The Daily Circuit: Sovereigns dominate dealmaking + Cruise ships reroute
👋 Hello from the Middle East!
Today in The Daily Circuit, we’re looking at how holiday cruise ships are avoiding the Red Sea, the diminishing Russian appetite for UAE real estate, ADQ’s interest in Polish poultry and a 122-story residential tower going up at the Dubai marina. But first, a report on the growing impact of sovereign wealth.
From artificial intelligence to renewable energy, Gulf sovereign wealth funds have become the go-to source for startup investment in a tight global economy. A new study from Bain & Co. gives a graphic view of why Silicon Valley titans and New York financiers have been making pilgrimages to the Public Investment Fund in Riyadh, Mubadala in Abu Dhabi and the Qatar Investment Authority in Doha.
The Bain report, released on Wednesday, showed that 86% of Middle East business deals last year came from sovereign funds, up from 84% in 2022 and 68% in 2018. The total value of those deals was an estimated $95 billion in 2023, down from a high of $98 billion in the previous year and more than triple the $26 billion recorded in 2018.
“The region’s sovereign wealth funds sit on an abundance of capital that they are using to accelerate an economic transformation, including an aggressive diversification away from hydrocarbon and an ambitious shift toward deals in Asia,” says the report, written by Bain’s Tom De Waele, Grégory Garnier, Riccardo Molinari and Elif Koc.
In their analysis of the sovereign wealth phenomenon, the authors look at how the funds have been used to build new industries such as esports in the Gulf, noting the $4.9 billion acquisition by PIF-owned Savvy Games of California-based Scopely in July. The shift toward Asia is illustrated in Mubadala’s co-leading a $2 billion investment last November in the Chinese online fashion company Shein, as well as the $1 billion that the QIA sank into India’s Reliance Retail Ventures in September.
The report examines the role that sovereign funds are playing in the energy transition, noting that commitments made to net-zero goals require them to “actively advocate for emissions reduction in portfolio companies and evaluate investments in enabling decarbonization technologies.”
As military efforts by the U.S. and its allies have failed to deter attacks in the Red Sea, more shipping lines are finding alternate routes. Along with cargo vessels, cruise operator Carnival said on Wednesday that it will probably not be sailing through the waterway until next year because of the persistent assaults on shipping traffic by Yemen’s Houthi militants. Royal Caribbean and MSC Cruises have also canceled trips. The number of vessels sailing through the southern Red Sea is down about 70% compared with the start of December. Container shipping has dropped about 90% and gas tankers have also ceased nearly all trips.
CLOSE WATCH
Russians are starting to cool on Dubai real estate and Kremlin-linked oil firms are facing payment delays as UAE banks become more cautious about adhering to international sanctions. Emirates NBD, Mashreq Bank and First Abu Dhabi Bank are among the firms that have upped their scrutiny of Russian entities in recent months, Bloomberg reports. Oil firms, meanwhile, are waiting several months to be paid for crude and other fuels as banks in the UAE, China and Turkey have become more cautious about possible violations of U.S. secondary sanctions, Reuters reports. In February, the UAE was dropped from a global watchdog’s list of countries at risk of illicit money flows, a coup for a country that is aiming to present its two largest cities, Dubai and Abu Dhabi, as model international financial hubs.
💲 Sovereign Circuit
Abu Dhabi Investment Authority: Swiss skincare company Galderma said on Tuesday the underwriters for the company bought an additional 5.6 million shares from one of its shareholders, Sunshine SwissCo AG (EQT) for 298 million Swiss francs ($329.83 million). Sunshine SwissCo is a wholly owned subsidiary of ADIA and Auba Investment, Reuters reports. The Cetaphil maker went public last week on the SIX Swiss Exchange in what could be the largest IPO in Europe this year.
ADQ: ADQ is mulling a bid for Cedrob Group, Poland’s biggest poultry and meat producer, as it looks to make investments that support the UAE’s future food security, Bloomberg reports. Taqa, an Abu Dhabi energy company wholly owned by ADQ, and Japan’s Jera have signed an agreement with a Saudi Aramco joint venture to build an electricity and stream generation plant to power a petrochemical complex in Jubail, Saudi Arabia.
↪↩ Closing Circuit
🌆 Living High: Six Senses, a unit of IHG Hotels & Resorts, and Dubai-based developer Select Group signed an agreement to manage the apartments in a 122-story building being built at the Dubai Marina that will be the world’s tallest residential tower when completed in 2026.
🇹🇳 No Thanks: Tunisia’s parliament stopped the Qatar Fund for Development from operating in the country, sacrificing some $150 million in financing over perceived threats to independence.
🇮🇳 India Office: Israel Aerospace Industries opened an Indian subsidiary, AeroSpace Services India, in New Delhi, where it will provide support for missile sales and other products used by the Indian army, navy and air force.
🗣 Circuit Chatter
🛏️ Rental Boom: Airbnb listings have more than doubled in Dubai to almost 25,000 over the past three years after the emirate was named the world’s most profitable location for the apartment rental platform’s landlords in 2022, The National reports.
🛥️ Ahoy Sailors: The Saadiyat Marina & Ferry Terminal has been inaugurated, opening up a range of new amenities for seafarers on the western end of the island, including 64 floating pontoons for mooring, a 10-meter wide slipway, 12 dry berths and a ferry terminal providing links to neighboring islands.
🛢️ Oil Flow: The UAE’s national oil company ADNOC announced that it has started production from its Belbazem offshore block, a joint venture with China National Petroleum Corporation.
🌍 Power Circuit
Saudi Crown Prince Mohammed bin Salman, who is Chairman of Soudah Development, said the new tourism destination on Saudi Arabia’s highest peak is “above the clouds” and will open to visitors in 2027.
Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and Chairman of Abu Dhabi Executive Council, spoke on the phone with Gibran Rakabuming Raka to congratulate him on his election as Vice President of Indonesia.
➿ On the Circuit
Tareq Al Sadhan was named CEO of Saudi National Bank, the kingdom’s largest lender, replacing acting CEO Talal Al Khereiji. He starts May 1.
Abbas Rizvi was named CFO of Investcorp, a Bahrain-based asset manager that counts Mubadala Investment Co. as its biggest shareholder. He has been with the company for 19 years.
Abdulla Salem Al Nuaimi, CEO of the Abu Dhabi Securities Exchange (ADX), said in a statement to the Emirates News Agency WAM that the ADX was the market for 75% of the IPOs in Gulf countries last year and he expects the positive trend to continue in 2024.
Alex Karp, Co-founder and CEO of Palantir, will come to Washington May 1 with some 100 other tech leaders for a conference focused on increasing government support for AI and protecting against competition from China.
Joseph Lieberman, the former U.S. Senator and Democratic nominee for Vice President in Al Gore’s unsuccessful White House bid in 2000, died on Wednesday at 82.
🎶 Culture Circuit
🐬 Ocean Life: The value of Marine Protected Areas for tourism and local fishing industries is in the billions, according to a comprehensive global assessment. The new study of 51 protected areas across more than 30 countries looked at ecosystems including coral reefs, mangroves, kelp forests and salt marshes, and found that establishing national parks at sea helped ocean life bounce back, providing many benefits to humanity, including hefty economic returns.
📷 Photo of The Day
Sheikh Mohammed bin Rashid, UAE Vice President and Ruler of Dubai, pictured riding in the front of the black vehicle, attended the final day of the Al Marmoom Heritage Festival for Camel Racing on Wednesday. (Photo: Emirates News Agency – WAM)
📅 Circuit Calendar
Daniel Kahneman, the Israeli-American psychologist who shared the 2002 Nobel Prize in economics for his research into how people make decisions amid uncertainty, died on Wednesday at 90.
Apr. 9, New York. The Information’s Private Capital Conference. An exclusive event for subscribers to join Founder and CEO Jessica Lessin and The Information’s reporters to discuss the future of technology and investing. New York Stock Exchange.
Apr. 16-17, Abu Dhabi, UAE. Green Hydrogen Summit 2024. Bringing together experts, policymakers, and industry leaders to explore opportunities and the industry’s future. Abu Dhabi National Exhibition Center.
Apr. 16-18, Abu Dhabi, UAE: World Future Energy Summit 2024. A platform to showcase the solutions to some of the most critical challenges identified at COP28. Abu Dhabi National Exhibition Center.
Apr. 16-18, Dubai, UAE. Middle East Energy. Energy leaders gather to debate and shape the future. Dubai World Trade Center.
Apr. 23-25, Dubai, UAE: GISEC Global. A forum for furthering the key discussions that are helping to define cyber resilience and connecting the global cybersecurity community. Dubai World Trade Center.
Apr. 25-26, Abu Dhabi, UAE: DriftX. An event for smart, autonomous and sustainable urban mobility across air, land, and sea organized in partnership with the Abu Dhabi Investment Office, Abu Dhabi’s Smart and Autonomous Vehicles Industry (SAVI) cluster and Bayanat. Yas Marina.
Apr. 28-29, Riyadh, Saudi Arabia: World Economic Forum Special Meeting. A gathering of investors, politicians and experts on topics of collaboration, growth and energy for economic development. TBC.
Apr. 29-May 1, Riyadh, Saudi Arabia: Future Hospitality Summit. An international gathering hosted in cities around the world bringing together the most influential hospitality investors and developers. Mandarin Oriental Al Faisaliah.
Apr. 29 – May 5, Abu Dhabi, UAE: Abu Dhabi International Book Fair. A key event for the publishing industry in the Middle East and North Africa. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Mobility Live. A conference and exhibition sponsored by the Abu Dhabi transport regulators, gathering disruptive technology developers in transportation and the public sector. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Middle East Rail. The leading conference in the region for rail innovation, technology and strategy. Abu Dhabi National Exhibition Center.
May 13-15, Abu Dhabi, UAE: Abu Dhabi Global Healthcare Week. A conference focusing on investments, and innovation to solve the most important global health challenges. Abu Dhabi National Exhibition Center and Abu Dhabi City.
May. 14-16, Doha, Qatar: Qatar Economic Forum, Powered by Bloomberg. A news-driven event dedicated to global business and investment. This year’s theme is “A World Remade: Navigating the Year of Uncertainty.” Request your invite here. Fairmont & Raffles, Doha.
May 29-31, Marrakech, Morocco: GITEX Africa. The second edition of the biggest tech and startup gathering in Africa. Place Bab Jdid.
Today in The Daily Circuit, we’re looking at rising import prices for Red Sea cargo, the Qatar Investment Authority’s new $1 billion fund of funds, a jolt to the Egyptian bond market and the new AI bot attending Board meetings at Abu Dhabi’s IHC. But first, Hub71 brings the A-List to the UAE.
It wasn’t until this morning that Hub71, the bustling startup accelerator in Abu Dhabi, staged a celebrity reveal for its showcase Impact event. Splashing the news on social media, Hub71 announced that comedian Trevor Noah would appear onstage fresh from his appearance at Web Summit in Qatar on Monday. The annual Hub71 conference highlights emerging tech companies in the UAE ecosystem and provides opportunities for startup leaders to rub shoulders with investors.
Besides Noah and Idris Elba, the British actor, DJ and investor who was interviewed onstage by The Circuit’s Kelsey Warner, speakers at the two-day conference included Badr Al-Olama, Director General of the Abu Dhabi Investment Office; Ahmad Ali Alwan, CEO of Hub71; Eddy Farhat, Executive Director of e& Capital, and Nadine Mezher, Co-founder of the Sarwa investment platform.
Joe Kawkabani, CEO of OSN Group and Elie Habib, Co-founder of Anghami, also spoke to Warner onstage, the first public appearance for the media executives since announcing their merger in November.
More investors, corporate executives and government leaders will appear on Wednesday at the UAE’s Investopia conference on Abu Dhabi’s Saadiyat Island. Among the keynotes will be UAE Minister of the Economy Abdullah bin Touq Al Marri, Mubadala CEO Khaldoon Al Mubarak; Anthony Scaramucci, Founder and Managing Partner of SkyBridge and Eric Cantor, the former U.S. House Majority Leader and Vice Chairman of Moelis.
International Holding Company, the Abu Dhabi-owned industrial conglomerate, announced that it has created a new post on its Board of Directors for an “Artificial Intelligence Observer.” The virtual entity was developed by G42, the holding company’s fast-growing AI firm, in collaboration with Microsoft, and given the name “Aiden Insight.” It will use its abilities “to continuously process and instantly analyze decades of business data, financial information, market trends, and global economic indicators,” the company said. IHC Chairman Tahnoun bin Zayed Al Nahyan said appointing Aiden Insight to the Board shows the company’s “commitment to innovation and forward-thinking leadership.”
SHIPPING PREMIUM
Prices for goods imported by container ships have risen more than 300% in the U.K. because of attacks on vessels in the Red Sea, with delays in delivery stretching up to a month, according to a survey of 1,000 companies by the British Chambers of Commerce. Retailers are appealing to the government for help, reporting supply shortages and cash flow problems. The average cost of shipping goods from China to Europe has more than doubled, with most ships preferring to travel around Africa rather than risk attack by approaching the Suez Canal, according to the UN Conference on Trade and Development.
💲 Sovereign Circuit
Qatar Investment Authority: The QIA is creating a $1 billion fund of funds to invest in tech startups through international and regional venture capital funds.
Public Investment Fund: Saudi Arabia’s sovereign wealth fund has hired Goldman Sachs, HSBC and Standard Chartered as joint global coordinators to arrange investor meetings starting on Monday to sell Islamic sukuk bonds, its second offering this year, Reuters reports.
ADQ: Egypt’s dollar-denominated bonds rose by record margins and its currency strengthened on the black market as the $35 billion investment deal it signed with the UAE’s ADQ sovereign wealth fund provided hope that the government will manage to weather its financial crisis.
🗣 Circuit Chatter
⛏️ Gold Rush: Saudi mining company Ma’aden plans to increase gold exploration after CEO Bob Wilt said a find in the Mecca region could set off “the world’s next gold rush.”
⚓ Sustainable Ports: UAE-based DP World and Masdar renewable energy company agreed to set up solar and energy storage systems in the region’s seaports, starting with Saudi Arabia, Senegal, and Egypt.
👟 Just Doing It: Adidas plans to open 100 stores in Saudi Arabia by next year and sign commercial partnerships with the Saudi Arabia Football Federation and Saudi Pro League.
↪↩ Closing Circuit
🚗 Parking Lots: The Dubai government will sell a 25% stake in Parkin, the company set up to manage municipal parking operations in an IPO planned for March 21.
🩺 Hospital Bonds: Middle East Healthcare Co., which runs Saudi Arabia’s German Hospital, concluded its $267 million offering of Islamic sukuk bonds that will be traded on the Tadawul Exchange in Riyadh.
💰 Venture Platform: Dubai’s Cotu Ventures said it will launch a $54 million fund to invest in early stage startups across the Middle East and North Africa. Cotu’s limited partners include Mubadala, Lunate, the Dubai Future District Fund and Arab Bank.
💼 Personnel Management: Workday, which helps companies manage human resources functions, announced its intent to acquire Israeli HR startup HiredScore for an undisclosed price.
🐙 Octopus Target: Codefresh, an Israeli-U.S. software integration startup, was acquired by Australia’s Octopus Deploy for a reported $40-$50 million, Calcalist reports.
🌍 Power Circuit
Emir of Qatar Sheikh Tamim bin Hamad Al Thanibegins a state visit in Paris today with French President Emmanuel Macron.
Sheikh Maktoum bin Mohammed, the UAE Finance Minister and First Deputy Ruler of Dubai, hailed the importance of training young government officials for future senior posts in an address to mark the completion by 10 ministry officials of the “Second-Line Leaders Edge Program,” designed by the University of Arizona’s Eller Executive Education Center.
➿ On the Circuit
WTO Director General Ngozi Okonjo-Iwealatold trade ministers meeting in Abu Dhabi on Monday that global trade is unlikely to reach the organization’s 3.3% growth forecast because of geopolitical tensions.
James Humfrey was appointed by Xlinks as CEO of the $25 billion Morocco-UK Power Project, which is building an undersea cable to bring solar and wind-generated electricity to Britain’s power grid.
🎶 Culture Circuit
😂 Just for Laughs: Aziz Ansari and Tom Segura will headline the inaugural Abu Dhabi Comedy Week, to be held from May 18-26 at Etihad Arena. Tickets go on sale on Thursday.
📷 Photo of the day
Idris Elba, the British actor and star of “Hijack,” “Beasts of No Nation,” and “Mandela: Long Walk to Freedom,” was interviewed onstage today by The Circuit’s Kelsey Warner about his business ventures during the Hub71 Impact event in Abu Dhabi. Calling himself an “Afro-optimist,” Elba said he was inspired in his African investments by how the UAE has flourished from a modest past not long ago.
📅 Circuit Calendar
Feb. 25-27, AlUla, Saudi Arabia: AlUla Future Culture Summit. Conference on art and culture in Saudi Arabia. Daimuma Cultural Oasis.
Feb. 26-27, Abu Dhabi UAE: Hub71 Impact. Founders, investors and government discuss the impact of the UAE startup ecosystem. Abu Dhabi Global Market North Pavilion.
Feb. 26-29, Doha, Qatar: Web Summit Qatar. A Middle East edition of the technology crowd mega-event, gathering investors, entrepreneurs and business leaders. Doha Exhibition and Convention Centre.
Feb. 28-29, Abu Dhabi, UAE: Investopia. A gathering of investors hosted by SALT and Investopia, an investment platform launched by the UAE Ministry of Economy and backed by Mubadala and the Department of Economic Development. St. Regis Saadiyat.
