September Fourth Week Newsletter of Middle East Business News – Issue #77
Dubai Increases Salik IPO Size to $1 Billion on Strong Demand – Bloomberg — www.bloomberg.com – The government will now sell 1.87 billion shares in Salik PJSC, representing a 24.9% stake in the company, it said in a statement on Friday. The initial plan had been to sell a 20% stake. The offer price remains unchanged at 2 dirhams ($0.54) per share. – The increase in size comes after investors snapped up all shares on offer within hours of the IPO opening on Tuesday. – The institutional tranche of the IPO will increase to 1.72 billion shares, representing 92.2% of the deal, while retail investors will get 146 million shares. Read more. Abu Dhabi’s IHC Buys 15% Stake in IPO Candidate Burjeel Holdings – Bloomberg — www.bloomberg.com – The acquisition will aim to continue to scale and diversify IHC’s investment in the healthcare sector locally and regionally – Founded in 2007, Burjeel has 61 operating assets, including hospitals and medical centers, in the UAE and Oman. Read more. Dubai Court Orders Sanjay Shah, Others to Pay $1 Billion in Cum-Ex Case – Bloomberg — www.bloomberg.com – The Danish tax agency, which confirmed the ruling, said it “is satisfied with the decision of the appellate court against one of the central players in the fraud committed against Denmark.” – Shah was named as the mastermind of the scheme in which pension plans filed for tax returns to which they weren’t entitled, because they never paid the taxes to begin with. Shah, a British national, has always maintained his innocence. – Denmark and the United Arab Emirates signed an extradition deal in March, with Shah’s handover being one of the main purposes. Read more. SPAC Winter Spreads to the Middle East With Two Deals Delayed – Bloomberg — www.bloomberg.com – Abu Dhabi-based private equity firm Gulf Capital is holding off on its vehicle’s initial public offering after pushing back a summer deal that would have been one of the first SPACs in the UAE capital. – Investcorp, the Middle East’s biggest alternative asset manager, aims to list in November after failing to complete a deal before the summer. – Both Middle Eastern firms that have gone public after mergers with US blank-check firms this year have fared poorly. Spotify Technology SA rival Anghami is down 76% since its debut in February, while Dubai-based ride sharing firm Swvl Holdings Corp. has dropped about 85%. – SPACs are cash shell companies that raise money from investors in an initial public offering with the sole purpose of buying a private business within a specified time frame. Read more. Oman’s OQ Picks BofA for $800 Million Gas Pipeline IPO – Bloomberg — www.bloomberg.com – The IPO of OQ Gas Network could raise as much as $800 million. – The country has only had a small number of IPOs in the last decade. The most recent sizable deal was Omani Qatari Telecommunications Co.’s IPO in 2010 that raised $475 million. – OQ has also discussed the possibility of a dual listing in Muscat and Saudi Arabia. – If OQ opts for a dual listing, it would be one of the Middle East’s first. Read more. Saudi Oil Driller Hires Goldman, HSBC, SNB Capital for IPO – Bloomberg — www.bloomberg.com – The firm will sell 26.7 million shares, or a 30% stake, in initial public offering. – the proceeds will be used to scale up onshore and offshore fleet and expand operations in the Gulf Cooperation Council region. – Arabian Drilling operates 45 rigs and had revenue of $586 million last year. It also has an order backlog of $2.2 billion. Read more. Turkey’s Erdogan Vows Half-Million New Homes in $50 Billion Vote Push – Bloomberg — www.bloomberg.com – Poorer voters are increasingly blaming the government for policy mistakes that lowered their purchasing power. – According to the plan unveiled by Erdogan on Tuesday, state-run housing agency TOKI will build 500,000 homes and sell 250,000 land plots to qualifying applicants. – The government will extend repayment period to 20 years to keep monthly payments at as low as $125 in a country where the minimum monthly wage is about $300. – Prices and rents have more than doubled in less than a year in largest cities such as Istanbul, while salary increases have lagged far behind. Read more.
