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Qatar Airways is teaming up with British Airways parent IAG SA and Malaysia Aviation Group Bhd to create a joint cargo business as the airlines seek to expand their networks and streamline services at a time of growing uncertainty around global trade.
The partnership would integrate the cargo operations to offer enhanced connectivity and more route options across key freight markets, the companies said in a joint statement Tuesday. The alliance would also work on greater service flexibility, shorter transit times and new routing options to customers worldwide, tapping into the combined infrastructure of the three carriers.
The move comes as businesses look to reassess supply chains and seek strategic alliances to hedge against policy shocks in response to President Donald Trump’s reciprocal tariffs that have led to volatile trade patterns and geopolitical tensions.
Qatar Airways has 28 Boeing Co. 777 freighters, making it one of the largest cargo operators among airlines globally. The carrier also owns a 25% share of IAG.
Venture capital investment in the Middle East and North Africa surged in the first quarter as interest rate cuts boosted sentiment.
Startups in the region raised $678 million, the strongest quarter since the end of 2023, according to data platform Magnitt. The median deal size rose, reflecting an increase in the capital flowing to larger startups.
Saudi Arabia held the top spot for MENA investment and ranked first globally among emerging markets, attracting $391 million, Magnitt said. The United Arab Emirates raised about half of that.
The Middle East defied a broader slowdown in fundraising across emerging markets, thanks in part to active sovereign wealth funds and events in Riyadh and Dubai that catalyzed activity, according to Magnitt. That momentum is now under threat, it said, as US tariff policies create global uncertainty and declining oil prices threaten to weigh on investment decisions at funds like Saudi Arabia’s PIF.
“In venture capital, this uncertainty is likely to impact three areas: the deployment of capital from LPs to VCs, VC’s willingness to make decisions in uncertain times and finally, startups’ ability to raise funds,” said Philip Bahoshy, chief executive officer and founder of Magnitt.
Strong local capital and pro-startup government policies still position the region for long-term growth and tech-led sectors look poised to attract fresh capital, Bahoshy said.
Fintech funding accounted for 57% of all VC capital raised in the MENA region in the first quarter, led by Saudi Arabia-based Tabby’s $160 million funding round. The enterprise software and education technology sectors also experienced strong growth, while e-commerce and retail slowed, Magnitt said.
The Middle East and Africa also had a record number of mergers and acquisitions in the first quarter. The total regional deal count more than doubled from a year earlier to 21, Magnitt said. Egypt and the UAE led the way with nine deals each.
A list of Saudi Arabian food and beverage firms are readying new share sales in deals that will be exposed to the outlook of consumers in an economy that is grappling with the prospect of lower-for-longer oil prices.
Coffee chain Half Million and biscuit-maker Deemah are among firms speaking to banks about an IPO, according to people familiar with the matter, who asked not to be identified. Other deals in the pipeline include Barn’s coffee and Hashi Basha, which operates a chain of restaurants featuring camel meat on the menu.
Representatives for Half Million couldn’t be reached for comment, and Deemah declined to comment.
The firms’ rush to the market coincides with the kingdom’s efforts to open up its entertainment sector as part of efforts to slash its reliance on oil. That’s given residents more opportunities to fork out money on recreation, where the share of spending grew two-thirds from 2017 to 2024, according to Capital Economics.
That was reflected in the kingdom’s busy pipeline of initial public offerings last year, when listings from food and beverage firms accounted for a major chunk of new deals. Still, while companies are looking to capitalize on the momentum in Saudi consumer spending, some analysts still sounded a note of caution.
“Salaries have not gone up as much as the avenues to spend have in the past few years,” said Nishit Lakhotia, head of research at SICO Bank. Several listed grocery stores and restaurants chains have recently warned of pressure on consumer disposable income, he added.
Americana Restaurants, which operates chains including KFC, Pizza Hut and TGI Friday’s across the Middle East, said consumer demand had started to soften over the past year. The economy could come under further stress if low oil prices persist and force the government to curtail spending.
