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Strong demand and lack of supply will continue to drive growth for the UAE’s real estate market in 2023, says CBRE

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Sahfy Sahfy
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Taimur Khan, Head of Research – MENA at CBRE in Duba
Taimur Khan, Head of Research – MENA at CBRE in Duba

CBRE anticipates that a strong demand and a lack of supply in key sectors will continue to support a positive outlook for the UAE’s real estate market in 2023, according to the company’s 2023 UAE Real Estate Market Outlook Mid-Year Review.

Global economic headwinds, led by tighter monetary policy regimes and persistently high inflation in major economies, have led to downgrades in both global and the UAE’s GDP growth forecasts. At the start of the year, the UAE’s economy was expected to grow by 3.5% and the latest forecast now puts this number at 2.2%. However, the downgrade has been down to the expected contraction in the UAE’s hydrocarbon sector, which is forecast to contract by 3.3% (compared to the 2.7% growth expected in January 2023). The non-hydrocarbon sector, on the other hand, is now estimated to register 4.2% growth in 2023, up from the previously estimated growth of 3.9%.

Despite a weaker than expected hydrocarbon sector and even amidst what we now expect will be a prolonged rates cycle, which is likely to impact demand, CBRE continues to maintain many of its forecasts made in early 2023.

Taimur Khan, Head of Research – MENA at CBRE in Dubai, comments: “In large parts, we are seeing market performance playout as expected in 2023, where despite some global economic concerns, the lack of supply in key commercial sectors such as the industrial & logistics, office, and even segments of its retail sectors has underpinned strong performance. The continued growth of demand in the residential sector has been more surprising. That being said, we nevertheless maintain our outlook that the rate of price growth by year-end will have tapered, but still remain positive.”

CBRE’s report details the company’s 2023 UAE real estate market outlook mid-year review for multiple sectors.

Offices
Activity levels in Abu Dhabi’s office market have been strong throughout the first half of 2023, with new office rental contract registrations up 12.4% year-on-year. Rents have continued to increase although the annual rate growth rates have moderated, across all segments of the market as expected. In Dubai, whilst occupier demand remains strong and has driven average occupancy levels to 92.7% as at Q2 2023, the lack of available stock is impacting take-up. Average rents have continued to rise, where in the year to Q2 2023, Prime, Grade A, Grade B, and Grade C rents have grown by 17.2%, 11.0%, 16.4%, and 30.0%, respectively. Only the Grade C segment has not shown a moderation in its rate of change since the start of the year, other than this market has developed as expected.


Residential

Year-on-year, in the year to date to H1 2023, the total number of transactions in Abu Dhabi has increased by 94.1%. This has been underpinned by a 160.4% increase in off-plan transactions over this period. Whilst on an annual basis average Abu Dhabi’s villa prices have started to grow at a faster rate, for apartments we have seen this rate moderate in Q2. For the latter, we still expect this trend to reverse over the course of the year. In Dubai, the total volume of transactions has broken records in the first half of the year, up 43.3% year-on-year in the year to date to H1 2023. This surge in demand has also underpinned higher than expected price growth. On the rental front, in Dubai, the growth rate of average rents has moderated in each of the first six months of the year. In Abu Dhabi, the rental market to date has performed as forecasted.

 

Hotels
The UAE’s ADRs, as expected, have softened year-on-year in the year to date to June 2023 by 1.9%. Over the same period, we have seen the occupancy rate rise by 4.1 percentage points, to reach 75.7%. This increase in occupancy has been at a faster rate than expected and as a result, we have seen RevPARs increase by 3.6% over the same period noted above. This better than expected performance can be in parts put down to the reopening of the European tourism market. Given the UAE’s hub status, tourists are both deciding and being induced into breaking-up their trips to the continent, which has helped underpin stronger performance. This, in turn, is helping drive demand and profitability in what is usually the start of the low season. The beachfront luxury segment of the market has underperformed the wider market in occupancy, ADR and RevPAR terms. We no longer expect a softening in ADRs and hence, we expect RevPARs to post positive performance for the year.

