Bahrain aims to be Hong Kong to Saudi Arabia’s China

Bahrain hopes a new investment strategy will strengthen its position as a gateway to Saudi Arabia in the same way that Hong Kong has become aa financial hub for China. (Reuters)
Updated 27 January 2018
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Bahrain aims to be Hong Kong to Saudi Arabia’s China

DAVOS: Bahrain is ramping up its drive to attract foreign investment, undeterred by the prospect of big global capital flows toward Saudi Arabia under the Vision 2030 strategy.
Khalid Al-Rumaihi, the former investment banker who heads the Bahrain Economic Development Board (EDB), took the opportunity of the World Economic Forum in Davos to showcase the country’s investment strategy, which is underpinned by $32 billion of planned infrastructure projects across five key sectors.
Al-Rumaihi said: “The Bahrain story is not well understood. We have the ability to become a hub for growing GCC trade flows. We see ourselves potentially playing the same role in the Arabian Gulf as Hong Kong does next to China. There is room for several hubs in the region as there are in Asia.”
The EDB is planning a global investment conference — “Gateway Gulf” — in the country in May to explain its attractions for foreign investors.
He said that while intra-GCC trade had grown substantially — from $15 billion in 2002 to more than $120 billion at the latest estimate — it was still low by the standards of other big trading blocs like the EU. “We think it can get to $500 billion,” he said.
The focus is on five sectors where he sees potential to attract foreign investment: Logistics, light manufacturing, financial services (especially in the growing fintech market), digital technology, and tourism.
Bahrain already has a big tourism industry, with 12 million visitors per year in comparison with its 1.5 million resident population. But, with about 8 million of those tourists coming on short visits from Saudi Arabia, some experts have forecast a threat from the Kingdom’s plans to develop its own tourism and entertainment sector.
“The average stay for Saudi tourists is two days, so we are planning to build up our facilities to encourage them to stay longer,” Al-Rumaihi said.
Beachside hotel facilities as well as shopping and other leisure facilities are underway, with Abu Dhabi developer Eagle Hills involved in several big projects. Dubai leisure group Jumeirah is also involved in two new hotel developments in Bahrain.
Some $7.5 billion of the planned investment spend will come from the Gulf Fund set up by GCC allies after 2011. Al-Rumaihi said that he saw a big future for the GCC, despite the current confrontation with Qatar over terrorism funding allegations. “The GCC is here to stay, despite political issues at the moment. I could even see it getting bigger,” he said.
While Bahrain’s long-established financial industry took a hit from the 2011 disturbances, Al-Rumaihi said foreign investment had recovered since, with FDI statistics showing an increase from $142 million in 2015 to $730 million last year.
Bahrain has attracted some big names to invest in the country, with e-commerce group Amazon and food manufacturer Mondelez recently announcing major investments.


Comcast challenges Disney for control of 21st Century Fox assets

Updated 27 min 45 sec ago
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Comcast challenges Disney for control of 21st Century Fox assets

NEW YORK: A full-fledged bidding war for key assets of Rupert Murdoch’s 21st Century Fox erupted Wednesday as media and cable giant Comcast announced it plans an all-cash bid that would top an offer already on the table from Walt Disney Co.
Comcast said it is in “advanced stages of preparing” the offer for the television and entertainment assets Fox agreed to sell to Disney in a $52.4 billion stock deal announced in December.
Comcast, which owns the NBCUniversal media-entertainment group and is the largest US cable operator, said it was prepared to pay more than Disney for the operations, which don’t include Murdoch’s Fox News Channel, Fox Broadcasting and major sports channels.
“Any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney,” the Comcast statement said.
“The structure and terms of any offer by Comcast, including with respect to both the spin-off of ‘New Fox’ and the regulatory risk provisions and the related termination fee, would be at least as favorable to Fox shareholders as the Disney offer.”
Either deal would dramatically reshape the media-entertainment landscape and scale back the Fox empire created by the 87-year-old Murdoch.
Murdoch, who with his family controls 21st Century Fox, agreed to the tie-up in December that would give Disney the famed Fox studios in Hollywood along with Fox’s international TV operations and US cable entertainment and regional sports channels.
Included in the sale is Fox’s 39 percent stake in the British pay TV operator Sky. Murdoch has sought full control of Sky but has faced opposition from regulators in Britain.
Separately, Comcast last month made an offer of $30.7 billion in cash for Sky, in a move welcomed by the British firm.
Some reports said Murdoch had previously rejected an offer from Comcast. But the controlling family and shareholders would face pressure if the new offer is better than the one from Disney.
Fox had no immediate comment on the Comcast statement. But in its most recent earnings call, co-executive chairman Lachlan Murdoch said that “we are committed to our agreement with Disney” and that board members “are aware of their fiduciary duties on behalf of all shareholders.”
Analyst Richard Greenfield at BTIG Research predicted last month that Comcast would offer “a 25 percent premium to Disney’s bid” in an effort to win the deal.
“While a Comcast acquisition of Fox is surely challenging financially, Comcast has never shied away from a challenge,” the analyst wrote.
Either deal could face intense scrutiny from antitrust regulators because of the implications for the television and cinema sectors.
A tie-up with Disney would create giant a with up to 40 percent of US box office revenues, according to some estimates.
Comcast’s Universal studios is smaller than Disney’s but could vault to the top of the market by adding 20th Century Fox.
Either Comcast or Disney would gain global stature in the TV sector with Sky, the pan-European broadcaster with operations in Britain, Ireland, Germany, Austria and Spain. Comcast operates the NBC broadcast network while Disney owns ABC, and both have multiple cable channels.
The move comes with Murdoch gradually withdrawing from the empire he built, giving more authority to his sons Lachlan and James.
The group announced last week that Lachlan Murdoch would assume the role of chairman and chief executive at the “new” Fox, which would be tightly focused around the Fox News Channel and sports cable channels.
The consolidation in the sector comes with traditional operators facing pressure from online and tech platforms such as Netflix and Amazon, which are shaking up the model of pay TV deliver as well as the studio system for content production.
Another pending deal that would join telecom and broadband giant AT&T with media-entertainment group Time Warner is being challenged by the US Justice Department in an antitrust suit. A judge is expected to rule in that case next month.