July Second Week Newsletter of World and GCC Business News – Issue #67
Wishing you a cheerful and spiritual Eid Adha Mubarak. My heartiest regards to you and your family! Dr Atie J El Mouallem Making Saudi Inc: How MBS drove the sovereign wealth fund’s oil-fueled takeover – Bloomberg — www.bloomberg.com Highlights: – Receding is the conservative Islamic kingdom of old, which lived off its oil revenues while cautiously investing in safe US treasuries and disbursing lucrative state contracts. This is Saudi Inc. – In the space of five years, the PIF’s become a major international investor, snapping up US blue chips like Uber and investing in electric cars. It’s also made forays into sports, buying UK soccer team Newcastle United and investing $200 million in an international golf venture. – In March 2015, the fund was “reborn,” its website declares, and placed under MBS. – As the prince began to vigorously expand his authority, the PIF became a key tool, giving him that opportunity to run the new Saudi Arabia more like a tech startup. – MBS said it would have assets worth more than $2 trillion by 2030, making it the world’s largest sovereign wealth fund. Read more. The Global Energy Crisis Just Got Even Worse. Here’s Why – Bloomberg — www.bloomberg.com Highlights: – Natural gas is the hottest commodity in the world right now. It’s a key driver of global inflation, posting price jumps that are extreme even by the standards of today’s turbulent markets — some 700% in Europe since the start of last year, pushing the continent to the brink of recession. – Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based research firm. “The world is now thinking about gas as it once thought about oil, and the essential role that gas plays in modern economies and the need for secure and diverse supply have become very visible.” – In Asia, the fuel is now about three times as expensive as a year ago. Read more. UAE, Indonesia Ink Economic Pact to Boost Trade – Bloomberg — www.bloomberg.com Highlights: – The Indonesia deal is the UAE’s third major trade pact since it announced the plan to broaden its economic relationships in 2021. It inked similar agreements with India and Israel this year. – Some of the industries targeted in the trade pact include logistics, tourism, communications, construction and business. – The UAE has previously pledged to invest $10 billion in Indonesia’s new wealth fund. Read more. NYSE Pitches US Listings to Gulf Tech Firms Amid Global Selloff – Bloomberg — www.bloomberg.com Highlights: – Gulf firms that have chosen to list in the US so far have fared poorly. – Spotify Technology SA rival Anghami went public on the Nasdaq in February after its merger with a special purpose acquisition company and has since slumped more than 50%. Read more. Dubai Becomes New Switzerland for Traders of Russian Commodities – Bloomberg — www.bloomberg.com Highlights: – In Switzerland, some kind of exodus appears inevitable after the country followed European Union bans targeting exports from Russia. – By the end of 2022, the EU will have restrictions in place banning the insurance and financing of transporting Russian oil to countries outside of the bloc and Switzerland has said it will do likewise. – The UAE has attracted wealthy Russians and their money since the invasion of Ukraine, and now state-run businesses and private commodity firms are following. Read more. Venezuela Economy Seen Growing Most in 15 Years as Oil Flows – Bloomberg — www.bloomberg.com Highlights: – Gross domestic product is expected to grow 8.3% this year, from 1.9% in 2021. – The country is getting a lift from a rise in oil production and seeing tax revenue and banking credit expand. – Over the past decade, gross domestic product shrunk to around $49 billion from $352 billion in 2012, according to the International Monetary Fund. – Angel Alvarado, a senior fellow at the University of Pennsylvania and founder of the Venezuelan Finance Observatory said the country would need to post double-digit growth for a decade for it to return to the size it was in 2012. Read more. UAE Set to Attract Biggest Share of Millionaires as Rich Russians Flee Sanctions – Bloomberg — www.bloomberg.com Highlights: – The London-based investment migration consultancy projects the UAE will attract a net inflow of 4,000 millionaires, the most of any country globally, and as many as 2,500 may move to Israel. Russia could suffer a net outflow of 15,000 high-net-worth individuals. – Meanwhile, the estimated exodus from Russia accounts for about 15% of the country’s population of HNWIs, according to Henley. The invasion is also driving millionaires out of Ukraine, which is predicted to suffer the highest net loss in the nation’s history — 2,800 people or 42% of its HNWIs. Read more.
