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Middle East Edition
13th March 2024
 
THE HOT STORY
Abu Dhabi sets up $100bn tech investment firm
Abu Dhabi is launching a technology investment firm called MGX, in partnership with sovereign wealth fund Mubadala Investment Co. and AI firm G42. The new entity aims to surpass $100bn in assets under management in the coming years. MGX will focus on AI infrastructure, semiconductors, and AI core technologies and applications. The portfolios of Mubadala and G42 will remain unchanged for now, with MGX initially funded by new capital from Abu Dhabi's government. The firm will be chaired by Sheikh Tahnoon bin Zayed Al Nahyan, with Mubadala CEO Khaldoon Al Mubarak as vice chairman. G42 has previously partnered with OpenAI and is reportedly in discussions to raise funding for a new chip venture. Abu Dhabi's MGX is part of a $1.5tn empire controlled by Sheikh Tahnoon.
CORPORATE
Government pledges are expected to drive IPOs in the GCC region in 2024
Government pledges for privatisation will drive the momentum of initial public offerings (IPOs) in the Gulf Cooperation Council (GCC) region in 2024, according to Fitch Ratings. The credit rating agency also predicts that the sale of minority stakes by government-linked entities and the establishment of public subscription funds will accelerate the number of IPOs in the region this year. The study highlights the support provided by capital market reforms, resilient IPOs, and fixed-income listings to the credit profiles of Financial Market Infrastructure (FMI) companies in GCC markets. Fitch notes that the energy sector, particularly oil and gas, dominates market capitalisation across GCC markets. Saudi Arabia led the IPOs in the GCC region in 2023, with 35 out of the 46 offerings. KAMCO Invest predicts that IPO proceeds in 2024 will be dominated by fewer larger issues, while several smaller IPOs are expected to debut on the markets.
LEGAL
Qatar highlights progress in workers' rights
Chairperson of Qatar National Human Rights Committee (NHRC), Maryam bint Abdullah Al Attiyah, has highlighted what she said was the significant progress made in workers' rights in Qatar. She emphasized the positive changes in legislation and laws that have contributed to improving the human rights situation for workers. Al Attiyah mentioned the establishment of a special Ministry of Labour, the cancellation of the sponsorship system "Kafala," and the creation of an electronic platform for receiving complaints. NHRC said it continuously monitors workers' situation in Qatar and ensures compliance with labour laws. Al Attiyah also discussed the NHRC's visits to worker-exporting countries to ensure compliance with Qatar's labour conditions and laws. She emphasized the importance of awareness and education programs for workers, including campaigns on heat stress.
STRATEGY
Hong Kong start-ups look to benefit from China-Middle East relationship
Partnering with Saudi Arabia may be Hong Kong's big break to advance local science and technology internationally, reports South China Morning Post. Hong Kong Science and Technology Parks and Cyberport have signed MoUs with the King Abdulaziz City for Science and Technology in Riyadh, aiming to promote fields such as biotech, healthcare-related technologies, media platforms, and AI. The partnerships are expected to offer new opportunities for locals to break into the Middle East, while Hong Kong can serve as a stepping stone for Saudi start-ups into China. 
Banco Santander opens new office in Doha
Banco Santander has opened a new representative office in Doha, Qatar, to improve customer service and channel investment between the region and its existing markets. The office, located in the Qatar Financial Centre, will provide local coverage for clients in the region and enhance the capabilities of the group across all markets. Ziad El-Saigh will lead the office as Senior Country Executive. Yousuf Mohamed Al Jaida, Board Member and CEO of QFC, welcomed the establishment of the representative office, stating that it strengthens Doha's position as a premier financial destination. Santander serves 165 million customers across Europe and the Americas, with offices in other markets including Hong Kong, Singapore, and Beijing. The bank has also expanded its activity in the Middle East by establishing a branch in Dubai International Financial Centre (DIFC).
