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Good morning, friends. The domestic news agenda this morning is being driven out of Davos, not Riyadh: Top government officials and business figures are braving the cold and snow to attend the World Economic Forum, which runs through Friday.
We saw three big messages come out of Davos yesterday:
#1- We’re not going to take our foot off the pedal when it comes to economic transformation, Minister for Economy and Planning Faisal Al Ibrahim told Bloomberg in an outdoor, stand-up interview (watch, runtime: 7:21). Al Ibrahim, always well-spoken in engagements with foreign media, thinks “there are a lot of opportunities to look forward to” globally despite macro challenges in many economies and talked up a just economic transition.
Delivery on Vision 2030 is not just key for the economy at home, it’s going to create a stronger region, he said, “and we’re doubling-down on our diversification plans,” including a target to see foreign direct investment account for 5.7% of the economy by 2030. There’s plenty of momentum among foreign investors interested in the Saudi story, he said, as underscored by quarter-on-quarter improvement in FDI throughout last year.
#2- We’ll recognize Israel — if there is peace and a state for the Palestinians. “We agree that regional peace includes peace for Israel, but that could only happen through peace for the Palestinians through a Palestinian state,” Foreign Minister Prince Faisal bin Farhan said on a panel yesterday.
#3- The US doesn’t see what’s being now being called “the Red Sea conflict” becoming a global conflict. White House National Security Advisor Jake Sullivan said that how long tensions in the Red Sea last and “how bad it gets” hinge on whether US allies help it pressure Iran to rein-in the Houthis. Sullivan also said Washington wants to see relations between the Arab countries and Israel normalize, but said little of winding down Israel’s war in Gaza.
Also in Davos:
ON ENERGY: Investment Minister Khalid Al Falih highlighted the government’s ongoing commitment to provide “energy solutions, energy reliability and energy affordability to the rest of the world.” Al Falih was speaking at a panel headlined “Gulf Economies: All In” (watch, runtime: 47:48). He said the government is offering what he referred to as a “mix of energy” that would not shun oil and gas and would include green and blue hydrogen among other cleaner fuels
ON FDI: The GCC attracts FDI at more than twice the pace of the global average rate, “when you compare it and normalize it to GDP,” Al Falih said. KSA is at a turning point that would see it draw in higher levels of FDI, highlighting the importance of FDI in bringing “know-how, access to market, and global integration,” he said.
ON THE BRICS: The Kingdom is not a member of the BRICs club just yet, Reuters reported, citing statements by Commerce Minister Majid Al Kasabi during a panel. “Saudi Arabia has been invited to attend BRICs, we have not yet officially joined BRICs,” he said as he clarified where the Kingdom stands after the proposed joining date of 1 Jan expired.
ON REGULATION: Regulators should think smart when deciding on regulations for non-bank financial institutions, Finance Minister Mohamed Al Jadaan said at the Regulating Non-Banks panel yesterday (watch, runtime: 44:09). “We need to be very careful not to apply regulatory frameworks that apply to banks to non-bank financial institutions, because that could potentially kill innovation,” said Al Jadaan.
HAPPENING TODAY in Davos:
Finance Minister Mohammed Al Jadaan will speak about the importance of resilience for businesses to withstand shocks in a session entitled Resilience: What it means and what to do about it at 11am KSA.
Minister of State for Foreign Affairs and climate envoy Adel Al Jubair will take to the stage in a session headlined Bold steps for a sustainable MENA at 7:30pm KSA.
PIF WATCH-
#1- More Heathrow shareholders want to exit alongside Ferrovial, and the Financial Times thinks that could cast a shadow over a GBP 2.4 bn agreement that would see the Public Investment Fund and Ardian buy Ferrovial’s 25% stake in the airport. A Canadian pension fund, sovereign fund from Singapore, and a UK pension fund holding a combined 35% are now looking to exit by exercising their tag-along rights.
The catch? PIF doesn’t seem to want more shares, and while Ardian might, it doesn’t have the firepower to buy 35%. “The Saudis plan to stick with their original plan to buy 10 per cent and do not want to increase their stake in the airport beyond this,” the salmon-colored paper reports. The transaction “could collapse if all the shareholders cannot find buyers.” PIF and Ardian could bring in a third investor to help them take on the transaction.
SOUND SMART- If a other shareholder exercises tag-along rights, the buyer must take their shares at the same price it offered other shareholders — or walk away.
#2-PIF is mulling “sizeable investment” in semiconductors + space this year: The Public Investment Fund (PIF) is looking to pour significant capital into both the semiconductor and space industries this year, Communications and Information Technology Minister Abdullah Alsawaha — who is also chairman of the Space Agency — told Bloomberg in an interview yesterday. “They plan to make an announcement on a particular champion within space to lead the Saudi efforts,” he said, declining to provide further details.
How big? He said the Kingdom sees the new space economy as the next trn-USD market. “The Kingdom is very bullish on not only becoming a regional leader in this space but also a global leader. The ambition by 2030 is to definitely establish regional leadership and then move on by 2040 to global leadership,” Alsawaha said.
#3-PGA Tour Commissioner Jay Monahan is reportedly in town to meet with PIF governor Yasir Al-Rumayyan in a bid to reach a definitive agreement over Liv Golf / PGA tour / European tour tie-up, Sports Business Journal reported yesterday, citing unnamed sources. The reported visit comes a few weeks after the PIF and PGA Tour agreed to extend talks into 2024 after failing to agree on merger terms before a 31 December deadline.
