#SaudiArabia’s Budget Deficit Widens to Five-Year High on Lower Oil Revenue - Bloomberg

Saudi Arabia’s Budget Deficit Widens to Five-Year High on Lower Oil Revenue - Bloomberg

Saudi Arabia’s fiscal deficit widened in the fourth quarter to the highest level in five years, as lower oil prices put pressure on the kingdom’s finances.

The government posted a budget deficit of 94.9 billion riyals ($25.3 billion) in last three months of 2025. That brought the total shortfall for the year to nearly 276.6 billion riyals, up from 115.6 billion riyals in 2024, according to the Ministry of Finance. The figure for all of last year equated to roughly 5.5% of gross domestic product.

Non-oil revenue climbed to about 122.6 billion riyals in the fourth quarter of 2025, while oil revenue slid to around 154.2 billion riyals from 170.8 billion riyals a year earlier, according to the ministry data.

The kingdom has been running budget deficits since late 2022. Bloomberg Economics estimates its oil fiscal breakeven price at $97 per barrel in 2025, or $114 when the sovereign wealth fund’s domestic spending is included. That’s far below today’s price for Brent of $71.

The wide gap has led to Saudi Arabia borrowing much more on international bond markets. It’s also caused the government to start delaying or scaling back some of the huge projects that are part of Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify from petroleum.

Saudi officials expect the fiscal deficit for this year to decrease to 3.3% of GDP. Analysts at Goldman Sachs Group Inc. and Bank of America Corp. estimate the figure will be higher, at 5%-6%.

#Qatar Lender Readies AT1 Deal as Sales Boom in Middle East - Bloomberg

Qatar Lender Readies AT1 Deal as Sales Boom in Middle East - Bloomberg

Qatar’s oldest private lender plans to sell its first Additional Tier 1 bond since 2021 as it joins a spate of issuers offering the risky bank debt in the region.

The Commercial Bank P.S.Q.C. has mandated banks for a planned dollar-denominated perpetual sale of the junior subordinated notes, according to a person familiar with the matter. The deal will follow investor calls starting today and the offering will be subject to market conditions, the person added.

High-yielding AT1 debt has seen strong demand in recent sales, with investors attracted by the fact that the borrowers are less exposed than others to broader market concerns such as AI disruption and geopolitics. Subordinated bond issuance from the Middle East and Turkey has already reached $7.88 billion this year, following a record near-$29 billion of issuance last year, according to data compiled by Bloomberg.

The Qatari lender has an existing perpetual bond that can be called next month, with a reset margin of 387.4 basis points over the US Treasury benchmark. Earlier in February UAE-based Mashreqbank sold a US dollar-denominated perpetual non-call 5.5-year AT1 with a reset margin of 251.6 basis points.

AT1 bond sales from the region are running at their fastest year-to-date pace in at least a decade, based on data compiled by Bloomberg. Saudi lenders are leading issuance so far in 2026, having accounted for almost half of the AT1s last year as the kingdom grappled with the spending demand of its mammoth projects.

BofA Securities, DBS Bank Ltd., HSBC Holdings Plc, Mashreq, Banco Santander SA and Sumitomo Mitsui Banking Corp have been hired as joint lead managers and joint bookrunners for CBQ’s sale. The deal is planned in Regulation S format only.

Issuer Profile
Debt distribution: CBQK QD Equity DDIS

Capital structure: CBQK QD Equity CAST

Related securities: CBQK QD Equity RELS

Ratings history: CBQK QD Equity CRPR

#Saudi Firms Advance IPO Plans in Boost for Flagging Local Bourse - Bloomberg

Saudi Firms Advance IPO Plans in Boost for Flagging Local Bourse - Bloomberg

Several Saudi Arabian firms are pressing ahead with plans for local listings, testing investor appetite in Riyadh at a time when volatile oil prices and geopolitical risks have weighed on the benchmark index.

Companies now looking to go public cut across a swathe of sectors, from an oil field services provider and a manufacturer to a telecommunications firm and a contractor. This would come as a boost for the kingdom, which hasn’t seen any significant listings in 2026, compared to at least three by this time last year.

Deals in the offing include AlKhorayef Petroleum, which has begun working with Citigroup Inc., JPMorgan Chase & Co. and BSF Capital on a potential share sale, according to people familiar with the matter, who asked not to be identified discussing confidential information.

The Dammam-based company operates across the Middle East, Africa and Latin America and is controlled by AlKhorayef Group, whose interests span industrial services, lubricants and water solutions. Saudi Arabia’s Public Investment Fund is among its shareholders.

Elsewhere, ArcelorMittal Tubular Products Jubail — backed by the PIF and steelmaker ArcelorMittal SA — is working with Moelis & Co. on a listing and is looking to add banks to assist on the deal, some of the people said.

Telecommunications provider Etihad Salam Telecom Co. is also preparing for an IPO arranged by BSF Capital, while Mutlaq AlGhowairi Contracting is exploring a share sale that could value it as up to 15 billion riyals ($4 billion), Bloomberg News has reported.

No final decisions have been taken on any of the transactions. Representatives for Al Khorayef Group, ArcelorMittal, Etihad Salam and the banks declined to comment, while the PIF did not respond to a request for comment.

If the deals materialize, they would help boost volumes on the Riyadh bourse but valuations will be closely watched. Companies raised $4.2 billion in the kingdom last year, though just two of the 10 largest IPOs trade above their offer price, according to data compiled by Bloomberg.

That marks a reversal from previous years, when firms routinely surged on debut. The recent under-performanceof new listings has been underpinned by a slump in the benchmark Tadawul All Share Index, which was among the worst performing emerging-market bourses of last year.

