April Fourth Week Newsletter of World and GCC Business News – Issue #57
Abu Dhabi Investment Authority (ADIA) Joins KKR in $15 Billion Ramsay Health Bid – Bloomberg — www.bloomberg.com Highlights: – Ramsay, which operates a network of private hospitals across Australia and Europe, revealed the takeover proposal on Wednesday. – The Australian Financial Review reported ADIA’s participation earlier on Thursday. Representatives for ADIA and KKR declined to comment. – Abu Dhabi Investment Authority is among investors in a consortium led by KKR & Co. seeking to buy Australia’s Ramsay Health Care Ltd. for A$20.1 billion ($15 billion). Read more. Dubai Breaks Into World’s Top Five Listing Venues With DEWA IPO – Bloomberg — www.bloomberg.com Highlights: – DEWA’s IPO, which drew $86 billion in orders, is a watershed moment for Dubai, after the city missed out on a listing boom that swept through the Middle East last year. – DEWA is the first of 10 planned listings of state-owned assets to reinvigorate Dubai’s capital market. They include road-toll collection system Salik and business park operator Tecom Group, both expected to be smaller than DEWA. Read more. Majid Al Futtaim Death Leaves Dubai to Untangle Inheritance Plan – Bloomberg — www.bloomberg.com Highlights: – Al Futtaim’s inheritance was left unresolved when the octogenarian died in December. While the villa was intended as a residence for him and his third wife, the centerpiece of the estate is Majid Al Futtaim Holding. – The company controls $16.5 billion in assets including a renowned indoor ski hall, the opulent Mall of the Emirates and the Carrefour hypermarket franchise in the Middle East. It has activities in 17 countries, extending into Africa. – To oversee any potential disputes, Dubai’s leader Sheikh Mohammed bin Rashid Al Maktoum appointed a special judicial committee, a relatively rare occurrence reserved for high-profile cases. – Al Futtaim founded the business in the 1990s with funds from a succession dispute with his cousin. His company was the first to combine shopping and entertainment. Read more. Coal Tycoon Low Tuck Kwong Is Making Billions in a World Aiming to Go Green – Bloomberg — www.bloomberg.com Highlights: – Burning coal is still common, generating about 35% of the world’s electricity and twice as much in Indonesia. – the miner is building new infrastructure to boost its production capacity to as much as 60 million tons by 2026 from 37.6 million tons in 2021 – Even if the Russian-Ukraine conflict subsides, she said, “coal will still be needed by most of the Asian countries by 2050, and lack of financing at coal mines will provide price support. Read more. Ukraine’s Wheat Fields Sow Putin’s Megalomania – Bloomberg — www.bloomberg.com Highlights: – For centuries, Ukraine has been one of the most productive places on the planet when it comes to growing wheat. – Much of Ukraine is along what’s called the chernozem belt, a beautifully aerated black loam that is excellent for growing almost anything. – High prices for grain are also likely to hurt consumers in cities in North Africa and the Middle East, which have been consuming grain since the days of the old Byzantine Empire. Wheat makes up about 40% of the calories consumed by the poorest households in those places. Because food prices are going up, as they did in 2011, we may see food riots comparable to what we saw during Arab Spring. Read more. Russia Economy Defies Forecasts Despite Looming Recession, High Inflation – Bloomberg — www.bloomberg.com Highlights: – The bleakest scenario hasn’t materialized in large part because Russia contained the spread of financial contagion with stiff capital controls while plentiful petrodollars helped the ruble recoup losses and put a leash on inflation. – For many, however, the hardships are only just beginning. Moscow Mayor Sergei Sobyanin said about 200,000 jobs are at risk in the Russian capital alone because of the exit or halt to operations by foreign businesses. Read more. Chip-Starved Firms Are Scavenging Silicon From Washing Machines – Bloomberg — www.bloomberg.com Highlights: – Automakers have yet to overcome a semiconductor crunch that has challenged their operations for over a year. Tesla Inc. said this week that production remains hampered by shortages and elevated prices for key components, while Volkswagen AG has cautioned to expect continued negative effects from chip scarcity. Earlier this week, Toyota Motor Corp. trimmed its output target by about 100,000 units for this year on insufficient semiconductor supply – Some signs of weakening consumer electronics demand have yet to translate into relief for manufacturers of other silicon-hungry products and devices. Read more. Sanctions on Russian Diamonds Cause Chaos as Industry Scrambles to Keep Buying – Bloomberg — www.bloomberg.com Highlights: – Buyers across the big trading centres in Antwerp and Dubai and manufacturing hubs in India have spent the past two weeks consulting lawyers to determine what the U.S. sanctions on Alrosa PJSC mean and how they can continue to buy – The disruption is already being felt in diamond prices, as the cost of the smaller stones that Alrosa specializes in has started to rise in the past week – The disruptions around Russian diamonds are being felt through the global industry, which was already facing a shortage of rough stones even before the war in Ukraine. Read more.
