UAE turns ‘largest investor’ with $10bn pledge for Indonesia wealth fund

The UAE helped Indonesia establish the INA through its Abu Dhabi Investment Authority (AIDA) in February this year, with the AIDA serving as one of its advisers. (Shuttertstock/File Photo)
The UAE helped Indonesia establish the INA through its Abu Dhabi Investment Authority (AIDA) in February this year, with the AIDA serving as one of its advisers. (Shuttertstock/File Photo)
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Updated 24 March 2021

UAE turns ‘largest investor’ with $10bn pledge for Indonesia wealth fund

The UAE helped Indonesia establish the INA through its Abu Dhabi Investment Authority (AIDA) in February this year, with the AIDA serving as one of its advisers. (Shuttertstock/File Photo)
  • Fund will be used to finance top infrastructure projects, boost connectivity across the nation

JAKARTA: Indonesia on Wednesday welcomed the UAE’s commitment to invest $10 billion in its recently launched sovereign wealth fund, which a senior official said made the emirates the “largest major investor” in the initiative.

“With this investment, so far the UAE has become the largest major investor in the Indonesia Investment Authority (INA),” Husin Bagis, Indonesia’s ambassador to the UAE, told Arab News on Wednesday.

“The joining of the UAE further shows the high level of international confidence to invest in the INA and would attract other world investors to join and invest,” he added.

The UAE helped Indonesia establish the INA through its Abu Dhabi Investment Authority (AIDA) in February this year, with the AIDA serving as one of its advisers.

The sovereign wealth fund, introduced during the same period, will be used for major infrastructure projects and will boost connectivity in the world’s largest archipelago, with nearly 17,000 islands.

“We believe that more investors would be interested in a number of high-potential opportunities in Indonesia, which range from stable brownfield assets to greenfield projects with potential value in the future,” Jodi Mahardika, a spokesman for the Coordinating Ministry of Maritime Affairs and Investment, told Arab News on Wednesday.

On Tuesday, the UAE’s state-run news agency, WAM, reported that the emirates’ commitment to invest in Indonesia’s sovereign wealth fund was as per the directives of Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan.

The investment will focus on strategic infrastructure projects — particularly in the infrastructure, roads, ports, tourism, agriculture and other promising sectors — that “can contribute to growth, as well as economic and social progress.”

According to Bagis, the investment pledge is the “sweet result” of talks between Indonesian President Joko Widodo and Sheikh Mohammed on Friday last week, when the two leaders discussed bilateral cooperation and touched upon the INA.

“The UAE’s investment in the INA would strengthen bilateral relations between the two countries in various fields, and it reflects the close personal relations between the two states’ leaders,” Bagis said.

The investment pledge came two weeks after a UAE delegation, headed by Energy and Infrastructure Minister Suhail Al-Mazrouei, visited Indonesia earlier this month to attend the Indonesia-UAE Week.

During the week-long visit, both sides inked several business deals, including agreements to develop a $500 million tourism resort on an island in the Aceh province and a $1.2 billion port and industrial zone development scheme in Gresik, in the province of East Java.

In addition to that, officials also participated in the groundbreaking ceremony for a replica of the Sheikh Zayed Grand Mosque in Widodo’s hometown in the Central Java province.

At the time, Al-Mazrouei had said that the UAE was studying investment options for infrastructure development projects in Indonesia before injecting more financial support.

The INA was launched with an initial capital of up to $5.3 billion in cash and assets that the government will inject until the end of the year toward various infrastructure and development projects. It has a target to develop an initial $20 billion financing pool.

Indonesian officials said other countries such as the US, Japan, Canada and the Netherlands had expressed interest in injecting a total of $9.5 billion into the INA through their respective development, financing and pension fund agencies.

Analysts, for their part, said that the funds secured by the INA could provide some respite to state-owned construction companies’ leverage, several of which have been struggling to secure finance for infrastructure projects by issuing global bonds.

According to Fitch Ratings, these companies have a total debt of over 170 trillion rupiahs ($11.77 billion) as of the end of September 2020, while state-owned energy company Pertamina’s debt amounted to almost 300 trillion rupiahs as of June 2020.

