Riyad Capital sees GDP growth picking up

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WHAT WE’RE TRACKING TODAY

THIS MORNING: Faisal bin Farhan + Arab foreign ministers talk Gaza in Brussels

Good morning, wonderful people. You may be receiving today's issue a bit late as our current email service provider has decided to have issues this morning. We’re very sorry for the inconvenience and hope to be back to our regular schedule tomorrow morning.

UP FIRST- Washington could resume deliveries of offensive weapons to Saudi in the “coming weeks,” ending a three-year hiatus, the Financial Times reported, citing US officials it says have knowledge of the situation. While the resumption of sales is not directly related to an anticipated Saudi-US defense pact, the paper says, it suggests an agreement is imminent, in our view.

BACKGROUND- Officials in Riyadh and Washington are putting the final touches on a series of agreements including a security and defense pact and another that could see us get US assistance building out the domestic nuclear power industry. We expect a third agreement will cover artificial intelligence and other advanced technologies.

HAPPENING TODAY-

#1- Arab foreign ministers led by Foreign Minister Faisal bin Farhan are inBrussels for talks with their 27 European Union counterparts. Expect Gaza to be the word of the day. The Arab FMs were in Paris over the weekend where they stressed the urgency of a ceasefire in Gaza during a meeting with French President Emmanuel Macron.

#2- The Smart Data and AI Summit gets underway in just a couple of hours at Riyadh’s JW Marriott Hotel. The two-day event will welcome some 40 keynote speakers, 300 “pre-qualified” experts in AI, IT and robotics from over 150 leading organizations in those fields to give their two cents on next-gen technology, digital transformation, smart urban development, the online economy, and the future of open data, among other issues.

Key speakers include:

Isa Truchet, senior advisor to the assistant director general at the Saudi Data and AI Authority;
Nayef Al-Otaibi, vice president and chief digital officer at Aramco;
Akram Nour, chief of digital transformation at the Economic Cities and Special Zones Authority;
Eyad Buhuaiga, chief data and digital strategy officer at Saudi Electricity;
Faisal AlNasser, chief information officer at Almarai.

IPO WATCH #1- Bookbuilding for the retail tranche of Riyadh-based Saudi Manpower Solutions (Smasco) closes today as its IPO on Tadawul’s main market pushes on. The institutional tranche of the labor agency’s IPO drew in SAR 115 bn in orders, making it 128x oversubscribed.

IPO WATCH #2- The final allocation of shares for Fakeeh Care Group is happening today, after its institutional offering closed with a 119x oversubscription rate. Fakeeh has priced the transaction at the top of the range at SAR 57.50 per share, which would give the business a market cap of SAR 13.3 bn at the start of trading. The pricing means Fakeeh is set to raise SAR 2.9 bn from the offering.

Sound smart: With more than one IPO in the market at the same time, strong oversubscription rates underline rising institutional appetite for new Saudi paper even as the Tadawul underperforms global markets: The all-share index is down 1% year to date and the MSCI Tadawul 30 is off5%, while US and European benchmarks are up 7-11% so far. Still, the TASI is doing better than the ADX (-7.8% for the year) and the DFM (-1.2%).

WEATHER- Riyadh could see scattered showers tomorrow with a daytime high of 41°C and a low of 27°C. Makkah is sunny with a high of 45°C and a low of 26°C. Meanwhile, Jeddah is still windy, bringing a daytime high of 36°C and a low of 27°C.

WATCH THIS SPACE-

#1- Mining could be coming to AlUla: The Industry and Mineral Resources Ministry has approved a mechanism with the Royal Commission for AlUla (RCU) to grant mining licenses within an area of the heritage site outlined by the RCU, the ministry said on X. RCU planners will consider specific areas of mineral reserves of important minerals and ores as they plan projects.

Licensing requirements: Companies looking to obtain licenses should present an environmental impact study, develop a plan for rehabilitation of the exploration site and preserve water, environment and wildlife, according to the statement.

#2- Nomu-listed Watani Iron Steel has submitted a request to the exchange to transfer to Tadawul’s main market after satisfying all the requirements, it said in a disclosure to Tadawul. Watani has a market cap of SAR 501 mn, satisfying the SAR 300 minimum market cap requirement for issuers to list on the main market.

