#Qatar invests in US-backed fund to loosen China dominance of critical minerals

Qatar invests in US-backed fund to loosen China dominance of critical minerals

Qatar has invested in a US-backed initiative designed to loosen China’s dominance of minerals critical to clean energy in the first such collaboration between a western and Gulf state. 

Qatar’s sovereign wealth fund has agreed to invest $180mn in TechMet, a Dublin-based mining investment vehicle backed by the US International Development Finance Corporation, the country’s development bank. 

The investment by the Qatar Investment Authority is a significant moment in the geopolitical tussle between the US and China for control over supplies of rare earths, lithium and cobalt used to power electric cars. 

The administration of US President Joe Biden has escalated efforts to wrest dominance from China over critical minerals and made it one of its big strategic objectives in the switch to renewable power. 

A plank of those efforts has been attempting to persuade Saudi Arabia, Qatar and the United Arab Emirates to use their financial muscle to invest in US initiatives to extract and process critical minerals for industrial use. 

The wealthy Gulf states are hoping to become big players in the critical minerals market, using their neutrality in the geopolitical stand-off between the US and China to their advantage. 

Qatar is designated by the US as a major non-Nato ally. It also has good ties with China, which is one of the biggest buyers of Qatar’s liquefied natural gas.

Gulf shares broadly extend gains amid global stock rebound | Reuters

Gulf shares broadly extend gains amid global stock rebound | Reuters

Stocks in the Middle East broadly rose on Wednesday, extending their comeback from an aggressive sell-off in global stocks earlier in the week driven in part by fears of a possible U.S. recession.

Stock markets in Saudia Arabia, Dubai and Abu Dhabi all ended the day higher as shares in Europe and Asia also rose. Share price gains in Asia were led by a bounce in the Nikkei, as the Bank of Japan unexpectedly turned cautious on rate hikes amidst market volatility.

Some investors also reassessed the outlook for the U.S. economy after Federal Reserve policymakers pushed back late on Monday against the notion that weaker-than-expected July jobs data means that the economy is in a recessionary freefall.

Markets are pricing in a 65% chance of the Fed cutting interest rates by 50 basis points in September, the CME FedWatch tool shows, compared with 85% a day ago.

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions as most regional currencies are pegged to the U.S. dollar.

Saudi Arabia's benchmark index (.TASI), opens new tab closed 0.4% higher, with oil giant Saudi Aramco (2222.SE), opens new tab rising 2%.

Aramco will buy from Japan's Sumitomo Chemical (4005.T), opens new tab a 22.5% stake in their petrochemical joint venture Petro Rabigh (2380.SE), opens new tab for $702 million, the companies said on Wednesday, outlining a turnaround strategy for the loss-making venture.

Petro Rabigh shares soared 10%.

Dubai's main share index (.DFMGI), opens new tab advanced 1.5%, led by a 2.9% rise in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.

Meanwhile, Dubai's main airport is on track to handle a record number of passengers this year after an 8% year-on-year increase in the first six months, operator Dubai Airports said on Wednesday.

In Abu Dhabi, the index (.FTFADGI), opens new tab finished 1.1% higher.

The Qatari benchmark (.QSI), opens new tab added 0.3%, with Islamic lender Masraf Al Rayan (MARK.QA), opens new tab increasing 1.3%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab rose 1.5%, with Talaat Mostafa Group (TMGH.CA), opens new tab gaining 4%.

Egypt's remittances from its overseas workers reached $7.5 billion in the April-June quarter, up from $4.6 billion a year earlier, the Central Bank of Egypt said on Wednesday.

#AbuDhabi investment giant IHC expects growth in H2 2024; Q2 net profit drops 29.8%

Abu Dhabi investment giant IHC expects growth in H2 2024; Q2 net profit drops 29.8%

Abu Dhabi investment giant International Holding Company (IHC) saw its Q2 profit decline 29.8% to 4.3 billion UAE dirhams ($1.17 billion) compared to Q2 2023. The diversified conglomerate expects sustained growth in the second half of the year.

The decline has been attributed to an increase in general and administrative expenses and a finance cost that almost doubled from the AED 557 million in June 2023 to AED 1.03 billion in Q2 2024 for the period ending June 30.

Revenues for the second quarter jumped to AED 22.46 billion, up from AED 12.9 billon in Q2 2023, representing a 73.7% increase.

While IHC’s H1 net profit jumped 18% to AED 12.3 billion year-on-year, its H1 revenues reached AED 41.7 billion, representing a 46% year-on-year increase, which the company said was mainly driven by sustained growth in real estate and construction, marine and dredging, hospitality and leisure, and technology segments.

Syed Basar Shueb, CEO of IHC, said: “We are well-positioned for sustained growth and agility throughout the remainder of 2024 and beyond.”

The conglomerate marked significant developments in H1with notable acquisitions in key sectors such as energy and mining. IHC acquired an equity stake of 14.83% in Grupo Nutresa and a 51% equity interest in Mopani Copper Mines in Zambia, one of the biggest mines and exporters of copper and cobalt in the world.

Total asset position reached AED 362.9 billion, marking a 37% increase compared to December 2023.

