Bahrain’s outlook cut to negative by Fitch amid rising debt /node/2591420/business-economy
Bahrain’s outlook cut to negative by Fitch amid rising debt
Despite Bahrain’s fiscal weaknesses, strong financial backing from GCC nations — particularly Saudi Arabia and the UAE — remains a stabilizing factor. Shutterstock
Bahrain’s outlook cut to negative by Fitch amid rising debt
Updated 49 min 55 sec ago
Miguel Hadchity
RIYADH: Bahrain’s economic outlook has been downgraded to negative from stable by Fitch Ratings, which affirmed the country’s B+ rating due to mounting fiscal pressures, high debt levels, and delayed economic reforms.
This makes Bahrain the only Gulf Cooperation Council nation with this rating and a negative outlook from the agency.
Fitch highlighted Bahrain’s persistent fiscal deficits and escalating interest burdens as primary concerns. Government debt is projected to rise from 130 percent of GDP in 2024 to 136 percent by 2026, significantly surpassing the 54 percent median for sovereigns in the B rating category.
“The ‘B+’ rating reflects weak public finances, with debt to gross domestic product ratio more than double the ‘B’ category median, high fiscal dependence on oil revenue, low levels of FX reserves, which weigh on the ratings, but exceptionally strong support from its GCC partners, notably Saudi Arabia and the UAE,” Fitch said.
The nation’s budget deficit is expected to remain substantial, nearing 9 percent of GDP in both 2025 and 2026, despite some improvements in the non-oil sector.
While Bahrain continues to rely heavily on hydrocarbon revenues, Fitch expects oil-related income to remain stable, supported by increased refinery output at Bapco Energies.
However, with oil prices forecasted to decline — from $80 per barrel in 2024 to $70 in 2025 and $65 in 2026 — non-oil revenue is becoming increasingly crucial. “The improvement will mostly be propelled by the tax on multinational companies introduced in January 2025,” said the report.
DMTT collection will begin in the third quarter of 2025 and could generate about 0.6 percent of GDP in revenue on a full-year basis, according to the agency. “Our base case does not include the introduction of corporate income tax or a rise in VAT during this budget cycle,” it added.
Budget discussions for 2025 and 2026 are ongoing between Bahrain’s government and parliament. In the interim, spending is capped at one-twelfth of the 2024 budget per month, excluding inflation adjustments.
Fitch anticipates the adoption of a new budget by mid-2025, with potential savings from subsidy reforms transitioning to a means-tested cash transfer system.
Despite Bahrain’s fiscal weaknesses, strong financial backing from GCC nations — particularly Saudi Arabia and the UAE — remains a stabilizing factor.
The agency noted that Bahrain benefits from low-cost funding via GCC-related entities, private placements, and international debt markets. “In Fitch’s view, absent strong reforms, Bahrain could require a substantial increase in GCC concessional funding to stabilize and reduce debt. Our base case is that Bahrain would be able to obtain this funding from GCC partners,” said the report.
Bahrain’s foreign exchange reserves remain low, at approximately $4.8 billion in 2024, covering just 1.3 months of current account outflows — far below the ‘B’ category median of 4.5 months. The country remains dependent on external funding and market access to maintain its currency peg and financial stability.
Fitch outlined key factors that could lead to a downgrade, including a failure to stabilize the debt-to-GDP ratio or a reduction in GCC financial support. Conversely, the outlook could return to stable if Bahrain demonstrates meaningful fiscal consolidation and stabilizes government debt.
Saudi IT firm MIS sells investment in OpenAI, achieves $3.4m gain
Impact of sale will be reflected in the first quarter of this year
Updated 23 min 9 sec ago
Nirmal Narayanan
RIYADH: Al Moammar Information Systems Co. has announced the sale of its entire investment in OpenAI, a US-based artificial intelligence research organization, for $8.4 million.
According to a Tadawul statement, the sale has resulted in a positive financial impact of $3.4 million, as the cost price of the investment was $5 million.
In January, MIS invested $5 million in OpenAI after the Tadawul-listed firm approved the allocation of $10.7 million to set up a portfolio through self-financing to invest in international AI companies to take advantage of the growth opportunities in the field.
In the latest statement, MIS said the impact of the sale will be reflected in the first quarter of this year.
Established in 2015, OpenAI is globally recognized for developing ChatGPT, a generative artificial intelligence chatbot.
Earlier this month, MIS announced that it signed a memorandum of understanding with Saudi Fransi Capital to explore and evaluate the feasibility of establishing an AI-powered cloud services business in the Kingdom.
At that time, MIS said the new project aims to offer graphics processing unit-based computing solutions to support next-generation AI applications, machine learning, and high-performance computing in Saudi Arabia.