July First Week Newsletter of World and GCC Business News – Issue #66
Dubai’s Tecom IPO Set to Price at Top of Range, Bucking Selloff – Bloomberg — www.bloomberg.com Highlights: – Tecom’s IPO is the second of 10 planned privatizations as part of Dubai’s plans to deepen its capital markets after years of flagging volumes. The first of these share sales, Dubai Electricity & Water Authority’s $6.1 billion offering in April, drew overwhelming demand from both regional and international investors and ranks as the world’s second-biggest IPO of the year. – Tecom houses more than 7,500 companies and 10 large business complexes including Dubai Internet City and Dubai Media City. Its customers include Microsoft Corp., Alphabet Inc.’s Google and Meta Platforms Inc.’s Facebook. Read more. New Hedge Fund Hotspot? Dubai Draws More Finance Firms – Bloomberg — www.bloomberg.com Highlights: – Brexit has spurred many funds to seek new bases outside the City of London, while some traders have fled Hong Kong’s strict Covid restrictions. And with living costs soaring around the world, Dubai’s tax-free welcome mat has seldom looked so appealing. – For fund managers making the move, the city offers a fertile ground of high net worth individuals and institutional investors. The United Arab Emirates is set to attract a net inflow of 4,000 millionaires this year, the most of any country globally, according to consultancy Henley & Partners. – “It makes sense with lockdowns in Asia that financial centres like Dubai are becoming a destination for hedge funds,” said Whitney Baker, the New York-based founder of Totem Macro and former head of emerging markets at Bridgewater Associates. – Stricter visa requirements, hiring restrictions and other bureaucratic roadblocks are also limiting Singapore’s appeal to money managers Read more. Exxon Mobil (NYSE:XOM) Takes Stake in $29 Billion Qatar Gas Project – Bloomberg — www.bloomberg.com Highlights: – The US oil giant will take a 6.25% stake in the North Field East project — the biggest in the gas industry — that’s expected to start operating in early 2026. The expansion will increase Qatar’s liquefied natural gas capacity to 110 million tons annually from 77 million, just as demand surges across the world. – Qatar is planning a second expansion phase called North Field South. That will raise the country’s LNG production to 126 million tons a year. Many of the partners for that project will be the same as those on North Field East, Qatar’s government has said. Read more. Elon Musk’s Twitter (TWTR) Bid Includes Financier Linked to Russian Tycoon – Bloomberg — www.bloomberg.com Highlights: – Vy, whose equity commitment to the $44 billion deal topped those by Brookfield Asset Management and Qatar, has also backed companies such as Musk’s Boring Co. and crypto exchange ErisX, according to PitchBook data. – He’s also put money into the Tesla Inc. boss’s rocket company SpaceX and brain-machine maker Neuralink Corp. And according to LinkedIn, one of Vy’s summer analysts is currently Benjamin Birchall, a son of Musk’s key aide Jared Birchall. – Tamas and Hering have the biggest individual holdings in Vy Global Growth, according to a securities filing. – Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum appointed Tamas to an advisory council focused on the digital economy. Read more. Salt Bae Backers Seek New Investors and a $1 Billion Valuation – Bloomberg — www.bloomberg.com Highlights: – D.ream Group, owned by Turkish billionaire Ferit Sahenk’s Dogus Holding AS, may sell a 20% stake to the Qatar Investment Authority for about $300 million – Dogus has been trying to raise cash and deliver on pledges it made to banks as part of a debt restructuring. – D.ream Group owns stakes in restaurants including Nusr-Et, founded by butcher Nusret Gokce. Read more. EssilorLuxottica’s Leonardo Del Vecchio, Owner of Ray-Ban, Dies at 87 – Bloomberg — www.bloomberg.com Highlights: – Del Vecchio the second-largest fortune in Italy — after the chocolate-making Ferrero family — with a net worth of $25.7 billion – In addition to a controlling stake in EssilorLuxottica, Del Vecchio’s Delfin holding also had interests in Italian financial companies such as Mediobanca SpA, Assicurazioni Generali SpA and UniCredit SpA. – He founded Luxottica in 1961 with a dozen workers on land he got free from the town in a bid to stimulate the local economy. – Luxottica started producing its own designs in the late 1960s, and in the 1980s, Del Vecchio began buying up companies in the US. In 1999, he purchased Ray-Ban for $640 million. Read more. Chicken on Track to Overtake Beef, Pork as Top Protein Source – Bloomberg Highlights: – In 2022 chicken consumption is expected to reach 98 million metric tons, double the amount eaten in 1999. That’s more than three times the growth rate of pork and 10 times that of beef, according to US government data. – Global chicken consumption is on track to account for 41% of all meat-eating by 2030. – Thanks to genetics and other innovations, the cost of rearing chickens has been pushed down repeatedly over the years. – The cost of production vs. total output in poultry has probably fallen to a third of what it was 30 years ago, says Tai Lin, managing partner of Proterra Asia, a private equity firm that invests in the food industry. – Some producers of slow-growing, less industrial chickens see a way to grow poultry as part of a system that’s both more humane and better for the environment. Yet no one has been able to bring such a system to scale. Read more.
June Fourth Week Newsletter of World and GCC Business News – Issue #65
Abu Dhabi’s Aldar Mulls Buying Stake in Egypt’s Medinet Nasr – Bloomberg — www.bloomberg.com Highlights: – Aldar, which primarily operates in Abu Dhabi, has been looking to expand abroad as it faces limited growth prospects in its home market, the United Arab Emirates. The developer is seeking to deploy 5.6 billion dirhams ($1.5 billion) on acquisitions this year. – The Egyptian government owns a 15% stake in Medinet Nasr. Hisham Tawfik, Egypt’s public enterprise minister, said Aldar has shown interest in the Cairo-based developer, but an offer has yet to materialize. Read more. UAE Set to Attract Biggest Share of Millionaires as Rich Russians Flee Sanctions – Bloomberg — www.bloomberg.com Highlights: – The London-based investment migration consultancy projects the UAE will attract a net inflow of 4,000 millionaires, the most of any country globally. – Affluent Russians seeking to escape the impact of the devastating Western sanctions on their country have started to move to the UAE and Israel in large numbers,” Henley said in the report published on Monday. – The country’s success in attracting tourism and trade through visa waivers has propelled the UAE up to the No. 15 position on the Henley Passport Index from No. 64 a decade ago. Read more. UAE Ramps Up Extradition Pacts in Bid to Fight Dirty Money – Bloomberg — www.bloomberg.com Highlights: – The UAE has 37 mutual legal assistance and extradition accords in place, including pacts with the UK, France, Italy, India and China, a spokesperson at the Executive Office of AML/CFT, the UAE government body responsible for tackling illicit finance issues, said in an email to Bloomberg News. – The FATF has said it wants the UAE to implement an action plan to demonstrate “a sustained increase” in effective prosecutions of different types of money laundering cases. Read more. Meet the Three Gupta Brothers, Symbols of South African Corruption – Bloomberg — www.bloomberg.com Highlights: – They fled South Africa for Dubai in early 2018 after the ruling party forced Zuma to quit and were charged with graft later that year. In June 2022, two of the Gupta brothers were arrested in Dubai to face possible extradition and trial in South Africa. – Dubai police said they detained Rajesh and Atul Gupta “in connection with money laundering and other criminal charges in South Africa. – President Cyril Ramaphosa said in 2019 that at least $32 billion may have been stolen during his predecessor’s tenure and the actual figure could be more than double that amount. Read more. Oman Wealth Fund Considers IPOs of State Energy Firm OQ’s Units – Bloomberg — www.bloomberg.com Highlights: – The share sales are part of Oman Investment Authority’s plan to exit state assets in a bid to bolster the country’s coffers and expand its stock exchange, according to its statement on Twitter. It plans a full and partial exit of a number of Omran hotels and resorts and two Asyad projects. – Muscat Stock Exchange’s Chief Executive Officer Haitham Al-Salmi said that Oman is planning to list 35 state-owned enterprises over the next five years, with one or two oil companies to potentially list this year. Read more. Macron Proposes Worker Dividends as Inflation Grips France – Bloomberg — www.bloomberg.com Highlights: – A company would be required to pay employees every time its shareholders got a payout. It could be done in several ways, including the tax-free bonuses Macron introduced in 2019 and the original profit-sharing formulas first developed by de Gaulle. – “It’s a question of rebuilding the social contract between labor and capital,” Macron said. – The potential benefits, Lanxade says, range from increased productivity and higher worker motivation to better relationships between staff and management. Read more.
