The Weekly Circuit
👋 Good Monday morning in the Middle East!
Amid shifting alliances in the Middle East, India is emerging as an influential business player with compelling reasons to strengthen its relationships across the region. In turn, the Gulf states have watched India’s population swell to 1.4 billion, eclipsing China as the world’s largest, and are looking for new commercial opportunities in the subcontinent, columnist Steven A. Cook writes in Foreign Policy.
Saudi Arabia, which is India’s second-largest oil supplier, now sees the country as a market for renewable fuels that can help increase the $43 billion in annual trade between them, Cook writes. India and the United Arab Emirates, meanwhile, have boosted commercial ties through the Comprehensive Economic Partnership Agreement they implemented in May 2022, raising non-oil trade by almost 7% to $45 billion.
India’s involvement has also reinforced the UAE’s budding ties with Israel through a multilateral partnership that includes the U.S. and is known as the “I2U2” grouping after the four countries. The $1.2 billion purchase last year of Israel’s Haifa Port by India’s Adani Group and an Israeli partner has deepened connections between the two countries, which are negotiating a free-trade agreement. As Cook puts it, “The evolution of India’s place in the Middle East reflects the changing international order and the willingness — perhaps even eagerness — of countries in the region to benefit from the new multipolarity.”
While cultivating its ties with India, Saudi Arabia hasn’t veered from its focus on China. The Financial Times noted that the kingdom sent one of the biggest delegations to last week’s World Economic Forum in Tianjin, China, known as the “Summer Davos.” Saudi Arabia “is keen to receive Chinese help to diversify its economy and wants investments beyond the traditional oil, refining and telecommunications sectors, in industries ranging from steel to internet platforms, gaming and tourism,” the FT said.
Now that Saudi Arabia’s Public Investment Fund has agreed to merge its LIV Golf league with the PGA Tour, the kingdom is further expanding its range of interest in professional sports. Both the men’s and women’s professional tennis tours have acknowledged talking to the Saudi sovereign wealth fund about potential investment that would provide financial stability for the organizations and fatten players’ prize money.
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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CYBER COMBAT
UAE, Israel battle computer hackers with ‘Crystal Ball’ platform
Fighting computer crime together has helped reinforce ties between the United Arab Emirates and Israel since they signed a normalization agreement almost three years ago, the UAE’s head of cybersecurity, Mohamed Al Kuwaiti, said. Visiting Tel Aviv last week for the annual Cyber Week conference, Al Kuwait introduced the “Crystal Ball” project, a digital platform for detecting and repelling computer attacks, Shoshanna Solomon reports for The Circuit.
Common threats: Microsoft, Israel’s Rafael Advanced Defense Systems and Abu Dhabi-based CPX are providing the technological backbone, and an unspecified number of countries will also participate. “Cyberthreats do not distinguish between nations, do not distinguish between entities or people,” Al Kuwaiti said on Tuesday at the Tel Aviv University gathering. “That is why we need to unite against those threats, and the Crystal Ball, that we are aiming for the whole community, will be the first step toward that.”
Netanyahu chat: Al Kuwaiti, who met with Israeli Prime Minister Benjamin Netanyahu on Monday as part of a group of national cyber directors attending the conference, said the platform will enable partner countries to “easily and seamlessly share information.” The collaborative international effort will be strengthened by the combination of abilities, processing power and volume of data, he said.
Under attack: The mission is to “design, deploy and enable regional intelligence enhancement” through collaboration and knowledge-sharing to combat national-level cyberthreats, according to a slide Al Kuwaiti showed during his presentation. He said the value of cooperation between the two countries was demonstrated recently when they worked together to ward off a DDOS (distributed denial of service) attack on their networks.
Shin Bet chat: The UAE and Israel normalized diplomatic relations as part of the September 2020 Abraham Accords, leading to the bolstering of both commercial and strategic ties between the countries. The meeting with Netanyahu was held at the headquarters of the Israel Security Agency, or Shin Bet, whose director, Ronen Bar, spoke at the Cyber Week conference about the agency’s increasing use of artificial intelligence.
