The Daily Circuit
đź‘‹ Hello from the Middle East!
Today in The Daily Circuit, we’re looking at Aramco’s roadshow in London, Emirates Chief Tim Clark’s beef with Boeing, a new tool in Saudi Arabia’s campaign to house corporate HQs and an alliance between sovereign wealth funds in Bahrain and China. But first, plans for the London debut of Shein shares.
Fast fashion disruptor Shein is planning to confidentially file for a London public listing as soon as this week, Sky News reported, the first step in a super-sized initial public offering in the U.K. The Singapore-headquartered company, which counts Abu Dhabi’s Mubadala as a major shareholder, had been targeting a New York IPO in the second half of last year but Beijing-Washington tensions waylaid those plans.
To placate U.S. lawmakers in a bid to go public there, Shein has gone so far as to move its HQ from China to Singapore and stop selling its products in the world’s second-largest economy. Executive Chair Donald Tang told the Financial Times last month those efforts were not enough.
Now the retailer is serving up a potential blockbuster to the sluggish London exchange, although a confidential filing does not necessarily mean a share sale is imminent. The filing will allow Shein to list more quickly if the company decides to move ahead on a market debut. The 15-year-old company, which also counts venture capital group Sequoia China and private equity group General Atlantic as major backers, was valued at $66 billion in a funding round a year ago.Â
While Shein did not invent the technology to help it predict rising fashion trends, the platform to give near real-time data to suppliers — who are mostly in China — created its unique “on-demand” production model, according to Business Insider, which looked into its production practices. The data sharing allows for a fast turnaround from small order runs to much larger orders when an item is selling well, and to quickly drop an item when it isn’t. The tight control it keeps over its supply chain has revolutionized fast fashion in recent years, making Shein more in demand among consumers than competitors like Zara and H&M. Price is another factor in its popularity. McKinsey found the average cost per item from Shein is $14, while Zara is $34.
đź“° Developing Stories
ARAMCO ROADSHOW
Saudi Aramco executives are traveling this week to recruit international investors for the oil company’s $12 billion secondary offering, a departure from its IPO held five years ago that was marketed primarily to the home crowd. Aramco CEO Amin Nasser and CFO Ziad Al Murshed will be attending roadshow events in London while others are planning to join presentations in New York, Bloomberg reports. Institutional investors can submit orders until June 6 for the $1.8 trillion company’s share sale that began the booking process on Sunday and was oversubscribed within hours. Before Aramco’s $29.4 billion IPO in 2019, overseas investors showed limited interest, leaving the government reliant on local buyers. The kingdom scrapped a roadshow event in London and decided against presentations in the U.S. and Japan, choosing instead to focus on its enthusiastic domestic audience, who made the IPO the largest in history.
BOEING WOES
Emirates President Tim Clark says in a round of interviews that the crisis at Boeing is far from over and the U.S. planemaker needs to do more to address customer concerns. For starters, he says Emirates should receive billions in compensation for delays in the development of Boeing’s latest 777 jet, Arab News reports. Clark’s concerns carry clout given that his airline is the biggest buyer of both Boeing and Airbus widebody aircraft. “For me, this will be a five-year hiatus starting from now,” Clark said in an interview with Bloomberg. As a result of the manufacturing issues and delays on new widebody aircraft at the planemaker, Emirates is putting more of its Boeing 777 aircraft through an extensive retrofit program, Clark said. That has raised the cost of the program to about $3.5 billion from previously $2 billion, he said. Clark also advised that Boeing pick a strong CEO grounded in engineering and business to replace the departing Dave Calhoun. The Emirates chief also said he’s certain that airfares are going up. “Unfortunately, but that’s the way it is,” he told CNBC.
đź’˛ Sovereign Circuit
Public Investment Fund: Saudi Arabia’s sovereign wealth fund is clamping down on its regional headquartering rule for firms looking to do business with the kingdom, Bloomberg reports. The PIF has started adding language to agreements with bankers to determine if they have obtained a regional headquarters license in the country. Meanwhile, EV maker Lucid, which counts the PIF as its biggest shareholder, has opened its first showroom in the UAE as the struggling luxury carmaker eyes the Gulf as a core market for growth.
Mumtalakat: The Bahraini sovereign wealth fund signed a preliminary agreement with China Investment Corp., China’s largest sovereign fund, to explore potential investment opportunities. The agreement was reached during the state visit of King Hamad bin Isa Al Khalifa, President of the 23rd Arab Summit, and the accompanying official delegation’s visit to China last week.
