{"id":99307,"date":"2025-08-03T00:00:00","date_gmt":"2025-08-03T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/08\/03\/riyadh-air-soon-to-fly-arab-investment-company-is-on-exit-mode\/"},"modified":"2025-08-03T00:00:00","modified_gmt":"2025-08-03T00:00:00","slug":"riyadh-air-soon-to-fly-arab-investment-company-is-on-exit-mode","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/08\/03\/riyadh-air-soon-to-fly-arab-investment-company-is-on-exit-mode\/","title":{"rendered":"Riyadh Air soon to fly? + Arab Investment Company is on \u201cexit mode\u201d"},"content":{"rendered":"

Good morning<\/strong>, everyone, and welcome to the accidental macroeconomics edition of EnterpriseAM Saudi. Our news well is dominated by GDP growth figures from Gastat, the latest quarterly budget performance report from the Finance Ministry, and S&P\u2019s forecasts for the Kingdom\u2019s financial health over the next few years.<\/p>\n

The gist?<\/strong> Non-oil activity propped up the economy in 2Q, and growth is expected to remain solid through 2028 as diversification efforts bear fruit, but we should make ourselves comfortable with twin deficits as they\u2019re not going anywhere soon.<\/p>\n

Also in today\u2019s issue: <\/strong>An Acwa Power-led consortium secures SAR 12.8 bn for two 3.6 GW IPP projects, and Rawabi Marketing is moving ahead with floating 1 mn shares on Nomu.<\/p>\n

BUT FIRST- We spent the weekend low-key freaking out about AI, and our weekend <\/strong>reading did little to assuage our malaise: <\/strong>AI is coming for consulting, and McKinsey is freaking out<\/a>, the Wall Street Journal warns us. Smart folks are starting to get really worried not just about the safety of our jobs, but about whether we can even trust AI not to kill us<\/a>. Per Bloomberg \u201cWould a chatbot kill you if it got the chance? It seems that the answer \u2014 under the right circumstances \u2014 is probably.\u201d And over in the pages of the FT, novelists are losing it<\/a>, worrying about the future of creativity in a gen AI world.<\/p>\n

Palate cleanser: Samuel L. Jackson in a <\/strong>delightfully profane ad<\/a><\/strong> for wind energy player Vattenfall.<\/p>\n

HAPPENING TODAY-<\/p>\n

<\/a> E<\/strong>ight Opec<\/strong>+ countries are scheduled <\/strong>to meet today<\/a><\/strong> to decide on oil production levels for <\/strong>September.<\/strong> The oil cartel has reportedly agreed in principle to add another 548k bbl \/ d next month, an unnamed delegate told Bloomberg<\/a> yesterday.<\/p>\n

The last hike?<\/strong> The increase would complete the reversal of a previous 2.2 mn bbl \/ d cut, bringing the group\u2019s production to some 33 mn bbl \/ d by September. Goldman Sachs expects<\/a> Opec+ to stop increasing output after September, citing rising US oil production and slowing global demand. A separate, larger cut of 3.65 mn bbl \/ d remains in effect until the end of 2026.<\/p>\n

We took a <\/strong>deep dive<\/a><\/strong> on Opec+\u2019s output increase and what it means for us.<\/strong><\/p>\n

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WEATHER- <\/strong>It\u2019s another blazing day in the Kingdom, with Riyadh expected to see a high of 44\u00b0C and a low of 34\u00b0C today, while Jeddah\u2019s mercury will go as high as 40\u00b0C and as low as 33\u00b0C. Makkah is in for thunderstorms, with a 42\u00b0C high and 35\u00b0C low.<\/p>\n

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NEWS TRIGGERS-<\/p>\n

A<\/strong>ramco is expected to publish its 1H 2025 earnings on Tuesday, 5 August<\/strong>, according to the company\u2019s website<\/a>. The oil giant is forecasted to post SAR 92.8 bn in net income for the quarter, up from SAR 106.2 bn recorded in the same period last year, according to Argaam<\/a>.<\/p>\n

REFRESHER- <\/strong>The company posted a 4.6% y-o-y drop in net income to SAR 97.5 bn (USD 26 bn) in 1Q 2025<\/a>, exceeding analyst estimates by some SAR 3.4 bn amid weaker oil prices caused by global economic uncertainty.<\/p>\n

Tuesday will be busy: <\/strong>Riyad Bank\u2019s Purchasing Managers Index for July is also set to come out on the same day. Non-oil business activity in the Kingdom accelerated in June<\/a>, driven by expansions in new client demand and a surge in hiring.<\/p>\n

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PSAs- <\/p>\n

#1- <\/strong>Businesses subject to w<\/strong>ithholding tax must file their June tax returns by Sunday, 10 <\/strong>August via Zatca\u2019s <\/strong>website<\/a><\/strong>, according to a post on X<\/a>. Meanwhile, Businesses subject to VAT have until Sunday, 31 August 2025 to file their July tax returns.<\/p>\n

#2-<\/strong> Registration is no<\/strong>w open for Monsha\u2019at\u2019s <\/strong>Jadeer Tour<\/a><\/strong> in Khobar, <\/strong>the authority said on<\/a>X<\/a> on Thursday. The two-day event begins on Monday, 11 August, in the city\u2019s SME Support Center, offering attendees the opportunity to learn about the Jadeer service and receive valuable training and support for their businesses.<\/p>\n

