The cost of keeping up

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WHAT WE’RE TRACKING TODAY

THIS MORNING: PIF may have found its way out of LIV Golf’s bankruptcy

Good morning, wonderful people. This morning’s batch of earnings has a distinct ins. flavor to it, with the common denominator being growth on premiums while their investment portfolios lost money. The banks, meanwhile, are getting a version of the same message from their depositors.

Fitch says the era of cheap funding for Saudi banks is over. Lending has run ahead of deposits again, the pressure on margins lasts years rather than quarters, and it falls hardest on the lenders that grew fastest without a deep base of cheap deposits behind them.

AND- October’s contracting awards tripled from September, making it the third-biggest month of the year by value. Almost all of it landed in one sector, which is the catch. Red Sea International’s quarter, further down, shows the other side of the same market — what a slower pace of execution does to a contractor, with a rights issue now sitting with the CMA.

PSAs

Four more nationalities qualify for fast-track Saudi visas: Citizens of Mexico, Serbia, Bosnia and Herzegovina, and North Macedonia no longer need a US, UK, or Schengen visa or a GCC residency to get a Saudi tourist visa online or on arrival, according to a Tourism Ministry statement. The multiple-entry visa is valid for a year and allows stays of up to 90 days for tourism, events, family visits, and Umrah outside of Hajj season.

This is the second visa expansion in a month, after Kosovo and Guyana were added in early October.

Buying bankruptcy

PIF may have found its way out of LIV Golf’s bankruptcy. BC Partners is preparing a preliminary bid for the USD 50 mn debtor-in-possession loan the fund holds — the financing that carries control of LIV’s Chapter 11 case — days after walking away from its LIV 2.0 project, the Financial Times reports, citing people familiar with the matter. The bid is early enough that it isn’t known whether PIF or LIV are receptive to it, or aware of the details.

A sale would serve what PIF has wanted since it stopped funding the league in September — a fast exit with no residual liabilities and no exposure to suits from golfers or vendors. The fund, which owned 98% of LIV, would put in further money to settle trade vendor claims that the Financial Times previously reported may run to USD 100 mn or more, against the USD 2 mn set aside for unsecured creditors. Selling the loan alongside that settlement would take PIF out of the case.

LIV’s lawyers told a federal bankruptcy court in New Jersey on Thursday that the group would wind down, with liquidation paperwork due by Monday, while leaving room to revisit if circumstances change.

For BC, the loan buys time for a 2027 relaunch, thinner than the 17-tournament, USD 300 mn version it had proposed. It would also preserve the USD 5 bn in net operating losses LIV has racked up in the US and UK since 2021, which it could use to shelter profits at companies it buys later.

LIV Golf was reportedly set for liquidation as its negotiations with BC broke down over unresolved terms. The original LIV 2.0 collapsed at the eleventh hour over player demands, with some of the 15-40 golfers who had shown interest demanding BC honor guarantees canceled during the Chapter 11 process while keeping the right to withdraw after signing. BC argues the opening is still there, citing PGA Tour schedule changes in 2028 and losses at Europe’s DP World Tour, though both tours have been cool on releasing players for future LIV events.

A footnote

Saudi Arabia’s 3Q deficit looks worse than it is. One of the causes of the USD 22.5 bn shortfall for the quarter came from a one-off collapse in Aramco’s income tax bill, a timing effect that should reverse, specialist publication Mees reports.

Aramco itself had a strong quarter, even as its payments to the state shrank. Net income rose 34.5% y-o-y to USD 36.3 bn in 3Q on a 20.3% jump in revenue to USD 123.8 bn, but the company’s income tax payment collapsed to just USD 758 mn, from USD 13.6 bn in 2Q. The cause is the price-equalization mechanism, which compensates Aramco for selling some fuels domestically at subsidized prices. A compensation lag from 2Q was largely cleared in 3Q, cutting its taxable income for the period. Mees calls it a timing effect that should unwind as payments normalize.

Royalties softened too, while dividends held. Royalty payments fell to USD 12.5 bn from USD 18 bn as realized crude averaged USD 95.2 a barrel, down from USD 108.1 in 2Q, though royalty income stayed above pre-conflict levels. Dividends remained the biggest single component of Aramco’s payments to the state, at USD 17.8 bn, so the quarter’s shortfall sat in the tax and royalty lines — both of which could rebound if, as Mees expects, 4Q oil prices average above USD 100 a barrel.