Those declines prompted even the PIF — central to building out Saudi Arabia’s equity markets by selling down stakes in its portfolio companies — to slow the pace of share sales, Bloomberg News has reported.

A push toward more localization of IPOs may also be stalling momentum. Several banks have pressed Saudi regulators to rethink guidance encouraging issuers to give local retail investors a bigger piece of their offerings amid concerns the efforts risk further weakening listing performance, Bloomberg News has reported.

The regulator is also trying to boost international inflows into equity markets by lifting restrictions on foreign investment.

#UAE, #SaudiArabia, #Qatar: Prolific Private Credit, Buyout Backers Face Test - Bloomberg

UAE, Saudi Arabia, Qatar: Prolific Private Credit, Buyout Backers Face Test - Bloomberg

Middle Eastern wealth funds have historically ranked as the biggest backers of private equity and many have increasingly been pushing into private credit. Over the past few weeks, there’s been some anxiety in both those pockets of finance.

First, Blue Owl shut the gates on one of its funds, preventing investors from withdrawing cash, and said it would sell assets to return investor capital. And on Monday, a report from Bain laid out some stark numbers on the state of private equity — distributions as a percentage of net asset value are at the second-lowest level since the depths of the 2008 financial crisis.

The Bain report was published at a delicate moment for buyout firms in the region. Many of the largest Gulf wealth funds have already become pickier about who they work with. Some have sounded alarm over valuation practices and returns, while others have complained that pockets of the market have become crowded.

Yet, the industry remains front and center in the Middle East. For instance, Qatar’s sovereign wealth fund is teaming up with Orix to start a $2.5 billion private equity fund targeting Japanese companies, Bloomberg News reported in November. And Kuwait’s pension fund is looking to restart private equity allocations after a years-long hiatus.

Meanwhile, many regional behemoths have made deeper inroads into private credit. Earlier today, my colleague Olivia Fishlow reported that the $580 billion Qatar Investment Authority is investing in a private credit firm run by former Goldman Sachs partners.

Over in Abu Dhabi, Mubadala has been a prolific backer of private credit, which has been among the fund’s top-performing asset classes. It has built up a $20 billion portfolio, supported by relationships with the likes of Apollo Global Management, Carlyle and KKR. In 2023, it formed a partnership with Blue Owl, committing $1 billion to the firm’s credit platform.

To be sure, those private credit and buyout outlays are a sliver of the nearly $5 trillion of assets overseen by Middle Eastern wealth funds.

Shortly after a pair of collapses exposed losses for banks and investment firms, and spooked investors late last year, a top executive at Mubadala batted away concerns over structural issues within the sector.

“We’ve had four fantastic years in private credit, and we know that’s likely to perform cyclically,” Waleed Al Mokarrab Al Muhairi, Mubadala’s deputy group chief executive officer, said at the time. “I don’t think it’s going to implode in any shape, way or form.”

Most Gulf equities edge higher amid US-Iran nuclear talks | Reuters

Most Gulf equities edge higher amid US-Iran nuclear talks | Reuters

Major Gulf stock markets edged higher on Monday as Iran and the U.S. prepared to hold a third round of nuclear talks, raising hopes the longtime adversaries could find a way to step back from direct confrontation.

Saudi Arabia's benchmark index (.TASI), opens new tab finished 0.3% higher in a volatile session, recovering slightly from a near 2% drop in the previous session. Al Rajhi Bank (1120.SE), opens new tab, the world's largest Islamic lender, gained 1.3%, reversing some losses after a sharp 2.9% decline on Thursday, its worst in nearly five months.

Energy giant Saudi Aramco (2222.SE), opens new tab advanced 1.1%. Trade sources reported that the company sold several shipments of ultra-light crude oil from its $100 billion Jafurah gas plant to U.S. firms and an Indian refiner, ahead of its first export later this month.

Dubai's main share index (.DFMGI), opens new tab climbed 1.8%, ending a two-day losing streak in a broad-based rally, led by a 3.7% gain in blue-chip developer Emaar Properties (EMAR.DU), opens new tab and a 2.9% leap in Emirates NBD Bank (ENBD.DU), opens new tab.

Emirates Central Cooling Systems Corporation climbed 2.3% after announcing a contract award for the design of its fifth district cooling plant in Dubai's Business Bay.

A positive fourth-quarter earnings season, and the prospect of an easing in geopolitical tensions could strengthen investor sentiment, allowing markets to climb further, said Daniel Takieddine, Co-founder and CEO of Sky Links Capital Group.

In Abu Dhabi, the index (.FTFADGI), opens new tab gained 0.6%, following two consecutive sessions of profit-taking from record highs. Abu Dhabi Commercial Bank (ADCB.AD), opens new tab edged 0.4% higher, while Alpha Dhabi Holding (ALPHADHABI.AD), opens new tab climbed over 2%.

Qatar's benchmark (.QSI), opens new tab rose 1.1%, marking its strongest one-day gain in nearly a month, supported by banking stocks. Qatar National Bank (QNBK.QA), opens new tab, the largest lender in the region, climbed 2.2%, its best daily performance since mid-October.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab climbed 2.6% with all sectors closing in the green, buoyed by optimism after the International Monetary Fund said its board would meet on February 25 to review Egypt's Extended Fund Facility programme, a move that could unlock $2.3 billion in disbursements.

Commercial International Bank (COMI.CA), opens new tab, Egypt's leading private lender, rose 3.3%, while Talaat Moustafa Group (TMGH.CA), opens new tab jumped 2.7%. The real estate developer posted a 43% jump in full-year profits and was promoted to the Mid Cap Segment within the FTSE Russell Global Equity Index Series.