Markets in retreat on growing fears of Middle East war

Markets in retreat on growing fears of Middle East war
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A currency trader passes by the screens showing the Korea Composite Stock Price Index, left, and the foreign exchange rate between US dollar and South Korean won, center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, on Oct. 18, 2023. (AP)
Markets in retreat on growing fears of Middle East war
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People stand in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm on Oct. 17, 2023, in Tokyo. (AP)
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Updated 19 October 2023
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Markets in retreat on growing fears of Middle East war

Markets in retreat on growing fears of Middle East war
  • All three main indexes on Wall Street ended in the red, and Asia followed suit
  • The prospect of an all-out war pushed oil prices up Wednesday

HONG KONG: Asian markets tumbled Thursday on fears the Israel-Hamas crisis would spill over into a wider conflict in the Middle East, with some warning that a full-blown war was increasingly likely.
With Benjamin Netanyahu building up a huge force ahead of an expected land incursion into Gaza, Iran has warned of a possible pre-emptive strike and called for an oil embargo against Tel Aviv.
President Joe Biden was due to make a television address on the crisis later in the day, having delivered full US backing for Israel in person on Wednesday during a solidarity visit.
However, Jordanian King Abdullah II, Palestinian leader Mahmud Abbas and Egyptian President Abdel Fattah El-Sisi canceled a meeting with Biden after a deadly strike on a hospital in Gaza.
The tragedy, which each side has blamed on the other — with Biden backing Israel — ratcheted up tensions and saw Lebanon’s Iran-backed Hezbollah movement call for a “day of rage.”
Meanwhile, Iran’s Foreign Minister Hossein Amir-Abdollahian called for an “immediate and complete embargo on the Zionist regime by Islamic countries, an oil embargo against the regime.”
He also urged Muslim countries to expel Israeli ambassadors in comments at a summit of the Organization of Islamic Cooperation, called in Saudi Arabia to discuss the crisis.
“The risks of an escalation have risen on the back of the latest news reports regarding the hospital bombing,” Jane Foley, of Rabobank, said.
“On any clear escalation, we can expect to see a ratcheting up of risk aversion” in markets, she added.
All three main indexes on Wall Street ended in the red, and Asia followed suit, with Hong Kong, Tokyo, Sydney, Seoul and Singapore more than one percent down.
There were also losses in Shanghai, Manila, Jakarta and Wellington.
“The window for a diplomatic off-ramp to avert a wider war in the Middle East appears to be closing,” said RBC Capital Markets’ Helima Croft.
“A regional crisis appears the most likely outcome, especially with Israel still seemingly committed to a ground offensive to crush Hamas.”
The prospect of an all-out war pushed oil prices up Wednesday, though Washington’s decision to suspend some sanctions on Venezuelan output tempered the gains and both contracts were slightly lower in Asian trade.
Risk aversion among traders was increased by concerns the Federal Reserve would hike interest rates again, or at least keep them elevated for an extended period.
That pushed US 10-year Treasury yields above 4.9 percent for the first time since 2007, fanning even more unease on trading floors, with focus turning to Fed boss Jerome Powell’s speech later in the day at the Economic Club of New York.
That comes after New York Fed chief John Williams said borrowing costs would need to be kept restrictive “for some time” if the bank wanted to get inflation back to its two percent target.
And Governor Christopher Waller said: “I believe we can wait, watch and see how the economy evolves before making definitive moves on the path of the policy rate... As of today, it is too soon to tell.”
Carol Kong, at Commonwealth Bank of Australia, said: “A reiteration of the ‘higher for longer’ message on interest rates may allow US yields to stay at or above their current levels and keep the dollar supported.”