CAPITAL MARKETS-
#1- Saudi German Health hires Al Rajhi Capital to quarterback its SAR-denominated sukuk issuance: Tadawul-listed Saudi German Health is gearing up to issue the first tranche of its recently-launched sukuk program through a public offering, it said in a Tadawul regulatory filing. Proceeds from the issuance will be used for general corporate purposes, the statement reads. Al Rajhi is acting as financial advisor and sole arranger on the transaction. The company is yet to announce a timeframe for the sale, which has received Capital Market Authority approval.
The details: The prospectus (pdf) allows for a program of up to SAR 1.5 bn. Subscribers will need to buy blocks of SAR 5k.
#2-Another day, another IPO in the pipeline: Online cosmetics retailer Nice One Cosmeticsis auditioning bankers for a potential Tadawul listing, Bloomberg reported, citing sources it says have knowledge of the company’s plan. Talks are still ongoing with the size and timing of the share sales undetermined, the sources said.
AND- More than 13 Saudi startups are eyeing IPOs in the upcoming two years, Saudi Venture Capital (SVC) Nabeel Koshak told Asharq Business in an interview yesterday, without providing further details.
SPORTS-
#1- IN SPORTS, it was a stunning comeback for the Green Falcons, who topped Oman 2-1 in their 2023 AFC Asian Cup opener yesterday at Qatar’s Khalifa International Stadium. Confusion over the VAR that saw a goal by defender Ali Al Bulayhi disallowed in injury time before it was awarded in the last minutes.
Next up: The national team takes on Kyrgyzstan on Sunday, 21 January, at 8:30 pm KSA.
#2- UFC Saudi Arabia might be pushed back to June as the Kingdom reportedly looks for a “more entertaining fight card,” MMA pundit Ariel Halwani said on MMA Hour.
Not so happy with what’s on the table: “I was told that the reason for the postponement is because they just want — the powers that be in Saudi Arabia — a, how should we put it, more entertaining fight card. A deeper fight card with bigger names on it. [They] weren’t too pleased with what was being offered. So, it is being moved to later in the year, June,” he said.
ALSO WORTH KNOWING-
DATA POINT-Cement exports plunged 34.7% y-o-y in December to 543k tons, according to a report (pdf) from Aljazira Capital.
PSA #1- All government institutions must give their employees four to five-day holidays for each Eid, according to a decision approved by the cabinet yesterday. No further information was provided.
PSA #2- Applications for the Culture Ministry’s emerging new media artists program (pdf)are now open until 29 April. The one-year training program, which will be offered in the Diriyah Art Futures institute, includes personal mentorship from renowned digital artists on new media arts.
WEATHER- Expect clear skies in Madinah today and sun with cloudy periods in Riyadh. Prepare for a little wind in Dammam today, and 25% chance of light rain tomorrow.
- Riyadh: 21°C daytime / 14°C overnight
- Madinah: 26°C daytime / 15°C overnight
- Dammam: 22°C daytime / 13°C overnight
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THE BIG STORY ABROAD
THE BIG STORY ABROAD- The global business press is digesting Donald Trump’s landslide win in the Iowa caucuses yesterday. He was always tipped to come out on top, but a much stronger than expected showing has pundits openly suggesting that his appeal has expanded beyond his base (at least in very white, very Republican midwestern states…) and that Nikki Haley and Ron Desantis are “running out of time” to stop him. (Financial Times | Wall Street Journal | Politico | Axios | Reuters)
Must-read on the topic:A wary world braces for Trump’s return to the White House, in Bloomberg.
IT’S A BIG DAY FOR: Tech nerds, as Samsung holds its Galaxy Unpacked event. Expect a new S24 line with new artificial intelligence capabilities to take center stage. Samsung faithful expecting a big redesign will be as disappointed as were iSheep this past fall with the, let’s say “extreme stability” of Apple’s iPhone design language.
Want more? You can check out Samsung’s Unpacked page or head over to its Youtube channel when the event starts at 10pm UAE time tonight.
Speaking of Samsung: The company is no longer the world’s largest mobile phone maker. Apple, which already led the industry in terms of value, has overtaken Samsung by volume — the first time in a dozen years of heavy competition that the Cupertino company has edged out its Korean rival.
And speaking of Apple: The tech giant is going to let third-party apps in the United States link to their developer’s website to process payments for in-app purchases. While doing so would bypass Apple’s built-in payment system, it will still ask for a percentage of the sale, Bloomberg reports. Apple and Google face pressure from regulators around the world to open their app marketplaces to sideloading and third-party payment methods.
Curious about Apple’s Vision Pro? With the order and delivery window coming up (for readers in the United States only), you might want to head over to The Verge not just for a Samsung recap this evening, but for Victoria Song’s take on Vision Pro after getting to spend 30 minutes hands-on with it. Her take: “I know what I saw, but I’m still trying to figure out where this headset fits in real life.”
AND- Interim BP boss Murray Auchincloss will get the job permanently, the Financial Times reports. Expect an announcement later today.
CIRCLE YOUR CALENDAR-
The Dakar Rallycontinues through Friday, 19 January, with the final stage running from Yanbu to Riyadh.
The PIF Private Sector Forum will kick off in Riyadh on Tuesday, 6 February to Wednesday, 7 February, the PIF said on Linkedin. The event will bring together the fund, portfolio companies, private sector and others to help advance economic growth.
Riyadh will host the International Conference on Sand and Dust Storms in the Arabian Peninsulafrom Monday, 4 March to Wednesday, 6 March. The conference will address regional challenges caused by sand and dust storms and discuss monitoring systems, mitigation strategies, economic and infrastructural impacts, and more.
Tickets are on sale for the 2024 Saudi Arabian Grand Prix, scheduled for Jeddah from 7-9 March.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