September Third Week Newsletter Middle East Business News – Issue #76
Abu Dhabi Commercial Bank (ADCB) Plans $1 Billion Bad Debt Sale – Bloomberg — www.bloomberg.com – Codenamed Project Turbo, the emirate’s second-largest lender recently kicked off a process to sell claims of about 4.1 billion dirhams ($1.1 billion) that are mainly secured by personal and corporate guarantees, as well as real estate assets. – A successful deal — which could be one of the Gulf’s biggest bad debt sales — would help ADCB to move on from several corporate collapses such as that of hospital group NMC Health Plc, payments firm Finablr Plc and construction company Arabtec Holding. – ADCB is working with Interpath Advisory, KPMG’s former UK restructuring practice, on the sale, according to the document. Read more. Serbia Wins $1 Billion UAE Loan Amid Headwinds Over Russia – Bloomberg — www.bloomberg.com – President Aleksandar Vucic signed the loan agreement with a 3% interest rate on Sunday during a visit to the UAE and talks with Emirati leader Sheikh Mohammed bin Zayed. – Still, the largest former Yugoslav republic is also considering a new, stand-by arrangement with the International Monetary Fund for “additional support,” Vucic said. Read more. EGP/USD: Egypt Backs Flexible Pound Exchange Rate to Support Economy – Bloomberg — www.bloomberg.com – We as a government do agree that a flexible exchange rate is definitely good for the economy,” Elsaid, who’s also chairwoman of Egypt’s sovereign wealth fund – Bank of America Corp. economist Jean-Michel Saliba said “Large external funding needs call for flexible dollar/pound. A flexible dollar/pound is key to help the current-account deficit compress over the coming period.” – Abu Dhabi wealth fund ADQ and a unit of Saudi Arabia’s Public Investment Fund have so far pumped roughly $3 billion into the country, snapping up government-held stakes in prominent companies in deals facilitated by the Egyptian sovereign fund. Read more. Investcorp, Mubadala Back TruKKer Fundraise Ahead of Planned IPO – Bloomberg — www.bloomberg.com – Gaurav Biswas, founder and chief executive officer, said in an interview. The firm is considering a listing on several exchanges over the next two to three years, including in Saudi Arabia, he said. – The firm currently operates in eight countries including Saudi Arabia, the United Arab Emirates and Turkey, and manages a network of over 45,000 trucks through its platform that matches shippers and freight carriers. Read more. Egypt Inflation Accelerates to 14.6%, Fastest in Almost Four Years – Bloomberg — www.bloomberg.com – Inflation in Egypt is likely close to peaking after a run-up in food and energy costs that followed Russia’s invasion on Ukraine and the pound’s devaluation in March. – Consumer prices climbed 14.6% from a year earlier in August, versus 13.6% the previous month. – Food and beverage costs, which make up the largest single component of the inflation basket, jumped 23.1%. On a monthly basis, price growth slowed to 0.9% from 1.3% in July. Read more. SoftBank Nears $2 Billion Sale of Fortress Investment to Mubadala – Bloomberg — www.bloomberg.com – Rajeev Misra, a key lieutenant to SoftBank founder Masayoshi Son with close ties to the Gulf emirate, is playing a key role in brokering the deal – Misra was a partner at Fortress before joining SoftBank, and his knowledge of the business was instrumental in helping Mubadala proceed in the negotiations. Read more. Turkey Plans New Loan Stimulus to Spur Growth Before Vote – Bloomberg — www.bloomberg.com – The government disclosed plans to extend loans under the Credit Guarantee Fund at a closed-door meeting held by Treasury and Finance Minister Nureddin Nebati in Ankara. – The new stimulus would be among the most ambitious steps yet by authorities to sustain growth in the $830 billion economy. – The risk of a recession in Europe, the main destination for Turkish shipments abroad, and higher energy prices are now among factors that can put the brakes on the economy in the coming months. Read more.
September Second Week Newsletter of World and GCC Business News – Issue #75
Dr. Atie J. El Mouallem – The Problem With Corruption Index Scores Like CPI and CC — atiejelmouallem.com The World Bank’s Worldwide Governance Indicators (WGI) ‘s and Transparency International CPI scores are the most widely used indexes to measure national Corruption. Hence it is impertinent to understand how these index scores are formulated. What are the factors considered for measuring the scores? An error in this score means we might end up chasing the wrong metric in our fight against Corruption. Read more. Dubai to Sell 20% Stake in IPO of Road-Toll Operator Salik – Bloomberg — www.bloomberg.com – The offering starts on Sept. 13, with an expected listing on the Dubai stock exchange on Sept. 29. – Salik’s IPO will test investor appetite after the summer in the Gulf, which saw record listing proceeds in the first half. – The deal is part of wider plans to list 10 state-owned firms in a bid to reverse years of falling trading volumes and catch up with neighboring Abu Dhabi and Saudi Arabia. – About 60% of commuters in Dubai use private cars and net toll traffic from 2013-2019 grew at a compound annual growth rate of 5.5%. – An ambitious urban plan that predicts population will surge 76% over the next two decades, and the government expects Salik to be one of the main beneficiaries. Read more. Kuwait Overhauls State Boards After Government Vows Shake Up – Bloomberg — www.bloomberg.com – Kuwait is replacing the boards of major government entities, a far-reaching overhaul in the OPEC nation where the crown prince has vowed to end political deadlock. – The decision could lead to mergers of some government agencies, according to the newspaper. – Years of policy paralysis and claims of corruption have created widespread discontent among citizens in Kuwait. Read more. Aramco VC Fund Turns to Global Investments in Saudi Startup Push – Bloomberg — www.bloomberg.com – Wa’ed will invest about $100 million this year after spending around $50 million over the past nine years, Chief Executive Officer Fahad Alidi said in an interview. – In its first global foray, Wa’ed has invested in 5G internet of things satellite operator OQ Technology as part of a 13 million euro ($13 million) series A funding round. – Wa’ed has increased the size of its typical investment to $20 million from $5 million, Alidi said. Read more. Saudi Central Bank Hires Crypto Chief to Boost Digital Ambitions – Bloomberg — www.bloomberg.com – The emergence of the neighbouring United Arab Emirates as a global crypto hub has created some urgency in Riyadh to draft more formal rules for the asset class. – AlZahrani, a former managing director at consultancy Accenture, reports to Ziad Al Yousef, the Central Bank’s deputy governor for development and technology. Read more. Erdogan Says Only Traitors or Illiterates Link Rate to Inflation – Bloomberg — www.bloomberg.com – The president acknowledged that the economic policies his government has followed since 2018 have exacted a “heavy toll” in the form of a higher cost of living for citizens. – Erdogan has nevertheless defied orthodox economic views, insisting that high rates are the cause of faster inflation, not the opposite. – Erdogan defended his government’s economic program as “consistent and scientific” and said the lira’s current level helps preserve Turkey’s competitiveness. Read more. Gas Firm Botas’s Hunt for Dollars Boosts Turkish Coffers to a Record – Bloomberg — www.bloomberg.com – State energy company Botas is buying physical greenbacks from the spot market to finance Turkey’s growing import bill and some of the physical cash is finding its way to the central bank. – The monetary authority in Ankara spent around $18 billion to meet state-owned firms’ FX needs during the first six months of the year, with Botas emerging as the biggest recipient. – Botas has been hit by skyrocketing gas prices since Russia invaded Ukraine in February. – Turkey’s total gross foreign exchange reserves stood at $71.5 billion during the week through Aug. 19. Read more. Inflation-Scarred Consumers Fire Up Turkey’s Economy by Spending – Bloomberg — www.bloomberg.com – Facing a trade-off between growth and inflation ahead of elections next year, President Recep Tayyip Erdogan has championed an economic model that prioritizes exports, production and employment at the expense of price stability and the currency. – Treasury and Finance Minister Nureddin Nebati said this month that “we are not compromising on growth.” Speaking in a televised interview, he added “when we do not compromise on growth, combating inflation takes time.” – The monetary stimulus has supported demand and lending in an economy where spending by households accounts for more than half of output. Read more.
September First Week Newsletter of World and GCC Business News – Issue #74
World Cup Fever Spreads From Qatar in Tourism Boom – Bloomberg — www.bloomberg.com – Match-day flights from major Middle Eastern cities will shuttle spectators to games, benefiting airlines, hotels and hospitality venues across nations, including the United Arab Emirates, Saudi Arabia and Oman. – The already popular tourism hub of Dubai stands to benefit the most. Of the more than 90 new flights that will land each day in the host city, Doha, about 40 will leave from the UAE. – Dubai will be “the major gateway” to the World Cup, with probably more people coming through the city than Qatar, said Paul Griffiths, the chief executive officer of Dubai Airports. Read more. Qatar Sovereign Wealth Fund Considers $3 Billion Pakistan Investment – Bloomberg — www.bloomberg.com – The South Asian nation will also get $1 billion in oil financing from Saudi Arabia and a similar amount in investments from the United Arab Emirates. – Prime Minister Sharif has been visiting Qatar ahead of an IMF board meeting next week that could lead to the release of $1.2 billion in financing. – The decision came during a meeting between ruler Sheikh Tamim Bin Hamad Al Thani and Pakistan Prime Minister Shehbaz Sharif. – The fund may end up investing more or less than $3 billion depending on the asset valuations and opportunities. Read more. Saudi Arabia’s EV Battery Bets Are a Warning to Those Going Slow on Clean Energy – Bloomberg — www.bloomberg.com – So far, besides China and its behemoth battery makers, few others have been able to achieve manufacturing scale. – The kingdom has started assessing and issuing mining licenses quickly to tap into its mineral resources, with an estimated potential value of $1.3 trillion – It shouldn’t be a surprise, then, if firms and nations soon end up swapping their dependence on Saudi Arabian oil for critical battery materials, much like they’ve had to do with China. Read more. Saudi Prince Says Oil Futures Disconnect May Force OPEC+ Action – Bloomberg — www.bloomberg.com – Prince Abdulaziz said futures prices don’t reflect the underlying fundamentals of supply and demand, which may require the group to tighten production when it meets next month to consider output targets. – Benchmark crude oil futures have fallen more than 20% since early June on concern about the outlook for the global economy and the possibility of more Iranian oil coming onto the market. – Still, open interest and trading volumes remain well below historical levels as the price swings caused by the war in Ukraine scare investors away. Read more. Iran May Drain Offshore Crude Oil Cache If Nuclear Deal Reached – Bloomberg — www.bloomberg.com – About 93 million barrels of Iranian crude and condensate are currently stored on vessels in the Persian Gulf, off Singapore and near China, according to ship-tracking firm Kpler, while Vortexa Ltd. estimates the holdings at 60 to 70 million barrels – The current volume of crude and condensate in onshore storages within Iran is estimated at about 48 million barrels, Kpler data showed, adding that the producer could be holding even more oil in some land storages around China. – While Iran may aim to fill the void left by Russia in Europe, namely in Spain, Italy, Greece and even Turkey, Tehran would also attempt to reclaim share in the prized Asian market. Read more. Default Jitters Stalk Egypt, Sending Traders on Wild Ride – Bloomberg — www.bloomberg.com – The north African nation has become the latest symbol of the distress gripping poorer nations on the back of surging inflation, rising yields and a grinding down of global growth. – The probability its government will fail to repay debt in the one year has surged to the highest since 2013, and to the region’s worst, based on a Bloomberg model – said Callee Davis, an economist at Oxford Economics Africa. “If Egypt is unable to secure further external financing, the risk of a debt default will increase substantially.” – Egypt has $83.3 billion of foreign-currency debt outstanding, including more than $5 billion of dollar- and euro-denominated securities coming due in the fourth quarter. Read more.
