PIF’s Lucid deal a VC success even as fund isn’t among top 10 investors in 2021

PIF’s Lucid deal a VC success even as fund isn’t among top 10 investors in 2021
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Updated 02 January 2022

PIF’s Lucid deal a VC success even as fund isn’t among top 10 investors in 2021

PIF’s Lucid deal a VC success even as fund isn’t among top 10 investors in 2021

RIYADH: Saudi Arabia's Public Investment Fund, known as PIF, wasn't among the top 10 global sovereign wealth funds in terms of cash deployment in 2021; however, its investment in Lucid Motors was considered one of the most successful venture capital deals of the year, according to a new industry report. 

The PIF "was not as active in VC as in previous years, but it scored one of the best goals of the season when Lucid Motors went public in July," Global SWF said on Saturday in its annual report on the performance of global sovereign wealth funds.

With a return on investment that was almost 40 times, "every SOI [state-owned investors] should aspire to replicate the success of PIF with Lucid Motors...even if 90 percent of startups are doomed to fail," Global SWF said.

PIF invested $1.3 billion for 63 percent of Lucid in 2018, when the startup was running short of money. "Three years later, the stake is worth $41 billion, and the transaction showcases the competitive advantage of sovereign wealth funds when it comes to venture capital investing, thanks to liquidity and long-term horizon," it added in the report.

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Top 10 SWFs

The Saudi sovereign wealth fund, which plans to be among the largest globally in terms of assets under management by 2030, was among the top 10 SOIs in 2020 when it invested $7.9 billion, according to Global SWF. It assesses funds based on investment deals that are private market transactions with some public deals that are sizable and long-term in nature. Global SWF didn't include investment in domestic development such as NEOM in Saudi Arabia, or any transfer of assets from governments to these funds.  

Global SWF report showed that the PIF was ranked the top fund globally for two years in a row when it invested $61.2 billion in 2016 and $31.4 billion in 2017, as those were the years when it invested in big schemes such as Softbank Vision Fund I and the Blackstone Infra Fund. 

The Fund’s presence on the world stage has grown as it invests in various global markets, which contributes to diversifying sources of income and bringing international expertise to the Kingdom.

Firms to see investment include Lucid Motors, with about $2.9 billion, bringing global investors at its initial public offering listing in July 2021, making it one of the most significant companies in the electric vehicle sector. The company's value has risen from $3 billion to $65 billion.

PIF also ploughed $2.8 billion into Indian companies, such as the mobile network operator Jio Platforms and the conglomerate Reliance.

Saudi Arabia’s sovereign wealth fund is on track to surpass its objective for the second quarter of 2022, and reach SR1.8 trillion ($480 billion) in assets under management, the fund’s Governor Yasir Al-Rumayyan said last month.

The Riyadh-based PIF, is considered a key player in the Kingdom’s diversification strategy, particularly in achieving the Vision 2030 goals.

Global outlook

Assets held by the world's sovereign wealth and public pension funds rose to a record $31.9 trillion in 2021 thanks to rising U.S. stock and oil prices, and investments rose to their highest for several years, Global SWF report showed.

The report on state-owned investment found that the assets managed by sovereign wealth funds rose 6 percent over the year to $10.5 trillion, while those of public pension funds jumped 9 percent to $21.4 trillion.

The report also found that state-owned investors had deployed more money, both in number of deals and by volume, than in any of the previous six years. Some $215.6 billion was spent, almost half of it by sovereign wealth funds.

Singapore's GIC sovereign wealth fund topped the league, increasing its dealmaking by 75 percent to $31.1 billion, spread across 109 deals. Over a third of that capital was invested in real estate, especially logistics.

Overall, emerging markets fell behind, attracting only 23 percent of the capital this year, one of the lowest figures in the last six years, Diego Lopez at Global SWF wrote in the report.

Venture capital investments make up only a small slice of funds deployed by state-owned vehicles overall, but grew by more than 80% this year to $18.2 billion, with Singapore's Temasek accounting for more than a quarter.

The annual report by Global SWF analyzed data from 161 sovereign wealth funds and 275 public pension funds.

(With Reuters)


Apple’s holiday iPhone sales surge despite supply shortages

Apple’s holiday iPhone sales surge despite supply shortages
Updated 28 January 2022

Apple’s holiday iPhone sales surge despite supply shortages

Apple’s holiday iPhone sales surge despite supply shortages
  • Apple to report iPhone sales of $71.6 billion for the October-December period