Retail
As we reach the halfway point of 2023, we have indeed seen a convergence in rental performance. In Abu Dhabi and Dubai, average rental growth reached 16.9% and 38.0% in the year to Q2 2023, up and down from the 5.6% and 51.5% year-on-year growth rates registered in 2022 respectively. In Dubai, year-on-year in the year to date to June 2023, we have seen new retail contract registrations fall by 16.2%. Whilst occupier demand remains very strong, the availability of prime quality stock is curtailing activity levels. In Abu Dhabi, long-awaited concepts, both new and repositioned, have underpinned an increase in the number of new retail contract registrations in Q2 2023, although a sluggish Q1 has meant the total is down marginally y-o-y. 

Industrial & Logistics

On the whole, in the 12 months to June 2023, we have seen rental growth continue in the industrial and logistics sector over the course of the year, with average rents in Abu Dhabi and Dubai increasing by 6.4% and 19.0%, respectively. As at Q2 2023, average rents in Abu Dhabi stood at AED 393 per square metre and in Dubai at AED 41 per square foot. However, whilst we have seen uniform growth across sub-markets in both cities, the rate of growth has certainly been very polarized, as expected. Institutional quality stock has recorded significant rental increases over the first half of the year, whereas secondary stock, in most cases, has seen more muted rental growth in comparison over this period.

OQ Wins the ICF Coaching Impact Award

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Sahfy Sahfy
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OQ Wins the ICF Coaching Impact Award
OQ Wins the ICF Coaching Impact Award

OQ, the global integrated energy group, has been honoured with the prestigious ICF Coaching Impact Award by the International Coaching Federation (ICF). The award recognizes OQ’s exceptional use of coaching to enhance organisational culture, attain remarkable objectives, empower staff, and drive national progress. Presented biennially to the foremost emerging organization, the award signifies the highest global coaching standards.

OQ’s recognition applauds its dedication to human development, emphasising staff qualification and societal support through personal coaching. The group’s executive management plays a pivotal role, fostering these initiatives to strengthen coaching programs. From 2021 to 2023, OQ coached 530 employees, trained 80 leaders to coach teams, and achieved a return on investment in coaching of around USD $500,000. With 1,775 coaching hours completed and 49 coaches trained, 6 are internationally accredited.

The positive impact of coaching and employment extended to the public and private sectors through the coaching programs.

OQ triumphed over a competitive field of over 100 international companies to secure the ICF Coaching Impact Award. Out of the 46 finalists, OQ emerged as the global leader in this category.

OQ’s culture of continuous growth has thrived in partnership with Takatuf, its development collaborator. This collaboration has empowered leaders, trained employee cohorts, and guided fresh graduates towards International Coaching Federation accreditation.

Olivia Al Farsi, Vice President People and Culture said: ‘”Coaching is vital in Oman’s evolving landscape and a crucial skill. At OQ, we invest in cultivating coaching expertise to reshape our culture, elevate business results, and strengthen adaptability. This milestone prompts us to extend coaching to teams for stronger internal and external ties, and to individuals to enhance career and family wellbeing.”

SRMG Ventures Bets on Anghami to Lead Music Streaming in MENA

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Sahfy Sahfy
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SRMG Ventures Bets on Anghami to Lead Music Streaming in MENA
SRMG Ventures Bets on Anghami to Lead Music Streaming in MENA

SRMG Ventures, the venture capital arm of SRMG, has today announced a $5 million investment in Anghami, the leading music and entertainment streaming platform in the MENA region. An investment by the MENA region’s largest integrated media group in Anghami, marks a significant development in the region’s rising music and audio industry. SRMG Ventures will bolster Anghami’s growth trajectory through its extensive media reach, content library, and portfolio of leading assets in audio/podcasts and enable it to capture a larger share in the fast-growing sector that is forecasted to reach $700m in 2026.