REMEMBER- The government posted a SAR 244.3 bn deficit in the first nine months against an original full-year budget forecast of SAR 165.4 bn. Revenues rose 3% y-o-y to SAR 858.9 bn — oil down just 1% to SAR 446.3 bn, non-oil up 8% to SAR 412.5 bn — while the gap was driven by spending: grants jumped 197%, subsidies rose 49%, and financing expenses climbed 38%.

War Watch

Saudi air defenses intercepted a barrage of Houthi missiles and drones yesterday, with falling shrapnel causing minor damage to an Aramco administrative building in Riyadh. The coalition said it destroyed two ballistic missiles launched toward Riyadh, one aimed at the eastern region, two cruise missiles over Riyadh, and a drone launched toward the southern region.

The Saudi-led coalition destroyed a ballistic missile launch platform in Sanaa that the Houthi militia had used in an attempted attack on Saudi Arabia’s Eastern Province, SPA reported yesterday, citing coalition spokesperson Turki Al Maliki. Saudi forces carried out 91 airstrikes and missile attacks across Al Jawf, Taiz, Hajjah, Saada, Hodeidah, and Lahj, Houthi spokesperson Yahya Saree said on X. These strikes brought the total number of air and missile strikes since the escalation began to nearly 4.5k, according to Saree.

Yemeni forces are pressing from the other end: The Yemeni army said it carried out 875 strikes on Saturday and killed or neutralized 130 Houthis. Spokesman Majed Al Nazili said forces also destroyed or disabled 50 vehicles, military equipment, and missile launch platforms. Fighting continued in Taiz, while emergency units and Nation’s Shield forces struck Houthi concentrations and reinforcements in Marib and Al Jawf.

Diplomacy continues in parallel: Foreign Minister Faisal bin Farhan spoke on Saturday with Egyptian Foreign Minister Badr Abdelatty about regional and international developments and efforts to support security and stability. He also spoke with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani about efforts to de-escalate regional tensions.

REMEMBER- The Houthis reportedly demanded around USD 51 bn plus formal recognition of the group as Yemen’s rulers in exchange for ending the war.

Put on ice

Two logistics forums set to take place in Riyadh have been pushed back by nearly a year. The Global Logistics Forum (GLF), originally scheduled for 29 November to 1 December, will now run on 16-18 November 2027, according to the Saudi Ports Authority (Mawani). The Global Supply Chain Forum, which Mawani and UN Trade and Development (UNCTAD) co-organized to run alongside the GLF, is also moving to 2027, UNCTAD said, without specifying new dates. The GLF said the extra time will allow more preparation and coordination with international partners.

What about the participants? Organizers confirmed existing GLF registrations and partnerships will remain valid. The forum, organized by the Transport and Logistics Services Ministry, debuted in Riyadh in 2024, when it generated a string of agreements covering cargo operations, warehousing, and logistics zones.

Know your obligations

Businesses can now check which zakat, tax, and customs obligations apply to their activities through Business Consult, a new online service from Zatca, the authority said. Users enter information about their business activities, and the system analyzes the data to display the applicable regulatory obligations instantly, alongside relevant guidance.

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The big story abroad

Nvidia is investigating its own boss. The company said in a brief statement yesterday that it will look into whether CEO Jensen Huang “has been the target of a foreign intelligence effort.” Huang was reportedly in a romantic relationship with Alice Huang, an executive at Megaspeed and an alleged Chinese spy. Megaspeed is a Singapore-based Nvidia customer that has come under US scrutiny over alleged smuggling of Nvidia chips into China. Nvidia is caught between Washington and Beijing — the Trump administration has licensed it to sell a limited range of chips to China, but Beijing has blocked their import.

Singapore has overtaken Ireland as Apple’s largest tax shelter, the Financial Times reports. The tech giant used Singapore’s tax incentive regime to cut USD 2.7 bn from its tax bill this year after attributing up to USD 50 bn in earnings to its Asian hub, according to disclosures filed with its annual report under new US reporting rules. That beats the USD 2.6 bn reduction it secured through Ireland, home to its European headquarters.