April Third Week Week Newsletter of World and GCC Business and Finance News – Issue #56
“Easter is meant to be a symbol of hope, renewal, and new life.” Janine Di Giovanni UAE dominates Gulf Business’s Top 100 Arab Power List for 2022 – GulfToday — www.gulftoday.ae Highlights: – On Sarah Al Amiri, Gulf Business said, “After reaching Mars, the chairwoman of the UAE Space Agency, Sarah Bint Yousif Al Amiri is not standing still. – Al Jaber was named the highest-ranked CEO outside of the US and China, according to Brand Finance.” – Sheikh Ahmed led Dubai carrier Emirates’ resurgence in the wake of the pandemic. – On selection of Al Mubarak, Gulf Business said, “With $243 billion in assets under management, Mubadala Investment, headed by Al Mubarak is playing a key role in diversifying Abu Dhabi’s economic growth. – Emaar founder, Alabbar, has also driven the e-commerce platform noon.com. Read more. Best place to start a business: UAE tops global ranking ahead of Netherlands, Finland, and Saudi Arabia Highlights: – The GEM 2021/22 report includes a comprehensive National Expert Survey (NES), which captures the perspectives of more than 2,000 relevant experts – at a minimum of 36 per country – across the 50 participating countries, about the conditions governing entrepreneurship in their country. – Of the 35 countries that participated in the NES for each of the three years, the highest increases were in Saudi Arabia (from 5.0 in 2019 to 6.1 in 2021), the UAE (from 5.8 to 6.8), and the Republic of Korea (from 5.1 to 5.7). Read more. UAE calls on global investors to benefit from its business-friendly environment — www.thenationalnews.com Highlights: – Last year, the UAE announced Operation 300bn, which aims to more than double the contribution of the industrial sector to economic output to Dh300 billion ($81.68bn) by 2031, from Dh133bn in March 2021. – Dubai Industrial City, part of Tecom Group, has attracted regional and international players in the industrial and logistics sector, and promoted the export of UAE-made products to international markets, Malek Al Malek, director-general of the Dubai Development Authority and group chief of Tecom Group, said. Read more. UAE Investors Weigh Projects in Syria as Ties Warm: Al-Watan – Bloomberg — www.bloomberg.com Highlights: – in recent years, Gulf Arab governments have been restoring relations with the country, with the UAE reopening its embassy in Damascus in December 2018. – Last year, Syria’s state-run SANA news agency reported that UAE firms and the country’s electricity ministry signed an agreement to build a photovoltaic power station in the Damascus suburb. Read more. A New World Energy Order Is Emerging From Putin’s War on Ukraine – Bloomberg — www.bloomberg.com Highlights: – The 27-nation European Union has responded by speeding up its disconnection from Russian gas, while the U.S. has barred Russian oil imports and is scouring the world for alternative supplies. Saudi Arabia is reveling in a renewed strategic importance as crude prices that collapsed two years ago hit new highs. – Gulf Arab nations accused the U.S. of a lack of support in the face of repeated attacks by Iranian-backed militia on Saudi oil facilities and Gulf tanker traffic, and on Abu Dhabi this year. – Now that we are in a crisis moment, we’re reaping the effect of that lack of trust that’s been building over the years,” said Karen Young, senior fellow at the Middle East Institute in Washington. – Biden needs more oil to keep down the price of gasoline at the pump for American voters and help his Democratic party’s chances of retaining Congress in November’s midterm elections. – China will continue to carry on “normal trade cooperation” with Russia, including in oil and gas, said Zhao Lijian, a foreign ministry spokesperson. China is considering buying or increasing stakes in Russian companies such as Gazprom PJSC, Bloomberg reported this week. Read more. Corporations Could Pay Nearly 14% More Under Global Tax Deal – Bloomberg Highlights: – The IMF’s projections foreshadow a sharp increase in corporate tax collections largely tied to a two-part pact struck last year with nearly 140 countries to implement a 15% minimum tax rate and an overhaul of some global taxing rights to require some of the largest companies to book income in the countries where revenues are generated. – The minimum tax would increase corporate tax payments worldwide about 5.7% — or roughly $150 billion, according to the IMF’s estimates. – The estimates provide an optimistic outlook for a potential end to rampant cross-border profit shifting, a problem that world leaders have for years been trying to resolve. Sri Lanka Economic Crisis: Default Looms as Debt Payments Halted to Save Dollars – Bloomberg — www.bloomberg.com Highlights: – All outstanding payments to bond holders, bilateral creditors and institutional lenders will be suspended until a debt restructure, the finance ministry said in a statement Tuesday. – Sri Lanka has about $12.5 billion outstanding in eurobonds, and its next payments are due on April 18, according to data compiled by Bloomberg. – Nomura Holdings Inc. expects an “Ecuador-style debt restructuring” where the existing stock of bonds are exchanged into three longer-dated bonds with a reduction in coupon rates and some principal haircut, said Nicholas Yap, head of Asia credit desk analysts in Hong Kong. Can Celebrities Promote NFTs? Regulators Struggle to Oversee DeFi Market – Bloomberg — www.bloomberg.com Highlights: – A key legal question is whether digital assets including NFTs are securities, and therefore subject to the same rules as stocks. – U.S. Securities and Exchange Commission rules stipulate that it is unlawful for any person to tout security, like a stock, without disclosing a financial relationship or ownership to the source. In other words, celebrities that are being compensated would need to disclose their payment. – About $44 billion worth of crypto was sent to smart contracts on the Ethereum blockchain tied to NFTs during 2021, up from $106 million the year before, according to data from Chainalysis. – For MoonPay CEO Ivan Soto-Wright, it’s clear why artists and musicians are so attracted to NFTs: Web3 and the blockchain technology
