NEW YORK: Hindenburg Research, the financial research firm with an explosive name and a track record of sending the stock prices of its targets tumbling, is taking on one of the world’s richest men.
Hindenburg is back in the headlines after last week accusing Indian conglomerate Adani Group of “a brazen stock manipulation and accounting fraud scheme.” It cited two years of research, including talks with former Adani senior executives and reviews of thousands of documents.
The Adani Group has blasted the accusations, calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.”
Nevertheless, Hindenburg’s scorching allegations have caused the fortune of Adani Group’s founder, Gautam Adani, to slide by nearly $47 billion in just over a week, according to the Bloomberg Billionaires index. Here’s a look at the firm behind all the movement:
What is it?
Hindenburg says it specializes in “forensic financial research.” In layman’s terms, it looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management.
Hindenburg has even come to be known as Ponzi hunters in some circles, according to the Washington Post, which detailed how it helped bring down an alleged $500 million scheme that targeted Mormons.
Where did its name come from?
The firm says it sees the Hindenburg, the airship that famously caught fire in the 1930s to the cry of “Oh, the humanity,” as the “epitome of a totally man-made, totally avoidable disaster.” It says it looks for similar disasters in financial markets “before they lure in more unsuspecting victims.”
Who else has Hindenburg gone after?
It’s perhaps most famous for a 2020 report on Nikola, a company in the electric-vehicle industry whose founder Hindenburg said made misleading claims to ink partnerships with top auto companies hungry to catch up to Tesla.
Among its allegations, Hindenburg accused Nikola of staging a video to calm skepticism about its truck, one that showed the vehicle cruising on a road. Hindenburg said the video was actually just showing the truck rolling down a hill after getting towed to the top.
What has come of such accusations?
For Nikola, quick scrutiny from the government and investors.
The company and its founder, Trevor Milton, received grand jury subpoenas from the US Attorney’s office for the Southern District of New York and the N.Y. County District Attorney’s Office shortly after Hindenburg released its report.
The Securities and Exchange Commission also soon issued subpoenas to Nikola’s directors.
Milton was convicted this past October of charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.
And Nikola in late 2021 agreed to pay $125 million to settle SEC charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects.
What does Hindenburg get out of this?
It can make money. In its Adani report, it said that it had taken a “short position in Adani Group Companies” through bonds that trade in the US and other investments that trade outside India.
It has made similar “short” bets against other companies it published unflattering reports on. A “short” trade is a way for someone to make money if an investment’s price falls. Afterward, if the price of a company’s stock or bonds falls because of the negative attention from the report, Hindenburg can profit.
Such short sellers have been criticized for unfairly pushing down prices of stocks with potentially unfounded allegations. But proponents also call them a healthy part of a stock market, keeping stock prices in check and preventing them from running too high.
Who is Hindenburg, the firm targeting India’s Adani?
Who is Hindenburg, the firm targeting India’s Adani?
- Hindenburg is an investment research firm with a focus on activist short-selling. It looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management, and It can make money out of its work
NEW YORK: Hindenburg Research, the financial research firm with an explosive name and a track record of sending the stock prices of its targets tumbling, is taking on one of the world’s richest men.
'Trust OPEC+,' Saudi energy minister says after announcement of voluntary oil output cuts
- Saudi Arabia pledged to cut production by further 1 million barrels a day from July
- Voluntary cut announcement is on top of broader deal by OPEC+ to limit supply into 2024
VIENNA: Defending the decisions made by the oil producers’ alliance, Saudi Energy Minister Prince Abdulaziz bin Salman stressed the need to “trust OPEC+” which he described as “the most effective international organization” working to restore market stability.
Talking to CNBC International’s Dan Murphy on Sunday, the energy minister said the voluntary oil output cuts announced by the Organization of the Petroleum Exporting Countries and its allies including Russia, also known as OPEC+, were precautionary measures.
“It was just our sensibility, if you will call it, that the environment was not sufficiently allowing confidence to be there. So taking a precautionary measure tends to put you on the safe side. And it is part of the typical rhythm that we have installed in OPEC, which is being proactive, being preemptive,” Prince Abdulaziz said.
Oil prices rose by more than $1 a barrel on Monday after Saudi Arabia pledged to cut production by a further 1 million barrels per day from July to counter macroeconomic headwinds that have depressed markets.
The voluntary cut is on top of a broader deal by OPEC+ to limit supply into 2024 as the group seeks to boost flagging oil prices.
