👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at Dubai’s plans to build the world’s largest car market, the Saudi Public Investment Fund’s latest deals in Turkey and Hong Kong, a new finance team at the Egyptian Cabinet table and the Michelin stars awarded to five more Dubai restaurants. But first, the UAE and Japan talk tech in Tokyo.

The UAE’s power man met with the head of SoftBank on Thursday as the Japanese firm is reportedly looking to make investments at the intersection of energy and artificial intelligence. 

Dr. Sultan Al Jaber, who in addition to serving in the Cabinet as Minister of Industry and Advanced Technology is also CEO of state-owned oil company ADNOC and Chairman of alternative energy firm Masdar, met with SoftBank CEO Masayoshi Son in Tokyo. The pair discussed “trends in the energy, industry and advanced technology sectors, highlighting the importance of increasing strategic investments in these areas to enhance sustainable economic growth,” according to an Instagram post from the Ministry of Industry and Advanced Technology.

Abu Dhabi and SoftBank have a history: The capital’s sovereign wealth fund Mubadala was an anchor investor in Son’s Vision Fund I, ultimately writing down its stake as the fund’s big play for WeWork went belly up. SoftBank’s fortunes have since reversed with Arm. The U.K. chip designer it acquired in 2016 has more than doubled its market capitalization to about $170 billion since going public last year in New York.

The Information reported on Thursday that SoftBank is looking to borrow up to $10 billion from banks to enable investments in energy-related projects. The data centers that power AI are hugely energy-intensive and face growing demand. SoftBank is also exploring ways to gain access to a large volume of Nvidia’s graphics processing units, the building block of AI development, the Silicon Valley publication reported. 

Al Jaber also met with Japanese Prime Minister Fumio Kishida as well as Hayashi Yoshimasa, Chief Cabinet Secretary; and Taro Kono, Minister of Digital Transformation. Alongside UAE Minister of Foreign Trade Thani Al Zeyoudi, he met with Ken Saito, Japan’s Minister of Economy, Trade and Industry of Japan to discuss strengthening trade and investments in energy and advanced industry with the world’s fourth-largest economy.

AUTOMOTIVE MEGAMARKET

Dubai is planning to build what its leaders describe as the world’s largest and most advanced car market. Officials signed a contract with DP World on Thursday to build and manage a 20 million square-foot facility connected to 77 international ports that is expected to generate an estimated $3.8 billion in sales. “The new market will become a global hub that offers commercial services and logistics and financing solutions” for the automobile industry,” Sheikh Mohammed bin Rashid, Ruler of Dubai and the UAE’s Vice President and Prime Minister, said in a statement released on Thursday. The new compound – eight times the size of the city’s current car market – will enable buying, selling, registration and banking within its domain. It will also host major conferences and events for the international automotive industry.

SCORING RISK

Israel and Saudi Arabia are at the greatest risk of defaulting on their debt among emerging markets tracked by Goldman Sachs. Over the first half of 2024, Israel showed the sharpest decline in the investment bank’s tally of sovereign-risk scores, as war in Gaza created a drain on public finances, Bloomberg reports. Saudi Arabia’s massive spending on Neom and other mega-projects mapped out in Crown Prince Mohammed Bin Salman’s Vision 2030 economic blueprint led to the kingdom’s drop in the risk scorecard, according to the July 1 Goldman Sachs report. Reduced oil revenues led to lower scores for other Arab Gulf countries including Oman and Bahrain, Bloomberg said. Goldman takes into account economic, governance, fiscal, external and monetary metrics to come up with its overall risk scores.

Public Investment Fund: PIF-owned Saudi Arabian Military Industries signed draft agreements with Turkish defense contractors Baykar, Fergani Space and Aselsan to develop products and services together at facilities within Saudi Arabia. Meanwhile, the fund’s expansion in Asia continues as the PIF on Thursday signed a non-binding preliminary agreement with Hong Kong conglomerate ChaoShang for a potential $500 million investment aimed at providing the company with convertible debenture and loan financing. The investment, which will be fully funded by the sovereign wealth fund, will be finalized over the next three months and back investments in industries like mining and healthcare.

ADQ: Abu Dhabi’s ADQ has listed a dual-tranche $2.5 billion bond on ADX. The notes were initially listed on the London Stock Exchange in April. The fund sold a $1.25 billion five-year portion at 80 basis points (bps) over US Treasuries and another $1.25 billion 10-year tranche at 90 bps over the same benchmark.

Lunate: The UAE’s $105 billion investment firm, which is backed by Abu Dhabi-based International Holding Co. and ADQ, and Daman Investments were authorized by The Ministry of Human Resources and Emiratisation and the Securities and Commodities Authority to launch employee savings funds that protect capital and comply with Islamic Sharia.