April Second Week Newsletter of World and GCC Business and Finance News – Issue #55
DIFC launches world’s 1st Studio Launchpad for Ubiquitous Finance ecosystem – GCC Business News — www.gccbusinessnews.com Highlights: – The Studio Launchpad, which is supported by an international group of venture building experts, digital asset pioneers and emerging technology strategists, is designed to attract and engage a consortium of leading startup and corporate venture studios. – In the next 5 years, over 20 studios will be set up in the DIFC and are expected to launch over 200 new ventures, of which over 100 will be scale-ups and 10 will gain unicorn status. They will create over 8,000 innovation jobs in Dubai and attract over $544 million in venture capital. Read more. Abu Dhabi sees 21.5% rise in new economic licenses – Mubasher Info Highlights: Germany to Nationalize Gazprom Unit to Safeguard Gas Supply – Bloomberg — www.bloomberg.com Highlights: – Gazprom Germania’s Astora unit operates Germany’s biggest gas storage facility in the northern town of Rehden in the state of Lower Saxony. The site is considered key to Germany’s energy security. – The Russian gas giant didn’t disclose the new ownership, but regulatory filings showed the transaction involved exiting Gazprom Export Business Services LLC, the owner of Gazprom Germania. Read more. China’s Covid Variants: New Omicron Virus Subtype Discovered – Bloomberg — www.bloomberg.com Highlights: – The new iteration of the virus, isolated from a mild Covid-19 patient in a city less than 70 kilometres (43 miles) from Shanghai, evolves from the BA.1.1 branch of the omicron variant, Global Times reported, citing sequencing data from local health authorities. – The report said the subtype doesn’t match other coronaviruses that are causing Covid in China nor those submitted to GISAID, where scientists around the world share the coronavirus they sequenced as a way to monitor mutations. Read more. Spain Plans to Invest $12.4 Billion in Chips, Semiconductors – Bloomberg — www.bloomberg.com Highlights: – With its 45 billion-euro Chips Act, the European Commission freed up public funding last month to produce chips considered “first of a kind” in Europe. Individual countries are acting too: Germany is looking to grant Intel Corp. 5 billion euros in public funds to help fund a 17-billion semiconductor plant. – The chips are key for Spain’s auto industry, which is Europe’s second-largest, representing about 10% of gross domestic product. Read more. Ukraine Sunflower Oil Crisis Hits Food From Chips to Cookies – Bloomberg — www.bloomberg.com Highlights: – Walker said 450 products Iceland Foods sell are affected and while many can use alternatives, such as rapeseed oil, the grocer will have no choice but to “regrettably” use palm oil in about 30 to 40 products. – Wm Morrison Supermarkets said it too will have to use sustainable palm oil in some products when they are unable to switch to alternatives such as rapeseed oil. – Ukraine is a key supplier of grains to countries in the Middle East. – Ukrainian President Volodymyr Zelensky said Thursday that Russian troops are targeting agriculture, placing land mines on farms and destroying machinery. Read more. How Biden’s Billionaire Minimum Income Tax Would Hit Wealthy Americans’ Stocks – Bloomberg — www.bloomberg.com Highlights: – The plan, which would tax the appreciation of financial and business assets owned by people worth more than $100 million, has strong support among many Democratic voters – How would the tax work? The proposal would require that taxpayers worth more than $100 million pay a minimum of 20% on their capital gains each year, regardless of whether they sold assets for a profit or continue to hold them. – People with illiquid holdings, like a business or real estate, wouldn’t have to pay the full tax on the gain until they sell, but they would owe a deferral charge each year. – How many people would pay this tax? The $100 million wealth threshold means the richest 0.01% of Americans — roughly 20,000 households — would owe this tax. – Chief among their concerns: How would it work in practice, and what are the chances it actually becomes law? Read more. Why Ethereum’s Coming ‘Merge’ Matters for Cryptocurrency (ETH) – Bloomberg — www.bloomberg.com Highlights: – Developers who work on refining the Ethereum software roll out periodic upgrades, but none has been as major as the one expected this year. Named “the Merge,” it will replace miners with so-called stakers. Miners order transactions by solving complex calculations using millions of powerful servers—a system that’s been criticized for its heavy use of electricity. Stakers, by contrast, will order transactions by putting up their own Ether on a new system, which has been in testing since December 2020. – People can already use their digital wallets to stake Ether on this test system, called the Beacon Chain; after the Merge they will start to be selected at random to become what is known as validators, ordering transactions on the Ethereum digital ledger into blocks and getting paid with new Ether. This is called “proof of stake.” – ETHEREUM’S $415.3 BILLION market capitalization depends on the Merge going smoothly, but so do the thousands of businesses that operate on the blockchain, plus millions of users. Some $121.5 billion of capital is locked in Ethereum’s decentralized finance (Defi) apps, according to tracker DappRadar. Most NFTs—also with a total value in the billions—use Ethereum. Read more.
Ramadan Mubarak! Wishing you a bright and joyful Ramadan!
