Recently, there has been more frequent news about the Middle East in Hong Kong than ever before
On November 24, it was reported in the market that PCCW (00008) considered a significant minority interest in its optical fiber business for about US$1 billion (about HK$7.8 billion), and the related assets attracted Chinese investors andSovereign wealth of the Middle East**interest.
On November 29, CSOP Saudi Arabia ETF will be officially listed on the Hong Kong Stock Exchange. This is the first Saudi Arabian ETF in Hong Kong. The launch of the CSOP Saudi Arabia ETF means that Chinese asset managers are actively "going global" to explore investment opportunities in the Middle East market.
On December 8, Yida Capital announced that its US$1 billion Phase II was invested by JADA, the parent company of Saudi Public Investment (PIF).
On December 10, Kingdee International announced that it had reached a definitive agreement with the Qatar Investment Authority, under which the Qatar Investment Authority would invest approximately US$200 million as consideration to subscribe for the ordinary shares issued by Kingdee International under a general mandate.
In the eyes of industry insiders, at present, only a small part of the funds invested in the Asian market (mainly China) by the sovereign of the Middle EastIn the future, the amount of money invested in the Chinese market is expected to increase significantly.
There are a few phenomena that support this trend:
On the one hand, Middle Eastern sovereign wealth** has opened offices in China intensively this year. Recently, the head of Saudi Arabia's Public Investment** (PIC) announced plans to open an office in Chinese mainland, following the opening of an office in Hong KongPreviously, in September this year, the UAE's sovereign wealth ** Mubadalah Investment Company had just opened an office in Beijing.
On the other hand, the data shows that the holding position of Middle Eastern capital in China is rising sharply. According to data from Industrial **, this proportion was 45%, and by the end of the first quarter of this year, it had risen to 229%。
There will be trillions of dollars of Middle Eastern money invested in China!
According to public information, as of 2022, the total AUM of Middle Eastern sovereign wealth** is as high as 3$64 trillion, or one-third of the world's total sovereign wealth**. In terms of the scale of management, the Middle East currently ranks first in sovereignty**Abu Dhabi Investment Authority (ADIA).with a management scale of $853 billion;
And then there'sKuwait Investment Authority (KIA).with a management scale of $803 billion;
Again, yesSaudi Public Investment** (PIF)., with total assets under management of $776.7 billion;
Fourth in lineQatar Investment Authority (QIA)., with a management scale of 475 billion US dollars;
In fifth place isDubai Investment Authority (ICD).with a management scale of 320 billion US dollars;
The Middle East accounts for 5 of the world's top 10 sovereign wealth**. **Guotai Junan**).
And then there's thatMubadala, the UAE's sovereign wealth after Abu Dhabi and the Dubai Investment Authority**, with $276 billion in assets under management, and the sixth largest sovereign wealth in the Middle East**.
HKEX Chief Executive Officer Nicolas Aguzin said he had recently visited many cities in the Middle East and met with many investors who had shown a keen interest in investing in China.
He expects the size of the Middle East's sovereign wealth** to grow by 150% to $10 trillion by 2030, up from the current $4 trillion. At that time, more than 10% to 20% (1-2 trillion) of the funds will be invested in the Chinese market.
What types of assets are most sought after by Middle Eastern capital?
Investments in the Chinese market by Middle Eastern sovereign wealth** are not new.
Back in 2006, the Kuwait Investment Authority and the Qatar Investment Authority subscribed to 7$200 million and 2US$0.6 billion**, participated in the IPO of ICBC.
Since then, Middle East Sovereign Wealth** has successively invested in a number of projects and enterprises in the Chinese marketBanking, insurance, telecommunications, aviation, automobiles, e-commerce, technologyand other industries.
In recent years, they have frequently appeared in the list of shareholders of A-share listed companies.
As of the end of the second quarter, Abu Dhabi Investment Authority and Kuwait** Investment Authority appeared in the top 10 shareholders of 26 and 36 A-share listed companies, respectively, according to Flush data. The two sovereign wealth** hold a total of 135 values5.8 billion yuan.
