Abu Dhabi to control majority stake in new mega bank:
The Government of Abu Dhabi will own 60.2 per cent of the new bank that will be formed following the completion of a merger between Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB), with the new entity acquiring Al Hilal Bank.
The Abu Dhabi government’s ownership in the banking group will be through the Abu Dhabi Investment Council. Other ADCB shareholders will own 28 per cent, while other UNB shareholders will own 11.8 per cent in the new entity.
The new board and management will assume their new roles when the transaction becomes effective following regulatory approvals.
Tuesday 29 January 2019
Etihad ‘could own 40% of India’s Jet Airways’
Etihad ‘could own 40% of India’s Jet Airways’:
Jet Airways creditor State Bank of India is likely to own 15 percent of the airline if the cash-strapped carrier’s plan for a debt-for-equity swap is approved, Indian TV channels reported on Tuesday.
With debts of about $1.14 billion, Jet has been hit by fierce competition from other low-cost carriers, a rupee depreciation and high oil prices. It owes money to banks, pilots, vendors and lessors, some of whom are considering taking back aircraft, sources have told Reuters.
Jet said on Monday it would seek shareholder approval next month to convert debt into equity, increase its share capital and allow lenders to nominate a director on its board to help resolve its financial problems.
Jet Airways creditor State Bank of India is likely to own 15 percent of the airline if the cash-strapped carrier’s plan for a debt-for-equity swap is approved, Indian TV channels reported on Tuesday.
With debts of about $1.14 billion, Jet has been hit by fierce competition from other low-cost carriers, a rupee depreciation and high oil prices. It owes money to banks, pilots, vendors and lessors, some of whom are considering taking back aircraft, sources have told Reuters.
Jet said on Monday it would seek shareholder approval next month to convert debt into equity, increase its share capital and allow lenders to nominate a director on its board to help resolve its financial problems.
Corporate profits will remain strong in 2019 - The Peninsula Qatar
Corporate profits will remain strong in 2019 - The Peninsula Qatar:
Amidst muted growth expectations in global markets, economic outlook for the GCC region as a whole remains positive, as the surge in oil revenues and fiscal reforms will provide the necessary cushion for GCC countries to support economic growth through capital expenditure. With the exception of Bahrain, where there is weakness in government finances, economic factors remain largely favourable for the region.
Markaz noted in its “GCC Stock Market Outlook 2019” that the growth in corporate earnings is expected to witness an uptick in the GCC during 2019 with the exception of Bahrain and Saudi Arabia. Banks will be the primary growth drivers, as the sector is expected to see a rise in profitability and credit growth due to tailwinds such as rising interest rates and new infrastructure projects. Commodity related companies are likely to see their earnings drop due to the fall in oil prices while the construction sector is expected to mildly rebound after years of underperformance.
Amidst muted growth expectations in global markets, economic outlook for the GCC region as a whole remains positive, as the surge in oil revenues and fiscal reforms will provide the necessary cushion for GCC countries to support economic growth through capital expenditure. With the exception of Bahrain, where there is weakness in government finances, economic factors remain largely favourable for the region.
Markaz noted in its “GCC Stock Market Outlook 2019” that the growth in corporate earnings is expected to witness an uptick in the GCC during 2019 with the exception of Bahrain and Saudi Arabia. Banks will be the primary growth drivers, as the sector is expected to see a rise in profitability and credit growth due to tailwinds such as rising interest rates and new infrastructure projects. Commodity related companies are likely to see their earnings drop due to the fall in oil prices while the construction sector is expected to mildly rebound after years of underperformance.
M&A Bankers Wanted for Gulf Merger Boom - Bloomberg
M&A Bankers Wanted for Gulf Merger Boom - Bloomberg:
It’s a good time to be an M&A banker in the Middle East.
Just one month into the year, five banks are merging: a three-way merger in oil-rich Abu Dhabi and a cross-country combination in Kuwait and Bahrain. More deals are in the works.
As oil prices settle at a new normal that’s barely enough to balance the budget of Gulf Arab monarchies, governments are engineering ways to stay competitive, prompting an unprecedented consolidation wave. Abu Dhabi, home to 6 percent of global oil reserves, combined three of its investment firms to create a wealth fund with about $250 billion of assets, shortly after another mega-merger between two of its largest lenders.
