Oracle to invest $1.5bn in Saudi Arabia, plans cloud region in Riyadh 

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Updated 06 February 2023

Oracle to invest $1.5bn in Saudi Arabia, plans cloud region in Riyadh 

Oracle to invest $1.5bn in Saudi Arabia, plans cloud region in Riyadh 
  • The Kingdom is a very high priority for Oracle, says top official

RIYADH: Aiming to meet the growing demand for its cloud services, Oracle plans to open a third public cloud region in Saudi Arabia, the company’s senior vice president, technology cloud, Middle East and Africa, told Arab News in an exclusive interview. 

“Saudi Arabia is a very high priority for Oracle right now,” said Nick Redshaw. “We’re seeing unprecedented growth in the region, which is tremendous and LEAP 2023 will reiterate our commitment to that unprecedented growth with what we think are unprecedented investments and expansion and innovation into the Kingdom and the region.” 

Oracle unveiled its expansion plans at LEAP 2023 International Technology Conference, which is taking place in Riyadh from Feb. 6-9.

Redshaw added: “Oracle is going to invest $1.5 billion in Saudi Arabia to meet the unprecedented acceleration of cloud computing and demand that we’re seeing in the Kingdom. We are also going to expand our first (public cloud) region in the Kingdom, which is in Jeddah, to provide incremental capacity to service the current demand. 

“In addition, we are opening a new public cloud region in Riyadh.”

The opening of the new region in the Saudi capital will “take our total to six across the Middle East and three regions in the Kingdom,” the official said. 

He said the Riyadh region will primarily service the expanding requirements of the Kingdom’s eastern region and Oracle’s government clients who are predominantly based in Riyadh. 

The cloud region in Riyadh will join the existing regions in Jeddah and the futuristic city of NEOM. 

This investment was earlier included in a memorandum of understanding that was signed during Oracle CEO Safra Catz’s recent visit to Riyadh in the presence of Haytham Al-Ohali, vice minister at the Ministry of Communications and Information Technology. 

“The aim here is to help the government and businesses take advantage of all the latest innovation in the cloud and digital transformation that we can deliver,” said Redshaw. 

As part of the MoU, Oracle will work with MCIT and the Communications and Information Technology Commission to establish a commercial and operational model for an additional cloud region in Saudi Arabia that is aligned with the Saudi government’s requirements and local data residency regulations. 

Meeting unprecedented demand 

“We’re seeing an unprecedented rise in cloud computing across the whole region, particularly in Saudi Arabia,” said Redshaw. 

Indeed, according to IDC — a global provider of market intelligence — public cloud spending in Saudi Arabia will increase at a compounded annual growth rate of 26.8 percent over the coming years to reach $3.1 billion in 2026, spurred by organizations looking to leverage the power of the cloud to modernize their critical business applications and become cloud native. 

Redshaw continued: “I anticipate it to grow even more rapidly over the next few years.” 

With regard to the rise of cloud adoption, he said, it’s all about organizations wanting to transform. 

“Cloud adoption is making them more cost-efficient, more secure, more agile, more flexible as businesses as they capitalize on cloud,” he explained. “You’ve got the Kingdom’s demand going up, cloud transformation going up, and then really innovating as businesses on top of that to take advantage of it.” 

Creating job opportunities 

Asked how the new initiatives are likely to impact the job market, Redshaw explained, that since the Kingdom’s Vision 2030 is continuing at a fast pace, it is enabling businesses to transition to the new digital environment and take advantage of technology to drive business outcomes and innovation. 

“Whether it’s Jeddah or Riyadh, what we’re doing is providing the capability to take advantage of that demand which is very strong,” he said. 

Redshaw went on to list a couple of measures that Oracle is taking within the Kingdom to foster and promote talent.

“One is around skills enablement and building capability, both in businesses, in engineering, in startups,” he said. “We have a number of programs running where we bring in young individuals, train them, educate them, and then they can go back into the broader technology market and take advantage of that innovation.” 

He also mentioned the Oracle Academy where educators from around the globe work with institutions in the Kingdom to build learning programs.  

“In addition, we have innovation hubs we’ve built — in Riyadh and the UAE as well,” he continued. “This is where people can meet. We put experts in there. They can brainstorm, train and figure out how to take advantage of all the technology.” 

