Non-oil sector private sector contracts

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WHAT WE’RE TRACKING TODAY

Opec+ presses ahead with symbolic output increase

Good morning, friends. It is another morning led by the impact of the regional war on our economy — non-oil private activity contracted for the first time in over five years.

Also in today’s issue: We look at how our aviation industry is holding up amid all that’s going on and the ins and outs of the Kingdom’s real estate tokenization rollout.

WEATHER- The downpour continues across most of the Kingdom today, with Asir, Jazan, and Najran in for the wettest weather while the Eastern Region, Northern Borders, Al-Jawf, Hail, Qassim, Riyadh, and Al-Baha will see milder showers.

Riyadh: 29°C high / 19°C low;
Jeddah: 31°C high / 25°C low;
Makkah: 37°C high / 29°C low;
Dammam: 27°C high / 20°C low.

PSAs

The Education Ministry will open registration for new primary and early childhood students on Sunday, Saudi Gazette reports. The process allows children born during the Covid period to enroll in formal education, provided they meet the approved age requirements.

Students aged six or older — born before 24 August 2020 — qualify for standard admission, while those under six by up to 90 days — born between 25 August and 22 November 2020 — are eligible if they have completed a full year of kindergarten.

Watch this space

OIL — Opec+ decided to boost oil output by 206k bbl / d for May yesterday, with Saudi Arabia alone contributing 62k bbl / d, according to a statement from the organization. The hike may only take effect on paper as key nations remain unable to raise production amid the US-Iran conflict, Reuters reports.

The move indicates a willingness to raise output once the Strait of Hormuz reopens, sources in the eight-member bloc told Reuters. The hike — which only amounts to 2% of the supply disrupted by Iran’s closure of the waterway — is expected to add “very few barrels to the market,” former Opec official Jorge Leon told Reuters.

The organization “expressed concern regarding attacks on energy infrastructure, noting that restoring damaged energy assets to full capacity is both costly and takes a long time, thereby affecting overall supply availability.”

ENERGY — Acwa limits dispatch at two solar projects over grid concerns: Acwa is temporarily limiting power dispatch at its Al Kahfah (1.4k MW) and ArRass2 (2k MW) solar IPPs following instructions from the grid operator over alleged reactive power fluctuations affecting grid stability, it said in a disclosure to Tadawul on Thursday.

The impact: Al Kahfah — which began commercial operations in November 2025 — has faced dispatch restrictions since 12 December, with partial output allowed from 11 February, resulting in an estimated SAR 95 mn of challenged revenue through March. ArRass2, operational since September, has been under limitation since 16 January 2026, with partial dispatch from 8 March, affecting roughly SAR 73 mn in revenue. Both projects are conducting independent technical assessments and coordinating with authorities to restore full operations.

INVESTMENT WATCH — Gulf investors backing Paramount’s Warner Bros’ takeover are expected to put pen to paper as soon as today, people familiar with the matter told the Wall Street Journal. The Public Investment Fund, Abu Dhabi’s L'imad Holding, and the Qatar Investment Authority are committing some USD 24 bn to Paramount, with PIF putting down the lion’s share — around USD 10 bn.

REMEMBER- The battle for Warner Bros Discovery reached a dramatic end in February, with Netflix walking away from its bid for the Hollywood studio and streaming giant, paving the way for Paramount to acquire the firm.

Data point

USD 907 mn — that’s how much Saudi Pro League clubs spent on signing players from abroad in 2025, up 95% y-o-y, Asharq Business reported, citing figures from FIFA.

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The big story abroad

It’s a pretty quiet morning in the global front pages, with the latest threats from Trump getting top billing.

US President Donald Trump has once again threatened to destroy Iran’s power infrastructure. Should Tehran keep the Strait of Hormuz shut, Trump has vowed to target civilian infrastructure — power plants and bridges — in a TruthSocial post leading to some critics pointing out that this would constitute a war crime.

Oil jumped following the President’s ultimatum. Brent futures rose 1.6% to USD 110.74 a barrel earlier today, while US West Texas Intermediate futures gained 0.6% to trade at USD 112.25.

War sends non-oil private sector growth into contraction

The non-oil private sector has contracted — for the first time in over 5.5 years. The headline Purchasing Managers’ Index (PMI) tumbled to 48.8 in March — a sharp drop from 56.1 in February, according to the Riyad Bank Saudi Arabia PMI (pdf). The 7.3-point drop is the second-largest decline in the survey’s history, eclipsed only by the initial pandemic shock of March 2020.

