PIF’s assets under management hit SAR 4.5 tn, net income doubles

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WHAT WE’RE TRACKING TODAY

Morgan Stanley cut its oil price forecasts as Hormuz traffic recovers

Good morning, all. Our big story this morning dives into the Public Investment Fund’s 2025 financials — its net income more than doubled, while revenues saw a 9% y-o-y jump. We also look at the latest Saudi citizen unemployment figure, which fell to its second lowest level since 2021 in 1Q.

PSAs

Work permit deadline extended to end-2026: The Human Resources Ministry extended the deadline to correct the status of expatriate workers with expired work permits — or those who have been working for more than six months without a permit — until the end of 2026. Employers and workers who haven’t rectified their situation by then will face formal action.

Tax penalty exemption extended

The Zakat, Tax, and Customs Authority (Zatca) has extended its fine cancellation and financial penalty exemption initiative for another six months, from 1 July to 31 December, according to an announcement. The extension provides exemptions for penalties related to late tax registration, delayed payments, late return filings, and VAT return correction fines.

The details: Taxpayers must be registered with Zatca, submit all outstanding tax returns, and settle the associated principal tax liabilities to qualify for the exemption. They can request installment plans, provided applications are submitted during the initiative period and payments are made according to Zatca-approved schedules.

A barrel short of bullish

Morgan Stanley cut its oil price forecasts for the second time in about two weeks, citing faster-than-expected Hormuz traffic recovery, resilient US supply, and soft Chinese demand, Bloomberg reports. The bank now sees dated Brent averaging USD 75 / bbl in 3Q (down USD 15) and 4Q (down USD 5), with all four 2027 quarters also revised lower and dated Brent seen at USD 70 by end-2027.

Why it matters: Brent futures fell about 30% this quarter as the US-Iran peace agreement opens the door for more tanker traffic through Hormuz. Morgan Stanley estimates flows only need to recover to about 65% of pre-conflict levels to balance the market in 2027, suggesting prices still have room to fall. Goldman Sachs also cut its outlook, and bearish signals like contango pricing — where future prices trade above spot — point to a market already pricing in a glut.

The bearish turn is broadening: The downgrade comes as analysts cut their 2026 oil price forecasts for the first time since the Iran war began, according to a Reuters poll. The survey lowered its average Brent forecast to USD 84.5 / bbl from USD 90.4 a month earlier. The shift reflects growing expectations that the market is heading back into surplus, with analysts expecting Opec to continue gradually raising production.

Romoz wants a Nomu listing

Arabian Romoz Co. got the green light to register and offer 950k shares — 11.95% of its share capital — on the parallel market Nomu, according to a Capital Markets Authority (CMA) statement.

Another real estate firm heads to the parallel market… The announcement landed the same month as another real estate firm, MSGA Investment Company, headed to Nomu, floating 11.1 mn shares — equivalent to 10% of its IPO capital of 111.1 mn shares.

That’s not all: Al Manhal Company also got the CMA’s thumbs up to register and offer 900k shares — 15% of its share capital — on Nomu, according to a separate CMA statement.

… while IPOs are almost on ice: We saw issuers shelving IPOs amid geopolitical jitters. Mutlaq Al Ghowairi Contracting parked its SAR 3 bn Tadawul listing, while Arabian Dyar is reportedly pulling its IPO, once pitched near a SAR 16 bn valuation. Both are said to be rattled by demand worries after the strikes on Kuwait and Bahrain.

WB merger in (more) hot water

The UK government may halt Paramount Skydance’s Gulf-backed USD 110 bn takeover of Warner Bros Discovery over media ownership concerns, Bloomberg reports, citing a letter (pdf) from the Department for Culture, Media, and Sport. Although no final decision on intervention has been reached, Secretary of State for Culture Lisa Nandy may prompt regulators to investigate the transaction, adding another hurdle to the merger. Nandy has given Paramount and Warner Bros. until 6 July to respond.

REMEMBER- The deal puts CBS-owner Paramount in control of the larger Warner family, home to HBO and CNN. The Public Investment Fund, the Qatar Investment Authority, and Abu Dhabi’s L’imad Holding are partially bankrolling the transaction with some USD 24 bn in equity.

What’s next? Weeks after the US Justice Department closed its eight-month antitrust probe into the merger, the European Commission must conclude two parallel reviews. This includes a Phase 1 merger check due 7 July and a Foreign Subsidies probe targeting the Gulf money due 14 July.

Data point

97.7% — that’s the percentage of Saudi residents saying they feel safe walking alone in their neighborhood at night, according to Gastat data submitted to the UN Sustainable Development Goals Indicators Database. This percentage puts the Kingdom first among G20 countries for public safety perception.

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The big story abroad

How yesterday’s talks between the US and Iran unfolded: US negotiators Jared Kushner and Steve Witkoff held “positive” talks with regional leaders in Qatar, indicating that technical talks are proceeding. This followed reports that Tehran’s representatives would refuse to meet the envoys, with Iranian officials saying the terms of the ceasefire must be sorted out before tackling the issue of the Islamic Republic’s nuclear program.

International dailies are zeroing in on US President Donald Trump’s annual financial disclosure, which reveals at least USD 1.4 bn in earnings from crypto and crypto-related ventures. The report highlighted almost USD 600 mn made from sales by World Liberty Financial, a crypto firm co-founded by Trump, his sons, and Witkoff.

Wall Street just finished its best quarter since 2020, as optimism over a long-lasting peace agreement for the US-Iran conflict bolsters investor confidence. The S&P 500 closed up by 0.8% at around 7.5k, while the Dow Jones rose 0.3% at 52k.

Chip stocks also had a good quarter — they closed out their best quarter ever, jumping 88% during the three-month period. We have more in this morning’s Planet Finance, below.

Meanwhile, in the AI world: Anthropic launched Claude Science, an AI research workbench which integrates tools and computer resources geared towards scientists and researchers. It can render artifacts like 3D protein structures, genome tracks, and chemical structures.

PIF bottom line more than doubles in 2025, clears AUM target

The Public Investment Fund (PIF) more than doubled its net income in 2025, up 152.4% y-o-y to SAR 65.2 bn, driven by higher fair-value gains and operating income even as dividend income fell, according to its financials (pdf). Revenue rose 9% y-o-y to SAR 449.9 bn and operating income climbed 125% y-o-y to SAR 78 bn.

Much of the lift was unrealized. Total income from investment activities reached SAR 137.9 bn, up from SAR 129.4 bn — but the mix has shifted. Income from fair-value changes in financial instruments nearly doubled to SAR 38.8 bn, and income from fair-value changes in managed funds rose to SAR 29.1 bn from SAR 20.7 bn. Dividend income, meanwhile, fell to SAR 65.3 bn from SAR 84 bn, a drop the fair-value gains more than absorbed.

The operating side pulled its weight too. Earnings from associates and joint ventures more than tripled to SAR 9.8 bn from SAR 2.8 bn, administrative costs fell 8.7% y-o-y to SAR 157 bn, and operating cashflow rose by roughly a quarter to SAR 75.5 bn.

Where the operating revenue came from: Banking and financial services led at SAR 85.3 bn, followed by telecoms at SAR 76.8 bn and mining at SAR 38.8 bn. Agriculture and livestock more than tripled to SAR 7.6 bn.

On the balance sheet: PIF’s investments in associates and joint ventures rose to SAR 212.8 bn from SAR 196.9 bn. Investment securities remained the largest asset category at SAR 2.16 tn, while investment properties rose 23% y-o-y to SAR 80.5 bn. Cash reserves stood at SAR 354.4 bn, and loans and borrowings rose 27% y-o-y to SAR 725.3 bn — taking borrowings to 16% of assets.

The fund cleared a milestone on the way: Assets under management (AUM) grew 5% y-o-y to SAR 4.54 tn in 2025, passing the SAR 4 tn target it set for 2025 and keeping it on the path to SAR 10 tn by 2030.

How it stacks up globally: The latest AUM boost pushed PIF past the Abu Dhabi Investment Authority (USD 1.18 tn) to become the largest Arab sovereign wealth fund at USD 1.21 tn of AUM, now fourth worldwide behind Norway’s NBIM and China’s Safe and CIC, Alarabiya reports, citing Global SWF data.

Looking ahead

A foundation for 2026-2030: The solid earnings form a sound launchpad for the fund’s adjusted strategy, more focused on generating financial returns, building stronger local champions, and taking a more measured approach to gigaproject spending as the Kingdom faces a wider mix of challenges, such as a ballooning deficit and war-fueled oil export and supply chain disruptions that have weakened investor sentiment.

What’s next? PIF will present European partners with roughly 140 prospects worth around EUR 10.4 bn through 2030. It’s also reworking its sports portfolio — seeking external investment for Newcastle United’s infrastructure plans, winding down its LIV Golf financing, and exploring selling several football clubs.

Saudi citizen unemployment nears record low in 1Q

The unemployment rate for Saudi citizens fell to 6.4% in 1Q 2026 — the second-lowest level since 2021 — while overall unemployment in the Kingdom eased to 3.1%, according to Gastat’s latest labor force survey (pdf). The overall rate is down 0.4 percentage points from 4Q 2025.

Why it matters: The drop is the result of converging structural and immediate economic shifts. Mega-projects are transitioning from planning to mass hiring, aggressive Saudization mandates are successfully pushing nationals into logistics and tech, and the steady dismantling of workplace barriers for women continues to pay dividends, Senior Economist at MT Trading Ahmed Chreim tells EnterpriseAM.

This structural momentum is colliding with a post-war recovery pivot. “Shifting priorities from mega-projects to targeted industry support over the past year has helped shift labor demand,” MENA Economist Hamzeh Al Gaaod tells us, adding that positive growth prospects are fueling a push for tighter labor markets as firms gear up for recovery efforts.

The breakdown

Saudi women drove the decline: Female unemployment dropped 1.3 percentage points q-o-q to a historic low of 9.0%. Male unemployment eased 0.7 points to 4.9%.

But gains came with a participation cost: The Saudi labor force participation rate slipped to 49.0%, down 0.5 points q-o-q and 2.3 points y-o-y. Female participation fell to 33.9%, and the employment-to-population ratio for Saudis edged down to 45.8%. Youth participation (ages 15-24) also slid, despite unemployment in that demographic dropping significantly for both men and women.

The private sector shift is nearly absolute: Some 95.8% of unemployed Saudis say they will accept a private-sector role, signaling a massive cultural shift away from traditional reliance on public sector jobs. When hunting for these roles, direct applications to employers remain the dominant channel (74.6%), followed by the government’s Jadarat platform (55.2%) and CV postings on professional networks (48.5%).

On flexibility: A greater percentage of unemployed women (60.4%) showed a willingness to commute over an hour than men did (45.3%), though more men (82.8%) are willing to work eight-plus hours a day compared to women (68.2%).

What comes next

Look for the Saudi national unemployment rate to stabilize between 6.0% and 6.5% through the second half of the year, Chreim says. As the sheer volume of new jobs levels out, expect the narrative to shift toward job quality, wage growth, and addressing underemployment among highly skilled graduates.

Expanded private-sector credit could further boost SME hiring if local interest rates ease later this year, Chreim notes, though the rapid creation of specialized roles will continue to place pressure on local vocational training to bridge the skills gap.

Net FDI inflows amount to SAR 23.1 bn in 1Q

Net inflows of foreign direct investment (FDI) in the Kingdom fell 2.4% y-o-y to SAR 23.1 bn in 1Q 2026, according to Gastat data seen by EnterpriseAM. On a quarterly basis, FDI net inflows dropped by 51.9%.

FDI inflows reached SAR 26.6 bn in 1Q, marking a 2.4% increase y-o-y but a 49.9% decline compared to the last quarter. FDI outflows reached SAR 3.5 bn, up 50.6% y-o-y and down 31.8% q-o-q.

The numbers in context: The 51.9% q-o-q drop looks dramatic but follows an unusually strong 4Q, when net inflows surged 90% y-o-y to SAR 48.4 bn — a single quarter that accounted for nearly 40% of the full-year total. Strip that out, and 1Q’s SAR 23.1 bn is roughly in line with the first-half 2025 run rate despite war-fueled disruptions.

REMEMBER- The government is targeting USD 100 bn in annual FDI inflows by 2030 as part of its diversification agenda, a number that’s still a ways off, with the last tally putting 2025 FDI at SAR 122.4 bn (USD 32.5 bn).

The Kingdom is counting on several reforms to close the gap, introducing non-Saudi real estate ownership last week, opening Tadawul to direct foreign investment, rent freezes, and a revamped privatization strategy.

Worth watching: The PIF’s greater focus on local champions and its recalibration of spending priorities could reshape how foreign firms and consultants assess prospects in the Kingdom — though it’s too early to tell whether that’s showing up in the FDI data or just in the conversation around it.

1001 banks USD 30 mn to bring predictive AI to GCC ports, energy, and aviation

GCC- and London-based sovereign AI startup 1001 raised USD 30 mn in a Series A round led by US venture capital firm Lux Capital, according to a press release. PIF-backed Sanabil Investments joined the round, alongside Hanabi, 9Yards, General Catalyst, Chris Ré, and a group of regional and global investors. The company’s existing backers include Emirati entrepreneur Amira Sajwani (LinkedIn).