The requirements in the nutshell: Issuers must have done business for a minimum of three years under the same management, according to the exchange website. They must also take a minimum stake of 30% to market, and have at least 200 public shareholders. The move would also require Watani to start publishing quarterly and annual financial statements post-listing.

#3- An unnamed “commercial establishment” in Hafar Al Batin was forced to temporarily shut down its operations over suspected food poisoning, Hafr Al Batin Municipality said in a post on X. Health authorities have collected samples to determine the cause of a suspected outbreak in the city, the municipality said.

The government is sending a message on food safety: Earlier this month, officials ordered the recall of Bon Tum mayonnaise after it traced the Hamburgini-linked food poisoning outbreak to the condiment brand. The move comes after a laboratory analysis by the Saudi Food and Drug Authority identified clostridium botulinum bacteria in the mayo used by the local burger chain. One person reportedly died of food poisoning and more than 70 were made sick, with a number of them sent to the intensive care unit.

PSAs-

#1- Travelers coming to Saudi from Europe for Hajj are encouraged to receive the quadrivalent meningococcal vaccine, the European Center for Disease Prevention and Control said in a statement. The recommendation comes after the agency said it was monitoring 12 cases of pilgrims diagnosed with the invasive meningococcal disease after performing Umrah.

#2- The deadline to register for school bus services for the upcoming academic year is Monday, 10 June, Okaz reports. The deadline applies to all areas and schools across the country. Parents can register for the services via the Education Ministry’s Noor e-platform for SAR 200 per year. Students with disabilities and children from social security families are exempt from transportation fees.

DATA POINT-

The Kingdom’s fashion industry was valued at SAR 92.3 bn in the first quarter of 2024, small and medium enterprises regulator Monsha’at said in a statement. Spending on local brands came in at SAR 46.9 bn, while spending on imported fashion brands totalled SAR 27.4 bn.

SPORTS-

Al Hilal will go head to headagainst rival Al Nassr on Friday in the Saudi King’s Cup final in Jeddah. Al Hilal has its eyes on the treble after being officially crowned the Saudi Pro League title last week with an unbeaten streak and securing the Saudi Super Cup title last month. Officials are yet to specify when kickoff will take place.

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THE BIG STORY ABROAD-

It’s a reasonably quiet morning in the global business press, as is often the case on Mondays — and even more so when it’s a long weekend: Markets are closed today in both the United States (Memorial Day) and the UK (spring bank holiday).

Hamas fired rockets at Tel Aviv yesterday for the first time since January in what defense analysts are saying is a demonstration of resilience, the Associated Press reports. Eight rockets were launched from Rafah and several were intercepted, the Israeli military said.

Israel, in turn, killed dozens in airstrikes on Rafah hours after Hamas’ attacks. At least 35 people were killed and dozens injured.

Negotiations due to resume in Cairo tomorrow: Another round of ceasefire and hostage swap negotiations is due to kick off in Cairo tomorrow, CNN and Reuters report, citing unnamed officials. Egyptian and Qatari mediators will lead the talks with US involvement.

Aid delivery resumes: Some 200 aid trucks and four fuel trucks departed from Egypt to enter Gaza through the Kerem Shalom crossing yesterday, bypassing the Rafah crossing that has been closed for several weeks, Al Qahera News reports.

A bad morning for nervous flyers: The press is picking up on the idea that significant in-flight turbulence is becoming more common thanks to global warming after a dozen people were injured yesterday on a Qatar Airways flight that ran into turbulence over Turkey. The incident came just days after dozens were hurt in a similar Singapore Airlines incident. The story is all front pages this morning.

Signs of the times: Hedge fund managers are blaming slow fundraising on the slow pace of exits by their counterparts in private equity. Both rely on pension plans, foundations, and endowments for assets under management, but with PE exits slowing, limited partners have less cash to put into hedge funds and other asset classes, the Financial Times writes.

Keep an eye on: Closing arguments in Donald Trump’s hush-money trial, which begin on Tuesday, and parliamentary elections in South Africa, which start on Wednesday.

CIRCLE YOUR CALENDAR-

Demo day for the final round of the Sanabil 500 MENA seed accelerator will take place this Wednesday, 29 May, in Riyadh with seven finalists. Applications for the next batch are now open and will close on 6 August 2024.

