PIF is back to a reawakening USD bond market

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WHAT WE’RE TRACKING TODAY

Ninja lines up banks for IPO, keeps options open

Good morning, ladies and gents. We start off the week with a debt-focused issue, led by the Public Investment Fund’s first USD bond issuance since the war broke out. We also look at what renewed Iran hostilities could mean for Saudi-US relations.

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IPO — Ninja lines up banks: Delivery app Ninja reportedly tapped Citigroup, Goldman Sachs, Riyad Capital, and UBS to advise on a potential Tadawul IPO that could raise USD 1 bn by late 2026 or early 2027, Bloomberg reports, citing sources it says are in the know. The plans are preliminary, with the company also considering a private funding round instead of a listing, the sources said.

REMEMBER: The company has reportedly been exploring IPO options since March, despite regional tensions tied to the Iran war. Executives also met investors in London around that time, as part of early market soundings, with the focus on listing in Tadawul rather than overseas exchanges like the NYSE.

If it goes ahead, Ninja would slot into a Saudi IPO pipeline that’s still active even as Gulf listings have slowed. A few names are already moving forward, including Dar Al Balad for Business Solutions, which became the first IPO launch since the conflict began, targeting about USD 55 mn. Mutlaq Al Ghowairi Contracting and Arabian Dyar are also reportedly eyeing listings before their CMA approvals expire in late June.

There’s a reason the local market keeps coming up. Tadawul has held up relatively well through the geopolitical noise, with energy-heavy TASI index supported by stronger oil prices and heavyweight stocks like Aramco, making it a more stable exit route compared to more volatile global markets.

DEBT — KSA could be looking at bns of USD from global index inclusion: Some USD 10 bn in foreign inflows are expected after Saudi Arabia’s bonds are added next year to the JPMorgan Government Bond Index for Emerging Markets and the Bloomberg Emerging Market Local Currency Government Index, Saudi Exchange CEO Mohammed Alrumaih told Bloomberg.

ICYMI- The Kingdom’s SAR-denominated sovereign sukuk will be joining JPMorgan’s EMGBI starting 29 January 2027. The sukuk will be added incrementally to EMGBI, to eventually comprise 2.5% of the index. At the moment, eight Saudi sovereign sukuk — totaling nearly USD 69 bn — meet the requirements for inclusion.

The pace of the inflows will depend on investor sentiment and broader market conditions, with the index inclusion set to support the market, Fitch Ratings’ global head of Islamic Finance Bashar Al Natoor told the business information service. Saudi Arabia’s debt market traded just over USD 3 bn over-the-counter bonds in 1Q, with foreign investors holding about 8% of local government bond issuance, Al Natoor added.

Data point

54.5 points — that’s where Saudi Arabia’s Business Confidence Index(BCI)(pdf) stood in April, rising from 52.1 in March. Sectoral level readings also showed an increase, sitting further into the optimistic zone, with industry at 53.5 points, services at 53.9 points, and construction at 55.7 points (up 5.1% m-o-m).

Blue Wave fans are rejoicing

Al Hilal took home the 2025-2026 King’s Cup after beating Al Kholood Club 2-1 in the final at King Abdullah Sports City. Al Kholood had taken an early lead thanks to Ramiro Enrique, before Nasser Al Dawsari and Theo Hernández turned the match around for Al Hilal.

A notch in the new head coach’s belt: The victory marks Al Hilal’s first domestic title under head coach Simone Inzaghi, who joined in June 2025.

Attention now turns to the Saudi Pro League, where Al Hilal will meet Al Nassr on Tuesday. Al Hilal are five points behind the leaders but hold a game in hand, keeping the title race alive ahead of the showdown.

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The big story abroad

Global headlines are abuzz with geopolitical updates from around the world. After reports of US-Iran clashes on Friday, the situation in the Strait of Hormuz appeared to reach relative calm as of yesterday, while Washington awaits Tehran’s response to its latest proposals. A Qatari LNG vessel is attempting to transit the waterway in what sources characterize as Tehran’s bid to build confidence with mediators in Doha and Islamabad.

