The Daily Circuit
👋 Hello from the Middle East!
Today in the Daily Circuit, we’re looking at how a string of profitable IPOs is stoking interest in Gulf stocks, the appointment of a new Board at Bahrain-based Gulf Air, Magellan Capital’s new $700 million hedge fund and the Dubai firm tailoring private jets for canine passengers. But first, Saudi Arabia’s sovereign wealth fund is growing larger and choosier.
Amid indications that Saudi Arabia’s Public Investment Fund is tightening its belt, the sovereign wealth fund’s coffers grew at a higher rate last year than in 2022.
The PIF, which bankrolls a wide range of the kingdom’s investments including Neom, Riyadh Airlines and LIV Golf, reports that assets under management increased to $765 billion at the end of 2023, a growth rate of 8.7% compared to 8% in the previous year.
Reviewing the fund’s performance in its annual report released on Monday, Chairman Yasir Al-Rumayyan said the PIF “has continued to deliver on its mandate as the driving force of Saudi Arabia’s sustainable economic transformation and diversification.”
After years in which the fund became a go-to source for bankers, venture capitalists and dealmakers pitching investments around the world, the PIF is narrowing its focus to concentrate on priorities closer to home, the Financial Times reports.
With oil prices slumping, Saudi officials are applying more conditions when dispensing cash, often demanding the hiring of local employees and investment in domestic companies and projects, the newspaper said.
📰 Developing Stories
TAKING STOCK
The success of high-profile IPOs and potential for high dividend yields are driving increased demand for Gulf stocks among local and regional investors, The National reports. In the UAE, the Dubai Financial Market welcomed 72,583 new investors in the first half of this year, while the Abu Dhabi Securities Exchange attracted more than 50,000 new investors last year, with a significant rise in trading volumes on both exchanges. In the second-quarter of 2024 alone, $890 million was raised through IPOs in the emirates. In Saudi Arabia, companies raised $1.6 billion, accounting for 61% funds raised via IPO in the GCC, according to PwC’s IPO Watch report. The bulk of stocks offered via IPO are swallowed up by institutional investors, with about 10% allocated to retail players, often leaving those allocations heavily oversubscribed amid the high demand.
PLASTIC TACTICS
The U.S. has broken ranks with China and Saudi Arabia to support a global treaty limiting new plastic production, ahead of the final round of negotiations taking place in November in South Korea. Major fossil-fuel and plastic-producing countries have so far opposed any annual targets on plastic production, favoring a focus on recycling and re-use as a way to reduce pollution. But environmental advocates, alongside many of the developing countries most affected by poorly managed plastic waste streams, have pushed for the burden of the plastic crisis to be placed back on producers. Plastics make up about 50% of demand for petrochemicals globally and oil producers see ramping up plastic production as a potential soft-landing as the world shifts away from fossil fuels for energy. The U.S. produces about 130 kg of plastic waste per person per year, the highest rate per capita in the world, and the U.S. chemicals industry was quick to label the shift in position as a betrayal of U.S. manufacturers, setting the treaty negotiations up as a potential presidential election issue.
💲 Sovereign Circuit
Public Investment Fund: The PIF is in exploratory talks to line up Boeing and Airbus freighters for a new cargo airline, as it looks to turn the kingdom into a logistics hub to rival Dubai and Doha, Bloomberg reports. Meanwhile, Saudi healthcare startup Athir raised an undisclosed amount from Wa’ed Ventures, the VC unit of PIF-backed national oil company Aramco.
Mumtalakat: The Bahraini sovereign wealth fund appointed a new board of directors for Gulf Air Group, which runs the country’s national airline and airports, naming Khalid Hussain Taqi as chairman.
ADQ: The Abu Dhabi sovereign wealth fund is collaborating with Ne’ma, the UAE’s National Food Loss and Waste Initiative, to support its work across the UAE.
↪↩ Closing Circuit
👃 Scent of Success: Saudi perfume manufacturer Al Majed for Oud Co. plans to launch an IPO on the kingdom’s Tadawul stock market, releasing 30% of its issued share capital for sale to investors.
💰 Hedge Launch: Dubai-based Magellan Capital Holdings plans to open a $700 million hedge fund next month with seed capital from the family wealth of Hassan El Ali, who founded Zakher Marine International and sold it to a unit of Adnoc two years ago, Bloomberg reports. 🛏️ Hotel Loan: Criterion Capital, the U.K.-based property firm led by billionaire Asif Aziz, secured shariah-compliant financing for $32 million from Bank of London and the Middle East (BLME) for its Trafalgar Square hotel conversion project.