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WATCH THIS SPACE-<\/p>\n

<\/a> #1-<\/strong> The USD 1.2 bn state-backed Arab<\/strong> Investment Company (TAIC) is divesting its legacy <\/strong>portfolio as it pivots toward private markets<\/strong>, CEO Abdullah Bakhraibah told Bloomberg<\/a>. The move aims to lift average annual returns to 9% from 5%, following a strategic review that weighed closing the firm against a full overhaul.<\/p>\n

Going \u201cexit mode\u201d:<\/strong> TAIC is liquidating its holdings in short-term lending, letters of credit, government bonds, and treasury bills as it shifts to a \u201ccommercially-driven investor,\u201d Bakhraibah \u2014 who joined the company in 2023 from State Street Corp \u2014 said. The freed-up capital will be redeployed mainly into private markets, public equities and venture investments, targeting sectors like healthcare, education, and technology, industrials, and artificial intelligence. The firm plans at least 20 new transactions this year across shareholder countries and is exploring potential partnerships with the PIF and Kuwait\u2019s sovereign wealth fund.<\/p>\n

About TAIC: <\/strong>Founded in 1974, the firm is one of the region\u2019s first sovereign wealth funds, owned by 17 Middle Eastern countries, with Saudi Arabia and Kuwait among its largest shareholders.<\/p>\n

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<\/a> #2- <\/strong>Riyadh Air soo<\/strong>n to fly in London\u2019s sky? <\/strong>PIF-owned Riyadh Air<\/a> will reportedly launch flights on 26 October connecting Riyadh and London Heathrow Airport, using its Boeing 787-9 Dreamliner fleet, Aviation Business<\/a> reported. The move follows securing a daily slot at Heathrow swapping with British Airways, marking its first-ever international destination in Europe.<\/p>\n

Could we see the launch before 3Q ends? <\/strong>Saudi\u2019s newest carrier has pushed back its launch to 3Q 2025 from earlier this year after facing delays in Boeing aircraft deliveries. The airline voiced plans in June<\/a> to serve 100 cities by 2030, aiming to add a destination every two months once it\u2019s operational. The carrier also announced it has snapped up the necessary landing slots for its first destinations, and is set to reveal its first route and ticket sale mechanism in the upcoming months.<\/p>\n

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#3- <\/strong>23 people were injured when a<\/strong>n amusement park ride collapsed in the Al Hada<\/strong> area of Taif on Wednesday<\/strong>, Al Arabiya<\/a> reported. The 360 Big Pendulum ride broke mid-air, causing the section carrying passengers to crash to the ground, which pushed authorities to shut down the park and launch an investigation into the accident.<\/p>\n

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OIL WATCH-<\/p>\n

<\/a> <\/p>\n

Saudi Arabia\u2019s oil drilling rig count has fallen for the sixth consecutive month to <\/strong>20<\/strong>, its lowest level in over two decades, and a significant drop from 46 rigs in early 2024 as the nation pivots its investment focus from oil to natural gas, Bloomberg<\/a> reports, citing Baker Hughes data.<\/p>\n

Out with the old: <\/strong>The 18-month downward trend has largely been driven by Riyadh's decision to abandon plans to increase Saudi Aramco's oil production capacity to 13 mn bbl\/d, maintaining it at the current 12 mn. With several major oilfield expansion projects now complete or nearing completion, the need for new oil rigs has diminished, Qamar Energy founder Robin Mills said.<\/p>\n

In with the new:<\/strong> Over half of the Aramco\u2019s upstream spending is now directed towards gas projects, the star of which is the USD 100 bn Jafurah gas project, whose first phase is expected to start this year, Aramco CEO Amin Nasser said in May<\/a>. The Kingdom aims to replace approximately 1 mn barrels of crude oil used for domestic power generation with natural gas by 2030 and is also exploring options for future gas exports.<\/p>\n

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

It\u2019s finally August \u2014 aka Tariff Month \u2014 and US President Donald Trump has published <\/strong>a<\/a><\/strong>list of new tariffs<\/a><\/strong> set to be implemented next Friday. Trading partners are sorted into three groups depending on trade surplus, with most of the Gulf falling to the first group hit by the minimum 10%.<\/p>\n

Among the highest tariffs:<\/strong> Canada will be slapped with a 35% tariff, higher than the earlier announced 25%, as diplomatic friction between the country continues and after it said it would recognize a Palestinian state; Switzerland was slapped with a 39% tariff; and India will be subject to a 25%.<\/p>\n

The story is everywhere in the foreign press:<\/strong> Bloomberg<\/a> | Reuters<\/a> | Financial Times<\/a> | CNBC<\/a> | New York Times<\/a> <\/p>\n

ALSO- Trump shoots the messenger: <\/strong>Worse-than-expected job growth numbers prompted the president to fire the Bureau of Labor Statistics commissioner<\/a> Erika McEntarfer, a Biden appointee who \u201cfaked the Jobs Numbers before the Election to try and boost Kamala\u2019s [Harris\u2019] chances of Victory,\u201c he claimed.<\/p>\n

The Fed is also closer to danger: <\/strong>The decision coincided with an opening for Trump to target the Fed by appointing one more governor, after governor Adriana Kugler resigned on Friday<\/a>. Trump had lashed out at chairman Jerome Powell<\/a> for not capitulating to interest rate cuts demands, calling him \u201cTOO ANGRY, TOO STUPID, & TOO POLITICAL,\u201d and calling on the Fed\u2019s board to assume control of the independent institution.<\/p>\n

Markets are not liking the volatility: <\/strong>Dow Jones closed down 1.2% on Friday, while the S&P declined 1.6% and the Nasdaq Composite shed 2.2%.<\/p>\n

ALSO GETTING ATTENTION- Apple and Amazon published their earnings on Thursday:<\/strong><\/p>\n