Saudi records SAR 57.7 bn budget deficit in 4Q 2024, full-year deficit at SAR 115.6 bn

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WHAT WE’RE TRACKING TODAY

THIS MORNING: A Saudi Champs-Élysées in the works? + US, Russian officials to convene in Saudi next week over Ukraine

Good morning, wonderful readers. We’re two weeks away from Ramadan, and business activity is ramping as the Kingdom prepares for the holy month.

In today’s issue: FinMin’s out with its budget performance report for 4Q 2024, Derayah Financial prices IPO at the top of the guidance range, and a flurry of agreements from Ceer, Roshn and SADC. Saudi is also making big regional moves, taking the lead on the Arab plan for Gaza’s future.

BUT FIRST- It’s a wrap on PIF’s Private Sector Forum, which saw the signing of 140 agreements worth up to SAR 14 bn on Wednesday and Thursday, with participation of over 100 PIF companies, Director of Strategy and Planning for National Development at the PIF Abdullah Alhussaini said in an interview with Al Arabiya (watch, 1:24). Most agreements were between PIF subsidiaries and other private sector firms, but the event also saw signings between private sector firms following “matchmaking” by the fund.

HAPPENING TODAY-

#1- Rawasi Albina Investment is launching the public offering of its Series 1 SAR-denominated Sukuk today, which runs until Thursday, 27 February, according to a Tadawul disclosure. The initial SAR 50 mn issuance — the first issuance under its SAR 500 mn sukuk program — has a five-year maturity and a 10.25% annual return paid semi-annually. The Sukuk holds a BBB (Stable) rating, with a minimum subscription of SAR 5k and a maximum of SAR 500k.

ADVISORS- Al Khair Capital is acting as the sole arranger and financial advisor for the issuance. Receiving agents include SNB Capital, BSF Capital, Alrajhi Capital, Riyad Capital, Albilad Capital, Aljazira Capital, Alistithmar Capital, Derayah Financial, Alinma Investment, ANB Capital, Yaqeen Capital, Alkhabeer Capital, SAB Invest, and Sukuk Capital.

#2- The two-day AlUla Conference for Emerging Market Economies kicks off today and runs until Monday. The event, organized by the Finance Ministry and the IMF, aims to foster dialogue on economic challenges affecting emerging markets, with a focus on fiscal policy, debt, and AI’s role in economic development. Finance Minister Mohammed Al Jadaan and IMF Managing Director Kristalina Georgieva will give opening and closing remarks.

WEATHER- Riyadh is looking at a 23°C high and a 12°C low today, with some light showers. Jeddah will see a 29°C high and 23°C low. Meanwhile, Makkah will see rainstorms as well as a 30°C high and 21°C low.

HAPPENING TOMORROW-

The Middle East Trade Summit is coming to Riyadh’s Boulevard City tomorrow, courtesy of the International Association of Amusement Parks and Attractions. The event, which runs through Wednesday, 19 February, brings together industry stakeholders to discuss innovations and trends in the region’s amusement and entertainment sector. Register here.

HAPPENING THIS WEEK-

The three-day Capital Markets Forum — organized by Saudi Tadawul Group — kicks off on Tuesday, 18 February at Riyadh’s KAFD Conference Center, before moving to the Four Seasons Hotel Riyadh for the following two days.

** EnterpriseAM will be at the Forum in Riyadh next week, Tuesday to Thursday. Feel free to drop us a line at awahid@enterprisemea.com — we’d love to grab a coffee and chat about the latest in the industry.

WATCH THIS SPACE-

#1- A Saudi Champs-Élysées in the works? A Saudi version of the iconic Parisian Champs-Élysées boulevard is set to be unveiled in Diriyah, Argaam cites Diriyah Company CEO Jerry Inzerillo as saying at the PIF Private Sector Forum. The project’s name — personally selected by Crown Prince Mohammed bin Salman — is set to be unveiled later this year at the Future Investment Initiative, Inzerillo said.

The details: The 1.9 km boulevard will feature the Saudi Museum of Contemporary Art, an opera house, and the world’s largest Apple Store, among other attractions.

#2- Senior officials from the US and Russia are set to convene in Saudi next week to begin laying the groundwork for an upcoming Trump-Putin summit, which will see talks aimed at bringing an end to the Ukraine War, Bloomberg reports, citing people it says are in the know. The list of attendees is still in the works, and it is likely to include national security advisers, sources said.

More on the when and how: Organizers are hoping for a gathering as soon as this month, with hopes that the summit will kick off before the start of Ramadan in March. The Kingdom has reportedly invited representatives from the US, Russia, and Ukraine.