Anghami has established itself as the region’s leading music and entertainment streaming platform. With 120 million registered users (a significant increase from 75 million users in 2021), a substantial subscriber base and a catalogue comprising of more than 100 million songs, Anghami is the go-to platform for Arabic and International music, podcasts and entertainment.

Since launching in 2012, Anghami has broadened its portfolio beyond music streaming. It now provides in-house productions, branded music and video content, concerts and live events, a record label for Arab artists, podcasts, a music lounge with live entertainment, exclusive and original Arabic content, along with its renowned music streaming service.

SRMG Ventures’ investment in Anghami reflects its unique and leading position in the promising music and audio segment of the media industry. The MENA music and audio industry is forecasted to grow at a CAGR of 11%, outpacing the global market. This rapid growth, further highlighted by the rising prominence of Arab stars and local talent, coupled with the strategic presence of international labels including Warner, Universal, and Sony, is cementing MENA’s position as a pivotal player in the global music landscape.

Anghami’s breadth of data and its leading distribution capabilities present compelling collaboration opportunities with SRMG. Billboard Arabia, the latest addition to SRMG’s media portfolio, will introduce several charts using data from the leading digital streaming platforms – including Anghami – to highlight the artists and songs driving the global and regional music industry. In addition, Thmanyah, Independent Arabia, and Hia, all notable audio content creator outlets under SRMG, are already present within the Anghami platform, setting the stage for continued collaboration between SRMG and Anghami.

Jomana R. Al-Rashid, CEO of SRMG, said: “Audio consumption is growing fast in the MENA region. In 2022 alone, the market size for audio increased by 35%. This demand coupled with the commercial opportunity it presents makes digital audio and media one of the investment priorities for SRMG Ventures. These opportunities are also demonstrative of our strategy and commitment to support and develop the media ecosystem, act as a catalyst for further growth and enhancement of SRMG’s offerings and services. Today, Anghami has been able to secure one of the largest user bases in audio streaming in the region, and has developed an impressive platform with extensive technological capabilities – a testament to the leadership of founders Elie Habib and Eddy Maroun. We’re looking forward to working closely with the Anghami team to realize our shared vision of elevating the region’s media and entertainment industry.”

Eddy Maroun, Co-founder & CEO of Anghami, said: “This investment from SRMG Ventures marks a significant milestone for Anghami. We have continually evolved to meet our audience’s changing demands and support the region’s rising entertainment and music industry. Working together with SRMG, a leader and innovator in regional media, Anghami will be able to unlock further opportunities to champion the music ecosystem. This partnership will propel regional artists to greater heights, expand their global reach, and create new touchpoints for our users and artists alike.”

SRMG Ventures’ investment in Anghami aligns with the Group’s strategy to invest in businesses and areas of commercial growth, focusing on media creators, immersive and interactive entertainment, and digital media platforms and enablers that are at the forefront of technological and creative innovation. SRMG Ventures inaugural investments included Telfaz11, a Saudi based creative media studio, and Vuz, a leading VR-enabled social media application. As part of the investment agreement, SRMG will be invited to join Anghami’s board of directors and will have the opportunity to increase its investment in Anghami in the future.

Ajman Tourism Inks MoU with City University Ajman for Enhanced Cooperation & Experience Exchange

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Sahfy Sahfy
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Ajman Tourism Inks MoU with City University Ajman for Enhanced Cooperation & Experience Exchange
Ajman Tourism Inks MoU with City University Ajman for Enhanced Cooperation & Experience Exchange

The Ajman Department of Tourism Development – ADTD signed a memorandum of understanding with City University Ajman which aims to establish a partnership between the two parties to enhance cooperation, knowledge and expertise exchange in community services and institutional experiences.

The memorandum of understanding was signed by His Excellency Mahmood Khaleel Alhashmi, Director General of the Ajman Department of Tourism Development, and Mr Imran Khan, President of City University Ajman.

As per the agreement, City University Ajman will provide partial scholarships for the employees of the ADTA and their families who will be nominated according to agreed criteria. In return Ajman Tourism will facilitate volunteer work for the university students and allow them to participate in joint events and programs. It also includes strengthening partnerships with strategic partners of both parties and mutual promotion of activities and events.