OPEC+ pumps about 40 percent of the world’s crude and has cut its output target by a total of 3.66 million bpd, amounting to 3.6 percent of global demand.
Commenting on the Saudi decision, Prince Abdulaziz said: “It is icing on the cake.”
The Kingdom has kept the option open for an extension to the voluntary cuts depending on “how things really work.”
The Saudi energy minister told CNBC that the oil producers’ group is considering new baselines to ensure equitable and fair production quotas for all members in the group according to their capacities in a transparent manner.
OPEC+ now intends to have three independent analysts — IHS, Wood Mackenzie, and Rystad Energy — study the individual capacity of each group member.
“Hopefully by mid-year next year, we will have new baselines and a way forward that makes it more equitable, more fair for everybody to assign for them production levels that are going to be commensurate with their capacities in the most transparent way,” the minister said.
When asked about trusting OPEC’s ally Russia, Prince Abdulaziz responded in the affirmative.
“Absolutely. But I always like President (Ronald) Reagan’s line: trust but verify.” He said, noting the instrumental role of independent sources in assessing production.
Pakistani PM promises business-friendly, pro-people budget as IMF deal remains elusive
- Sharif approves increasing Public Sector Development Program from Rs700 billion to Rs950 billion
- Pakistan's national inflation rate rose to 37.97% in May, setting national record for second month
ISLAMABAD: Prime Minister Shehbaz Sharif said on Monday the budget for fiscal year 2023-24, due to be presented on June 9, would bring economic prosperity, business friendly policies and public welfare to the country, as an International Monetary Fund bailout deal remains elusive after months of talks.
Millions of Pakistanis are struggling to cope as Pakistan's annual inflation rate rose to 37.97% in May, setting a national record for the second month in a row and adding to the South Asian nation's problems of a balance of payment crisis and the risk of a sovereign default. Inflation has been on an upward trend since early this year after the government took painful measures as part of fiscal adjustments demanded by the IMF to unlock stalled funding.
The IMF demands include the withdrawal of subsidies, a hike in energy prices, a market-based exchange rate and new taxation to generate extra revenue in a supplementary budget.
Islamabad says it has met the demands, but the IMF has yet to release the $1.1 billion funding stalled since November as part of the $6.5 billion Extended Fund Facility agreed in 2019.
The funding is critical for Pakistan to unlock other bilateral and multilateral financing. The IMF program is set to expire on June 30 this year.
“The central point of the fiscal year 2023-24 budget is going to be economic prosperity, public welfare and business friendly policies,” the prime minister said in a statement, as he approved increasing the Public Sector Development Program (PSDP) from Rs700 billion to Rs950 billion to boost growth and create job opportunities.
The statement came after the prime minister held a detailed meeting with coalition partners in Islamabad to incorporate their proposals in the upcoming budget.
“The government is endeavouring to ensure prudent utilisation of all available resources despite economic challenges,” he said, promising to allocate a “sufficient amount” for those affected by floods last year and start a flood response program to deal with the disaster in future.
Floods from record monsoon rains in Pakistan and glacial melt in the country’s mountainous north last year affected 33 million people and killed over 1,500, washing away homes, roads, railways, bridges, livestock and crops in damage estimated at $30 billion.
Separately, the Prime Minister’s Coordinator for Economy and Energy, Bilal Azhar Kayani, told Arab News Sharif’s government would be presenting a “pro-investor and pro-poor budget.”
He declined to share the total outlay of the budget or its revenue and taxation targets, saying: “These details will be revealed in the National Assembly on the budget day.”
He said finance ministry officials, including Finance Minister Senator Ishaq Dar, were meeting all stakeholders, including industrialists and professionals, to get their input on the budget: “We will be trying to entertain proposals of all stakeholders to make an investor friendly budget.”
Economists said the country’s net federal receipts were not sufficient to even pay for the markup and the government had to take domestic and foreign loans to bear all expenditures.
“Pakistan’s budget is in serious distress and in need of serious repair,” Dr Khaqan Hassan Najeeb, a former economic adviser to the government, told Arab News.
He said that a look at the budget of FY-23 would reveal that Pakistan’s net federal receipts with the federal government would not be sufficient to even pay for the markup which had risen from the budgeted amount of Rs 3900 billion to Rs 5300 billion.
“It is unfortunate that all other expenditures would have to be borne by taking domestic and foreign loans,” he said, adding that the same fact would become even larger as the markup payment for the FY-24 budget would be much bigger considering the rise of the policy rate to 21 percent.