June Second Week Newsletter of World and GCC Business News – Issue #64
Dubai’s Tecom Courts Investors After Lining Up Banks for IPO – Bloomberg — www.bloomberg.com Highlights: – Tecom hosts 10 large business complexes including Dubai Internet City and Dubai Media City. Part of state-owned Dubai Holding, the business park operator houses the headquarters of more than 5,600 companies in the United Arab Emirates. – A listing could come as soon as the middle of this year, though details on the potential size or valuation were not immediately available. Read more. Borouge Shares Soar in Debut After Staging Abu Dhabi’s Biggest IPO – Bloomberg — www.bloomberg.com Highlights: – The IPO attracted $83 billion of orders in the latest sign of strong demand for listings in the region. It drew interest from the likes of BlackRock Inc. and Fidelity, Bloomberg reported last week. Seven cornerstone investors agreed to subscribe for $570 million worth of shares, including Gautam Adani, Asia’s richest man. – The shares rose as much as 20% to 2.95 dirhams on Friday, valuing Borouge at just over 88 billion dirhams ($24 billion). The shares were priced at 2.45 dirhams each. – Listings on Gulf stock exchanges are on track for their best-ever first half as high oil prices and broad economic reforms draw investors to the region. Read more. EQT, Mubadala Buys Envirotainer for $3 Billion Enterprise Value – Bloomberg — www.bloomberg.com Highlights: – EQT Private Equity and Mubadala will seek to support Envirotainer in its next phase of growth by accelerating expansion in APAC, – The company currently has 6,700 containers and employs 375 employees. – The Stockholm-based private equity firm and Mubadala were advised by Jefferies International. Read more. Turkish Quest to Hedge Inflation Fuels World-Beating Stocks Boom – Bloomberg — www.bloomberg.com Highlights: – A jump in the inflation rate to almost 70%, coupled with a government-led pause to interest-rate hikes, has left Turks with limited choices for where to park their savings. – Burak Cetinceker, a money manager at Istanbul-based Strateji Portfoy, in a phone interview. “It’s impossible for savers to ignore Turkish equities if they want to protect their savings from inflation.” – But while local Turkish investors keep piling into stocks, foreigners spooked by the country’s unorthodox monetary policy stance are retreating. Read more. Startup Layoffs Start as Tech Stocks Get a Crushing Reality Check – Bloomberg — www.bloomberg.com Highlights: – Shareholders in high-flying private tech companies such as Stripe Inc. and Instacart Inc. have marked down the value of their holdings, in some cases multiple times. – Investor sentiment in Silicon Valley is the most negative since the dot-com crash” 20 years ago, tweeted PayPal co-founder David Sacks, now a partner at the investment firm Craft Ventures. – Kyle Stanford, an analyst at PitchBook says “The market turn is only beginning to take hold. Just 5% of completed investments during the March quarter were down rounds, valuation could increase but that what could come first is a rise in “dirty term sheets. – Venture-backed startups including ghost kitchen operator Reef Technology, grocery delivery company Avo, and artificial intelligence company DataRobot cut more than 7,500 jobs globally from April 1 to May 16, according to employment tracker. Public companies have also cut jobs, instituted hiring freezes, or both. Read more. World’s Biggest Chipmaker TSMC’s $100 B Wipeout Fails to Faze Bullish Analysts – Bloomberg — www.bloomberg.com Highlights: – Of the 37 analyst recommendations compiled by Bloomberg, 34 are buys, three are holds and none are sells. – We think TSMC stock is already factoring in a downturn,” JPMorgan Chase & Co. analysts including Gokul Hariharan said in a note Wednesday. “However, the extent of potential downside to 2023 estimates is still unclear,” they said while maintaining a buy rating. – Morgan Stanley analysts including Charlie Chan said the current nervousness in the market presents a good opportunity to buy TSMC, whose “future looks secure.” Read more.