August Fourth Week Newsletter of World and GCC Business News – Issue #73
Abu Dhabi AI Firm G42 Sets Up $10 Billion Fund for Tech Deals – Bloomberg — www.bloomberg.com – Abu Dhabi-based artificial intelligence firm G42, backed by a key member of the oil-rich emirate’s ruling family, is setting up a $10 billion fund with a focus on technology investments in emerging markets. – The entity will be formed in partnership with the Abu Dhabi Growth Fund, which was set up by state-controlled ADQ last year. – The G42 Expansion Fund will target late-stage growth companies with disruptive technologies. – G42, an AI and cloud computing company, has operations spanning from energy to healthcare and autonomous vehicles. Read more. Abu Dhabi Fund Mubadala Deploys Billions Defying Tech Rout – Bloomberg — www.bloomberg.com – Mubadala led the latest funding round for German insurance-technology firm Wefox, which raised $400 million at a valuation of $4.5 billion this month. The fund also came in as a new investor in the $800 million raise by Klarna, the buy-now-pay-later giant. – More recently, Mubadala led an $768 million funding round for Turkish grocery delivery app Getir in March at a valuation of $11.8 billion. The fund also participated in a $300 million raise for payments business SpotOn, which valued the company at about $3.6 billion. It also led a $100 million round for Swedish fintech firm Juni last month. Read more. Saudi Wealth Fund PIF Buys $7 Billion US Stocks Amid Recession Fears – Bloomberg — www.bloomberg.com – Saudi Arabia’s sovereign wealth fund invested more than $7 billion to build new positions in US stocks including Amazon.com Inc., Alphabet Inc., BlackRock Inc. and JPMorgan Chase & Co. as markets were battered by recession fears. – The $620 billion Public Investment Fund also added to positions it held in Facebook Inc. owner Meta Platforms Inc., PayPal Holdings Inc. and Electronic Arts Inc. in the second quarter, according to a 13F filing. – In total, the value of the PIF’s disclosed portfolio in the US fell by about $3 billion in the second quarter to roughly $40 billion. Read more. Kuwait’s $769 Billion Fund Breaks Silence on UK Chief’s Removal – Bloomberg — www.bloomberg.com – Saleh Al-Ateeqi, who was hired in 2018 to modernize the UK branch known as the Kuwait Investment Office, was abruptly removed in July. – In question is whether Al-Ateeqi was a reformer looking to modernize the direct investing arm of Kuwait’s wealth fund, or an executive who fueled a toxic culture that led to departures and lawsuits, according to people with direct knowledge of the dispute. – Al-Ateeqi, who has filed a complaint with Kuwait’s public prosecutor against the country’s finance minister as well as the KIA’s managing director. Read more. Iran Nuclear Deal: Iranian Oil Would Fill Russia-Shaped Hole in Supplies – Bloomberg — www.bloomberg.com – Lengthy negotiations over the restoration of the Joint Comprehensive Plan of Action (or JCPOA, as the deal between Iran, the five permanent members of the United Nations Security Council, Germany and the European Union is known) seem to be approaching their end. – But nothing’s agreed until everything’s agreed, and there are as many reasons to be pessimistic as there are for optimism. – EU nations are still importing about 1.2 million barrels a day of Russian crude. – But sanctions due to come into effect in December will curb that flow. Read more. Egypt Holds Rates as Governor’s Shock Exit Turns Focus to Pound – Bloomberg — www.bloomberg.com – The Monetary Policy Committee maintained the deposit rate at 11.25% and the lending rate at 12.25% for a second consecutive meeting. – Thursday’s pause is probably temporary, with monetary tightening likely to resume under a new governor, according to analysts. – The Arab world’s most populous nation has hiked rates by a cumulative 300 basis points since March. Read more. Turkey Delivers Shock Interest Rate Cut as Inflation Set to Peak Over 80% – Bloomberg — www.bloomberg.com – The Monetary Policy Committee led by Governor Sahap Kavcioglu lowered its benchmark to 13% on Thursday, after keeping it at 14% since December. – The threat of a recession in Europe, the main destination for Turkish shipments abroad, is a big worry for an industry that now accounts for 95% of Turkey’s total exports. – The central bank now predicts inflation will reach a high of around 85% this fall, before ending the year near 60%, or 12 times its target. – Erdogan is intent on turbocharging growth by focusing on exports and employment as part of what he calls a “new economic model.” – Erdogan, long a believer that cheaper borrowing costs can slow inflation instead of pushing it higher. – Cutting rates when the rest of the world is hiking and inflation is at decades highs is crazy,” said Henrik Gullberg, a macro strategist at Coex Partners Limited in London. Read more.
