Good morning, friends. The high cost of building real estate in Riyadh and the prospect of a new cement champion in the kingdom’s west lead the business headlines this morning, but the story that everyone is talking about remains the death of hundreds of pilgrims during this year’s Hajj.
The Health Ministry has for the first time confirmed a toll, saying some 1.3k pilgrims died during Hajj. Most succumbed to heat stroke or other complications from extreme heat, mirroring an uptick in deaths in India and North America as the world breaks one heat record after another.
A big factor in the deaths: An influx of pilgrims on unauthorized tours who didn’t have the same on-site and medical support from tour operators that those on official visits had. “Eighty-three percent of [those who died] were unauthorized pilgrims who walked long distances under direct sun with no suitable shelter or comfort,” state news agency SPA reported Health Minister Fahad bin Abdurrahman Al Jalajel as saying.
Al Jalajel said most of those who died were elderly or had chronic illness, but stopped short of saying exactly how many fo the deaths could be directly attributed to heat. It’s the first time the government has confirmed a death figure.
Background: Hundreds died during this year’s pilgrimage as an extreme heat wave settled in over Makkah and the surrounding area. More Egyptians died than did any other nationality: 672 are confirmed dead and another 25 are missing, according to Reuters. The rise in fatalities led the Egyptian government to crack down on tourism operators who facilitated the travel of pilgrims who lacked hajj permits, rescinding the licenses of 16 tourism companies.
PSAs-
WEATHER- No respite from the searing heat: Riyadh is looking at a daytime of 46°C and a nighttime low of 31°C. In Makkah, the mercury will peak at 44°C before dropping to a cooler 30°C at night. Madinah will see the temperature hitting 45°C during the day and will fall to a low of 30°C.
WATCH THIS SPACE-
#1- Qatar is making an AI play as it looks to chip into the lead (pun intended, we’re afraid) already established by the Saudi and the UAE. Ooredoo CEO Aziz Aluthman Fakhroo told Reuters.
What’s happening: The Qatari network operator will deploy Nvidia chips at data centers in Qatar, Algeria, Tunisia, Oman, Kuwait, and the Maldives, the company said in a statement.
Why it matters: It will give some companies in our part of the world access the core tech behind much of the current boom in generative AI — at the same time as the US continues to block the export of some of Nvidia’s most advanced chips to the rest of our region.
What to watch for: A sweeping pact on defense and nuclear power between Riyadh and Washington is likely to also include an agreement on AI and other advanced technologies. That could see see Saudi companies get more access to cutting edge tech provided the Kingdom turns its back on rival Chinese gear, much as the UAE’s G42 promised to do as it embraced Microsoft technology earlier this year.
#2- SPEAKING OF AI… Singapore-headquartered startup Dyna.Ai plans to set up an office in Saudi, Chairman Tomas Skoumal told Arab News. The company wants to pitch government institutions and related agencies with AI-powered financial solutions. Dyna.Ai — which has already launched two of its products in Saudi — focuses on addressing digitization challenges for financial services players.
#3- A delay in regulatory approvals in “several countries” is holding up a USD 10 bn JV between Neom and Denmark-based freight company DSV, Bloomberg reports, citing a report from German outlet DVZ. The now-delayed joint venture — which was set to kick off operations in 2Q 2024 — is pending regulatory approvals from the Kingdom and Egypt before it can proceed. “It’s not unusual for delays to occur in projects of this size, and this doesn’t change our preparations and long-term expectations for the collaboration,” a DSV spokesperson told the business information service.
Background: The venture — which was announced in October of last year — will see the Danish freight company provide logistical services to Neom over the coming years. DSV had initially pledged USD 2.5 bn towards the project, but intends to cut its investment down to USD 1 bn “under the current business case,” Bloomberg reports.
IPO WATCH-
Automotive oil manufacturer Neft Alsharq will ring the opening bell for parallel market Nomu tomorrow as its shares start trading for the first time, according to a Tadawul statement. Neft’s offering was oversubscribed as it priced IPO at the top range of SAR 3.60 per share.
Background: Neft Alsharq is taking a 20% stake to the market in an offering that saw the company raise SAR 18 mn and lock-in a market cap of 90 mn at the start of trading, according to our calculations. Net proceeds from the share sale will support the company’s growth and working capital needs.
What to expect tomorrow: Shares will be allowed to trade within a ±30% band in daily price fluctuation limits and a ±10% band in static price fluctuation limits.