The reaction from Ukraine: Ukrainian President Volodymyr Zelenskiy said he is yet to receive an invitation, adding that he was not pleased that plans for a summit were being put together without Kyiv’s input.

#3- Saudi Arabia’s lack of direct air connectivity to global destinations is “Haram, Haram, Haram,” Riyadh Air CEO Tony Douglas was quoted as saying at the PIF Private Sector Forum by Saudi Gazette. “We can’t travel directly from Riyadh to Tokyo, to Shanghai, to Seoul, to Sydney — the list goes on and on,” Douglas said. The lack of direct connections out of the Kingdom means that Saudi passport holders land among the top premium passengers on airlines such as Qatar Airways and Emirates.

IN CONTEXT- Saudi Arabia’s newest carrier pushed back its launch to 3Q 2025 from earlier this year, after facing delays in Boeing aircraft deliveries. The airline expects to receive as many as four Boeing 787 Dreamliners this year — half of which were originally scheduled.

DATA POINTS-

#1- The global ESG sukuk market surpassed USD 50 bn in 2024, with Saudi Arabia, Malaysia, and Indonesia accounting for 67% of the total, Zawya reported, citing data from the London Stock Exchange Group (LSEG). ESG sukuk issuances grew 14.5% y-o-y to USD 15.2 bn last year, accounting for 1.8% of total ESG bonds and 6.2% of total sukuk issuances. Sustainability sukuk nearly doubled during the year, comprising 69% of all ESG sukuk.

Financial institutions issued 55% of ESG sukuk in 2024, with 93% coming from GCC-based banks. Saudi banks snapped four places among the top 10 issuers of ESG Sukuk in 2024, including Rajhi Bank (USD 2.26 bn), Saudi National Bank (USD 850 mn), Saudi Investment Bank (USD 750 mn), and Riyadh Bank (USD 750 mn).

#2- Riyadh’s metro served a total of 18 mn passengers up until the end of last week, with the Blue Line being the busiest route at 10 mn passengers since its launch in December, the Royal Commission for Riyadh City posted on X. Meanwhile, the Financial Center Station saw the highest footfall at upwards of 3 mn passengers.

#3- The Saudi cybersecurity market is valued at around SAR 13-14 bn, and is expected to grow at a compound annual growth rate (CAGR) of 11-13% over the next 5 years, PwC Middle East Cybersecurity & Digital Trust Leader Samer Omar told Argaam. Some 31% of the market is controlled by the government and public sectors, while the remaining 69% is controlled by the private sector.

SPORTS-

#1- PGA Tour and PIF-backed LIV Golf are closer to striking an agreement, with last week’s meeting with Trump at the Oval Office bringing the golfing schism “one step closer” to a conclusion, the Associated Press reports, citing PGA Tour Commissioner Jay Monahan. Meanwhile, LIV critic Rory McIlroy has said that he is pro-unification, adding that players who are upset at peers who chose to join LIV in exchange for massive outlays should “move forward.”

A good timing for an agreement? The PIF is nearing the USD 5 bn mark in total investments in LIV Golf, as losses mount and funds are set aside to renew big-ticket signings, Reuters reports, citing financial documents reviewed by Money in Sport newsletter. Operating losses at LIV Golf UK reportedly hit USD 394 mn in 2023, up USD 150 mn y-o-y, despite an uptick in revenues. Meanwhile, LIV’s US losses are expected to “be considerably worse than the rest of the world performance reported by LIV Golf in UK,” Money in Sport wrote.

#2- Real Madrid are close to agreeing on a contract extension with Vinicius Jr, with the team connecting with the player’s agents last month to renegotiate his contract and put to rest Saudi hopes of signing the player, Reuters reports citing multiple unnamed sources.

What gives? Despite the Kingdom showing interest in bringing the Brazilian 2024 Ballon d'Or runner-up to Al Ahli, no formal offer was made, with the move losing momentum over the past few months, the newswire cites a source close to Vinicius Jr as saying. Meanwhile, Real Madrid was reportedly approached by PIF in January regarding a possible transfer, but the club showed no interest, citing the player’s EUR 1.04 bn buy-out clause as the only situation in which they would consider a handover, a source close to the Spanish club said.

#3- Our World Cup will be dry and sober: There will be “no alcohol at all” at the World Cup hosted in the Kingdom in 2034, Saudi Arabia’s Ambassador to the UK Khalid bin Bandar Al Saud told UK radio station LBC. “Rather like our weather, it's a dry country,” Al Saud added.