It’s a good time to be an M&A banker in the Middle East.
Just one month into the year, five banks are merging: a three-way merger in oil-rich Abu Dhabi and a cross-country combination in Kuwait and Bahrain. More deals are in the works.
As oil prices settle at a new normal that’s barely enough to balance the budget of Gulf Arab monarchies, governments are engineering ways to stay competitive, prompting an unprecedented consolidation wave. Abu Dhabi, home to 6 percent of global oil reserves, combined three of its investment firms to create a wealth fund with about $250 billion of assets, shortly after another mega-merger between two of its largest lenders.
Oil prices rise as U.S. imposes sanctions on Venezuela | Reuters
Oil prices rise as U.S. imposes sanctions on Venezuela | Reuters:
Oil prices rose on Tuesday after Washington imposed sanctions on state-owned Venezuelan oil company PDVSA in a move likely to curb the OPEC member’s crude exports, but gains were capped by abundant supply and signs of a slowing Chinese economy.
The upward momentum in the global benchmarks gathered pace in afternoon trading. International Brent crude oil futures were up $1.31 at $61.24 a barrel by 1438 GMT and on track for its biggest monthly rise since April 2016.
U.S. West Texas Intermediate (WTI) crude futures were up $1.32 at $53.31.
Oil prices rose on Tuesday after Washington imposed sanctions on state-owned Venezuelan oil company PDVSA in a move likely to curb the OPEC member’s crude exports, but gains were capped by abundant supply and signs of a slowing Chinese economy.
The upward momentum in the global benchmarks gathered pace in afternoon trading. International Brent crude oil futures were up $1.31 at $61.24 a barrel by 1438 GMT and on track for its biggest monthly rise since April 2016.
U.S. West Texas Intermediate (WTI) crude futures were up $1.32 at $53.31.
UPDATE 1- #Saudi NEOM set up as joint stock company run by state fund - SPA | Reuters
UPDATE 1-Saudi NEOM set up as joint stock company run by state fund - SPA | Reuters:
Saudi Arabia has set up a closed joint-stock company, called NEOM, that aims to develop a $500 billion economic zone and which will be owned by the government’s Public Investment Fund, the state news agency SPA reported on Tuesday.
NEOM is part of Crown Prince Mohammed bin Salman’s Vision 2030 plan that aims to attract foreign investment and create jobs in a bid to wean the kingdom off reliance on oil.
The new legal status of NEOM will enable the company to create 16 key economic areas, including energy, manufacturing and tourism, SPA said.
Saudi Arabia has set up a closed joint-stock company, called NEOM, that aims to develop a $500 billion economic zone and which will be owned by the government’s Public Investment Fund, the state news agency SPA reported on Tuesday.
NEOM is part of Crown Prince Mohammed bin Salman’s Vision 2030 plan that aims to attract foreign investment and create jobs in a bid to wean the kingdom off reliance on oil.
The new legal status of NEOM will enable the company to create 16 key economic areas, including energy, manufacturing and tourism, SPA said.
MIDEAST STOCKS-Banks pressure #Saudi, Global Telecom leads Egypt gains | Reuters
MIDEAST STOCKS-Banks pressure Saudi, Global Telecom leads Egypt gains | Reuters:
Saudi Arabia's stock market fell on Tuesday as most of its bank shares dropped while Egypt's blue-chip index gained, partly helped by Global Telecom on the prospect of it going private.
Market sentiment was also hurt by weak global markets, as prospects for a long-awaited Sino-U.S. trade deal were dealt another blow after the United States levelled sweeping criminal charges against China's telecom giant Huawei.
Saudi Arabia's index lost 0.5 percent with Al Rajhi Bank dropping 0.8 percent and Samba Financial Group shedding 1.6 percent.
Saudi Arabia's stock market fell on Tuesday as most of its bank shares dropped while Egypt's blue-chip index gained, partly helped by Global Telecom on the prospect of it going private.
Market sentiment was also hurt by weak global markets, as prospects for a long-awaited Sino-U.S. trade deal were dealt another blow after the United States levelled sweeping criminal charges against China's telecom giant Huawei.