June First Week Newsletter of World and GCC Business News – Issue #63
Dubai emerges popular destination for entrepreneurs, millionaires and startups – News | Khaleej Times — www.khaleejtimes.com Highlights: – Referring to the new rules for the 10-year Golden Visa, five-year Green Visa and other reforms, experts said Dubai will attract global talent, skilled professionals, freelancers, investors, and entrepreneurs that will ultimately benefit the economy. – Saad Maniar, senior partner at Crowe, said Dubai has always been and will continue to be a popular destination for HNIs from a tourism perspective, as Dubai has very high standards of safety and security coupled with the amazing infrastructure and plenty of to-do things in Dubai. – From the business perspective the overall infrastructure is business-friendly, with airlines offering connectivity to all major cities in the world, making it very attractive for business owners to establish their presence in Dubai,” Maniar told Khaleej Times on Sunday. Read more. “Oil Leaders” Review: Saudi Arabia’s Chief Oil Whisperer Spills His Secrets – Bloomberg — www.bloomberg.com Highlights: – A new book provides a lexicon of four decades of verbal intervention in the price of crude by the world’s biggest oil-producing nation. – Ibrahim AlMuhanna was the power behind the power, the trusted communications advisor to four Saudi oil ministers from the late 1980s until recently. – Now retired, he has just published a book that reveals some of the secrets of Saudi-speak. “Oil Leaders” divulges a few bombshells, including the time when British officials in 2008 proposed to Riyadh a “mechanism” to keep oil prices between $60 and $90 a barrel. – The author also describes how former Saudi oil minister Ibrahim Al Naimi kept his plan to fight the growth of US shale by flooding the market in 2014 secret even from others in Riyadh. – His book, a mix of memoirs and historical analysis, gives away just enough to allow readers a peek behind a curtain that has remained drawn for years. Read more. Saudi Arabia Is Planning the Largest Buildings Ever Constructed – Bloomberg — www.bloomberg.com Highlights: – Neom, the brainchild of Saudi Crown Prince and de facto ruler Mohammed bin Salman, aims to build twin skyscrapers about 500 meters (1,640 feet) tall that stretch horizontally for dozens of miles. – The buildings would be “different heights as you go,” adapting to the landscape, with their final size determined by engineering considerations and the terrain, Al-Nasr said. – The Middle East is already home to the world’s tallest building, Dubai’s Burj Khalifa. Read more. Putin’s War Machine Is Thriving Off Russian Energy Sales – Bloomberg — www.bloomberg.com Highlights: – The US has already banned Russian oil, but Europe is only slowly weaning itself off this dependency. That’s giving Moscow time to find other markets — such as commodity guzzling behemoths China and India. – Once mocked by Biden as “rubble” when it initially collapsed in response to the sanctions, it’s since been propped up by Russia to become the world’s best-performing currency against the dollar this year. – One of the big holes in the sanctions against Russia is the willingness of other nations to continue oil purchases. – Indian refiners purchased more than 40 million barrels of Russian oil between the start of the Ukraine invasion in late February and early May. That’s 20% more than Russia-India flows for the whole of 2021. – China is also strengthening its energy links with the country, securing cheaper prices by buying oil that’s being shunned elsewhere. Read more. Sri Lanka Crisis: A Fire Sale Looms as Lenders Won’t Make a Bailout Easy – Bloomberg — www.bloomberg.com Highlights: – The newly-appointed prime minister, Ranil Wickremesinghe — his sixth time in the job — wasted no time in announcing the government would privatize Sri Lankan Airlines, which prior to the pandemic had flown to 126 destinations in more than 60 countries. – In September last year, one of India’s largest companies, the Adani Group, entered into a $700 million deal to develop a deep-water container terminal in Sri Lanka in what the Sydney-based Lowy Institute described as a “strategic game-changer” in the battle for influence between Beijing and New Delhi. – In January, the Indian Oil Corp. subsidiary Lanka IOC took a 49% stake in the joint development of the Trincomalee oil tank farm, with Ceylon Petroleum Corp. maintaining a 51% stake. – Kadirgamar, a senior lecturer at the University of Jaffna, said officials were most likely to consider the Ceylon Electricity Board and the Ceylon Petroleum Corp. Read more. Venture Capital Investments Surge in King’s Cross, Redefining City of London – Bloomberg — www.bloomberg.com Highlights: – In the City, the pubs may still be busy — when workers are in their offices — but public listings have dried up, dampening the appeal of traditional finance. Staff have noticed, with 57% of new hires into venture capital jobs in 2021 moving from investment banking. – The likes of Sequoia Capital, Silicon Valley’s top venture shop, and its US rival General Catalyst have set up London offices in the past year. – This abundance on the private side is attracting talent to venture capital from traditional banking jobs, despite the attractive pay and bonus packages in long-established firms. Read more. China Unemployment Rate for Young People Hits Record Highs – Bloomberg — www.bloomberg.com Highlights: – In April, China’s jobless rate among 16- to 24-year-olds, a group that includes new college graduates, climbed to a record 18.2%. That’s three times as high as the national urban unemployment rate in China, and more than the 7.9% for the same cohort in the US. – The angst of young people is being vented on social media and spilling over into rare protests about Covid control at some universities. – The government has provided incentives to companies such as tax breaks, given refunds on previously paid unemployment insurance premiums, suspended employers’ contributions to social security plans, and provided cash subsidies to companies to train employees. – For many young job seekers, the lure of dropping out of the labour market altogether and
May Last Week Newsletter of World and GCC Business News – Issue #62
Lebanon’s independents disrupt political order Highlights: – The phone has not stopped ringing since political novice Ibrahim Mneimneh won a seat in Lebanon’s parliamentary election this month. – He is one of 13 new lawmakers with ties to the October 2019 protest movement. – His win was even more surprising as it came in a Beirut district where establishment parties have dominated for the past 30 years. – Najat Aoun Saliba, a chemistry professor and environmental activist who was among those elected last week, credits the blast for her decision to run. – Saliba is one of four women in the new cohort of independents and one of eight overall female MPs in the new parliament, a record number for Lebanon. Read more. UAE Chemicals Firm Borouge Seeks to Raise $2 Billion From IPO – Bloomberg — www.bloomberg.com Highlights: – Seven cornerstone investors have agreed to subscribe for $570 million worth of shares. The family of Indian billionaire Gautam Adani, Asia’s richest man, has committed $75 million, Abu Dhabi wealth fund ADQ will buy shares worth $120 million and Alpha Dhabi Holding has committed $100 million. – Founded in the late 1990s, Borouge makes plastics used in everything from automobiles and food packaging to medicine