Good morning, nice people. It’s the last business day before much of the country goes on vacation in observance of Eid Al Adha, but the news cycle hasn’t mentally checked out just yet.

EnterpriseAM Saudi will be off all of next week in observance of Eid Al Adha. We’ll be back at the usual hour on Sunday, 23 June.

HAPPENING TODAY-

Not one, but two companies will start trading on Tadawul today: Homegrown fintech Rasan and aluminum products maker Talco will ring the bell on Tadawul’s main market in just a couple of hours, according to two separate statements here and here.

Business as usual: Their shares will be allowed to trade within a ±30% range for the first three days before being capped at no more than 10% up or down when circuit breakers kick in. All shares on Tadawul are subject to the 10% up-or-down rule.

REFRESHER #1- Al Taiseer Group Talco Industrial (Talco) is taking a 30% stake to the market in a secondary share sale. The company priced its offering at the top end of its indicative price range after its institutional tranche was 68.5x oversubscribed. Talco’s shares will debut at SAR 43 apiece, giving it a market cap of SAR 1.7 bn at the start of trading.

REFRESHER #2- Fintech startup Rasan is also selling a 30% stake in its Tadawul debut, in an offering of new and existing shares. Rasan is set to raise SAR 841 mn from the IPO after pricing its shares at SAR 37 a pop, valuing the company at a total of SAR 2.8 bn. The offering saw strong investor appetite, with its institutional tranche closing 129.1x oversubscribed.

Crown Prince and Prime Minister Mohammed bin Salman will be absent from the G7 summit, which kicks off in Italy today, state news agency SPA reported. The Crown Prince sent a letter to Italian Prime Minister Giorgia Meloni apologizing for not attending the summit “due to commitments related to supervision of Hajj.” This was the Kingdom’s first invitation to the summit.

What’s on the agenda: Leaders are expected to chew over topics on artificial intelligence, energy, along with discussing challenges and opportunities in Africa, China, and the Mediterranean during the summit, which wraps up on Saturday.

ALSO- The Public Investment Fund’s FII Priority summit is on its final day today in Rio de Janeiro. The invitation-only event, headlined Invest in Dignity, brings together government officials and senior business and finance executives to deliberate on key topics including renewables, AI tech, and biodiversity. Check out the event’s factsheet (pdf). The last such event was held in February 2024 in Miami, while the Asia iteration was held in Hong Kong in December 2023.

WEATHER- Expect a very warm and sunny day in Riyadh today, with a daytime high of 44°C and a low of 29°C at night. In Makkah the mercury will peak at 43°C during the day before dropping to a nighttime low of 29°C. Madinah is looking at the hottest weather of the three, with a daytime high of 46°C and a low of 32°C.

WATCH THIS SPACE-

#1- Easier tax rules shore up foreign investment in DCM? The Capital Market Authority (CMA) is considering eliminating a 5% withholding tax on interest payments for debt instruments, it said in a report (pdf) outlining a strategy to develop the Kingdom’s debt capital market. The potential tax change is one of several proposals on the table to help attract foreign investors to local corporate bonds.

The pitch: The withholding is “unattractive and discouraging for foreign institutional investors,” the CMA said in its report. The regulator will also look into easing requirements for debt offerings to encourage local issuances and work on facilitating trading, settlement and clearing of foreign-currency denominated debt instruments by local companies.

Why this is important: The local debt capital market is still nascent, particularly when compared to the equity market, which “has been a point of strength” in Saudi “thanks in part to a thriving environment for initial public offerings, Bloomberg notes. Our friend EFG Hermes Head of Research Ahmed Shams El Din also told us earlier this year that the “dark horse in Saudi Arabia is debt capital markets,” which are still lagging behind most emerging markets. Whereas the average emerging market has DCM issuances at around 25% of GDP, Saudi’s stands at 3% of GDP, Shams El Din noted. A lacking debt capital market will make “the hype” on equity capital markets “not sustainable,” he told us.

