August First Week Middle East Finance Newsletter
Lebanon Central Bank Deputy to Take Over From Scandal-Hit Head, Kuwait’s $21 Billion Budget Surplus Ends Nine Years of Deficits, Saudi Arabia Ramps Up Mining Foray in $2.6 Billion Brazil Deal
Lebanon Central Bank Deputy to Take Over From Scandal-Hit Head
Key Takeaways
Lebanon's central bank is facing a severe financial crisis, with losses in the banking sector, a devalued national currency, and a defaulted debt.
Wassim Mansouri will temporarily assume the role of governor and will initiate discussions with the government to float the pound's exchange rate.
Former governor Riad Salameh, who is under investigation for money laundering, will not seek a new term, leaving the caretaker government to appoint a successor.
UAE Oil Giant Adnoc Sets Tougher Climate Targets Before COP28
Key Takeaways
Abu Dhabi National Oil Co. has accelerated its target to reach net zero emissions by 2045, ahead of its initial plan for 2050, as the UAE prepares to host the COP28 climate summit.
Adnoc, the biggest oil producer in the UAE, aims to eliminate methane discharges by the end of the decade, highlighting its commitment to reducing greenhouse gas emissions.
While Adnoc's emissions-reduction targets cover its own operations, the company still needs to address Scope 3 emissions, which account for the majority of warming gases linked to oil and gas production.
Saudi Arabia Ramps Up Mining Foray in $2.6 Billion Brazil Deal
Key Takeaways
Saudi Arabia's sovereign wealth fund is making its first major investment in the mining industry, purchasing a 10% stake in Vale SA's base metals unit as part of its diversification strategy away from oil.
The deal with Vale gives Saudi Arabia a presence in mines globally, supporting its ambitions to build a domestic industry and secure critical materials for the energy transition.
The sale of the stake will provide Vale with cash to expand in copper and other base metals, while also giving Engine No. 1, an investor focused on decarbonization, a 3% stake in the base metals unit.
Saudi Arabia Sets Up New Firm to Invest in Global Mining Assets
Key Takeaways
Saudi Arabia is establishing a new company, funded with $3.2 billion, to invest in mining assets internationally, as part of its efforts to diversify its economy and secure access to strategic minerals.
The new company will focus on investing in iron ore, copper, nickel, and lithium, as well as signing supply agreements with the companies and mines it invests in.
This move is aligned with Saudi Arabia's Vision 2030 strategy to build industries outside of oil, with the country holding untapped deposits of copper, gold, and other metals worth over $1 trillion.
Forget China, The Hot Money in Mining Is Suddenly Saudi
Key Takeaways
Saudi Arabia's entry into the global mining industry through strategic investments in key metal suppliers signifies a potential shift in the control of critical minerals needed for decarbonization efforts.
The kingdom's deep pockets and political influence make it an attractive partner for Western mining companies seeking capital and expansion opportunities in the Muslim world.
The changing landscape of Chinese investment restrictions in the metals sector has opened up opportunities for Middle Eastern countries like Saudi Arabia to become major financiers and secure future supplies of strategic minerals.
QIA Considering $1 Billion Stake in Ambani’s Reliance Retail
Key Takeaways
The Qatar Investment Authority is reportedly in early discussions to purchase a minority stake in Mukesh Ambani's Reliance Retail Ventures Ltd.
The stake may amount to $1 billion, and other Middle Eastern investors are also interested in investing in the retail arm. Reliance Retail Ventures Ltd. raised more than $6 billion from funds in 2020.
Kuwait’s $21 Billion Budget Surplus Ends Nine Years of Deficits
Key Takeaways
Kuwait has ended nine consecutive years of budget deficits thanks to a surge in oil revenue and controlled spending.
The country reported a budget surplus of 6.4 billion dinars ($21 billion) for the year through March, with revenue increasing by 55% compared to the previous year.
This marks a significant turnaround for one of the largest crude producers in the Middle East. However, internal tensions have hindered efforts to diversify the economy away from oil.
Cash-Tight Egypt Gets $616 Million Loan From Arab Monetary Fund
The Arab Monetary Fund is providing a $616 million loan to Egypt to improve the efficiency of the country's financial and banking sectors.
The loan is aimed at bettering the payment-systems infrastructure, financial inclusion, and regulatory framework in Egypt.