Saudi banks dominate MENA ranking on annual Forbes list
While Saudi Arabia leads the Gulf in oil production, it’s also the region’s biggest banker.
The kingdom hosts 10 of the 30 largest lenders in the Middle East and North Africa, with a combined market value of $269 billion, according to Forbes’ annual ranking.
Riyadh-based Al Rajhi Bank was the region’s most valuable bank, with a market capitalization of $106 billion. Trailing Saudi Arabia in the rankings were the UAE in second place with seven banks valued at $153 billion, followed by Qatar in third place with six banks worth $77 billion.
Kuwait has two banks on the Forbes list with a combined worth of $68 billion, while Morocco’s three banks have a market value of $24 billion.
Saudi Arabia to deepen deficit amid foreign investment shortfall
Saudi Arabia is slipping deeper into deficit spending mode amid slowing growth in revenue from international investment and cutbacks in oil production.
Finance Ministry figures released on Monday show the kingdom’s 2024 deficit growing by almost 50% to $32 billion from projections made last December and reaching 2.9% of GDP.
The forecast buttresses earlier government statements that some of the banner construction projects it plans will have to be slowed down because of revenue shortfalls.
Saudi Arabia is having trouble meeting its goals for foreign direct investment, which at $9.7 billion was roughly the same in the first six months of 2024 as in the same period last year.
The government has set a target of $100 billion in FDI annually by 2030, about three times more than its previous high.
The Daily Circuit: Made in the UAE + OPEC oil targets
👋 Hello from the Middle East!
Today in The Daily Circuit, we’re looking at the UAE’s quick pace in reaching its oil production capacity, Congressional chatter on the $1.5 billion G42-Microsoft deal, talk of a reorganization at Saudi Arabia’s Public Investment Fund and Qatar’s smart bet on India’s Adani Group. But first, Emirati ambitions to become a hub for Middle East manufacturing.
Gulf governments may be pouring billions into technology’s next wave but old-fashioned industry is still front and center amid the global energy transition from oil. The UAE is courting investors in manufacturing at its third annual Make it in the Emirates Forum, a two-day deal-signing spree in Abu Dhabi that kicked off this morning. The UAE capital will look to build on $32.7 billion worth of procurement agreements and the over 100 deals that were inked at the previous two events.
In 2021 the Arab world’s second-biggest economy rolled out “Operation 300bn,” setting targets to become an industrial center by 2031 and more than double the industry sector’s contribution to the economy over a decade. There are signs of progress: industrial productivity has increased by 18% compared to 2020 and the UAE was ranked first regionally and 29th globally last year in a competitive industrial performance index from the United Nations, climbing seven spots since 2020, The National reports.
This year’s event will emphasize investment opportunities in energy, telecoms, aerospace, healthcare and pharmaceuticals and food and beverage manufacturing. The agenda is focused on Operation 300bn, the use of AI in industries and the Emirates’ goals in aerospace development. Speakers include Dr. Sultan Al Jaber, Minister of Industry and Advanced Technology; Sarah Al Amiri, Minister of State for Public Education and Advanced Technology; Badr Al Olama, Director General of the Abu Dhabi Investment Office; and Faisal Al Bannai, Secretary General of Abu Dhabi’s Advanced Technology Research Council and Advisor to the UAE President for Strategic Research and Advanced Technology Affairs.
The UAE is likely to achieve its full oil capacity target of 5 million barrels a day more than a year earlier than expected, Bloomberg reports. ADNOC, the state-owned oil company, is on course to reach the threshold by the end of next year or early 2026, which is ahead of the 2027 goal the company had set, according to people with knowledge of the operations. The higher capacity will be a potential source of tension as OPEC+ debates new production quotas later this year, the news agency said. OPEC and its partners have been restricting output for years to shore up the market and raise prices. The UAE – which said this month that it had raised capacity from last year’s level – has been eager to use some of its spare volume, according to Bloomberg. The country has occasionally clashed with Saudi Arabia on the issue, risking a split among the group three years ago, before a compromise was found.
