Key Takeaways

1. Demand for Aramco's Secondary Offering Mitigates Market Concerns;
2. Fakeeh Care to List on TASI on June 5;
3. stc Group Considers Offer for United Group, Valued at $8.7 Billion;

I. Market Recap

Saudi Arabia's Tadawul All Shares Index(TASI.SA) increased by 1.58% and the Parallel Market Capped Index (NomuC)(NOMUC.SA) was up by 1.71% on Monday. Saudi Research and Media Group(4210.SA) emerged as the top performer, while Saudi Pharmaceutical Industries and Medical Appliances Corp.(2070.SA) witnessed the most significant drop. 

As of Monday’s close, the S&P 500 index(SPX.US) increased by 0.11%, the NASDAQ(IXIC.US) rose by 0.56%, and the Dow Jones Industrial Average(DJI.US) decreased by 0.30%.

II. Flash Headlines

Saudi Arabia Issues 127 Regional HQ Licenses in Q1 2024

Saudi Arabia issued 127 regional headquarters licenses in Q1 2024, a 477% increase year-on-year, reflecting the Kingdom's favorable business environment. New regulations mandate companies with state contracts to have regional headquarters in the country, employing at least 15 people.

AI Crucial for Saudi Vision 2030, Says PwC Executive

AI and emerging digital technologies are essential for Saudi Arabia to achieve Vision 2030, according to PwC's Marwan Khamis. He emphasized AI's role in improving decision-making and efficiency, with 73% of Middle East CEOs planning AI adoption within three years. Khamis highlighted the importance of project management and fostering a positive work culture for successful transformation.

Kuwaiti Bank in Talks for 50% Stake in TASI-Listed Bank

A Kuwaiti bank is in advanced negotiations to acquire a controlling 50% stake in a Saudi bank listed on the Tadawul All Share Index (TASI), according to Al Rai. The deal could be valued at $1.7 billion, pending regulatory approvals and due diligence.

III. Stocks To Watch

SA snapshot

Demand for Aramco's Secondary Offering Mitigates Market Concerns

Analysts note that demand for Saudi Arabian Oil Co.(2222.SA)’s secondary offering has offset market woes, despite TASI's 7.2% drop in May. Factors like high inflation, interest rates, and geopolitical tensions contributed to selling pressure. However, strong demand for the offering is attracting foreign investment and normalizing liquidity levels, highlighting key sectors like banking, telecommunications, and transportation for investment opportunities.

Fakeeh Care to List on TASI on June 5

Dr. Soliman Abdel Kader Fakeeh Hospital Co.(4017.SA) will debut on the Saudi Exchange (Tadawul) on June 5 under the symbol 4017. The stock will have ±30% daily and ±10% static price fluctuation limits for the first three days, reverting to ±10% daily limits thereafter. Fakeeh Care's IPO offered 49.8 million shares, representing 21.47% of its post-IPO capital, with the retail offering 14.5 times oversubscribed.

stc Group Considers Offer for United Group, Valued at $8.7 Billion

Saudi Telecom Co.(7010.SA) Group is exploring a potential offer for European telecom and pay-TV operator United Group, valued at approximately $8.7 billion including debt, Reuters reports. Talks are in early stages, with UK buyout group BC Partners, United Group's current owner, working with advisors on the sale.

USA snapshot

NYSE Invalidates Trades Caused by Technical Issues

The NYSE announced it will invalidate erroneous trades resulting from technical issues that affected several stocks, including Berkshire Hathaway. Trades for Berkshire Hathaway Inc. Class A(BRK.A.US) below $603,718.30 between 9:50 and 9:51 AM ET will be canceled. Similar actions will apply to Bank of Montreal(BMO.US), Chipotle Mexican Grill, Inc.(CMG.US), Barrick Gold Corp.(GOLD.US), and NuScale Power Corp(SMR.US) due to related errors.

GameStop Closes Up 21% Amid Keith Gill Controversy

GameStop Corp. Class A(GME.US)'s stock closed 21% higher on Monday after doubling pre-market. E-Trade is considering banning Keith Gill over market manipulation concerns, while the SEC investigates bullish options trades linked to his social media posts.

NVIDIA and Goldman Sachs Agree: Next Focus for AI Trading is PC Upgrades

Goldman Sachs Group, Inc.(GS.US) predicts a new wave of PC and mobile device upgrades, featuring AI enhancements and improved security. NVIDIA Corporation(NVDA.US) CEO Huang Renxun confirms agreements with two PC manufacturers to integrate AI chips into future products.

Google Cloud and Workday Deepen Collaboration

Alphabet Inc. Class C(GOOG.US) Cloud and Workday, Inc. Class A(WDAY.US) expand partnership on June 3. Workday to leverage Gemini model and Vertex AI in Workday Extend for AI capabilities, enhancing business performance and transaction efficiency.

Read More: Near 100% Dip Rocks Berkshire Hathaway, NYSE Invalidates Erroneous Trades - What Happened?

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