vials and piping systems. Its main plant is in Abu Dhabi. Read more. First Middle East Spac lists in Abu Dhabi Highlights: – ADC Acquisition Corporation, backed by the oil-rich emirate’s government, is the latest in a string of blank-cheque companies from the region as liquidity surges thanks to sky-high oil prices. – ADC was established by ADQ and Chimera Investment, a unit of the private Royal Group, which is chaired by Sheikh Tahnoon bin Zayed al-Nahyan. Read more. PIF’s total assets in 22 local companies amount to $228.26bln after acquiring stake in KHC — www.zawya.com Highlights: – KHC founder Prince Alwaleed Bin Talal signed an agreement with the PIF to sell 625 million shares, representing 16.87 percent of the company’s share capital. By this, the market value of PIF’s shares in KHC reached about SR6.24 billion. – The PIF had earlier acquired about four percent of the Saudi Aramco shares, and its current market value is about SR313.6 billion – The PIF owns 67.18 percent of the shares of the Saudi Telecom Co. (STC) with a value of SR141.89 billion. STC was followed by SNB (Al Ahli Bank) with a value of SR113.39 billion regarding the PIF stake. Read more. $UST $USDT Terra Collapse Triggers $83 Billion Decentralized Finance Slump – Bloomberg — www.bloomberg.com Highlights: – The total value locked across all major protocols has slumped to $112 billion from $195 billion at the start of the month, data from industry tracker DeFi Llama show. – Bitcoin and Ether, the two largest tokens, tumbled below key support levels earlier this month and have struggled to break above them since, caught just below $30,000 and $2,000 respectively. – MakerDAO, the largest DeFi project by total value staked, has seen its total value locked drop by almost a third over the past month, to $9.8 billion, DeFi Llama data show. Curve, a popular platform for swapping stablecoins, has suffered a more than 55% plunge, to $9 billion. Read more. Xi Jinping May Not Get a Third Term? George Soros Thinks So. Here Are the Odds – Bloomberg — www.bloomberg.com Highlights: – At this week’s World Economic Forum in Davos, Soros made his most sensational claim yet — that Xi may not get re-elected to a third term at the 20th National Congress this fall. – Soros is not alone in thinking that Xi may be losing his grip on power. – Speculation is rife that there’s a power struggle going on and possibly even gridlock among the political elite. – is China’s most powerful politician in decades. In 2018, he managed to remove the two-term limit on the presidency, thereby paving the way for a third term this fall. – The Chinese Communist Party’s legitimacy depends on its ability to deliver economic prosperity — and that’s now a stumbling block. Read more. Stressed-Out Supply Chain Managers Are Throwing in the Towel – Bloomberg Highlights: – LinkedIn, a division of Microsoft Corp., calculates turnover by analyzing member profiles to determine the number of people who left their jobs each month. The figure is compared with the average for 2016, which LinkedIn calls the “separation rate.” For supply-chain managers, the average separation rate increased by 28% from 2020 to 2021, according to data compiled for Bloomberg. – The number of openings for supply-chain managers on ZipRecruiter Inc.’s website more than doubled between January 2020 and March of this year. Read more.
May Fourth Week Newsletter of World and GCC Business News – Issue #61
UAE Prince Who Reshaped Region Named Ruler of Oil-Rich Power – Bloomberg — www.bloomberg.com Highlights: – Crown prince of Abu Dhabi since 2004, MBZ controls the world’s fourth-richest wealth fund and about 6% of proven reserves of crude oil. He’s also helped hone the UAE’s image as a socially liberal, pro-business oasis – He was born in the oasis town of Al Ain in 1961, several years after the first discovery of oil in Abu Dhabi. – A graduate of the UK’s Royal Military Academy at Sandhurst, he served in the UAE’s special forces and as a helicopter pilot. – The 61-year-old is trusted by Washington and has used the UAE’s economic clout to forge influential partnerships from Russia to China. – Sheikh Mohammed is funnelling the country’s energy wealth into new industries like technology and manufacturing to create jobs for nationals and prepare the country for a post-oil future. Read more. Lebanon’s Bond Restructuring Faces More Delays After Election – Bloomberg — www.bloomberg.com Highlights: – With no alliance winning a clear majority in Sunday’s elections, it’s not clear the deeply divided legislature can quickly form a new government, let alone bolster efforts to gain IMF cash. A deal with the Washington-based lender is seen as a prerequisite for a restructuring that could benefit bondholders. – The election results do very little to lift the fog over Lebanon’s policy making,” said Mohieddine Kronfol, the Dubai-based chief investment officer for Middle Eastern and North African fixed income at Franklin Templeton, which doesn’t own Lebanese debt. “Uncertainty has increased, as parliament is more fragmented, politics more polarized.” Read more. Saudi Arabia’s PIF Takes 5% Stake in Nintendo, Adding to Games Investments – Bloomberg — www.bloomberg.com Highlights: – The PIF has been building stakes in video game makers and e-sports firms over the past two years, turning to the Japanese market just as a weaker yen has made investments more affordable. – Saudi Arabia has been beefing up efforts to create its own content industry, and this series of investments in Japanese game companies is likely a way for them to learn from Japan,” said Hideki Yasuda, a senior analyst at Toyo Securities. Read more. Saudi Oil Chief Says All Energy Sectors Running Out of Capacity – Bloomberg — www.bloomberg.com Highlights: – Suhail al Mazrouei, said that without more investment across the globe, OPEC+ wouldn’t be able to guarantee sufficient supplies of oil when demand fully recovers from the coronavirus pandemic. – Saudi Arabia and the UAE are among the few producers investing in greater output. They’re spending billions of dollars to raise their crude capacity by 2 million barrels a day between them by the end of this decade. Most others are struggling to get funding as shareholders and governments encourage a shift from fossil fuels to renewable energy. Read more. Saudi Aramco Weighs IPO of Trading Unit Amid Boom in Oil Prices – Bloomberg — www.bloomberg.com Highlights: – The trading unit could fetch a valuation of tens of billions of dollars, the people said, with two of them saying it could be potentially worth more than $30 billion. – Aramco is still debating the merits of the potential listing, and there’s no certainty it will proceed, the people said. – Aramco established the trading unit in 2011 and now trades everything from crude oil to LNG, according to its website. Read more. Luna, Terra Collapse Reveal Crypto Price Volatility – Bloomberg — www.bloomberg.com Highlights: – Luna’s price was soaring, thanks to the success of another coin with which it was deeply intertwined, TerraUSD. Some of the crypto industry’s biggest names had already invested, including Galaxy Digital Holdings Ltd., the high-frequency trading firm Jump Trading, and venture investment arms of the exchanges Coinbase Global Inc. and Binance. – TerraUSD was a so-called stablecoin, which means it was supposed to keep a constant value of $1. But it dropped below $1 and kept falling, and Luna tokens, once worth more than $100, crashed to below a penny, all but erasing a