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Didi shares plunge more than 20 pct on plan to delist from NYSE, months after debut

Just five months after its debut, ride-hailing giant Didi Global said it plans towithdraw from the New York Stock Exchange and pursue a Hong Kong listing, a stunning reversal as it bends to Chinese regulators angered by its US IPO.
Reaction from investors was swift: the company’s shares fell 22.17 percent, losing about $8.4 billion in market value. At their Friday close of $6.07, Didi shares have fallen about 57 percent since their June 30 IPO price.

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“Following careful research, the company will immediately start delisting on the New York stock exchange and start preparations for listing in Hong Kong,” Didi said on its Twitter-like Weibo account.
Didi did not elaborate but said in a separate statement it would organize a shareholder vote at an appropriate time and ensure its New York-listed stock would be convertible into “freely tradable shares” on another globally recognized exchange.
Market participants said the decision ramps up uncertainty for investors in US-listed shares of Chinese companies. US-listed shares of Alibaba, Baidu and other Chinese firms fell on Friday.
“If you are a money manager and don’t understand what the rules are, it’s easier to just sell and move your money where you better understand the rules of the game,” said Michael Antonelli, market strategist at Baird.
Sources told Reuters last month that Chinese regulators had pressed Didi’s top executives to devise a plan to delist from the New York Stock Exchange due to concerns about data security.
Didi’s board convened on Thursday and approved the US delisting and HK listing plans, said two sources with knowledge of the matter.
Didi pushed ahead with a $4.4 billion US initial public offering in June despite being asked to put it on hold while Chinese officials reviewed its data practices.
The powerful Cyberspace Administration of China (CAC) then quickly ordered app stores to remove 25 of Didi’s mobile apps and told the company to stop registering new users, citing national security and the public interest.
Didi, whose apps, in addition to ride-hailing, offer products such as delivery and financial services, remains under investigation.
Redex Research analyst Kirk Boodry, who publishes on Smartkarma, said Didi may need to buy shares at the $14 IPO price to avoid legal issues and at the very least pay more than the current share price.
However, uncertainty remained over what the delisting means for investors. “There may also be some hope that by doing this, Didi management will improve its regulatory relations, but I am less confident on that,” Boodry added.
The upending of Didi’s New York listing — likely to be a difficult and messy process — underscores the huge clout Chinese regulators possess and their emboldened approach to wielding it.
Billionaire Jack Ma ran afoul of Chinese authorities after blasting the country’s regulatory system, leading to the dramatic scuppering of a mega-IPO for Ant Group last year.
Didi’s move will likely further discourage US listings by Chinese firms and could prompt some to reconsider their status as US publicly traded companies.
“Chinese ADRs face increasing regulatory challenges from both US. and Chinese authorities. For most companies, it will be like walking on eggshells trying to please both sides. Delisting will only make things simpler,” said Wang Qi, chief executive of fund manager MegaTrust Investment (HK).
Didi plans to proceed with a Hong Kong listing soon and is not looking at going private, sources with knowledge of the matter told Reuters.
It aims to complete a dual primary listing in Hong Kong in the next three months and delist from New York by June 2022, said one of the sources.
The sources were not authorized to talk to the media and declined to be identified. Didi did not immediately respond to Reuters’ requests for comment, and the CAC has yet to comment on its announcement.

“Not long after the IPO US investors had been trying to sue DiDi for failing to disclose its ongoing talks with the Chinese authorities. This is unlikely to be taken any better,” said William Mileham, an equity analyst at Mirabaud.
“It appears that DiDi are not waiting to be dual-listed, but could well be delisted from the US before it starts trading on the HK stock exchange.”