Read More: Oracle opens Riyadh tech hub

Oracle headquarters campus in Silicon Valley, Redwood City, CA, USA. (Shutterstock)

Focus on sustainability 

Underscoring its ongoing focus on sustainability, Oracle is committed to powering all its cloud regions worldwide with 100 percent renewable energy by 2025. 

Several Oracle cloud regions, including regions in the North and South Americas, and all 10 regions in Europe, are already powered by 100 percent renewable energy, which enables customers to run their computing services more sustainably and with a lower carbon footprint. 

To further advance its commitment to sustainable operations, Oracle recycled 99.9 percent of its retired hardware in 2022. 

“We’re very proud of the sustainability plan that we have and everything we roll out, we roll out consistently worldwide, including Saudi Arabia,” informed Redshaw. 

He added: “We stand committed to our goal of achieving 100 percent renewable energy in all the next-generation cloud regions by 2025 and that would include Riyadh, Jeddah, and all the ones we are bringing on board in the region. We also do a lot around the hardware recycling, so that’s our continued effort to reduce e-waste.” 

“We also decreased the amount of waste sent to landfill in Oracle-owned buildings by 25 percent per square foot since 2015,” Redshaw continued. “In addition, we do a lot of work around responsible sourcing and by 2025 the aim is that 100 percent of our key suppliers will also have an environmental program in place.” 

Not surprisingly, according to him, Oracle is well on its way to achieving its aim of net-zero emissions by 2050. 

Redshaw concluded by saying that they apparently found that 95 percent of businesses believe they make more progress toward sustainability and social goals with the help of artificial intelligence. 

“When you look at technological capability and how people take advantage of it and innovate, there’s a lot you can do with data and AI to actually make your business more sustainable as well,” he said. 

Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover

Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover
Updated 17 sec ago

Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover

Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover

ZURICH, March 29 : UBS Group AG has rehired Sergio Ermotti as CEO to steer its massive takeover of neighbor Credit Suisse — a surprise move that seeks to take advantage of his experience in rebuilding the bank after the global financial crisis, according to Reuters.

The trader turned corporate problem fixer faces the tough challenge of laying off thousands of staff, cutting back Credit Suisse’s investment bank and reassuring the world’s wealthy that UBS remains a safe harbor for their cash.

Ermotti, the current chairman of Swiss Re, will take the helm from April 5. He was chief executive of UBS from 2011 to 2020.

He takes charge weeks after UBS bought rival Swiss bank Credit Suisse in a shotgun merger engineered by Swiss authorities to stem turmoil after Credit Suisse ran aground.

That deal made UBS Switzerland’s one and only global bank, underpinned by roughly 260 billion francs ($170 billion) in state loans and guarantees, a risky bet that makes the Swiss economy more dependent on a single lender.

UBS shares climbed 2.2 percent in early trade.

Analysts said Ermotti’s experience paring back UBS’s investment bank after the 2008 financial crash made him well equipped for the job.

“The decision to bring back Sergio Ermotti is very positive as it reduces integration and execution risk by 80 percent,” said Davide Serra, CEO of Algebris Investments.

“Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. As a shareholder and bondholder I am very happy,” he added.

Ermotti said he was looking forward to integrating UBS and Credit Suisse.

“The task at hand is an urgent and challenging one,” Ermotti said in a statement.

“In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options.”

Current CEO Ralph Hamers, who succeeded Ermotti in November 2020, “has agreed to step down to serve the interests of the new combination, the Swiss financial sector and the country,” UBS said in a statement.

“The board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition,” UBS added.

Hamers, who will stay on as an adviser, had no big-ticket M&A experience under his belt and faced the task of combining two banks with $1.6 trillion in assets, more than 120,000 staff and a complex balance sheet.

He was a notable absentee from the announcement of UBS’s takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a “sad day” that nobody wanted.

A nearly 30-year veteran of Dutch lender ING, Hamers had been a surprise choice when he was appointed to lead UBS, as he had little experience in investment banking or wealth management.

At ING, Hamers was seen as a tech-savvy boss who spurned the image of a stuffy banker for a young, modern and approachable CEO, and there he was credited with overseeing a digital transformation.

The digital success at ING is what attracted UBS’s then-chairman Axel Weber to poach him, at a time that some analysts said UBS’s progress was stagnating. 

