The Weekly Circuit
š Hello from the Middle East!
This week, we’re looking at Saudi Arabiaās campaign to become the new Mideast corporate HQ, AD Ports snapping up Spanish cargo terminals and Indian billionaire Gautam Adaniās tie-up with the UAEās Sirius International for AI development. But first a glance at the year ahead.
As a new year dawns, anticipated lower interest rates and ongoing geopolitical tension are driving the outlook for the Middle East in 2024. Gulf equity markets are looking to shake off a largely sluggish year and oil markets are rebounding, with drama on the Red Sea expected to prop up oil prices, according to analysts.
The GCC equity market index closed out 2023 with one of the smallest annual gains globally, registering a rise of 3.7% after recording mixed performances at the country level, according to Kamco Invest, a Kuwaiti investment firm. Out of the seven exchanges, four recorded gains while three closed in the red. Dubai was the best performing market in the region with a gain of 22% followed by Saudi Arabia ā also with a double-digit gain of 14% ā mirroring other major global markets which closed in double-digits. Kuwait All Share index and Abu Dhabiās ADX were both down around 6% at the close of the year.
UAE Minister of State for Foreign Trade Thani Al Zeyoudi wrote in an op-ed for The National that trade was one of the nationās triumphs in 2023 as it gears up to host the World Trade Organizationās 13th Ministerial Conference in February. The country has a goal of more than doubling foreign trade to $1 trillion by 2031 and non-oil exports to $218 billion.
Those efforts got a shot in the arm on Monday as the UAE, Saudi Arabia, Egypt and Iran, along with Ethiopia, joined BRICS. China and India, two key members of the emerging markets bloc, are the second and third biggest consumers of oil in the world with strong ties to the Gulf. Analysts predict Saudi Arabia and the UAE will be granted easier access to the growth markets of the BRICS countries on more favorable terms.
Hong Kong-based Regal Hotels International Holdings will partner with Saudi Arabiaās Ministry of Investment in a $5 billion plan to build about 100 hotels around the world under environmentally conscious principles, with 30 of them in the Saudi kingdom, Poman Lo, the companyās managing director, told Bloomberg. Lo said the deal illustrates Hong Kongās ability to be a āsuper-connectorā between China and Saudi Arabia.
Abu Dhabiās International Holding Co. is launching a new $27 billion holding company called 2PointZero that will operate in the fields of artificial intelligence, financial services, mineral management and cryptocurrency. The government-owned IHC is led by UAE National Security Advisor Sheikh Tahnoon bin Zayed al-Nahyan, chairman of the ADIA sovereign wealth fund and brother of the UAEās president.
Meanwhile, KLP, Norwayās $70 billion pension fund, said it will stop investing in Saudi Aramco because of āa lack of climate mitigation and energy transition plans.” The fund said it divested $15 million in assets from Gulf firms and will halt investment in 11 telecom and real estate companies, citing an āunacceptably highā risk of government surveillance and human rights abuses in their countries.
Welcome to The Weekly Circuit. Read on for the stories, deals and players at the top of the news across the MENA business landscape. Please send comments and story tips to [email protected].
MIDEAST HUB
Will Saudi Arabiaās plan work to become the Middle Eastās new corporate HQ?
The deadline has passed for international companies vying for big contracts with Saudi Arabia to relocate their corporate headquarters to the kingdom, The Circuit‘s Kelsey Warner reports.
Rivaling UAE: From Jan. 1, government-backed entities are restricted from doing business with large foreign firms that donāt have regional headquarters in the country, as Saudi Arabia looks to diversify its economy away from oil. In effect, the kingdom is squaring off with the UAE, which has long held the majority of regional headquarters and attracted the lionās share of corporate expenditure and foreign investment.
No pretending: āA superficial nameplate saying āthis is the regional headquartersā will not fly,ā Saudi Arabiaās Minister of Investment Khalid Al-Falih said back in 2021, when the mandate was first announced. The expectation is that businesses will employ executive-level staff and oversee operations in other Middle East countries from their kingdom-based offices.
Looking for loopholes: Ultimately Saudi Arabia is aiming to lure 480 companies to open regional HQs by 2030. For context, as of 2021, 196 of the Fortune 500 had a dedicated office to serve the Middle East and Africa, with 70% opting to locate in Dubai. Analysts and recruitment experts predict executives are scrutinizing the policy for loopholes.
