Opec+ is pushing forward with accelerated output hikes. Can we afford it?

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Kingdom Holdings is reportedly in talks to acquire a stake in UK-based Global Airlines

Good morning. The Eid vacation is getting closer, with Arafat day set to arrive on Thursday, and we hope you’re as excited as us to enjoy the time off.

Leading our news well today is our analysis of Saudi-led Opec+ output hikes, and how they will impact oil markets (and our budget). Let’s dive in.

HAPPENING TODAY-

Al Kuzama Trading debuts today on Tadawul’s parallel market Nomu, according to a statement. The restaurant operator floated some 422.4k shares at SAR 107 apiece, representing a 10.7% stake post-IPO, in a SAR 45.2 mn primary offering, with proceeds earmarked for bolstering working capital and funding market expansion across the Kingdom over the next three years.

The company’s shares will be allowed to fluctuate within a 30% band, with a static fluctuation band of 10% on the first three trading days. Starting from the fourth day, shares will be allowed to trade at a 10% volatility as circuit breakers take effect, and the static fluctuation limit will be removed.

WEATHER- Riyadh is expected to see a high of 43°C and a low of 28°C today, while Jeddah’s mercury will go as high as 36°C and as low as 27°C. Makkah will see a 42°C high and 30°C low.

PSAs-

The subscription window for the June round of the government-issued retail sukuk program Sah closes tomorrow at 3pm, the National Debt Management Center said in a post on X. The sukuk offers a 4.76% yield, with investors able to sign up for a minimum of SAR 1k in shares each and a maximum of SAR 200k.

⚠️ Hajj heat warning: Pilgrims are urged to stay inside their tents from 10am to 4pm on Arafat Day — this Thursday, 5 June — and avoid visiting Jabal Al Rahmah and the Namira Mosque during peak heat, the Hajj and Umrah Ministry said in a post on X. They are also required to follow approved movement schedules, use only authorized transport, and carry their Nusuk ID cards at all times.

WATCH THIS SPACE-

#1- Khwarizmi Ventures is set to launch its second investment fund by the end of 2025, targeting to rake in between USD 100-120 mn, Managing Partner Abdulaziz Al Turki told Al Arabiya (watch, runtime: 2:31).

The details: The new fund will focus on early-stage startups in the MENA region, especially those based in Saudi Arabia or those aiming to expand into the Saudi market. Khwarizmi Ventures primarily targets seed to Series A rounds, backing companies once their product is developed and revenues start to materialize.

The firm’s first fund raised USD 70 mn, with 80% already deployed and the remaining 20% reserved for follow-on investments in existing portfolio companies.

The VC has been ramping up its investments in 2025, taking part in erad’s USD 16 mn pre-series A round, Aya’s USD 1.6 mn seed round, Khazna’s USD 16 mn pre-series B round, and Calo’s USD 25 mn series B funding round.

#2- Kingdom Holdings is reportedly in talks to acquire a “substantial equity stake” in UK-based Global Airlines, aiming to support the startup’s expansion and shift towards an ACMI (aircraft, crew, maintenance, and ins.) business model, Times Aerospace reports, citing sources it says are in the know. The investment would help Global Airlines acquire three additional A380s and position it to tap a rising demand for widebody aircraft leasing.

Not the first aviation venture: The conglomerate — chaired by Prince Alwaleed bin Talal — is a significant shareholder in flynas, owning a 37.1% stake in the low-budget carrier.

#3- Saudi Arabia is making a new push to transfer the management of football stadiums to the private sector, Director of Sport Sector Investment Development at the Investment Ministry Basim Ibrahim told Asharq Business on the sidelines of the Middle East Sports Investment Forum in London. The move comes under a wider initiative to implement existing investment plans and signed agreements to turn the facilities into stable revenue generators, Ibrahim added.

This builds on the Kingdom’s ongoing, multi-phase privatization program of football clubs, which began in June 2023. The program has seen 14 clubs privatized across two phases, with six more clubs slated for public offering. The private sector was also invited to bid for sports facility contracts in three major sports cities, including naming rights, stadium rentals, and facility management, among others, under five-year contracts last month.

#4- IT services firm Axelerated Solutions’ share price declined 3% to SAR 26.2 on its Nomu debut yesterday, after reaching a high of SAR 27.5 in intraday trading. The company priced its offering — which was 208% oversubscribed — at SAR 27 apiece. Shares can fluctuate within a 30% range for the first three days, after which price fluctuations will be capped at 10% as circuit breakers take effect.