The#Growth Summit is set to kick off on Wednesday, 5 June, bringing together marketing, product and growth experts at the InterContinental in Riyadh. You can request your invite here.

The Global EV and Mobility Tech Forum will open its doors on Wednesday, 10 July to Thursday, 11 July at the Riyadh International Convention and Exhibition Center. The event will bring together policymakers, NGOs, and startups.

Saudi will host the UN Trade and Development Global Supply Chain Forum in 2026, according to a statement by Saudi Ports Authority (Mawani).

The World Water Forum will take place in Riyadh in 2027under the theme “Together for a better tomorrow,” state-run news agency SPA reports.

Riyad Capital sees non-oil activity fueling an economic rebound

Riyad Capital expects the domestic economy to rebound this year and next as non-oil activity picks up at a faster pace, it said in its latest Saudi Economic Chartbook report for 2Q 2024 (pdf). The firm sees GDP growth bouncing back to a 2.3% clip in 2024 before accelerating further to 5.8% in 2025.

Where the economy currently stands: GDP shrank 1.8% y-o-y in 1Q 2024, marking the third consecutive quarter that the economy has been in contraction. The downturn came on the back of a 10.6% decline in oil activity, which accounts for c. 40% of GDP (and about 75% of government revenues).

The FinMin remains more optimistic: The Finance Ministry is targeting GDP growth of 4.4% for the current fiscal year, Finance Minister Mohamed Al Jadaan said in December.

But Riyad Capital’s forecasts are on par with other outfits: The IMF revised its 2024 growth forecast for the Kingdom down to 2.6% in April, pointing to the combined effects of lower oil prices and production cuts. The Washington-based lender’s revision came on the heels of the World Bank cutting its forecast for 2024 growth to 2.5%, down from the 4.1% it had expected in January.

Fiscal policy + investments will drive non-oil growth: A “growth-oriented” fiscal policy along with increased investment spending will help enable robust growth for non-oil activities, Riyad Capital says, expecting the non-oil economy to grow 4.8% this year and 5.2% next year. Non-oil activity rose 4.4% y-o-y last year. The oil sector’s GDP contribution would be “mildly negative” this year at -2.2% but will “record substantial growth of 8.7% in 2025,” Riyad Capital said. Its forecasts come on the back of expectations of increased oil production above 10 mn barrels per day in the coming 18 months.

More budget deficits: Riyad Capital sees a budget deficit of 3.0% of GDP this year, which it expects to narrow to 1.8% next year due to the “expected expansionary fiscal policy pursued by the government in the next two years.” It sees the current account balance to grow further to 3.7% of GDP this year and 4.9% of GDP in 2025 due to projections of higher oil export revenues.

REMEMBER- The Kingdom reported its sixth consecutive quarter with a budget deficit, posting a deficit of SAR 12.4 bn in the first quarter of 2024 — four times higher than its shortfall in 1Q 2023. Officials are accepting modest fiscal deficits as the price of pursuing growth.

The outlook on inflation + interest rates: Riyad Capital expects inflation to cool to 2.0% in 2024 before it accelerates slightly to 2.4% in 2025. Price growth came in at an average rate of 2.3% last year. The US Federal Reserve is set to slash interest rates two times in the second half of this year, with four rate cuts in the cards throughout 2025, Riyad Capital suggests. Saudi Central Bank Sama would mirror rate cuts due to the currency being pegged to the USD by an overall 150 basis points by the end of 2025, the firm said.

Sabic could be closing steel unit Hadeed’s sale to PIF in 2H 2024

Sabic nears completion of Hadeed sale: Petrochemicals giant Sabic has obtained all necessary approvals and satisfied conditions precedent to close the sale of its steel subsidiary Hadeed to the Public Investment Fund (PIF), it said in a disclosure to Tadawul. Sabic has also completed the transfer of the full ownership of Hadeed to the PIF, it added.

What we know: The transaction — which has an enterprise value of SAR 12.5 bn — should close in the second half of this year. The transaction will close with a “completion accounts mechanism” — in finance-speak, that means the price PIF will pay Hadeed will ultimately be calculated based on Hadeed’s financials at the time of close.

Sabic’s expectations: It said earlier this year that it expects the sale of its steel subsidiary Hadeed to the PIF to draw in USD 1.7-1.9 bn upon its completion.