March Fourth Week Newsletter of World and GCC Business and Finance News – Issue #53
Disillusioned Lebanese lose faith with politicians ahead of poll Highlights: – Under the country’s confessional system, the Sunnis provide the country’s prime minister but Saad al-Hariri, the three-times prime minister, withdrew from politics in January and announced his Future Movement, the leading Sunni party, would boycott the poll. He said he was convinced there “is no room for any positive opportunity for Lebanon in the light of Iranian influence, international disarray, national division, sectarianism, and the collapse of the state”. – The fear, he said, was that some of those seats would go to Sunnis allied with Hizbollah, further tilting the balance towards the Shia group. One option under consideration, he said, was for Future Movement candidates to run as independents. – Many people experiencing the collapse of the country will turn to former warlords or to anyone who can provide protection or services,” said Emile Hokayem, a senior fellow at the International Institute for Strategic Studies. Read more. Dubai sets sights on Latin America as key region for $544bln trade — www.zawya.com Highlights: – As Dubai works towards the target [of] boosting foreign trade to $544 billion within the next five years, LATAM will be a key focus for our ambitious strategy,” the chairman Abdul Aziz Al Ghurair stated. – Al Ghurair highlighted how Dubai imports from LATAM were worth “well above $6 billion” between 2018 to 2020, with food being a major contributor. Read more. UAE, GCC states move to sell stakes in govt enitities to further develop debt, equity markets – News | Khaleej Times — www.khaleejtimes.com Highlights: – “We do not expect revenue generated by the share sales to materially improve the public finances of the respective governments. We view the GRE sector as generating only limited contingent liabilities for their respective governments in most of the region. We believe that, with the exception of Oman, GCC governments have sufficiently strong balance sheets, in relation to the level of outstanding GRE debt, to absorb financial distress in the GRE sector, without materially worsening their overall fiscal positions,” – Timucin Engin, a primary credit analyst at S&P said. Read more. India explores ‘rupee-rouble’ exchange scheme to beat Russia sanctions – Western countries have imposed sweeping sanctions on Russia’s central bank and cut several of its lenders off from the Swift financial messaging system. But India, which has longstanding ties with Russia, its most important supplier of military equipment, has remained neutral. – A foreign trade executive argued that a rupee-rouble pact would risk a furious reaction from the US, which is India’s biggest export destination, buying more than $50bn of Indian goods per year. – Indian exporters hope the mechanism could release money they are owed by Russian clients, who cannot wire cash internationally because of the Swift restrictions. – The foreign trade executive said a rupee-rouble arrangement could allow India to continue buying Russian energy in the event of an oil embargo. Read more. Ex-Banker Running Rivian’s (RIVN) Finances Has Plan to Regain Wall Street Trust – Bloomberg — www.bloomberg.com Highlights: – If we can really prove out this ramp, if we can prove out our opportunity to bring new vehicles to market, to build additional capacity in a cost-effective way, the stock price will just take care of itself,” McDonough said in an interview. – The Irvine, a California-based company, founded in 2009, only recently started producing its signature plug-in pickup trucks and SUVs, as well as electric delivery vans for Amazon.com Inc., a key investor. – It could take several more years for its vehicles to produce meaningful revenue to offset cash usage, likely forcing Rivian to raise more capital amid equity market turmoil. – Rivian raised sticker prices as much as 20% on its consumer models, including for previously placed orders, leading to cancellations by angry customers. – Just days later, Rivian reinstated the original prices for existing pre-order customers. Read more. London’s Threat From Amsterdam Hasn’t Gone Away – Bloomberg — www.bloomberg.com Highlights: – The recent private-equity related floats in London have performed poorly. While shares in the main U.S.-listed buyout firms have also been weak, they haven’t fared as badly. – Perhaps CVC reckons it will enjoy a quieter life and come under less scrutiny in Amsterdam than in London. – Amsterdam has been at pains to establish itself as the neutral venue post-Brexit, home to companies regardless of domicile and sector. On that, it’s arguably made more headway than either Paris or Frankfurt. Read more. The Rivalry Between Indian Billionaires Ambani and Adani Looks Ready to Heat Up – Bloomberg — www.bloomberg.com Highlights: – Adani’s main interest in hydrocarbons continues to be coal. – But while coal is very much India’s past and present, it’s not the future. This is why Adani made a big bet on solar power. He also started circling around plastics. – After Adani set up a new petrochemicals subsidiary last year. The tantalizing question is whether Adani’s ambitions include a refinery as well. – Back in 2018, Aramco and Adnoc were going to partner with state-owned Indian firms to set up a mammoth $44-billion refinery. That plan has gone nowhere after the project lost its original site in India’s Maharashtra state because of local political opposition. Could the Adani Group insert itself into a revival of that project. – That would put the billionaires in direct competition. Read more.