Gold retreats as waning banking crisis dampens demand

Gold retreats as waning banking crisis dampens demand
Updated 5 min 59 sec ago

Gold retreats as waning banking crisis dampens demand

Gold retreats as waning banking crisis dampens demand

RIYADH: Prices of safe-haven gold dropped on Wednesday as easing fears of a further contagion from the global banking crisis whetted appetite for riskier assets. 

Spot gold was trading 0.7 percent lower at $1,960.91 per ounce, as of 0619 GMT, after rising 1 percent on Tuesday. US gold futures slipped 0.6 percent to $1,962.10. 

"We've seen a natural retracement ... gold is pulling back after a failed 'bid' to break above $1,975," said Matt Simpson, senior market analyst at City Index. 

But some investors "still seem to be holding onto gold 'just in case' there's another skeleton or two lurking in the closet," Simpson said. 

The dollar firmed, making bullion expensive for overseas buyers. Asian shares surged on Wednesday. 

While gold would "ultimately" be supported by financial uncertainty, prices could become more volatile over coming weeks if inflation and US economic data stay elevated, Simpson said. 

Data on Tuesday showed US consumer confidence unexpectedly increased in March, while February's US trade deficit in goods widened modestly. 

Analysts at Macquarie, in a note, said they expect the Fed to "prioritize bringing inflation back to target – with one more rate hike and then no cuts in the early stages of economic contraction," resulting in cyclically weaker gold prices through the second half of 2023. 

The opportunity cost of holding non-yielding gold rises when interest rates are increased. 

Markets are pricing in a 44.5 percent chance of a 25-basis-point Fed hike in May. 

In contrast, MKS PAMP said in a note that "the Fed will have to choose between higher inflation, a harder landing or financial instability- all outcomes will keep safe havens in play," likely prompting gold to retest and pierce all time highs ($2,070/oz) this year. 

Silver fell 0.8 percent to $23.08 per ounce, platinum lost 0.7 percent at $956.76 and palladium edged down 0.2 percent to $1,416.93.

SRMG launches new venture capital arm, SRMG Ventures

SRMG launches new venture capital arm, SRMG Ventures
Updated 28 March 2023

SRMG launches new venture capital arm, SRMG Ventures

SRMG launches new venture capital arm, SRMG Ventures
  • SRMG’s new venture capital arm focuses on supporting content creation and digital media platforms
  • Inaugural investments in disruptive regional production house Telfaz11 and immersive video platform VUZ

RIYADH: SRMG, a global integrated media group, today announced the launch of its corporate venture capital arm, SRMG Ventures.

In line with SRMG’s transformative growth strategy, SRMG Ventures will invest in early-stage companies and technologies within the core target areas: media creators, digital media, media enablers and tools, including generative AI, as well as immersive and interactive entertainment. SRMG Ventures will initially target investments from the seed to Series B stage.

SRMG Ventures will enable SRMG to back and empower regional talent and entrepreneurs, acting as a catalyst for further growth of the rapidly evolving media industry in the region.

SRMG Ventures will provide SRMG with direct access to innovative technologies, as well as new media talent and content creators, that will continue to enhance SRMG’s own media portfolio and drive forward the future of media. The new corporate venture capital arm will additionally help SRMG penetrate new markets and further diversify its business offering, whilst generating tangible financial returns.

SRMG Ventures has also announced inaugural investments and partnerships with two fast-growing companies:

  • Telfaz11: a Saudi-based creative media studio specializing in locally relevant entertainment content, and producer of the box office hit “Sattar” and feature film “Alkhallat+” which was one of the top ten most watched movies in Saudi Arabia on Netflix.
  • VUZ: a leading VR-enabled social media app that allows users to engage with 360o videos enabling a new level of immersive realism.

Jomana R. Al Rashid, CEO, SRMG said: “We are excited to continue to lead and support the growth of the dynamic and fast-growing media and content industry in Saudi Arabia and beyond. Our new venture capital arm, SRMG Ventures, will enable us to discover and nurture new talent and content creators, and leverage the latest advances in virtual reality and artificial intelligence.

“The adoption of cutting-edge technologies will invigorate SRMG’s products and services, further elevating content offerings and experiences for our local and global audiences. Our first investments in two leading companies, one local and one regional, led by exceptional creatives from the Arab world, mark the beginning of this thrilling endeavor.”

