Good morning, friends, and happy Thursday to you all. We hope you’re looking forward to the weekend as much as we are.

THE BIG QUESTION of the day: Are we closing in on AI and defense pacts with the United States separate from a potential agreement to normalize ties with Israel? That’s what Bloomberg and the Guardian contend this morning. Reportedly in play:

  • A new agreement on artificial intelligence that would see lost of investment in (and cooperation on) AI and quantum computing while we agree to “limit” the use of some Chinese technology in Saudi;
  • A defense pact that would see Washington pledging to help defend Saudi and give the military access to more advanced US weapons;
  • US help building a domestic nuclear power industry, a key “always-on” component of our drive to ensure energy security (and cement our position as an exporter of green and low-emission electrons).

^^ Any one of these three is good news for Saudi, and all three would be great — with or without a broader pact to recognize Israel.

Sound smart: The US wants Saudi to recognize Israel and establish formal diplomatic and trade ties. Saudi wants three things: A defense pact, a nuclear agreement, and an irrevocable path to statehood for Palestine. Trying to orchestrate a full set of agreements all at once became questionable as Israel’s war in Gaza grinds on and as it continued to insist it would launch a ground attack on Rafah.

So where would normalization come in? Riyadh and Washington would, effectively, tell Israeli Prime Minister Benjamin Netanyahu: “Join us or be left behind,” Bloomberg says. “An offer would be made to Israel of normalization of diplomatic relations with Riyadh in return for Israeli acceptance of the two-state solution,” the Guardian adds. Bloomberg Opinion sees the push to do a bilateral agreement as having legs, saying it would help Washington and Riyadh contain Iran even if Israel doesn’t fall in line.

The usual caveats apply: Talks could stall (particularly as US domestic politics come into play) and the defense pact would likely require approval in the US Senate.

WHISPERS- New York City’s equivalent of a CFO-slash-chief investment officer doesn’t want BlackRock to allow Aramco boss Amin Nasser to sit on the asset manager’s board. Nasser was named to the board last summer. NYC Comptroller Brad Lander has had his knickers in a twist ever since, saying he objects to a “climate-conflicted” exec joining a board that the thinks should be part of a low-carbon future.

What’s happening now? Lander wants shareholders to vote against Nasser’s appointment as an independent non-executive board member. NYC’s pension fund holds BlackRock Stock, Bloomberg writes, and is a client of the world’s largest asset manage.

Odds that shareholders will follow Lander’s line: Just about zero, we think.

READY FOR EXPO 2030?

That faint drumbeat you hear? It’s the sound of preparations ramping up for Expo 2030. Crown prince and Prime Minister Mohammed bin Salman discussed the Kingdom’s preparations to host the world fair at a meeting with Bureau International des Expositions Secretary-General Dimitri Kerkentzes, according to state news agency SPA.

The event could attract mns to the Kingdom, cementing our position as one of the fastest-growing globally significant tourism destinations. It is set to be a boon to construction and infrastructure players and others in the Kingdom, with spending on infrastructure and other components of the event estimated to be in the USD 92 bn range, according to officials.

BACKGROUND- The Kingdom was named host in November after edging out Italy and South Korea in balloting by BIE member states.

WATCH THIS SPACE-

#1- A global treaty on plastic pollution inches forward without production caps: Weeklong talks in Ottawa on a global treaty on plastic pollution saw delegates from 170 member states and over 480 observer organizations convened to refine the international legally binding draft text on plastic pollution, including marine environments. Despite objections from some parties, a group of 28 countries issued a pledge to include production caps in the final treaty text.

THE LOCAL ANGLE- Saudi Arabia and other countries want to focus on cutting down on plastic waste instead, arguing that the negotiations would be better served by “focusing on less contentious topics such as plastic waste management and product design,” Reuters reports. Countries across the board agreed to set forth a plan for how to identify hazardous plastic chemicals and wasteful plastic products including single-use plastic.

What’s next: Work will continue in ad hoc meetings before the final summit on 25 November in Busan, South Korea, including discussions on how to make it possible for emerging markets to afford the implementation of whatever treaty emerges from the talks.

#2- Ukrainian fintech companies are looking to do business in Saudi, Ukraine’s Deputy Digital Transformation Minister for IT Development Oleksandr Bornyakov told Aleqtisadiah. “Ukrainian companies are looking towards bolstering cooperation with Saudi and creating an enabling environment for cross-border partnership and knowledge exchange to help facilitate entry into Gulf markets,” he said.

