World Bank says to set up office in Abu Dhabi’s ADGM

The World Bank has announced it will be establishing its country office in Abu Dhabi Global Market (ADGM), Abu Dhabi’s financial hub.

Serving as the World Bank’s platform in the UAE, the new bureau will exercise its full functions including the facilitation of research on relevant policy issues, providing technical assistance to local governments on appropriate sustainable development programmes, and supporting initiatives that increase shared prosperity.

Obaid Humaid Al Tayer, Minister of Finance, UAE said: “We welcome the World Bank Group to the UAE and congratulate them on the decision to set up its office in Abu Dhabi with the Abu Dhabi Global Market.

“As a global business hub and corporate citizen, the UAE can relate to the World Bank Group’s commitment to create sustainable economic growth and improve the well-being and livelihood of the communities across developing countries. 

“We will continue to work closely with like-minded authorities and organisations to share knowledge and promote innovative solutions that will address the growth and needs of the UAE and the neighbouring region.”

Ferid Belhaj, World Bank vice president for the Middle East and North Africa, added: “The UAE has been a strategic partner of the World Bank Group on various levels. We are grateful to the government of UAE and ADGM for supporting the establishment of this office which will help us strengthen our partnership.”

Ahmed Ali Al Sayegh, chairman of Abu Dhabi Global Market said: “The establishment of the World Bank office in ADGM and their strategic mission resonates with our commitment to foster greater capital formation, drive sustainable financing and investments towards the long-term economic growth and development of the community.

“ADGM looks forward to working with the World Bank team collaborating with the right partners to support global initiatives, create jobs, improve access to health services, and maximise finance for development.”

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Theresa May asks MPs for more time to hold Brexit talks

Prime Minister Theresa May asked MPs Tuesday to give her more time to try and revive her Brexit deal with the EU in what the opposition said was a ploy to “run down the clock”.

May updated parliament following meetings in Belfast, Brussels, and Dublin despite EU leaders’ insistence that they will not renegotiate the deal they had already struck with her.

Deal or no deal, Britain is due to leave the European Union on March 29 and a disorderly exit could cause chaos.

“The talks are at a crucial stage. We now all need to hold our nerve to get the changes this house requires and deliver Brexit on time,” May told lawmakers.

“Having secured an agreement with the EU for further talks, we now need some time to complete that process,” she said.

The announcement was seen by political commentators as an attempt to defuse any parliamentary rebellion in a series of votes on May’s Brexit strategy to be held on Thursday.

May has promised that parliament would have another chance to vote, on February 27, on what to do if no agreement is reached.MPs last month overwhelmingly rejected the deal struck between May and Brussels for Britain’s exit from the EU. Ever since, the premier has been trying to secure changes to the accord that would satisfy parliament’s lower House of Commons.

Pro-Brexit MPs in May’s Conservative Party are unhappy particularly with a so-called backstop provision intended to keep the border with Ireland free-flowing.

Some fear it could leave Britain trapped in EU trade rules indefinitely with no withdrawal mechanism.

Main opposition Labour Party leader Jeremy Corbyn said May had come to parliament Tuesday with “excuses and delays” and accused her of trying to “play chicken with people’s livelihoods”.

“It appears the prime minister has just one real tactic: to run down the clock hoping members of this house are blackmailed into supporting a deeply flawed deal,” he said.

“This is an irresponsible act. She’s playing for time and playing with people’s jobs.”

Commons Leader Andrea Leadsom said the onus was on the EU to show flexibility.

“It would be an extraordinary outcome if the thing that the backstop is seeking to avoid, which is a hard border in Northern Ireland, if the EU were so determined to be completely intransigent about it that they actually incur the very thing that they’re seeking to avoid by pushing the UK into a position where we leave without a deal,” she told BBC radio.

If no transition deal is in place when Britain leaves the EU, it could trigger economic shockwaves around the continent.

Brexit Secretary Stephen Barclay and David Lidington, May’s de facto deputy, met members of the European Parliament in Strasbourg Tuesday while British Foreign Secretary Jeremy Hunt was in Paris as part of a diplomatic offensive.

Hunt said he had “open and thoughtful discussions” with French Foreign Minister Jean-Yves Le Drian.

“Both sides want a Brexit deal that supports ongoing friendship between UK/EU/France so patience and goodwill on backstop now the critical ingredient,” he tweeted.

