Mubadala aims to double Asia portfolio to 25% within a decade

Abu Dhabi’s Mubadala sovereign wealth fund plans to double its exposure to Asia, raising the share of Asian assets in its portfolio to about 25% over the next decade. 

Currently, Asia accounts for roughly 13% of Mubadala’s $330 billion in assets under management, or about $43 billion, the Zawya news agency reports. “In the next five to 10 years, we would love to see that double,” Mohamed Albadr, Mubadala’s Head of Asia, said during a discussion at Abu Dhabi Finance Week.

China, Japan, South Korea and India will be Mubadala’s core target markets in Asia, Albader said, citing their mature private-equity markets and exit-opportunity potential. The fund already maintains a Beijing office, a Hong Kong joint-venture office and a growing list of activities, including recent large deals in real estate and healthcare. 

Albadr said Mubadala would deploy capital in real estate, infrastructure and private equity, which will play a key role in late-stage and buyout investments.

Khazna Data Centers, meanwhile, a growing AI infrastructure business backed by Mubadala, appointed Mohammed Bin Hassan as Country Head for Saudi Arabia following the company’s acquisition of land in the port city of Dammam to develop new data capacity.

Egypt intercontinental rail plan needs go-ahead for Saudi bridge

Egypt is aiming to link its expanding railway network with Asia and Europe, but it hasn’t yet been able to finalize plans to build a bridge to Saudi Arabia.

In the meantime, it will use ships to bring cargo across the Red Sea, Reuters reports. Saudi’s King Salman first announced the bridge project in 2016, envisioning a road that would cross the Straits of Tiran to Egypt’s Sinai Peninsula.

If completed, the route would compete with another notional rail project that would connect the UAE to Israel’s Haifa Port through Saudi Arabia and Jordan.

Another project on the drawing board would run north from the Gulf through Iraq.

Emirates seeks to expand its routes, increase the use of sustainable fuel

Emirates, the largest airline in the Middle East, is pushing to expand its routes to Europe, Asia and Africa, while coping with delays in new aircraft deliveries from Boeing and Airbus.

In an interview with The Circuit, Adnan Kazim, Emirates’ Chief Commercial Officer and Deputy President, said the UAE flag carrier is also focused on increasing its use of reduced-carbon Sustainable Airline Fuel (SAF), though supplies remain low.

“While SAF remains a priority for us, it is currently too expensive, costing two to three times more than conventional jet fuel,” Kazim said during the interview last week on the sidelines of the World Governments Summit in Dubai. “However, we are committed to being part of the solution and will adopt SAF wherever it becomes commercially viable.”

Kazim, a 33-year veteran of the Dubai-based airline, has served in posts across the Middle East and Africa, including in Iran. Working beside Sheikh Ahmed bin Saeed Al Maktoum, the airline’s Chairman and CEO, and Emirates President Tim Clark, Kazem has led fleet planning, market expansion, governmental relations and a range of other tasks at the carrier.

The interview was edited for length and clarity.

The Circuit: What are some of the challenges you face as Emirates plans for future growth and new destinations?

Adnan Kazim: There is a lot of volatility in the global market, including currency devaluations and fluctuating fuel prices, but we are managing these challenges effectively. When entering new markets, our decisions are based on demand, stability, and the value these destinations bring to our network and to Dubai.

A key part of our strategy is connecting people to Dubai. Major events hosted in the city, such as those involving 150 participating countries, align with our role in bringing travelers from across our network. Dubai’s tourism sector is thriving, with 18.7 million tourists recently reported, reflecting the success of the city’s strategy and our contribution to it.

Sustainable fuel is becoming a more significant focus in aviation. How is this affecting Emirates commercially?

Sustainable aviation fuel (SAF) is a core part of our strategy. We have committed $200 million to research and development in sustainability. However, SAF is not yet a commercially viable option due to its limited availability. Currently, only a few airports, such as Singapore, Amsterdam, Norway, and London Heathrow, supply SAF and in very small quantities. The challenge lies in the lack of refineries producing SAF at scale, making it difficult to integrate it into our operations.

