Against the backdrop of the AH market index continuing to weaken, large Middle Eastern investors have indeed continued to increase their holdings of Chinese assets, which is worth paying attention to.
Against the backdrop of the AH market index continuing to weaken, large Middle Eastern investors have indeed continued to increase their holdings of Chinese assets, which is worth paying attention to.
On December 10, Kingdee International Software Group Limited (“Kingdee International”; 00268.HK) announced that it had reached a final agreement with the Qatar Investment Authority (“QIA”). According to the agreement, QIA will invest about 200 million US dollars as consideration to subscribe to common shares issued by Kingdee International. After the transaction is completed, it will account for about 4.26% of Kingdee International's total common stock, and the lockdown period will be 180 days. According to information, this strategic investment is the largest single investment record for a Middle East fund in a Chinese software circuit company up to now, and it is also QIA's largest single investment in a Chinese company since 2019.
QIA is a sovereign investment institution in Qatar. It was founded in 2005 and is responsible for investing and managing national reserve funds. It is also the ninth largest sovereign wealth fund in the world. QIA has extensive investment experience in the global TMT sector. In the SaaS direction, QIA focuses on the scale and quality of the subscription business, tracks the Chinese software industry for a long time, and is optimistic about Kingdee's subscription business development, philosophy and long-term value. QIA said that it will not interfere with the company's daily operations after taking a stake in the company, and is also willing to provide all kinds of resources for Kingdee International to go overseas to help its global strategy and explore the Middle East market.
The cartel's funds have just been removed, and the head of the Saudi Public Investment Fund (PIF) announced plans to open an office in mainland China soon. As early as September of this year, the UAE sovereign wealth fund Mubadala Investment Company just set up an office in Beijing. Since this year, Saudi public investment funds have invested in the Chinese market many times.
Investors believe that the establishment of an office for the Saudi Public Investment Fund once again shows the confidence of the Saudi Public Investment Fund in continuing to invest in China. In August of this year, the Saudi Public Investment Fund released its 2022 annual report, stating that PIF's asset management scale (AUM) exceeded 2.23 trillion Saudi riyals (approximately US$594.556 billion, RMB 4.27 trillion).
Whether the Hong Kong market has value or not, the Middle East capital has already explained everything with practical actions. Prior to investing in Kingdee International, QIA also participated in the IPO cornerstone investment of China Biocoupling Drug Contract Research, Development and Production (CRDMO) Company (02268.HK) in November.
In June of this year, the UAE's Abu Dhabi Investment Authority (“ADIA”), the largest sovereign wealth fund in the Middle East region, ADIA also made strategic investments totaling about 1.1 billion US dollars in the new car builder NIO (9866.HK; NIO.N; NIO.SG) through its institutions.
According to Wind data, as of the end of the first half of 2023, the Kuwait Investment Authority (“KIA”), the second largest sovereign wealth fund in the Middle East, appeared in the list of the top ten tradable shareholders of 36 A-share listed companies.
The Saudi Arabian Public Investment Fund (“PIF”), the third largest sovereign wealth fund in the Middle East, signed a memorandum of cooperation with Little Yellow Duck Deying (2250.HK), the largest local intellectual property company in China, in July this year. It plans to invest US$250 million in Little Yellow Duck Deying, including joint development of B.Duck theme entertainment parks and hotels in Thailand and Southeast Asia, further expanding B.Duck's brand influence and IP market penetration in the local market.
Saudi Investment Minister Khaled Falih recently led a group visit to China. On December 10, China Financial Corporation President Wu Bo led a team to a meeting and exchange discussions. After Wu Bo became the new president of CICC, this was one of the few public events from an industry perspective. A number of securities companies are also acting in the same way, including many securities companies such as China Financial Corporation, Bank of China Securities, CITIC Securities, and Tianfeng Securities, etc., to cooperate between China and Saudi Arabia and actively expand the Middle East market.
CITIC Securities pointed out that this is because Middle Eastern sovereign wealth funds tend to allocate manufacturing, utilities, raw materials, and optional consumption, etc. related to the domestic industrial structure. As the industrial upgrading strategies of major Middle Eastern economies advance, it is expected that in the future, the layout of China's dominant industries, such as new energy and advanced manufacturing, will be increased in line with their own development strategies.
The latest data on central enterprises also shows that A-shares and Hong Kong stocks are actually not short of money; they just lack confidence in holding shares. Today, large Middle Eastern investors are sweeping away high-quality Chinese assets, but the direction of investment has changed. It is no longer the big market capitalization Internet platform+real estate+big finance that was popular back then. Instead, it is an emerging technology industry+green energy, etc., which has made investors even more admired. Who dares to say that in the 2024 stock market, “structured bulls” are more tempting?