SECOND THOUGHTS
Congressional China hawks are raising red flags over Microsoft’s $1.5 billion investment in Abu Dhabi artificial intelligence firm G42, Politico reports. The deal, brokered with the help of the U.S. Commerce Department, was in part aimed at bringing the UAE – a regional leader in AI development – out of China’s “camp,” Commerce Secretary Gina Raimondo said at the time. Microsoft and G42 are now in initial talks for a follow-on agreement that could include the transfer of cutting-edge U.S.-designed semiconductors to G42. In February, G42 said it is divesting its stakes in Chinese companies and in recent months has “signaled a willingness” to replace hardware made by Huawei and other Chinese vendors with U.S. alternatives, according to Politico. Sen. Marco Rubio (R-Fla.), the ranking member of the Senate Intelligence Committee, said he has “serious concerns that the Biden Commerce Department, under Secretary Raimondo, is not adequately safeguarding our advanced technologies.” On the other hand, Rep. Ritchie Torres (D-N.Y.) hailed the deal and said Congress “should welcome countries who choose to align themselves with the United States,” describing the UAE as a strategic ally and a moderating force in the Middle East.
💲 Sovereign Circuit
Public Investment Fund: 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. Part of the overhaul also includes reviewing expenditures on consulting firms like BCG and McKinsey. Meanwhile, the Saudi sovereign wealth fund got the green light from regulators over the weekend to acquire Saudi Iron and Steel Co., better known as Hadeed, from the kingdom’s petchems firm SABIC. The deal is expected to close in the second half of the year for an estimated $3.3 billion.
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.
Oman Investment Authority: 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.
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.
↪↩ Closing Circuit
🇯🇵 Tokyo Support: Saudi Arabia’s venture builder BIM Ventures and Japan’s SBI Holdings will launch a $100 million joint investment fund to support start-ups in the kingdom. The agreement was signed at the Saudi Vision 2030 Business Forum in Tokyo over the weekend.
🚁 Air Taxis: Dubai helicopter operator Air Chateau is considering making an investment of $27 million to build infrastructure for the air taxi network it is putting together in the UAE.
🚜 Fertilizer Source: QatarEnergy signed a 15-year contract to supply urea to U.S.-based Koch Fertilizer, a manufacturer and distributor of agricultural products.
👩🍳 First Course: OneOrder, an Egyptian developer of supply chain and logistics solutions for restaurants, raised $16 million in a Series A funding round led by Delivery Hero Ventures.
🛢️ Energy Hunt: Saudi exploration service provider ADES Holding Co. has secured a $645 million deal for six onshore drilling contracts with Kuwait Oil Co.
🏗️ Medical Center: Bymoro, the Moroccan subsidiary of Nigeria’s Bouygues Construction, won the construction contract for the Mohammed VI International University Hospital in Rabat.
🗣 Circuit Chatter
💥 Arms Sales: The Biden administration is expected soon to lift a three-year-old ban on selling offensive weapons to Saudi Arabia, the Financial Times reports.
🚢 Shipping Premium: The cost of international shipping has shot up as businesses prepare to ship goods for the Christmas holiday season far earlier than usual, in a sign of the far-reaching effects of disruption from attacks in the Red Sea, the Financial Times reports.
🔌 Plugging In:Saudi Arabia’s ACWA Power signed preliminary agreements with several Japanese companies on the sidelines of the Saudi-Japan Vision 2030 Business Forum last week.
✈️ Rocky Skies: A Qatar Airways flight from Doha hit severe turbulence over Turkey, injuring 12 people on board, before landing as scheduled in Dublin on Sunday.
👠 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
Chinese President Xi Jinpingwill host Egyptian President Abdel Fattah El-Sisi as well as several other Arab leaders in Beijing this week, its foreign ministry said on Monday. The leaders will “pay state visits to China and attend the opening ceremony of the 10th Ministerial Conference of the China-Arab States Cooperation Forum,” Foreign Ministry spokeswoman Hua Chunying said in a statement. UAE President Sheikh Mohamed bin Zayed is also expected to travel to China this week.
Sheikh Mohamed led the country in offering congratulations to the Al Ain football club after the team overcame Yokohama to win the Asian Champions League final on Saturday, with a 5-1 win on the night, and a 6-3 victory on aggregate.
