👋 Hello from the Middle East!

Today in The Daily Circuit we’re looking at Aramco’s $31 billion dividend payout, a broad fleet expansion by Gulf airlines, Norwegian wind turbines in Egypt and the start of talks on a free trade pact between the UAE and New Zealand. But first, the prediction game.

From Dubai to Beverly Hills, the question occupying the world’s financial elite is this: when will the U.S. Federal Reserve cut interest rates? Not till September at the earliest, says hedge fund manager Ken Griffin, CEO of Citadel, who addressed the Milken Institute Annual Conference at The Beverly Hilton on Monday. Yie-Hsin Hung, CEO of State Street Global Advisors, sees rate cuts happening sooner: she predicted that the Fed will start to reduce rates as soon as July amid a more muted economy, speaking this morning at Day 2 of the Dubai FinTech Summit. 

The market-moving question is top of mind, but so too is the Gulf’s growth story amid the energy transition. “We’re known as oil exporters, but our second biggest export is capital,” Mohammed El-Kuwaiz, Chair of the Board of the Capital Market Authority of Saudi Arabia said at Milken on Monday, fielding questions from The Economist’s Editor-in-Chief Zanny Minton Beddoes. 

“For the first time in our history we may be capital importers,” El-Kuwaiz predicted, as the kingdom looks to lure foreign capital to help fuel the $3 trillion of investment from now until 2030 for its economic diversification drive. The money is being poured into developing sectors like tourism, manufacturing and tech alongside mega-projects like NEOM. “The capital markets are an extremely important fulcrum” at this time and why Saudi has opened up to the world and cracked into the top 10 capital markets, he said. El-Kuwaiz shared the stage with Jane Fraser, CEO of Citigroup; Harvey Schwartz, CEO of Carlyle; and Ron O’Hanley, Chair and CEO of State Street.

Back in Dubai, non-oil growth was top of the agenda for UAE Minister of Economy Abdulla bin Touq Al Marri. Speaking at the Dubai Fintech Summit, he repeated his belief in 7% annual GDP growth, but said that 4.9% non-oil growth is possible in 2024. “We see growth away from traditional economies such as real estate and tourism to new types of tourism, such as sustainable tourism, health tech. We’re looking into AI, generative AI, the UAE is becoming the capital of AI,” he said.

ARAMCO PAYOUT

Saudi Aramco, the world’s largest oil company, will distribute $31 billion in dividends despite a decline in first-quarter profit. The payout is critical to the Saudi government, which owns 82% of the company and has reported a deficit for the sixth straight quarter. The kingdom’s budget gap has forced a slowdown in the pace of building NEOM and other ambitious construction projects. Aramco reported that first-quarter net income declined 14% to $27.3 billion, down from $31.9 billion a year earlier. The company declared base dividend payouts for the first quarter totalling $20.3 billion and a performance-linked dividend distribution of $10.8 billion to be paid in the second quarter. Saudi Arabia has pushed other oil producers to cut their output and keep oil prices high amid concerns about rising U.S. production creating surplus supply.

UP, UP AND AWAY

Gulf airlines are expanding their fleets amid the recovery in world travel and tourism. Abu Dhabi-based Etihad plans to buy 70 aircraft over the next five years, up from the current 80, CEO Antonoaldo Neves told Reuters on Monday. In Saudi Arabia, where Riyadh Air makes its debut in 2025 as the kingdom’s second flag carrier with 39 Boeing 787-9 long-range jets, the company is planning follow-up orders to nearly double that number, CEO Tony Douglas said in an interview with Bloomberg. No-frills Saudi airline Flyadeal, meanwhile, is considering an order for more single-aisle Airbus aircraft and upgrading its existing order of 50 narrow-body jets, as it seeks to build its international route network, CEO Steven Greenway told The National.

Public Investment Fund: Lucid, the PIF-backed maker of luxury electric cars, reported a higher than expected first-quarter loss of $0.30 a share. Revenue increased 16% to $173 million from the same period a year ago. The California carmaker’s shares fell over 8% on Monday in after-hours trading.

Mubadala: Mubadala-backed healthcare technology company M42 has partnered with AstraZeneca to expand cancer diagnostic capabilities in the Middle East. M42 will sequence genes for hereditary breast cancer to develop personalized care tailored to patients. Mubadala Investment Co. has announced an investment alongside Global Infrastructure Partners in Perdaman’s $4.2 billion Western Australia Urea project, representing the largest investment ever made in the Australian fertilizer industry.