The announcement comes at an important moment for the MENA media and venture capital sectors. The MENA media and entertainment sector is expected to grow at 9 percent to exceed $20 billion by 2026, outpacing global growth.

In addition, the MENA region, and Saudi Arabia in particular, is experiencing a vibrant entrepreneurial ecosystem, with venture capital funding crossing the $3bn mark in 2022, an annual rise of 8.3 percent, with Saudi Arabia startups securing $987m in 2022, a 72 percent increase compared to 2021.

Egypt’s economic prospects hindered by external financing needs: Morgan Stanley 

Egypt’s economic prospects hindered by external financing needs: Morgan Stanley 
Updated 28 March 2023

Egypt’s economic prospects hindered by external financing needs: Morgan Stanley 

Egypt’s economic prospects hindered by external financing needs: Morgan Stanley 

RIYADH: Egypt’s external financing needs are standing in the way of its economic development and may hinder its medium-term growth, according to a report by Morgan Stanley.

The investment management and financial services firm recommended the North African country implement structural reforms through a large-scale privatization program in order to boost its economy.

The US-based company also noted the shift to a permanently flexible exchange rate system would also help reduce the Egyptian economy’s sensitivity to global shocks.  

“Egypt has favorable prospects for medium-term growth, but the large external financing needs weigh on the macroeconomic outlook,” said the report.  

 Even though the continuous depreciation of the Egyptian pound since 2022 will aid in shrinking the current account deficit, there is limited recovery in its official reserves. 

The report attributed this to the uncertainty around the rate of reform and the tightening of financial conditions in the global economy, which will likely limit foreign direct investment flows. 

Egypt’s economic struggles, exacerbated by the fallout from Russia’s invasion of Ukraine, were brought into focus in December when the International Monetary Fund approved a $3 billion Extended Fund Facility loan.

The Morgan Stanley report said this support from the IMF is “insufficient to close the financing gap and provide the country's foreign exchange needs in the near term”.

Egypt has the potential to sell up to $7 billion worth of assets by 2024 as it seeks to boost foreign exchange liquidity and public finances, as well as narrow its financing gap. 

The country’s financial gap is currently pegged at $23 billion to $24 billion by the end of fiscal year 2023/2024, reported Morgan Stanley  

“This in turn should tame further expectations of FX depreciation and ensure a smooth transition to a durably flexible regime, potentially lowering the bar for portfolio investors and buying time for the authorities to implement the structural reforms to level the playing field and boost FDI inflows further,” added the report.

The UAE’s banking sector to remain stable: KPMG

The UAE’s banking sector to remain stable: KPMG
Updated 28 March 2023

The UAE’s banking sector to remain stable: KPMG

The UAE’s banking sector to remain stable: KPMG

RIYADH: Following a 31 percent rise in net profits and a 10.6 percent increase in assets in 2022, the UAE’s banking sector is projected to remain stable, according to a KPMG report.

The global accounting firm said the sector’s net sentiment improved by 7 percent from the previous year, based on 96,321 tweets regarding seven UAE banks tracked.

The UAE banking sector recorded an industry average of -7.4 percent, a seven-percentage point increase from the 2022 study’s industry aggregate of -14.4 percent last year, the report added.

“The UAE’s vibrant economy and its favorable business environment has attracted a significant amount of foreign investment, with banks benefiting from large pools of capital and high-net-worth customers the UAE is attracting,” Abbas Basrai, partner and head of financial services at KPMG Lower Gulf, said.

The country’s banking sector, which has benefited greatly from the government’s commitment to regulatory reforms, saw the total assets of the top 10 banks increase by 10.6 percent year-on-year to $898.89 billion in 2022, driven by strong growth in deposits, loans, and advances.

The UAE’s economy is expected to grow by 7.6 percent in 2022, the highest rate in 11 years, after expanding by 3.9 percent in 2021, according to the Central Bank of the UAE. In 2023, the country’s gross domestic product is forecast to increase 3.9 percent 2023, according to the regulator.

According to KPMG's report, the vibrant banking sector remained well-positioned to maintain a stable outlook in 2023 “with the growing demand for digital financial services, rapid adoption of fintech solutions enhancing customer experience, and industry competitiveness.”