Weekly Market Update - 18 March 2024
AI Bullishness
Abu Dhabi is setting up a technology investment firm targeting deals in artificial intelligence and semiconductors that could surpass $100 billion in assets under management in a few years. The emirate unveiled the company called MGX, led by sovereign wealth fund Mubadala Investment and AI firm G42 as foundational partners, according to people familiar with the matter. Ahmed Yahia Al Idrissi, who’s CEO of Mubadala’s direct investments platform, will serve as the new entity’s CEO. Mubadala and G42’s portfolios will for now remain as they are, with MGX pursuing its own deals initially funded by new capital from Abu Dhabi’s government. G42, part of a $1.5 trillion empire controlled by Sheikh Tahnoon, has been at the forefront of the country’s AI efforts.
Source: Bloomberg
TikTok
The US House of Representatives passed a bill to ban TikTok in the US unless its Chinese owner sells the video-sharing app. The measure now faces a less-certain future in the Senate. President Joe Biden has said he’d sign the legislation if it passes, even though his reelection campaign recently joined TikTok and despite the risk he would alienate younger voters eight months before facing Donald Trump in an election rematch. If it becomes law, the bill would force a fresh showdown with China, whose leaders came out against a sale when Biden previously pressed TikTok owner ByteDance to sell. The bill marks the most significant congressional attempt yet to restrict the platform. The law’s proponents argue that China’s government has sway over ByteDance and uses the app as a propaganda tool. TikTok told employees the company isn’t planning to change its approach.
Source: Bloomberg
Complex Commodities
Oil climbed to a fresh 2024 high as the International Energy Agency warned of a supply deficit throughout the year. The agency, which had previously anticipated a surplus, now expects a shortfall if OPEC+ continues output cuts in the second half of the year. Those cuts have shown signs of tightening supplies in the short term, but production from outside the cartel has risen and traders are still concerned about demand in China. Copper futures fell as China’s smelters pledged to control capacity. That comes as the industry responds to a tightening in the global concentrate market, which has caused processing fees to plunge to nearly nothing.
Source: Bloomberg