March Third Week Newsletter of World and GCC Business and Finance News – Issue #52
UAE Business: UAE launches ambitious new programme for SMEs — www.gdnonline.com Highlights: – The UAE has launched the ambitious National Programme for Small and Medium Enterprises (SMEs) which has created more than 25 tie-ups with leading institutions in the public and private sectors to support citizen entrepreneurs. – This further reflects changes in the services provided to citizen entrepreneurs to support them in developing their projects, thereby enabling them to increase their contribution to the country’s economic diversification efforts and growth in line with the goals of the ‘Projects of the 50.’ Read more. Biden Will Have to Work With Saudi Prince MBS, Like It or Not – Bloomberg — www.bloomberg.com Highlights: – At CERAWeek in Houston, one of the energy industry’s biggest annual gatherings, Scott Sheffield, chief executive officer of Pioneer Natural Resources Co., warned that if Biden can’t convince the prince to pump more oil, crude could trade at a sky-high $150 to $200 a barrel for the next “several years.” – But as the attempt to connect with the prince on the phone suggests, Biden realizes he can no longer shun the man who controls the world’s biggest oil exporter. – MBS has previously brushed off appeals from U.S. officials to increase the kingdom’s oil output. For good measure, he has suggested Saudi Arabia might reduce investments in the U.S., which are thought to be in the region of $800 billion. Read more. Rivian (RIVN) Enthusiasm Turns to Skepticism After $117 Billion Wipeout – Bloomberg — www.bloomberg.com Highlights: – With investors increasingly concerned about Rivian’s production ramp combined with its inability to combat cost inflation with price increases, we have trimmed our price target to $47 from $115,” Barclays analyst Brian Johnson wrote in a note to clients on March 8. – The electric-truck manufacturer’s initial public offering in November coincided with heightened investor appetite for all things EV, driving its market valuation to $153 billion. – Rivian is still considered the best-positioned startup to compete with Tesla Inc. in the rapidly growing EV market. Read more. SoftBank Founder Masayoshi Son Loses $25 Billion in Tech’s Brutal Winter – Bloomberg — www.bloomberg.com Highlights: – From China’s tech crackdown to Russia’s invasion of Ukraine, inflation to the markets, a litany of troubles has beset Son and his conglomerate. – The stock has tumbled almost 60% in the past year and the loan-to-value chart that Son obsesses over daily just keeps ticking higher, indicating SoftBank’s net debt is getting unwieldy relative to the equity value of its holdings. – As of December, it had pledged more than half of its stakes in Alibaba, T-Mobile US Inc., Deutsche Telekom AG and its telecom unit SoftBank Corp. Asset-backed financing makes up $54 billion of the conglomerate’s $128 billion in total debt, according to a BI analysis. – All but three of the 23 stocks backed by the conglomerate that listed in 2021 have fallen below their initial public offering prices. – Kirk Boodry, an analyst at Redex Research doesn’t rate the shares. “There is some cushion there, despite the poor performance of the portfolio over the last three quarters,” he said. Read more. Global Food Crisis: Latest News and Analysis With Ukraine-Russia War – Bloomberg — www.bloomberg.com Highlights: – The United Nations warned that already record global food costs could surge another 22% as war stifles trade and slashes future harvests. – Hungary, Indonesia and Argentina are among a cluster of countries that have imposed trade barriers on agricultural exports ranging from wheat to cooking oil in an attempt to suppress domestic prices and safeguard local food supplies after Russia’s invasion led to widespread panic about shortages. – Other global suppliers may take strides to fill stockpile shortfalls. India, for example, has increased wheat shipments in recent years and could boost exports to a record 7 million tons if the conflict drags on. But many nations that could typically offset shortages are themselves facing production problems. – Ukraine and Russia together account for more than a quarter of the global trade in wheat, as well as a fifth of corn sales. Read more. UAE billionaire Sajwani to invest $1bln in building data centres — www.zawya.com Highlights: – The facilities, to be established through Sajwani’s new data centre business Edgnex, will target major tech giants like Google, Microsoft and Amazon. – Data consumption has surged in recent times, mainly driven by remote work, online shopping and cloud computing. Read more.