Meanwhile, students supporting a second referendum urged Corbyn to “get off the fence” on Brexit, in a stunt in his north London constituency.

Many of Labour’s younger, newer supporters who propelled the veteran socialist to the party leadership want to stay in the EU — but many of the seats Labour holds in parliament are in pro-Brexit hotbeds.

“A lot of people have noticed the complete lack of opposition on this,” said Kira Millana Lewis, an 18-year-old student and Labour member.

“We believed in him because we believed he would offer us a brighter future. That isn’t possible outside of the European Union.”

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Richard Branson gifts UAE flag taken into space

A UAE flag, which was taken into space on the recent successful test flight of Virgin Galactic, has been gifted to Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi.

Sheikh Mohamed, also Deputy Supreme Commander of the UAE Armed Forces, met with Sir Richard Branson, chairman of Virgin Galactic on the sidelines of the World Government Summit in Dubai.

During the meeting, Branson presented the UAE flag to Sheikh Mohamed, state news agency WAM reported on Tuesday.

Branson said the gift is a tribute to the role played by the United Arab Emirates and its vision and approach to the space sciences, adding that the UAE has entered this field as a key player on the regional and international scene.

Sheikh Mohamed expressed his thanks and appreciation for this gesture and affirmed the UAE’s efforts to achieve its goals in the space sector and its sciences and launch projects and initiatives that would further enhance the country’s position in this field.

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Saudi king reaffirms support for Palestinian state

Saudi King Salman said Tuesday the kingdom was committed to an independent Palestinian state with east Jerusalem as its capital ahead of a US-led conference on Middle East peace and security.

The monarch was speaking during a meeting with visiting Palestinian president Mahmud Abbas in Riyadh.

King Salman said his country “permanently stands by Palestine and its people’s right to an independent state with east Jerusalem as its capital”, reported the official Saudi Press Agency.

The pledge comes as the United States is expected to offer hints of its proposals for peace between Israel and the Palestinians at a conference in Poland.

Announcing the two-day conference last month, US Secretary of State Mike Pompeo said that foreign ministers from around the world would attend to take up the “destabilising influence” of Iran in the Middle East.

But with most major European powers sending low-level representation, the United States and Poland have toned down the agenda, saying the gathering is not focused on Iran but rather looking more broadly at the Middle East.

US President Donald Trump’s son-in-law and adviser Jared Kushner, who has been putting the final touches on a “deal of the century” for the Middle East, will make a rare speaking appearance on Thursday.

Kushner, whose family is close to Israeli Prime Minister Benjamin Netanyahu, is not expected to unveil the proposal until after the April 9 election in Israel.

Kushner will reportedly visit the Middle East at end of this month, during which he will make a stop in Saudi Arabia.

The Trump administration faces an difficult task in selling any deal to the Palestinian Authority, which remains livid over his landmark 2017 decision to recognise Jerusalem — claimed by both peoples — as Israel’s capital.

The Palestinian government — which has labelled the Warsaw conference an “American conspiracy” — has refused talks with the United States until it starts what it calls a more balanced policy.

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OPEC oil production falls as Saudi Arabia slashes output

Global oil cartel OPEC said Tuesday it sharply reduced crude oil production last month, after heavyweight Saudia Arabia slashed output and exports fell in crisis-hit Venezuela.

In its monthly report, OPEC said it produced 797,000 fewer barrels per day in January than in the previous month, a decrease in line with the cartel’s pledge to curb output in a bid to boost sagging prices.

The decrease by the group of 14 producer countries — which has long manipulated oil output to influence global prices in members’ favour — brought total production to 30.81 million barrels per day in the month, the report said citing secondary sources.

The reduction came mostly from the world’s top oil exporter and OPEC kingpin Saudi Arabia, which cut 350,000 barrels per day, followed by the United Arab Emirates and Kuwait.

Oil production in Venezuela, which has been rocked by a crippling economic crisis, spiralling political turmoil and US sanctions, meanwhile sank by 59,000 barrels per day.

The cartel’s scale-back was in line with an agreement by OPEC and non-OPEC members in December to trim production by 1.2 million barrels a day from January 1.

OPEC members vowed to cut 800,000 barrels a day of that amount, so January’s figures fell just 3,000 barrels short of that commitment.

The cartel has joined forces with 10 non-member nations including Russia to trim output to avoid a repeat of the 2014 crash when prices dove to below $30 a barrel — down from over $100 — due to a glut in supplies and weakening global demand.