SAN RAMON, California: Apple shook off supply shortages that have curtailed production of iPhones and other popular devices to deliver its most profitable holiday season yet.
The results posted Thursday for the final three months of 2021 help illustrate why Apple is looking even stronger at the tail end of the pandemic than when the crisis began two years ago.
At that point, Apple’s iPhone sales had been flagging as consumers began holding on to their older devices for longer periods. But now the Cupertino, California, company can’t seem to keep up with the steadily surging demand for a device that has become even more crucial in the burgeoning era of remote work.
Apple’s inability to fully satisfy the voracious appetite for iPhones stems from a pandemic-driven shortage of chips that’s affecting the production of everything from automobiles to medical devices.
But Apple so far has navigated the shortfalls better than most companies. That deft management enabled Apple to report iPhone sales of $71.6 billion for the October-December period, a 9 percent increase from the same time in the previous year.
Those sales gains would have likely been even more robust if Apple could have secured all the chips and other components needed to make iPhones. That problem plagued Apple’s July-September quarter when management estimated that supply shortages reduced its iPhone sales by about $6 billion. The company may address how supply shortages affected its performance in the most recent quarter during a conference call with analysts scheduled later Thursday.
Despite what drag the shortages caused, Apple still earned $34.63 billion, or $2.10 per share, a 20 increase from the same time in the previous year. Revenue climbed from the previous year by 11 percent to $123.95 billion.
Apple’s ongoing success help push the company’s market value above $3 trillion for the first time earlier this month. But its stock price has tumbled 13 percent since hitting that peak amid worries about a projected rise in interest rates aimed at dampening the torrid pace of inflation that has been fueled in part by supply shortages.
Its shares gained more than 3 percent in Thursday’s extended trading after the Apple’s fiscal first-quarter numbers came out.
The supply issues looming around Apple’s devices have magnified the importance of the company’s services division, which is fueled by commissions from digital transactions on iPhone apps, subscriptions to music and video streaming and repair plans.
The up to 30 percent commissions collects from apps distributed through Apple’s exclusive app store have become a focal point of a fierce legal battle that unfolded in a high-stakes trial year, as well as proposed reforms recently introduced in the US Senate that tear down the company’s barriers that prevent consumers from using alternative payment systems.
For now, though, the services division is still booming. Its revenue in the past quarter hit $19.52 billion, a 24 percent increase.
Apple is widely believed to be maneuvering toward another potentially huge money-making opportunity with the introduction of an augmented reality headset that would project digital images and information while its users interact with other physical objects and people. True to its secretive form, the company has never said it is working on that kind of technology.
But Apple CEO Tim Cook has openly shared his enthusiasm for the potential of augmented reality in public presentations, and analysts believe the long-rumored headset could finally roll out later this year — unless it’s delayed by supply shortages.


Lebanon’s finance minister says replacing central bank governor is not ‘wise’

Lebanon’s finance minister says replacing central bank governor is not ‘wise’
Updated 28 January 2022

Lebanon’s finance minister says replacing central bank governor is not ‘wise’

Lebanon’s finance minister says replacing central bank governor is not ‘wise’

BEIRUT: Lebanon’s finance minister said on Thursday replacing the central bank governor, Riad Salameh, today is not “wise.”
Finance Minister Youssef Khalil told local broadcaster MTV that nobody proposed removing the central bank governor, but “I do not imagine changing the central bank governor today is a wise matter.”
Salameh, who has support from several top politicians, is being probed in Lebanon and at least four European countries, with his role under close scrutiny since Lebanon’s economic collapse in 2019.
Salameh denies any wrongdoing during almost three decades leading the central bank.


Aramco CEO says energy transition not going smoothly: Reuters

Aramco CEO says energy transition not going smoothly: Reuters
Updated 27 January 2022

Aramco CEO says energy transition not going smoothly: Reuters

Aramco CEO says energy transition not going smoothly: Reuters

BEIRUT: Saudi Aramco CEO Amin Nasser said on Thursday that the energy transition “was not going smoothly,” pointing to a resurgence in demand for oil and gas as the global economy recovers while supplies lag on the back of falling investment, according to Reuters.

“We all agree that to move towards a sustainable energy future a smooth energy transition is absolutely essential but we must also consider the complexities and challenges to get there,” he told the B20 conference in Indonesia via video link.

“We have to acknowledge that the current transition is not going smoothly,” he said.

- Reuters


SNB board recommends dividends of over $1bn for the second half of 2021

SNB board recommends dividends of over $1bn for the second half of 2021
Updated 27 January 2022

SNB board recommends dividends of over $1bn for the second half of 2021

SNB board recommends dividends of over $1bn for the second half of 2021

RIYADH: Saudi National Bank, the Kingdom’s biggest lender, said its board has recommended cash dividends of SR4.03 billion ($1.1 billion), or 9 percent of capital, for the second half of 2021.

SNB’s shareholders will receive SR0.9 per share, with a total amount of 4.48 billion shares eligible for dividends, a bourse statement by the bank revealed.

This brings the annual dividend yield to 2.12 percent, based on a share price of SR73, given the bank paid out SR0.65 per share for the first half of the same year.

The distribution date is yet to be disclosed, according to the statement.


Data-led innovation needed to help Saudi firms process information, says Dell ahead of LEAP

Data-led innovation needed to help Saudi firms process information, says Dell ahead of LEAP
Updated 27 January 2022

Data-led innovation needed to help Saudi firms process information, says Dell ahead of LEAP

Data-led innovation needed to help Saudi firms process information, says Dell ahead of LEAP

RIYADH: The majority of Saudi businesses gather data faster than it can be analyzed and used, Dell Technologies has warned ahead of the LEAP tech event being held in Riyadh from Feb. 1-3.

The US firm is set to take part in the forum, which is focused on future and disruptive technologies.

Ahead of the event, Mohamed Talaat, vice president in Saudi Arabia, Egypt and Levant at Dell Technologies, pointed to research by his company in 2021 that showed 70 percent of Saudi respondents have data-driven business and consider data as the lifeblood of their organisation.

However, 59 percent said they were gathering data faster than they could analyze and use.

Talaat said: “Saudi Arabia today stands at the threshold of change, underpinned by the nation’s ambitious vision and drive to transform, innovate and build a legacy for generations to come.

“Dell Technologies remains committed to advancing the country’s transformation agenda. We're empowering local organizations with end-to-end infrastructure and client solutions. They not only support a data-driven work culture, but are also capable of predicting the future and achieving better business results.”