Modern Mills jumps in Tadawul debut

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Three more companies line up to list on Nomu, Tadawul’s parallel market

Good morning, friends. We’ve made it through another workweek together, and our reward is two days of rest before we get to do it all over again. We expect a handful of big earnings announcements today and Sunday as FY 2023 results season rushes to a close — and then, hopefully, a nice, gentle slide into the final days of Ramadan.

PSA- Most of us are now just 12 days away from Eid break. Businesses will be off for Eid Al Fitr from Tuesday, 9 April through Friday, 13 April, while banks and the stock market will be closed from Friday, 5 April, through Saturday, 13 April.

WEATHER- Expect another sunny day in Riyadh today, with a daytime high of 27°C falling to 17°C. Be sure to pop on those sunglasses and check if your A/C is ready for winter to end.

It’s more of the same in Makkah with a high of 37°C and a low of 22°C, but tomorrow could see thunderstorms hitting the holy city.

Meanwhile, Medinah is in for some haze today with the weather peaking at 33°C before dropping to 23°C. Watch out for some rain in the area this weekend.

So, when do we eat? Maghrib prayers are at 6:08 pm in the capital city, and you’ll have until 4:29 am tomorrow to hydrate and caffeinate ahead of fajr. Today is day 18 of Ramadan.

WATCH THIS SPACE-

#1- Three fresh offerings on Nomu: The Capital Market Authority (CMA) gave LeafGlobal Environmental Services the green light for an offering on parallel market Nomu, where the environmental resource management company will offer 1.5 mn shares — good for a 30% stake — to qualified investors, according to a statement. Petroleum derivatives manufacturer Petrol Naas and Arabian United Float Glass are also gearing up to make their debuts on Nomu after receiving regulatory approval, according to two separate CMA statements (here, and h ere).

MEANWHILE- Miral Dental Clinic is going for a direct listing on Nomu, according to a statement. Direct listings allow a company to list its shares on the exchange without having to issue fresh stock or raise funds. Instead, current shareholders can simply opt to start offering shares for sale after the company’s stock is admitted to trading.

#3- As many as 59k seasonal work visas are expected to be issued this year to meet demand during the Hajj and Umrah seasons, Al Riyadh quotes Human Resources Minister Ahmed Al-Rajh as saying. The minister’s statements come after the government said it will bear visa costs for seasonal workers brought in for the livestock sacrifice program Adahi during Hajj.

#4- Dar Global — the global arm of one of the Kingdom’s largest listed real estate developers Dar Al Arkan — is planning to buy property in the US and Europe as the company pushes ahead with its overseas expansion strategy, CEO Ziad Al Chaar told The National yesterday. The company is looking to buy property in Miami and New York and will fund its new projects from its own resources or through debt, Al Chaar said. Dar Global’s portfolio includes projects in the UAE, Oman, Qatar, the UK, and Spain.

What they said: “Miami, which used to be one type of market for mainly Latin Americans, now is attracting investment and buyers from all over the globe,” he said. “This is why we are looking at the market in Miami.” He said his company is seeking a developer to buy projects in New York, adding that is also working with unnamed developers to “reactivate projects [in New York] that have been launched before but were not completed.”

London is on the radar, too: Dar Global is also looking to launch a project in London with an unnamed developer or acquire ready projects being sold by other developers, he said. The plans come nearly a year after Dar Global was listed on the London Stock Exchange, raising USD 72 mn in gross proceeds.

#4- Tickets are available here for Zarqaa Al Yamama — the Kingdom’s first-ever grand opera production. The show will run from Thursday, 25 April until Saturday, 4 May. Tickets start from SAR 100.

THE BIG STORY ABROAD-

There’s no single story capturing the imagination of the global press this morning, but watchers of the green economy will want to pay attention here:

Janet Yellen is stirring the pot with China, warning Beijing against dumping key components of the global green economy on other markets.

Yellen claims China is dumping excess production of solar panels, EVs, and lithium ion batteries on other countries. She said the practice “distorts global prices and production patterns and hurts American firms and workers, as well as firms and workers around the world.”

