Medgulf, Buruj agree to merge as ins. sector heads into consolidation

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Saudi, France to lead push for two-state solution at the UN

Good morning, wonderful people. Consolidation in the ins. sector is leading this morning’s packed issue, after Medgulf signed a binding agreement to absorb Buruj, together making the sector’s fourth biggest player. We also dive into Capital Economics’ analysis of why our inflation rates have been (enviably) so low in the last few years, and why they’re poised to stay that way.

ALSO- Big players in telecoms and petrochems — including STC, Zain, Sabic and more — are out with their 2Q earnings. We break down the numbers in today’s news well, below.

HAPPENING TODAY-

The Jadeer tour kicks off today at the SME Support Center in Jeddah, as part of an effort to help small and medium enterprises enter supply chains with major national companies, Monshaat said on X on Saturday. The two-day event features over 400 exclusive procurement options, instant qualification for Jadeer certification, and more than 32 specialized workshops led by six large companies. Advisory sessions in areas like strategic planning, HR, and operations will also be held, ahead of upcoming stops in Al Khobar, Riyadh, and Madinah.

WEATHER- Riyadh is expected to see a high of 45°C before easing to a warm 31°C after dusk, while Jeddah’s heat will peak at 41°C, settling to a balmy 32°C as the evening rolls in. In Makkah, temperatures will climb to 42°C at their hottest, tapering off to 33°C by nightfall.

HAPPENING THIS WEEK-

Local sports tech startups have until Thursday to register for the ASICS Innovation Pitchcompetition, which offers a prize pool of SAR 35k for the top three winners. The competition is launched in partnership with the Saudi Sports for All Federation following a three-year partnership agreement signed with ASICS back in January.

PSAs-

New Saudization rates for dentistry, pharma and engineering sectors came into effect starting yesterday, the Human Resources and Social Development Ministry said in a statement. The decision was first announced in January in a larger plan to increase nationalization rates in 269 professions across various sectors.

Localizing dentistry jobs will run through a two-phase plan, starting at 45% before rising to 55% in January 2026, with a minimum wage of SAR 9k. It applies to firms with at least three dental professionals.

Pharma professions now require 35% Saudization in community pharmacies and medical centers, 65% in hospitals, and 55% in other pharmacy-related roles — all with a minimum wage of SAR 7k. The new rates apply for facilities with five or more employees.

Engineering roles must meet a 30% Saudization rate with SAR 5k in minimum wage, applicable to private sector companies with five or more employees, covering 184 targeted job categories.

WATCH THIS SPACE-

The Kingdom and France will lead the push for the two-state solution at the UN ministerial conference in New York this week, as part of the Kingdom’s ongoing support for a just and lasting peace, Foreign Minister Faisal bin Farhan told state news agency SPA yesterday.

France is set to formally recognize Palestine at the UN General Assembly on 21 September, with hopes that more European countries will follow, Reuters reported. A proposed roadmap toward a two-state solution — covering security, reconstruction, and governance — will also be presented at the meeting, France’s foreign minister said.

ALSO- The newswire claims that European diplomats are in talks with some Arab countries on an initiative that would see Europe recognize the state of Palestine during the meeting, in return for Arab countries condemning Hamas and publicly calling for its disarmament.

AND- Aid trucks are making their way from Egypt to Gaza: Aid trucks loaded with food and basic supplies began moving from Egypt into Gaza yesterday, Al Qahera News reports. This comes a day after Israel said that it had resumed airdropping aid into Gaza.

The news comes as Israel claims it will “stop fighting” for up to 10 hours each day in some areas of Gaza to allow food distribution. Jordan and the UAE, meanwhile, have begun airdropping food aid on Gaza, where starvation is a fact of daily life and famine is now the watchword. Some in the west, meanwhile, continues to debate what constitutes famine.

Nomu-listed Canadian Medical Center (CMC) filed to transition to Tadawul’s main market, according to a disclosure. The move was first announced in March of last year when it hinted at an ambitious expansion plan that included moving into new segments of the industry including telemedicine, physiotherapy, outpatient clinics, the local emergency medical services market, as well as plans to open new branches in Jubail and Tabuk. CMC appointed Al Rajhi Capital as financial advisor to quarterback the move.

What it takes: To transition from Nomu to the main market, a company must have been listed on Nomu for at least two years and satisfy all main market listing conditions — except for market capitalization, where a lower threshold of an average SAR 200 mn over the past six months applies.

The General Authority of Foreign Trade (Gaft) is running an anti-dumping probe into imports of ductile iron pipes originating from or exported by India, according to an initiation notice (pdf). The investigation will include cast iron pipes and hollow tubes with diameters ranging from 100-1k mm.

BACKGROUND- The action follows a complaint by Saudi Arabian Amiantit ’s subsidiary Saudi Arabian Ductile Iron Pipe Manufacturing Company, along with another Saudi company, against imports by India of hollow pipes and tubes of cast iron, according to a Tadawul disclosure released last Thursday.

