The Weekly Circuit
👋 Hello from the Middle East!
This week we’re looking at a new Abu Dhabi financial services company under the IHC umbrella, the extra $1.5 billion that EV carmaker Lucid is getting from the Saudi PIF, Oman’s plan to build artificial reefs through 3D concrete printing and Bahraini runner Winifred Yavi’s gold medal at the Paris Olympics. But first, Aramco disputes forecasts of lower oil prices.
Washington energy analysts are backing expectations of a slump in global demand for oil next year that is likely to bring lower crude prices. Saudi Aramco CEO Amin Nasser disagrees.
In its monthly report released on Tuesday, the U.S. government’s Energy Information Administration said global crude consumption will be about 104.5 million barrels a day in 2025, a drop of 200,000 barrels a day from its earlier forecast. With China, the world’s largest crude importer, expected to cut back its oil usage, the agency reduced its projected demand growth rate for next year to 1.6%.
Aramco’s Nasser, on the other hand, says oil will rebound from the selloff this week that brought prices to their lowest level since January. Speaking in a conference call on Tuesday about the company’s lower-than expected second-quarter earnings, Nasser said energy traders have been too quick to respond to global concerns about a U.S. economic slowdown, Bloomberg reports. “The market to my view is overreacting and the fundamentals do not support the drop in prices that we are witnessing today,” Nasser said.
Brent crude dropped to almost $75 a barrel on Monday, alongside the rout in global stock markets. Despite Aramco’s profit falling in the second quarter due to OPEC+ limits on production, Nasser said demand for oil is expected to rise by 1.6 million to 2 million barrels a day this year.
Sliding profit didn’t stop Aramco from paying a $31 billion dividend in the second quarter. The state-owned petroleum producer reported that net income fell 3.4% to $29.1 billion in the three-month period ended June 30 compared with a year earlier.
Aramco, nevertheless, distributed the dividend, which is the lifeblood of Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify the economy from dependence on oil and finance more than $1.5 trillion in megaprojects such as the Neom development on the kingdom’s Red Sea coast. Shares of Aramco, the world’s largest oil company, have declined 19% this year, underperforming rivals such as Exxon Mobil and Shell.
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].
FINANCE FOCUS
UAE’s Rorix to capitalize on free-trade pacts as IHC subsidiary
International Holding Co., the broad-based conglomerate controlled by UAE power broker Sheikh Tahnoon bin Zayed, is expanding its financial services business by forming Rorix Holdings, The Circuit’s Jonathan Ferziger reports.
Money Spinner: The new company under the IHC umbrella will focus on finance, commodities trading and trade insurance, the parent company said in a statement on Monday.
Trade Route: Through Rorix, IHC said it expects to accelerate trade volumes, attract foreign investment, and broaden economic partnerships. The new firm will seek to capitalize on a flurry of free trade agreements the UAE has signed in the past three years.
BATTERY RECHARGE
Saudi PIF pumps another $1.5 billion into Lucid Motors
Saudi Arabia’s Public Investment Fund has pumped another $1.5 billion into electric vehicle start-up Lucid Motors ahead of the launch of its first SUV later this year, The Circuit reports.
Cash Injection: The PIF, which already has a 60% stake in California-based Lucid after investing about $8 billion over several years, will buy $750 million in convertible preferred stock and provide a $750 million loan facility through Ayar, an affiliate investment company.
Expedited Delivery: Nasdaq-traded Lucid reported Q2 earnings on Monday, recording a $790 million net loss, but beating analyst expectations with $200 million revenue after delivering 2,394 cars in the quarter.
💲 Sovereign Circuit
Public Investment Fund: Saudi Arabia’s sovereign wealth fund has invested $750 million in Magic Leap, a 14-year-old augmented-reality company that’s still searching for a workable business model and says it needs even more cash, Bloomberg reports. Prince Alwaleed Bin Talal’s Kingdom Holding Co., which is 17% owned by the PIF, reported that it has more than doubled its net profit year-on-year in Q2 to 624.2 million riyals ($166.5 million).
Mubadala: Emirates Global Aluminium, a Mubadala-backed manufacturer, said it used an LNG-fueled cargo vessel to ship bauxite to China, cutting greenhouse gas emissions by as much as 28% over conventional transport. MGX, the artificial intelligence mega-fund created in January through a partnership between Mubadala and G42, has reportedly joined a consortium in a bid for Australian data center AirTrunk in a deal worth more than $12.8 billion.
Abu Dhabi Investment Authority: Hargreaves Lansdown gave a consortium led by ADIA and CVC Advisers until Aug. 9 to make a firm offer of at least $6.9 billion for the British investment platform. L’Oreal is buying a 10% stake in Galderma Group, a Swiss maker of injectable skin fillers, from a consortium that includes ADIA, Sunshine SwissCo and Auba Investment.
Qatar Investment Authority: Nasser Al-Khelaifi, chairman of QIA-owned Qatar Sports Investments, the majority owner of the Paris-Saint Germain football club, has become one of French soccer’s most influential figures, Bloomberg reports.
↪↩ Closing Circuit
🏭 Chemical Reaction: Saudi Aramco agreed to pay about $700 million to purchase an additional 22.5% stake in refining and chemical firm Petro Rabigh from Japanese joint venture partner Sumitomo Chemical Co, becoming the company’s majority owner.
🚜 Caterpillar Distributor: Saudi Arabia’s Zahid Group is in talks to acquire South Africa-based Barloworld, the distributor in Africa for Caterpillar’s construction and mining equipment, which has an approximate corporate value of $886 million, Bloomberg reports.
