Securitization, secondary sales, and new instruments take center stage

1

WHAT WE’RE TRACKING TODAY

THIS MORNING: Mubadala could step in to take a piece of Heathrow alongside PIF, Ardian

Good morning, friends, and happy last day of the workweek to you all. We hope you’re looking forward to time with family and friends as much as we are.

PROGRAMMING NOTE- We’re off tomorrow the Founding Day long weekend holiday and will be back in your inboxes at our appointed hour on Sunday.

UP FIRST, some news from capital markets in the wake of this week’s Saudi Capital Markets Forum:

#1- The Capital Market Forum is taking its first steps outside of town, Tadawul Group CEO Khalid Al-Hussan said yesterday. A spin-off of the event, dubbed CMF Connect, will take place in China on 9 May 2024 in partnership with the Hong Kong Exchange.

Sound smart: Tadawul officials and other policymakers have been on a drive to build closer ties with China. The first Saudi exchange-traded fund in Asia launched in Hong Kong this past December, PIF boss Yassir Al Rumayyan launched the HK version of the Kingdom’s flagship Future Investment Initiative conference in December, and ministers attending a high-profile China-Saudi investment conference in Beijing that saw MoUs worth SAR bns signed.

#2- Property management company Azad Properties is eyeing an IPO on Tadawul by 2027, CEO Ayman Al Burti told Asharq Business in an interview (watch, runtime: 1:42). The company, with 15 commercial centers across the Kingdom, will invest SAR 2 bn in growth between 2025 and 2026, he said.

WATCH THIS SPACE-

#1-Riyadh Air will take to the skies by mid-2025: The Kingdom’s newest carrier, Riyadh Airlines, is set to begin commercial operations by the end of the first half of 2025, Saudi Gazette reported yesterday, citing statements by CEO Peter Bellew on the sidelines of the Singapore Airshow. Riyadh Air, which bills itself as “the first digital-native airline,” is fully owned by the Public Investment Fund.

#2- Infath is auctioning 544 residential and commercial real estate units located in 10 different regions, state news agency SPA reports. The auctions wrap up on Thursday, 29 February, and you can find more information here.

#3- An early shopping spree: Ramadan and Eid Al Fitr price reductions began yesterday and will run through 14 April, the Commerce Ministry said on X. More than 3k retailers and online stores obtained permits to offer price cuts on some 5 mn products.

DATA POINT-

Real estate investment trusts (better known as REITS) now account for 34% of all funds under management in the Kingdom, up from 18% in 2012, according Fahad bin Hamdan, assistant undersecretary financing and investment at the Capital Market Authority. Investors have committed some SAR 192 bn worth of capital to REITs, reflecting both interest in the asset class and real underlying demand for property in the Kingdom, bin Hamdan told Al Eqtisadiah that

WHISPERS-

#1- Mubadala may be interested in taking a stake in Heathrow, de-risking a bid by Ardian that would see PIF take a 10% stake. Abu Dhabi’s Mubadala is in talks to purchase a stake in London’s Heathrow airport after Paris-based buyout firm Ardian approached the wealth fund to join an in-process transaction, Bloomberg reports, citing people it says are familiar with the matter.

What’s up for grabs? Spain-based infrastructure firm Ferrovial agreed in November to sell its 25% stake in Heathrow in November, with PIF taking a 10% stake and Ardian taking 15%, each though a separate vehicle. Qatar Investment Authority is already a shareholder with a 20% stake.

The issue: Shareholders holding a combined 35% stake in the airport have invoked tag-along rights, effectively requiring they be bought out or the full sale doesn’t go through. PIF has for more than a month now been said not to be interested in more than a 10% stake, but Ardian might consider taking a larger position, Bloomberg reports. Ardian needs to find additional partners to snap up the additional 35% stake or risk the transaction going bust.

THE BIG STORY ABROAD-

No single story has captured the imagination of the global business press this morning. For nearly two weeks now, it’s been all politics, all the time, and today is no exception.

Bloomberg worries that a meeting of G20 foreign ministers in Brazil today could see the bloc pull away from trying to shape the conversation on political issues including Israel’s war in Gaza and Russia’s invasion of Ukraine. “The Group of 20 nations is so split on the conflicts in Gaza and Ukraine that they may be forced to reduce the forum’s scope and avoid geopolitical issues altogether this year,” the business information service writes.