Faster debt offerings are here: The Capital Market Authority (CMA) will now fast-track the review of public debt offering applications if the issuer has a credit rating from a CMA-approved agency, it said in a statement yesterday. The move — which will be in place through the end of 2026 — aims to make it easier for companies to raise funds through debt instruments and encourage more issuers to seek credit ratings, helping investors better assess risk and make informed decisions.

DATA POINTS-

Ride-hailing apps in the Kingdom recorded over 32 mn trips in 2Q 2025, up 104% y-o-y, the Transport General Authority said on X yesterday. Riyadh accounted for the highest share at 41%, followed by Makkah at 22.5% and the Eastern Province at 15.7%. Active male drivers rose to 263k, while female drivers reached 15.3k.

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THE BIG STORY ABROAD-

The US and the EU have narrowly averted a trade war after reaching an agreement that will see the bloc face a 15% tariff on exports to the US. The agreement came following months of talks and just a few days before a Friday deadline will see higher tariffs take effect.

There are still points of contention: European Commission President Ursula von der Leyen said the tariffs covered all exports, including automobiles, drugs, and chips, hitting back at Trump’s claim that the agreement did not cover pharma and metals. The US is working on a probe into pharma that could see it implement a global tariff on drugs later. Conventional wisdom is that we’ll see a low tariff imposed this year — and a much higher one next year after firms have regrouped. (Bloomberg | Financial Times | Reuters | Wall Street Journal | New York Times)

ALSO- It’s going to be a big week on Wall Street and in Washington, DC, with CNBC’s Jim Cramer saying it could set the tone for markets through the rest of the summer. Here’s what to watch out for:

The Federal Reserve’s open markets committee meets tomorrow and the day after. It’s widely expected to stay the course and hold rates steady despite continued pressure from Trump. Its concern: tariff-driven inflation;
It’s Big Tech week on the earnings front, with Apple, Amazon, Meta, and Microsoft all expected to begin reporting 2Q results from Wednesday;
Friday will see the US publish its latest jobs report and kick into gear higher tariffs for all trading partners with which it has not reached a trade agreement.

CIRCLE YOUR CALENDAR-

The first-ever Riyadh Comedy Festival will run from 26 September to 9 October at Boulevard City, featuring over 50 of the world’s renowned comedians, the General Entertainment Authority said in a press release. The largest of its kind festival will include a diverse lineup of daily shows ranging from stand-up and live talk shows to workshops and interactive activities, aimed at audiences of all ages, state news agency SPA reports.

Medgulf, Buruj Cooperative Ins. agree to merge in SAR 584.6 mn transaction amid growing appetite for consolidation

Buruj Cooperative Ins. entered into a binding merger agreement with the Mediterranean and Gulf Ins. and Reins. (Medgulf), marking a significant consolidation move in the local ins. sector, according to a statement (pdf). The merger will see Buruj get absorbed into Medgulf in an all-share transaction.

The inner workings: Some 33.16 mn new Medgulf shares will be issued to Buruj shareholders, implying an exchange ratio of around 1.11 Medgulf shares for every Buruj share held. The transaction values Buruj at SAR 584.6 mn. As a result of the merger, Medgulf will raise its capital by 31.58% to SAR 1.38 bn, with its total number of shares increasing to 138.16 mn from 105 mn.

At a premium: The implied valuation — putting Buruj at SAR 19.49 per share — represents a 2.66% premium to Buruj’s closing share price of SAR 18.98 on 24 July, the last trading day before the agreement was signed. The valuation was based on Medgulf’s share price of SAR 17.63 on the same day.

The merger will create the fourth-largest ins. player in the Kingdom by gross written premiums (GWP), with a combined SAR 4.1 bn in GWP and an estimated 5.4% market share based on 2024 data. The Kingdom’s ins. sector recorded SAR 76 bn in total premiums last year. The top three players controlled 64.5% of the market, while the remaining 24 companies, including Buruj and Medgulf, shared the rest, according to the Saudi Ins. Authority. Medgulf accounted for 4.9% of premiums in 2024, while Buruj held a modest 0.5%.

The transaction is expected to improve the merged company’s scale, profitability, and capital strength. It aims to enhance operational efficiency through cost synergies and shared services, optimize the combined ins. portfolio — especially the health and motor segments — and support new growth in digital, reins., and investment offerings. The merged entity also plans to improve its solvency margin and expand access to retail, SME, and corporate customers, according to the statement.

As part of the governance structure post-merger, Medgulf’s board will expand to nine members from seven, with Buruj nominating two directors. Yasser Yousef Naghi, Buruj’s chairman, is set to chair the merged company.

What’s next? Some regulatory and shareholder approvals from both companies are still pending. Buruj creditors will have a 15-day window to object once the general assembly meetings are formally called, and any unresolved objections could delay or halt the merger.

Buruj shares will be delisted from Tadawul once all approvals are obtained. Any fractional entitlements resulting from the share swap will be sold on-market, with proceeds distributed pro rata.

Appetite for consolidation in the sector is growing: A string of merger talks including Liva-Malath and Salama Cooperative-Saudi Enaya are underway as ins. players contend with tightening capital regulations, shrinking margins, and mounting competition in motor and medical lines, according to Fitch Ratings. Gulf General Cooperative Ins. was also in talks with Gulf Union Al Ahlia earlier this year before scrapping the merger proposal in March.

