Major Global Tech Outage Leads to Disruptions Across Multiple Sectors from Airlines to Banks…

UAE News:

Sharjah plans to quadruple FDI to USD 10bn over the next 5 years. FDI into Sharjah surged by 140% to USD 2.75bn in 2023, with the launch of 19 new greenfield projects.

UAE’s debt capital market outstanding surged by 11.8% YoY to USD 281bn in H1 2024, according to Fitch Ratings. The UAE was the 3rd largest USD debt issuer among emerging markets excluding China, with an 8.9% share of the total – ahead of the UAE were Saudi Arabia (17.4%) and Brazil (9.4%).

UAE is considering a second nuclear power plant to meet the nation’s growing electricity demand, according to a government official. The final reactor of the UAE’s only nuclear plant will start commercial operations this year. The official stated that even though the location of the plant or size are still undecided, it is possible that a tender could be issued this year.

UAE’s energy startups secured USD 30mn in investment in H1 2024, much higher than the USD 24mn raised in full year 2023, according to IEA’s data. UAE wind energy firms accounted for 8.3 percent of the overall financing received in H1 this year. Startup companies operating in the UAE’s energy sector reached 54 by end-2023, with 12 working on energy storage & batteries. (Data: https://www.iea.org/data-and-statistics/data-tools/energy-start-up-data-explorer)

Abu Dhabi National Hotels (which trades on the Abu Dhabi stock exchange) appointed banks to work on the IPO of its catering business, and hopes to raise USD 300-400bn, reported Bloomberg. The company, which owns 12 hotels in the UAE, did not confirm offering size or timing of the listing.

Amanat Holding, a Dubai investment company, plans to list its education platform which includes Middlesex University Dubai, Human Development Company, a special education and care services provider in Saudi Arabia, and Nema Holding, a privately held education company in the UAE.

Eos-X Space, a European space exploration company, will begin operating balloon flights to the edge of space from Abu Dhabi in Q3 2025. The emirate will host the launch facility and spaceport, though no further details were shared.

MENA News:

The IMF lowered MENA’s growth forecast to 2.2% this year (from 2.7% in its April 2024 report), citing the impact from both lower oil production (affecting oil exporting nations) and regional conflicts (affecting trade, tourism and FDI flows among others). Saudi Arabia’s growth was revised down to 1.7% this year on lower oil production (a drop by 0.9 percentage points) and 4.7% in 2025 while Egypt’s was slightly lowered to 2.7% this year (before growing by a faster 4.1% in 2025).

Suez Canal revenues fell by 23% YoY to USD 7.2bn in 2023-24, according to the head of the Canal’s Authority, from USD 9.4bn in 2022-23. The number of ships using the crossing fell to 20,148 from 25,911 the year before (-22.2% YoY). Separately, the Suez Canal Authority plans to float a subsidiary (Canal Mooring & Lights Company, a specialist in the mooring and unmooring of ships) next year.

Egypt is planning to invest USD 1.2bn in the 2024-25 fiscal year to drill 110 exploratory wells in a bid to boost its oil and gas production capabilities. Currently, there are 145 active exploration agreements in oil and gas with 40 partners.

Iraq has resumed talks to join the WTO, about 20 years since it first applied for membership.

Sweden will phase out development aid to Iraq from next year, revealed Sweden’s Minister for International Development Cooperation and Foreign Trade, given Iraq’s progress into a middle-income country with increased ability to support its economy. The current aid package of SEK 190mn (USD 18mn) will be lowered to a total of 100mn next year and phased out by June 30th.

Hotel revenues in Oman increased by 10.2% YoY to OMR 108.3mn (USD 281.5mn) in January-May 2024, supported by the number of hotel guests (13.7%) while occupancy rate rose to 51.5% (+6%). GCC visitors grew by 6.8% to 58,572 while 306,255 guests were Omanis.

The IMF revised down Saudi growth to 1.7% this year. Non-oil sector activity has been robust and will continue to be a driving force (thanks to the mega & giga projects underway). Growth is forecast to rise 4.7% in 2025. The IMF also welcomed “recalibrations” on Saudi major projects.

Wholesale prices in Saudi Arabia inched up to 3.21% in June (May: 3.18%), with most categories posting declines except agriculture & fishery products (0.9% in June from May’s 1.3% dip). In H1 2024, wholesale prices accelerated: averaging 3.5% (vs H1 2023: 0.9%), with the surge driven by “other transportable goods” (8.5% from 0.9% in H1 2023).

Saudi Arabia’s FDI stock grew by 6.1% YoY to SAR 817.7bn (USD 218bn) in Q1, as per a report released by the Ministry of Investment.

Crude oil exports from Saudi Arabia rose by 2.51% MoM to 6.12mn barrels per day in May, according to data from the Joint Organizations Data Initiative. Crude oil production inched up by 0.08% MoM to 8.99mn BPD.

US Treasury bonds held by Saudi Arabia surged by 22.46% YoY to USD 136.3bn in May, making it the 17th largest investor globally in the instrument.

Saudi Arabia welcomed 60mn tourists in H1 2024, disclosed the Minister of Tourism. Tourist spending touched approximately SAR 150bn (USD 40bn) during the period, up 10% YoY. The Minister also stated that a tourist visa would be launched next month to boost visitors.

Home ownership by citizens in Saudi Arabia touched 63.74% at end-2023, up 16.7% compared to 2016, in line with meeting the goal of 70% ownership by 2030. The report highlighted that more than 96k families benefited from the program in 2023.

Global News:

Major equities markets ended in the red last week, following a global tech outage that led to disruptions across multiple sectors from airlines to banks, raising questions about cybersecurity and interconnected / integrated ecosystems. Regional markets including in Saudi Arabia and UAE performed well thanks to strong corporate earnings and hopes about Fed rate cuts. The euro and GBP weakened vis-à-vis the dollar last week, given the ECB’s lack of forward guidance on its policy direction and weak economic data. Oil prices fell on a strong dollar and concerns about Chinese demand while eyes are also on a potential ceasefire in Gaza. Gold price fell from its peak hit earlier in the week (USD 2483.6 on Wednesday) on profit taking and dollar strength.

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SOURCE:
Nasser Saidi & Associates