Dubai’s Growing Commodities Hub Is Now Enticing London Traders, Banker Pay Surges For Those Willing to Work in Saudi Arabia, Tech VCs Resort to Party Crashing in Middle East During Downturn
Dubai’s Growing Commodities Hub Is Now Enticing London Traders
Key Takeaways
Dubai is becoming a major energy trading hub, attracting more commodities companies and traders from London due to a growing pool of merchant counterparts, low taxes, and lifestyle perks.
The influx of foreign wealth, including crypto millionaires, bankers relocating from Asia, and wealthy Russians shielding assets, is benefiting Dubai and the United Arab Emirates.
European power and gas traders are finding Dubai appealing due to the favorable time zone and the highly digitized nature of the business, allowing for geographical flexibility.
Tech VCs Resort to Party Crashing in Middle East During Downturn
Key Takeaways
Middle Eastern sovereign wealth funds have extensive exposure to venture capital, and their relationships with VC firms are becoming more desirable and visible.
Gulf investors are diversifying away from oil and investing in the tech industry to prepare for a post-oil economy.
Middle Eastern sovereign wealth funds value long-term relationships and discretion, and some newer venture capitalists have been poorly perceived for trying to crash parties held by UAE and Saudi Arabian investors.
Dubai Reprimands Three Arrows Founders Over New Crypto Project
Key Takeaways
Dubai regulators are taking a stricter approach towards crypto, as evidenced by the reprimand issued to the co-founders of OPNX for operating without the required local license.
The action against OPNX is part of broader efforts by the UAE to get off the Financial Action Task Force’s “gray list” of jurisdictions that don’t do enough to uncover illicit funds.
The co-founders of Three Arrows Capital, who have been sparring with liquidators trying to recover money for creditors of their fallen fund, have made Dubai one of their main bases since its implosion last summer.
Arab League to Re-admit Syria After More Than a Decade of Isolation in Defiance of US
Key Takeaways
Arab League states have unanimously decided to reinstate Syria, ending President Assad’s isolation and defying US warnings.
This move reflects a broader political shift in the Middle East, with Saudi Arabia seeking to cement its role as a regional power broker.
The decision to disregard US reservations highlights a growing willingness among allies to forge their own political path and build stronger strategic ties with US rivals like Iran and Russia.
Banker Pay Surges For Those Willing to Work in Saudi Arabia
Key Takeaways
Despite the challenges in terms of social regulations and a shortage of experienced local employees, banking jobs in Saudi Arabia are plentiful and salaries are surging due to the expansionist zeal of Crown Prince Mohammed Bin Salman.
The Public Investment Fund, with more than $600 billion of assets, is hiring at breakneck speed, often recruiting staff from foreign firms based in the country, and bonuses are usually more than 100% of a banker’s salary in good years.
To attract foreign workers for the long term, Saudi Arabia is taking steps to ease rules, but many foreigners are still reluctant to move to a place that lacks the infrastructure, thriving social scene, and availability of alcohol that make other global finance centers appealing.
Saudi Red Sea Developer Weighs Public Offering as Soon as 2026
Key Takeaways
Red Sea Global, the company behind a major tourism destination on Saudi Arabia’s Red Sea coast, is considering a possible public market offering by 2026 to help underpin value and give access to a broader universe of investors.
The Red Sea project, covering an area about the size of Belgium, is a cornerstone of Saudi Arabia’s push to attract tourists and diversify its economy, with the first phase of the project expected to complete by the end of 2024, and 13 resorts set to open in that year.
Saudi Arabia’s tourism industry, historically consisting of millions of pilgrims traveling to Islam’s holiest sites in Mecca and Medina, could benefit from a feeder market if a fraction of these visitors were to extend their stays and explore other parts of the kingdom through the leisure component offered by Red Sea Global’s destinations.
Turkish Lira Volatility Jumps, Banks Climb in Pre-Vote Trading
Key Takeaways
Traders are increasing protection against potential turmoil in the Turkish lira ahead of the country’s elections, with the currency’s implied volatility against the dollar over the next week surging to 74% – the highest in the world.
The lira has already fallen 23% in the past year to record lows, and derivatives traders see a more-than-even probability that it will slide by 25% to 26 per dollar by the end of Q3, regardless of the outcome of the election.
Despite concerns surrounding Turkey, a further slide in the lira is unlikely to have knock-on effects on other emerging markets, as the mistakes of Turkish monetary policy are viewed as being homemade and not being repeated elsewhere.
Egypt Gets First Fitch Downgrade Since 2013 as Economy Stumbles
Key Takeaways
Fitch Ratings downgraded Egypt’s sovereign credit rating to B from B+, the first time in a decade, due to currency devaluations and lack of significant reforms.
High external financing requirements and a marked deterioration of public debt metrics were among the factors contributing to the downgrade.
The delay in enacting wide-ranging reforms and a transition to a flexible exchange rate could potentially undermine confidence and delay the IMF program.