UAE weighs up investment options in Indonesia

UAE weighs up investment options in Indonesia
The UAE is studying investment options for infrastructure development projects in Indonesia. (Shutterstock)
Short Url
Updated 09 March 2021

UAE weighs up investment options in Indonesia

UAE weighs up investment options in Indonesia
  • Projects focus of scrutiny prior to injection of more money through deals

JAKARTA: The UAE has announced it is studying investment options for infrastructure development projects in Indonesia before injecting more financial support through the southeast Asian country’s newly launched sovereign wealth fund.

As part of the recent Indonesia-Emirati Amazing Week tour of four cities, UAE Energy and Infrastructure Minister Suhail Al-Mazrouei and his delegation signed several business deals, including a pledge to develop a $500 million tourism resort on an island in Aceh province and a $1.2 billion port and industrial zone development scheme in Gresik, East Java province.

“When we met two years ago, no one was seeing these projects, now we are signing some of these projects,” said the minister, referring to Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan’s visit to Indonesia in July 2019 — the first by a UAE leader since the crown prince’s father visited the country in 1990.

Some of the other agreements given the green light last week included follow-ups to the $22.9 billion investment deals inked during Indonesian President Joko Widodo’s visit to Abu Dhabi in January last year to develop the energy, infrastructure, and mining sectors, which will be channeled through the sovereign wealth fund.

In a joint press conference with his Indonesian counterpart, coordinating minister for maritime affairs and investment, Luhut Pandjaitan, Al-Mazrouei said that the UAE was keen on looking at assets for infrastructure development projects that Indonesia was offering through the new fund agency that the Abu Dhabi Investment Authority helped to establish – where it also serves as an adviser – and evaluate them before securing the investments.

However, he stopped short of revealing a figure, and pointed out that the UAE’s commitment to Indonesia was “more than a number.”

The minister said: The fact that  we work together on the creation of the sovereign wealth fund makes us committed to looking at it. We will continue working with Indonesia and supporting them, and this is the nature of our investments in every country.” Al-Mazrouei added that the UAE had promised Widodo that it would be “a candid and a good adviser.”

“Indonesia is a major economy and the largest Islamic economy. It is a vibrant economy with a very healthy growth rate. I think there are lots of things that can happen in Indonesia, so let’s not limit ourselves to a number,” he said.

The Indonesia Investment Authority was launched in February, with the government pledging to inject up to $5.3 billion in initial capital until the end of the year.

One of its priorities is developing infrastructure projects that offer more access and connectivity in the vast Indonesian archipelago, such as toll roads, airports, and seaports. Pandjaitan said the agency, which had a target to develop an initial $20 billion financing pool, had set up a master fund and thematic funds through which foreign investors could inject capital, adding that it was securing about $9.5 billion from investors since its establishment.

Earlier in January, Indonesia’s chief economic minister, Airlangga Hartarto, said that the US International Development Finance Corporation (IDFC) and the Japan Bank for International Cooperation (JBIC) had expressed an interest to inject $2 billion and $4 billion, respectively, into the master fund, while Canada’s global investment group CDPQ and Dutch investment company APG were also interested in committing up to $2 billion and $1.5 billion each in the thematic funds.

Singapore’s sovereign wealth fund agency GIC had also been in touch, although no figure has yet been revealed.

According to data from the Indonesia Investment Coordinating Board, Singapore ranked first on the list of foreign direct investment (FDI) in Indonesia last year, making up 34.1 percent of the overall FDI, with $9.8 billion worth of projects.

Toto Pranoto, an economist at the University of Indonesia’s school of economics and business, told Arab News on Monday that the establishment of the INA could reduce the gap between the funds required for development projects and Indonesia’s domestic funding capability.

It would also relieve some pressure on state-owned infrastructure development companies, which had been struggling to pump funding into the projects by issuing global bonds due to limitation in securing funds from the state budget, he said.

“The financial capital secured from the sovereign wealth fund would help to improve their cash flows,” Pranoto added. He noted that the INA could serve as a catalyst to attract foreign investors to inject financing into projects that could yield good returns for them.


Dubai’s Alabbar to lead new digital-only UAE bank

Dubai’s Alabbar to lead new digital-only UAE bank
Updated 17 min 45 sec ago

Dubai’s Alabbar to lead new digital-only UAE bank

Dubai’s Alabbar to lead new digital-only UAE bank
  • Online banking has become increasingly popular in the UAE, especially as a result of restrictions as a result of the pandemic

Dubai businessman Mohamed Alabbar is to lead a new digital bank set to be launched soon in the UAE.

Zand is being billed as “the world’s first combined digital corporate and retail bank” and is currently going through final approvals ahead of its launch, according to an announcement issued on Monday.

Alabbar is the founder of Emaar Properties — the Dubai developer behind The Dubai Mall and Burj Khalifa — and also teamed up with Saudi Arabia’s Public Investment Fund (PIF) to launch the Noon online shopping platform in 2017. As part of his latest venture, he will take on the role of chairman of Zand.

“The UAE combines progressive regulations with commercial, financial, and technology hubs. This provides the perfect environment for a world-leading digital bank that can launch in the UAE and scale beyond,” Alabbar said in a statement.

“As the first fully independent digital bank in the country, with a full UAE banking license, Zand will provide innovative, effective financial solutions that help simplify businesses and lives, addressing the needs of both retail and corporate customers.”

