Holding 30 trillion, the foreign capital most daring to bet on A-shares is still frantically increasing its positions in the new tea beverage industry trends, understanding the new product information of various brands.
Over the past two years, a large foreign capital army has emerged from Beijing, consistently bullish regardless of whether A-shares rise or fall, and has now become an undeniable new force in the market.
It is the sovereign wealth funds from the Middle East. 01 The more they fall, the more they buy. According to statistics from the global sovereign wealth fund data platform Global SWF, in 2023 alone, sovereign wealth funds from GCC countries such as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE made a total of $2.3 billion in direct investments and acquisitions in China, compared to just $100 million in 2022. As we enter 2024, Middle Eastern capital continues to buy more as domestic capital markets face downward pressure.
Data shows that in the first three quarters, the transaction volume of Middle Eastern companies in the Greater China region has reached $9 billion. This does not include investments in China from their subsidiaries.
For example, last year, the Abu Dhabi Investment Authority's investment institution CYVN Holdings made two rounds of strategic investments in NIO in cash form, totaling up to $3.3 billion; another example is that last March, Saudi Aramco signed a final agreement with Rongsheng Petrochemical to acquire 10% of Rongsheng Petrochemical's equity for 24.6 billion RMB, and in May this year, a subsidiary of the Saudi Public Investment Fund (PIF) provided Lenovo Group with a $2 billion interest-free convertible bond investment, etc.
Roughly calculated, Middle Eastern capital has already invested hundreds of billions of dollars in China since 2023. And this seems just to be the beginning.
On May 20 of this year, the chairman of the Securities Regulatory Commission, Wu Qing, met with the Saudi Minister of Finance, Jadaan, to finalize topics such as cooperation in the capital markets between China and Saudi Arabia. On June 2, the CEO of the Hong Kong Securities and Futures Commission, Laura Liang, met with the chairman of the Saudi Capital Market Authority and senior officials of the Saudi Stock Exchange Group to discuss financial cooperation between Hong Kong and Saudi Arabia.
Within just a few months, substantial and significant initiatives have been implemented. On August 1, the Saudi Public Investment Fund (PIF) announced on its official website that it had signed a memorandum of understanding worth up to $50 billion with six Chinese financial institutions to further expand cooperation in capital flows. On October 30, the first ETF for investing in Chinese Hong Kong stocks - Albilad CSOP MSCI Hong Kong China ETF was listed on the Saudi Exchange. Previously, Bloomberg reported that the expected issuance scale of this ETF was around $400 million, but the final raised funds exceeded HKD 10 billion, with subscription enthusiasm far exceeding expectations.
Given the strength and appetite of Middle Eastern capital, it would not be surprising to see significant actions taken next. There are currently 20 sovereign wealth funds in the Middle East, with a total asset scale of $4.9 trillion, accounting for over 40% of the total managed scale of global sovereign wealth funds, of which the sovereign wealth funds of the six GCC countries amount to $4.5 trillion (equivalent to over 30 trillion RMB).
As of the end of 2023, the Middle East occupies 5 out of the top 10 sovereign wealth funds in the world by managed scale, with another 2 ranking 11th and 12th, namely Mubadala Investment Company and Abu Dhabi Holding Company (ADQ).
