla Tour 2024 will wrap up on 3 February.

In the mood for some Picasso? Riyadh will host the international interactive art exhibition Imagine Picasso starting Saturday, 3 February, and running for one month. The exhibition will feature projections of 200 of Pablo Picasso’s most famous works, pulled from the collections of museums around the world.

The PIF Private Sector Forum takes place in Riyadh on Tuesday, 6 February to Wednesday, 7 February, the PIF said on Linkedin. The event will bring together the fund, portfolio companies, private sector and others to help advance economic growth.

The Hail Toyota International Rally which will kick off on 8 February and wrap up on 10 February. You have until Saturday, 27 January to register.

TheSaudi Capital Market Forum will kick off on Monday, 19 February and wrap up the next day.

Riyadh will host the International Conference on Sand and Dust Storms in the ArabianPeninsulafrom Monday, 4 March to Wednesday, 6 March. The conference will address regional challenges caused by sand and dust storms and discuss monitoring systems, mitigation strategies, economic and infrastructural impacts, and more.

Tickets are on sale for the 2024 Saudi Arabian Grand Prix, scheduled for Jeddah from 7-9 March.

Riyadh will host a World Economic Forum special meeting on 28-29 April.

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

Aramco could float more shares on Tadawul in a secondary offering

Aramco could pull the trigger this month on what would again be one of the world’s largest-ever share sales as the oil giant looks to revive plans to sell shares in a secondary offering, Bloomberg reports.

The details: Bankers working on the potential transaction are reportedly looking to raise at least SAR 40 bn (USD 10 bn) in proceeds from the potential follow-on offering on the local exchange, the business information service reports, citing unnamed sources it says are familiar with the matter.

What we don’t know: The size of the stake it intends to float, a timeline for the potential transaction, who’s advising, whether the sale will be open to retail investors…

Our math: Aramco would have to float 1.3 bn shares (or a bit more than 0.5% of the company) to raise SAR 40 bn at yesterday’s closing share price. Aramco shares closed the day down 2.2% at SAR 30.60 yesterday.

BACKGROUND- The idea of selling more shares first surfaced in 2021, when CrownPrince and Prime Minister Mohammed bin Salman said the government would sell more shares in the oil giant, with proceeds earmarked for the Public Investment Fund. Aramco raised USD 29.4 bn on Tadawul in 2019 in what remains the biggest IPO in history.

Uh, Enterprise? What’s a “secondary offering”? A primary offering of shares is when a company’s shareholders agree to create new shares and sell them. In that case, the proceeds from the sale go to the company to use as it sees fit — usually for growth. A secondary sale is when one or more existing shareholders decide to sell shares they already hold. In that case, cash proceeds usually go into the selling shareholder’s pocket unless they agree specifically to reinject a portion of the capital into the company.

The 2019 IPO in a nutshell: The world’s largest oil company floated a 1.5% stake for a top of the range price of SAR 32 a piece on Tadawul in December 2019, raising USD 25.6 bn before exercising its “greenshoe option” for an over-allotment of shares that earned the company USD 29.4 bn in total proceeds in January 2020. The transaction valued the company atUSD 1.87 tn, after selling a total of 3.45 bn shares.

KPIs for 3Q 2023: The oil giant’s bottom line rose 27.5% y-o-y to SAR 354.5 bn in 9M 2023, and 23% y-o-y to SAR 122.2 bn in 3Q 2023, according to the company’s latest earnings release (pdf). The company has also earmarked SAR 73.2 bn to base dividends payouts in 3Q 2023.

Ownership structure: The government is currently majority shareholder and the only substantial shareholder of the oil giant with a 90.2% stake, while 1.5% is floated on the market and the remaining shares are held by non-substantial holders (those who own less than 5% each). Foreign shareholders have in their hands just 0.4% of the company’s shares.

