As China seeks to strengthen economic ties with the Gulf, investors from the world’s second biggest economy are getting an opportunity to place their bets on Saudi stocks while paying with their own currency.

Two exchange-traded funds focused on Saudi Arabia, the largest Arab economy, debuted today in the corporate centers of Shanghai and Shenzhen that will enable investors to put Chinese yuan directly into Saudi businesses and access information in Chinese, Bloomberg reports.

China emerged last year as Saudi Arabia’s most active foreign investor, pouring $16.8 billion into the kingdom and accounting for 58% of new business investments – primarily focused on automotive, metals and semiconductor investments. That was more than 11 times the $1.5 billion that China invested in Saudi Arabia in 2023, according to Dubai-based Emirates NBD.

At the Shenzhen stock exchange today, the China Southern Asset Management CSOP Saudi Arabia ETF QDII started trading after raising 634 million yuan ($87 million), Bloomberg reported.  A second fund, the Huatai-PineBridge CSOP Saudi Arabia ETF QDII, began trading in Shanghai after raising 590 million yuan.

China Southern’s ETF targets investors “who have knowledge in equity markets, have demand for global asset allocation and have confidence in the energy sector,” said Mao Wei, the asset manager’s chief equity investment officer, according to Bloomberg. “People will pay more attention to Saudi Arabia looking at the energy and financial sector” compared with U.S. or Japan investment options, Wei said.

IPO fundraising jumped in Saudi Arabia during the first half of 2024 while slowing in other Gulf markets.

Saudi companies raised $2.1 billion in 19 offerings, a 141% increase from the first half of 2023, according to Markaz, the Kuwait Financial Centre.

The largest IPO in the region during the first half of the year was Dr. Soliman Abdulkader Fakeeh Hospital Co., which raised $764 million on the Tadawul Stock Exchange on June 4.

Across the GCC, the value of IPOs declined 32% to $3.6 billion during the first half of 2024, compared to $5.3 billion in the same period last year, Markaz said.

The UAE’s three IPOs during the first half raised $1.3 billion, down 67% percent from 2023. Alef Education led the UAE with an offering on the ADX that raised $515 million on June 11.

UAE residents woke up Sunday morning to a big cabinet reshuffle in the federal government.

Following approval from President Sheikh Mohamed bin Zayed, Vice President and Prime Minister Sheikh Mohammed bin Rashid announced the new cabinet, appointing his son Sheikh Hamdan bin Mohammed as Deputy Prime Minister and Minister of Defense, marking his first roles in the national government.

Foreign Minister Sheikh Abdullah bin Zayed was also named a Deputy Prime Minister.

In recent years, Sheikh Hamdan, often referred to as “Fazza” – he can be found @Faz3 on Instagram, where he has over 16 million followers – has taken on a more public role in the running of the emirate of Dubai, where his father is ruler.

A newly created post of Minister of State for Entrepreneurship has gone to Alia Abdullah Al Mazrouei, herself an entrepreneur and CEO of the Khalifa Fund for Enterprise Development, according to her Linkedin profile. 

Omani carbon capture startup 44.01 has landed a fresh round of funding as it looks to commercialize its solution in the UAE and Oman — where it has completed pilot projects — to turn CO2 into rock and trap it under the Earth’s surface.

The firm, already backed by Sam Altman’s Apollo Projects, secured $37 million in Series A funding from a group of investors led by the UAE’s Shorooq Partners and Equinor Ventures. Other investors in the round include Amazon’s Climate Pledge Fund and Bill Gates’ Breakthrough Energy Ventures.

44.01 declined to comment to The Circuit on how this round values the four-year-old company, but a spokesman said the next two years will be focused on delivering larger, commercial-scale projects and continuing to refine its technology.

With 50 people on staff across offices in Muscat, Abu Dhabi and London, 44.01 will “as much as double our headcount in the next two years” in engineering and research, the spokesman said. The company also plans to court clients working on carbon removal technologies and so-called “hard-to-abate” industries like steel and cement manufacturing.

Carbon dioxide can turn to rock naturally in a process called mineralization when absorbed by a certain kind of rock. 44.01, named after the molecular mass of CO2, has techniques to massively speed that process up – from decades to less than a year.

Part of the firm’s sales pitch is that rock formations capable of mineralizing and sequestering carbon dioxide are found on every continent, making it a transferrable solution worldwide. 

“Our investors bring a wealth of international expertise and experience that will help us to accelerate our development and ultimately mineralize CO2 at scale worldwide,” Talal Hasan, Founder and CEO of 44.01, said. “We believe mineralization can play a significant role in protecting and repairing our climate.”

Neom, the flagship mega-project of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 economic roadmap, is facing budget cuts.

The development along the Red Sea coast is expected to be allocated 20% less than its targeted budget for this year, Bloomberg reports.