Hong Kong hurdles

Listing in Hong Kong, however, might prove complicated, particularly in a three-month timeframe, given Didi’s history of compliance problems and scrutiny over unlicensed vehicles and part-time drivers.
Only 20 percent-30 percent of Didi’s core ride-hailing business in China is fully compliant with regulations requiring three permits relating to the provision of ride-hailing services, vehicle licensing and drivers’ licenses, sources have previously said.
Didi’s IPO prospectus said it had obtained ride-hailing permits for cities that together accounted for the majority of its rides. It has not responded to further queries about permits.
Those problems had been Didi’s main obstacle to conducting an IPO in Hong Kong earlier and it is unclear whether the bourse will approve it now, sources with knowledge of the matter said on Friday.
“I don’t think Didi qualifies to be listed anywhere before it … sets up effective protocols to manage and ensure the drivers’ responsibility and benefits,” said Nan Li, associate professor for finance at Shanghai Jiao Tong University.
The Hong Kong bourse does not comment on individual companies, a spokesperson said.
Didi provided 25 million rides a day in China in the first quarter, its IPO prospectus said. Its main shareholders are SoftBank’s Vision Fund, with a 21.5 percent stake, and Uber Technologies Inc, with 12.8 percent, according to a filing in June by Didi.
Sources have also told Reuters that Didi is preparing to relaunch its apps in China by the year’s end in anticipation that Beijing’s cybersecurity investigation of the company would be wrapped up by then.

Read more: China fines tech giants Alibaba, Tencent over anti-monopoly violations

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Abu Dhabi Overtakes Oslo for Sovereign Wealth Fund Capital in Global SWF’s First City Ranking

Today, industry specialist Global SWF published a special report announcing a new global ranking of cities according to the capital managed by their Sovereign Wealth Funds (SWFs). The findings show that Abu Dhabi is the leading city that manages the most SWF capital globally, thanks to the US$ 1.7 trillion in assets managed by its various SWFs headquartered in the capital of the UAE. These include the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (MIC), Abu Dhabi Developmental
Holding Company (ADQ), and the Emirates Investment Authority (EIA). Abu Dhabi now ranks slightly above Oslo, home to the world’s largest SWF, the Government Pension Fund (GPF), which manages over US$ 1.6 trillion in assets. Abu Dhabi and Oslo are followed by Beijing (headquarters of the China Investment Corporation), Singapore (with GIC Private and Temasek Holdings), Riyadh (home to the
Public Investment Fund), and Hong Kong (where China’s second SWF, SAFE
Investment Corporation, operates from). Together, these six cities represent two thirds
of the capital managed by SWFs globally, i.e., US$ 12.5 trillion as of October 1, 2024.
For the past few decades, Abu Dhabi has grown an impressive portfolio of institutional
investors, which are among the world’s largest and most active dealmakers. In addition
to its SWFs, the emirate is home to several other asset owners, including central banks,
pension funds, and family offices linked to member of the Royal Family. Altogether, Abu
Dhabi’s public capital is estimated at US$ 2.3 trillion and is projected to reach US$ 3.4
trillion by 2030, according to Global SWF estimates.
Abu Dhabi, often referred to as the “Capital of Capital,” also leads when it comes to
human capital i.e., the number of personnel employed by SWFs of that jurisdiction, with
3,107 staff working for funds based in the city.
Diego López, Founder and Managing Director of Global SWF, said: “The world ranking
confirms the concentration of Sovereign Wealth Funds in a select number of cities,
underscoring the significance of these financial hubs on the global stage. This report
offers valuable insights into the landscape of SWF-managed capital and shows how it is
shifting and expanding in certain cities in the world.”

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AM Best Briefing in Dubai to Explore State of MENA Insurance Markets; Panel to Feature CEOs From Leading UAE Insurance Companies