Aster DM Healthcare eyes expansion in Saudi, dual listing on Tadawul

Dubai-based, BSE-listed healthcare provider Aster DM Healthcare is planning a dual listing of its GCC unit in Saudi Arabia and the UAE within the next three to five years, chairman and managing director Azad Moopen told CNBC Arabia in an interview (watch, runtime: 5:26). Investors holding a 65% stake will be among the sellers, Moopen said, adding that his family aims to maintain its stake and sell a few shares.

In context: Aster agreed last year to sell a 65% stake in its Gulf business to a consortium led by Dubai-based private equity firm Fajr Capital for USD 1 bn as it looks to spin off the unit from its Indian parent company. The consortium also includes UAE federal sovereign wealth fund Emirates Investment Authority, Al Dhow Holding Co, Wafra International Investment Co and the Olayan family’s Hana Investment. Moopen told CNBC Arabia that he expects the sale to close in the coming weeks.

Expansion in the Kingdom is on the cards: “We’re focusing now on Saudi Arabia, where there is a gap between supply and demand, and we hope to fill part of it especially in pharma,” he said. He said the healthcare group is earmarking USD 100 mn in debt financing to push ahead its growth here, “yet more is needed.”

Aster aims to open 250 pharmacies across the country in the next three to five years, he said, adding that the company is also looking to open hospitals and clinics as part of its expansion.

Astor’s GCC footprint includes 15 hospitals, 118 clinics and 276 pharmacies in the UAE, Saudi Arabia, Qatar, Oman, Bahrain and Jordan. The 218-bed Aster Sanad in Riyadh is its only Saudi hospital.

ADVISORS- Our friends at HSBC Middle East are sell-side advisors on the spinoff of the GCC business alongside Moelis & Company and Credit Suisse. The transaction is expected to close by March. You can check out the investor presentation for the spinoff here (pdf).

Neom set to tender USD 8 bn residential project

Neom prepares to tender second phase of worker accommodation project: Neom is set to issue a request for proposals (RFP) for a contract to develop the second phase of its workers’ accommodation project, Meed reported yesterday.

The details: A source close to the matter told Meed that the second phase of the residential development will include 20 “villages,” each worth around USD 400-500 mn for a total of USD 8 bn. The project is set to span a built-up area of about 240k sqm, enough to include 10k accommodation units each. No timeline for the tender or the project was disclosed.

Phase one concluded in June 2023: Neom’s first stage of the community villages PPP scheme, which was announced in October 2022, ended in June of last year. It was worth a total of USD 5.6 bn (SAR 21 bn). The agreement included ten villages.

Who were the preferred bidders then? They included local companies Alfanar Global Development, Almutlaq Real Estate Investment Company, Nesma Holding Company and Tamasuk, among others.

Advisors: Accounting giant Deloitte and infrastructure consulting service provider Aecom are advising Neom on the PPP housing transactions.

With proposed rule change, the Finance Ministry is aiming make it easier for Saudi gov’t agencies to tender, procure

The Finance Ministry could introduce amendments to the executive bylaws of its government tenders and procurement law in a bid make it easier for government agencies to implement projects abroad and to close public construction works, a document on the proposed changes (pdf) shows.

Fresh rules: Government entities will, if the changes go through, have the freedom to waive requirements that bidders provide preliminary or final financial guarantees “depending on what [the agency] sees as of best interest.” The changes would also give it flexibility on final guarantees and deadlines provided it makes clear the requirements in its initial tender documents.

Changes to advance payments: Governmental bodies would be allowed to disburse an advance payment of no more than 30% of the total contract for projects and purchases abroad, the amendments showed. An option to disburse an advance payment of no more than 10% of the total contract for projects and purchases in the Kingdom was left unchanged. Deposits are only made when contractors provide guarantees for the deposits; agencies cannot make deposits on extensions or additional works.

And arbitration: The rules would remove a requirement that theFinance Minister approve clauses on arbitration for overseas contracts on contracts worth less than SAR 10 mn. Both parties can agree on arbitration clauses regardless of the contract’s value.