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THE BIG STORY ABROAD-

It’s all about geopolitics in the foreign press this morning, with the Gaza ceasefire agreement seemingly back on track, Ukraine negotiating US trade demands, and Trump unveiling plans for reciprocal tariffs in his latest tariff salvo in the brewing trade war.

Ukraine turns down a bold offer: Ukrainian President Volodymyr Zelensky reportedly rejected a request by the US to get more than half of the country’s mineral resources, with Ukraine working on a counterproposal. Negotiations over security guarantees for Kyiv come as US President Donald Trump’s Ukraine envoy Keith Kellogg confirmed the EU will not be part of anticipated peace talks with Russia. (Washington Post | FT | Reuters)

Again with the tariffs: Trump also unveiled on Thursday plans to customize import tariffs according to a host of factors, including its trading partners’ subsidies, exchange rates, and taxes. This is in addition to new charges on cars, semiconductors, and pharma — with more details set to be announced after 1 April. (Bloomberg | Reuters | FT | CNBC)

CLOSER TO HOME- Hamas and Israel moved forward with the planned prisoner exchange yesterday, which saw the release of three Israelis in return for 369 Palestinians. The Palestinian group re-committed to the exchange after talks with mediators in Qatar and Egypt, following earlier disagreements that threatened to put the ceasefire in jeopardy. (BBC | Bloomberg | AP | The Guardian)

Saudi records budget deficit widens in 4Q 2024, full-year deficit exceeds forecasts

The state budget closed with a SAR 57.7 bn deficit in 4Q 2024, widening from SAR 30.2 bn in 3Q , according to the Finance Ministry’s quarterly budget performance report (pdf). Total government revenues shrunk 15% y-o-y to SAR 302.9 bn during the quarter, while expenditure fell 9% to SAR 360.5 bn.

On an annual basis: The Kingdom recorded a budget deficit of SAR 115.6 bn during 2024, compared to SAR 81 bn in 2023, far exceeding the government’s earlier forecasts in June 2024 at SAR 79 bn. Government expenditures came in at SAR 1.37 tn, with revenues clocking in at SAR 1.26 tn.

REFRESHER- The Kingdom is willing to accept modest fiscal deficits as the price of pursuing long-term diversification goals. The budget deficit is expected to come in at 2.3% of GDP (SAR 101 bn) in 2025 and to “continue at similar levels over the medium term” as the Saudi state continues to invest heavily in the diversification agenda. The government is also mindful of staying clear of “overheating” the national economy, despite the ramp-up in public spending.

THE BREAKDOWN-

Oil revenues accounted for some 56% of total government income in 4Q 2024, at a total of SAR 170.85 bn — declining 31% y-o-y. Meanwhile, non-oil revenues made up the remaining 44%, coming in at a combined SAR 132 bn, up 21% compared to the same period last year.

Total expenditures for 4Q 2024 fell 9% y-o-y to SAR 360.5 bn, with most sectors seeing declines in public spending, except for subsidies (up 55% y-o-y), financing expenses (up 23%), and employee compensation (up 4%). Non-financial assets saw the largest y-o-y decline in government spending (down 43%), followed by grants (down 35%). Meanwhile, employee compensation comprised the lion’s share of public spending at SAR 146.3 bn.

The Kingdom’s biggest expenses and moneymakers in 2024: Oil revenues marginally increased to SAR 756.6 bn in 2024, accounting for 61% of total government income. Non-oil revenues made up the remainder, increasing 10% y-o-y to a combined SAR 502.47 bn. Meanwhile, total expenditure rose 6% y-o-y to SAR 1.37 tn in 2024. Employee compensation clocked in at SAR 562.3 bn — the largest line item during the period — followed by goods and services usage at SAR 313 bn, and non-financial assets at SAR 190.7 bn.

Derayah Financial prices Tadawul IPO at the top of the guidance range at SAR 30 per share

E-brokerage firm Derayah Financial set its final offer price for its Tadawul IPO at SAR 30 apiece, the top of the guidance range, according to a press release (pdf). Strong demand from institutional investors saw the offering close 162x oversubscribed, with total orders hitting SAR 243 bn.

REFRESHER- The first brokerage firm to hit the market is taking a 20% stake to Tadawul in a Regulation S-compliant IPO open to both local and foreign institutional investors, with a 10% clawback for retail investors. Some 49.95 mn company shares will be up for grabs in the share sale.