combined market value that had topped $60 billion. – The two coins’ collapse fed a digital-asset rout, helping wipe out more than $300 billion from the combined value of all cryptocurrencies in the week ended May 13. – TerraUSD didn’t even claim to be backed by dollars or other assets held in a bank account. Instead, it was supposed to be worth $1, because it could be redeemed for $1 worth of Kwon’s other token, Luna. – TerraUSD launched in 2020, but it gained little traction until March 2021 when Kwon introduced a third part of the network: Anchor, a quasi-bank for crypto where users could deposit their Terra stablecoins and earn 20% interest. – But TerraUSD had a flaw, – If users lost confidence in the system, they could rush to sell or redeem their coins, and others might follow. Read more. Global Economy Loses $1.6 Trillion as World Struggles to Avoid a New Cold War – Bloomberg — www.bloomberg.com Highlights: – Bloomberg Economics has run a simulation of what an accelerated reversal of globalization might look like in the longer term. It points to a significantly poorer and less productive planet, with a trade back at levels before China joined the World Trade Organization. – For three decades, a defining feature of the world economy has been its ability to churn out ever more goods at ever-lower prices. The entry of more than a billion workers from China and the former Soviet bloc into the global labour market, coupled with falling trade barriers and hyper-efficient logistics, produced an age of abundance for many. – But the last four years have brought an escalating series of disruptions. Tariffs multiplied during the US-China trade war. The pandemic brought lockdowns. And now, sanctions and export controls are upending the supply of commodities and goods. – a rollback of globalization to late-1990s levels would leave the world 3.5% poorer than if trade stabilizes at its current share of output, and 15% poorer relative
May Third Week Newsletter of World and GCC Business News – Issue #60
UAE Invites Companies to Bid for 40% Stake in 1.5 GW Solar Plant – Bloomberg — www.bloomberg.com Highlights: – Emirates Water and Electricity Co. will seek bidders to build a 1.5-gigawatt plant in the Ajban area of the UAE’s desert. – It aims to have 20 GW of solar power by 2030 and 44 GW by 2050, energy minister Suhail Al Mazrouei said on Monday. Read more. Emirates Trims Annual Loss, Sees Profit Ahead as Travel Revives – Bloomberg — www.bloomberg.com Highlights: – Seat capacity rose 150% as aircraft including the largest fleet of Airbus SE A380 superjumbos returned to service, helping to spur group revenue by 86% to 66.2 billion dirhams. – The revival allowed Emirates to increase its cash balance by 30% to 25.8 billion dirhams. – Dubai International airport, where Emirates is based, reported its busiest quarter since the start of the crisis in the first three months, attracting 13.6 million passengers. – The Emirates workforce stood at just over 85,000 in March and the group is still hiring across all divisions in an attempt to keep pace with the travel rebound. Read more. Saudi Arabia Gloom Shows Toll Inflation Is Taking During Economic Boom – Bloomberg — www.bloomberg.com Highlights: – Facing higher prices, Saudi companies responded by building up stocks, with purchasing activity and inventories both rising at the sharpest rate since December 2017. – New order growth in the Saudi non-oil private sector slipped to a three-month low in April as companies sharply raised selling charges to pass on higher input costs, according to a survey of purchasing managers published by S&P Global on Monday. Read more. Should You Sell Your Bitcoin, Stablecoins, NFTs? Advisers Say Don’t Panic – Bloomberg — www.bloomberg.com Highlights: – Bitcoin briefly fell below $30,000 Wednesday, its lowest level in nearly a year. Shares in Coinbase Global Inc., one of the largest crypto exchanges, slumped to a record low. – Bear markets are typically a great time to accumulate the coins you have long-term conviction in,” said Gritt Trakulhoon, lead crypto analyst at investing app Titan. – the cryptocurrency has largely tracked the Nasdaq 100 index of the largest tech stocks, which are notoriously sensitive to rising prices. – Matt Hougan, a chief investment officer of Bitwise Asset Management, argues that Bitcoin is both a risk asset in the short term and a hedge against inflation in the long term. – Bitcoin is not fully mature, and investors allocating to Bitcoin are betting in part on a future outcome where it is widely accepted as a store of value like gold or evolves into other mainstream use cases. Read more. Coinbase, Binance Bosses’ Wealth Drops in Weeks After Bitcoin, Luna, UST Crash – Bloomberg — www.bloomberg.com Highlights: – There is “no risk of bankruptcy” even amid a “black swan” event and users’ funds are safe, said Armstrong, the firm’s chief executive officer. – Michael Novogratz. The CEO of crypto merchant bank Galaxy Digital has seen his fortune plummet to $2.5 billion, from $8.5 billion in early November. He’s been a champion of TerraUSD, the algorithmic stablecoin that’s now at risk of a complete collapse amid a breakdown in the price of a crypto token in the same ecosystem, Luna. – Changpeng Zhao, the CEO of closely held Binance, has lost an even larger fortune than Armstrong or Novogratz. He debuted on the Bloomberg wealth index in January with a net worth of $96 billion, one of the world’s largest. By Wednesday that had shrunk to $11.6 billion. Read more. Africa Faces Unrest as Thumping Food Prices Hit It Hardest – Bloomberg — www.bloomberg.com Highlights: – Some countries including Ethiopia, Zambia, Sudan, and Nigeria have food weightings above 50%, economists Jacques Nel and Petro van Eck said in a research note. – Egypt and Nigeria have delayed plans to end costly food and fuel subsides while Morocco, Kenya, and Benin have increased minimum wages. South Africa has extended monthly stipends for the jobless and cut its general fuel levy for two months. – Ghana and Tunisia, may face a popular backlash. – Lebanon, Mozambique, Togo, Jordan, Tunisia and Namibia are among the most susceptible to political unrest, given their high import dependency on oil and food, low incomes and already elevated social risks, Moody’s said. Read more. The Powerful Rajapaksa Dynasty Bankrupted Sri Lanka in Just 30 Months – Bloomberg — www.bloomberg.com Highlights: – The Rajapaksa family now is in full damage control mode, racing to ensure basic goods for the citizenry while seeking emergency funds from the IMF, World Bank, China and other lenders. It has stopped paying back foreign debt, defaulting for the first time since achieving independence from the British in 1948. – The Rajapaksas are afraid that if they go, they’ll be very vulnerable both in and outside the country. They face human rights violations, accusations of war crimes, and corruption charges.” – Fears of a broader meltdown first emerged with the pandemic, which suddenly sapped revenue from tourism and remittances. Credit rating companies downgraded Sri Lanka. To stay afloat, the government printed money, boosting supply by 42% between December 2019 and August 2021 — helping to stoke what would become Asia’s fastest inflation. – Last April, Sri Lanka suffered another shock: the government abruptly banned chemical fertilizer imports. – The policy mistakes led to shortages of food, electricity and medicine for the poor, and soon prompted angry protesters to hit the streets. Read more.