Sovereign Circuit
Public Investment Fund: Saudi Arabiaās PIF was the worldās most active sovereign wealth fund in 2023, investing $31.5 billion and leaping ahead of Singaporeās GIC fund in an annual ranking compiled by Global SWF. Total investment by sovereign funds declined by about 20% to $123.8 billion. The PIFās mining company Maaden said it discovered several new gold deposits south of its Mansourah Massarah gold mine and intends to start intensified drilling in the area.
Gulf Investment Corporation: GIC, an investment company equally owned by each of the six GCC governments and incorporated in Kuwait, is part of a $408 million consortium to develop a major water project in the Makkah region of Saudi Arabia, led by the ADQ-backed TAQA energy company.
ADQ: AD Ports Group, which is 75% owned by ADQ, has confirmed that its Spanish unit Noatum Terminals has acquired full ownership of APM Terminals CastellĆ³n in Spain for $11 million. The acquisition agreement with APM Terminals has already obtained regulatory and stakeholder approvals, and the change of ownership will take place immediately, AD Ports said in a statement on Tuesday. ADQ also signed a multi-year sponsorship deal with the Egyptian Premier Leagueās Pyramids Football Club.
Qatar Investment Authority: An updated indictment of U.S. Senator Bob Menendez alleges that the New York Democrat introduced an unidentified member of the Qatari royal family who is a principal in the fundās Qatar Investment Co. to a New Jersey businessman before the company invested millions of dollars in the businessmanās real estate project. Menendez has pleaded not guilty in the case.
Circuit Chatter
š¢ļø Back in Session: OPEC+ will resume regular oil market monitoring meetings with an online session in early February, following a series of production cuts enacted when it convened in November, Bloomberg reports.
šµ Rate Cut: The Bank of Israel lowered its benchmark interest rate by 25 basis points to 4.5%, the first developed country to ease monetary policy in almost four years.
šŗšø America in Qatar: The U.S. has quietly reached agreement to keep operating its largest Middle East military base in Qatar for the next 10 years, CNN reports.
š Drug Halt: Kuwaiti health authorities suspended the licensing of private pharmacies
pending new rules on the sale of antidepressants and other psychoactive drugs.
š Orbital Options: Saudi Arabia will hold a two-day conference on future economic opportunities in space and the dangers of space debris, starting Feb. 11.
š° Startup Shield: Israel has set aside $100 million to protect startups from running out of cash as investment has dried up with the Gaza war, the Financial Times reports.
š®š³ AI India: Adani Group, Indian billionaire Gautam Adaniās investment vehicle, joined a venture with Abu Dhabiās Sirius International to develop AI and blockchain products.
š” No Sale: The buying wave by Russians of high-priced Dubai properties is slowing down as the rubleās value declines against the dollar, Bloomberg reports.
š» Show of Support: Palantir, the U.S. data analytics giant founded by Peter Thiel, said it will hold its first board meeting of 2024 in Tel Aviv next week to support Israel.
š« Taking Off: UAE flag carrier Etihad Airways started 2024 with two new routes to India, bringing the airlineās total number of destinations to 10 in the worldās most populous country.Ā
Closing Circuit
ā³ Longer Round: LIV Golf and the PGA Tour have extended a negotiation deadline to agree on terms of a merger deal, originally set for at Dec. 31.
šŖš¬ Egyptian Oil: Dubai-owned Dragon Oil started production from Egyptās Al Wasl field, its first oil discovery in the country and part of a $200 million investment planned through 2026.
š¤ Robot IPO: Micropolis, a Dubai-based startup that makes autonomous mobile robots, filed to raise $37 million through an IPO on the New York Stock Exchange.
š¢ Fun Park Tech: Pomvom, an Israeli tech startup that makes equipment to photograph visitors on amusement park rides, said it would go public on the Nasdaq through a SPAC merger.
š¢ Digital HR: Investcorp Technology Partners, an arm of Bahrain-based alternative asset manager Investcorp is acquiring a majority stake in Germanyās Veda GMBH, a digital platform for managing payroll, recruitment and other human resource functions. Terms of the deal were not disclosed.
š Charging Up: Chinaās BTR New Material said it will invest about $500 million to establish a cathode manufacturing plant for lithium-ion batteries in Morocco.
š Engine Makers: Saudi Engines Manufacturing Co. signed a preliminary agreement with Rolls-Royce to produce engines and generating equipment for the marine and energy industries.
š Shopping Around: Kuwaitās Raha, an e-grocery and logistics startup, plans another fundraising round this year after securing $6.7 million in a 2023 seed financing effort.
āļø Clean Tech: The U.S.-Israeli BIRD foundation has invested $10 million for projects in areas that range from solar power to battery storage and carbon reduction.