Proceeds + market cap: The pricing sees the offering raising some SAR 1.5 bn (USD 400 mn) in proceeds, while placing the company’s market cap at SAR 7.49 bn (USD 2 bn) upon listing, according to EnterpriseAM calculations.

Ownership + lock-up period: All proceeds in Derayah’s secondary offering will go to selling shareholders after setting aside SAR 51 mn for IPO-related expenses. Selling shareholders will see their combined ownership stand at 80% following the completion of the offering, according to the press release. At least 60% of the company shares are subject to a 24-month lock-up period beginning at the first day of trading — including shareholders with at least a 3% stake, along with directors and senior executives. New shareholders will not be subject to the lock-up.

What’s next: A three-day retail subscription period is due to kick off on Thursday, 20 February, where retail investors will be allowed to subscribe to up to 10% of the offering at a maximum of 250k shares and a minimum of 10 each. The final allocation is slated for Thursday, 27 February.

ADVISORS- Our friends at HSBC Saudi Arabia are quarterbacking the transaction as the sole lead financial advisor, bookrunner, global coordinator, and lead manager, with Baker McKenzie acting for HSBC as the sole underwriter. Receiving agents include Derayah Financial Company, Alinma Investment, Al-Istithmar Capital, Aljazira Capital, Alkhabeer Capital, Al Rajhi Capital, ANB Capital, BSF Capital, GIB Capital, Riyad Capital, SAB Invest, Sahm Capital, SNB Capital, and Yaqeen Capital.

Ceer signs SAR 5.5 bn agreements to localize EV components

Homegrown electric vehicle brand Ceer signed 11 agreements worth SAR 5.5 bn at the PIF Public Sector Forum with mostly Saudi companies, as part of a localization strategy, the company said in a press release. Details of each agreement, including value and timeline, were not disclosed.

The details: Ceer will source heating, ventilation and air conditioning systems from Zamil Central Air Conditioners, plastic injected parts from Zamil Plastic Industrial Company, and alloy wheels from Obeikan Glass Company and Abdul Latif Jameel Enterprises under the agreements. Other supply agreements include portable EV chargers from Saudi Company for Controls and Maintenance, blow parts from Arabian Plastic Industrial, small stampings from First Telecom Industries, and aluminum casting from Saudi Aluminum Casting Company. Ceer will also work on localizing the manufacturing of aluminum-forged parts in the Kingdom with global supplier CTR.

What they said: “By working with local suppliers, we ensure access to high-quality components for Ceer vehicles while simultaneously fostering a sustainable automotive sector in Saudi Arabia,” Ceer’s CEO Jim DeLuca said.

REMEMBER- Ceer is set to roll out its EVs in the Kingdom this year. The company awarded a SAR 5 bn construction contract for its plant to local contractor Modern Building Leaders in March 2024, and partnered with local EV infrastructure firm EVIQ in October to install and expand the country’s EV charging infrastructure. Ceer is looking to source over 40% of its raw materials locally during its initial stage of operations.

Roshn Group signs SAR 1.5 bn agreements for Sedra development

PIF-backed Roshn Group signed new agreements worth SAR 1.5 bn for the development of its Sedra neighbourhood, Executive General Manager of Procurement Ian McBride told Al Arabiya on the sidelines of the PIF Private Sector Forum.

The details: Roshn signed a SAR 700 mn agreement with China Harbour which will build upon the recent opening of an integrated pre-cast factory to offer more high-end products. Another SAR 650 mn agreement with Saudi-based Sarh Attaqnia Company will see the roll-out of 900 multi-family units in Sedra. Roshn also entered into a SAR 130 mn agreement with Riyadh-based Development Works for Sedra’s first commercial mall, which will include retail stores, restaurants, cafés, and office spaces.

About Sedra: The flagship development, which is located in Northern Riyadh within close proximity of King Khalid International Airport, is set to add more than 30k residential units and 400 amenities over a 20 mn sqm area, according to its website.

Roshn also signed a number of agreements for the development of infrastructure at the developer’s projects across the Kingdom, including:

An agreement with the Aluminum Products Company (Alupco) to set up a manufacturing facility for aluminum windows and doors in Riyadh;
An MoU with Daikin Saudi to cooperate on setting up a production facility in the Kingdom for heating, ventilation and air conditioning (HVAC) systems;
An agreement with Johnson Controls Arabia for energy-efficient HVAC solutions at Roshn projects;
A MoU with Solutions Valley, which will see it offer consultations for evaluating and designing energy-efficient electrical infrastructure;
An agreement with Shaker Group to prioritize allocating products to Roshn with preferential pricing.

