{"id":86317,"date":"2024-05-20T00:00:00","date_gmt":"2024-05-20T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/05\/20\/we-could-be-days-away-from-a-saudi-us-defense-pact\/"},"modified":"2024-05-20T00:00:00","modified_gmt":"2024-05-20T00:00:00","slug":"we-could-be-days-away-from-a-saudi-us-defense-pact","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/05\/20\/we-could-be-days-away-from-a-saudi-us-defense-pact\/","title":{"rendered":"We could be days away from a Saudi-US defense pact"},"content":{"rendered":"

Good morning, ladies and gentlemen.<\/strong> It\u2019s shaping up to be a busy morning (and week), led by news of progress on a potential agreement between Saudi and the US on defense cooperation. Meanwhile, two big aviation events in the capital are driving the agenda here at home, while the eyes of the world wait for news of whether Iran\u2019s president and foreign minister have survived a helicopter crash in the country\u2019s north. <\/p>\n

UP FIRST-<\/strong><\/p>\n

#1- We could be \u201cdays away\u201d from a defense pact with the US<\/strong>, CBS News<\/a> cites an unnamed US official close to the talks as saying, after Crown Prince and Prime Minister Mohammed bin Salman met with US National Security Advisor Jake Sullivan in Dhahran to review a draft of a strategic agreement<\/a>, state news agency SPA<\/a> reports. <\/p>\n

The agreement is now \u201cnearly final,\u201d<\/strong> SPA says, with CBS\u2019 source saying the Crown Prince and Sullivan made \u201ca lot of progress\u201d yesterday. The meeting got ink in Reuters<\/a> and AP<\/a>.<\/p>\n

REFRESHER- <\/strong>The agreement would see Washington provide security assurances to Riyadh, along with cooperation on the development of a domestic nuclear power industry as well as on artificial intelligence and other advanced technologies. <\/p>\n

Where do things stand with Israel?<\/strong> It remains unclear whether Tel Aviv will budge on accepting a two-state solution with Palestine, which the Foreign Ministry has made clear<\/a> is a requirement for Saudi to agree to a normalization pact with Israel. After his meeting with the Crown Prince yesterday, Sullivan met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem to underscore the \u201cconstructive\u201d talks in Dhahran \u201cand the potential that may be available for Israel, as well as the Palestinian people,\u201d according to a White House readout<\/a>.<\/p>\n

Bibi not biting?<\/strong> \u201cThe effort appears to be a non-starter in Israel, with Netanyahu reiterating again yesterday that he would not accept a Palestinian state\u201d and is willing to forego normalization with Saudi, the Times of Israel<\/a> reports.<\/p>\n

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#2- It\u2019s a big week for relations with Japan: <\/strong>Crown Prince and Prime Minister Mohamed bin Salman kicks off this morning a four-day visit to Japan. He\u2019s accompanied by a high-profile business delegation and will be talking investment and climate tech while there. Also on the agenda: Gaming and esports. Our biggest export to Japan: Oil. And our biggest import: cars, per Aleqtisadiah<\/a> <\/p>\n

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#3- <\/strong>King Salman<\/strong> will be treated at Jeddah\u2019s Al Salam Royal Palace for <\/strong>inflammation in the lungs<\/strong>, where his treatment program will include a course of antibiotics, state news agency SPA<\/a> reported overnight. The diagnosis comes after the King was admitted earlier in the day to the palace\u2019s royal clinics for a medical checkup due to \u201chigh temperature and joint pain,\u201d SPA<\/a> reported earlier. King Salman was briefly admitted to Jeddah\u2019s King Faisal Specialist Hospital last month<\/a> for a \u201croutine checkup.\u201d Reuters<\/a> and the National<\/a> have more. <\/p>\n