May Second Week Newsletter of World and GCC Business News – Issue #59
The ‘one of a kind’ Beirut theatre surviving Lebanon’s crises Highlights – The humour is abrasive, but the bigger surprise is the fact that in the face of the country’s catastrophic economic conditions — hyperinflation, coronavirus lockdowns, a collapsing economy and a devastating explosion at the capital’s port in 2020 — Metro al-Madina has survived, putting on shows almost every night. – Metro is only 10 years old but the theatre, located in a basement in the heart of the city, quickly became a Beirut institution with its spectacular shows presenting cabaret, burlesque, belly dancing, political satire and musicals. After the show, the action often moves to the theatre bar, where the audience lingers to dance late into the night. – In order to survive, Metro had to adapt. Jaber said he had reduced ticket prices and that though the 120-seat venue operated at half capacity owing to Covid-19 restrictions, audiences had come back. Fifteen per cent of tickets are sold on a “pay what you can afford” basis. “You feel they need live shows,” said Jaber. “They are surprising us by returning. This city has fallen into a depression and it needs something to make it happy.” Read more. UAE Crypto News: Bankers Quit Jobs for Shot at Riches in ‘Wall Street of Crypto’ – Bloomberg — www.bloomberg.com Highlights: – Co-founder and Chief Executive Officer Changpeng ‘CZ’ Zhao of Binance Holdings Ltd. called UAE the “Wall Street of crypto.” – We see a lot of interest from employees in traditional financial institutions who want to work for us,” Richard Teng, the head of the Middle East and North Africa at Binance. – We have witnessed the UAE making a huge push in developing world-class infrastructure and a regulatory environment for crypto firms to thrive and call home.”– Ahmed Ismail – HAYVN, Abu Dhabi-based digital currency investment bank. – The UAE’s crypto-friendly policies — in contrast to tightening regulations in other jurisdictions — have lured the largest firms. – The UAE is the Middle East’s third-largest crypto market, trailing Turkey and Lebanon, with a transaction volume of about $26 billion, according to data compiled by Chainalysis from July 2020 to June 2021. Read more. UAE-India trade deal is new phase of globalisation — www.zawya.com Highlights: – The UAE-India Comprehensive Economic Partnership Agreement (CEPA) that came into effect on Sunday is a precursor to similar trade deals that Abu Dhabi is sewing up with other countries that could allow free movement of goods with zero tariffs. – The takeaway from the development is this: one-size globalisation does not fit all; countries who are unafraid to experiment and are coming out of their regional shells and partnering with like-minded nations they can trust and have done business with over decades. – Under this deal, bilateral non-oil trade could see a jump to $100 billion from the current $60 billion in five years, but industry sources said that figure could be achieved in 2-3 years. New Delhi will offer preferential access to the UAE on over 90 per cent of its tariff lines. Read more. EU Plans to Court Africa to Help Replace Russian Gas Imports – Bloomberg — www.bloomberg.com Highlights: – Countries in Africa, in particular in the western part of the continent, such as Nigeria, Senegal, and Angola, offer largely untapped potential for liquified natural gas, according to a draft EU document seen by Bloomberg News. – The 27-nation bloc wants to prepare the region for imports of 10 million tons of renewable hydrogen by 2030 to help replace gas from Russia, in line with the ambitious EU Green Deal to walk away from fossil fuels and reach climate neutrality by mid-century. – Another target is to sign a trilateral memorandum of understanding with Egypt and Israel to boost LNG supplies to Europe by summer this year. – The bloc also plans to support the doubling of the capacity of the Southern Gas Corridor, which brings gas from Azerbaijan to 20 billion cubic meters per year. Read more. Uber Repairs Paris and London Relationships With EV Push – Bloomberg — www.bloomberg.com Highlights: – Uber Chief Executive Officer Dara Khosrowshahi sensing a way to burnish Uber’s green credentials, has set a goal of eliminating carbon emissions from every trip booked on its platform in Europe and North America by 2030 and worldwide a decade later. – To help persuade manufacturers to build more EVs and to get more of its British drivers to adopt them, Uber has arranged discounts on battery-powered cars from Hyundai, Kia, and Nissan. – The company announced it would spend £5 million building 700 fast chargers in Newham and two other boroughs that are home to many of its drivers, expanding London’s overall charging network by 7%. – In Paris, Mayor Anne Hidalgo has aggressively sought to reduce traffic and give the streets back to pedestrians and bikers. Diesel engines will be banned in 2024, followed by all other combustion engine vehicles in 2030. – Paris was the second city, after Lisbon, where the company introduced what it calls Uber Green—the ability to book a hybrid or EV. Read more. Instagram must stop the scammers targeting Gen Z | Financial Times — www.ft.com Highlights – Lloyds Bank recently reported a 155 per cent annual increase in scams on Instagram in the past year, focused on the under-25s. – Some of the UK’s most popular personal finance content creators are being deliberately targeted by fraudsters who clone their accounts and attempt to scam their followers. – It’s frighteningly easy for scammers to copy the account names, profile pictures and months’ worth of content, then use these fake accounts to target young (and often financially naive) followers with scam investments. – Like it or not, social media is where young people turn to for their financial education. It’s a shame some are learning lessons about fraud the hard way. Read more.