In February, MIS signed a deal valued at SR227.8 million ($60.75 million) with the Saudi Data and AI Authority to carry out the expansion project for the Naqaa Data Center.
In a Tadawul statement, the company said the project includes expanding the Naqaa Data Center in Riyadh to meet the growing demand for hosting, as well as expanding the capacity of the data center in digital technologies.
MIS also procured a contract from Saudi Arabia’s Ministry of Health in January, valued at SR70.06 million to operate and maintain the digital infrastructure of 38 hospitals across the Kingdom’s southern and western provinces.
According to a Tadawul statement, the scope of the project includes the maintenance and operation of computers, printers, scanners, and operating software.
It also includes supervising servers, information network devices, wireless networks, information security, communication systems, data centers, and their associated components.
In November, MIS announced that its net profit for the first nine months of 2024 reached SR121.56 million, representing a rise of 356 percent compared to the same period in 2023.
PIF’s SALIC to boost stake in Olam Agri to over 80% in $1.78bn deal
Updated 24 February 2025
Nirmal Narayanan
RIYADH: Saudi Agricultural and Livestock Investment Co. has struck a $1.78 billion deal for a controlling stake in Singapore-based Olam Agri Holdings.
The agreement will raise SALIC’s stake from 35.43 percent to 80.01 percent, with an option to acquire the remaining 19.99 percent within three years, the company said in a statement, adding that the transaction is subject to regulatory approvals.
The move aligns with the Saudi firm’s strategy to strengthen global food supply chains, reflecting its 2009 mandate as a Public Investment Fund-owned entity investing in agriculture and livestock to bolster the Kingdom’s food security.
“This success has reinforced our confidence in our investment vision and our pursuit of sustainable growth,” said Sulaiman Al-Rumaih, group CEO of SALIC.
“It aligns perfectly with SALIC’s strategy of backing innovative, high-potential companies that address future food security needs through integrated supply chains both at home and abroad,” he added.
The company has a track record of investing across the global agri-food supply chain to improve access to essential foods, with current investments spanning five continents, seven countries, and 16 food commodities.
Al-Rumaih added that the investment would enable Olam Agri to leverage SALIC’s extensive global network to expand its market presence.
“This investment not only reinforces our leadership in the global grains sector but will ultimately benefit consumers through enhanced food production and more efficient distribution,” he said.
The statement added that the increased stake in Olam Agri Holdings is a key element of SALIC’s international strategy, aimed at ensuring the availability of essential goods and enhancing sustainability through investment diversification and supply chain integration.
Sunny Verghese, CEO of Olam Agri, said the company’s partnership with SALIC, which began in 2022, has unlocked new avenues for growth.
“With its strategic mandate as a global agrifoods investor and related complementary strengths, SALIC and Olam Agri share the same vision and focus on sustainable sourcing and commitment to meet the rising demand for food, feed and fiber. Importantly, this transaction is transformative for Olam Agri,” said Verghese.
He added that the deal will unlock significant value for Olam Group shareholders.
In a separate statement, Olam Agri said the divestment of its entire stake to SALIC will raise total proceeds of $3.9 billion for Olam Group, adding $2.7 billion to its equity reserves.
Olam Agri has a strong presence in grains and oilseeds, animal feed and proteins, edible oils, rice, and cotton, according to its website.
Oil Updates — prices slip as Kurdistan export resumption looms
Updated 24 February 2025
Reuters
NEW DELHI: Oil prices slipped in Asia on Monday, extending losses from last week, on the prospect of a resumption of exports from Kurdistan’s oilfields, while investors awaited clarity on talks to resolve Russia’s war on Ukraine.
Brent futures were down 14 cents, or 0.2 percent, at $74.29 barrel, as of 7:41 a.m. Saudi time, while US West Texas Intermediate crude futures lost 22 cents, or 0.3 percent, to $70.18 a barrel.
Both Brent and WTI dropped by more than $2 on Friday, posting weekly declines of 0.4 percent and 0.5 percent, respectively.
“The downward spiral in crude oil prices is driven by pressure from the US president on Iraq to resume oil exports from Kurdistan oilfields, which could improve supply flows in global oil markets after nearly two years of disruption,” said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet.
Iraq will export 185,000 barrels per day from Kurdistan’s oilfields through the Iraq-Turkiye pipeline once oil shipments resume, an Iraqi oil ministry official said on Sunday.
Iraq’s oil ministry said all procedures had been completed to allow the resumption of exports through the Iraq-Turkiye pipeline, potentially resolving a dispute that has disrupted crude flows.
