Abu Dhabi’s Mubadala seeks Israeli tech, investment partners

Abu Dhabi’s Mubadala seeks Israeli tech, investment partners
The UAE has signed a host of accords with Israel to boost economic ties. (Shutterstock)
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Updated 26 November 2020

Abu Dhabi’s Mubadala seeks Israeli tech, investment partners

Abu Dhabi’s Mubadala seeks Israeli tech, investment partners
  • Since the UAE and Israel agreed to normalize relations in August, the two countries have signed a host of accords to boost economic and business ties

DUBAI: Abu Dhabi state investor Mubadala plans to identify potential fund partners in Israel and find high-growth technology firms in which to co-invest, as the UAE and Israel seek to boost commercial ties after normalizing relations.

“There will be interesting opportunities with joint funds or joint ventures, but we are still early on in evaluating this,” Ibrahim Ajami, head of Mubadala’s Ventures unit, told a financial technology conference in Abu Dhabi on Wednesday.

He said that Mubadala — which manages over $230 billion in assets — has co-invested with Israeli investors in the US and Europe, but closer ties between the UAE and Israel open up a significant opportunity for investments.

“We are always excited about Silicon Valley. But we are also looking at Europe, we’re looking at the Middle East, we’re looking at India and we would like to be very active in China,” Ajami said.

Since the UAE and Israel agreed to normalize relations in August, the two countries have signed a host of accords to boost economic and business ties.

Bank Leumi, Israel’s second-biggest bank, this week brought a delegation of executives to Dubai from industries ranging from real estate to energy and technology.

“Once the peace agreement was signed we thought that being the leader for connecting Israeli companies and Emirati organizations could be our role,” Avraham Ortal, CEO of Leumi’s investment arm Leumi Partners, told Reuters on the sidelines of a business gathering on Dubai’s palm-shaped island.

“It’s very early,” said Ortal. “We are just planting the seed. We’re going to plant it, we’re going to nourish it, and eventually it will flourish, but it’s going to take a while.”

The UAE has recently announced visa and business reforms aimed at attracting more expatriates to live and work in the country, after many left as firms cut jobs amid a severe economic slowdown caused by the coronavirus outbreak.


Jack Ma video reappearance fails to soothe all investor concerns

Jack Ma video reappearance fails to soothe all investor concerns
Updated 40 min 31 sec ago

Jack Ma video reappearance fails to soothe all investor concerns

Jack Ma video reappearance fails to soothe all investor concerns
  • Ma had not appeared in public since Oct. 24, after he blasted China’s regulatory system
  • Chinese regulators have set about reining in Ma’s financial and e-commerce empires

HONG KONG: Billionaire Jack Ma’s 50-second video reappearance has done little to resolve Alibaba Group’s troubled relationship with regulators that is making some investors hesitate about owning the Chinese e-commerce giant’s stock.

Relief at Ma’s first public appearance added $58 billion in market value on Wednesday as Alibaba’s Hong Kong-listed stock soared, though doubts crept in a day later and the stock fell more than 3 percent as the broader market steadied near two-year highs.

Ma had not appeared in public since Oct. 24, when he blasted China’s regulatory system. That set him on a collision course with officials and led to the suspension of Alibaba fintech affiliate Ant Group’s blockbuster $37 billion IPO.

A source familiar with the matter said Ma cleared his schedule late last year to keep a low profile, prompting discussion at Alibaba about when and how he should reappear to assure investors.

It was decided he should do something that would appear as part of his normal routine, rather than anything overt that could irk the government.

While Ma has stepped down from corporate positions, he retains significant influence over Alibaba and Ant, and the regulatory crackdown on his business empire coupled with his absence was a concern for some investors.

There was skepticism that Ma’s brief reappearance meant all was well with his businesses.

“The coast is not all clear for Alibaba and it is a judgment call whether you believe the company can still thrive in the changing environment,” said Dave Wang, a portfolio manager at Singapore’s Nuvest Captial, which owns Alibaba stock.

“Without some skepticism, the price would be a lot higher,” he said, adding his firm had increased exposure to China and with it Alibaba, which he believes can prosper over the medium to longer term.

Two of the company’s investors in the US who have sold out or reduced positions in Alibaba said they needed more reassurance about the company and the regulatory environment before reconsidering the stock.

“One of our top criteria is leadership and we were investing in Alibaba because I really respect Jack Ma as a leader,” said William Huston, founder and director of institutional services at independent investment advisory firm Bay Street Capital Holdings in Palo Alto, CA, with assets under management of $86 million.

“We all know that just because he showed up ... doesn’t necessarily explain what is going on.”

Huston, whose firm cut its holding in the Chinese firm last year from 8 percent of its portfolio to less than 1 percent, said the halting of the Ant IPO in November had caused uncertainty, and that Alibaba was “not a prudent investment” for it going forward.

David Kotok, chairman and chief investment officer at Cumberland Advisers, Florida, which has about $4 billion in assets, said he held Alibaba last year but also sold as the Ant IPO was pulled.

“When you don’t know what to do in an evolving situation like this you can’t use traditional securities analytics to reach decisions. We are standing aside and watching,” Kotok said.

Chinese regulators have set about reining in Ma’s financial and e-commerce empires since the Ant IPO suspension, which has weighed on its stock that remains below levels prior to the cancelation of the Ant IPO.

“What his actual state is will be completely up to Beijing to reveal to us,” Leland Miller, CEO of US-based consultancy China Beige Book.

“What we do know is whether Jack is running around, Jack is hiding or something else, Alibaba is not in the clear. There is a lot more of the story still to see.”

Some investors are, however, betting on long-term potential for Alibaba in the world’s second-largest economy.

Dennis Dick, a proprietary trader at Bright Trading, who holds Alibaba shares, said he had protected against a potential fall when speculation about Ma’s whereabouts began by buying put options.

He covered those puts earlier in January on a report that Ma was OK and retains a long position in the stock.

“We have been investors for many years ... there’s a very strong team of executives and Alibaba is bigger than just one person,” said a Hong Kong based long-only investor, declining to be named as he was not authorized to speak to the media.