Saudi Arabia's index lost 0.5 percent with Al Rajhi Bank dropping 0.8 percent and Samba Financial Group shedding 1.6 percent.
Abu Dhabi Three-Way Merger to Form $114 Billion U.A.E. Bank - Bloomberg
Abu Dhabi Three-Way Merger to Form $114 Billion U.A.E. Bank - Bloomberg:
Abu Dhabi Commercial Bank PJSC agreed to merge with Union National Bank PJSC and Al Hilal Bank to create the Gulf’s fifth-biggest lender with about $114 billion in assets.
ADCB offered 0.5966 share for every UNB share, according to a statement. The combined entity will buy privately-held Al Hilal Bank for about 1 billion dirhams ($272 million) by issuing a mandatory convertible note. The deal is expected to close in the first half.
The merger "makes a lot of strategic sense," said Richard Segal, a senior analyst at Manulife Asset Management in London. "The first-half closing timetable seems ambitious, unless some of the preliminary work has already been undertaken."
Abu Dhabi Commercial Bank PJSC agreed to merge with Union National Bank PJSC and Al Hilal Bank to create the Gulf’s fifth-biggest lender with about $114 billion in assets.
ADCB offered 0.5966 share for every UNB share, according to a statement. The combined entity will buy privately-held Al Hilal Bank for about 1 billion dirhams ($272 million) by issuing a mandatory convertible note. The deal is expected to close in the first half.
The merger "makes a lot of strategic sense," said Richard Segal, a senior analyst at Manulife Asset Management in London. "The first-half closing timetable seems ambitious, unless some of the preliminary work has already been undertaken."
Oil gains as U.S. imposes sanctions on Venezuela, global supplies weigh | Reuters
Oil gains as U.S. imposes sanctions on Venezuela, global supplies weigh | Reuters:
Oil prices rose on Tuesday after Washington imposed sanctions on Venezuelan state-owned oil firm PDVSA in a move that may curb the OPEC member’s crude exports, but price rises were capped by ample global supply and signs of a slowing Asian economy.
International Brent crude oil futures were up 61 cents at $60.54 per barrel by 0941 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 48 cents at $52.47 per barrel.
Oil prices rose on Tuesday after Washington imposed sanctions on Venezuelan state-owned oil firm PDVSA in a move that may curb the OPEC member’s crude exports, but price rises were capped by ample global supply and signs of a slowing Asian economy.
International Brent crude oil futures were up 61 cents at $60.54 per barrel by 0941 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 48 cents at $52.47 per barrel.
Three #AbuDhabi lenders agree to merge, creating a $114 billion bank | Reuters
Three Abu Dhabi lenders agree to merge, creating a $114 billion bank | Reuters:
Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank said on Tuesday the banks have agreed on a three-way merger, creating the third-largest bank in the United Arab Emirates.
Under the deal, ADCB will issue 0.5966 shares for every UNB share, corresponding to a total of 1.64 billion new shares issued to UNB shareholders. The exchange ratio implies a premium to UNB shareholders of 0.6 percent versus the closing price of the previous trading day, the statement said, valuing UNB at nearly $4 billion. Al Hilal Bank will operate as a separate Islamic entity within the merged bank.
The banks announced in September that they were in preliminary talks about a three-way merger, which will create a bank with assets of $114 billion.
Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank said on Tuesday the banks have agreed on a three-way merger, creating the third-largest bank in the United Arab Emirates.
Under the deal, ADCB will issue 0.5966 shares for every UNB share, corresponding to a total of 1.64 billion new shares issued to UNB shareholders. The exchange ratio implies a premium to UNB shareholders of 0.6 percent versus the closing price of the previous trading day, the statement said, valuing UNB at nearly $4 billion. Al Hilal Bank will operate as a separate Islamic entity within the merged bank.
The banks announced in September that they were in preliminary talks about a three-way merger, which will create a bank with assets of $114 billion.
#UAE accuses #Qatar of banning its products, files WTO complaint | Reuters
UAE accuses Qatar of banning its products, files WTO complaint | Reuters:
The United Arab Emirates has filed a complaint against Qatar at the World Trade Organization saying Doha has imposed a ban on Emirati products, UAE state news agency WAM said on Tuesday.