The drivers: The shakeout follows a regulatory overhaul that handed supervision of the industry to the newly-formed Saudi Ins. Authority in 2023, with a risk-based capital framework set to take effect by 2027. However, the wave had already started before 2023, with Gulf Union merging with Al Ahlia in 2020, Aljazira Takaful acquiring Solidarity in 2021, and Arabian Shield absorbing Alahli Takaful in 2022 and taking over Alinma Tokio Marine in 2023.

The mergers trend is expected to lead to stronger balance sheets and fewer market players that are better positioned to manage risks. While Fitch views the consolidation trend and regulatory push as credit-positive over the long term, smaller players are already facing rising compliance costs and earnings pressure amid limited economies of scale. The market remains heavily concentrated, with Tawuniya and Bupa Arabia controlling 52% of total GWP as of late 2024, leaving the remaining players to either scale up or risk being squeezed out.

ADVISORS- HSBC Saudi Arabia acted as the financial advisor to Medgulf, while Zeyad Sameer Khoshaim Law Firm provided counsel. Buruj appointed Alinma Capital as its financial advisor, with Baker McKenzie providing counsel.

Market reax: Medgulf’s stock price rose 1.0% to close at SAR 17.8 yesterday.

Why are Saudi Arabia’s inflation rates so low? Capital Economics weighs in

Our inflation is projected to remain low: Saudi Arabia has consistently experienced exceptionally low inflation rates since the pandemic, compared to other emerging economies. This pattern is anticipated to persist, with inflation rates projected to weaken even further in the coming years, according to a Capital Economics note seen by EnterpriseAM.

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Since the beginning of 2014, our headline inflation rate has averaged 1.1% y-o-y, except for two notable periods of increased inflation from late 2018 and early 2020. Many emerging markets saw inflation surge in 2022 when the fallout from the pandemic hit supply chains and the war in Ukraine ramped up global commodity prices. However, Saudi Arabia’s headline rate climbed to a peak of just 3.4%, softening even further in the next months, hovering around the 2% mark until now.

WHAT’S KEEPING INFLATION AT BAY?

#1- A strong USD: Saudi Arabia has benefited significantly from the strength of the greenback in recent years. Due to the SAR’s peg to the USD, the Kingdom’s “nominal trade-weighted exchange rate has appreciated by 14% [since the beginning of 2021], increasing its purchasing power,” according to the research note.

Caution ahead: The recent weakness of the USD could be a factor behind the slight acceleration in the Kingdom’s headline inflation in the last few months, Capital Economics’ James Swanston warned, adding it could result in further upward pressure on prices in the coming months. The good news is that the greenback is expected to regain most of its lost value over the next year, the note says.

#2- Cheaper Chinese imports: Disinflationary pressures from China, which supplies over a fifth of the Kingdom’s imports, have helped ease import price pressures. After adjusting for exchange rate fluctuations, producer prices in China have remained in negative territory for the most part since 2021. This has directly translated into lower core goods prices in our neck of the woods, the consultancy said.

#3- Subsidized local fuel prices: The government’s decision to cap local fuel prices in July 2021 has effectively absorbed the surge in global energy prices, resulting in virtually no domestic energy inflation.

#4- Flexible labor market: Saudi’s labor market exhibits remarkable flexibility, largely due to the ability to adjust the supply of foreign workers, who make up nearly 80% of the workforce. Non-Saudi employment growth has closely mirrored the trajectory of non-oil GDP growth — when economic activity accelerates, Saudi firms quickly increase their hiring to meet rising demand.

As these firms can easily bring in foreign workers, companies are able to expand their workforce without driving up wages or prices, the note argues.

#5- Steady VAT: Another significant contributor to price stability is that the rate of VAT has remained unchanged for a few years now. Historically, higher inflation periods coincided with the initial implementation of a 5% VAT in 2018 and its subsequent tripling to 15% in 2020.

BUT- Housing costs are the only outlier: Recent revisions to Saudi residential real estate data reveal a substantial 30% increase in property prices since the pandemic. “That is likely to have fed through into the rental market with landlords charging higher rents to tenants. With affordability constrained, demand for rental properties may have increased too,” the research note read.

THE OUTLOOK-

The case for inflation in Saudi Arabia remaining subdued over the next few years is strong. Housing costs, food and beverages, and energy inflation are all expected to remain modest.

Housing-related inflation is anticipated to soften: “A faster increase in housing supply would, all else equal, help to put downward pressure on housing prices and rents; rents make up a fifth of the CPI (the consumer basket),” according to the research note.

ICYMI Supply could be going up indeed: The government has already launched a battery of reforms to stimulate the real estate market, including allowing foreign investment in Makkah- and Madinah-based real estate companies, lifting development restrictions on 81 sq km of land in northern Riyadh, and approving the White Land Tax, in addition to planning the release of 10k-40k affordable residential plots per year.

Food and beverages inflation is also expected to remain subdued, with global food price indices having experienced a decline this year. In addition, China’s producer prices are to continue falling over the next few years, helping push down inflation rates, according to the note.