Why the fuss? Western economies are scrambling to catch up to China on clean-tech manufacturing. They see it as critical to energy security, to the green transition, and to bringing manufacturing jobs back to the west. The US is offering tax breaks and subsidies to everyone from green hydrogen producers (hello, Inflation Reduction Act) to key component makers, sparking competition with Canada and the European Union.

Why now? Yellen was speaking on the eve of her second trip to Beijing as US treasury secretary.

Read more: Head to our website for links to stories from the Financial Times and CNBC.

ON A RELATED NOTE- EV and business nerds alike (Elon stans, not so much) will enjoy this morning’s analysis from the Wall Street Journal, which writes that Chinese EV maker “BYD’s rise challenges Tesla — and its valuation. The companies are increasingly close peers while being valued completely differently.”

Tesla is worth about 7x more, and “it takes a lot of faith in Tesla Chief Executive Elon Musk’s promise of autonomy to rationalize the difference,” the Journal suggests.

ALSO WORTH KNOWING ABOUT on this fine Thursday morning:

Daniel Kahneman, one of the founding fathers of behavioral economics, is dead at age 90. The Nobel laureate and his partner Amos Tversky were pioneers of the notion that we don’t make rational economic decisions (take that, Adam Smith). Instead, he explained how we use mental shortcuts, get swayed by emotions, and otherwise simply make choices that frequently fail to give us the best economic outcomes. We’ll have an explainer in EnterprisePM on Sunday, and you can read more in the meantime in the Wall Street Journal.

AND- Just in time to help explain why fast-fashion retailer H&M is delaying somecampaigns: The ‘no-fail’ mission to protect the Red Sea isn’t working,” writes Bloomberg.

Modern Mills jumps on Tadawul debut

Modern Mills’ shares climbed 30% on their first day of trading on the Tadawul yesterday to close at SAR 62.40 apiece, up from their initial price of SAR 48.00. The shares hit the maximum of the ±30% band within which they are allowed to trade on the first three days. Starting from the fourth day of trading on the Tadawul, the band will be capped at no more than 10% up or down before circuit breakers kick in.

Background: The flour milling company sold a 30% stake in the IPO, with 20 percentage points allocated to institutional investors and the remaining 10 points to retail investors. The IPO saw strong demand from retail investors with a 22x oversubscription rate. Selling shareholders — including Mada International Holding, Al Ghurair Foods Company, and Masafi Company — will now own a combined 69% of Modern Mills.

ADVISORS- HSBC Saudi Arabia quarterbacked the transaction as financial advisor, joint bookrunner, underwriter and lead manager, while Emirates NBD Capital KSA was joint bookrunner and underwriter. Al Rajhi Bank and SNB acted as receiving agents. Moelis & Company Saudi advised selling shareholders.

Saudi’s private equity hits record USD 4 bn with transactions led by the PIF

Private equity (PE) activity in the Kingdom hit a record USD 4 bn in 2023, up 11.1% y-o-y, according to a recent report (pdf) by venture data platform Magnitt. The 2023 figure highlights a steady growth trajectory since 2020, with total PE investments growing 3.7x y-o-y in 20231 to USD 610 mn before climbing to USD 3.6 bn in 2022.

Where the growth is coming from: The report shows growth in the local PE landscape led by a large volume of food and beverage transactions coupled with the high value of manufacturing buyouts. The figure is up from USD 3.6 bn in 2022 and USD 610 mn in 2021.

The methodology: The the report covers buyouts, PE growth, leveraged buyouts and bolt-ons. It doesn’t include venture capital, private debt, venture debt, real estate, infrastructure or natural resources investments. The report was sponsored by Saudi Venture Capital (SVC).

Overall, buyouts made up the largest share of PE activity in the past five years: On average, buyouts accounted for 80% of the total capital deployed in private equity in the past five years. It accounted for 70% of total deployed capital in 2023 and 75% in 2022, after peaking at 80% in 2021. Meanwhile, growth transactions hit a high of 27% last year up from 21% in 2022 and 10% in 2021.