SADC acquires Tanzania’s Bagamoyo Port as part of East Gateway project

Saudi Arabia lands in Tanzanian waters: The Saudi African Investment and Development Company (SADC) will manage Tanzania’s Bagamoyo Port and boost its logistical capabilities, after being awarded concession and acquisition rights for the facility, according to a statement from the Federation of Saudi Chambers of Commerce. The port is targeted to be operational in the next three to five years, Chairman Mohammed Al Dulaim told Al Arabiya. No investment ticket was disclosed.

The rationale: The Bagamoyo Port will serve as the main port to export African raw materials and import goods into Africa, helping to ease congestion in Tanzania’s main port at Dar es Salaam and position Bagamoyo as a trade hub. The move is also in line with the Kingdom’s East Gateway project, which aims to help diversify our foreign investments and projects across East Africa.

Outmatching China: Tanzania was originally planning a USD 11 bn project in 2015 with China Merchant Holding International to make Bagamoyo the country’s biggest port, Reuters reported at the time. Negotiations fell through, however, over disagreements on the concession rights tenure, Al Dulaim told Al Arabiya.

More than just port development: The Saudi Chambers of Commerce also inked an agreement with the Tanzania Chamber of Commerce, Industry, and Agriculture to set up a Saudi-Tanzanian Business Council to enhance cross-border cooperation and facilitate investments for Saudi and Tanzanian businesses, SPA reported on Thursday.

Trade in numbers: The Kingdom’s exports to Tanzania reached USD 1.44 bn in 2023, while its imports reached USD 31.4 mn, according to Trading Economics data.

eXtra’s net income increases 37% y-o-y in 2024

United Electronics Company (eXtra)’s actual net income was up 36.9% y-o-y at SAR 534.4 mn in 2024, according to a disclosure to Tadawul. The growth was driven by higher revenues on the back of a better sales mix and expansion in the consumer finance portfolio. Excluding non-recurring events — such as the discontinuation of expansion in Egypt, a SAR 16.3 mn provisions reversal, and debt recovery — adjusted net income growth stood at 18.5% y-o-y. Revenues were up 9.4% during the same period at SAR 6.8 bn.

MEANWHILE- eXtra subsidiary United International Holding (UIHC) — which owns and operates Tas’heel Finance — saw a 4.8% y-o-y increase in net income at SAR 222.4 mn in 2024, according to a separate disclosure. The uptick is attributed to a 28.4% y-o-y expansion in the firm’s consumer finance portfolio, supported by Sharia-compliant financing solutions. Meanwhile, an increase in expected credit loss provisions and higher expenses offset some of the gains. UIHC’s revenues grew 19.1% to SAR 623.7 mn over the same period.

Trump-Putin summit in Riyadh cements Saudi Arabia’s role as a global powerbroker

Picking Saudi Arabia as the “most likely venue” for a potential Trump-Putin summit on ending the war in Ukraine earned a spotlight from Bloomberg, arguing it reinforces the Kingdom’s role as an international power broker. Riyadh’s choice as a middle ground highlights the Saudi leadership’s close relations with both world leaders, and plays into the Kingdom’s plans of securing peace as a means to unlock FDI to push the diversification agenda, the outlet explains.

What the pundits said: US President Trump’s decision to host talks in Saudi Arabia “intends to bolster the kingdom’s role on the world stage,” Associate Fellow at Chatham House’s Middle East and North Africa program Lina Khatib said, adding it also “validates Riyadh’s approach to foreign affairs, which is based on diversification of the kingdom’s diplomatic relations.”

Mediating Ukraine negotiations might help: The Kingdom is hopeful that it can leverage its relationship with Trump to reach an acceptable compromise regarding his plans for a US takeover of Gaza. Hosting Ukraine talks may “grease the wheels for its preferences and goals related to Gaza,” Director of the Atlantic Council’s Scowcroft Middle East Security Initiative Jonathan Panikoff said.

BUT- Navigating Gaza’s crisis might prove complicated: Saudi’s strict public stance against displacing Gazans may still cause complications in US-Saudi relations. Saudi Arabia and other officials from the region have expressed a readiness to extend assistance to Egypt and Jordan if Trump withholds aid, the business news information service said citing an unnamed source.

Bawan completes acquisition of Petronash Holding

M&A WATCH-

Building materials manufacturer Bawan finalized its acquisition of an 80% stake in Petronash Holding, according to a disclosure to Tadawul. The step comes following October’s conclusion of a sale and purchase agreement with Petronash Global to acquire its full stake in Petronash Holding for USD 175 mn.