“An important contributor to the consumption growth forecasts comes from the idea of expats moving to Saudi,” according to Lakhotia. “So, if there is some level of slowdown in things like projects, this could impact future growth in consumption and spending.”
And for IPO hopefuls reliant on consumers opening up their wallets, hitting the right valuation will be key, especially given tepid debuts for some high profile regional listings in the last few months. While recent deals in Saudi Arabia have done relatively well, investors will likely be more discerning.
“With most names trading below or near IPO prices, the strength of business model and valuation is the key now,” said Sanat Sachar, a portfolio manager at Azimut Difc Ltd. in Dubai.
In the bustling Gold Souk in Dubai, dubbed the "City of Gold", 22-karat gold jewellery is a traditional favourite for weddings, religious celebrations, and as a family investment.
Yet with bullion prices hitting record highs above $3,400 an ounce, there are signs of change, as buyers look to diamonds and lighter gold jewellery, instead.
While U.S. tariffs and other factors have added fire to already hot demand for gold as an investment, the impact is different for gold jewellery, according to Andrew Naylor, head of Middle East and Public Policy at the World Gold Council (WGC).
"In markets like Dubai, this creates a two-fold effect: on one hand, you see stronger interest in gold as a safe-haven asset, on the other, high prices dampen jewellery demand."
At Dubai’s Gold Souk, retailers told Reuters they are seeing this trend, as current prices prompt shoppers to look for alternatives.
"There are no potential customers nowadays because of the gold prices," said Fahad Khan, a sales representative at retailer Damas Jewellery.
"It’s a little bit tough to afford gold, so I think it’s better to go with diamonds," said Lalita Dave, 52, as she browsed around the Gold Souk.
LAB-GROWN DIAMONDS
Dubai has been a magnet for gold buyers for at least 80 years, starting with Iranian and Indian traders, both cultures sharing a tradition of 22-karat jewellery for adornment and investment.Yet as gold prices rose 27% last year, demand for gold jewellery in the UAE fell by around 13%, outpacing an 11% drop globally, according to the WGC.
From crisis hedge to record setter: Gold hits $3,200 milestone
Jewellery demand could face further pressure across key regions in 2025 if gold prices remain elevated or volatile, the WGC said in its gold demand trends report published in February.
Price swings, more than price levels, are increasingly shaping consumer behaviour, particularly in India, it noted.
Shifts in Indian purchasing patterns often ripple through Gulf markets such as the UAE, where buyers are a key driver of sales.
Item 1 of 5 People shop for jewelry in Dubai's Gold Souq, Dubai, United Arab Emirates, April 17, 2025. REUTERS/Amr Alfiky
Goldman Sachs recently raised its end-2025 gold forecast to $3,700 per ounce and said prices could climb as high as $4,500.
"Higher gold prices are likely to dampen demand for jewellery, in a classic example of how the best cure for high prices is high prices,” said Russ Mould, investment director at AJ Bell.
UAE's gold jewelry demand softens in 2024
One sign of economising has been the rise of lab-grown diamonds.
India exported $171 million worth of lab-grown diamonds to the UAE in 2024, up almost 57% from $109 million two years earlier, data from the Gem and Jewellery Export Promotion Council showed.
India's exports of cut and polished diamonds to the UAE in the April–November 2024 were up 3.7%.
UAE ranked third in global diamond imports in 2023, trade data shows, its primary trade partners including India, South Africa, and Belgium.
While the UAE accounted for just 1.5% of the global diamond jewellery market by revenue in 2023, it is projected to grow by 5.9% annually to reach nearly $2 billion by 2030, according to Grand View Research.
That outpaces the global growth forecast of 4.5% and makes the UAE the fastest growing market in the Middle East and Africa.
TRADE TENSIONS
One impact from recent trade tensions with the U.S. has been accelerated talk about finding alternative markets and production hubs, two executives at major Indian diamond exporters told Reuters.
