The PIF now holds a majority stake in MBC

The Public Investment Fund (PIF) now holds a majority stake in MBC, after acquiring Istedamah Holding’s entire 54% stake in the media company for SAR 7.5 bn under a binding share sale and purchase agreement, according to a disclosure to Tadawul. The transaction saw Istedamah selling its stake in MBC at SAR 41.60 per share. Bloomberg also had the story.

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IN CONTEXT- The PIF is shifting its strategy towards domestic investments, with plans to reduce overseas exposure from 30% to 18-20%, to support domestic diversification projects and encourage co-investment from foreign firms within the Kingdom. The move just comes one day after the sovereign wealth fund signed five MoUs worth USD 51 bn with Japanese banks for two-way capital flows.

Market reax: MBC’s shares closed up 10% yesterday at SAR 45.75 apiece on the back of news of the acquisition.

BinDawood Holding signed a sale and purchase agreement for the full acquisition of Zahrat Al Rawdah Pharma for SAR 444.1 mn from Kawakeb Al Saydailyat, according to a press release (pdf) and a disclosure to Tadawul. Zahrat Al Rawdah’s mother company, Gulf Pharma Industries, had disclosed the planned acquisition earlier this week, saying that the transaction is expected to close by 1Q 2025.

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The breakdown: BinDawood paid SAR 40.8 mn as an upfront deposit when signing the agreement, with the remaining balance due later subject to certain adjustments in accordance with the signed agreement. Planet Pharma has stepped in as a seller guarantor for the acquisition.

The pitch: The acquisition will enable BinDawood to integrate pharma products at its retail outlets, expanding its footprint in the health and wellness sector. Zahrat Al Rawdah will retain its brand identity post-acquisition.

About Zahrat: Zahrat Al Rawdah Pharma, a wholly-owned subsidiary of UAE-based Gulf Pharma Industries’ (Julphar) retail and distribution arm, currently operates 173 Zahrat Al Rawdah pharmacies in the Kingdom.

Jana Medical is guiding on a price range of SAR 40-44 per share for its offering of a 25% stake on Tadawul’s parallel market Nomu, the transaction’s financial advisor Afaq Capital said in a disclosure to Tadawul.

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Proceeds + market cap: At the top of the range, the pricing would see Jana Medical raise SAR 28.3 mn in proceeds, and would give it a market cap of SAR 141.4 mn at listing, according to our calculations. Of the total proceeds, SAR 2.9 mn will be deducted to cover offering-related expenses, with remaining funds allocated to medical equipment procurement initiatives that are estimated to cost around SAR 160.7 mn. Company resources, earnings, and bank facilities will be used to cover procurement costs that exceed the offering’s proceeds. Shareholders will not be allocated any proceeds from the offering.

Lock-up period: Major shareholders will be restricted from executing any transactions on their shares for 12 months from the first day of trading.

What’s next? Qualified investors can book a minimum of 10 shares and a maximum of 157.4k apiece between this Wednesday, 6 November and next Thursday, 14 November. Final allocations are set for Tuesday, 19 November, while any available refunds will be processed by Sunday 24 November. The first day of trading will be announced once all regulatory requirements have been met.

ADVISORS- Afaq Capital is assuming the role of financial advisor, while Musharaka Capital is stepping in as lead manager and RSM Global as auditor. Receiving agents include Alistithmar Capital, Alinma Investment, SNB Capital, Aljazira Capital, Riyad Capital, ANB Capital, Albilad Capital, Al Rajhi Capital, Derayah Financial, Saudi Fransi Capital, SAB Invest, Alkhabeer Capital, Yaqeen Capital.

Saudi banks achieved their highest quarterly net income on record in 3Q 2024, at SAR 20.5 bn, rising 13.5% y-o-y, according to Asharq Al Awsat. On a 9M basis, Saudi banks saw an 11.6% y-o-y increase in net income, amounting to SAR 58.7 bn, compared to SAR 52.6 bn for the same period in 2023.

