The Weekly Circuit
đ Good Tuesday morning in the Middle East!
Saudi Arabiaâs Jamjoom Pharma, which makes generic drugs, will be taking orders from retail investors this week for what is poised to be the Riyadh stock exchangeâs biggest IPO of 2023. The company expects to raise 1.26 billion riyals ($336 billion) through the sale of 21 million shares. A date for the stockâs listing has not yet been determined.
Gaming has taken the MENA region by storm and Gulf countries are positioning themselves as leaders in e-sports and other digital entertainment fields. Revenue from gaming in MENA is projected to reach $6 billion in 2027, almost double the level in 2021, according to a report by the Dubai Multi Commodities Centre. The research paper, part of DMCCâs âFuture of Tradeâ series, says MENAâs âyoung and digital-savvy population, high levels of digital connectivity, and government support are driving the regionâs emergence as a consumer and creator hub.â
Leading the industry in the MENA region are the UAE and Saudi Arabia, âsupported by high income levels, strong digital engagement, and public investment initiatives,â according to the report. It notes that gaming industry leaders such as Franceâs Ubisoft placed their regional headquarters in Abu Dhabi, while Chinaâs Tencent and Los Angeles-based Riot Games are in Dubai. Saudi Arabia has made investments of more than $1.7 billion in the industry and has included gaming as a core element in Neom, its futuristic city project on the Red Sea, the report says.
Morocco and Israel signed an agreement to honor the driverâs licenses of each otherâs countries on their roads. In a visit to Rabat on Monday, Israeli Transportation Minister Miri Regev signed two other deals with her counterpart, Mohamed Abdeljalil, including one to promote road safety and another to develop greater cooperation in maritime traffic and seaports.
Turkeyâs trading partners in the MENA region are assessing the impact of President Recep Tayyip Erdoganâs narrow victory in Sundayâs runoff election. Just a day after winning an unprecedented third term, Erdogan spoke on the phone with Egyptian President Abdel Fattah al-Sisi and announced that the two countries will upgrade their relations and exchange ambassadors, trying to get past 10 years of friction.
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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FUELING DEBATE
Friends again, Qatar and Saudi Arabia warn over prospects for higher energy prices
Putting aside past disputes, the energy ministers of Qatar and Saudi Arabia came together to warn about the likelihood of higher natural gas prices this year and cuts in oil supply, arguing that global targets for shifting away from fossil fuels are unrealistic, The Circuitâs Jonathan Ferziger reports. âThereâs going to be a big shortage in gas in the future, predominantly because of the energy-transition push that weâd say is very aggressive,â Saad al-Kaabi, Qatarâs energy minister, said at the Qatar Economic Forum last week. âEconomic stability and environmental responsibility are not mutually exclusive. You have to have both.â
CEOs and artists: Al-Kaabi spoke at the opening of the three-day conference in Doha, Qatar, an annual gathering of investors, corporate executives and government leaders that is underwritten by the wealthy Gulf state and co-sponsored by Bloomberg LP, the financial information company. The event drew world figures ranging from TikTok CEO Shou Chew and former Treasury Secretary Steven Mnuchin to economist Nouriel Roubini and artist Jeff Koons. The panels were webcast on the conferenceâs internet site.
Patching up differences: The conference also underlined efforts by Qatar and Saudi Arabia to resolve their four-year rift in which a Saudi-led coalition including the UAE, Bahrain and Egypt cut off all ties in 2017. The break in relations was accompanied by an air, sea and land blockade of Qatar, which lasted through early 2021. Both sides are now trying to patch over their differences. âI donât call myself a guest,â the Saudi energy minister, Prince Abdulaziz bin Salman, said on the opening panel in Qatar. âIâm part of this country and part of the family.â
Run-up to COP28: As the United Nations has rallied governments around the world to reduce carbon emissions, Saudi Arabia, Qatar and other producers of oil and gas have cautioned against moving too quickly because solar power, hydrogen and other renewable energy sources wonât displace petroleum for decades. The question has become central in the run-up to the U.N.âs COP28 climate conference in November, which will be hosted by the United Arab Emirates.