“The borrowing needs would be higher without meaningful expenditure and tax reforms,” Najeeb said. “Without containment of a fiscal deficit to near 5 percent of GDP on a permanent basis Pakistan’s fiscal and debt sustainability will never be ensured.”
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) suggested the government ensure tax reforms in the country and add new taxpayers to boost revenue.
“The taxation system in Pakistan contributes less than 10 percent of the GDP to the national exchequer, indicating that it is not balanced, broad-based and simplified,” Irfan Iqbal Sheikh, President FPCCI, told Arab News.
The taxation system's heavy reliance on indirect taxation and surcharges was damaging the economy, he said, adding that taxes were insufficient for debt servicing, defence, social welfare and public-sector development programs.
Sheikh said the upcoming federal budget was a golden opportunity for the government and the business community alike to agree upon and introduce budgetary measures and policies to enable industrial growth in Pakistan, explore avenues for import substitution and revive sick units through targeted, phased and result-oriented fiscal measures.
“Industrialization is the key to wealth creation and reversing the trend of dwindling per capita income in the country; bridge trade deficit and create employment in these difficult times,” he said.
“We can only have healthy foreign exchange reserves on a sustainable basis if our industry earns substantive sums in a number of industrial sectors like many of our regional and sub-regional countries.”
Prince Fahad bin Mansour Al-Saud represents Saudi Arabia at G20-Startup20 engagement group
- Al-Saud expressed his gratitude to King Salman and Crown Prince Mohammed bin Salman for the exemplary support they provide to entrepreneurs.
- “Today we witness the impact of this support on the entrepreneurship system in the Kingdom. This has resulted in accelerated growth in our national economy,” he said.
RIYADH: Prince Fahad bin Mansour Al-Saud has been chosen to represent Saudi Arabia in the G20-Startup20 engagement group, the Saudi Press Agency reported on Saturday.
Launched earlier this year under the Indian Presidency of G20 2023, the Startup20 engagement group is one of 11 official networking groups.
Al-Saud expressed his gratitude to King Salman and Crown Prince Mohammed bin Salman for the exemplary support they provide to entrepreneurs.
“Today we witness the impact of this support on the entrepreneurship system in the Kingdom. This has resulted in accelerated growth in our national economy,” he said.
Having been appointed to represent the Kingdom due to his extensive entrepreneurial experience, Al-Saud stressed the importance of Saudi Arabia’s participation in the Startup20 official group summit.
“The Kingdom is a leading country in entrepreneurship and an enabler for startups under Vision 2030, which aims to raise small and medium enterprises’ contribution to GDP from 20 percent to 35 percent,” he said.
The chair of the board of directors of the Saudi Entrepreneurship Vision, Al-Saud said that the Startup Summit in India was an opportunity to exchange creative and innovative ideas, find strategic partnerships and investment opportunities, and learn about the experiences of the G20 countries, in addition to promoting the projects of Saudi entrepreneurs.
The group is distinguished as the first official group specialized in emerging companies, which are considered the most critical engines of economic growth and sustainable development, according to SPA’s report.
The group seeks to communicate the voice of the global start-up system through the G20 countries, and recommendations will be developed to be formally submitted to the G20 leaders for consideration.
Outreach groups are independent collaborative groups led by civil society organizations in the host country each year.
Al-Saud has founded several companies in various fields. He holds a bachelor’s degree in entrepreneurship from Loyola Marymount University, Los Angeles, California.
PIF’s joint venture with Ma’aden to help establish mining sector: top official
- There is ‘as much as $1.3 trillion in untapped resources sitting under the ground in the country’
RIYADH: With metals and mining being identified as one of the 13 strategic sectors to focus on to achieve the goals outlined in Vision 2030, the Kingdom’s sovereign wealth fund’s joint venture with Saudi Arabian Mining Co., also known as Ma’aden, will help unlock the potential of the mineral wealth in the nation, a top official said.
In an interview with Arab News, Mohammed Aldawood, head of industrials and mining sector for Middle East and North Africa investments at the Public Investment Fund, said that the joint venture will help to establish the mining sector as the third pillar of the Kingdom’s economy, along with providing an opportunity to explore new territories.
“We (PIF) plan to support the growth of mining as a key enabler of this mission to help establish the industry as the third pillar of the economy. Saudi Arabia is fortunate to be endowed with healthy mineral reserves that are currently underexplored. We estimate that there is as much as $1.3 trillion in untapped resources sitting under the ground in the country,” said Aldawood.