DRY WELL
Growing recovery in world tech investment leaves Israeli startups behind
Israel’s tech industry is lagging behind the U.S. and Europe in attracting venture capital even as breakthroughs in artificial intelligence are generating renewed investment in startups, The Circuit’s Jonathan Ferziger reports. Companies in Israel raised $3.7 billion in the first six months of 2023 – the lowest amount of technology investment at the midyear point since 2018, according to a survey by the Start-Up Nation Policy Institute (SNPI). That represents a 68% drop in financing from the same period last year.
Declining deals: Drilling down further, a report by the IVC research center, an industry group, and Bank Leumi’s LeumiTech unit indicated that the 100 fundraising deals recorded in the second quarter of 2023 represented a 48% decline from the corresponding period last year. Second-quarter funding was down 65% from the same quarter in 2022. The SNPI report suggested that perceptions of instability in Israel stemming from government efforts to overhaul the judicial system and widespread protests against the proposals continue to chill investment.
Nasdaq gap: “We are concerned that local unrest could cut off Israel’s high-tech industry from the global technology sector’s recovery, making it less competitive during this crucial time,“ the policy institute said. The government’s Israel Innovation Authority added its own note of caution in a midyear report, citing a recovery by technology stocks in the U.S. that has not included Israeli companies. The Nasdaq 100 technology sector index rose 23.7% in the first quarter, compared to Israeli companies on the Nasdaq that increased only 10.8%.
Israel detached: “In light of the increase in the NASDAQ since the beginning of the year, the normal expectation would have been for an increase in fundraising and employee recruitment in Israel already during the summer months of 2023,” the government report said. “However, according to indicators presented so far, and which are reinforced by data for April and May, there is a genuine concern that Israeli high-tech will become detached from global trends.”
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Circuit Chatter
Miami Rival: Saudi Crown Prince Mohammed bin Salman, speaking in English on the Discovery Channel. said the new Neom mega-city will rival Miami as an entertainment capital and he will prove that skeptics of the $500 billion project are wrong.
Latin Food: Abu Dhabi’s Sheikh Tahnoon bin Zayed and Colombian banker and real estate developer Jaime Gilinski, the new owners of Grupo Nutresa, plan to turn the food company into a global business.
Renewable Goals: Bahraini officials said they expect to meet their goal of making renewable energy produce 5% of electricity needs by 2025 and 20% by 2035.
Startup Kingdom: Saudi Arabia’s Falak Investment Hub said it hopes to provide more money for startups to fulfill the kingdom’s vision of becoming a technology leader.
No to OPEC: Guyana, the world’s fastest-growing oil producer, rebuffed invitations to join OPEC as it seeks to quickly maximize production, the Wall Street Journal reported.
Charging Morocco: Guangzhou Tinci Materials Technology, one of China’s leading manufacturers of materials for electric vehicle batteries, will open a plant in Morocco.
Law Firm Magnet: Kirkland & Ellis is among top international law firms that may open an office in Saudi Arabia amid a boom in mergers and acquisitions in the kingdom, the Financial Times reported.
Closing Circuit
French Fund: The Abu Dhabi Investment Authority agreed to invest $6 billion in a fund run by French investment firm Ardian that plans to buy stakes in private equity funds.
Freeze-Dried: Thrive Foods, a maker of freeze-dried food partially owned by Abu Dhabi-based Mubadala, agreed to acquire German freeze-dried ingredient company Groneweg.
Hydrogen Power: Kuwait Petroleum International laid the foundation to build Rome’s first refueling station for hydrogen-power buses and other vehicles.
Egyptian Satellite: China’s aerospace company completed assembly and testing of Egypt’s remote sensing satellite MisrSat 2, funded by part of a $92 million Chinese grant.
Classified Data: Cyera, an Israeli cybersecurity startup, raised $100 million in a Series B funding round that valued the company at $500 million.