Geopolitical instability is doing most of the damage. Non-oil firms saw new business drop sharply as the regional war pushed clients to delay spending and shelve new projects pending clarity on the conflict, the report noted. Export orders were hit particularly hard, falling at their fastest rate in nearly six years.

Local logistics are also under strain. “There is a decline in new orders and local purchasing power, or at least in consumer confidence, which has led to a reduction in production and supply,” MENA Economist Hamzeh Al Gaaod tells EnterpriseAM. Transport costs have spiked as industries — particularly oil production — shift operations from the east to the west to secure exports, leading to “time delays and increased costs,” he said.

The backlog paradox: Though new business has slowed, work is piling up. Backlogs grew at their fastest pace since 2018 driven by freight delays and rising transport costs, while supplier delivery times hit their worst level since June 2020. This buildup suggests that “underlying demand remains present,” Riyad Bank Chief Economist Naif Al-Ghaith noted in the report, adding that “firms responded prudently by adjusting purchasing activity, while inventory levels stayed relatively well-positioned.”

There is a modest silver lining: Input cost inflation eased to its slowest pace in a year on softer wage pressures and weaker demand. Employment also continues to expand in March, albeit at a slower pace. Al Ghaith attributed this to firms continuing to hire “to meet local workforce targets” and manage supply pressures.

Aviation buildout gives the Kingdom edge amid disruption

Years of aviation spending in the Kingdom are now paying off in disruption. Early industry feedback suggests Saudi’s aviation industry held up, even as the regional war rippled across global aviation — with airlines navigating closed airspace, longer routes, and mounting pricing pressure. However, how resilient is its infrastructure under sustained pressure?

The first phase was about absorption: “Saudi Arabia’s aviation system has, so far, demonstrated a notable degree of resilience under initial stress,” Richard Maslen, head of analysis at CAPA – Center for Aviation tells EnterpriseAM. Riyadh, Jeddah, Dammam, and Madinah absorbed the first surge in disrupted traffic — helped by years of investment in airport infrastructure and air traffic management.

The sector absorbed the first shock in the early days: Saudi airports handled more than 120 flights for neighboring carriers between 28 February and 16 March as regional airspace pushed airlines to redraw routes and lean on the kingdom as a fall back operating space.

AND- We have room to maneuver: “Compared to more constrained Gulf airspaces, Saudi Arabia has benefited from greater geographic scale, giving it more flexibility in routing and absorbing overflow traffic”, Maslen adds. The flexibility helped the Kingdom hold up better in the first shock phase.

BACKGROUND- Saudi Arabia has pegged several investments into its airport buildout — with nearly USD investment 3.8 bn into Jeddah’s King Abdulaziz International Airport, roughly USD 1.5 bn into an earlier King Khalid upgrade in Riyadh, about USD 427 mn into Eastern Province airport projects, and another USD 107 mn into Riyadh’s Terminal 1 expansion.

The numbers speak for themselves: The Kingdom airports handled 140.9 mn passengers in 2025 — with Jeddah alone processing 53.4 mn.

The reliability squeeze

However, the systems did show signs of friction: Flight-tracking data from 22 March revealed nearly 300 disrupted flights across the Kingdom’s four major hubs — reporting 39 cancellations in a single day.

A “de facto” isolation is also emerging as international carriers increasingly price in risk. KLM, Cathay Pacific, and Lufthansa have suspended or reduced services to Riyadh and Dammam, with some extensions stretching into October.

This forces regional traffic onto domestic carriers, just as they face their own constraints. Flynas has suspended several key GCC routes through mid-April, leaving Saudia to carry the bulk of the regional load.

The stress test gets harder with the Hajj collision: The prolonged conflict is looking increasingly likely to collide with the 2026/1447 Hajj season. International arrivals for the pilgrimage begin 18 April — creating a massive influx of traffic. The system will head towards one of its busiest periods — which can stress-test a network that proved somewhat resilient in the early days of disruptions.

What’s next?

The next phase will test flexibility, not just scale: “Saudi Arabia’s aviation system is designed to scale traffic efficiently, but sustained geopolitical disruption shifts the challenge from size to flexibility, with the real pressure showing up at the limits of optimization,” Maslen flags.