He added: “This is a really exciting development that is going to give the PIF and Ma’aden an extensive international footprint in the mining space. It’s going to give the partners a platform to access minerals not available in Saudi Arabia and gives us an opportunity to move into new geographical territories.”
It was in January that Ma’aden and the PIF agreed to form a joint venture to invest in mining assets globally.
Ma’aden will own 51 percent of the venture while the PIF will own 49 percent.
The new venture’s strategy will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.
Mohammed Aldawood, Head of industrials and mining sector for Middle East and North Africa investments at PIF
Aldawood said that the new venture’s strategy “will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.”
“When we commence the partnership, the company’s paid-up capital will amount to $50 million and we will review that as operations grow. We have agreed if additional funding is required, both PIF and Ma’aden will fund the new company up to $3.12 billion,” he added.
Rising demand for critical minerals
Aldawood also talked about the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms.
Citing consultancy firm Wood Mackenzie, Aldawood said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world.
The PIF official further said that the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals as the world undergoes an energy transition where demand for critical minerals will rise sky-high.
“Through our JV with Ma’aden and our combined skills sets and knowledge of the industry, I am confident that we will play a role in the critical minerals supply response for the EV value chain. We’ll work with large mining companies and trading houses in developing projects that address an expected acute shortage in future minerals and ensure that Saudi Arabia retains a leading position,” Aldawood added.
• The official discussed the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms.
• Citing consultancy firm Wood Mackenzie, he said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world.
• The PIF official said the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals.
According to Aldawood, the PIF is committed to bringing core mining projects to life, supplying the world with critical minerals, and helping to meet decarbonization targets at the same time.
“The PIF has all the right attributes to be successful in this journey. We have access to capital and the appetite to invest globally and across the life cycle of an asset,” he said.
JV with Baosteel and Saudi Aramco
In May, the PIF, Saudi Arabian Oil Co. and China-based Baoshan Iron & Steel Co. signed a shareholders’ agreement to establish an integrated steel plate manufacturing complex in the Kingdom.
Aldawood said that this new facility will be the first of its kind in the Gulf Cooperation Council region, and will help advance the regional steel industry ecosystem.
“The project aims to enhance the domestic manufacturing sector through localizing the production of heavy steel plates, transferring knowledge and creating additional export opportunities. It’s a significant investment and a vital development for the industry,” Aldawood noted.
This JV complex is expected to be located in Ras Al-Khair Industrial City, and the facility would have a steel plate production capacity of up to 1.5 million tons per year.
According to Aldawood, this investment decision has been made to significantly reduce the reliance on imported steel and to serve more customers in several strategic industrial sectors including pipelines, shipbuilding, rig manufacturing, offshore platform fabrication plus tank and pressure vessel manufacturing.
“As with our investment in the mining sector, the investment aligns with the PIF’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive diversification of the local economy,” Aldawood concluded.
Shared mobility speeds up in GCC as global users to cross 62m by 2027
- Region embraces a system that provides a car-ownership experience without the need for owning a car
DUBAI: Shared mobility is gradually gaining a foothold in the Gulf Cooperation Council region as the automobile industry predictably joins other sectors in adapting to the sharing economy.
Whether it is renting out office space, an Airbnb vacation home, or a fancy dress for a special occasion, more people around the world are embracing the concept of sharing resources and services as opposed to owning them.
Companies are also changing their business models by leveraging the ongoing shift to a sharing economy and the transport sector is no exception.
In fact, the number of users in the car-sharing segment worldwide is likely to grow to 62.11 million by 2027, according to a report issued by Germany-based data-gathering platform Statista.
In the GCC, companies such as Udrive and ekar have dominated the car-sharing space providing customers with an alternative to the existing rental options in cities such as Dubai, Abu Dhabi, and Riyadh.
“There’s a lot of demand for the product,” said Nicholas Watson, the co-founder, and CEO of Udrive, a car-sharing provider in the region.
“The methodology or business model that car-sharing represents, is a fully digital experience with no human interaction. And through that, you streamline access to the vehicles,” which can then be parked anywhere in the city, he said.
With a fleet of 1,000 cars in the UAE mainly Abu Dhabi, Dubai, and Sharjah, Udrive charges customers 1-2 dirhams ($0.27-$0.54) per minute with several options for daily rates.
The car-sharing platform recently launched its operations in the Saudi capital Riyadh with plans to expand its fleet to 1,000 cars by the end of 2023.