March 1, Abu Dhabi, UAE: Abu Dhabi Family Office Summit. One of the largest meetings in the region for family office leaders and investors. Saadiyat Rotana.
March 4-7, Riyadh, Saudi Arabia: LEAP. A global technology conference for developers, startups, investors, C-suite and media. King Abdul Aziz International Conference Center.
March 5-6, Doha, Qatar: International LNG Forum. Gathering of industry leaders and key stakeholders to discuss the future of gas in a key export market. InterContinental Doha Beach.
March 5-6, Jerusalem, Israel. Life Science & Health-Tech Week in Israel. Healthtech company executives, investors, and government leaders join the annual conference. International Conference Center.
Chipmaker chatter in Dubai + Rising Red Sea premiums
👋Hello from the Middle East!
Today we’re looking at rising war risk premiums in the Red Sea, investments by the UAE and Saudi Arabia in India, Mubadala’s efforts to lure fund managers to Abu Dhabi and NEOM’s new members-only beach club. But first, chipmakers will be peering into the future onstage in Dubai.
The founder of the world’s first semiconductor company to be valued at more than $1 trillionwill take the stage on Day 1 of the World Governments Summit in Dubai next week. Jensen Huang, founder and CEO of California-headquartered Nvidia, will be in conversation with Omar Al Olama, the UAE’s Minister of State for Artificial Intelligence, discussing who will shape the future of AI. (Spoiler: perhaps them?)
The annual summit was started by Ruler of Dubai Sheikh Mohammed Bin Rashid in 2013 to serve as a global knowledge exchange program for governments. Asked about the summit’s role against the backdrop of escalating geopolitical tensions in the region, Mohammad Al Gergawi, Minister of Cabinet Affairs and Chairman of the World Governments Summit Organization, said that the event focuses on laying out a future roadmap for governments. “We don’t claim to have all the solutions, but we try to get a glimpse of the future,” he said.
Alongside Huang, other AI leaders like Sam Altman, CEO of OpenAI and Alex Karp, CEO of Palantir Technologies, are also scheduled to attend. Other attendees include Ajay Banga, president of the World Bank; Kristalina Georgieva, Managing Director of the International Monetary Fund; Klaus Schwab, Chairperson of the World Economic Forum; and Tedros Adhanom Ghebreyesus, Director General of the World Health Organization.
Mubadala Investment Co. Managing Director and Group CEO Khaldoon Al Mubarak is also on the Day 1 agenda, onstage with Stephen Pagliuca, the founder, Chairman and CEO of Bain Capital. Pagliuca, who is also co-owner of the Boston Celtics, will be alongside Ross Perot Jr., Chairman of The Perot Group.
Closing out the first day will be former Fox News host Tucker Carlson. The lightning rod newsman, who found a landing pad in Elon Musk’s X last year after departing his eponymous show, is reportedly raising millions of dollars for his own media company. He will give a talk titled “What’s next for storytelling.”
War underwriters have raised the premiums they charge U.S., British and Israeli firms by as much as 50% for ships sailing through the Red Sea because of attacks by Yemen’s Houthi militants, Reuters reports. The premiums quoted for Red Sea voyages have hovered around 1% of the value of a ship in the past 10 days, up from around 0.7% previously, the news agency says. That adds hundreds of thousands of dollars for a seven-day voyage.
INTEREST IN INDIA
ADIA, the Abu Dhabi Investment Authority, is putting aside as much as $5 billionto invest in India through a tax-neutral finance hub in Prime Minister Narendra Modi’s home state of Gujarat, Reuters reports. With approval from regulatory authorities, ADIA will become the first sovereign wealth fund to invest in the world’s most populous country through the Gujarat International Finance Tec-City, known as GIFT City. The approval comes a week before Modi visits Abu Dhabi to inaugurate the grand BAPS Hindu temple.
💲 Sovereign Circuit
ADQ: Lunate, an ADQ-backed investment management firm, will contribute about $500 million to an effort by New York’s Blue Owl Capital to raise $2.5 billion and buy minority stakes in mid-size asset managers, Bloomberg reports.
Mubadala: Abu Dhabi Catalyst Partners, a joint venture between Mubadala and Alpha Wave Global to attract fund managers to the UAE capital, has invested in 29 companies since it was set up in 2019, and is helping to create about 400 new jobs in Abu Dhabi Global Market, Bloomberg reports.
Public Investment Fund: More than 8,000 executives, investors and senior officials from government attended the PIF’s Private Sector Forum, which concluded on Wednesday. The two-day meeting aimed to drive investment into the kingdom and put a spotlight on the fund’s portfolio and wholly-owned companies.
🗣 Circuit Chatter
🚌 Eco-Friendly Buses: Egypt is trying to bolster its motor vehicle industry, focusing on Nasr Automotive, a state-owned company that produces eco-friendly buses.
🛩️ Chinese Arms: While U.S. companies like Boeing and Lockheed Martin dominated the World Defense Show in Riyadh this week, China’s arms sales overshadowed that of most other countries, Bloomberg reports.
💵 Busting Sanctions: Some Russian banks appear to have maneuvered around a ban on shipping dollars and euros to the country by trading gold in the UAE and Turkey, Bloomberg reports.
🛡️ IP Protection: The UAE is introducing a national program to protect intellectual property that is aimed at attracting more foreign investment by reinforcing trust in the country’s laws.
↪↩ Closing Circuit
Calling Fintech: Zain Bahrain, the country’s leading telecom provider, launched Zain Fintech, a subsidiary that will expand the firm’s financial services business across the MENA region.
Panda Moots IPO: Saudi Arabia’s Savola Group is considering an IPO to help build up its Panda subsidiary, which operates 185 retail stores across the kingdom.
Oil Funds: Saudi Aramco is in discussions with several companies to make investments in India, the world’s third largest importer and consumer of oil, Reuters reports.
Members Only: Saudi Arabia’s NEOM is building a members-only beach club called Xaynor, which will offer waterside lounges, gourmet dining, entertainment and a luxurious spa on the Gulf of Aqaba.
🌍 Power Circuit
Bahraini Crown Prince Salman bin Hamad flew on Wednesday to Riyadh, where he was greeted by Saudi Crown Prince Mohammed bin Salman for a meeting of the Saudi-Bahraini Coordination Council.
Sheikh Mohammed bin Rashid, Ruler of Dubai and Prime Minister of the UAE, attended the graduation ceremony of Zayed II Military College, urging the graduates to demonstrate loyalty to the country and to help those in need.
Saudi Minister of Economy and Planning Faisal Al-Ibrahim has been named the new chairman of the kingdom’s National Infrastructure Fund.
➿ On the Circuit
Katerina Giannouka, CEO of Jumeirah Group, was the only woman to break into the top 10 of a power ranking by Arabian Business of “100 people you should know in Dubai.”
Nandhu Nandhakumar, a former LG Electronics executive, has been tapped to become CTO of the new PIF-backed electronics company Alat, which is currently making key hires.
🎶 Culture Circuit
👠 Stepping Out: Vogue Arabia’s block party in Al Balad, the historic neighborhood of Jeddah, Saudi Arabia kicks off today. Hai Vogue marks the storied publication’s first big event in the kingdom, bringing together local and international fashion, beauty, music, food and art until late-night on Friday.
📅 Circuit Calendar
Feb. 3-11, Abu Dhabi, UAE: Mubadala Abu Dhabi Open. WTA brings top women tennis players to the nine-day tournament. International Tennis Center, Zayed Sports City.
Feb. 9-11,Abu Dhabi, UAE: Middle East Comic Con. Nerds unite for the biggest pop culture gathering in the region. Abu Dhabi National Exhibitions Center.
Feb. 12-14,Dubai, UAE: World Governments Summit. Artificial intelligence takes center stage this year at the global gathering. Madinat Jumeirah.
Feb. 12-13,Riyadh, Saudi Arabia: Global Smart City Forum. AI and smart city experts convene to discuss the future of these cities and their impact on communities. The Arena.
Feb. 16-18, Munich, Germany: Munich Security Conference. Defense industry, foreign policy and national security leaders gather for annual summit. Hotel Bayerischer Hof.
Feb. 19-20, Riyadh, Saudi Arabia: Saudi Capital Markets Forum. A gathering of government ministers, banks and local publicly traded companies to discuss integrating emerging markets with established financial systems. King Abdullah Financial District.
Feb. 21-22,Dubai, UAE: Step Conference. The Dubai edition of the leading tech festival for emerging markets. Internet City.
Feb. 22-23, Miami Beach, FL: FII Priority Miami. A summit on disruptive technology and investment trends hosted by the Future Investment Initiative Institute. Faena Hotel Miami Beach.
Feb. 26-29,Doha, Qatar: Web Summit Qatar. A Middle East edition of the technology crowd mega-event, gathering investors, entrepreneurs and business leaders. Doha Exhibition and Convention Centre.