About the sale: Sabic agreed last year to sell Hadeed to PIF in a bid to “optimize its portfolio and focus on its core business” and contribute to the growth of several sectors including renewables and mining. It said the divestment also aligns with the sovereign fund’s efforts to progress the country’s industrial development and meet growing local demand for steel. Officials had initially hoped to finalize the sale in 1H 2024.

About Hadeed: Sabic’s steels unit focuses on manufacturing steel products, including reinforcing bar, coiled wire, billets, slabs, sections, hot and cold rolled coil, galvanized coil, preprinted coil and hot film laminated coil.

The divestment was among factors leading Sabic to its first net-loss ever: Sabic reported a net loss of SAR 2.8 bn in 2023 in what was the petrochemical giant’s first-ever net loss. The losses came partly due to discontinued operations after the divestment of its steel subsidiary Hadeed.

Mawani + DP World begin construction on Jeddah Islamic Port logistic park

Saudi Ports Authority (Mawani) and Dubai-based DP World broke ground on a SAR 900 mn logistics park at Jeddah Islamic Port, according to a Dubai Media Office statement. The new storage and distribution hub, which is set to boost trade volumes in the Kingdom and the region, is set to open in 2Q 2025. The project will be developed in two phases, according to the statement.

The 415k square meter greenfield development is set to become Saudi’s largest logistics park, featuring 185k square meters of warehouse space and a multipurpose storage yard. It will also include 20 MW of installed rooftop solar.

The logistics park will provide importers and exporters with numerous benefits, such as services linking port operations to last-mile activities, access to bonded and unbonded zones, temperature-controlled storage, import and export consolidation centers, and various other value-added services.

Jeddah Logistics Park is being developed under a 30-year concession worth SAR 500 mn (USD 133.33 mn) granted to DP World by Mawani in 2022, according to an earlier release. Mawani and DP World are partnering on another 30-year concession for DP World at the South Container Terminal. These two projects represent a total investment of almost SAR 4 bn (USD 1 bn), according to the statement.

Horizon Educational wraps up its IPO book-building

Horizon Educational priced its Nomu IPO at the top of its indicative price range, setting the final price at SAR 54 per share, according to a filing to Tadawul. The Riyadh-based school operator’s offering was6.8x oversubscribed, it said in the filing. There is no publicly available information on when the company will ring the opening bell on the exchange.

Background: The company is taking a 20% stake to Tadawul’s parallel market Nomu by issuing 500k new shares to finance its expansion plans, acquire new branches, and ramp up its campus capacities.

Proceeds + market cap: The final price would allow the company to raise SAR 27 mn in IPO proceeds, and would give it a post-IPO market cap of SAR 135 mn, according to our calculations. Issuers on Nomu are required to have a minimum post-listing market cap of SAR 10 mn, while issuers on main market Tadawul must meet a minimum of SAR 300 mn post-listing market cap.

ADVISORS- Yaqeen Capital is quarterbacking the transaction as financial advisor and lead manager, while RSM is providing counsel. Receiving agents include Alistithmar Capital, Alinma Investment, SNB Capital, AlJazira Capital, Riyadh Capital, ANB Capital, Albilad Capital, Al Rajhi Capital, Derayah, and Saudi Fransi Capital.

Subscription for Leaf Global’s Nomu IPO commenced with a price range of SAR 46-50 a piece

Leaf Global Environmental Services is guiding on a price range of SAR 46-50 per share for its IPO on parallel market Nomu, according to a filing to the exchange. The Jeddah-based environment consultant is taking a 30% stake to market.

What’s next: Qualified investors can place orders here for a minimum of 10 shares and a maximum of 250k shares each until this Thursday, 30 May. Final allotment of shares is slated for Thursday, 6 June.

Post-IPO ownership structure + lock-up period: The ownership of the two substantial shareholders will settle at a combined 70% stake after the sale, down from 100%. Their shares will remain locked up for a period of 12 months from the first day of trading.

Proceeds + market cap: At the top of the range, the pricing would see it raise up to SAR 75 mn, and give it a post-IPO market cap of up to SAR 250 mn, according to our calculations. Some SAR 3 mn of the offering’s proceeds will be used to cover the offering’s expenses, with the remainder set to be divided between the selling shareholders on a pro rata basis, according to the company’s prospectus (pdf)

ADVISORS-Al Khair Capital is quarterbacking the transaction as financial advisor and lead manager, while receiving banks include SNB Capital, Al Rajhi Capital, Saudi Fransi Capital, Riyad Capital, Albilad Capital, AlJazira Capital, Alinma Investment and Derayah Financial.

