The Weekly Circuit
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Bankers are suddenly in demand in Saudi Arabia. While the finance industry is tightening up in other parts of the world amid the collapses of First Republic Bank and Credit Suisse, salary offers are soaring in the desert kingdom, according to Bloomberg. Competition for financial pros has been set off by booming oil profits this year that Saudi Arabia’s sovereign wealth fund is pouring into investment while “hiring at breakneck speed,” the news agency reported. New rules prodding foreign companies to move their regional headquarters to the kingdom are also creating unprecedented work for headhunters.
Ranging from $225,000 to $255,000 a year in one survey, salaries in Riyadh for banking vice presidents are up to 20% higher than in London – and foreigners pay no income taxes. The salary bounty is necessary, Bloomberg said, to overcome the hesitation many expatriates feel about the conservative social climate and religious laws that govern the country.
Heading for Turkey’s May 14 presidential election, investors show little optimism about prospects for the economy, the Financial Times reports. Fund managers interviewed by the paper warn it will be a “grotesquely difficult” task to regain credibility with foreign investors regardless of which party wins. Kemal Kılıçdaroğlu, who is leading a coalition of six opposition parties, has vowed to undertake sweeping reforms to lure back foreign capital if he defeats President Recep Tayyip Erdoğan. But the fund managers say even if the opposition wins, investors will sit on the sidelines until the coalition shows it can bring about sustained change.
A gathering in Morocco brought together close to 100 female business leaders from the Middle East and Africa last week to discuss technology, finance, entrepreneurship and job opportunities. Participants came to the conference in Marrakesh from Bahrain, Benin, Egypt, Israel, Jordan, Kenya, Nigeria, South Africa, Sudan, the UAE and the U.S. The event was among a series of activities Tel Aviv-based Start-Up Nation Central has arranged since the Abraham Accords in 2020 to cultivate Arab-Israeli business links.
Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].
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China’s tech-driven port in Haifa aims for interconnected Middle East
Commercial ports are usually a cacophonous jumble of clanging metal, screeching chains and yelling dock workers engaged in a race to unload massive container ships. But the barely two-year-old Haifa Bayport run by the Shanghai International Port Group on Israel’s Mediterranean coast is quiet enough to hear the seagulls caw. The port, where a fleet of electric vehicles ferries cargo 24 hours a day, has barely any humans in sight, Melanie Lidman reports for The Circuit. Massive red and white cranes that carry the company’s name in Chinese characters loom 100 meters (328 feet) over the nearly silent pier, hoisting the containers above the freighters with state-of-the-art technology and logistical expertise.
Looking east: China’s SIPG, a state-owned industrial conglomerate that operates the world’s biggest port in Shanghai, is playing the long game. Having won a bidding war in 2015 to construct the new facility and compete against the existing Port of Haifa that was built 90 years ago, the company is looking eastward. With Israel linked now to the United Arab Emirates and Bahrain through the 2020 Abraham Accords, SIPG officials say Haifa can be a maritime gateway to the broader Middle East. The vision fits into China’s global “Belt and Road” initiative, which aims to build transportation infrastructure around the world and create an uninterrupted, modern-day Silk Road.
International expertise: “In the future, the port will be a very easy way to help connect all of the countries around Israel,” SIPG Bayport Israel CEO Miao Qiang told The Circuit during a tour of the facility. “We can really contribute to connecting the entire Middle East.” Some 99% of all cargo arriving in Israel enters through Haifa and the two other port cities of Ashdod and Eilat, which last year handled 3.1 million containers in total. As outdated technology and sluggish government bureaucracy proved unable to handle increased traffic over the past decade, Israel decided to build two more ports at Ashdod and Haifa and put the operations at all four sites up for bidding by experienced international port companies.
Indian rival: The older Haifa port is now run by India’s Adani Group in a joint venture with Israel’s Gadot Chemical Terminals. While competition from SIPG has steadily eaten into the older Haifa port’s market share, the new owners, led by India’s second-wealthiest man, Gautam Adani, are overhauling the facility to fight back. The Adani Group’s winning bid of $1.1 billion last year was strongly supported by the U.S., which expressed security concerns about China’s operation of the Bayport. The older port has also become a centerpiece of the so-called I2U2 initiative, which created a regional West Asia trading bloc two years ago comprising India, Israel, the United Arab Emirates and the U.S.
Gulf connection: Building on I2U2, U.S. National Security Adviser Jake Sullivan was expected during a meeting on Sunday with Saudi, Emirati and Indian counterparts to discuss the possibility of connecting Gulf and Arab countries via a network of railways that would also be connected to India, Axios reported. While Israel’s role is not directly part of the discussion, it could be added later, the report said.
Sixth Fleet: American concerns center on the Chinese company’s operating essential infrastructure so close to the old Haifa Port, which houses Israeli military installations and is also an important refueling stop for the U.S. Navy’s Sixth Fleet. SIPG says the issues are unfounded because Israeli authorities handle all security matters. “We are not dealing with any defense or security issues whatsoever,” the company’s vice president in Israel, Yoav Zuckerman, said. “We are just loading and unloading containers and general cargo.”
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HEARD AT MILKEN
Saudi ministers tout shift to investment from fossil-fuel dependence
Amid warnings of more U.S. bank closures and a world economic slowdown, Saudi Arabia is looking for new opportunities to pour the kingdom’s petroleum wealth into international investment, The Circuit’s Jonathan Ferziger reports. Two Saudi cabinet ministers, accompanied by representatives of the country’s sovereign wealth fund, traveled to Beverly Hills, Calif., for last week’s annual Milken Institute Global Conference, where the world’s top bankers and investors were discussing the global financial picture.
Leaping away: The Saudi minister for economy and planning, Faisal Alibrahim, spoke about his government’s efforts to “leapfrog away from oil” and diversify the economy through investing abroad in technology companies and developing commercial industries at home. Fueled by its $650 billion Public Investment Fund, Saudi Arabia is distributing venture capital and promoting the desert kingdom as one of the world’s fastest-growing tourist destinations. “We have a very large VC ecosystem that is growing fast, one of the largest, if not the largest in the Middle East,” Alibrahim said.
Greater scrutiny: Alibrahim and his fellow cabinet member, Investment Minister Khalid Al-Falih, joined panel discussions at the Beverly Hilton after a parade of bankers and world financial figures painted a gloomy picture of the coming months. Among other MENA financial figures at the conference, Ibrahim Ajami, head of ventures at Mubadala Capital, an investment arm of Abu Dhabi’s $284 billion sovereign wealth fund, invited pitches from promising tech companies while cautioning that the current industry shakeout means they will be subject to intensified examination.
Shifting narrative: “The overall, overarching perception today amongst a lot of our VC colleagues is that everybody should go to the Middle East and raise capital, because that’s where the money is,” Ajami said, adding, “there’s a very high bar for it. Investors are much more sophisticated.” While applying greater scrutiny, Ajami noted that Mubadala is invested in more than 100 venture capital firms. “I just want to shift the narrative from one that says that capital has dried up and venture capital is no longer an interesting asset class, to one that says, you know, I think the industry is evolving,” he said.
Training engineers: On a panel exploring how to follow up on the 2020 Abraham Accords, Israeli investor Shlomo Dovrat said a shortage of trained software developers could be addressed within the MENA region through Israel-Gulf partnerships in technology education. He noted that Israeli companies employ about 40,000 software engineers in Ukraine. “Why not Jordan and Egypt?” asked Dovrat, founder of Viola Ventures. “The salary level is, you know, over $100,000 and Israel will hire as many people as you can provide with your computer science graduates, and we are willing to invest in tools because it’s a strategic challenge for us.”
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Pricey Lesson: Dubai-based Gems Education, one of the world’s largest private school operators, is looking for options after potential buyers balked at its $6 billion price.
Gulf Pass: GCC countries are in talks to introduce a European-style visa that would allow tourists to visit all partner countries under one visa.
Leaving Home: Israel’s judicial overhaul plan is causing tech firms to consider relocating, with 80% of startups established this year registering outside the country.
Energy Market: Commodities traders are flocking to Dubai from London and Switzerland as the city becomes a central hub in the international energy market.
New Gig: HSBC recruited five executives from failed Silicon Valley Bank’s Israel office, including founder David Cohen, to launch a global tech banking business.
Gold Fever: Egyptians are lining up to buy gold, even though local prices have surged this year and are more than 30% higher than on the global market.
Friendly Skies: Emirates and Etihad airlines will cooperate to let passengers who book tickets into Dubai or Abu Dhabi leave on a return flight from the other city.
Selling Shares: Jamjoom Pharmaceuticals Factory plans to sell a 30% stake in a June IPO on Saudi Arabia’s Tadawul market.
All Aboard: Abu Dhabi’s Mubadala sovereign wealth fund and affiliates of Apollo Global Management will invest $500 million in Brightspeed, a U.S. broadband firm.
Islamic Banking: Mubadala sold its 7.6% stake in Abu Dhabi Islamic Bank to Emirates International Investment Company, the bank’s biggest shareholder.
