December Second Week Newsletter of Middle East Business News – Issue #87
UAE Plans Global Energy Push With $150 Billion Oil, Gas Spending – Bloomberg — www.bloomberg.com – The United Arab Emirates’ main energy company will boost investment to $150 billion over the next five years, speed up an increase in oil-production capacity and list some of its natural gas business. – Adnoc owns 70% of its LNG arm, with the rest held by Japan’s Mitsui & Co., BP Plc and TotalEnergies SE. – Adnoc Gas Processing is 68%-owned by Adnoc. The other shareholders are Total, Shell Plc and PTT Pcl of Thailand. Read more. UAE Seeks Economic Pact to Boost Trade With War-Torn Ukraine – Bloomberg — www.bloomberg.com – The Gulf state said it plans to negotiate a wide-ranging economic deal which will boost bilateral trade with Ukraine, one of the Middle East’s most important sources of grains such as barley and wheat. – The pact, known as a Comprehensive Economic Partnership Agreement (CEPA), will lay the groundwork for freeing up trade flows between the two countries. – If the economic talks go to plan, the UAE could increase trade with Ukraine 10-fold over the coming decade, Al Zeyoudi told Bloomberg. Read more. Newsletter Sponsor THRIVE Consultancy FZE THRIVE Consultancy FZE is a Third Party Marketing company for Asset Managers specialising in developing product offerings that provide investment diversification mainly to institutional investors. Learn more. OPEC+ Holds Oil Production Steady as Russia Sanctions, China Covid Roil Markets – Bloomberg — www.bloomberg.com – The decision by the Organization of Petroleum Exporting Countries and its allies should hold for at least a few months. – OPEC+ responded to surging volatility and growing market uncertainty by keeping oil production unchanged. – On Monday, the EU will ban most seaborne imports of Russian crude and block anyone else from using the region’s shipping or insurance services for purchases of Russian oil, unless it’s done so below a $60-a-barrel price cap. Read more. Saudi Central Bank Steps Up Efforts to Ease Liquidity Crunch – Bloomberg — www.bloomberg.com – A rapid rise in lending that’s not been matched by deposit growth has left banks clamoring for funding. – The rising Saibor premium appears to be driven by strong demand so an injection of liquidity by SAMA will help,” said Tarek Fadlallah, head of Nomura Asset Management’s Middle East business. “But banks may need to additionally lure substantial private-sector deposits in order to maintain the current pace of lending.” Read more. Qatar Wealth Fund QIA Hires Former JPMorgan Exec Niall Byrne as CFO – Bloomberg — www.bloomberg.com – Byrne, who has nearly 30 years’ experience in the finance industry. – He previously held positions at JPMorgan including chief operating officer and chief financial officer of global fixed income, currency and commodities at its asset management arm. – QIA has been poaching Wall Street veterans to beef up its senior ranks. It recently hired Gautier Martin-Regnier, a former Morgan Stanley managing director in EMEA equity capital markets, as its global head of capital markets. Read more.
December First Week Newsletter of Middle East Business News – Issue #86
NEWSLETTER SPONSOR THRIVE Consultancy FZE THRIVE Consultancy FZE is a Third Party Marketing company for Asset Managers specialising in developing product offerings that provide investment diversification mainly to institutional investors. Learn more. FTX Chaos Prompts Reckoning on Dubai’s Embrace of Crypto Giants – Bloomberg — www.bloomberg.com – While some financial centers tightened regulations, many UAE officials promoted virtual assets as a gold mine for economic growth and pivotal in the nation’s diversification strategy beyond fossil fuels. – That helped the Gulf state position itself as a crypto hub, attracting industry heavyweights while also prompting bankers, lawyers and tech executives to switch jobs. Property brokers were reporting an infusion of crypto funds into luxury real estate. – The Dubai virtual assets regulator’s structure is aimed at opening the doors for the biggest firms to operate but initial licenses only allow a narrow range of services. Read more. EGP/USD: Egypt’s Devalued Pound and Rescue Funds Trigger Stock Frenzy – Bloomberg – Agreements with the IMF and other international partners to help finance Egypt’s external funding gap have fueled investor confidence in the nation’s equities. – Investments from Persian Gulf nations could also be supporting the market. Abu Dhabi wealth fund ADQ is snapping up stakes in key listed Egyptian companies. Also, Saudi Arabia’s sovereign wealth fund has started a company that will invest in swathes of Egypt’s economy. Read more. EGP/USD: Egypt Pound Makeover Still Untested, But That May Change Soon – Bloomberg – Among developing peers, Egypt is the economy most vulnerable to a currency crisis over the next 12 months. – At stake is the willingness of foreign investors to plow money back into the one-time darling of emerging markets. – Right now, there is a lot of confusion as to whether we are in a truly flexible regime,” said