The gov’t wants to know what the public thinks: The Finance Ministry has put its proposed rules up for public consultation on the public consultation platform Istitlaa. Stakeholders have until 12 February to submit comments.

Increasing supply could make home ownership in Saudi Arabia more affordable

A rise in the supply of residential units is poised to make them more affordable to citizens and foreign investors, ultimately increasing home ownership rates, said PwC partners in a report (pdf) on Sunday. The government is set to make available 300k new residential units in three cities by 2025, said Minister of Municipal and Rural Affairs and Housing, Majed bin Abudllah Al Hogail, and there are now 141k units under construction across the Kingdom.

Off-plan models contribute to affordability: The report claims that the model, under the government’s housing program, has contributed to speeding up home ownership, reducing costs as compared to ready-made units, and is boosting supply by stimulating competition between real estate developers.

Regulating the off-plan industry: The government has taken strides to better regulate the off-plan sale and rent industries. The Wafi programme (pdf), launched in 2019, regulates off-plan property sales through a set of rules and systems that hold both parties accountable.

BACKGROUND- A new law regulating off-plan property sales and rentals will go into effect on Thursday, 4 April. The law, which we covered in detail on 8 January, regulates the sale and rent of real estate being developed through off-plan sales. That’s industry-speak for units that are built after reservations and down payments from buyers.

Home ownership KPIs: The national housing program has contributed to an increase in home ownership to 60% by the end of 2022, up from 47%. The report doesn’t provide information on the comparison period. The ministry also aims to raise the ratio of home ownership to leased units to 70% by 2030 by “providing affordable and quality housing for Saudi families.”

By the numbers: Off-plan property sales have been gaining steam in recent months, growing 52% y-o-y in 1H 2023, according to Arab News. Some 47 off-plan sales projects were licensed in the first six months of 2023, according ministry figures.

It’s not without challenges: The housing sector faces hurdles including high unit costs, scarcity in supply, inadequate contractor due diligence and feasibility studies, restricted financing alternatives, and a shortfall in private sector involvement.

Making off-plan units more attractive: The report claims that establishing off-plan projects far from city centers and essential services is a key challenge facing the industry. It also urges developers to work on shifting the consumer culture to opt for off-plan purchases by educating them on their affordability. Liquidity pressures on lenders are another obstacle where there’s rising demand for liquidity to complete off-plan projects. Focusing on affordability, ensuring quality, and providing diverse financing options could also boost the industry, the report reads.

Free shipping, fast websites optimum way to lure young Saudi, UAE shoppers

No-cost shipping and fast websites are key to luring in younger shoppers from the Kingdom and UAE, a survey (pdf) by Tabby Business showed yesterday. The research surveyed 7.5k shoppers from a range of age groups in the Kingdom and UAE, with the majority of the respondents from Saudi.

No-cost shipping > everything else: The survey determined that 29% of Saudi shoppers (and 23% in the UAE) express frustration when retailers don’t provide shipping at no cost.

They also don’t want to pick one form of shopping over the other: Tabby reports that 36% of Saudi shoppers (32% in the UAE) prefer a mix of online and offline shopping. “The data shows that in-store and online retail should work together to give the shopper the best experience possible,” Tabby said, advising retailers to stop viewing brick-and-mortar stores as standing on opposition to online sales.

Faster websites should be the norm: Younger shoppers “expect” fast websites when shopping online, with the survey estimating folks 18-29 pace a premium on speed.

Loyalty programs? What loyalty programs? The marketing strategy does little to nothing to drive repeat purchases by Saudi and Emirati shoppers, with only 7.7% of respondents considering a loyalty scheme as a reason to return. “The key drivers of repeat business are a positive shopping experience and a quality product,” the survey said.

