The Weekly Circuit
👋 Good Monday morning in the Middle East!
As the world bakes through one of the hottest summers ever, people across the MENA region are enduring record highs day after day. Temperatures in Morocco soared above 50 C (120 F) for the first time, setting a record on Friday in the southern coastal city of Agadir.
In Riyadh, where daytime temperatures routinely reach 45 C, Kansas-based Textron Aviation won a contract to supply aircraft for Saudi Arabia’s cloud-seeding program that will aim to cool off the parched desert kingdom later this year with more abundant rainfall.
The heat hasn’t put a dent in Dubai’s resurgent tourism,which in the first half of the year surpassed the pre-pandemic level of 8.4 million visitors recorded during the first six months of 2019. The flood of tourists visiting in 2023 is on track to set a record, according to the city-state’s Department of Economy and Tourism.
Years of feverish construction activity in Qatar running up to the World Cup soccer championship has left the gas-rich Gulf state with a glut of residential properties. A new report on Qatari real estate finds that home prices and rental fees have dropped amid rising interest rates and a shrinking mortgage market.
America’s favorite summer sport is coming to the Gulf in the form of Baseball United, the first professional league focused on the Middle East and Indian subcontinent. The two teams in the UAE will be called the Dubai Wolves and the Abu Dhabi Falcons. They will face off in November at Dubai International Stadium against the Mumbai Cobras and the Karachi Monarchs.
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Oil, tech and Tom Cruise fuel surge in Mideast IPOs
When Jamjoom Pharma sold a 30% stake in its generic drug business on Saudi Arabia’s Tadawul stock exchange in June, the company raised $336 million and generated new interest in the Gulf amid an IPO drought in other markets, The Circuit’s Jonathan Ferziger reports. The Saudi listing came two weeks after an IPO in the United Arab Emirates by Adnoc Logistics and Services, a subsidiary of the national oil company, raised $769 million.
Record year: Likely to follow soon is an initial share sale by Abu Dhabi-based Lulu Group International, which operates hyper-supermarkets across the Middle East and obtained $2.7 billion from banks this month to refinance debt. The new crop of stock offerings follows a record year of 51 IPOs across the Middle East and North Africa region that has brought investors flocking to Dubai, Riyadh and other Gulf financial centers. Led by sovereign wealth funds in Saudi Arabia, the United Arab Emirates and Qatar, whose assets have ballooned with high oil and gas prices, companies are recognizing new opportunities to raise cash.
Breaking barriers: “It starts with a lot of noise and then the noise turns into actual investment,” Ryan Lemand, co-founder and CEO of Neovision Wealth Management in Abu Dhabi, told The Circuit. The noise has been amplified by the massive construction projects, expanding government spending and barrier-breaking foreign activities, such as the merger of the Saudi-backed LIV Golf tournament with the PGA Tour and the UAE’s cultivating Hollywood stars such as Tom Cruise, whose latest “Mission Impossible” movie was partly filmed in Abu Dhabi.
Tax-free: Also contributing to the buzz was the UAE’s agile management of the COVID-19 pandemic and its tax-free economy, which drew Russian tycoons, crypto billionaires and investment bankers who have sparked a boom in real estate sales. In turn, asset managers such as AllianceBernstein and Brevan Howard are opening new offices in the country, along with dozens of hedge funds.
Cloud kitchens: Among the IPOs currently in the pipeline are Ducab, a Dubai-based maker of cables and wiring; Alef Education, an education technology business in Abu Dhabi; and Dubai Taxi Corp., investment managers said. Other Emirati companies that may soon start selling shares include Pure Harvest, which grows crops in arid environments; Kitopi, a platform for managing restaurants’ cloud kitchens; and Dubizzle, an online classified advertising firm.
Saudi-Israeli joint venture aims to boost solar power use in Gulf
SolarEdge Technologies, one of Israel’s largest companies trading on the Nasdaq, is forming a joint renewable energy venture with a business group in Saudi Arabia amid White House efforts to broker a normalization pact between the two countries, The Circuit reports. The new company created by SolarEdge and Ajlan & Bros Holding will be based in the Saudi capital of Riyadh and work to accelerate the adoption of solar power in the kingdom, the two partners said in a July 31 statement.
Energy-efficient: SolarEdge, an S&P 500 company that maintains headquarters in both Herzliya, Israel, and Milpitas, Calif., produces solar inverters, which manage photovoltaic cells to make renewable energy more efficient. Ajlan is the majority shareholder. The announcement came more than a year after the Saudi and Israeli companies signed a cooperation agreement that provided little detail of what the alliance would entail. It was one of 13 deals between Saudi and U.S. companies that were announced while U.S. President Joseph Biden visited Saudi Arabia in July 2022.
Saudi vision: Zvi Lando, SolarEdge’s Israeli CEO, said in the statement that his company was “honored to partner with Ajlan & Bros Holding and to support Saudi Arabia’s journey towards Vision 2030” – referring to a document outlining the kingdom’s efforts to wean the economy off oil and develop industries ranging from finance and tourism to sports and entertainment. “SolarEdge is committed to driving the clean energy transition on a global scale, exemplified by this JV which will provide local enterprises in Saudi Arabia,” Lando said.
Normalization pact: Israel and Saudi Arabia do not have diplomatic relations and their citizens are generally barred from each other’s territory unless they have second passports issued by other countries. Biden, who has repeatedly said he would like to facilitate an agreement between Israel and Saudi Arabia that would normalize relations between the two countries, sent senior aides to Riyadh last month to discuss a possible deal.
Female Focus: Saudi Arabia’s Public Investment Fund launched a new company called Kayanee focused on women’s health, from fitness and nutrition to sportswear.
Retail Backing: Qatar’s sovereign wealth fund may buy a stake in India’s Reliance Retail Ventures conglomerate, the Financial Times reports.
Pay Guide: The recruitment agency MCG Talent published a salary guide for Saudi Arabia, listing monthly pay for jobs in marketing, communications and technology.
Solar Supplier: Morocco is marketing itself as a supplier of solar energy to Europe, pointing to its year-round sunshine, wide open space and access to EU funding.
Soccer Stream: Billionaire Len Blavatnik’s DAZN is close to acquiring broadcast rights for Saudi Pro League soccer in the UK, Germany and Austria, Bloomberg reports.
Pakistani Assets: Pakistan may sell state assets to Saudi Arabia, the UAE and Qatar to bring in foreign currency and stabilize the economy, the Wall Street Journal reports.
Egyptian Woes: Citibank expressed concern that Egypt is lagging targets for privatizing state companies, putting at risk an IMF economic rescue plan, Bloomberg reports.
Tastier Dates: Saudi Arabia’s Public Investment Fund established a new company, Al Madinah Heritage Co., to improve the quality and production capacity of its Ajwa dates.
Profit Slide: Saudi Aramco reported $30 billion in net profit for the second quarter, a 38% drop from the same period last year amid declining oil prices.
Property Giant: Abu Dhabi will consolidate its major real estate assets under a new company called Q Holding worth about $12 billion.
Debt financing: Saudi Arabia’s Rawabi Energy secured $1.9 billion worth of syndicated loans to help accelerate the company’s growth and refinance its debt.
Hail Africa: Moove, a Nigerian startup that finances car purchases for drivers of Uber and other firms, raised $76 million from investors including Mubadala and BlackRock.
Telecom Stake: Abu Dhabi-based Emirates Telecommunications Group said it will pay $2.4 billion for a controlling stake in some of PPF Telecom’s assets in Eastern Europe.
Gulf Track: Israeli Prime Minister Benjamin Netanyahu said the country will invest $27 billion to expand its rail network and possibly link up with a route to Saudi Arabia.
China Concerns: U.S. national security officials are reviewing the proposed $3 billion takeover of New York’s Fortress Investment Group by the Mubadala sovereign wealth fund because of concerns about the UAE’s ties to China, the Financial Times reports.
Metal Deal: Brazilian mining company Vale is close to selling a 10% stake in its $25 billion base metals unit to a Saudi joint venture, the Wall Street Journal reports.
Amazon Pledge: Amazon said it will invest $7.2 billion in Israel over the next 14 years as it launched a set of Amazon Web Services data centers in the country.
Wind Power: Spanish utility Iberdrola sold a 49% stake in its Baltic Sea offshore wind farm to Abu Dhabi’s Masdar renewable energy company for about $415 million.
Cancer Drugs: Georgiamune, a Gaithersburg, Md., biotech startup focused on cancer and autoimmune disease treatments, raised $75 million, led by General Catalyst and the Parker Institute, and with participation from the UAE’s Mubadala.
