It’s all manufacturing, all the time on day three of the World Defense Show

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Hypermarket operator LuLu is said to be shopping for bankers as it eyes IPO on Tadawul and ADX

Good morning, wonderful people. Happy hump day to you all — two more after today and we can all slide into the weekend.

Driving the conversation this morning: The World Defense Show, as we suggested on Sunday might be the case. We also have coverage this morning of the latest purchasing managers’ index (no real surprises), Saudi Electricity’s roadshow for its newest sukuk, SNB Capital’s new real estate fund, and Kazyon’s acquisition of a 50% stake in Dukan, the country’s only hard discounter.

BUT FIRST- LuLu Group International, the operator of the iconic supermarket chain, is shopping around for bankers for a potential dual-listing on the ADX and Riyadh’s Tadawul in 2H 2024, Bloomberg reported overnight. The offering could be worth as much as USD 1 bn, the business information service says, citing sources it says have knowledge of the company’s plans.

Abu Dhabi-headquartered LuLu is likely to list its GCC assets in the transaction. The company valued itself at north of USD 5 bn in 2020 when it sold a stake to Abu Dhabi wealth fund ADQ and last explored the possibility of an IPO in 2022. LuLu was thought in late 2023 to have been discussing the potential sale of a stake to Saudi Arabia’s Public Investment Fund.

In context: Dual listings on the UAE and Saudi Arabia are rare. MENA restaurant operator Americana Restaurants went for an ADX + Tadawul listing in 2022. LuLu declined to comment on Bloomberg’s report.

By the numbers: LuLu has 18 hypermarkets and seven shopping malls in its pipeline as it pushes ahead with aggressive growth plans. It has some 70k employees across more than two dozen countries, but its centers of gravity are the GCC, India and, more recently, Egypt.

HAPPENING TODAY- The PIF Private Sector Forum runs today and tomorrow in Riyadh.The event will bring together the fund, portfolio companies, and the private sector.

PSA #1- The Zakat, Tax and Customs Authority (Zatca) is again warning about fake text messages and emails asking taxpayers for banking data for refunds, Mubasher reports. The authority only requests personal information through official channels including its website and its mobile applications.

PSA #2- Is your spawn about to apply to college abroad? We have two stories you’ll want to know about this morning:

Top US colleges are looking to once again require SATs and ACTs for kids seeking admission. Many colleges are making decisions now about their fall 2025 intake — and those backing standardized testing just got a boost from Dartmouth, which is bringing back the tests. (Financial Times | NPR | New York Times)
Canada has extended its ban on foreign ownership of real estate by another two years as part of a bid to ease a housing shortage. The Great White North has also imposed a cap on the number of student visas it will issue.

WEATHER- Expect hazy sun in Riyadh and Dammam today, while it’s shaping up to be a cloudy day in Taif with some rain in the cards for Thursday.

Riyadh: 22°C daytime / 8°C overnight
Dammam: 22°C daytime / 8°C overnight
Taif: 21°C daytime / 9°C overnight

DIPLOMACY-

The war in Gaza, navigation in the Red Sea, and “regional integration” were at the top of the agenda yesterday when US Secretary of State Antony Blinken made Riyadh the first stop on his latest tour of the Middle East.

A sit-down between the Crown Prince and Prime Minister Mohamed bin Salman and Blinken lasted two hours, Reuters reported. Blinken did not respond to questions from reporters on what was discussed during the meeting. He is scheduled to visit Egypt, Qatar, Israel, and the West Bank through Thursday, 8 February.

On the agenda yesterday: An “enduring end to the crisis in Gaza,” “building a more integrated and prosperous region and reaffirm[ing] the strategic partnership between the United States and Saudi Arabia” (read: recognition of Israel in return for an expanded US defense pact). The two also discussed the situation in the Red Sea, a readout from the State Department said. You can check out state news agency SPA’s take here.

REMEMBER- Blinken’s visit comes as negotiators from Egypt and Qatar try to strike an agreement on a longer ceasefire in Gaza in return for the release of Israeli hostages.

Key to the visit: Delivering “a message directly to countries in the region that the United States does not want to see the conflict escalated and will not escalate the conflict,” a senior US official told reporters during the trip to Riyadh. “It’s important to show up and say it on one-on-one,” the official added.

