Happy Thursday and Day of Arafah to everyone celebrating!

Our top stories for today are: Saudi Arabia’s IPO momentum is faltering as weak IPO debuts and withdrawn listings raise investor concerns. In the UAE, businesses are feeling the squeeze from U.S. tariffs, with rising operational costs and slower non-oil sector growth. But it’s not all pressure — Abu Dhabi’s EDGE Group just signed a landmark $2.5 billion missile boat deal with Kuwait, underscoring the UAE’s growing defense manufacturing muscle.

But before that: For quick daily updates, follow us on Instagram, and you can watch our Smashi Business Show live every weekday from 10AM onwards (UAE time). Also, you can join our Whatsapp channel to receive updates from the business world.

Saudi IPO Momentum Wobbles As Weak Debuts, Withdrawals Cloud Market Outlook

🟡 What Is It About:

• Saudi Arabia’s IPO boom faces turbulence as weak market debuts and pulled listings dent investor sentiment, Bloomberg reported.

• Two companies — Al Khaldi Logistics Co. and Dome International Investment Co. — withdrew planned listings on the Nomu parallel market this week without giving reasons.

• United Carton Industries Co., which listed recently, saw its share price fall nearly 20% after a muted trading debut.

• Despite the headwinds, over $1.3 billion was raised via IPOs in May alone, showcasing continued primary market activity.

🔴 Why It Matters:

• The Nomu Parallel Market, known for nurturing high-growth firms, has become more volatile — its index is down over 13% year-to-date, worse than the Tadawul All Share Index, which has dropped about 9%.

• Analysts say earlier Nomu successes may have led to inflated valuations, now out of sync with a cautious investor mood.

• Broader Saudi equities are under pressure due to falling oil prices and concerns over slower mega-project spending.

🔵 What’s Next:

• All eyes are on Flynas Co., whose upcoming IPO debut is expected to be a litmus test — the airline attracted over $100 billion in orders, making it the biggest Middle Eastern IPO of 2025 so far.

• Industry experts believe Flynas could perform well, buoyed by strong airline stock performance in the region — Jazeera Airways is up 58%, and Air Arabia has gained 17% year-to-date.

• Several IPOs with regulatory clearance — including Ejada Systems, Dar Al Majed Real Estate, Marketing Home Group, and Sports Club Co. — may proceed cautiously, with valuation adjustments or possible delaysexpected until after the summer.

Discover the Arab World’s Cinematic Rise with The Reel Deal Podcast - Episode 1 is Out!

Introducing The Reel Deal Podcast — a new collaboration between Katara Studios and Media City Qatar that puts the spotlight on the fast-growing Arab film industry. This podcast dives deep into the stories, trends, and talents shaping the region’s cinematic future. From exclusive interviews with key players to industry insights you won’t hear anywhere else, The Reel Deal is your gateway to understanding the opportunities and creative energy emerging from the Arab world. Whether you're a producer, investor, or film enthusiast, this podcast offers a front-row seat to a cultural and commercial movement redefining global cinema.

The first episode is out! Watch it here…

Markets

Trump’s Tariffs Start to Bite: UAE Firms Grapple With Rising Costs, Slower Growth

🟡 What Is It About:

• UAE businesses are feeling the heat from U.S. tariffs introduced by former President Donald Trump in April, with 65% of companies surveyed by HSBC reporting a rise in operational costs.

• Although some tariffs were later paused or revised and are now under legal review in U.S. courts, their global economic impact is already unfolding — particularly in trade-dependent economies like the UAE.

• Affected sectors range from fast-moving consumer goods to oil and gas, with input costs rising and revenues forecasted to decline, according to HSBC and S&P Global data.

🔴 Why It Matters:

• The UAE's non-oil private sector growth slowed in May, with the PMI dropping to 53.3, its lowest since September 2021 — still expanding, but at a weaker pace.

• Rising costs are beginning to squeeze margins, forcing non-oil firms to raise selling prices for the fifth month in a row, despite consumer resistance.

• Global trade disruptions are spilling into the Gulf, highlighting how even paused U.S. trade policies can cause ripple effects for regional economies reliant on global supply chains.

🔵 What’s Next:

• 80% of UAE businesses expect cost pressures to persist through the rest of the year, even if U.S. policy shifts or court rulings change the outlook.

• Companies may need to diversify suppliers, restructure pricing, or seek new trade routes to adapt to longer-term volatility in global trade policy.

• With input costs gradually climbing and competition intensifying, businesses in the UAE’s non-oil sectors may enter a phase of margin compression — unless external pressures ease or local demand strengthens.

UAE Flexes Defense Muscle With $2.5B Missile Boat Deal to Kuwait

🟡 What Is It About:

• UAE defense giant EDGE Group signed a $2.45 billion deal with Kuwait’s Defense Ministry to supply Falaj 3 missile boats, marking EDGE’s largest-ever contract since its launch in 2019.

• As part of the agreement, Abu Dhabi Ship Building, a subsidiary of EDGE, secured a $1.9 billion contract for production, procurement, and logistics support.

• The announcement came during UAE Vice President Sheikh Mansour bin Zayed’s visit to Kuwait, which also included cooperation on a $30 billion AI infrastructure initiative backed by Microsoft and Abu Dhabi.

🔴 Why It Matters:

• The deal underscores UAE’s emergence as a serious player in the global arms industry, driven by its strategy to localize defense manufacturing and reduce reliance on imports.

• It strengthens military and economic ties between Gulf allies Kuwait and the UAE at a time of rising regional and global security concerns.

• For Kuwait, the purchase is part of a broader effort to modernize its naval capabilities amid growing maritime threats and instability in the region.

🔵 What’s Next:

• EDGE’s global ambitions are accelerating — the company recently secured $2.9 billion in defense contracts and has invested in international firms like SIATT (Brazil), ANAVIA (Switzerland), and Milrem Robotics (Estonia).

• The UAE’s defense push aligns with a broader geoeconomic strategy: export advanced tech, deepen Gulf alliances, and position itself as a hub for both AI and arms.

• With global defense spending at a post-Cold War high, expect the UAE to keep expanding its reach — both militarily and diplomatically — through strategic deals like this.

🔍From Smashi Business’ Desk

• Lebanese Founder Turns Down New York Times Job, Citing “Complicity in Genocide”.

🔍In other news…

• Dubai-Based Mashreq Debuts On Nasdaq Dubai With $500M Sukuk Listing.

• Amid Gaza war, Israel defence exports jump 13% in 2024 to record $15 billion.

• Gulf investors help finance growth of Turkish data centres.

• Italy’s billion-dollar jewellery sales lead trade with UAE.

• Brazil removes UAE from list of jurisdictions with preferential tax regimes.

• Abu Dhabi-based VC fund EQIQ bets big on Iraq’s tech start-ups.

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