Farouk Soussa, an economist at Goldman Sachs Group Inc. in London. – The North African nation devalued the pound by 18% in late October and signalled it’s shifting to a more flexible foreign-exchange regime. – The central bank plans by end-December to remove a requirement for importers to acquire letters of credit to buy some goods abroad. Read more. US Navy AI Drone Fleet Protects Persian Gulf Arabs From Iran – Bloomberg — www.bloomberg.com – The 1980 Doctrine held that the US would intervene to prevent any outside force from gaining control of the region. It was understood this included repelling any assaults on Gulf Arab states, such as the 1990 Iraqi invasion of Kuwait. – President Joe Biden’s administration seems to be taking its security role in the Gulf more seriously. This month, after Saudi Arabia discovered credible threats of an imminent Iranian missile and/or drone attack, US fighter jets were scrambled and flew near Iran in an aggressive show of deterrence. – To secure the flow of energy and commercial shipping, as well as for general maritime security, the US is developing and deploying a cutting-edge surveillance system known as Digital Ocean. Read more. US, Russia Urge Turkey to De-Escalate Fighting in Northern Syria – Bloomberg — www.bloomberg.com – President Recep Tayyip Erdogan said Monday, accusing the US and Russia of not fulfilling their promises to force the militants to withdraw from the Turkish border as mandated under deals reached in 2019. – Over the weekend, Turkey bombed bases of the outlawed Kurdish PKK group in northern Iraq, as well as positions of US-backed Kurdish forces in northern Syria. – Erdogan’s threat of a new assault may help him consolidate nationalist support ahead of elections next year. Read more.
November Fourth Week Newsletter of Middle East Business News – Issue #85
Brookfield (BAM) Expands Into Saudi Arabia to Target Kingdom’s Riches – Bloomberg — www.bloomberg.com – There are vast investment opportunities within our main areas of focus including infrastructure, renewables, private equity and real estate,” said Jad Ellawn, regional head of Middle East at Brookfield. – Brookfield and rival alternative-investment firms are looking at high-net-worth clients as a pool of untapped capital for their private equity, real estate and credit funds. Read more. How a Flawed But Historic Climate Deal Emerged From COP Chaos – Bloomberg — www.bloomberg.com – Frans Timmermans told reporters, flanked by ministers from Germany, Austria, Ireland and Spain. “The EU would rather have no decision than a bad decision.” – Ultimately the Europeans and their allies accepted the kind of flawed outcome they had vowed to avoid. – Timmermans said after reaching the COP27 agreement. The final deal “is not enough of a step forward for people and the planet.” Read more. Brookfield (BAM) Expands Into Saudi Arabia to Target Kingdom’s Riches – Bloomberg — www.bloomberg.com – There are vast investment opportunities within our main areas of focus including infrastructure, renewables, private equity and real estate,” said Jad Ellawn, regional head of Middle East at Brookfield. – Brookfield and rival alternative-investment firms are looking at high-net-worth clients as a pool of untapped capital for their private equity, real estate and credit funds. Read more. U.S. Tells Gulf Allies Certain China Ties Would Cap Cooperation – Bloomberg — www.bloomberg.com – The perceived US retreat from the region has sent allies in search of ways to diversify their security and diplomatic partnerships. – The United Arab Emirates offered one example last year, suspending talks on a $23 billion deal to purchase F-35 jets and other weaponry after failing to agree on conditions for the protections of US defense equipment. – The Biden administration has also pressured the UAE to remove Huawei Technologies Co. from its telecommunications network. – the White House signed an agreement with Saudi Arabia in July to invest in new US-led technology to develop 5G and 6G networks — part of efforts to try to limit the influence of China’s Huawei. Read more. Goldman Sachs Is Hiring in the Middle East to Tap Deals, Fund Flow (NYSE:GS) – Bloomberg — www.bloomberg.com – Flush with cash from a commodity boom and home to some of the world’s biggest sovereign funds that control more than $3 trillion in assets, the Persian Gulf is emerging as a bright spot globally for initial public offerings and merger and acquisitions. – Money is coming in because of the positive macro; it makes sense for money to be deployed here and there is growth” said Zaid Khaldi, co-head of Goldman Sachs in the Middle East and North Africa. Read more. Hedge Fund LMR Joins Millennium, ExodusPoint to Open in Dubai – Bloomberg — www.bloomberg.com – The London-based firm secured a license from Dubai International Financial Centre and will start with six people. – LMR, which already has a presence in London, Hong Kong, New York, Glasgow and Zurich, now has six offices globally with about 190 staff. – LMR, whose traders invest in various strategies and asset classes including equities and fixed income. Read more.