Inside the impending Saudi real estate tokenization launch

The Kingdom is entering the final countdown for its June 2026 real estate tokenization rollout, moving to turn its skyline into a digital asset class by trading physical deeds for programmable code. Using an approach that would see regulators, businesses, and technology providers align and exchange ideas, Saudi Arabia wants to bypass the traditional friction of capital markets by creating a direct digital reflection of the national land registry.

We sat down with Saleh Alghamdi, CEO of Ghanem, and Adam Popat, CEO of SettleMint, to look under the hood of Saudi Arabia’s top-down approach to digitizing, tokenizing, and eventually fractionalizing the entire property market. Ghanem is among the proptechs licensed to operate in the Real Estate General Authority's tokenization sandbox, and Settlemint is the tokenization infrastructure provider for the Real Estate Registry (RER).

Uh, Enterprise… What's a token? Think of a token as a digital certificate of ownership that lives in a decentralized ledger (called a blockchain) rather than in a filing cabinet. Real estate tokenization takes an asset — like an office tower — and slices it into mns of identical digital units, similar to how a company issues shares of stock. Tokens are “programmable,” meaning the rights attached to them are baked into the code: a token can represent a direct fraction of the property deed or simply a right to a share of the rental income.

The pitch

Adios, middlemen: Selling an asset can take days to settle in traditional capital markets. That lag disappears on the blockchain, according to Popat. The blockchain eliminates intermediaries and settlement delays, allowing transactions to happen instantaneously because the parameters are pre-programmed into smart contracts. “You don't need the backend settlement infrastructure. You don't need the various third parties,” Popat said.

The investor’s journey is automated under the system, starting with purchasing the token via the app. Investors will then receive updates and rental income via the app, and can choose to exit via a trading platform or at the end of the property’s timeline.

It’s a deed, just digitally dressed up: A digital token will hold the same legal weight as a physical piece of paper, according to Alghamdi. Tokens will be visible on government platforms like Absher and Tawakkalna. The token label is simply a way to manage high numbers of investors and collective voting rights, Alghamdi says.

Could tokenization drive up prices? Alghamdi isn’t concerned, pointing to well-informed Saudi investors and a proactive regulator. With no trading platforms yet, authorities still have room to set pricing and premium controls to safeguard the market. Popat agrees, arguing that tokenization is a net positive — lowering barriers for middle-class and foreign investors while supporting liquidity, even in risk-off periods.

Playing in the sandbox

The REGA Regulatory Sandbox serves as a high-tech laboratory where firms like Ghanem stress-test the limits of current laws before the full framework goes live. Currently fully integrated with the RER, the firm is operating at scale while awaiting the final approval of the national tokenization law.

What it takes to graduate: Alghamdi says the path to a permanent license has two stages — sandbox testing and full graduation. Participants submit weekly reports and undergo continuous audits, but Alghamdi describes the relationship as a “two-way street” — firms comply with strict rules while pushing regulators to expand what’s allowed.

Final approval hinges on the new tokenization law and meeting two key criteria — proving a viable business model — think profitability, local hiring, and governance — as well as ensuring investor protection.

Democratizing the skyline

Historically, premium Saudi real estate was the playground of high-net-worth individuals (HNWIs). Tokenization changes the math, allowing new players to pump capital into and reap the rewards of these assets, Alghamdi argues.

This creates a new demographic of Saudi property owners, according to Alghamdi. Diversifiers look to spread risk across multiple assets rather than one large property. Ghost investors want real estate exposure without the headache of brokers, WhatsApp messages, and property management. Micro investors can now enter the market with as little as SAR 1k.

Ghanem is also positioning its fractional real estate platform as a tool for developers to unlock capital faster. “Instead of paying SAR 2 mn for the property, you can pay only SAR 50k and get part of the property and benefit from distributions and rental income,” Alghamdi explains.

Meshing with reforms

With the Foreign Ownership Law on the horizon, the infrastructure is being built with compliance in mind. The system uses geo-fencing and eligibility tiers to enforce national restrictions automatically.

That means “no-go” zones can be baked into the system: The platform can be programmed to recognize a user’s residency or religion and automatically block transactions in restricted zones if the user does not meet the criteria. “If the regulation says foreigners must not be able to own property in various places [like Makkah or Madinah], then that can be programmed directly into the tokens,” Popat explains.

Ready this year? Despite these necessary guardrails, the opening of the gates is expected to bring a massive surge of global liquidity. Alghamdi expects non-Saudi investor capabilities to launch within the next five months.