  • Tokyo — Nikkei 225: DOWN 1.9 percent at 31,446.99 (break)
  • Hong Kong — Hang Seng Index: DOWN 1.4 percent at 17,478.06
  • Shanghai — Composite: DOWN 0.7 percent at 3,036.72
  • West Texas Intermediate: DOWN 0.5 percent at $86.84 per barrel
  • Brent North Sea crude: DOWN 0.7 percent at $90.88 per barrel
  • Euro/dollar: DOWN at $1.0537 from $1.0540 on Wednesday
  • Pound/dollar: DOWN at $1.2136 from $1.2141
  • Dollar/yen: UP at 149.83 yen from 149.93 yen
  • Euro/pound: DOWN at 86.82 pence from 86.79 pence
  • New York — Dow: DOWN 1.0 percent at 33,665.08 points (close)
  • London — FTSE 100: DOWN 1.1 percent at 7,588.00 (close)
     

Saudi investor group joins hands with Pakistan’s SuperNova

Saudi investor group joins hands with Pakistan’s SuperNova
Updated 4 sec ago
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Saudi investor group joins hands with Pakistan’s SuperNova

Saudi investor group joins hands with Pakistan’s SuperNova

KARACHI: A leading Saudi investor group in the IT and technology sector has joined hands with SuperNova Solutions, a major Pakistani enterprise resource planning and business solutions provider, the Pakistani firm said on Monday. 

The partnership deal was signed on the sidelines of the LEAP tech convention taking place in Riyadh from March 4-7 and was welcomed by Ahmed Farooq, Pakistan’s ambassador in Saudi Arabia.

“It is a pivotal investment into Pakistan’s IT industry and SuperNova Solutions,” the company said in a press release, quoting the envoy. 

“Saudi Arabia will be the flag bearer of Pakistan’s IT capabilities on a world stage.”

Farooq specifically thanked Khaled Saad Al-Sabti, a key investor from Saudi Arabia in IT & tech sectors, for investing into Pakistan’s IT sector:

“His trust and confidence in Pakistan will bring a renewed attention of the world investors into Pakistan’s IT industry.”

Farooq inaugurated the Pakistan Pavilion at LEAP 2024 on Monday afternoon and witnessed the signing ceremony of the equity partnership between SuperNova Solutions and a group of influential Saudi investors.

“The investment is one of its kind and a substantive leap forward in Pakistan’s investment landscape,” Rashid Hakeem, SuperNova’s Pakistan chief executive, said. “This investment makes us go global; establish a strategic presence in the regional IT market and encourage other investors to embark on more partnerships, collaborations and JVs.”

He said the partnership would enhance Pakistan’s competitiveness, digital transformation and ERP implementation competencies, services and exports.

Saudi investor Muhammad Ghazali highlighted the “strategic rationale” behind the move, saying SuperNova would become an important part of the Saudi group’s investment portfolio. 

“Saudi Arabia is rapidly progressing toward its Vision 2030 goals and digital transformation has emerged as a key enabler, revolutionizing industries; government services and societal interactions,” Ghazali said. 

“This acquisition aligns perfectly with our vision of driving digital transformation and innovation. By combining our resources and expertise; we are well-positioned to help businesses harness the power of ERP solutions to achieve their strategic objectives.”


Saudi Arabia startups close February with $16.3m in funding 

Saudi Arabia startups close February with $16.3m in funding 
Updated 04 March 2024
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Saudi Arabia startups close February with $16.3m in funding 

Saudi Arabia startups close February with $16.3m in funding 

RIYADH: Saudi Arabia emerged as a significant player in the startup ecosystem this February, raising $16.3 million, making it the second-highest amount secured by any country across the Middle East and North Africa.

According to Wamda’s monthly investments report for the region, the Kingdom secured the funding across seven transactions, marking a 48.18 percent increase from a total of $11 million in January 2023.

The UAE led the region in startup funding in the second month of 2024, securing $65.6 million across 22 deals. This was greatly influenced by a $35 million sum raised by Flare Network to take over half of the total number of deals.

Investments in MENA startups amounted to $88.7 million in February, after 2024 kicked off at a slow pace with $86.5 million in January. The figure represented an 88.28 percent decrease from the $760 million raised in February 2023. 

