Welcome to the Mideast Money newsletter, I’m Adveith Nair. Join us each week as my team and I chronicle the intersection of money and power in a region that's become one of the most influential in global finance. You can sign up here.

This week, we delve into the consultancy boom in the Middle East, Saudi Arabia’s next giga-project and its latest lifeline for Lucid. But first, let’s explore the region’s surprising IPO hotspot, with insights from our new equity capital markets reporter Laura Gardner Cuesta. 

The wave of listing activity that transformed the Middle East into a hotspot for new share sales over the past few years has so far largely been a tale of three cities — Abu Dhabi, Dubai and Riyadh. There are early signs of that wave broadening beyond the two biggest Gulf economies, Saudi Arabia and the United Arab Emirates. 

Oman’s state energy firm last week sold a 25% stake in its exploration and production business in a deal that raised about $2 billion. That means the region’s biggest initial public offering in well over a year has come from one of its smallest bourses. 

The IPO — also the fourth-largest of the year in the wider Europe, Middle East and Africa region — helps Oman narrow the gap with Saudi Arabia and the United Arab Emirates in terms of money raised from new share sales.

For context on how quiet it’s been in Muscat, OQ Exploration & Production’s listing alone accounts for more than half the proceeds from listings in the sultanate over the past decade. 

The latest Omani share sale comes on the back of Abraj Energy Services’ IPO that raised $244 million last year. Months later, OQ Gas Networks debuted with a $771 million deal. That momentum looks set to continue — the government has been working on an ambitious privatization drive, which is set to go up a gear over the next few months. 

OQ has also lined up Morgan Stanley and local banks to work on the IPO of its methanol and liquefied petroleum gas unit, slated for this year. Meanwhile, the Oman wealth fund — among the Middle East’s smallest sovereign investors — is gearing up for a divestment plan that may include several dozen listings over the next five years as the Gulf sultanate chases an upgrade to emerging-market status. 

“If the upgrade is achieved, Oman’s blue-chips will receive sizeable inflows from passive funds that track the MSCI and FTSE emerging market benchmarks, increasing bourse turnover and likely company valuations,” Neetika Gupta, head of research at Ubhar Capital, said. “Highly concerted efforts are being made towards a potential upgrade.”

Also Read: Oman Seeks to Deepen Capital Markets With Eye on Gulf IPO Boom

Oman, the largest non-OPEC oil producer in the Middle East, is also hoping an influx of capital from state asset sales will boost industries such as energy, transport and tourism. That’s part of a broader trend of divestments in the energy-rich region, where governments are preparing for a post-oil age.

About 30 assets are in the pipeline with the priority on IPOs, an executive at the Oman Investment Authority told Bloomberg News late last year. 

These could include prominent firms like Asyad Group, the sultanate’s logistics company that describes itself as a $4 billion enterprise backed by an initial $26 billion in government infrastructure spending. The fund has also appointed Lazard to advise on a potential IPO of the state power utility.

“Recent Omani issuances have all have had generous dividend expectations driving investor demand, a model which we expect can continue,” Nishit Lakhotia, the head of research at SICO Bank, said. As global interest rates start to decline, high yield stocks will be tempting for many investors, he said. 

To be sure, the other big regional venues are also gearing up for mega deals. In Abu Dhabi, hypermarket operator Lulu is set to launch an issue at a valuation of at least $5 billion. Meantime, the emirate’s carrier Etihad Airways is working on an IPO, the first for a major airline in the Middle East. 

A Lulu hypermarket in Dubai. Photographer: Christopher Pike/Bloomberg

Over in Saudi Arabia, a rare technology IPO is in the offing, while a financial services unit is looking to list on its main market. The Public Investment Fund meanwhile is planning to float the kingdom’s largest medical procurement firm.

A Saudi wealth fund affiliate purchased an additional 374.7 million shares of Lucid in a private placement deal, taking the kingdom’s overall infusion into the struggling electric vehicle maker to about $8.5 billion. 