HAPPENING TODAY-<\/p>\n

<\/a> Brace yourselves for a very aviation-heavy week: The <\/strong>Future Aviation Forum<\/a><\/strong> kicks <\/strong>off in Riyadh this morning<\/strong> with some 5k<\/a>executives<\/a> from aviation majors including Boeing, Airbus, China\u2019s Comac, and Embraer gathering to chew over the industry\u2019s trends and challenges, while signing some agreements on the sidelines. <\/p>\n

The event is co-hosted with the <\/strong>International Civil Aviation Organization\u2019s<\/a><\/strong> Facilitation <\/strong>2024 Global Summit<\/strong>, which gets underway tomorrow.<\/p>\n

AND- Riyadh <\/strong>will host<\/a><\/strong> the annual conference of the Airports Council International<\/strong> \u2014 also known as WAGA<\/a> \u2014 from tomorrow through Thursday, 23 May. The global gathering brings together senior executives from around the world. The event\u2019s speakers include PIF-owned airline Riyadh Air CEO Rony Douglas, Saudi Air Connectivity Program Majid Khan, Riyadh Airports CEO Ayman Aboabah and others.<\/p>\n

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MEANWHILE- The <\/strong>Real Estate Supply Chain Forum<\/a><\/strong> opens its doors today<\/strong>, bringing together local and international players to discuss cooperation, investment, and innovation solutions for the industry. The event, which is organized by the National Housing Company, runs until tomorrow at the JW Marriott Riyadh. <\/p>\n

<\/a> AND- Finance Minister Mohamed Al Jadaan is leading a Saudi delegation to <\/strong>Beijing<\/strong> for meetings with Chinese officials today and tomorrow, the ministry said in a post on X<\/a> yesterday. The delegation will also pitch investment in gigaprojects to a number of Chinese business players.<\/p>\n

HAPPENING THIS WEEK-<\/p>\n

#1- The two-day subscription period for the retail tranche of the IPO of healthcare <\/strong>provider Fakeeh Group starts<\/strong> tomorrow <\/strong>and ends on Wednesday.<\/strong> The institutional portion of the offering drew in strong demand, closing with a 119x oversubscription rate<\/a>. Fakeeh Group has priced the transaction at the top of the range<\/strong> at SAR 57.50 per share, which would give the family business a market cap of SAR 13.3 bn at the start of trading. The pricing means Fakeeh is set to raise SAR 2.9 bn from the offering.<\/p>\n

Background: <\/strong>The group is taking a 21.5% stake<\/a> to the market through an offering of both new and existing shares. It plans to offer 30 mn new shares and 19.8 mn existing shares held by the Fakeeh family.<\/p>\n

ADVISORS-<\/strong> Our friends at HSBC are acting as sole financial adviser. HSBC is joint bookrunner together with our friends at EFG Hermes as well as ANB Capital. Moelis is advising the selling shareholders, while AlRajhi Bank, Saudi National Bank, Arab National Bank, SAB, Alinma Bank and Bank Aljazira are serving as receiving banks.<\/p>\n

DATA POINT-<\/p>\n

<\/a> Tadawul-listed healthcare providers saw their collective net income grow <\/strong>16.4% <\/strong>y-o-y <\/strong>to <\/strong>SAR 1.1 bn in 1Q 2024<\/strong>, according to data Mubasher compiled<\/a> on nine listed medical groups. Meanwhile, their revenues were up 17.8% to SAR 7.3 bn.<\/p>\n

In the lead:<\/strong> Dr Sulaiman Al Habib Medical Services accounted for the lion\u2019s share of medical firms\u2019 net income in the first quarter of the year, with its net income up 12.6%<\/a> y-o-y SAR 552 mn. Mouwasat came in second, with SAR 171.6 mn in net income, rising 3% y-o-y. Other healthcare operators reporting positive results include Dallah Healthcare, the National Medical Care, Saudi German Health and others.<\/p>\n

Out of nine listed healthcare firms, only two saw net income dip during the quarter<\/strong>, including Al Hammadi Holding, which saw its net income decline 21.3% y-o-ySAR 64 mn, while Ayyan Investment saw its net losses widen to SAR 56 mn.<\/p>\n