Egypt saw only two startups raising $4.6 million in total.

“Web3 providers are the market’s rising stars this month, having raised $39 million in three rounds, led by Flare Network’s $35 million,” the report stated.

In terms of sector performance, foodtech showcased a robust performance, securing $21 million across two deals, with a notable $12 million directed toward The Cloud’s Series B round. 

Fintech and logistics startups raised $6.9 million and $5.4 million, respectively.

Seed-stage ventures continued to dominate investment, with a total of $25.5 million raised by 11 companies.

Business-to-consumer startups received a significant portion of funding, amounting to approximately $55 million across 16 transactions, while business-to-business enterprises secured $18.4 million through 17 deals.

Firms led by men continued to dominate the industry, accounting for over 55 percent of the total transaction value. Startups led by mixed-gender teams received 44.6 percent of the funds, while those led by women captured only 0.2 percent of the total investment.

Additionally, last month saw 14 new ventures not disclosing their fundraising amounts. A conservative estimate of $100,000 each was allocated to 12 of these companies. 

Notable recipients included Bookr, PIESHIP, and PhysioHome. Magpie Protocol and Groene Point received $1 million each for their undisclosed rounds.

In terms of venture capital activity, notable developments included the establishment of the Falcon Foundation in the UAE, with plans to invest $300 million in open-source generative AI models. 

The non-profit Falcon Foundation is dedicated to advancing the development of open-source generative artificial intelligence models and building sustainable ecosystems around projects that accelerate technology development, according to a press release.

Ray O. Johnson, CEO of the Technology Innovation Institute, stated: “We’re committed to fostering transparency and collaboration in AI. Extending the UAE’s collaborative spirit into AI development, we set new standards for openness, and we encourage all other entities that support open source from around the world to join us.”

Jordan’s Innovative Startups and SMEs Fund contributed $5 million to the MENA-focused initiative, MSA Novo.

MSA Novo is a multi-stage investment firm focused on emerging markets, according to its website. It also provides global best practices and institutional support to its portfolio companies, enabling them to scale to regional leaders.

“As a responsible investor in venture capital investment, MSA Novo is committed to building a better business for communities in the region and around the world,” the firm’s website says.

MSA Novo says it integrates environmental, social, and corporate governance to not only serve its goals but also as a powerful tool to further its investment impact, with a policy aiming to incorporate material ESG considerations into investment decisions with the objective of integrating sustainability elements into the fund’s investment process and improving the long-term financial outcomes.

COTU Ventures launched a $54 million inaugural fund, while Globivest completed the second close of its first initiative.

“We are on a mission to transform the culture of venture capital in the Middle East by setting the standard for others to follow,” COTU says on its website.

“We are the Champions Of The Underdog. We help people become extraordinary by showing them how to believe in themselves when they are at the loneliest, earliest, and most challenging parts of their journeys,” according to the firm’s manifesto.

Globivest is a venture capital firm on a mission to “break the myth that opposes capital returns to impact-driven models.”

According to its website, the company focuses on innovative and scalable early-stage startups. 

The firm seeks to establish long-term relationships with visionary entrepreneurs while adding clear value in strategy and execution.

Sawari Ventures also announced plans for a $150 million fund to support Egyptian businesses without specifying a timetable.

The Cairo-based venture capital firm invests in knowledge and innovation-based technologies across North Africa. 

“In our part of the world, everywhere you look, there are huge opportunities to be captured and entire industries ripe for transformation,” the company says in its website.

The firm’s objective is to enable entrepreneurs in the area to generate innovative solutions.

Sawari Ventures believes this will drive the region’s economies for years to come. 

The company invests in sectors including consumer internet, fintech, and ed-tech, as well as health tech, deep tech, and e-commerce.