➿ On the Circuit
Abdulla Al Marri, Minister of Economy and Chairman of Investopia, hosted the first meeting of the Next50 initiative in Abu Dhabi today. The program of Investopia brings together 50 CEOs and executives to promote dialogue and knowledge-sharing among leading companies in the UAE, and stimulate investment in emerging sectors in the private sector. Also in attendance were Hadi Badri, CEO of Economic Development at Dubai Department of Economy; Jean Fares, CEO of Investopia and Trevor McFarlane, CEO of EMIR.
Faisal Al-Mujfelhas been appointed Saudi Arabia’s new ambassador to Syria, state news agency SPA reported on Sunday. It is the kingdom’s first envoy to Damascus since the closure of the Saudi embassy there in 2012 during the Syrian civil war.
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.
Chris Eby, co-head of asset-management investment banking for Goldman Sachs, was hired by New York-based Blue Owl Capital and will start in September as head of strategy and corporate development, Bloomberg reports.
🎶 Culture Circuit
🍺 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
Toto Wolff, the Austrian billionaire CEO of the Mercedes AMG Petronas F1 team, and Emirati Mohammed Ben Sulayem, President of the Fédération Internationale de l’Automobile, catch up during qualifying ahead of the Monaco F1 Grand Prix in Monte Carlo on Saturday. (Photo: Getty Images)
🗓️ Circuit Calendar
May 27-28, Abu Dhabi, UAE: Make It In The Emirates Forum. Organized by the Ministry of Industry and Advanced Technology in collaboration with the Abu Dhabi Department of Economic Development and ADNOC, the forum offers a networking and knowledge exchange platform for the industrial community, both locally and internationally. Abu Dhabi Energy Center.
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 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.
The Weekly Circuit: AllianceBernstein in Dubai + Saudi contraction
👋 Good Monday morning in the Middle East!
Saudi Arabia’s economy, the world’s fastest growing in 2022, is likely to contract this year as the Gulf kingdom cuts back on oil production and invests in cultivating new industries such as solar power, tourism and professional sports. In a dramatic turnaround from last year’s growth of close to 9%, the $1 trillion Saudi economy is projected to shrink by 1%, which would make it the worst performer in the G20 after Argentina, according to Bloomberg.
To expand its sports interests, the kingdom plans to launch a multibillion-dollar investment company connected to its sovereign wealth fund, the Financial Times reported. The agreement last month to merge the Saudi-backed LIV Golf league with the PGA Tour is spurring proposals for other investments in international soccer, tennis, cycling, pro wrestling and other sports.
On Saudi Arabia’s western shoreline, Red Sea Global is installing 750,000 solar panels to power 16 new resort hotels it’s building with adjoining shopping malls. The company is also building the world’s largest battery storage facility with a capacity of 1,200 megawatts per hour. Some 50 resorts are under development by Red Sea, with up to 8,000 hotel rooms and more than 1,000 residential buildings spread across 22 islands and six inland areas.
Even as the Saudi economy slows, its growing financial ties with China are taking up some of the slack. After Chinese leader Xi Jinping visited the country and met with Crown Prince Mohammed bin Salman, the two countries signed a series of agreements that could be worth around $50 billion, the Wall Street Journal reported. At the Arab-China Business Conference in Riyadh last month, Hong Kong Stock Exchange CEO Nicolas Aguzin predicted that the Middle East’s biggest sovereign wealth funds could allocate up to $2 trillion of investments to China by 2030.
Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].
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BOUND FOR DUBAI
AllianceBernstein joins UAE’s new wave of investment firms
Dubai International Financial Centre (SYLVAIN SONNET VIA GETTYIMAGES)
AllianceBernstein, one of the largest U.S. money-management firms, plans to open a regional office in the United Arab Emirates to tap into the rising tide of investments flowing through the Gulf, The Circuit’s Jonathan Ferziger reports.
Details: The Nashville, Tenn.-based business, which has $676 billion in assets under management, said last week that it received a regulatory license to operate in the Dubai International Financial Centre, a special economic zone within the UAE’s biggest city. More than 300 asset- and wealth-management firms have offices in the DIFC.
On the ground: The new branch will be led by Jean-Paul Hobeika, managing director for Middle East institutions, who was named senior executive officer, AllianceBernstein said. He will work with Eduard van Nes, head of intermediary sales for the Middle East and Africa, who recently moved to Dubai. The firm also has an Israeli office in Tel Aviv.
