Greetings from the Middle East!
Today’s digest includes the flourishing of Gulf tourism, the UAE’s record-breaking non-oil foreign trade numbers, Redbird IMI’s sizable purchase of All3Media, and the potential public offering for Saudi Global Ports Co. Meanwhile, the Tadawul exchange beckons investors to Riyadh.
Saudi Arabia is promoting its stock exchange’s robustness as the Saudi Capital Markets Forum commences today in Riyadh. Hosted by the Saudi Tadawul Group, the forum celebrates the $2.9 trillion market cap of the nation’s primary exchange as of January’s end.
The nation has been courting international investment in its capital markets with regulatory reforms, aligning practices with global standards, and enhancing technology and infrastructure, says Saudi Tadawul Group CEO Khalid Al-Hussan.
Their efforts seem to be fruitful. A surge in IPOs in Saudi Arabia and the UAE has been evident since late 2021. January saw the Saudi exchange’s traded shares quadruple from the previous year, as reported by the exchange.
“Momentum is excellent, and 2024 looks promising,” remarks Zaid Ghoul, SNB Capital’s Head of Investment Banking, noting the recent spike in share trading. This activity bodes well for more companies to consider IPOs.
The Saudi Tadawul is expanding its horizons beyond capital markets with a plan to acquire a 33% stake in the Dubai Mercantile Exchange, aiming to dominate the global commodities market. Post-acquisition, the exchange will be known as the Gulf Mercantile Exchange.
On a short-term note: Major Gulf stock markets dipped in early trading following news of higher-than-expected U.S. producer prices in January, raising inflation worries and diminishing expectations for the Federal Reserve’s rate cuts. Gulf Cooperation Council (GCC) countries, including Saudi Arabia and the UAE, closely monitor the Fed’s moves due to their dollar-pegged currencies.
The UAE has witnessed a historic peak in its non-oil foreign trade, hitting $953 billion in 2023. This milestone comes as the nation signs free trade pacts with countries like India, Turkey, and Indonesia, and pursues economic diversification. This expansion is crucial to the UAE’s economic strategy, fostering growth in innovative and technologically advanced sectors, says Foreign Trade Minister Thani Al Zeyoudi.
Tourism is experiencing a renaissance in the Gulf. Dubai International Airport exceeded its pre-pandemic passenger traffic last year, handling about 87 million passengers—an increase from 2019’s figures. Similarly, Saudi Arabia’s tourist influx saw a 56% rise from 2019 to 2023, topping the UN’s World Tourism Barometer’s recovery report.
Notable corporate moves include: The Public Investment Fund’s Saudi Global Ports Co., considering an IPO in Riyadh; Mubadala’s investment in the expansion of Israel’s Tamar gas field; and a strategic investment in Indian fashion brand Beyoung by the Royal Office of Sheikh Tahnoon Bin Saeed in the UAE.
Significant media developments: RedBird IMI’s $1.45 billion acquisition of All3Media signals a major move in the media sector. Universal Music Group’s plan to set up a Capitol Studios branch in the UAE represents a commitment to fostering regional talent.
Highlighted events include the Saudi Capital Markets Forum in Riyadh, the Step Conference in Dubai, and the international gatherings like the Web Summit Qatar and Abu Dhabi Family Office Summit, showcasing the region’s dynamic engagement in global business trends.