(Speaking of the war in Gaza: The Foreign Ministry expressed regret overnight that the US vetoed an Arab-backed UN Security Council resolution calling for an immediate ceasefire. The FM statement said it is time to talk about reform of the Security Council.)

The Financial Times is still keeping its eye on what it thinks could be looming trouble for banks struggling with bad property loans. And it’s not just regional lenders: “Bad commercial real estate loans have overtaken loss reserves at the biggest US banks after a sharp increase in late payments linked to offices, shopping centres and other properties,” the salmon-colored paper writes.

FINALLY- India is trying to line up as much as USD 26 bn in private investment to build and operate nuclear power plants as the country looks to generate 50% of its energy from clean sources by 2030, up from 42% today. Reuters has the exclusive.

Recap: Day two of the Saudi Capital Market Forum

Setting the tone for the last day of the Saudi Capital Market Forum yesterday was Tadawul Group CEO Khalid Al-Hussan, highlighting the three trends he expects to drive global and local capital markets over the next five years.

The three things: Al Hussan ticked off diversification of offerings at the market level (hedging against volatility of fragile equity markets, he suggested). The other two trends are the monetization of data by market infrastructure companies and global connectivity of exchanges given “stock exchanges do not work in isolation.”

Other key takeaways from yesterday’s fireside chats and 1:1 sessions:

Foreign investors have strong appetite for Saudi equities;
Secondary offerings could attract more liquidity to the market, suggesting officials could be pushing out incentives to have more large (usually founding family) shareholders sell down positions;
Officials want to see more corporate paper and more securitized offerings to add vibrancy to debt capital markets.

WANT TO GO DEEPER? Watch the entire day of discussions, if you’re so inclined (watch,runtime: 7:21:12).

DIVERSIFICATION-

A more diversified capital market is the best way to develop an exchange able to absorb the volatility of local and global markets alike, said Al-Hussan, emphasizing the importance of broadening the exchange's offerings and global connectivity. Last year saw a volatile equity market face several challenges including global instability, geopolitical tensions, high interest rates, and rising inflation, Al-Hussan added. “There has been a drop in IPO volumes by 8% y-o-y with proceeds down by 23% y-o-y,” he said, reflecting on the volatility of equity markets.

TADAWUL’S STRATEGY in a sentence: “We [Tadawul] want to build an advanced capital market,” with a new plan that is focused on infrastructure, equity and capital formation, debt commodities, security services, derivatives and IPOs.

Regulatory bodies are introducing new tools drive growth of capital markets, including the gradual introduction of speculative investments that carry higher risks but potentially higher rewards, said the CMA’s chief for listed companies and investment products, Abdullah Binghannam (LinkedIn). Speculative investments are distinct from more conservative investments, such as bonds or blue-chip stocks, which tend to offer more stable returns over time. Look for options and futures contracts, penny stocks, and maybe tradeable venture capital.

There's also a push to create new classes of shares where different classes of shares provide shareholders with different voting rights, dividend preferences, or liquidation preferences, he added. Classes of preferred stock will be attractive to founders. Binghannam said they could also make it easier for companies to go ahead with mergers and acquisitions and be a useful tool for companies looking to grow at home and abroad.

REMEMBER: The Kingdom's largest lender, Saudi National Bank (SNB), was the latest to debut single stock options (SSOs) on its stocks on Sunday, allowing investors to trade in these contracts for the purpose of hedging against potential losses or speculate on the stock’s price movement to make gains. SSOs were introduced as the third derivative instrument on the Saudi stock exchange in November 2023 to trade on the stocks of four of the largest most liquid companies including Sabic, Al Rajhi Bank, Aramco, and STC.

FOREIGN APPETITE-

The number of qualified foreign investors (QFIs) registered on Tadawul rose to 3.7k by the end of last year, up from 50 in 2017. QIFs now wn c. USD 85 bn worth of Saudi equities, Al-Hussan said.

This was supported by the implementation of 700 reforms on the business and investment fronts, he added. Regulatory reform underpins the Kingdom’s economic development, said Binghannam. “Whereas de-regulation could be a choice in different parts of the world, we believe that international investors are into confidence before everything else, confidence is viewed as the catalyst for international inflows,” he added, suggesting that the Kingdom will continue to push out regulation with a view to making the Saudi market more predicable.

ATTRACTING FRESH LIQUIDITY-

A new framework on what Binghannam called “further market offerings” aims to drive more secondary sales by existing shareholders.

