China, the world’s second-largest economy, is set to receive $1 trillion to $2 trillion in investments from top sovereign funds in the Middle East by 2030 as they look to pivot to Asia amid a rapid rise in their investment capital, the chief executive of Hong Kong Stock Exchange (HKEX) has said.
The state-controlled wealth funds in the region currently have about $4 trillion in investment capital available and only a small portion of that – approximately 1 per cent to 2 per cent – is being invested in Asia, particularly China, Nicolas Aguzin told delegates at the 10th Arab-China Business Conference in Riyadh on Monday.
This investment capital is expected to grow to about $10 trillion by the end of this decade and “we estimate somewhere between 10 per cent and 20 per cent will be invested in China”, said Mr Aguzin, a former JP Morgan banker.
“Think about what that means. That’s about $1 trillion to $2 trillion that will be reallocated in investments in that part of the world.”
Sovereign wealth funds in the Middle East, which are some of the largest in the world, invest on behalf of their governments to generate long-term returns.
Sovereign funds in the six-member economic bloc of the GCC, including the Public Investment Fund in Saudi Arabia, Qatar Investment Authority and Kuwait Investment Authority, as well as Abu Dhabi Investment Authority and Mubadala Investment Company in the UAE, channel the Gulf nations’ hydrocarbon wealth across assets classes including debt and equity capital markets.
Sovereign funds that hold significant stakes in publicly listed companies across the world have started pivoting to the broader Asia region, particularly to China as their economic growth continues to outpace the global average.
China is a “unique opportunity, especially when we think about the Middle East” and how that can tap into the rapid development of the Chinese capital market, Mr Aguzin said.
“That is really massive” and is something a “lot of people in the audience today are focused on”, he added.
China, he said, is also home to one of the biggest pools of investment capital: the Chinese domestic savings, both retail and institutional, which are growing at a rapid pace.
That pool of investment has so far been focused primarily on opportunities in China’s domestic market.
However, with China being the main trading partner of about 140 economies in the world, this capital will start to move out of the country and flow to eastern and western markets, which also bodes well for trade in the Middle East, Mr Aguzin said.
“We will start to see more of that capital coming out of the mainland and going internationally,” he said.
The economic ties between China and the Arab world, especially with Saudi Arabia, are growing rapidly and there is ample room for further growth, especially in capital market relation between the two countries, Khalid Al Falih, Saudi Arabia’s Minister of Investment, told policymakers, government officials, investors and executives from top companies in China and Saudi Arabia on Sunday at the opening of the two-day summit in Riyadh.
In February, HKEX signed a preliminary agreement with the Saudi Tadawul Group Holding, the operator of Tadawul stock exchange, the biggest bourse in the Arab world.
The pact allows the two bourses to explore co-operation in areas of cross listings, FinTech and environment, social and governing standards.
It also allows working on a framework of cross listing providing easier access to investors in both exchanges.
The close co-operation between Tadawul and HKEX will continue to grow and “we hope this will extend to the Shanghai Stock Exchange”, leading to “joint listings of companies” in both markets to accommodate the flow of funds, Mr Al Falih told delegates on Sunday.
The 10th conference marked its first day with the signing of $10 billion in investment agreements, spanning more than 30 deals across sectors including technology, renewables, agriculture, property, minerals, supply chains, tourism and health care.
A $533 million deal between the AMR ALuwlaa and Zhonghuan International Group from Hong Kong to set up an iron ore factory, and a $500 million agreement between Saudi Arabia’s ASK Group and China National Geological & Mining Corporation for the Arabian Shield copper mining project were among the major businesses-to-business deals.
Government-to-business agreements included a $5.6 billion deal between the Saudi Ministry of Investment and Chinese developer of autonomous driving technology Human Horizons, to set up a joint venture for the research, development, manufacturing and sale of electric vehicles.
UAE currency: the story behind the money in your pockets
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
RESULTS
5pm Maiden (PA) Dh70,000 (Dirt) 1,400m
Winner AF Nashrah, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
5.30pm Maiden (PA) Dh70,000 (D) 1,400m
Winner Mutaqadim, Riccardo Iacopini, Ibrahim Al Hadhrami.
6pm Maiden (PA) Dh70,000 (D) 1,600m
Winner Hameem, Jose Santiago, Abdallah Al Hammadi.