August Third Week Newsletter of World and GCC Business News – Issue #72
New Best Cities for Expats: Lisbon, Bangalore Emerge to Rival Hong Kong – Bloomberg — www.bloomberg.com Kuala Lumpur – the Malaysian capital is becoming increasingly attractive to global businesses because of its large English speaking workforce, easy flight connections around the region and relative affordability. In 2021, the city ranked first in a worldwide survey of some 12,000 expats by InterNations, scoring top for housing. Lisbon – One of the oldest cities in Europe, Lisbon has reinvented itself as a hipster destination, hosting events such as the annual Web Summit and offering a mix of culture, nightlife and warm weather within easy reach of some of Europe’s most spectacular beaches Dubai – The desert state has been challenging Hong Kong and Singapore for expat traffic for more than a decade now and the combination of the pandemic and war in Europe has made the Emirate even more popular Bengaluru (Bangalore) – Venture capital is flowing into the southern Indian city faster than to London or San Francisco by one estimate, surging to $7.2 billion in 2020 from $1.3 billion in 2016. With a growing expat community has come international schools, as well as bars and bistros that serve everything from craft beers to pork ribs. Mexico City – Mexico topped the global ranking in InterNations’ 2022 Expat Insider ranking of the best countries to live in and its high-altitude capital is home to foreigners from all over the world. Blending seven centuries of history with some of the region’s most progressive policies — the city was the first in Latin America to legalize same-sex marriages — the capital is also home to one of the most vibrant restaurant scenes in the Americas. Rio de Janeiro – While the city suffered a decline in the 1990s, overshadowed by financial hub Sao Paulo, the laid-back vibe and world-famous beaches of Rio continues to hold an allure for foreigners moving to South America’s largest economy. Read more. UAE Makes First Major Turkish Acquisition Since Relations Eased – Bloomberg — www.bloomberg.com – A unit of Abu Dhabi’s International Holding Co. acquired the stake in renewable energy firm Kalyon Enerji Yatirimlari AS for 1.8 billion dirhams ($490 million. – In November, Turkey and the UAE signed accords for billions of dollars of investments, including in technology and energy. – In June, Abu Dhabi wealth fund ADQ bought Birgi Mefar, a small Turkish pharmaceutical firm. Read more. Dubai Ruler Sheikh Mohammed Gets Chunk of Developer Emaar in $2 Billion Deal – Bloomberg — www.bloomberg.com – Emaar will buy Dubai Holding’s 50% stake in the Dubai Creek Harbour project and finance the deal equally in cash and shares, Sheikh Mohammed bin Rashid Al Maktoum’s holding firm said in a statement late on Thursday. – The Dubai Creek Harbor deal is the latest in a series of asset sales by the state-backed conglomerate. – In 2019, Dubai Holding unit Meraas set up a $1.4 billion joint venture with Brookfield Asset Management Inc., giving the Canadian firm a degree of control of some of the city’s most prized retail assets. Dubai Holding is also behind Tecom Group, which in June raised $454 million in an initial public offering. Read more. Dubai Inflation: Year of Discounting Ends as Companies Feel Cost Pressures – Bloomberg — www.bloomberg.com – Competition in the emirate has meant that non-energy private firms didn’t always pass on higher costs even as their margins suffered. But while input cost inflation eased in July after four months of gains, businesses “reported a stable trend in prices charged for goods and services,” according to a report from S&P Global on Tuesday. – While not as intense as in other parts of the world, inflation is percolating in the oil-rich Gulf. The United Arab Emirates, of which Dubai is a part, is among countries in the region that set aside billions of dollars in inflation relief. The World’s Cotton Supply Keeps Shrinking, Hit by Drought, Heat – Bloomberg — www.bloomberg.com – This confluence of extreme weather events brought on by climate change has sent cotton prices soaring by as much as 30%. – Earlier this year, they touched the highest level since 2011, squeezing the margins of clothing suppliers around the world and threatening to raise the costs of everything from t-shirts to diapers, to paper and cardboard. Read more. How the US Toppled the World’s Most Powerful Gold Trader – Bloomberg — www.bloomberg.com – The case has shone a light on how JPMorgan’s traders — including Nowak and the bank’s long-time lead gold trader Gregg Smith — for years allegedly manipulated markets by placing bogus orders designed to wrongfoot other market participants, principally algorithmic traders whose high-speed activity became a major source of frustration. – Alex Gerko, the head of an algorithmic trading firm, complained about Smith’s activity in the gold market as early as 2012 to CME Group Inc., which owns the futures exchanges where the US alleged thousands of spoof trades took place. – At the Justice Department, the road to JPMorgan began with a decision to begin hunting down traders who made bogus offers to buy and sell commodities that they never intended to execute. – In his testimony, Edmonds, who’d started in an operations role at JPMorgan, described spoofing on the desk as a daily phenomenon and felt obliged to take part because it was part of the normal strategy. – At JPMorgan, Edmonds said the practice was referred to as “clicking” rather than spoofing, and the traders never discussed it as being illegal despite the firm’s own compliance policies making it plain. Read more.
August Second Week Newsletter of World and GCC Business News – Issue #71
Alvarez & Marsal to Increase Staff by 70% in Middle East Push – Bloomberg — www.bloomberg.com – The turnaround firm aims to have more than 200 employees in the region in 2023 after doubling its headcount to 116 in the past year, it said in a statement on Monday – The New York-based company made its mark in the Middle East after being appointed as the administrator of scandal-hit NMC Health Plc in 2020. It has also worked on other high-profile cases, including Gulf Pharmaceutical Industries PSC and Finablr Plc. Read more. Egypt’s Pound (USD/EGP) Cure Affects Imports and Curbs Supply of Cars, Clothes – Bloomberg — www.bloomberg.com – Although basic commodities are freely available, shortages in more luxurious products — ranging from summer clothes to imported cars — are becoming common. Choices for customers have dwindled at fast fashion groups like Mango, Zara and H&M. – Goldman Sachs Group Inc. estimates Egypt may need to secure a $15 billion package from the IMF to meet its funding requirements over the next three years. – That’s in addition to pledges of more than $22 billion in deposits and investment from Saudi Arabia, the United Arab Emirates and Qatar. Read more. Allianz (ETR: ALV) Considering Sale of Stake in Saudi Arabia Unit – Bloomberg — www.bloomberg.com – The German insurer is working with an adviser on the potential disposal of its controlling stake in Allianz Saudi Fransi Cooperative Insurance Co. – Established in 2007, Allianz Saudi Fransi is a joint venture between the Allianz Group and Banque Saudi Fransi. Allianz owns a 51% stake in the venture. Read more. Erdogan Eyes Mediator Role With Putin to End Ukraine War After Grain Deal – Bloomberg — www.bloomberg.com – The sides also emphasized the need for full implementation of the July 22 agreement allowing safe crop exports from Ukrainian ports as well as unhindered deliveries of Russian grain and fertilizers – Russian Deputy Prime Minister Alexander Novak told reporters after the meeting that Russia and Turkey would move to partial payment in rubles for gas deliveries as part of a gradual shift toward settlement in national currencies – On Syria, Putin and Erdogan reaffirmed a “determination to act together and in close coordination with each other in the fight against all terrorist organizations,” – Putin may give the nod to a Turkish incursion that’s opposed by his ally Syrian President Bashar al-Assad because ties with Erdogan are important for the Kremlin. Read more. UAE Healthcare Provider Burjeel Holdings Seeking to Raise $750 Million From IPO – Bloomberg — www.bloomberg.com – Once listed, the United Arab Emirates-based firm is considering a dividend payout ratio of 40% to 70% of net income from 2023 – Burjeel’s owner VPS Healthcare LLC has been courting potential investors including sovereign and pension funds to drum up support for the deal. – Burjeel, operates 39 hospitals and medical centers across the UAE and Oman. Read more. Can’t Find an Electric Car? One Startup Is Selling ‘Subscriptions’ – Bloomberg — www.bloomberg.com – But what if EV ownership was just a stopgap? What if you could simply subscribe to a car like a 5,000-pound magazine? – That’s the future being sold by Autonomy, a California-based startup that since January has been targeting a narrow niche on the EV ownership spectrum, somewhere between the Hertz rental counter and a three-year lease – Autonomy is now stocking up on EVs from pretty much every company that makes them: This week, it announced plans to order nearly 23,000 cars from 17 automakers, including Ford, Polestar and Tesla. There are even 200 vehicles reserved from Canoo and Fisker – customers can end the subscription any time after three months, and don’t have to pay maintenance, registration fees or interest. Read more.
August First Week Newsletter of World and GCC Business News – Issue #70
Dr. Atie J. El Mouallem – Relationship between high Inequality and Corruption — atiejelmouallem.com The world economic forum held this year reported that one of the top global trends that will affect global markets was the rising income and wealth inequality, along with other issues like climate change, terrorism, infectious diseases, cyberattacks, immigration, ageing population and loss of global cooperation under the weight of nationalism. How serious is the problem of inequality in Lebanon? As per the Carnegie Endowment scholar Lydia Assad, the richest 10% and 1% of adults accounted for 56% and 23% of the total national income respectively, and only 3,000 nationals, the Top 0.1%, accounted for a full 10% of the national income! Read more. Saudi Aramco Buys Valvoline’s Petroleum Unit for $2.65 Billion – Bloomberg — www.bloomberg.com – Valvoline, based in Lexington, Kentucky, will use about $2.25 billion from the transaction to return money to shareholders, reduce debt and invest in its retail services. It will become a “pure-play automotive service provider” and target earnings-per-share growth of more than 20%. – Goldman Sachs Group Inc. advised it on the deal with Aramco Read more. Abu Dhabi’s Wealth Fund Buys Stake in CVC-Owned TMF Group – Bloomberg — www.bloomberg.com – The Middle East sovereign wealth fund will take a significant minority stake in TMF and a seat on the company’s board – TMF provides services including bookkeeping, payroll, fund administration and compliance to multinational corporations and financial institutions. Read more. Abu Dhabi Investment Authority/ADIA Deepens Internal Shift – Bloomberg — www.bloomberg.com – ADIA’s choices can have an impact around the world. It is one of the biggest investors in US real estate, and its recent deals include stakes in German railcars, North American energy and Indonesia’s biggest internet firm – ADIA merged its internal and external equities departments into one. Even more striking was the launch last year of an in-house science lab, staffed with quants, physicists, artificial intelligence and computer experts recruited from hedge funds or academia. – The net result of all these changes was a loss of 160 people, or almost 10% of the fund’s workforce, in 2021. – Efficiency, agility and speed are now the characteristics for successful investors of all types – including those with long-term objectives,” the spokesman said – ADIA was set up in 1976 to manage the oil surplus revenues of Abu Dhabi, one of the world’s top crude exporters. It’s the biggest sovereign wealth fund in the city, eclipsing Mubadala Investment Co. and ADQ, and one of the largest in the world Dubai’s Metaverse Strategy Targets 40,000 Virtual Jobs in Five Years – Bloomberg — www.bloomberg.com – The plan, launched by Dubai Crown Prince Sheikh Hamdan bin Mohammed, aims to support the government’s goal of increasing