#Qatar’s Ooredoo wades into Gulf’s AI data centre rivalry

Qatar’s Ooredoo wades into Gulf’s AI data centre rivalry

Qatari telecoms company Ooredoo is borrowing QR2bn ($550mn) to expand its regional network of data centres, as the gas-rich Gulf nation seeks to capitalise on the information highway running through the Middle East. 

Ooredoo is majority-owned by the Qatari government but listed and independently managed. Its data centre subsidiary, Mena Digital Hub, has obtained the 10-year financing facility from three Qatari banks and aims to overhaul and expand its data centres to meet demand for artificial intelligence applications. 

Fossil fuel exporting Gulf nations are betting heavily on AI to diversify their hydrocarbon-dependent economies. They believe they can provide the cheap power needed to run the energy-hungry computing warehouses that crunch vast quantities of data for AI uses. 

Analysts expect Saudi Arabia, the Gulf region’s largest economy, and the tech-focused United Arab Emirates to become the biggest markets for data centres and AI. 

But Ooredoo also has big ambitions, aiming to build 120MW of data centre capacity in the next five years. That’s equivalent to about half of the region’s 237MW market today, according to data from international real estate firm Cushman & Wakefield, which projects that figure will more than double to 537MW by 2029. 

In June, Ooredoo struck a partnership with US semiconductor maker Nvidia, which produces chips that can be used in data centres to handle AI’s intense computing demand. 

In the Gulf “there’s space for probably three to four major players”, Ooredoo’s chief executive Aziz Aluthman Fakhroo told the Financial Times. “We hope to be one of those.”

Hedge Funds, Golden Visas and the #UAE’s Commercial Real Estate Boom - Bloomberg

Hedge Funds, Golden Visas and the UAE’s Commercial Real Estate Boom - Bloomberg

Global financial centers are grappling with an anemic commercial real estate market. In Manhattan, 16% of office space lies empty — a level last seen three decades ago, while in San Francisco, the rate is twice as high. Vacancies in the City of London are sitting at a two-decade high of 11.8%.

But Dubai and Abu Dhabi have emerged as the bright spots. An influx of hedge funds has solidified a recovery built on government reforms and the emirates have begun to orchestrate moves that indicate the extent of the boom, as my colleague Zainab Fattah highlighted.

“The level of demand is pretty unprecedented at this moment, and that has been a significant driver,” Taimur Khan, head of research in the Middle East for real estate services firm CBRE, told Joumanna Bercetche on Bloomberg TV’s Horizons Middle East & Africa show.

To address that, Dubai — long the regional business hub — is spending over a quarter of a billion dollars on three new office towers, and there’s talk of further expanding its financial center. DIFC 2.0, if you will. This is in an area where a building recently sold at a $1.5 billion valuation, roads are routinely packed with cars — and good luck finding a table at Zuma.

Neighboring Abu Dhabi, the capital of the United Arab Emirates — some call it the capital of capital — is taking it one step further. A bevy of hedge funds have made a beeline for the city, drawn by a string of incentives and $1.5 trillion in sovereign wealth capital. The influx includes Brevan Howard and has led to a shortage of space. Authorities are now kitting out a whole new island to house firms, a move that will create one of the largest financial districts globally.

“We talk about financial centers and the fact that demand is originating from the likes of the hedge funds, financial institutions, global banks,” CBRE’s Khan said. “The reality is when you look outside the main financial free-zone and even onshore jurisdictions, we’re seeing a lot of firms expanding headcount significantly to service UAE and the wider region.”

One common theme with the rest of the world, Khan said, is the rush to quality. “In many global cities, we’re seeing commercial real estate on a headline level is not performing well, but LEED Gold or Platinum buildings are not only achieving a higher level of occupancy, they are also achieving a lot higher rent than the wider market.’’

“This goes to show the quality of the real estate is driving occupancy — that is true here and in a number of other key cities.”

#Dubai: Hedge Funds Now Employ More Than 1,000 People in DIFC - Bloomberg

Dubai: Hedge Funds Now Employ More Than 1,000 People in DIFC - Bloomberg

An influx of some of the world’s biggest hedge funds, from Millennium Management to Balyasny Asset Management, has pushed the industry’s headcount in Dubai to over 1,000, burnishing the city’s credentials as an emerging hub for the sector.

While that’s still a fraction of the numbers employed in the biggest financial centers — hedge funds in North America and Europe have close to 100,000 staff — the headcount has been ticking up in Dubai, according to data from the city’s financial freezone.

It’s not just hedge funds. The Dubai International Financial Centre has seen employee numbers surge by two-thirds since 2019 to nearly 44,000. The financial hub expects a record number of firms to set up this year too, and is building three new office towers to meet the anticipated demand.