A Lucid Air Dream Edition electric vehicle. Photographer: Christopher Pike/Bloomberg

Goldman Sachs’ top executive in Saudi Arabia is set to leave the bank after nearly a decade. 

Saudi Arabia is preparing to begin construction work on its next giga-project: a cube-shaped skyscraper big enough to fit 20 Empire State Buildings.

Artist illustration of the Mukaab cube, center, and New Murabba. Source: New Murabba Development Co.

Saudi Arabia’s main finance district is looking to raise about $700 million to fund further development of its Riyadh real estate complex.

Dubai’s vacant palm-shaped islands will soon be home to hundreds of luxury villas. 

Abu Dhabi’s ADQ is buying Odeabank, marking the latest example of the emirate’s efforts to expand into Turkey.

Germany’s E.ON and Turkey’s Haci Omer Sabanci have hired advisers to work on a possible IPO of their electricity producing joint venture.

Dubai-based private equity firm Gateway Partners is considering selling its stake in the Gulf franchise of Tim Hortons.

A Saudi solar developer plans to revive the sale of Fotowatio Renewable Ventures in a deal that may value the Spanish energy company at about €2 billion.

Qatar Investment Authority joined the $50 million funding round of UFC-rival Group One. 

Abu Dhabi is seeking to attract around $35 billion in investments into its food sector by 2045.

Lebanon, already locked out of global debt markets, is expected to be added to a watchdog’s “gray list” for shortcomings in tackling illicit finance.

Trade between Russia and the UAE tripled over the last three years, President Vladimir Putin said.

Vladimir Putin, right, meets with UAE President Sheikh Mohamed bin Zayed at the Novo-Ogaryovo state residence outside Moscow on Oct. 20, in a photo released by Russian state media. Photographer: Artem Geodakyan/AFP/Getty

Hedge funds slashed their bullish bets on West Texas Intermediate crude prices to the lowest in eight months as expectations ebbed that Israel will strike Iran’s oil infrastructure.

Meanwhile, Israel widened its bombing campaign in Lebanon, targeting financial institutions it says help fund Hezbollah’s military operations. And US Secretary of State Antony Blinken is set to travel to the region in a renewed push for a cease-fire between Israeli forces and Hamas.

Morgan Stanley joined Wall Street rivals in posting better-than-expected revenue, sending shares up the most in almost four years.

Also Read: Goldman Profit Jumps 45%; Stock Trading Set for Record Year

Republican presidential candidate Donald Trump defended his plans to overhaul the US economy through dramatic tariff increases and more direct consultation with the Federal Reserve.

Also Read: Stan Druckenmiller Says Market Is ‘Very Convinced’ Trump Will Win

Biden administration officials have discussed capping sales of advanced artificial intelligence chips on a country-specific basis. Officials are focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them.

ASML shares plunged the most in 26 years after it booked only about half the orders analysts expected.

Fake names. Fake jobs. A London headhunter allegedly lured traders into sharing confidential information. 

Citadel employees’ stake in its flagship hedge fund more than tripled to $9 billion in the last four years. 

Hedge funds are betting against the global battle to beat climate change, thanks to lagging green stocks, culture wars and a hostile geopolitical environment.

The long-lasting impact of Europe’s former empires on growth forms the basis of research by three US-based academics who will share the 2024 Nobel Prize in economics.

The famously difficult road to partnerships and promotions at some of the world’s largest consulting firms can run through the Middle East these days — despite escalating violence in the region. 

At McKinsey, some executives choose to take positions in the Gulf because they see it as a stepping stone for career advancement and partner roles, people familiar with the matter said. 

At rival Boston Consulting Group, some senior leaders are based in Dubai and the firm counts Saudi Arabia’s sovereign wealth fund as one of its largest customers, the people said.

Globally, the industry is in the throes of an extended slump, growing just 3% to $250 billion in 2023, according to Source Global Research. In the Gulf, the pace of increase has been four times that.

It’s all down to a simple playbook.

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