May Fourth Week Newsletter of World and GCC Business News
Highlights:
– Crown prince of Abu Dhabi since 2004, MBZ controls the world’s fourth-richest wealth fund and about 6% of proven reserves of crude oil. He’s also helped hone the UAE’s image as a socially liberal, pro-business oasis
– He was born in the oasis town of Al Ain in 1961, several years after the first discovery of oil in Abu Dhabi.
– A graduate of the UK’s Royal Military Academy at Sandhurst, he served in the UAE’s special forces and as a helicopter pilot.
– The 61-year-old is trusted by Washington and has used the UAE’s economic clout to forge influential partnerships from Russia to China.
– Sheikh Mohammed is funnelling the country’s energy wealth into new industries like technology and manufacturing to create jobs for nationals and prepare the country for a post-oil future.
Highlights:
– With no alliance winning a clear majority in Sunday’s elections, it’s not clear the deeply divided legislature can quickly form a new government, let alone bolster efforts to gain IMF cash. A deal with the Washington-based lender is seen as a prerequisite for a restructuring that could benefit bondholders.
– The election results do very little to lift the fog over Lebanon’s policy making,” said Mohieddine Kronfol, the Dubai-based chief investment officer for Middle Eastern and North African fixed income at Franklin Templeton, which doesn’t own Lebanese debt. “Uncertainty has increased, as parliament is more fragmented, politics more polarized.”
Highlights:
– The PIF has been building stakes in video game makers and e-sports firms over the past two years, turning to the Japanese market just as a weaker yen has made investments more affordable.
– Saudi Arabia has been beefing up efforts to create its own content industry, and this series of investments in Japanese game companies is likely a way for them to learn from Japan,” said Hideki Yasuda, a senior analyst at Toyo Securities.
Highlights:
– Suhail al Mazrouei, said that without more investment across the globe, OPEC+ wouldn’t be able to guarantee sufficient supplies of oil when demand fully recovers from the coronavirus pandemic.
– Saudi Arabia and the UAE are among the few producers investing in greater output. They’re spending billions of dollars to raise their crude capacity by 2 million barrels a day between them by the end of this decade. Most others are struggling to get funding as shareholders and governments encourage a shift from fossil fuels to renewable energy.
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Highlights:
– The trading unit could fetch a valuation of tens of billions of dollars, the people said, with two of them saying it could be potentially worth more than $30 billion.
– Aramco is still debating the merits of the potential listing, and there’s no certainty it will proceed, the people said.
– Aramco established the trading unit in 2011 and now trades everything from crude oil to LNG, according to its website.
Highlights:
– Luna’s price was soaring, thanks to the success of another coin with which it was deeply intertwined, TerraUSD. Some of the crypto industry’s biggest names had already invested, including Galaxy Digital Holdings Ltd., the high-frequency trading firm Jump Trading, and venture investment arms of the exchanges Coinbase Global Inc. and Binance.
– TerraUSD was a so-called stablecoin, which means it was supposed to keep a constant value of $1. But it dropped below $1 and kept falling, and Luna tokens, once worth more than $100, crashed to below a penny, all but erasing a combined market value that had topped $60 billion.
– The two coins’ collapse fed a digital-asset rout, helping wipe out more than $300 billion from the combined value of all cryptocurrencies in the week ended May 13.
– TerraUSD didn’t even claim to be backed by dollars or other assets held in a bank account. Instead, it was supposed to be worth $1, because it could be redeemed for $1 worth of Kwon’s other token, Luna.
– TerraUSD launched in 2020, but it gained little traction until March 2021 when Kwon introduced a third part of the network: Anchor, a quasi-bank for crypto where users could deposit their Terra stablecoins and earn 20% interest.
– But TerraUSD had a flaw,
– If users lost confidence in the system, they could rush to sell or redeem their coins, and others might follow.
Highlights:
– Bloomberg Economics has run a simulation of what an accelerated reversal of globalization might look like in the longer term. It points to a significantly poorer and less productive planet, with a trade back at levels before China joined the World Trade Organization.
– For three decades, a defining feature of the world economy has been its ability to churn out ever more goods at ever-lower prices. The entry of more than a billion workers from China and the former Soviet bloc into the global labour market, coupled with falling trade barriers and hyper-efficient logistics, produced an age of abundance for many.
– But the last four years have brought an escalating series of disruptions. Tariffs multiplied during the US-China trade war. The pandemic brought lockdowns. And now, sanctions and export controls are upending the supply of commodities and goods.
– a rollback of globalization to late-1990s levels would leave the world 3.5% poorer than if trade stabilizes at its current share of output, and 15% poorer relative to a scenario of global ties strengthening.
– The intensity of the current shocks from war and plague will fade. The underlying forces driving deglobalization will not. Brace for a world of lower growth, higher prices, and increased volatility.