The United Arab Emirates, of which Dubai is a part, has emerged as a magnet for hedge funds over the past few years. Izzy Englander’s Millennium, Michael Platt’s BlueCrest Capital Management, and Balyasny have all expanded operations to Dubai, drawn by a slew of incentives, a favorable timezone and a low tax regime.

The $68.8 billion Millennium has, in particular, been aggressively ramping up operations since securing a license in 2020, employing close to 100 people. Meantime, Balyasny aims to double its 12-person workforce in Dubai, Bloomberg has reported.

Schonfeld Strategic Advisors, meanwhile, has more than 30 people based in Dubai and will move to a new office with space for 80 people in the Index Tower in November, a person with knowledge of the matter said.

Multistrategy hedge funds moving to a region has an outsize impact on the number of people employed by the industry, given they have teams of traders investing for them. While such firms account for just 8% of assets, Goldman Sachs Group Inc. estimates that they account for a quarter of total headcount in hedge funds.

Neighboring Abu Dhabi, which has the added attraction of being one of few cities globally to manage $1.5 trillion in sovereign wealth, has also managed to draw in big names. Brevan Howard Asset Management now manages more money from that emirate than anywhere else, Bloomberg News has reported.

Most Gulf markets track oil, Asian shares higher | Reuters

Most Gulf markets track oil, Asian shares higher | Reuters

Most stock markets in the Gulf ended higher on Tuesday in line with oil prices and Asian shares buoyed by broad stimulus measures from China, although geopolitical tensions in the region limited gains.

Oil prices - a catalyst for the Gulf's financial markets - jumped more than 2% on news of monetary stimulus from top importer China and concerns that conflict in the Middle East could hit regional supply. At the same time, another hurricane threatened supply in the United States, the world's biggest crude producer.

People's Bank of China Governor Pan Gongsheng announced plans to lower borrowing costs, inject more funds into the economy, and ease households' mortgage repayment burden. Pan also said China would roll out structural monetary policy tools for the first time to help stabilise capital markets.

Saudi Arabia's benchmark index (.TASI), opens new tab advanced 1.1%, led by a 0.5% rise in aluminium products manufacturer Al Taiseer Group (4143.SE), opens new tab and a 6.6% increase in ACWA Power Company (2082.SE), opens new tab.

Elsewhere, oil giant Saudi Aramco (2222.SE), opens new tab gained 0.3%.

Aramco is planning to raise up to $3 billion in five and 10-year U.S. dollar-denominated sukuk, or Islamic bonds, according to two sources with direct knowledge of the matter and a term sheet reviewed by Reuters on Tuesday.

Dubai's main share index (.DFMGI), opens new tab added 0.6%, with toll operator Salik Co (SALIK.DU), opens new tab closing 3.3% higher.

In Abu Dhabi, the index (.FTFADGI), opens new tab inched 0.1% higher.

The Abu Dhabi bourse saw limited activity with low volatility. While rising oil prices are favorable, apprehensions about geopolitical tensions are limiting the potential for higher gains, said Joseph Dahrieh, Managing Principal at Tickmill.

Israel carried out a new wave of airstrikes on Hezbollah targets in Lebanon and said it would keep up pressure on the armed group as its Iran-backed foe fired rockets into Israel on Tuesday, amid growing fears of all-out war in the Middle East.

The Qatari benchmark (.QSI), opens new tab gained 0.5%, with Qatar Islamic Bank (QISB.QA), opens new tab rising 1.7%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab dropped 0.5%, with top lender Commercial International Bank (COMI.CA), opens new tab losing 0.6%.

#UAE's Masdar buys Brookfield's Saeta Yield in $1.4 bln deal | Reuters

UAE's Masdar buys Brookfield's Saeta Yield in $1.4 bln deal | Reuters

United Arab Emirates' renewable energy company Masdar said on Tuesday it has reached an agreement to buy green energy firm Saeta Yield from Canada's Brookfield's (BAM.TO), opens new tab in a deal valuing the company at $1.4 billion.

Under the deal, Masdar is acquiring 745 megawatts (MW) of mostly wind assets and 1.6 gigawatts of projects under development in Spain and Portugal, marking one of the largest such deals in the Iberian region.

This is Masdar's second big green energy deal in recent months in Spain, one of Europe's largest wind and solar markets. It follows the agreement to buy a minority stake in 48 solar plants controlled by Endesa - a unit of Italy's Enel (ENEI.MI), opens new tab for 817 million euros.

Higher interest rates brought about a "normalisation" of asset prices, Masdar's CFO told Reuters after the deal with Endesa, adding that the company was seeking more opportunities in the region.

The agreement with Brookfield includes 538 MW of wind assets in Spain and 144 MW of wind assets in Portugal, with the remaining being solar power assets in Spain. Some solar thermal plants controlled by Saeta are not part of the sale process and will remain under Brookfield's control.

Closing of the deal is expected around the end of the year.

