Sovereign wealth funds (SWFs) across the Arabian Gulf are selling financial assets as the low oil price hits the region’s economies.
The Saudi Arabian Monetary Authority (Sama) and the Qatar Investment Authority (QIA) are selling stakes in European companies, as the oil price slump forces Gulf states to run major fiscal deficits for the first time since 2009, and encourages SWFs to plug the gap.
Sama has withdrawn US$1.3 billion from European equities this year, according to Nasdaq estimates.
The QIA said last week that it was selling its 10 per cent stake, valued at $615 million, in the German construction company Hochtief, the QIA’s third divestment in three months. Sama and QIA did not respond to requests for comment.
Sama has withdrawn up to $70bn from international fund managers, while the QIA is said to have suffered a paper loss of up to US$12bn on its equity stakes in Volkswagen, Glencore and the Agricultural Bank of China, according to the Financial Times of London.
The QIA has since announced stake sales in the French construction conglomerate Vinci and two London office buildings, and is reported to be in talks to sell the film studio Miramax.
The Kuwait Investment Authority is reported to have sold $30bn of assets, according to Kuwait media reports. Overall, SWFs including those outside the Gulf will dispose of around $1.2 trillion of assets by the end of the year, according to UBS.
Sama had about $671.8bn in assets under management as of the middle of this year, up from about $29bn in 2004, according to estimates from the Sovereign Wealth Fund Institute. The QIA held $256bn as of the middle of this year, according to the institute. That figure is up from $2.9bn in 2004, according to a statement from the Qatar Central Bank.
But Gulf states have been hit by the oil price collapse from about $110 per barrel in July last year to below $50 a barrel at the weekend.
Collectively, Gulf countries have lost more than $300bn in export earnings from lost hydrocarbons revenues this year, the IMF said. That is leading to budget deficits across the region. Saudi Arabia and Kuwait earn more than three-quarters of government revenues from oil, and the UAE earns more than half, according to IMF data.
Saudi Arabia and Kuwait, and Qatar and the UAE, are in contrasting positions. With a deficit of 19.5 per cent of GDP, and reserves equivalent to 100 per cent of GDP, the kingdom has an urgent need for cash to plug the gap. Saudi Arabia has tapped local bond markets with a $27bn issue, and has proposed a reported $10bn spending cut in its forthcoming budget, according to reports and central bank data. Kuwait is set to run an even bigger budget deficit of 22 per cent of GDP.
The UAE and Qatar are less vulnerable. The UAE holds reserves equivalent to about 275 per cent of GDP, and is set to run a deficit of 2.3 per cent, meaning that its fiscal shortfall is considerably less urgent. It has announced plans to cut Dh20bn from its spending on subsidies. Qatar is expected to run a deficit of just 0.5 per cent of GDP, according to the credit ratings agency Fitch.
“The decline in oil prices is putting pressure on the oil-dependent SWFs, and that is causing them to exit their European equity holdings,” said Alexander Free, an analyst at Nasdaq.
Michael Maduell, the president of the Sovereign Wealth Fund Institute, said: “The issue for Sama is liquidity and a level of capital preservation”.
Many SWFs are moving away from equities due to increased volatility in the run-up to expected interest rate hikes, and they might also be moving away from Europe, he said.
Mubadala is selling most of the assets of its commercial finance joint venture with General Electric, Mubadala GE Capital. GE this month announced the sale of several of its North American financing businesses to Wells Fargo, the US lender.
“[For Mubadala], the winding down of the joint venture is related to General Electric getting out of the financing business,” said Mr Maduell.
“Many of these assets have been prepped for sale, waiting for the right price. These entities know that many private equity funds have dry powder, while corporations have plenty of cash.”
abouyamourn@thenational.ae
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Notable salonnières of the Middle East through history
Al Khasan (Okaz, Saudi Arabia)
Tamadir bint Amr Al Harith, known simply as Al Khasan, was a poet from Najd famed for elegies, earning great renown for the eulogy of her brothers Mu’awiyah and Sakhr, both killed in tribal wars. Although not a salonnière, this prestigious 7th century poet fostered a culture of literary criticism and could be found standing in the souq of Okaz and reciting her poetry, publicly pronouncing her views and inviting others to join in the debate on scholarship. She later converted to Islam.
Maryana Marrash (Aleppo)
A poet and writer, Marrash helped revive the tradition of the salon and was an active part of the Nadha movement, or Arab Renaissance. Born to an established family in Aleppo in Ottoman Syria in 1848, Marrash was educated at missionary schools in Aleppo and Beirut at a time when many women did not receive an education. After touring Europe, she began to host salons where writers played chess and cards, competed in the art of poetry, and discussed literature and politics. An accomplished singer and canon player, music and dancing were a part of these evenings.
Princess Nazil Fadil (Cairo)
Princess Nazil Fadil gathered religious, literary and political elite together at her Cairo palace, although she stopped short of inviting women. The princess, a niece of Khedive Ismail, believed that Egypt’s situation could only be solved through education and she donated her own property to help fund the first modern Egyptian University in Cairo.