Watch out: Prince Abdulaziz said oil producers need to protect their economies against short-sellers in the market who are betting on lower prices. The prospects of reduced oil revenue led the 23 member-nation OPEC+ group to agree in October 2022 and April 2023 on voluntary cuts in supplies of more than 3 million barrels a day. It also prompted President Joe Bidenâs trip to Saudi Arabia last July to push for expanded oil production. âSpeculators, like in any market, they are there to stay,â the Saudi minister said. âI would just tell them, watch out.â He added, âI keep advising that they will be âouching.â They did ouch in April.â
Rising prices: The Qatari minister, whose country is one of the worldâs leading producers of liquefied natural gas, said prices are likely to rise again, having plunged from the heights they reached after Russiaâs invasion of Ukraine reduced supplies. âThe only thing that saved humanity and Europe this year was a warm winter and the slowdown in the economy worldwide,â al-Kaabi said. âIf the economy comes back in 2024, the worst is yet to come.â
DIGITAL DEFENSE
Mideast cybersecurity threats highlight need to develop strategy on regional cooperation
Concern about cybersecurity is bringing together states in the Middle East and North Africa to develop a regional approach to repelling digital threats. Representatives from the United Arab Emirates, Bahrain, Israel and the U.S. participated last week in a forum at the Atlantic Council in Washington, D.C., to discuss making cybersecurity a new field for cooperation under the Abraham Accords, The Circuit reports.
Harden defenses: âWhat we are doing here is seizing upon a geopolitical opening,â Robert Silvers, the U.S. Homeland Security undersecretary for strategy, policy and plans, said during the May 23 panel discussion, which was webcast from the Washington think tank. âWe can work together as partners to harden up our defenses.â
Sharing expertise: Citing statistics that showed Israeli companies receiving 40% of global private capital invested in cybersecurity in 2021, generating $8.8 billion in exports, Israelâs ambassador to the U.S., Michael Herzog, said his country wants to share its expertise with regional partners. âWe live in the same region. We are targeted by the same actors: state actors, non-state actors and cybercriminals,â Herzog said. âIt’s only natural that we cooperate in the field of cybersecurity since we have so much going between us in so many fields [under the normalization agreements signed in 2020].â
Naval model: Cooperation between the U.S. Navy and Bahrain, where the U.S. 5th Fleet is based, could serve as a model for protection against computer threats, said Bahrainâs ambassador to the U.S., Abdullah bin Rashed Al Khalifa. âIt’s about time that we do the same in the cyber realm,â he said. âThe time is now, and I think that there is an appetite with the Abraham Accords. It has really opened up the opportunity to work together.â
Congressional caucus: The forum was organized by the Atlantic Councilâs N7 Initiative, which is supported by the Jeffrey M. Talpins Foundation in New York. Among other participants were Mohamed Al-Kuwaiti, the UAE governmentâs head of cybersecurity; Jeanette Manfra, global director of security and compliance at Google; Rep. Elissa Slotkin (D-MI), co-chair of the House Cybersecurity Caucus; and Sen. James Lankford (R-OK), co-chair of the Senate Abraham Accords Caucus.
Circuit Chatter
Damage Control: Canada and Saudi Arabia agreed to restore diplomatic relations, resolving a 2018 dispute that weakened trade between the two countries.
Green Light: The emirate of Abu Dhabi is working with Google to manage its roads, using artificial intelligence to unsnarl traffic jams and reduce pollution.
Star Trek: Following the launch of Emirati and Saudi astronauts into space, Oman, Kuwait and Bahrain are developing their own space programs, focusing on satellites.
Talent Search: Apple is trying to cultivate computer expertise in the Gulf, opening a programming academy last year in Saudi Arabia and scouting for talent in the UAE.
Fuel Shuffle: Saudi Arabia is buying Russian diesel fuel that is subject to Western sanctions while selling its own diesel in European markets, Bloomberg reported.
Investment Map: Egyptâs Ministry of Public Enterprise will publish a road map of private investment opportunities in state-owned businesses that it is trying to sell.
Weak Shekel: Goldman Sachs revised its forecast for Israelâs currency, saying the shekel may weaken because of concern about possible government intervention.
Saudi Sojourn: Tablet magazine sent its staff on a trip to Saudi Arabia to report on the cultural and business changes taking place in the Islamic kingdom.
Closing Circuit
AI Supercomputer: Nvidia Corp. said it will build one of the worldâs fastest supercomputers for generative artificial intelligence applications in Israel.