"Saeta is the perfect complement to Masdar's portfolio in Europe, especially after the recent partnership with Endesa," Masdar CEO Mohamed Jameel Al Ramahi said.

Spain and Portugal's abundant solar and wind resources have drawn both domestic and foreign firms eager to leverage growing demand for renewable energy.

Controlled by UAE's power and water firm TAQA, its national oil company ADNOC and sovereign wealth fund Mubadala Investment Company, Masdar aims to grow its capacity to 100 GW of renewable energy by 2030.

Brookfield acquired and delisted Saeta, founded by Spanish construction company ACS, in 2018 for 1 billion euros.

EU clears deal by #UAE's e& for PPF in first foreign subsidy probe | Reuters

EU clears deal by UAE's e& for PPF in first foreign subsidy probe | Reuters

The EU Commission on Tuesday said it approved UAE telecoms group e&'s EAND.AD bid for parts of Czech telecoms company PPF under certain conditions, as it concluded its first probe under new bloc-wide regulation aimed at reigning in unfair competition from overseas.

The deal will see e& acquire the sole control of PPF Telecom excluding its local business in the Czech Republic.

WHY IT'S IMPORTANT
The examination of the acquisition is the first by the European Commission under the bloc's Foreign Subsidies Regulation which allows the watchdog to crack down on unfair foreign state support to their companies.

KEY QUOTE
"The foreign subsidies received by e& did not lead to actual or potential negative effects on competition in the acquisition process", the Commission said, adding: "e& was the sole bidder for the target and had sufficient own resources to perform the acquisition, which reflected the target's market value, so that foreign subsidies did not alter the outcome of the acquisition process."

#Saudi Aramco to raise up to $3 bln in two-tranche dollar Islamic bonds, sources say | Reuters

Saudi Aramco to raise up to $3 bln in two-tranche dollar Islamic bonds, sources say | Reuters

Saudi Aramco (2223.SE), opens new tab is planning to raise up to $3 billion in five and 10-year U.S. dollar-denominated sukuk, or Islamic bonds, according to two sources with direct knowledge of the matter and a term sheet reviewed by Reuters on Tuesday.

The sources could not be named as the information on the deal size had not yet been made public. Aramco, mostly owned by the Saudi Arabian government, did not immediately respond to a request for comment.

Banks will hold investor calls starting on Tuesday, according to the term sheet.
Aramco, the world's top oil exporter, has long been a cash cow for Saudi Arabia, which is seeking funds to invest in new industries and wean its economy away from oil under its Vision 2030 plan.

In July, Aramco raised $6 billion from its first bond issuance in three years.
Aramco expects to pay out $124.3 billion in dividends for 2024, most of which goes to the government, which directly owns nearly 81.5% of the company. Its sovereign wealth fund, the Public Investment Fund, owns another 16%.

Saudi Arabia has been pumping around 9 million barrels per day of oil, about 25% below its capacity.

Al Rajhi Capital, Citigroup, Dubai Islamic Bank, First Abu Dhabi Bank, Goldman Sachs International, HSBC, JP Morgan, KFH Capital and Standard Chartered are active bookrunners.

Abu Dhabi Commercial Bank, Albilad Capital, Alinma Investment, BOC International, Emirates NBD Capital, Mizuho, MUFG, Natixis, Sharjah Islamic Bank and SMBC Nikko are passive bookrunners.

#UAE president meets Joe Biden in push for more US AI technology

UAE president meets Joe Biden in push for more US AI technology

The United Arab Emirates’ leader met US President Joe Biden in Washington on Monday to advance artificial intelligence co-operation as the Gulf nation tries to secure easier access to US-made technology. 

The meeting comes during Sheikh Mohamed bin Zayed al-Nahyan’s first official trip to the US in seven years and underscores his determination to win White House support in his efforts to transform the UAE into an AI leader. 

As well as discussing technology and trade, Biden said the UAE would now have “major defense partner” status along with India, to foster greater security ties through measures such as joint military training and exercises. 

The UAE is one of the US’s most important allies in the Middle East, but relations have been strained at times in recent years. Talks for a formal security pact with Washington have stalled, and Abu Dhabi was infuriated by what it saw as a lukewarm US response to attacks on the UAE’s capital by Houthi rebels from Yemen in 2022. 

Yet AI has brought new energy to the relationship. Oil-rich Abu Dhabi has made AI central to its plan to wean itself off fossil fuel exports and has taken a strategic decision to work with US companies producing cutting-edge technology. 

“AI and new changes in cloud computing, etc, are going to change the way the world looks,” Anwar Gargash, Sheikh Mohamed’s diplomatic adviser, said in Dubai last week. “We cannot let this sort of wave of technological breakthroughs pass by us. 

“If we believe that hydrocarbon is on the way out, slowly but surely, then we have to replace the revenue stream through something else,” he added.