The Daily Circuit: PIF connects with China banks + U.K. property lures Gulf

👋 Hello from the Middle East!

Today in the Daily Circuit, we’re looking at a surge of Gulf investment in U.K. real estate, the UAE’s amnesty offer for lapsed visa-holders, an IPO filing by Abu Dhabi-backed California chipmaker Cerebras and Live Nation Arabia’s deal to manage AlUla’s stunning mirror-wrapped desert concert hall. But first Saudi Arabia’s PIF connects with China’s biggest banks.

Saudi Arabia’s Public Investment Fund is putting its $925 billion in assets to work in China. Following a trip to Beijing last month by a delegation of Saudi executives led by PIF Governor Yasir Al Rumayyan, the sovereign wealth fund corralled preliminary agreements worth $50 billion with six major Chinese financial institutions.

Besides a series of deals focused on renewable energy and steel manufacturing that were already disclosed, the PIF said in a statement on Thursday that it signed the memorandums of understanding with the Agricultural Bank of China, the Bank of China, the China Construction Bank, China Export and Credit Insurance Corp., the Export-Import Bank of China, and the Industrial and Commercial Bank of China.

The new agreements “demonstrate the PIF’s strong and deepening relationships with leading financial institutions and accentuate PIF’s commitment to enhancing partnerships globally,” Fahad Al Saif, the fund’s Head of Global Capital Finance, said in the statement.

Saudi Arabia, the UAE and other Gulf states have been engaged in a delicate balancing act of strengthening commercial ties with China, the world’s second-biggest economy, while steering clear of U.S. efforts to restrict Chinese access to cutting-edge technology in artificial intelligence and other competitive fields.

📰 Developing Stories

LONDON CALLING

Investors from the Gulf region are pouring an unprecedented amount of money into the U.K. property market. Citing a rare economic alignment of slowing inflation, a drop in commercial real estate prices and anticipated interest rate cuts, Gulf investors are expected to spend over $4 billion a year on property in London and other parts of the country, according to a report by The Bank of London and the Middle East. “We anticipate investors from the GCC will look to the U.K. to diversify their portfolios, and they will see profitable opportunities to invest and improve existing building stock,” said Rashid Khan-Gandapur, the bank’s Director of Real Estate Finance. Among the opportunities for property owners is a demographic shift that is boosting the number of students looking for rental housing, the report said.

FREE PASS

Residents of the UAE with lapsed or invalid documentation will be given the chance to rectify their status without penalty when the country holds a two-month visa amnesty, starting on Sept. 1. The grace period, to be overseen by the Federal Authority for Identity, Citizenship, Customs and Port Security, will allow those with expired residency visas to either leave the country without being fined for overstaying, or apply for new documentation in order to get a fresh start in the UAE. It is the first time such a program has been held since 2018, when hundreds of thousands of residents took advantage of an amnesty period, leading to lengthy queues at immigration centers. Many people who overstay visas do so unintentionally, having lost a job or gone through a family break-up, or after being duped by unauthorized job agencies, a welfare organization told The National.

💲 Sovereign Circuit

ADQ: Abu Dhabi-backed California semiconductor startup Cerebras Systems has filed confidentially for an initial public offering in the U.S. and picked Citigroup as its lead bank, Bloomberg reports. Cerebras was valued at over $4 billion in a 2021 funding round, when it raised $250 million. Billed as an alternative to dominant chipmaker Nvidia, Cerebras is backed by the Abu Dhabi Growth Fund, an investment fund established by sovereign wealth fund ADQ, and Abu Dhabi artificial intelligence company G42. Meanwhile, Joszef Varadi, CEO of Wizz Air, said in an interview with The National that the budget carrier’s plans to expand flight capacity in Abu Dhabi, where it runs a joint venture with ADQ, were put on hold. The action stemmed from a shortage of aircraft because of problems with Pratt & Whitney engines that led to grounding 21% of the airline’s fleet, he said. 

Public Investment Fund: Concert promoter Live Nation Arabia will manage operations at AlUla’s Maraya Hall cultural center after striking a three-year deal with PIF-backed AlUla Development Co. The PIF is reported to be looking into bankrolling a ninth team to be added to the Hundred tournament in order to gain a stake in the U.K. cricket franchise, according to London’s The Times. The head of world cycling’s governing body, David Lappartient, meanwhile, told Bloomberg that Saudi investments are welcome to help stabilize finances in the road racing circuit, as long as they don’t create a parallel league to the UCI.

