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$15 Billion in Contracts Estimated at AFED 2018

A part of AFED 2018 exhibition. (SPA)
A part of AFED 2018 exhibition. (SPA)
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$15 Billion in Contracts Estimated at AFED 2018

A part of AFED 2018 exhibition. (SPA)
A part of AFED 2018 exhibition. (SPA)

The Armed Forces Exhibition for Diversity of Requirements and Capabilities (AFED 2018) registered around 57,600 manufacturing orders in Saudi Arabia, while the contracts amounted to more than $15 billion.

The exhibition, organized by the Saudi Ministry of Defense at its fourth session in Riyadh, was a platform for boosting local manufacturing. More than 120,000 visitors attended the event, which concluded on Sunday.

AFED 2018 focused on localization of local content by presenting 80,000 manufacturing opportunities to investors, with the participation of civil and military officials in Saudi Arabia and abroad.

About 68 international and 130 local companies participated in the exhibition, including research institutions at the King Abdulaziz City for Science and Technology and Prince Sultan Advanced Research Institute.

The exhibition witnessed the signing of an agreement on the localization of military technology.

CEO of Middle East Propulsion Company Ltd, Abdullah al-Omari said it was signed with General Electric and the Saudi Air Force for the assembly and maintenance of new F15-S and F15-SA aircraft, Apache engines, and the Black Hawk T700 for more than $330 million.

He revealed that this agreement will generate revenues worth $693 million in the upcoming five years.

In addition, KACST offered a package of military and security projects that have been relocated to Saudi Arabia, such as a laser-guided short-range rocket powered by a solid fuel engine, as well as a short-range ballistic missile with a solid fuel engine.

The King Abdulaziz City also presented Custodian of the Two Holy Mosques King Salman bin Abdulaziz’s initiative to desalinate water using solar energy in al-Khafji province to produce 60,000 cubic meters of desalinated water per day.

The Ministry of National Guard showcased at AFED four modern vehicles that were assembled locally at Ministry facilities. This led to the creation of 294 manufacturing opportunities and contributed to the support of local manufacturing and achieving Vision 2030.

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Investors Weigh Market Risks as Israeli-Iranian Tensions Rise

Traders monitoring the movement of stocks on Wall Street (Reuters)
Traders monitoring the movement of stocks on Wall Street (Reuters)
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Investors Weigh Market Risks as Israeli-Iranian Tensions Rise

Traders monitoring the movement of stocks on Wall Street (Reuters)
Traders monitoring the movement of stocks on Wall Street (Reuters)

As the conflict between Israel and Iran escalates, investors are analyzing several potential market scenarios, especially if the United States deepens its involvement. A key concern is a sharp increase in energy prices, which could amplify economic consequences across global markets.

Rising oil prices could fuel inflation, weaken consumer confidence, and diminish the likelihood of interest rate cuts in the near term. This may prompt initial stock market sell-offs and a flight to the US dollar as a safe-haven asset.

While US crude oil prices have surged by around 10% over the past week, the S&P 500 index has remained relatively stable, following a brief decline after the initial Israeli strikes.

Analysts suggest that if Iranian oil supplies are disrupted, market reactions could intensify significantly. A serious supply disruption would likely ripple through global petroleum markets and push oil prices higher, leading to broader economic consequences.

Oxford Economics has outlined three possible scenarios: a de-escalation of conflict, a full suspension of Iranian oil production, and the closure of the Strait of Hormuz. Each scenario carries escalating risks to global oil prices. In the most severe case, prices could soar to $130 per barrel, pushing US inflation to nearly 6% by year-end. In such a scenario, consumer spending would likely contract due to declining real income, and any possibility of interest rate cuts this year would likely vanish under rising inflationary pressure.

So far, the most direct impact has been felt in oil markets, where Brent crude futures have jumped as much as 18% since June 10, reaching nearly $79 a barrel, the highest level in five months. Volatility expectations in the oil market now exceed those of major asset classes like equities and bonds.

Although equities have largely brushed off the geopolitical turmoil, analysts believe this could change if energy prices continue to climb. Rising oil prices could weigh on corporate earnings and consumer demand, indirectly pressuring stock markets.

While US stocks have held steady for now, further American involvement in the conflict could spark market anxiety. Historical patterns suggest any sell-off might be short-lived. For instance, during the 2003 Iraq invasion, stocks initially dropped but recovered in subsequent months.

As for the US dollar, its performance amid escalating tensions could vary. It may strengthen initially due to safe-haven demand, although past conflicts have sometimes led to long-term weakness, especially during prolonged military engagements.