CGI Gulf Insights of the Week (146)

ByCGI Gulf Insights of the Week
Monday, 23 December 2019
Published inDecember 2019

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CRIF GULF WEEKLY INSIGHTS

Country Risk Update - Kuwait

Risk Indicator - DB3d
Risk Level - Slight
Ratings Trend - Deteriorating

Disputes with Saudi Arabia over the Divided Zone appear to be largely resolved, but a restart would require output cuts elsewhere to meet OPEC quotas. Business opportunities should increase as the government targets a more diverse economy with its national development plan.

Market Overview

Saudi environmental sensor firm Sadeem secures $2.6m in funding
Sadeem, a wireless environmental sensing systems spinout company from Saud Arabia’s King Abdullah University of Science and Technology (Kaust), has secured $2.6 million of co-investment from the Kaust Innovation Fund and Saudi Aramco’s Wa’ed Ventures fund, it was announced on 23, December 2019. Sadeem is the world’s first multi-patented sensor solution for flood, traffic, weather, and air quality monitoring. In a statement, Sadeem said that the joint funding round will support the firm in pioneering crucial sensor technology that helps solve problems related to natural disasters. “We are thrilled to be co-investing with Wa’ed Ventures in Sadeem, one of the kingdom’s leading deep tech startups,” said Kaust I&ED vice president, Kevin Cullen. “What started as an idea between Kaust students is now a fast-growing company with a strong IP position, R&D, and a talented local team.” Wassim Basrawi, managing director of Wa’ed Ventures, said that Sadeem is a “great example” of a Saudi start-up turning “collaborative research efforts into commercial solutions” and addressing environmental challenges. Specifically, the investment will be used by Sadeem for product updates to its existing Equa and Aura sensors, as well as to develop new technologies to monitor ice, hurricanes, tornadoes, and earthquakes, as well as business development and new customer acquisition.

UAECB reveals $107.9bn banking investments in November
The UAE Central Bank has revealed that total banking investments reached AED396.2 billion ($107.9bn) in November. According to banking indicators released by the Central Bank, debt securities saw a jump of 16.7 percent year-to-date, with a total of AED245.4bn ($66.8bn). Bank deposits saw a rise of 4.6 percent year-on-year, with a total of AED1.8 trillion ($490.1bn) in November 2019 compared to AED1.74 trillion ($473.8bn) for the same month in 2018. Total banks' reserves at the Central Bank totaled AED309.6 billion ($84.3bn), representing a 9.2 percent increase year-on-year.

Etihad Credit Union pens MoU to boost ties with Oman
The UAE federal export credit company, Etihad Credit Insurance (ECI), has signed an MoU with the export credit guarantee agency of Oman – Credit Oman – to enhance trade and economic cooperation between the two countries. The MoU was signed by Massimo Falcioni, CEO at ECI, and Sheikh Khalil bin Ahmed Al-Harthy, the recently appointed CEO at Credit Oman. According to a statement from ECI, the new partnership will provide incentives for UAE businesses looking to expand globally by providing them with mutual opportunities for insurance, reinsurance, co-insurance services for export for goods, investments and services from ECI and Credit Oman. The statement added that “through this alliance, both institutions will identify specific solutions in the export and investment fields that will help specifically small and medium-sized businesses access high growth markets with ease”. Falcioni said that the “recently signed partnership with Credit Oman marks a strategic step in identifying new business opportunities for local businesses”.

UAE-based Shettys lose $820m after 'unfounded' Muddy Waters claims
The billionaire clan behind UAE-based hospital operator NMC Health and financial services firm Finablr has seen its fortune drop by about $820 million since short-seller Carson Block issued a report on 17, December 2019 criticizing the medical company’s accounts and disclosing a short position. NMC shares tumbled 32 percent on 17, December 2019 in response to the report - which the company called “principally unfounded”. They continued sliding 19, December 2019 when a buy-back program failed to convince investors and slumped again 20, December 2019 by 13 percent in London after the Financial Times reported NMC held talks to raise off-balance-sheet debt to fund growth. NMC said the claims are “based on false information.” Shares of Finablr have dropped 18 percent since Block’s Muddy Waters Capital launched its attack on NMC, prompting the firm to confirm it’s on track to hit expected financial results.

Abu Dhabi fund approves $15m loan for Cameroon road project
The Abu Dhabi Fund for Development (ADFD) on 21, December 2019 announced the approval of a concessionary loan worth AED55 million ($15 million) for a road project in Cameroon. The fund said that the 204km the Olama-Kribi road will link the capital Yaoundé to Kribi, one of the largest seaports in the country. ADFD said the project aims to enhance the country's transportation sector and "will go a long way in stimulating Cameroon’s economy, facilitating trade exchange, as well as easing the movement of people, vehicles, and goods". Mohammed Saif Al Suwaidi, ADFD director-general, and Iya Tidjani, ambassador of Cameroon to Saudi Arabia, signed the loan agreement in Abu Dhabi, reported state news agency WAM. Al Suwaidi said: "ADFD is proud to work as a strategic partner with the governments of beneficiary countries to help achieve their development objectives with a focus on financing projects that improve infrastructure and drive sustainable economic growth. "The fund believes that the development of the transportation sector increases nationwide and cross-country trade," he added.

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