Looking ahead

Ghanem wants to move into the off-plan frontier: While it is currently focusing on ready-made properties, Alghamdi tells us his firm is exploring tokenizing off-plan properties with the regulator. On the tech side, Popat tells us the capability is already there. “The technology could handle [off-plan] today,” Popat notes, pointing instead to the need to “flesh out the rules… in a tokenized environment.” The platform can already support conditional minting and escrow tied to construction milestones, leaving regulation as the final hurdle.

Settlemint is also beta testing the marketplace: The current focus is on developing the "marketplace" side, including pricing feeds and escrow arrangements. Popat noted that while compliance is built into the smart contracts, the specific rules for marketplace governance are still being discussed with REGA and will likely be reflected in the next six to 12 months.

Could we see a regional (GCC) tokenized market? Popat believes a regional market is technically feasible if technical and regulatory standards are harmonized, though no formal political discussions have started yet.

Almarai sees stronger sales but flat bottom line in 1Q

Almarai’s net income was flat y-o-y at SAR 732 mn in 1Q 2026, it said in an earnings release (pdf). Revenue rose 7% y-o-y to SAR 6.2 bn, supported by stronger Ramadan performance and higher sales volumes across most markets and product categories, particularly dairy and poultry.

Jeddah port gets two new shipping links, Italy’s GKSD moves into Saudi

Mawani adds two new PIL services through Jeddah

Jeddah adds two more links: The Saudi Ports Authority (Mawani) has added two new Pacific International Lines (PIL) shipping services through Jeddah Islamic Port. The RGS service will connect Jeddah to Nhava Sheva and Mundra in India, Djibouti, and Berbera, with a capacity of 1.8k TEUs. The RS2 will link the port to nine international ports, including hubs in China and Singapore, as well as Ain Sokhna and Aqaba, with a capacity of roughly 12k TEUs.

More links, same playbook: Jeddah has become one of Saudi Arabia’s main tools for adding route density and widening liner access while Red Sea shipping patterns remain under pressure. The port has seen a steady run of new service additions over the past year, including routes tied to India, China, Egypt, Jordan, and Oman.

GKSD eyes Saudi healthcare market

GKSD, part of Italy’s Gruppo San Donato, is making its move into Saudi Arabia and Egypt, Al Arabiya reports its Managing Direct Masroor Haq as saying. In the Kingdom, it has partnered with a private firm to build an integrated hospital and smart clinics, with investments topping USD 200 mn. The company is targeting advanced healthcare services, including diagnostics, AI, robotic surgery, and specialized treatments.

Ades Holding to develop gas fields in Syria

Ades Holding has signed an implementation contract with the Syrian Petroleum Company to develop a number of gas fields across Syria, the state-owned company said in a statement yesterday. The contract — which also entails maintaining and developing existing wells — aims to see gas production grow 25% in the first six months and 50% by year-end. The contract’s value was not disclosed.

Ades Holding was among several energy players that signed agreements late last year to boost Syrian gas production. Taqa, Argas, and Arabian Drilling also inked similar agreements.

Tokenization could amplify market risks, IMF says

The global push to put traditional finance on the blockchain just got a flashing warning light, from none other than the International Monetary Fund.

What’s happening? Big players like the New York Stock Exchange are already testing infrastructure to trade tokenized stocks and exchange-traded funds around the clock. Nasdaq is pushing the US SEC to allow tokenized stock trading, and SEC Chair Paul Atkins appears supportive.

BUT- A new IMF report (pdf) warns that this isn't just a marginal tech upgrade. “Tokenization constitutes a structural reallocation of trust within the financial system,” the author argues.

Why it matters

The big selling point of tokenization is instant, constant settlement — what the industry calls “atomic settlement.”

The problem? The traditional financial system relies on delays. The lag time gives institutions a chance to net their claims and gives central banks a window to step in before a market hiccup turns into a full-blown meltdown. If trades settle instantly by design, we lose that temporal buffer.

This rewiring of market infrastructure creates several major systemic headaches:

Liquidity strains: Because end-of-day netting is eliminated, institutions must maintain liquidity continuously, sharply increasing intraday liquidity needs.
Algorithmic fire sales: As the IMF notes, “automated margin calls triggered by price movements can force rapid asset sales, reinforcing procyclical dynamics.”
Outdated backstops: Central bank emergency lending facilities currently operate on standard business hours and are insufficient in a 24/7 tokenized environment.
Private money risks: Privately issued stablecoins are increasingly used to settle these digital trades. However, the IMF warns that today's stablecoins resemble money market funds and “could be vulnerable to confidence-driven runs in adverse conditions.”