💵 Green Backing: ADNOC and the Japan Bank for International Cooperation have signed a $3 billion agreement for a green financing facility. ADNOC said the funding would support decarbonisation and energy transition initiatives. 

🌐 Potential IPO: Alpha Data, an IT services company based in the UAE is planning an IPO that would seek to raise about $200 million and is working with EFG Hermes and Emirates NBD Capital on the potential sale, Bloomberg reports.

🤖 Fiber AI: CogniFiber, an Israeli startup that processes data at the speed of light for artificial intelligence applications, raised $5 million in a funding round led by Chartered Group and Eastern Epic Capital.

🇲🇦 Pay Boost: Moroccan government and union negotiators reached agreement on a new contract that will provide a 50% salary increase and expanded health coverage for 1.1 million public employees.

🗣 Circuit Chatter

🚚 Overheated EVs: Amazon is trying to address the challenges to electric vehicles posed by the Middle East’s extreme heat as it accelerates use of EVs for its delivery fleet in the UAE, Prashant Saran, the company’s director of operations for Turkey, the Middle East and Africa, told The National.

🛂 Citizen Drive: Saudi Arabia has begun granting citizenship by royal decree to a number of scientists, medical doctors, researchers and entrepreneurs with unique specializations as it looks to attract talent to the kingdom.

🇬🇧 New Order: The financiers that populate the City of London and Mayfair, sometimes referred to as “Little Doha,” shunned the Conservatives on U.K.’s Election Day yesterday and are embracing their new Labour constituency, Bloomberg reported.

🏗️ Going Public: Oman’s state-owned logistics company Asyad Group has hired Jefferies Group and EFG Hermes as advisers and is planning an IPO for its subsidiary Asyad Shipping Co before the end of the year, Zawya reports.

🎞️ Film Drama: The terrorism charges against animated-film maker Abdulaziz Almuzaini, a U.S.-Saudi citizen who does work for Netflix, shows the possible limits of reform in Saudi Arabia, the Wall Street Journal reports.

🌍 Power Circuit

Egyptian President Abdel-Fattah el-Sissi led the first meeting of his new Cabinet on Thursday, declaring the importance of completing economic reform while “attracting and encouraging domestic and foreign investments.” Among the government’s new faces were Finance Minister Ahmed Kouchouk; Rania Al-Mashat, Minister of Planning, Economic Development and International Cooperation; and Hassan ElKhatib, Minister of Investment and Foreign Trade.

Emir of Qatar Sheikh Tamim bin Hamad Al Thani met with Russian President Vladimir Putin on the sidelines of the Shanghai Cooperation Organization summit in Astana, Kazakhstan.

The UAE sent a delegation to the summit in Astana to represent President Sheikh Mohamed bin Zayed that included Sheikh Saud bin Saqr Al Qasimi, Member of the Supreme Council and Ruler of the emirate of Ras Al Khaimah.

➿ On the Circuit

U.S. Congressman Josh Gottheimer (D-NJ) led a House Intelligence Committee trip to Israel and the UAE where he met with UAE Secretary-General of the Supreme Council for National Security Ali Al Shamsi; UAE Director of Signals Intelligence Agency Ahmed Al Dehaim and Executive Vice President of G42 Talal Al Kaissi.  

Hamad Al Ameri, CEO of Abu Dhabi-listed conglomerate Alpha Dhabi, said the firm plans to list some of its portfolio companies this year amid strong market performance, in an interview with The National.  

🎶 Culture Circuit

⭐ Star Power: Five restaurants have been added to Dubai’s growing list of Michelin-starred dining venues in the latest rankings for the emirate by the famed French gastronomic guide, announced on Wednesday. A total of 19 restaurants now boast the coveted stars, with four obtaining two-star rankings. Jason Atherton’s new restaurant Row on 45, which offers a 1,145 dirham ($312) tasting menu, was awarded two-stars just 10 months after opening, while Dubai institution Orfali Bros and Anne-Sophie Pic’s La Dame Pic received their first stars.

📷 Photo of the Day

🗓️ Ahead on The Circuit

July 2-Aug. 25, Riyadh, Saudi Arabia: Esports World Cup. An international competition for professional gamers with a $60 million prize pot. Boulevard City.

July 10-11, Riyadh, Saudi Arabia: Global EV and Technology Forum. The inaugural summit in Saudi Arabia bringing together policymakers, companies and investors focused on sustainable urban mobility solutions. Riyadh International Convention & Exhibition 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. 

Aug. 12-15, Riyadh, Saudi Arabia: Saudi Food Expo. One of the kingdom’s largest trade shows for the food & beverage industry. Riyadh Front Exhibitions. 

Sep. 30-Oct. 2, Dubai, UAE: Future Hospitality Summit. The global conference for leaders in the hospitality industry expands this year at a new location with dedicated space for ESG planning, country pavilions and a larger exhibition area. Madinat Jumeirah.