November Third Week Newsletter of Middle East Business News – Issue #84
Abu Dhabi Expects IPO Boom to Continue, With 11 Deals Next Year – Bloomberg — www.bloomberg.com – A 5 billion-dirham ($1.36 billion) fund launched a few months ago to boost public listings has helped, Abu Dhabi Department of Economic Development Chairman Mohamed Ali Al Shorafa said. The fund has seen an influx of private-sector and family-owned companies that have sought government support as they prepare to list. Read more. Mideast Bucks IPO Slump as Investors Flock to Saudi, UAE Deals – Bloomberg — www.bloomberg.com – Middle Eastern IPOs have fetched $18 billion this year, representing 47% of the wider region’s $38.2 billion. – Six of the 10 biggest offerings in Europe, the Middle East and Africa have taken place in the Gulf in 2022. – GCC investors consider shares of well-known companies, especially from the public sector, as an excellent way to diversify their savings from real estate, hugely subject to swings in demand and supply, and bank deposits that yield low returns,” said Vijay Valecha, chief investment officer at Century Financial. Read more. US Oil Dispute With Saudi Arabia Ahead of G20 Tests Biden Influence – Bloomberg — www.bloomberg.com – The oil row exposes a broader shift, with countries willing to push back against or question US influence, even if that runs counter to their immediate economic interests. – This comes ahead of the Group of 20 world leaders summit in Bali next week where Biden seeks to rally international support for the further isolation of Russia and how to tackle the effect on the global economy and energy markets. – The crown prince “doesn’t envision his country as a second-tier player” Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy wrote this month, describing Prince Mohammed’s vision of a “new non-aligned movement.” – Two senior European diplomats in close contact with Gulf officials said ‘Washington had become accustomed to having acquiescent allies in the Gulf Arab region and that has changed.” Climate Activists Are Wrong About Saudi Arabia, Energy Minister Says – Bloomberg — www.bloomberg.com – The world’s biggest oil exporter says climate activists are “more than wrong” to cast doubt on its ambitions to reduce carbon emissions.– The kingdom has laid out plans to neutralize planet-warming emissions within its borders by 2060. – At the same time, it’s spending billions of dollars to increase crude-production capacity to 13 million barrels a day from 12 million. – That’s led to criticism from activists including Greta Thunberg, who’s said Saudi Arabia is playing down the need to move away from fossil fuels. – The Saudi government regularly says companies and investors in the West are trying to transition too quickly. – Prince Abdulaziz said that ‘The Paris Climate Accords from 2015 were not about “getting rid of sources of energy, but about mitigating emissions,”. Read more. After Twitter Exit, Egyptian Billionaire Investor Plans EV Push – Bloomberg — www.bloomberg.com – Mansour, 74 said his almost 50 years of experience in the automotive sector helps him “understand what’s marketable and what’s not. We want to be a leader in that aspect.” – The Mansours do much of their investing through a London-based family office, Man Capital. – Mansour was an early investor in juggernauts like Airbnb Inc., Snowflake Inc. and Spotify Technology SA. He also invests in tech via San Francisco-based venture capital firm 1984 Ventures, which he helped found in 2017. Read more. Turkey’s President Erdogan Finds Himself a Surprise G-20 Power Broker – Bloomberg — www.bloomberg.com – As he arrives in Bali, Erdogan appears increasingly confident of his place at the table. He’s more sought after for his continued ties to Russia’s President Vladimir Putin. – Erdogan succeeded — against many predictions — in helping to navigate a July deal to permit Ukrainian grain exports by sea and, as a result, counter runaway global food price inflation. More recently he helped persuade Putin to rejoin the agreement just days after the Russian president suspended his country’s participation. – Turkey has delayed accession to NATO by Finland and Sweden, over the latter’s ties to Kurdish groups. It continues to defy the US over its purchase of a Russian air defense system seen as a threat to NATO aircraft. And more recently Erdogan expressed an interest in joining the Shanghai Cooperation Organization, set up by Russia and China as a rival to NATO, which names both countries as security threats. Read more.