SOUND SMART- This framework aims to increase the portion of shares available for trading freely in the market, he added, explaining that there's a push to raise awareness among companies and shareholders about the significance of having a larger percentage of shares in free float. A larger free float means a company's stock carries more weight in market indices, which in turn attracts more investors to buy shares.

Case in point: Aramco is said to be in talks to hire banks including HSBC, Goldman Sachs and Citigroup as it prepares to revive plans to sell shares in a USD 20 bn secondary offering.

SECURITIZED DEBT + CORPORATE PAPER-

There’s lots of room for Saudi to explore what panelists called the “secondary loan market,” or the sale of packages of debt via securitized bonds.

“Securitization is at early stages,” but serious changes are already underway, said Waleed Mohsen, managing director and head of CEEMEA research at Goldman Sachs, suggesting that securitization could be a good booster for the Kingdom’s debt market.

REFRESHER: Securitization is a financial process where certain types of assets, such as loans or receivables, are pooled together by the original lender and converted into securities that can be sold to other parties — banks or others who want to invest in debt. This allows lenders (including non-bank financial services and banks) to free up capital that would otherwise be tied up in these assets, enabling them to originate more loans and support growth and funding sources. Securities are typically backed by the cash flows generated from the underlying assets.

Corporate paper accounts for a mere 4% of all borrowing by businesses in the Kingdom, said Mohsen, explaining that over 75% of local corporate borrowing is financed by banks versus 50% in Europe and 35% in the US. “Clearly, there has been an uneven reliance on bank debt [for funding].” Mohsen is suggesting that instruments such as corporate bonds contribute to the diversification of ways in which corporates can raise funds.

The pitch for diversification in the debt market: Over the coming two to three years, Goldman Sachs sees local banks issuing over USD 30 bn in loans — excluding the Kingdom’s sovereign and corporate financing needs. The global investment bank is predicting a 6% gap annually in financing requirements, citing data from the Investment Ministry which sees borrowing needs rising 15%, while supply is set to grow at a slower 9%.

Targets set by the CMA: There’s a need to grow the debt capital market where debt securities including securitization and corporate bonds are issued to 18% of GDP, up from the current 4%, said bin Ghanam, adding that in order to ensure efficient allocation of capital, the asset management industry must grow to more than 28% of GDP — currently at 19%.

Alat announces four new global partnerships to accelerate sustainable tech manufacturing

A shot in the arm for sustainable tech manufacturing: Alat, the new advanced manufacturing investment platform launched by the Public Investment Fund (PIF), announced four new global partnerships under a plan to create a sustainable manufacturing hub in the Kingdom, it said in a statement yesterday. Alat plans to invest USD 100 bn through 2030.

A breakdown of the partnerships:

#1- Industrial robots with Softbank: Alat will invest USD 150 mn with Japanese technology investment giant Softbank to create an industrial automation venture that will manufacture advanced industrial robots. The fully automated manufacturing and engineering hub will cater local and global demand. It is set to open in December of this year, according to the statement.

#2- And another with Dahua Technology: Alat will invest USD 200 mn with Chinese surveillance technology firm Dahua Technology to manufacture surveillance hardware through a joint venture. They will “produce and market solutions for safety and surveillance use” in smart cities, it added.

#3- A manufacturing facility with Carrier: Alat will develop a manufacturing and research and development facility here with air conditioner maker Carrier. Its production will include advanced heating, ventilation and air conditioning solutions with the aim of increasing energy efficiency and curbing emissions.

#4- Tahakom is in, too: Alat will partner up with Saudi Technology and Security Comprehensive Control Coman (Tahakom) to accelerate smart mobility and smart cities solutions. Tahakom provides intelligent transport systems, AI, and advanced safety solutions.

Paving the way for sustainable manufacturing: “In conjunction with our international and regional partners, the first four of which we proudly announce today, we will redefine sustainable manufacturing. Alat´s mandate is focused on harnessing the Kingdom´s solar, wind and green hydrogen clean energy,” Alat Global CEO Amit Midha said.

We’re not tech buyers, but producers: “Saudi Arabia is no longer going to buy the technology. It is going to be building the technology,” Industry and Resources Minister Bandar Alkhorayef said in Alat’s event in statements picked up by Reuters.