ALSO- Capital Economics expects energy inflation to remain modest, as oil prices are set to fall to USD 60 / bbl by the end of this year and to USD 50 / bbl by late 2026, the note read. “If Aramco were to adjust prices accordingly that could, all else equal, knock as much as 1.3% [...] off headline inflation. Lower oil prices could feed into falling costs to domestic producers.”

BUT- The government will need to tighten its fiscal policy in response to declining oil prices, Capital Economics noted. A decision to increase the VAT rate or expand the range of goods and services subject to the tax can raise the inflation outlook. Raising other taxes or introducing new taxes also remains on the table, but “would lead to a one-off step change in the price level, rather than lead to a permanently higher inflation,” the note said.

Capital Economics has previously expected inflation to accelerate a little further throughout 3Q 2025 before peaking at around 2.6% y-o-y. As for 2026, it also anticipated inflation to average 0.8% y-o-y. This is considered optimistic when compared to other forecasts. Riyad Capital sees inflation rising to 2.5% this year, before easing slightly to 2.3% in 2026, up from an inflation reading of 1.7% in 2024. The IMF said in June that inflation in Saudi Arabia will remain around 2% this year, supported by the currency’s peg to the USD, domestic subsidies, and a flexible labor supply.

Construction costs inch up 1.1% y-o-y in June

The Kingdom’s Construction Cost Index (CCI) rose 1.1% y-o-y in June 2025, due to a 1.2% annual rise in construction costs for the residential sector and a 1% increase for the non-residential sector, according to data (pdf) from the General Authority for Statistics.

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Labor and machinery drove costs up: The cost of residential activity — which makes up 77.5% of the index — increased as a result of a 2.5% increase in labor costs and a 2.6% rise in rental prices of equipment and machinery. Meanwhile, costs of non-residential activity inched up due to a 2.1% increase in labor costs and a 2.3% rise in rental prices of equipment and machinery.

What went up: Energy costs jumped 9.9% y-o-y, mainly due to a 27.3% increase in diesel fuel prices. Similarly, rental prices of equipment and machinery increased by 2.5%. Labor costs also went up by 2.4%, driven by a 6.3% rise in wages for general laborers.

.. and what went down: The cost of basic materials decreased by 0.7%, influenced by a 1.9% drop in other building materials prices and a 1.9% decrease in wood and carpentry prices.

On a monthly basis, construction costs in June remained stable compared to May, with no significant changes in either residential or non-residential activity. Minor fluctuations included a 0.1% rise in both labor costs and rental prices of equipment and machinery. Meanwhile, the costs of basic materials dipped 0.1%, driven by a 0.4% decrease in metal product prices.

Riyadh’s office market remains strong as rents, occupancy rise -Savills

Riyadh’s office market is maintaining its strong footing, driven by confidence in the national economy and its positive outlook, according to Savills Research’s Riyadh Office Market report (pdf). Healthy demand pushed rents and occupancy up in 2Q 2025, as Riyadh’s Grade A office market recorded a 98% occupancy rate, with rents rising 10% y-o-y and 0.75% q-o-q. Annual rent growth was fastest in Zone C at 15% and Zone A at nearly 11%.

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ICYMI- Riyadh’s prime office occupancy exceeded 95%, driving average commercial rents up by approximately 4% q-o-q, according to CBRE.

Multinational headquarters in the capital have already surpassed the 2030 target of 500, with 660 firms acquiring licenses for their regional headquarters, including 60 licenses granted from February through June. This 2Q momentum included new entrants like BNY Mellon, London Business School, ASPEN, and Globant.

Leasing activity was strong during the quarter, with half of the demand generated from the banking, financial services, and ins. (BFSI) sector, followed by legal services and pharma at 25% each. Half of these leasing transactions were expansion-driven, while reallocations and new entrants equally shared the other half, which suggests that larger space requirements may likely be linked to the recent PMI increase.

Businesses want bigger spaces: A trend towards larger footprints drove 2Q demand, with requests for spaces over 1k sqm climbing to 50% of all enquiries (up from 28% last quarter). Of those enquiries, 30% were for spaces larger than 4k sqm. This robust pipeline was led by the BFSI, technology, media, telecoms, and engineering sectors, which together comprised 45% of demand.

The Riyadh metro is enhancing accessibility and appeal for key business districts, such as King Abdullah Financial District and Olaya, which are becoming more accessible as new stations open, the report said.

Looking ahead, Savills predicts strong demand and occupancy to continue driving rental growth, though this upward pressure may soften by the end of 2026 as over 900k sqm of new Grade A space is expected to be delivered, including Diriyah Gate and Prince Mohammed bin Salman Nonprofit City.

More and more 2Q earnings are rolling in

STC-

Saudi Telecom Company (STC) saw its net income rise 15.7% y-o-y to SAR 3.8 bn in 2Q 2025, on the back of a stronger gross profit and reduced costs, it said in a disclosure to Tadawul yesterday. The figure exceeds analysts’ expectations of SAR 3.5 bn in net income.

Revenue inched up 2.6% y-o-y to SAR 19.5 bn over the same period, buoyed up by growing revenue streams from commercial unit, carriers and wholesale unit, and STC’s subsidiaries.

Over the first half of the year, STC’s bottom line rose 13.4% y-o-y to SAR 7.5 bn, while its top line was slightly up 2.1% y-o-y to SAR 38.7 bn, recording its highest-ever six-month revenue, according to the disclosure.

ALSO- The telecoms giant will distribute around SAR 2.7 bn in 2Q dividends for its shareholders at SAR 0.55 apiece, according to a separate disclosure. The distribution date is set for Tuesday, 19 August.

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SOLUTIONS-

Arabian Internet and Communications Services Company (solutions by stc) saw its net income slip 1.5% y-o-y to SAR 446 mn in 2Q 2025, it said in a disclosure to Tadawul yesterday, still beating Bloomberg’s analysts’ forecasts of SAR 394.3 mn.

Revenue increased 4.7% y-o-y to SAR 2.9 bn during the same period, supported by 10.4% growth in core ICT services and a 2% increase in IT managed and operational services, despite a 5.3% decrease in digital services.

On a 1H basis: Solutions reported SAR 807 mn in net income during 1H 2025, up 0.1% from the same period last year. Meanwhile, revenue rose 2.6% to SAR 5.7 bn during the period.

ZAIN KSA-

Mobile Telecommunication Company Saudi Arabia (Zain KSA) saw its net income rise 21% y-o-y to SAR 127 mn in 2Q 2025, the company said in a disclosure to Tadawul. The increase — exceeding Bloomberg’s analysts’ expectations of SAR 114 mn for the quarter — was driven by growth in high-margin segments and lower financing costs, offset by a one-off government grant of SAR 52 mn recorded in 2Q 2024.

Revenue increased 4% y-o-y to SAR 2.7 bn over the same period, driven by Zain KSA’s consumer segment, particularly 5G services, and contributions from its subsidiary Tamam.

On a 1H basis, Zain KSA’s bottom line was up 27.9% y-o-y at SAR 220 mn, while its top line expanded 5.1% y-o-y to SAR 5.3 bn.

SABIC AGRI-NUTRIENTS-

Sabic Agri-Nutrients posted a net income of SAR 1.1 bn in 2Q 2025, up 50.4% y-o-y, the company said in a disclosure to Tadawul yesterday, surpassing Bloomberg’s analysts’ expectations of SAR 949.3 mn. The growth was attributed to a 23% rise in sales and gains from an associate and joint venture, helping offset rising costs of goods sold amid increased feedstock costs.

Revenues grew 22.8% y-o-y to SAR 3.3 bn over the same period, thanks to a 23% climb in average selling prices.

On a 1H basis: Sabic reported SAR 2 bn in net income for the first six months, up 32.2% from the same period last year. Revenue rose 22.5% to SAR 6.4 bn during the same period.

YANSAB-

Yanbu National Petrochemical Co. (Yansab) reported an 80.2% y-o-y drop in its 2Q 2025 net income to SAR 44.5 mn, it said in a disclosure to Tadawul and its earnings release (pdf). The company attributed the decline to higher production costs and lower average sales prices. Meanwhile, the company’s revenue fell 15.9% to SAR 1.4 bn over the same period.

On a 1H basis, Yansab’s bottom line shed 82% y-o-y to SAR 58.2 mn, while its top line slid 4.6% y-o-y to SAR 2.9 bn.

Looking ahead, Yansab anticipates better demand and stable prices for polypropylene and polyethylene in Asia during 3Q 2025, along with an expected increase in monoethylene glycol prices, the firm’s President Wazen bin Mubarak Al Solami said.

ALSO- Yansab’s board approved the distribution of SAR 562.5 mn in interim dividends for 1H 2025 at SAR 1 apiece, according to a separate disclosure. The distribution date is set for 11 September.

Dr. SULAIMAN AL HABIB-

Dr. Sulaiman Al Habib Medical Services Group’s net income rose 6.5% y-o-y to SAR 591 mn in 2Q 2025, according to a disclosure to Tadawul. The figure beat Bloomberg analysts’ estimates for the quarter of SAR 578.8 mn, despite gains being capped by fixed costs related to new expansions.

Revenue jumped 31.5% y-o-y to SAR 3.4 bn over the same quarter, which also came higher than Bloomberg’s analyst expectation of SAR 3.3 bn, steered by greater hospital patient volumes and pharma sales.

On a 1H basis, the group’s bottom line jumped 3.8% y-o-y to SAR 1.1 bn, while its top line increased 28.4% y-o-y to SAR 6.5 bn.

ALSO- The group’s board greenlit the distribution of SAR 416.5 mn in dividends for 2Q 2025 at SAR 1.19 per share, starting 18 August, according to a separate disclosure.

SAUDI TADAWUL GROUP HOLDING-

Saudi Tadawul Group Holding’s net income fell 41.3% y-o-y to SAR 96.2 mn in 2Q 2025, driven by lower operating revenues and a 15.9% increase in operating expenses attributed to the group’s growth strategy implementation, it said in a disclosure to Tadawul yesterday. The figure is way below analysts’ forecast of SAR 329 mn.

Revenue also dropped 9.8% y-o-y to SAR 318.9 mn during the quarter, due to lower trading and post-trade services revenues following a 32.2% drop in average daily trading values. This was partially offset by an 8.1% increase in revenue from non-trading linked services.

On a 1H basis, the group reported SAR 216.8 mn in net income, down 40.7% y-o-y. Meanwhile, revenue fell 12.7% y-o-y to SAR 647.1 mn.

NADEC-

The National Agricultural Development Company (Nadec) saw its net income rise 3% y-o-y to SAR 115.3 mn in 2Q 2025, driven by higher sales across its dairy, protein, and agri segments, along with increased treasury income and dividends, according to a disclosure to Tadawul.

Revenue grew 5.1% y-o-y to SAR 830.5 mn during the quarter, falling short of the SAR 874 mn projected by Bloomberg’s analysts, Asharq Business reports.

On a 1H basis, Nadec’s net income was up 2.6% y-o-y at SAR 218.7 mn, while revenue rose 11.8% y-o-y to SAR 1.8 bn, supported by an increase in agri and protein sales.

ADVANCED PETROCHEMICAL-

Advanced Petrochemical’s bottom line grew 95.2% y-o-y to SAR 82 mn in 2Q 2025, as a result of lower propane and propylene prices and the absence of one-off losses on investment reported last year, it said in a Tadawul disclosure yesterday.

Revenue also rose 7.6% over the same quarter to SAR 698 mn, pushed up by a 20% increase in sales from the trial production of a new plant, offsetting a 10% decrease in netback prices.

Over 1H 2025, the company’s net income swung back into the black with SAR 153 mn, up from a net loss of SAR 17 mn in 1H of last year. Revenue jumped 35.4% to SAR 1.3 bn over the same period.

Advanced Petrochemical Company Dr. Sulaiman Al Habib Medical Services Group EARNINGS WATCH Mobile Telecommunication Company Saudi Arabia (Zain KSA) National Agricultural Development Company (Nadec) Sabic Agri-Nutrients Saudi Tadawul Group Holding Saudi Telecom Group (stc) Solutions Yanbu National Petrochemical Co. (Yansab)

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ALSO ON OUR RADAR

ICDOC secures SAR 210 mn refinancing agreement from Arab National Bank

DEBT WATCH-

Miahona subsidiary secures refinancing agreement: Miahona’s subsidiary Industrial Cities Development and Operating Company (ICDOC) inked a SAR 210 mn shariah-compliant refinancing agreement with the Arab National Bank, according to a disclosure to Tadawul yesterday.

The details: The agreement includes two term loans, with SAR 159 mn allocated to repaying existing debt and the remainder going toward supporting capital spending. The new facility extends maturity to July 2030 from February 2026. The agreement is backed by receivables, ins. proceeds, pledged accounts, a six-month reserve account, and a promissory note.

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ADVERTISING-

TTP Media Group launched ARTAI, a new company that uses artificial intelligence to produce advertisements and videos, it said on LinkedIn last week. ARTAI's goal is to increase production speed and efficiency, allowing clients to experiment with different types of content with more flexibility.

LOGISTICS-

The Saudi Ports Authority (Mawani) added Blue Ocean’s BOS shipping service to Jeddah Islamic Port, linking it to three major Chinese ports, it said in a statement yesterday. The new route — with a capacity of 2.3k TEUs — will connect Jeddah with Qingdao, Ningbo, and Nansha in China.

PHARMA-

Spimaco kicks off cancer drug production this August: Saudi Pharmaceutical Industries and Medical Appliances Corp. (Spimaco) opened its new SAR 272 mn plant for the production of oncology and high-potency medications at its Qassim site, it said in a disclosure to Tadawul yesterday. The facility — built with collaboration with AstraZeneca — spans 2.8k sqm and can produce over 275 mn units annually.

M&A WATCH-

Our friends at Al Hammadi extended the non-binding MoU signed in April to acquire a 40% stake in Wareed Medical Company by another 90 days, according to a disclosure to Tadawul. The extension will allow time to complete an independent review of the deal’s feasibility and strategic fit.

Investors funnel USD bns into corporate debts over US gov’t bonds amid fiscal concerns

Investors are reallocating USD bns from US Treasuries to US and European corporate debt, as government debt progressively looks relatively weaker, Bloomberg reported. However, the shift is happening slowly, as US Treasuries still hold a steadier performance than corporate bonds, even after the April tariff announcement which pulled both of their prices down. Foreign demand for Treasuries remained resilient, with holdings climbing in May.

By the numbers: Money managers cleared USD 3.9 bn from the US treasuries last month, while putting USD 10 bn into European and US investment-grade corporate debt, according to EPFR Global data. Meanwhile, investors poured another USD 13 bn into US high-grade corporates in July alone, the largest net client purchasing on record since 2015, according to a note from Barclays strategists.

The rationale: If the US fiscal deficits continue to expand as a result of tax cuts and growing interest costs, the government could end up borrowing more, making Treasuries riskier and company debt relatively safer.

