February Third Week Middle East Finance Newsletter

Saudi Arabia Becomes Largest Outside Shareholder of Nintendo

Key takeaways:

PIF is now the largest outside shareholder of Nintendo Co.

PIF is making a concerted push to break into the games and esports industry and has invested in other game companies such as Nexon Co. and Capcom Co.

PIF's investments are guided by the Saudi state's goals for 2030, which include building strategic economic partnerships and bringing home cutting-edge technology.

Counter arguments:

It is unclear how this investment will benefit Saudi Arabia in the long-term.

It is uncertain if PIF will continue to increase its stake in Nintendo going forward.

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Qatar and Abu Dhabi Are Interested in Buying NBA Teams

Key takeaways:

The NBA Board of Governors recently approved a rule change to allow sovereign wealth funds to buy up to 20% of teams.

The value of NBA franchises has soared in recent years, with the most recent sale valuing the Phoenix Suns at $4 billion.

As their coffers have swelled, Gulf countries have been on a spending spree for marquee sports teams and events.

Counter arguments:

Any international deal for an NBA team would face significant scrutiny and likely require lengthy due diligence before securing league approval.

The governments behind many of the sovereign wealth funds in the Gulf have been criticised by international organisations for human rights violations.

[Read more.]

How to Know Where Egypt’s Once-in-Decade Crisis Is Heading

Key takeaways:

The Egyptian currency is more flexible due to an IMF demand, but uncertainty surrounds it.

Egypt targets $2 billion in net inflows by July, but foreign investor appetite remains weak.

The IMF has promised to reduce state involvement in the economy, but this may face resistance.

Counter arguments:

Gulf allies have not fully opened the taps for investment, which may delay the recovery.

Inflation is still high and is causing misery for the population, with no sign of easing yet.

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UAE Says Oil Supply A Bigger Issue Than Demand For 2024

Key Takeaways

The UAE is worried about the future of oil supplies and is preparing for the possibility that there will not be enough to meet global demand.

The UAE and other OPEC+ producers are sticking to their current production targets for this year but are concerned about the future of oil supplies.

There are concerns about the economy and the potential for a recession, which could increase oil demand.

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Lebanon Makes Another Plea For Aid at Dubai Summit

Key Takeaways

Lebanon is trying to convince donors that their money will be spent "in the right way."

Donors, including Saudi Arabia and the European Union, have pledged billions of dollars but haven't delivered.

The World Bank has dubbed Lebanon’s financial implosion one of the worst globally since the mid-19th century.

[Read more]

Turkey Injects Billions of Liras to Prop Up Stocks Before Open

Key Takeaways

The Turkish government is throwing its full weight behind stocks before the planned resumption of trading at the nation’s key equity market on Wednesday.

The scope of measures shows authorities are determined to reverse the rout that erased tens of billions of dollars from Turkish companies’ market value in the two days following Feb. 6 earthquakes that devastated much of the country’s southeast.

Other measures include suspending trading on Feb. 8 and cancelling trades made that day after the earthquakes destroyed large parts of 10 cities in Turkey.

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Gulf IPO Rush Resumes as Adnoc Tees Up Largest Deal of 2023

Key Takeaways

Adnoc Gas plans to raise $2 billion or more by listing its natural gas business in what could be the largest initial public offering so far this year.

According to people familiar with the matter, the deal should give Adnoc Gas a valuation of at least $50 billion.

High oil and gas prices helped the region — especially the UAE and Saudi Arabia — buck a global IPO slump last year, and more listings are expected in the coming months.

[Read more]