November Second Week Newsletter of Middle East Business News – Issue #83
Foxconn Partners With Saudi Wealth Fund to Build Electric Cars – Bloomberg — www.bloomberg.com – The pair will set up a joint venture called Ceer that will license component technology from Germany’s BMW AG and design and build vehicles including sedans and sport utility vehicles in Saudi Arabia for buyers in the region. – The Ceer venture will bring in over $150 million of foreign direct investment and create as many as 30,000 jobs, according to the statement. It’s projected to contribute $8 billion to Saudi Arabia’s gross domestic product by 2034. Read more. Abu Dhabi Sheikh Tahnoon’s Firm Takes to Private Credit With $2 Billion Warchest – Bloomberg — www.bloomberg.com – Chimera Capital, part of a business empire overseen by Sheikh Tahnoon Bin Zayed, has raised $2 billion for the first close of a fund and plans to deploy loans to private companies. – The firms plan to make investments globally through an open-ended fund structure – The partnership’s focus has so far landed predominantly in the fintech, artificial intelligence and life-sciences sectors, with a big focus on the Indian market. – Investors globally continue to be drawn to a market that provides senior-secured loans, which can generate double-digit yields in the US. – The loans will be senior-secured, meaning the lender is the first to be paid out in the event of a bankruptcy. Read more. Largest Mideast Broadcaster Said to Tap HSBC, JPMorgan for IPO – Bloomberg — www.bloomberg.com – The Saudi government owns a 60% stake in MBC and the rest is held by founder and chairman Waleed Al-Ibrahim, one of the kingdom’s richest businessmen. – MBC was founded in London in 1991. It moved its headquarters to Dubai in the United Arab Emirates in 2002, and then to Saudi Arabia’s capital Riyadh. The first privately-owned pan-Arab satellite TV channel, it now includes 20 TV channels and video-streaming service Shahid VIP. Read more. Iran’s Deadly Protests Unite a Nation Behind the Struggles of Women and Kurds – Bloomberg — www.bloomberg.com – Kurds, the 10 million or so minority has found itself at the center of one of the biggest anti-government uprisings in Iran since the 1979 Islamic Revolution following the death in police custody of Mahsa Amini, a 22-year-old Kurdish-Iranian woman. – The struggles of the Kurds along with women that have now galvanized dissent across ethnic and social lines. That sets the current demonstrations apart from previous protests and poses a more complicated challenge to the regime and its security apparatus. – The Kurds are one of the biggest stateless nationalities or ethnic groups in the world. Numbering up to 45 million, they played a critical role in defeating Islamic State in Iraq and Syria, where they have secured some autonomy. In Turkey, they have been increasing their political influence while the government continues a decades-long campaign against Kurdish militants. Read more. Egypt’s Bondholders Show Skepticism Post-IMF in Lesson for EM – Bloomberg — www.bloomberg.com – investors are demanding evidence the nations are taking the tough steps necessary to bridge funding gaps and reduce debt. – Gordon Bowers of Columbia Threadneedle Investments said that “The IMF involvement is a nice policy anchor but does not by itself fix any of the external funding issues as program success is very much contingent on execution of the privatization and foreign-direct-investment agenda, of which investors remain skeptical given previous disappointments.” Read more. Saudi LIV Boss Accused by PGA of Stonewalling in Lawsuit – Bloomberg — www.bloomberg.com – Al-Rumayyan, an avid golfer who is governor of the Saudi kingdom’s Public Investment Fund,” founded LIV Golf in 2021 to compete with the long-established PGA Tour – The upstart tour poached several of golf’s top stars, including Greg Norman, Phil Mickelson and Dustin Johnson, with the promise of huge paychecks. The PGA responded by barring those players from its tournaments. – The players swung back with a lawsuit. – As part of a countersuit, the PGA is seeking the testimony of Al-Rumayyan and documents from the Saudi sovereign wealth fund. – Al-Rumayyan and the investment fund “have flatly objected to the Tour’s subpoenas, refused to produce a single responsive document and declined to appear for deposition. Read more.
