Good morning, friends. We hope you all had a fantastic long weekend and are looking forward to a productive week now that we have just two weeks to go before Ramadan.

This morning’s report should be a quick read — news flow was quiet over the Founding Day weekend.

WEATHER- Expect a strong breeze in Riyadh and Jeddah today with some rain in the cards— and there’s nothing but sunshine in store for folks in Dammam.

  • Riyadh: 27°C daytime / 14°C overnight
  • Jeddah: 29°C daytime / 22°C overnight
  • Dammam: 23°C daytime / 15°C overnight

MORNING MUST READ-

The Public Investment Fund (PIF) is ramping up its annual deployment capacity to USD 70 bn a year starting 2026, Bloomberg reports, quote what it said were remarks by fund governor Yasir Al Rumayyan at the FII Priority conference in Miami last week. This is a big step-up from its current annual spending clip of USD 40-50 bn. Some 25% will be earmarked for international investment, with c. 70% earmarked to drive economic growth and diversification at home.

Positioning Saudi as a global AI hub: “We are fairly well positioned to be an AI hub outside of the US,” said PIF Governor, adding that “AI will consume a lot of energy and we are the global leader when it comes to fossil fuel energy and when it comes to renewable energy,” Reuters reports

In context: PIF pumped USD 100 bn into the US economy between 2017 and 2023, creating 103k jobs, Al-Rumayyan added.

KUDOS- Our friends at EFG Hermes snagged Best Research House Award in 2023 for the second consecutive year at the Saudi Capital Market Forum 2024.

OIL WATCH-

#1- OPEC+ cuts are here to stay — at least through 2Q: OPEC+ is forecast to maintain its 2 mn bpd output trim into the next quarter in an attempt to balance out global oil markets against a backdrop of waning demand and rising US crude supply, according to a Bloomberg survey. Fourteen of the 17 traders and analysts surveyed by the business newswire expect the oil cartel to maintain the cuts, while three see the curbs being eased gradually.

What the pundits are saying: “They’ll have to extend their cuts,” Bob McNally, who leads consulting firm Rapidan Energy Group, told Bloomberg TV. “Supply is exceeding demand, and to keep prices stable, OPEC+ has to keep that oil off the market,” McNally said. “OPEC+ have no choice but to extend the current cuts in order to avoid a meltdown,” said Tamas Varga, an analyst at brokerage PVM Oil Associates.

#2- Adnoc Drilling could soon be drilling right into Saudi soil:Abu-Dhabi listed oil services company Adnoc Drilling is looking to expand its operations across the Middle East, including Saudi, Kuwait and Oman, Bloomberg reported last week, citing statements by its CFO Youssef Salem at a media briefing. It is investing USD 750-950 mn on rig procurement to cover deployment needs for target countries by the end of the year, he said.

On track: Adnoc Drilling has met the qualifications to compete for rig supply contracts in Oman and is currently in the process of obtaining approvals to participate in tenders here and Kuwait, according to Salem. Oil and gas operators in the GCC are the most attractive due to lower production costs and reduced emissions from pumping compared to other regions.

Background: Adnoc Drilling had intended to expand following its 2021 IPO, but prioritized domestic growth and deployment in Abu Dhabi, Salem said.

HAPPENING TOMORROW-

Big 5 Construct will open tomorrow and run until Thursday, 29 February. It will bring together industry players, government stakeholders and others for talks on the future of construction. It also sees the participation of 1.3k exhibitors from 47 countries. It

The event shares space with:

^^ Both co-located events will run until Thursday.

PSAs-

#1- We’re less than two months away until the Transport General Authority (TGA) starts rolling out an automated monitoring system to track truck and bus violations on the road, the TGA said in a statement last week. The system will watch for road violations as well as expired operating cards and other breaches of regulations. Cargo transport, international bus services, as well as truck and bus rentals fall under the scope of the system, which comes into effect on 21 April.

#2- The Zakat, Tax, and Customs Authority has issued a notice urging taxpayers to use invoice number (020) for accurate payment processing of all ZATCA dues, saying that the previous invoice number (030) has been discontinued, it said in a statement last week.

THE BIG STORY ABROAD-

The big story abroad is a USD 35 bn investment in Egypt by Abu Dhabi wealth fund ADQ, which bought the development rights to build a “world-class” finance and tourism hub on the Mediterranean coast for USD 24 bn. ADQ will invest a further USD 11 bn in “real estate and other prime projects” in Egypt, it said in a statement (pdf).

EnterpriseAM Egypt has the full rundown on the story. News of the investment saw the EGP strengthen on both the parallel and futures market. The Madbouly government, fighting a foreign exchange crisis, says it expects USD 10 bn in fresh cash within a week, setting expectations that the Central Bank of Egypt will soon go ahead with a devaluation.

Egypt is also making progress on an expanded loan from the International Monetary Fund. Together with the ADQ investment, the cash would cover its funding deficit for a four-year period.

MEANWHILE- Donald Trump has handily beaten Nikki Haley in South Carolina, her home state, as he continues to cruise to a rematch against Joe Biden in this fall’s election. The story dominates the front pages of the business and mainstream press around the world (Financial Times | Wall Street Journal | Politico | Reuters).

AND- There’s unrest at Goldman Sachs (“Goldman Sachs chief executive David Solomon is facing a new wave of unrest inside the Wall Street bank, threatening a fragile peace among its partners,” the FT writes) and a “crucial” meeting in Paris has revived talks of a ceasefire in Gaza, says the Wall Street Journal.

CIRCLE YOUR CALENDAR-

Riyadh will host the International Conference on Sand and Dust Storms in the Arabian Peninsulafrom Monday, 4 March to Wednesday, 6 March. The conference will address regional challenges caused by sand and dust storms and discuss monitoring systems, mitigation strategies, economic and infrastructural impacts, and more.

Tickets are on sale for the 2024 Saudi Arabian Grand Prix, scheduled for Jeddah from 7-9 March.

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

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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