The manufacturing sector led sectors with highest PE investment values in the past five years at USD 4 bn, accounting for 46% of total PE value, the report showed. This was followed by financial services with USD 2 bn (29%), telecommunications with USD 1 bn (11%), healthcare with USD 570 mn (7%), and food and beverages with USD 155 mn (2%).

But F&B clinched the top spot for number of PE transactions: Despite the food and beverages sector coming in last in terms of PE investment values during 2019-2023, it led the number of transactions with 12 buyouts and three growth transactions. Healthcare came in second with 11 transactions followed by the financial services sector which came in at eight. The technology and manufacturing sectors saw seven and six transactions, respectively.

PIF has been scoring big in private equity transactions: The top five PE transactions, which were mostly led by the Public Investment Fund (PIF), accounted for 76% of total PE between 2019 and 2023. The PIF topped transactions with a USD 3.3 bn buyout of Sabic’s steel subsidiary Hadeed in 2023, followed by the sovereign wealth fund’s USD 1.5 bn buyout of Prince Al Waleed Bin Talal’s Kingdom Holding in 2022. Its acquisition of a 80% stake in telecom operator Zain in 2022 for USD 806.8 mn came in third.

Savvy Games Group gears up for some esports, games launches in the short, medium term

PIF-owned Savvy Games Group is developing three mobile games, with two of them set to launch this year as it looks to accelerate its transformation into a global leader in gaming and e-sports, CEO Brian Ward told Aleqtisadiah. These include a triple-A game by Savvy’s Steer Studio.

SOUND SMART- AAA games are characterized by their top-tier quality, requiring significantinvestment — think of them as the gaming equivalent of a Hollywood blockbuster These games are mostly released on console or PC, and only rarely (or as cut-downs / spinoffs) on mobile devices. Think Call of Duty, GTA 5, or Destiny 2 for the gaming-literates.

An e-sports tournament, brought to you by Saudi: Savvy and its recently acquired ESL FACIT are working to launch the upcoming Esports World Cup this summer. This is part of the Kingdom’s efforts to diversify its economy, with the industry expected to contribute SAR 50 bn to the economy, according to Crown Prince and Prime Minister Mohammed bin Salman.

Saudi’s video game industry is worth SAR 4 bn, and boasts an annual growth rate of 8.5%, Ward added.

REMEMBER- Savvy acquired Scopely for USD 4.9 bn last year, in the “largest investment Savvy has made to-date,” said Ward at the time. Scopely boasts a portfolio of games including Monopoly GO, which became the most downloaded game worldwide.

IN OTHER GAMING NEWS- Ajlan & Bros subsidiary Sandsoft partnered with Chinese NetEase to establish a new JV named Stellar Gate Games, which will work on game publishing, marketing and in the e-sports industry for the MENA region, according to a joint statement.

MBC’s business, commercial segment drives growth in its post-IPO 2023 results

MBC Group recorded a 44.8% y-o-y rise in net income to SAR 69 mn in 2023, exceeding its financial targets for the year, the regional broadcaster said in its first post-IPO earnings release (pdf). Revenues were up 6.2% y-o-y to SAR 3.7 bn in the same period. MBC made its debut on Tadawul’s main market in January, selling shares at SAR 25.00 apiece in an IPO that raised SAR 831 mn.

What’s driving growth: The strong performance was attributed to a fall in Shahid’s net losses, along with revenue growth from the advertising video on demand (AVOD) and subscription video on demand (SVOD) platforms. The media giant aims to hit breakeven for Shahid within five years.

By the numbers: The company’s strategy has “driven Shahid SVOD subscribers to surpass our targets, reaching just under 4 mn, while our AVOD revenues have grown by 143% y-o-y, reaching SAR 112 mn,” said MBC Group CEO, Sam Barnett.