💼 Deal Dropped: Dubai’s Sidara is calling off efforts to spend $2 billion on a buyout of the U.K.’s John Wood consulting firm, which advises on engineering projects in the energy field, citing geopolitical risks and market uncertainty. The shares plunged 40% after the announcement.
🏦 Banking Bid: Dubai-listed Emirates NBD has been shortlisted to submit a bid to buy a majority stake in Indian state-backed IDBI Bank, vying with Canada-based Fairfax Financial Holdings and Indian lender Kotak Mahindra Bank, Reuters reports.
👟 Keeping Track: Placer.ai, an Israeli startup platform for tracking location and foot traffic data, raised $75 million in a funding round limited to current investors, including Josh Buckley, WndrCo, Lachy Groom, MMC Technology Ventures, Fifth Wall Ventures, and Array Ventures.
🗣 Circuit Chatter
☁️ Billowing Cloud: Oracle has opened its second cloud region in Saudi Arabia, enabling the kingdom to get more value out of artificial intelligence, The National reports.
🛩️ Fraud Alert: The UAE’s Securities and Commodities Authority and Etihad Airways issued notices alerting the public to fake advertisements inviting people to invest in a fictitious IPO for the Abu Dhabi airline.
💵 India’s Wealthy: Nuvama Private, one of India’s largest wealth management firms, has opened an office in Dubai International Financial Centre, from which it intends to steer its Middle East business.
🐠 3D Reefs: Omantel, the state-owned telecom company, and Omani startup Innotech, signed an agreement to build artificial reefs through 3D concrete printing with the aim of increasing the depleted fish population.
🛫 Maintain Altitude: Jordan has asked all airlines landing at its airports to carry 45 minutes of reserve fuel, in what experts see as a precautionary measure in case of an attack by Iran against Israel, Reuters reports.
🌍 Power Circuit
U.S. President Joe Biden spoke with Sheikh Tamim Bin Hamad, the Emir of Qatar, and Egyptian President Abdel Fattah El-Sisi in separate phone calls on Tuesday about how to stop growing regional tensions from turning into a war.
Sultan Haitham of Oman was greeted by U.K. Prime Minister Keir Starmer for a meeting at his 10 Downing Street office in London, where they discussed trade between their two countries and rising Middle East tensions.
UAE President Sheikh Mohamed bin Zayed talked by phone with Kenyan President William Ruto about economic cooperation in sectors including renewable energy, technology and infrastructure.
Sheikh Maktoum bin Mohamed, Deputy Prime Minister and Finance Minister of the UAE, Deputy Ruler of Dubai and Chairman of Dubai Media Inc., toured DP World’s London Gateway Logistics Park, where he was met by DP World Chairman and CEO Sultan Ahmed bin Sulayem.
Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and Chairman of the emirate’s Executive Council, placed medals on the winners of the World Junior Mixed Martial Arts Championship at the Mubadala Arena in the UAE capital.
➿ On the Circuit
Nabil Ouajjane, founder of London-based Aster Capital Management, is moving to Dubai and opening an office amid a wave of investment firms building up their presence in the Gulf.
Sheikh Theyab bin Tahnoon, who was appointed as the new chairman of Dubai-listed contractor Drake & Scull on Friday, said the company will play a “vital” role in the UAE construction sector.
Winifred Yavi won Bahrain’s first medal at the Paris 2024 Olympic Games, securing gold in the women’s 3000m steeplechase and setting a new Olympic record with a time of 8:52.76 minutes.
Jared Kushner, founder of Gulf-backed private equity fund Affinity Partners, plans to spend $1 billion to turn bombed-out buildings in Albania and Serbia into luxury hotels and homes, Bloomberg reports.
Sultan bin Abdulaziz Al-Deghaither, the CEO of Zain who is credited with turning around the mobile telecommunications operator by eliminating more than $500 million in accumulated losses and tripling the company’s market capitalization, has died.
🎶 Culture Circuit
🎤 They’re Back: Seminal 90s pop group the Backstreet Boys will return to Abu Dhabi for a performance at Etihad Arena on Oct. 23. The vocalists, known for hits including “Everybody” and “I Want It That Way,” will be back little more than a year after their first gig in the UAE capital as part of their DNA World Tour last May, which sold out in six hours, The National reports.
⚾ Batter Up: Baseball United, the first professional baseball league focused on the Middle East and South Asia, announced plans to start its opening season Oct. 23 in the UAE, with a championship tournament scheduled for next February.
📷 Photo of the Week
🗓️ Ahead on The Circuit
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.
Aug. 24-25, Riyadh, Saudi Arabia. New Global Sports Conference. Uniting top players to showcase how esports can create new global opportunities. Four Seasons Hotel Riyadh.
Aug. 31-Sept. 8, Abu Dhabi, UAE. Abu Dhabi International Hunting and Equestrian Exhibition (ADIHEX). The premier event for hunting, falconry and equestrian enthusiasts in the Middle East. ADNEC.
Sept. 1-7, Dubai, UAE. Dubai Fashion Week. Promoting Dubai’s creativity and fashion businesses to a worldwide audience. Dubai Design District.
Sept. 10-11, Dubai, UAE: Global Vertical Farming Show 2024. Annual event brings together investors, growers, and executives in the vertical farming industry from around the world. Le Méridien Dubai Hotel & Conference Centre.
Sept. 24-25, Dubai, UAE: ACT Middle East Treasurers Summit. Corporate treasurers and financial professionals from across the region gather for policy discussions on issues ranging from cash management to sustainability. Grand Hyatt Dubai.
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.
