Stonepeak, Arab Energy Fund to invest in energy infrastructure under USD 1 bn partnership

The Arab Energy Fund (formerly known as Apicorp) formed a USD 1 bn partnership with US-based infrastructure investor Stonepeak to invest in energy infrastructure across the Middle East, primarily targeting businesses within the sector, according to a press release (pdf). No further details were provided on the timeline, targets, or mechanism for the planned investments.

What they said: “We aim to accelerate the development of resilient, future-ready energy platforms that contribute to economic growth and energy security across the Middle East,” CEO of the Arab Energy Fund Khalid Ali Al Ruwaigh said.

About Stonepeak: Stonepeak is a USD 73 bn alternative investment firm specializing in real estate, energy transition, digital infrastructure, logistics, and transport.

ICYMI- The Arab Energy Fund inked a non-binding MoU with I Squared Capital earlier this month to advance a strategy for scaling up energy infrastructure to support regional decarbonization efforts. Last month, Stonepeak said it plans on opening a second office in Riyadh.

A handful of public-private partnership agreements and initiatives valued at a combined SAR 8.5 bn were signed at the Hail Investment Forum 2025 earlier this week, state news agency SPA reports. No further details were provided on the nature of the agreements or the signing parties. The agreements are designed to support the Hail region’s growth and improve its economic and business climate.

The forum saw the launch of several potential investment projects worth SAR 34.2 bn in total, which are listed on the Invest Saudi platform. The investments span sectors including agriculture, tourism, manufacturing, and sports.

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Investments in Hail have been on the up: Foreign direct investment in Hail has reached SAR 1.4 bn, with 177 active licenses across construction, manufacturing, tourism and hospitality, food, and wholesale and retail trade, Investment Minister Khalid Al Falih said at the forum. The Investment Ministry also backed the recent launch of several tourism projects totaling around SAR 700 mn.

And there’s more in the pipeline: The ministry plans to open over 40 investment locations in Hail, including Al Shanan Park, Al Ni’ay Park, agricultural nurseries, and marketing service centers. Al Jawhara Tower offers 13k cbm of water storage alongside potential investments in its facilities and nearby areas.

ALSO- The Transport and Logistics Ministry announced its plans to expand Hail International Airport to an annual passenger capacity of over 2.2 mn, the Saudi Gazette reports. This comes as part of a broader plan to leverage the airport’s proximity to 11 Arab capitals (60 minutes away) and Central Europe (200 minutes away) and transform Hail into an integrated logistics center — a plan that includes a 374k sqm logistic hub.

Anmat priced its IPO on Tadawul’s parallel market Nomu at SAR 9.5 per share, according to a filing to Tadawul. The multi-sector firm is set to raise SAR 47.5 mn from the sale of 5 mn new shares, giving the company a market cap of SAR 408.5 mn at listing, based on our calculations.

REFRESHER- The company is offering a 11.6% stake on Nomu as it seeks to shore up capital to finance two of its already-awarded projects that are expected to cost SAR 45 mn. Some SAR 2.5 mn of total proceeds are earmarked to cover transaction-related costs. The company’s two substantial shareholders will retain 88.4% ownership post-IPO, down from 100%, and will not receive any proceeds from the offering.

What’s next: The subscription window runs from this Thursday, 22 May until next Tuesday, 27 May, during which qualified investors can subscribe for up to 2 mn shares each, with a minimum order size of 100 shares. Final allocations are expected to be announced on Sunday, 1 June.

ADVISORS- Merchant’s Capital is quarterbacking the transaction as financial advisor, with Alinma Capital serving as lead manager on the transaction. RSM is serving as an independent auditor. Receiving agents include Al Jazira Capital, Albilad Capital, Alkhabeer Capital, and ANB Capital, among others.