Target clients: Setting up in the UAE will spur AllianceBernstein’s regional growth and “improve our ability to serve clients through proximity as well as capturing important market opportunities,” said Willem van Gijzen, head of Central Europe, Middle East and Africa institutions at the firm. The new office will target institutional clients, distribution partners and family offices with its asset management services, the firm said.
Relocated Russians: The UAE’s sovereign wealth funds manage more than $1.5 trillion in assets. A proliferation of mergers and acquisitions across the Gulf, as well as the money brought by Russians relocating because of international sanctions have bolstered financial and property markets.
Forecast raised: Capital inflow to the UAE rose by 10% last year to $23 billion. Investment banks and asset management firms have also been opening new offices in Saudi Arabia, which has made establishing local branches a prerequisite for government business. The World Bank raised its growth forecast for the UAE to 3.4% from 1.1%, based on higher oil output, recent economic reforms and new investments.
Moroccan business conference draws MENA’S female business leaders
Graffiti wall at Marrakesh conference painted by artists from Morocco, Senegal and Israel
In a bid to strengthen normalization efforts across the Middle East and North Africa, Morocco, Bahrain, the United Arab Emirates and Israel are promoting business ties among women. The most recent joint activity was a three-day conference in May that took place in Marrakesh, Morocco, and drew nearly 100 female business leaders, The Circuit reports.
Shared challenges: Besides networking, the gathering explored women’s access to education, financial security and opportunities for leadership. In a series of panel discussions and workshops, the conference focused on investments, corporate funding and infrastructure development. Participants also discussed shared challenges for women in the Middle East and Africa and the impact of geography, culture and religion.
Alone at the table: The conference was organized by Start-Up Nation Central, a nonprofit group that promotes Israeli tech companies, and Morocco’s Consensus Public Relations firm. Among the participants were women from Bahrain, Benin, Egypt, Israel, Jordan, Kenya, Morocco, Nigeria, South Africa, Sudan, United Arab Emirates and the U.S., organizers said. “What we were hearing often is that these women, particularly in the countries that we targeted, are often alone around decision-making tables,” Aviva Steinberger, SNC’s director of innovation diplomacy, told The Circuit. “The goals of this event were to connect these women at a professional level and at a personal level.”
Women’s solidarity: The conference, which was titled “Women Connect to Innovate,” was supported by a range of companies and organizations including Google, Women in Tech, Morocco’s Foundation for Research, Development and Innovation in Science and Engineering and the Mohammed VI Polytechnic University. Morocco’s minister of solidarity and social integration, Aawatif Hayar, hosted a dinner for the conference. While the workshops were going on, three artists from Morocco, Israel and Senegal created a graffiti wall dedicated to women’s solidarity and international cooperation.
Trade Leader: Foreign direct investment into the UAE rose to a record $23 billion in 2022, leading all six countries in the Gulf Cooperation Council.
Poaching Managers: HSBC is in talks to poach Aladdin Hangari and his team from Credit Suisse after the Swiss bank’s acquisition by UBS, the Financial Times reported. Abu Dhabi Commercial Bank, meanwhile, hired Citigroup’s Sami Tabbarah as head of investment banking, Bloomberg reported.
Lebanese Rebound: Business conditions in Lebanon’s private sector improved to a 10-year high in June despite the country’s soaring inflation and political deadlock.
Aramco India: Saudi Aramco is scouting for new investment opportunities in India amid a surge in demand for crude oil in the South Asian country, Bloomberg reported.
Iranian Drilling: Kuwait invited Iran to fresh talks about their sea borders after Tehran said it was ready to start drilling in a disputed gas field in the Gulf.
Islamic Cybercurrency: IslamicCoin, the world’s first halal digital asset, is launching a new platform called HaqqPad designed to offer Shariah-compliant decentralized apps.
MBC IPO: MBC Group, the Middle East’s biggest broadcaster, is planning meetings with investors to prepare for an IPO in Saudi Arabia, Bloomberg reported.
Vegan Protein: India’s Kothari Fermentation and subcontractor Biochem signed an agreement with Israeli startup Nextferm to produce its yeast-based vegan protein.
Active Ingredients: Israel’s Teva Pharmaceutical Industries, the largest maker of generic drugs, is weighing options for its active ingredients business, including a possible sale, Bloomberg reported.