⚓ Electric Ferry: Saudi Arabia’s Neom mega-project has bought eight electric-powered hydrofoil boats from Massachusetts-based Candela to whisk passengers between resorts, businesses and residential areas on the Red Sea coast.
🩺 AI Prescription: DreaMed, an Israeli startup that uses artificial intelligence to provide treatment recommendations to people with diabetes, raised $3 million in a funding round led by eHealth Ventures.
🗣 Circuit Chatter
💼 Growing Community: The Qatar Financial Centre, which houses international businesses in an area governed by its own legal and regulatory system, registered 505 new firms in the first half of 2024, up 230% from the same period last year.
🔒 Locking Up: Egypt’s Ahram Security Group is considering plans to build a factory to produce door locks and other products in Riyadh that would cater to Saudi Arabia and the broader GCC market, Chairman Samir Aref told Al Arabiya.
✈️ Delayed Delivery: Flydubai canceled new routes to Latvia, Lithuania and Estonia planned to start in October because of delays in the expected delivery of new Boeing jets and other logistics problems.
🏗️ High Price Tag: Rebuilding the Gaza Strip whenever the war between Hamas and Israel ends will cost more than $80 billion and require complicated international cooperation to carry out, Bloomberg reports.
🐩 Pet Set: Pet owners can take their furry companions on a luxury private charter flight aboard a Gulfstream GV, complete with treats and areas to relieve themselves in the air, The National reports.
🏘️ Price Guide: Abu Dhabi has launched a residential rental index to provide guidance to tenants and landlords on average rent prices across the capital.
🌍 Power Circuit
Sheikh Abdullah bin Zayed, UAE Deputy Prime Minister and Minister of Foreign Affairs, marked World Humanitarian Day with a message posted on X, speaking of how “the values of philanthropy and human solidarity are deeply rooted in the UAE’s legacy.”
Zaki Nusseibeh, Cultural Adviser to UAE President Sheikh Mohamed bin Zayed and Chancellor of the United Arab Emirates University, signed the transport fund for the satellite “ALainSat-1,” the university’s first satellite project, on Monday.
➿ On the Circuit
Majed Al-Hogail, the Saudi Minister of Municipalities and Housing, visited Washington on Monday and inaugurated the Sakani Program Exhibition, which is designed to provide Saudi families living in the U.S. with comprehensive housing and financing options.
Hassan Abdalla, head of the Central Bank of Egypt, had his term extended for another year in a step aimed at showing the country’s commitment to monetary reform after its devastating economic crisis.
Mohamed Abdel Samad, Managing Director of Nissan Egypt, said the company plans to invest in a power plant and achieve energy self-sufficiency in 2025, speaking after a meeting with Egyptian Minister of Investment and Foreign Trade Hassan El Khatib.
🎶 Culture Circuit
📽️ Movie Magic: Four Arab films were awarded prizes in Switzerland’s Locarno Film Festival over the weekend. Titles from Tunisia, Qatar, Saudi Arabia, Egypt, Lebanon, Iraq and Palestine were included in the line-up at the festival, which is in its 77th year. Among those to be recognised was French filmmaker Sylvie Ballyot’s “Green Line,” which follows a woman growing up during the Lebanese Civil War in the 1980s.
📷 Photo of the Day
🗓️ Ahead on The Circuit
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. 11-12, Dubai, UAE: Dubai AI & Web3 Festival. Bringing together the brightest minds to explore and expand the commercial possibilities of AI and Web3 technologies. Madinat Jumeirah.
Sept. 12, Dubai, UAE: U.S.-U.A.E. Space Relationship. U.S.-U.A.E. Business Council hosts luncheon featuring astronaut Sultan Al Neyadi, Minister of Youth; Salem Al Marri, Director General of Mohammed Bin Rashid Space Centre; and U.S. Ambassador Martina Strong. Ritz Carlton Hotel, DIFC.
Sept. 15-19: Abu Dhabi. Loop Beyond Borders. Luxury travel fair brings together hotel owners, tour operators, travel agents and government officials. Saadiyat Rotana Resort & Villas and Anantara Qasr Al Sarab.
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.