While SAF remains a priority for us, it is currently too expensive, costing two to three times more than conventional jet fuel. However, we are committed to being part of the solution and will adopt SAF wherever it becomes commercially viable.

What can the industry do to address the cost of SAF and implement more sustainable practices?

A: Right now, the high cost of SAF is largely due to its scarcity and the limited number of refineries producing it. In the future, as production scales up and availability increases, we expect prices to stabilize. However, this requires collaboration between governments, academic institutions, and oil companies to build the necessary infrastructure and supply chains. It’s not just an airline issue—it requires a collective effort to create a sustainable future for aviation.

How is Emirates managing its expansion plans?

Our expansion strategy includes not only new routes but also increased frequencies on existing routes. We are particularly focused on growing our presence in Asia, Europe, and Africa as part of our financial year plans starting from April 1.

In 2024, we expanded into several new destinations, including Bogotá (via Miami), Adelaide (our fifth destination in Australia), Edinburgh in the UK, and Nampink (via Singapore). We also resumed flights to Lagos, Nigeria, and increased frequencies to 15 additional destinations. This growth trajectory will continue, with more destinations and frequencies to be announced in due course.

UAE’s AI drive may lead to TSMC, Samsung building factories

The UAE’s determination to become a world center for AI development is attracting new interest from Asia’s big chipmakers.

Taiwan’s TSMC and South Korea’s Samsung Electronics have discussed building large facilities to manufacture semiconductors in the UAE that could help propel the Gulf state to its goal of recognition as an artificial intelligence power, the Wall Street Journal reports.

Under initial terms being discussed, the projects would be funded by the UAE, with a central role for the Mubadala sovereign wealth fund and state-owned investment company MGX, which is focused on AI technology.

Amid the avalanche of interest in artificial intelligence, UAE-owned G42 has signed a variety of agreements with Microsoft, OpenAI and Nvidia over recent months.

UAE’s non-oil trade hits record $381 billion in first half of 2024

The UAE’s pursuit of closer trade ties with fast-growing economies in the Middle East, Asia and Africa saw its non-oil foreign trade hit a record $381 billion in the first half of 2024, up 25% compared to the same period last year. Non-oil exports made up 18.4% of total trade, compared to 16.4% for H1, 2023.

The double-digit expansion in foreign trade defied a global trend in slowing trade growth, spurred on by the signing of so-called comprehensive economic partnership agreements with several countries, Dr. Thani Al Zeyoudi, Minister of State for Foreign Trade, said in a statement on Sunday. 

The new trade figures show “the UAE economy’s resilience, which is the result of our steadfast commitment to building strong, productive public-private partnerships as well as fostering collaborative growth with emerging global economies,” Al Zeyoudi said.

The Emirates, which is planning to sign similar trade deals with 26 countries, has so-far inked agreements with India, Turkey, Israel, Indonesia, Cambodia and Georgia, and is negotiating with Serbia, Vietnam, the Philippines, New Zealand and Ecuador.

The deals are considered critical to achieving the UAE’s ambitious target of close to $1.1 trillion in non-oil foreign trade by 2031.

Saudi Aramco raises oil prices slightly in Asia, slashes in Europe

Saudi Arabia is cautiously bullish on Asia’s appetite for oil while it tries to stoke demand in Europe.

That’s the takeaway from state-owned Aramco’s decision to raise the price of its Arab Light crude to Asia for the first time in three months – an increase of 20 cents to $2 a barrel above the regional Oman-Dubai benchmark, Bloomberg reports. At the same time, the world’s biggest oil company slashed prices in Europe by $2.75, its biggest reduction since the Covid-19 pandemic.

The moves come days after OPEC+ signaled it would make no changes to oil supplies this month and maintained its tentative plans to let member-countries start increasing production next quarter.