Business segment is leading the charge: Net income from broadcasting and commercial activities fell 21% y-o-y to SAR 345 mn in 2023, yet they remain to be the highest revenue generating segment, followed by media and entertainment initiatives with a net income of SAR 4 mn.

Market reax: MBC shares were down 0.2% at market close to SAR 58.6 apiece. Shares are up 134% since its debut.

TAIBA INVESTMENTS-

Real estate firm Taiba Investments’ net income dropped 21.3% y-o-y to SAR 109.8 mn in 2023, while its revenues grew 62.4% to SAR 536.4 mn, it said in a disclosure to Tadawul yesterday.

SNB names Tareq Al Sadhan as new CEO

SNB gets new CEO: The Saudi National Bank (SNB), the Kingdom’s largest lender by assets, has named Tareq Al Sadhan (Linkedin) as its new CEO effective 1 May, it said in a disclosure to Tadawul yesterday. Al Sadhan succeeds acting CEO Talal Al Khereiji (bio), who is stepping down for “personal circumstances,” effective 30 April.

Al Sadhan is no stranger to the banking industry, having served as Riyad Bank’s president and CEO from April 2019 to January 2024. Prior to joining the bank, he served as acting director general for the Zakat, Tax and Customs Authority and was previously Saudi Central Bank Sama’s deputy governor for supervision. He is currently a member of the Public Investment Fund (PIF)’s audit committee and is a member of Mastercard’s advisory board.

EFG Holding eyes KSA expansion + Aramco chief says energy transition is “failing”

Our friends at EFG Holding are planning to boost their headcount in Saudi Arabia by 30% to reach 47 this year as it looks to expand its market share, Group CEO Karim Awad told Bloomberg. “We have big plans for hopefully increasing our market share, either at brokerage or investment banking through more [transactions],” he said. “We need to have a lot more focus there.”

For even more IPOs? The company has six IPOs in the pipeline for this year, Awad said, without providing further details. The investment bank has participated in a number of Saudi’s largest share sales in recent years, including offerings by Aramco and Ades Holding.

ALSO- Aramco chief Amin Nasser’s skepticism around the energy transition — which he said is “visibly failing on most fronts” at CERAWeek — got ink in France24, and China Southern Airline’s launch of a second route to the Kingdom this summer got a mention in Airways Magazine.

And, finally, The Guardian could not contain the snark as it took note of the Kingdom being named chair of the UN Commission on the Status of Women for the next year.

Oil & gas giant Ades secures a 10-year project from the Egyptian General Petroleum Corporation

OIL & GAS-

Oil and gas drilling company Ades Holding will work to boost oil productionat two brownfields in Egypt after landing a 10-year service agreement, it said in a statement (pdf). Under the agreement, Ades will receive “incremental production returns,” the statement reads. The agreement has an option for a 10-year extension. The drilling giant signed the agreement with two subsidiaries of the Egyptian General Petroleum Corporation — Suez Oil Company (SUCO) and Offshore Shukeir Marine Oil — and will partner on the projects with an unnamed “leading local exploration and production player.”

The details: The agreement will see Ades invest USD 30 mn in SUCO and USD 36 mn in OSOCO, over the first three years. The consortium’s share of the additional production will range between 61% and 72% depending on production volume and price factors.The project is slated for launch in July 2024.

AVIATION-

Lithuania-based Private jet charter Klasjet is set to operate domestic and international flights in the Kingdom after receiving approval from the General Authority of Civil Aviation, it said in a statement on Tuesday. This is going to be the second country of operation for the charter company in the Middle East, after the UAE. KlasJet Boeing 737 will be operated by Horizon Aviation on an aircraft, crew, maintenance, and ins. (ACMI) leasing contract. KlasJet is part of the Avia Solutions Group family.

FASHION-

The largest Dolce & Gabbana outlet is coming to Diriyah: PIF subsidiary Diriyah has teamed up with Italian fashion powerhouse Dolce and Gabbana and local luxury retailer AlMalki Group to inaugurate the largest Dolce & Gabbana retail outlet, it said in a press release. The partnership will also introduce the GCC region’s first cafe in Bujairi Terrace later this year. The D&G outlet will feature an exclusive Abaya collection, available only at this store.