Power Circuit
Sheikh Mohammed bin Rashid, Ruler of Dubai and Vice President of the UAE, appeared with other cabinet members at the Arab Strategy Forum on Wednesday in the Dubai International Financial Center.
UAE President Sheikh Mohamed Bin Zayed met in Abu Dhabi on Tuesday with World Health Organization Director-General Tedros Ghebreyesus, discussing efforts to address climate change, global epidemics and support for medical aid to the Gaza Strip.
Egyptian President Abdel-Fattah El-Sisi prodded his prime minister and central bank governor to intensify efforts at attracting foreign investment as the country seeks to meet its obligations under a $3 billion loan agreement with the IMF.
Saudi Crown Prince Mohammed bin Salman delivered the annual royal speech on behalf of King Salman for the first time last Wednesday.
On the Circuit
UAE Investment Minister Mohamed Hassan Alsuwaidi has resigned from the board of ADNOC Distribution. He also serves as CEO of Abu Dhabi sovereign investor ADQ and is chairman of Abu Dhabi-listed utilities company TAQA.
Russian billionaire Roman Abramovich filed a lawsuit against Israelās Mizrahi-Tefahot Bank for freezing his account and blocking a $2.2 million charity donation.
Fahad Al-Jarboa, CEO of Saudia Private, told Arab News that health concerns sparked by COVID-19 have created new opportunities for the global private aviation industry.Haifa Al Kaylani, president and founder of the Arab International Womenās Foundation, was appointed by King Charles as an officer of the Order of the British Empire.
Adiv Baruch was appointed executive chairman of software maker Elad Systems after previously serving as chairman of the Israeli Export Institute.
Culture Circuit
šļø School in Flames: āFrom the Ashes,ā a Saudi film directed by Khaled Fahed that dramatizes the outbreak of a fire in an all-girls school will premiere on Netflix on Jan. 18.
š Round-the-Clock Mosque: Abu Dhabi’s Sheikh Zayed Grand Mosque, one of the most popular sites for tourists in the UAE, will be open 24 hours a day from now on and offer nighttime tours for a fee. Tours during the day will remain free.
š½ļø Making Movies: Red Sea Labs is expanding its program to strengthen filmmaking in Saudi Arabia and the broader MENA region. Under its initiative The Lodge, a spinoff of the annual Red Sea Film Festival, the organization will select 16 applicants for its long-term residency program that supports the development of Middle East filmmaking. For the first time, applicants from the wider Asian continent will also be considered.
Ahead on the Circuit
Jan. 13-14, Abu Dhabi, UAE: Mubadala SailGP. F50 racing boats go head-to-head at the Mubadala Abu Dhabi Sail Grand Prix, presented by the Abu Dhabi Sports Council. Mina Zayed Port.
Jan. 15-19, Davos-Klosters, Switzerland: World Economic Forum Annual Meeting. The annual meeting aims to drive public-private cooperation and this year will focus on exploring opportunities enabled by new technologies.
Jan. 16-18, Dubai, UAE, Intersec: Security conference bringing together government and vendors focused on domestic, cyber, commercial, fire and rescue. Dubai World Trade Center and Commercial Security, Safety & Health, and Fire & Rescue. Dubai World Trade Centre.
Jan. 22-24, Riyadh, Saudi Arabia: Real Estate Future Forum. A gathering of government officials, developers and investors exploring development opportunities in the kingdom. Four Seasons Hotel.
Jan. 22-25, Abu Dhabi, UAE: UMEX. The only conference in the Middle East dedicated to drones, robotics and autonomous systems. Abu Dhabi National Exhibitions Center.
Jan. 24, Kuwait City, Kuwait: Kuwait Innovation Forum. Startup founders, investors, policymakers meet for annual conference. Arraya Ballroom.
Jan. 25, Dubai, UAE: Casino Countdown. First Middle East conference to focus solely on the gaming industry, sponsored by Arabian Business. Atlantis The Royal Hotel.
Jan. 25-27, Manama, Bahrain: Health/Wellness Expo 2024. Annual gathering of medical professionals and alternative treatment specialists. Exhibition World Bahrain.
Jan. 29-Feb. 1, Dubai, UAE: Arab Health. The biggest trade show in the region for medical devices and healthcare. Dubai World Trade Center.
Feb. 26-29, Doha, Qatar: Web Summit Qatar. A Middle East edition of the technology crowd mega-event, gathering investors, entrepreneurs and business leaders. Doha Exhibition and Convention Center.