ALSO IN THE PIPELINE:

• Hawiya Auctions, Asas Makeen, Dkhoun, Axxelerated Solutions, Al Khaldi Logistics, Adeer Real Estate, and Dome International were the latest to price their Nomu IPOs;
• Al Kuzama Trading is guiding on a price range of SAR 99-107 per share;
• Meanwhile, Qudra for Communications and IT, the National Signage Industrial Company, Naf for Feed Industry, medical equipment supplier Wajd, and property developer Hammad Mohammed Bin Saedan Real Estate were given the CMA’s all-clear to list on the parallel market.

Regional eyewear retailer Magrabi Retail Group plans to acquire 100% of Kuwait-based optical chain Kefan Optics for an undisclosed sum, according to a joint statement (pdf). The transaction would see Magrabi add 37 stores to its network, expanding its presence in the Kuwaiti market and pushing its total store count to more than 350 across the GCC and Egypt by year-end.

The transaction marks Magrabi’s second major retail acquisition in less than a year, following its acquisition of Dubai’s Rivoli Vision last September.

We love to hear about consolidations in fragmented markets: Magrabi is doing what regional category leaders are expected to do — buying scale, cutting overlap, and consolidating. Magrabi says it will retain the Kefan brand post-acquisition while integrating its own retail and customer service standards into the chain.

Kefan’s JVs + subsidiaries: Kefan also has a joint venture with Nikon for lens manufacturing and is a shareholder in Optical Supplies Company, which owns and distributes the Bella colored contact lens brand. Optical Supplies Company isn’t included in the transaction with Magrabi, the statement said.

Saudi Arabia has become the global frontrunner in mega construction projects, with active developments valued at USD 1.5 tn, according to a Versatile International white paper (pdf). This pipeline — featuring giga-projects like Neom, Diriyah Gate, Jeddah Central, and King Salman International Airport, alongside the Kingdom’s significant infrastructure investment — is rapidly establishing Saudi Arabia as the regional benchmark in construction, Versatile Chairman and CEO Marco Fahd told Al Arabiya.

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The construction boom is driving a shift in supply chain models, with 55% of professionals in Saudi Arabia and the UAE now prioritizing regional supply chains to boost economic resilience and lower emissions. Though Saudi Arabia is increasingly using local materials like limestone for sustainability and economic independence, 48% of professionals acknowledge that complete reliance on local sources is unrealistic, affirming the ongoing necessity of international partnerships.

The major challenges: The primary challenge for regional construction is cost increases, driven by massive and complex projects, the report reads. Rework is another major factor, with 57% citing it as the main cause of cost inflation (prompting 42% of firms to allocate 5-10% of budgets to it). Significant labor shortages, which 56% of professionals anticipate will come into play over the next decade, were also highlighted in the report amid rising demand, which has made workforce development a high priority and prompted firms to explore automation and digital solutions to bridge the skills gap.

REMEMBER- Construction costs in Saudi Arabia rose between 3.4% and 4.2% in 2024, driven by material shortages, heightened labor demand, and inflation in raw materials and energy, according to a Stonehaven report. The Tender Price Index (TPI), which averaged 6.1% growth over the last four years, is projected to rise by 7.4% in 2025, driven by increasing contractor expenses related to labor and living costs.

All eyes are on AI, with 57% of professionals in Saudi Arabia and the UAE identifying AI and automation as the most significant industry trend. AI integration is already reshaping project management, with 60% of professionals using AI-powered tools to improve scheduling and resource allocation, reduce rework, and boost supply chain efficiencies. Qiddiya has been among the pioneers in the sector in adopting AI-powered project management tools and Building Information Modeling (BIM).

Looking ahead: Fahd expects further investment in AI-powered BIM and data-led oversight tools for optimized resource allocation and predictive maintenance. Modular and prefabricated construction methods are also becoming increasingly crucial, with projects like Neom spearheading their adoption for improved efficiency and sustainability.