Ukraine’s pitch: The war-town country’s tech industry has expertise in digitizing public services, government and defense technologies, deep tech, artificial intelligence, and others.

This is a take two: Ukraine first began talks with Saudi on cooperation in the tech sector in 2021, but the plans were shortly shelved after the Russian invasion a year later, Bornyakov said.

#5- The Transport General Authority (TGA) has suspended an unspecified ride-hailing app from operating, it said on X. The app was suspended for failing to comply with unspecified rules, TGA said. It didn’t say whether the app had been banned permanently or for a set period.

Background: TGA warned in March that it would crack down on unlicensed passenger transportation. The most recent rules for ride-hailing apps include allowing drivers to see the destination of a trip before accepting the ride request. Rules also now ban non-Saudi drivers and will allow apps to suspend users who cancel more than five rides within a month.

Industry and Mineral Resources Minister Bandar Al Khorayef is in Doha for talks, state news agency SPA reported yesterday. Al Khorayef is leading the Kingdom’s delegation to a meeting of the GCC Industrial Cooperation Committee.

Kicking off a busy schedule with an offer on mining: Al Khorayef highlighted incentives offered by the government to mining investors during a meeting with Qatari investors as it looks to tap on the nation’s untapped mineral resources which are estimated at USD 2.5 tn, state news agency SPA reported.

PSAs-

#1- WEATHER- Thunderstorms are starting to ease up: Calm is being restored in Makkah following the storm — expect sunny skies and highs of 38°C. There’s no rain today over in Jeddah, but there are strong winds. It’s looking like another day of thunderstorms today in Riyadh, meanwhile, but these are expected to draw to a close in time for the weekend, according to the national weather center.

Did the storm hit you hard? Al Ula and Medinah as well as Riyadh saw some flooding over the past two days.

#2- Residents of Jazan will now be able to get around town with the city’s first-ever public bus service, which launched yesterday, the Transport General Authority said in a statement. The new system includes 47 buses, nine routes, and 84 stops, covering Jizan, Sabya, and Aburish for 18 hours a day.

IN CONTEXT- Jazan’s new public bus service comes as part of a broader government initiative to gradually roll out transport services, including metro and bus services across the country. In the capital city, the King AbdulAziz Project for Riyadh Public Transport saw the launch of the first phase of the Riyadh bus service in March 2023 and will see metro service roll out, too.

DATA POINT-

The general ins. market is set to be worth north of USD 22 bn by 2028, growing at a compound annual growth rate of 5.2% over the next four years, according to projections by GlobalData. Growth will be driven by the health and automotive segments, which together accounted for 86% of the general ins. market’s gross written premiums in 2023, the data showed.

The ins. market saw high growth over the last two years, coming in 27.7% in 2022 and 22.8% in 2023. The rapid expansion of the market was “supported by favorable regulatory developments in motor and health ins. lines, rising construction activities, increasing preference for specialized healthcare, and growing motor vehicle sales,” said GlobalData’s Sutirtha Dutta. Expect growth to taper off and settle in at around 5.2% per year, supported by the continued expansion of demand from non-oil sectors including transport, logistics, and tech, Dutta says.

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DID YOU KNOW that we also cover Egypt and the UAE?

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THE BIG STORY ABROAD-

#1- Hamas is “negative” on Israel’s latest proposal as part of Cairo-brokered ceasefire talks, but said its negotiators would continue to engage in the process.

AND- US Democrats are putting pressure on Joe Biden to push Israel not to assault Rafah, where more than 1 mn people are taking refuge from Israeli forces, Reuters reports.

#2- The US Federal Reserve said it is “more likely to keep interest rates at their current level for longer than to raise them again,” the Wall Street Journal reports after the Fed wrapped last night its two-day monetary policy meeting. At issue with the higher-for-longer stance: “It is likely to take longer for us to gain confidence that we are on a sustainable path down to 2% inflation,” the Financial Times reports Fed chair Jay Powell as having said after the meeting. “I don’t know how long it will take.”

#3- The global press remains obsessed with pro-Palestinian protests in the United States, where hundreds were arrested yesterday as many university administrators called in police. Reuters | Wall Street Journal | BBC | Politico

CIRCLE YOUR CALENDAR-

AlUla will host the first edition of Arab Cup for Camel Racing tomorrow. The camel race will see camel owners from 15 countries competing in 13 rounds for prizes of over SAR 3 mn.

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