REFRESHER- The terms of the sale see Bawan paying USD 80 mn upfront for the 80% stake, with an additional USD 60 mn follow-on payment if Petronash meets three-year financial targets. The remaining 20% stake will be purchased after the company publishes its 2027 and 2028 financials for an amount that will be determined through an agreed valuation method.

ADVISORS- Bawan tapped PwC as its financial advisor for the transaction, with Khoshaim and Associates providing counsel and Rystad Energy acting as commercial advisor. Meanwhile, Freshfields Bruckhaus Deringer and Piper Sandler are advising Petronash on the transaction.

DEBT WATCH-

ZainKSA lined up a SAR 1.93 bn shariah-compliant loan with AlRajhi Bank to refinance its outstanding murabaha facility with the Finance Ministry, according to a disclosure to Tadawul. The new five-year facility, set to mature in February 2030, is backed by a promissory note and will be repaid in a single payment upon maturity.

MANUFACTURING-

#1- Four manufacturing projects with a total investment of SAR 2.1 bn were inaugurated in Sudair Industrial City, state news agency SPA reports. The projects include Sudair Pharma 's insulin plant, a factory for Marami Food Industries, a factory for Shawarma House, and Kirby Contracting's metal structures plant. Over SAR 1 bn will be financed from the Industrial Development Fund.

ALSO- The Kuwaiti Danish Dairy Company (KDD) signed a contract with the Saudi Authority for Industrial Cities and Technology Zones (Modon) to establish a factory in Sudair Industrial City, SPA said. No further details were disclosed.

#2- Hyperview Mobility will establish the Kingdom’s first hydrogen-powered truck factory and the Middle East’s first autonomous driving hardware factory under an MoU it signed with the Public Investment Fund, Hyperview Mobility’s Managing Partner Ali Al Sailik told Al Arabiya.

The details: The Jeddah-based project will kick off with a USD 50 mn investment for its initial phase and looks to produce 1k hydrogen trucks and 300k self-driving hardware units annually, with 60% of truck output earmarked for export. Key investors in the project include Saudi Aramco and Hyundai’s investment fund, with discussions with other financing sources underway. Meanwhile, purchase agreements are already in place with Switzerland and Germany with ready demand for the factory’s output, Al Sailik added.

Rising US inflation in January reduces chance of Fed rate cut

The odds of a US Federal Reserve rate cut took another hit after inflation came in hotter than expected in January, with the consumer price index rising 3% y-o-y, the highest increase since June, according to Bureau of Labor Statistics data. While only marginally higher than December’s 2.9%, the uptick was enough for traders to dial back projections of a 2025 rate cut, pushing Treasury yields above 4.6%, CNBC reports.

What’s driving inflation? Shelter costs accounted for nearly 30% of January’s price increase, rising 0.4%. Gasoline jumped 1.8%, contributing to a 1.1% increase in overall energy costs. Food prices also ticked up 0.4%, with grocery costs rising 0.5%. Meanwhile, used car prices climbed 2.2%, and motor vehicle insurance jumped 2%. Excluding food and energy, core CPI rose 3.3% y-o-y.

REMEMBER- Donald Trump’s tariffs are expected to stoke inflation further. US President Donald Trump reiterated earlier last week that rates “should be lowered, something which would go hand in hand with upcoming tariffs,” CNBC reports. Some 90% of the economists in Reuters’ October 2024 and February 2025 polls raised their inflation estimates for 2025 following Trump’s election victory.

ICYMI- Trump has already imposed a 10% tariff on USD 450 bn worth of Chinese goods and 25% tariffs on steel aluminum imports and vowed to impose reciprocal tariffs matching those imposed by other US trade partners. He has also threatened to impose 25% tariffs on US imports from Mexico and Canada, with the measures on hold until 1 March as the neighboring countries continue to negotiate over border security. White House Press Secretary Karoline Leavitt also signaled that more trade actions could be announced soon, CNBC reports.

Are cuts still possible? A Reuters poll of 101 analysts suggests that Fed officials will adopt a wait-and-see approach as they assess how tariffs and other policy changes could affect the economy before making any further rate cuts.

