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Quick Hits

Soaring rates

Saudi Arabia may subsidize war insurance costs for Gulf shipping

The Daily Circuit: Saudi war insurance help + TotalEnergies invests in UAE

french connection

MBS, Macron love ‘manga’ comics so much, they plan a theme park

The Daily Circuit: Aramco ships circle Africa + Ma’aden secures $1B in loans

continental shift

Aramco sends oil on African detour to reach customers in Asia

SPACE RACE

Saudi space economy projected to reach $31.6 billion by 2035

french summit

Saudi leader to join Macron for Esports World Cup in Paris

The Daily Circuit: MBS heads for Paris + Record oil tanker prices

gulf signals

Saudi entertainment chief shares photo of encounter with son of UAE’s Sheikh Tahnoon bin Zayed 

wartime REBOUND

Kuwait signals resilience as Iran war tests Gulf nation’s economy

sports business

Saudi Arabia transfers stakes to PIF in four top football clubs

The Daily Circuit:  PIF nets football stakes + Investcorp buys 20Cube

BANKING RIFT

Saudi Arabia tightens scrutiny of UAE-bound money transfers

SAFE HAVEN

Gulf producers look to Asia for safer storage of their crude oil

The Daily Circuit: Storing Gulf oil in Asia + Anthropic’s sovereign fund bounty

flying high

Space42 targets global markets, seeks to reduce UAE dependence

The Daily Circuit: Space42 orbits abroad + Saudi fund’s AUM drops

going private

L’Imad moves to take full control of AD Ports amid Hormuz risks

The Daily Circuit: L’Imad offers AD Ports buyout + QIA in Canary Wharf

Port plot

DP World plans to invest $3 billion in Gulf, India and Africa

Quick Hits

sour sentiment

Gulf central banks chop interest rates in tandem after Fed cut

Middle East stock exchanges lost ground as traders absorbed the message from Fed Chairman Jerome Power that rates cuts will be slower in 2025

Dubai's skyline at sunrise (Getty Images)

By
Jonathan H. Ferziger
December 19, 2024
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The U.S. Federal Reserve’s decision to cut interest rates set off a chain reaction of parallel reductions in the Middle East.

Central banks in Saudi Arabia, the UAE, Bahrain and Oman, which have currencies pegged to the U.S. dollar, chopped their own borrowing rates today by 0.25% in tandem with the Fed, Reuters reports. Qatar cut its three main interest rates by 0.30%.

The Fed’s action on Wednesday produced a sour reaction, however, on Gulf stock exchanges, which dropped in morning trading with other global markets as traders absorbed the message from Federal Reserve Chairman Jerome Power that rates cuts will be slower in 2025.

Benchmark indexes lost ground in Riyadh, Dubai and Abu Dhabi. Qatar’s market was closed for the country’s National Day.

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CIRCUIT INTERVIEW

China’s Keeta drones launch in Dubai to make airborne deliveries

Keeta is a subsidiary of Beijing-based Meituan, whose drones have become a popular means of ordering fried chicken by app from KFC

Keeta Drone hovers above its base station in Dubai (Credit: Keeta)

By
Omnia Al Desoukie
December 18, 2024
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The skies over Dubai are starting to buzz with drones operated by a Chinese company that has been licensed to deliver fast food, pharmaceuticals and other products to customers across the emirate.

Keeta Drone held a launch event on Tuesday that was attended by Dubai Crown Prince Sheikh Hamdan bin Mohammed bin Rashid. The prince, who is also the UAE’s Deputy Prime Minister and Minister of Defense, was so impressed that he immediately authorized a 33% expansion of Keeta’s initial coverage area.

Keeta is a subsidiary of Beijing-based Meituan, a shopping platform and tech developer active in retail, restaurants, travel and entertainment. The drone itself can carry a payload of 2.5 kilograms and travel up to four kilometers per trip.

Across China, Meituan’s drones have become a popular means of ordering fried chicken from KFC through an app that can also be used to buy hot coffee, groceries and prescription drugs.

In an interview with The Circuit, Keeta President Yinian Mao talked about how the company managed to become the first drone delivery service to start flying in Dubai and its plans to launch its six-propeller aircraft into markets across the Middle East.

 What are your expansion plans beyond Dubai in the Middle East? 

We have been looking at different areas where we can deploy our kiosks. We see a lot of synergy here with medical supply, diagnostics, medicine, prescriptions, all these things. So that’s why we’re going to focus on two things. One is food and beverage. That’s our strength. And then the medical side. We then plan to expand to quite a few areas within Dubai. That’s for the next year, 2025. If we are looking beyond 2025, we are looking at other GCC countries, as well as in MENA.