As part of the agreement, regular meetings will be held to review the best practices of both parties in all work fields, experience and knowledge exchange through field and academic training related to skills development, and specialized training programs.

The collaboration also includes cooperation in innovation activities and entrepreneurship to achieve common goals at the local and global levels in various areas including participation and exchange of experiences related to creativity and innovation which contributes to accomplishing common strategic goals, creating mechanisms to operate innovation labs as per international best practices, and cooperation in evaluating mutual creative and innovative ideas.

In this regard, His Excellency Mahmood Khaleel Alhashmi, Director General of the Ajman Department of Tourism Development stated, “Signing this agreement with City University Ajman comes as part of the department’s endeavour to enhance cooperation and establish partnerships with prominent entities in the emirate such as City University Ajman which is a renowned higher education provider offering outstanding academic programs for students.

Mr. Imran Khan, President of City University Ajman said, “We are thrilled to join efforts with Ajman Tourism to reinforce the position of the emirate and highlight its excellent academic programs that meet market needs and contribute to the advancement of the society. We look forward to establishing a fruitful partnership with Ajman Tourism, strengthening joint efforts and experience exchange at all levels.”

President El-Sisi Meets Prime Minister, Minister of Agriculture and Land Reclamation

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Sahfy Sahfy
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President El-Sisi Meets Prime Minister, Minister of Agriculture and Land Reclamation
President El-Sisi Meets Prime Minister, Minister of Agriculture and Land Reclamation

Today, President Abdel Fattah El-Sisi met with Prime Minister Dr. Mostafa Madbuly and Minister of Agriculture and Land Reclamation Mr. El Sayed el Quseir.

The Spokesman for the Presidency, Counselor Ahmed Fahmy, said the meeting reviewed the national agricultural projects nationwide, in light of the steady progress achieved in this vital sector over the past years, within the State’s plan to bring about a radical change in Egypt’s agricultural map through massive and unprecedented efforts to reclaim millions of acres across Egypt over a short period of time. More than 3 million new acres will be added soon to agricultural land, which is more than one third of the entire agricultural land area in the country.

President El-Sisi was briefed on efforts to increase and improve the productivity of the acres in Egypt in terms of quantity and type, which led to Egypt’s progress in the global ranking of acre productivity into the top five in many crops, including rice, maize and wheat. The President gave directives to continue working on the governance of fertilizer use and the operationalization of modern water-saving irrigation systems, as well as facilitating the use of mechanization in agriculture to reduce loss during harvesting, in addition to the important role of agricultural scientific research in this regard. The President reviewed the growth rates of Egypt’s fresh and manufactured agricultural exports, which achieved over $ 7.5 billion in 2022. The President gave directives to continue intensive efforts in terms of providing full support to farmers, continuously working to improve the quality, as well as preserving and enhancing the reputation of the Egyptian product globally, by adhering to international standards in this regard.

President El-Sisi stressed that the significant efforts to develop the agricultural sector and to restore Egypt’s historical status in this field are part of comprehensive development efforts, integrating all economic sectors, such as agriculture, industry, infrastructure, roads and facilities, transport and trade, to achieve the highest value added for Egyptian products, to help Egypt  enhance food security, in light of the current international conditions, in addition to advancing all components of the national economy , especially providing job opportunities, increasing exports and limiting imports, to improve the standard of living of citizens.

Valu Transforms Into a Comprehensive Financial Technology Institution

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Sahfy Sahfy
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ڤاليو تتحول إلى مؤسسة شاملة في مجال تكنولوجيا الخدمات المالية
ڤاليو تتحول إلى مؤسسة شاملة في مجال تكنولوجيا الخدمات المالية

Valu, MENA’s leading financial technology company, announced today a strategic rebranding, marking a pivotal shift in its brand architecture. Today, Valu is no longer just a Buy-Now, Pay-Later (BNPL) platform nor a consumer finance player only; it has evolved to become a universal financial technology powerhouse with a comprehensive suite of financial solutions. The rebranding is a milestone in the company’s journey of growth and transformation as it represents its commitment to better serving its clients and expanding its reach in the dynamic world of financial technology.