The top five companies with the largest value held by the Abu Dhabi Investment Authority are: Zijin Mining, Oriental Yuhong, Haid Group, Hengli Hydraulics, and Daqo Energy. The top five companies with the largest value held by the Kuwait Investment Authority are: Sanhua Intelligent Control, Hengli Hydraulics, Chenguang Shares, Myway Shares, and Satellite Chemical.
Source**: Straight Flush ifind).
According to Guotai Junan's statistics at the end of the third quarter, the Abu Dhabi Investment Authority has a more diversified choice of industries, but the overall allocation tends to be cyclical industries. Since 2023, the proportion of its allocation of medicine, agriculture, forestry, fishery and animal husbandry, machinery and automobiles has remained stable at about % and 6%, and the allocation of media, home appliances, building materials, nonferrous metals, electric new and chemical industries has been strengthened in phases in Q1, Q2 and Q3 respectively. As of the end of the third quarter of 2023, the top five industries with heavy positions are: non-ferrous metals (23.).33%), chemical industry (1797%), electric new (1382%), medicine (1054%), automobiles (759%）。
The Kuwait Investment Authority tends to allocate cyclical and consumer industries, especially focusing on investing in four sub-sectors: chemicals, home appliances, pharmaceuticals and machinery. Specifically, the top five positions held by the Kuwait Investment Authority at the end of the third quarter of 2023 were: chemicals (30.).39%), home appliances (2083%), medicine (1743%), mechanical (1328%), electronics (768%）。In the first three quarters of 2023, the Kuwait Investment Authority maintained a high allocation weight to the four major industries of medicine, machinery, chemicals, and home appliances. As of the end of the third quarter of 2023, the above four industries accounted for 81% of its total A-share investment93%。
In addition, according to the announcement of A-share listed companies, since October, a number of A-share listed companies such as Xiling Power, BAIC Blue Valley, and Dongfang Shenghong have announced that they will join forces with Middle East Capital to cooperate in the fields of new energy vehicles and parts and petrochemicals by signing relevant agreements and jointly investing in the establishment of joint ventures.
Since the beginning of this year, the sovereignty of the Middle East has also continued to be in Hong Kong's **market**Chinese assets.
June 20th,NIO (09866).Announced the signing of a share subscription agreement with Abu Dhabi investment vehicle CYVN Holdings. Under the terms of the agreement, CYVN Holdings will make a strategic investment of approximately US$1.1 billion in NIO through a private placement of new shares and the transfer of existing shares.
On August 26, the Abu Dhabi Investment Authority was listed in Hong Kong through its subsidiaryFengxiang shares (09977).Nearly 15.7 billion shares, with an average of 1HK$5,132.
The Abu Dhabi Investment Authority, Mubadala Investment Company, Qatar Investment Authority, and others are also investing in the primary market.
On the whole, from the perspective of investment direction, Middle East capital focuses onNew energy, mass consumption, biomedicine, information technologyand other fields.
Taking the new energy vehicle industry as an example, according to the incomplete statistics of the Superelectric Laboratory, since the beginning of this year alone, more than 5 new car-making companies and Middle Eastern countries have signed cooperation agreements, including brands such as NIO, Gaohe, Tianji, and Great Wall Huaguan. The Abu Dhabi Investment Authority acquired a 7% stake in NIO and became the second largest external investor after TencentThe Saudi Ministry of Investment signed a large order worth 21 billion Saudi riyals (about 5.6 billion US dollars, 40 billion yuan) with Human Horizons, the parent company of Gaohe, which is the largest single cooperation amount for a new Chinese EV manufacturer. In October, Pony.ai announced that it had received a $100 million investment from the Kingdom of Saudi Arabia's New Future City (NEOM) and its subsidiary**NIF. At the same time, Pony.ai and NEOM plan to establish a joint venture in New Future City in northwestern Saudi Arabia to provide autonomous driving technology solutions for the region.