Spare Change: The UAE’s e& telecom group will acquire a majority stake in the peer-to-peer lending platform Beehive to reach small- and medium-size businesses.
Cheaper Flights: Wizz Air’s Gulf venture plans to double its fleet, increase hiring and add destinations as demand for low-cost flights has surged since the pandemic.
Oracle Cloud: Abu Dhabi’s Injazat signed an agreement with Oracle that will give government agencies and companies access to cloud applications and infrastructure.
Rating Cut: Egypt’s credit rating was downgraded by Fitch for the first time in a decade. It was cut from B+ to B, which is considered non-investment grade.
Frequent Flyer: Flydubai is in talks with both Boeing and Airbus to purchase new aircraft as it expands its fleet, which is currently composed only of Boeing planes.
Unmanned Sub: Israel Aerospace Industries unveiled its BlueWhale autonomous submarine, after testing its intelligence-gathering for maritime and coastal targets.
Open Banking: Dubai’s Tarabut Gateway raised $32 million in a Series A funding round led by Pinnacle Capital to expand its open banking platform in Saudi Arabia and regionally.
Moroccan Gas: Morocco’s Tendrara liquefied natural gas plant, built by London-based Sound Energy, is expected to produce its first revenue in early 2024.
On the Circuit
Khalid Alsweilem was named chief global sovereign funds advisor and chairman for the new Saudi unit of South Africa’s Ninety One investment firm. He was previously chief counselor and director-general of investment at Saudi Arabia’s central bank.
Tim Clark, president of Emirates Airline, said he’s not daunted by competition from two new Saudi Airlines, anticipating the kingdom’s massive investment in regional tourism. “Good luck to them,” he told the Arabian Travel Market conference last week.
Shlomi Hagai was named by Jerusalem Venture Partners as head of its JVP Cyber-Climate-tech center in New York City. He was previously CFO of Contentsquare.
Ahead on the Circuit
May 8-10, Abu Dhabi, UAE: AIM Global 2023. Abu Dhabi’s Annual Investment Meeting brings together investors, corporate executives and government officials. Abu Dhabi National Exhibition Centre.
May 10-11, Abu Dhabi, UAE: UAE Climate Tech. Government-sponsored conference bringing together business leaders and policymakers in preparation for U.N.’s COP28 climate summit in November. Abu Dhabi Energy Centre.
May 11, Dubai, UAE: Annual Private Wealth Middle East Forum. Conference connecting family offices, high-net-worth wealth managers and investors. Shangri-La Hotel.
May 15-16, Abu Dhabi, UAE: Mobility Live Middle East 2023. Conference brings together investors, corporate executives, policymakers to discuss the future of transportation. Abu Dhabi National Exhibition Center.
May 23-24, Dubai, UAE: Seamless Middle East 2023. Conference explores the future of digital commerce. Dubai World Trade Center.
May 23-25, Doha, Qatar: Qatar Economic Forum. Qatari financial leaders, international investors and corporate executives meet to discuss global financial challenges in conference co-sponsored with Bloomberg.
May 29-31, Tokyo: Israel-Japan Innovation and Technology Conference. Calcalist newspaper and Israel Discount Bank hold three-day conference pairing Israeli and Japanese investors and business executives. Toranomon Hills Forum.
May 31-June 1, Abu Dhabi, UAE: Make it in the Emirates Forum. Annual manufacturing conference sponsored by the UAE Ministry of Industry and Advanced Technology. Abu Dhabi Energy Centre.
June 17-18, Tel Aviv, Israel: Fintech Junction. Conference brings together investors, bankers, regulators and tech company executives. Hilton Tel Aviv.
Holy Books: The Louvre Abu Dhabi is preparing an exhibition on the sacred texts of Muslims, Christians and Jews. The show, titled “Letters of Light,” will include historic volumes of the Quran, the Hebrew Bible and the New Testament, emphasizing universal messages shared by the three religions and the importance of the texts in intellectual and art history. It will run from Sept. 13 to Jan. 14, 2024.
Glory at Sea: Australia won the $1 million prize on Sunday in the Mubadala SailGP’s Grand Final race on San Francisco Bay, taking the title in the F50 catamaran competition for the third year in a row and beating the UK and New Zealand.
NBA in UAE: The NBA will bring the Dallas Mavericks and Minnesota Timberwolves to Abu Dhabi’s Etihad Arena to play two preseason games on Oct. 5 and Oct. 7.
Dog Paddling: Dubai is opening its first dog-friendly beach. Located on the emirate’s northern coastline, the Dubai Islands Beach will allow people to swim with their pets.