DATA POINTS-
#1- Saudi Arabia is expected to attract an estimated 300 m’naires in 2024, thanks in part to the Kingdom’s Premium Residency program, giga-projects, and advancements in aviation, according to Henley & Partners’ Private Wealth Migration Report 2024. The report lists Saudi as the top country to watch — edging out Malta, Mauritius, Monaco, Spain, France, and New Zealand — after seeing a 40% growth in its number of m’naires in the last 10 years.
Riyadh and Jeddah were highlighted as “hotspots” for m’naire inflows, especially from neighboring MENA countries, with potential to rival Dubai and Abu Dhabi in the future.
Zooming out: The UAE leads the charts as the top magnet for high-net worth individuals for the third year in a row with a projected record net inflow of 6.7k m’naires this year. That’s twice as many as its runners-up, the US (3.8k) and Singapore (3.5k). The report cites the UAE’s no-tax income, golden visa residency program, and geographic location as its secrets to success for attracting migrating m’naires. China, meanwhile, has the highest outflows of m’naires with an anticipated exit of 15.2k m’naires.
#2- The total number of complaints lodged against airline carriers rose 62.5% y-o-y to 1.3k complaints in May 2024, according to data by aviation regulator Gaca. Flagship carrier Saudia saw the least complaints in May at a rate of ten per 100k passengers, followed by budget airline flyadeal at 11 and low-cost airline Flynas at 13. Most of the complaints were related to boarding services, customer service, tickets, baggage services and others.
#3- The fourth phase of the Jeddah-Makkah road is 24% complete, according to Okaz. This phase spans 11 km and is part of the larger 73 km, four-lane highway which has already opened its first three phases to traffic.
#4- Motorcycle imports grew in volume by 95.5% y-o-y in 2023, with the total value of motorcycle exports growing 36.6% y-o-y to SAR 258.5 mn, Aleqtisadiah reports, citing the General Authority for Statistics. The upward trend is expected to continue into 2024, with SAR 41 mn worth of motorcycles imported in the first two months of the year.
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THE BIG STORY ABROAD-
Expect a big week of politics to dominate headlines in the global business press, though AI and the stock market (is a correction finally in the cards?) aren’t going anywhere anytime soon.
Elections will be the big theme, with three televised debates setting up a high-stakes week for incumbents on both sides of the pond:
- French Prime Minister Gabriel Attal takes on his top right- and left-wing challengers in on Tuesday;
- Across the Channel, sitting Prime Minister Rishi Sunak goes head-to-head with Labour’s Keir Starmer in a leaders’ debate on BBC this Wednesday;
- Joe Biden takes on Donald Trump this Thursday in the first of two televised debates. (They will meet again on 10 September.)
French voters go to the polls in snap parliamentary elections this coming Sunday — an FT poll suggests voters trust the right-wing Rassemblement National more on the economy than they do Emmanuel Macron’s centrist bloc. And voters in Iran follow suit on this Friday, casting their votes for a new president.
HEAT is also in the headlines after Saudi Arabia confirmed more than 1.3k pilgrims died during this year’s Hajj — the vast majority of the deaths were heat-related — and as much of the US and Canada swelters under a heat dome.
WAR WATCH- Netanyahu says his assault on Gaza will enter a more “targeted” phase “very soon.” The Israeli leader was speaking in his first televised interview since October of last year. Meanwhile, an Israeli air assault killed eight people at an aid distribution center yesterday.
SPORTS
#1- We’ve got dates for the Esports World Cup: The eight-week Esports World Cup will open on Wednesday, 3 July and run through Sunday, 25 August Riyadh’s Boulevard City. It will see the world’s best esports clubs competing for a pool of USD 60 mn — the largest purse in esports.
IN CONTEXT- Saudi aims to be a global power in esports: Multi-bn USD development Qiddiya is also set to be home to the world’s first gaming and esports district. The Kingdom has invested heavily in the domestic and global game development industries and aims to see gaming contribute SAR 50 bn to the economy by 2030.
#2- Robert Whittaker (also known as The Reaper) knocked out Ikram Aliskerov in the debut UFC card at the Kingdom Arena in Riyadh on Saturday. Former middleweight champion Whittaker hit Aliskerov with a massive overhand in the first round, forcing the referee to stop the fight which lasted a little under two minutes. This victory marks Whittaker’s first knockout win since 2017.