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THE BIG STORY ABROAD-

Hopes for a breakthrough in Ukraine’s war with Russia faded further yesterday after both sides exchanged some of their most intense strikes of the conflict. Ukraine launched its longest-range drone assault of the war, hitting five Russian airfields — including in Murmansk and deep into Siberia — in an attack Kyiv says damaged more than 40 aircraft. The operation, which involved 117 drones had been in the works for more than a year, President Volodymyr Zelenskyy said. Moscow responded with its largest aerial barrage since the war began, firing 472 drones and seven missiles overnight. At least 18 locations were hit, including a military training base in eastern Ukraine that killed 12 soldiers and wounded more than 60.

The strikes come on the eve of direct ceasefire talks in Istanbul, where Ukraine will present a proposal today calling for a full truce monitored by the US, the return of abducted children, and no recognition of Russia’s territorial claims. Despite recent diplomatic overtures, both sides remain far apart on core issues, with Ukrainian officials warning that Moscow has yet to provide its own written peace terms. (Reuters | Associated Press | New York Times | Financial Times)

And in election news, nationalist candidate Karol Nawrocki in Poland’s presidential election is leading with a razor-thin lead over pro-EU Warsaw mayor Rafał Trzaskowsk. A Nawrocki win, if confirmed, could derail current Prime Minister Donald Tusk’s reform agenda, deepen political gridlock, and shift Poland’s stance away from the EU and its support for Ukraine. (Financial Times | Guardian)

CIRCLE YOUR CALENDAR-

The Fintech Revolution Summit is coming to Riyadh on 3 July, bringing together CFOs, CTOs, investors, government officials, and BFSI experts to discuss recent trends in the banking and finance industry, investment prospects, AI-powered solutions, open banking, cloud innovations, and digital payment infrastructures.

Saudi is pushing forward with accelerated output hikes. Can we afford it?

Saudi Arabia upended its oil strategy this year, leading Opec+ to a sharp acceleration of output hikes since April. The new strategy seems to be aimed at regaining market share and getting Opec+ overproducers back in line, all taking place in increasingly uncertain times.

IN CONTEXT- In early April, Opec+ announced a long-delayed plan to gradually return 2.2 mn bbl / d of oil to the market over 18 months, and then proceeded to accelerate these output hikes at triple the initially expected rate, with that last hike agreed on the group’s meeting last Saturday.

THE RATIONALE-

Saudi Arabia had been the stabilizing force behind Opec+ production cuts for the past five years, balancing the market by voluntarily curbing its own output by up to 2 mn bbl / d. These efforts — including the extra 2.2 mn bbl / d of voluntary cuts between 2023 and 2024 — propped up oil prices and increased revenues of oil exporters.

Sign of the times: Ongoing production boosts could mark Saudi Arabia’s recognition that it can no longer drive prices higher, analysts told the Financial Times. Indeed, Saudi Arabia appeared to be “calling time” on its price-support efforts as it shifted focus to volume and market share.

Punishing violators: The Saudi-led push could be aimed at penalizing members who benefited from higher prices while not adhering to their production limits. Other Opec+ members like Iraq and Kazakhstan were habitually pumping above their quotas, with Kazakhstan’s energy minister stating that he would prioritize national interest over Opec+ quotas, after Kazakhstan’s April output exceeded its target despite a 3% cut pledge. Iraq, Opec’s second-largest producer, has also routinely pumped above its quota.

The production increase is as much about challenging US shale supply. For the past few years, US shale drillers had been steadily capturing market share as the oil group restrained its own production, with American oil output hitting record highs above 13 mn bbl / d early this year.

Expanding output now could help the Kingdom reclaim market share from US producers, which need oil prices averaging around USD 65 per barrel to remain profitable. Sustained prices in the USD 50-60 range could dampen the drive for new projects.

Saudi Arabia is reviving a tactic from past oil price wars, undercutting higher-cost producers by driving prices down to a level where only the lowest-cost producers can thrive. Analysts estimate that Saudi production costs USD 3-5 per barrel, according to Reuters.

Trump’s influence? US President Donald Trump has recurrently pressed Saudi Arabia and Opec+ to pump more oil to tame high gasoline prices and inflation at home. Riyadh’s move could be — at least in part — an effort to curry favor with Washington at a relatively low cost, scoring points with its key ally by aiding the White House’s goal of pushing oil below USD 60 a barrel, according to the Center for Strategic and International Studies.