What 1001 does: Founded in 2025 by Bilal Abu-Ghazaleh (LinkedIn), 1001 builds AI systems for operators in energy, industrials, aviation, ports, and logistics. The platform gives operators real-time visibility into complex infrastructure, predicting disruptions and automating decisions before problems compound. Aviation, ports and logistics, and manufacturing are the company’s current focus areas, with energy and industrials close behind, Abu-Ghazaleh tells EnterpriseAM — sectors where, as he puts it, “one better decision is worth a fortune.”

Why GCC + London: “The GCC is where we're starting to serve, because this is where the world's most critical infrastructure runs,” Abu-Ghazaleh said. London, in turn, gives the company “access to one of the deepest talent pools in the world” in a timezone next door to the Gulf.

The investor bench is full of heavyweights: Backers include Replit's Amjad Masad, Ramp's Karim Atiyeh, Clay's Kareem Amin, and Cognition's Russell Kaplan — founders of some of the fastest-growing US startups in go-to-market, data infrastructure, and frontier AI engineering. Abu-Ghazaleh frames it as a deliberate corridor play: “US builder velocity paired with GCC operating scale” is how he describes it. “They give us the playbooks and the technical judgment for shipping fast and scaling deliberately, plus access to frontier talent networks as we keep pulling world-class builders toward the region,” he explains.

What’s next?

The fresh capital — on top of a USD 9 mn seed round closed in October 2025 — will grow the engineering team and fund commercial expansion across the GCC. Abu-Ghazaleh isn't naming specific markets or a fixed order yet; the operating principle, he said, is to “follow the value and go deeper before we go wider.”

The startup is betting its growth doesn't track government infrastructure spending cycles — a meaningful claim in a region where sovereign capex swings can make or break a vendor's pipeline. Abu-Ghazaleh argues the platform's value is “largely insulated from new infrastructure spend” because it squeezes more performance out of assets operators have already built, with ROI typically visible within the same year.

He says demand actually firms up when budgets tighten, because operators prioritize resilience and control over new spending. “Demand didn't soften through a turbulent period,” he said. “This region treats AI as national strategy, not a discretionary line item, so the commitment is patient and doesn't flicker with the cycle.”

Riyadh Air adds more routes, Al Kathiri + Anaam investors get compensation

Riyadh Air added three new international routes to its network, bringing its total destinations to nine. The carrier opened bookings for flights connecting Riyadh with Kuala Lumpur, Malaga, and Dhaka.

REMEMBER- The airline previously launched routes to Jeddah, Dubai, Cairo, Madrid, and Manchester after receiving its first three Boeing 787 Dreamliner aircraft. It also launched its first commercial international flight to London Heathrow this month and received clearance to use US airspace. This is part of a plan to integrate one Boeing 787-9 Dreamliner into its fleet each month and launch two new destinations every two months, reaching 100 cities by 2030.

Investors compensated for Al Kathiri, Anaam violations

The Capital Market Authority (CMA) has paid out compensation to more than 20k investors affected by “violations committed in the shares” of Al Kathiri Holding and Anaam International Holding, it said in a statement. The payout came following a final ruling obliging the perpetrators to pay back SAR 292.8 mn in illegal gains.

REMEMBER- Seven members of Albanyan family and one outsider were accused of upping their stake in the two listed investment companies in 2020, far exceeding the 5% minimum stake investors must disclose to Tadawul.

Al Khobar to get SAR 994 mn healthcare campus

Prince Mohammed bin Fahd University awarded an SAR 994 mn (USD 262 mn) contract to Chinese state-owned Zhejiang Construction Investment Group, according to a press release. The contract involves building a 60k sqm healthcare campus in Al Khobar, featuring a 10-story specialty hospital equipped with advanced medical systems and integrated clinical infrastructure.

Chip stocks see their best quarter ever — but volatility raises questions over what comes next

Chip stocks are closing out their best quarter ever, but not without some volatility on the way out. The Philadelphia Semiconductor Index climbed 88% in 2Q, its strongest three months on record. That puts the index up 101.1% for the year — a pace that would make 2026 its best since the dot-com year of 1999, dwarfing the Nasdaq 100's 25% quarterly gain and the S&P 500's 14%, Bloomberg reports.

Memory chips, not Nvidia, drove the rally. SanDisk is up 764% this year. Micron has gained 301%, pushing its market cap past USD 1 tn. Nvidia — still the world’s most valuable company — is up just 4.5%, the weakest stock in the index despite trading at 18 times forward earnings, its cheapest multiple since 2018.