November First Week Newsletter of Middle East Business News – Issue #82
Abu Dhabi Firms Said to Weigh Bid for GEMS Education Stake – Bloomberg — www.bloomberg.com – GEMS is owned by its founder Sunny Varkey and buyout firm CVC Capital Partners, who have been exploring options for their stakes in the business. Any sale may value GEMS at about $6 billion. – Parents in the UAE are among the world’s biggest spenders when it comes to educating their children, contributing to a glut of private schools. – GEMS, which traces its roots back about 60 years, operates more than 60 schools teaching over 130,000 students across the Middle East and North Africa. Read more. IMF Sees $1 Trillion Oil Exporter Windfall, Bigger Gulf Savings – Bloomberg — www.bloomberg.com – Saudi Arabia and five other members of the Gulf Cooperation Council, already among the biggest winners in emerging markets, will benefit even more since they may save about a third of their oil revenues – IMF. It predicts growth in remittances from the Gulf to the region’s poorer economies at between 1.9% to 3.4% annually in the medium term. – Oil-exporting countries grew over the last couple of years not only because of the increase in oil prices and production but also because of the increase in the non-oil sector,” said Azour. Read more. Qatar Aims to Become the World’s Top LNG Trader, Says Minister – Bloomberg — www.bloomberg.com – While Qatar is among the top LNG producers, it usually just delivers the fuel to long-term customers and historically hasn’t participated in much trading. – Saad Al Kaabi, the nation’s energy minister and chief executive officer of state-owned QatarEnergy, said in an interview with Bloomberg TV, “We saw that a lot of our volume has been traded in some of the markets, and we think we can do this very well because of our size and because this competency was missing as far as trading was concerned.” Read more. Israel, Lebanon Agree US-Brokered Deal Over Gas-Rich Waters – Bloomberg — www.bloomberg.com – The agreement will allow international companies to begin exploring for natural gas in previously-contested waters, potentially leading to more energy exports to Europe in the coming years. – Iran-backed Hezbollah, a militant group in Lebanon opposed to Israel’s existence, has said it would accept the deal. – Now that the countries have agreed on a maritime border, a TotalEnergies SE-led consortium will be able to start drilling in the Kana prospect, most of which lies in Lebanese territory. If gas is produced, both countries would be entitled to payments. – Gas production from Kana is far from certain. Since no exploration wells have been drilled, the presence and quality of resources are unknown. Read more. Saudi Wealth Fund PIF Ready Billions in Domestic Stock Sales, Sources Say – Bloomberg — www.bloomberg.com – Saudi Arabia’s sovereign wealth fund is pushing ahead with plans to reduce its stakes in some of the kingdom’s biggest companies and raise billions of dollars for new investments. – The PIF hasn’t finalized the details of particular sales and may wait until next year before executing the transactions. – The PIF is at the center of this plan, known as Vision 2030, plowing billions of dollars into stock markets and assets globally. – The PIF also plans to invest $40 billion locally a year until 2025 and help bankroll ambitious projects. Read more. Saudi Arabia’s Economy Looks Great in a World Full of Bad Predictions – Bloomberg — www.bloomberg.com – Prince Mohammed is sitting on his first budget surplus, allowing him to finance domestic mega-projects, channel the $620 billion Public Investment Fund (PIF) into assets globally, and project political clout in the region and beyond. – Saudi Arabia still struggles to persuade the world it has an economy beyond oil that’s worth investing in. Most of those who’ve descended on Riyadh for the conference are looking to make connections and extract money from the kingdom, not pump it in. – Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy, says “there’s a mismatch between the business case for FDI in the kingdom, and an effort to brand the mega-projects as providing solutions to everything.” Read more.