Anthropic is pushing further into the energy sector. The AI lab secured commitments for 1.7 GW of heavy-duty gas-fired generators for data centers in September, paying USD 3.4 bn to Texas-based equipment supplier OnePWR Solutions, the Financial Times reports. The order includes the engineering and construction expertise needed to get the generators up and running. It marks the biggest known one-off acquisition of power-generation equipment by an AI lab, as developers increasingly go straight to suppliers to secure hard-to-find power gear.

Saudi banks face years of pricier funding as lending outpaces deposits, Fitch warns

The era of cheap, abundant funding for Saudi banks is coming to a close. The latest money-supply trend “points to adequate but less abundant banking-sector liquidity,” Anton Lopatin, senior director for banks at Fitch Ratings, tells EnterpriseAM, and the competition to hold onto it is intensifying as lending keeps outrunning deposits. There is no liquidity crunch, he clarifies, but over the next several years funding costs look set to stay high and margins to come under pressure, unevenly, with the fastest-growing banks that have the thinnest cheap-deposit bases hit hardest.

Lending is outpacing deposits, and the gap is widening. Bank credit reached SAR 3.5 tn in September, up 7% y-o-y, while deposits and broad money each grew about 5%, with M3 growth slowing from 8% in June, says Lopatin. That lifted the sector’s non-regulatory loan-to-deposit ratio to around 114%, from 111%. Money supply is still expanding, but lending has again run ahead of deposits, adding to funding pressure, he says.

What is growing is the expensive kind of deposit. Time and savings deposits jumped 23% y-o-y as customers moved into higher-yielding products, while cheaper demand deposits fell 5% and dropped to 46% of total deposits, from 50% a year earlier. That props up headline M3, Lopatin said, but “it does not represent equally cheap liquidity for banks because customers are moving funds into higher-yielding products.”

Lopatin still calls the funding profile broadly sustainable, underpinned by large domestic deposit franchises, access to government and government-related deposits, strong capital, and sound regulatory liquidity metrics. The question is whether that holds over several years. If credit keeps growing persistently faster than deposits and M3, banks will have to lean harder on market funding or slow their asset growth, a shift that Lopatin says would probably raise funding costs and could narrow margins.

“Deposit competition is likely to remain the most immediate pressure,” he says. Slower deposit growth and strong loan demand push banks to pay more to keep and attract funds, and the contest is sharpest around government and government-related deposits, which “can be sizable but concentrated and relatively price-sensitive.” The drift out of non-remunerated current accounts into term deposits “improves deposit stability in some respects,” since those carry defined maturities, but it raises average funding costs and can put pressure on net financing margins.

Reliance on wholesale funding is likely to grow. Banks have already tapped international bonds and sukuk, syndicated loans, and other instruments to diversify, and Fitch expects that to increase if domestic deposits keep lagging credit. “This is not inherently negative,” Lopatin says, “longer-term market funding can improve asset-liability matching and reduce dependence on short-term deposits. However, it increases exposure to international interest rates, investor sentiment, refinancing conditions and geopolitical volatility,” with the risk weighted toward fast-growing banks that have smaller deposit franchises and weaker access to low-cost accounts.

Funding costs look set to stay elevated even if policy rates fall. Deposit pricing is slow to follow lending yields down, Lopatin said, so margins could compress most at banks with price-sensitive corporate or institutional deposits, weak current- and savings-account franchises, rapid loan growth, heavy wholesale reliance, or large fixed-rate, long-duration books. And the demand driving the squeeze is not easing: public-sector enterprise lending rose 21.5% y-o-y to SAR 285.1 bn in September, roughly three times total credit growth, as Vision 2030 spending keeps balance sheets stretched.

Contract awards triple in October, with oil and gas leading the drive

Saudi contracting awards more than tripled in value in October, with 23 projects worth SAR 24.65 bn awarded, up from nine projects worth SAR 7.8 bn a month earlier, according to the Saudi Contractors Authority (SCA) (pdf). October was the third-biggest month of the year by value, behind May’s SAR 30 bn and June’s SAR 29.5 bn.

REMEMBER- August awards totaled SAR 4.86 bn, down 50% by value from July’s SAR 9.6 bn. The number of projects awarded last month was the highest since June’s, when 25 projects were awarded, compared with 11 in July, 13 in August, and 9 in September.