Weekly newsletter of World and GCC Business and Finance News – Issue #51
Why new technology is top dollar in forex trading | Gn Focus – Gulf News Highlights: – With an average daily turnover of approximately US$5.1 trillion, according to a 2019 Triennial Survey, the Foreign Exchange (forex) is the world’s richest market in liquidities, its main purpose is to trade currency. – The financial industry now has two powerful new tools: predictive analytics and big data. – The key to predictive analytics is that it looks at patterns in data to determine if they’re likely to emerge again. – This branch of advanced analysis is increasingly used in risk management and trading in the financial markets – especially in very liquid markets such as forex (FX). – “The first thing you need to think about is your personality, your trading know-how, your financial goals, and of course the level of risk you’re willing to bear,” advised Dr Atie Mouallem, Head of BBAC (Bank of Beirut and Arab Countries) GCC. Read more. Surging Oil Price Is Budget Boon for the Middle East’s Exporters – Bloomberg — www.bloomberg.com Highlights: – Russia’s invasion of Ukraine lifted crude prices over $105 a barrel for the first time since 2014. – The fighting in Europe means OPEC member states like Saudi Arabia and the United Arab Emirates are set for an even bigger windfall. – Saudi Arabia, which needs oil at about $72 a barrel to balance the books, already said it expects to record a surplus this year. For the UAE, that figure is about $67 a barrel. Read more. OPEC+ Faces Russia Reckoning Despite Effort to Ignore War – Bloomberg — www.bloomberg.com Highlights: – Russia’s attack has triggered one of the strongest packages of economic sanctions ever imposed on a major economy, but none of them targets energy exports. – But traders and shipowners are increasingly shying away from handling the Russian oil, even without direct sanctions. – “If Russian exports and production are lower at the next meeting, things might be different,” said UBS Group AG analyst Giovanni Staunovo. – OPEC+’s desired image as a responsible steward of a “balanced” oil market could be under threat if crude prices don’t fall. – U.S. President Joe Biden is talking about a formal ban on importing Russian oil and gas, a move that may force oil prices higher. Read more. Saudi Arabia Prince’s $500 Billion ‘Neom’ Megaproject Woos Wall Street – Bloomberg — www.bloomberg.com Highlights: – Neom has hired more than a thousand employees to move to the remote site and plan the new region’s economy and urban design — including former executives from Buro Happold, General Electric and Germany’s RWE. – The invitation says executives will share details on Neom’s “unique vision of urban design,” which includes plans for a car-free linear city, an industrial development that floats on the Red Sea and a mountain ski resort with an artificial lake — all powered by renewable energy. Read more. Meta’s new home in Dubai will change the Middle East — www.thenationalnews.com Highlights: – The site in Dubai Internet City will have more than 100 employees. At the opening, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, described the move as a reflection of the emirate becoming an increasingly diverse business destination, particularly in technological fields. Bloomberg Intelligence estimates that the metaverse market alone could be worth $800 billion by 2024. – At the inauguration, Sheryl Sandberg, chief operating officer of Meta, said the UAE’s “culture of innovation” matched Meta’s ambitions. Read more. Argentina to Get $9.8 Billion From IMF After Agreement Approval – Bloomberg — www.bloomberg.com Highlights: – The agreement is expected to face tough criticism from radical-left members of the ruling coalition backed by vice-president Cristina Fernandez de Kirchner and would only head to the IMF’s board for final approval if congress passes it. – If the agreement is passed by congress and the IMF executive board, Argentina would receive 7 billion ($9.8 billion) of the IMF’s special drawing rights upon approval. It would receive smaller amounts if it passes the quarterly revisions of the IMF staff, increasing the total of the program to $45 billion. – The central bank’s dwindling reserves have been a key investor concern, while economists warned that large-scale money printing fueled higher inflation. Read more.
March First Week Newsletter of World and GCC Business and Finance News – Issue #50
Abu Dhabi’s Mubadala invests Dh1.3b in Singapore-based Princeton Digital | Business – Gulf News Highlights: – Data-center operator Princeton Digital Group has pulled in over Dh1.3 billion investment from Abu Dhabi sovereign fund Mubadala. – The investment will further accelerate the UAE’s presence in key international markets. – This comes just weeks after Mubadala led a $500 million funding round with an investment of $350 million. – Princeton Digital invests in, develops and operates data-centre infrastructure in countries including China, Singapore, Japan, India and Indonesia, according to its website. Read more. UAE’s SHUAA Capital introduces $100mn SPAC on NASDAQ – GCC Business News — www.gccbusinessnews.com Highlights: – The $100 million Special Purpose Acquisition Company (SPAC) will be listed on the NASDAQ Global Marketplace and begin trading under the ticker symbol ‘SHUAU’. – The company will focus on identifying and merging technology-based/enabled financial services businesses in the Middle East, North Africa, and Turkey (MENAT). Read more. UAE’s Gulf Capital accelerates investment pace in Egypt and Africa — gulfbusiness.com Highlights: – According to the latest report from the International Monetary Fund (IMF), the Egyptian economy will become the second-largest Arab and African economy during 2022. – The IMF projects a robust average annual growth rate of 5.6 per cent for the Egyptian economy over the next five years, the best in the country’s economic history over the last 25 years – Gulf Capital’s most recent investment was in fintech payment solutions provider, Geidea, and health tech company, Vezeeta. Read more. Russian Oil Shock: How Do You Replace Millions of Barrels a Day? – Bloomberg — www.bloomberg.com Highlights: – Oil traders believe exports are likely to suffer a notable drop by late next week. They all suggest that at least 2 million barrels a day of Russian oil exports (crude and refined products) are at risk or about 25% of the total. – The International Energy Agency on Tuesday agreed to release 60 million barrels from its members’ strategic petroleum reserves, but that’s not close enough to cover the potential drop in Russian oil exports. – The U.S., Japan and Europe should use diplomatic pressure to convince Saudi Arabia and the United Arab Emirates to immediately increase production well above their OPEC+ current quotas. – Finally, a nuclear deal with