It also plans to launch a 1,000-strong fleet of electric vehicles in the next 18 months in Dubai but have similar plans for the Kingdom in near future.
The car-sharing option will also help mitigate the effects of climate change as according to a World Bank report the transportation sector is a major source of emissions accounting for close to 20 percent of the world’s total greenhouse gas emissions.
European statistics show that every car shared removes 17 vehicles off the road, said Udrive CEO.
“That’s where sustainability comes in with car-sharing, we are fractionalizing car rental itself and we are making it available to everybody by the minute,” Watson added.
Reports show that an average passenger car sits idle for 22.5 hours per day. “The key is that the more people become aware that you can rent a car through your mobile phone, open the car through your mobile phone, and drive wherever you want, and end the trip wherever you want,” he told Arab News.
Unlike rental companies, car-sharing covers all costs for petrol, parking, and insurance without requiring customers to put down any deposit amount or worry about minor damage.
In case of an accident, customers must obtain and submit a police report, as per the law, with all damages covered under comprehensive insurance.
“It removes all the barriers of entry for people who normally wouldn’t be able to rent a car,” many of which fall in the middle to lower-income bracket, also considered the largest mobile and working population, said Watson.
Reports by Statista show the car-sharing segment in Saudi Arabia is projected to grow by 7.54 percent in the next five years with the market volume expected to reach $148.60 million in 2027.
In the UAE, the segment is projected to grow by 5.6 percent during the same period with the market volume likely to hit $102.60 million in 2027.
“When you look at these cities, it’s more about population density and the distances (covered) in average travel,” said Watson.
For example, Dubai is a city with horizontal highways such as Emirates Road and Sheikh Zayed Road, which extend from one end of the emirate to the other.
It consists of areas with huge vertical infrastructures and a high density of people per 100 sq. meters looking to move from one area to another.
This makes Dubai an ideal place for car-sharing, says Watson, whereas Abu Dhabi follows a grid-based system resulting in less congested areas.
“Car-sharing is indeed gaining significant momentum in the Middle East,” said Vilhelm Hedberg, founder of ekar, a self-drive mobility platform.
He pointed to a twofold year-on-year increase in user registrations and usage over the last three years on the platform.
According to him, the shift in consumer behavior is due to several factors, including a higher demand for environmentally friendly urban mobility options, which are affordable, convenient, and flexible at the same time.
• More people around the world are embracing the concept of sharing resources and services as opposed to owning them.
• Companies are changing their business models by leveraging the ongoing shift to a sharing economy and the transport sector is no exception.
• The number of users in the car-sharing segment worldwide is likely to grow to 62.11 million by 2027, according to a report issued by data-gathering platform Statista.
“The prices for chauffeur-driven alternatives have increased, making car-sharing a more attractive and cost-effective option,” said Hedberg
He believes, the increase in the adoption of car-sharing services is partly due to the COVID-19 pandemic, which prompted a shift away from public transportation.
“We have also observed a trend where individuals are moving away from traditional car ownership, and instead are opting for longer-term rentals to meet their mobility needs,” he said.
In response to this demand, ekar has recently introduced subscription leasing, offering flexible rental options ranging from 1 to 9 months with a door delivery service.
Similarly, Soham Shah, CEO of Selfdrive.ae, a car rental and monthly subscription platform, believes there is a growing acceptance of car subscription programs, particularly among expatriates residing in the Gulf countries.
According to him, subscription services are especially attractive to individuals who seek a personalized mobility experience but are unable to purchase a car immediately upon arrival in the country.
“Whether they are in the process of settling down or are aware of a certain timeframe before making a buying decision, they require monthly mobility solutions,” he said.
“The majority of clients in this region are expatriates, who typically prefer vehicle subscriptions over simply sharing a car from point A to point B,” Shah added.
He also described the GCC taxi market as “well-established, highly regulated and maintained,” pointing out that there is a strong inclination toward using local taxis or opting for services like Uber that offer car-sharing.
However, Shah believes the future of mobility in the GCC lies in a sustained ecosystem of on-demand mobility that provides a car-ownership experience without the need for purchasing a car.
The subtle shift in the automobile industry coincides with the region’s increased attention toward combating climate change and its unified vision to create smarter, greener transportation systems.
By providing individuals with convenient access to transportation without the need for private vehicle ownership, car-sharing promotes a shift toward “a more sustainable and environmentally conscious lifestyle,” said Hedberg.
There is no doubt that sharing mobility offers more efficient utilization of vehicles, reducing the number of cars on the road, he added.