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Saudi National Bank recorded the highest net income during the quarter, rising 7.1% y-o-y to reach SAR 5.4 bn. Al Rajhi Bank followed, with a 22.8% rise, totaling SAR 5.1 bn. Riyad Bank recorded the highest growth rate among Saudi banks, up 27% y-o-y, with the third highest net income of SAR 2.7 bn. Of the 10 Tadawul-listed Saudi banks, only Banque Saudi Fransi experienced a decline in net income, down 7.8% y-o-y to SAR 1.2 bn

Pressure from liquidity constraints: Despite the generally positive results, banks faced liquidity pressures as financing portfolios grew by 12.4%, outpacing deposit growth of 10.5%.

Saudi-based Edafa Venture Capital took a strategic stake in corporate solutions app TaskedIn in a USD multi-mn transaction, it said in a statement. Edafa did not disclose exact figures on the value of the transaction or the size of the stake it has acquired in Taskedin.

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Use of proceeds: The capital is earmarked for accelerating TaskedIn’s expansion in Saudi, the GCC, and external markets.

Edafa is going regional: The acquisition comes as part of the Saudi VC’s push into the Egyptian market, where TaskedIn is based. Edafa is also lining up new branches in Bahrain and Qatar in an effort to back regional startups.

Meet TaskedIn: The Egypt-born digital workspace platform provides integrated solutions for task management, human resources, payroll, attendance and departure tracking, while also supplying tools for virtual meetings. Taskedin looks to replace traditional channels for communication including emails and Whatsapp and is claimed to cut operating costs by up to 30%.

IN OTHER STARTUP NEWS-

Edafa Venture Capital also nabbed a 25% stake in Cairo-based edtech Bonyan for an undisclosed sum, Waya reports. The investment will enable Bonyan’s to expand its educational programs, which leverage interactive tools to teach programming and computing skills to children.

AL HAMMADI HOLDING-

Al Hammadi Holding’s net income grew 5.7% y-o-y to SAR 79.1 mn in 3Q 2024, according to the company’s earnings report (pdf). The higher bottom line was driven by higher financing revenue and higher profitshare from associates, the company said in a disclosure to Tadawul. Meanwhile, revenues fell 2.4% y-o-y to SAR 290.6 mn during the quarter on the back of reduced sales to the Health Ministry and a decline in drug sales to subsidiaries.

On a 9M basis: The company’s bottom line was up 10% y-o-y at SAR 261.0 mn during the first nine months of the year on the back of improved profitability attributable to reduced costs. Revenues fell 4.8% to SAR 831.1 mn during the period due to lower patient numbers, and reduced pharma sales to subsidiaries, the release read.

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Riyadh Cables Group’s net income rose 76.9% y-o-y to SAR 234.8 mn in 3Q 2024, on the back of higher sales volumes and an improved product mix, it said in a disclosure to Tadawul. Meanwhile, revenues grew 16.9% at SAR 2.43 bn.

On a 9M basis: The company’s bottom line was up 46.4% y-o-y at SAR 563.1 mn during the first nine months of the year, while revenues increased 9.7% at SAR 6.51 bn.

ELM-

PIF-owned digital solutions provider Elm Company’s net income increased 49.1% y-o-y to SAR 498 mn in 3Q 2024, as boosted sales offset higher expenses and a fall in Murabaha income, the company said in a disclosure to Tadawul. Revenues were up 23% over the same period at SAR 1.87 bn, on the back of growth in the digital business and business process outsourcing segments which offset a drop in professional services.

On a 9M basis: The company saw its net income up 29.1% y-o-y at SAR 1.33 bn during the first nine months of the year, while revenues increased 25.3% at SAR 5.28 bn.

AL MAJED OUD-

Al Majed Oud’s net income increased 59.3% y-o-y to SAR 22.4 mn in 3Q 2024 on the back of higher sales and improved operational performance, the company said in a disclosure to Tadawul. Revenues were up 41% over the same period at SAR 170.6 mn.

On a 9M basis: The company net income rose 23.3% y-o-y to SAR 141.9 mn during the first nine months of the year, with new store openings driving gains. Revenues increased 25.5% at SAR 683.7 mn.

REMEMBER- The perfume maker wrapped up a 30% stake offering on Tadawul’s main market in September at SAR 94 apiece, raising SAR 705 mn in proceeds, and giving it a market cap of SAR 24 bn at listing. The institutional tranche of the offering was 15.6x oversubscribed while the retail tranche was 8.2x oversubscribed.