WATCH THIS SPACE-

The Investment Ministry has removed fiscal data it published early yesterday in a monthly bulletin on its website. The data suggested the state budget had recorded a surplus of SAR 16 bn in FY2023, Reuters reports. The newswire says a government official told it the data didn’t represent the Finance Ministry’s latest figures for last year and were published in error.

MEANWHILE- Mubasher has a story that shows a screenshot of the now-deleted data showing that revenues came in at SAR 1.13 tn in FY2023, while expenditures recorded SAR 1.11 tn, and debt totalled SAR 951 bn. That’s an exact match to what the Finance Ministry penciled into its FY2023 budget statement (pdf).

DATA POINTS-

The total number of employees in the private sector hit a record high in January to c. 11.1 mn, state news agency SPA said yesterday, citing a report by the National Labour Observatory. There are some 2.3 mn citizens now working in the private sector, with expats accounting for 8.7 mn private-sector employees.

Residential mortgages to individuals plunged 35% y-o-y in 2023 to SAR 77.7 bn, Argaam reported, citing data from SAMA. This marks the highest annual decline in residential real estate financing provided by banks since 2018.

THE BIG STORY ABROAD-

One story dominates front pages of the global press this morning: The UK’s King Charles III has been diagnosed with an unspecified “form of cancer” at the age of 75, a year and a half after acceding to the throne, according to a statement released by Buckingham Palace yesterday. Charles will continue to work behind closed doors, but will be stopping public activities while he seeks treatment.

The story got plenty of ink in the int’l papers:BBC | Associated Press | NBC News | Reuters.

TECH NEWS-Microsoft is trying its hand at AI-aided journalism: Microsoft has reportedly handed media startup Semafor a “substantial” amount of money to develop a breaking news channel — dubbed Signals — that will use AI to help journalists write daily news and analysis, the Financial Times wrote.

IN MEMORIAM- Richard Debs, the longtime Middle East hand of Morgan Stanley who led a boardroom coup in 2005, has died at 93. Readers of a certain age will recall that Debs, a Fulbright scholar in Egypt in the 1950s, led Morgan Stanley’s push into Cairo and Riyadh starting in the late 1970s. After retirement, was advisory director and chairman of Morgan Stanley Saudi Arabia and chairman (later emeritus) of the American University in Beirut. See obits in the New York Times ’s Legacy and Bloomberg.

CIRCLE YOUR CALENDAR-

Filipino exporters are coming to town: 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 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.

The Saudi Capital Market Forum will open on Monday, 19 February and wrap up on Tuesday. Held under the theme “Powering Growth,” the event will bring together members of the global financial landscape for discussions on the capital markets and investment strategies.

Jeddah will host the 2024 West Asian Football Federation (WAFF) Women’sChampionshipon Monday, 19 February until Thursday, 29 February. The tournament, which is the first official 11-a-side women’s tournament at home, marks the women national team’s first-ever participation in the championship.

The Diriyah Contemporary Art Biennale will kick off in Diriyah on Tuesday, 20 February and wrap up on Friday, 24 May. Headlined After Rain, it will be led by German curator Ute Meta Bauer and features 92 artists from 43 countries. It will see several new commissions, including a joint project documenting “Saudi futurism” since the 1940s by local artist Ahmed Mater and Berlin-based photographer Armin Linke.

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

Fitch affirms Kingdom’s A+ credit rating on robust fiscal, external balance sheets

We’re still a A+ for Fitch: Ratings agency Fitch affirmed the Kingdom’s credit rating of A+ on the back of a solid fiscal position and strong external balance sheet, including a positive debt-to-GDP ratio and strong sovereign net foreign assets, it said in a statement yesterday. It left its outlook on Saudi at “stable.”

Driving the decision: Fitch said the “government’s debt-to-GDP [ratio] and sovereign net foreign assets are considerably stronger than both the A and AA medians.” It also cited “significant fiscal buffers” in deposits and other public sector assets.

The weak points: The ratings agency said “oil dependence, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses.” Still, governance is improving as policymakers push ahead with social and economic reforms and cabinet works to strengthen the effectiveness of state agencies and institutions.

We’re still very dependent on oil, Fitch writes (shocking, we know). The agency’s forecast sees oil revenues accounting for c. 60% the state’s income in FY 2024-2025.

Non-oil, private-sector GDP will grow at a 4.5% clip in 2024-2025, it said, down a bit from c. 5% in the last fiscal year. Driving growth: continued investment by the government, reforms, and gradually lower interest rates. Strong credit growth, booming retail and tourism, and rising employment will be factors, it said.