Cloud Cover: Cloud data company Rubrik will pay as much as $250 million to buy Israeli-founded Laminar, which specializes in cloud data security, TechCrunch reports.
On the Circuit
Darren Woods, chairman and CEO of ExxonMobil, visited Abu Dhabi to meet with Crown Prince Khaled bin Mohamed for a discussion that touched on energy partnerships and decarbonization efforts.
Riad Salemeh, Lebanon’s former central bank governor for 30 years, is the target of new sanctions by the U.S., U.K. and Canada for “unlawful self-enrichment schemes.”
Yosef Zinger, a partner at Tel Aviv law firm Herzog Fox & Neeman, was confirmed as chairman of the Israel Securities Authority, replacing Anat Guetta.
Eugene Kandel, a former economic adviser to Israeli Prime Minister Benjamin Netanyahu and CEO of Start-Up Nation Central, which promotes Israeli technology, was named chairman of the Tel Aviv Stock Exchange, replacing Arik Steinberg.
Kylian Mbappé, star of French soccer’s Paris-St. Germain club, was reportedly offered a world-record $332 million to play for Saudi Arabia’s Al Hilal. The deal prompted NBA star LeBron James to quip on Twitter that he could also be wooed with a Saudi contract.
Max Karpel, a hedge fund lawyer and head of Lowenstein Sandler’s Israel practice, was hired by Akin Gump Strauss Hauer & Feld.
Arkady Volozh, the co-founder of Russian tech company Yandex who lives in Israel, spoke out against the war in Ukraine, calling Russia’s invasion “barbaric.”
Ahead on the Circuit
Sept. 5-6, Tel Aviv, Israel: Agro-Mashov Conference 2023. Growers, buyers, retailers, wholesalers, importers gather for annual Israeli agricultural conference. Expo Tel Aviv.
Sept. 11-13, Riyadh, Saudi Arabia: Saudi Water Expo. Investors and leaders from industry and government discuss prudent use of the region’s water resources. Riyadh International Convention and Exhibition Centre.
Sept. 13-14, Riyadh, Saudi Arabia: IDC Saudi Arabia CIO Summit. Chief information officers explore new digital trends in business. Fairmont Riyadh Hotel.
Sept. 14-15, Abu Dhabi, UAE: Super Angels Summit 2023. Angel investors meet with startup founders at annual conference. Abu Dhabi National Exhibition Centre.
Sept. 19, Dubai, UAE: Middle East Investment Conference. Asset owners, managers, investors discuss latest trends in regional market. Ritz Carlton, DIFC.
Oct. 2-5, Abu Dhabi, UAE: ADIPEC 2023: Abu Dhabi International Petroleum Exhibition & Conference brings oil industry together to discuss trends and strategy. Abu Dhabi National Exhibition Centre.
Oct. 11-12, Dubai, UAE. Dubai Assembly for Generative AI. UAE-sponsored conference drawing government officials, corporate executives, investors to debate opportunities and risks of artificial intelligence, Museum of the Future.
Taste of Damascus: Syrian cuisine is becoming trendy across the Middle East, as well as in London and Los Angeles, Bloomberg reports. Underlining the development was the naming of Orfali Brothers Bistro’s to the No. 1 spot in the Middle East and North Africa region on the annual list compiled by the “World’s 50 Best Restaurants.” In London, Imad’s Syrian Kitchen’s overflow crowds have led its move to a larger space on Carnaby Street. Other notable Syrian restaurants are SYKO in Brooklyn, N.Y., and the pop-up restaurant Nawal in Los Angeles.
Golf Island: Saudi Arabia will open a golf course on the seahorse-shaped artificial island of Sindalah, offshore in the Red Sea from its Neom megacity development. The nine-hole, 6,474-yard par 70 golf course, designed by Robert Trent Jones Jr., will include a 280-yard driving range and state-of-the-art golf practice suites with advanced ball tracking technology.
Barbie Banned: Kuwait will not allow the blockbuster movie “Barbie” to be shown in theaters because it promotes “ideas and beliefs that are alien to Kuwaiti society” – an apparent reference to gay characters portrayed in the film. The movie, which has earned more than $1 billion, will debut later this month in Saudi Arabia, the United Arab Emirates and Qatar.