For emerging and developing economies in the region, this structural shift is especially risky. Frictionless digital finance could lead to wild swings in capital flows and the erosion of monetary sovereignty. Money could flood out of a developing economy during a panic before policymakers can react. The report explicitly warns that this continuous settlement could accelerate outflows during stress episodes, “limiting the effectiveness of traditional capital flow management measures.”

What comes next

The IMF is telling global regulators they need to adapt their crisis playbooks immediately. To avoid a fragmented market or a system dominated by private stablecoins prone to bank runs, governments need to provide the underlying digital cash.

That likely means a faster rollout of wholesale central bank digital currencies (wCBDCs), to anchor the system in safe public money.

“Tokenization does not diminish the role of the public sector, but it reshapes it,” the report said, warning that “the window for shaping the architecture of the tokenized financial system is open, but it will not remain so indefinitely.”

MARKETS THIS MORNING-

Asia-Pacific markets are up in early trading this morning, as investors seemingly brush off Trump’s latest threats to destroy Iranian power plants and bridges if it doesn’t open up the Strait of Hormuz. Japan’s Nikkei is up over 1.6% and South Korea’s Kospi is looking at gains of 2.2%. Despite the early rally, it’s anyone’s guess how the week will unfold with war developments and upcoming data releases potentially pushing markets in either direction.

TASI	11,272	0.0% (YTD: +7.5%)
MSCI Tadawul 30	1,516	0.0% (YTD: +9.3%)
NomuC	22,524	-0.1% (YTD: -3.3%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	47,276	+1.9% (YTD: +13.0%)
ADX	9,601	+0.2% (YTD: -3.9%)
DFM	5,485	-0.5% (YTD: -9.3%)
S&P 500	6,583	+0.1% (YTD: -3.8%)
FTSE 100	10,436	+0.7% (YTD: +5.1%)
Euro Stoxx 50	5,693	-0.7% (YTD: -1.7%)
Brent crude	USD 109.03	+7.8%
Natural gas (Nymex)	USD 2.80	-0.7%
Gold	USD 4,680	-2.8%
BTC	USD 67,369	0.0% (YTD: -23.1%)
Sukuk/bond market index	913.94	+0.2% (YTD: -0.6%)
S&P MENA Bond & Sukuk	149.14	-0.3% (YTD: -1.8%)
VIX (Volatility Index)	23.87	-2.7% (YTD: +59.7%)

THE CLOSING BELL: TADAWUL-

The TASI was flat yesterday on turnover of SAR 4.3 bn. The index is up 7.5% YTD.

In the green: Amiantit (+10.0%), DWF (+10.0%), and Chemanol (+9.9%).

In the red: Emaar EC (-7.6%), Saudi Energy (-4.4%), and East Pipes (-3.7%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.1% yesterday on turnover of SAR 17.6 mn. The index is down 3.3% YTD.

In the green: Almunnef (+10.0%), Riyadh Steel (+4.5%), and Naas Petrol (+3.3%).

In the red: Aljouf Water (-6.1%), Mulkia (-3.5%), and Future Vision (-3.5%).

CORPORATE ACTIONS-

The Capital Market Authority greenlit Middle East Pharmaceutical Industries’ (Avalon Pharma) capital increase to SAR 350 mn, according to a Tadawul statement. The move will be facilitated by an issuance of three bonus shares for every four existing shares owned by shareholders — bringing up the company’s capital up from SAR 200 mn.

CALENDAR

APRIL

20-22 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

20-22 April (Monday-Wednesday): Future Aviation Forum, Riyadh.

MAY

3-9 May (Sunday-Sunday): The Global Sustainability Expo, The Arena Riyadh Venue.

19-21 May (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

24-28 May (Sunday-Thursday): Eid Al Adha holiday.

JUNE

15-17 June (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

21-24 June (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

22-24 June (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

JULY

6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

AUGUST

31 August-3 Sep (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

9-10 September (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

9-10 September (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

OCTOBER

12-15 October (Monday-Thursday): World Energy Congress, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

NOVEMBER

24-28 November (Tuesday-Saturday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
September: Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center;
November: The UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;
SkyMove Air Cargo MENA, Riyadh;
The Intervision international music competition will 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;
Capital Markets Forum takes place in March in Riyadh.

Signposted to happen sometime in 2Q 2027:

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

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