GCC Sukuk issuance drops 15% in 2018 on rising cost of borrowings, S&P says - The National:
The issuance of Sharia-compliant bonds in the Arabian Gulf region have slowed by around 15 per cent in the first three quarters of this year and are likely to remain lower than $95.9 billion in 2017 on the back of tightening international liquidity and rising borrowing costs as the US Federal Reserve hikes interest rates.
Sovereigns, financial institutions and the corporate issuers in the region are expected to sell about $70bn to $80bn worth of Shariah-compliant debt in 2018, said Mohammed Damak, senior director and global head of Islamic finance at S&P Global Ratings. The number may climb to as high as $100bn if other sukuk deals are included as part of total sales in 2018, he added.
“Global liquidity is becoming more scarce and more expensive," said Mr Damak who was speaking in Dubai on Tuesday. "The Fed is increasing the rates and the ECB [European Central Bank] will start to reduce its asset purchase programme base…. because of that we think the cost of funding for the issuers is increasing,” he said. “All the liquidity that used to be channelled to emerging markets, including the GCC is, somewhat, reduced because of that.”
Tuesday 25 September 2018
SABIC prepares to meet investors to offer bond
SABIC prepares to meet investors to offer bond:
Saudi Basic Industries Corp. (SABIC) is preparing to offer its dollar-denominated unsecured bond to the global market with investor meetings due to start this week.
The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25, according to a filing on the Saudi stock exchange on Tuesday.
The Saudi company is likely to be keen to tap into the heightened international interest in the Kingdom’s financial markets following the lifting of some restrictions on foreign investors’ activities at the start of the year.
Saudi Basic Industries Corp. (SABIC) is preparing to offer its dollar-denominated unsecured bond to the global market with investor meetings due to start this week.
The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25, according to a filing on the Saudi stock exchange on Tuesday.
The Saudi company is likely to be keen to tap into the heightened international interest in the Kingdom’s financial markets following the lifting of some restrictions on foreign investors’ activities at the start of the year.
Gulftainer port deal shows tide has turned for UAE business in US | Arab News
Gulftainer port deal shows tide has turned for UAE business in US | Arab News:
Time was ultimately on the side of UAE-based port operators in their efforts to break into the US business. A $600 million deal between Gulftainer, the Sharjah-based ports group that ranks among the largest independent terminal operators in the world, and the authorities in Delaware, on the US Atlantic seaboard, sets the seal on a successful campaign of persistence and industrial logic over political prejudice and opportunism.
In 2006, the attempt by DP World to buy the US ports then owned by British shipping group P&O fell foul of a well-orchestrated political campaign featuring none other than Hillary Clinton, then senator for New York where some of the port facilities were located. In the febrile atmosphere of the time, when memories of 9/11 were still intense and the war in Iraq was at its height, Clinton argued that ownership of US ports by a UAE government entity would be a threat to national security.
Her efforts were successful in so far as the US ports were eventually excluded from the global transaction and sold separately to private equity groups. Once bitten, DP World has never since looked seriously at adding US ports to its global portfolio.
Time was ultimately on the side of UAE-based port operators in their efforts to break into the US business. A $600 million deal between Gulftainer, the Sharjah-based ports group that ranks among the largest independent terminal operators in the world, and the authorities in Delaware, on the US Atlantic seaboard, sets the seal on a successful campaign of persistence and industrial logic over political prejudice and opportunism.
In 2006, the attempt by DP World to buy the US ports then owned by British shipping group P&O fell foul of a well-orchestrated political campaign featuring none other than Hillary Clinton, then senator for New York where some of the port facilities were located. In the febrile atmosphere of the time, when memories of 9/11 were still intense and the war in Iraq was at its height, Clinton argued that ownership of US ports by a UAE government entity would be a threat to national security.
Her efforts were successful in so far as the US ports were eventually excluded from the global transaction and sold separately to private equity groups. Once bitten, DP World has never since looked seriously at adding US ports to its global portfolio.
Macron tells Trump oil prices would fall if Iran could sell its oil
Macron tells Trump oil prices would fall if Iran could sell its oil:
French President Emmanuel Macron on Tuesday responded to U.S. President Donald Trump’s criticism of high oil prices, saying that if he had not reimposed sanctions on Tehran, prices would not have risen as much.