October’s project awards were heavily concentrated in oil and gas, which dominated the value of contracts awarded during the month. The sector accounted for SAR 17.4 bn of October’s awards, or roughly 71% of total value, despite representing eight projects. Buildings led by volume, with nine awards worth SAR 3.8 bn, while infrastructure accounted for three projects worth SAR 2.2 bn. Power and water and industrial projects made up the remaining two and one awards, respectively.

The geographic split was similarly concentrated: The Eastern Province took 12 projects, or 52% of the month’s total, worth SAR 18.9 bn, nearly four times Riyadh’s SAR 4.8 bn across five projects. The Eastern Province’s awards were primarily oil and gas, which accounted for 72.73% of its projects, with buildings and industrial work making up the remainder. Riyadh’s pipeline, meanwhile, was split between buildings (60%) and infrastructure (40%).

Aramco led project owners by value, with six awards worth SAR 13.1 bn, ahead of Al Khafji Joint Operations’ SAR 3.99 bn and the Royal Commission for Riyadh City’s SAR 2 bn across two projects. Center3 and Humain followed with a SAR 1.8 bn data center project, while Yokogawa Engineering Middle East & Africa FZE rounded out the top five with SAR 750 mn.

What’s next: The authority expects 10 new awards this month, more than half in buildings and construction and roughly half concentrated in Riyadh and the Eastern Province. Potential project owners include the Saudi Arabian Football Federation, the Royal Commission for Riyadh City, Aramco, PIF and Expo 2030 Riyadh Company.

Saudi insurers grow on premiums as Savola’s one-offs fade and Red Sea sinks deeper

Savola’s 3Q income slumps

Savola Group’s 3Q net income fell 66.7% y-o-y to SAR 128.5 mn, largely because of non-recurring gains recorded over the same quarter last year, according to a Tadawul filing. The 3Q 2025 figure included an SAR 247 mn reversal of prior-year zakat accruals and an SAR 40 mn gain attributable to Savola from the settlement of put option liabilities. Excluding one-offs, recurring net income was broadly flat at SAR 127 mn, against SAR 129 mn a year earlier, with revenue up 1.5% to SAR 6.55 bn.

Food processing drove the quarter, while retail weighed it down. Net income from Savola’s food processing segment rose 31% to SAR 131 mn on higher edible oil volumes and prices, while the retail segment swung to an SAR 18 mn loss from an SAR 24 mn gain as quarterly revenue fell 2.8% and competitive pricing pressured gross margins, according to the company’s earnings release (pdf). Food services returned to an SAR 3 mn gain from an SAR 48 mn loss, mostly due to the absence of a SAR 36 mn impairment booked a year earlier, while frozen food net income edged up to SAR 9 mn from SAR 8 mn. Group EBITDA fell 6.6% to SAR 576 mn.

The 9M picture shows stronger underlying growth, led by food processing. Net income declined 22.2% y-o-y to SAR 529.6 mn, while revenue increased 3.1% to SAR 20.13 bn. The decline reflects the absence of the prior-year SAR 247 mn zakat accrual reversal, a further SAR 53 mn reversal of other accruals, and the SAR 40 mn gain from settling put option liabilities. Excluding one-offs, Savola puts recurring net income up 26% at SAR 500 mn, driven by food processing, where recurring income rose to SAR 412 mn from SAR 283 mn. Panda’s revenue was broadly stable at SAR 8.5 bn, down 0.3% y-o-y, but competitive pricing narrowed its gross margin to 23.5% from 24.9%, and its recurring income fell to SAR 28 mn from SAR 72 mn.

Red Sea sinks deeper into the red

Red Sea International’s net loss widened to SAR 31.2 mn in 3Q from SAR 1.7 mn a year earlier as revenue fell 62% y-o-y to SAR 375.2 mn, according to a Tadawul filing. The company attributed the drop to a slower pace of project execution.

The filing points to three drivers behind the drop: lower gross income, higher credit-loss provisions, and rising finance costs. Gross income fell 55% y-o-y to SAR 39.9 mn, tipping the company into an operating loss of SAR 33.6 mn from operating income of SAR 25 mn a year earlier. Provisions for expected credit losses on ageing receivables rose to SAR 9 mn from SAR 4.9 mn, while finance costs rose 25% to SAR 14 mn as borrowings climbed to SAR 648 mn from SAR 401.6 mn at the end of 2025, according to the company’s earnings release (pdf).