THE OIL OUTLOOK-

If Opec+ sustains its accelerated production hikes, the Kingdom’s voluntary cuts could end by October, bringing its quota to 9.98 mn barrels a day (bbl / d). However, crude export volumes could remain below 1Q levels as domestic demand rises during the summer season.

The hikes are heavily weighing down oil prices: Goldman Sachs expects Brent crude to average USD 63 a barrel for the remainder of 2025, before dropping further to USD 58 in 2026, with JP Morgan showing similar forecasts for prices potentially sinking to the “high USD 50s” later this year.

Production hikes are not the only problem: The Trump administration’s tariffs — combined with unwinding the cuts — is creating a sell signal to traders, ClearView Energy Partners’ cofounder Kevin Book told the Financial Times. This toxic mix of weaker demand outlook and extra supply created a decidedly “bearish” mood in the energy markets, according to the International Energy Agency’s April 2025 Oil Market Report.

BUT- Announced production hikes may not reflect actual production levels: April saw a 23k bbl / d increase from the Group of Eight instead of the announced 138k bbl / d hike, while headline Opec+ actual production fell by 106k bbl / d, according to Mees.

AND- Despite the expected plunge in oil prices following the decision, markets might react positively since there was anticipation of larger hikes, UBS Group AG commodity analyst Giovanni Staunovo told Bloomberg.

IS SAUDI READY FOR LOWER OIL PRICES?

Lower prices coil spell trouble for oil exporters: Few Opec+ producers can balance their budgets at the project levels at USD 60 per barrel. Saudi Arabia reportedly needs roughly USD 92 a barrel to balance its fiscal accounts this year, per IMF projections in April. Analysts are expecting our deficit to exceed 5% this year, with some projections going as high as 6%.

It’s already starting: The Kingdom’s oil revenues fell 9% y-o-y to USD 54.7 bn in 1Q 2025 — the worst 1Q performance since the Covid pandemic crisis in 2021 — despite seeing a slight increase compared to the previous two quarters, according to Mees analysts.

Oil revenues are expected to fall further in 2Q, as Arab Light crude slumped to USD 70.9 a barrel in April from USD 76.1 in March and is expected to average less than USD 65 a barrel for May. However, oil prices seem to have stabilized through May as the US and China stepped back from an all-out trade war.

Lower revenues could be problem: Funding for the Kingdom’s capital-intensive gigaprojects is mostly top-down, which supports the big players, but the SME sector — which is huge and very influential in the non-oil sector in Saudi — is very important, EFG Hermes’ Head of Research Ahmed Shams El Din told us back in March. “That means that you can expect substantial delays with some projects. There will be a second round of recalibration and reprioritization.”

The Kingdom says it’s ready, lining up multiple strategies including “long-term fiscal planning and medium-term frameworks” to adapt to different scenarios for oil prices, Economy and Planning Minister Faisal Al Ibrahim said earlier this month.

Saudi will also use the current drop in oil revenues and global uncertainty to “take stock” of its spending priorities, Finance Minister Mohammed Al Jadaan said on Thursday. The minister confirmed earlier reports that some gigaprojects are undergoing extensive reviews to optimize spending.

Al Jadaan also emphasized that government spending will continue to support non-oil growth, even if the budget deficit exceeds expectations. “There will possibly be more deficit than we anticipated in the budget, but not significant.”

Aramco chief remains optimistic: Opec+ production hikes could generate an extra USD 1.9 bn in annual cashflow for Aramco at USD 60 per barrel, CEO Amin Nasser said earlier this month. Aramco can boost crude oil production to 12 mn bbl / d at minimal extra cost, with each 1 mn bbl / d of spare capacity potentially generating USD 12 bn in operating cashflows at 2024 prices, Nasser added.

Demand growth could also do us some favors: Some analysts believe that Saudi Arabia’s plan to increase supply is logical, since US drivers will soon take to the roads for summer vacations, and the use of air conditioning will peak at home and in the region, meaning demand will rise over the next few months. A Reuters poll expects global oil demand to grow by some 775k bbl / d in 2025 on the back of higher oil demand during the summer — 35k above the figure posted by the International Energy Agency.

WHAT’S NEXT?

Disagreements could start emerging within Opec+: The Kingdom’s latest decision to accelerate hikes reportedly met some resistance from Russia, Algeria, and Oman, all of which suggested suspending oil output increments, Bloomberg reports, citing unnamed delegates.

The largest offender, Kazakhstan, reiterated its rejection to the Saudi plan, with its Energy Minister saying last Thursday that the country has “no plans to atone” and cannot cut its oil production.