If tensions persist, potentially spanning years, one of the sources speaking to Reuters on condition of anonymity said his company's contingency plans included shifting some Indian production overseas, including to the UAE.
Shamlal Ahamed, managing director of international operations at retailer Malabar Gold & Diamonds, told Reuters the rise in lab-grown diamond jewellery sales in the UAE appeared to be driven more by design preferences than pricing and he remained bullish on gold jewellery demand.
"While price-conscious buyers may wait for a dip, our experience shows that such declines are often short-lived, with buyers quickly adapting to new price levels."
The International Monetary Fund on Tuesday lowered its 2025 GDP growth forecast for Saudi Arabia, while flagging headwinds for the broader region, including a more gradual resumption of oil production. Oil-dependent governments are coming under pressure from the lowest crude prices since the COVID-19 pandemic, with officials preparing policy responses for a drop in revenue such as issuing more debt and reducing spending.
In its World Economic Outlook, the IMF cut the forecast for Saudi Arabia's GDP growth in 2025 to 3% versus a January estimate of a 3.3% increase. IMF also reduced the projection for growth in 2026 by 0.4 percentage point to 3.7%.
Meanwhile, the growth projection for the broader Middle East and Central Asia region was lowered to 3% this year versus a 3.6% estimate earlier.
"Compared with that in January, the projection is revised downward, reflecting a more gradual resumption of oil production, persistent spillovers from conflicts, and slower-than-expected progress on structural reforms," the report said.
Saudi Arabia, the world’s top oil exporter and a G20 economy, had been expected to see a sharp growth rebound in 2025 on the back of higher crude output, with an October Reuters poll forecasting expansion of 4.4%.
But market volatility, weaker prices, and mounting global risks now threaten to weigh on the recovery, even as the kingdom pushes to diversify its economy beyond oil.
Still, Gulf oil exporters are seen as relatively well insulated from oil market volatility thanks to higher reserves, lower debt and ongoing diversification efforts, economists say.
S&P raised, opens new tab Saudi Arabia’s long-term sovereign credit rating to 'A+' in March, citing stronger institutions and solid non-oil growth under Vision 2030, while cautioning that weaker oil revenue could widen fiscal deficits and lead to delays or cutbacks in major infrastructure projects.
Most stock markets in the Gulf reversed earlier losses to close higher on Tuesday, helped by a slew of corporate earnings, although concerns persist over economic headwinds from tariffs and U.S. monetary policy.
Saudi Arabia's benchmark index (.TASI), opens new tab rose 0.3%, with the country's biggest lender Saudi National Bank (1180.SE), opens new tab jumping 4% as the bank surpassed analysts' expectations for first-quarter profit.
Dubai's main share index (.DFMGI), opens new tab gained 0.6%, led by a 1.8% rise in Emirates NBD (ENBD.DU), opens new tab after the top lender beat first-quarter profit estimates, supported by strong growth in loans and interest income.
ENBD - whose total assets surpassed the 1 trillion dirham ($272.29 billion) milestone - reported net profit of 6.2 billion dirhams for the first quarter, beating analysts' expectations of about 5.1 billion dirhams.
U.S. President Donald Trump stepped up his criticism of Federal Reserve Chair Jerome Powell for not cutting interest rates in a social media post on Monday, raising concerns about the president's influence over the central bank.
The continued attacks on Powell increased worries about the Fed's independence and the path of monetary policy in the world's largest economy.
Oil prices - a catalyst for the Gulf's financial markets - rose due to short-covering, but traders remained worried about U.S. tariffs impacting fuel demand.
On Sunday, the bank reported first-quarter profit of 251.6 million riyals ($69.09 million), up from 231.3 million riyals a year earlier.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab - which traded after a two-session break - dropped 0.7%, weighed down by a 2.3% slide in tobacco monopoly Eastern Company (EAST.CA), opens new tab.