AM Best will host a briefing focused on the insurance markets of the Middle East and North Africa (MENA) on 20 November 2024, at Kempinski Central Avenue in Dubai.
At this annual regional market event, senior AM Best analysts and leading executives
from the (re)insurance industry will discuss recent developments in the MENA region’s
markets and anticipate their implications in the short-to-medium term. Included in the
programme will be a panel of chief executive officers at key insurance companies in the
United Arab Emirates: Abdellatif Abuqurah of Dubai Insurance; Jason Light of Emirates
Insurance; Charalampos Mylonas (Haris) of Abu Dhabi National Insurance Company
(ADNIC); and Dr. Ali Abdul Zahra of National General Insurance (NGI).
Shivash Bhagaloo, managing partner of Lux Actuaries & Consultants, will his present
his observations in an additional session regarding implementation of IFRS 17 in the
region. The event also will highlight the state of the global and MENA region
reinsurance sectors, as well as a talk on insurance ramifications stemming from the
major United Arab Emirates floods of April 2024. The programme will be followed by a
networking lunch.
Registration for the market briefing, which will take place in the Diamond Ballroom at the
Kempinski hotel, begins at 9:00 a.m. GST with introductory comments at 9:30 a.m.
Please visit www.ambest.com/conference/IMBMENA2024 for more information or to
register.
AM Best is a global credit rating agency, news publisher and data analytics
provider specialising in the insurance industry. Headquartered in the United
States, the company does business in over 100 countries with regional offices in
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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Future of Automotive Mobility 2024: UAE Leads the Charge in Embracing Digital Car Purchases and Alternative Drivetrains

-UAE scores show highest percentage among the region in willingness to purchase a car
completely online
– Openness to fully autonomous cars has grown to 60% vs previous 32%.
– More than half of UAE respondents in the survey intend to move to hybrid cars during
next car purchase, while less than 15% intend to move to fully electric car.
– UAE sees strong use of new mobility services such as ride-hailing (Uber, Careem, Hala
Taxi)
– The perceived future importance of having a car is not only increasing in UAE but is
higher than any other major region globally, even China

Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry. This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles,
autonomous driving, and new mobility services within the UAE.

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility
solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East
and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in
transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies,
and a strong inclination towards digital transactions in car purchases. These insights are critical
for automotive manufacturers and policymakers navigating the evolving landscape of the UAE
automotive market.”
Key Findings for the UAE:
1. Car Ownership:
o Over half of UAE respondents perceive that the importance of owning a car is
increasing, with the study showing the increase higher than any other major
region, including China.
o Approximately 80% of UAE respondents expressed interest in buying new (as
opposed to used) cars, above Europe and the USA which have mature used
vehicle markets

2. Shift to Electric and Hybrid Vehicles:
o While a high number of UAE respondents currently own internal combustion
engine (ICE) vehicles, more than half intend that their next vehicle have an
alternative powertrain, with significant interest in electric and plug-in hybrid
(PHEV) options. Less than 15% plan to opt for pure battery electric vehicles
(BEVs).

3. Emerging Mobility Trends:

o Ride-hailing services are the most popular new mobility option among UAE
residents, with higher usage rates than traditional car sharing and ride sharing.
The study indicates a strong openness to switching to alternative transport modes
given the quality and service levels available today.

4. Autonomous Vehicles:
o UAE consumers are among the most open globally to adopting autonomous
vehicles, with a significant increase in favorable attitudes from 32% in previous
years to 60% this year versus approximately 30% in mature markets. Safety
concerns, both human and machine-related, remain the primary obstacles to
broader adoption.

5. Car Purchasing Behavior and Sustainability:
o The internet has become a dominant channel for UAE residents throughout the car
buying process, from finding the right vehicle to arranging test drives and closing
deals. UAE car buyers visit dealerships an average of 3.9 times before making a
purchase, higher than any other region in the world, emphasizing the need for
efficient integration of online and offline experiences.
o Upwards of 53% of respondents from the region would prefer to ‘close the deal’
and complete the purchase of their car online, which is the highest for any region
in the world.
o Sustainability is a key factor cited by UAE consumers as influencing car choice.
The UAE scored among the top half of regions, highlighting the importance of
environmental considerations.

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and
distributors in the UAE” commented Philipp Seidel, Principal at Arthur D. Little and co-Author
of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars
while being among the most demanding globally when it comes to latest vehicle technologies
and a seamless purchase and service experience.”
The comprehensive report, “The Future of Automotive Mobility 2024” by Richard Parkin and
Philipp Seidel, delves into global automotive trends and their impact on various regions,
including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate
and leverage the dynamic changes driving the future of mobility.

 

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