THIS MORNING: Non-oil private sector activity grows again

id: 2024-10-06-03:31:33:711t

Good morning, ladies and gentlemen, and happy Sunday. We have a relatively busy issue with which to start the week, starting with the latest purchasing managers’ index figures that indicate the Kingdom’s non-oil private sector grew for the second consecutive month in September. We have chapter and verse on that story and others in this morning’s news well, below.

HAPPENING TODAY-

The 2024 Saudi Games is on its fourth day at Riyadh’s Boulevard City, with musical performances from The Saudi Arwa and Abdulwahab kicking off the annual sporting competition, according to a post on X. The event will see upwards of 9k male and female athletes compete in 52 sports. The two-week event runs from until 17 October. You can grab tickets here.

PSAs-

The Transport General Authority issued fresh requirements for licensing drivers and owner-operators training and testing centers, state news agency (SPA) reports. Under the new requirements, the centers must have a valid commercial register, a valid permit from the Technical Vocational Training Corporation, a financial guarantee of SAR 100k, and be integrated with specified online platforms dictated by the authority. The training facilities must also meet the standards set by the city where they operate. Applications for licenses can be made here.

WEATHER- Riyadh is looking at a daytime high of 37°C and a nighttime low of 26°C today. Over in Madinah, the temperature will peak at 40°C before dropping to 26°C. Meanwhile, Jeddah will see a high of 36°C and a low of 28°C.

WATCH THIS SPACE-

#1- PIF eyes larger holdings in Japan’s gaming sector: PIF might be raising its stakes in Nintendo and other Japanese gaming companies, with the fund already in the process of transferring its shareholdings in Japanese gaming companies to its gaming unit Savvy Games Group, in a bid to boost synergies, Vice Chair of PIF’s gaming unit Prince Faisal bin Bandar bin Sultan Al Saud told Japanese news agency Kyodo News on the sidelines of Tokyo Game Show. The story got ink from Reuters.

More on the fund’s gaming plans: PIF currently holds an 8.58% stake in Nintendo and an 8.97% stake in Koei, Kyodo News said, citing PIF filings to Japan’s Finance Ministry. The fund is also eyeing stakes in additional gaming firms as it looks to leverage intellectual property rights and help from Japanese partners to develop a localized gaming industry, complete with merchandise and animations, Al Saud explained.

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#2- The Kingdom is planning to generate 44 GW of its electricity from renewable energy by the end of 2024, Energy Minister Prince Abdulaziz bin Salman was quoted as saying by state news agency SPA. The Kingdom plans to establish a hydrogen production facility in Ras Al Khair to support its renewable energy goals, in addition to developing a carbon capture and storage project with an annual capacity of 9 mn tons, bin Salman revealed at the G20 meetings in Brazil.

#3- The Tourism Development Fund is backing seven hotel projects in Al Ahsa, valued at a combined SAR 2 bn, the fund said in a press release. The projects are expected to have a combined capacity of 700 keys upon completion. Information about the completion timeline wasn’t disclosed.

#4- Russian state-owned nuclear developer Rosatom is participating in the development of Saudi Arabia’s inaugural nuclear power facility, the company’s MENA CEO Alexander Voronkov told Aleqtisadiah. Details about the specific role of Rosatom weren’t disclosed.

REMEMBER- The Kingdom plans to step up its nuclear oversight and submitted last month a request to the International Atomic Energy Agency to implement the Comprehensive Safeguards Agreement, and withdraw from the less-strict Small Quantities Protocol. The new agreement is scheduled to be in place by the end of the year.

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#5- Saudi investors proposed establishing investment funds to develop projects in the Egyptian tourism sector, state news agency SPA reports. The proposal came during a meeting between the Federation of Saudi Chambers and Egyptian Tourism and Antiquities Minister Sherif Fathy. No further details were provided.

DATA POINTS-

#1- Tourist spending in the Kingdom totaled SAR 92.6 bn in 1H 2024, marking an 8.2% increase compared to the same period last year, the Tourism Ministry said on X. The boost saw the Kingdom record a surplus of some SAR 41.6 bn in the balance of payments’ travel account for 1H, setting a new semi-annual record. A travel account surplus indicates net gains from tourism exceeds the amount residents spent on travel abroad during the same period.

#2- Banks handed out SAR 6.6 bn in new mortgage finance to individuals in August, down 7.6% y-o-y, according to Sama’s latest monthly statistical bulletin (pdf). Meanwhile, finance companies provided SAR 161 mn, down 47.6% y-o-y.

OIL WATCH-

Aramco raised the price of its flagship Arab Light Crude to Asian buyers by USD 0.90 to a premium of USD 2.2 / bbl against the regional benchmark, Bloomberg reports. The move, which comes against a backdrop of rising geopolitical tensions, surprised traders and refiners who were expecting a less substantial USD 0.65 bump, according to a survey by the business news service. Meanwhile, the state owned oil giant slashed the price of all grades to the US and Europe.

IN CONTEXT- The price hike follows Iran’s missile strikes on Israel, which have shaken global oil markets. The ripple effects are being closely monitored, especially as OPEC+ delays output hikes until December.

Oil market gains relatively muted despite geopolitical turbulence: Substantial spare capacity — estimated at some 6 mn bbl / d — that can come online when needed, as well as recent history that shows that conflicts in the Ukraine and the Middle East have not led to significant supply disruptions so far, Daan Struyven, co-head of global commodities research told CNBC in an interview (watch, runtime: 3:29). At the same time, there is an uptick in activity in options markets as buyers look to hedge against future uncertainty.

SPORTS-

The scoreboard for Saudi Pro League matchday 6 of 34:

• Al Ahli vs. Al Hilal: 1-2
• Al Nassr vs. Al Orobah: 3-0
• Al Akhdoud vs. Al Ittihad: 1-2
• Al Ettifaq vs. Al Raed: 0-1
• Al Wehda vs. Al Feiha: 2-2
• Al Khaleej vs. Al Kholoud: 1-0
• Al Riyadh vs. Al Qadisiyah: 2-1
• Damac vs. Al Shabab: 1-0

• Al Taawoun vs. Al Faleh: 2-0

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THE BIG STORY ABROAD-

Israel ramped up its attack on Lebanon on Saturday and overnight, executing “massive consecutive strikes” in Beirut’s southern suburbs, as well as its first attack on Tripoli in Lebanon’s north. Yesterday’s attacks come after a strike on Thursday reportedly targeting a potential successor to Hezbollah leader Hassan Nasrallah, who was killed by Israeli strikes late last month. The successor, Hashem Safieddine, has reportedly been out of contact since Friday, although Hezbollah has not confirmed his death. Reuters, Bloomberg, the New York Times, and the Financial Times all have coverage.

WORTH READING- The Financial Times and Bloomberg each also have a front-page piece looking into how the US and Israel’s relationship as “close allies” is being tested as Israeli Prime Minister Benjamin Netanyahu all but ignores warnings and so-called red lines in its attacks in the region. Meanwhile, Biden is weighing how to approach the issue during his last few months in the White House, which the Financial Times notes is an issue that “could influence the [US presidential] election and define his legacy.

CIRCLE YOUR CALENDAR-

The three-day 6 Kings Slam event at Riyadh’s Venue kicks off on Wednesday, 16 October, featuring all-star players competing for the largest purse in tennis history. The matches will see face offs between tennis champs Novak Djokovic, Rafael Nadal, Jannik Sinner, Carlos Alcaraz, Daniil Medvedev, and Holger Rune (watch, runtime: 5:15). The final and third-place match will be held on Saturday, 19 October. Book your tickets here.

The Professional Fighters League’s (PFL) Battle of the Giants is coming to Riyadh on Saturday, 19 October. Headlining the card, MMA superstar Francis Ngannou will face PFL heavyweight champion Renan Ferreira for the title of inaugural PFL Super Champion. Meanwhile, women’s featherweight champion Cris Cyborg will square off against Larissa Pachecho for the World Title Fight in the co-main event. Expect fireworks with additional matchups featuring Johnny Eblen vs. Fabian Edwards and A.J. McKee vs. Paul Hughes.

The two-day Multilateral Industrial Policy Forum will kick off in Riyadh on Wednesday, 23 October. The forum will address global industrial challenges, focusing on topics like industrial policy, clean energy, and advanced manufacturing tech. The forum is organized by The Industry and Mineral Resources Ministry in partnership with UNIDO. The Kingdom will also host the UNIDO General Conference in 2025.

The four-day Biban24 Forum organized by Monsha’at will run from Tuesday, 5 November to Saturday 9 November in Riyadh. It will feature over 250 speakers and 1.4k exhibitors, focusing on supporting the growth and competitiveness of SMEs, as well as promoting entrepreneurship in the Kingdom. Biban24 will also host the Entrepreneurship World Cup finals, offer 420 workshops, and focus on key sectors like e-commerce and financing.

The Saudi General Aviation Airshow Sand & Fun 2024 will run from Tuesday, 19 November to Saturday 23 at Al Thumamah Airport, Riyadh. Organized by the Saudi Aviation Club, the event will feature 100+ exhibitors and 15 airshow teams, with over 100k visitors expected. Sand & Fun is a key platform for exploring aviation tech, fostering partnerships, and driving industry growth.

The four-day Saudi Film Forum 2024 will kick off Wednesday, 9 October in Riyadh, featuring areas for agreement signings, consulting, studio simulation, film talks, cinematic arts, and a little filmmaker section for children.

The Saudi Winter festivities are back, starting October until the end of March 2025, with over 1k events spread across seven key destinations — Riyadh, Jeddah, AlUla, the Red Sea, Eastern Province, Madinah, and Hail. Expect everything from Riyadh Season’s entertainment spectacles, the Dakar Rally, and MDL Beast’s massive music festival, to hiking trails, camps and winter caravans, with special offers available through the Visit Saudi app (Google Play | App Store).