 

Valu has consistently been at the forefront of innovation and a game-changer in the fintech space since its inception as the first BNPL platform in the MENA region. It now hosts a universe of cutting-edge financial solutions and services that empower individuals to pursue their aspirations and improve their quality of life. As the fintech industry evolves rapidly, Valu recognizes the importance of adapting to meet clients’ changing needs and demands. This strategic rebranding not only reflects Valu’s growth but underscores the company’s dedication to innovation, efficiency, and excellence in serving a broader range of clients across various sectors.

 

Under the new brand identity, Valu has refreshed its logo, application, and overall visual identity to represent the company in a more modern and dynamic way. The new brand identity embodies the company’s core values of responsibility, innovation, prioritizing people, and agility, while the revamped application offers an expanded range of services and solutions. The application’s new design highlights Valu’s enhanced capabilities and investments in cutting-edge technologies through its ongoing commitment to innovation and to providing clients with unparalleled access to financial solutions through a universal platform.

 

Walid Hassouna, CEO of Valu, commented on the news: “One of the key drivers behind our strategic rebranding is our unwavering focus on client centricity. We developed our offerings to provide clients with everything they need through one platform. Our expanded suite of fully digitalized products and services will empower individuals and businesses and foster financial inclusion. Valu today is no longer a consumer finance company; we now offer an instant cash redemption program, savings solutions, investment products, B2B services platform, and more. As such, it was about time for Valu to undergo a brand restructuring to reflect the breadth and depth of its brand portfolio as well as its current position as a universal financial technology powerhouse. The rebranding further encompasses an intensified effort to foster strategic partnerships and collaborations with industry leaders, global brands, and market innovators to accelerate the development and deployment of ground-breaking solutions that will shape the future of the fintech industry.”

 

The newly optimized structure of the brands under the umbrella of Valu will be as follows:

 

  • U – BNPL platform offering financial program up to 60 months with the following programs:
    • Sha2labaz: An instant cash-redemption program
    • Ma3ak: A program targeting university students between 18 – 23 years of age
    • Family: A program qualifying clients’ first-degree relatives over 16 years of age to acquire a borrowing limit
    • Ulter: A special program that enables customers to make high-value purchases of up to EGP 15 million
  • Business – A B2B services platform offering a corporate HR employee management system, benefits, payroll cards, and other financial services (formerly Paynas, which was acquired by Valu in 2022).
  • Akeed – Virtual Lease to Own Product (VLTO), a save-to-buy platform embedded within Valu’s universe that allows clients to save and gain returns.
  • Flip – Allows customers to send and receive funds. It is the most widely accepted gift card in Egypt.
  • Invest – An investment platform that will allow customers to make strategic investments in various funds, including the current AZ Valu Fund, a money-market fund launched in partnership with Azimut providing people with a flexible and convenient investment solution and EFG Hermes ONE, a state-of-the-art online securities trading platform that provides users with one-click access to global markets anytime, anywhere.

 

The strategic rebranding coincides with the company’s continuous commitment to strengthening its team, expanding its presence, and driving positive change within the fintech ecosystem. Its dedicated professionals remain focused on fostering lasting relationships with their clients, understanding their unique goals, and providing tailored solutions that drive measurable results.