Iran would help to alleviate the crisis, guaranteeing the return of perhaps 500,000 barrels a day. Read more. Whether They Back War or Not, Russian Billionaires Hit by EU – Bloomberg — www.bloomberg.com Highlights: – The restrictions imposed Monday are some of the most sweeping yet on Russia’s super-wealthy, freezing assets and putting in place travel bans and trading curbs – The U.K. last week banned all private Russian aircraft from the nation’s airspace and has instructed ports to block any vessels they believe are owned, controlled, chartered or operated by any person connected with Russia, or by sanctioned individuals. – Historically neutral Switzerland said on Monday it’s adopting EU sanctions on Russia, including asset freezes. – On Tuesday, Bloomberg reported that EU ambassadors had agreed to exclude seven Russian banks from SWIFT, while sparing the nation’s biggest lender Sberbank PJSC and a bank part-owned by Russian gas giant Gazprom PJSC. Read more. How the Russia-Ukraine War Will Impact US Dollar Dominance, FX Rates – Bloomberg — www.bloomberg.com Highlights: – With Russia losing access to its foreign currency reserves, a message has been sent to all countries that they can’t count on these money stashes to actually be theirs in the event of tension. – The global head of short-term interest rate strategy at Credit Suisse AG Pozsar argues that this recognition may encourage central banks to diversify away from the dollar, or try to re-anchor their currencies to assets that are less susceptible to influence from the U.S. or European governments. – As of January, Russia held over $120 billion worth of gold, more than its actual dollar-denominated holdings. Now, given the loss of access to its dollars and euros, gold is effectively it’s primary holding. And Pozsar sees potential for the ruble to become de facto, or literally, backed by gold. – Cameron Crise, a macro strategist for Bloomberg. “It’s not clear that anyone other than the United States has both the ability and the will to ‘manufacture’ safe assets and sell them to foreigners as the bedrock of a global financial system.” Read more. To Punish Putin for Russia’s War in Ukraine, the World Weaponized Finance – Bloomberg — www.bloomberg.com Highlights: – They have been trying to ‘bulletproof’ their economy from sanctions since 2014,” says Elina Ribakova, deputy chief economist at the Institute of International Finance in Washington. – Russian officials also were forced to put stringent controls in place to deter capital flight and stem a bank run that drained some $14 billion in deposits in a single day. Measures included freezing the assets of all nonresident investors, making it impossible for them to liquidate their holdings, and a ban on converting rubles into other currencies. – The U.S. and Europe also moved to disconnect several major Russian banks from SWIFT, the global messaging system used to facilitate payments between financial institutions. Read more.
February Fourth Week Newsletter of World and GCC Business and Finance News – Issue #49
Abu Dhabi’s G42 Expands Investment Team With Wealth Fund Hires – Bloomberg — www.bloomberg.com Highlights: – Koster and Nieman are among those reporting to Chief Investment Officer Tariq bin Hendi, who’s looking to hire more money managers from other Abu Dhabi-based investment firms, the people said. – Last year, G42 formed a joint venture with Beijing-based Sinopharm CNBG, marking the first overseas manufacturing of the Chinese vaccine. Read more. India, UAE Seal Bilateral Economic Pact to Deepen Trade and Investment Ties – Bloomberg — www.bloomberg.com Highlights: – The trade deal inked Friday cutting duties on almost 90% of goods traded between India and the United Arab Emirates, will create one million jobs in the next five years. – The pact signed Friday cuts duties on metals, minerals, petrochemicals and petroleum products sold by the UAE in India while giving India’s exporters an advantage in items including leather, footwear, pharmaceuticals and textiles, Indian trade minister Piyush Goyal said while announcing the deal. Read more. UAE’s Alpha Dhabi Holding Eyes Opportunities in Saudi Arabia, Egypt – Bloomberg — www.bloomberg.com Highlights: – Egypt, the Arab world’s most populous nation, and Saudi Arabia, the region’s biggest economy, have emerged as key markets for UAE-based firms seeking growth. – The firm went public last June, quickly becoming one of the Middle East’s biggest listed firms. Read more. Investment Bankers Debate the Chance of Nuclear War, Russian Trading Risk – Bloomberg — www.bloomberg.com Highlights: – “It’s the first time in more than 30 years that the threat of nuclear confrontation is a real possibility,” said Goldman Sachs Group Inc. Alex Younger, ex-chief of Britain’s MI6 intelligence service and now an adviser to the Wall Street giant. – Only France’s Societe Generale SA, Italy’s UniCredit SpA and Austria’s Raiffeisen Bank International AG have a substantial on-the-ground presence in Russia. – Banks have been locked in urgent mapping exercises to try to work out their trading exposure to counterparties backed by Russian money, according to a lawyer who works with many large financial institutions. – Biden’s targeting of a broad swath of Russian elites and their family members, following a similar move by Johnson will be of greater concern to banks with large wealth management operations, especially those in Europe. Read more. Taiwan Supports U.S.-Led Sanctions on Russia Over Ukraine Invasion – Bloomberg — www.bloomberg.com Highlights: – “I want to stress that the situation in Ukraine and in Taiwan Strait are fundamentally different, not only because of the natural barrier of the Taiwan Strait, but also Taiwan’s geopolitical and strategic status,” President Tsai Ing-wen said in a speech in the southern city of Tainan Friday morning. Read more. Where Are the Yachts, Jets of Russian Billionaires Like Roman Abramovich? – Bloomberg — www.bloomberg.com Highlights: – So far, even as the U.S. and U.K. have ramped up sanctions on more than 100 Russian individuals and entities, these assets of the country’s elite — which can be worth hundreds of millions of dollars each — have avoided any direct hit. So too have their high-end real estate holdings, which in London range from Chelsea penthouses to Highgate mansions. – Assets like planes or yachts could be targeted by a round of sanctions, according to Andrew Lohsen, a fellow in the Europe, Russia and Eurasia program at the Center for Strategic and International Studies. The challenge is they could be held through shell companies, complicating the ownership chain. – If the U.S. imposes sanctions on Russia’s ultra-wealthy individuals, penalties could extend to family members as well, said Rachel Fiorill, a lawyer for Paul Weiss and former enforcement section chief at the Treasury Department. Read more.
