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Good morning, wonderful people. Three big stories are driving the conversation on the Kingdom on this fine Wednesday morning:
#1- Officials don’t want gigaprojects to “overheat” the economy, Finance Minister Mohamed Al Jadaan said yesterday.
The domestic positioning: Al Jadaan’s remarks suggest the Kingdom will “optimize economic plans to withstand global shocks,” Arab News writes. The daily, which frequently telegraphs government policy, said the finance minister had “urged economic planners to optimize their strategies to curb ‘economic leakage’ and prevent resources or funds from being wasted.”
Why it matters: There’s an argument to be made that Al Jadaan’s remarks represent a shift in policy. The finance minister was the first official to talk openly about pacing out some aspects of gigaprojects even as he noted that the treasury would run modest deficits to continue investing in economic diversification. Others, including Economy Minister Faisal Alibrahim, have joined him — Alibrahim recently called gigaprojects “modular.” Officials have also flagged that it is important that state borrowing activity not crowd the private sector out of the domestic debt market.
AND- Al Jadaan was speaking at a forum in Qatar. While on-stage content at the forum was produced by Bloomberg, the event itself is put on by the Qatari government. Al Jadaan’s appearance there — and his choice of the venue to make a significant policy statement — speaks to consistently warming ties between Doha and Riyadh.
^^ We have more in this morning’s news well, below.
#2- Joe Biden’s national security advisor, Jake Sullivan, is coming back to Saudi this weekend, a senior White House official said yesterday in remarks that got wide pickup in the global business press overnight. He’ll also be heading to Israel, where he’s expected to focus on the IDF’s ramp-up of its assault on Rafah.
Sullivan’s visit will raise expectations that there may be progress on a series of key agreements between the two countries covering defense, artificial intelligence and advanced technologies, and the creation of a domestic nuclear power industry. He had been scheduled to travel to Riyadh a few weeks back, but canceled at the last minute after cracking a rib in an accident.
SOUND SMART- Washington had originally hoped to sign the three pacts as part of a wider series of accords that would see Saudi normalize ties with Israel, but some in the Biden administration are pushing to close the bilateral agreements now to put pressure on Israel to come to the table on Gaza. While Axios is positioning that as a “long shot,” it also notes that “US and Saudi officials say they’ve made significant progress in their talks.”
Sullivan will be the third senior US official to stop in Riyadh in less than a week. Energy Secretary Jennifer Granholm is due here shortly (she’s a key player in the nuclear pact) and Nasa chief Bill Nelson will also be here this week.
#3- It’s the second and final day of a high-profile Saudi-UK business summit. Saudi Great Futures, a UK government-sponsored investment conference, is backed by our friends at HSBC and brings together as many as 450 executives from some 300 British companies. We have chapter and verse on the first day of the conference in this morning’s news well, below.
WEATHER- There’s a chance of rain in Riyadh with a daytime high of 41°C and a low of 25°C. Makkah is set for a clear sky and a cooler day with a high of 39°C and a more pleasant low expected at 30°C, while windy weather is in the cards for Jeddah with a high of 36°C and a low of 26°C.
HAPPENING THIS WEEK-
Red Sea Fashion Week will get underway tomorrow and run until Saturday, 18 May at the St. Regis Red Sea Resort, according to state news agency SPA. The event, organized by the Saudi Fashion Commission, will feature an opening show on the first day, followed by two days of runway shows showcasing collections from both Saudi and international designers.
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WATCH THIS SPACE-
#1- China-Gulf trade agreement in jeopardy? Trade talks between the Gulf Cooperation Council (GCC) and China are hitting a wall as Saudi remains concerned that low-cost Chinese products could hinder its efforts to boost domestic manufacturing and become an industrial powerhouse, Reuters reports, citing sources it says are in the know. The agreement is not yet entirely off the table, but will require compromises from both sides of the table to move forward, the sources said.
The last stretch is proving the hardest: Chinese officials said earlier this year that while talks were “90%” of the way there, a number of difficult issues were still on the table. Trade talks first began 20 years ago but lapsed without a conclusion.
Speaking of China: Local real estate developers expect freshly-inked agreements between the Housing Ministry’s real estate investment arm, National Housing Company (NHC), and Chinese contractors will help to provide high-quality housing at affordable price points, Aleqtisadiah reported. The agreements will help accelerate the pace of construction and halve costs, Riyadh-based real estate developer Menassat Realty CEO Khaled Al Mobid told Aleqtisadiah.
IN CONTEXT- NHC signed a cooperation agreement with Chinese-state owned conglomerate Citic to establish an industrial city and logistics zones for building materials and another with Chinese contractor China Machinery Engineering to build 20k homes in NHC projects.
SOUND SMART- With multiple USD bn gigaprojects in the works and a push to add housing in Riyadh and beyond, officials are increasingly wary of ensuring that building materials are available — and that the Kingdom has the construction players able to execute.
#2- WHISPERS- It looks like merger talks between PIF-backed Liv Golf and the PGA Tour are still on. “We’re working on negotiations with PIF. It’s ongoing; it’s fluid; it changes day-to-day. We’re making steps and it may not be giant steps, but we’re making steps,” golf star Tiger Woods said yesterday, according to Reuters. Woods, a member of two key PGA boards, suggested that talks between the two sides meant that he may not have time to captain the US Ryder Cup team this year.