the number of blockchain companies by five times in five years. Dubai is already home to over 1,000 companies in the metaverse and blockchain sector, which contributes $500 million to the national economy, Sheikh Hamdan said. Portugal Golden Visas: Rich Chinese Losing Their Favorite Escape Route to Europe – Bloomberg — www.bloomberg.com – Investment migration consultancy Henley & Partners estimates that 10,000 high-net-worth residents are seeking to pull $48 billion from China this year. In the past, some have used the golden visa program as an escape route. – The EU has increasingly made clear its disdain for residence and citizenship-by-investment programs, currently offered in some form by 10 member states, with Cyprus and Malta already scrapping their golden passport initiatives after coming under scrutiny from the bloc. – Portugal’s program grants residency in exchange for a minimum 350,000 euro ($358,400) investment in real estate or 500,000 euros in an approved local venture fund. – European Commission President Ursula von der Leyen is now warning that the region’s values “are not for sale.” – Starting this year, Portugal restricted the golden visa program in Lisbon, Porto and high-density coastal areas, pushing investment to the less-developed countryside, which proponents see as an unrealized opportunity. Russian Gas Shipments to China Will Ease Europe’s Energy Crunch – Bloomberg — www.bloomberg.com – The biggest fields in Siberia, which currently feed Europe, will eventually be connected to China, giving Russia an alternative outlet for its vast resources as relations with the West deteriorate. – Should Russia impose a complete halt on gas flows to Europe, prices may spike to five times the current level, according to Accenture. – The risk of global recession will also curb gas consumption, with demand shrinking as much as 16% in the European Union next year, according to Accenture.
July Fourth Week Newsletter of World and GCC Business News – Issue #69
UAE Earmarks $820 Million to Build Satellites, Fund Space Plan – Bloomberg — www.bloomberg.com – “The project will contribute to the UAE’s efforts to develop solutions to climate change, environmental sustainability and improved disaster management,” the country’s media office said – Applications will include detection of oil spills, monitoring ships, as well as search and rescue. – The country established a Space Agency in 2014, sent its first astronaut to the International Space Station five years later Read more. Abu Dhabi Fund Mubadala Deploys Billions Defying Tech Rout – Bloomberg — www.bloomberg.com – Mubadala led the latest funding round for German insurance-technology firm Wefox, which raised $400 million at a valuation of $4.5 billion this month. The fund also came in as a new investor in the $800 million raise by Klarna, the buy-now-pay-later giant, that saw its valuation plunge to $6.7 billion from the $45.6 billion achieved last year. – More recently, Mubadala led an $768 million funding round for Turkish grocery delivery app Getir in March at a valuation of $11.8 billion. The fund also participated in a $300 million raise for payments business SpotOn, which valued the company at about $3.6 billion. It also led a $100 million round for Swedish fintech firm Juni last month. – Buyout firm EQT AB and Mubadala agreed to buy Swedish medical freight company Envirotainer AB for an enterprise value of about 2.8 billion euros last month. Mubadala teamed up with another investment firm, Warburg Pincus, on a more than $2 billion deal for Informa Plc’s pharma analytics unit reached in February. Read more. French Lawmakers Reject Windfall Tax Profit in Close Vote – Bloomberg — www.bloomberg.com – France’s National Assembly rejected a tax on windfall profits on Saturday in a close vote, as pressure mounts to tax energy and transport companies that have benefited from rising prices. – members of the lower house rejected amendments that would have set up an exceptional tax on so-called “superprofits” from companies such as TotalEnergies SE, Engie SA and shipper CMA CGM SA. – The tax was proposed by the left, and backed by 96 MPs, including one who belongs to Emmanuel Macron’s coalition. Read more. Why India’s World-Beating Growth Isn’t Creating Jobs: QuickTake – Bloomberg — www.bloomberg.com – Output is increasing as a result of pandemic-related government spending while the private sector sits on the fence, deterred by dim conditions for new investment. – The labor force participation rate — meaning people who are working or looking for work — has dropped to just 40% of the 900 million Indians of legal age, from 46% six years ago, according to the CMIE. By comparison, the participation rate in the US was 62.2% in June. – CMIE estimated that female labor force participation plummeted to 9% by 2022 — putting it in the same league as war-torn Yemen. Read more. Zara’s Owner Sees Real Estate Fortune Rise to $16 Billion – Bloomberg — www.bloomberg.com – Most of Ortega’s income comes from his 59% stake in Zara owner Inditex SA. – In 2021, Pontegadea had revenue of 2 billion euros, with Inditex dividends accounting for 1.3 billion euros. Net profit was 1.6 billion euros, up from 666 million euros in 2020. – Late last year, Ortega, who is notoriously press-shy, shocked the investment community with the decision to name his 38-year-old daughter Marta as chairwoman of Inditex – Ortega has a fortune of about 51 billion euros, making him Spain’s richest person. Read more. Chips Act Delay in Congress Harms US Semiconductor Position – Bloomberg — www.bloomberg.com – In June 2021 the US Senate passed a bill dedicating more than $50 billion to increase the manufacture of semiconductors. – Over a year later that money—the centerpiece of a bill called the Chips Act—still hasn’t been deployed. – Silicon Valley is literally named after the stuff that semiconductors are made of, but the real action in the chip industry now mostly happens elsewhere. About 12% of chips are manufactured domestically, down from 37% in the 1990s. – The European Union is also working on a new package of incentives for chipmakers. Read more. How the Grammarly Online Tool Made Its Ukrainian Founders Billionaires – Bloomberg — www.bloomberg.com – Started by three Ukrainians in 2009, Grammarly has more than 600 employees and works with more than half a million applications to analyze 14 trillion words a year for its 30 million daily active users across the globe. – Grammarly is already one of the world’s biggest unicorns after raising $200 million in November from investors including BlackRock Inc. and Baillie Gifford, valuing the company at $13 billion. – Grammarly has made billionaires of at least two of its founders, Max Lytvyn and Alex Shevchenko, who are worth at least $2.4 billion each. Read more.