October Fourth Week Newsletter of Middle East Business News – Issue #81
Abu Dhabi Transfers Etihad Ownership to Sovereign Wealth Fund – Bloomberg — www.bloomberg.com – Following the move, disclosed on Tuesday, ADQ will have interests ranging from the passenger airline, air freight, aircraft engineering and ground handling to ownership of Abu Dhabi Airports and a stake in a venture with Wizz Air Holdings Plc. It also oversees other key transport activities including Abu Dhabi Ports. – ADQ, which has $110 billion of assets, will take over responsibility for Etihad from Abu Dhabi’s Supreme Council for Financial and Economic Affairs. The transfer follows a previous acquisition of some Etihad operations in 2021. Read more. KKR, Abu Dhabi Wealth Fund Mubadala Earmark $1 Billion for Private Credit – Bloomberg — www.bloomberg.com – The agreement, “strengthens Mubadala’s exposure in the rapidly growing APAC credit market.” – Bucking an industry-wide slowdown, some of alternative-asset investors are building up their presence in Asia at a brisk pace. – In Asia-Pacific, KKR said it has deployed nearly $3 billion in credit capital since 2019. Read more. Credit Suisse Needs a Smarter Play, Not a Gulf Bailout – Bloomberg — www.bloomberg.com – If the sovereign wealth funds with their brimming coffers want to join the big leagues, they’ll have to be controlling shareholders and show they can make strategic plays. – During the financial crisis, they came in with big checks and walked away with small, minority stakes. Many of the investments didn’t turn out so well, and didn’t do much to establish their standing as either savvy investors or rescuers of the crippled global financial institutions. – Playing a key funding role at a global institution, although a shadow of its former self (therefore, small enough) but still deeply embedded in the financial system, would bring the influence they want. Read more. Wall Street is heading to Saudi Arabia as a US spat over oil simmers – Bloomberg — www.bloomberg.com – “The savvy of Wall Street know their history well and know the difference between the short-term and political versus the long-term and strategic,” said Talal Malik, CEO at Saudi consultancy Alpha1Strategy. “With this kind of liquidity, it makes sense for US investment firms to ramp up their attendance.” – Despite talk of possible no-shows, there are few signs US executives are pulling out. – Organizers are seeing “more and more appetite from the US private sector to attend,” according to Richard Attias, CEO of FII Institute. The event “has zero political agenda” and “it’s a coincidence” that the US-Saudi tension is happening at the same time, he said. Read more. TRY/USD: Turkey Central Bank Ducks Questions on Flagship Lira Saving Tool – Bloomberg — www.bloomberg.com – Irfan Yanar, head of budget and financial reporting at the central bank, repeatedly declined to give a figure for the FX-protected deposit accounts, which guarantee savings against falls in the lira. – Savers can open accounts with liras they already hold or with foreign currency they convert. If the lira falls by more than the account’s interest rate, the Treasury is responsible for paying the difference to the first group, and the central bank to the second. Read more. Egypt to Introduce Currency Hedging, Central Bank Governor Says – Bloomberg — www.bloomberg.com – We will make an index for the Egyptian pound through a group of other currencies in addition to gold in order to change the culture that we are linked to the dollar,” Hassan Abdalla, the central bank’s acting governor. – the economic fallout of Russia’s invasion of Ukraine and an exodus of foreign investors in its local debt have prompted a devaluation in March and kept the pound under pressure since then. Read more.
October Third Week Newsletter of Middle East Business News – Issue #80
OPEC+ Oil Cut Is Mostly Illusion as Saudis Face Kazakh Crude Return – Bloomberg — www.bloomberg.com – Ministers from the OPEC+ group of oil-producing countries agreed to cut their collective output target by 2 million barrels a day from November. – Estimates of OPEC+’s September production suggest that, collectively, it’s lagging the planned level by about 3.6 million barrels a day. – When the new targets come into effect on Nov. 1, only eight countries will be required to pump less crude. – The total reduction required of them is just 890,000 barrels a day. Read more. UAE Ruler to Meet Putin in Russia Tuesday as War Escalates — www.bloomberg.com – Putin and Sheikh Mohammed Bin Zayed Al Nahyan will discuss regional and international issues of common interest, the UAE’s state-run WAM agency said. – Dubai’s former finance chief, Nasser al-Shaikh, said on Twitter that the UAE ruler was going to try to “defuse a European war” that no one expected would reach this level of escalation. Read more. FIFA World Cup Qatar 2022: Thousands of Hotel Rooms Made Available – Bloomberg — www.bloomberg.com – A spokesperson for Qatar said it is on track to provide 130,000 rooms for the tournament, and that more than 117,000 rooms are currently available. Lodging options include purpose-built housing, tents, Airbnb-style accommodations and at least two cruise ships with almost 4,000 cabins. – The country and its largely immigrant labor force have been working nonstop to get the country ready, including an overhaul of sewage systems to handle the 1.2 million fans estimated to come