THIS MORNING: Bankers haven’t had to prop-up Aramco’s share price since it pulled trigger on USD 11.2 bn secondary offering

Good morning, wonderful people. We have an Aramco-heavy issue to get us started this morning, so let’s jump right in:

UP FIRST- Bankers haven’t had to prop-up Aramco’s share price since the oil giant’s USD 11.2 bn secondary offering, stabilization manager Merrill Lynch KSA said in a disclosure to Tadawul. The stabilization period runs until Tuesday, 9 July.

Uh, Enterprise? What’s price stabilization? It’s when the stock’s underwriters buy shares to support a stock’s price within a set period of the start as trading. The idea is to provide support to keep a stock from falling below its IPO price. Once the price stabilization period ends though, the stock’s price is completely at the market’s whim. Not every IPO or secondary sale has a stabilization fund.

REMEMBER- Aramco closed earlier this month a follow-on offering that saw it raise USD 11.2 bn in what was the largest secondary offering in EMEA since 2000. The transaction was also the largest in equity capital markets in the region since Aramco’s own IPO in 2019. Newly sold shares began trading on Tadawul on Sunday, 9 June after the final allocation of shares took place on Friday, 7 June.

WATCH THIS SPACE-

We have two real estate stories to get us started:

#1- Dar Global eyes US push: Dubai-headquartered Dar Global plans to invest USD 300 mn in to develop luxury homes in the US cities of New York, Miami, and Los Angeles in the coming months, Dar Global’s CEO Ziad El Chaar was quoted as saying by Reuters. Dar Global is a unit of Dar Al Arkan, one the Kingdom’s largest listed real estate developers,.

The developer wants at least half of its US developments to go to non-US buyers, El Chaar said, adding that the first project is scheduled to close before the end of 2024. Dar Global is currently seeking partners to help with the expansion.

#2- Dallah and other investors to launch real estate investment fund: Dallah Healthcare, Dallah Real Estate, Tatweer, and asset management firm AlJazira Capital plan to launch a real estate investment fund, Aleqtisadiah reported citing sources it says have knowledge of the plan. The fund develop a mixed-use building on King Fahd Road in Riyadh that will include commercial and office space, hotels, and healthcare facilities.

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#3- Non-Saudis will now be allowed to take part in auctions by the Zakat, Tax and Customs Authority (Zatca), a statement on the authority’s updated regulations for public auctions showed. The updated regulations also include clearer requirements and procedures for the auctions across Zatca’s air, sea and land ports to ensure transparency. No further details were provided.

FOR THE RECORD-

Our friends at HSBC are “very bullish” on Saudi equities due to the Kingdom’s strong reform program and ongoing economic diversification drive, HSBC Global Banking and Markets Head of Equity Sales, Europe & Emerging Markets Camille Asmar told Argaam on the sidelines of the HSBC GCC London Conference (watch, runtime: 5:51). “If you want to take the long term view, this [Saudi] is the emerging market that offers you one of the most attractive returns,” Asmar said.

DATA POINTS-

#1- Two-way trade between the Gulf and the US reached USD 180 bn in 2023, Aleqtisadiah reports citing statements by Gulf Cooperation Council (GCC) Secretary-General Jassim Al Badawi at a round table in Washington. Al Badawi also talked up opportunities for US investors in large-scale regional infrastructure projects, including the proposed GCC railway that would connect all six GCC member states.

#2- The Saudi sports market will nearly triple in value to SAR 84 bn by 2030, up sharply from SAE 30 bn today Investment Ministry Director of Sports Sector Investment Development Basem Ibrahim said during an industry gathering, SPA reports.

#3- The Small and Medium Enterprises Bank has handed out over SAR 1 bn in loans since its launch in 2021, with SAR 715.4 mn provided under its co-financing program, SAR 235.9 mn under a subsidized loan program, and SAR 88.5 mn under its agency program, according to a report from the National Development Fund.

PSAs-

#1- Saudi citizens should leave Lebanon immediately the Saudi embassy in Beirut said yesterday as tensions ramped up between Hezbollah, Israel, and Iran.

#2- The Friday sermon and prayer at the Grand Mosque in Makkah and the Prophet Mosque in Madinah will be shortened to 15 mins only until the end of summer due to scorching heat, Saudi Gazette reports.

#3- The next round of e-invoicing: Companies that had more than SAR 7 mn in revenues subject to VAT in 2022 or 2023 will have to “integrate their e-invoicing solutions with Zatca’s Fatoora platform from 1 January 2024,” Zatca said in a statement. It’s the latest phase of a e-invoicing rollout that began in late 2021.

WEATHER- Expect some clouds over Riyadh skies with a daytime high of 44°C today and an overnight low of 30°C. Makkah will see a high of 45°C with hot wind before the mercury dips to 31°C at night, and Madinah can look forward to a high of 44°C today and a low of 31°C tonight.

SPORTS-

#1- Spanish-Venezuelan tennis star and former world number-one Garbine Muguruza has been named as director of the WTA Finals that will be held in Riyadh starting this year, according to a WTA statement. It’s the first time a former player assumes a leadership position at the season finale, according to the statement. She will be in charge of planning and delivering the flagship event for the next three years, coordinating between the WTA, Saudi Tennis Federation, and Sports Ministry.

BACKGROUND- Riyadh was named host of the WTA tennis finals from 2024-2026. The tournament, which will run from 2-9 November in Riyadh, will feature the top women singles players as well as doubles matchups with a record purse of USD 15.25 mn on offer.

#2- The Asian Snooker Championship kicked off in Riyadh on Thursday, with more than 200 male and female participants from 15 countries, state news agency SPA reports. The tournament wraps up on Friday, 5 July.

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THE BIG STORY ABROAD-

It was a busy weekend for news by any standard, but one story clearly stands out: Joe Biden’s disastrous debate performance on Thursday night, which has led to a cacophony of calls for him to step aside as the Democratic nominee and allow a younger challenger to take on Donald Trump. Biden stumbled over words and appeared spaced-out at times during the CNN-hosted slugfest, while Trump engaged in serial lies.

Missed it? CNN has a summary and NBC has a three-minute lowlight reel.

Typical of the message Biden is getting right now: To serve his country, President Biden should leave the race, in the New York Times.

How would that work? Biden would have to agree to step aside and release his nearly 3.9k delegates well before the Democratic National Convention gathers in Chicago on 19 August. It won’t be easy, though, the Associated Press warns.

Biden is so far having none of it and has asked wealthy donors to stick stand by him.

ALSO making headlines: A US Supreme Court ruling has dealt a sharp blow to the US administrative state’s ability to regulate businesses. Like in many countries, US legislators pass laws that are brought to life by regulation — and much of that regulation is tested in internal agency tribunals outside of the courts. The overturning on Friday of a 40-year-old precedent now calls into question how that would work going forward the New York Times and Wall Street Journal report.

CLOSER TO HOME- EUR 40 bn in commitments to Egypt? Today is day two of the EU-Egypt investment conference in Cairo, where European Commission President Ursula von der Leyen said yesterday that European Union companies are inking transactions — in the form of contracts and less-sticky MoUs — that could be worth more than EUR 40 bn if they materialize. Von der Leyen said that Egypt’s “stability and prosperity are essential for an entire region,” Retuers reports.

CIRCLE YOUR CALENDAR-

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.

The Real Estate General Authority (REGA) is holding its first media-focused forum in Riyadh on Sunday, 7 July at the Riyadh International Conventions and Exhibitions Center. The forum will discuss the media’s role in developing the real estate market and the future of the relationship between the two industries.