February Third Week Newsletter of World and GCC Business and Finance News – Issue #48
UAE not as affected by inflationary pressures as some developed economies — www.thenationalnews.com Highlights: – The main drivers of inflation in the developed markets last year were energy prices, supply chain disruptions, reopening frictions and food prices. – It was only in August 2021 that the UAE’s annual inflation rate returned to positive territory, and rose to 2.5 per cent by the end of last year. This is still around half the inflation seen in Europe and around a third of the US inflation rate. – Last year, housing and utility costs in the CPI declined by 3.5 per cent from 2020, which helped to offset some price increases in other components of the index. – UAE petrol prices had increased almost 48 per cent year-on-year by the end of last year, reflecting the higher price of crude oil in 2021. – The biggest increase in the UAE’s CPI in 2021 was in the transport component of the index, which reached 18 per cent year-on-year by December and averaged a 9 per cent increase over the whole of last year. Read more. Dubai starts issuing ‘fractional’ property ownership title deeds in move to expand investor base | Property – Gulf News Highlights: – In its simplest form, fractional ownership allows multiple investors to acquire an apartment, villa or other property types, and with each of them having ownership rights through the title deeds. – Under the current rules, “A maximum of four investors can acquire property together in the emirate,” said Sameer Lakhani, Managing Director at Global Capital Partners. – If one of the fractional title deed owners want to exit, he can just sell his stake and transfer the deed to another buyer. The processes are smooth enough. In fact, there was a recent auction that called for bids on a fractional ownership deed. Read more. Can Saudi Arabia become the world’s biggest hydrogen producer? Highlights: – If the new plant meets its daily production target of 650 tonnes of environmentally friendly ‘green’ hydrogen, it will become the world’s largest. Large scale construction of the plant has not yet started at the site of the planned city of Neom on the Red Sea coast. Production would begin in 2026, an official told the Financial Times. – But with Russia and the UAE among the many countries also angling for a share of the market, sceptics question whether the Red Sea plant will deliver all that Riyadh is hoping for. – Roland Kaeppner – Head of the hydrogen project at Neom, says Saudi Arabia has “excellent solar and wind resource, available land, well-sited to export to Europe. So (the) fundamentals are good,” he added. “I’m not saying KSA doesn’t have the capabilities, just that they now need to demonstrate them.” Read more. China Targets Billionaires for Detentions in Rough Justice, Communist-Style – Bloomberg — www.bloomberg.com Highlights: – In 2017, Chinese President Xi Jinping justified sweeping new powers for detentions, citing a desire to “improve the party’s ability to purify itself.” In a social media post at the time, China’s anti-corruption watchdog said the party must control the justice system to avoid “the trap of law” and “the trap of democracy.” In January the agency reinforced its pledge to “show no mercy” in breaking the ties between money and power. – What the United Nations calls “enforced disappearances” have surged 10-fold under Xi, who came to power in 2012, compared with the previous decade. – Investigations have intensified under Xi’s “common prosperity” campaign, which seeks to alleviate wealth inequality. – By removing certain billionaires from public view, the party is sending a clear message, says Steve Tsang, director of SOAS University of London’s China Institute: “Making profit is a privilege, not a right. Big tycoons can continue at the grace of the party.” – George Soros, the billionaire financier, has called investing in China “a tragic mistake.” Meanwhile, Wall Street’s BlackRock Inc. and Goldman Sachs Group Inc. are doubling down. In their view, investors can’t afford to miss out on the rewards of doing business in the world’s second-largest economy. – As of year-end, the Bloomberg Billionaires Index, a ranking of the world’s wealthiest 500 people, included 79 from China, second only to the number from the U.S. China accounts for 1 in 6 of the world’s billionaires, up from 1 in 20 in 2016. Read more. The U.S. Is Exporting Every Molecule of LNG Possible – Bloomberg — www.bloomberg.com Highlights: – Once Calcasieu Pass LNG is in full service, the seven U.S. LNG export terminals will be able to draw as much as 13.9 billion cubic feet of natural gas per day, solidifying America’s lead over Qatar and Australia as the world’s top supplier of the superchilled power plant fuel, figures from U.S. Energy Information Administration show. Read more. Lithium Supply for EV Batteries Vary From Deficit to Surplus in Forecasts – Bloomberg — www.bloomberg.com Highlights: – The metal’s price has surged fivefold in the past year, reflecting mounting worries about the availability. – The stakes are high for carmakers that are spending billions of dollars betting on a battery-powered future. Mining companies and governments are responding with ambitious plans to boost production. But demand is growing at such a breathtaking pace that it’s not clear whether it will be enough. – In a further sign of how quickly the surge in EV sales is reshaping the lithium landscape, Citigroup Inc. on Wednesday almost doubled its price forecast for 2022. Read more.