Join the #1 financial centre for accessing public and private capital When you join the number one global financial centre in the Middle East, Africa and South Asia, accessing sovereign wealth is just the beginning. Our 1,000+ start-ups and growth stage firms have raised over USD 3.3 bn, including accessing capital from the region’s largest cluster of institutions, family offices, private equity companies, venture capital businesses and banks. DIFC based wealth and asset managers are now overseeing over USD 720 bn in AUM from private and public markets in the region. No wonder the industry chooses DIFC as their catalyst for growth. Join the number one: difc.ae/business/make-an-enquiry Untitled-10 102/12/2024 10:57fi nancemiddleeast.comDecember 2024 | 3 EDITOR’S LETTER The recession that America was expecting never showed up. Many economists spent early 2023 predicting a painful downturn, a view so widely held that some commentators started to treat it as a given. Infl ation had spiked to its highest level in decades and forecasters thought it would take a drop in demand and a prolonged jump in unemployment to bring it under control. Instead, the economy grew 3.1% last year, up from less than 1% in 2022 and faster than the average for the fi ve years leading up to the pandemic. Infl ation has eased substantially. Unemployment remains at historic lows and consumers continue to spend despite US Federal Reserve interest rates at a 22-year high. From market predictions to the number of rate cuts, economists and analysts got it all wrong this year. In our cover feature, we break down everything that happened in 2024 and their fi nancial repercussions on the markets. Spoiler alert—gold, Bitcoin and the S&P 500 all touched their all-time highs this year. In this edition, we’re putting the spotlight on entrepreneurship. Hollywood often glamorises it, making it look like an easy path, but it takes more than ambition. It takes commitment, hunger and the willingness to go the extra mile to create something impactful. Through our podcast feature and the newly launched Founders in Focus series, we explore the real challenges entrepreneurs face and share insights and success stories from startup founders and experts to inspire the next generation of business leaders. And fi nally, it’s December. The holiday season is here, or as Mariah Carey says, “It’s time!” In our industry insights section, Beatriz Valero analyses how the retail sector gears up for the holidays and what this means for economic activity during this crucial period. This is an action-packed edition to wrap up the year. So, grab your eggnog and get reading! Nivetha Dayanand Editor FME_Dec2024_3_Editor Letter_13444580.indd 322/11/2024 15:40fi nancemiddleeast.com4 | December 2024 CONTENTS 20 14 24 30 SHOPPING TIME What’s in store for the GCC retail industry? IS TOKENISATION THE FUTURE OF FINANCE? Tokenisation is reshaping key fi nancial sectors, enabling effi ciency and accessibility 2024 WRAPPED An in-depth look at global fi nancial markets FINANCE’S NEW FRONTIERS Marex’s top executives discuss the company’s expansion in the Middle East 14 24 20 30 FME_Dec2024_4-5_Contents_13444586.indd 402/12/2024 10:41fi nancemiddleeast.comDecember 2024 | 5 38 32 44 52 INVESTED IN TECHNOLOGY Behind the scenes of technology VC and PE decision-making VENTURING INTO THE MIDDLE EAST Firms targeting the Gulf must adapt to regulatory, cultural and economic nuances to succeed BETTER TOGETHER Breaking down the GCC mergers and acquisitions market LET’S GET FUNDED Serial entrepreneur Jigar Sagar shares tips on raising capital 32 4452 38 FME_Dec2024_4-5_Contents_13444586.indd 502/12/2024 10:42fi nancemiddleeast.com6 | December 2024 PO Box 500024, Dubai, UAE Tel: +971 4 444 3000 Web: www.itp.com Offices in Abu Dhabi, Dubai, London, Mumbai, Riyadh & Geneva ITP MEDIA GROUP CEO: Ali Akawi Managing Director: Martin Chambers Head of Digital Media: Thomas Shambler EDITORIAL Editor: Nivetha Dayanand Tel: +971 4 444 3887 email: nivetha.dayanand@itp.com Deputy Editor: Beatriz Valero Tel: +971 4 444 3413 email: beatriz.valero@itp.com Commercial Editor: Angitha Pradeep Tel: +971 4 444 3278 email: angitha.pradeep@itp.com ART Art Director: Amjad Ayche Art Editor: Tofi q Memon ADVERTISING Group Publishing Director: Natasha Pendleton Tel: +971 4 444 3248 email: natasha.pendleton@itp.com Senior Commercial Manager: Ines Ben Rejeb Tel: +971 4 444 3223 email: ines.benrejeb@itp.com PHOTOGRAPHY Senior Video Editor: Liju Cheruvathur MARKETING Head of Events: Eleanor Ashton email: eleanor.ashton@itp.com Events & Marketing Manager: Kate Galaktionova Associate Events Manager: Vrinali Nazareth Events Administrative Assistant: Aronn Pureza Events Administrative Assistant: Bobbie Rosario Events Sales Assistant: Joyce Salonga email: events@itp.com PRODUCTION Production Manager: Balasubramanian P DISTRIBUTION Distribution Coordinator: Avinash Pereira Circulation Executive: Rajesh Pillai ITP GROUP CEO: Ali Akawi CFO: Toby Jay Spencer-Davies The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. 