Meanwhile, in a statement on Monday, the international credit rating agency said that the INA is unlikely to cause any short-term reduction on the state-owned companies’ debts “since its capital is modest relative to the scale of debt” among state-owned enterprises engaged in construction, toll roads, oil and gas, and other strategic sectors.

“The INA’s capacity to mobilize funds may be amplified if it is able to channel overseas capital into Indonesian infrastructure investments. It is possible that the authority’s privileged legal and political positions may provide greater assurance to foreign partners wanting to invest in infrastructure,” Olly Prayudi, corporate director at Fitch Ratings Indonesia, said.


Egypt to launch natural gas-powered bus fleet in 2022

Egypt to launch natural gas-powered bus fleet in 2022
Updated 05 December 2021

Egypt to launch natural gas-powered bus fleet in 2022

Egypt to launch natural gas-powered bus fleet in 2022

CAIRO: Egypt will launch its first fleet of buses powered by natural gas next year, Minister of Public Enterprise Hisham Tawfik has said.

About 70 percent of the components used in the manufacturing of the buses will be sourced locally, in cooperation with several Egyptian companies, he said.

Tawfiq said that the fleet will include buses that can accommodate 14 to 50 passengers, and that the goal of the project is to localize technology and transport production.

“Our strategy is to work in the production of environmentally friendly vehicles, whether they run on natural gas or electricity,” he added.

A delegation from the Belarusian Minsk Automobile Plant signed a contract to supply production materials for the project.

Production is expected to begin in mid-2022, with a target of 250 buses completed per year.

Tawfiq welcomed cooperation with the Belarusian side, especially in light of the distinguished relations between the two countries, which have developed significantly in recent years.


PIF offers 100m shares in stc in secondary public offering

PIF offers 100m shares in stc in secondary public offering
Updated 05 December 2021

PIF offers 100m shares in stc in secondary public offering

PIF offers 100m shares in stc in secondary public offering

RIYADH: Saudi Arabia’s Public Investment Fund (selling shareholder) and stc on Sunday announced the launch of a secondary public offering of stc’s ordinary shares, Argaam reported.

“The potential transaction is in line with the PIF’s strategy to recycle its capital to new investments,” the fund said in an earlier statement. 

A total of 10.02 million shares will be allocated to retail subscribers.

The offering comprises a fully marketed secondary public offering of 100.2 million stc shares, representing 5.01 percent of its share capital

The price range has been set between SR100 and SR116 per share. The final offer price will announced on Dec. 10.

Goldman Sachs Saudi Arabia, HSBC Saudi Arabia, Morgan Stanley Saudi Arabia and SNB Capital are acting as joint financial advisers for STC and joint global coordinators for STC and PIF. The Citigroup Saudi Arabia and Credit Suisse Saudi Arabia are acting as joint bookrunners, according to a bourse filing.


Bitcoin continues to decline from its high in November: Crypto wrap

Bitcoin continues to decline from its high in November: Crypto wrap
Updated 05 December 2021

Bitcoin continues to decline from its high in November: Crypto wrap

Bitcoin continues to decline from its high in November: Crypto wrap

RIYADH: Bitcoin, the leading cryptocurrency, plunged around 30 percent from the year’s high of $69,000 on Nov. 10.

It, however, traded higher on Sunday, rising by 2.82 percent to $48,972 at 5:14 p.m. Riyadh time.

Ether, the second most popular cryptocurrency, traded at $4,140 up 4.16 percent, according to data from CoinDesk.

“Corrections and declines do occur in almost all markets including crypto. The current decline is considered the largest in terms of market value since the late March 2020 decline,” Abdullah Mashat, managing director of a private Saudi retail company told Arab News.

Mashat said: “Current decline is due to investors being concerned of tapering talks in the US, which resulted in the decline in stock exchanges and later this caused liquidity crunch in the crypto markets."

Anto Paroian, COO at crypto hedge fund ARK36 said: “The market sentiments  have decisively soured as a result of deepening concerns about omicron variant and its (likely) effect on the economy. The current situation resembles closely what happened in March 2020 as we’re seeing equities plunge 5 percent off recent highs and the negativity is spreading to other markets as well including the digital asset markets. 