Feb. 28-29,Abu Dhabi, UAE: Investopia. A gathering of investors hosted by SALT and Investopia, an investment platform launched by the UAE Ministry of Economy and backed by Mubadala and the Department of Economic Development. St. Regis Saadiyat.
March 1,Abu Dhabi, UAE: Abu Dhabi Family Office Summit. One of the largest meetings in the region for family office leaders and investors. Saadiyat Rotana.
March 4-7,Riyadh, Saudi Arabia: LEAP. A global technology conference for developers, startups, investors, C-suite and media. King Abdul Aziz International Conference Center.
March 5-6,Doha, Qatar: International LNG Forum. Gathering of industry leaders and key stakeholders to discuss the future of gas in a key export market. InterContinental Doha Beach.
Lulu eyes $1 billion IPO + M&A shifts to sovereigns
👋Hello from the Middle East!
Today we’re looking at how sovereign wealth funds are propping up regional M&A activity, a fresh word of warning on the Red Sea, Mubadala’s plans with Abu Dhabi’s biggest developer for a new office tower and Emirates President Tim Clark’s spicy words for Boeing. But first, are IPOs headed for another banner year in the Gulf?
Lulu Group International, one of the biggest retail operators in the Middle East, is eyeing a potential $1 billion initial public offering as a solid pipeline of 29 IPOs is in the offing for 2024.
Banks have been asked to pitch for roles in Lulu’s planned dual listing in Riyadh and Abu Dhabi, Bloomberg reports, citing unnamed sources. Indian entrepreneur Yusuff Ali founded the grocery chain in the early 1990s. Today it has annual revenue of about $8 billion and employs more than 70,000 people, operating in 26 countries across the Middle East, Asia, the U.S. and Europe.
Robust post-listing performance of the region’s companies – returning an average of 40% to investors – has spurred interest in IPOs, bolstered by government reforms and a privatization push. Companies from the GCC region raised a total of $10.79 billion in IPOs last year, data showed. Although the overall value of funds raised through primary public listings dropped by 55% annually, mirroring global trends, the number of IPOs in the GCC declined marginally to 46 issuances in 2023 from 48 issuances in 2022, according to data from Bloomberg.
Middle East sovereign wealth funds are dominating merger and acquisition activity in the region amid an overall decline in dealmaking activity, according to new data from Bain & Co. Sovereign wealth funds poured an estimated $81.7 billion into M&As in 2023, representing 86% of the total value of deals during the year. The region saw around $95 billion worth of M&As, registering a 3% decline from the prior year, mirroring global trends. “The Middle East is undergoing a significant shift towards accelerating the energy transition, with a growing emphasis on clean energy investments and ambitious net-zero targets,” said Elif Koc, a partner at Bain & Company Middle East.
WORD OF WARNING
While raising its 2024 growth forecast for the world economy to 2.3%, the OECD warned that a widening of the Gaza conflict and escalated attacks on tankers in the Red Sea “could disrupt shipping more extensively than presently expected, intensify supply bottlenecks, and push up energy prices if traffic is interrupted in the key routes for the transport of oil and gas from the Middle East to Asia, Europe and the Americas.”
💲 Sovereign Circuit
Abu Dhabi Investment Authority: ADIA is mulling the purchase of a minority stake in Dalian Wanda Group Co.’s mall operator, Bloomberg reports. Private equity firm PAG and other investors hold a combined 60% in China’s Zhuhai Wanda, the world’s largest mall operator by square footage.
Mubadala: The sovereign wealth fund is partnering with Aldar, Abu Dhabi’s biggest developer, to build an office tower on Al Maryah Island, the capital’s financial center. The plan is part of Aldar’s larger development push to deploy $1.4 billion on a range of retail, commercial and residential assets across the emirate.
Public Investment Fund: The Private Sector Forum, hosted by the PIF, got underway in Riyadh on Tuesday with the sovereign wealth fund showcasing its portfolio companies to potential private sector investors and collaborators.
🗣 Circuit Chatter
💰 Annual Earnings: International Holding Co., the UAE’s most valuable listed company, reported annual earnings on Monday, posting a less than 1% growth in net profit for the full year 2023.
🇫🇷 Doubling Down: French defense contractor Thales plans to double its presence in Saudi Arabia, focusing on military sales and cybersecurity, CEO Patrice Caine told Arab News at the World Defense Show in Riyadh.
🌊 Under the Sea: Emirati telecom company e& will manage the UAE’s section of the 2Africa undersea cable project that is planned to connect Europe, Africa and Asia, while providing faster internet connections across the MENA region.
🇮🇱 Flight Halt: El Al Israel Airlines canceled flights to Marrakech, Morocco, citing a decline in demand from Israeli travelers. Israel’s flag carrier has also scrubbed flights to South Africa.
🇮🇷 Tehran Front: Iran used accounts at Lloyds and Santander banks to evade international sanctions, operating out of a London office of Petrochemical Commercial Co. near Buckingham Palace, the Financial Times reports.
↪↩ Closing Circuit
🛢️ Condensation Contract: QatarEnergy signed a 10-year deal to supply a unit of Japan’s Mitsui & Co. with up to 11 million barrels a year of condensates, the hydrocarbon liquid that condenses in natural gas production and is used in a variety of fuels.
✈️ Air Force Fuel: Airbus, the world’s largest aircraft manufacturer, said it’s in talks to sell Saudi Arabia more of its A330 tanker military planes as part of the kingdom’s efforts to build up its air force.
🇪🇬 Egypt Package: Goldman Sachs analysts expect the IMF’s financing package for Egypt to reach $12 billion, Asharq Bloomberg reports.
💸 Crypto Retail: Oobit, an Israeli-founded startup based in Singapore that enables crypto currency holders to pay at more than 100 million retailers around the world, raised $25 million in a Series A funding round.
🇹🇷 Cargo Carrier: Ghitha Holding, a subsidiary of Abu Dhabi-based International Holding Co., said it has acquired a 44% stake in Turkish cargo carrier MNG Airlines for $211 million in shares.
🌍 Power Circuit
Saudi Crown Prince Mohammed bin Salmanmet with U.S. Secretary of State Antony Blinken in Riyadh on Monday as part of the Washington envoy’s latest tour of the Middle East. Blinken will also travel to Egypt, Qatar and Israel this week.
Emir of Qatar Sheikh Tamim ibn Hamad Al Thani received a letter from President of South Korea Yeon Suk-yeol, during a meeting in his office at the Amiri Diwan in Doha on Tuesday. The letter was delivered by Shin Won-sik, the South Korean Minister of National Defense.
Sheikh Mohammed bin Rashid, UAE Prime Minister and Ruler of Dubai, chaired a Cabinet meeting at Qasr Al Watan, Abu Dhabi, on Monday where a new online platform was introduced to explain and highlight the country’s laws.
Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, attended the groundbreaking ceremony for the Hamdan Bin Rashid Cancer Hospital in Al Jaddaf on Monday. The 116-bed facility will open in 2026 and pays tribute to the late Deputy Ruler of Dubai, Sheikh Hamdan bin Rashid Al Maktoum.
➿ On the Circuit
Elena Sorlini has been tapped as the new Managing Director and Chief Executive Officer of Abu Dhabi Airports, which operates the capital’s five commercial airports, after serving as the interim head since June 2023.
Tim Clark, President of Emirates, said the Dubai-based airline will send its own engineers to monitor Boeing production lines, citing a “progress decline” in safety standards at the world’s second-largest commercial aircraft manufacturer. Emirates placed $52 billion in Boeing orders at the Dubai Air Show in November.
Faisal Abbas, Editor-in-Chief of Arab News, has a new book coming out in June called “Anecdotes of an Arab Anglophile,” from Nomad Publishing.
🎶 Culture Circuit
🎾 Tennis Titans: Saudi Arabia will host a new tennis tournament in October titled “6 Kings Slam,” in which No. 1-ranked Novak Dejokovik, No. 2 Carl Alcaraz and Grand Slam winner Rafa Nadal will compete for an as-yet undisclosed cash prize.
📅 Photo of the Day
At the Mubadala Abu Dhabi Open on Tuesday, ahead of the tennis, Becky Anderson (left), CNN Abu Dhabi Managing Editor, moderated a discussion on women’s health and peak performance with (left to right) Dr. Mai Al Jaber, CEO of Imperial College London Diabetes Center; Dr. Summia Zaher, Medical Director at Danat Al Emarat Hospital and Julie Khani, Vice President at Hologic. (Photo: The Circuit)
📅 Circuit Calendar
Feb. 3-11, Abu Dhabi, UAE: Mubadala Abu Dhabi Open. WTA brings top women tennis players to nine-day tournament. International Tennis Center, Zayed Sports City.
Feb. 7-8, Riyadh, Saudi Arabia: PIF Private Sector Forum. The gathering will showcase the Public Investment Fund and its portfolio companies’ business opportunities. King Abdul Aziz International Conference Center.