Meanwhile, the world’s oil inventory is shrinking, with one estimate placing the drop at roughly 4.8 mn bbl / d between March and April. As the global economy is forced to draw increasingly from its security buffers, the risk of more volatile price fluctuations and severe supply shortages rises.

Over in the UK, Prime Minister Keir Starmer declared he plans to stay in office following calls for his removal after the Labor Party’s dire performance in local elections — the worst results by a governing party in decades. Right-wing party Reform UK and Welsh nationalist party Plaid Cymru made notable gains at Labor’s expense in key areas.

Brazil’s IPO dry spell is over: Energy player Compass sold around USD 655 mn in shares in Brazil’s first landmark listing in nearly five years. The ongoing regional conflict, which shot up crude prices, prompted foreign investors to pump funds in the oil exporter, as well as other energy heavyweights.

Another virus outbreak on the brink? World Health Organization officials are working to contain a hantavirus outbreak reported on a cruise ship carrying around 150 passengers. The vessel is due to arrive at Spain’s Tenerife island today.

Back in the game

The Public Investment Fund is back to the USD debt market for the first time since the war brokeout, and investors welcomed it with open arms.

The fund pulled in USD 7 bn from a three-tranche USD bond issuance on Thursday, its first hard-currency issuance since the Iran war scrambled regional capital markets earlier this year. The order book for the three, seven, and 30-year notes topped USD 29 bn, over four times the deal size, letting the fund tighten pricing across all three tranches.

The pricing tells the story. The 30-year tranche landed at 135 bps over US Treasuries, down from initial talk of around 170 bps — that’s 35 bps of compression on the long end. The seven-year came in at 105 bps, and the three-year at 95 bps.

Why this matters: Thursday’s agreement is one of the clearest signals yet that the public market window has reopened for Gulf names. PIF last tapped the markets in January with a USD 2 bn 10-year sukuk issuance, and then went quiet as the Iran conflict rattled GCC issuers and pushed many of them into private placements.

The deficit angle: The issuance came hot on the heels of Saudi posting a 1Q budget deficit of SAR 125.7 bn — the biggest since 2018 — as Riyadh ramped up spending to absorb the economic hit from the Hormuz disruption. The National Debt Management Center (NDMC) said this week that it has completed its 2026 annual borrowing plan, but with a wrinkle — roughly 90% of that funding came through private placements and domestic issuance rather than the international public market.

The PIF agreement is not part of the sovereign borrowing program, but a heavily oversubscribed PIF book gives the sovereign and other Saudi issuers an easier runway if they need to come back to public USD markets in 2H.

The wider GCC picture is shifting in the same direction. The Islamic Development Bank raised USD 1 bn from its first benchmark sukuk of the year on Thursday. Meanwhile, Emirates NBD priced an AT1 agreement earlier in the week, and First Abu Dhabi Bank placed a sukuk on Wednesday. Four GCC-linked issuers in five days suggests the region’s primary market freeze is thawing.

ALSO ON OUR DEBT WATCH- The NDMC signed HSBC on Thursday as a primary dealer for the government’s local debt instruments, bringing the international primary dealer count to seven alongside 10 domestic banks.

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

Saudi-US friction?

Did Saudi Arabia put the brakes on a US military operation in the Gulf? Reporting in the Wall Street Journal and Financial Times claimed Riyadh told the Trump administration last week that US warplanes wouldn’t be flying out of Saudi bases or through Saudi airspace for the US push to resume commercial shipping through the Strait of Hormuz. Kuwait reportedly took the same line and, within 36 hours of the operation kicking off, President Donald Trump paused the whole thing.