 

Key Valu Milestones to Date

 

  • Forbes Middle East listed Valu as one of the ‘Top Fintech companies’ in 2021, 2022 and 2023
  • Named ‘Fintech Company of the Year’ at the Gulf Business Tech Awards in 2021 and 2022
  • Entrepreneur Middle East awarded Valu 3 times at the ‘Leaders in Fintech Awards 2021’ and ‘Leaders in Fintech Awards 2022’ – as Best BNPL platform, and at the ‘Tech Innovation Awards 2021’ as Fintech Company of the Year
  • Awarded ‘Fintech Innovation of the Year’ at the Seamless Awards in 2019
  • Recognized as the ‘Best Fintech Startup in North Africa: BNPL Service’ at the Africa Bank 4.0 Awards in 2023
  • Honored as the ‘Most Innovative Fintech Company’ by the Global Brands Magazine 2023
  • Won the title of ‘Best Ramadan Comedy Ad’ at the Creative Industry Summit in 2023 and received the accolade for ‘Best Marketing Campaign’ at the International Finance Awards 2023
  • Almost 3 million transactions with over 3 million app downloads across the board
  • More than 5,500 points of sale and service providers over 1,500+ e-commerce platforms
  • Over 1 million active Valu clients across the board
  • Total gross merchandise value of EGP 5.8 billion as of 2022 on the BNPL platform, U — a twofold increase from the EGP 2.4 billion booked in 2021
  • Amazon acquired USD 10 million in EFG Holding GDRs with the option to place that investment into Valu in the future, translating into 4.255% of Valu’s issued share capital
  • Fully acquired Paynas in 2022 — a full-fledged employee management and benefits company that offers services to MSMEs. Paynas is currently rebranded to Valu
  • Valu also acquired a minority stake in Kiwe — the first social payment app for youth in Egypt
  • Valu has a 2% indirect stake in Paytabs Egypt
  • Valu acquired a minor stake in Hoods, the Middle East’s leading live commerce platform
  • Valu owns a 10% stake in EFG EV Fintech, EFG Holding’s accelerator and incubator

Orascom Development Egypt: Gouna masterplan amendments add value

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Sahfy Sahfy
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Orascom Development Egypt Gouna masterplan amendments add value
Orascom Development Egypt Gouna masterplan amendments add value

In a recent report, HC Brokerage issued an update note about Egypt’s real-estate sector, through shedding the light on Orascom Development Egypt where they expect ODE to offset potential FX losses.

اتش سي: أوراسكوم للتنمية مصر تتمتع بموقع متميز وخطط نمو قوية

 Mariam Elsaadany, real estate analyst at HC Brokerage commented: “Gouna masterplan amendments should pave the way for significant value unlocking: In February 2023, Orascom Development Egypt (ODE) signed a new masterplan agreement with the Egyptian authorities, including the following terms: (1) approval of a new master plan for the remaining land bank in El Gouna and 1,000 hotel rooms at the company’s discretion, (2) granting ODE the right to connect its lagoon system to the sea via two new water canals to improve water quality in existing and future projects, (3) reducing the shoreline setback for the remaining land bank from 200 meters to 105 meters, which allows ODE to make commercial use of the most prime land of the destination, and (4) amending the transfer fee payable by ODE on real estate sales for the remaining land bank, which is fixed for ten years and will be paid in advance over 15 years, and (5) granting environmental permits for 24 projects in Gouna and exonerating ODE from all charges and settlement of all disputes with the Environment Protection Agency (EPA). The amendments remove the overhang on the stock and allow significant value extraction from its 16.6m sqm, which we had previously valued at an NPV of only EGP209/sqm, compared to EGP402/sqm currently. Moreover, ODE’s recurring income business benefitted from a strong touristic season, contributing c32% to 1Q23 revenue, up from c28% in 1Q22, and c29% to EBITDA, up from c20% in 1Q22. Nonetheless, ODE’s USD and EUR debt balance, representing c73% of total debt, exposes it to significant FX losses during EGP devaluations, despite recording higher hospitality revenue in EGP terms helped by the EGP devaluation. Accordingly, we expect more one-off transactions, including land sales and non-core asset sales, to offset possible FX losses and margin compression from the real estate business, such as the company’s sale of an EGP390m high-margin land plot in Gouna in 3Q23.”