Rising spending on gigaprojects could be a medium-term risk: Rising government spending outside the budget as part of its Vision 2030 and a possible higher debt of state-owned and government-related entities could be a medium-term risk to to the Kingdom's balance sheet, Fitch said. “However, leverage is currently low across the public sector and investments may bring returns” by driving private-sector crowth and creating new jobs, it added.

PMI remains in growth territory despite slowest rate of expansion in two years

The non-oil economy grew at its slowest rate in two years, but remains firmly in growth territory,according to the Riyad Bank Saudi Arabia PMI report (pdf) out yesterday. Headline PMI declined to 55.4 in January, down from 57.5 in the previous month.

There was an increase in new business activity,fuelling increased input demand as purchasing activity and inventory holdings also increased — albeit at an eight-month low in purchasing growth.

Input price inflation recorded its highest level since August 2020 on the back of greater supply chain risks, and increased staff costs. Business raised selling prices in response, but modestly and slowly as sellers were reluctant to pass on the costs to their customers, with construction firms even reducing their prices.

Purchase prices recorded the sharpest rise since May 2012 — with firms noting strong demand, higher material prices, greater supply chain risks, and higher shipping costs amid the Red Sea crisis.

Input costs rose at their fastest pace since May 2012… This was driven by higher shipping prices due to Red Sea disruptions, an uptick in material costs and increasing supply chain risks, the survey showed.

The outlook: Market sentiment dropped to the second-weakest in January, since mid-2020, citing slowed demand growth and inflationary pressures to pose limitations to firms' business expansion this year. However, the backlog of work in Saudi registered an expansion for the first time in four years, particularly in the construction sector, reflecting strong demand for construction services, attributed to ongoing infrastructure and real estate development, Riyadh Bank Chief Economist Naif Al Ghaith commented.

AROUND THE REGION-

Output growth in the UAE slowed to a five-month low in January, EnterpriseAM UAE reports this morning. The PMI there inched down to 56.6 from 57.4 in December, still remaining above the 50.0 threshold that separates growth from contraction.
Egypt’s PMI contracted for a 38th consecutive month, EnterpriseAM Egypt notes.

SNB Capital, Alshegrey launch SAR 1 bn Riyadh-focused commercial real estate fund

SNB Capital + Alshegrey Investment launch SAR 1 bn real estate fund: SNB Capital and Alshegrey Investment Group launched the SAR 1 bn Al Ahli Al Basateen Real Estate fund, they said in a joint statement picked up by Zawya earlier this week.

The play: SNB (the investment banking arm of SNB, the kingdom’s largest bank by assets) and Alshegrey are looking to capitalize on rising demand in Riyadh for offices and commercial real estate.

A SMART INVESTMENT- Grade A office occupancy levels in Riyadh hit 98%, which is among the highest globally, a 3Q 2024 report (pdf) by real estate services provider Savills showed. “Activity remains so strong that under-construction buildings have recorded healthy pre-commitment levels,” it said.

What it’s investing in: The fund will invest and develop office and commercial projects in Diriyah’s Al Basateen District through Alshegery’s subsidiary Al Basateen Real Estate Company, according to the statement. The first project, dubbed Al Basateen Offices, spans 25k square meters to offer office spaces of over 30k square meters, while the second project, Al Basateen 360, spans 10.3k square meters with commercial and office rental spaces of up to 13k square meters.

Egypt’s Kazyon expands to Saudi Arabia, acquiring a 50% stake in supermarket chain Dukan

Kazyon sets foot in Saudi: Kazyon Limited, the UK-based parent company of Egyptian discount supermarket chain Kazyon, has acquired a 50% stake in Saudi grocery chain Dukan — the Kingdom’s sole discount retailer — through a SAR 250 mn (c. USD 66.7 mn) capital increase, according to a press release (pdf). The transaction marks Kazyon’s first investment in Saudi Arabia.

Where is the money going? The investment will help roll out more Dukan stores across the Kingdom as part of Kazyon’s plan to expand its portfolio to 5k stores across Egypt, Morocco, and Saudi Arabia within the next five years, a fivefold increase from its current network, backed by its own end-to-end logistics network.