Over 9M, net loss attributable to shareholders widened to SAR 45.5 mn from SAR 14.2 mn, as revenue fell 34.5% to SAR 1.61 bn. Operating outflows climbed to SAR 243.8 mn from SAR 2.9 mn a year earlier. Facilities management and rental was the only segment to grow, with revenue rising 52% to SAR 192 mn and net income up to SAR 51.5 mn from SAR 17.8 mn. General construction led the drop in revenue, down 33% to SAR 1.36 bn, which the company attributed mainly to the regional geopolitical situation. The segment swung to an SAR 13.3 mn net loss from SAR 121.1 mn in net income, while revenue from non-concrete residential and commercial buildings fell 79% to SAR 66 mn.

What’s next: Red Sea is awaiting approval from the Capital Market Authority and shareholders for an SAR 280 mn rights issue that would lift its capital to SAR 762.7 mn, and plans to carve its main businesses out into separate entities. It also expects an amortization charge tied to a past acquisition — SAR 73.1 mn so far this year — to fall significantly from 1Q 2027, when a major intangible asset reaches the end of its useful life, according to the filing.

Medical and motor lines drive Medgulf growth

Mediterranean and Gulf Ins. and Reins. (Medgulf) posted a 34.5% y-o-y rise in net income to SAR 24.1 mn in 3Q, as stronger underwriting offset a drop in investment income, the insurer said in a Tadawul filing. Ins. revenue jumped 46.3% to SAR 1.5 bn and gross written premiums grew 56.5% to SAR 1.3 bn, led by medical (SAR 358.8 mn) and motor (SAR 99.9 mn).

Behind the numbers: The ins. services result before reinsurance rose 54% y-o-y to SAR 103.5 mn, lifting the total ins. result to SAR 24.5 mn from SAR 9.1 mn. Working against that, net investment income fell 95.9% to SAR 0.6 mn, on SAR 20.6 mn of fair-value losses on financial assets amid market volatility and regional geopolitical developments, compared to fair-value gains a year earlier.

9M earnings nearly tripled: Net income rose 189.7% y-o-y to SAR 104.5 mn, alongside a 33.2% increase in ins. revenue to SAR 4.1 bn. Gross written premiums grew 44.5% to SAR 5.18 bn, led by growth in medical (SAR 1.3 bn) and motor ins. (SAR 322.8 mn).

Reins. helps Tawuniya recover from 1H slump

The Company for Cooperative Ins. (Tawuniya) saw net income after zakat jump 74.1% y-o-y to SAR 301.7 mn in 3Q, reversing its 1H earnings decline and bringing 9M earnings back to growth, according to a Tadawul filing. Ins. revenue rose 20.3% to SAR 6.51 bn.

Reins. helped turn the quarter around: Tawuniya’s ins.-service result before reins. fell 51.3% y-o-y to SAR 471.3 mn as higher expenses in property and casualty (P&C) ins. weighed on performance. After reins., however, net ins.-service income increased 21.1% to SAR 413.6 mn, supported by recoveries and improved underwriting. P&C’s contribution after reins. rose to SAR 81.7 mn from SAR 47.3 mn, while health’s contribution climbed to SAR 315 mn from SAR 275.7 mn. Motor’s contribution slipped to SAR 29.1 mn from SAR 35.8 mn.

Premium growth was uneven: Gross written premiums increased 6.8% y-o-y to SAR 5.44 bn, led by a 36.7% increase in motor premiums and 14.9% growth in protection and savings. Health premiums slipped 1.3%, while P&C premiums declined 25.9%. Health remains Tawuniya’s largest business, accounting for 72% of written premiums and 74% of ins. revenue in 1H, CEO Othman AlKassabi told Asharq Business.

Investment income added support, while costs rose. Net investment income rose 25.9% y-o-y to SAR 233.4 mn on stronger commission income and fair-value gains, while net ins. and reins. finance expenses fell 32.3% to SAR 32.7 mn, partly offsetting higher costs elsewhere. Other operating expenses climbed 18.3% to SAR 289.7 mn, which the company attributed to investment in new capabilities and subsidiaries, while finance charges rose to SAR 12.6 mn from SAR 1.8 mn.

