Newsletter 100 Issue December (Copy 89)

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CRIF GULF WEEKLY INSIGHTS
Country Risk Update - Kuwait

Risk Indicator - DB4b
Risk Level - Moderate
Ratings Trend - Stable

Contract awards suggest that Divided Zone oil production will restart in 2019: this would tie in with the end of OPEC-led production cuts. Business opportunities should increase as the government targets a more diverse economy with its national development plan.
Market Overview
Saudi Arabia’s PIF Plans Additional $45 Billion Investment In SoftBank Fund
Saudi Arabia’s Public Investment Fund (PIF) is planning to invest an additional $45 billion into a second technology fund by private equity firm SoftBank, according to the Fund’s chairman Crown Prince Mohammed bin Salman. In an interview with Bloomberg News, Crown Prince Mohammed detailed that he would channel the proceeds from a stake sale of Saudi Basic Industries Corp (SABIC) and an IPO of state-owned Saudi Aramco to a $100 billion SoftBank fund, which could be launched next year. The decision comes after the PIF was able to pocket higher returns from its first round of investment in a SoftBank technology fund. “We have a huge benefit from the first one,” he told Bloomberg. “We would not put, as PIF, another $45 billion if we didn’t see huge income in the first year with the first $45 billion.” PIF’s biggest assets are mainly local equities but it has worked to build up a diverse portfolio of companies. The fund has invested $3.5 billion into the ride-sharing giant Uber Inc, acquired a 5% stake in electric car maker Tesla, and a $1 billion investment into Lucid, a smaller manufacturer of luxury electric vehicles. In addition, PIF has also committed $20 billion to a fund run by Blackstone Group.
UAE Contributes AED 12.5 Billion To Support Bahrain’s Economy
The United Arab Emirates signed a financial cooperation agreement worth AED 12.5 billion ($3.4 billion) with the government of Bahrain to support the financial stability of the country and stimulate its economic growth. The contribution will be managed by Abu Dhabi Fund for Development (ADFD), the leading national entity for development aid. The AED12.5 billion from the UAE falls within the framework of the Bahraini government’s approved fiscal balance programme, which aims to achieve a balance between the government revenues and expenditure in accordance with performance criteria and stipulated indicators for implementation by 2022. The UAE’s commitment, along with those of Saudi Arabia and Kuwait, is about $10.233 billion, in equal shares disbursed over five years (2018-2022). The Arab Monetary Fund (AMF), has been designated as the programme consultant. The agreement was signed by His Excellency Obaid bin Humaid Al Tayer, UAE Minister of State for Financial Affairs, His Excellency Sheikh Ahmed bin Mohamed Al Khalifa, Bahraini Minister of Finance, and Dr. Abdulrahman bin Abdullah Al Humaidi, Director General and Chairman of the AMF. Several senior officials from the Bahraini government were in attendance. His Excellency Obaid bin Humaid Al Tayer said that the UAE government’s contribution to the fiscal balance programme is based on the strong historic bonds of friendship that exist between the UAE and Bahrain and is in line with the directives of the UAE President His Highness Sheikh Khalifa bin Zayed Al Nahyan, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President of the UAE and Ruler of Dubai, and His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.
90% Of UAE And KSA Business Leaders Expect Struggle To Meet Changing Customer Demands
According to a survey of business leaders in the UAE and KSA, 90% of regional heads of business believe that their organization will struggle to meet changing customer demands within just five years, while 37% fear they’ll be left behind. Dell EMC revealed the findings of its recent Dell Technologies Digital Transformation Index (the DT Index), which was completed in collaboration with Intel. The Index maps the digital transformation progress of mid to large-sized companies and examines the digital hopes and fears of business leaders. While many organizations are embracing their digital transformation journeys, many fail to even start. With the majority (90%) of businesses facing major barriers to digital transformation, only 4% of businesses in the UAE & KSA can be categorized as digital leaders. Defining the challenges, 87% of business leaders believe that digital transformation should already be more widespread throughout the organization. Other key challenges are a shortage of in-house skill sets and expertise (30%), and a lack of the right technologies to work at the speed of business (24%).
Saudi British Bank And Alawwal Bank Finalize Merger Agreement
Saudi British Bank (SABB) has inked a binding agreement to take over Alawwal Bank, finalizing a merger that will create the Kingdom’s third-biggest lender with a market capitalization of more than $17 billion. The deal was initially announced in May 2018 as part of a non-binding agreement, which came together after a year of talks. Under the arrangement, all of Alawwal’s assets and liabilities will be transferred to SABB. The combined banks will have assets of $71 billion, and a loan to deposit ratio of 86.6%. On completion of the merger, Alawwal bank will cease to exist as a legal entity and its shareholders will receive 0.48535396 new SABB shares for each Alawwal Bank share. Key shareholders in the combined bank will be HSBC Holdings, Olayan Saudi Investment Company, and NatWest Markets, among others. Lubna Sulaiman Olayan will become chair of the combined group, while SABB’s David Dew will serve as managing director. The tie-up is part of a larger trend of mergers in Saudi Arabia, as the kingdom pursues an economic reform agenda.
Trade Bank Of Iraq And Commerzbank Sign EUR 100 Million Loan Agreement
Trade Bank of Iraq (TBI) has signed a Basic Loan Agreement for financing loans with Commerzbank to support small and medium-sized projects in Iraq. The Loan Agreement was signed at the back of TBI being approved by Germany’s export credit insurer Euler Hermes as a borrower for medium and long-term Export Credit Agency (ECA) financing with repayment terms of up to 5 years. TBI aims to support public and private sector projects up to a business volume of EUR 100 million ($115 million) and facilitate financing of export contracts for products, materials, and machines. The newly-signed loan agreement focuses on the financing of export contracts awarded to Commerzbank clients in Germany and other European countries. The signing of this agreement is part of the long-term strategy of TBI to source and secure funding for projects in Iraq, which will create new opportunities for employment and accelerate the process of economic growth. TBI was established in July 2003 with the aim of helping in the reconstruction of Iraq by facilitating international trade and continues to be at the forefront of large-scale infrastructure developments across the country.
Commodity Tracker
Business Events this Week In UAE
Global Education Fair Dubai
@ Crowne Plaza Dubai
Date: 12 October 2018 To 13 October 2018
Business Updates
ONLINE PORTAL FOR INFORMATION FOR LOCAL AND INTERNATIONAL MARKET
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