Online banking has become increasingly popular in the UAE, especially as a result of restrictions as a result of the pandemic, which made it harder to get to a physical bank branch.

A survey by the Boston Consulting Group (BCG) last October found that 70 percent of respondents said that they are actively searching for a new bank and 87 percent said they would be willing to open an account with a branchless digital-only lender.

The same BCG survey found that 53 percent said that they were using banking mobile apps more often as a result of the pandemic and half of those surveyed had started using digital banking for the first time.

“UAE’s banking customers’ have a strong appetite for digital banks, and we see more growth in the demand of digital products during the pandemic,” Mohammad Khan, partner at BCG, was quoted as saying.


Bahrain Bourse expects to attract two more listings, says CEO

Bahrain Bourse expects to attract two more listings, says CEO
Updated 22 min 35 sec ago

Bahrain Bourse expects to attract two more listings, says CEO

Bahrain Bourse expects to attract two more listings, says CEO
  • The pandemic had prompted some companies to shelve planned offerings

RIYADH: Bahrain Bourse is expected to attract two new public offerings this year, its CEO told Asharq Business.
The first is a logistics company and the second an oil company, Sheikh Khalifa bin Ibrahim Al-Khalifa, told the website
However, he said that the pandemic had prompted some companies to shelve planned offerings.
He said that the exchange was focused on easing the entry of investors into the market.
He also highlighted the launch of the Bahrain Bourse environmental, social and governance (ESG) reporting guideline for listed companies, in response to rising appetite for such investments from global institutions.
The stock exchange applies the Global Industry Classification Standard (GICS) to classify listed companies, he said, highlighting continued cooperation with Saudi Arabia’s Tadawul stock exchange, the largest in the region.
He said the bourse’s main objective was to diversify its investor based which is currently dominated by institutions, unlike some other regional exchanges where individual investors are more strongly represented,
Al-Khalifa pointed to the adoption of new listing rules that better guarantee the rights of investors, including those directed at companies with large accumulated losses.


We are happier at home say UAE workers

We are happier at home say UAE workers
Updated 38 min 22 sec ago

We are happier at home say UAE workers

We are happier at home say UAE workers
  • The Life and Beyond 2020 research after polling 10,000 workers in 11 countries to discover the impact of COVID-19 on their wellbeing

DUBAI: UAE workers are happy working from home according to a new study.

The Life and Beyond 2020 research, conducted by US-based technology company Avaya, revealed the UAE as “among the fondest of work-from-anywhere models,” after polling 10,000 workers in 11 countries to discover the impact of COVID-19 on their wellbeing.

The research found 64 percent of those polled in the UAE would support government policies aimed at adopting modern working practices, including remote working, adding it would contribute to their happiness.

The biggest worry for 51 percent of the country’s workforce was returning to work in the office full-time, the survey also revealed.

The UAE was also identified as the world’s best equipped country for remote working, with 64 percent claiming they have access to technology to be able to work from anywhere. Only 62 percent in the US said the same, and 55 percent inthe UK.


Al Ramz boss sees interest rate upside for UAE property

Al Ramz boss sees interest rate upside for UAE property
Updated 12 April 2021

Al Ramz boss sees interest rate upside for UAE property

Al Ramz boss sees interest rate upside for UAE property
  • Dubai-listed Al Ramz recorded a 2020 loss of investments of about 31 million dirhams ($8.4 million)

DUBAI: Low interest rates may fuel the recovery of the UAE real estate sector, according to the boss of one of the country’s biggest brokers.
The country is well positioned for an “accelerated bounce back from 2020 as all the ingredients for growth come back in play starting in 2021,”
Al Ramz chairman Dhafer Sahmi Al-Ahbabi said in the company’s annual report published on Monday.
“The backdrop of low interest rates not seen since the 2011 lows, will fuel the private sector and real estate sector in the country to fuel the growth over the next few years,” he said.

The UAE stock market has already signaled this positive outlook with the UAE indexes already outperforming in the EMEA and EM region in 2021.”
It comes after a tough year for regional brokers hit hard by the sharp decline in corporate profits and trading activity.
Dubai-listed Al Ramz recorded a 2020 loss of investments of about 31 million dirhams ($8.4 million), resulting to a net loss of 10.9 million dirhams, compared to a profit of 4.1 million in 2019.
Al Ramz had to diversify its income sources to buffer the blow of COVID-19, Al-Ahbabi said.


Dubai to become first location outside US to get self-driving vehicles

Dubai to become first location outside US to get self-driving vehicles
Updated 12 April 2021

Dubai to become first location outside US to get self-driving vehicles

Dubai to become first location outside US to get self-driving vehicles
  • The move will make Dubai the first location outside the US to operate self-driving vehicles

DUBAI: Dubai’s transport authority has signed an agreement with Cruise, a General Motors unit, to operate its autonomous vehicles in the emirate by 2023.
The move will make Dubai the first location outside the US to operate self-driving vehicles, the emirate’s Crown Prince Hamdan bin Mohammed Al-Maktoum said on Twitter.
He said the goal was to convert 25 percent of the total transportation trips in Dubai into self-driving trips by 2030.
The fleet will reach 4,000 vehicles by 2030, the crown prince said, as Dubai aims to cut transportation costs by 900 million dirhams ($245 million) annually and reduce carbon emission by 12 percent per year by then.