#UAE: #AbuDhabi Set to Join EM Bond Rush With Sale of Dollar Debt - Bloomberg

UAE: Abu Dhabi Set to Join EM Bond Rush With Sale of Dollar Debt - Bloomberg

Abu Dhabi is set to raise $3 billion from selling dollar bonds in its first debt offering of the year.

The oil-rich emirate — the largest of seven in the United Arab Emirates — will issue five- and 10-year notes, according to a person familiar with the matter who asked not to be identified. Final spreads for both tranches are about 30 basis points below initial price thoughts, the person added. Order books peaked at more than $12.7 billion.

Abu Dhabi joins a slew of Gulf issuers who have already tapped debt markets this year to take advantage of favorable rate conditions and strong demand. It’s also been a busy year for sovereign issuers in emerging markets, with Saudi Arabia selling more than $10 billion worth of bonds. Israel and Turkey have each priced around $6 billion of notes.

Borrowing by Abu Dhabi’s government-related entities is expected to gradually increase to fund ambitious plans to further develop its non-hydrocarbon economy, Fitch Ratings said. The agency notes the emirate maintains a low ratio of debt to gross domestic product — at 17.4% at the end of 2024, it’s well below the peer median of 48.8%.

Abu Dhabi issued $3.8 billion of eurobonds last year, while the emirate’s banks, companies and wealth funds raised about $15 billion.

JPMorgan Chase & Co. said earlier this week that it will remove the United Arab Emirates from its emerging-market bond indexes by June, after the Middle Eastern nation exceeded the bank’s measures of wealth for three successive years. The UAE accounts for 4.1% of the JPMorgan’s global diversified EM bond universe.

JPMorgan’s removal of the UAE from its index is likely to trigger brief bond underperformance, similar to Qatar’s experience, but inflows from developed-market crossover investors and local buyers may offset the impact, making the overall effect largely negligible.

The bonds are expected to be rated AA by both S&P Global Ratings and Fitch Ratings, the person said. That is two notches above France.

BNP Paribas SA, Emirates NBD Capital Ltd, First Abu Dhabi Bank PJSC, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Standard Chartered Bank Plc are the joint global coordinators for the sale.

Major Gulf markets ease as investors await US-Iran developments | Reuters

Major Gulf markets ease as investors await US-Iran developments | Reuters

Major Gulf stock markets fell on Thursday as investors maintained a risk-averse approach amid heightened geopolitical tensions and uncertainty surrounding a third round of U.S.-Iran nuclear talks set to take place in Geneva later in the day.

Saudi Arabia's benchmark stock index (.TASI), opens new tab dropped 1.3%, marking its second consecutive week of decline. Losses were broad-based, led by energy stocks, with Saudi Aramco (2222.SE), opens new tab dropping 3% — its steepest one-day decline in nine months — after the company confirmed damage at its Juaymah terminal and subsequent delivery cancellations.

Al Rajhi Bank (1120.SE), opens new tab, the world's largest Islamic lender, fell 1.4%, and Saudi National Bank (1180.SE), opens new tab, the country's largest lender by assets, dropped 1.7%.

Reuters reported that Saudi Arabia is ramping up oil production and exports as part of contingency measures to mitigate potential disruptions from a U.S. strike on Iran.

The robust non-oil economic sector could aid a market rebound if geopolitical tensions subside, according to George Pavel, general manager at Naga.com Middle East.

Dubai's main stock index (.DFMGI), opens new tab retreated 0.8%, weighed down by banking and real estate stocks. Emirates NBD Bank (ENBD.DU), opens new tab plunged over 4%, marking its worst daily performance in more than three months, while Emaar Properties (EMAR.DU), opens new tab, a leading real estate developer, fell 1.2%.

On Wednesday, the UAE's Central Bank unveiled plans to establish a sovereign financial cloud infrastructure in collaboration with G42 subsidiary Core42.

Abu Dhabi's index (.FTFADGI), opens new tab edged 0.4% lower, extending a cautious trading pattern after two flat sessions. The market remained near historical highs as investors awaited clearer regional developments. Alpha Dhabi Holding (ALPHADHABI.AD), opens new tab and Aldar Properties (ALDAR.AD), opens new tab both dropped 0.4%.

However, strong fourth-quarter corporate earnings in Abu Dhabi and a positive economic outlook could provide upward momentum once geopolitical risks subside, though oil price fluctuations remain a key concern, said Pavel.

Bloomberg News reported that Shell (SHEL.L), opens new tab is in talks with ADNOC and others regarding the sale of its stake in an Australian LNG project.

Qatar's stock index (.QSI), opens new tab tumbled 1.9%, marking its steepest single-day decline since mid-June, with all sectors closing in negative territory. Shares of Qatar National Bank (QNBK.QA), opens new tab, the region's largest lender, dropped 3%, representing its biggest single-day loss in over five months. Qatar Aluminum Manufacturing Co (QAMC.QA), opens new tab sank 3.5%, its largest one-day drop in nearly 11 months.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab gained 0.4%, seeking to recover from Wednesday's losses, as sentiment was bolstered by the IMF's completion of two reviews of Egypt's economic reform programme and a Resilience and Sustainability Facility (RSF) review, paving the way for disbursements of about $2.3 billion.

Commercial International Bank (COMI.CA), opens new tab, the country's leading private lender, advanced 1.1%, while Telecom Egypt (ETEL.CA), opens new tab surged 3.4% after reporting a fourfold rise in its fourth-quarter profits.

The Kuwait Bourse (.BKP), opens new tab was closed on account of National Day and Liberation Day.