“Project Freedom” was supposed to be a show of strength. US destroyers, fighter jets, drones, and surveillance aircraft would shepherd commercial vessels through a narrow corridor cleared of Iranian mines — what US Defense Secretary Pete Hegseth called a “red, white and blue dome” over the strait. However, the plan relied entirely on regional bases and airspace to work. Once Riyadh and Kuwait City pulled the plug on access, the operation lost its physical footing.

US media had interesting details: Crown Prince Mohammed bin Salman reportedly spelled this out directly to Trump in a phone call Tuesday evening, telling him about the access restrictions and urging him to stand down. The operation got paused the same day, and Trump later framed the climbdown publicly as a favor to Pakistan and “other countries.”

Later reports are saying an off-ramp came Wednesday night. A second call between Trump and the Crown Prince cleared the way for Saudi and Kuwaiti access to be reinstated, and Pentagon officials are now floating a restart of Project Freedom as soon as this week. The White House, for its part, insists there was never a ban — calling that framing “fake news” and saying allies were notified in advance.

Why it matters

The reporting paints a picture of a kingdom increasingly uneasy with what it sees as Trump's improvisational approach to a war that has put Gulf states — not the US — directly in Iran's line of fire. People briefed on the talks told the FT that Riyadh saw Project Freedom as “unnecessarily escalatory and not well thought through.”

Iran answered the launch of Project Freedom by firing more than a dozen missiles and drones at the UAE, setting an oil facility at Fujairah ablaze. It also fired cruise missiles at US warships and commercial vessels.

The last straw was the US response — or lack of one. Joint Chiefs Chairman Dan Caine reportedly described the Iranian strikes as low-level harassment, and Trump himself said it wasn’t “heavy firing.” For Riyadh, that signaled Washington wouldn’t back the Gulf up if Tehran kept lashing out.

The pushback is “probably a signal by the Saudis that they’re feeling a little bit neglected and tired of the improvisation,” Brookings’ Michael O’Hanlon told CNBC. Still, it’s unlikely to be a durable outcome as the US security alliance is just still too important, O’Hanlon said.

Hormuz Watch: crickets

The Strait of Hormuz has been effectively closed to commercial shipping since Tuesday, after US and Iranian forces traded blows overnight near the waterway. Bloomberg ’s vessel-tracking data shows zero observed inbound or outbound transits since then.

What triggered the latest halt: US forces hit missile and drone launch sites inside Iran that Washington said were behind attacks on three US warships transiting the strait. Tehran has tightened its own grip in parallel, now requiring shipowners to file detailed paperwork — vessel histories, cargo values, the lot — with its newly established Persian Gulf Strait Authority before any voyage. The combination has all but emptied the waterway.

A double blockade: Iran is obstructing traffic from one side, and the US is preventing ships from calling at or leaving Iranian ports from the other. US Central Command says American forces are currently holding more than 70 tankers — with combined capacity of over 166 mn barrels of oil — out of Iranian ports.

Wall Street has stopped expecting a quick fix. A Goldman Sachs poll conducted 4-6 May found a majority expect Hormuz flows to stay disrupted past the end of June, with 43% not expecting normal shipping until after July. A third see Brent finishing the year between USD 80-90 a barrel. Goldman's clients also flagged short oil as a favored trade if and when the strait reopens, with options markets showing sustained demand for downside protection — traders are hedging against a sudden de-escalation as much as further escalation.

More 1Q earnings

More companies are out with their quarterly earnings — we have earnings from Zain KSA, Elm Company, ABI, and Dar Alarkan.

Zain’s net income more than doubles on cost relief and one-offs

Mobile Telecommunication (Zain KSA) reported a 116.1% y-o-y surge in net income to SAR 201 mn in 1Q 2026, according to a Tadawul disclosure. This came despite a 1.3% y-o-y dip in revenue to SAR 2.7 bn during the same period.

Behind the jump in net income: Net income was mainly lifted by a SAR 98 mn one-off gain from the Universal Service Fund, which, if excluded, would put income growth at 11% y-o-y. Other drivers included a stronger revenue mix, a 9.8% decline in cost of revenue driven by lower device costs, and a 15% reduction in finance costs following debt optimization and repayments.