Out Fishing: Indonesia’s eFishery, an aquatech startup, raised $47.7 million in a Series D funding round, bringing its valuation to more than $1.3 billion.
Spanish Ships: Abu Dhabi’s AD Ports Group completed the acquisition of Noatum, a logistics services company based in Spain, for about $720 million.
Offshore Gas: Chevron and its partners said they will invest an additional $568 million in Israel’s Leviathan offshore gas field to build a third pipeline.
Canada Boost: Canada’s investments in the UAE have tripled to a record $6.8 billion over the past two years since the coronavirus pandemic.
Stealth Fleet: Israel plans to buy an additional squadron of F35i stealth fighter jets from the U.S. at a cost of about $3 billion.
AI Drug: Insilico, a Hong Kong-based drugmaker backed by the UAE, started testing a treatment for chronic lung disease discovered through artificial intelligence.
Stealth Fleet: Israel plans to buy an additional squadron of F35i stealth fighter jets from the U.S. at a cost of about $3 billion.
Crypto Expansion: Julius Baer will expand crypto wealth management services in Dubai, the first major foray outside Switzerland for its digital assets business, Bloomberg reported.
On the Circuit
Daniel B. Shapiro, the former U.S. ambassador to Israel, was appointed as the U.S. State Department’s senior adviser for regional integration, with the mission “to deepen and broaden the Abraham Accords.”
Vladimir Lisin, who is worth an estimated $23 billion, transferred his stakes in Russia’s biggest steelmaker and a rail freight company to firms registered in Abu Dhabi, Bloomberg reported.
André Azoulay, an adviser to Morocco’s King Mohammed VI and longtime leader of the Moroccan Jewish community, was awarded Israel’s Medal of Honor.
Billie Jean King, founder of the Women’s Tennis Association and 12-time Grand Slam champion, told The National she welcomes Saudi Arabia’s interest in hosting and sponsoring international tennis tournaments.
Ahead on the Circuit
July 3, Tel Aviv, Israel: SubMed 2023. Medical device manufacturers meet investors and healthcare industry leaders at annual conference. Expo TLV.
July 4-5, Tel Aviv, Israel: Future of AI. Conference bringing together investors, corporate executives and government officials on advances in artificial intelligence. Expo Tel Aviv.
July 20, Dubai, UAE: Blockchain Banking Fest. Entrepreneurs discuss impact of blockchain on banking and payments. DIFC Innovation Hub.
July 28-Aug. 6, Jerash, Jordan: Jerash Festival. Annual gathering at ancient city’s Roman ruins features concerts, plays, fashion shows and art exhibitions. Jerash archeological site.
Sept. 14-15, Abu Dhabi, UAE: Super Angels Summit 2023. Angel investors meet with startup founders at annual conference. Abu Dhabi National Exhibition Centre.
Culture Circuit
Saudi Runway: Saudi Arabia will stage its first Saudi Fashion Week in October, gathering top designers from around the world to show their collections in the capital city of Riyadh. The Saudi Fashion Commission, which is organizing the event, aims to promote domestic designers who are on par with fashion houses in Paris, New York and Milan.
Soccer Bid: The Qatari investment group led by Sheikh Jassim Bin Hammad Al Thani is growing increasingly confident that it will win the bidding war for Manchester United that is likely to fetch more than $5 billion for the U.K. soccer team, Bloomberg reports.
Batter Up: Baseball United, a fledgling league aimed at promoting professional baseball in the Gulf and southern Asia, signed a partnership deal with the Emirates Cricket Board in preparation for its initial season. The Dubai-based league plans to stage an eight-game exhibition tournament in November with teams from the UAE, India and Pakistan. Organizers have been talking to potential team owners in Saudi Arabia and Qatar.
‘Golda’ Returns: The Jerusalem Film Festival opens July 13 for an 11-day run, leading off with a screening at the Sultan’s Pool amphitheater of “Golda” starring Helen Mirren in a biopic about the late Israeli prime minister.