About Versatile International: Versatile International is a project management consultancy with offices in Dubai and Riyadh, specializing in destination-scale real estate development projects. It provides services to asset developers in supply chain management, risk mitigation, and procurement.

Saudi Arabia’s ins. sector contributed 2.59% to non-oil GDP in 2024, up from 2.38% in 2023, the Ins. Authority said in its 2024 Ins. Market Report (pdf). The sector’s bottom line rose to SAR 3.6 bn in 2024, compared y-o-y to SAR 3.2 bn, supported by improved services and higher investment income. The Saudization rate in the sector climbed to 85%, up 10 percentage points in 2023.

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Premiums, penetration, and density: Total gross written premiums (GWP) grew 16.3% y-o-y to SAR 76.1 bn in 2024. Health ins. remained dominant at 55% of total GWP, despite a slight decline from 59% the previous year, while protection and savings ins. rose sharply to 10.1%, up from 3.9% in 2024. Ins. penetration increased to 1.87% of GDP, up from 1.64% in 2023, while ins. density (GWP per capita) rose 16.3% to SAR 2.4k per capita.

Health and motor ins. together accounted for 73.7% of total GWP in 2024. Health ins. premiums grew by 9.4% y-o-y to 55.5% of GWP last year, while motor ins. premiums declined by 2.8% y-o-y to 18.2%. Protection and savings ins. saw a 200% jump in premiums to SAR 7.7 bn, representing 10% of total GWP. The retention ratio for health and motor ins. increased slightly, exceeding 98% in both categories, while property ins. rose three percentage points to 21.7% and marine ins. fell five percentage points to 25.5%.

In terms of client segments, retail ins. GWP logged SAR 17.1 bn, representing 22.4% of the total market in 2024. Within motor ins., individual policyholders accounted for 63.6% of total motor premiums. Ins. for micro enterprises represented 2.9% of total market GWP, small enterprises made up 6.6%, and medium enterprises accounted for 11.2%. Corporate ins. remained dominant, representing 56.9% of total market GWP, with corporates contributing 70.1% of health ins. GWP.

Direct and online sales led distribution, contributing 54.4% of GWP in 2024, up from 50.3% the year prior. Broker sales accounted for 44%, with online broker sales comprising 9.6%. Sales through agents continued to decline, falling to just 1.6% in 2024, compared to 3.6% in 2023.

Claims and gains on the up: Gross claims paid rose 15.9% to SAR 47.9 bn in 2024. Health ins. claims increased 12.1%, while motor ins. claims jumped 21.2%. Net investment income improved to SAR 3.46 bn in 2024 from SAR 2.56 bn in 2023, supporting higher overall net income and pushing up ins. operations income to SAR 2.9 bn, compared to SAR 2.66 bn in 2023.

The ins. market balance sheet: Total assets of ins. companies grew to SAR 88.2 bn in 2024, up from SAR 77.4 bn the year before. Investments rose to SAR 26.3 bn from SAR 21 bn. Total liabilities rose to SAR 60.8 bn from SAR 53.8, while total equity increased to SAR 27.4 bn from SAR 23.7 bn. Meanwhile, share capital saw modest growth, logging SAR 15.6 bn.

Regulation round-up: Key regulatory updates in 2024 included the Standard Ins. Policy for compulsory health ins. for domestic workers, allowing the establishment of a mandatory minimum coverage for them. New policies for inspection bodies and high-risk venues established minimum liability coverage and uniform standards, supporting compliance with the Saudi Building Code and safety regulations for populated areas.

Saudi data embassies were put under the spotlight by the foreign press amid US concerns over its semiconductor tech reaching China after a flurry of AI agreements at the Saudi-US summit. Bloomberg highlighted that Saudi Arabia’s newly introduced Global AI Hub Law could enable US control over its computing power in “data embassies” to prevent China from acquiring advanced military AI via Saudi tech entities like Humain.