A key catalyst for the sentiment shift is Moody’s Ratings, after it lowered the US government rating to Aa1 in May from AAA, citing the impact of growing deficit and rising interest. Interest payments will eat up some 30% of revenue by 2035, compared to 18% in 2024 and 9% in 2021, the agency noted that. The next decade could see US deficits increase by some USD 3.4 tn, on the heels of the Trump administration’s tax cuts, according to the Congressional Budget Office.

MEANWHILE- Corporates are posting robust performance despite warnings, with established companies having the ability to pay interest from yielding earnings. More US companies are exceeding analysts’ expectations compared to the same period last year. “What we’ve seen on the government fiscal side is not great news. Corporates seem to be chugging along nicely,” Jason Simpson, senior fixed income SPDR ETF strategist at State Street Investment Management, told Bloomberg.

Corporate bonds still possess some risks: The high demand for corporate bonds has driven their prices up and their yields down, a reason money managers tend to be cautious. Corporate bond spreads are currently too tight to make them attractive, according to Dominique Braeuninger, a multi-asset fund manager at Schroders Investment Management.

MARKETS THIS MORNING-

Asian markets are mixed this morning, as anticipation for news on a US-China trade agreement is at an all-time high with the August 12 deadline approaching. Hong Kong’s Hang Seng is up 0.9%, while Japan’s Nikkei is down 0.8%. Meanwhile, Wall Street futures are indicating a strong open following the trade agreement with the EU.

TASI	10,956	+0.1% (YTD: -9.0%)
MSCI Tadawul 30	1,410	+0.1% (YTD: -6.6%)
NomuC	26,991	+0.3% (YTD: -14.3%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	34,554	+1.3% (YTD: +16.2%)
ADX	10,340	+0.4% (YTD: +9.8%)
DFM	6,150	+0.6% (YTD: +19.2%)
S&P 500	6,389	+0.4% (YTD: +8.6%)
FTSE 100	9,120	-0.2% (YTD: +11.6%)
Euro Stoxx 50	5,352	-0.1% (YTD: +9.3%)
Brent crude	USD 68.44	-1.1%
Natural gas (Nymex)	USD 3.11	+0.5%
Gold	USD 3,393	-1.1%
BTC	USD 119,695	+1.4% (YTD: +27.9%)
Sukuk/bond market index	911.76	-0.2% (YTD: +1.1%)
S&P MENA Bond & Sukuk	146.17	0.0% (YTD: +4.5%)
VIX (Volatility Index)	14.93	-3.0% (YTD: -14.0%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.1% yesterday on turnover of SAR 3.5 bn. The index is down 9.0% YTD.

In the green: Teco (+9.9%), Baan (+9.6%) and Raydan (+6.7%).

In the red: Buruj (-4.1%), Cenomi Retail (-3.0%) and Sadafco (-2.8%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.3% yesterday on turnover of SAR 31.5 mn. The index is down 14.3% YTD.

In the green: Adeer (+23.3%), Time (+9.1%) and Alashghal Almoysra (+9.0%).

In the red: Jana (-8.0%), Mufeed (-5.5%) and Ratio (-5.4%).

CORPORATE ACTIONS-

Artex Industrial Investment’s board greenlit a SAR 15.6 mn capital increase subscription for the Red Sea Cables, aiming at keeping a 27% ownership stake — equivalent of 864k shares — it said in a disclosure to Tadawul yesterday.

Adeer Real Estate’s board approved a SAR 25 mn dividend payout for 1H 2025 at SAR 5 per share, to be distributed on 21 August, it said in a disclosure to Tadawul yesterday.

The Saudi Investment Bank’s (Saib) board greenlit a SAR 498.9 mn dividend payout for 1H 2025 at SAR 0.4 apiece, it said in a filing to the exchange yesterday. The distribution date is set for 12 August.

Modern Mills for Food Products’s board approved a SAR 81 mn dividend payout for 1H 2025 at SAR 1 apiece, it said in a disclosure to Tadawul yesterday. Distribution is slated for 17 August.

CALENDAR

JULY

8 July-24 August (Monday-Sunday): Esports World Cup, Riyadh.

29-30 July (Tuesday-Wednesday): US Federal Reserve Open Market Committee meeting.

31 July (Thursday): Deadline for companies with SAR 2.5 mn or more in 2022/2023 revenues to integrate e-invoicing solutions with Fatoora.

31 July (Thursday): Deadline for companies with SAR 40 mn in revenues from goods and services during June and 2Q 2025 to integrate e-invoicing solutions with Fatoora.

31 July (Thursday): Deadline for companies to register for the ASICS Innovation Pitch competition.

AUGUST

3 August (Sunday): Opec+ meeting to decide on production levels for September.

5 August (Tuesday): Saudi Aramco to publish 2Q 2025 earnings.

7 July-24 August (Monday-Sunday): Esports World Cup, Riyadh.

5-17 August (Tuesday-Sunday): 2025 Fiba Asia Cup, Jeddah.

3Q 2025

The National Water Company is expected to award a construction contract for the Hail Region Water Networks project.

SEPTEMBER

3-4 September (Wednesday-Thursday): Sustainable Maritime Industry Conference (SMIC), Ritz-Cartlon, Jeddah.

