A-shares are in a downturn, but Middle Eastern consortia see this as an opportunity to wave money and sweep goods in China. According to public data, Abu Dhabi Investment Authority, the largest sovereign wealth fund in the Middle East and the fourth largest in the world, rose in the third quarter of its A-share holdings, and entered the list of the top ten circulating shareholders of 25 listed companies, mainly covering non-ferrous metals, pharmaceuticals, automobiles, new energy and other fields. The stocks of the Abu Dhabi Investment Authority's heavy positions are Zijin Mining, Wanhua Chemical, Hengli Hydraulics, and Beijing New Building Materials.
As early as the fourth quarter of 2021, the Abu Dhabi Investment Authority entered the list of the top ten shareholders of outstanding shares, increasing its holdings by 2.998 million shares in the third quarter of this year, holding a total of 153 million shares, becoming the largest heavy stock in A-shares, with a market value of about 1.859 billion yuan as of November 3. In addition, the Abu Dhabi Investment Authority also began to buy bank shares in the third quarter, entering the list of the top ten outstanding shareholders of Bank of China for the first time, holding 0.0583% of outstanding shares and a market value of 463 million yuan.
According to the combing, as of November 4, the Kuwait Investment Authority appeared in the top 10 shareholders or unrestricted shareholders of 28 A-share companies. It is worth noting that the shareholding ratio of the Kuwait Investment Authority is relatively diversified, and the target is dominated by a market capitalization of 10 billion yuan or less. However, it has shown a strong interest in biomedicine, and among the 28 companies it has invested, 7 are biomedical companies.
According to the statistics of Shanghai Securities News, the Abu Dhabi Investment Authority held a total of 25 A-share companies in the third quarter, with a market value of about 9.567 billion yuan. The Kuwait Investment Authority has invested in 28 A-share companies, with a market value of about 4.831 billion yuan.
Yu Lingqu, executive director of the Institute of Financial Development and State-owned Assets and State-owned Enterprises of the China (Shenzhen) Comprehensive Development Research Institute, told Shenzhen Satellite TV that the Middle East sovereign funds, as long-term funds of the allocation type, are more interested in the long-term development of A-share enterprises in the future, and the current price is actually a relatively more reasonable range for them, so they will choose to buy at the right time. Yu Lingqu added that if more long-term funds such as Middle Eastern sovereign wealth funds participate in the A-share market, "our capital market may only undergo some fundamental improvements." ”
Since the beginning of this year, in addition to the stock market, Middle Eastern funds have also accelerated their investment in Chinese companies. On December 12, at the China-Saudi Arabia Investment Summit held in Beijing, China and Saudi Arabia signed more than 60 memorandums and agreements in various fields such as tourism, mining and finance, with a total value of about 25 billion US dollars. The biggest deal was in the esports space, where the Saudi Esports League and Chinese esports event operator VSPO signed an $8.5 billion memorandum. Back in February this year, Savvy Games Group, a subsidiary of Saudi Arabia's sovereign wealth fund, made an investment in VSPO.
Not only in the field of e-sports, but also in the fields of software technology, artificial intelligence, and new energy, which are favored by Middle Eastern capital. NIO announced on December 18 that CYVNHoldings, an investment arm of the Abu Dhabi Investment Authority, a sovereign wealth fund in the United Arab Emirates, will invest US$2.2 billion to subscribe for 294 million ordinary shares of NIO at a purchase price of US$7.5 per share. In June, the agency also made a strategic investment totaling about $1.1 billion in NIO. A week ago, Shenzhen-based company Kingdee Software received a strategic investment of US$200 million from the Qatar Investment Authority. In October, Pony.ai, an autonomous driving company, announced that it had received a $100 million investment from New Future City in the Kingdom of Saudi Arabia and its investment fund NIF.
The "Middle Eastern tycoons" who buy non-stop in the Chinese market want to set up localized teams in China and open new offices. Yasser al-Rumayan, head of Saudi Arabia's Public Investment Fund, recently said that he plans to open an additional office in Chinese mainland. The head of the fund said that international investment is being expanded. He highlighted that currently, 52% of the world's tech companies' turnover growth comes from Asia, 43% of start-up financing and 51% of R&D spending are in Asia, and China has 26% of the world's unicorns.
In September, Mubadalah Development Corporation, the UAE's sovereign wealth fund, opened an office in Beijing. Prior to Mubadala, Middle Eastern sovereign funds such as the Abu Dhabi Investment Authority, the Kuwait Investment Authority, and the Qatar Investment Authority had set up offices in China. There are signs that Middle Eastern sovereign funds are stepping up their recruitment efforts in China, and relevant institutions are focusing on recruiting investment experts, investment consultants, investment managers and senior analysts.
At present, Middle Eastern sovereign wealth funds are actively looking for opportunities in China and diversifying their layout to increase their weight in China. In the case of the Abu Dhabi Investment Authority, which invested only 4.5% of its RMB assets in 2019, it has grown rapidly to 22.9% in 2023. According to the chief executive of the Hong Kong Stock Exchange, Nicolas Aguzin, the top 10 sovereign wealth funds in the Middle East currently have about $4 trillion in assets under management, of which $40 billion is invested in China. This is expected to expand to $10 trillion by 2030, with 10 percent, or nearly $1 trillion, in China.
Yu Lingqu, executive director of the Institute of Financial Development and State-owned Assets and State-owned Enterprises of China (Shenzhen) Comprehensive Development Research Institute, pointed out that the accelerated investment of Middle East funds in China is actually the result of a two-way choice. Therefore, it is looking for high-tech and hard-tech targets around the world. In this field, China has come to the forefront of the world. For example, China is the world's leader in new energy vehicles, which are frequently invested by Middle Eastern funds. In this case, from the perspective of Middle Eastern funds, investing in China is a must.
Author丨Wang Jia, editor-in-chief of Shenzhen Satellite TV Direct News
Editor丨Duan Xiaoqing, editor-in-chief of Shenzhen Satellite TV Direct News