How Tabby sees itself in trends: The homegrown BNPL platform, which is one of the region’s first fintech unicorns, expects 30% of shoppers in the Kingdom and the UAE to be using its flexible payment solutions when making purchases. The projections are up from 22.5% in both nations. “The use of flexible payments has become commonplace in the Middle East, with 1 in 4 shoppers already using Tabby,” it said. “We see this trend continuing in 2024 as more shoppers use flexible payments on a larger range of their purchases,” it added.

The economy closed 2023 in contraction, shrinking 3.7% in 4Q

The economy contracted by 0.9% in 2023 on the back of a 9% drop in oil activity,according to the latest figures (pdf) from Gstat. This is in line with the 1.1% contraction estimated by the IMF in its latest World Economic Outlook Update (pdf).

The silver lining: The non-oil economy grew 4.6% in the same period, and government spending climbed 2%.

Background:The Kingdom started trimming its oil production by 500k barrels per day in April 2023 in a bid to arrest falling oil prices. This was compounded by another 1 mn bpd of voluntary cuts in June, which was scheduled to end in December 2023 before the government, in November, decided to extend the duration to 1Q 2024. Aramco is currently pumping 9 mn bpd.

The gov’t expected near-zero growth: The government had estimated that GDP would increase 0.03% in 2023, with a 6% growth in the non-oil sector. Meanwhile, It expects the economy to rebound in 2024 with a 4.4% growth, according to the budget statement (pdf).

Pundits saw it coming: “A continued contraction in the oil sector was expected,” the chief economist at Abu Dhabi Commercial Bank, Monica Malik, told Bloomberg.

4Q in a nutshell: The economy shrank 3.7% on an annual basis in 4Q 2023, according to the latest figures (pdf) by the General Authority for Statistics (Gstat). This was driven by a sharp decline of 16.4% in oil activity, which accounts for 40% of GDP.

Non-oil activity expanded at 2.6% q-o-q in 4Q 2023, the highest increase on a quarterly basis in 2023. “A rebound in non-oil activities has pulled Saudi Arabia out of its technical recession. This is a relief — the sectors generate most jobs for citizens and profits for companies. Their slowdown in recent quarters was both worrying and mysterious given significant government spending,” said Bloomberg Economics’s chief emerging markets economist, Ziad Daoud.

The outlook:The Finance Ministry is targeting GDP growth of 4.4% in its budget for this year, Finance Minister Mohamed Al Jadaan said last month. This is lower than the 2.7% forecast by the IMF. Benchmark Brent crude is currently trading at USD 79 a barrel, which is USD 29 short of the price that would allow the government to dodge a deficit this year, according to Bloomberg Economics.

It’s earnings season: Al Rajhi Bank, Bahri report results

Al Rajhi Bank’s bottom line declined 3% y-o-y to SAR 16.6 bn in FY2023 on a 3.7% y-o-y decrease in total operating income, according to a disclosure to Tadawul yesterday. Similarly, the lender’s revenues from its financing and investment business fell 4.1% y-o-y to SAR 21.3 bn in the same period as a result of a 3.7% decrease in net financing and investment income and fees from banking services.

Positive indicators: The lender’s investments soared 32% y-o-y to SAR 133.4 bn in FY2023, the loans and advances portfolio grew 4.6% to SAR 594 bn, while client deposits grew 1.5% to SAR 573 bn.

4Q in a nutshell: Bottom line fell 5% y-o-y to SAR 4.5 bn in 4Q 2023, while revenues declined 0.5% y-o-y to SAR 5.6 bn, Argaam reports.

The bank has yet to post its 4Q / FY 2023 results on its investor relations website.

BAHRI’S NET INCOME UP IN 2023-

National shipping company Bahri’s net income rose by 50.6% y-o-y to SAR 1.6 bn in 2023, according to an earnings release. The company’s top line grew 2.3% y-o-y to SAR 8.8 bn during the same period.

Why the big jump? The company cites improved performance in different operations boosting gross earnings by some SAR 602 mn compared to last year as the company earned more from transporting oil and chemicals. Capital gains on the sale of vessels, collections of ins. claims, as well as an uptick in income from murabaha deposits were also cited as factors shoring up earnings.

2023 highlights: This year saw Bahri, along with the Suez Canal Authority pour some USD 50 mn into an Egyptian joint-stock company for maritime transport. The company also secured an agreement with South Korean ship owner Sinokor that will see the liner charter two newbuild 115k Aframax tankers. Bahri is also set to become Saudi railway operator Saudi Arabia Railways’ primary freight forwarding services provider, under a three-year agreement.

Mawani wins Excellence in Ports Infrastructure Award + celebrates Globe Marine Service Co for cargo throughput milestone

Our Thursday Kudos section recognizes folks who do well — as companies and in their communities. Want to pitch us on something to feature in this space? Email ksa@enterprise.news.

#1-TheSaudi Ports Authority (Mawani) has bagged the Excellence in Ports Infrastructure Award, according to a statement. The award is in recognition of achievements including building new berths in Jeddah Islamic Port and upgrading two container terminals at King Abdulaziz Port in Dammam. Separately, Mawani honored Globe Marine Service Co for reaching a milestone in cargo throughput, handling 4.4k vehicles within a 21-hour timeframe, according to a statement.

#2-National shipping company Bahri was named Best Employer of the Year at the ShipTech Awards 2024, according to a statement.

3- ALSO GETTING A HAT TIP- Healthcare revenue cycle management solutions provider Accumed Saudi Arabia took home the Best RCM Service Provider of the Year award from the Council of Health Ins., according to a statement.

Sarco elects new BoD

Sarco elects new BoD: The Saudi Arabian Refineries Co. (Sarco) has named Obaid Al Subaie (Linkedin) as its new chairman, it said in a disclosure to Tadawul yesterday. Al Subaie has served as the CEO of Northern Region Cement Company, according to his bio. The board also elected Abdulrahman Al Mufarreh as its new CEO. The board’s term will end in 2027.

PIF reportedly in talks to acquire stakes in top British rugby clubs

It’s a quiet morning for the Kingdom in the foreign press this morning, with no single story driving the conversation.The PIF’s possible venture into British rugby got some ink in The Telegraph, which reports PIF representatives have held talks to grab stakes in top British rugby clubs Gloucester, Leicester Tigers, Northampton Saints and Newcastle Falcons in a GBP 60 mn transaction.

Meanwhile, the Kingdom’s emerging hiking trails for hike enthusiasts got a shout in CNN Travel.

Norges Bank snaps back from losses to record returns

#1- World’s largest sovereign fund had a bumper year: Norway’s USD 1.6 tn sovereign wealth fund — the world’s largest — reported record gains of NOK 2.2 tn (USD 213 bn) over 2023, driven by strong returns on investments. This is a stark contrast to the record losses the fund saw in 2022. (Statement | CNBC)

#2- Binance customers wary: Beleaguered crypto exchange Binance will allow select traders to hold their assets with independent banks outside of the platform as customers seek safehaven custodians with regulatory oversight. (Financial Times)

#3- China embarks on banking shake-up: Hundreds of Chinese rural banks will soon merge into regional lenders as part of a consolidation push, as the country’s deepening property crisis has placed pressures on its USD 6.7 tn banking sector. (Bloomberg)

TASI	11,796.63	-1.6% (YTD: -1.4%)
MSCI Tadawul 30	1,530.39	-2% (YTD: -1.3%)
USD : SAR (SAMA)	3.75 Sell	3.75 Buy
Interest rates	6% repo	5.5% reverse repo
EGX30	28,281.91	-6.8% (YTD: +13.6%)
ADX	9,508.32	-0.1% (YTD: -0.7%)
DFM	4,169.08	+0.02% (YTD: +2.7%)
S&P 500	4,845.65	-1.6% (YTD: +1.6%)
FTSE 100	7,630.57	-0.5% (YTD: -1.3%)
Euro Stoxx 50	4,649.47	-0.3% (YTD: +2.8%)
Brent crude	USD 81.71	-1.4%
Natural gas (Nymex)	USD 2.14	+1.8%
Gold	2,058.10	-0.5%
BTC	42,565.14	-1.6% (YTD: +79.4%)

THE CLOSING BELL-

The TASI fell 1.6% yesterday on turnover of SAR 8.7 bn. The index is down 1.4% YTD.

In the green: Almunajem (+10%), SPM (+6%) and Alyamamah Steel (+5.9%).

In the red: Ades (-9.9%), Arabian Drilling (-9.6%) and AlBaha (-7.1%).

Asian markets are mixed in early trading this morning after the US Federal Reserve yesterday poured cold water on expectations that it could start cutting interest rates as early as March. The ASX 200, Nikkei, and Shanghai were all in the red, while the Kospi and Hang Seng are (just barely) clinging to the green. Futures point to a soft opening in Europe, with most major benchmarks in the red, while Wall Street could shrug off concerns — futures for the Dow, Nasdaq, and S&P 500 are all in the green at dispatch time this morning.

King Salman, Kuwait Emir call on Iraq to abide with disputed Khor Abullah waterway

Regional disputes and trade agreements were the key talking points for King Salman and Kuwaiti Emir Sheikh Meshal Al Ahmad Al Sabah during Al Sabah’s visit to the Kingdom.

#1- Disputed Khor Abdullah waterway: The two leaders called on Iraq to abide by a Kuwait-Iraq maritime agreement on the Khor Abdullah waterway dating back over a decade, according to a joint statement. The Iraqi Federal Supreme Court deemed last year the agreement between the two neighbors was unconstitutional.

#2- Al Durra gas field dispute: King Salman and Al Sabah also reiterated calls to Iran to come to the negotiating table on the disputed offshore Al Durra gas field. The Kingdom and Kuwait have repeatedly affirmed their joint ownership, while Iran claims it has the rights to the field, which it names Arash. An agreement on the field can be reached through “constructive cooperation,” Iran’s Foreign Ministry spokesperson said, according to Mehr News Agency. Talks to agree on a border demarcation between the two parties collapsed last year.

#3- Boosting trade: The two countries signed an agreement on a railway connection project, in addition to several other strategic agreements on bilateral trade and economic cooperation.

ALSO IN DIPLO- The Federation of Saudi Chambers signed an agreement to boost economic ties with its Moroccan counterparts, it said on X. The agreement also covered the exchange of trade delegations between the two countries.

CALENDAR

JANUARY

30 January-3 February (Tuesday-Saturday): Alula 2024 Tour.

FEBRUARY

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

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

8 February (Thursday): end of Tuwaiq International Sculpture Symposium, Riyadh.

8-10 February (Thursday-Sunday): Hail Toyota International Rally.

10-14 February (Saturday-Wednesday): Filipino exporters will be in town for a business-matching tour.

9 February- 23 March (Friday-Saturday): Desert X ALUla.

10 February (Saturday): Last day to apply for permits to lease properties to pilgrims during Hajj season.

11- 12 February (Sunday-Monday): The Space Debris Conference, Securing the Future Growth of the Global Space Economy, Riyadh.

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

19 February (Monday): The Future of Business 2024 Forum, Eastern Chamber’s HQ, Dammam.

19-20 February (Monday-Tuesday): Saudi Capital Market Forum, King Abdullah Financial District, 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 SAUD

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

14-21 April (Sunday-Monday): IMF and World Bank spring meetings, Washington, DC

28-29 April (Sunday-Monday): World Economic Forum’s Special Meeting, Riyadh.

29 April-1 May: Future Hospitality Summit at Al Faisaliah Hotel, Riyadh.

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)

AUGUST

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

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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