Mariam concluded: “We expect accelerated collections on shorter payment plans in first-home projects and expect reduced risk of margin erosion due to core and shell offerings: We assume substantial increases in ODE’s real estate selling prices, hospitality average room rates (ARRs), and rental prices to preserve its profitability amid inflationary pressures. Annual urban headline inflation averaged 31.6% in 1H23 compared to a c59% increase in residential selling price increase and a c86% increase in hospitality ARR over the same period, demonstrating the company’s efforts to preserve its margins. Margin compression for ODE is limited during the coming two years, in our view, due to (1) the company’s strategy to raise selling prices and (2) expected one-off sales going forward, and (3) more core and shell offerings allow it to avoid margin erosion on finishing materials. For the real estate business, we expect a drop in sales volumes over 2023—2024e, in line with management’s strategy to hold onto inventory, where it opts to reduce the number of units launched to the market during uncertain times and offers them when the profitability outlook is higher. Our total receivables estimates over our forecast period stand at EGP151bn, including the company’s share of O West receivables. Our CAPEX estimate is EGP90.2bn for the forecast period, which implies an average margin of c40% for the company’s residential business. Over our forecast period, we increased hospitality occupancy rates to range from c70%–80% in Gouna and increased ARRs at an average of c10% annually. We did not include in our estimates any of the 1,000 planned hotel rooms in Gouna, and it is worth noting that the company is not obliged to build these rooms and can abandon the plan if it chooses to. Our hospitality estimate yields a c28% 4-year CAGR in hospitality revenue, and we expect the company’s hospitality margin to average c30% over our 2H23–2027e forecast period. We expect ODE’s 2023e net debt-to-equity to drop to 0.46x from 1.10x in 2022 as its cash balance grows on the back of strong collections. It is worth noting that the company has reduced payment plans in O West, which we believe affirms strong demand.  We also highlight the increase in the company’s interest expense, especially on the EUR and USD debt, given that c73% of its debt is in these currencies.”

Nasdaq White Paper Highlights Opportunities for Carbon Markets in Middle East and North Africa

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Sahfy Sahfy
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Nasdaq White Paper Highlights Opportunities for Carbon Markets in Middle East and North Africa
Nasdaq White Paper Highlights Opportunities for Carbon Markets in Middle East and North Africa

A new white paper published by Nasdaq today explores the challenges and opportunities for developing carbon markets in the Middle East and North Africa (MENA) region.

The report, titled “The Carbon Market Opportunity in Middle East & North Africa,” notes that the MENA region is particularly vulnerable to the impacts of climate change, making it an ideal place to grow and mature carbon markets.

The report also highlights the region’s strong capital markets, which have evolved greatly over the past 20 years and are now well-positioned to support decarbonization efforts.

“The development and growth of sophisticated capital markets in MENA over the past 20 years means that the region is well-placed to support decarbonization through channeling capital to carbon projects/initiatives,” the report states.

“Establishing voluntary carbon markets (VCMs) could further help incentivize businesses to think long term and embrace the transition to a net-zero economy.”

The report identifies several challenges that need to be overcome in order to develop carbon markets in MENA, including:

Inconsistency in how credits are defined, measured and supplied
A lack of cohesive trading and post-trade infrastructure
Regulatory uncertainty
The report also outlines a number of steps that need to be taken to address these challenges, including:

Building awareness and understanding of carbon markets
Standardizing carbon credit definitions and measurement methods
Developing a strong trading and post-trade infrastructure
Creating a clear regulatory framework
“Entities across the MENA capital markets spectrum must tackle the lack of awareness, standardization, transparency and regulatory alignment before they can open the door to capital flows and meaningful climate change mitigation,” the report states.

“Building a strong infrastructure for developing, verifying, trading, registering and retiring these assets will be essential to those efforts and the realization of benefits by countries, participants and populaces.”

The report concludes by highlighting the potential benefits of developing carbon markets in MENA, including:

Increased investment in low-carbon projects
Job creation
Improved air quality
Reduced greenhouse gas emissions
“The development of carbon markets in MENA has the potential to deliver significant benefits to the region,” the report states. “By overcoming the challenges and taking the necessary steps, MENA can become a leader in the global fight against climate change.”