Riyadh’s King Khalid International Airport beats Jeddah airport to claim top spot in April

King Khalid International Airport in Riyadh claimed the top spot in April among airports catering to 15 mn or more passengers annually, dethroning (by a slim margin) King Abdulaziz International Airport in Jeddah from the top spot it had claimed the previous month, the General Authority of Civil Aviation (GACA) said in its monthly report.

The methodology: The aviation watchdog tracks 11 metrics on passenger experience, including flight delays, check-in, security, passport and customs control, asset availability, flight delays and assistance services for individuals with limited mobility.

The breakdown: In the 5-15 mn passenger category, King Fahd International Airport in Dammam led the pack, followed by Madinah’s Prince Mohammed bin Abdulaziz International Airport. Abha International Airport in Asir ranked first in the 2-5 mn passenger category, followed by King Abdullah bin Abdulaziz International Airport in Jizan. Finally, in the category for airports catering to fewer than 2 mn passengers per year, Al Qaisumah-Hafar Al Batin Airport topped the list, outperforming peers with the least waiting time for departure flights.

Domestic airports category: Arar Domestic Airport came in first, outperforming peers by delivering shorter wait times for departure and arrival flights.

Sama releases draft principles on compliance and internal audit at finance and refinance companies

The Saudi Central Bank (Sama) has made public draft principles for compliance and internal auditing at finance and refinance companies operating in the Kingdom, here (pdf) and here (pdf). The proposed drafts, which come under the central bank’s broader efforts to support the local financial sector, have been put up on the government’s survey platform Istitlaa for public consultation until Tuesday, 25 June.

COMPLIANCE FUNCTIONS-

The pitch: These principles aim to create a regulatory framework for compliance for finance and refinance companies to help bolster internal control. They also aim to set minimum provisions to help measure firms’ compliance and audit progress. They will come into effect six months following their publication on the central bank’s website.

The proposed regulations include:

Stipulations that the companies’ board of directors must ensure there is an active compliance unit independent from other departments within the company. The unit would be led by a compliance officer whose appointment and resignation are subject to a non-objection decision from Sama. The board must also sign off on a written compliance policy that is aligned with Sama’s standards, and review periodic compliance reports;
Requirements for audit committees to ensure the implementation and effectiveness of awritten compliance policy. They would also have a say in the appointment and evaluation of the compliance officer, and must approve the company’s annual compliance plan;
Executive management must define and clarify the role of the independent compliance unit, and prepare a compliance policy that would be subject to approval by the board;
The compliance unit would oversee and supervise the company’s rate of compliance, and would be tasked with explaining relevant rules and identifying risks by implementing risk-based compliance programs;
The unit would also be tasked with drafting internal policies to fight money laundering, funding of terrorism, and fraud, and report to Sama in case of any violations or irregularities resulting from non-compliance.

REGS ON INTERNAL AUDITORS-

The regulations, in a nutshell:

The company’s board must ensure the independence and objectivity of its internal and external auditor. It should also ensure the sufficiency of human and financial resources for internal auditors depending on the company’s size and business volume;
Executive management must grant the internal audit unrestricted access to company records, personnel, and premises, and ensure that it has the power to review and access necessary information;
Executive management must put metrics and review mechanisms in place to monitor and evaluate internalaudit functions;
The company is mandated to prepare a periodic management report on internal audit reviews, which must be submitted either quarterly or annually to the audit committee;
External evaluations of the internal audit activities must be made at least once every five years.

Red Sea International names new chairman

Tadawul-listed Red Sea International appointed Amr Al Dabbagh (LinkedIn) as its new chairman, it said in a disclosure to Tadawul. Al Dabbagh served as chairman and CEO of Al Dabbagh Group (ADG) for 33 years, in addition to an eight-year term as governor and chairman of the Saudi Arabian General Investment Authority until 2012. ADG is the majority owner of Red Sea International.

Aramco eyes minority stake in Repsol’s renewables unit. Plus: oil and gas, logistics, and cybersecurity

M&A WATCH-

#1- Aramco is reportedly eyeing a minority stake in Spanish oil company Repsol’s renewables arm, Reuters reports citing unnamed sources it says are familiar with the matter. The news was first reported by Spanish news outlet Expansion. Saudi Aramco is reportedly interested in the Spanish company’s renewable assets in the US. The potential sale aims to finance Repsol’s diversification into renewables. No details were provided on the timeline or size of the potential transaction.

REMEMBER- Oil giant Aramco is set to develop two SAF demonstration projects in Neom by 2025, one of which will be developed in partnership with Repsol.

#2- Tadawul-listed Al Baha Investment and Development is gearing up to become the sole owner of its majority-owned subsidiary Elegant Centers, it said in a disclosure to Tadawul. The industrial investment company inked a non-binding MoU that would see it acquire an additional 13% stake in Elegant Centers, which would make it the sole owner of the subsidiary. Al Baha will begin due diligence to determine the value of the sale.

OIL & GAS-

An Ades Holding unit inked a SAR 2.4 bn agreement with Kuwait Oil Company for “four of the Company’s current operating rigs in Kuwait as well as two newbuild units,” it said in according to a disclosure to Tadawul (pdf). Operations are slated to start in 2Q-3Q 2025 for a period of five years with the option of a one-year extension. This constitutes a 3x increase in Ades’ contracted fleet with Kuwait Oil Company over the past two years, tot a total of 12 rigs, up from just four in 2023. The oil and gas giant currently has 10 onshore rigs operating with the Kuwaiti company in Kuwait.

LOGISTICS-

Bahri, Gasco break off plans for logistics JV: National shipping company Bahri and the National Gas and Industrialization Co (Gasco) terminated an MoU aimed at setting up a joint venture focused on logistics and land transportation, they said in separate disclosures to Tadawul (here and here). The joint venture was deemed not feasible for both parties after completing the necessary studies. There was no financial impact from the termination of the MoU, which was signed in October last year.

TRADE-

The Saudi Export-Import Bank (Saudi Exim Bank) signed a line of credit agreement worth USD 100 mn with Turkish state-owned Ziraat Bank to fund exports of Saudi’s non-oil products and services to Turkey, it said in a statement. It said the move comes under the bank’s efforts to empower the non-oil economy and enhance the competitiveness of Saudi products in global markets.

REMEMBER-Saudi Exim Bank signed earlier this month an ins. agreement and a murabaha agreement with the Saudi National Bank to fund the export of non-oil products by improving documentary credits and providing ins. and financing solutions. It signed in April a number of reins. treaties with global reins. firms led by the world's second biggest reins. company Swiss Re to drive local export growth through ins. coverage expansion.

AUTOMOTIVE-

China’s Newrizon to bring its EV trucks to the GCC through Saudi’s Al Yemni Group: Chinese electric truck maker Newrizon signed an agreement with local commercial vehicle dealer group Al Yemni Group to become Newrizon’s exclusive distributor in the GCC region, according to a statement. No further details were provided.

About Al Yemni: Established in the early 1970s, Al Yemni began its business by selling new and used cars before expanding into manufacturing, real estate, F&B, construction and equipment sectors. Al Yemni is also a dealer for Japan’s Subaru and Isuzu vehicles along with China’s Chery.

CYBERSECURITY-

The Saudi Information Technology (Site) obtained an information security standard certification that aims to optimize the security of credit and debit card payments by preventing cybersecurity compromise of personal data, according to a statement. Site is a wholly owned subsidiary of the Public Investment Fund. The Payment Card Industry Data Security Standards (PCI DSS v4.0) certification was secured by Site “as a provider of managed security services,” it said.

TOURISM-

#1- The Saudi Tourism and Investment Company (Asfar) is looking to improve visitor experiences at cultural heritage sites, after signing an MoU with the Heritage Commission, it said in a post on X.

REMEMBER- Asfar wants to turn Saudi’s small cities to tourist destinations: Asfar said earlier this month that it plans to set up tourist destinations in small cities nationwide to bridge the gap in the hospitality sector in those areas. The move comes as part of the company’s strategy to transform smaller cities into tourism and entertainment hubs through partnerships with the private sector.

#2- Tadawul-listed Saudi Ground Services is set to launch a subsidiary, Ground Service Company for Travel and Tourism Services, as part of its growth strategy, it said in a disclosure to Tadawul.