All about Kazyon: Kazyon was founded in 2014 by our friend Hassan Heikal, the former EFG Hermes CEO, and has grown to become the largest discount retailer in Egypt. It sells a range of food and household products at competitive price points. Kazyon entered the Moroccan market last October.

“The transaction was funded by introducing to the capital structure of Kazyon a global sovereign wealth fund as we solidify our position as a leading grocery retailer in the region,” Heikal said.

ICYMI- A consortium led by our friends at Africa-focused private equity firm Development Partners International (DPI) invested USD 165 mn in Kazyon last April to help the company expand its presence in Egypt. In addition to Heikal and DPI, the company counts among its shareholders “a leading global sovereign wealth fund, major development finance institutions, FIM Capital, Sango Capital, and regional family offices.”

ADVISORS- Evercore Partners, EFG-Hermes, White & Case and PWC.

Alinma Bank finalizes acquisition of Tokyo Marine’s stake in Arabian Shield ins

Alinma Bank has finalized the acquisition of a 5.75% stake in Arabian Shield Cooperative Ins. in a SAR 81 mn transaction, it said in a disclosure to Tadawul yesterday, bringing Alinma’s stake to 11.5%. The selling party was from Tokio Marine & Nichido Fire Ins.

The rationale: Alinma said the acquisition will help it “expand its footprint through diversifying its investments,” according to the disclosure. Tokio Marine said last month that its decision to divest is part of a strategy to improve its capital efficiency and diversify investments. Tokio Marine had struck an agreement with Arabian Shield to see the company “continue serving Japanese clients” in Saudi Arabia.

Background: Tokio Marine and PIF-backed Alinma Bank established a JV dubbed Alinma Tokio Marine Company in 2012, which was then merged with Arabian Shield in November 2023. Tokio Marine & Nichido Fire is the non-life ins company of the global player Tokio Marine Holding.

Saudi Railways, Stadler sign agreement for supply of ten next generation passenger trains

Saudi Arabia Railways (SAR) signed an agreement with Swiss train maker Stadler for the supply and maintenance of 10 next generation passenger trains, state news agency SPA reported yesterday, citing a joint statement. The total contract, which is valued at CHF 600 mn (SAR 2.6 bn), could also see Saudi Railways buy another 10 trains.

The main goal? Upping capacity: The new trains will help double the annual passengers capacity for eastern trains to more than 3.8 mn passengers. It will also help operate direct trips from Riyadh to Dammam to meet growing demand. The low-emissions train will enter into service starting 2027, according to the statement.

SAR’s been making strides lately: Last month, SAR sealed a SAR 200 mn agreement with Italy’s Arsenale Group to launch the Italian-manufactured Dream of the Desert train next year. The Dream of the Desert train — the first of its kind in MENA — will consist of 40 luxury cabins with a maximum capacity of 80 passengers. It will travel across a 770-mile route starting from the North Train Station in Riyadh and passing through Hail with its final stop in the northern city of Al Qurayyat near the border with Jordan.

Saudi Electricity kicks off roadshow for foreign-currency sukuk program

Saudi Electricity has kicked off a roadshow for a potential FCY sukuk issuance,it said in a Tadawul filing yesterday. The sale is part of a USD-denominated green and / or conventional sukuk program kicked off in March of 2023 and is open to qualified international and local investors.

Background: The aims to raise funds to both finance capex spending and, possibly, green projects, the company’s website says. The program has raised USD 2 bn so far.

The details: The state-owned utility company will be marketing the unsecured senior USD-denominated issuance to fixed-interest investors. The roadshow will allow it to set a final price and size of the issuance once bankers get a handle on demand.

There’s no information yet on the timeline for the issuance, which like the previous two would be listed on the London Stock Exchange.

Refinancing its FYC sukuk program: The talked-up issuance would follow the company’s recent redemption of its Euronext Dublin-listed USD 800 mn last week.

The benchmark: The company’s first sukuk issuance under the program saw it raise USD 800 mn by selling 10-year sukuk with a 4.6% yield; and USD 1.2 bn via 30-year sukuk with a 5.7% yield in April 2023. Both issuances were listed on the LSE.

Uh, Enterprise? What’s an unsecured senior sukuk? It’s a shariah-compliant bond with no specific collateral backing, but holds a senior claim on the issuer's assets and cashflow in case of default or liquidation. In other words: In the (really unlikely) event that Saudi Electricity were to default, you’d have a better chance than non-senior bondholders and equity shareholders when you line up to see what you can salvage from the situation.