May First Week Newsletter of World and GCC Business and Finance News – Issue #58
UAE Golden Visa 2022: Lowering investment to Dh2m is an instant bonus for property buyers, entrepreneurs | Property – Gulf News Highlights: – To be eligible for a Golden Visa, the investor will now have greater flexibility on the payment side of it. (The eligibility also applies to investors purchasing the property through lending from specific local banks – but the equity component of the property investment should be Dh2 million-plus. Owning multiple properties with a combined value of Dh2 million plus also puts the buyer on track for the Visa.) – There could be the initial payment and the rest staggered within a set timeframe. So long as the equity part of the investment adds up to Dh2 million-plus, the buyer is eligible. – The reforms on Golden Visas gradually eliminates the sponsorship for residency – and frees up skilled professionals and the talented from sponsorship,” said Rizwan Sajan, Chairman of Danube Group. Read more. Abu Dhabi’s ADQ Invests in Egyptian Firms to Help Shore Up Economy – Bloomberg Highlights: – ADQ said it’s buying into Commercial International Bank, Fawry for Banking & Payment Technology Services SAE, Alexandria Container & Cargo Handling Company, Misr Fertilizers Production Company and Abu Qir Fertilizers & Chemical Industries. – The fund didn’t specify how much it will spend, but Bloomberg has previously reported ADQ plans to invest about $2 billion in Egypt. – Egypt and the UAE set up a $20 billion joint strategic platform in 2019 to invest in a range of sectors and assets. Read more. Adnoc Buys 25% Stake in Borealis in Chemicals Expansion Push – Bloomberg — www.bloomberg.com Highlights: – Austrian oil producer OMV AG will continue to hold the largest stake in Borealis, at 75%, with Adnoc taking control of Mubadala’s 25% holding. – Buying into Borealis will allow Adnoc to increase control over plastics maker Borouge, as that venture plans to list on the Abu Dhabi stock exchange later this year. Borouge, which would be valued at about $20 billion, is jointly owned by Adnoc and Borealis. Read more. Gaza Strip farmer digs up 4,500-year-old sculpture of ancient goddess of war — www.nbcnews.com Highlights: – The sculpture represents the head of Anat, “the goddess of love, beauty and war” in Canaanite mythology, said Jamal Abu Rida, a spokesperson for the Hamas-run Palestinian Ministry of Tourism and Antiquities. – In the sculpture, Anat wears a snake as a crown, a symbol of strength and invisibility. – The 6.7-inch-tall limestone head is estimated to date to 2,500 B.C, the ministry said. – This statue documents the history of the Palestinian people on this land and that its origins are Canaanite. – Canaan” refers to lands that include parts of modern-day Syria, Israel, Jordan and the Palestinian territories. Read more. War in Ukraine Is Making Qatar Even Richer as Europe Ditches Russian Gas – Bloomberg — www.bloomberg.com Highlights: – Several of the European Union’s most senior officials have flown to Doha in recent weeks, all with a clear message: we need your gas as fast as possible. – Much of the money will be used to bolster Qatar’s sovereign wealth fund, according to a person familiar with the matter. That would enable the Qatar Investment Authority, already a major investor in companies from Barclays Plc to Volkswagen AG, as well as New York and London real estate, to accelerate its push into technology stocks. – Qatar could also use the fund to further its regional goals. Last month, the government pledged $5 billion of investments in Egypt. That was part of a plan by Gulf states to support the North African country, which has been battered by a rise in food prices since the Ukrainian war started. Read more. On Russian Gas, Germany Has Bad Options — or Worse Options – Bloomberg — www.bloomberg.com Highlights: – Germany will face the same dilemma that Poland and Bulgaria encountered a few days ago: pay for Russian gas on Vladimir Putin’s terms, effectively breaching European sanctions, or see the Kremlin close the valves. – Putin has essentially written off its gas business with Germany. Either in four weeks or in 24 months, Russia knows that it will not sell energy to Berlin. – The Kremlin has told its European gas customers that if they want to continue receiving Russian gas, they have to pay for it via an account at Gazprombank, a state-controlled lender. – Putin has turned the table: he’s using the EU sanctions now against them by forcing them to do business with the central bank in rubles. – Putin will exploit the gas weakness for more. Now is ruble payments; tomorrow may be about rolling back sanctions or military aid to Ukraine. – The era of cheap-Russian gas fueling the German economy is over. German energy-intensive companies, like its chemical giants, could not compete in the global market. Read more. Palm Oil Price Jumps as Traders Weigh Severity of Indonesia Export Ban – Bloomberg — www.bloomberg.com Highlights: – Indonesia imposed the ban just as the country that’s home to the world’s largest Muslim population heads into the Eid al-Fitr holiday. The local shortage of edible oil has led to street protests and become a key political issue for President Joko Widodo. – Supply will be tight until at least the year-end as top producer Indonesia implements moves to secure its own domestic supply. Read more. Majority of India’s 900 Million Workforce Stop Looking for Jobs – Bloomberg — www.bloomberg.com Highlights: – Between 2017 and 2022, the overall labor participation rate dropped from 46% to 40%. Among women, the data is even starker. About 21 million disappeared from the workforce, leaving only 9% of the eligible population employed or looking for positions. – Now, more than half of the 900 million Indians of legal working age — roughly the population of the U.S. and Russia combined — don’t want a job, according to the CMIE. Read more.