January Third Week Middle East Business Newsletter
Summary:
Egypt has devalued its currency three times in the last year, narrowing the gap between the official and black market exchange rates. This has led to an influx of foreign capital but has also caused extreme fluctuations in the pound and a scarcity of foreign exchange due to rising prices of commodities.
Summary:
Saudi Arabia is investing up to $15 billion to become a global mining hub and secure raw materials for domestic use. However, there are challenges in attracting foreign direct investment due to the risks involved and the need to provide large enough incentives.
Summary:
Saudi Arabia is investing in mining assets internationally to diversify its economy from oil.
Key takeaways:
1. Saudi Arabia is forming a company to invest in iron ore, copper, nickel and lithium.
2. Maaden and the Public Investment Fund will own 51% and 49% of the new firm respectively.
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Summary:
The head of Qatar’s $450 billion sovereign wealth fund said it would use the current economic turmoil to rebalance its portfolio. The Qatar Investment Authority is looking for opportunities in Europe, Asia and the US in venture capital, fintech and sustainability.
The QIA backed lenders such as Barclays Plc and Credit Suisse Group AG during the 2008 financial crisis. It was also a cornerstone investor in the sports car brand Porsche AG's IPO and has invested in many tech startups. The fund is also considering investing in soccer clubs but hasn’t decided whether to pull the trigger on any specific investment.
Summary:
Kakao Entertainment Corp. has won $930 million from the sovereign wealth funds of Saudi Arabia and Singapore. The company, a unit of Korean social media giant Kakao Corp., said it’s raising 1.2 trillion won. Kakao Entertainment will use the capital to expand its content.
The deal follows Saudi Crown Prince Mohammed bin Salman's much-hyped visit to Seoul in November, which local media reported could precede a raft of investment deals for Korean conglomerates worth $30 billion.
Saudi Arabia, which wants to lower its reliance on oil exports, has invested in games and entertainment providers, such as Korea's NCSoft Corp. and Tokyo-listed Nexon Co.?
Summary:
Turkish clothing manufacturers have asked the government for a special exchange rate. They say it is needed to remain competitive and avoid job cuts ahead of general elections this summer. Sales of goods abroad have stagnated in recent months, threatening the economy.
The Turkish currency is trading at close to 19 per greenback and nearly 20 against the euro. The industry favours an exchange rate of about 23 versus the dollar and around 24 per euro for as long as nine months. It wasn’t immediately clear whether authorities would comply with the request.
The unemployment rate was 10.2% in November, with about 3.6 million people officially unemployed. The government has hiked the minimum wage by 55% and promised nearly 2.3 million people early retirement.