Mayy Ziyadah (Cairo)
Ziyadah was the first to entertain both men and women at her Cairo salon, founded in 1913. The writer, poet, public speaker and critic, her writing explored language, religious identity, language, nationalism and hierarchy. Born in Nazareth, Palestine, to a Lebanese father and Palestinian mother, her salon was open to different social classes and earned comparisons with souq of where Al Khansa herself once recited.
Results
5pm: Al Maha Stables – Maiden+(PA) Dh80,000 (Turf) 1,600m; Winner: Reem Baynounah, Fernando Jara+(jockey), Mohamed Daggash+(trainer)
5.30pm: Wathba Stallions Cup – Maiden+(PA) Dh70,000 (T) 1,600m; Winner: AF Afham, Tadhg O’Shea, Ernst Oertel
6pm: Emirates Fillies Classic – Prestige+(PA) Dh100,000 (T) 1,600m; Winner: Ghallieah, Sebastien Martino, Jean-Claude Pecout
6.30pm: Emirates Colts Classic – Prestige+(PA) Dh100,000 (T) 1,600m; Winner: Yas Xmnsor, Saif Al Balushi, Khalifa Al Neyadi
7pm: The President’s Cup – Group 1+(PA) Dh2,500,000 (T) 2,200m; Winner: Somoud, Adrie de Vries, Jean de Roualle
7.30pm: The President’s Cup – Listed+(TB) Dh380,000 (T) 1,400m; Winner: Haqeeqy, Dane O’Neill, John Hyde.
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
Manchester City (0) v Liverpool (3)
Uefa Champions League, quarter-final, second leg
Where: Etihad Stadium
When: Tuesday, 10.45pm
Live on beIN Sports HD
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
The Beekeeper
Director: David Ayer
Starring: Jason Statham, Josh Hutcherson, Emmy Raver-Lampman, Minnie Driver, Jeremy Irons
Rating: 3/5
Indoor cricket World Cup:
Insportz, Dubai, September 16-23
UAE fixtures:
Men
Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final
Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final
Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
Company profile
Name: WonderTree
Started: April 2016
Co-founders: Muhammad Waqas and Muhammad Usman
Based: Karachi, Pakistan, Abu Dhabi, UAE, and Delaware, US
Sector: Special education, education technology, assistive technology, augmented reality
Number of staff: 16
Investment stage: Growth
Investors: Grants from the Lego Foundation, UAE's Anjal Z, Unicef, Pakistan's Ignite National Technology Fund
UAE currency: the story behind the money in your pockets
The five pillars of Islam
Killing of Qassem Suleimani
RACE CARD AND SELECTIONS
5pm: Maiden (PA) Dh80,000 1,200m
5,30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 1,200m
6pm: The President’s Cup Listed (TB) Dh380,000 1,400m
6.30pm: The President’s Cup Group One (PA) Dh2,500,000 2,200m
7pm: Arabian Triple Crown Listed (PA) Dh230,000 1,600m
7.30pm: Handicap (PA) Dh80,000 1,400m
The National selections
5pm: RB Hot Spot
5.30pm: Dahess D’Arabie
6pm: Taamol
6.30pm: Rmmas
7pm: RB Seqondtonone
7.30pm: AF Mouthirah
World Cup warm-up fixtures
Friday, May 24:
- Pakistan v Afghanistan (Bristol)
- Sri Lanka v South Africa (Cardiff)
Saturday, May 25
- England v Australia (Southampton)
- India v New Zealand (The Oval, London)
Sunday, May 26
- South Africa v West Indies (Bristol)
- Pakistan v Bangladesh (Cardiff)
Monday, May 27
- Australia v Sri Lanka (Southampton)
- England v Afghanistan (The Oval, London)
Tuesday, May 28
- West Indies v New Zealand (Bristol)
- Bangladesh v India (Cardiff)
The Mother
Director: Niki Caro
Stars: Jennifer Lopez, Joseph Fiennes, Gael Garcia Bernal, Omari Hardwick and Lucy Paez
Rating: 3/5
The specs
A4 35 TFSI
Engine: 2.0-litre, four-cylinder
Transmission: seven-speed S-tronic automatic
Power: 150bhp
Torque: 270Nm
Price: Dh150,000 (estimate)
On sale: First Q 2020
A4 S4 TDI
Engine: 3.0-litre V6 turbo diesel
Transmission: eight-speed PDK automatic
Power: 350bhp
Torque: 700Nm
Price: Dh165,000 (estimate)
On sale: First Q 2020
RESULTS
5pm: Maiden (PA) Dh80,000 2,200m
Winner: Arjan, Fabrice Veron (jockey), Eric Lemartinel (trainer).
5.30pm: Maiden (PA) Dh80,000 1,400m
Winner: Jap Nazaa, Royston Ffrench, Irfan Ellahi.
