CGI Gulf Insights of the Week (90)

ByCGI Gulf Insights of the Week
Monday, 04 February 2019
Published inFebruary 2019

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CRIF GULF WEEKLY INSIGHTS

Country Risk Update
United Arab Emirates

Risk Indicator - DB3b
Risk Level - Slight

Ratings Trend - Stable

As the oil price slumps, risks will be raised slightly; growth will slow, the fiscal and budget surpluses will fall and liquidity will be curtailed. Access to global markets from Dubai will be among the best in the world. The UAE will continue to strengthen its position as a regional safe haven and business hub.

Market Overview

Goldman Sachs Joins HSBC For $20 Million Bet On Bud’s AI-Powered Bank Accounts
Some of the world’s biggest banks yesterday joined forces to invest in a London-based startup determined to change our relationship with money. Bud, co-founded by Ed Maslaveckas and George Dunning, provides open banking technologies to high street players, with a particular focus on AI and “smart accounts”. Goldman Sachs, HSBC, ANZ (the Australian and New Zealand banking group), Investec and Spain’s Banco Sabadell, along with other investors, today backed Bud to the tune of $20 million as part of the startup’s Series A funding round. “What we've been doing for the last year or so is testing and trialing things with the banks and that has proven to be very successful, and now it's really time to actually scale up and actually bring this stuff into a live banking environment,” Bud CEO Maslaveckas told Forbes. To do so Bud intends to double its 70-person headcount and establish what Maslaveckas calls the “largest team dedicated to Open Banking in the world”. Launched in 2016 as an app to let people aggregate all their bank accounts and spending in one place, Bud quickly changed course to focus on becoming a business-to-business provider of open banking tech. Today Bud powers the smarts behind HSBC’s artha AI app for its First Direct customers, which lets them analyze spending across all their accounts, and claims to be working with 85 companies including Hiscox and AJ Bell. Raman Bhatia, the head of digital bank at HSBC Retail Banking and Wealth Management, who will be joining Bud’s Board as part of the investment, said: “[Bud has] helped to shape our approach to open banking, working with us to deliver services that make banking easier for our customers.”

Bayut.com’s Parent Firm Raises $100M Funding
Emerging Markets Property Group, parent firm of Bayut.com, announced that it had raised $100 million in Series D funding from a group of investors. The latest round will be led by investment fund KCK Group and eight other investors including Exor Seeds, which is part of the European firm Exor. EMPG said that the latest round of investment would be used for more acquisitions and improving technological development, its Group CEO Imran Ali Khan said in a statement. The company has previously raised $20 million in funding in 2016, in addition to $60 million in the previous rounds. To date, it has raised $160 million in different rounds. “EMPG has grown from strength to strength by adding value to real estate markets through our unique business models and bespoke technology platforms, and with the conclusion of this round we will be looking to expand our geographical footprint,” said EMPG’s CEO Imran Ali Khan. EMPG also owns Zameen.com in Pakistan, Bproperty.com in Bangladesh and Mubawab.ma in Morocco. Real estate technology startups have historically been successful in raising investment, thanks to the rising interest in the regional property market. Recently another real estate listing website, Property Finder raised $120 million from a global private equity firm called General Atlantic. At the time of investment, Property Finder was valued at $500 million. Meanwhile, classifieds website Dubizzle, which also lists properties for sale and rent, was bought out fully by South African firm Naspers when they snapped up the remaining stake in the company for $190 million.

Saudi Arabia's Alawwal Bank training all employees in AI
Saudi Arabia’s Alawwal Bank is training its entire workforce in the basics of artificial intelligence in a bid to educate staff on its applications in the financial sector, according to managing director Soren Nikolajsen. In an interview with Arabian Business, Nikolajsen said that the online course has been designed by Finnish tech firm Reaktor and also includes workshops led by experts from Reaktor and the Helsinki University. The course is designed to give all staff members at Alawwal with an overview of AI for employees, including those without a background in digital technology. “It’s not just for the guys in IT or the guys in retail. It’s for everyone across the board, from senior management all the way down,” Nikolajsen said. While Nikolajsen admits he “wasn’t sure” how the course would be received, he said that the initial courses saw three times the number of staff members sign up than could actually be accommodated. Nikolajsen, who personally took the course, said that it “isn’t about making everyone an AI expert.” Among the potential applications for AI technology, Nikolajsen said, our Know Your Customer (KYC) applications, help Saudis with financial literacy and help the bank process the vast amount of data it collects. However, Nikolajsen said that AI still has “enormous restrictions.” “It can’t think and it has no conscious,” he said. “It can only do what we tell it.”

Abu Dhabi's FAB surges as it seeks to raise foreign ownership
First Abu Dhabi Bank jumped on optimism the lender will follow peers and raise the foreign-ownership limit in its stock. The shares climbed as much as 5.8 percent to 15.6 dirhams at the open in Abu Dhabi, the biggest increase since April 2017. The ADX General Index added 2.5 percent. The UAE's biggest lender aims to raise the cap to 40 percent from 25 percent; it said last week. Shareholders still need to approve the change in a meeting on February 25. Investors from abroad held about 12 percent of FAB shares as of the end of last month, according to information on the stock exchange’s website. Dubai-based Emirates NBD previously announced plans to quadruple the limit for a foreigner to 40 percent.

Total UAE banking reserves rise to $77.1bn
Total reserves at the Central Bank of the UAE increased to AED283.4 billion ($77.1 billion) by the end of November, a growth of 4.3 percent from AED271.6 billion during the same month of 2017. The growth reflects the robust solvency position of the UAE banking sector and its compliance with international standards, including Basel III, state news agency WAM reported. According to CBUAE figures, reserves have been growing steadily since the beginning of 2018, hitting a total of AED267 billion in the first half of the year before snowballing to AED283.4 billion by the end of November. WAM reported that the certificates of deposits held by UAE banks, valued at AED125.8 billion by the end of November, accounting for 44 percent of aggregate reserves while reserving requirements comprised 42.9 percent or AED121.8 billion and current accounts of banks stood at 13.1 percent, or AED35.8 billion. Last month, WAM reported that UAE banks’ net international reserves hit a record high of AED404 billion by the end of November, up 23.1 percent. The AED76 billion growth in net international reserves is reflected the country’s financial and economic status, which was affirmed by global credit rating agencies that classify the UAE as one of the key international hubs in the region, WAM said.

Commodity Tracker

Business Events this Week In UAE

Oracle OpenWorld Middle East

@ Dubai World Trade Centre
Date: 11 February - 12 February 2019

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