“If he goes to the end of his logic, he’ll see that it’s good for the oil price that Iran can sell it,” Macron said. “It’s good for peace and global oil prices. Otherwise there is an impasse in the rationale for which I don’t have the answer. It’s an economic reality ... supply and demand.”
French President Emmanuel Macron on Tuesday responded to U.S. President Donald Trump’s criticism of high oil prices, saying that if he had not reimposed sanctions on Tehran, prices would not have risen as much.
“If he goes to the end of his logic, he’ll see that it’s good for the oil price that Iran can sell it,” Macron said. “It’s good for peace and global oil prices. Otherwise there is an impasse in the rationale for which I don’t have the answer. It’s an economic reality ... supply and demand.”
MIDEAST STOCKS-Saudi surges on oil prices, Kuwait gains on FTSE Russell inclusion | Reuters
MIDEAST STOCKS-Saudi surges on oil prices, Kuwait gains on FTSE Russell inclusion | Reuters:
Saudi stocks rose 1.8 percent on Tuesday on the back of a surge in oil prices, while Kuwaiti shares gained on hopes of more foreign fund flows after inclusion in the FTSE Russell emerging market index.
Oil prices jumped to a fresh four-year high, helping push Petrochemicals giant Saudi Basic Industries up 2.8 percent, refiner Petro Rabigh 1.6 percent and Al Rajhi Bank 2.6 percent.
The Saudi index closed at 7,905 points on Tuesday above its 200-day average, which analysts see as a positive technical signal for the index.
Saudi stocks rose 1.8 percent on Tuesday on the back of a surge in oil prices, while Kuwaiti shares gained on hopes of more foreign fund flows after inclusion in the FTSE Russell emerging market index.
Oil prices jumped to a fresh four-year high, helping push Petrochemicals giant Saudi Basic Industries up 2.8 percent, refiner Petro Rabigh 1.6 percent and Al Rajhi Bank 2.6 percent.
The Saudi index closed at 7,905 points on Tuesday above its 200-day average, which analysts see as a positive technical signal for the index.
EU, Russia and China agree special payments system for Iran | Financial Times
EU, Russia and China agree special payments system for Iran | Financial Times:
The EU’s three biggest member states have agreed a deal with Russia and China to set up a special payments system to facilitate trade with Iran as global powers step up measures to protect a nuclear deal with Tehran after the US reimposed sanctions.
In a joint statement on Tuesday, the foreign ministers of China, Russia, Germany, the UK and France agreed to “assist and reassure economic operators pursuing legitimate business with Iran” including its oil exports.
The five countries remain signatories to a 2015 Iran nuclear deal which Donald Trump withdrew from earlier this year after calling it the “worst deal ever”.
The EU’s three biggest member states have agreed a deal with Russia and China to set up a special payments system to facilitate trade with Iran as global powers step up measures to protect a nuclear deal with Tehran after the US reimposed sanctions.
In a joint statement on Tuesday, the foreign ministers of China, Russia, Germany, the UK and France agreed to “assist and reassure economic operators pursuing legitimate business with Iran” including its oil exports.
The five countries remain signatories to a 2015 Iran nuclear deal which Donald Trump withdrew from earlier this year after calling it the “worst deal ever”.
TPG in talks to take over Abraaj’s healthcare fund | Financial Times
TPG in talks to take over Abraaj’s healthcare fund | Financial Times:
US private equity firm TPG has entered exclusive negotiations to take over management of Abraaj’s $1bn healthcare fund, another step in the dismantling of the Dubai-based group’s emerging markets empire.
TPG’s Rise Fund, described as the world’s biggest impact investing fund with $2.1bn assets under management, is in talks to replace Abraaj as general partner and manager, according to a letter sent to employees by AlixPartners, the healthcare fund’s interim manager.
Abraaj, once one of the world’s largest emerging markets specialists with more than $13bn under management, has been in a tailspin since it emerged that investors were concerned that money held in the healthcare fund had been misused.
US private equity firm TPG has entered exclusive negotiations to take over management of Abraaj’s $1bn healthcare fund, another step in the dismantling of the Dubai-based group’s emerging markets empire.
TPG’s Rise Fund, described as the world’s biggest impact investing fund with $2.1bn assets under management, is in talks to replace Abraaj as general partner and manager, according to a letter sent to employees by AlixPartners, the healthcare fund’s interim manager.
Abraaj, once one of the world’s largest emerging markets specialists with more than $13bn under management, has been in a tailspin since it emerged that investors were concerned that money held in the healthcare fund had been misused.
Saudi Aramco CEO defends Sabic deal | Financial Times
Saudi Aramco CEO defends Sabic deal | Financial Times:
Saudi Aramco’s planned acquisition of a majority stake in Sabic, the Saudi state-controlled chemicals and materials group, is central to its plans to diversify its revenues and prepare for tighter constraints on greenhouse gas emissions, its chief executive says.
Amin Nasser, who has been chief executive of the Saudi national energy company since 2015, told the Financial Times that talks were at an “early stage”, but that the Sabic deal would help accelerate Saudi Aramco’s plans to develop its chemicals operations.
“Sabic has a strong market position, [and is] vertically integrated: there’s a lot of synergy with Saudi Aramco,” Mr Nasser said. Though some senior executives at the group have questioned how it adds value, he said: “It’s a very strategically [good] fit with what we are aspiring to be, which is [to be] deeper in the downstream sector.”
Saudi Aramco’s planned acquisition of a majority stake in Sabic, the Saudi state-controlled chemicals and materials group, is central to its plans to diversify its revenues and prepare for tighter constraints on greenhouse gas emissions, its chief executive says.
Amin Nasser, who has been chief executive of the Saudi national energy company since 2015, told the Financial Times that talks were at an “early stage”, but that the Sabic deal would help accelerate Saudi Aramco’s plans to develop its chemicals operations.
“Sabic has a strong market position, [and is] vertically integrated: there’s a lot of synergy with Saudi Aramco,” Mr Nasser said. Though some senior executives at the group have questioned how it adds value, he said: “It’s a very strategically [good] fit with what we are aspiring to be, which is [to be] deeper in the downstream sector.”
Oil hits four-year peak after OPEC+ shows no sign of turning on the taps | Reuters
Oil hits four-year peak after OPEC+ shows no sign of turning on the taps | Reuters:
Crude oil prices shot to a four-year high on Tuesday, catapulted by imminent U.S. sanctions on Iranian crude exports and the apparent reluctance of OPEC and Russia to raise output to offset the potential hit to global supply.
Brent crude futures LCOc1 were up 61 cents at $81.81 a barrel by 1121 GMT, having touched a session peak of $82.20, the highest price since November 2014.
The oil price is on course for its fifth consecutive quarterly increase, the longest stretch of gains since early 2007, when a six-quarter run led to a record high of $147.50 a barrel.
Crude oil prices shot to a four-year high on Tuesday, catapulted by imminent U.S. sanctions on Iranian crude exports and the apparent reluctance of OPEC and Russia to raise output to offset the potential hit to global supply.
Brent crude futures LCOc1 were up 61 cents at $81.81 a barrel by 1121 GMT, having touched a session peak of $82.20, the highest price since November 2014.
The oil price is on course for its fifth consecutive quarterly increase, the longest stretch of gains since early 2007, when a six-quarter run led to a record high of $147.50 a barrel.
Qatar's Al Khalij Commercial Bank hires banks before dollar bond issue | Reuters
Qatar's Al Khalij Commercial Bank hires banks before dollar bond issue | Reuters:
Qatar’s Al Khalij Commercial Bank mandated Barclays, QNB Capital, Standard Chartered and Qatar’s Commercial Bank to arrange fixed income investor meetings in Asia and Europe, a document issued by one of the banks leading the deal said.
The document seen by Reuters said the Qatari lender, rated A3 by Moody’s and A by Fitch, would start meeting investors on Sept. 27, before a potential U.S. dollar-denominated benchmark bond issue. Benchmark deals are generally meant to be upwards of $500 million.
Qatar’s Al Khalij Commercial Bank mandated Barclays, QNB Capital, Standard Chartered and Qatar’s Commercial Bank to arrange fixed income investor meetings in Asia and Europe, a document issued by one of the banks leading the deal said.
