Middle East private equity and venture capital investments surge in 3Q 2024

Middle East private equity and venture capital investments hit USD 2.3 bn in 3Q 2024 surpassing the previous quarter’s USD 2.2 bn, according to S&P Global Market Intelligence data. The third-quarter figure is also nearly double the USD 1.2 bn in PE and VC investments across the region in 1Q 2024. However, 2024 is expected to fall short of last year’s USD 11.6 bn, due to ongoing regional conflicts, S&P said.

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Where the money has been flowing: Israel led the region with 150 transactions, followed by the UAE (70), and Saudi Arabia (47).

The UAE locked in two of the largest agreements this year: Lunate and Olayan Financing’s USD 735 mn acquisition of a 49% stake in ICD Brookfield Place. Additionally, Silver Rock Group invested USD 325 mn in UAE-based generative AI firm Pathfinder Global.

Also on the list of the top 10 investments of the year: Apollo Global Management’s USD 600 mn investment in Vale Oman Distribution Center (Oman); Gulf Islamic Investment’s USD 160 mn investment in Abeer Medical (Saudi Arabia); MNT-Halan’s USD 157.5 mn funding round (Egypt); and e-commerce app Salla’s USD 130 mn pre-IPO round (Saudi Arabia).

The standout sectors: Technology, media, and telecommunications led with USD 2.2 bn in investments across 124 agreements, followed by real estate (USD 752 mn) and industrial sectors (USD 741 mn).

Renewable energy investments have particularly slowed as regional instability and challenges in green hydrogen and carbon capture projects deter investors. “[The] future of hydrogen is limited by time and cost because its main application is in hard-to-abate industries like aviation, shipping and manufacturing of steel and cement,” Ian Palmer, an oilfield engineer and partner at Higgs-Palmer Technologies, wrote in an email to Market Intelligence.

MARKETS THIS MORNING-

Asian markets are mixed this morning as investors digest a weekend briefing from China’s finance ministry at which officials said they would “significantly increase” government debt issuances. Finance Minister Lan Foan was light on detail that investors hoped would make it easier to quantify how Beijing planned to bolster its growth outlook.

Futures suggest US equities may come under a bit of selling pressure at the opening bell, as will the FTSE 100 and Euro Stoxx 50. The big catalyst for share movement this week: Sentiment attendant to earnings season…

THE CLOSING BELL: TADAWUL-

The TASI rose 0.6% yesterday on turnover of SAR 5.7 bn. The index is up 0.9% YTD.

In the green: Cenomi Retail (+10.0%), DWF (+9.9%) and Batic (+9.4%).

In the red: Al Baha (-9.5%), Al Majed Oud (-6.0%) and Anaam Holding (-2.2%).

THE CLOSING BELL: NOMU-

The NomuC rose 2.4% yesterday on turnover of SAR 57.3 mn. The index is up +2.4% YTD.

In the green: Burgerizzr (+30.0%), Raoom (+13.6%) and Aictec (+11.0%).

In the red: Tharwah (-5.7%), Amwaj International (-5.6%) and Riyadh Steel (-4.8%)

CORPORATE ACTIONS-

Molan Steel’s board of directors recommended a SAR 26.6 mn capital hike through a rights issuance to acquire assets, expand operations, and fund working capital, according to a disclosure to Tadawul. The move is still pending shareholder and regulatory approval. The board also proposed the transfer of SAR 4.7 mn in share premiums to offset accumulated losses of SAR 3.7 mn, representing 14% of the company’s capital, it said in a separate disclosure.