through for the monthlong event. Read more. Biden Should Hit Saudi Arabia Over Oil Snub Where It Really Hurts – Bloomberg — www.bloomberg.com – Foreign policy heavyweights like Senator Chris Murphy are musing about the wisdom of selling arms to the Saudis. Three members of the House of Representatives have introduced legislation calling for the withdrawal of American troops and missile defense systems from the kingdom — and, for good measure, from the United Arab Emirates. Others threaten to revive the so-called “NOPEC” bill, which would target the entire cartel for antitrust action. – NOPEC is also opposed by the American Petroleum Institute and the U.S. Chamber of Commerce, which have warned that U.S. companies abroad may face retaliatory action if it becomes law. – Blocking military sales to the Saudis and withdrawing the American security umbrella from the kingdom would hurt US arms makers and empower Iran, which represents a far greater threat to the world economy than $90 oil. Read more. Why Did Saudi Arabia Defy Biden to Keep Oil Prices High – Bloomberg — www.bloomberg.com – US attempts to revive a nuclear deal with Riyadh’s regional foe Iran, Saudi Arabia’s participation in Yemen’s war, and what Gulf states perceived as a lack of protection from Washington against attacks from Iranian-backed proxies, have all contributed to tensions and a growing divergence in views. – Faced with a choice between supporting the global economy at the behest of the US, and risking their own, the Saudis chose themselves. And other Gulf states did too. – Gulf officials argue that they need to balance their ties with both the US and Russia, which plays an important role not only in energy markets, but also in regional conflicts from Syria to Libya. – They’re also suspicious of US attempts to punish Russia with tools such as price caps on its energy exports, moves that effectively shift pricing power to energy buyers from the sellers. Read more.
October Second Week Newsletter of Middle East Business News – Issue #79
Lebanon Set to Re-Peg Currency If Recovery Plan Is Approved – Bloomberg — www.bloomberg.com – The program, designed to end an economic collapse, marks an attempt to restructure the banking sector and the central bank’s balance sheet by recognizing billions of losses in the financial system. – The local currency now trades at about 38,800 pounds per dollar on the parallel market. – The Lebanese pound’s official rate, which has been set at 1,507.5 per dollar since 1997, will be fixed at 15,000. – The decision, effective on Nov. 1, was confirmed by the central bank. Read more. Saudi Arabia’s Wealth Fund PIF Mandates Banks for Debut Dollar Green Bond – Bloomberg — www.bloomberg.com – The PIF will use proceeds from the bond sale to finance, refinance or invest in one or more green projects. – The sale will add to the almost $3 trillion of outstanding ESG bonds globally, according to data compiled by Bloomberg. – The fund was also working with BlackRock Inc. on developing an ESG framework. – The PIF has been mandated to develop 70% of the kingdom’s renewable energy program and expects to make more than $10 billion of investment in green projects by 2026. Read more. Brookfield, TPG Among Potential Bidders for Mashreq Payments Unit (MASQ) – Bloomberg — www.bloomberg.com – If Brookfield acquires the unit, it would become a market leader with about 60% of market share and potentially strong pricing power. If Network International’s bid is successful, it would significantly bolster their Dubai presence and help to improve margins, Bajaj said. – Any purchase of NeoPay by either Network International or Brookfield Asset Management is set to significantly consolidate the payments landscape in the UAE. Read more. Iran Protests: Khamenei Slams Protests as Security Forces Target Universities – Bloomberg — www.bloomberg.com – The Oslo-based Iran Human Rights said on Sunday that 133 people have been killed by security forces so far, including 41 in the southeast province of Sistan-Baluchestan during an attack on Friday prayers on Sept. 30 – The latest major standoff between protesters, militias and police, started on Sunday afternoon when a large number of students held sit-ins and protests outside the computer engineering faculty of the Sharif University of Technology in Tehran. Read more. Saudi Arabia Is Seen Planning Budget Around Sub-$80 Oil for 2023 – Bloomberg — www.bloomberg.com – For 2023, we believe oil revenues could reach 754 billion riyals and non-oil revenue at 417 billion riyals,” said Mazen Al Sudairi, head of research at Al Rajhi Capital, a local investment bank. “Based on our assessment, the government’s 2023 budgeted revenues are likely based on an assumption of Brent at around $76 a barrel.” – Brent crude prices have already dropped from this year’s highs, trading at $87.9 a barrel on Friday. Read more. Empower Said to Plan up to $700 Million Dubai IPO in November – Bloomberg — www.bloomberg.com – Details of the IPO such as size and timing are still preliminary and subject to change, the people said. Empower could decide to proceed with the listing at the beginning of next year instead, they added. – Empower, established almost two decades ago, is 70% owned by Dubai Electricity & Water Authority, which listed earlier this year in a $6.1 billion offering. It’s the world’s largest district cooling services provider, with a roughly 80% market share in Dubai. Read more.