Property Shopping: Dubai’s Al Habtoor Group is looking to buy commercial property in Slovakia, the Czech Republic and Romania, The National reported.
New Vision: Qatar is using its wealth to chart a new course, following last year’s construction boom in advance of hosting the soccer World Cup, the Financial Times reported.
Hot Homes: Wealthy buyers keep buying property in Dubai, with 176 homes worth at least $10 million sold during the first half of 2023, Bloomberg reported.
Closing Circuit
Iraqi Boost: The UAE and Saudi Arabia agreed to invest $3 billion each to bolster trade with Iraq and help restore its economy.
Fit to Invest: Affinity Partners, the private equity firm founded by former U.S. President Donald Trump’s son-in-law Jared Kushner, said it will invest in German fitness-tech company EGYM.
Healthcare Sell-Off: Aster DM Healthcare, which operates in India and the UAE, is in talks with Fajr Capital and other parties to sell a majority stake in its Gulf business.
Flying Qatar: Qatar Airways posted record profit in the fiscal year 2022/-23 of $1.2 billion, reflecting increased traffic while it hosted the World Cup soccer tournament.
Messy Burger: Rebel Foods, the Indian company that owns The Messy Burger and other “cloud kitchen” brands, outlined plans to open in Saudi Arabia.
Digital Chill: Abu Dhabi’s Mubadala Investment and funds managed by KKR acquired Canada-based CoolIT Systems, which maintains optimal temperatures for computers.
EV Fires: General Motors acquired Algolion, an Israeli startup that can detect potential hazards in battery cells and prevent fires in electric vehicles.
Chemical Merger: Abu Dhabi’s ADNOC is in talks with Austria’s OMV about merging the Borouge and Borealis companies in which they both hold stakes to create a $30 billion giant in the chemicals and plastics industries.
Test-Drive: WeRide, a Chinese maker of self-driving cars, secured a license from the UAE to test its vehicles on the country’s roads.
On the Circuit
Mohammed Al Suwaidi, CEO of Abu Dhabi’s ADQ holding company and chairman of Abu Dhabi National Energy Co., was appointed as the UAE’s minister of investment.
Chuka Umunna, JPMorgan’s head of green investments in the Europe, Middle East and Africa region, told Reuters that critics should stop “carping from the sidelines” about the UAE hosting the COP28 climate talks and let it show leadership in decarbonising the energy sector.
Monsignor Pierbattista Pizzaballa, the Latin patriarch of Jerusalem and the Vatican’s top representative in the Middle East, was elevated to cardinal by Pope Francis.
Ahead on the Circuit
July 10, Dubai, UAE: Inaugural Lab-Grown Diamond Symposium. International dealers, experts discuss latest innovations and the industry’s future. Atlantis, The Palm.
July 20, Dubai, UAE: Blockchain Banking Fest. Entrepreneurs discuss impact of blockchain on banking and payments. DIFC Innovation Hub.
July 28-Aug. 6, Jerash, Jordan: Jerash Festival. Annual gathering at ancient city’s Roman ruins features concerts, plays, fashion shows and art exhibitions. Jerash archeological site.
Sept. 14-15, Abu Dhabi, UAE: Super Angels Summit 2023. Angel investors meet with startup founders at annual conference. Abu Dhabi National Exhibition Centre.
Culture Circuit
F1 Debut: Formula One announced its 2024 schedule, starting in Bahrain and Saudi Arabia, where the March 2 and March 9 races will take place on Saturdays to accommodate Ramadan observances. The season ends Dec. 8 in Abu Dhabi.
Pedal for Peace: Top world cyclists from the Tour de France, Giro d’Italia and Vuelta a España will be invited to compete in the new “Middle East Peace Race,” which is being organized to take place in October, Cyclingnews reported. The three-day competition through courses in Israel, Bahrain and the UAE was conceived in part by Israeli billionaire Sylvan Adams, owner of the Israel-Premier Tech cycling team.
Gamers and Borders: A team of Israeli gamers arrived in Saudi Arabia to take part in a video game version of the FIFA World Cup soccer tournament that runs July 16-19. Although Israel and Saudi Arabia don’t have official ties, the three team members, their trainer and a deputy manager were allowed to enter on their Israeli passports in a diplomatic process brokered by FIFA officials.