9-11 September (Tuesday-Thursday): International Beauty Expo 2025, Jeddah Superdome.

15-17 September (Monday-Wednesday): Money 20/20 Middle East, Riyadh.

17-18 September (Wednesday-Thursday): US Federal Reserve Open Market Committee meeting and Summary of Economic Projections.

23 September (Tuesday): Saudi National Day.

OCTOBER

1 October (Wednesday): Electronic salary transfer via the Musaned platform to include employers with two or more domestic workers.

1-3 October (Wednesday-Friday): Saudi Green Building Forum, Riyadh.

7-8 October (Tuesday-Wednesday): Global EV & Mobility Technology (GEMTECH) Forum, Riyadh.

15 October (Wednesday): Russian-Arab Summit.

17 October (Friday): Saudization for private healthcare roles enters its second phase.

22-23 October (Wednesday-Thursday): Private Capital Forum, Riyadh.

24 October-1 November (Friday-Saturday): AlUla Wellness Festival.

26-27 October (Sunday-Monday): The Global Proptech Summit 2025, Mandarin Oriental Al Faisaliah, Riyadh.

27-30 October (Monday-Thursday): Global Health Exhibition, Riyadh Exhibition and Convention Center, Riyadh.

28-30 October (Tuesday-Thursday): Future Investment Initiative (FII9), King Abdulaziz International Conference Center (KAICC) and the Ritz-Carlton, Riyadh.

28-29 October (Tuesday-Wednesday): US Federal Reserve Open Market Committee meeting.

NOVEMBER

2 November (Sunday): Naming ASICS Innovation Pitch competition’s six finalists.

3-9 November (Monday- Sunday): WTA Tour Finals, Riyadh.

8-9 November (Saturday-Sunday): Del Monte Superleague Supercup, Jeddah.

11-13 November (Tuesday-Thursday): TouriseSummit, Riyadh.

17-20 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre, Riyadh.

22 November (Saturday): The Ring IV, ANB arena, Riyadh.

23-26 November (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh.

24-26 November (Monday-Wednesday): The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh.

24-26 November (Monday-Wednesday): Metropolis Madinah Conference for civilizational capitals, King Salman International Convention Centre (KSICC), Al Madinah.

27-30 November (Thursday-Sunday): World Rally Championship Saudi Arabia 2025, Jeddah.

28-30 November (Friday-Sunday): UIM F1H2O World Championship, Jeddah.

30 November (Sunday): Zatca 21st E-invoicing integration wave deadline.

DECEMBER

1-4 December (Monday-Thursday): International Conference on Nuclear and Radiological Emergencies, Riyadh.

1-4 December (Monday-Thursday): 61st ISOCARP World Planning Congress, Riyadh.

9-10 December (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

25-27 December (Saturday-Monday): The Fortune Global Forum 2025, Riyadh.

31 December (Wednesday): Zatca 22nd E-invoicing integration wave deadline.

31 December (Wednesday): Cancellation of Fines and Exemption of Financial Penalties Initiative by the Zakat, Tax and Customs Authority (Zatca) deadline.

December: Made in Saudi exhibition, Riyadh International Convention and Exhibition Center, Riyadh

2026

JANUARY

1 January (Thursday): Electronic salary transfer via the Musaned platform becomes mandatory for all domestic workers in the Kingdom.

13-15 January (Tuesday-Thursday): Future Minerals Forum, King Abdul Aziz International Conference Center, Riyadh.

20 January (Tuesday): SuperReturn Saudi Arabia, Hotel Fairmont, Riyadh.

18-21 January (Sunday-Wednesday): Saudi Hospital Design and Build Expo, Riyadh.

26-27 (Monday-Tuesday): GPRC Summit, Riyadh.

26-28 (Monday-Wednesday): Saudi Franchise Expo (SFE), Riyadh Exhibition and Convention Centre, Riyadh.

26-28 (Monday-Wednesday): Real Estate Future Forum, Four Seasons Hotel, Riyadh.

27-28 (Tuesday-Wednesday): SkyMove Air Cargo MENA, Riyadh.

28 (Wednesday): Data Center Nation Riyadh, Riyadh.

28-30 (Wednesday-Friday): Jeddah International Travel and Tourism Exhibition (JTTX), Jeddah.

FEBRUARY

2-4 (Monday-Wednesday): Saudi Media Forum, Riyadh.

2-4 (Monday-Wednesday): Women Leaders Summit and Awards KSA, Riyadh.

3-4 (Tuesday-Wednesday): RLC Global Forum Annual Meeting, Riyadh.

8-12 February (Sunday-Thursday): World Defense Show, Riyadh.

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

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

13-14 February (Friday-Saturday): Jeddah E-Prix 2026, Jeddah.

MARCH

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

APRIL

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

OCTOBER

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

Signposted to happen sometime in 2026:

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

Signposted to happen sometime in 2027:

The World Water Forum takes place in Riyadh.
The Ocean Race finishes in Amaala on the Red Sea.
Riyadh-Kudmi transmission line to be completed.

Signposted to happen sometime in 2Q 2027:

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

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