“On the other hand, the current price levels aren’t unexpected after the bulls failed to flip the $60,000 resistance multiple times in the past few weeks. During previous Bitcoin bull markets violent swings of 20-30 percent happened a few times before the market topped and let’s remember what happened in July - and how well the market rebounded afterward."

 "It must be noted, though, that one of the key Bitcoin bull market indicators — the 20-week simple moving average — has now been decisively breached so the outlook is currently bearish in the short to medium term. What’s more, since there are widespread expectations that interest rates will rise as central banks are signaling a more aggressive stance on inflation, the violent price move in the digital asset market may also suggest that some investors are preparing to go into a risk-off mode for the time being," Paroian added.

Meanwhile, El Salvador President Nayib Bukele said the Central American country had acquired an additional 150 bitcoins after the digital currency’s value slumped again, enlarging his bet on the cryptocurrency despite criticism.

Bukele said last week that El Salvador had acquired 100 additional coins to take advantage of the currency weakening.


Aramco enters Saudi lubricants market with new product line

Aramco enters Saudi lubricants market with new product line
Updated 05 December 2021

Aramco enters Saudi lubricants market with new product line

Aramco enters Saudi lubricants market with new product line

RIYADH: Saudi Aramco on Sunday announced its entry into the Kingdom’s domestic lubricants market with the launch of a new line of products.

The oil giant timed the ORIZON® launch to coincide with the inaugural Saudi Arabian Formula 1 Grand Prix in Jeddah.

The product line has been introduced in more than 20 cities including Riyadh, Jeddah and Dammam with more locations planned. The products include synthetic and semisynthetic lubricants for gasoline engines and heavy-duty diesel engines, as well as driveline products, greases and brake fluids. 

The company has also expanded the brand to include ORIZONPRO® which is a high-performance line for the industrial sector.

Yasser M. Mufti, Aramco vice president of fuels, said: “Entering the lubricants market is an important milestone for the company, as we continue to expand our presence throughout the downstream value chain.” 

The launch “further complements Aramco’s presence in the Kingdom’s downstream direct-to-consumer segment, following the inauguration of our first two service stations in Riyadh and Saihat recently.”


Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap

Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap
Updated 05 December 2021

Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap

Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap

CAIRO: The Australian government is expected to raise its economic growth forecast for 2022 in its midyear budget review, according to the country’s treasurer, Josh Frydenberg.

He said omicron’s effect, the new COVID-19 variant, is still unclear.

The country’s fiscal year runs until June.

The Australian economy narrowed by 1.9 percent in the third quarter of this year on the back of the delta variant which led to a national lockdown.

However, the treasurer said the country now enjoys one of the highest vaccination rates in the world, boosting market conditions.

France avoids more restrictions

France will try to refrain from the imposition of any health-related restrictions even as virus cases continue to rise, the country’s Finance Minister Bruno Le Maire said.

France is also avoiding any mandatory vaccination campaigns, Bloomberg reported, citing the minister.

He said two sectors, restaurants and hospitality, were particularly hit by the wave of new cases, adding that they will receive government support.

He also stated the new variant, omicron, is yet to have an effect on the country’s economic growth.

US growth rate

Unlike other countries, US expected growth rates for both 2021 and next year were trimmed down by Goldman Sachs, one of the world’s leading investment banks. 

It said this downward revision was attributed to a potential adverse effect by omicron, according to Bloomberg.

The world’s largest economy is now predicted to grow by 3.8 percent in 2021, instead of the previous 4.2 percent forecast. As for next year, the US is set to expand by 2.9 percent, down from 3.3 percent.

Meanwhile, the country’s unemployment rate plunged to a 21-month low to hit 4.2 percent in November, according to the Labor Department. This is a 2.1 percent drop compared to January’s level, a considerable decline.

However, employment growth slowed down during the month.

The economy is still expected to experience strong growth in the fourth quarter, following the previous quarter’s weak performance.