July Third Week Newsletter of World and GCC Business News – Issue #68
Biden’s Quest for Saudi Oil Faces Reality-Check of Slim Capacity – Bloomberg — www.bloomberg.com – The price of gasoline remains a source of political peril for a president heading to mid-term elections with approval ratings near 40%. – Saudi Arabia and the United Arab Emirates together currently have a buffer of about 3 million barrels a day. – That’s about 3% of global oil output, and roughly equivalent to the amount of Russian oil that could be kept off the market by sanctions at year-end, according to the International Energy Agency. Read more. Abu Dhabi Sovereign Wealth Fund Mubadala in Talks to Buy Fortress From SoftBank – Bloomberg — www.bloomberg.com – SoftBank acquired Fortress in 2017, intending to use the New York-based firm’s expertise to help manage its behemoth Vision Fund. – The firm, led by co-chief executive officers Pete Briger and Wesley Edens, managed $53.3 billion as of Dec. 31, its website shows. Read more. Turkey Gets Landmark $929 Million Deutsche Bank Loan to Buy LNG – Bloomberg — www.bloomberg.com – The three-year loan allows Boru Hatlari ile Petrol Tasima AS, or Botas, to buy LNG from pre-arranged suppliers in 10 countries, including the US, Algeria and Qatar, according to an emailed statement from Deutsche Bank. – And while it will only fund a fraction of Turkey’s gas consumption, it paves the way for similar transactions that will let Botas diversify supplies currently dominated by Russia and Iran. – The company was also the biggest recipient of the central bank’s $18 billion of currency sales for state companies in the first half of this year. Read more. Italy Political Crisis: Mario Draghi Has Less Than a Week to Form Unity – Bloomberg — www.bloomberg.com – Boosted by over 200 billion euros ($200 billion) of aid from the the European Union’s recovery fund, the 74-year-old premier set about addressing some of the deep-seated problems that have held Italy’s economy back for decades. – Italian bonds fell for a third day Friday, with the spread between Italy and Germany’s yield — a major gauge of risk in the region — widening further to 213 basis points. Italy’s stock market has fallen about 5.6% this week, more than twice the drop of the Stoxx 600. Italy has the worst-performing major index in Europe this year, down 26%. – The political chaos was triggered after the Five Star Movement, the second-largest party in Draghi’s alliance, boycotted a confidence vote in the senate, criticizing the government’s response to the economic crisis. Read more. Buyout Firm Actis Hires Citi to Sell African Renewables Firm – Bloomberg — www.bloomberg.com – Buyout firm Actis LLP appointed Citigroup Inc. to help with the sale of its BTE Renewables business in South Africa and is seeking a value close to $1 billion. – BTE, previously known as BioTherm Energy, has over 400 megawatts of wind and solar capacity. Its assets include Kenya’s second largest wind farm, Kipeto, and other wind and solar projects in South Africa. Read more. Sequoia’s Vaunted Strategy Feels the Pain of Tech Stock Selloff – Bloomberg — www.bloomberg.com – Sequoia’s portfolio companies that listed in the US last year have lost more than $7.7 billion of market value since their debuts. – it typically hangs on to stock well past the initial share sale and the post-IPO lockup period before distributing shares to its own investors. – In October Sequoia announced a new structure, the Sequoia Capital Fund, which allows it to invest in and hold public stocks indefinitely, bypassing a basic constraint of venture capital. – Though stock is being transferred rather than sold, it will still have to be marked to market, so the changes will still affect one important number: the original venture fund’s return. Read more. Klarna’s Funding Cuts Value to $6.7 Billion from $46 Billion – Bloomberg — www.bloomberg.com – Tech specialists such as SoftBank Group Corp. — which backed Klarna last year, but wasn’t named as a supporter this time — have been left sitting on billions of dollars of losses. – While its customer numbers are growing rapidly, its own debt costs and losses are also piling up, and the business is burning through hundreds of millions of dollars per quarter. – Klarna has 147 million global active users and 400,000 retail partners, including Nike Inc., Ikea, Sephora and Expedia Group Inc, according to its website. Read more.