Aramco to buy stake in JV Petro Rabigh from Sumitomo Chem | Reuters

Aramco to buy stake in JV Petro Rabigh from Sumitomo Chem | Reuters

Saudi Aramco (2223.SE), opens new tab will buy from Japan's Sumitomo Chemical (4005.T), opens new tab a 22.5% stake in their petrochemical joint venture Petro Rabigh for $702 million, the companies said on Wednesday, as part of a turnaround plan for the loss-making venture.

Under the deal, Aramco and Sumitomo Chemical will each provide $702 million in funding to Petro Rabigh (2380.SE), opens new tab and waive loans worth a total $1.5 billion, they said.

Petro Rabigh had racked up 8.871 billion riyals ($2.36 billion) of accumulated losses by the end of June, equivalent to over 53% of its share capital, it said on Wednesday.

The Aramco-Sumitomo deal marks a turnaround effort as Petro Rabigh looks to abide by Saudi law, which says that if a joint-stock company's losses are half its issued capital, it must make recommendations to address them within 60 days.

An extraordinary general meeting must also be called within 180 days to either take steps to resolve the losses or dissolve the company.

The deal shrinks Sumitomo Chemical's stake in the venture to 15%, while increasing Aramco's share to 60%. The remaining 25% is owned by stock market investors.

Petro Rabigh said in a second-quarter results filing that its accumulated losses were mainly due to "unfavorable market conditions which resulted in lower or negative margins of the refined and petrochemical products", as well as higher finance costs due to an increase in interest rates.

The deal aligns with Aramco's expansion in downstream markets such as refining, and Sumitomo Chemical's move away from commodity chemicals toward speciality chemicals, they added.

"While we had decided not to increase our exposure to Petro Rabigh, we came up with the idea to cash our stake and inject the cash to the JV," Sumitomo Chemical President Keiichi Iwata told reporters.

"We believe this scheme was the best option."

#Dubai's DXB airport sees record year for passengers after 8% rise in H1 | Reuters

Dubai's DXB airport sees record year for passengers after 8% rise in H1 | Reuters

Dubai's main airport is on track to handle a record number of passengers this year after an 8% year-on-year increase in the first six months, operator Dubai Airports said on Wednesday.

Dubai International Airport (DXB), the world's busiest airport for international traffic, welcomed 44.9 million passengers in the first half of the year, Dubai Airports said, noting strong demand from key markets such as India and the resurgence of China.

Traffic from China, hit hard by restrictions during the COVID-19 pandemic, exceeded one million passengers, up 80% year-on-year and representing 90% of 2019 levels.

"We have a very optimistic outlook for the remainder of the year, and we are on track to break records with 91.8 million annual guests forecasted for 2024," CEO Paul Griffiths said in a statement.

In May, Griffiths forecast 91 million passengers for the year, surpassing the airport's previous annual record of 89.1 million in 2018.

Dubai is a major tourism and trade hub in the Middle East, attracting a record 17.15 million international overnight visitors in 2023. Thousands of foreigners have flocked to the city, attracted by massive infrastructure spending, generous income tax policies and an open-door approach to immigration.

In April, Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum approved a new passenger terminal at Al Maktoum International airport worth 128 billion dirhams ($35 billion).

Al Maktoum International Airport will be the largest in the world with a capacity of up to 260 million passengers, and five times the size of DXB, the Sheikh said at the time, adding all operations at Dubai airport would be transferred to Al Maktoum in the coming years.

DXB connects to 269 destinations across 106 countries. After India, Saudi Arabia, Britain and Pakistan were the top three countries by passenger numbers, Dubai Airports said.

Most Gulf markets extend gains as US recession fear fades | Reuters

Most Gulf markets extend gains as US recession fear fades | Reuters

Most Gulf stock markets rose in early Wednesday trade, on course to extend their comeback from an aggressive sell-off in global stocks earlier in the week triggered by fears of a possible U.S. recession.

U.S. Federal Reserve policymakers pushed back on Monday against the notion that weaker than expected July jobs data means that the economy is in a recessionary freefall.

Markets are pricing in a 65% chance of the Fed cutting interest rates by 50 basis points in September, the CME FedWatch tool shows, compared with 85% a day ago.

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions as most regional currencies are pegged to the U.S. dollar.

Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.8%, with oil giant Saudi Aramco (2222.SE), opens new tab advancing 1.7%.

Aramco will buy from Japan's Sumitomo Chemical (4005.T), opens new tab a 22.5% stake in their petrochemical joint venture Petro Rabigh for $702 million, the companies said on Wednesday, outlining a turnaround strategy for the loss-making venture.

On Monday, Aramco reported a second-quarter net profit of 109.01 billion riyals ($29.04 billion), beating a company-provided median estimate from 15 analysts of $27.7 billion.

Dubai's main share index (.DFMGI), opens new tab rose 2%, led by a 4.2% jump in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.

Meanwhile, Dubai's main airport is on track to handle a record number of passengers this year after an 8% year-on-year increase in the first six months, operator Dubai Airports said on Wednesday.

In Abu Dhabi, the index (.FTFADGI), opens new tab added 1.4%.

The Qatari benchmark (.QSI), opens new tab, however, eased 0.2%, hit by a 0.1% decrease in the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab.