Egypt intercontinental rail plan needs go-ahead for Saudi bridge
Egypt is aiming to link its expanding railway network with Asia and Europe, but it hasn’t yet been able to finalize plans to build a bridge to Saudi Arabia.
In the meantime, it will use ships to bring cargo across the Red Sea, Reuters reports. Saudi’s King Salman first announced the bridge project in 2016, envisioning a road that would cross the Straits of Tiran to Egypt’s Sinai Peninsula.
If completed, the route would compete with another notional rail project that would connect the UAE to Israel’s Haifa Port through Saudi Arabia and Jordan.
Another project on the drawing board would run north from the Gulf through Iraq.
UAE’s AI drive may lead to TSMC, Samsung building factories
The UAE’s determination to become a world center for AI development is attracting new interest from Asia’s big chipmakers.
Taiwan’s TSMC and South Korea’s Samsung Electronics have discussed building large facilities to manufacture semiconductors in the UAE that could help propel the Gulf state to its goal of recognition as an artificial intelligence power, the Wall Street Journal reports.
Under initial terms being discussed, the projects would be funded by the UAE, with a central role for the Mubadala sovereign wealth fund and state-owned investment company MGX, which is focused on AI technology.
Amid the avalanche of interest in artificial intelligence, UAE-owned G42 has signed a variety of agreements with Microsoft, OpenAI and Nvidia over recent months.
UAE’s non-oil trade hits record $381 billion in first half of 2024
The UAE’s pursuit of closer trade ties with fast-growing economies in the Middle East, Asia and Africa saw its non-oil foreign trade hit a record $381 billion in the first half of 2024, up 25% compared to the same period last year. Non-oil exports made up 18.4% of total trade, compared to 16.4% for H1, 2023.
The double-digit expansion in foreign trade defied a global trend in slowing trade growth, spurred on by the signing of so-called comprehensive economic partnership agreements with several countries, Dr. Thani Al Zeyoudi, Minister of State for Foreign Trade, said in a statement on Sunday.
The new trade figures show “the UAE economy’s resilience, which is the result of our steadfast commitment to building strong, productive public-private partnerships as well as fostering collaborative growth with emerging global economies,” Al Zeyoudi said.
The Emirates, which is planning to sign similar trade deals with 26 countries, has so-far inked agreements with India, Turkey, Israel, Indonesia, Cambodia and Georgia, and is negotiating with Serbia, Vietnam, the Philippines, New Zealand and Ecuador.
The deals are considered critical to achieving the UAE’s ambitious target of close to $1.1 trillion in non-oil foreign trade by 2031.
The Daily Circuit: Aramco price hikes + Adani plots succession
👋 Hello from the Middle East!
Today in the Daily Circuit, we’re looking at plunging share prices in the Middle East, who will succeed Indian tycoon Gautam Adani in managing his sprawling corporate empire, the Mubadala-backed AI fund that may join the $12.8 billion bid for an Australian data center and the new Middle East pro baseball league’s plans for opening day in the UAE. But first, Saudi Aramco’s bumpy year.
Saudi Arabia is cautiously bullish on Asia’s appetite for oil while it tries to stoke demand in Europe.
That’s the takeaway from state-owned Aramco’s decision to raise the price of its Arab Light crude to Asia for the first time in three months – an increase of 20 cents to $2 a barrel above the regional Oman-Dubai benchmark, Bloomberg reports. At the same time, the world’s biggest oil company slashed prices in Europe by $2.75, its biggest reduction since the Covid-19 pandemic.
The moves come days after OPEC+ signaled it would make no changes to oil supplies this month and maintained its tentative plans to let member-countries start increasing production next quarter.
In contrast to its rivals whose stock prices are hitting record highs this year, Aramco is down 17%, the worst performance among the world’s 10 biggest oil companies by revenue, a reflection of its production cuts. PetroChina, by contrast, is up 24% while Exxon Mobil has gained 17% and Shell has risen 4.6% since the beginning of 2024.
A stock market rout led by Japan, where the Topix index plunged 12.2% in its biggest one day loss in more than 30 years, is continuing as markets open across the rest of the world today, amid fears of an economic slowdown in the U.S. While the sell-off was less pronounced than in Japan, markets in the Middle East fell on opening, with the Saudi Tadawul All Share Index showing declines of more than 3%, Abu Dhabi’s FTSE ADX down more than 3% and Dubai Financial Market’s General Index falling more than 4%. Dubai’s largest property developer, Emaar, was among the hardest hit, with its shares plunging more than 8% in the UAE. European markets opened down, with the tech sector leading falls and U.S. stock futures pointing to heavy losses when markets open.