Zain has been tidying up its debt: Zain has been on an 18-month debt cleanup that’s starting to hit the books. By the time 1Q rolled around, Zain had already replaced its aging, expensive debt with two major shariah-compliant facilities — a SAR 5.5 bn murabaha facility from a five-bank syndicate to refinance SAR 4.7 bn in maturing debt on “favorable terms,” and a SAR SAR 1.9 bn Al Rajhi loan that refinanced its outstanding Finance Ministry facility.

Elm sees strong 1Q growth despite higher costs

PIF-owned digital giant Elm Company posted a strong start to 2026, with net income up 32.5% y-o-y to SAR 656 mn and revenue up 31.7% y-o-y to SAR 2.5 bn.

Broad-based growth: Business process outsourcing led the charge with a 43.2% y-o-y revenue surge, followed by a 30.4% increase in professional services. The digital business segment — the company's largest contributor — remained robust, posting a 28% rise in inflows.

ABI flourishes on margin gains

Advanced Building Industries’ net income climbed 30.7% y-o-y to SAR 31 mn in 1Q, lifted by stronger steel and insulation margins, offsetting legacy project exits, according to its Tadawul disclosure. Revenue fell 11.3% y-o-y to SAR 1.3 bn in 1Q, weighed down by a 63.4% decline in construction segment revenue and a 6.3% drop in AC segment sales.

ABI sacrificed seasonal revenue to clean house: The drop in 2025 revenue — which extended to 2026 — was driven by a strategy to exit inherited projects that suffered from poor execution and high contractual costs, CEO Ahmed Al-Zaatari earlier told CNBC Arabia (watch, runtime 9:38).

Sales momentum and leaner operations propel Dar Alarkan

Dar Alarkan Real Estate Development kicked off 2026 with a double-digit jump in its bottom line, reporting a net income of SAR 260.2 mn in 1Q, up 24.3% y-o-y, according to its Tadawul disclosure and financial statements (pdf). Revenue climbed 24.8% y-o-y to SAR 1.2 bn, supported by a surge in property sales alongside higher returns from Islamic Murabaha deposits and improved cost management.

The biggest growth engines? Property development remained the group’s dominant segment, generating SAR 1.1 bn in revenue (93% of the total) at a healthy 45% margin. While the leasing segment contributed a smaller 3.5% to the top line, it stood out in efficiency with a hefty 79.7% gross margin.

And the funding behind them: Total finance costs jumped 35.5% y-o-y to SAR 276.3 mn, reflecting a greater reliance on debt and sukuk financing to bridge the gap between operational income and its expanding project pipeline.

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

Cherry Trading sees management reshuffle

Cherry Trading is going through a management reshuffle, with the company appointing Zaid Al Nasser as CEO and Nasser AlOmeir as its new managing director, both effective 1 June, according to separate Tadawul filings. AlOmeir brings over 30 years of experience in trading and contracting, having previously served as General Manager at Al-Omier Group of Trading and Contracting, while Al Nasser joins from Shari Company, where he served as COO.

ICYMI- These changes follow the resignation of Vice Chairman Sultan AlDuwaish in January and former CEO Abdulaziz Saleh AlSowai last month.

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

Alkhorayef brings China’s Sany Trucks to Saudi

Alkhorayef Commercial Company (ACC) has become the exclusive distributor of Sany Trucks in the Kingdom under an MoU inked with the Chinese automotive manufacturer, according to a press release. The move marks Sany Trucks’ entry into the Saudi market through an integrated sales and services model, supported by ACC’s Riyadh-based inventory, a nationwide distribution and service network, and fleet financing solutions.

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

Hybrid bond rush

Companies are selling hybrid bonds at a record pace this year, with Bloomberg data showing that firms have sold USD 65 bn worth of the debt instrument YTD, continuing on from a wave of issuances that followed a move from Moody’s to raise the equity credit in hybrid bonds back in 2024.

Why hybrid bonds, and why now? Hybrid bonds allow issuers to strengthen their balance sheet given that their debt-equity mix doesn’t only add leverage like traditional bonds. For buyers, the subordinated debt comes with a higher coupon in comparison to senior notes. Right now, that additional cost is near record lows, with spreads reaching an all-time low of 58 bps in March.

There’s also “massive demand” for the instrument from investors willing to take on extra risk, analysts said. Orders in Europe are currently surpassing issuance sizes by 4.5x.

Europe is the primary issuance hub for the moment, with the likes of Carlsberg issuing hybrid notes to shore up its balance sheet after an acquisition play. The Gulf is also starting to warm up to the concept, with Abu Dhabi developer Aldar Properties raising not one, but two hybrid issuances this year.

A wider debt rush is happening over in Asia, as well, with hopes of an end to the war also triggering record lows in credit spreads and leading issuers to race to secure cheap financing, Bloomberg reported elsewhere. Westpac Banking issued a USD 4 bn offering, while HSBC is also preparing a USD-denominated issuance.

Credit spreads tightened by 13 bps in 1Q in Asia, outperforming global averages of 5 bps, Bloomberg data showed. The findings indicate a vote of confidence in the fundamentals of the energy import-reliant region, amid reports of a possible ceasefire.

The outlook: For hybrid notes, the more selective, the better, one analyst says, pointing to issuances with shorter waiting periods before the first call. For now, the flurry of activity in Europe is particularly precarious, given its exposure to energy distribution linked to the war.

TASI	11,031	+0.8% (YTD: +5.2%)
MSCI Tadawul 30	1,476	+1.0% (YTD: +6.4%)
NomuC	22,635	-0.8% (YTD: -2.8%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	53,605	+2.0% (YTD: +28.2%)
ADX	9,840	-0.4% (YTD: -1.6%)
DFM	5,902	-0.5% (YTD: -2.4%)
S&P 500	7,399	+0.8% (YTD: +8.1%)
FTSE 100	10,233	-0.4% (YTD: +3.0%)
Euro Stoxx 50	5,912	-1.0% (YTD: +2.0%)
Brent crude	USD 101.29	+1.2%
Natural gas (Nymex)	USD 2.76	-0.4%
Gold	USD 4,529	-0.1%
BTC	USD 80,819	+0.7% (YTD: -7.8%)
Sukuk/bond market index	920.79	+0.5% (YTD: +0.2%)
S&P MENA bond & sukuk	151.88	-0.1% (YTD: 0.0%)
VIX (Volatility Index	17.19	+0.6% (YTD: +15.0%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.8% yesterday on turnover of SAR 6.7 bn. The index is up 5.2% YTD.

In the green: Al Jouf Cement (+10%), ACWA POWER (+10%), and Elm (+10%).

In the red: Saudi Public Transport (-10%), United International Transportation (-10%), and Savola Group (-8%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.8% yesterday on turnover of SAR 20.3 mn. The index is down 2.8% YTD.

In the green: Lana Medical (+14.3%), Mayar Holding (+10.0%), and Ratio Speciality (+9.6%).

In the red: National Building and Marketing (-14.2%), Marble Design (-7.1%), and Arabian Plastic Industrial (-7.1%).

CALENDAR

MAY

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

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

30 August-1 September (Sunday-Tuesday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

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

SEPTEMBER

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

23 September (Wednesday): Saudi National Day.

28 September-1 October (Monday-Thursday): The International Conference on Theory and Practice of Electronic Governance (ICEGOV), Prince Sultan University, Riyadh.

OCTOBER

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

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

28-29 October (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

28-29 October (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

NOVEMBER

25-29 November (Wednesday-Sunday): 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.

2027

FEBRUARY

1-3 February (Monday-Wednesday): Energy Regulators Regional Association annual conference, Riyadh.

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Ninja lines up banks for IPO, keeps options open