The Daily Circuit: Selling Saudi stocks in Shanghai + Aldar logistics hub

👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at the massive new logistics park being built in the UAE by Aldar and DP World, long-term projections for Middle East business at Airbus, Telecom Egypt’s new 5G partnership with Nokia and Team USA’s narrow win over Australia at last night’s exhibition basketball game in Abu Dhabi. But first, trading Saudi stocks with Chinese yuan.

As China seeks to strengthen economic ties with the Gulf, investors from the world’s second biggest economy are getting an opportunity to place their bets on Saudi stocks while paying with their own currency.

Two exchange-traded funds focused on Saudi Arabia, the largest Arab economy, debuted today in the corporate centers of Shanghai and Shenzhen that will enable investors to put Chinese yuan directly into Saudi businesses and access information in Chinese, Bloomberg reports.

China emerged last year as Saudi Arabia’s most active foreign investor, pouring $16.8 billion into the kingdom and accounting for 58% of new business investments – primarily focused on automotive, metals and semiconductor investments. That was more than 11 times the $1.5 billion that China invested in Saudi Arabia in 2023, according to Dubai-based Emirates NBD.

At the Shenzhen stock exchange today, the China Southern Asset Management CSOP Saudi Arabia ETF QDII started trading after raising 634 million yuan ($87 million), Bloomberg reported.  A second fund, the Huatai-PineBridge CSOP Saudi Arabia ETF QDII, began trading in Shanghai after raising 590 million yuan.

China Southern’s ETF targets investors “who have knowledge in equity markets, have demand for global asset allocation and have confidence in the energy sector,” said Mao Wei, the asset manager’s chief equity investment officer, according to Bloomberg.  “People will pay more attention to Saudi Arabia looking at the energy and financial sector” compared with U.S. or Japan investment options, Wei said.

LOGISTICAL STEP

Mubadala-backed Aldar Properties has signed an agreement with DP World to develop a 1.55 million-square-foot logistics park as Abu Dhabi’s biggest real estate developer looks to expand in Dubai and respond to e-commerce driven demand for warehousing. The project at National Industries park in the Jebel Ali district of Dubai gives Aldar access to develop and lease assets in a strategic location between Dubai’s major port and Al Maktoum International Airport. The deal comes at a time when the UAE is jockeying for position in the global supply chain and to play a role in the region’s future food security. The agreement with DP World is part of a $270 million investment Aldar announced in January to expand its logistics real estate business in Abu Dhabi and Dubai.

FLIGHT PLAN

Looking toward the horizon over the next 20 years, Airbus trimmed its sales forecast for the Middle East slightly in an effort to avoid overcapacity. The European planemaker, which is the world’s largest, cut its manufacturing projection by 2% for the region as it expects its international fleet to more than double to 48,230 jets over the next two decades, Reuters reports. India and China, the world’s most populous nations, will play a greater role in Airbus’ manufacturing plans as it expects more than 1.7 billion people to join the middle class globally and become potential airline customers. “We see particularly strong growth in Asia and the Middle East, led particularly by India and China,” said Bob Lange, head of market analysis and forecasts at Airbus. 

Mubadala: Singapore’s Princeton Digital Group, which counts Mubadala as an investor, plans to double the capacity of its data centers in Asia over the next three years to meet growing demand from artificial intelligence users, Bloomberg reports.

Abu Dhabi Investment Authority: ADIA’s potential $2.6 billion buyout of Malaysia Airports with BlackRock’s Global Infrastructure Partners is characterized as a bright spot in Asia-Pacific dealmaking by Bloomberg as Malaysia comes out on top in the region amid surging M&A activity.

⚽ TV Rights: Qatari channel beIN Sports and the U.K.’s DAZN have acquired the TV rights to French football’s top-flight Ligue 1 for at least the next two seasons, paying close to $540 million, AFP reports.

⛏️ Mining Morocco: Genius Metals, a Canadian mining firm, signed an agreement with Societe Bleida Mineral Resources to acquire a 100% interest in the BMR Copper-Gold mining project located in Ouarzazate, Morocco for about $365,000 in cash and work commitments.

🤕 Battle Scars: MediWound, an Israeli company that develops products for treatment of burns and wounds, raised $25 million in a private placement led by Swedish company Mölnlycke Health Care.

🩺 Cardiac Care: Innovalve Bio Medical, an Israeli startup that makes catheter-delivered heart valves, was acquired by Irvine, Calif.-based Edwards Lifesciences, which exercised an option it received when it first invested in the company in 2017. Terms of the deal were not disclosed.

⚖️ Judicial Jump: The Dubai International Financial Centre’s independent court system is busier than ever, handling 480 cases in the first half of 2024, a 10% increase over the same period last year. The value of the cases heard rose 37% to more than $285 million compared to the first half of 2023.

🤝 Insurance Bid: Affinity Partners, a U.S. investment firm led by Jared Kushner, is in talks to buy a 4.9% stake in Israeli insurer Phoenix Holdings, with an option to buy an additional 4.9%, Globes reports. ADQ, the Abu Dhabi-based sovereign wealth fund, canceled its bid to buy control of Phoenix last year after getting indications the deal would not get regulatory approval.

📞 Data Upgrade: Telecom Egypt announced a partnership with Nokia to introduce 5G data services in cities across Egypt, including Giza, Luxor, Aswan and Alexandria.

Indonesian President Joko Widodo starts a two-day state visit to the UAE today. He is scheduled to hold discussions with UAE President Sheikh Mohamed bin Zayed on strengthening the strategic relations between the two nations, with a focus on a comprehensive economic partnership. In an interview with The National ahead of his visit, Widodo talked about his close relationship with “my brother” Sheikh Mohamed. “The UAE is Indonesia’s strategic partner in the Middle East. Indonesia is also the UAE’s strategic partner in Asia. Therefore, the relationship between the two countries is complementary,” he said. 

Sheikh Mohammed bin Rashid, the Vice President and Prime Minister of the UAE and Ruler of Dubai, celebrated his 75th birthday on Monday. 

Dr. Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, opened a new cashew-processing plant in Côte d’Ivoire on Saturday with Prime Minister Robert Beugré Mambé and officials from Pan African Agro Commodities, which operates the factory and is incorporated in the Abu Dhabi Global Market.

Haniya Minhas, a 13-year-old tennis player representing Saudi Arabia, competed last week at Wimbledon in the girl’s under-14 category.

🛫 Autumn Getaways: Etihad Airways has launched its seasonal sale, running until Friday, with discount airfares from Abu Dhabi to destinations including Maldives, Sri Lanka, Greece, India and the U.K. Flights to Etihad’s newest North American destination, Boston, start at Dh4,720 ($1,285), with tickets to Washington D.C. and New York also included in the promotion. Sale flights are valid for travel between September and November.

July 2-Aug. 25, Riyadh, Saudi Arabia: Esports World Cup. An international competition for professional gamers with a $60 million prize pot. Boulevard City.

July 17, Abu Dhabi, UAE: USA Basketball Showcase. The 2024 Team USA men’s  basketball team will play an exhibition game against the national team of Serbia. Etihad Arena. 

July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada. 

July 16-19, Aspen, Colo.: Aspen Security Forum. Pentagon leaders, defense contractors and security officials from around the world meet for a four-day conference. Aspen Institute.

July 27-Aug. 4, Washington D.C. Mubadala Citi DC Open. Tennis tournament featuring nine of the world’s top 20 players. Rock Creek Park.

Aug. 12-15, Riyadh, Saudi Arabia: Saudi Food Expo. One of the kingdom’s largest trade shows for the food & beverage industry. Riyadh Front Exhibitions. 

Sep. 30-Oct. 2, Dubai, UAE: Future Hospitality Summit. The global conference for leaders in the hospitality industry expands this year at a new location with dedicated space for ESG planning, country pavilions and a larger exhibition area. Madinat Jumeirah.