About Alat: The PIF unit was set up earlier this month with focus on seven sectors, including “advanced industries and semiconductors, smart appliances, smart health, smart devices and smart buildings, in addition to next generation infrastructure.” It aims to contribute USD 9.3 bn in direct non-oil GDP by 2030 and create 39k jobs, according to its website.

Saudi Arabia among top 10 retail markets in emerging economies

Saudi Arabia’s retail market ranked third out of 44 developing markets in the 2023 Global Retail Development Index (GRDI), up from 12th place rank in 2021, according to data from Kearney.

The local retail sector received a final score of 62.7 in the index last year, up from 50.6 in 2021. This is attributed to the sector’s total sales volume increasing to USD 249 bn, up from USD 119 bn. Market attractiveness has soared to a score of 81.7 last year, up from 75.8 in 2021, while market saturation has increased to a score of 26.7, up from 16.9. We scored an optimum country risk score of 100 in 2023, up from 98.6 in 2021.

Digitization contributed heavily to the sector making up 12% of the total output of the economy, the survey found. This figure increases to 23% when measured against the makeup of the non-oil economy, said Minister of Municipal and Rural Affairs and Housing Majed Al Hogail at the Retail Leaders Circle MENA Summit in Riyadh, Arab News reports. The sector is expected to grow to SAR 460 bn by the end of this year, Al Hogail added.

About GRDI: The every-two-years survey assesses the retail prospects of 35-40 developing markets by considering factors like economic stability, consumer prosperity, and regulatory environment. Retailers use the survey as a point of reference for the prospects of the retail sector and spot opportunities in EMs.

The share of e-commerce in the overall retail market is expected to rise to 8% in 2027, up from the current 6%, while cross-border e-commerce is projected to slide from the current 50% share of digital retail revenues on the back of an influx of local players. E-commerce and AI-enabled experiential retail are amongst the primary growth drivers of the sector with young consumers attracted to services such as virtual fitting rooms, self-checkouts, paperless transactions, shop online pick up from store, and click-and-collect.

Non-cash retail transactions rose to 62% in 2022, up from 16% in 2016 on the back of an increased customer familiarity with cashless payment methods.

The MENA region has emerged as the next big hot spot in the global retail space, according to the index: Egypt ranked in sixth place, followed by Jordan with a rank of 12, Morocco (17), Algeria (29), and Tunisia (36).

Growth KPIs: The sector had an occupancy rate of 88% in 2023 with 70k licenses offered to market players annually.

Regulation + private sector partnerships: The government has been drafting and producing the regulations along with building partnerships with private sector players to boost the sector with a focus on the segments of restaurants, cafes, entertainment and public areas, the minister added.

On localization: “We are working to incentivize private sector establishments and provide an attractive environment for Saudis to work,” said Al Hogail.

Energy Ministry announces qualified bidders for dry gas filling, wholesale LPG distribution licenses

The list of qualified bidders for dry gas and liquified petroleum gas tender is out: The Energy Ministry has released a list of qualified bidders vying for licenses to set up dry gas and liquified petroleum gas (LPG) filling and storage facilities and wholesale LPG distribution to consumers, it said in a statement yesterday.

Who’s bidding? Domestic fuel retailer Aldrees, Riyadh-based Unigaz Arabia, UAE’s Adnoc Distribution, and Sergas Group. Also on the list are two separate consortiums: One led by Egypt’s Petrojet and Elsewedy Electric, another by and Natgas and Petrogas.

What’s next: The qualified bidders will be shortlisted before the ministry shares tender documents. Bidders at that stage will be asked to outline “work programs, technical and financial capability and operational plans,” among other requirements.

We’ve been expecting this: The tender comes months after the Energy Ministry issued in May implementing regulations for dry gas and LPG distribution for residential and commercial purposes. They aim to regulate the establishment, development, and operation for LPG filling and storage facilities and its wholesale distribution.

Uh, what’s dry gas, Enterprise? It’s industry-speak for natural gas without significant amounts of liquid hydrocarbons — so minimal propane, butane, and other condensates compared to “wet gas.” The lack of condensates makes dry gas easier and less expensive to transport and it has a lower emissions footprint. Wet gas is more likely to be used industrial processes like the production of petrochemicals.

SNB kicks off sale of USD-denominated sustainable sukuk

The Saudi National Bank (SNB) began the sale of its five-year USD-denominated sustainable sukuk under its international sukuk program, it said in a disclosure to Tadawul yesterday. It is set to wrap up the sale which is being offered to eligible investors here and abroad tomorrow.

