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Egyptian billionaire Naguib Sawiris would not invest in Saudi Arabia

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Egyptian billionaire Naguib Sawiris will not invest in Saudi Arabia as he says he does not believe there’s rule of law in the country, and has some concerns about human rights there.

Asked by CNBC’s Hadley Gamble if he would invest in the kingdom, Sawiris said: “No, I would not.”

“Personally, I can invest anywhere in the world, why would I go somewhere where I am not convinced there is a rule of law and order. And that there is real democracy, and that people are free,” Sawiris said Tuesday at the MENA Summit 2019 in Abu Dhabi organized by the Milken Institute.

Saudi Arabia has been under intense scrutiny in recent months, especially after the high-profile killing of U.S.-based journalist Jamal Khashoggi, who disappeared last October after visiting the Saudi consulate in Istanbul. The Saudi journalist, who also wrote for the Washington Post, was a prominent critic of Crown Prince Mohammed bin Salman.

Turkish officials said he was killed by Saudi agents, but Riyadh denies those allegations. After more than two weeks of denying that he was kidnapped and murdered, Saudi authorities finally admitted he was killed inside the consulate.

Khashoggi’s death prompted the U.S. Treasury to impose economic sanctions on 17 Saudi officials, including the crown prince’s former top aide Saud al-Qahtani, who was fired as a result of the investigations.

“I think it goes together — political stability and economic stability, they go together. And also, you need to be somewhere you are comfortable,” Sawiris said, adding that Riyadh needs to “come straight on human rights.”

The kingdom of 33 million has seen steady drops in foreign direct investment flows over the last decade, something it needs for its ambitious Vision 2030 initiative to diversify the country’s economy and grow private sector jobs. Obstacles remain in the form of skills shortages, lower oil prices and rising unemployment in the kingdom.

There’s also been growing international concern over the unpredictability and repressive tactics of the kingdom’s powerful young crown prince.

In 2017, Crown Prince Mohammed ordered an anti-corruption drive, detaining hundreds of Saudi royals and businessmen in the Ritz Carlton hotel and confiscating large portions of their finances.

Emerging markets investor Mark Mobius also urged investors not to put their money in Saudi Arabia.

“The Khashoggi murder is a very bad situation, and as far as I’m concerned I don’t think we should be investing in Saudi Arabia for that reason unless there is some real big change,” Mobius told CNBC last week.

He also pointed to how the plummeting oil prices are “disastrous” for the country, a top oil exporter.

However, some investors, including Michael Milken, the founder of Milken Institute, remain bullish about Saudi Arabia.

Asked if the negative headlines in the kingdom would stop him from investing there, Milken said: Not at all.”

The billionaire philanthropist pointed to “profound changes” in the kingdom in recent years, such as women being allowed to drive and the opportunity for young Saudi men and women to interact at concerts and social events today.

With Saudi Arabia’s booming youth population and its access to a massive regional market, numerous international investors — including BlackRock CEO Larry Fink and the Blackstone Group’s Stephen Schwarzman — remain committed to the kingdom and say they see significant long-term potential.

— CNBC’s Natasha Turak contributed to this report.

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Investing in China real estate, warehouses on the back of e-commerce boom

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The online retail boom in China is fueling demand for storage spaces — and real estate investors should start thinking about putting their money in warehouses, said the founder and CEO of Baring Private Equity Asia, Jean Eric Salata.

“If you look at the e-commerce logistics and warehouse space in China, it’s still very, very underdeveloped,” he told CNBC’s “Capital Connection” at the Singapore Summit last Friday.

Salata estimates that 98% of existing warehouses in China are “old stock,” and only around 2% are “modern warehousing.”

“It’s a question of not just adding capacity, it’s also about upgrading what’s there today, which is very outdated,” Salata said. “A rather safe way, I think, to invest in real estate in China is in the whole logistics and industrial distribution space.”

The demand for warehouses has been driven in part by the rise of e-commerce in China. A report by research firm eMarketer predicted China would be the world’s top e-commerce market in 2019, with sales expected to hit $1.935 trillion.

According to property consultancy firm JLL, Chinese mega cities such as Beijing, Shanghai and Shenzhen are seeing “robust demand” for industrial real estate, which includes warehouse facilities and distribution centers.

JLL also wrote that the “primary drivers of market demand in these markets continue to be retail, e-commerce, manufacturing and third-party logistics firms.”

That’s part of a larger domestic consumption story in China that Baring Private Equity Asia is focused on, said Salata, adding that this trend is “hardly” affected by the trade war with America.

Beijing and Washington have been locked in a trade dispute for more than a year, with both sides imposing punitive duties on each other’s exports, and shaking up industries ranging from manufacturing to agriculture and retail.

“What is happening is that you’re seeing the supply chain kind of bifurcate, where companies now are looking for alternative ways of sourcing their product and their technology that separates them from being reliant on U.S. suppliers. And likewise, US companies are doing the same,” said Salata. “It’s been quite disruptive.”

But not all sectors have been impacted and one such exception is the tech industry, said Salata.

“What’s happening in technology in China is pretty interesting,” he said. “It’s incredible, really, the way that that’s transforming the way that businesses and their consumers (are) operating in the market.”

“That’s a story that’s going to continue regardless of what happens with the trade talks.”

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Hong Kong police fire tear gas to break up protesters

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Pro-China supporters clean up a Lennon walls of anti-government posters and memo notes as riot police stand guard outside Yeung Long MTR station on September 21, 2019 in Hong Kong, China.

Anthony Kwan | Getty Images News | Getty Images

Hong Kong police fired tear gas to disperse democracy protesters marching in sweltering heat on Saturday after pro-China groups pulled down some of the “Lennon Walls” of anti-government messages in the Chinese-ruled city.