Going to market through an SPV: The company plans to take the issuance to market through what’s called a “special purpose vehicle” or SPV. An SPV is a kind of safety net for bondholders. Issuers usually create SPVs with segregated assets and cashflow to provide a measure of transparency and clarity to bondholders about what their claims would be against in case of default or liquidation. And since the SPV is a separate legal entity from the issuer, its assets and cashflow are not exposed to claims by creditors other than the bondholders.

ADVISORS- The company has appointed Standard Chartered Bank, HSBC Bank, SMBC Nikko Capital Markets, MUFG EMEA, Mizuho International, JP Morgan Securities, Al Rajhi Capital, First Abu Dhabi Bank, Mashreq Bank, Dubai Islamic Bank, KFH Capital Investment and Bank of China as joint managers for the potential offering.

The World Defense Show’s first day has been a hit

A lot of action at the World Defense Show: Saudi Arabian Military Industries (Sami) inked 11 agreements or MOUs with global defense firms during the second day of the World Defense Show in Riyadh, state news agency SPA reported yesterday. Sami is the PIF’s national defense and security champion. No full breakdown on the agreements was disclosed, but we know that US arms maker Lockheed Martin is at least one of them.

#1- The agreement with Lockheed Martin will see defense firms in the Kingdom manufacturing components for Lockheed’s missile defense system, Reuters reported, citing a statement by the company. Such sub-contracts for the Terminal High Altitude Area Defense (Thaad) system to boost the Kingdom’s manufacturing capacities and help exchange expertise, it added. Local firms receiving sub-contracts include the Middle East Propulsion Company (Mepc) and Arabian International Company for Steel.

#2- And a lot from Boeing: The government is currently examining a potential project with Boeing to set up an aircraft-grade aluminum manufacturing plant, Boeing Saudi Arabia President Asaad Al Jomoai told Al Eqitsadiyah. The talks are being led by the PIF, Industry Ministry and Mineral Resources and state-owned mining giant Ma’aden. The project’s feasibility studies are set to be finalized this year before making its way to the PIF for review and approval if an agreement is reached, he said.

#3- Boeing has submitted a request to set up a regional HQ in Riyadh, he said, expecting an approval from the Investment Ministry in the next few months. Separately, national shipping company Bahri subsidiary Bahri Logistics signed a MoU with Boeing to boost supply chain operations in the Kingdom for the global aerospace company in the Kingdom, its President Soror Basalom told Asharq Business in an interview (watch, runtime: 2:40).

#4- Sami signed a preliminary agreement with Qatar’s Barzan Holdings — the procurement arm of the Defense Ministry. It’s a first-of-its-kind agreement between the two defense firms in the neighboring countries, the Qatari company’s CEO, Abdullah Al Khater, told Reuters. "We would like to explore some quick wins with them and think about longer term opportunities as well," he said without disclosing details on the projects.

#5- Airbus said it’s currently in negotiations with the Kingdom to sell it more A330 multi-role tanker transport, the European company’s head of air power Jean-Brice Dumond told Bloomberg in an interview. Any purchase would add up to the six Airbus MRTTs owned by the Kingdom as it looks to bolster its air force capabilities. The Airbus MRTT is an aerial refueling and military transport aircraft used to transport troops, cargo and others.

#6- And an interest in A400Ms? The Kingdom is also looking to purchase the Airbus A400M turboprop military transport, Dumond told Bloomberg. “We know there is an interest in the A400M, and we will address it with the Saudi Air Force and the Ministry of Defence,” he said. The talks are being conducted through Airbus’s JV with Sami, in which Airbus holds a 49% stake.

#7- Eurofighters are officially back on the table: The Kingdom is also set to make orders for more Eurofighter jets, with the potential order coming a month after Germany lifted an earlier objection on the sale of Eurofighter jets to here following the aftermath of October 7 attacks. The Kingdom is reportedly looking to purchase 48 Eurofighters after buying 72 of the jets in 2007 from UK’s BAE Systems for c. GBP 4.4 bn. The advanced combat aircraft is developed by Airbus, UK’s BAE Systems and Italy’s Leonardo.

#8- And Rafales:The Kingdom is also in talks with France’s Dassault Aviation to purchase Rafale fighters jets, according to Bloomberg. It is reportedly looking to acquire 54 Rafales.