The market, by the numbers: The CMA said earlier this month that the local debt capital market grew by 7.9% annually since 2019. However, the growth was mainly driven by unlisted issuances which rose by 9.6% per year. It said it has implemented several initiatives to boost the number of issuances and issuers and ensure a “more diverse investor base.” The corporate sukuk and debt capital market grew 31.6% to SAR 125 bn by the end of 2023, up from SAR 95 bn by the end of 2019.

#2- CAPITAL MARKETS- Two Nomu-listed companies are gearing up for a transition to Tadawul’s main market, with Alwasail Industrial and Raoum Trading each filing for the move.

Buraidah-based pipes maker Alwasail Industrial has submitted a request to the Capital Market Authority to move up to Tadawul’s main market, according to a filing to the exchange. The company, valued at SAR 250 mn, started trading on Nomu in 2022.

Glass and ceramics manufacturer Raoum Trading has also filed to move to the main market, it said in a regulatory filing to Tadawul. The company — valued at SAR 62.5 mn — started trading on Nomu in 2022.

REFRESHER- Companies must meet a set of requirements to list on the main market, including having done business for a minimum of three years under the same management. They must also take a minimum stake of 30% to market, and have at least 200 public shareholders. Moving from parallel market Nomu to Tadawul’s main market would also require the companies to start publishing quarterly and annual financial statements. You can check out our rundown of the full list here.

MEANWHILE- Al Rajhi Capital’s Al Suqia Associations Endowment Fund got the green light to list on the main market, according to a CMA statement. There’s no publicly available information about the size of the fund, or the asset classes it will invest in.

AND- Naqawa for IT is cleared to IPO a 20% stake on Nomu, according to a statement. The prospectus for the offering is yet to be published.

#3- A Gulf observatory initiative to identify challenges facing the private sector in the Gulf is in the works, state news agency SPA reported. The initiative — which is being set up by the Federation of GCC Chambers — will monitor bilateral trade between GCC nations and seek to address constraints hindering intraregional trade and joining investments. It is set to be launched this year.

#4- Shareholders of Nomu-listed escalator company Mayar Holding will vote on the board’s recommendation to issue SAR-denominated sukuk worth SAR 500 mn on Wednesday, 3 July, it said in a disclosure to Tadawul. The issuance program will be spread out across 24 months through a number of separate issues offered publicly in the market. It set a maximum number of new shares at 1 mn with a nominal value of SAR 0.5, with the board tasked with determining returns for the sukuk program.

#5- Local music entertainment company MDLBEAST is launching a music publishing arm, which will work to support local and regional artists with broadcasting rights, intellectual property management, and financial rights for creators, according to a statement. The unit, MDLBEAST Publishing, will work with British independent music publisher Sentric to ensure a “full representation of authors’ rights” beyond the Mena region. “We can now provide a comprehensive range of services to meet the commercial development needs of the creative community, artists, music producers, and songwriters,” MDLBEAST COO and Head of Music Talal Albahiti said.

DATA POINTS-

Over 1.5 mn foreign pilgrims arrived in Saudi for the annual Hajj pilgrimage as of Tuesday, the Associated Press reported. More pilgrims — including locals and expats — are set to arrive in Makkah today ahead of the pilgrimage which starts tomorrow. Officials see the number of pilgrims surpassing 2023 levels which saw over 1.8 mn pilgrims performing the pilgrimage. This is still below pre-pandemic levels which saw over 2.4 mn people performing hajj in 2019.

ALSO FROM HAJJ- The first self-driving air taxi trial took flight yesterday ahead of the start of Hajj, state news agency SPA reported. The air taxi will be used to transport pilgrims between the holy sites, as well as facilitating emergency transportation. It will also transport medical equipment and goods. The autonomous air taxi is the first globally to be licensed by a civil aviation authority.

OIL WATCH-

Oil prices closed slightly higher yesterday, although its gains were curbed due to the Federal Reserve opting for only one rate cut this year as they kept rates unchanged, Reuters reported. Brent crude futures were up USD 0.83 to USD 82.6 a barrel, while US West Texas Intermediate (WTI) crude futures closed 0.77% higher to USD 78.5.

With a now-bullish outlook from some: We’re going to have a “staggering” glut of oil by 2030, the US Energy Information Administration said, as it expects global oil demand to hit 1.10 mn bbl / d this year, up from a previous estimate of 900k bbl / d. “We’re now at least considering the idea that maybe demand will pick up in 2H, and the market may actually need some additional Opec+ supply,” an independent energy analyst told Reuters, adding that “the market was becoming somewhat oversold… We’re getting a bit of a trampoline effect.”

This is in line with Opec+ projections: The group sees global demand for oil picking up to 2.2 mn bpd in 2024 before settling at 1.85 mn bbl / d in 2025, supported by tourism and travel sector growth, it said in its monthly report (pdf).

REMEMBER- Opec+ could start pumping more oil into the market over the fall. The group will keep in place current production cuts of 3.66 mn bbl / d until the end of September, before beginning to “phase out the cuts of 2.2 mn bbl / d over the course of a year from October 2024 to September 2025.” They are scheduled to meet again on Sunday, 1 December.

SPORTS-

A light at the end of the tunnel for LIV-PGA merger? Golf star Tiger Woods is feeling optimistic about a potential agreement between the PIF-backed LIV Golf and PGA Tour following a recent in-person meeting last week in New York with PIF boss Yasir Al Rumayyan and PGA’s negotiating committee, Reuters reported. “It was productive. And is there light at the end of tunnel? I think we’re closer to that point than we were pre-meeting,” Woods said.

PIF wants to take the ring home: The Public Investment Fund is in talks with various boxing stakeholders to establish a league — possibly through a JV — with a potential agreement that could value the new entity at between USD 4-5 bn, Reuters reports, citing people it says are close to the matter. The efforts are led by General Entertainment Authority (GEA) boss Turki Alsheikh who has been overseeing final negotiations a month ago, one of the sources said. It involves prominent promoters such as Matchroom Boxing and Golden Boy Promotions, the newswire said. The PIF is looking to take a minority stake in the venture, it added.

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THE BIG STORY ABROAD-

Steady as she goes says the Fed, which yesterday kept interest rates unchanged and forecasted only one cut to come this year in the ongoing will they, won’t they interest rate cut saga occupying central banks across the globe. Despite encouraging inflation data (pdf) for May also released yesterday being “a step in the right direction … you don’t want to be too motivated by any single data point,” said Fed chief Jerome Powell (watch, runtime: 1:02:04).

It seems that Wall Street didn’t get the Fed’s memo, with the S&P 500 and Nasdaq both hitting all-time highs, while the Dow slipped 0.1%. With inflation falling faster than forecasts, many traders aren’t buying the Fed’s hawkish tone and are pricing two cuts by the end of the year.

WHILE IN OUR PART OF THE WORLD- Hamas has rejected US claims it has obstructed its ceasefire plan with proposed changes, with officials from the organization taking to the airwaves to argue that Israel has instead been the one refusing to agree to an end to hostilities. Despite claims by US State Secretary Antony Blinken that Israel has accepted the ceasefire plan “as it was, as it is,” Israeli PM Netanyahu has repeatedly insisted that he will not end the war before destroying Hamas.

AND IN TARIFF NEWS- Chinese EVs are getting hit by a fresh raft of tariffs from the EU as the bloc adds more fuel to a trade war with China by imposing tariffs of up to 38.1% — depending on the maker — on imports of Chinese EVs on top of a pre-existing 10% levy.

CIRCLE YOUR CALENDAR-

Norah — Saudi’s first film to screen at Cannes — will hit theaters at home and abroad starting Thursday, 20 June, state news agency SPA reported. It tells the story of an illiterate young orphan Norah, crossing paths with an artist called Nader, who moved to the village to be a school teacher. The encounter helps Norah unleash a passion for art and a better future.

Saudi Film Nights by the Film Commission will land in Australia this month with screenings of four Saudi films, state news agency SPA reported. Movie enthusiasts in Sydney and Melbourne can watch adventure movie Hajjan, short film Me & Aydarous, comedy film Alhamour H.A and animated short movie Saleeg between Wednesday, 26 June to Friday, 28 June.

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