Abu Dhabi Investment Authority: The recent rejection of a ÂŁ5 billion ($6.35 billion) bid from ADIA, CVC and Nordic Capital by the board of Hargreaves Lansdown is a “sign that bargain-hunting predators are circling over cheap-and-cheerless British companies,” according to an op-ed in the Financial Times today that examines London’s revival for equity-raises.Â
ADQ: Mohammed Saeed Al Remeithi was named CEO of Abu Dhabi Aviation, the ADQ-backed operator of helicopters and fixed-wing aircraft.
↪↩ Closing Circuit
🛢️ Oil Allies: OPEC+ agreed on Sunday to continue its deep oil output cuts well into 2025 as the group seeks to shore up the market amid tepid demand growth, high interest rates and rising rival U.S. production, Reuters reports.
💰 Venture Kingdom: Saudi Arabia’s tech startups raised $400 million in venture debt in 2023, seven times as much as the year before, accounting for 53% of the region’s venture financing, according to a report by the Dubai-based data analysis firm MAGNiTT.
🪸 Fund Fishing: Saudi agritech company Iyris (formerly Red Sea Farms) raised $16 million in new investment led by Ecosystem Integrity and with participation from Global Ventures, Dubai Future District Fund, Kanoo Ventures, Globivest and Bonaventure Capital.
đź—Ł Circuit Chatter
🤖 AI Safety: UAE-based G42 joined a coalition with 16 top tech companies, including Microsoft, Amazon and OpenAI, committed to new safety standards in developing artificial intelligence applications.
⚡ Energy Choice: Oman’s OQ Group joined other companies including Dutco, Sumitomo Middle East, Automobili Lamborghini and Airbus, in signing a preliminary agreement to study the potential supply of sustainable automobile and aircraft fuels in Oman.
💸 VC Return: Two of the largest venture capital firms in Silicon Valley, Greylock and Sequoia, are planning to reopen offices in Israel that were closed as investment in the country’s tech startups declined.
🌍 Power Circuit
Sheikh Tamim, the Emir of Qatar, visited the UAE for a few hours on Sunday, meeting President Sheikh Mohamed bin Zayed in Abu Dhabi. The Emirati leader affirmed the UAE’s support for Qatar in hosting the annual meetings of the International Monetary Fund and the World Bank in 2026 and confirmed that the UAE will withdraw its request to host the meetings, according to a government statement.
Sheikh Meshal, the Emir of Kuwait, issued a decree nominating Sheikh Sabah al-Khalid as Crown Prince, the state news agency KUNA reported.
âžż On the Circuit
Anthony Scaramucci, founder of SkyBridge Capital, a partner in the UAE’s annual Investopia conference and briefly the White House spokesman under former President Donald Trump, is now backing President Joe Biden for reelection and vigorously criticizing Trump, Air Mail reports.
Meshari Al-Ibrahim, Assistant Secretary General of the Kuwait Democratic Forum, said in an interview with Al-Rai TV that blaming expats for Kuwait’s shortcomings is just a “balloon created to cover up for other problems” troubling the government.
The sprawling empire of Ken Griffin, CEO of hedge fund Citadel and Founder of Citadel Securities, is the subject of a feature in The Information. “He wants to own the world,” one former Citadel hedge fund investor put it to the Silicon Valley publication.
🎶 Culture Circuit
📽️ Screen Time: Saudi Arabia’s first film to be selected at the Cannes Film Festival, “Norah,” has been slated for release to local and international cinemas on June 20. The debut feature from director Tawfik Alzaidi follows the story of a failed artist in the 1990s who helps a student find her way. The film, which was shot in AlUla, was picked for the Un Certain Regard section of the festival, which recognises emerging talent and non-traditional narratives.Â
đź“· Photo of The Day
🗓️ Circuit Calendar
June 2, Muscat, Oman: Taiwan Trade Mission to Oman. Taiwan trade officials invite Omani investors and entrepreneurs for one-on-one meetings at conference. Crowne Plaza Muscat.
June 5, Hong Kong: Bloomberg Wealth Event. A gathering to bring actionable intelligence to portfolio managers and other dealmakers and analysts from asset managers and owners, family offices and hedge funds. Conrad Hong Kong.
June 11-13, Rio de Janeiro, Brazil: Future Investment Initiative Priority Summit. Saudi Public Investment Fund holds FII conference for first time in Latin America. Copacabana Palace.
June 16-18, Across MENA: Eid Al Adha. Government offices and businesses are closed across the MENA region for the Islamic holiday. Dates are subject to sighting of the moon by state religious committees in each country.
June 22-23, New York City: Mubadala New York Sail Grand Prix. Flying catamarans compete at SailGP’s two-day racing festival in New York Harbor. Governors Island.
June 23-26, National Harbor, Maryland: SelectUSA Investment Summit. The highest profile event in the U.S. to facilitate business investment by connecting thousands of investors, companies, economic development organizations and industry experts to make deals. Gaylord National Resort and Convention Center.
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.