We also got a sneak of the locally assembled Hawk T-165 jets, which was assembled through 3.1k parts supplied from 25 local companies, SPA reported.

REMEMBER- The Kingdom has a target of localizing over 50% of its military equipment spending by 2030.

Also at the World Defense Show:

KSA+South Korea: The Defense Ministry signed an agreement with its South Korean counterpart for military industries cooperation.
And Pakistan: The Defense Ministry signed two MoUs with Pakistan’s Defense Ministry.
KSA + Russia: Defense Minister Prince Khalid bin Salman discussed joint cooperation in military industries with Russian Deputy PM and Industry and Trade Minister Denis Manturov. The Russian minister also discussed cooperation in industrial and mining sectors with Industry and Mineral Resources Minister Bandar Al Khorayef in a separate meeting.

Industrial licenses up 54.4% in December

More and more industrial licenses: The number of industrial licenses granted by the Industry and Mineral Resources Ministry rose by 54.4% y-o-y in December 2023 to 122, data from the ministry showed yesterday (here and here). The licenses appear to have been for smaller projects on the whole: total investment by value was down a bit over 17% to SAR 1.85 bn compared to December 2022.

Driving growth: Non-metallic minerals and non-ferrous metal manufacturing (18 licenses each, food manufacturing (15 licenses), chemical manufacturing (11 licenses), and rubber and plastics (10).

A look at the full year: The number of industrial licenses grew 43% y-o-y for 2023 to c. 1.38k licenses, while investment volume was up 8% y-o-y for the same period to SAR 1.4 trn.

It’s earnings season: SNB, Bank Aljazira, Banque Saudi Fransi report results

SAUDI NATIONAL BANK-

The Saudi National Bank (SNB)’s net income rose 7.7% y-o-y in FY 2023 to SAR 20 bn on the back of an increase in total operating income, according to a disclosure to Tadawul yesterday. Revenues from its financing and investment business grew 2.7% y-o-yto SAR 27 bn in the same period on the back of a growth in the bank’s financing and investments portfolios.

Deep dive: The bank’s assets rose 9.7% y-o-y last year to SAR c. 1.04 tn, while investments were up 4.2% y-o-y to c. SAR 269.1 bn. Client deposits were up 3.8% y-o-y to c. SAR 590.1 bn.

BANKALJAZIRA-

Bank Aljazira reported a c. 8% y-o-y decline in net income to SAR 1 bn in FY 2023 on the back of a decrease in operating income, according to a disclosure to Tadawul. Revenues from financing and investments fell 7.7% y-o-y to c. SAR 2.4 bn in the same period due to a rise in return on deposits and financial liabilities, it said.

Bank Aljazira’s assets rose 11.8% y-o-y last year to c. SAR 130 bn, while their investments were down c. 0.6% to SAR 24.4 bn. Clients deposits grew 9.3% y-o-y in the same period to SAR 94.1 bn.

BANQUE SAUDI FRANSI-

Banque Saudi Fransi (BSF)’s net income rose 18.1% y-o-y in FY 2023 to c. SAR 4.2 bn on the back of an increase in total operating income, according to a disclosure to Tadawul yesterday. Financing and investment income grew 21.9% y-o-y to SAR 7.8 bn in the same period on the back of higher returns.

The bank’s assets rose 9.2% y-o-y last year to SAR c. 253.4 bn, while investments were up 8.9% y-o-y to c. SAR 48.5 bn. Client deposits were up 9.3% y-o-y to c. SAR 172.2 bn.

ABO MOATI BOOKSTORES-

Abo Moati Bookstores’ net income fell 3.4% y-o-y in FY 2023 to c. SAR 24.3 mn on the back of a drop in sales, according to a disclosure on Tadawul. Revenues were down 14.7% y-o-y to c. SAR 214 mn in the same period due to lower ink sales resulting from the cancellation of a HP brand ink distribution agreement.

4Q in a nutshell: Abo Moati’s net income rose 6.6% y-o-y in the fourth quarter of the year to SAR 8.5 mn due to an increase in net income and gross income, while revenues were down 13% y-o-y in the same period to SAR 75.1 mn as the cancellation of the HP brand ink distribution agreement impacted ink sales.

