Good morning, wonderful people. It’s another very busy news day with news from aviation, sports, capital markets, and more than a little bit of foreign policy.

UP FIRST- US officials have started talking up prospects of a security pact with Saudi Arabia — and are using the occasion to publicly put pressure on Israel. Secretary of State Antony Blinken told the powerful Senate Foreign Relations Committee yesterday that “the Saudis have been clear that [normalization] would require calm in Gaza and it would require a credible pathway to a Palestinian state. It may well be that in this moment Israel isn’t able or willing to proceed down that pathway.”

A senior US official has since given briefings to major global news outlets talking up prospects for a US-Saudi pact that would cover both defense and help developing a domestic nuclear energy industry. (We also expect to see an agreement on artificial intelligence and advanced technologies, though no report overnight has an update on that front.)

A bilateral agreement between Riyadh and Washington is “more or less complete” and “pretty much there,” the official told reporters.

For the record: “We now have a near final set of arrangements, which would be the bilateral elements of this deal, and we really believe the Saudi deal is pretty much there. But there are elements of it, including a credible pathway for the Palestinians and also some other elements, that would still have to be completed. The [war in Gaza] needs to recede to open up space for this,” the official said. Israel continues to pound Palestinian neighborhoods in both north and south Gaza this morning.

BACKGROUND- The pacts have been in the works for some time now, but got another big push a few days back after White House national security advisor Jake Sullivan touched down in Riyadh.

Read more: The story is getting prominent play from the Financial Times | Wall Street Journal | Reuters.

THE BIG STORY AT HOME-

#1- Crown Prince and Prime Minister Mohammed bin Salman reassured the public about King Salman’s health during yesterday’s cabinet meeting, state news agency SPA reports. The Crown Prince chaired the meeting after postponing a four-day visit to Japan due to the King’s health, as the King receives treatment at Jeddah’s Al Salam Royal Palace for inflammation in the lungs. The diagnosis comes after the King was admitted to the palace’s royal clinics for a medical checkup due to “high temperature and joint pain.”

#2- The Tadawul All Share Index is nearly 6% behind the MSCI Emerging Markets gauge this year — Saudi stocks are lagging behind other EM counterparts for the first time since the pandemic. (Bloomberg)

HAPPENING TODAY-

#1- There are two IPOs whose retail subscription periods wrap up today:

Fakeeh Care: The institutional tranche of healthcare provider Fakeeh Care’s 21.5% offering on the main market drew in strong demand, closing with a 119x oversubscription rate. Fakeeh has priced the transaction at the top of the range at SAR 57.50 per share, which would give the 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.

Miahona: Water treatment outfit Miahona priced its IPO at the top end of its indicative price range at SAR 11.50 per share, valuing the IPO at SAR 555.5 mn. The institutional component of the offering attracted strong demand from investors. Vision Invest, the sole owner of Miahona, will offload a 30% stake on the main market Tadawul in a secondary share sale.

#2- It’s the second and penultimate day of the Airports Council International annual conference — better known as WAGA 2024. The conference kicked off at the Hilton Riyadh Hotel yesterday, hosting a meeting for the ACI Advisory Board, as well as a networking meeting, exhibition, and reception.

What to expect today: Riyadh Airports CEO Ayman Aboabah, General Authority for Civil Aviation (Gaca) President Abdulaziz Al Duailej, and International Civil Aviation Organization President Salvatore Sciacchitano will set the tone for today’s sessions with opening remarks.

The talking points: The day will include discussions of airport competitiveness, infrastructure, airline strategies for network expansion and partnerships, and the economic impact on regional growth and tourism, as well as the role of technology and innovation in enhancing passenger experiences. Panels will also examine the changes and economic impacts of air transport liberalization, with discussions on market reforms, regulatory shifts, economic outcomes, and geopolitical effects on airline operations and trade.

Panelists to look out for:

  • Majid Khan, Saudi Air Connectivity Program CEO;
  • Aimen Al Hosni, Oman Airports CEO;
  • Selahattin Bilgen, iGA Istanbul Airport CEO;
  • Deborah Flint, president and CEO Greater Toronto Airports Authority;
  • Juan Jose Salmon Balestra, Lima Airport Partners CEO;
  • Kashif Khalid, regional director for the Middle East & Africa at IATA;
  • Lorie Argus, Australia Pacific Airports Corporation CEO;
  • Serkan Kaptan, TAV Airports CEO.

WEATHER- Riyadh’s skies are still sunny with a daytime high of 42°C and a low of 28°C. Jeddah is looking windy with a high of 38°C and a low of 27°C,while Makkah is also getting some wind, albeit at higher temperatures with a high of 45°C and a low of 29°C.

WATCH THIS SPACE-

Mining giant Ma’aden has extracted lithium from seawater — though not at a commercially viable rate, CEO Robert Wilt told Reuters yesterday. “We are actually producing lithium from seawater now,” Wilt, who is also vice chairman of Manara Minerals — a JV between Ma’aden and the PIF — said. He did not provide further details on the extraction process, but highlighted efforts by Aramco to extract lithium from brine in its oilfields. “We are both working parallel paths. Ma’aden on extracting lithium from seawater. Aramco from brines where lithium has higher concentration,” he said, adding that Ma’aden was currently in talks with Aramco on “how we can join forces.”

REMEMBER- Industry and Mineral Resources Minister Bandar Al Khorayef said last month that Saudi will continue to source lithium from abroad as part of its plans for the nascent EV sector as securing domestic supplies were still at an early stage. “Lithium is a very important mineral that happens to be part of a very important part of the supply chain, especially for batteries,” he told Reuters at the time. “There are some signs which are encouraging, but we need to do more,” he said on producing lithium locally.

Why does it matter? Lithium is a critical component of both modern consumer electronics and the green transition, factoring into everything from rechargeable batteries for phones and computers to electric vehicles and grid storage.

Manara is aiming high when it comes to minerals: Manara Minerals completed earlier this month the acquisition of a minority stake in Brazilian miner Vale Base Metals. The transaction is worth an estimated USD 2.6 bn, based on a USD 26 bn enterprise value VBM had previously disclosed. It is eying a stake in Zambia’s First Quantum Minerals copper mines Sentinel and Kansanshi, and is also about to close a USD 1 bn investment in Barrick Gold’s Reko Diq copper and gold mining project in Pakistan.

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THE BIG STORY ABROAD-

It’s a mixed bag on global front pages this morning with no single story captivating the attention of the business press.

#1- Iran will hold presidential elections on 28 June as the country looks to elect a new president following the death of Ebrahim Raisi in a helicopter crash. Vice President Mohammad Mokhber will serve as interim president in the meantime.

#2- US stocks hit another record high: The S&P 500 and tech-heavy Nasdaq Composite both hit fresh highs yesterday. US stocks have been closing in the green for the past couple of sessions following promising inflation data that reignited trader optimism that the Federal Reserve could start cutting interest rates this year.

#3- Pixar is laying off 14% of its workforce as the company adopts a quality over quantity mindset, a Disney spokesman told CNBC.

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