With the cartel set to meet again on 6 July to decide on August outputs, it remains to be seen whether these differences could have an impact on the accelerated pace of output hikes.

Net foreign assets drop to a surplus of SR 1.47 tn in April

Net foreign assets in the Kingdom’s banking sector dropped once again following a rebound in March, reaching a surplus of some SAR 1.47 tn by the end of April — the lowest level in the last twelve months and a 9.6% y-o-y drop, according to the Saudi Central Bank’s (Sama) latest monthly statistical bulletin (pdf).

The decline was once again driven by commercial banks, whose net foreign assets came in at an SAR 89.6 bn deficit, down from a surplus of SAR 37.6 bn in April 2024. Meanwhile, Sama’s foreign assets inched slightly down to SAR 1.56 tn by the end of the month, making up the bulk of the sector’s external position.

MEANWHILE- Bank credit across all segments increased 16.5% y-o-y to SAR 3.13 tn in April. Personal loans once again accounted for the majority of all credit handed out by local banks during the month at SAR 1.4 tn, followed by corporate credit to the real estate sector, and financial and ins. activities.

Residential mortgages financed by banks reached just under SAR 6.3 bn during the same period, up 17.9% y-o-y, with a total of 8.2k contracts. This includes SAR 3.9 bn for houses, less than SAR 2.1 bn for apartments, and SAR 304 mn for land contracts.

ALSO- Broad money supply (M3) grew by 9.3% y-o-y to SAR 3.05 tn. Demand deposits (47.8%) topped the list of currency supply components, followed by time and savings deposits (34.8%), other quasi-cash deposits (9.4%), and banknotes in circulation outside banks (7.99%). Meanwhile, total liabilities reached SAR 5.3 tn, clocking a 7.4% y-o-y growth.

SOUND SMART- M3 is the broadest measure of money supply in a given economy. It includes cash, current accounts, and other money that can be quickly mobilized (what econ-nerds call M2) as well as large time deposits, institutional money market funds, short-term repurchase agreements, and larger liquid funds.

Meanwhile, on the investment front: Government bonds rose for the tenth consecutive month to SAR 617.0 bn, up 0.7% m-o-m and 11.7% y-o-y, representing 73.9% of total public sector liabilities. At the same time, bank credit to public institutions increased 38.3% y-o-y to SAR 218.2 bn.

Anmat Tech sees strong investor demand ahead of listing on Nomu

The Nomu IPO of Anmat Technology for Trading was nearly 3x oversubscribed by qualified investors, according to a disclosure to Tadawul. The multi-sector firm priced its IPO on Tadawul’s parallel market Nomu at SAR 9.50 per share, set to raise SAR 47.5 mn from the sale of an 11.6% stake, giving the company a market cap of SAR 408.5 mn at listing.

ADVISORS- Merchant’s Capital is quarterbacking the transaction as financial advisor, with Alinma Capital serving as lead manager on the transaction. RSM is serving as an independent auditor. Receiving agents include Al Jazira Capital, Albilad Capital, Alkhabeer Capital, and ANB Capital, among others.

ALSO IN THE PIPELINE-

Dome International’s subscription period wrapped up yesterday;
Naf for Feed and Industries recently issued a prospectus to float a 20% stake;
Hawiya Auctions, Dkhoun, and Al Khaldi Logistics were the latest to price their Nomu IPOs;
Meanwhile, Qudra for Communications and IT, the National Signage Industrial Company, medical equipment supplier Wajd, and property developer Hammad Mohammed Bin Saedan Real Estate were given the CMA’s all-clear to list on the parallel market.

Saudi-listed companies' earnings inch down 0.5% y-o-y in 1Q 2025

Saudi-listed companies reported a 0.5% y-o-y fall in aggregate net income in 1Q 2025 to USD 36.2 bn, down from USD 36.4 bn, according to Kamco’s GCC Corporate Earnings Report (pdf). The dip was attributed to weaker performances across the energy, ins., and food & staples retailing sectors, which offset gains by the banking, real estate, and telecom sectors.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

The energy sector continues to make the largest contribution with a net income of USD 25.6 bn in 1Q 2025, down from USD 27.4 bn in the same quarter last year. The decline was led by Aramco, whose earnings dropped 7.2% y-o-y due to lower revenues and other incomes, as well as higher operating costs. In contrast, the National Shipping Company of Saudi Arabia (Bahri) saw a 17.6% y-o-y rise in net income to USD 142 mn, driven by higher contributions from equity-accounted investees, offsetting a 6.3% drop in revenue from its oil and chemical segments.

