Good morning, friends. It’s a brisk morning for news on this hump day. Assurances on Neom, lower growth forecasts, and, of course, tensions between Iran and Israel dominate this morning’s news report.

UP FIRST- Driving the news agenda today:

#1- It’s day two of the IMF and World Bank spring meetings in Washington, DC. Today’s highlights: The release of the latest IMF World Economic Outlook and chapter one of its Global Financial Stability Report. You can check out today’s schedule here.

Why it matters: The WEO is a closely-watched gauge that helps set sentiment about the global economy. We’ll have full coverage tomorrow.

#2- Housing Minister Majed Al Hogail began an official three-day visit to Spain yesterday for talks with Spanish officials on housing, infrastructure and real estate development among other topics, according to state news agency SPA.

Will Spanish protectionism be on the agenda, too? Spain’s government continues to buy shares of mobile network operator Telefonica, increasing its stake yesterday for the second time in three weeks as it looks to keep ahead of Stc, which is also accumulating shares. The latest buy gives Spanish state investment firm Sepi a 5% stake after it accumulated another 2% in recent days.

The end-game: Edging out Stc as a major shareholder. “The [Spanish] government aims to buy as much as 10% of Telefonica’s shares as soon as possible, which would leave it a step ahead of the Saudi state-backed telecom’s plan to take a 9.9% stake,” per Bloomberg.

#3- Foreign Minister Prince Faisal bin Farhan arrived in Pakistan yesterday for talks on potential Saudi investment there, according to state news agency SPA. The visit comes nearly a week after Pakistan’s PM discussed a USD 5 bn investment package during a meeting in Makkah with Crown Prince Mohammed bin Salman.

REMEMBER- The Kingdom has been among key backers of the financial crisis-hit Pakistan, which is struggling with depleted foreign reserves. Saudi extended the term of its USD 3 bn in deposits at the State Bank of Pakistan through December of this year. The country also received last year USD 2 bn in financial assistance from the Kingdom to shore up finances.

WEATHER- Look for intermittent thunderstorms today and tomorrow in Riyadh, Eastern Province and Al Qassim, according to our favorite weather app. Public safety officials continue to warn against the risk of flash floods.

WATCH THIS SPACE-

#1- Saudization of sales professionals in the ins. industry is now in effect, the Ins. Authority said in a post on X. Foreign workers in the industry can no longer be compensated with sales commission.

#2- The local arm of wealth manager Fisher Investments has gotten the okay to offer investment management and advisory services, according to a Capital Market Authority statement.

#3- Just two weeks to go for a fresh mining round for six exploration licenses: The Industry and Mineral Resources Ministry has set Wednesday, 1 May as the deadline for domestic and international mining outfits to submit technical bids for six exploration licenses, data from the ministry showed. The ministry hopes prospectors will find gold, silver ores, copper, zinc, and lead.

BACKGROUND- The ministry unveiled last month a fresh incentives package worth SAR 685 mn to boost mineral exploration in the Kingdom. The program is being rolled out in collaboration with the Investment Ministry and aims to reduce early-stage risk for exploration companies.

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THE BIG STORY ABROAD-

Israel’s senior military officer signaled yesterday that “missiles into the territory of the State of Israel will be met with a response.” Herzi Halevi was speaking in a carefully choreographed set piece, standing in front of an F-35 fighter jet on one of the air bases Iran had targeted in the Sunday missile and drone attack.

WHERE WE STAND NOW: Officials in the Arab world and the West are still working overtime to try to tamp things down, with the United States, the European Union, Germany, France and the UK all urging Israel to hold back. (FT | WSJ | NYT | Politico)

Saudi was not involved in a coalition that helped Israel intercept Iranian drones, sources familiar with the matter told Al Arabiya. The sources denied reports in Israeli media suggesting that Arab forces took part in downing drones. A Wall Street Journal piece yesterday talked up intelligence sharing between the US and its regional allies in the lead up to Iran’s strike.

The tone abroad: A dangerous turning point in the Middle East (FT)

Regional markets were mixed as traders took things in stride: The Tadawul was up slightly, as was the ADX, while the DFM was basically flat.

US markets reacted much as Mohamed El Erian suggested they would, with major benchmarks sagging at the closing bell. Traders of European equities took things with a bit more equanimity as major benchmarks closed up or little changed yesterday. Oil and gold were up a little bit in overnight trading.

The EnterpriseAM Hyperbole Award™: “We’re now in the prelude to World War III precisely when humanity should rebuild its economy towards the rapid goal of decarbonization.” CNBC used the “prelude to World War III” bit in its front-page coverage of sentiment.

Other headlines worth knowing about:

  • Sales of Apple’s iPhone lineup may have fallen as much as 10% in 1Q 2024, according to independent data, losing a bit of ground as Samsung launched its S24 lineup and Chinese manufacturers Xiaomi and Transsion picked up steam in their home market. (Financial Times)
  • Tesla is laying off up to 10% of its global workforce, CEO Elon Musk said in a memo to employees. The company’s shares were down 3% on the news. (CNBC)
  • Goldman Sachs’ 28% bottom-line growth beat analyst expectations, sending its stock up 3%. Advisory work, underwriting fees, and bond trading fueled profit growth. (Reuters)

OIL WATCH-

Analysts at Citigroup have raised their forecasts for West Texas International by USD 8 a barrel in the short term as the situation between Israel and Iran escalates, Bloomberg reports. The bank expects WTI to hit USD 100 per bbl if the conflict drags out. “What is not priced into the current market … is a potential continuation of a direct conflict between Iran and Israel, which we estimate could see oil prices trade above USD 100 per bbl,” the business information service reports, citing a note by analysts including Max Layton.

How bad could it get? Societe Generale’s Global Head of Commodities Research sees Brent crude, the “European” benchmark, rising as high as USD 140 should a wider regional conflict take a more serious form, putting pressure on Iran’s oil supply. United Overseas Bank shares the same view.

CIRCLE YOUR CALENDAR-

The Gulf Film Festival (GFF) runs through Thursday, 18 April in Riyadh. Organized by the Film Commission in cooperation with the Gulf Cooperation Council (GCC) General Secretariat, the five-day event will showcase a selection of 29 films from across the region. It will also include three training workshops and six educational seminars focused on fostering artistic dialogue and raising awareness of cinema’s social impact.

Riyadh will host a special meeting of the World Economic Forum on 28-29 April.

Automechanika Riyadh will open on Tuesday, 30 April till Thursday, 2 May at the Riyadh International Convention and Exhibition Center.The annual trade fair will showcase the automotive industry’s latest advances and innovations.

The King Salman bin Abdulaziz Royal Reserve Festival will kick off today at the Cultural Center in Al-Qurayyat governorate, state news agency SPA reports. The art and culture event runs until Thursday, 18 April.

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