In contrast to its rivals whose stock prices are hitting record highs this year, Aramco is down 17%, the worst performance among the world’s 10 biggest oil companies by revenue, a reflection of its production cuts. PetroChina, by contrast, is up 24% while Exxon Mobil has gained 17% and Shell has risen 4.6% since the beginning of 2024.

The Daily Circuit: Aramco price hikes + Adani plots succession

👋 Hello from the Middle East!

Today in the Daily Circuit, we’re looking at plunging share prices in the Middle East, who will succeed Indian tycoon Gautam Adani in managing his sprawling corporate empire, the Mubadala-backed AI fund that may join the $12.8 billion bid for an Australian data center and the new Middle East pro baseball league’s plans for opening day in the UAE. But first, Saudi Aramco’s bumpy year.

Saudi Arabia is cautiously bullish on Asia’s appetite for oil while it tries to stoke demand in Europe.

That’s the takeaway from state-owned Aramco’s decision to raise the price of its Arab Light crude to Asia for the first time in three months – an increase of 20 cents to $2 a barrel above the regional Oman-Dubai benchmark, Bloomberg reports. At the same time, the world’s biggest oil company slashed prices in Europe by $2.75, its biggest reduction since the Covid-19 pandemic.

The moves come days after OPEC+ signaled it would make no changes to oil supplies this month and maintained its tentative plans to let member-countries start increasing production next quarter.

In contrast to its rivals whose stock prices are hitting record highs this year, Aramco is down 17%, the worst performance among the world’s 10 biggest oil companies by revenue, a reflection of its production cuts. PetroChina, by contrast, is up 24% while Exxon Mobil has gained 17% and Shell has risen 4.6% since the beginning of 2024.

💲 Sovereign Circuit

Mubadala: MGX, the artificial intelligence mega-fund created in January through a partnership between Mubadala and G42, has reportedly joined a consortium in a bid for Australian data center AirTrunk in a deal worth more than $12.8 billion. The consortium is led by IFM Investors, DigitalBridge, Silver Lake Management, and Global Infrastructure Partners.

Abu Dhabi Investment Authority: L’Oreal is buying a 10% stake in Galderma Group, a Swiss maker of injectable skin fillers, from a consortium that includes ADIA, Sunshine SwissCo and Auba Investment.

International Holding Company: Enersol, a joint venture between ADNOC Drilling and IHC-controlled Alpha Dhabi Holding, is set to acquire EV Holdings, which provides vision-based diagnostics and analytics services for the oil and gas sector, for approximately $45 million from UK-based private equity firm, Dunedin.

Qatar Investment Authority: Nasser Al-Khelaifi, chairman of QIA-owned Qatar Sports Investments, the majority owner of the Paris-Saint Germain football club, has become one of French soccer’s most influential figures, Bloomberg reports.

↪↩ Closing Circuit

🛢️ Oil Drilling: A unit of Sweden’s Tethys Oil was granted a loan facility for $60 million from Abu Dhabi Commercial Bank to support its drilling for oil at two sites in Oman.

🏡 At Home Abroad: Egypt’s Beit Al-Watan initiative, which encourages Egyptians living abroad to invest in the domestic housing market, has brought in $7.3 billion since its launch in 2012, the government said.

🏦 Banking Bid: Dubai-listed Emirates NBD has been shortlisted to submit a bid to buy a majority stake in Indian state-backed IDBI Bank, vying with Canada-based Fairfax Financial Holdings and Indian lender Kotak Mahindra Bank, Reuters reports.

⌚ Time Flies: Titan Watches, part of Indian conglomerate Tata Group, plans to open 35 outlets across the Gulf region over the next 12 months, Arabian Business reports.

💼 Slowing Down: Non-oil business activity in the UAE improved at the weakest pace in almost three years in July amid heightened competition, rising price pressures and capacity overloads, according to the seasonally adjusted S&P Global UAE Purchasing Managers’ Index.