DEBT WATCH-

#1- ProMedEx renews shariah-compliant credit facility with SNB: Medical devices distributor ProMedEx has renewed a shariah-compliant SAR 38 m credit facility with the Saudi National Bank (SNB) for an additional eight months, it said in a disclosure to Tadawul. Proceeds will be channeled towards the issuance of letters of guarantee and multi-purpose financing for a number of its projects, it said.

#2- Yamama Cement gets SAR 800 mn loan from Alinma Bank: Cement producer Yamama Cement has obtained a shariah-compliant SAR 800 bn banking facility from Alinma Bank, it said in a disclosure to Tadawul. The funds will “refinance existing liabilities, capital expenditures and financing working capital requirements to improve financial efficiency.”

LOGISTICS-

New shipping service at Jeddah Islamic Port: The Saudi Ports Authority (Mawani) has added a new shipping service, RGI by Unifeeder, connecting Jeddah Islamic Port to India’s Mundra, Nhava and Sheva, UAE’s Jebel Ali and Egypt’s Sokhna in regular weekly trips, it said in a statement. The new service will offer a capacity of up to 2.8k TEUs.

Victims of the FTX meltdown are getting 100% of their money back — and then some

FTX founder Sam Bankman-Fried will be sentenced in a US court today, and it’s anyone’s guess how many years he’ll do in the pokey: A handful, as his lawyers have suggested, or up to five decades, as prosecutors are suggesting.

Why is it so hard to sort out? And why the gulf between defense and prosecution sentencing recommendations so wide?

Crypto has soared since FTX melted down — its appreciation against the greenback is masking the underlying losses. Prosecutors have called the meltdown of FTX “one of the biggest financial frauds in American history.” But his legal team told the judge that, in the end, everyone is being made whole through bankruptcy proceedings: “Each victim . . . will receive 100 cents on the USD, plus interest,” they say.

Customers may in fact get 40% than the initial value of their claims against FTX, the Financial Times said earlier this week, citing remarks by FTX’s bankruptcy administrators.

But, but, but… That math relies on the fact that clients who filed claims against FTX are getting their money back in USD. But their original assets were crypto, and BTC, for example, is up about 4.4x to nearly USD 70k between the time FTX’s meltdown and now. The value of the AI assets FTX held — including a nearly USD 1 bn stake in Anthropic that administrators recently sold — have also soared.

Want to read more? Head to our website for coverage in the Financial Times | Wall Street Journal | CoinDesk | CNBC.

Also worth knowing about this morning:

From the FT’s Lex: “Donald Trump taps superfans to make Spacs great again. TMTG looks like a rightwing meme stock combined with the classic pathologies of the blank cheque bubble.”
There should be “no rush” to cut rates given recent US inflation data, a senior US Federal Reserve official said yesterday, though he didn’t rule out the possibility of rate hikes later this year. (Reuters)

THE MARKET THIS MORNING-

Asian shares are in the red this morning while US futures were largely unchanged overnight, leaving the Dow, Nasdaq Composite, and S&P 500 still on track to close the first quarter up 10% or more. European futures were up slightly in as we slid toward dispatch time this morning, suggesting major benchmarks will open in the green later today.

Remember: Today is the last day of trading in 1Q 2024 for most Western markets, which will close Friday and Monday for the Easter holiday weekend.

TASI	12,608	+0.2% (YTD: +5.4%)
MSCI Tadawul 30	1,592	+0.1% (YTD: +2.6%)
NomuC	27,009	+1.3% (YTD: +10.1%)
USD : SAR (SAMA)	3.75 Sell	3.75 Buy
Interest rates	6.5% repo	5.5% reverse repo
EGX30	28,224	-2.9% (YTD: +13.4%)
ADX	9,273	-0.5% (YTD: -3.2%)
DFM	4,232	-0.3% (YTD: +4.2%)
S&P 500	5,248	+0.9% (YTD: +10%)
FTSE 100	7,932	+0.01% (YTD: +2.3%)
Euro Stoxx 50	5,082	+0.4% (YTD: +12.4%)
Brent crude	USD 86.31	-0.07%
Natural gas (Nymex)	USD 1.72	-3.9%
Gold	USD 2,194.8	+0.7%
BTC	USD 69,379	-1.7% (YTD: +154.4%)

THE CLOSING BELL: TADAWUL-

The TASIrose 0.2% yesterday on turnover of SAR 7.4 bn. The index is up 5.4% YTD.