REAL ESTATE-

The Real Estate Development Fund deposited SAR 978 mn in the accounts of Sakani program beneficiaries for May 2024, according to state news agency SPA.

What is Sakani? The program is part of a wider government-run housing initiative that enables citizens from accessing the housing market and owning a home through “financing options including rent-to-own and mortgage options.” Sakani’s diverse financing options include an upfront non-refundable assistance of up to SAR 150k, SPA quotes the fund’s CEO Mansour bin Madi as saying. The fund deposited a total of SAR 60 bn in Sakani since its inception in 2017, bin Madi added.

ENTERTAINMENT-

MBC FZ inked a SAR 65 mn contract with MedYapim Middle East Audiovisual Media Production for the production of a 90-episode TV series, Mother Anne, it said in a filing to the exchange. The episodes are expected to be delivered in February 2025. The two companies are subsidiaries of MBC Group.

AVIATION-

Riyadh Air has scheduled certification flights for September through November of this year as the Public Investment Fund’s flagship carrier looks to line up an operator’s certificate in preparation for its commercial launch in the summer of 2025, Simple Flying reports, citing remarks by Riyadh Air CEO Tony Douglas at the Future Aviation Forum last week. “We’ll go into service in the summer of next year,” Douglas said. Riyadh Air is set to operate a fleet of Boeing 787s.

Sound smart: Certification flights are a series of test flights designed to evaluate the safety, performance, and functionality of new jets, in addition to their compliance with regulatory standards. They are a prerequisite for obtaining a license to commercially operate a fleet.

SoftBank to sink USD 9 bn a year into AI

SoftBank has lots of appetite for AI: Japan’s SoftBank plans to earmark around USD 9 bn a year to AI investments as it looks to fuel the expansion of its chip-design subsidiary Arm, the Financial Times wrote.

All for the group’s “crown jewel:” The group’s founder and CEO Masayoshi Son has been pushing to transform it into an AI powerhouse, in hopes of securing acquisitions that can feed into its Arm. Much of the company’s USD 180 bn net asset value has been driven by the UK-based Arm, which saw its share price jump nearly 25% after its blockbuster September 2023 market debut. Arm’s valuation has soared since then to exceed USD 100 bn currently.

Refresher: SoftBank has shifted its investment strategy to AI and semiconductors after backtracking on venture capital investments and selling assets owned by its startup fund Vision Fund, which included a USD 14 bn stake in defunct coworking startup WeWork.

MARKETS THIS MORNING-

Asian markets are up slightly in early trading this morning as investors look forward to a week packed with macro data in the run-up to Friday’s release of US core personal consumption expenditures — a report that Reuters says “could set the stage for a cut in interest rates there, albeit not for a few months yet.”

European futures were down slightly overnight, and both Wall Street and the City are off today for holidays.

	TASI	11,850	-1.2% (YTD: -1.0%)
	MSCI Tadawul 30	1,473	-1.4% (YTD: -5.0%)
	NomuC	26,638	-0.2% (YTD: +8.6%)
	USD : SAR (SAMA)	3.75 Sell	3.75 Buy
	Interest rates	6% repo	5.5% reverse repo
	EGX30	27,539	+1.2% (YTD: 10.6%)
	ADX	8,833	-0.6% (YTD: -7.8%)
	DFM	4,013	-0.3% (YTD: -1.2%)
	S&P 500	5,305	+0.7% (YTD: +11.2%)
	FTSE 100	8,318	-0.3% (YTD: +7.6%)
Down	Euro Stoxx 50	5,035	0.00% (YTD: +11.4%)
	Brent crude	USD 82.12	+0.9%
	Natural gas (Nymex)	USD 2.52	-5.2%
	Gold	USD 2,357	-0.1%
	BTC	USD 68,431	-0.9% (YTD: +63.1%)

THE CLOSING BELL: TADAWUL-

The TASI fell 1.2% yesterday on turnover of SAR 4.4 bn. The index is down 1% YTD.

In the green: Bupa Arabia (+4.8%), Sfico (+4.5%) and Care (+3.8%).

In the red: Al Baha (-7.1%), Eic (-5.1%) and Maaden (-4.6%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.2% yesterday on turnover of SAR 29.6 mn. The index is up 8.6% YTD.