October First Week Newsletter of Middle East Business News – Issue #78
Germany Secures Just One Tanker of Gas During Scholz’s Gulf Tour – Bloomberg — www.bloomberg.com – Securing additional supplies is crucial for Germany after the Kremlin shut down a key pipeline. – The deal announced Sunday shows how difficult it will be for the country to get more gas in the near term. – Germany and Qatar have been discussing LNG supplies for several months, with Germany being reluctant to commit to long-term contracts at record prices for LNG. Read more. UAE’s Adnoc Considers Bid for Oil Trader Gunvor – Bloomberg — www.bloomberg.com – Gunvor, which is controlled by Chief Executive Officer Torbjorn Tornqvist, is one of a handful of mostly privately-held companies that dominate the trade in physical commodities. – Tornqvist, who owns over 88% of the company, spoke earlier this year about the potential for Gunvor to raise equity through partnerships while adding he was “not in the market to sell out. – Gunvor was founded in 2000 by Tornqvist and Gennady Timchenko and grew rapidly in the mid-2000s as a major trader of Russian oil. Read more. Saudi Wealth Fund Head Likens Dalio Market Views to Movie Critic – Bloomberg — www.bloomberg.com – Dalio, who takes global macro views, “is like a movie critic. – Before going there, he knows it’s going to be a bad story, bad production, bad cast. And he knows before he sits there, but he has to sit there to give his critique.” – PIF, on the other hand, makes more targeted bets and “can bring the right production, we can bring the right cast, we can bring the right story and put it all together,” he said. “We control our own destiny.” Read more. Abu Dhabi’s ADQ Backs $200 Million Fund for Tech Startups – Bloomberg — www.bloomberg.com – Further Ventures, which is anchored by sovereign wealth fund ADQ, will focus on investments in digital assets, fintech and supply chain, it said in a statement. – The new vehicle will partner with founders and provide “capital from pre-seed to growth, product, engineering, design, regulatory support and market access to teams who want to build lasting technology companies.” Read more. Egypt Seeks Up to $6 Billion by June From Sale of State Firms – Bloomberg — www.bloomberg.com – Egypt aims to raise as much as $6 billion before the middle of next year by selling stakes in state-owned businesses, the country’s planning minister said. – The program may include share offerings to the public or block sales to strategic investors, and will be supported by the country’s sovereign wealth fund, Hala Elsaid said in an interview in New York. – The North African nation is promising a wider overhaul that will see the state play a smaller role in the economy, in line with IMF policy advice. – Abu Dhabi wealth fund ADQ and a unit of Saudi Arabia’s Public Investment Fund have already pumped roughly $3 billion into Egypt. – Egypt has set up a “pre-IPO” fund, which aims to restructure some state-owned assets and prepare them for stake sales. Read more. Turkey Kept Milk Prices Unchanged to Fight Inflation. The Move May Backfire – Bloomberg — www.bloomberg.com – Some dairy farmers are expected to send cows to the slaughterhouse rather than lose money. – Officials are turning to price caps. That usually means operating at a loss, something the family firms which make up the backbone of the milk sector can ill-afford, said Sencer Solakoglu, chairman of Tusedad, an association of dairy farmers. – An alternative source of revenue for farmers used to be exports, now restricted as the government wants to rein in inflation. Read more. Saudi Arabia Faces Challenges to Use Its Vast Copper Reserves – Bloomberg — www.bloomberg.com – Perhaps the biggest hurdle — especially for a country covered in large part by desert — is water, which is essential in churning out the mineral from open-pit or underground mines. – Another challenge may be attracting giant miners with global expertise and deep pocketbooks. – The potential rewards are huge, with the estimated supply of copper worth $222 billion, at current prices. Read more.