The banking sector made the second largest contribution, reporting a USD 5.9 bn net income in 1Q 2025, up 19.4% y-o-y. All listed banks reported growth, including Al Rajhi Bank, whose income rose 33.3% y-o-y to USD 1.6 bn, driven by a 25.7% increase in net financing and investment income. During the same period, Saudi National Bank posted a 19.4% y-o-y increase in net income to USD 1.6 bn, while Riyad Bank reported a 19.9% y-o-y rise to USD 662.5 mn, and Banque Saudi Fransi recorded a 16.3% y-o-y gain to USD 356.5 mn.

The telecommunications sector came in third, raking in a net income of USD 1.2 bn in 1Q 2025, up from USD 1.1 bn in the same period last year. The increase was driven by stc recording a net income rise of 11.0% y-o-y to USD 972.4 mn, and Mobily reporting a 20.2% y-o-y increase to USD 204.3 mn.

THE REGIONAL PICTURE-

GCC-listed companies saw aggregate earnings rise 2.0% y-o-y to USD 58.6 bn in 1Q 2025, driven by continued strength in banking, telecoms, and real estate, according to the GCC earnings report (pdf). Banking sector earnings hit USD 16 bn (+10% y-o-y) — a record high — led by strong growth in Saudi Arabia, Abu Dhabi, and Bahrain.

Telecoms were the breakout sector, with earnings up 45.3% y-o-y to USD 3.5 bn, thanks to Emirates Telecom, STC, and Zain Group. Real estate followed with a 55.5% y-o-y gain to USD 2.9 bn, bolstered by strong contributions from UAE and Saudi developers.

Still, the energy sector remained a drag, with earnings falling 5.7% y-o-y to USD 28.3 bn amid weaker oil prices and a 7.5% decline in Saudi Aramco’s earnings. Stripping out Aramco, GCC earnings rose 10.7%, underscoring the resilience of the region’s non-oil economy.

Gastat is revising our GDP figures

A look into Gastat GDP revision project: The General Authority for Statistics (Gastat) recently updated its nominal and real GDP historical data over 2011-2024, as part of a revision project that looks to better capture the economic transformation taking place in the Kingdom with more detailed insights over the performance of key sectors in the economy.

What changed? Gastat launched the revision project at the beginning of 2024, using updated survey data and new sources, including the comprehensive economic survey, the household income and expenditure survey, and the comprehensive agricultural survey. The authority also adopted a chain-linking method in line with global standards to provide more accurate real GDP growth estimates, assessing growth rates “based on the weights and prices of the year preceding the measurement year,” according to Gastat.

This resulted in the number of tracked economic activities jumping to 134, up from 85. The revision “better captures the ongoing economic transformation in the kingdom by expanding the economic activities covered and data sources,” S&P Global Ratings’ Zahabia Gupta told EnterpriseAM.

Saudi Arabia’s 2023 GDP was revised to be 14.1% higher than earlier estimates, which puts the economy’s size at SAR 4.5 tn, up from SAR 3.94 tn, according to Gastat‘s revised figures.

What this meant for the Kingdom’s revised GDP growth for 2024: “With these updates, nominal GDP is 14% higher for 2024, which mainly reflects improvements in the non-oil economy including construction, trade, hospitality, transport, and manufacturing. For real GDP, with the rebasing of the year to 2023, growth was revised to 1.8% for 2024, from 1.3% previously,” Gupta said.

By the numbers: The update shows that the non-oil sector now makes up 53.2% of GDP, a 5.7 percentage point increase from previous estimates, reflecting faster growth in construction, retail, transport, and services, as well as stronger contributions from small- and medium-sized enterprises, the authority said.

The sector breakdown: Construction saw the biggest upward revision, with activity rising 61%, followed by a 29.8% upward revision in wholesale, retail hospitality and restaurants, and a 25.6% boost in transport and communications. The revised numbers also show higher government and household spending than previously reported.

The updates could become a more regular occurrence as Gastat wrote that without regular updates to its data collection mechanisms, the statistics may “fail to reflect the ongoing transformation of Saudi Arabia’s economic structure, particularly in light of the rapid expansion of the non-oil sector.”

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Flynas, Prince Mohammed Airport post lowest complaint rates in April -Gaca

Air carrier complaints rose 34.4% y-o-y to 1.3k in April 2025, according to our calculations based on data shared by the General Authority of Civil Aviation (Gaca). Airport complaints also rose 46.4% y-o-y to 82.

Flynas had the lowest rate of complaints per 100k passengers in April, recording 22 complaints, followed by Saudia with 23 complaints, and flyadeal with 38 complaints. The budget carriers flyadeal and flynas resolved 100% of the complaints on time, while Saudia achieved a 99% resolution rate.

For international airports handling more than 6 mn passengers annually, Prince Mohammed International Airport had the lowest complaint rate at 0.2 per 100k passengers, with just 2 actual complaints. King Khalid International Airport followed closely at 0.3, while King Abdulaziz and King Fahad international airports both recorded a rate of 1.

Among international airports with less than 6 mn passengers, four airports tied with a complaint rate of 1 per 100k passengers, including Abha, Taif, Hail, and Prince Naif airports. Meanwhile, Al Qaisumah and Al Ahsa airports reported the highest rates at 7 per 100k passengers.

Always on time: All domestic and international airports achieved a 100% on-time complaint resolution rate.

Int’l press dissects Saudi and the Gulf’s AI infrastructure bid

The foreign press’ interest in Saudi AI ambitions is growing, as the Financial Times broke down Saudi Arabia and the Gulf’s potential to become superpowers for electricity-intensive AI infrastructure.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

Gulf states “have the capital, the energy, the political will,” said Sam Winter-Levy, fellow at the Carnegie Endowment for International Peace. Following US President Donald Trump’s visit to the region, Gulf nations are poised to be granted access to AI-powering chips after easing prior restrictions on accessing vital US chip technology.

The salmon-colored paper highlighted some of the obstacles facing the Gulf's ambitious AI goals, including the lack of skilled workforces compared to Silicon Valley or Shanghai, lower research output, and the absence of a globally leading AI model company. Current research, like developing Arabic LLM, is mainly driven by state-affiliated entities and royal leadership.

The paper also covered what Saudi Arabia and the Gulf are doing to overcome these hurdles, including offering incentives like low taxes, golden visas, and lax regulations to attract global AI talent. In addition, the Gulf’s harsh climate for data center operations could be counterbalanced by ample land and cheap energy.

BUT- Saudi Arabia and the Gulf need more indigenous AI companies to benefit from the expanding infrastructure, beyond serving US companies, the FT argued. While Gulf states aim to provide their expensive AI facilities to neighboring African and Asian countries, US-based companies like OpenAI are expected to be the main customers.

Flynas is adding more routes to Damascus

AVIATION-

Budget air carrier flynas is adding more routes to Damascus, with two weekly flights from Jeddah set to take off starting 12 June, it said in a post on X. The addition follows the airline’s announcement last week of launching direct flights between Riyadh and Damascus starting 5 June. Flynas previously operated flights to several Syrian cities, including Damascus, Aleppo, and Latakia.

REMEMBER- Flyadeal announced earlier this month it plans to launch flights to Syria as early as July, joining several other operators — like Qatar Airways, Turkish Airlines, and Royal Jordanian Airlines — that resumed flights to Syria following the fall of the Assad regime in December and the removal of US sanctions earlier this month. Rival UAE-based airline flydubai also said it plans to launch flight services to the country starting next month.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

OIL & GAS-

Tadawul-listed Ades Holding secured a SAR 128.9 mn drilling contract in Cameroon, according to a disclosure to Tadawul (pdf). The contract was awarded by Sinopec Group’s subsidiary Addax Petroleum and covers the deployment of the Admarine 510 rig for a one-year campaign starting in 4Q 2025, eligible for two additional six-month extensions.

ICYMI- Ades Holding inked a SAR 816 mn, four-year contract extension with Qatar-based North Oil Company earlier this month to continue leasing the Sapphire Driller jackup rig. A week later, it inked a SAR 1.6 bn, 10-year renewal contract with Aramco for one of its offshore jackup rigs.

M&A WATCH-

Enaya + Salama Cooperative Ins. get regulatory approval for merger: Saudi Enaya and Salama Cooperative Ins. received a no-objection certificate from the General Authority for Competition for their proposed merger, according to two separate Tadawul disclosures (here and here). An MoU was signed in February for feasibility studies and financial advisors were appointed (Wasatah Capital for Enaya and Estidamah Capital for Salama), but the move remains under review with no binding agreement.

What’s next: The merger’s completion still needs approvals from the Ins. Authority, the Capital Market Authority, Tadawul, and the shareholders of both companies.

TECH-

GO Telecom backs Syria’s digital push: Etihad Atheeb Telecom Company (Go Telecom) signed a memorandum of cooperation with Syria’s Communications and Information Technology Ministry to support digital transformation policies in the country, the company said in a post on X.