SULAIMAN AL HABIB-

Sulaiman Al Habib's net income increased 9.3% y-o-y to SAR 595.5 mn in 3Q 2024, driven by increased patient numbers, the company said in a disclosure to Tadawul. Revenues were up 21.8% over the same period at SAR 2.98 bn on the back of growth in both hospital and pharma segments, with the uptick in patient numbers also driving pharma growth.

On a 9M basis: The company's net income rose 11.9% y-o-y to SAR 1.7 bn during the first nine months of the year while revenues increased 14.9% at SAR 8.1 bn.

LUBEREF-

Aramco Base Oil Company (Luberef)’s net income fell 33.6% y-o-y to SAR 226 mn in 3Q 2024, as falls in by-product crack margins and a slight dip in base oil margins offset gains in base oil sales volumes, according to a disclosure to Tadawul and an earnings release (pdf). Revenues fell 2.1% y-o-y to SAR 2.5 bn over the same period, on the back of declining by-product prices which offset higher sales volumes.

On a 9M basis: The company net income decreased 38.4% y-o-y to SAR 763.8 mn during the first nine months of the year while revenues increased 6.5% at SAR 7.4 bn.

State-owned Okaz’s general assembly re-elected Abdullah Saleh Kamel as chairman for another five-year term, according to Okaz. Kamel is the chairman of Umm Al Qura Company for Development and Construction, Al Baraka Banking Group, and the Islamic Chamber of Commerce.

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Following the launch of Sindalah Island at the end of last month, Bloomberg looks at Saudi’s tourism push. The island, which includes luxury offerings including overwater bungalows, desert-view infinity pools, and sea-side resorts, is one of many new projects expected to contribute to driving growth towards the Kingdom’s targeted 150 mn tourists by 2030, Bloomberg notes.

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Lots of new hotel rooms are on the way: Developers are committing some USD 110 bn towards hospitality projects in the Kingdom, with analysts expecting the country’s hotel capacity to double by 2030. The ongoing developments represent “one of the biggest hotel pipelines on the planet,” Bloomberg said. Saudi’s plans to host upcoming mega events such as the 2030 World Expo, 2034 FIFA World Cup, and 2029 Asian Winter Games are also set to boost its appeal as a major tourist destination.

Religious tourism is still expected to form the “bedrock” of Saudi tourism, officials said, with more than half of the planned hotel capacity slated for Makkah and Madinah. However, the Saudi government is also planning to encourage tourists from this category to visit other parts of the Kingdom after completing their visits to religious sites.

CAPITAL MARKETS-

SNB Capital opened subscription for its newest fund, SNB Capital Saudi Nomu Market Fund, giving retail investors access to equities on parallel market Nomu without the need to meet the Qualified Investor criteria, according to a press release (pdf). The initial offering subscription is available through the SNB Capital app, with a minimum subscription of SAR 5k.

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MANUFACTURING -

Al Watania Poultry opened a 17.7k kW cooling plant, the largest in the Middle East, according to a press release. The new plant will primarily serve an automated slaughterhouse that processes 36k birds per hour, in addition to providing cooling solutions to the latter’s warehouses, according to a press release. Al Watania tapped GEA to construct the facility’s machinery.

LOGISTICS-

Emirates Shipping Line brings EGRC service to Jeddah Port: Dubai-based container liner company Emirates Shipping Line (ESL) added new shipping routes to Jeddah Islamic Port, connecting it to Jebel Ali in the UAE, Aqaba in Jordan, and Ain Sokhna in Egypt, with a handling capacity of some 2.6k standard containers, the Saudi Ports Authority (Mawani) said in a statement. The ESL Gulf Red Sea Connector service would support regional market needs, facilitate trade, and strengthen the Kingdom’s position as a global logistics hub, according to Mawani.

DIGITIZATION-

Edarat signs contract to manage Sahayeb’s data centers: Al Moammar Information Systems (MIS) tapped affiliate cloud solutions firm Edarat Communication and Information Technology Co. to provide support and maintenance services to Sahayeb ’s data center facilities under a SAR 125.8 mn agreement signed yesterday, according to a disclosure to Tadawul. MIS, which owns a 30% stake in Edarat, awarded the company the three-year contract in June.

BANKING

Alkhabeer Capital signs profitrate swap hedging agreement with AlRajhi Bank: Alkhabeer Capital agreed to a profitrate swap hedging contract with AlRajhi Bank for an amount of SAR 170 mn to fix a profitrate of 50% for some SAR 737.5 mn Alkhabeer used under a SAR 1.04 bn credit facility from the lender, according to a disclosure to Tadawul. The credit facility was used for Alkhabeer REIT Fund offering, where it tapped SAR 340 mn for the fund’s initial offering, and SAR 397.5 mn for its first additional offering.

The rationale: The hedging facility aims to safeguard the fund against potential profitrate fluctuations during the remaining tenor of the facility, which matures in September 2031.

ENTERTAINMENT-

Qiddiya eyes digital revamp with Globant partnership: PIF-owned entertainment company Qiddiya Investment and Luxembourg-born tech heavyweight Globant will develop the Qiddiya Play Life Connected Experience, with the goal of turning Qiddiya City into an immersive playground for entertainment, sports and culture, according to a joint statement.

Tech meets play: The agreement will see Globant create a digital ecosystem using AI, data analytics and cloud technology to personalize visitor interactions, streamline event bookings and enhance overall engagement.

DEBT WATCH-

Nomu-listed Academy of Learning Company secured a SAR 30 mn, four-year Shariah-compliant loan from Bank Albilad to fund future expansions, it said in a disclosure to Tadawul. No details were provided on the specific projects the loan will fund.

Analysts anticipate a flurry of rate cuts following this week’s US elections: The US Federal Reserve and its peers around the world are expected to cut interest rates following Tuesday’s US presidential elections, Bloomberg reports. Analysts expect central banks responsible for over a third of the global economy to make their decisions partly based on the results of the election — all with their own guesses over how each result could shape American economic policy over the next four years.

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Remember: The expected cuts come just two months after the Fed’s 50 bps rate cut in September — its first in over four years.

While some were skeptical of an incoming loosening cycle, employment data begged to differ: Weak US employment data for October released on Friday showed hiring increase at its slowest pace since 2020, pushing up analysts’ expectations of multiple rate cuts this year even further, according to Bloomberg. This comes after top Wall Street executives — including the chief executives of Goldman Sachs, Morgan Stanley, and Standard Chartered, among others — suggested last week that the US Federal Reserve is unlikely to enact more than one more interest rate cut by year-end.

The question is, by how much? Economists see the Fed opting for a 25 bps cut on Thursday, with another such cut penciled in for December, Bloomberg writes, with the UK, Sweden, the Czech Republic, and a number of other countries anticipated to cut rates following election day. However, central banks could hold off on their decisions until there’s a settled result, which — if 2020’s drawn-out process is any indication — could extend several days beyond election day.

Economists see the result as having big implications for global trade policy: “With polls showing the campaign in a dead heat, the stakes couldn’t be higher. The winner will be able to reshape trade policy — Trump, especially, is likely to make use of this power if he wins,” economists from research service Bloomberg Economics said.

MARKETS THIS MORNING-

Most Asian markets are in the green this morning — South Korea’s Kospi is leading the gains, up over 1.5% in early trading. The Shanghai is up 0.4% and the Hang Seng is up 0.2%.

THE CLOSING BELL: TADAWUL-

The TASI rose 0.2% yesterday on turnover of SAR 4.2 bn. The index is up 0.7% YTD.

In the green: Riyadh Cables (+10.0%), MBC Group (+10.0%) and Anaam Holding (+8.0%).

In the red: Jabal Omar (-4.2%), Rasan (-4.0%) and Fourth Milling (-3.9%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.3% yesterday on turnover of SAR 66.5 mn. The index is up 11.3% YTD.

In the green: Meyar (+7.6%), WSM (+6.5%) and NGDC(+6.0%).

In the red: Paper Home (-8.2%), Al Wasail Industrial (-6.9%) and Al Dawliah (-5.9%)