Key Takeaways

1. SMASCO Targets SAR 7-7.50 in IPO;
2. stc Group Secures Approval for Shariah-Compliant stc Bank;
3. Ignore "Sell in May," BofA Predicts 75% Chance of Summer Rally;

I. Market Recap

Saudi Arabia's Tadawul All Shares Index(TASI.SA) was up by 0.83% and the Parallel Market Capped Index (NomuC)(NOMUC.SA) gained 0.54% on Wednesday.

ACWA POWER Co.(2082.SA) emerged as the top performer (9.70%), while Nahdi Medical Co.(4164.SA) witnessed the most significant drop (2.48%).

During regular trading Wednesday in the USA, the S&P 500 index(SPX.US) inched slightly lower to close near the flatline, while the NASDAQ(IXIC.US) slid about 0.2%. 

A slate of falling tech stocks weighed on the indexes, including Uber Technologies,Inc.(UBER.US) and Shopify, Inc. Class A(SHOP.US), both of which had recently reported quarterly results. The Dow Jones Industrial Average(DJI.US) was the outperformer of the major averages, adding more than 170 points.

II. Flash Headlines

Saudi Arabia Unveils $100B Aviation Investment at Forum

The Future Aviation Forum in Riyadh this month will unveil over $100 billion in investment opportunities to boost Saudi Arabia's aviation sector. Projects include $50 billion for airports, $40 billion for aircraft orders, and $10 billion for logistics and other ventures. The event will also showcase the six-runway King Salman International Airport and PPPs for regional airports.

stc Group Secures Approval for Shariah-Compliant stc Bank

Saudi Telecom Co.(7010.SA) (stc) has received approval for a soft launch of its Shariah-compliant fintech subsidiary, stc Bank. The new bank will provide secure banking services and fintech solutions. The group also finalized a deal with PIF in April, to sell a 51% stake in Tawal, aligning with its DARE 2.0 strategy for unconventional growth.

Ignore "Sell in May," BofA Predicts 75% Chance of Summer Rally

Bank of America advises investors to ignore the "sell in May" narrative, predicting a strong summer rally ahead of the presidential election. Historically, in election years, the S&P 500 has a 75% chance of rising during summer, with an average return of 7.3%.

III. Stocks To Watch

SA snapshot

SMASCO Targets SAR 7-7.50 in IPO

SNB Capital, overseeing the potential IPO of Saudi Manpower Solutions Co. (SMASCO), set the price range at SAR 7-7.50 per share. The book-building process runs from May 8-14 for qualified investors. Retail investors can subscribe on May 26-27. SMASCO aims to float 120 million shares.

Saudi Cable Co. Recommends SAR 400M Rights Issue for Growth

Saudi Cable Co.(2110.SA)'s board recommends increasing the company's capital by SAR 400 million through a rights issue, aiming to restructure finances and inject working capital to boost operational capacity. Shareholders will be eligible if they hold shares on the date of the Extraordinary General Assembly meeting.

Modern Mills Sees Revenue and Profit Growth in Q1

Modern Mills for Food Products Co.(2284.SA)'s Q1 2024 revenue grew by 2.2% year-over-year to SAR 257.8 million, driven by new sub-categories. Net profit increased to SAR 64.98 million due to revenue growth and efficiency improvements. Quarter-over-quarter net profit surged by 27.1%, boosted by Ramadan season planning.

Jamjoom Pharma Q1 Sales Up 28%, Profit Rises 22%

Jamjoom Pharmaceuticals Factory Co.(4015.SA)'s Q1 2024 revenue surged by 28.1% year-over-year to SAR 385.5 million due to increased sales across key markets. Net profit rose by 22% to SAR 103 million despite Egyptian Pound devaluation, while quarter-over-quarter profit grew by 131.5%, driven by higher sales and improved margins.

USA snapshot

Arm Drops 9% After-Hours on Weak FY2025 Revenue Outlook

Arm Holdings Ltd.(ARM.US)'s stock dropped over 9% in after-hours trading due to a weak revenue forecast for FY2025. While its Q4 revenue reached $928 million, beating estimates, its FY2025 revenue outlook of $3.8-4.1 billion fell short of analysts' $4.01 billion expectation.

Shopify Plunges 18% on Q1 $273M Net Loss

Shopify, Inc. Class A(SHOP.US)'s stock fell 18.59%, closing at $62.73. In Q1, revenue was $1.86 billion, exceeding expectations. However, a net loss of $273 million, or $0.21 per share, compared to a $68 million profit last year. The company forecasts a 50-basis-point drop in Q2 gross margin.

DeepMind Releases AlphaFold 3 for Advanced Drug Research

Google's (Alphabet Inc. Class A(GOOGL.US)) DeepMind has unveiled AlphaFold 3, a next-generation AI model for drug research. It can predict the structures of proteins, DNA, RNA, and their interactions, enabling scientists to target disease mechanisms more accurately and develop effective treatments.

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