SUCCESSION PLAN
Asia’s second richest man Gautam Adani has laid out his succession plans for the first time, telling Bloomberg in a rare interview that he will retire at 70 and hand over the reins of his vast Adani Group conglomerate to his two sons, Karan and Jeet, and their cousins, Pranav and Sagar. The 62-year-old tycoon is currently the 11th richest individual in the world, with a net worth of more than $100 billion, and has deep business connections in the Gulf from ports and power to tech and AI. Planning for one of the world’s largest and most complex transfers of wealth kicked off in 2018 when Adani invited the four heirs to lunch at his home and gave them a three-month ultimatum to decide whether they would keep the Adani Group together or split it up and part ways, Bloomberg reported. The four men decided to stick together. “I am happy that all of them are hungry for growth, which is not common in the second generation,” Adani said. “They have to work together to build a legacy.”
💲 Sovereign Circuit
Mubadala: 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. The consortium is led by IFM Investors, DigitalBridge, Silver Lake Management, and Global Infrastructure Partners.
Abu Dhabi Investment Authority: 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.
International Holding Company: Enersol, a joint venture between ADNOC Drilling and IHC-controlled Alpha Dhabi Holding, is set to acquire EV Holdings, which provides vision-based diagnostics and analytics services for the oil and gas sector, for approximately $45 million from UK-based private equity firm, Dunedin.
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
🛢️ Oil Drilling: A unit of Sweden’s Tethys Oil was granted a loan facility for $60 million from Abu Dhabi Commercial Bank to support its drilling for oil at two sites in Oman.
🏡 At Home Abroad: Egypt’s Beit Al-Watan initiative, which encourages Egyptians living abroad to invest in the domestic housing market, has brought in $7.3 billion since its launch in 2012, the government said.
🏦 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.
⌚ Time Flies: Titan Watches, part of Indian conglomerate Tata Group, plans to open 35 outlets across the Gulf region over the next 12 months, Arabian Business reports.
💼 Slowing Down: Non-oil business activity in the UAE improved at the weakest pace in almost three years in July amid heightened competition, rising price pressures and capacity overloads, according to the seasonally adjusted S&P Global UAE Purchasing Managers’ Index.
🗣 Circuit Chatter
🛩️ 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.
🛫 Flights Grounded: Many international airlines, including Lufthansa, British Airways and Air India, are canceling flights to Beirut and Tel Aviv amid concerns of growing escalation in the Middle East conflict.
🩺 Luxury Hospital: Oman’s Badr Al Samaa Royal Hospital was opened as a private healthcare facility in the capital city of Muscat offering “world-class medical care in a luxurious environment.”
✈️ Not for Sale: Egypt is seeking private investment in its airports and flight support services, but doesn’t plan to sell any of the facilities outright, Civil Aviation Minister Sameh El-Hefny said.
🍗 Boycott Bite: Revenues have fallen significantly at American brands in Muslim countries such as Kentucky Fried Chicken, Starbucks and Coca-Cola because of consumer boycotts, as fighting in Gaza goes into its 10th month, the Financial Times reports.
📃 AI visa drive: The UAE will streamline processes for a two-month residency visa amnesty using artificial intelligence, The National reports.
🌍 Power Circuit
UAE President Sheikh Mohamed bin Zayed conveyed his condolences to Abdul Hamid Dbeibeh, Prime Minister of Libya’s Government of National Unity, over the death of his son, Abdulrahman.
➿ 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.
Nicolai Tangen, CEO of Norway’s $1.7 trillion NBIM investment fund, is increasingly backing shareholder activists on climate action and corporate governance, Fortune reports.
Sheikh Abdullatif Al-Asheikh, the Saudi Minister of Islamic Affairs, Dawah, and Guidance, met with Syrian Minister of Awqaf Mohammad Abdul-Sattar Al-Sayyed in Mecca on Sunday on the sidelines of the Conference of Ministers of Awqaf and Islamic Affairs.
🎶 Culture Circuit
⚾ 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 Day
Umar Nurmagomedov of Russia celebrates after defeating Cory Sandhagen in a bantamweight fight during UFC Fight Night at Etihad Arena in Abu Dhabi on Saturday. (Photo: Getty Images)
🗓️ 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.
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.
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.
