👋 Hello from the Middle East! 

This week we’re looking at the proliferation of proptech deals across the MENA region, Saudi Prince Alwaleed’s faith in Elon Musk, a $2 billion deal between PIF-backed Alat and Hong Kong-based Lenovo, and ADIA’s interest in Carlyle’s Indian data center stake. But first, let’s follow the leaders summiteering in Seoul and Beijing.

China is showcasing its growing interests in the Middle East this week as it hosts UAE President Sheikh Mohamed bin Zayed for a state visit and convenes the China-Arab States Cooperation Forum in Beijing.

The Emirati leader will meet China’s President Xi Jinping on Thursday to discuss both trade and politics as the two countries celebrate the 40th anniversary of their diplomatic relations. The UAE is China’s largest trading partner in the Arab world, with business ranging from crude oil and petrochemicals to artificial intelligence. Chinese investments in the UAE increased by more than 16% annually last year to $1.3 billion.

Xi will also address the meeting of the regional forum, which was established in 2004 as a conduit between China and the member states of the Arab League. Outlining the assembly’s agenda, Chinese Vice Foreign Minister Deng Li cited a tenfold increase in trade with the Middle East over the past two decades, Bloomberg reported.

China gets more than one-third of its crude oil from members of the six-member Gulf Cooperation Council with the largest share coming from Saudi Arabia. In overall trade, though, the UAE has become a bigger partner for China. The UAE plays a key role in the Belt and Road Initiative – China’s global infrastructure drive – and has more than 6,600 Chinese brands registered in the country, Bloomberg Intelligence wrote last week.

Before heading to China, Sheikh Mohamed visited South Korea, where he was hosted for a state visit by President Yoon Suk Yeol. The two countries signed a comprehensive economic partnership agreement on Wednesday that includes “tariff liberalization, the opening of service sectors such as health care and online gaming, and the establishment of a future-oriented economic partnership in fields like biotechnology and energy,” the Korea Herald reports, citing a South Korean presidential statement.

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].

APP BUILDERS

Proptech seizes Middle East moment amid real estate boom

Proptech is having a moment in the Middle East, The Circuit’s Kelsey Warner reports. 

Building bonanza: A flurry of deals among some of the biggest property technology players in the region amid a glut of real estate development projects in the Gulf has prompted capital data platform Magnitt to ponder: Is this a proptech bubble? 

Leading the Gulf: Saudi Arabia and the UAE in particular are driving the action. The total value of real estate projects currently planned or under construction stands at an estimated $1.68 trillion, up from $1.38 trillion a year earlier, according to commercial real estate firm CBRE.

Click here to read the full story.

MUSK’S MACHINE

Prince Alwaleed Bin Talal among biggest backers of Elon Musk’s xAI

Saudi Arabia’s Prince Alwaleed Bin Talal and his Kingdom Holding Co. continue to rank among Elon Musk’s biggest backers, The Circuit reports.

Heavily invested: A list of key investors in the $6 billion Series B funding round for the tech billionaire’s startup xAI includes the Saudi prince’s personal office and his Tadawul-listed company. 

AI competition: xAI, which is focused on the development of advanced AI systems, is valued at $24 billion, following the latest funding round. The cash will be used to take xAI’s first products to market as the Musk entity rises to challenge OpenAI’s ChatGPT.Click here to read the full story.

Public Investment Fund: The Saudi sovereign wealth fund established its new Neo Space Group that will make strategic investments in satellite communications, earth observation, satellite navigation and the Internet of Things to help establish the kingdom as a leader in the space industry. PIF-backed technology investment mega-fund Alat has bought $2 billion worth of convertible bonds in Hong Kong PC giant Lenovo. Under the deal, Alat has lured the world’s largest seller of personal computers to open a manufacturing plant to produce servers and PCs, as well as open a research center and its Middle East and Africa headquarters in Riyadh. Another PIF holding, Halal Products Development Co., signed a binding agreement with Believe, a Singapore-based company specializing in halal cosmetics that will move its headquarters to Saudi Arabia and build a manufacturing plant for its products.