More details: The agreement includes plans to develop government digital solutions and a national data center, introduce digital technologies (like AI and IoT), and build digital infrastructure to support cloud computing and cybersecurity services, Al Arabiya reports.

TRADE-

The GCC will impose five-year anti-dumping duties on Chinese and Indian imports of ceramic sanitary ware, effective Tuesday, 8 July, according to a disclosure to Tadawul from the Saudi Industrial Development Company (SIDC).

The details: The new duties — ranging from 33.8% to 51% for Chinese products and from 21.4% to 83.4% for Indian products — will be levied on ceramic sinks, washbasins, washbasin pedestals, bathtubs, bidets, water closet pans, flushing cisterns, and urinals, among other similar items.

The decision follows an investigation by the Technical Secretariat Office for Combating Harmful Practices in International Trade, which found that both countries engaged in dumping practices and caused material harm to the regional industry.

REMEMBER-The Kingdom imposed last December five-year anti-dumping tariffs ranging from 25.6% to 51% on imports of PVC-coated textiles and fabrics from China and South Korea and imports of s ulphonated naphthalene formaldehyde (a concrete additive) from Russia and China.

LOGISTICS-

The Saudi Ports Authority (Mawani) added SeaLead’s 5CX shipping service to Jeddah Islamic Port, it said in a statement. The new service, which has a capacity of 1.5k standard containers, will link the Jeddah port to 10 major ports, namely Qingdao, Shanghai, Ningbo, and Nansha in China, Damietta in Egypt, Aliağa, İzmit, Istanbul, and Mersin in Turkey, and Klang in Malaysia.

Mawani by numbers: Ports supervised by Mawani handled 625.4k TEUs in April 2025, up 13.4% y-o-y. The growth was fueled by a 22.5% y-o-y rise in imported containers, reaching 259.4k TEUs, and an 8% rise in exports, totaling 233.8k TEUs.

FINTECH-

Two local fintech platforms receive CMA approval: Emkan Alarabiya and InvestSky Holding both received the green light to begin testing their platforms under the FinTech Experimental Permit framework, according to separate statements from the Capital Market Authority. Emkan Alarabiya will test an investment and real estate fund distribution platform, while InvestSky will trial a social trading service.

Proposed sukuk reforms may risk fracturing USD 1 tn Islamic debt market

Planned sukuk reforms could fracture a USD 1 tn market: A proposed overhaul to Shariah Standard 62 by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is raising concerns across the Islamic finance sector, with market players warning it could destabilize the sukuk market — a major funding source across the MENA region and beyond, the Financial Times reports. Recent estimates see global sukuk volumes surpassing USD 1 tn in 2025, having represented 12% of all emerging market USD-denominated debt in 2024 and 25% of total USD debt capital market issuances in the GCC, Malaysia, Indonesia, Turkey, and Pakistan.

The planned revisions aim to make sukuk less like conventional interest-bearing debt, and more in line with Islamic Shariah principles. It would mean moving from an asset-based model to a stricter asset-backed structure, where sukuk holders would gain full legal ownership of the underlying assets and expose them to additional risks like defaults. It could also increase costs and red tape for issuers through additional asset transfer and legal documentation.

The returns: Currently, sukuk holders receive periodic distributions and their initial investment back at maturity, while the asset itself stays under the issuer’s name. Under the new setup, the asset might be transferred to a special purpose vehicle (SPV) controlled by investors who would get monthly returns and eventually resell the asset to the issuer.

The shift could blur the line between sukuk and an equity investment, potentially making them less attractive to investors seeking shariah-compliant fixed-income instruments. It also presents practical challenges for major issuers like the UAE, Saudi Arabia, and Indonesia, where handing over legal ownership of state assets can be difficult.

The number of foreigners holding sukuk could also dip on the back of legal restrictions regarding the ownership of property and land. Uneven application across jurisdictions could also lead to fragmented practices, greater legal ambiguity, and reduced market liquidity.

Fitch Ratings warned last March that the proposed sukuk could fall outside the scope of traditional credit rating systems — a red flag for institutional investors like sovereign wealth funds that depend on rated instruments to allocate capital.

Currently the AAOIFI is still consulting stakeholders, with the finalized standard expected sometime in 2025. Many advocate for a gradual rollout, dialogue with rating agencies to ensure sukuk remain viable for institutional portfolios, and flexibility to make legal amendments if needed.