The revision comes as the kingdom reconciles lower-than-expected oil prices and foreign investment that has it on track for at least three more years of projected national budget deficits.

Saudi Finance Minister Mohammed Al-Jadaan has previously said the eight-year-old Vision 2030 plan may face delays because the kingdom needs to be careful about “overheating” the economy – which may cause inflation to rise. 

“If you don’t allow your economy to catch up with your projects, basically what will happen is you’ll import a lot more,” Al-Jadaan said at the Qatar Economic Forum in May.

As a result, Saudi Arabia could lack the factories and other capacity needed to support its plans. “So giving it more time is actually wise,” he said.

Modifying the vision is not necessarily a bad sign, analysts told Bloomberg, echoing the Finance Minister’s comments. The “rightsizing” of projects is a sign the kingdom is maturing, according to Goldman Sachs’ MENA Economist, Farouk Soussa. 

“What they’re doing in terms of adjusting these projects gives us a lot of comfort,” Soussa said. “They’re basically saying they’re not going to go for broke or bet the house on any one particular thing. If it’s possible, they’ll do it. If not, they won’t. They’re being quite sensible.”

Chief executives from three of Europe’s largest energy companies and a top Japanese conglomerate came to Abu Dhabi this week to sign agreements backing state-owned ADNOC’s ramped-up efforts to sell liquified natural gas.

Each of the firms – Shell, BP, TotalEnergies and Mitsui & Co. – will take a 10% interest in ADNOC’s Ruwais LNG plant, a project scheduled to begin production in 2028 as spending on gas as a cleaner alternative fossil fuel to oil is projected to rise. Payments were not disclosed.

Signing the contracts to take part in the LNG venture on Wednesday were Murray Auchincloss, CEO of BP; Wael Sawan, CEO of Shell; Patrick Pouyanné, Chairman and CEO of TotalEnergies; and Kenichi Hori, President and CEO of Mitsui, according to a UAE government statement.

The executives were hosted by UAE President Sheikh Mohamed bin Zayed in a sit-down at the beachside Qasr Al Shati palace. Dr. Sultan Al Jaber, ADNOC Managing Director and Group CEO, signed the agreements with the other executives during a separate meeting with Sheikh Khaled bin Mohamed bin Zayed, Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council. 

“As natural gas demand continues to increase, this world-class project will enable us to provide more lower-carbon gas to meet growing demand today while helping the world transition to a cleaner energy future,” said Dr. Al Jaber, who continues to serve as President of COP 28, the United Nations climate conference that was held in Dubai last December.

The UAE signed a series of deals and preliminary agreements with Russia this week at the Innoprom industrial exhibition in Yekaterinburg, Russia’s fourth largest city.

Led by Dr. Sultan Al Jaber, Minister of Industry and Advanced Technology and Group CEO of state energy company ADNOC, the Emirati delegation met Russian officials and discussed a variety of issues that included concluding a free-trade agreement and improving supply chains in agricultural technology, The National reports.

“We anticipate the removal of excessive barriers to mutual trade in the near future,” Russian Industry and Trade Minister Anton Alikhanov said,” Russian President Vladimir Putin noted during a visit to Abu Dhabi in December that the UAE is his country’s leading investor and trade partner in the Middle East.

Riyadh Air has yet to embark on its maiden voyage — that’s scheduled to depart sometime in 2025 — but it’s already changing the air space over Saudi Arabia. The startup carrier, marketed to the business class crowd flocking to the Gulf these days in search of deals, inked its own agreement on Tuesday with Delta Air Lines. 

The partnership deal will introduce the only non-stop service on an American airline between the U.S. and King Khalid International Airport in Riyadh, and marks Delta’s first foray into the Middle East market. 

Signed at Delta’s headquarters in Atlanta, Ga., the partnership makes Riyadh Air Delta’s exclusive partner in Riyadh while offering hundreds of destinations in the U.S. to Riyadh Air’s customers. The partnership, still subject to regulatory approvals, will also allow coordination on flight times and routes while enabling passengers to book tickets on both carriers’ flights.

Delta, the world’s largest publicly traded airline by revenue, is getting in at a good time: airlines in the Middle East recorded a 33% increase in air passenger traffic in 2023 compared to 2022, according to the International Air Transport Association.

A number of factors are coming together to boost air travel in the region, in addition to improved airport infrastructure in a part of the world that serves as a transit hub connecting East and West.

Government tourism campaigns are also encouraging travel. Saudi Arabia for example, is pouring $800 billion into developing its tourism sector. 

Riyadh Air, which is owned by the Public Investment Fund, aims to fly to more than 100 destinations worldwide by 2030.

Meanwhile, on Tuesday, Abu Dhabi’s Etihad Airways said it will run daily nonstop flights between Boston and the UAE capital starting in October in response to the route’s strong performance flying four times weekly.