WATCH THIS SPACE-<\/p>\n

<\/a> #1- <\/strong>Ukraine is looking to attract Saudi investment as it looks to recover from war <\/strong>and grow its economy<\/strong>: <\/strong>DTEK<\/a> \u2014 Ukraine\u2019s largest privately-held energy company \u2014 is engaged in \u201chigh-level governmental talks\u201d with the Public Investment Fund (PIF) on the possibility of the fund putting capital into the war-torn country\u2019s economy, CEO Maxim Timchenko told Arab News<\/a>. The company is in talks \u201cwith PIF and other [Saudi] institutions\u201d about investment in cleantech, IT, agriculture, and energy, according to Timchenko. DTEK is also involved in talks with renewables giant Acwa Power to boost its wind and solar power capacities in addition to upping battery storage activity. <\/p>\n

BACKGROUND- Ukraine\u2019s fintech scene is also looking for Saudi investment:<\/strong> Ukraine\u2019s deputy digital transformation minister, Oleksandr Bornyakov, said earlier<\/a>this month<\/a> that Ukrainian fintech companies are looking to do business in Saudi. \u201cUkrainian companies are looking towards bolstering cooperation with Saudi and creating an enabling environment for cross-border partnership and knowledge exchange to help facilitate entry into Gulf markets,\u201d he said. <\/p>\n

PSAs- <\/p>\n

#1- We\u2019re less than a month away from Eid Al Adha: <\/strong>Tadawul will be closed for Eid Al Adha holiday from Friday, 14 June until Saturday, 22 June, according to a statement<\/a> yesterday. Trading will resume on the stock market on Sunday, 23 June.<\/p>\n

#2- Saudis traveling to Montenegro on charter flights will be exempt from visa <\/strong>requirements until<\/strong> Thursday, 31 October 2024<\/strong>, the Saudi embassy in Albania said on X<\/a>. Tourists will be required to provide receipts of travel arrangement fees, along with a letter of invitation from the tourist office in Montenegro, and a return ticket to the Kingdom.<\/p>\n

#3- <\/strong>Pilgrims holding a valid Hajj permit will be the only ones allowed to perform Umrah <\/strong>starting Friday, 24 May until <\/strong>Wednesday, 26 June<\/strong>, which overlaps with the year\u2019s Hajj season, the Hajj and Umrah Ministry said in a directive, according to Saudi Gazette<\/a>. Violators \u2014 whether citizens, residents and visitors \u2014 risk a fine of SAR 10k, with deportation and an entry ban imposed on residents in Makkah and holy sites without a hajj permit, according to a ministry post on X<\/a>.<\/p>\n

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THE BIG STORY ABROAD- <\/p>\n

One story has captured the attention of the foreign press this morning: Search and <\/strong>rescue operations are underway to find Iranian President Ibrahim Raisi <\/strong>and Foreign Minister Hossein Amirabdollahian after their helicopter crashed in the country\u2019s northwest. Their lives are \u201cat risk,\u201d <\/strong>according to Iran\u2019s state news agency, Irna<\/a>.<\/p>\n

The search is being slowed by poor weather<\/strong>, a contributing factor in the crash. The two were returning from a visit to the border with Azerbaijan, where they inaugurated a dam, media reports suggest. <\/p>\n

Business as usual? <\/strong>Iranian Supreme Leader Ayatollah Ali Khamenei says there will be \u201cno disruption to state affairs,\u201d Reuters reports.<\/p>\n

The story is everywhere:<\/strong> (CNBC<\/a> | Financial Times<\/a> | Bloomberg<\/a> | AP<\/a> | Reuters<\/a>)<\/p>\n

Saudi Arabia is following the crash \u201cwith great concern\u201d and has offered to help with <\/strong>search and rescue operations<\/strong>, according to a statement by the Foreign Ministry on X<\/a>. <\/p>\n

OTHER STORIES on which you\u2019ll want to keep any eye <\/strong>as the week unfolds:<\/p>\n