DIVERSITY, EQUITY & INCLUSION
Females in leadership roles can boost performance
Having females in senior leadership roles can ensure that companies perform better, according to research from the universities of Glasgow and Leicester in the UK. The report suggests that companies with more than 30% female executives are more likely to outperform organisations with a lower gender balance. Analysis from McKinsey highlights that companies in the top quartile for gender diversity on executive teams are 25% more likely to have above-average profitability. McKinsey's Women in the Workplace report also found that three in four young women now aspire to senior positions. With analysis suggesting that more needs to be done to ensure women take top jobs, British companies are being urged to reach a target of 40% female leadership by the end of 2025. Bina Mehta, chairwoman of KPMG UK, said: “While setting the tone from the top is crucial, so, too, is attracting and retaining a strong pipeline of talented women from all backgrounds."
INTERNATIONAL
Investigation launched into Indonesian airline after pilots fell asleep
Indonesia's transport ministry has announced an investigation into Batik Air after a pilot and co-pilot were found to have fallen asleep during a flight. The incident occurred during a flight from Southeast Sulawesi to Jakarta, resulting in navigation errors. The Airbus A320's passengers and flight attendants were unharmed. The transport ministry has reprimanded Batik Air and called for increased attention to air crew rest time. The pilots involved have been temporarily suspended. The investigation will focus on fatigue risk management. Batik Air has stated that it operates with an adequate rest policy and is committed to implementing safety recommendations. The report by the National Transportation Safety Committee revealed that one of the pilots had not rested adequately before the flight. The co-pilot inadvertently fell asleep while in command of the aircraft. The pilot woke up after 28 minutes and corrected the flight path. The investigation recommends regular cockpit checks and ensuring well-rested pilots and cabin crew.
Nigeria pauses controversial expatriate employment levy
Nigeria has paused a controversial annual levy that would require businesses employing expatriates to pay $15,000 (£12,000) for a director and $10,000 (£8,000) for other workers. President Bola Tinubu imposed the tax over a week ago, but it was met with widespread condemnation. The Ministry of Interior said on the X social media platform that the levy would be paused for "dialogue among stakeholders." The ministry explained the tax was intended to "discourage abuse" of the expatriate quota. It said it hoped the levy would create "employment opportunities for Nigerians while closing wage gaps between expatriates and local workers." Dele Kelvin Oye, national president of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), said he welcomed the pause. Foreign investors would be discouraged from investing in Nigeria, a body for manufacturers in the West African nation had warned. The Manufacturers Association of Nigeria stated that the levy was an "unwarranted and unprecedented addition to the cost of doing business" and was perceived as a punishment imposed on foreign investors. Manufacturers argued that the levy would deter multinational companies from investing in Nigeria and setting up regional headquarters in the West African country.
India's booming youth population turns to foreign universities for its higher education
As India's youth population outpaces its education system, a growing number of students are seeking higher education opportunities abroad. India estimates that 1.5 million students are studying at foreign universities, with the U.S. being the most popular destination. The trend represents a loss for India, because many students see universities abroad as stepping stones for careers overseas. However, it is a boon for American schools, which are benefiting from the increase in full-price tuition payments. India's own higher education system is struggling to meet the demands of its surging population, leading to fierce competition for admission to top universities. The majority of Indian students studying abroad are pursuing graduate programs, particularly in science, math, and engineering, and the chance to work in the U.S. for up to three years after graduation is a significant draw.
Number of Chinese workers in Africa drops by 64% since 2015
The number of Chinese workers in African countries has decreased by 64% since 2015, mainly due to funding for projects drying up and the impact of the coronavirus pandemic. According to a recent report by the International Monetary Fund (IMF), the official number of Chinese workers in Africa stood at about 93,000 at the end of 2021, a significant decline from the peak of 263,000 in 2015. The decline in workers is closely linked to the gross revenues of Chinese companies' construction projects in Africa. The decline is expected to continue, although some countries like Egypt have seen small increases in Chinese workers. The presence of Chinese workers is also correlated with available project finance and the hiring of local workers by Chinese companies. However, it is unlikely that the high numbers of Chinese workers seen in the past decade will return.
OTHER
Mall of Qatar signs agreement with Abyat
Mall of Qatar has signed an agreement with Abyat to open its first showroom in Qatar. The Abyat showroom will be directly connected to Mall of Qatar through a gateway on the ground floor. Abyat, established in 2005, offers a wide range of finishing products, furniture, and accessories. The partnership aims to enrich the shopping experience for visitors. The opening of the Abyat store is expected in early 2025, with a spacious showroom spanning 15,000 square metres over two floors.
 


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