🗣 Circuit Chatter

🛩️ Fraud Alert: The UAE’s Securities and Commodities Authority and Etihad Airways issued notices alerting the public to fake advertisements inviting people to invest in a fictitious IPO for the Abu Dhabi airline.

🛫 Flights Grounded: Many international airlines, including Lufthansa, British Airways and Air India, are canceling flights to Beirut and Tel Aviv amid concerns of growing escalation in the Middle East conflict.

🩺 Luxury Hospital: Oman’s Badr Al Samaa Royal Hospital was opened as a private healthcare facility in the capital city of Muscat offering “world-class medical care in a luxurious environment.”

✈️ Not for Sale: Egypt is seeking private investment in its airports and flight support services, but doesn’t plan to sell any of the facilities outright, Civil Aviation Minister Sameh El-Hefny said.

🍗 Boycott Bite: Revenues have fallen significantly at American brands in Muslim countries such as Kentucky Fried Chicken, Starbucks and Coca-Cola because of consumer boycotts, as fighting in Gaza goes into its 10th month, the Financial Times reports.

📃 AI visa drive: The UAE will streamline processes for a two-month residency visa amnesty using artificial intelligence, The National reports.

🌍 Power Circuit

UAE President Sheikh Mohamed bin Zayed conveyed his condolences to Abdul Hamid Dbeibeh, Prime Minister of Libya’s Government of National Unity, over the death of his son, Abdulrahman.

➿ On the Circuit

Nabil Ouajjane, founder of London-based Aster Capital Management, is moving to Dubai and opening an office amid a wave of investment firms building up their presence in the Gulf.

Nicolai Tangen, CEO of Norway’s $1.7 trillion NBIM investment fund, is increasingly backing shareholder activists on climate action and corporate governance, Fortune reports.

Sheikh Abdullatif Al-Asheikh, the Saudi Minister of Islamic Affairs, Dawah, and Guidance, met with Syrian Minister of Awqaf Mohammad Abdul-Sattar Al-Sayyed in Mecca on Sunday on the sidelines of the Conference of Ministers of Awqaf and Islamic Affairs.

🎶 Culture Circuit

⚾ Batter Up: Baseball United, the first professional baseball league focused on the Middle East and South Asia, announced plans to start its opening season Oct. 23 in the UAE, with a championship tournament scheduled for next February.

📷 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.

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.  

UAE President meets with business heavyweights in South Korea ahead of visit to Beijing

Landing in Seoul on Tuesday for a two-day state visit to South Korea, UAE President Sheikh Mohamed bin Zayed swiftly set the strengthening of ties with Asia’s business elite at the top of his agenda.

He travels to Beijing on Wednesday amid ongoing negotiations within the Gulf Cooperation Council on a proposed free trade agreement with China.

Ahead of ceremonies and strategic talks with South Korean President Yoon Suk Yeol, the Emirati leader met with leaders of the country’s biggest conglomerates to discuss expanding trade in fields ranging from construction and shipbuilding to green energy, the Korea Herald reports.

Among those at the meeting were Samsung Electronics Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won, Hyundai Motor Group Executive Chair Chung Euisun and GS Group Chairman Huh Tae-soo.

Sheikh Mohamed brought his own corporate heavyweights on the swing through Asia, including Dr. Sultan Al Jaber, the Minister of Industry and Advanced Technology who is Group CEO of the national oil company ADNOC and President of COP28, which led the U.N. climate summit in Dubai.

Khaldoon Al Mubarak, Chairman of the UAE Executive Affairs Authority and Group CEO of the Mubadala sovereign wealth fund, is also traveling in the presidential delegation.

Other key UAE cabinet members on the trip are Minister of Energy and Infrastructure Suhail Al Mazrouei, Minister of Investment Mohamed Alsuwaidi and Minister of State for Foreign Trade Dr. Thani Al Zeyoudi.

The four units of the UAE’s new $20 billion Barakah power plant in Abu Dhabi were built by Korea Electric Power Corp. and a consortium of Korean companies.