But the cracks are starting to show: The index shed 7.9% last week — its worst weekly drop since April 2025 — before swinging from down 3.2% to up 3.8% in a single session on Monday. Volatility, measured by the Cboe Semiconductor ETF Volatility Index, has jumped 83% this year, which would be its biggest annual rise on record, and is sitting near levels last seen during last year’s tariff shock.

Again, it all boils down to speculation that the AI boom — and investments from hyperscalers — is not sustainable. The main doubt that analysts and investors have is whether hyperscalers keep growing their investment beyond this year. So far, Microsoft, Amazon, Alphabet, and Meta are holding the line — it’s hardware makers further down the chain, squeezed by rising prices, and a reportedly wavering OpenAI IPO that are giving the bears evidence of the contrary.

What’s next: Analysts have raised 2027 earnings growth forecasts for the sector to 49%, up from 35% in April — well ahead of the S&P 500’s projected 17%. But with new AI capability papers landing weekly and a retail-heavy investor base still finding its footing in the sector, analysts expect the hyper-volatile market to persist for a while.

MARKETS THIS MORNING-

Asia-Pacific markets are mixed in early trading this morning, with Japan’s Nikkei and the Shanghai Composite in the green while South Korea’s Kospi and the Hang Seng are down. Investors are closely monitoring the latest developments in the talks between the US and Iran and where the JPY will settle against the USD after it slipped to its weakest level in decades.

TASI	10,800	+0.1% (YTD: +3.0%)
MSCI Tadawul 30	1,436	0.0% (YTD: +3.5%)
NomuC	23,051	-0.1% (YTD: -1.1%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	50,488	+1.3% (YTD: +20.7%)
ADX	9,804	-0.4% (YTD: -1.9%)
DFM	5,956	-0.6% (YTD: -1.5%)
S&P 500	7,499	+0.8% (YTD: +9.6%)
FTSE 100	10,497	+0.1% (YTD: +5.7%)
Euro Stoxx 50	6,328	+1.6% (YTD: +9.2%)
Brent crude	USD 72.95	-1.3%
Natural gas (Nymex)	USD 3.25	-0.7%
Gold	USD 4,020	-0.4%
BTC	USD 58,604	-2.7% (YTD: -33.1%)
Sukuk/bond market index	915.94	+0.3% (YTD: -0.4%)
S&P MENA Bond & Sukuk	152.64	0.0% (YTD: +0.5%)
VIX (Volatility Index)	16.45	-6.8% (YTD: +10.0%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.1% yesterday on turnover of SAR 5.5 bn. The index is up 3.0% YTD.

In the green: Sharqiyah Development (+10.0%), Tihama (+10.0%), and Mutakamela Ins. (+10.0%).

In the red: Al Babtain (-3.8%), Al Hammadi Holding (-3.1%), and Cenomi Retail (-2.7%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.1% yesterday on turnover of SAR 16.5 mn. The index is down 1.1% YTD.

In the green: Al Waha REIT (+23.0%), Al Razi Medical (+10.0%), and Balady Poultry (+9.8%).

In the red: Keir International (-30.0%), Leaf Global (-6.7%), and Al Rasheed (-6.4%).

CALENDAR

AUGUST

30 August-1 September (Sunday-Tuesday): Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center.

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

SEPTEMBER

8-10 September (Tuesday-Thursday): The WTM Spotlight Riyadh, Riyadh Front Exhibition & Conference Center (RFECC), Riyadh.

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

25-26 October (Sunday-Monday): The Global Proptech Summit, Mandarin Oriental Al Faisaliah Hotel, 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.

30 October-1 November (Friday-Sunday): The New Global Sport Conference, Sofitel Hotel & Convention Centre, Riyadh.

NOVEMBER

11-12 November (Wednesday-Thursday): Aluminum Arabia, The Arena, Riyadh.

16-19 November (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre (Malham), Riyadh.

29 November-1 December (Sunday-Tuesday): The UN Trade and Development Global Supply Chain Forum, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;

2027

FEBRUARY

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

MARCH

21-25 March (Sunday-Thursday):The World Water Forum, Riyadh.

22–24 March (Monday-Wednesday): Capital Markets Forum, Four Seasons Hotel, Riyadh

APRIL

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

JUNE

1-3 June (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

Signposted to happen sometime in 2027:

The Ocean Race finishes in Amaala on the Red Sea;
Riyadh-Kudmi transmission line to be completed;
Aero Middle East and Sand & Fun takes place in Thumamah Airport, Riyadh.

Signposted to happen sometime in 2Q 2027:

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

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