Feb. 9-11, Abu Dhabi, UAE: Middle East Comic Con. Nerds unite for the biggest pop culture gathering in the region. Abu Dhabi National Exhibitions Center.
Feb. 12-14. Dubai, UAE: World Governments Summit. Artificial intelligence takes center stage this year at the global gathering. Madinat Jumeirah.
Feb. 16-18. Munich, Germany: Munich Security Conference. Defense industry, foreign policy and national security leaders and gather for annual summit. Hotel Bayerischer Hof.
Feb. 21-22, Dubai, UAE: Step Conference. The Dubai edition of the leading tech festival for emerging markets. Internet City.
Feb. 22-23, Miami Beach, FL: FII Priority Miami. A summit on disruptive technology and investment trends hosted by the Future Investment Initiative Institute. Faena Hotel Miami Beach.
Feb. 26-29, Doha, Qatar: Web Summit Qatar. A Middle East edition of the technology crowd mega-event, gathering investors, entrepreneurs and business leaders. Doha Exhibition and Convention Centre.
Feb. 28-29, Abu Dhabi, UAE: Investopia. A gathering of investors hosted by SALT and Investopia, an investment platform launched by the UAE Ministry of Economy and backed by Mubadala and the Department of Economic Development. St. Regis Saadiyat.
March 1, Abu Dhabi, UAE: Abu Dhabi Family Office Summit. One of the largest meetings in the region for family office leaders and investors. Saadiyat Rotana.
March 4-7, Riyadh, Saudi Arabia: LEAP. A global technology conference for developers, startups, investors, C-suite and media. King Abdul Aziz International Conference Center.
March 5-6, Doha, Qatar: International LNG Forum. Gathering of industry leaders and key stakeholders to discuss the future of gas in a key export market. InterContinental Doha Beach.
The Weekly Circuit: MBZ touches down in India + Phoenix mines Bitcoin
👋 Hello from the Middle East!
This week, we’re looking at the risks and rising costs of Red Sea shipping, a final reckoning of 2023 VC funding in MENA, the UAE’s moon mission agreement with NASA and Iran’s suspension of flights to Saudi Arabia. But first a glance at MBZ’s trip across the Gulf to visit the world’s most populous country.
All eyes are on India, one of the UAE’s most critical economic partners, as President Sheikh Mohamed bin Zayed touched down to attend the three-day Gujarat Global Summit that started on Wednesday. He was received at the airport by India’s Prime Minister Narendra Modi, the two leaders meeting for the fourth time in less than seven months – this time in Ahmedabad, one of the country’s largest cities.
The two nations announced agreements to develop renewable energy, food processing and healthcare. UAE port operator DP World and the government of Gujarat province also signed a preliminary agreement to build green ports.
The UAE-India relationship cannot be understated, with 3.5 million Indian expats living in the Emirates as of 2021, making up over a third of the country’s population. The UAE is India’s third-largest trading partner. In 2022, an economic partnership agreement was forged that helped boost bilateral trade to $38.6 billion in the first nine months of the year – almost double the figure recorded in the same period in 2020. During Modi’s visit to the UAE in July last year, the two nations signed an agreement to settle trade in the Indian rupees, instead of U.S. dollars.
Modi will travel to Abu Dhabi next month to inaugurate the Middle East’s first traditional Hindu stone temple, the BAPS Hindu Mandir, and attend a community reception of Indian expats planned at Zayed Sports City Stadium in the capital on Feb. 13.
Due to disruptions in the Red Sea, shipping costs soared by nearly 250% during the two months in which Yemen’s Houthi rebels have been attacking commercial vessels in the Red Sea. Charges for transporting a 40-foot container from China to Europe through the waterway have risen to about $4,000, up from $1,148 on Nov. 21 when the attacks began, according to the Drewry World Container Index, which tracks container freight rates.
Egypt and Abu Dhabi, however, are banking on the Red Sea’s future. AD Ports got approval from Egypt to connect the UAE capital to Red Sea ports in Upper Egypt under a new contract to build, operate and maintain terminals for cruise lines. Abu Dhabi’s Zayed Port will link to Safaga, Hurghada and Sharm El-Sheikh and eventually plug into a broader network of Arabian Gulf hubs, Aqaba and Europe and Asia, according to the Egyptian Ministry of Transport. The ADQ-backed AD Ports aims to have its first Egypt terminal operational by 2025.
The Abu Dhabi cryptocurrency mining and blockchain company Phoenix Group is investing $187 million in Bitcoin mining machines following a lucrative IPO on ADX last month. The company’s wholly owned subsidiary, Phoenix Computer Equipment Trading, has agreed through a related party Cypher Capital DMCC to purchase Bitcoin mining machines from industry giant Bitmain Development. International Holding Co., Abu Dhabi’s largest conglomerate chaired by Sheikh Tahnoon bin Zayed, bought a 10% stake in Phoenix in October of last year. Phoenix is also developing a crypto-mining farm in Oman, The Circuit previously reported.
Saudi Arabia’s Tadawul stock exchange is launching a new index to track its top 50 companies, which account for 90% of the Riyadh-based bourse’s value. The new TASI 50 index, which will be used as a benchmark for exchange-traded funds, futures and options, is part of the kingdom’s efforts to attract foreign investors and diversify its economy beyond oil.
The UAE signed an agreement to participate in NASA’s Lunar Gateway project to build a new space station in cooperation with the U.S., Canada, Japan and the EU. The UAE’s Mohammed bin Rashid Space Centre agreed to supply the tailor-made airlock for entering and exiting the space station, which is expected to be launched by 2030. The agreement enables the UAE to send its own astronauts to the space station, which will be used as a transfer point in NASA’s Artemis project to establish a sustainable human presence on the moon.
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].
GLASS HALF FULL
Gulf venture financing held steady in 2023 amid funding drought in U.S., Europe, Israel
Saudi nationals attend GITEX at the Dubai World Trade Center in Dubai. (Photo by KARIM SAHIB/AFP via Getty Images)
Saudi Arabia has come out on top in a final reckoning of venture capital activity in 2023, as the kingdom continues to lure startups from innovative competitors in the Middle East and Africa, The Circuit’s Kelsey Warner reports.
Debt expectations: Including debt financing deals, which propped up much of the deal activity last year, investment in Saudi Arabia-based startups grew 160%, while debt-free investment rose 48% compared to 2022, according to a new report from UAE startup platform Wamda. “Debt financing typically rises when investors become hesitant and, given what is happening both globally and regionally, I expect it to grow this year too,” Triska Hamid, editorial director at Wamda, told The Circuit.
Bucking a trend: Gulf investors poured a steady flow of cash last year into tech companies, bucking the global pullback from startup funding in the midst of economic slowdown and regional conflicts. Financing from the MENA region rose 1% to about $4 billion in 2023. By contrast, seed funds for startups plunged 60% in Israel, 44% across Europe and 30% in the U.S..
Steep drop: Look at how capital was raised in MENA more broadly and it’s a less rosy picture: nearly half of total fundraising came through debt financing in 2023. Equity accounted for $2.2 billion across 488 deals, down 36% from the $3.45 billion raised in 2022 and a steep decline from the nearly 800 deals done last year, according to Wamda.
Public Investment Fund: Saudi Arabia’s sovereign wealth fund raised its stake to 23% in Middle East Paper Co. (MEPCO), one of the region’s largest makers of cardboard and paper products. PIF was also among the investors listed as holders of risky property participation rights issued by Austria’s Signa Prime Selection, which is now undergoing insolvency proceedings, Bloombergreports. The PIF-backed NEOM mega-project signed a preliminary agreementwith the Saudi Ministry of Energy to advance cooperation, state news media reported on Sunday. Hong Kong’s Tsangs Group, which struck an agreementlast month with the PIF-owned ROSHN Group to facilitate technology investments, hopes to help create more “bilateral investment pipelines” between Chinese family offices and Saudi enterprises, Chairman Patrick Tsang told Asian Investor.
ADQ: The Abu Dhabi-based fund is mulling a bid in the competition to buy a minority stake in ICD Brookfield Place, Dubai’s largest office tower, a building worth as much as $1.5 billion, Bloomberg reports.
Mubadala: Brazil’s state-owned oil company Petrobras and Mubadala Capital are reportedly looking to formalize a partnership agreement after discussions earlier this year to co-develop biofuels in Brazil. The Emirati fund’s Mamoura Diversified Global Holding company held a bell-ringing ceremony at the Abu Dhabi Securities Exchange on Tuesday to announce the listing of $4.5 billion of dollar-denominated bonds and AED 750 million of dirham-denominated bonds.
Sovereign Fund of Egypt: The SFE plans to finance the development of downtown Cairo with the building of hotels that hold 2,600 rooms, refurbishing of historic buildings and creating 15,000 square meters of parks and green spaces.
Circuit Chatter
🏭 Mineral Energy: Saudi Arabia plans to build an industrial accelerator park aimed at sparking innovation in generating low-carbon energy from minerals, Minister of Industry Bandar Alkhorayef told the Future Minerals Forum in Riyadh.
🚢 Risky Business: COSCO Group, China’s largest cargo-shipping company, has notified customers that it is suspending service to Israel because of danger to its vessels in the Red Sea, Calcalist reports.
📺 TV Sequel: Former CNN President Jeff Zucker talks toThe New York Times about investing in the independent Hollywood studio Media Res through his Redbird IMI joint venture with Sheikh Mansour bin Zayed al Nahyan, Vice President and Deputy Prime Minister of the UAE.
🏢Trump Probe: Hotels and residential properties belonging to Donald Trump received $7.8 million during his presidency from foreign governments, topped by China and Saudi Arabia, a report by House Democrats said. Trump has maintained there was nothing illegal about his companies doing business with overseas customers.
🌏Chinese Puzzle: The Economistexamines China’s growing connections in the Gulf and asks, “Can Sino-Arabian business ties replace Sino-American ones?”
Closing Circuit
🇦🇪 Positive Performance: The UAE’s non-oil economy reported its second-best month in nearly five years, according to the December index-tracker from S&P.
💰Tech Fund: Israel’s Liquidity Group is raising $200 million for its sixth debt fund, which will focus on technology ventures, Calcalist reports. The Harel Insurance Group, which will invest $30 million in the new fund, will be the anchor investor.
🔒 Unicorn Defense: Aqua Security, an Israeli startup that protects cloud networks, raised $60 million in a funding round that valued the company at more than $1 billion.
🚗 Car Crash: Shares of Mobileye fell 28% in New York trading on Jan. 4 after the Jerusalem-based maker of self-driving vehicle equipment warned that lower-than-expected sales substantially hurt its 2023 earnings.
☀️ Solar Power: BlackRock, the world’s largest alternative assets manager, increased its stake to 15.8% from 9% in Israel’s SolarEdge, which makes equipment for optimizing solar panels.
🚙 Swift Commute: Dubai’s Road and Transport Authority awarded a $90 million contract to improve a traffic artery through its Umm Suqeim residential neighborhoods.
🌾 Growth Stage: Maalexi, a UAE-based risk management platform for farming businesses, raised $3 million in seed funding, led by Global Ventures.
⛽ Energy Exploration: Oman signed an agreement giving rights to Lebanon’s CC Energy Development to explore for oil and gas in the southern Dhofar region.
Power Circuit
U.S. Secretary of State Anthony Blinken traveled to Egypt on Wednesdayfor consultations on the Gaza war with Egyptian President Abdel Fattah El-Sisi to conclude a Mideast tour that has taken him to Israel, Jordan, Saudi Arabia, the UAE, Qatar and Turkey.
Jordan’s King Abdullah II hosted a meeting in the Red Sea port city of Aqaba on Wednesday with President El-Sisi and Palestinian Authority President Mahmoud Abbas to discuss the Gaza war.
Saudi Crown Prince Mohammed bin Salman hosted U.S. senatorsincluding Virginia Sen. Mark Warner, chairman of the Senate Intelligence Committee, Texas Sen. John Cornyn, New York Sen. Kirsten Gillibrand, Georgia Sen. Jon Ossoff, and Arizona Sen. Mark Kelly at his winter camp in AlUla. South Carolina Sen. Lindsey Grahammet with the Crown Prince on Sunday.
Kuwait’s Sheikh Mohammed Sabah Al-Salem, a Harvard-trained economist, was appointed prime minister by the emir, Sheikh Mishal Al Ahmad Al-Sabah.
UAE Prime Minister and Dubai Ruler Sheikh Mohammed bin Rashid rolled out a $56 billion program to doublethe number of Emirati families living in Dubai over the coming decade through investments in education and healthcare.
On the Circuit
Bill Anthony O’Reganwas appointed CEO of Q Holdings, a subsidiary of International Holding Co., succeeding Majed Fuad Mohammad Odeh, who stepped down.
Tim Clark, president of Emirates airlines, said in an interview with Bloomberg that the mid-flight accident that blew a door off an Alaska Airlines Boeing 737 Max aircraft was a setback for the manufacturer and “just another manifestation” of its longtime problems.
Qing Pan, chief financial officer of Chinese wealth manager Noah Holdings, said the firm is expecting to get a business license in Dubai by the end of this year, as more Asian wealth managers look to do business in the Gulf.
India Commerce and Textiles Minister Piyush Goyal said the country will open a goods showroom and warehouses for Indian goods in the UAE dubbed “Bharat Park” as the countries boost bilateral trade.
Rashit Makhat, director and co-founder of Dubai venture capital firm Scalo Technologies, writes about projects underway in the Gulf leveraging AI to address water scarcity in an op-ed for The National.
Culture Circuit
🏎️ Start Your Engines: The 46th annual Dakar Rally took off from Saudi Arabia’s historic desert city of AlUla, featuring 434 vehicles and covering a distance of 4,850 miles. The legendary two-week race takes drivers through stretches of challenging terrain across the kingdom and ends on Jan. 19 in the Red Sea port of Yanbu.
🎙 Sailing Music: The Mubadala Abu Dhabi Sail Grand Prix, which takes place Jan. 13-14, announced it will host an opening day concert by British pop group Take That.
⛳ Teeing Off: The first Dubai Invitational golf tournament starts on Thursday at the Dubai Golf & Yacht Club, featuring Northern Ireland’s Rory McIlroy, the world’s No. 2 player. The biannual event is new on the DP World Tour, pairing 60 professional golfers with 60 amateurs for three of the four rounds. The final round on Jan. 14 is just for the pros, with the winner taking a $425,000 prize. Coming up Jan. 21 is the Dubai Desert Classic, which takes place at the Emirates Golf Club, followed by the Bahrain Championship on Feb. 4 and the Qatar Masters on Feb. 11.
🎾 Net Play: British tennis champ Emma Raducanu will compete in the Mubadala Abu Dhabi Open next month, organizers said. Raducanu, who won the U.S. Open title in 2021 joins Tunisia’s Ons Jabeur and Brazil’s Beatriz Haddad Maia as top draws in the WTA event, which Switzerland’s Belinda Bencic won last year. The tournament takes place Feb. 3-11 at the International Tennis Centre in Abu Dhabi’s Zayed Sports City.
Ahead on the Circuit
Jan. 9-12, Las Vegas, Nev.: Consumer Electronics Show. CES 2024 will showcase the latest advancements and products in technology, transportation and healthcare, with a focus on artificial intelligence. Las Vegas Convention Center, the Venetian Expo and the Aria Resort & Casino.
Jan. 13-14, Abu Dhabi, UAE: Mubadala SailGP. F50 racing boats go head-to-head at the Mubadala Abu Dhabi Sail Grand Prix, presented by the Abu Dhabi Sports Council. Mina Zayed Port.
Jan. 15-19, Davos-Klosters, Switzerland: World Economic Forum Annual Meeting. The annual meeting aims to drive public-private cooperation and this year will focus on exploring opportunities enabled by new technologies.
Jan. 16-18, Dubai, UAE, Intersec: Security conference bringing together government and vendors focused on domestic, cyber, commercial, fire and rescue. Dubai World Trade Center and Commercial Security, Safety & Health, and Fire & Rescue. Dubai World Trade Centre.
Jan. 22-24, Riyadh, Saudi Arabia: Real Estate Future Forum. A gathering of government officials, developers and investors exploring development opportunities in the kingdom. Four Seasons Hotel.
Jan. 22-25, Abu Dhabi, UAE: UMEX. The only conference in the Middle East dedicated to drones, robotics and autonomous systems. Abu Dhabi National Exhibitions Center.
Jan. 24, Kuwait City, Kuwait: Kuwait Innovation Forum. Startup founders, investors, policymakers meet for the annual conference. Arraya Ballroom.
Jan. 25, Dubai, UAE: Casino Countdown. First Middle East conference to focus solely on the gaming industry, sponsored by Arabian Business. Atlantis The Royal Hotel.
Jan. 25-27, Manama, Bahrain: Health/Wellness Expo 2024. Annual gathering of medical professionals and alternative treatment specialists. Exhibition World Bahrain.
Jan. 29-Feb. 1, Dubai, UAE: Arab Health. The biggest trade show in the region for medical devices and healthcare. Dubai World Trade Center.
Feb. 26-29, Doha, Qatar: Web Summit Qatar. A Middle East edition of the technology crowd mega-event, gathering investors, entrepreneurs and business leaders. Doha Exhibition and Convention Center.
Endangered coral reefs connect countries in Mideast and Africa
Less than two years ago, Israeli and European researchers took a Nazi-built naval ship that had been used to place mines, outfitted it with modern scientific equipment and set sail from the Israeli city of Eilat to the Port of Sudan to study coral formations. The journey, which took place just months after Israel and Sudan normalized relations through the Abraham Accords, was among the first instances of formal scientific cooperation between the two countries.
But in the middle of the night, just a day into the voyage, a huge crash threw the researchers out of bed. The ship had run aground on a coral reef off the coast of Sinai, causing extensive damage and canceling the survey, which was sponsored by the Swiss-founded Transnational Red Sea Center.
“It was scary,” Maoz Fine, a professor of marine ecology at Hebrew University in Jerusalem and the Interuniversity Institute for Marine Science in Eilat, told The Circuit. “We were stuck on the reef for a few hours before we were rescued by the Egyptian navy. We lost a lot of equipment and personal stuff, but… the biggest loss was not to continue the cruise to Sudan.”
Although Sudan signed onto the normalization agreements in January 2021, and there have been some high-profile visits between the two countries, relations are still strained. While some European researchers flew to Sudan for a coral survey a few months later, Fine has not returned.
Next month, the Transnational Red Sea Center, founded by the Swiss Federal Institute of Technology in Lausanne, plans to carry out the full coral survey that was planned for 2021. The European and Sudanese researchers will study why coral across the Red Sea has been much more resilient to rising ocean temperatures than other places around the world. Researchers believe that the Red Sea’s hardy corals might contain the secret to help struggling corals around the world, which have declined by 14% globally since 2009.
Just below the surface of the Red Sea is a riot of psychedelic color, a Dr. Seuss-like jungle of more than 200 species of corals stretching down to the seafloor. Diving in the Red Sea is like entering a playground of underwater cliffs and caves and narrow canyons filled with corals that look like giant brains the size of a school bus, two-dimensional neon yellow oak trees, and bright orange tubes waving hello to the circulating schools of fish.
The water in the Red Sea is exceptionally clear compared to other marine environments, which allows sunlight to penetrate farther down than other areas, so the color is spectacular at every depth. And, most enticing for researchers, the Red Sea’s vibrant corals have been barely perturbed by the rising sea temperature that is bleaching other corals around the world, causing them to lose their color and sometimes die.
“We think the northern Red Sea has the best chance of survival, because the corals are farther away from the bleaching threshold than any other locality in the world,” said Fine, who has spent decades studying the corals in the Red Sea. Until recently, he’s only been able to collaborate directly with Jordanian and Egyptian scientists. There are eight countries that border the Red Sea: Israel, Jordan, Saudi Arabia, Yemen, Djibouti, Eritrea, Sudan and Egypt.
Cooperation across the entire Red Sea is essential for understanding why the coral are so resilient, Fine said. “If we don’t have a spread of monitoring and research along the Red Sea, we miss part of the picture,” he said. “There is a latitudinal gradient in temperatures, and of course there are local parameters like overfishing, so to have a full picture, we have to do it all along the gradient.” Since its founding in 2019, the Transnational Red Sea Center has run two research missions to Jordan and Djibouti.
Globally, corals cover less than 1% of the ocean floor, but they’re an important economic engine and environmental resource. Corals support approximately 25% of all marine life and generate billions of dollars and millions of jobs in fishing and tourism, as well as providing protection against storm surges. The value of goods and services provided by corals around the world is estimated at $2.7 trillion per year, including around $36 billion of coral reef tourism, like scuba diving, snorkeling and boat tours.
Although Australia is perhaps the best-known scuba destination, Egypt’s proximity to Europe makes it one of the most popular countries in the world for diving. Sharm el Sheikh alone has almost 300 dive clubs. Coral reef-related tourism contributes 3.5% to Egypt’s gross domestic product, according to the Global Coral Reef Monitoring Network’s 2020 report. Saudi Arabia’s Vision 2030 economic plan specifically calls for developing coastal tourism to diversify the kingdom’s economy. In Yemen, more than 220,000 people depend on fishing as their principal source of income, and commercial fishing accounts for 15% of the GDP.
“These reefs are the livelihoods of millions of people in the region, and we want to keep it intact and healthy, and the research is one of the parts of keeping [the coral] happy,” explained Fine.
Israel accounts for just 12 kilometers of the thousands of kilometers of coast along the Red Sea, but the corals are an important economic resource in Eilat, Israel’s southern resort city. There are more than 400,000 dives per year at 19 diving clubs, Yossi Chen, CEO of the Eilat Tourism Corporation, told The Circuit. “We really need to appreciate these corals, because the corals take care of us and take care of the sea,” said Chen. “It’s a real tourist attraction, and I hope people can understand what would happen if that went away.” Chen said that 80% of Eilat’s population works in tourism or tourism-connected jobs to support almost 3 million visitors per year from within Israel and abroad.
The northern Red Sea is an essential place for studying coral resilience because local coral can survive at temperatures much higher than the average water temperature, thanks to what scientists believe was a harrowing journey for the corals to establish themselves. During the last Ice Age, 20,000 years ago, the Red Sea dropped by 120 meters and was cut off from the Gulf of Aden, leading to massive die-offs, Fine said. Coral only started returning to the Red Sea around 8,000 years ago, when the sea was once again connected to the Arabian Sea. Coral that today is in the northern Red Sea came from coral larvae that floated from the Arabian Sea and had to pass through the southern Red Sea. In the southern Red Sea, temperatures can reach 34 degree Celsius in the summer, around seven degrees warmer than the northern Red Sea. This means that only coral able to survive warmer temperatures made it to the northern Red Sea.
The research can help shed light on coral problems in the Persian Gulf, which is located at similar latitudes but experiencing much worse bleaching. Overall, the Gulf region has lost more than 40% of living coral between 1996 (when monitoring began) and 2019.
Globally, other scientists are using artificial intelligence and algorithms to track patterns of coral bleaching, trying to identify areas where bleaching is less prevalent and to see if those corals share characteristics with the northern Red Sea, to identify the most important areas for conservation.
“These [monitoring stations] provide the whole world all of the required data related to the health of the corals, so decision-makers can know exactly how the corals are doing,” said Ali Al Sawalmih, director of the Marine Science Station in Aqaba, Jordan, who is also part of the Transnational Red Sea Center. Al Sawalmih has been cooperating with Israeli and Egyptian scientists for years, but said the Transnational Center is allowing researchers to study the Red Sea as a holistic ecosystem for the first time.
Sudanese researchers joined the Transnational Center mission in Jordan last August that was set up to deploy a coral monitoring system on eight different coral colonies off Aqaba’s coast. Al Sawalmih said one of the most interesting aspects of the collaboration is that scientists from each country can study species of corals they don’t have locally.
Both Al Sawalmih and Fine agreed the Transnational Center is only possible because of an outside, neutral leader, at least in the beginning. “You need someone to trigger the beginning, and the Transnational Red Sea Center played a role in waking us up,” said Al Sawalmih. “It’s essential to have a neutral body that can communicate between countries without diplomatic relations and is a friend of all.”
Fine said the presence of a neutral leader also helps maintain public support for the research, without making it political. “Collaboration is not always seen as a good thing by the public or by some parties,” he said.
But Al Sawalmih, who grew up in Aqaba and has a deep, personal connection to the Red Sea, believes that scientific cooperation is an effective building block to pave the way for better diplomatic relations.
“If we apply for projects together, diplomatic people are aware of that, and that starts new collaborations on higher levels. Science is very good for this,” he said. “Water molecules don’t recognize borders…cooperation is not a choice, it’s a must.”
Israeli women press for greater tech influence + Bahrain courts startups in Tel Aviv
👋 Good Monday morning in the Middle East!
Across the region, women are speaking out about the need to increase their numbers in corporate leadership. A Tel Aviv conference last week drew top women from the fields of technology, investment and academia who are in positions to bring some degree of change. At a time that women make up fewer than 10% of the CEOs in Israeli tech companies, those who attended the Women’s Empowerment Summit came away with the sense that a lot more work needs to be done.
As business ties strengthen between Israel and its Gulf partners to the 2020 Abraham Accords, Bahrain is inviting Israeli startups to base some of their operations in the island nation. Meanwhile, a young Israeli company by the name of Wilco, has developed a gamified training program for software engineers that works like a flight simulator for pilots.
On the culture side this week, Saudi Arabia is coming out in the New York fashion scene with an exhibition by 100 of its designers showing clothing in eight categories, ranging from modest to demi-couture. The desert kingdom also features in our sports coverage as former President Donald Trump proudly opened the LIV Golf tournament to his club in Bedminster, N.J., and pushed back against critics of the Saudi-backed event.
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].
GENDER GAP
Israeli women push for greater influence in tech world
Yifat Oron, who runs the Israel office of Blackstone Inc., the world’s second-largest private equity firm, said she’s appalled at the industry’s meager support for women. Citing the $330 billion invested by venture capital firms in technology companies last year, Oron asked at a conference last week what percentage of that sum was invested in businesses led by women.
“It’s really bad – 2%,” she told the audience at the inaugural Women’s Entrepreneurship Summit in Tel Aviv, as Linda Gradstein reports for The Circuit. “A slightly less bad number is the amount of money invested in companies that have women in the founding team – that’s 16%. It’s still really bad. Why is it bad? Because we don’t have enough women investors. So it’s a vicious cycle. We have to solve it.”
With Oron, a senior managing director at Blackstone, painting the grim investment landscape, others at the July 26 conference concentrated on how to improve the situation through networking and pushing companies to recognize the need for change. Ofra Strauss, chairperson of the Israeli foodmaker Strauss Group that was founded by her grandparents, said the company has evolved since earlier days when she was often the only woman in key business meetings. “It only took me two minutes to understand,” Strauss said. “If the room was empty of women and I didn’t see them around me, something was fundamentally wrong.”
Speakers also focused on other realms where women are not equal partners. Ruth Wasserman Lande, a member of Israel’s parliament from the Blue & White party and a former diplomat at its embassy in Egypt, said working in the Arab country was not easy. “I spent three years as a woman in Cairo and being an Israeli Jewish woman was challenging,” she told The Circuit in a phone interview. “We still have a way to go to have truly equal opportunities. We have more to deal with especially after we get married and have kids and have more to juggle. It is changing but slowly.”
Wasserman Lande, who is co-chair of the Abraham Accords Caucus in the Knesset, Israel’s parliament, noted efforts by the United Arab Emirates to promote women. For example, women by law make up half the members of the Federal National Council, an unelected advisory body to the royal court. When it comes to tech, only 5% of all CEO’s in the UAE are women, according to government figures, which is just below the global figure of 6%.
Bahraini envoy pitches Israeli companies on operating in Gulf
Touting low operating costs and significant labor subsidies, Bahrain is reaching out to Israeli companies and raising the idea of moving some of their operations to the tiny Gulf nation. Bahraini Ambassador Khaled Al Jalahma outlined his government’s intention to set up a regional hub that would cater to the needs of Israeli startups in a July 28 meeting in Tel Aviv with executives from more than a dozen companies. Bahrain is both “willing and flexible” to help foreign companies get set up, said Yariv Becher, vice president for “innovation diplomacy” at Start-Up Nation Central, a nonprofit organization that promotes emerging Israeli companies, which arranged the meeting.
The ambassador told the Israelis that his country “is business friendly and our work attitude is tachles,” according to several people present, scoring points with the group by using a Yiddish word that means straight talk. Israeli executives who attended the meeting said Al Jalahma made a good case for his country as a Middle East hub for sales, R&D, manufacturing and other roles.
“We want to be very active in the region and Bahrain can be a gateway,” said Rotem Arad, director of business development for H2Pro, an Israeli company that produces so-called “green hydrogen” by splitting water into its component molecules and generating cleaner, renewable energy. Among H2Pro’s investors are Microsoft founder Bill Gates, Japan’s Sumitomo Corp. and Jerusalem-based OurCrowd.
Other companies at the Tel Aviv event, which was sponsored by the Bahrain Economic Development Board, were Addionics, Aleph Farms, Beewise, C2i Genomics, Finteka,, Papaya Global, Minute Media, Monday.com, Scorpio Labs, See Tree, Set Point and Trieye.
Israeli startup Wilco closes experience gap for aspiring software engineers
A rookie software engineer sits at his desk and faces a problem he’s never encountered before, at least not in his college coding class. The wrong fix could cost his company millions, but luckily the stakes here are much lower. This engineer is honing his skills at a fantasy company on an online platform that works much like a flight simulator for aspiring pilots.
When the Israeli startupWilco launched its simulator platform last month, On Freund, the company’s CEO, and his founding partners were taking a page out of the playbook used by pilots, architects and race car drivers by creating a simulation experience for software engineers to gain new skills and master existing ones regardless of someone’s career opportunities or background. Engineers using Wilco complete various “quests” that allow them to practice troubleshooting problems that commonly arise in real-world situations, but in an engaging way that’s akin to a video game.
“I quickly realized that there is a difference between the theory which they have learned in school and the actual hands-on practice that takes years to come by,” Freund told The Circuit‘s Sophie Cohen.
The idea for Wilco (the name comes from the Roger Wilco character in the “Space Quest” movie franchise, not the alt-rock group) came to Freund about a decade ago. After he graduated from Tel Aviv University, he was managing a team of engineers at Handy, an online platform that connects users with cleaning and handyperson services, and Freund was looking for ways to let his team practice and learn new skills, outside of coding, that were not taught in university.
Last year, Freund, Alon Carmel, Wilco’s chief products officer, and Shem Magnezi, the startup’s chief technology officer, came together to launch Wilco with $7 million in seed money; the platform is accessible to any software engineer regardless of their background or location.
Asia Focus: The sale of two ports in Haifa to Indian and Chinese businesses highlights Asia’s interest in Israel’s new Gulf ties and making the country a trans-shipment hub for Europe.
Green Power: Greece and Saudi Arabia agreed to work together on developing green hydrogen as a renewable energy source in Europe.
R&D: Apple is setting up a research and development center in Jerusalem to work alongside two other Israeli facilities in Herzliya and Haifa. Meanwhile, Yahoo! is also expanding operations, hiring Neetai Eshel as managing director of R&D in Israel.
Solar-Powered: French corporate giants TotalEnergies and Veolia will build a solar energy system to power a desalination plant in Oman.
Actis Invests: Actis, a UK-based private equity firm will acquire a controlling stake in Yellow Door Energy, a renewable developer based in Dubai.
Hospital Robots: Tel Aviv’s Sourasky Medical Center opened what it billed as the world’s largest emergency room, featuring self-triage screens and robot guides.
Digital Diplomacy: The White House is working to boost cyber cooperation with Saudi Arabia and Israel in an effort to counter Iranian digital threats.
Congressional Probe: The House Intelligence Committee held a hearing to look into Israel’s NSO group, whose Pegasus software has been used by by governments to spy on activists, journalists, political leaders and U.S. citizens.
Closing Circuit
Saudi-Israel: Saudi Arabia’s Mithaq Capital amassed a 20% stake in Israel’s Otonomo, becoming the biggest shareholder in the auto technology company.
Ad Purchase: Israeli digital advertising company Tremor is buying Amobee, an Israeli advertising platform, for $239 million from Singapore’s Singtel.
Robot Docs: Diagnostic Robotics, led by Dr. Kira Radinsky, has raised $45 million for its AI clinical prediction system.
French Influencers: Saudi supermarket retailer BinDawood bought a majority stake in France’s Ykone, which specializes in marketing through media influencers.
Neom Stock: Saudi Arabia expects to raise $26 billion by selling shares in the futuristic Neom megacity that it’s building on the Red Sea coast.
Egypt Gas: Adnoc Distribution, the UAE’s largest gas station operator, will acquire a 50% stake in TotalEnergies Marketing Egypt for about $186 million.
Tech Layoffs: Hundreds of Israeli tech workers lost their jobs with the closing of R&D centers by AID Genomics, a medical diagnostics company, and Asurion, a U.S. insurance company.
On the Circuit
Gal Krubiner, Avital Pardo and Yahav Yulzari, founders of Israeli fintech business Pagaya Technologies, became billionaires when the stock rose 700% on the Nasdaq exchange.
Ian Johnston has been appointed chief executive of the Dubai Financial Services Authority, regulator of the emirate’s financial services free zone, returning to a job he held between 2012 and 2018.
Guy Oseary, the Israeli-American agent who manages Madonna, U2 and the Red Hot Chili Peppers, has branched out into the NFT (non-fungible token) market through Yuga Labs’ Bored Ape Yacht Club, according to a profile in Variety.
Ahead on the Circuit
Aug. 11-16, Dubai: NFT World Investment Expo. International gathering of investors to discuss future trends in the market of non-fungible tokens. Dubai Chamber of Commerce and Industry, Residential Building.
Sept. 5-6, Jerusalem: Cleantec, an international conference bringing together business executives in water technologies, renewable energy and recycling. International Convention Center.
Circuit Culture
Fashionistas of Arabia: Saudi Arabia organized a fashion exhibition in New York, bringing together 100 Saudi designers to show their work. The exhibition, sponsored by the Saudi Arabia Fashion Commission, is divided into eight categories, including ready-to-wear, modest, concept, premiere, demi-couture, bridal, handbags and jewelry.
On location: Jerusalem, Tzfat and Acre are among Israeli cities discussed in an article in Variety that international filmmakers are using as locations to convey the exotic atmosphere of the Middle East.
Trump Defends Saudi Golf-backed Tour: Former President Donald Trump defended hosting the Saudi-backed LIV GOLF tournament at his club in Bedminister, New Jersey, against accusations that the kingdom was using the event to rehabilitate its image as an abuser of human rights. LIV, which is supported by Saudi Arabia’s Public Investment Fund, has lured stars from the PGA circuit, such as Phil Mickelson with payments reported to be as high as $200 million.