These insights are a result of a collaboration between Wamda and Digital Digest, providing comprehensive monthly reports on the startup ecosystem


Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 

Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 
Updated 04 March 2024
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Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 

Hilton to operate 3 new resorts in UNESCO World Heritage Site Al-Ahsa 

RIYADH: Saudi Arabia’s UNESCO World Heritage site, Al-Ahsa, is set to provide an enhanced hospitality experience as Hilton introduces three new resorts, establishing a farm-focused tourism hub. 

The global hotel operator and Dan Co., a Public Investment Fund company specializing in agritourism, ecotourism, and adventure tourism, have jointly announced the signing of an agreement.  

As part of the deal, Hilton will operate three resorts in the region: Al-Ahsa Agritourism Resort under LXR Hotels & Resorts, Al-Ahsa Eco Resort, and Al-Ahsa Adventure Resort, all part of the Curio Collection by Hilton. 

Covering 1.8 million sq. m., the master development in Al-Ahsa aims to establish a farm-focused tourism hub amid green landscapes and local farms, offering visitors a chance to connect with nature and enjoy a variety of experiences. 

Al-Ahsa, a significant agricultural region in Saudi Arabia’s Eastern Province, is home to Al-Ahsa Oasis, the largest date palm oasis in the world.

Chris Nassetta, president, and CEO of Hilton, said the three new hotels further expands the company’s footprint in Saudi Arabia, where it plans “to quadruple their portfolio.”  

He said: “Al-Ahsa is one of the key regions identified under the National Tourism Strategy of Saudi Arabia, and we are pleased to bring Hilton’s renowned hospitality brands to this unique new tourism development in the country.” 

Each resort will offer a unique experience: luxury at LXR Hotels & Resorts Agritourism Resort, wellness at Curio Collection by Hilton Eco Resort, and outdoor adventure at Curio Collection by Hilton Adventure Resort, according to a press release. 

The central activation area, available to guests and the public, will feature a nature garden, amphitheater, dining and retail options, as well as a farmers’ market, and multi-purpose spaces for local agricultural vendors and retailers. 

Abdulrahman Abaalkhail, CEO of Dan Co., said that the collaboration with Hilton to operate the initial three resorts in Al-Ahsa will combine Hilton’s world-class hospitality with the scenic landscapes of the region. 

“This part of Saudi Arabia offers unique experiences rich in cultural and natural beauty yet underrepresented in the current tourism landscape. This delivers on our strategy to establish a Saudi homegrown hospitality brand with a pioneering heritage-inspired fusion of agricultural, eco, and adventure experience resorts, nestled in nature, setting a remarkable precedent in Saudi Arabia’s hospitality industry,” he said.  

Abaalkhail added that their business approach is intertwined with promoting cultural authenticity, sustainability, and empowering local communities. This strategy not only nurtures an inclusive ecosystem but also plays a pivotal role in advancing the Kingdom's overarching economic and tourism aspirations.   

The release further added that the resorts will be easily accessible via main roads, with Riyadh, Dammam, Khobar, Jubail, Bahrain, and Qatar within a one-and-a-half to three-and-a-half-hour drive away.   


MODON and General Electric seal deal to operate $346m technology center in Dammam 

MODON and General Electric seal deal to operate $346m technology center in Dammam 
Updated 04 March 2024
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MODON and General Electric seal deal to operate $346m technology center in Dammam 

MODON and General Electric seal deal to operate $346m technology center in Dammam 

RIYADH: Dammam’s General Electric Manufacturing Technology Center will soon begin operations thanks to a new agreement signed by the Saudi Authority for Industrial Cities and Technology Zones.    

The authority, also known as MODON, inked the deal with US multinational conglomerate GE to operate the SR1.3 billion ($346 million) complex across an area of more than 119,000 sq. m., according to a statement.  

This agreement aligns with MODON’s mission to develop and manage industrial cities and technology zones in line with national priorities and in partnership with the public and private sectors.  

It also coordinates with the authority’s endeavors to boost its partnerships with major global manufacturers and companies to contribute to the Saudi industry with advanced technologies.  