The 9M picture remains tighter: Net income edged up 1% y-o-y to SAR 911.6 mn despite a 17.5% rise in ins. revenue to SAR 18.5 bn. The ins.-service result before reins. swung to an SAR 1.95 bn loss from an SAR 2.74 bn gain a year earlier, reflecting elevated P&C costs. After reins., the net ins.-service result remained positive at SAR 1.03 bn, though it fell 3.7% y-o-y. Higher net investment income provided some relief, up 17.2% to SAR 649.5 mn, and the investment portfolio expanded 11.4% to SAR 13.85 bn.

Underwriting lifts Wataniya's 3Q income

Wataniya Ins. nearly tripled its 3Q net income to SAR 21.2 mn, up 188.9% y-o-y, as stronger ins. results and lower operating expenses outweighed a decline in investment income, according to a Tadawul filing. Income before zakat and tax rose 80.4% to SAR 25 mn, while ins. revenue rose 71% to SAR 745.1 mn on higher earned premiums from business growth.

The ins. book did the heavy lifting: Net ins. results more than tripled y-o-y to SAR 19.5 mn from SAR 5.8 mn, driven by the company’s directly written business, even as the ins. service result before reins. fell 28.4% to SAR 57.9 mn. Other operating expenses fell 27.4%, which together outweighed a 25.4% drop in net investment income to SAR 17.6 mn.

Nine-month earnings also improved: Wataniya's net income more than doubled to SAR 30.4 mn from SAR 14 mn a year earlier, while ins. revenue grew 55.9% to SAR 2.09 bn. Net ins. results increased 35.7% to SAR 17.6 mn, although the ins.-service result before reins. fell 33.1% to SAR 219.9 mn. Investment income rose 7.5% to SAR 59.3 mn over the nine months, contrasting with the decline recorded in 3Q.

Sohail AlRazeen to take over Cherry Trading in 2027

Cherry Trading has a new CEO lined up for the new year. The company appointed Sohail AlRazeen (LinkedIn) to take over from acting CEO Zaid AlNasser (LinkedIn) on 1 January, according to a Tadawul disclosure. AlRazeen has more than 15 years of experience in executive and board roles, including positions at Elm Company, the Innovation and Entrepreneurship Center, and Carfer.

King Salman airport developer tenders roads, bridges, and utilities for Terminal 6

Building the links to Terminal 6

Tenders are out for infrastructure works at King Salman International Airport. King Salman International Airport Development Company (KSIADC), the Riyadh giga-airport’s developer, has tendered the roads, bridges and utility networks for Zone C1+C2 — the civil infrastructure underpinning the new Terminal 6 and its links to the existing Terminals 1-5, Meed reports. The tender went out on 26 October, with bids due 6 December.

The details: The package spans new roads, ramps and junctions, the Junction 6 and Terminal 6 bridges, and the full dry and wet utility networks, alongside enabling works and utility diversions. Two design-and-build elements are optional, among them a roughly 1.4-km access road to the Terminal 6 transport hub.

REMEMBER- King Salman International Airport is expected to handle over 100 mn passengers annually by 2030. The infrastructure, including the new Terminal 6, is being developed to accommodate this traffic, with capacity planned ahead of the expected influx of visitors for Expo 2030 and the 2034 World Cup.

Driverless rides get a regulatory roadmap

The Transport General Authority (TGA) approved the executive regulations for self-driving passenger transport, effective 6 January 2027, setting the framework for launching autonomous ride services in the Kingdom. The rules cover the qualification of companies and vehicles, safety and ins. obligations, supervision of operations, and procedures for emergencies and for technical and cybersecurity risks.

REMEMBER- The Interior Ministry introduced traffic rules for self-driving vehicles in June, making their owners, companies included, legally liable for accidents and violations tied to system errors. The rules also require approval from the relevant authority before such a vehicle can be deregistered, and exempt fully autonomous vehicles from standard driver-authorization requirements.

Bank Aljazira is topping up its capital with sukuk

Bank Aljazira has opened the offer for SAR-denominated Tier 2 capital sukuk under its SAR 3 bn (USD 800 mn) programme, a private placement to eligible local investors running to 6 December, according to a Tadawul filing. The notes are 10-year, callable after five, with the size and return left to market conditions. Aljazira Capital and Al Rajhi Capital are joint lead managers and bookrunners.

More backing for Syria

The Saudi Fund for Development has signed six concessional loans worth more than USD 403 mn with Syria’s finance ministry, spanning energy, water, health, housing, infrastructure and digital government, with Crown Prince Mohammed bin Salman and Syrian President Ahmed Al-Sharaa present at the signing, SPA reports.