Blinken’s visit to town drives the conversation

The conversation on the Kingdom in the foreign press is focused on US Secretary of State Antony Blinken’s visit to Riyadh as the first stop of his latest Middle East tour: The Associated Press | The New York Times | The Washington Post | AFP

Alkhorayef Water lands SAR 82.1 mn contract to operate + maintain water treatment plants. Plus: Sasco, Eviq to develop EV charging stations + Arabian Pipes to supply Aramco with steel pipes

INFRASTRUCTURE-

Alkhorayef Water + Power to operate + maintain water treatment plants in Buraydah, Al Khubara:Alkhorayef Water and Power Technologies was awarded a SAR 82.1 mn contract from Saline Water Conversion Corporation to operate and maintain Buraydah’s first water treatment plant and Riyadh Al Khubara’s fourth water treatment plant for 24 months, it said in a statement to Tadawul.

AUTOMOTIVE-

Sasco, Eviq to develop EV charging station infrastructure: Saudi Automotive Services (Sasco) and the Electric Vehicle Infrastructure Company (Eviq) will set up fast-charging EV stations and public charging points across the Kingdom after the two companies signed an MoU, Sasco said in a statement yesterday. Eviq is 75% owned by the Public Investment Fund, while the Saudi Electricity Company holds the remaining 25%.

MANUFACTURING-

Arabian Pipes will supply steel pipes to Aramco after signing an 11-month contract worth c. SAR 108 mn, it said in a disclosure to Tadawul yesterday.

OECD sees the global economy growing at a 2.9% clip this year

A more optimistic global growth outlook: OECD has revised upwards its 2024 world growth forecast to 2.9% from November’s 2.7% forecast, it said in its latest economic outlook. Geopolitical risks within the MENA region, however, pose a “significant” risk to activity and inflation.

Don’t celebrate yet: Despite raising its growth outlook, OECD’s 2024 forecast remains below 2023’s 3.1% growth rate. Next year’s 3.0% growth forecast was left unchanged.

Where we could see fallout: Regional escalation “could disrupt shipping more extensively than presently expected, intensify supply bottlenecks, and push up energy prices if traffic is interrupted in the key routes for the transport of oil and gas,” the report wrote, adding that this could spur a rush to safety in global markets.

ICYMI- The IMF revised upwards its 2024 global growth outlook by 0.2 percentage points to 3.1% last week, also noting the potential for price spikes amid Red Sea attacks.

TASI	12,024.91	+0.5% (YTD: +0.5%)
MSCI Tadawul 30	1,561.24	+0.5% (YTD: +0.7%)
USD : SAR (SAMA)	3.75 Sell	3.75 Buy
Interest rates	6% repo	5.5% reverse repo
EGX30	27,665.75	+0.3% (YTD: +11.1%)
ADX	9,427.88	-0.3% (YTD: -1.6%)
DFM	4,230.70	+0.1% (YTD: +4.2%)
S&P 500	4,942.81	-0.3% (YTD: +3.6%)
FTSE 100	7,612.86	-0.04% (YTD: -1.6%)
Euro Stoxx 50	4,655.27	+0.02% (YTD: +3%)
Brent crude	77.99	+0.9%
Natural gas (Nymex)	2.06	-1.1%
Gold	2,040.90	-0.1%
BTC	42,666.28	+0.2% (YTD: +82.1%)

THE CLOSING BELL-

The TASI rose 0.5% yesterday on turnover of SAR 8.1 bn. The index is up 0.5% YTD.

In the green: Al Jouf (+8.7%), Al Baha (+7.1%) and Riyadh Cables (+6.5%).

In the red: Ayyan (-4.9%), Atheeb Telecom (-3.8%) and Ades (-3.6%).

Asian markets are in the red, tracking declines yesterday in New York. Futures point to a mixed open for major benchmarks in Europe, New York, and Toronto later today.

CORPORATE ACTIONs-

The Capital Market Authority has approved Anaam International Holding’s request to increase its capital through a SAR 236 mn rights offering, it said in a statement yesterday.

Bank Albilad’s board of directors has proposed a 25% capital increase to SAR 12.5 bn by issuing bonus shares worth SAR 2.5 bn, it said in a disclosure to Tadawul.

TheMEFIC Reit Fund will distribute dividends of SAR 0.08 per unit for 2023, it said in a disclosure to Tadawul yesterday.

Jadwa Investment’s REIT Saudi Fund will distribute dividends of SAR 0.2 per unit for 4Q 2023, it said in a disclosure to Tadawul yesterday.

CALENDAR

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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