Good morning, friends. Our IPO-heavy theme continues this morning, and we’ve got news of a benchmark-sized government sukuk in the market — the second such big sale this year. Let’s jump right in.

HAPPENING TODAY- The two-day bookbuilding window for the retail tranche of Rasan’s IPO kicks off with a maximum of 2.3 mn shares up for grabs. Rasan priced its IPO on Tadawul’s main market at SAR 37 per share, pegging it at the top of its initial price range, after the institutional offering drew strong demand with a 129.1x oversubscription rate. The fintech startup is taking a 30% stake to the market.

ALSO- The subscription period for the retail offering of Al Taiseer Group Talco Industrial’s (Talco) IPO on the main market wraps up today with up to 1.2 mn shares up for grabs. Talco priced its IPO at the top range at SAR 43 per share after its institutional offering drew in strong demand with a 68.5x oversubscription rate. The aluminum products maker is taking a 30% stake to the market in a secondary share sale.

^^ The global business press has taken notice of multiple high-profile IPOs being in the market at the same time, as we note this morning in Saudi in the News.

WEATHER- Riyadh’s skies are looking clear with a daytime high of 42°C and a low of 27°C. Jeddah is on the windy side with a daytime high of 38°C and a low of 27°C, with Makkah seeing a similar weather pattern with a high of 46°C and a low of 30°C. Meanwhile, the national weather service is advising folks in Asir to exercise caution due to thunderstorms and winds.

WATCH THIS SPACE-

#1- Rent control coming? The Shura Council called on the Real Estate General Authority earlier this week to create a national plan for how to tackle rising rent prices in the country, according to state news agency SPA. The council wants to see the authority setting price caps on real estate, as well as a plan that would help blunt the pace at which rents are increasing. No further information was provided on the mandate.

REMEMBER- Rent has been the big culprit behind inflation: A 9.4% y-o-y increase in villa rental prices led to a 10.4% y-o-y hike in the price of the overall rent sector in April. Riyadh’s office market was tight in 1Q 2024, buoyed by a 4.4% growth in the non-oil sector. Grade A offices saw an occupancy rate of 98% during the quarter as demand continues to pick up pace on the back of the Kingdom’s diversification plan and regional headquarters program.

#2- It’s a big week for China’s relations with the Arab world as Chinese President Xi Jinping hosts Arab leaders this week in Beijing. The leaders of the UAE, Egypt, Bahrain, and Tunisia are all expected to be in the Chinese capital by tomorrow for the China-Arab States Cooperation Forum, but there’s no word yet on who will represent Saudi at the gathering.

Sound smart: Riyadh was the starting point for China’s latest Arab-world charm offensive when Xi visited in late 2022. Beijing last year showed it could be a constructive actor on the regional scene when it helped broker rapprochement between Riyadh and Tehran.

ON A RELATED NOTE- The Public Investment Fund’s advanced technologies arm has effectively invested USD 2 bn in Chinese PC maker Lenovo, Bloomberg and the Wall Street Journal report. Alat will buy USD 2 bn worth of zero-coupon convertible bonds at an initial conversion price of HKD 10.42 per share. That would translate to a sake of a bit more than 12% of Lenovo at that price if Alat were to convert the bond into equity at that price.

In context: Alat is the PIF’s unit investing in advanced and sustainable technologies. Formed in February, it aims to invest USD 100 bn across range of segments by 2030.

#3- UK-based industrial software outfit Aveva is planning to set up shop in Dhahran, according to a press release. The regional office will provide sales, services, project management, and technical support to customers locally and regionally, the statement reads. Aveva signed an MoU with Aramco in 2021 to collaborate on tech projects in a bid to support the oil giant in developing its blue hydrogen and decarbonization facilities.

#4- The Union of Arab Banks (UAB) plans to set up a fund focused on fintech and digital transformation in the Arab banking sector, UAB Secretary General Wissam Fattouh told Aleqtisadiah. The decision to launch the fund came following calls at the Arab League summit in Manama earlier this month to enhance Arab cooperation in fintech and digital transformation through funds and regulatory frameworks, Fattouh said. UAB set up its regional headquarters in Saudi.

#5- Some 270 Syrians flew from Damascus to Saudi in the first direct flight between the two countries in over a decade for Hajj, Associated Press reported, citing a statement by the Syrian Transportation Ministry. Another flight carrying Syrian pilgrims was scheduled to depart from the Syrian capital to Jeddah yesterday night. The resumption of flights comes days after the Kingdom appointed its first envoy to Syria since the closure of its embassy in Damascus due to the country’s civil war in 2012.

DATA POINT-

The Kingdom’s arms and ammunition imports fell 59.4% y-o-y to SAR 1.4 bn in 1Q 2024, according to statistics agency Gastat data (pdf). Imports rose 5.8% q-o-q from SAR 1.3 bn in the final quarter of 2023.

South Korea topped the list of arms suppliers to Saudi in 1Q 2024 with exports from Seoul valued at SAR 808.5 mn, followed by the US at SAR 276.8 mn. Belgium, Pakistan, the UK, Italy, Czech Republic, France and Turkey were also key arms exporters to Saudi during the period.

OIL WATCH-

Is a price cut for crude oil to Asia in the cards? Aramco may slash prices for most crude grade sales to Asian customers in July for the first time in five months, Reuters reports, citing unnamed sources in refining. The sources expect Aramco to cut the official selling price (OSP) for flagship Arab Light Crude by USD 0.30-0.50 a barrel on the back of weakened margins and benchmarks for Asian refiners.

SPORTS-

Al-Hilal was officially crowned the champion of the the Saudi Pro League, ending the season undefeated after a 2-1 victory over Al-Wehda yesterday. The match made Al Hilal the first team to earn the Pro League title twice without a single loss. Al Nassr secured the runner-up position, and Al-Ahly came in third place, qualifying the big three for the Saudi Super Cup and the AFC Elite Championship League.

ALSO- Cristiano Ronaldo broke the record for most goals scored in a single season, netting 35 goals for Al Nassr.

PSA-

You need to report in when a dependent’s visa expires. Sponsors failing to notify authorities of when their dependents leave the country after their entry visa expires could be subject to a fine of up to SAR 50k and a six-month prison term, according to state news agency SPA. Expats who don’t meet the reporting requirements could also be at risk of deportation.

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

Want to subscribe? Tap or click here to get your own copy of EnterpriseAM Saudi delivered every weekday before 7am Riyadh time — without charge, thanks to our friends at Cenomi.
***

THE BIG STORY ABROAD-

A big US M&A and another fresh high for Wall Street are the big business stories this morning, but they’re being largely overshadowed in the US and UK by political news.

UP FIRST- The tech-heavy Nasdaq Composite hit a fresh high at yesterday’s close, rising 0.6% to break the 17k barrier for the first time as traders returned from a three-day weekend. (CNBC)

AND- Shareholders of Hess voted yesterday to sell their company to Chevron in a USD 53 bn transaction. It’s still far from certain that sale will go through, because…

…Exxon is still looking for a way to scupper it. The story is perhaps a bit less dramatic than the 1980s oil patch soap Dallas, but if you want the inside dirt of what’s keeping the energy industry in thrall, go read: The leaders of Exxon Mobil, Chevron and Hess are duking it out over a generational oil discovery in Guyana in the Wall Street Journal. Both the WSJ and the FT are giving the shareholder vote prominent play on their front pages this morning.

IN EUROPE, an “investment shock”: Emmanuel Macron wrapped a three-day visit to Germany with the announcement that Paris and Berlin will work together to deliver an “investment shock” to the European Union to provide more incentives for manufacturers and business working on advanced technologies, writes Handelsblatt. Macron and his German counterpart, Olaf Sholz, telegraphed the move in an op-ed for the Financial Times earlier this week that argued the EU needs “more single market, innovation and investment to secure a common future.” The impetus? Countering China.

IN WAR and politics:

#1- Israeli tanks and troops have reached the center of Rafah in “a sign the military could be nearing its goal of taking full control of the southern Gazan city.” The story leads the front pages from Bloomberg through to the Financial Times. The Foreign Ministry has condemned in the “strongest terms” ongoing “genocidal massacres” by Israeli forces against Palestinian tent camps in Rafah, it said in a statement on X.

Oh, and that US pier that was going to feed Gaza? Satellite imagery shows that it’s broken apart, CNN reports.

#2- Closing arguments wrapped late yesterday in Donald Trump’s criminal hush-money trial, with the prosecutor taking six hours to bring the case home and the defense three. The jury should get the case today to start deliberations and could deliver a verdict anytime afterward.

FOOD FOR THOUGHT this morning: There are no signs that traffic will soon return to the Suez Canal as Dubai and Jeddah open new routes to Saudi Arabia and major players continue to steam around the Horn of Africa rather than transit through Egypt. The FT goes deep into how pirate attacks, instability in the Middle East, and climate change are putting “mounting strains on global shipping.”

CIRCLE YOUR CALENDAR-

The two-day Global Project Management Forum will open in Riyadh on Sunday, 2 June, bringing together project managers and stakeholders for talks on the project management ecosystem and emerging technologies.

The #Growth Summit is set to kick off on Wednesday, 5 June, bringing together marketing, product and growth experts at the InterContinental in Riyadh. You can request your invite here.

The Global EV and Mobility Tech Forum will open its doors on Wednesday, 10 July to Thursday, 11 July at the Riyadh International Convention and Exhibition Center. The event will bring together policymakers, NGOs, and startups.

Leave a comment

Your email address will not be published. Required fields are marked *