Your Rich Hedge-Fund Pals Are All Going to Dubai, UAE’s $60 Billion Firm Chases Global Deals Despite Vodafone Snag, Abu Dhabi Consolidates Real Estate Assets Under $12 Billion Firm.
Your Rich Hedge-Fund Pals Are All Going to Dubai
Key Takeaways
Dubai and Abu Dhabi are attracting wealthy Western hedge fund managers with tax-free status, lighter regulation, and an Asia-friendly time zone.
The UAE’s efforts to position itself as a global financial center may disrupt the race for rich talent and cause frustration among Western capitals.
While UAE offers tax advantages, there are concerns about money laundering risks and he erosion of tax bases in Western countries.
UAE’s $60 Billion Firm Chases Global Deals Despite Vodafone Snag
Key Takeaways
Abu Dhabi-based Emirates Telecommunications Group is pushing ahead with global expansion plans, unaffected by the decline in Vodafone’s share price.
Emirates Telecom, backed by the UAE government, aims to grow state-owned entities through acquisitions and create companies with significant international presence.
Despite recent setbacks, including a dispute in Pakistan, Emirates Telecom is actively pursuing M&A opportunities in Europe, Asia, and Africa to drive growth outside of the UAE.
Abu Dhabi Consolidates Real Estate Assets Under $12 Billion Firm
Key Takeaways
Abu Dhabi is consolidating key real estate assets to create a $12 billion property giant, aiming to support the emirate’s economic transformation efforts.
The new entity, Q Holding, will have an implied market value of $12 billion and a diverse portfolio of real estate developments, venues, land plots, and hospitality assets.
The consolidation is part of a broader strategy by ADQ and IHC to diversify the UAE economy and create an “Abu Dhabi champion” that fuels its ambitions.
UAE Oil Giant Adnoc Makes First Major Global Gas Deal with Azeri Buy
Key Takeaways
Abu Dhabi National Oil Co. (Adnoc) is making its first major international purchase of upstream hydrocarbon assets by acquiring a 30% stake in the Absheron gas field in Azerbaijan, aiming to enter the international gas market and tap into attractive growth markets in Europe and Central Asia.
The move reflects the increasing focus of government and private oil producers on developing gas assets to meet the growing global demand for cleaner energy sources and consumer products derived from gas.
Adnoc’s investment in the Caspian region not only provides access to significant natural resources and potential for growth but also aligns with the UAE’s efforts to diversify its income sources and develop new industries, including renewable energy projects.
Saudi’s Record Borrowing Costs Threaten MBS’ Grand Ambition
Key Takeaways
The rising Saudi Interbank Offered Rate (Saibor) poses a challenge to Saudi Arabia’s economic diversification projects and their funding requirements.
The increase in interest rates could limit borrowing capacity for Saudi consumers and dampen demand for non-subsidized mortgages.
The Federal Reserve’s monetary policy shift and rising oil prices may provide some relief to Saudi banks and encourage them to tap into cheaper debt for financing future projects.
Saudi Budget Slips Deeper Into Deficit With Jump in Spending
Key Takeaways
Saudi Arabia’s budget deficit widened in the second quarter due to increased spending on social benefits and diversification projects, despite a rise in government income.
The government’s focus on growing non-oil revenue is aimed at ending the boom-bust cycles of the past, but the deficit still came in at $1.4 billion, around 80% higher than the previous quarter.
Despite efforts to diversify the economy, Saudi Arabia remains heavily reliant on the energy sector, with oil and related products accounting for around 90% of exports in 2022.
Saudis Extend 1 Million-Barrel Oil Cut, Say Can Be Deepened
Key Takeaways
Saudi Arabia extends its unilateral oil production cut by another month, signaling its commitment to support the stability and balance of oil markets.
The post-pandemic recovery in fuel demand and output curbs by OPEC+ countries are tightening world crude markets, leading to a recent surge in oil prices.
Despite concerns over lackluster economic data and fears of recession, Riyadh remains steadfast in its efforts to control oil prices, with the possibility of further extensions or deeper cuts.
Aramco Boosts Payout to Government, Investors to $29 Billion
Key Takeaways
Saudi Aramco raises dividend payout by over half, helping to fill Saudi Arabia’s state coffers amid lower oil prices and increased government spending.
Despite a decline in profits, Aramco’s low-cost production, high supply reliability, and strong product demand contribute to strong earnings.
The rising dividends and need for cash underscore Saudi Arabia’s push to attract investors and fund Crown Prince Mohammed bin Salman’s ambitious economic diversification plans.