All eyes remain on the progress of talks to end Russia’s war on Ukraine, which enters its fourth year on Monday. Officials said on Sunday that EU leaders will meet for an extraordinary summit on March 6 to discuss additional support for Ukraine and European security guarantees.
This comes after US President Donald Trump initiated talks with Russia on ending the war but without inviting Ukraine or the EU to the table. A senior Russian diplomat said Russian and US teams plan to meet this week to discuss improving relations.
Sanctions by the US and EU on Russian oil exports have curbed its shipments and disrupted seaborne oil supply flows. Global energy supplies are expected to increase if a peace deal is reached and sanctions are lifted.
Oil prices will be influenced by geopolitical developments and US policy announcements in the short term, Sachdeva said.
In the Middle East, a Hamas official said talks with Israel through mediators on further steps in a ceasefire agreement are conditional on Palestinian prisoners being released as agreed.
Israel and Hamas have frequently accused each other of violations since the ceasefire started on January 19, but so far it has continued to hold.
ISLAMABAD: Pakistan and the International Monetary Fund mission will open discussions from today, Monday, for around $1 billion in climate financing for Pakistan, an adviser to the country’s finance minister said.
Khurram Schehzad told Reuters last week the IMF mission will visit from February 24-28 for a “review and discussion” of climate resilience funding.
The disbursement will take place under the Fund’s Resilience and Sustainability Trust, created in 2022 to provide long-term concessional cash for climate-related spending, such as adaptation and transitioning to cleaner energy.
Pakistan made a formal request in October last year for around $1 billion in funding from the IMF under the trust, to address the nation’s vulnerability to climate change.
Pakistan’s Geo News TV had earlier reported that the IMF would issue the $1 billion for climate financing this week.
The country’s economy is on a long path to recovery after being stabilized under a $7 billion IMF Extended Fund Facility it secured late last year.
“Another IMF mission will arrive in Pakistan in the first week of March for a first review of that facility,” Schehzad said.
The Global Climate Risk Index places Pakistan among the countries most vulnerable to climate change.
Floods in 2022, which scientists said were aggravated by global warming, affected at least 33 million people and killed more than 1,700. The country’s economic struggles and high debt burden impinged its ability to respond to the disaster.
MENA startups secure new investments, acquisitions across fintech, AI and e-commerce
Updated 23 February 2025
NOUR EL-SHAERI
RIYADH: Startups across the Middle East and North Africa continue to attract significant investment, with funding rounds and acquisitions shaping the region’s growing tech ecosystem.
From artificial intelligence infrastructure and fintech to automotive SaaS and second-hand fashion, companies are securing capital to expand operations, enhance technology, and enter new markets.
Among the latest developments, UK-based AI cloud infrastructure provider Ori has secured a strategic investment from Wa’ed Ventures, the venture capital arm of Saudi Aramco, as it prepares for expansion in the Middle East.
The financial terms of the investment were not disclosed. The deal follows Ori’s recent deployment of Nvidia’s H200 chips, positioning the company as a key AI infrastructure provider in the UK, the Middle East, and beyond.
Ori, which enables large-scale AI model training and deployment, currently operates in over 20 locations across North America and Europe.
Mahdi Yahya, CEO of Ori. Supplied
With the backing of Wa’ed Ventures, Ori plans to localize its operations in Saudi Arabia, launching a regional subsidiary in Riyadh to support the country’s Vision 2030 initiative.
Wa’ed Ventures, a $500 million fund investing in advanced technology startups, has expanded its focus internationally since 2022 to support companies that can localize their technologies in Saudi Arabia.
The fund has previously invested in AI chipmaker Rebellions and real estate fintech firm Stake.
Ori recently raised £140 million ($176.8 million) and is preparing for a larger funding round in 2025.
It partners with global technology firms, including Nvidia, Supermicro, and Dell, and is backed by investors such as Telefonica, NextEra Energy, and Episode 1 Ventures. Dubizzle acquires Egypt’s Hatla2ee
UAE-based online classifieds platform Dubizzle Group has acquired Hatla2ee, an Egyptian online car marketplace, for an undisclosed amount.
The acquisition strengthens Dubizzle Group’s regional presence by integrating its technology and resources into Hatla2ee’s platform.
Founded in 2016 by Samy Swellam, Hatla2ee provides a marketplace for buying and selling new and used cars in Egypt.
Dubizzle Group, established in 2005, operates multiple classified platforms, including Dubizzle, Bayut, and Drive Arabia.
The acquisition follows Dubizzle Group’s purchase of UAE-based automotive media platform Drive Arabia in May 2024. MANSA raises $10m for cross-border payments
MANSA, a fintech firm specializing in cross-border payments, has secured $10 million in funding to enhance its liquidity solutions.