Are you looking into hiring specialists from the UAE who can fly the drones?

Yes, for operating the drones. We are making expansion plans. We need maintenance crews. We need technicians. We need a skilled labor force. We need all this expertise. 

Can you tell us what kind of partnerships you are looking at here in Dubai as you expand to the city? 

We have two kinds of partnerships. One is with existing businesses, such as Fakeeh University Hospital or Americana. They have either restaurants or prescription drugs that we can deliver. The other partnership might be with those helping us maintain the drones. But right now, we are focusing on the first kind. 

How are you ensuring that your drones are safe?

Our drone is actually equipped with a lot of safety features, including redundant batteries, including motors. If you hit one motor and then disable it, the propulsion will be instantaneously transferred to the rest five. It will still be able to control itself. And including an onboard parachute that it will deploy in case of emergency. If it sees an obstacle in midair, it has something called send, detect and avoid capabilities to avoid obstacles…  to avoid collision in midair. We have, I think, one of the best track records in terms of operational safety for drone delivery. 

How long have you invested in terms of time to actually get the license in Dubai?

We’ve spent close to two years. So we have been planning since the beginning of 2023. There are some investigating phases, and then we did a flight demo here during the GITEX last year. Then, we went through a lot of validations and documentation reviews with DCAA and other regulatory bodies. I think it’s all worth it because, as you understand, we already got our operational license inside China. That was from 2021 to 2023. It took us two years here. Actually, it took us a little bit less time than the first time around because we have all this documentation and validation process with CAC, China’s Regulatory body for the Civil Aviation Authority of China.

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PROPERTY PAYOUT

Emaar leads Dubai rally with dividend boost for shareholders

The company’s 14% surge on the Dubai Financial Market led the exchange’s benchmark index to its highest level in almost a decade, rising 4.5%

A view of the Dubai Fountain next to Emaar's Burj Khalifa tower in Dubai (Getty Images)

By
Jonathan H. Ferziger
December 17, 2024
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Dubai’s property boom prompted Emaar, the city’s largest publicly traded developer, to provide shareholders with a big return. The move sent its stock soaring on Monday to a 17-year high.

The company, founded by Mohamed Alabbar, announced on Friday that it would declare dividends at 100% of its share capital starting with 2024 and continuing for the next few years.

Emaar said the new policy is aimed “at enhancing shareholder value while ensuring the financial sustainability and strategic growth” of the company.

The company’s 14% surge on the Dubai Financial Market on Monday led the exchange’s benchmark index to its highest level in almost a decade, rising 4.5%.

Meanwhile, Ali Sajwani, Managing Director of Damac Properties, says demand for Dubai property is growing among European customers, who are fleeing high taxes and regulatory changes to settle in the UAE.

“The customer base has shifted today,” Sajwani told The National. “The biggest customers are coming from Europe, no longer from Russia or Ukraine, and we believe that’s going to continue, and it’s going to grow further into 2025.”

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flying high

Dubai’s stock market surges to highest in close to a decade

The rally in the Dubai Financial Market comes amid expectations that the U.S. Federal Reserve will cut interest rates this week

A man watches stock movements at the Dubai Financial Market stock exchange. (Photo: Getty Images)

By
Jonathan H. Ferziger
December 16, 2024
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Dubai’s benchmark stock index soared today to its highest in nearly 10 years amid expectations that the U.S. Federal Reserve will cut interest rates this week.

The Dubai Financial Market’s General Index jumped 3.7% in morning trading to reach 5,010, led by Emirates NBD, Dubai’s largest bank, which rose 8%. The Fed’s decisions affect monetary policy in the Gulf, where the UAE dirham and other currencies are pegged to the U.S. dollar.

The stock surge comes as the UAE has embarked on a borrowing binge that promises to extend well into 2025, Bloomberg reports.

Emirati companies and sovereign entities in the UAE issued $38.4 billion of dollar debt this year, a 54% increase from 2023, according to the news agency.

In Abu Dhabi, ADNOC’s new XRG investment firm announced today that it has completed the formation of its joint venture with BP on an international natural gas platform called Arcius Energy. The JV, which will initially operate in Egypt, is 51% owned by BP and 49% by XRG.

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flying high

Saudi Arabia seals acquisition of 15% stake in London’s Heathrow

The Saudi fund has a range of U.K. investments that include the Newcastle United football club, Selfridges and the Rocco Forte hotel group

Aircraft on the tarmac at London's Heathrow Airport (Getty Images)

By
Jonathan H. Ferziger
December 13, 2024
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Saudi Arabia’s Public Investment Fund concluded its yearlong quest to buy a chunk of London’s Heathrow Airport, joining an ownership group that includes the sovereign wealth funds of Qatar and Singapore.

The PIF will own a 15% stake in FGP TopCo, the holding company that controls Europe’s busiest airport, after the deal was finalized on Thursday. The Saudi fund bought into Heathrow at the same time that Paris-based private equity firm Ardian acquired a 22.6% stake in the airport, which has a market value of about 8.7 billion pounds, or  $11 billion.

“Heathrow acts as a crucial gateway to the world, and we look forward to supporting Heathrow’s management in its efforts to secure the sustainable growth of the airport and to continue to maintain its position as a global aviation hub,” Turqi Al-Nowaiser, PIF Deputy Governor and Head of International Investments, said in a statement.

The Saudi fund, which manages some $930 billion in assets, has acquired a range of holdings in the U.K. that includes the Newcastle United football club and large stakes in Selfridges department store and the Rocco Forte luxury hotel group.

Among Heathrow’s owners are the Qatar Investment Authority, which holds a 20% interest, Singapore’s GIC sovereign fund and the Australian Retirement Trust.

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Doha Shake-up

Qatar sovereign fund’s new CEO plans to invest ‘aggressively’

Mohammed Al-Sowaidi is bullish on the U.S., the U.K. and Asia, and plans to focus the QIA on technology, artificial intelligence, healthcare and real estate

thecircuit-circuit-DOha

View of Qatar's Doha business district (Getty Images)

By
Omnia Al Desoukie
December 12, 2024
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The new chief of Qatar’s sovereign wealth fund plans to shake things up in Doha.
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CEO Mohammed Al-Sowaidi tells the Financial Times that the Qatar Investment Authority will deploy funds more “aggressively” and “do bigger-ticket deals,” counting on a projected windfall from gas prices that could ultimately double the fund’s size.

Sowaidi said he was bullish on the U.S., the U.K. and Asia, with plans to focus on technology, artificial intelligence, healthcare, real estate and infrastructure.

Al-Sowaidi was the QIA’s chief of investment in the Americas before he was appointed CEO last month.

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KICKING OFF

Saudi Arabia wins nod to host soccer’s World Cup in 2034

The Public Investment Fund plans to spend tens of billions of dollars on event, including a stadium 350 meters above the ground at NEOM

Fans celebrate in Riyadh as Saudi Arabia is announced as host nation for the 2034 World Cup (Getty Images)

By
Jonathan H. Ferziger
December 12, 2024
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Saudi Arabia has 10 years to prepare for its stint as the epicenter of global sports when the kingdom hosts soccer’s 2034 World Cup.

Gathered in an online meeting on Wednesday convened by governing body FIFA, representatives of 200 national soccer federations gave their approval to Saudi Arabia, which was uncontested in its bid for hosting the world’s most-watched sporting event, the Associated Press reports.

“We look forward to hosting an exceptional and unprecedented edition of the FIFA World Cup by harnessing our strengths and capabilities to bring joy to football fans around the world,” Saudi Crown Prince Mohammed bin Salman said in a statement.

Saudi Arabia’s Public Investment Fund plans to spend tens of billions of dollars on projects related to the World Cup, including one of the stadiums built 350 meters above the ground in NEOM. Another stadium named for the Crown Prince will be atop a cliff in Riyadh’s Qiddiya sports and entertainment development.

Much like Qatar’s experience hosting the 2022 World Cup in Qatar, Saudi Arabia will be subject to intense scrutiny of its human rights record, including the treatment of women and migrant workers.

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Teeing Off

LIV Golf a step closer to buying 6% stake in PGA commercial unit

Saudi Arabia's sovereign fund started LIV Golf in 2022 as a rival to the PG, setting off court battles after the new league lured away star golfers

Dustin Johnson tees off during LIV Golf Invitational-DC at Trump National Golf Club in May2023 (Getty Images)

By
Jonathan H. Ferziger
December 11, 2024
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LIV Golf, the upstart league backed by Saudi Arabia’s Public Investment Fund, is generating renewed buzz in its two-year dance with the PGA tour.

The sovereign wealth fund is nearing a deal to acquire a stake of about 6% in PGA Tour Enterprises, which would value the U.S.-based golf league’s commercial arm at $12 billion, Bloomberg reported on Wednesday, citing unnamed sources familiar with the negotiations.

The PIF started LIV Golf in 2022 as a rival to the PGA Tour, setting off court battles after the new league lured away star golfers for contracts worth hundreds of millions of dollars.

The two organizations agreed to a merger deal in 2023, but have since been unable to agree on the terms.

LIV is also considering a possible merger with Europe’s DP World Tour, Bloomberg reported last month.

The two golf leagues already have a strategic alliance on prize money growth and some reciprocal memberships.

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