Sadu Capital’s VC fund picks Apex Group services

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Sahfy Sahfy
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Apex Group Ltd. (“Apex Group” or “The Group”), a global financial services provider, today announces its appointment by Sadu Capital (“Sadu”) to provide Fund Administration and AML solutions.

 Sadu Capital is a venture capital firm that invests in private technology startups through equity ownership. Sadu’s latest fund currently focuses on investing in early-stage startups (pre-seed, seed and Series A) that are based in the Middle East & North Africa region (“MENA”).

The drive for economic diversification and state-backed initiatives continue to fuel the growth of Middle East’s venture capital industry. Despite a global economic slowdown, recent MAGNiTT data shows that MENA-based startups continued to significant interest from investors in the first half of 2023 as funding levels reached $1,075m across 193 deals in the MENA region.

Apex Group will support Sadu Capital’s Cayman domiciled fund with technology-enabled Fund Administration and AML Officer services. Fund Administration is at the core of Apex Group’s single-source solution, delivering timely, accurate and independent services, underpinned by market leading technology platforms.

In addition, Apex Group’s comprehensive AML services and outsourced officers coordinate proactive solutions to enable clients to understand and mitigate AML risks, as well as identifying early opportunities that arise from evolving regulation and new market trends.

This appointment, by a reputable VC firm such as Sadu, demonstrates the application of Apex Group’s single-source solution, delivering timely, accurate and independent services to meet client needs, streamline their vendor relationships and deliver time and cost economies. According to a Total Economic Impact (TEI) report by Forrester Consulting, clients of Apex Group’s single-source solution achieve, on average, cost benefits of $5.39m, with a net present value of $2.75m over a three-year period.

Salem Washeely, Managing Director, Sadu Capital adds: “As a leading venture capital firm in the MENA region, Sadu is pleased to appoint Apex Group to provide Fund Administration and AML solutions to our early-stage VC fund. Sadu, from its inception, planned to build an outstanding relationship with its investors and LPs including transparent reporting and seamless onboarding process among many other exceptional experiences. To achieve that, Sadu looked for a capable firm with global presence to rely on and Apex Group was the clear choice. Their single-source solution stood out for us, as it enables us to access all of the services we need across multiple jurisdictions, via one convenient relationship, therefore removing the complexity and inefficiency of multiple service provider relationships. We have been particularly impressed by the knowledge and responsiveness of Apex Group’s experienced local team.”

 Naveed Zamir, Country Head, Dubai at Apex Group comments: “Global venture capital continues to be an attractive proposition for Middle East investors, with the local ecosystem going from strength to strength. We look forward to supporting Sadu Capital’s entrepreneurial team with our solutions which deliver significant operational, resource and cost efficiency, allowing them to focus on identifying and investing in, high growth businesses in the region.

CBE rejects media reports on United Bank sale

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Sahfy Sahfy
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In light of the media reports circulating the sale of the United Bank, the Central Bank of Egypt (CBE) strongly rejects the allegations about the start of due diligence process, saying the sale process is underway according to a predetermined schedule.

In a statement on Monday August 21, 2023, the CBE said the due diligence process for the United Bank with interested buyers will start by the end of September 2023.

The central bank confirms interest from a number of international financial institutions, and that it would continue to provide updates on the sale process in a timely manner.

The United Bank occupies a distinguished position among Egyptian banks for demonstrating sustainable growth, providing banking services through highly-qualified calibers, and its adherence to sound governance rules and international best practices in line with applicable rules and laws. With regard to the diversity of its products and its customer base, the United Bank provides banking services to its customers from various sectors, which include individuals, companies and small and medium enterprises, in addition to Islamic banking services and others.

The United Bank operates through a wide network of branches amounting to 68 branches in addition to its digital channels, 225 ATMs, and 1,723 employees.  In terms of financial solvency and its financial position data as of December 2022, the total assets of the United Bank amounted to 85 billion Egyptian pounds.

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