China Partner: Saudi Arabia is in talks with Chinaâs New Development Bank to be a member of the emerging market lender, which is active in Brazil, Russia, India and South Africa.
3D Merger: Stratasys, an Israeli maker of 3D printing equipment, agreed to merge with Burlington, Mass.-based Desktop Metal in an all-stock deal valued at $1.8 billion.
Robots for Sale: EDGE, an Abu Dhabi-owned defense contractor and technology company, acquired an 80% stake in Jordanâs MARS Robotics for an unspecified price.
Moroccan Innovation: Israel Aerospace Industries and the International University of Rabat are creating a âcenter of excellenceâ for aeronautics, AI, research and innovation.
Tobacco-Free: Saudi Arabiaâs Public Investment Fund launched a new company, Badael, to make tobacco-free, nicotine delivery devices as an alternative to smoking.
Diamond Tower: Ayalon Insurance signed a deal to build a 100-story tower, the countryâs tallest, in the Israel Diamond Exchange area near Tel Aviv.
HQ Transfer: Intella, a Cairo-based developer of Arab-language artificial intelligence tools, is moving its headquarters to Saudi Arabia.
On the Circuit
Crown Prince Al Hussein bin Abdullah II of Jordan will marry Rajwa Al Saif, a Saudi citizen who studied architecture in the U.S., at Ammanâs Zahran Palace on Thursday.
Sam Altman, CEO of OpenAI, is due to visit Israel next week for meetings with researchers at Microsoftâs R&D Center and at Tel Aviv University.
Michael Bloomberg, the publisher and U.N. climate envoy, challenged members of Congress who criticized the UAE as host of this yearâs COP28 conference, writing in an opinion column that oil producing countries must be fully involved if the worldâs transition to sustainable fuels is going to be successful.
Omar El Amine Fichtali, an investment banker on JPMorgan Chase & Co.âs MENA team, was appointed as head of its investment banking unit in Saudi Arabia.
Ibrahim Ajami, head of ventures at Abu Dhabi’s Mubadala sovereign wealth fund, talks about investment opportunities in the UAE on the podcast, “This Week in Startups.”
Ahead on the Circuit
May 29-31, Abu Dhabi, UAE: Electric Vehicle Innovation Summit. Car manufacturers, dealers, technology companies discuss future of EVs at trade conference. Abu Dhabi National Exhibition Centre.
May 29-31, Tokyo: Israel-Japan Innovation and Technology Conference. Calcalist newspaper and Israel Discount Bank hold a three-day conference pairing Israeli and Japanese investors and business executives. Toranomon Hills Forum.
May 30, Manama, Bahrain: 4th Annual Islamic Finance Innovation Day. Central bank officials, corporate banking executives, leaders of Islamic finance gather for conference. Gulf Hotel.
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 financial tech company executives. Hilton Tel Aviv.
June 20-22, Riyadh, Saudi Arabia: The Saudi Food Show. Chefs, restaurateurs, food company executives, and government officials gather for trade show. Riyadh International Convention and Exhibition Center.
Culture Circuit
Hindu Shrine: The UAE is on course to finish construction of a massive Hindu temple next year, following up on its efforts to promote religious tolerance that included the recent opening of the Abrahamic Family House, a compound housing a mosque, church and synagogue in Abu Dhabi.
On Location: Ithra Film Productions launched a fund in Saudi Arabia that aims to attract international directors to shoot fully financed movies in the kingdom, giving actors and crew members the opportunity to develop their skills at a higher level.
Breakfast in Beirut: José Andrés, the Spanish-American chef and restaurateur, writes in his blog about a recent trip to Lebanon, Turkey and Greece, lavishing special attention on the ground lamb and eggs breakfast at El Soussi, a 130-year-old restaurant in Beirut.
House of Pops: Dubaiâs wildly popular maker of all-natural popsicles, House of Pops, is expanding across the Middle East, planning to open stores in Saudi Arabia and Bahrain while offering the colorful treats aboard Emirates airline flights.
NBA Partner: The ADQ sovereign wealth fund signed an agreement to be the presenting partner at the NBA’s two preseason games in October between the Dallas Mavericks and Minnesota Timberwolves at Abu Dhabi’s Etihad Arena. ADQ also agreed in the multiyear deal to host and support the NBAâs grassroots basketball programs in the UAE.