The deal cements the National Industrial Strategy’s aims to accelerate the diversification of its manufacturing base to enhance non-oil exports, encourage privatization, attract more foreign investment as well as increase funding for innovation and research and create local jobs.

This is not the first collaboration between MODON and GE. In 2023, the two entities signed an agreement whereby GE factories spread over 120,000 sq. m in the Eastern Region will come under MODON supervision. 

Through its strategy to empower industry and contribute to increasing local contribution, the authority seeks to help the private sector contribute some 65 percent to Saudi Arabia’s gross domestic product. 

In 2012, GE broke new ground when it launched the second phase of its high-tech GE Manufacturing Technology Center at Dammam’s Second Industrial City.

Since supplying Saudi Arabia with turbomachinery for its first oil expedition back in 1942, GE has been a growth technology partner to the Kingdom. 

The company has developed several successful programs with leading Saudi institutions such as the King Abdullah University of Science and Technology.


Saudi Arabia unveils ‘Hospitality Investment Enablers’ for tourism growth 

Saudi Arabia unveils ‘Hospitality Investment Enablers’ for tourism growth 
Updated 04 March 2024
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Saudi Arabia unveils ‘Hospitality Investment Enablers’ for tourism growth 

Saudi Arabia unveils ‘Hospitality Investment Enablers’ for tourism growth 

RIYADH: A new hospitality package is poised to enhance Saudi Arabia’s business operations, project viability, and land access, a senior official announced. 

The “Hospitality Investment Enablers” initiative, designed in collaboration with the Ministry of Investment, aims to elevate the efficiency of business operations and bolster project success, said Ahmed Al-Khateeb, the minister of tourism. 

He made the announcement during the opening remarks of the “100 Million Welcomes Celebration” held in Riyadh, highlighting the significance of the project. 

Al-Khateeb said: “These strategic enablers are designed to enhance business operations and project viability, facilitating access to government-owned land under favorable terms, streamlining project development processes, and minimizing barriers to market entry.”  

He added: “We have streamlined the investor journey to ensure a seamless experience. As part of these initiatives, we will be launching the Tourism Investment One Stop Shop later this year, in collaboration with our esteemed partners at the Saudi Business Center. Investors can get everything they need to do business in tourism, all from one place.” 

The total number of tourists in the Kingdom from home and abroad reached 106.2 million in 2023, reflecting an increase of 56 percent compared to 2019, and an increase of 12 percent on the 2022 figures. 

Al-Khateeb also highlighted the significant economic impact of tourism in the Kingdom, noting that tourists spent over SR250 billion ($66 billion) in 2023, contributing 4 percent to the gross domestic product. 

The minister emphasized the positive impact of tourism on local communities, promoting cultural exchange and showcasing Saudi hospitality. 

“I am delighted to announce the launch of the Saudi Tourism Excellence Award, aimed at recognizing the invaluable contributions of our local tourism and hospitality industry professionals, fostering innovation, and consistently elevating industry standards,” Al-Khateeb said. 

He added that in 2023, there had been a 390 percent increase in demand for tourism activity licenses. “But our journey does not end here. We are thriving, and Saudi tourism will continue ascending to even wider horizons.” 

Additionally, he further underlined the ongoing accomplishments in Saudi Arabia’s tourism sector, including giga projects like NEOM, Red Sea Project, AMAALA, AlUla, and Qiddiya, emphasizing the potential impact of these projects when fully operational. 

“This is why we are introducing the Tourism Investment Enabler Program to make doing business in the Saudi tourism sector easier and more cost-effective and enhancing our competitiveness,” Al-Khateeb explained. 

He continued: “Tourism license fees have been restructured to better fit the specific needs and operations of each investor … thanks to collaboration with government partners, we have reduced annual government fees by nearly 22 percent.” 

Furthermore, the minister recognized the collaborative efforts of various stakeholders, including government partners, global organizations like UN Tourism and the World Travel and Tourism Council, the private sector, and investors, in achieving remarkable success in the tourism sector.