MARKETS THIS MORNING-

It’s a sea of red across Asian markets this morning, following an announcement from US President Donald Trump at the end of last week that steel import tariffs will be doubled to 50% as of this Wednesday. South Korea’s Kospi is timidly in the green in early morning trading, while the Nikkei and Hang Seng are down. Futures suggest markets across Europe and North America will follow suit at the opening bell later today.

TASI	10,825	-1.5% (YTD: -10.0%)
MSCI Tadawul 30	1,382	-1.6% (YTD: -8.4%)
NomuC	26,669	-0.5% (YTD: -15.3%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	32,500	-0.6% (YTD: +9.3%)
ADX	9,685	-0.6% (YTD: +2.8%)
DFM	5,481	-0.2% (YTD: +6.2%)
S&P 500	5912	-0.01% (YTD: +0.5%)
FTSE 100	8772	+0.6% (YTD: +7.3%)
Euro Stoxx 50	5367	-0.1% (YTD: +9.6%)
Brent crude	USD 63.87	+1.7%
Natural gas (Nymex)	USD 3.53	+2.3%
Gold	USD 3315.40	-0.9%
BTC	USD 105,170.50	+0.3% (YTD: +12.4%)
Sukuk/bond market index	914.4	+0.1% (YTD: +1.4%)
S&P MENA bond & sukuk	143.6	+0.1% (YTD: +5.5%)
VIX (Fear gauge)	18.6	-3.2% (YTD: +7.0%)

THE CLOSING BELL: TADAWUL-

The TASI fell 1.5% yesterday on turnover of SAR 4.3 bn. The index is down 10.1% YTD.

In the green: Emaar Ec (+3.9%), Sinad Holding (+2.6%) and Alkhaliej Trng (+2.2%).

In the red: Ucic (-9.3%), Raydan (-8.0%) and Mcdc (-7.0%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.5% yesterday on turnover of SAR 50.4 mn. The index is down 15.3% YTD.

In the green: Drc (+13.0%), Future Care (+9.3%) and Spc (+7.1%).

In the red: Amwaj International (-9.8%), Fad (-9.4%) and Dar Almarkabah (-9.3%).

CORPORATE ACTIONS-

Gulf Ins. Group’s general assembly approved a SAR 63 mn dividend distribution at SAR 1.2 per share for FY 2024, according to a disclosure to Tadawul (pdf). The distribution date is set for 25 June.

Mulkia Investment Company’s general assembly approved a SAR 16.25 mn dividend distribution at SAR 2.5 per share for FY 2024, according to a disclosure to Tadawul. The distribution date is set for 18 June.

Twareat Medical Care (TMC) greenlit a SAR 10 mn dividend payout at SAR 0.25 apiece for FY 2024 at its latest general assembly, it said in a disclosure to Tadawul. The distribution date is set for 18 June.

Dallah Healthcare’s board decided to move ahead with a SAR 50.6 mn dividend distribution at SAR 0.5 apiece for 1Q 2025, it said in a disclosure to Tadawul. The distribution date is set for 29 June.

Miahona’s top brass recommended a SAR 16 mn dividend payout at SAR 0.1 per share for FY 2024, it said in a disclosure to Tadawul. The distribution date is yet to be announced.

Saudi Arabia and Kuwait sign financial cooperation agreement

Saudi Arabia and Kuwait agreed to collaborate on financial strategy and policy alignment across regional and international arenas, under a new agreement signed by Finance Minister Mohammed Al Jadaan and his Kuwaiti counterpart Noora Al Fassam on the sidelines of the GCC’s Financial and Economic Cooperation Committee meeting, Kuwait’s Finance Ministry said in a post on X. No further information was disclosed.

CALENDAR

JUNE

4-9 June (Wednesday-Monday): Hajj.

5-10 June (Thursday-Tuesday): Markets close for Eid Al Adha.

6-10 June (Friday-Tuesday): Eid Al Adha.

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

24-25 June (Tuesday-Wednesday): Tech-ecO-System Summit (ToSS), Riyadh.

30 June (Monday): Cancellation of Fines and Exemption of Financial Penalties Initiative by the Zakat, Tax and Customs Authority (Zatca) deadline.

JULY

July (Second week): World Intellectual Property Organization (WIPO) Global Awards 2025 awards ceremony, Geneva.

7 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.

AUGUST

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

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

SEPTEMBER

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

1-3 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.

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

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

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

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

30 November (Sunday): Zatca 21st E-invocing 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 22st E-invoicing integration wave deadline.

2026

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

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

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

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

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.

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