Page 92 - Forbes - Asia (December 2019 - January 2020)

2 I PROMOTION
Riyadh, Saudi Arabia
According to a report by PwC, the
Expo—which opens on October 20 and
runs for nearly six months—will have a
significant economic impact for Dubai,
which is expected to be the second-most
visited city in the world in 2020 and
2021. The emirate is already the fourth
most-visited city globally, according to
Mastercard’s Global Destination Cities
Index, hosting 15.9 million tourists
in 2018.
In November 2020, Saudi Arabia will
hold the G20 Summit, with participant
countries accounting for more than
80% of global GDP. The kingdom also
has its own mega-investments in the
works, with the planned smart city of
NEOM in northwestern Saudi Arabia
at the forefront. The project stretches
over three countries with territory from
Egypt and Jordan comprising a total
area of 26,500 kilometers. NEOM will
be backed by more than US$500 billion
from the Public Investment Fund of
Saudi Arabia as well as from local and
international investors. Its contribution
to the kingdom’s GDP is projected to
reach at least US$100 billion by 2030.
This is just a snapshot of the business
and infrastructure development
currently underway in MENA. And as
money continues to flow, the region has
www.forbesmiddleeast.com
witnessed a sizeable improvement in
IPO activity, both in terms of volume
and value, in the second half of 2019. Six
IPOs raised proceeds of US$2.8 billion,
compared with a single IPO that raised
US$57.6 million in the first half of the
year, according to EY.
With net proceeds reaching about
US$1 billion, Saudi Arabia led the IPO
activity in the region, which was fueled
by three listings on the main market,
including the Arabian Centres Company
that raised US$658.7 million. The
Gulf country is also preparing to kick
off what is expected to be the world’s
largest-ever IPO for Saudi Aramco, the
world’s leading producer of crude oil and
condensate, which generated US$163.9
billion in revenue in the first half of 2019.
Looking to North Africa, Egypt also
is working on an IPO program that will
see multiple state-owned companies
listed on stock exchanges locally and
potentially abroad. This year, the
country launched its first sovereign
wealth fund. The US$12.4 billion fund
aims to ensure the best use of Egypt’s
wealth and natural resources.
Despite a big drive in the region to
diversify economies, the oil and gas
sector continues to grab significant
investments, with new discoveries
coming to light. Recently, BlackRock
and KKR acquired a 40% stake in
Abu Dhabi National Oil Company oil
pipelines for US$4 billion, while the
Carlyle Group acquired a 30% to 40%
stake in Cepsa, which is wholly owned
by the U.A.E.’s Mubadala Investment
Company, for US$3.4 billion. Italian
multinational oil and gas company Eni
recently announced new discoveries in
Egypt, including new resources in the
Abu Rudeis Sidri development lease
in the Gulf of Suez. In August, it also
announced production from the Zohr
field—the largest gas discovery ever
made in Egypt and in the Mediterranean
Sea—had reached more than 2.7 billion
cubic feet per day.
Aside from the established big
names, MENA economies are also
getting a boost from widespread
entrepreneurial activity. The startup
scene is consistently gaining traction,
with US$517 million invested in 354
deals during the first nine months
of 2019, according to a report from
startup data platform MAGNiTT. The
U.A.E. continues to be the main hub
for startups, grabbing 62% of the total
funding, while Egypt accounted for
27% of deals during the same period.
The region witnessed its largest-ever
technology transaction in March 2019,
when Uber acquired its Middle Eastern
rival Careem for US$3.1 billion.
Investors are racing to fuel growth,
and countries have welcomed new
funds. Last February, Dubai-based
Middle East Venture Partners raised an
additional US$65 million for its third
regional fund, the Middle East Venture
Fund III. BECO Capital also closed its
second fund with US$100 million in
October. And most recently, Mubadala
Capital—the financial investment arm
of Mubadala—announced new tech
funds with assets of about $250 million
for MENA.
Overall, despite global headwinds
and regional challenges, the Middle
East’s economies are looking strong for
the future, and investors should keep
their eyes on this resilient and visionary
meeting point between East and West.