The details: The biggest are USD 105 mn for 25 civil-defense centers, USD 100 mn for hospitals and health facilities, and USD 90 mn to rehabilitate the Aleppo thermal power plant; smaller tranches cover 300k smart water meters, rehabilitating 10k damaged homes and a finance-ministry digital overhaul.

IN CONTEXT- The loans add to a rebuild where Saudi money now reaches most of Syria’s layers — power, water, telecoms, housing, airports and roads — without a plan connecting them. As we reported last week, the projects run through separate ministries and contracts: STC’s SAR 3 bn SilkLink fiber-and-data network, Elaf’s SAR 7.5 bn Aleppo airport, and the new flynas Syria often sit side by side with no stated link between them. With five or six foreign investors now sharing the reconstruction, no single player controls enough of the handoffs between assets to make the infrastructure work as one.

MEANWHILE- Flyadeal has launched twice-weekly direct flights between Madinah and Damascus, expanding its services to Syria, the low-cost carrier said in a statement. The new route runs in addition to Flyadeal’s existing three-times-weekly Jeddah and Damascus service.

Africa’s corporate debt market is just 0.3% of the world’s, with Egypt’s share more than halved since 2010

Africa’s corporate debt market is too thin for the economy it serves, according to the OECD’s Africa Capital Markets Report 2026. Outstanding market-based corporate debt across all 54 countries came to USD 211 bn at the end of 2025. That’s just 0.3% of the global total for a continent that accounts for 2.7% of world GDP. Syndicated loans make up 81% of that stock, and bonds only USD 35 bn.

Egypt’s slice of that market has more than halved since 2010. That year, Egyptian-headquartered companies held 30% of Africa’s corporate debt, only slightly below South Africa’s share. By 2025, Egypt’s share had fallen by more than half. The OECD attributes the drop largely to a contraction in Egypt’s own corporate debt stock, rather than to strong growth elsewhere on the continent. South Africa has been the region’s largest market for the past 15 years and now holds 30% of the total at USD 63 bn. Six countries — Egypt, Mauritius, Morocco, Mozambique, Nigeria, and South Africa — account for 80%.

Issuance is just as thin. No more than 20 corporate bonds were sold across the continent in 2025, and 17 of them were issued by financial companies. The bond market has shrunk 44% in real terms since its 2015 peak, mostly because of lower activity in South Africa. Syndicated loans signed in 2025 averaged about five years in maturity, against 7.5 years in other emerging markets. Median issue sizes for both bonds and loans still exceed those in emerging markets more broadly, which the OECD reads as a sign that large companies are the main users of the market and smaller firms still depend on bank lending.

Currency risk makes things harder. Only 17% of corporate debt issued in 2025 was in local currency, so a company that borrows in USD or EUR also takes on the risk of its own currency weakening. Egypt’s local-currency debt has a separate problem: FX rationing and sharp devaluations have repeatedly disrupted foreign investors’ ability to convert back into the greenback. As a result, they typically cap their EGP allocations at a fraction of what they put into African peers with the same nominal yield.

IN CONTEXT- Egypt’s own corporate bond market is young and short-dated. Valu closed its maiden conventional corporate bond in August, raising EGP 1 bn across two tranches: a 13-month fixed tranche at 20.75% and a 36-month tranche priced at 1% above the Central Bank of Egypt’s average corridor rate. The regulator is still writing the rulebook. The Financial Regulatory Authority’s (FRA) tighter private-bond rules, issued in August, set a firm 30-working-day subscription deadline that issuers can extend only with FRA approval.

The equity side of the same report reads better. African market capitalization rose 49% in 2025, nearly two-and-a-half times the 20% pace across emerging markets, and African exchanges beat the MSCI Emerging Markets Index over 2021-2026. Over the longer stretch since 2015, the corporate bond market has kept shrinking.

The OECD’s fixes put most of the work on policymakers. The report finds that the main barriers to bond market development are macroeconomic and institutional and that technical fixes such as better market infrastructure only pay off once those foundations are in place. Regulatory quality, rule of law, exchange-rate stability, and pension fund development are among the strongest correlates of market depth. A credible sovereign benchmark yield curve is the next building block, because it gives corporate bonds a local-currency reference to price against.