Jada, a fund of funds owned by the PIF, has backed a new fund from Dubai- and Singapore-headquartered healthcare private equity firm TVM Capital Healthcare, Bloomberg reports. The $250 million fund is one of the first health-care focused investment vehicles in the kingdom. The PIF is mulling a reorganization of management to delegate some of Governor Yasir Al-Rumayyan’s responsibilities and is looking to sharpen its investment focus as it scales back some of its mega-projects amid budget shortfalls, Reuters reports. The PIF also got the green light from regulators over the weekend to acquire Saudi Iron and Steel Co., better known as Hadeed, from the kingdom’s petchem firm SABIC. The deal is expected to close in the second half of the year for an estimated $3.3 billion. 

Abu Dhabi Investment Authority: U.S. private equity firm Carlyle Group has begun formal discussions with sovereign wealth funds including ADIA, Singapore’s GIC and global private equity majors like KKR for the sale of its 24% stake in Nxtra Data, the data center business of Indian telecom company Bharti Airtel, Moneycontrol reports. Carlyle had picked up the stake in the company in 2020 for Rs 1,780 crore ($235 million).

Mubadala: MGX, the artificial intelligence mega-fund created in January through a partnership between Mubadala and G42, held its first board meeting this week, chaired by Sheikh Tahnoon bin Zayed, Deputy Ruler of Abu Dhabi. The board meeting was attended by Mubadala CEO and MGX Vice-Chair Khaldoon Al Mubarak, as well as Jassem Mohamed Bu Ataba Al Zaabi, Peng Xiao and Ahmed Yahia Al Idrissi. Meanwhile, Strata Manufacturing, a unit of the Abu Dhabi sovereign wealth fund, won a contract to supply key elements of the F50 catamarans in the SailGP boating race. Mubadala is a title partner in next month’s Mubadala New York Sail Grand Prix.

ADQ: New York’s Blue Owl Capital and ADQ-backed Lunate Capital bought a minority stake in Linden Capital Partners, a Chicago-based health-care private equity firm, as part of their joint venture targeting investments in mid-sized asset managers.

Oman Investment Authority: The Omani sovereign wealth fund signed a preliminary agreement with Jordan’s Social Security Corp. to establish a direct shipping line between the Jordanian port of Aqaba and several ports in the sultanate. Companies affiliated with Oman’s sovereign wealth fund, meeting on the sidelines of the COMEX 2024 conference in Muscat, signed more than 30 agreements worth $91 million with companies in the fields of artificial intelligence and data management, including Google, Amazon and Microsoft.

Lunate: FAB Securities, a unit of the UAE’s largest lender First Abu Dhabi Bank, has been named as the latest authorized participant for the Chimera Umbrella Fund by Lunate Capital, an Abu Dhabi-based investment management firm and subsidiary of Lunate Holding, to provide expertise and support in simplifying access to regional and global stock markets. The nine Lunate ETFs provide investors with access to various bourses, including in the U.S., China, Saudi Arabia, Kuwait, Turkey and Pakistan. The ETFs include conventional, Shariah-compliant and dividend-distributing share classes that can be bought and sold like stocks.

International Holding Co.: The mining business owned by Abu Dhabi conglomerate IHC expects to make $1 billion worth of mining deals this year, IHC CEO Syed Basar Shueb told the Financial Times. 

Qatar Investment Authority: A hefty bet on shares in Adani Group is paying off for the QIA, which has more than doubled its gains after buying into the Indian conglomerate at a low in 2023 after U.S. short-seller Hindenburg Research issued a report that was critical of the group. Abu Dhabi’s International Holdings Co. and U.S. GHC Partners are also up big on the company’s U-turn.