The document seen by Reuters said the Qatari lender, rated A3 by Moody’s and A by Fitch, would start meeting investors on Sept. 27, before a potential U.S. dollar-denominated benchmark bond issue. Benchmark deals are generally meant to be upwards of $500 million.
UPDATE 1-UAE's Majid Al Futtaim raises $1 billion revolving credit facility | Reuters
UPDATE 1-UAE's Majid Al Futtaim raises $1 billion revolving credit facility | Reuters:
Dubai’s Majid Al Futtaim, a company that owns and operates shopping centres in the Middle East and North Africa, has raised a $1 billion loan from a group of regional and international banks, the firm said in a statement.
The loan, a revolving credit facility, has a six-year maturity and refinances an $800 million loan raised in 2014 for general corporate purposes.
A number of companies in the Gulf are refinancing their debt obligations ahead of maturity, or adding new leverage to their balance sheets, to avoid having to pay higher debt costs at a later stage due to expected increases in global interest rates.
Dubai’s Majid Al Futtaim, a company that owns and operates shopping centres in the Middle East and North Africa, has raised a $1 billion loan from a group of regional and international banks, the firm said in a statement.
The loan, a revolving credit facility, has a six-year maturity and refinances an $800 million loan raised in 2014 for general corporate purposes.
A number of companies in the Gulf are refinancing their debt obligations ahead of maturity, or adding new leverage to their balance sheets, to avoid having to pay higher debt costs at a later stage due to expected increases in global interest rates.
Delays and lack of transparency among banking challenges for Dubai entrepreneurs | ZAWYA MENA Edition
Delays and lack of transparency among banking challenges for Dubai entrepreneurs | ZAWYA MENA Edition:
The process of setting up a corporate bank account for small and medium-sized enterprises in the United Arab Emirates can be ‘painful’, taking up to three months, according to a new white paper published on Sunday.
The white paper said the primary pain points during the banking setup process were inadequate transparency, inconsistency around what documents are required and ‘insufficient guidance by bankers throughout the account opening process’.
While the need to comply with stringent banking regulations - to combat terrorist financing, money laundering and tax evasion - was suggested as a reason for the slow process, recommendations were made, including greater transparency around paperwork and processes, offering a ‘one-stop solution for a trade licence and bank account’, and a ‘basic no-frills’ bank account providing an IBAN number with a limited service, including caps on transaction amounts and offering domestic transactions only.
The process of setting up a corporate bank account for small and medium-sized enterprises in the United Arab Emirates can be ‘painful’, taking up to three months, according to a new white paper published on Sunday.
The white paper said the primary pain points during the banking setup process were inadequate transparency, inconsistency around what documents are required and ‘insufficient guidance by bankers throughout the account opening process’.
While the need to comply with stringent banking regulations - to combat terrorist financing, money laundering and tax evasion - was suggested as a reason for the slow process, recommendations were made, including greater transparency around paperwork and processes, offering a ‘one-stop solution for a trade licence and bank account’, and a ‘basic no-frills’ bank account providing an IBAN number with a limited service, including caps on transaction amounts and offering domestic transactions only.
MIDEAST STOCKS-Kuwait up 0.8 pct on expectations of foreign inflows | Reuters
MIDEAST STOCKS-Kuwait up 0.8 pct on expectations of foreign inflows | Reuters:
Kuwaiti stocks rose nearly 0.8 percent in early trade on Tuesday, helped by expectations that its inclusion in the FTSE Russell emerging market index will trigger more foreign fund flows.
The first phase of its entry to the index began on Monday and the second stage will be on Dec. 24.
“There’s more activity due to Kuwait’s inclusion in the emerging market index,” said Marie Salem, director of capital markets at FFA Dubai.
Kuwaiti stocks rose nearly 0.8 percent in early trade on Tuesday, helped by expectations that its inclusion in the FTSE Russell emerging market index will trigger more foreign fund flows.
The first phase of its entry to the index began on Monday and the second stage will be on Dec. 24.
“There’s more activity due to Kuwait’s inclusion in the emerging market index,” said Marie Salem, director of capital markets at FFA Dubai.
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