TASI	12,385	-0.01% (YTD: +2.9%)
MSCI Tadawul 30	1,538	-0.1% (YTD: +1.9%)
NomuC	31,615	+1% (YTD: +0.4%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	5.0% repo	4.5% reverse repo
EGX30	29,997	+1.1% (YTD: +0.9%)
ADX	9,626	-0.3% (YTD: +2.2%)
DFM	5,362	+0.8% (YTD: +3.9%)
S&P 500	6,116	-0.01% (YTD: +4%)
FTSE 100	8,733	-0.4% (YTD: +6.8%)
Euro Stoxx 50	5,493	-0.1% (YTD: +12.2%)
Brent crude	USD 74.74	-0.37%
Natural gas (Nymex)	USD 3.73	+2.67%
Gold	USD 2,900.70	-1.52%
BTC	USD 97,485	0.0% (YTD: +4.3%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.01% yesterday on turnover of SAR 5 bn. The index is up 2.9% YTD.

In the green: Nice One (+10%), Medgulf (+7.8%) and Jamjoom Pharma (+4%).

In the red: Albabtain (-4.2%), SRMG (-3.3%) and UCA (-2.9%).

THE CLOSING BELL: NOMU-

The NomuC rose 1% yesterday on turnover of SAR 58.8 mn. The index is up 0.4% YTD.

In the green: Intelligent Oud (+16.4%), Dar Almarkabah (+12%) and WSM (+9.3%).

In the red: Knowledge Tower (-8.9%), Alhasoob (-6.6%) and FAD (-4.6%).

CORPORATE ACTIONS-

#1- Saudi Industrial Investment Group (SIIG) submitted a request to the Capital Market Authority to reduce its capital from SAR 7.5 bn to SAR 6.8 bn by way of canceling 75.5 mn shares, it said in a disclosure to Tadawul. The move is pending shareholder and regulatory approvals.

#2- Anaam International Holding Group’s shareholders approved a reverse stock split, raising the nominal share value for SAR 0.50 to SAR 10 a piece, it said in a disclosure to Tadawul. The company will consolidate every 20 shares into one, keeping total capital unchanged at SAR 315 mn.

Saudi Arabia is taking the lead on Arab plan for Gaza’s future with Riyadh-hosted talks

Saudi Arabia is spearheading Arab efforts to develop a plan for Gaza's future that can act as a counterweight to Trump's proposal for a US takeover of Gaza that would see the forced displacement of Palestinians, Reuters reports, citing sources it says are in the know. Proposals — which will be discussed by countries including Saudi Arabia, Egypt, Jordan and the United Arab Emirates at a meeting in Riyadh ahead of a 27 February Arab Summit — could include a GCC-led reconstruction fund and a move to distance Hamas, the newswire reported.

Crown Prince Mohammed bin Salman is “taking the lead” in developing and presenting the Arab plan to Trump, the newswire said, citing an unnamed Jordanian official. By putting the Crown Prince at the forefront, the Arab bloc is looking to leverage the Saudi leadership’s strong relationship with the Trump administration, as well as its expanding business and political ties with Washington.

An Egyptian proposal is emerging as key to the Arab push for an alternative to Trump’s Gaza strategy, with the plan calling for a national Palestinian committee to govern Gaza without Hamas, international reconstruction efforts that don’t involve displacing Palestinians, and progress towards a two-state solution, Egyptian security sources told Reuters. The proposal also reportedly includes a buffer zone along Gaza’s border with Egypt, temporary living areas, and a potential Gulf-led reconstruction fund which may even be named the Trump Fund for Reconstruction. Jordan's King Abdullah reportedly told Trump that the Arab proposal would be “cheaper and faster” than the American proposition, Reuters reported separately, citing unnamed European diplomatic sources.

Gaza’s governance and security are major sticking points: Although Hamas is open to transferring governance to a national committee, it demands influence over its composition and rejects the deployment of foreign forces without its consent. Meanwhile, Israel has rejected any role for Hamas or the Palestinian Authority in governing Gaza or providing security there, while Arab countries and the US want to avoid sending their own troops. GCC states, which have financed reconstruction efforts in Gaza before, are hesitant to do so once more without assurances that Israel will not destroy what they rebuild.

IN OTHER DIPLOMACY NEWS-

Saudi Arabia and Rwanda agreed to form a joint business council to boost economic ties. The Federation of Saudi Chambers and the Rwandan Private Sector Union Organization signed the agreement in Kigali, Rwanda on Thursday. (SPA)

CALENDAR

EVENTS WITH NO SET DATE

1Q: BinDawood Holding expected to close 100% acquisition of Zahrat Al Rawdah Pharma.

FEBRUARY

15-18 February (Saturday-Tuesday): Week one of Big 5 Construct Saudi, Riyadh Front Exhibition & Conference Center.