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FME_Dec2024_6_Flannel_13444587.indd 622/11/2024 15:50FOR COMMERCIAL ENQUIRIES: Ines Ben Rejeb Senior Commercial Manager T: +971 4 444 3223 E: ines.benrejeb@itp.com WHERE & NUMBERS NARRATIVES WWW.FINANCEMIDDLEEAST.COM AN ITP MEDIA GROUP PUBLICATION online and in print nowNEWS fi nancemiddleeast.com8 | December 2024 Strong economic growth, a positive job market and controlled infl ation could allow the US Federal Reserve to take its time in deciding how far and how fast to lower interest rates, according to Fed Chair Jerome Powell. During remarks made to business leaders in Dallas, Powell pointed towards fur ther interest rate cuts. However, he also suggested they might not come as fast as analysts predict. “The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.” Powell further affi rmed that the Fed still considers infl ation to be “on a sustainable path” towards its target of 2%. This positive development is expected to allow the US central bank to move monetary policy “over time to a more neutral setting”. In early November, the US Fed reduced interest rates by 25 basis points (bsp). The policymakers lowered the central bank’s key lending rate to a range of 4.5% to 4.75%. GCC central banks were quick to mirror the rate cuts, following the Fed’s lead. The UAE Central Bank reduced the base rate for the Overnight Deposit Facility (ODF) by 25 bsp, bringing it down to 4.65%, while the Saudi Central Bank (SAMA) reduced its repurchase agreement (Repo) rate and reverse repo rate by 25 bps each to 5.25% and 4.75%. In a statement, SAMA said this decision aligns with its objectives to support monetary and fi nancial stability. “Lower rates in the GCC could fuel growth in sectors sensitive to credit US FED IN “NO HURRY” TO LOWER INTEREST RATES conditions, such as real estate and domestic spending, enhancing resilience in the broader economy,” added Vijay Valecha, Chief Investment Offi cer at Century Financial. The Fed’s decision is the second interest rate cut in four years. During this period, the agency raised the rates as many as 11 consecutive times, the last of which was in July 2023, setting the range between 5.25% and 5.50%. This rate was held constant for eight consecutive meetings until it was reduced by 50 bps in September 2024 to a range of 4.75% to 5%. As of September, offi cials saw the rate dropping as far as 2.9% in 2026. However, investors now see interest rates remaining as high as 3.9%. Following Powell’s remarks, US stocks broadly fell, while shorter-term Treasury bonds rose. The US Federal Reserve could slow down the pace of interest rate cuts in 2025 FME_Dec2024_8-13_News + In Focus_13457701.indd 802/12/2024 10:42fi nancemiddleeast.comDecember 2024 | 9 Saudi Arabia’s holdings of US Treasuries reached $143.9 billion in September 2024, sho w casing a mont h - on - m ont h increase of $1.1 billion. The investments were distributed among long-term bonds, which were wor th $113.4 billion, representing 79% of the total. Short-term bonds reached $30.5 billion, amounting to the remaining 21%, the latest fi gures released by the US Treasury showed. Saudi Arabia’s US bond holdings were the Kingdom’s highest in four and half years. In 2020, Saudi Arabia’s Central Bank transferred $40 billion from its bond holdings to the Public Investment Fund (PIF) to compensate for the impac t of the pandemic on equity markets. Prior to the transfer, Saudi Arabia held $159.1 billion in US debt instruments. The world’s largest oil producer has been increasing its holdings since April, as it seeks to benefi t from the attractive returns on the safest debt instruments in the world. The Kingdom remains the only Arab country among the top 20 foreign holder s of US Treasuries, at number 17. The UK, Luxembourg and Canada, also increased holdings in what is considered the world’s safest asset. In contrast, Japan and China made reduc tions in their holdings but continued to the lead the list of the top foreign holders of this asset. A s of September 2024, Japan reported $1.12 trillion in US Treasuries holdings. China was in second place with $772 billion. The UK, the Cayman Islands and Luxembourg followed, obtaining third, fourth and fi fth place with $764.7 billion, $420.1 billion SAUDI ARABIA’S US TREASURY HOLDINGS REACH $143.9 BILLION and $417.8 billion in US Treasuries holdings, respectively. O ther GCC nations also hold investments in US bonds. At the end of June 2024, the UAE held $65.2 billion in US Treasury bonds. Kuwait has maintained a steady presence in this investment, with its holdings reaching $50.8 billion at the end of Q2 2024. Meanwhile, Oman’s US bond holdings were reported to have reached $7.6 billion as of June 2024. At the time, Qatar held $7.4 billion in US Treasury holdings. As of June 2024, Bahrain held $1.2 billion in this asset. These fi gures include investments solely in treasury bonds and bills, and do not include other investments in securities, assets and cash in US dollars. Global holdings of US bonds reached $8.67 trillion at the end of the third quarter of 2024. The Kingdom added $1.1 billion to its US Treasury bond holdings by the end of September 2024 NEWS FME_Dec2024_8-13_News + In Focus_13457701.indd 922/11/2024 15:50Next >