6.30pm Maiden (PA) Dh70,000 (D) 1,600m
Winner AF Almomayaz, Sandro Paiva, Ali Rashid Al Raihe.
7pm Handicap (PA) Dh70,000 (D) 1,800m
Winner Dalil Al Carrere, Fernando Jara, Mohamed Daggash.
7.30pm Handicap (TB) Dh70,000 (D) 1,000m
Winner Lahmoom, Royston Ffrench, Salem bin Ghadayer.
8pm Handicap (PA) Dh70,000 (D) 1,000m
Winner Jayide Al Boraq, Bernardo Pinheiro, Khalifa Al Neyadi.
RESULTS
6.30pm Al Maktoum Challenge Round-1 Group One (PA) US$65,000 (Dirt) 1,600m
Winner RB Money To Burn, Fabrice Veron (jockey), Eric Lemartinel (trainer).
7.05pm Handicap (TB) $175,000 (Turf) 1,200m
Winner Ekhtiyaar, Jim Crowley, Doug Watson.
7.40pm UAE 2000 Guineas Trial Conditions (TB) $100,000 (D) 1,600m
Winner Commanding, Richard Mullen, Satish Seemar.
8.15pm Singspiel Stakes Group Two (TB) $250,000 (T) 1,800m
Winner Benbatl, Christophe Soumillon, Saeed bin Suroor.
8.50pm Handicap (TB) $135,000 (T) 1,600m
Winner Zakouski, William Buick, Charlie Appleby.
9.25pm Al Maktoum Challenge Round-1 Group Two (TB) $350,000 (D) 1,600m
Winner Kimbear, Pat Dobbs, Doug Watson.
10pm Dubai Trophy Conditions (TB) $100,000 (T) 1,200m
Winner Platinum Star, Christophe Soumillon, Saeed bin Suroor.
10.35pm Handicap (TB) $135,000 (T) 1,600m
Winner Key Victory, James Doyle, Charlie Appleby.
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Engine: Four electric motors, one at each wheel
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The biog
Favourite colour: Brown
Favourite Movie: Resident Evil
Hobbies: Painting, Cooking, Imitating Voices
Favourite food: Pizza
Trivia: Was the voice of three characters in the Emirati animation, Shaabiyat Al Cartoon
MATCH INFO
Aston Villa 1 (Konsa 63')
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Red card: Jon Egan (Sheffield United)
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
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Syria v Australia
2018 World Cup qualifying: Asia fourth round play-off first leg
Venue: Hang Jebat Stadium (Malacca, Malayisa)
Kick-off: Thursday, 4.30pm (UAE)
Watch: beIN Sports HD
* Second leg in Australia scheduled for October 10
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
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MATCH INFO
Europa League final
Who: Marseille v Atletico Madrid
Where: Parc OL, Lyon, France
When: Wednesday, 10.45pm kick off (UAE)
TV: BeIN Sports
Semi-final fixtures
Portugal v Chile, 7pm, today
Germany v Mexico, 7pm, tomorrow
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
COMPANY PROFILE
Name: Akeed
Based: Muscat
Launch year: 2018
Number of employees: 40
Sector: Online food delivery
Funding: Raised $3.2m since inception
The finalists
Player of the Century, 2001-2020: Cristiano Ronaldo (Juventus), Lionel Messi (Barcelona), Mohamed Salah (Liverpool), Ronaldinho
Coach of the Century, 2001-2020: Pep Guardiola (Manchester City), Jose Mourinho (Tottenham Hotspur), Zinedine Zidane (Real Madrid), Sir Alex Ferguson
Club of the Century, 2001-2020: Al Ahly (Egypt), Bayern Munich (Germany), Barcelona (Spain), Real Madrid (Spain)
Player of the Year: Cristiano Ronaldo, Lionel Messi, Robert Lewandowski (Bayern Munich)
Club of the Year: Bayern Munich, Liverpool, Real Madrid
Coach of the Year: Gian Piero Gasperini (Atalanta), Hans-Dieter Flick (Bayern Munich), Jurgen Klopp (Liverpool)
Agent of the Century, 2001-2020: Giovanni Branchini, Jorge Mendes, Mino Raiola
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Killing of Qassem Suleimani
The specs: 2018 Infiniti QX80
Price: base / as tested: Dh335,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 400hp @ 5,800rpm
Torque: 560Nm @ 4,000rpm
Fuel economy, combined: 12.1L / 100km
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Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
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