6pm: Al Ruwais Group 3 (PA) Dh300,000 1,200m
Winner: RB Lam Tara, Fabrice Veron, Eric Lemartinal.
6.30pm: Shadwell Gold Cup Prestige Dh125,000 1,600m
Winner: AF Sanad, Bernardo Pinheiro, Khalifa Al Neyadi.
7pm: Shadwell Farm Stallions Handicap (PA) Dh70,000 1,600m
Winner: Jawal Al Reef, Patrick Cosgrave, Abdallah Al Hammadi.
7.30pm: Maiden (TB) Dh80,000 1,600m
Winner: Dubai Canal, Harry Bentley, Satish Seemar.
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
THE DETAILS
Kaala
Dir: Pa. Ranjith
Starring: Rajinikanth, Huma Qureshi, Easwari Rao, Nana Patekar
Rating: 1.5/5
Director: Romany Saad
Starring: Mirfat Amin, Boumi Fouad and Tariq Al Ibyari
Gran Gala del Calcio 2019 winners
Best Player: Cristiano Ronaldo (Juventus)
Best Coach: Gian Piero Gasperini (Atalanta)
Best Referee: Gianluca Rocchi
Best Goal: Fabio Quagliarella (Sampdoria vs Napoli)
Best Team: Atalanta
Best XI: Samir Handanovic (Inter); Aleksandar Kolarov (Roma), Giorgio Chiellini (Juventus), Kalidou Koulibaly (Napoli), Joao Cancelo (Juventus*); Miralem Pjanic (Juventus), Josip Ilicic (Atalanta), Nicolo Barella (Cagliari*); Fabio Quagliarella (Sampdoria), Cristiano Ronaldo (Juventus), Duvan Zapata (Atalanta)
Serie B Best Young Player: Sandro Tonali (Brescia)
Best Women’s Goal: Thaisa (Milan vs Juventus)
Best Women’s Player: Manuela Giugliano (Milan)
Best Women’s XI: Laura Giuliani (Milan); Alia Guagni (Fiorentina), Sara Gama (Juventus), Cecilia Salvai (Juventus), Elisa Bartoli (Roma); Aurora Galli (Juventus), Manuela Giugliano (Roma), Valentina Cernoia (Juventus); Valentina Giacinti (Milan), Ilaria Mauro (Fiorentina), Barbara Bonansea (Juventus)
Crazy Rich Asians
Director: Jon M Chu
Starring: Constance Wu, Henry Golding, Michelle Yeon, Gemma Chan
Four stars
The specs
Engine: 2.3-litre 4cyl turbo
Power: 299hp at 5,500rpm
Torque: 420Nm at 2,750rpm
Transmission: 10-speed auto
Fuel consumption: 12.4L/100km
On sale: Now
Price: From Dh157,395 (XLS); Dh199,395 (Limited)
THE BIO: Martin Van Almsick
Hometown: Cologne, Germany
Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)
Favourite dessert: Umm Ali with dark camel milk chocolate flakes
Favourite hobby: Football
Breakfast routine: a tall glass of camel milk
25 Days to Aden
Author: Michael Knights
Pages: 256
Available: January 26
AGUERO'S PREMIER LEAGUE RECORD
Apps: 186
Goals: 127
Assists: 31
Wins: 117
Losses: 33
Teams
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals
The Freedom Artist
By Ben Okri (Head of Zeus)
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
UAE FIXTURES
Wednesday 19 April – UAE v Kuwait
Friday 21 April – UAE v Hong Kong
Sunday 23 April – UAE v Singapore
Wednesday 26 April – UAE v Bahrain
Saturday 29 April – Semi-finals
Sunday 30 April – Third position match
Monday 1 May – Final
HAJJAN
Director: Abu Bakr Shawky
Starring: Omar Alatawi, Tulin Essam, Ibrahim Al-Hasawi
Rating: 4/5
The bio
Date of Birth: April 25, 1993
Place of Birth: Dubai, UAE
Marital Status: Single
School: Al Sufouh in Jumeirah, Dubai
University: Emirates Airline National Cadet Programme and Hamdan University
Job Title: Pilot, First Officer
Number of hours flying in a Boeing 777: 1,200
Number of flights: Approximately 300
Hobbies: Exercising
Nicest destination: Milan, New Zealand, Seattle for shopping
Least nice destination: Kabul, but someone has to do it. It’s not scary but at least you can tick the box that you’ve been
Favourite place to visit: Dubai, there’s no place like home
At a glance - Zayed Sustainability Prize 2020
Launched: 2008
Categories: Health, energy, water, food, global high schools
Prize: Dh2.2 million (Dh360,000 for global high schools category)
Winners’ announcement: Monday, January 13
Impact in numbers
335 million people positively impacted by projects
430,000 jobs created
10 million people given access to clean and affordable drinking water
50 million homes powered by renewable energy
6.5 billion litres of water saved
26 million school children given solar lighting