In the green: Modern Mills (+30%), SAIC (+9.9%) and Saudi Cable (+9.9%).

In the red: AlKhaleej Training (-9.9%), AlBaha (-6.7%) and First Mills (-5.1%).

THE CLOSING BELL: NOMU-

The NomuCrose 1.3% yesterday on turnover of SAR 150.3 mn. The index is up 10.1% YTD.

In the green: Group Five (+11.6%), Ghida Alsultan (+8.6%) and Rawasi (+6.1%).

In the red:Enma AlRawabi (-8.3%), Almujtama Medical (-6.6%) and Leen AlKhair (-3.3%)

CORPORATE ACTIONS-

#1- Tam Development’s BoD has recommended a dividend payout of SAR 4 mn at SAR 1.23 per share for 2023, it said in a disclosure to Tadawul.

#2- Taiba Investment’s BoD has recommended a dividend payout of SAR 169 mn at SAR 0.65 per share for 2023, it said in a disclosure to Tadawul.

#3- Astra Industrial Group’s BoD has recommended a dividend payout of SAR 200 mn at SAR 2.5 per share for 2023, it said in a disclosure to Tadawul.

#4- Alamar Foods’s BoD has recommended a dividend payout of SAR 10 mn at SAR 0.4 per share for 4Q 2023, it said in a disclosure to Tadawul. Eligible shareholders can cash out on Monday, 22 April.

#5- Naqi Water’s BoD has recommended a 5% cash dividend (SAR 0.5 per share) for 2H 2023, amounting to a total of SAR 10 mn, according to a Tadawul disclosure.

Saudi, Argentina seek stronger investment ties

Saudi and Argentina talk about improving ties: Investment Minister Khalid Al Falih discussed bolstering bilateral economic and investment ties with Argentina’s Cabinet Chief Nicolás Posse and Economy Minister Luis Caputo, according to a statement on X by the ministry. They also discussed investment priorities by Saudi companies in the South American country. This is the first meeting between the two countries’ officials since Argentina’s new cabinet was sworn in December amid an ongoing economic crisis that pushed the government to adopt austerity measures.

All for promoting FDI: Saudi and Argentina signed last year a MoU to encourage direct investments between the two countries. They also inked an agreemen t to explore and evaluate mineral resources and groundwater reservoirs, conducting risk and impact mitigation reports, and assessing data management techniques. The South American country has set a target to become carbon neutral by 2050.

CALENDAR

APRIL

8-11 April (Monday-Thursday): Saudi Super Cup, Abu Dhabi.

10 April (Wednesday): Eid al-Fitr

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

16 April (Tuesday): FEI World Cup Equestrian, Riyadh.

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

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

MAY

2-5 May (Thursday-Sunday): Townhall Expo, Riyadh.

6-9 May (Monday-Thursday): Saudi Smart Manufacturing, Riyadh.

6-9 May (Monday-Thursday): Saudi Smart Logistics, Riyadh.

13-15 May (Monday-Wednesday): Smart Future Expo, Riyadh.

13 May (Monday): Saudi Giga Projects, Riyadh.

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

20-21 May (Monday-Tuesday): Future Projects Forum, Four Seasons Hotel, 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

4-7 June (Tuesday-Friday): Saudi Sports Show, Riyadh.

4-7 June (Tuesday-Friday): Aqarat Expo, Riyadh.

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.

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

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

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

NOVEMBER

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

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

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

2025

FEBRUARY

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

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