What we know: The spread for the sale was set at 90 bps over US Treasuries from an earlier initial price guidance of 120 bps, Reuters reported, citing an arranging bank document that it has seen. It has received orders worth USD 4.1 bn, according to the document.

Where the proceeds are going: The proceeds will be channeled for “general corporate purposes and to fulfill the bank’s financial and strategic objectives,” it said in a disclosure earlier this week.

ADVISORS- SNB hired our friends at HSBC Bank as well as Emirates NBD, Dubai Islamic Bank, Goldman Sachs, Mizuho International, SNB Capital and Standard Chartered as joint lead managers and bookrunners on the transaction.

WSM Information Technology shares start trading on Nomu today

WSMInformation Technology shares will make their debut on Nomu today, according to a Tadawul disclosure. Shares will open at SAR 49 apiece, valuing the consulting and digital solutions company at SAR 95.6 mn after it sold a 20% stake. Here’s the prospectus (pdf).

The offering saw strong demand from qualified investors with a 5x oversubscription, according to a disclosure to Tadawul. Investors can place orders for a minimum of 10 shares and a maximum of 97.5k.

All secondary: The transaction is fully a secondary offering, meaning existing shareholders have cashed out a portion of their holdings and the company has not raised fresh capital through the transaction.

Lockup period: All three substantial shareholders will have to abide by a 12-month lockup starting from the first day of trading — meaning they can’t sell any of their remaining shares for the coming year.

KPIs for 1H 2023: Revenues increased 3x y-o-y to SAR 12 mn in 1H 2023, while the bottom line 167% y-o-y to SAR 3.2 mn over the same period.

ADVISORS– Kasb Capital is quarterbacking the transaction as sole financial advisor and underwriter, while Kharashi and Partners is acting as legal advisor and Derayah is the receiving agent.

UPDATE ON AL MODAWAT

Shares of Al Modawat Specialized Medical will start trading on Nomu on Sunday, 25 February, according to a Tadawul statement yesterday. The healthcare player has sold a 20% stake to qualified investors, offloading 475k shares as SAR 111 apiece. The oversubscribed offering was quarterbacked by Yaqeen Capital.

Expat fee waiver for some small firms extended for three years

Cabinet extended yesterday for three years an exemption on monthly expat fees for “small” firms with nine or fewer employees, state news agency SPA reported yesterday. The set headcount includes the business’s owner, it said.

How the exemption works: The Human Resources and Social Development Ministry clarified the conditions for the exemptions: a waiver of fees on two expat workers if its owner is a full-timer and has his business registered with the General Organization for Social Insurance (GOSI), a waiver of fees on four expat workers if same conditions were met and if the company had at least one Saudi employees among its staff. The exemption aims to support small businesses and ensure their continuity in the labor market, according to the ministry.

Expat levy? The monthly fees have been imposed since 2018 to stimulate a local job creation drive as part of the Kingdom’s diversification plan away from oil. However, the gradually increasing fees have come under fire from businesses on grounds that they drive operating expenses up. Since then, the government has sought measures to help businesses with the cost, including a waiver on fees on expat workers in the industrial sector for five years and an exemption for businesses with a smaller headcount. The imposed fees have led to the mass exit of 1.05 mn foreign workers from the local employment market until 2021, according to government data by Okaz at the time.

Also approved yesterday:

Mandating the Foreign Minister to sign a MoU to set up he Saudi-Brazil Coordination Council;
Mandating the Finance Minister to sign a draft agreement with Iceland for the avoidance of double taxation in regards to income tax and prevention of tax evasion;
A cooperation agreement on crime prevention with Vietnam;
Two MoUs between the Saudi Data and AI Authority (SDAIA) and Slovenia-based International Research Centre on Artificial Intelligence (IRCAI) and Jožef Stefan Institute in the fields of AI research and development;
An air transport services agreement with Portugal.

Mobily, Banan Real Estate reports results for FY 2023

A record year for Mobily: Telecoms group Etihad Etisalat Co (Mobily)’s net income rose 34.7% y-o-y in 2023 to SAR 2.2 bn, recording its highest annual bottomline in the past decade, it said in its earnings release (pdf) yesterday. Its revenues were up 6.7% to SAR 16.8 bn to mark its highest annual topline over the past ten years, it added.

