The Weekly Circuit
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Saudi Arabia’s economy, the world’s fastest growing in 2022, is likely to contract this year as the Gulf kingdom cuts back on oil production and invests in cultivating new industries such as solar power, tourism and professional sports. In a dramatic turnaround from last year’s growth of close to 9%, the $1 trillion Saudi economy is projected to shrink by 1%, which would make it the worst performer in the G20 after Argentina, according to Bloomberg.
To expand its sports interests, the kingdom plans to launch a multibillion-dollar investment company connected to its sovereign wealth fund, the Financial Times reported. The agreement last month to merge the Saudi-backed LIV Golf league with the PGA Tour is spurring proposals for other investments in international soccer, tennis, cycling, pro wrestling and other sports.
On Saudi Arabia’s western shoreline, Red Sea Global is installing 750,000 solar panels to power 16 new resort hotels it’s building with adjoining shopping malls. The company is also building the world’s largest battery storage facility with a capacity of 1,200 megawatts per hour. Some 50 resorts are under development by Red Sea, with up to 8,000 hotel rooms and more than 1,000 residential buildings spread across 22 islands and six inland areas.
Even as the Saudi economy slows, its growing financial ties with China are taking up some of the slack. After Chinese leader Xi Jinping visited the country and met with Crown Prince Mohammed bin Salman, the two countries signed a series of agreements that could be worth around $50 billion, the Wall Street Journal reported. At the Arab-China Business Conference in Riyadh last month, Hong Kong Stock Exchange CEO Nicolas Aguzin predicted that the Middle East’s biggest sovereign wealth funds could allocate up to $2 trillion of investments to China by 2030.
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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BOUND FOR DUBAI
AllianceBernstein joins UAE’s new wave of investment firms
AllianceBernstein, one of the largest U.S. money-management firms, plans to open a regional office in the United Arab Emirates to tap into the rising tide of investments flowing through the Gulf, The Circuit’s Jonathan Ferziger reports.
Details: The Nashville, Tenn.-based business, which has $676 billion in assets under management, said last week that it received a regulatory license to operate in the Dubai International Financial Centre, a special economic zone within the UAE’s biggest city. More than 300 asset- and wealth-management firms have offices in the DIFC.
On the ground: The new branch will be led by Jean-Paul Hobeika, managing director for Middle East institutions, who was named senior executive officer, AllianceBernstein said. He will work with Eduard van Nes, head of intermediary sales for the Middle East and Africa, who recently moved to Dubai. The firm also has an Israeli office in Tel Aviv.
Target clients: Setting up in the UAE will spur AllianceBernstein’s regional growth and “improve our ability to serve clients through proximity as well as capturing important market opportunities,” said Willem van Gijzen, head of Central Europe, Middle East and Africa institutions at the firm. The new office will target institutional clients, distribution partners and family offices with its asset management services, the firm said.
Relocated Russians: The UAE’s sovereign wealth funds manage more than $1.5 trillion in assets. A proliferation of mergers and acquisitions across the Gulf, as well as the money brought by Russians relocating because of international sanctions have bolstered financial and property markets.
Forecast raised: Capital inflow to the UAE rose by 10% last year to $23 billion. Investment banks and asset management firms have also been opening new offices in Saudi Arabia, which has made establishing local branches a prerequisite for government business. The World Bank raised its growth forecast for the UAE to 3.4% from 1.1%, based on higher oil output, recent economic reforms and new investments.
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Moroccan business conference draws MENA’S female business leaders
In a bid to strengthen normalization efforts across the Middle East and North Africa, Morocco, Bahrain, the United Arab Emirates and Israel are promoting business ties among women. The most recent joint activity was a three-day conference in May that took place in Marrakesh, Morocco, and drew nearly 100 female business leaders, The Circuit reports.
Shared challenges: Besides networking, the gathering explored women’s access to education, financial security and opportunities for leadership. In a series of panel discussions and workshops, the conference focused on investments, corporate funding and infrastructure development. Participants also discussed shared challenges for women in the Middle East and Africa and the impact of geography, culture and religion.
Alone at the table: The conference was organized by Start-Up Nation Central, a nonprofit group that promotes Israeli tech companies, and Morocco’s Consensus Public Relations firm. Among the participants were women from Bahrain, Benin, Egypt, Israel, Jordan, Kenya, Morocco, Nigeria, South Africa, Sudan, United Arab Emirates and the U.S., organizers said. “What we were hearing often is that these women, particularly in the countries that we targeted, are often alone around decision-making tables,” Aviva Steinberger, SNC’s director of innovation diplomacy, told The Circuit. “The goals of this event were to connect these women at a professional level and at a personal level.”
Women’s solidarity: The conference, which was titled “Women Connect to Innovate,” was supported by a range of companies and organizations including Google, Women in Tech, Morocco’s Foundation for Research, Development and Innovation in Science and Engineering and the Mohammed VI Polytechnic University. Morocco’s minister of solidarity and social integration, Aawatif Hayar, hosted a dinner for the conference. While the workshops were going on, three artists from Morocco, Israel and Senegal created a graffiti wall dedicated to women’s solidarity and international cooperation.