The funding includes a $3 million pre-seed round led by Tether and co-led by Polymorphic Capital, with participation from Octerra Capital, Faculty Group, and Trive Digital.
MANSA also raised $7 million in liquidity funding from corporate investors, quantitative funds, and alternative investment firms.
Mansa Co-Founders. Supplied
The company, co-founded by Mouloukou Sanoh and Nkiru Uwaje, leverages stablecoins to streamline liquidity management for payment providers in emerging and developed markets.
Since launching in August, MANSA has facilitated $27 million in transactions, with on-chain volume surging 574 percent from August to January 2025.
The new funding will support the company’s expansion into Latin America and Southeast Asia. Egypt’s Qme raises $3m for AI business solutions
Qme, an Egypt-based B2B SaaS startup, has raised $3 million in a seed funding round led by AHOY and a group of angel investors from the Gulf Cooperation Council.
Founded in 2022 by Maged Negm, Qme provides AI-driven digital infrastructure for businesses, integrating booking, queuing, analytics, and payment solutions.
The investment will be used to enhance the company’s technology, expand its market presence, and strengthen partnerships. UAE fintech Blum secures $5m in seed funding
Blum, a UAE-based decentralized exchange, has raised $5 million in a pre-seed and seed funding round led by gumi Cryptos Capital, Spartan, No Limit Holdings, YZi Labs, and OKX Ventures.
Founded in 2024 by Gleb Kostarev and Vladimir Smerkis, Blum offers token trading through gamification within a Telegram mini-app.
The funding will support the platform’s infrastructure development, trading enhancements, and expansion across multiple blockchain networks. Tunisia’s Dabchy raises pre-Series A funding
Dabchy, a Tunisia-based peer-to-peer fashion marketplace, has raised an undisclosed amount in a pre-Series A funding round led by Janngo Capital and angel investors.
Founded in 2016 by Ameni Mansouri, Ghazi Ketata, and Oussama Mahjoub, Dabchy provides an e-commerce marketplace for second-hand fashion.
The funding will support the startup’s expansion into Egypt, broaden its product offerings, and improve its platform. The Box secures $12.5m for storage expansion
The Box, a UAE-based self-storage services provider, has secured $12.5 million in debt financing led by Shorooq Partners.
Founded in 2007 by Wadih Haddad, The Box offers personal storage, record management, and moving services.
The new capital will enable the company to expand its storage facilities and develop flagship locations. Palm Ventures closes $30m early-stage fund
Palm Ventures, a MENA-focused investment firm, has closed a $30 million fund to support early-stage startups in the region, with a portion allocated to US-based AI ventures.
Founded in 2014, Palm Ventures has backed 40 startups and collaborated with government entities to drive innovation.
Between 2020 and 2024, the firm invested in 20 MENA and US-based AI startups.
The new fund will target AI, fintech, and business solutions, supporting digital transformation in the region. Pinewood acquires 90.9 percent of Seez for $42m
Pinewood Technologies PLC has acquired a 90.9 percent stake in UAE-based automotive SaaS platform Seez for approximately $42 million.
The transaction, expected to close by March 19, 2025, will be funded through a mix of cash payments and newly issued shares.
Seez specializes in AI and machine learning solutions for the automotive sector, including e-commerce and omnichannel products.
Pinewood, which provides automotive intelligence solutions, aims to leverage Seez’s technology to enhance its agency management systems while reducing reliance on third-party AI licenses.
The companies anticipate the acquisition will be earnings-accretive by fiscal year 2026. Oman Investment Authority partners with Golden Gate
Oman Investment Authority has partnered with Singapore-based venture capital firm Golden Gate Ventures to strengthen Oman’s startup landscape.
Through its technology arm, Innovation Development Oman, OIA has become a limited partner in Golden Gate Ventures’ new $100 million fund, which marks the firm’s first major venture capital initiative in the MENA region.
The partnership aims to attract foreign investment into Oman’s technology sector while providing startups with funding, expertise, and market access.
Golden Gate Ventures, which has backed around 100 companies since 2011 — including nine unicorns — views Oman as a promising innovation hub. Algerie Telecom launches $11m AI startup fund
Algeria’s state-owned telecom company, Algerie Telecom, has announced an $11 million investment fund to support startups in artificial intelligence, cybersecurity, and robotics.
The initiative was unveiled at the third edition of Algeria’s CTO Forum as part of the country’s national AI and digital transformation strategy.
The investment will support the establishment of 20,000 startups, alongside efforts to develop AI-focused universities, incubators, and a nationwide expansion of digital infrastructure aimed at strengthening Algeria’s technological ecosystem.