16-17 February (Sunday-Monday): AlUla Conference for Emerging Market Economies, AlUla.

17-19 February (Monday-Wednesday): IAAPA Middle East Trade Summit, Riyadh.

18-20 February (Tuesday-Thursday): The Capital Markets Forum, KAFD conference centre, and the Four Seasons, Riyadh.

19 February (Wednesday): Derayah REIT dividend distribution.

19-21 February (Wednesday-Friday): Saudi Media Forum, Riyadh.

19-21 February (Wednesday-Friday): FII Priority Miami, Miami, USA.

21-22 February (Friday-Saturday): The Saudi Cup, Riyadh.

22 February (Saturday): Founding Day.

22 February (Saturday): Dazn Boxing event: Beterbiev vs Bivol II, Riyadh.

23-27 February (Sunday-Thursday): Riyadh International Disputes Week, Hilton Riyadh Hotel Granada.

24 February (Monday):Public Sector Excellence Forum, Movenpick Hotel & Residence Riyadh.

24-25 February (Monday-Tuesday): The Riyadh International Humanitarian Forum, Riyadh.

24-27 February (Monday-Thursday): Week two of Big 5 Construct Saudi, Riyadh Front Exhibition & Conference Center.

MARCH

1-30 March: Ramadan (TBC).

18-19 March (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

31 March- 3 April (Monday-Thursday): Eid Al Fitr.

31 March (Monday): Deadline for applying to theReal Estate General Authority’s Regulatory Sandbox Program.

31 March (Monday): Deadline for applying to the World Intellectual Property Organization (WIPO) Global Awards 2025

APRIL

7-9 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

3-20 April (Thursday-Sunday): AFC Asian U17 Cup.

13-14 April (Sunday-Monday): Human Capability Initiative (HCI) Conference, King Abdulaziz International Conference Center, Riyadh.

13-16 April (Sunday-Wednesday): EdgeX HCI, The Ritz Carlton, Riyadh.

14-16 April (Monday-Wednesday): Future Hospitality Summit, Mandarin Oriental Al Faisaliah, Riyadh.

18-20 April (Friday-Sunday): Saudi Arabian Grand Prix, Jeddah,

21-24 April (Monday-Thursday): Saudi Food Exhibition and Conference, Riyadh.

22-23 April (Tuesday-Wednesday): AAM Middle East, Riyadh.

23-25 April (Wednesday-Friday): Construction and Real Estate Development Exhibition, Jazan.

25 April- 4 May (Friday-Sunday): AFC Champions League Elite Finals

MAY

May: The World Intellectual Property Organization (WIPO) Global Awards 2025 announces its results.

6-7 May (Tuesday-Wednesday): Federal Open Market Committee meeting.

12-15 May (Monday-Thursday): Saudi Smart Manufacturing, Riyadh International Convention & Exhibition Center.

13-14 May (Tuesday-Wednesday): Global EV & Mobility Technology Forum, The Arena, Riyadh.

19-20 May (Monday-Tuesday): Tech-ecO-System Summit (ToSS), Riyadh.

23 May (Friday): Guns N’ Roses Show, Riyadh.

31 May-5 June (Saturday-Thursday): Hajj.

JUNE

6-9 June ( Friday-Monday): Eid Al Adha.

17-18 June (Tuesday-Wednesday): US Federal Reserve’s Federal Open Market Committee meeting.

26 June (Thursday): 2024-2025 academic year ends.

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

JULY

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

31 July (Thursday): Deadline for companies with SAR 2.5 mn or more in 2022/2023 revenues to integrate e-invoicing solutions with Fatoora.

29-30 July (Tuesday-Wednesday): Federal Open Market Committee meeting.

AUGUST

5-17 August (Tuesday-Sunday): Fiba Asian Cup.

SEPTEMBER

15-17 September (Sunday-Tuesday): Money 20/20 Middle East, Riyadh.

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

23 September (Tuesday): Saudi National Day.

OCTOBER

28-29 October (Tuesday-Wednesday): Federal Open Market Committee meeting.

NOVEMBER

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

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh Front Convention & Exhibition Centre, Riyadh.

27-30 November (Thursday-Sunday): The World Rally Championship (WRC), Jeddah.

DECEMBER

1-4 December (Monday-Thursday): International Conference on Nuclear Emergencies, Riyadh.

December: The Fortune Global Forum 2025, Riyadh.

9-10 December (Tuesday-Wednesday): Federal Open Market Committee meeting and Summary of Economic Projections.

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.

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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