#3- You can now spend up to SAR 3k at dutyfree shops on arrival: The Zakat, Tax and Customs Authority (Zatca) signed off on new regulations for dutyfree purchases on arrival at air, sea, and land ports across the country, capping spending at SAR 3k per person, Zatca said in a statement yesterday. The new rules also cap the number of smokes each person can purchase at 200.
Zatca has begun receiving licensing requests from operators interested in establishing dutyfree stores within arrival halls, according to the statement.
OIL WATCH-
Opec’s forecast for strong global oil demand in 2024 remain “broadly unchanged,” itsaid in its monthly report (pdf), saying it expects oil demand to grow by 2.25 mn barrels per day (bbl / d) this year and 1.85 mn bbl / d next year. This is the last report to be released by the Vienna-based group before OPEC+ meets on 1 June to decide on whether to extend voluntary oil cuts into the second half of the year.
The calculus for forecasting world demand on crude is changing a little: Opec said it will scrap a previous approach to calculating the world’s demand of its own crude, and will instead use forecasts on “demand for DoC crude” in reference to the OPEC+ framework. The move “not only demonstrates solidarity and unity…but also helps eliminate the potential for misunderstanding and/or misinterpretations.” An OPEC+ source told Reuters last week that OPEC+ demand was more relevant since its framework was the main forum for cooperation on the oil market.
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THE BIG STORY ABROAD-
It’s a mixed bag on global front pages this morning as a number of stories captivate the attention of the business pages.
The US has imposed a series of new tariffs on Chinese imports, including a 100% tariff on Chinese EVs as part of “ a package of measures designed to protect US manufacturers from cheap imports.” Also on the list: semiconductors. We have the details in this morning’s Planet Finance, below.
YOUR DAILY DOSE OF AI NEWS- Google introduced its AI assistant Project Astra. Think of Project Astra as your personal assistant who can help you find the keys you misplaced or explain a complicated piece of code. It will be powered by an upgraded version of Google’s Gemini and eventually be available across all of Google’s software. Like OpenAI’s Scarlett Johansson-sounding model yesterday, Project Astra can interact with users through text, audio, and video. The Verge’s David Pierce has a solid rundown here if you want more.
Google is also going to start to roll out AI search summaries to its users, starting in the US.
AND- OpenAI cofounder’s and chief scientist is out. Ilya Sutskever leaves six months after he participated in a palace coup that saw CEO Sam Altman briefly kicked out of the hot AI startup.
MEANWHILE- THE MEME STOCK FRENZY CONTINUES as Roaring Kitty and his army of winged monkeys pushed Reddit shares up 7% to USD 62.34 during trading yesterday. It’s reddit’s second-highest close since it made its market debut.
Want the backstory? Check out yesterday’s Planet Finance, where we dove into the return of Roaring Kitty and its impact on meme stocks. The Wall Street Journal is not along in wondering whether Kitty coming “out of hibernation” means meme stocks are a thing again — or if this is just a blip.
ALSO- Mining group Anglo American is planning to break up after rejecting second BHP offer in a bid to retain control of its most profitable companies, including its copper mining outfit — a smart move given the current copper boom.
CIRCLE YOUR CALENDAR-
Riyadh will host the Saudi Energy Convention from Sunday, 19 May to Tuesday, 21 May. The convention will see energy and utilities industry leaders advance collaborative decarbonization efforts and identify innovation areas. It will also host the Saudi Utilities Convention and Saudi Hydrogen Convention to address the role and challenges of rolling out hydrogen, water and utility projects that are in line with the global energy transition. Over 10k energy professionals and 200 industry speakers will be present at the event.
The Future Aviation Forum will get underway on Monday, 20 May and run until Wednesday, 22 May at the King Abdulaziz International Conference Center in Riyadh. The event, organized by the General Authority of Civil Aviation, will see the Kingdom showcasing some USD 100 bn worth of investment options in the aviation and logistics sector at large.
Riyadh will host the annual conference of the Airports Council International — also known as WAGA — from Tuesday, 21 May to Thursday, 23 May. The global gathering brings together leading senior executives from around the world to cover topics that shape the aviation industry. The event’s speakers include PIF-owned airline Riyadh Air CEO Rony Douglas, Saudi Air Connectivity Program Majid Khan, Riyadh Airports CEO Ayman Aboabah and others.
Demo day for the final round of the Sanabil 500 MENA seed accelerator will kick off on Wednesday, 29 May in Riyadh with seven finalists. Applications for the next batch are now open and will close on 6 August 2024.
Riyadh will host a Global AI Summit from 10-12 September, state news agency SPA reported yesterday. The event, which is organized by the Saudi Authority for Data and Artificial Intelligence, will focus on key AI topics and trends, delving into its local and global adoptions, ethics, and infrastructure.
Dammam will host the Saudi Maritime and Logistics Congress from Wednesday, 18 September to Thursday, 19 September. The two-day event looks to gather up to 10k attendees and 200 exhibitors, and will discuss topics including interlinked logistics, developments in supply chains, digitalisation, decarbonisation, the energy transition, and workforce development.