The first volley was fired when protesters hurled two petrol bombs towards an approaching police line. The marchers had converged on the town of Tuen Mun, in the west of the New Territories, where some set fire to a Chinese flag as others tore down wooden and metal fences and traffic bollards to build road blocks, at least one of which was set alight.

Some trashed fittings at the Light Rail Transit station, dug up bricks and picked up stones from the sides of the tracks. Others turned fire extinguishers on the police.

Many shops closed their shutters, and police made several arrests. “Radical protesters damaged facilities in Light Rail Town Centre Station in Tuen Mun with metal rods, hurled objects into the Light Rail tracks and set barricades in the vicinity, causing obstruction to the traffic,” police said in a statement.

“Radical protesters also threw petrol bombs, posing a serious threat to the safety of others and police officers.”

Hundreds of protesters retreated from the lines of riot police when the tear gas was fired, many sprinting across a highway to regroup and block more roads.

Some dissipated into malls and side-streets. Dozens of Beijing supporters had earlier torn down some of the large mosaics of colourful Post-it notes calling for democracy and denouncing perceived Chinese meddling in the former British colony which returned to Chinese rule in 1997.

“I am a Chinese man!” one the pro-Beijing protesters shouted in defense of his actions when confronted by pro-democracy supporters.

The walls have blossomed across the Asian financial centre, at bus stops and shopping centres, under footbridges, along pedestrian walkways and at universities.

They have also occasionally become hot spots of violence in more than three months of unrest. The subway transit operator, MTR, closed stations near potential protest sites, including Tuen Mun.

Hong Kong’s protests picked up in June over legislation, now withdrawn, that would have allowed people to be sent to mainland China for trial. Demands have since broadened into calls for universal suffrage.

A pro-Beijing city legislator, Junius Ho, who has been a vocal critic of the protests, had urged his supporters to clean up approximately 100 Lennon Walls around the city on Saturday.

But in a message posted late on Friday on his Facebook page, Ho said “for the sake of safety” the Lennon Walls would not be cleared up, only the streets.

‘Rising again’

Steve Chiu, who works in finance, said people like Ho would only give the pro-democracy movement fresh impetus.

“Through provocative acts like this, he helps unify the moderates and frontline in the movement,” he told Reuters. “It’s like a wave. Sometimes we’re in a trough and sometimes on a crest, and we’re rising again.”

The walls are named after the John Lennon Wall in communist-controlled Prague in the 1980s that was covered with Beatles lyrics and messages of political grievance.

The anti-government protesters are angry about what they see as creeping interference by Beijing in Hong Kong, which returned to China under a “one country, two systems” formula that ensures freedoms not enjoyed on the mainland.

China says it is committed to the “one country, two systems” arrangement and denies meddling. It has accused foreign governments including the United States and Britain, of inciting the unrest.

The demonstrations have taken on their own rhythm over the months and tend to peak at weekends, often with anti-government activists, many masked and in black, throwing petrol bombs at police, trashing metro stations, blocking airport roads and lighting street fires.

At times, they have been confronted by supporters of Beijing wielding sticks.

Police have responded with tear gas, water cannon, rubber bullets and several live rounds into the air, prompting accusations of brutality which they deny. Amnesty International on Friday said some police treatment of detainees amounted to torture.

Police said they have respected the “privacy, dignity and rights” of those in custody according to regulations, allowing detainees transport to hospitals and communication with lawyers and their families.

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Saudi Aramco has emerged from attacks ‘stronger than ever,’ CEO says

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A damaged pipeline is seen at Saudi Aramco oil facility in Khurais, Saudi Arabia, September 20, 2019.

Hamad Mohammed | Reuters

Saudi Aramco has emerged from attacks on its oil facilities “stronger than ever”, Chief Executive Amin Nasser told employees in a message, adding that full oil production would resume by the end of this month.

The Sept. 14 attacks on the Abqaiq and Khurais plants, some of the kingdom’s biggest, caused raging fires and significant damage that halved the crude output of the world’s top oil exporter, by shutting down 5.7 million barrels per day of production.

“The fires that were intended to destroy Saudi Aramco had an unintended consequence: they galvanized 70,000 of us around a mission to rebound quickly and confidently, and Saudi Aramco has come out of this incident stronger than ever,” Nasser said in the internal message, on the occasion of the Saudi national day, to be celebrated on Sept. 23.

“Every second counts in moments like these, and had we not acted quickly to contain the fires and undertake rapid restoration efforts, the impact on the oil market and the global economy would have been far more devastating.”

Six days after the assault, which hit at the heart of the Saudi energy industry and intensified a decades-long struggle with arch-rival Iran, the state oil giant Aramco invited reporters on Friday to observe the damage and the repair efforts.

Thousands of employees and contractors have been pulled from other projects to work around the clock to bring production back. Aramco is shipping equipment from the United States and Europe to rebuild the damaged facilities, Aramco officials told reporters. 

Aramco already brought back part of the lost production and will return to pre-attacks level end of September, Nasser said.

“Not a single shipment to our international customers has been missed or cancelled as a result of the attacks, and we will continue to fulfil our mission of providing the energy the world needs,” he said in the message, seen by Reuters.

Energy Minister Prince Abdulaziz bin Salman said on Tuesday that Saudi Arabia had used its reserves to maintain oil supply flows to customers abroad and inside the kingdom.

Yemen’s Houthi group claimed responsibility for the attacks but a U.S. official said they originated from southwestern Iran. Tehran, which support the Houthis, has denied any involvement in the attacks.

Saudi Arabia says 18 drones and three missiles were fired at Abqaiq, the world’s largest oil processing facility, while the Khurais facility was hit by four missiles.

No casualties were reported at either site even though thousands of workers and contractors work and live in the area.

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