While remaining volatile, oil prices have rallied to just above $60 a barrel and jumped more than a dollar after the OPEC production update.

That figure remains far below the $85 a barrel hit in early October before prices slid back.

The Tuesday report estimated that non-OPEC members would produce more oil than expected this year, particularly in the Gulf of Mexico and the United States.

It also slightly downgraded its forecast for growth in global demand in 2019 from 1.29 million barrels per day to 1.24 million.

“With economic momentum expected to slow in the current year, this makes economic developments in the major consuming nations a key factor to monitor going forward,” the report said.

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Harrison Ford attacks President Donald Trump over climate change denial

Hollywood veteran Harrison Ford on Tuesday attacked US President Donald Trump and other world leaders who deny climate change saying they were “on the wrong side of history”.

Ford, who famously played the title role of Indiana Jones and also Han Solo in the Star Wars franchise, was in Dubai to address climate change at the World Government Summit.

“Around the world, elements of leadership, including in my own country, to preserve their stake in the status quo, deny or denigrate science. They are on the wrong side of history,” he said.

“We are faced with what I believe is the greatest moral crisis of our time that those least responsible for nature’s destruction will suffer the greatest consequences.”

Trump opted out of a Paris climate pact months after taking office in 2017, saying it would pose a “burden” on the US economy.

The Paris deal saw nations agree to limit global temperature rises this century to at least below two degrees Celsius (3.6 Fahrenheit).

Failure to meet those goals, scientists have said, could result in irreversible sea level rises, disastrous droughts and higher temperatures.

Earlier this month, the UN said the past four years were the hottest since global temperature records began, in a “clear sign of continuing long-term climate change”.

Ford urged people to “roll up” their sleeves and work together to “get this thing done”.

“If we are to survive on this planet, the only home any of us are ever going to know, for our security, for our future, for our climate, we need nature now more than ever,” he said.

“Nature doesn’t need people. People need nature.”

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Saudi Arabia follows Abu Dhabi to invest in India infrastructure

Saudi Arabia is considering investing in India’s infrastructure fund as the kingdom’s crown prince plans his debut visit to the South Asian nation next week.

The cabinet authorised the energy minister to study entering into an agreement to invest in the National Investment and Infrastructure Fund, the Saudi Press Agency reported.

The move follows Abu Dhabi’s sovereign wealth fund becoming the first institutional investor in NIIF’s Master Fund in 2017 with a commitment of $1 billion. DP World Ltd., the Dubai-based port operator, and NIIF said last year they plan to jointly invest up to $3 billion in India.

Prince Mohammed bin Salman will visit India on Feb. 19-20. The prince and Prime Minister Narendra Modi met in Buenos Aires in November and discussed investment opportunities through Saudi Arabia’s Public Investment Fund.

Saudi Arabia is India’s fourth-largest trading partner, supplying about 20 percent of the nation’s crude requirements.

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Deutsche Bank seeks to rebuild in Middle East after cost cutting

Deutsche Bank AG aims to rebuild in the Middle East after years of cost cutting and has hired executives to help win debt and advisory deals.

“We have pivoted from a pure cost-control focus in 2018 to a controlled, disciplined growth phase in 2019,” Jamal Al Kishi, chief executive officer of the Middle East and Africa for the Frankfurt-based lender, said in an interview. “This year will be a better one in terms of both revenue and profitability, and you’ll see us on large financing deals and, hopefully, some MA this year.”

Deutsche Bank recently hired Ibrahim Qasim as head of structured solutions for the Middle East and North Africa, as well as Khalid Rashid from Standard Chartered Plc to take charge of capital markets. Last year, the bank brought in Asif Karmally to lead the financial solutions group in the UAE, Oman and Pakistan.

Deutsche Bank reported a drop in global revenue for the eighth successive quarter earlier this month, led by a slump in its key fixed-income trading business. CEO Christian Sewing said the bank seeks a return to growth, but pledged more cost cuts if revenues disappointed.

Clients have seen lenders “go through these cycles before and they want to see a strong European bank that can be a viable alternative to the US,” Al Kishi said. We would be “looking at re-establishing certain product areas in a very focused way and we will compete against the US firms in a very relevant way.”