🩺 Hospital Holding: Goldman Sachs increased its 4.99% stake in Egypt’s Cleopatra Hospitals Group to 5.12%, the investment bank’s Egyptian subsidiary reported in a regulatory statement.

🦷 Dental Stock: Saudi Arabia’s Miral Dental started trading today on the kingdom’s Nomu Parallel Market after the company set price guidance at 100 riyals a share.

💰 Home Team: Abu Dhabi-based hospital operator PureHealth has spent AED 1 billion ($272 million) on local procurement to support the UAE’s efforts to spur domestic industrial production.

📚 Open Books: Abu Dhabi-based Alef Education is looking to raise as much as 1.89 billion dirhams ($515 million) in an IPO that will be the first in the UAE capital this year.

🏭 Manufacturing Boost: ADNOC plans to boost its budget target for manufacturing critical industrial products within the UAE to 90 billion UAE dirhams ($24.5 billion) by 2030, up from 70 billion dirhams The national oil company made the announcement at the “Make it in the Emirates” forum in Abu Dhabi on Monday.

🗣 Circuit Chatter

💸 Top Talent: Salaries are exploding in the private credit field, where some Gulf-backed firms are vying for the most talented financiers, Bloomberg reports.

🛴 Motorless Mobility: Qatari transportation authorities have decided that all new road projects must be built with pedestrian and cycling tracks to promote non-motorized mobility options such as bicycles, e-scooters and walking.

⚡ Green Fuel: AD Ports Group is leading a consortium to develop a green methanol plant in Egypt, signing preliminary agreements with Egyptian container shipping line Transmar and Orascom Construction for the project.

💺 Fly With Us: Oman’s Civil Aviation Authority invited investors on Tuesday to participate in establishing a new low-cost airline that the Gulf sultanate intends to launch.

⚽ Sports Fund: Saudi Arabia’s Sports Boulevard Foundation announced a new partnership with Ajdan Real Estate Development Co. and Albilad Capital that is expected to add 1 billion riyals ($265 million) through a sports fund that invests in real estate. 

👠 Fashion Statement: Saudi Arabia’s fashion industry is set to post a cumulative annual growth of 48% from 2021 to 2025, according to a report by Monsha’at, the government’s Small and Medium Enterprises General Authority.

🌍 Power Circuit

Saudi Arabia’s King Salman has recovered from a recent respiratory illness that required his hospitalization, his son Crown Prince Mohammed bin Salman announced in a statement. The 88-year monarch chaired the cabinet’s weekly session through a remote video connection.

Saeed Ahmed bin Khalaf Al Otaiba, a close companion of the late Sheikh Zayed bin Sultan Al Nahyan, passed away on Wednesday. He is said to have been born around 1916 and witnessed the early development of the UAE. Al Otaiba was a key figure in the country’s economic transformation, serving as Chairman of the Abu Dhabi Chamber of Commerce and Industry since 1971 and later as Chairman of the Federation of UAE Chambers of Commerce and Industry.

Emir of Qatar Sheikh Tamim bin Hamad Al Thani visited Cyprus on Tuesday where officials there told the Associated Press he is looking at possible government-backed investments in energy, ports, finance and technology. 

UAE President Sheikh Mohamed bin Zayed issued a directive for 65,000 books from the 33rd Abu Dhabi International Book Fair to be distributed to libraries at 220 schools across the country.

Sheikha Fatima bint Mubarak, widow of the UAE’s late President Sheikh Zayed and Chairwoman of both the General Women’s Union and the Family Development Foundation, co-hosted an “onboarding event” with PureHealth for the Emirati Women Chapter mentorship initiative, aimed at cultivating role models for professional women in the UAE.

Sheikh Mansour bin Zayed, UAE Vice President, Deputy Prime Minister and Chairman of the Presidential Court, visited the Make It in the Emirates Forum in Abu Dhabi on Monday, saying that the country seeks to raise levels of innovation and use artificial intelligence to make its products more efficient and competitive.

➿ On the Circuit

Hamad Buamim, Chair of the Dubai Multi Commodities Centre, said sanctions on Russia slow the flow of trade down but cannot stop it. “Trade continues flowing, it just flows in a different way,” he told the Financial Times in an interview.

Mansoor Mohamed Al Hamed, Mubadala Energy CEO, is in Malaysia this week, where he has met with Prime Minister Datuk Seri Anwar Ibrahim. 

Adam Neumann, who founded WeWork and was later forced out as the shared-office space company went bankrupt, told The New York Times that he has abandoned his quest to buy back the firm while focusing on his new residential real estate company Flow.

Elizabeth Churchill, a former Senior Director of User Experience at Google, has been tapped to become Chair of the Human-Computer Interaction Department at the Mohamed bin Zayed University of Artificial Intelligence in Abu Dhabi. 

Mohamed Alabbar, Founder of Emaar, revealed details of the Dubai Creek Harbor development, a massive urban project comprising residential buildings and public parks. The head of Dubai’s largest developer said the firm is working with an undisclosed Chinese technology firm renowned for their expertise in multimedia installations for the “Music, Colour, and Fire Plaza.”

Adel Alsharji, Chief Operating Officer of Presight, will deliver a keynote address at GITEX Africa titled “Harnessing Big Data and Gen AI for Emergency Response Management” on Thursday, May 30. The G42-owned AI company plans to have a big presence at the tech conference, hosting talks and VIPs at its sponsored lounge. 

🎶 Culture Circuit

🌙 Holiday Season: The start of Eid Al Adha will likely fall on Sunday, June 16, one day after Arafat Day, subject to confirmation by Moon sightings. If this is the case, the holiday will run from June 16-18, with two working days off. Also known as the “festival of sacrifice,” Eid Al Adha marks how the Prophet Ibrahim was asked by God to sacrifice his son as a test of faith. Families traditionally have a goat or sheep butchered and share the meat. It is also a popular time for Gulf residents to take a short holiday or staycation, with destinations including AlUla offering Eid specials.

🍺 Breaking Ground: Building works for the first large-scale licensed brewery and spirits bottling factory in the Gulf region will begin next month in the UAE’s Ras Al Khaimah emirate. Falcon Brews Chief Marketing Officer and Director Leonard Menezes told Zawya Projects that the $65 million project would start with a large commercial brewery with a monthly production capacity of 100,000 cases, as well as a blending and bottling plant. Falcon Brews will cater to the GCC and Africa with Middle East-centric brands. It comes after Craft, the UAE’s first microbrewery, opened in Abu Dhabi in December amid steadily loosening rules around alcohol in the region.

📷 Photo of The Day

🗓️ Circuit Calendar

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

June 2, Muscat, Oman: Taiwan Trade Mission to Oman. Taiwan trade officials invite Omani investors and entrepreneurs for one-on-one meetings at conference. Crowne Plaza Muscat.

June 5, Hong Kong: Bloomberg Wealth Event. A gathering to bring actionable intelligence to portfolio managers and other dealmakers and analysts from asset managers and owners, family offices and hedge funds. Conrad Hong Kong. 

June 11-13, Rio de Janeiro, Brazil: Future Investment Initiative Priority Summit. Saudi Public Investment Fund holds FII conference for first time in Latin America. Copacabana Palace.

June 15, Arafat Day. Islamic holiday corresponding with the second day of the Hajj pilgrimage, falling on the ninth day of Dhu al-Hijjah of the lunar Islamic Calendar. 

June 16-18, Eid Al Adha. Government and business offices are closed across the MENA region for the Islamic holiday. Dates are subject to sighting of moon by state religious committees in each country.

June 23-26, National Harbor, Maryland: SelectUSA Investment Summit. The highest profile event in the U.S. to facilitate business investment by connecting thousands of investors, companies, economic development organizations and industry experts to make deals. Gaylord National Resort and Convention Center.

July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada.