Why are International Businesses relocating to Dubai…?

Why are International Businesses relocating to Dubai…?

UAE News:

Dubai will “never compromise” on the safety and security of individuals visiting, living and working in the city, Hoor Al Khaja, Senior Vice President of International Operations at Dubai Department of Economy and Tourism (DET) told Arabian Business.

From January to March 2024, DET recorded 5.1 million visitors, showing an 11% increase from 2023.

The UAE and Ukraine have concluded negotiations related to a bilateral trade deal. The CEPA will remove or reduce tariffs on several goods and services while also easing market access. Bilateral trade between the two countries touched USD 385.8mn in 2023 while investments clocked in at USD 360mn as of end-2022.

UAE’s Spinneys IPO was priced at AED 1.53 per share and was oversubscribed by around 64 times. Interest in the company was 35% international and 65% regional. With proceeds of close to AED 1.38bn, capitalisation is implied at around AED 5.51bn at the time of listing.

The Dubai Financial Market (DFM) counts “diversifying the investor base” as one of its top priorities and is currently focusing on supporting start-ups in the pre-IPO stage (i.e. to raise capital and connect them with investors). DFM’s CEO revealed that the exchange attracted around 44,000 new investors in Q1 2024, 10 times the average for the five years before 2019.

Bloomberg reported that Etihad Airways had picked more banks ahead of an IPO that could raise USD 1bn. Etihad posted a record USD 296mn core operating profit in H1 2022, from a loss of USD 392mn a year before. ADQ, which took full ownership of the airlines in 2022, is reportedly planning a listing for the end of this year.

Reuters reported that UAE was planning to issue a tender for a second nuclear plant within months, with construction scheduled for later this year and being operational in 2032. This would double the number of reactors to 8.

A UAE-Iran joint economic commission took place last week in Abu Dhabi, for the first time in a decade. Iran imported USD 20.8bn worth goods from the UAE in the fiscal year till March 2024 while the UAE was Iran’s third largest export destination (USD 6.6bn).

Ajman disclosed a 7% increase in total tourism revenue in Q1 2024, thanks to a 3% uptick in occupancy rates and a 9% growth in visitors while average hotel stay moved up by 5%.

MENA News:

Visitor numbers to Bahrain grew by 25% YoY in 2023 and saw revenues rise by almost one-third, according to the Tourism Minister (no overall data was provided). In a bid to increase the number of tourists to 14mn by 2026, the nation has been expanding its offerings: 11 new hotels (by international operators) are in the pipeline by end-2026, while number of beach clubs and private beaches will be increased to 17 and 24 respectively (from 7 and 20).

Egypt’s PM disclosed that the direct cost of hosting refugees in Egypt is estimated at over USD 10bn annually, on the sidelines of the WEF meeting in Riyadh last week. Currently, the country is home to more than 9mn refugees.

Egypt will open its first digital bank by the end-2024. MTI (a Banque Misr subsidiary), which applied for a digital bank license in Aug 2023, has received approval by the Central Bank.

The EU announced a financial aid package for Lebanon valued at more than USD 1bn and the grants will be made available over the next three years. The aid includes EUR 736mn of grants to help Lebanon with the Syrian refugee crisis and EUR 264mn in regular bilateral aid.

Total loans and financing provided by banks in Oman grew by 2.7% YoY to OMR 30.6bn by end-Feb, with credit to the private sector inching up by 3.9% to OMR 25.8bn. Total foreign assets of the Central Bank of Oman also increased by 4.3% to OMR 6.86bn. 

QatarEnergy awarded a USD 6bn contract to China State Shipbuilding Corporation to build 18 of the largest LNG vessels as part of its fleet expansion programme. This is the industry’s largest single shipbuilding contract ever, and 8 of the vessels will be delivered in 2028 and 2029 and the rest 10 in 2030 and 2031.

It will take a minimum of 16 years to rebuild destroyed homes in Gaza and it would take “approximately 80 years to restore all the fully destroyed housing units” if the pace of reconstruction follows previous post-conflict trends, according to the UN. Data show than about 80k homes have been destroyed in the conflict, and that over 70% of schools will need either major or full reconstruction.

Claims on the private sector in Saudi Arabia rose by 8.1% YoY to SAR 2.6trn in March alongside a 9.2% uptick in claims on the public sector (to SAR 1.19trn). Government deposits declined in YoY terms for the 13th month in a row in March (-10.8% yoy to SAR 444.1bn). Net Foreign Assets surged to SAR 1.628trn in March, the highest since January 2023.

It was revealed that net FDI inflows into Saudi Arabia grew by 16% QoQ in Q4 2023, during a meeting of the Council of Economic and Development Affairs.

Saudi Capital Market Authority plans to list 24 companies this year, raise its assets under management to 29.4% of GDP and target 17% ownership of free float shares by end-2024. Another major aim is to deepen the sukuk and debt instruments market and increase the debt-to-GDP ratio to 22.1% by end-2024. Saudi also saw a surge in fintech companies, surpassing 2023 targets with 216 in operation and launching two digital banks.  

In a bid to attract foreign investment and support the private sector, Saudi Arabia is open to provide up to 75% of financing for certain industrial projects, disclosed the Minister of Industry and Mineral Resources.

BlackRock and Saudi PIF signed an MoU to launch a multi-asset investment platform, backed by up to USD 5bn from the PIF. The platform is said to focus on Saudi though it will cover investments across the MENA region.

Car imports into Saudi Arabia surged by 40% YoY to 93,199 in 2023. Saudi accounts for more than half the car sales in GCC and ranks among the top 20 markets globally.

Saudi start-ups raised SAR 12bn in venture capital funding during the decade 2014-2023, according to a MAGNiTT report. The report finds that 44% of these firms were founded by multiple partners, and received 53% of the total venture capital funding.

Global News:

Equities markets were mostly up last week, as weak US jobs data eased concerns that the Fed would keep rates higher for longer: robust earnings report and tech stocks drove the US markets while MSCI global stocks posted a second straight weekly gain. Oil prices fell by around 7% last week, while gold price was down by more than 1.5%.

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Nasser Saidi & Associates

Arabian Business