Most Important News

1. Goldman Sachs: Oil Prices Have Yet to Factor in Geopolitical Risks;
2. Savola to Reduce Capital and Distribute Almarai Stake to Shareholders;
3. AMD Reaches Milestone as Oracle Adopts MI300X for Supercomputing Cluster;

1. Market Summary

On Thursday, Saudi Arabia's benchmark index Tadawul All Shares Index(TASI.SA) up by 0.25%, with top gainer Arab Sea Information System Co.(7201.SA) surged 9.91% and Batic Investments and Logistics Co.(4110.SA) increased 8.47%.

Dow Jones Industrial Average(DJI.US) up by 0.33% on Friday, with the S&P 500 index(SPX.US) and NASDAQ(IXIC.US) both closed in the red, down by 0.13% and 0.39% respectively.

2. Quick News

Saudi Banks Set for Profit Boost Amid Interest Rate Cuts

Saudi banks are poised for higher profit margins in early 2025 due to anticipated interest rate cuts, according to a recent Bloomberg Intelligence report. Their conservative leverage, higher valuations, and tax management position them ahead of Gulf counterparts.

Additionally, with Saudi Arabia's significant involvement in a $2 trillion construction pipeline, demand for funding will increase. The rate cuts are expected to support Vision 2030 and stimulate non-oil sectors like real estate and infrastructure.

Saudi Arabia's GDP Growth to Accelerate to 5.3% in 2025

S&P Global projects Saudi Arabia's GDP to grow by 1.4% in 2024 and accelerate to 5.3% in 2025, supported by US rate cuts and the Kingdom’s economic diversification efforts. The reforms, aimed at reducing oil dependence, are expected to boost sectors like tourism and construction.

Goldman Sachs: Oil Prices Have Yet to Factor in Geopolitical Risks Amid Middle East Conflict

Goldman Sachs warns that oil prices, Brent Crude closed at $71.98 per barrel, haven't priced in the escalating geopolitical risks following Hezbollah leader Nasrallah's death.

Analyst Lina Thomas highlights that oil prices are supported by four key factors: a global easing cycle, rising inventories signaling future supply shortages, low positioning and valuations, and the absence of geopolitical risk pricing.

With record-high net short positions in the oil market, the risk of a short squeeze increases as geopolitical tensions escalate.

3. Stocks To Watch

KSA Stocks

Savola to Reduce Capital and Distribute Almarai Stake to Shareholders

Savola Group(2050.SA)'s board has recommended reducing its capital by 73.54%, from SAR 11.34 billion to SAR 3 billion, through canceling shares.

The capital reduction is due to excess capital and aims to optimize the company's capital structure while facilitating the distribution of its entire 34.52% stake in Almarai as in-kind compensation to eligible shareholders.

This significant transaction is subject to regulatory approval and an extraordinary general assembly.

The capital reduction will not impact Savola’s obligations or operations but will reduce its share in Almarai's future profits.

The creditors' objection period for the capital reduction has commenced, ending on November 10, 2024.

Riyad Bank Completes $750 Million Sustainable Sukuk Offering

Riyad Bank(1010.SA) has successfully completed the issuance of its USD 750 million additional tier 1 capital sustainable sukuk, with a 5.50% annual return and a perpetual maturity, callable after 5 years. The sukuk will be listed on the London Stock Exchange, with settlement on October 3, 2024.

USA Stocks

Apple's AI-Driven Siri Could Generate Billions, Says BofA Analyst

Bank of America analyst Wamsi Mohan predicts Apple Inc.(AAPL.US) could earn billions from its AI-driven Siri, despite the iPhone 16 lacking AI features at launch. Mohan projects Siri’s deep integration with apps like Uber and DoorDash could generate $30 billion by 2026 and $500 billion over a decade. This AI development could boost Apple’s revenue even as current iPhone 16 demand remains soft compared to last year.

AMD Reaches Milestone as Oracle Adopts MI300X for Supercomputing Cluster

Oracle Corporation(ORCL.US) has chosen Advanced Micro Devices, Inc.(AMD.US)’s MI300X AI accelerator for its latest OCI supercomputing cluster, a significant win for AMD. This partnership, using AMD's ROCm ecosystem, positions MI300X as a strong competitor to NVIDIA Corporation(NVDA.US)’s H100 and H200 GPUs, marking AMD's increasing foothold in the AI GPU market, where it currently holds less than 10% share.

Gold Stocks Fall as Universa’s CIO Warns of Market Crash

Gold stocks declined on Friday, with Coeur Mining, Inc.(CDE.US) down 5%, Barrick Gold Corp.(GOLD.US) down 3.7%, and U.S. Gold Corp(USAU.US) slipping 1.6%. Mark Spitznagel of Universa Investments predicts a global market crash by year-end, driven by economic slowdown, with gold and cryptocurrencies falling alongside risk assets. Bonds may serve as a safe haven.

- Reporting by Zaid, Sahm News team