Excessive public borrowing can crowd out corporate credit, the report warns. Egypt’s borrowing is both heavy and short-dated. The state raised about EGP 4.3 tn at home in the first four months of FY 2026/27, almost all of it to refinance existing debt, and bills made up 85% of accepted domestic issuance last quarter.

Why it matters: Aid is shrinking. Official development assistance from OECD donors to sub-Saharan Africa fell by more than a quarter in a single year, yet the savings that could replace it are already on the continent. Pension and ins. assets exceed USD 1 tn, although the OECD finds that too little of that money goes into productive domestic investment. Corporate bond markets are how that money could reach African companies, Egypt’s included. By our read, what stands in the way is currency risk, along with a domestic investor base that is already busy financing the state.

MARKETS THIS MORNING-

Asian markets opened in the green earlier today. Japan’s Nikkei was up 2.4% and South Korea’s Kospi was up around 0.6% on the back of Friday’s US rally, though broader gains were limited amid concerns over a probe into Nvidia’s CEO. The MSCI Asia Pacific Index climbed 0.7%.

TASI	10,018	-0.8% (YTD: -4.5%)
MSCI Tadawul 30	1,367	-0.6% (YTD: -1.4%)
NomuC	21,742	+0.4% (YTD: -6.7%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	50,812	-0.7% (YTD: +21.5%)
ADX	9,393	-1.3% (YTD: -6.0%)
DFM	6,026	-0.3% (YTD: -0.4%)
S&P 500	7,377	+0.3% (YTD: +7.8%)
FTSE 100	10,674	-1.0% (YTD: +7.5%)
Euro Stoxx 50	6,170	-1.0% (YTD: +6.5%)
Brent crude	USD 98.32	0.0%
Natural gas (Nymex)	USD 3.00	+1.7%
Gold	USD 4,075	-0.9%
BTC	USD 74,697	-1.4% (YTD: -14.8%)
Sukuk/bond market index	895	0.0% (YTD: -2.7%)
S&P MENA Bond & Sukuk	149.69	-0.1% (YTD: -1.5%)
VIX (Fear gauge)	25.6	-9.0% (YTD: +71.5%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.8% yesterday on turnover of SAR 2.7 bn. The index is down 4.5% YTD.

In the green: Naseej International Trading (+10.0%), Middle East Healthcare (+10.0%), and Consolidated Grunenfelder Saady Holding (+10.0%).

In the red: Filing and Packing Materials Manufacturing (-6.6%), Specialized Medical (-4.9%), and Raydan Food (-4.8%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.4% yesterday on turnover of SAR 12.2 mn. The index is down 6.7% YTD.

In the green: Almuneef Company for Trade, Industry, Agriculture and Contracting (+26.9%), Alfakhera for Mens Tailoring (+13.7%), and Leen Alkhair Trading (+10.0%).

In the red: National Building and Marketing (-16.7%), Alhasoob (-8.8%), and Axelerated Solutions for Information and Communication Technology (-7.9%).

CORPORATE ACTIONS-

Qassim Cement is distributing SAR 87.8 mn in dividends for 3Q 2026, with shareholders receiving SAR 0.80 per share, according to a Tadawul filing. The dividend will be paid on 27 January.

Raydan Food Company submitted applications to the Capital Market Authority (CMA) to reduce its capital by SAR 58.5 mn, followed by a SAR 105 mn capital increase through a rights issue, according to a Tadawul filing. Both steps require CMA, regulatory and shareholder approvals.

CALENDAR

NOVEMBER

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

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

29 November-1 December (Sunday-Tuesday): The Global Logistics Forum, King Abdulaziz International Convention Centre, Riyadh.

DECEMBER

14-16 December (Monday-Wednesday): The Innovation Driven Water Sustainability Conference (IDWS 2026), Jeddah

2027

JANUARY

6 January (Wednesday): The Transport General Authority’s executive regulations for self-driving passenger transport takes effect.

12-14 January (Tuesday-Thursday): The Future Minerals Forum (FMF), Riyadh.

FEBRUARY

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

1-4 February (Monday-Thursday): Cityscape Global, Riyadh Exhibition and Convention Centre (Malham), Riyadh.

MARCH

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

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

APRIL

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

JUNE

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

Signposted to happen sometime in 2027:

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

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.
The Esports Nations Cup, Riyadh;

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