🇫🇷 Offshore Drilling: Saudi Arabia’s ADES Holding Co. signed a $93 million deal with TotalEnergies of France to provide a jack-up rig for offshore drilling services in Qatar.

⛽ Pumping Gas: The Shell oil company is in talks to sell its chain of gas stations in Malaysia to Saudi Aramco in a deal that could be worth as much as $1 billion, Reuters reports.

🌀 Wind Power: Norway’s Scatec and a group led by Egypt’s Orascom Construction signed agreements to build two wind power plants in Egypt with a combined $9 billion in investment.

🇨🇳 Biotech Fund: Nectin Therapeutics, an Israeli startup seeking to develop cancer drugs, raised $10 million from the Guangzhou-Israel Biotechnology Fund.

🩺 AI Medicine: Opmed.ai, an Israeli startup that helps hospitals use artificial intelligence tools, raised $15 million in a Series A funding round from NFX, Grove Ventures, Secret Chord Ventures, Unbox Ventures and U.K. investor Sir Ronald Cohen.

Dr. Sheikh Sultan bin Muhammad Al Qasimi, Ruler of Sharjah, inspected the Al Lyyah Water Canal project, which aims to increase the flow of water from the Arabian Gulf to Sharjah’s Khalid Lake.

Sheikh Shakhbout bin Nahyan, a UAE Minister of State, is heading the country’s delegation to the Islamic Summit of the Organization of Islamic Cooperation, which is taking place this week in Gambia.

➿ On the Circuit

Dipak Sakaria, Energy Transition Advisor at the UAE Ministry of Energy & Infrastructure, said Emirates Nuclear Energy Co. is eyeing more reactors to power 4 GW more capacity at its Barakah nuclear power plant, speaking on a panel at NYUAD hosted by AmCham Abu Dhabi on Monday evening, The Circuit reports. 

Aernout Boot, Senior Advisor at The Carlyle Group based in Abu Dhabi, speaking alongside Sakaria, said Carlyle would not join private equity peers in divesting from hydrocarbons amid the energy transition as the U.S. firm sees a long-term role for oil and gas in the global economy. 

Dov Kotler, CEO of Bank Hapoalim, Israel’s No. 2 lender, said he will step down after five years in the post. The bank formed a search committee to pick Kotler’s successor.

🎶 Culture Circuit

👻 Arabian Nightmares: An English-language anthology of short horror stories from the region co-created by Lebanese writer Daniel Habib has passed its $10,000 Kickstarter goal, confirming demand for the relatively neglected genre in Arab literature, The National reports.

📷 Photo of The Day

🗓️ Circuit Calendar

May 5-8, Los Angeles: Milken Institute Global Conference. Politicians, financiers, media and philanthropists convene to discuss challenges across themes like innovation and technology, health and medical research, diversity and inclusion. The Beverly Hilton. 

May 6-7, Dubai, UAE: Dubai FinTech Summit. The second annual gathering of financial leaders meet to spotlight innovation and discuss disruptions in the industry, organized by the Dubai International Financial Centre (DIFC). Madinat Jumeirah. 

May 7-9, Abu Dhabi, UAE: AIM Congress. The Annual Investment Meeting will convene inter-governmental leaders, executives, entrepreneurs and policymakers on the theme “Adapting to a Shifting Investment Landscape: Harnessing New Potential for Global Economic Development.” Abu Dhabi National Exhibition Center.

May 13-15, Abu Dhabi, UAE: Abu Dhabi Global Healthcare Week. A conference focusing on investments, and innovation to solve the most important global health challenges. Abu Dhabi National Exhibition Center and Abu Dhabi City.

May 14-15, Abu Dhabi, UAE: J.P. Morgan Asset Management: Life Sciences Innovation Summit. A gathering aimed at drawing startups and investors from the life sciences sector to Abu Dhabi. Cleveland Clinic Abu Dhabi. 

May. 14-16, Doha, Qatar: Qatar Economic Forum, Powered by Bloomberg. A news-driven event dedicated to global business and investment. This year’s theme is “A World Remade: Navigating the Year of Uncertainty.” Request your invitation here. Fairmont & Raffles, Doha.

May 29-31, Marrakech, Morocco: GITEX Africa. The second edition of the biggest tech and startup gathering in Africa. Place Bab Jdid.