Fueling the growth: The growth in net income was driven by higher revenues, EBITDA and cost efficiency, it said. Revenues rose on the back of a growth across all revenue streams for its segments and an increase in subscriber base to 11.8 mn, it said.

Highlights of 2023: The year saw Mobily launching its new five-year strategy to pick pace with the Kingdom’s digital transformation efforts. It also expanded its deployment of 5G services, providing a coverage of 84% in seven cities across the Kingdom, it said.

BANAN REAL ESTATE-

Nomu-listed Banan Real Estate’s net income grew c. 2% y-o-y in 2023 to SAR 28.8 mn, it said in a disclosure to Tadawul yesterday. Its revenues were up 11.3% y-o-y in the period to c. SAR 66 mn.

Main drivers: The uptick in net income came on the back of higher revenues and income from joint projects, it said. Its revenues rose on the back of an increase in revenues from rental activities and the sale of lands.

Wherein the WSJ takes an interest in Saudi Arabia’s public finances

Saudi makes the front page of the Wall Street Journal, which looks at how the Kingdom is taking on debt and planning the sale of another (small) stake in Aramco to continue financing gigaprojects under the Vision 2030 banner. The

REMEMBER- Policymakers have accepted small deficits as the price of continuing to invest in growth: “We intentionally decided to spend more and cause the deficit. If you spend that money right, on productive assets, then it’s money well spent,” Finance Minister Mohamed Al Jadaan said in December during the FY 2024 budget forecast. He signaled it will continue to run deficits to support the “government's strategic expansionary spending.”

AND- The Kingdom is pacing out investment in some megaprojects so as not to block the private sector from liquidity it nerds to grow. The Kingdom’s budget closed FY 2023 in deficit.

Aldrees opens six new filling stations, Retal to manage new complex in Riyadh

ENERGY-

Aldrees gets six new fuel stations on the road: Fuel retailer Aldrees Petroleum and Transport Services Co. opened six new fuel stations in Riyadh, Madinah, Khamis Mushait, Bisha, Turaif and Sabya throughout February, it said in separate posts on X.

CONSTRUCTION-

Retal hired as development manager for new complex in Riyadh: Tadawul-listed Retal Urban Development Company was appointed as a development manager by BlomInvest Saudi Arabia’s Business Oasis Fund for a “premium” complex in Riyadh under a SAR 25 mn contract, it said in a disclosure to Tadawul yesterday. The complex, located in Riyadh’s Al Narjes district, will span an area of 40k sqm and be home to offices and showrooms. The contract duration was set at 30 months, which starts upon commencement of construction.

REAL ESTATE-

Saudi-Egyptian consortium teams up with AOI to procure building materials for the Kingdom: A consortium that includes local aluminum manufacturer Aluminum Products Company (Alupco), Egypt’s Octa International (the business development arm of Dunes Capital Group ’s Octa Holding), and real estate developer City Edge Developments has inked an MoU with Egypt’s Arab Organization for Industrialization (AOI) to manage the supply chain of USD 1 bn worth of building materials for real estate development projects in the Kingdom, according to a statement from the AOI.

ENERGY-

National Gypsum Co. expects higher costs due to Aramco’s fuel hike:Tadawul-listed National Gypsum Co. (NGC) expects its sales costs to rise by 10.8%on the back of Aramco’s hike in diesel prices in January, it said in a disclosure to Tadawul earlier this week. The gypsum manufacturer sees the impact starting from Q1 results, it said, adding that it is “working to minimize the financial impact of this adjustment on the financial results”.

Fuel hikes? Aramco has notified in January industrial and petrochemical companies that it is raising the price of diesel 53% to SAR 1.15 per liter this year from SAR 0.75 last year. A number of Tadawul-listed players, including Sabic, said that they expect the price hike to hit their cost of production in 1Q 2024.

FOOD PRODUCTION-

Balady Poultry + China’s Famsun to set up USD 7 mn feed production facility: Nomu-listed Balady Poultry signed a USD 7 mn contract with China-based agro-business solutions provider Famsun to establish a new feed production plant in Khamis Mushait, it said in a disclosure to Tadawul yesterday. The plant will have three production lines with a capacity of 60 tons per hour. It will also include storage silos for corn feed with a capacity of 20k ton and a 10k ton soybean silo. The new plant comes under Balady Poultry’s strategy to “promote the poultry farming sector,” it said.