Trade Leader: Foreign direct investment into the UAE rose to a record $23 billion in 2022, leading all six countries in the Gulf Cooperation Council.
Poaching Managers: HSBC is in talks to poach Aladdin Hangari and his team from Credit Suisse after the Swiss bank’s acquisition by UBS, the Financial Times reported. Abu Dhabi Commercial Bank, meanwhile, hired Citigroup’s Sami Tabbarah as head of investment banking, Bloomberg reported.
Lebanese Rebound: Business conditions in Lebanon’s private sector improved to a 10-year high in June despite the country’s soaring inflation and political deadlock.
Aramco India: Saudi Aramco is scouting for new investment opportunities in India amid a surge in demand for crude oil in the South Asian country, Bloomberg reported.
Iranian Drilling: Kuwait invited Iran to fresh talks about their sea borders after Tehran said it was ready to start drilling in a disputed gas field in the Gulf.
Islamic Cybercurrency: IslamicCoin, the world’s first halal digital asset, is launching a new platform called HaqqPad designed to offer Shariah-compliant decentralized apps.
MBC IPO: MBC Group, the Middle East’s biggest broadcaster, is planning meetings with investors to prepare for an IPO in Saudi Arabia, Bloomberg reported.
Vegan Protein: India’s Kothari Fermentation and subcontractor Biochem signed an agreement with Israeli startup Nextferm to produce its yeast-based vegan protein.
Active Ingredients: Israel’s Teva Pharmaceutical Industries, the largest maker of generic drugs, is weighing options for its active ingredients business, including a possible sale, Bloomberg reported.
Property Shopping: Dubai’s Al Habtoor Group is looking to buy commercial property in Slovakia, the Czech Republic and Romania, The National reported.
New Vision: Qatar is using its wealth to chart a new course, following last year’s construction boom in advance of hosting the soccer World Cup, the Financial Times reported.
Hot Homes: Wealthy buyers keep buying property in Dubai, with 176 homes worth at least $10 million sold during the first half of 2023, Bloomberg reported.
Iraqi Boost: The UAE and Saudi Arabia agreed to invest $3 billion each to bolster trade with Iraq and help restore its economy.
Fit to Invest: Affinity Partners, the private equity firm founded by former U.S. President Donald Trump’s son-in-law Jared Kushner, said it will invest in German fitness-tech company EGYM.
Healthcare Sell-Off: Aster DM Healthcare, which operates in India and the UAE, is in talks with Fajr Capital and other parties to sell a majority stake in its Gulf business.
Flying Qatar: Qatar Airways posted record profit in the fiscal year 2022/-23 of $1.2 billion, reflecting increased traffic while it hosted the World Cup soccer tournament.
Messy Burger: Rebel Foods, the Indian company that owns The Messy Burger and other “cloud kitchen” brands, outlined plans to open in Saudi Arabia.
Digital Chill: Abu Dhabi’s Mubadala Investment and funds managed by KKR acquired Canada-based CoolIT Systems, which maintains optimal temperatures for computers.
EV Fires: General Motors acquired Algolion, an Israeli startup that can detect potential hazards in battery cells and prevent fires in electric vehicles.
Chemical Merger: Abu Dhabi’s ADNOC is in talks with Austria’s OMV about merging the Borouge and Borealis companies in which they both hold stakes to create a $30 billion giant in the chemicals and plastics industries.
Test-Drive: WeRide, a Chinese maker of self-driving cars, secured a license from the UAE to test its vehicles on the country’s roads.
On the Circuit
Mohammed Al Suwaidi, CEO of Abu Dhabi’s ADQ holding company and chairman of Abu Dhabi National Energy Co., was appointed as the UAE’s minister of investment.
Chuka Umunna, JPMorgan’s head of green investments in the Europe, Middle East and Africa region, told Reuters that critics should stop “carping from the sidelines” about the UAE hosting the COP28 climate talks and let it show leadership in decarbonising the energy sector.
Monsignor Pierbattista Pizzaballa, the Latin patriarch of Jerusalem and the Vatican’s top representative in the Middle East, was elevated to cardinal by Pope Francis.
Ahead on the Circuit
July 10, Dubai, UAE: Inaugural Lab-Grown Diamond Symposium. International dealers, experts discuss latest innovations and the industry’s future. Atlantis, The Palm.
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.
F1 Debut: Formula One announced its 2024 schedule, starting in Bahrain and Saudi Arabia, where the March 2 and March 9 races will take place on Saturdays to accommodate Ramadan observances. The season ends Dec. 8 in Abu Dhabi.
Pedal for Peace: Top world cyclists from the Tour de France, Giro d’Italia and Vuelta a España will be invited to compete in the new “Middle East Peace Race,” which is being organized to take place in October, Cyclingnews reported. The three-day competition through courses in Israel, Bahrain and the UAE was conceived in part by Israeli billionaire Sylvan Adams, owner of the Israel-Premier Tech cycling team.
Gamers and Borders: A team of Israeli gamers arrived in Saudi Arabia to take part in a video game version of the FIFA World Cup soccer tournament that runs July 16-19. Although Israel and Saudi Arabia don’t have official ties, the three team members, their trainer and a deputy manager were allowed to enter on their Israeli passports in a diplomatic process brokered by FIFA officials.