↪↩ Closing Circuit

🩺 Drug Developer: Ozon Pharmaceuticals, a New Delhi-based drugmaker, signed an agreement to build a new $80 million manufacturing facility in Dubai Industrial City to serve its growing MENA business.

⛽ Gas Expansion: Chevron and other partners in Israel’s Leviathan offshore gas project approved a $429 million investment to expand the field and increase production.

⚗️ Chemical Rebound: Saudi Arabia’s biggest chemical company, Sabic Basic Industries, beat analyst profit estimates for second-quarter profit, earning $581 million and indicating the industry may be recovering from last year’s downturn.

📺 Monetizing Video: Outbrain, the Israeli-founded content recommendation company that trades on Nasdaq, said it will buy Teads, a video monetization business owned by French billionaire Patrick Drahi’s Altice media firm.

🗣 Circuit Chatter

🛩️ Aircraft Fuel: Abu Dhabi’s clean energy company Masdar signed an agreement with France’s TotalEnergies to explore a sustainable aviation fuel project using methanol produced from green hydrogen.

☪️ Changing Direction: Kuwait Finance House, which provides Shariah-compliant Islamic banking services, plans to shut down its subsidiary in Malaysia as it expands in the GCC and other Middle East markets.

💱 Payment Platform: National Pulse, a strategic management company in the UAE, has invested in Singapore-based cross-border payment platform Aleta Planet to help it expand across the MENA region.

🛢️ Iraqi Energy: British oil and gas company BP signed an initial agreement with Iraq to negotiate the development of its Kirkuk oil and gas fields, including power generation, introduction of solar facilities and further energy exploration.

🌐 Chip Probe: The U.S. Justice Department is investigating Nvidia’s acquisition of Run:ai, an Israeli artificial intelligence start-up, for potential antitrust violations, the Financial Times reports.

🌍 Power Circuit

Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council, approved the launch of the Medeem Center for Family Nurturing, which seeks to “equip engaged and newly married couples and families with the necessary social, physical, psychological skills and knowledge for a successful married life and enable them to raise their children responsibly.”

Emir of Qatar Sheikh Tamim bin Hamad issued a decision formally reconstituting the country’s National Human Rights Committee, with a board composed of five government representatives and eight members of civil society organizations.

➿ On the Circuit

UAE Minister of Economy Abdullah bin Touq and Azerbaijani Minister of the Economy Mikayil Jabbarov met in the Azerbaijani city of Shusha on Thursday and agreed to strengthen commercial ties between the two countries, particularly in the realms of tourism, aviation, technology, agriculture, energy and food security.`

Stefan Gumuseli was named Air France-KLM’s Dubai-based General Manager for the airline company’s India-Middle East branch, with authority over business in the UAE, Saudi Arabia, Lebanon and Egypt.

🎶 Culture Circuit

🕌 Mosques of Tomorrow: Inspiring new ways of thinking about Islamic art and encouraging novel mosque designs will be the underlying theme of this year’s Islamic Art Conference at Saudi Arabia’s King Abdulaziz Centre for World Culture (Ithra). To be held between Nov. 25-30, the event will identify emerging trends from across the Arab world, while continuing to explore the heritage of Islamic arts and crafts.

📷 Photo of the Day

🗓️ Ahead on The Circuit

July 2-Aug. 25, Riyadh, Saudi Arabia: Esports World Cup. An international competition for professional gamers with a $60 million prize pot. Boulevard City.

July 27-Aug. 4, Washington D.C. Mubadala Citi DC Open. Tennis tournament featuring nine of the world’s top 20 players. Rock Creek Park.

Aug. 12-15, Riyadh, Saudi Arabia: Saudi Food Expo. One of the kingdom’s largest trade shows for the food & beverage industry. Riyadh Front Exhibitions.

Sept. 10-11, Dubai, UAE: Global Vertical Farming Show 2024. Annual event brings together investors, growers, and executives in the vertical farming industry from around the world. Le Méridien Dubai Hotel & Conference Centre.

Sept. 24-25, Dubai, UAE: ACT Middle East Treasurers Summit. Corporate treasurers and financial professionals from across the region gather for policy discussions on issues ranging from cash management to sustainability. Grand Hyatt Dubai

Sep. 30-Oct. 2, Dubai, UAE: Future Hospitality Summit. The global conference for leaders in the hospitality industry expands this year at a new location with dedicated space for ESG planning, country pavilions and a larger exhibition area. Madinat Jumeirah.