In the green: Naseej Tech (+14.3%), Watani Steel (+10.1%) and AlMohafaza For Education (+7.2%).

In the red: Riyadh Steel (-17.2%), Nofoth (-5.4%) and Pro Medex (-4.5%)

CORPORATE ACTIONS-

Perfect Presentation for Commercial Services is set to double its capital to SAR 300 mn by granting one new share for every current share held, according to a disclosure on Tadawul. The Capital Market Authority has approved the move.

Alkhorayef Water and Power Technologies has approved a 40% capital increase to SAR350 mn through the distribution of new shares by capitalizing SAR 100 mn from retained earnings, it said in a fi ling to the exchange.

Shareholders of Nomu-listed snacks manufacturer Fesh Fash have approved SAR 2 mn in dividends at SAR 0.18 apiece for FY 2023, it said in a disclosure to Tadawul.

Tadawul-listed vehicle rental firm Budget Saudi will distribute dividends of SAR 71.2 mn at SAR 1 apiece for the second half of 2023 on Thursday, 6 June, it said in a disclosure to Tadawul.

Faisal Al Megfel named Saudi’s ambassador to Syria

The Kingdom appointed its first envoy to Syria since the closure of its embassy in Damascus due to the country’s civil war in 2012, with Faisal bin Saud Al Megfel taking up the post, state news agency SPA reported.

Background: Saudi reopened its embassy in Syria earlier this year, while Syria appointed an ambassador to Riyadh as it reopened the embassy. The restoration came more than a decade after both countries severed diplomatic relations over the Syrian civil war in 2012. Syrian President Bashar Al Assad attended the Arab League summit in Jeddah last year after Arab states approved the readmission of Syria to the Arab League. Syria was suspended over the crackdown on protests against Al Assad. The Crown Prince also met with Al Assad at the Arab League summit in Bahrain last week.

The appointment is leading the conversation on Saudi in the international press this morning: Reuters | Associated Press | AFP.

CALENDAR

MAY

26-27 May (Sunday-Monday): Bookbuilding for retail investors in Smasco IPO.

27-28 May (Monday-Tuesday): Smart Data & AI Summit Saudi, JW Marriott Hotel, Riyadh.

29 May (Wednesday): Sanabil 500 MENA seed accelerator demo day, Four Seasons Hotel, Riyadh.

Signposted to happen sometime in May:

Global Trade Review (GTR): KSA
Saudi Energy Convention

JUNE

2 June (Sunday): OPEC+ meeting.

2-3 June (Sunday-Monday): Global Project Management Forum, Riyadh.

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

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

5 June (Wednesday): GROWTH Summit Riyadh, InterContinental Riyadh, Riyadh.

5 June (Wednesday): World Environment Day.

5 June (Wednesday): Digital Transformation Summit, Riyadh.

10 June (Monday): Deadline to register for school bus services for the upcoming academic year.

14-22 June (Friday-Saturday): Banks and capital markets closed for Eid Al Adha holiday.

JULY

4 July-25 August: (Thursday-Sunday): Esports World Cup, Boulevard Riyadh City, Riyadh.

10-11 July: (Wednesday-Thursday): Global EV & Mobility Tech Forum, Riyadh International Convention & Exhibition Center, Riyadh.

AUGUST

12-15 August (Monday-Thursday): The Saudi Food Expo, Riyadh

SEPTEMBER

10-12 September (Tuesday-Thursday): Global AI Summit, Riyadh.

11-12 September (Wednesday-Thursday): The Saudi Event Show, Riyadh.

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

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam.

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

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

OCTOBER

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh.

31 October (Thursday): No-visa travel for Saudis to Montenegro on charter flights expires.

NOVEMBER

2-9 November (Saturday- Saturday): WTA Finals, Riyadh.

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

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

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Dammam.

25-27 November (Monday-Wednesday): World Investment Conference, Riyadh.

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

DECEMBER

2-13 December (Monday-Friday): Conference of the Parties (COP16) to the United Nations Convention to Combat Desertification, Riyadh.

11 December (Wednesday): FIFA Congress, which will decide the hosting countries for the FIFA World Cup 2030 and 2034

Signposted to happen sometime in 2024:

The AFC Champions League Elite

2025

FEBRUARY 2024

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

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