In the fields of information technology such as biomedicine, artificial intelligence, and the Internet, we can see from Mubadala's Chinese official website that it has more than 80 investment projects in China, including Internet recruitment platformsBOSS Zhipin (02076)., short ** platformKuaishou-w (01024)., Clinical Research Services IncnovotechWait. A hot cross-border e-commerce giant in the past two yearsSheinBehind it, there is also the figure of Mubadala Investment Company;In 2022, Abu Dhabi Investment Authority investedHaiguang information；In early 2023, the Qatar Investment Authority (QIA) and RTW Investments, a world-renowned industry investor, co-led the investment in OriCell ......
The figure of Middle Eastern capital also appears in photovoltaic, petrochemical and other tracks. In March this year, Saudi oil giant Saudi Aramco acquired a 10% stake in China Rongsheng Petrochemical for 24.6 billion yuan, and the two sides cooperated in procurement, raw materials, chemical sales, refined chemical product sales, storage and technology sharing.
CITIC** pointed outThis is because the sovereign wealth** of the Middle East tends to allocate to manufacturing, utilities, raw materials and essential consumption related to the domestic industrial structureWith the advancement of the industrial upgrading strategy of major economies in the Middle East, it is expected to increase the layout of China's advantageous industries such as new energy and advanced manufacturing, which echoes its own development strategy.
The main speaker of the sovereign wealth of the Middle East**.
1. Sheikh Tanun bin Zayed Al Nahyan
Sheikh Tahnoon bin Zayed Al Nahyan, a member of the UAE royal family, is in charge of a 1A $5 trillion investment empire that includes two sovereign wealth**, the region's most important private investment firms, the country's largest bank, and the largest publicly traded companies. Since the beginning of 2022, the Abu Dhabi Investment Authority, helmed by Sheikh Tanun, has been the second-largest investor among the Middle East's major wealth**, according to Global SWF.
In addition, Sheikh Tanun manages the UAE-based Abu Dhabi Holding Company (ADQ), which favors emerging-market countries, which has billions of dollars in assets in Egypt and has pledged to invest to help the Turkish economyThe ** also looks at the forefront of food safety transactions, including an agreement to acquire a stake in LDC Companies.
2. Sheikh Mansour bin Zayed Al Nahyan
Sheikh Mansour bin Zayed Al Nahyan, a member of the UAE royal family, is better known as the owner of Manchester City Football Club. He is also the UAE Deputy Prime Minister, Deputy Prime Minister and Minister of Government. Sheikh Mansour is also the chairman of the Emirates Investment Authority (EIA), which manages $90 billion in assets, and is the head of Vodafone (VOD.).US).
In March this year, Sheikh Mansour was appointed chairman of the board of directors of the Mubadala Investment Company (MIC). It is another sovereign wealth of the UAE**, with $276 billion in assets under management, mainly invested in Europe. Mubadala Investment also backed Rajiv Misra's new $6.8 billion entity and technology companies during last year's valuation. From healthcare to finance, Mubadala Investment has been at the forefront of the UAE's diversification attempts to wean itself off its dependence on oil.
3. Yasser Rumayam
Yasiral-Rumayyan, chairman of Saudi Public Investment**, is one of the key figures responsible for implementing the Saudi Vision 2030 strategy aimed at reforming the country's economy. From the $500 billion futuristic city of NEOM, to deals that disrupt the global sports economy, to investments in mining, gaming, and technology, Saudi public investment** is leading Saudi Arabia's diversification efforts.
Saudi Arabia's $760 billion in assets** has become the region's largest sovereign wealth since the start of 2022, driven by oil prices last year. Saudi Public Investment** holds a stake in state-owned oil giant Saudi Aramco, or Lucid Group (LCID.).US) and holds Electronic Arts (EA.com).us) and Nintendo.
4. Mansour Almahmoud
Mansoor Al Mahmoud is the CEO of Qatar Investment Authority. The Qatar Investment Authority (QIA) has stakes in a number of companies, including mining giant Glencore, supermarket chain J Sainsbury plc and automaker Volkswagen AG.
Qatar, one of the largest LNG exporters, has benefited from the surge in LNG**. Mansour Almahmoud said earlier this year that the ** will increase spending in Asia and the United States, with plans to invest in climate change, infrastructure and digitalization.