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The regs are already in the works: Last month, the Communication, Space and Technology Commission published a draft of its Global AI Hub Law, which aims to create an attractive environment for foreign governments to establish sovereign data centers within the Kingdom. The draft law includes three different models for the data hub’s operation, oversight, jurisdiction, and provisions such as a 120-day period for guest countries to retrieve their data if their agreement with the Kingdom terminates.

SOUND SMART- A data embassy is a data center located in one country yet is legally under the jurisdiction of another, which requires specific bilateral agreements, as it's uncertain if the 1961 Vienna Convention protecting traditional diplomatic missions would apply to data centers.

IN CONTEXT- Nvidia’s partnership with PIF-backed Humain to construct a 500 MW AI facility on Saudi soil marked a shift in US policy under the Trump administration — reversing Biden-era AI chip restrictions — to grant the Kingdom greater access, partly to counter China’s growing chip influence. The access is conditioned on Saudi Arabia avoiding Chinese AI technology, such as Huawei chips, which the US deems a violation of export controls, though enforcement of this condition remains uncertain.

OIL & GAS-

Tadawul-listed oil and gas drilling services provider Ades Holding inked a SAR 1.6 bn (USD 429 mn), 10-year renewal contract with Aramco for one of its offshore jackup rigs, it said in a press release (pdf).

ICYMI- Ades Holding inked a SAR 816 mn, four-year contract extension last week with Qatar-based North Oil Company to continue leasing the Sapphire Driller jackup rig. It also extended contracts in April for three of its offshore jackup rigs operating in Egypt.

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DEBT WATCH-

Tadawul-listed Saudi Ground Services (SGS) lined up a SAR 550 mn shariah-compliant funding agreement with the Saudi National Bank, according to a disclosure to Tadawul. The funding, which runs until the end of 2027, allows SGS to draw up to SAR 450 mn to support its working capital needs, in addition to SAR 100 mn to cover contractual agreements.

ALSO- SGS landed another SAR 300 mn facility with Banque Saudi Fransi to fund its working capital, according to a separate disclosure. The facility expires at the end of April 2026, with an optional one-year extension.

TELECOMMUNICATIONS-

Solutions inks SAR 651.7 mn tech contracts with stc: Arabian Internet Communications Services Company (solutions) signed two five-year contracts worth around SAR 651.7 mn with its parent company, the Saudi Telecom Company (stc), according to a disclosure to Tadawul. The agreements include upgrading IT systems like computing, storage, and databases, and renewing Oracle software licenses.

REMEMBER- STC and Oracle expanded their strategic partnership last week with a SAR 2 bn agreement to advance AI-powered cloud infrastructure and sovereign cloud solutions in the Kingdom. The initiative will be delivered through Oracle’s Alloy platform which is hosted in data centers operated by Center3, stc’s digital infrastructure subsidiary.

FINANCIAL SERVICES-

Badwa Capital can now start operating as an arranger in the securities business, after it secured the Capital Market Authority’s (CMA) approval, according to a statement. The company fulfilled all the regulatory requirements stipulated by the CMA.

STARTUP WATCH-

Aramco’s VC arm, Wa’ed Ventures, and stc Group’s Tali Ventures co-led a USD 19 mn extension round for US-based Network-as-a-Service (NaaS) provider Graphiant, according to a press release. The investment, part of a broader USD 102 mn series B round, includes an agreement for Graphiant to establish its regional headquarters in Riyadh. The round also included participation from Sequoia Capital, Two Bear Capital, and IAG Capital Partners.

About the company: Founded in 2020 by Khalid Raza (LinkedIn), Graphiant provides a modern NaaS platform delivering secure, high-performance connections for hybrid and multi-cloud setups.

DISPUTE WATCH-

CMA authorizes Al Baha to proceed with SAR 100 mn complaint against ex-directors: The Capital Market Authority approved Al Baha company’s request to file its complaint with the Committee for the Resolution of Securities Disputes, according to a disclosure to Tadawul.