HAJJ SEASON-

Pilgrimage sites developer Jabal Omar Development Company has obtained a final permit from the Hajj and Umrah Ministry to provide services to 80k pilgrims overseas, it said in a disclosure to Tadawul yesterday. No further details were provided.

It’s been eventful for Jabal Omar since the start of 2024: It secured last month a SAR 1.9 bn murabaha facility from Al Rajhi Bank aimed at accelerating the completion of under-development assets and paying off debt. It also obtained in January an operating license from the Tourism Ministry for the second tower of its Jabal Omar Jumeirah hotel.

US Federal Reserve seen cutting rates in June

Economists now reckon the Fed rate cut to come in June: A slim majority ofeconomists — 53 out of 104 — polled by Reuters expect the US Federal Reserve to start cutting interest rates in June, with another 33 forecasting a May cut.

This is more or less in line with what the newswire’s surveys have been saying since September, projecting the Fed to ease its monetary policy around the middle of this year.

ICYMI: Fed officials have recently been doubling down on the need to see a strong indication of inflation cooling down before they deciding to start cutting rates.

MEANWHILE- Asian markets are in early trading this morning, tracking yesterday’s decline on Wall Street as the S&P 500 and Nasdaq closed in the red, dragged down by tech stocks. Major benchmarks in Europe look set to open in the red later this morning, and futures suggest a weak open on Wall Street.

TASI	12,606.50	+0.1% (YTD: +5.3%)
MSCI Tadawul 30	1,626.33	+0.4% (YTD: +4.9%)
USD : SAR (SAMA)	3.75 Sell	3.75 Buy
Interest rates	6% repo	5.5% reverse repo
EGX30	29,330.66	-0.4% (YTD: +17.8%)
ADX	9,400.28	-0.1% (YTD: -1.9%)
DFM	4,277.36	+0.1% (YTD: +5.4%)
S&P 500	4,975.51	-0.6% (YTD: +4.3%)
FTSE 100	7,719.21	-0.1% (YTD: -0.2%)
Euro Stoxx 50	4,760.28	-0.1% (YTD: +5.3%)
Brent crude	82.60	-1.2%
Natural gas (Nymex)	1.58	-2.1%
Gold	2,039.80	+0.8%
BTC	51,929.31	+0.3% (YTD: +114.7%)

THE CLOSING BELL-

The TASI rose 0.1% yesterday on turnover of SAR 10.3 bn. The index is up 5.3% YTD.

In the green: East Pipes (+6.4%), AlRajhi Takaful (+6.2%) and GACO (+6.1%).

In the red: AlArabia (-6.1%), Atheeb Telecom (-5.5%) and Ayyan (-5.4%).

CALENDAR

FEBRUARY

26-29 February (Monday-Thursday): Big 5 Construct Saudi, Riyadh.

26-29 February (Monday-Thursday): FM EXPO SAUD

26-29 February (Monday-Thursday): Stone and Service Saudi Arabia, Riyadh.

MARCH

2 March (Friday): end of Noor Riyadh show, segment “Refracted Identities, Shared Futures”, Riyadh.

4-6 March (Monday-Wednesday): International Conference on Sand and Dust Storms in the Arabian Peninsula, Riyadh.

4-7 March (Monday-Thursday): LEAP 2024, Riyadh.

11 March (Monday): Flag Day (national holiday)

Signposted to happen sometime in March:

Ramadan

APRIL

14-21 April (Sunday-Monday): IMF and World Bank spring meetings, Washington, DC

28-29 April (Sunday-Monday): World Economic Forum’s Special Meeting, Riyadh.

29 April-1 May: Future Hospitality Summit at Al Faisaliah Hotel, Riyadh.

Signposted to happen sometime in April:

Eid Al-Fitr (national holiday)

MAY

19-21 May (Sunday-Tuesday): Saudi Energy Convention, Riyadh.

21-23 May (Tuesday-Thursday): The Saudi Food Show, Riyadh.

Signposted to happen sometime in May:

Global Trade Review (GTR): KSA
Saudi Energy Convention

JUNE

5 June (Wednesday): World Environment Day.

Signposted to happen sometime in June:

Eid Al-Adha (national holiday)

AUGUST

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

SEPTEMBER

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

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

DECEMBER

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

Signposted to happen sometime in 2024:

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