Bond deals

Deutsche Bank was ranked 39th among syndicated loan bookrunners in the Middle East and North Africa last year, according to Bloomberg League Tables, a list dominated by foreign lenders. It was the fifth-biggest arranger of bond sales in the region, ranking behind Citigroup Inc. and JPMorgan Chase Co., the data show.

The German lender helped to arrange bond sales for Egypt and Lebanon and was part of a $2 billion loan refinancing for Dubai ports operator DP World Ltd.

Economic growth in the six-nation Gulf Cooperation Council is expected to accelerate to 3 percent this year from an estimated 2.4 percent in 2018, according to forecasts by the International Monetary Fund. Governments from Saudi Arabia to the UAE are stepping up investments after a period of low oil prices and budget cuts.

“The malaise that prevailed for the past few years is being replaced with a new normal, and that’s driving real reform in the region,” Al Kishi said. “We’re busy talking to clients in the public and private sectors about significant financing and MA and corporate-finance deals.”

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Bahrain’s Investcorp Bank sees sweet spot in Indian property crunch

A Bahrain-based investment manager wants to fill a vacuum in lending to Indian property developers that have $18 billion of debt to repay, aiming to capitalise on a credit crunch that’s narrowed their borrowing options.

Investcorp Bank BSC, which manages about $23 billion of assets, plans to provide structured lending to developers faced with borrowing constraints, executive chairman Mohammed Mahfoodh Alardhi said in an interview in Mumbai.

The company started its India operations in January after acquiring the private equity and real estate funds of IDFC Alternatives Ltd.

Investcorp’s push isn’t without risks. Developers are struggling as loans become harder to get from non-bank lenders whose own funding is drying up. The sector is trying to shrug off sluggish sales and price declines that followed a 2016 crackdown on cash as well as new consumer protection and tax policies.

Annual debt repayments for developers stand at about 1.29 trillion rupees ($18 billion) against disposable income of 570 billion rupees, according to research firm Liases Foras.

“Real estate in India has headwinds but that’s where the opportunity set also stems from,” Alardhi said. “Core demand from end-users is there, developers need financing and there is limited supply.”

The alternative investment manager aims to lend to residential developers even as other overseas investors from New York-based Blackstone LP to Toronto-based Brookfield Asset Management Inc. have focused on office space and commercial properties.

That decision is a bet on housing demand from more than 400 million millennials in the world’s second most-populous nation, said Rishi Kapoor, co-chief executive officer at Investcorp.

There are several risks though in the residential housing market.

Regulatory hurdles, developers’ inability to deliver quality construction and corporate governance issues plague the industry, according to  Anuj Puri, chairman at Anarock Property Consultants Pvt. Ltd.

The IDFC real estate funds that Investcorp acquired in India provide so-called structured senior credit to residential developers, with a focus on projects in five cities including Mumbai and Bengaluru, data provided by the company showed.

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Saudi Arabia-based execs optimistic about 2019

A majority of C-suite executives in Saudi Arabia are optimistic about the country’s long-term economic prospects, according to a new survey from Oxford Business Group.

According to the survey, 82 percent of business leaders said they were confident that the kingdom would successfully achieve the targets laid out in Vision 2030.

The survey also revealed that 15 percent of respondents believe that manufacturing will drive non-oil growth in the short to medium term, compared to 12 percent who said tourism.

Additionally, 62 percent of executives said that their expectations for local business conditions over the next 12 months are ‘positive’ or ‘very positive’.

A year after the implementation of value-added tax (VAT) in Saudi Arabia, four-fifths of business leaders said they thought the kingdom’s tax climate was competitive or very competitive on a global scale, with less than 10 percent describing it as uncompetitive or very uncompetitive.

Many executives expressed concern that external factors could affect the country’s economic plans, with 65 percent identifying regional political volatility as the event most likely to weight on the local economy, compared to slowing demand growth in China (13 percent) and multiple Fed rate hikes (7 percent).

OBG’s Middle East director, Billy Fitzherbert, said that while 2018 was disappointing, “there is optimism that the fortunes of emerging markets will fare better in 2019.”

“One thing that comes up again and again in our meetings with local businesspeople is the sense of renewed dynamism within the Kingdom, spurred by a large demographic of highly educated young nationals – 70 percent of the population in Saudi Arabia is under the age of 30. These young people are being reflected at the management level, too,” he said. “There is no denying that the winds of change that swept through Saudi Arabia in 2016 are still blowing strong.”

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