REMEMBER- Last week, the company filed a SAR 100 mn compensation claim against former board members who served between February 2010 and February 2013, over a disputed asset sale that led to financial losses and a stock suspension for Al Baha. The recovery includes the reversal of a SAR 84 mn provision and SAR 16 mn in damages. Legal outcomes remain uncertain at this time.

Wall Street’s Magnificent 7 are losing their shine, with the indices that track tech heavyweights Apple, Alphabet, Amazon, Tesla, Meta, Microsoft, and Nvidia now lagging behind the S&P 500 throughout the year so far, Bloomberg notes.

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It’s only the second time in a decade that tech’s powerhouses have underperformed the broader market during the year, a sharp turnaround from 2024 when tech and telecom stocks led the S&P 500 to a historic 23% annual gain.

BY THE NUMBERS- The now not-so-magnificent tech stocks are collectively down 4.4% since the start of the year, while the broader index has recently emerged back in the green at 1.4% following the announcement of a temporary US-China trade war truce earlier this month. This is in stark contrast to the decade-long view, which saw the S&P 500’s 181% gains dwarfed by Big Tech’s 2179% gains.

Investors are now looking toward other sectors, including industry, utilities, and finance, which are fueling investors' interest this year. The move signals a sea change in approach as investors start to focus more on company fundamentals than macro uncertainty. “The market is starting to look back more at individual stocks and companies and financial strength and innovation,” RGA Investments CIO Rick Gardner told Bloomberg.

But some still see an approaching Big Tech comeback in the cards, including Gardner who has been building up his stock portfolio on the assumption of a recovery. Hedge funds are also slowly returning, with Goldman Sachs’ prime brokerage reporting the fastest US equity buying since April 9 — the day markets surged on Trump’s tariff reprieve — which was led by tech stocks.

Not all of tech’s biggest names are having a bad year, with Meta up 9.4% YTD and Microsoft gaining 8.9% since the start of the year, boosted by solid earnings and limited China exposure. Despite initial concerns, Nvidia is flat for the year ahead of its next earnings release on 28 May.

Taking the Maginificent 7 down a peg or two could be good for the market overall, with the S&P 500’s ability to climb despite Big Tech losses a sign of a healthier and more sustainable market, according to Principal Asset Management CIO George Maris. “You probably have a healthier, more fundamentally-oriented market if you have greater participation across the investment universe,” he explained.

MARKETS THIS MORNING-

Asian markets are in the green in early trading this morning. Japan’s Nikkei is up 0.6%, Korea’s Kospi is looking at gains of 0.1%, the Shanghai Composite and the Hang Seng are both in the green, up 0.3% and 1%, respectively.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.3% yesterday on turnover of SAR 4.8 bn. The index is down 5.2% YTD.

In the green: Al Baha (+6.7%), SPPC (+5.1%) and NCLE (+4.8%).

In the red: MESC (-5.8%), Gasco (-4.7%) and eXtra (-4.7%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.6% yesterday on turnover of SAR 27.4 mn. The index is down 12.6% YTD.

In the green: Enma Alrawabi (+7.9%), Tharwah (+7.6%) and Paper Home (+6.6%).

In the red: Naseej Tech (-9.3%), Ghida Alsultan (-8.6%) and NBM (-7.7%).

CORPORATE ACTIONS-

Al Hassan Ghazi Ibrahim Shaker’s board (Shaker Group) recommended a SAR 27.8 mn dividend distribution for FY 2024 at SAR 0.5 a piece, the home appliances importer and distributor said in a bourse filing (pdf). The distribution is set to begin on Thursday, 29 May.

Alujain Corporation’s board greenlit a SAR 51.9 mn dividend distribution for 1Q 2025 at SAR 0.75 a piece — in alignment with its recently approved policy, it said in a disclosure to Tadawul. The distribution date is set for Monday, 2 June.