The UAE, Saudi Arabia, Bahrain, and Egypt have imposed a diplomatic, trade and transport boycott of Qatar since June 2017 over allegations Doha supports terrorism, a charge Qatar denies.
Qatar filed in July 2017 a wide-ranging legal complaint at the WTO to challenge the trade boycott by the UAE, Saudi Arabia and Bahrain. The case is still ongoing.
The United Arab Emirates has filed a complaint against Qatar at the World Trade Organization saying Doha has imposed a ban on Emirati products, UAE state news agency WAM said on Tuesday.
The UAE, Saudi Arabia, Bahrain, and Egypt have imposed a diplomatic, trade and transport boycott of Qatar since June 2017 over allegations Doha supports terrorism, a charge Qatar denies.
Qatar filed in July 2017 a wide-ranging legal complaint at the WTO to challenge the trade boycott by the UAE, Saudi Arabia and Bahrain. The case is still ongoing.
Abu Dhabi Commercial Bank, UNB, Al Hilal Bank Agree to $114 Billion Merger - Bloomberg
Abu Dhabi Commercial Bank, UNB, Al Hilal Bank Agree to $114 Billion Merger - Bloomberg:
Abu Dhabi Commercial Bank, Union National Bank and privately-held Al Hilal Bank have agreed to a merger, Bloomberg News reports. The combination that will create the Gulf’s fifth-biggest lender with about $114 billion in assets.
Abu Dhabi Commercial Bank, Union National Bank and privately-held Al Hilal Bank have agreed to a merger, Bloomberg News reports. The combination that will create the Gulf’s fifth-biggest lender with about $114 billion in assets.
#Qatar seeks to muscle its way back on to diplomatic stage | Financial Times
Qatar seeks to muscle its way back on to diplomatic stage | Financial Times:
Qatar is seeking to reassert itself on the regional stage by wielding its financial clout and launching a flurry of diplomatic activity 18 months after it was rocked by a Saudi-led blockade intended to isolate the gas-rich state.
Exuding renewed confidence underpinned by petrodollars, Doha has this month welcomed two foreign leaders desperate for financial support, offered $500m to embattled Lebanon, and hosted talks between the Taliban and the US.
“They are starting to be punchy again,” said Neil Quilliam, a Gulf expert at Chatham House. “There will still be red lines about where they go, but they have weathered the storm [of the embargo] and they are certainly feeling confident.”
Qatar is seeking to reassert itself on the regional stage by wielding its financial clout and launching a flurry of diplomatic activity 18 months after it was rocked by a Saudi-led blockade intended to isolate the gas-rich state.
Exuding renewed confidence underpinned by petrodollars, Doha has this month welcomed two foreign leaders desperate for financial support, offered $500m to embattled Lebanon, and hosted talks between the Taliban and the US.
“They are starting to be punchy again,” said Neil Quilliam, a Gulf expert at Chatham House. “There will still be red lines about where they go, but they have weathered the storm [of the embargo] and they are certainly feeling confident.”
Saudi Stocks to Outperform Rest of Emerging Markets, Credit Suisse Says – Bloomberg
Saudi Stocks to Outperform Rest of Emerging Markets, Credit Suisse Says – Bloomberg:
Ahmed Badr, managing director at Credit Suisse Group AG in Dubai, talks about oil, Saudi Arabia's infrastructure projects, and the country's stocks. He speaks with Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)
Ahmed Badr, managing director at Credit Suisse Group AG in Dubai, talks about oil, Saudi Arabia's infrastructure projects, and the country's stocks. He speaks with Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)
Time to Talk About Lebanese Debt Restructuring for Templeton - Bloomberg
Time to Talk About Lebanese Debt Restructuring for Templeton - Bloomberg:
Lebanon should consider a voluntary debt restructuring to avert a financial crisis despite pledges of aid from Gulf benefactors, according to Franklin Templeton Investments, which manages $650 billion in assets worldwide.
A debt overhaul needs to be part of a reform program backed by lenders such as the International Monetary Fund, said Mohieddine Kronfol, the firm’s chief investment officer for global sukuk and Middle East and North Africa fixed income. Even better if that’s accompanied by a change in leadership at the Finance Ministry and the central bank, he said in an interview in Dubai.
“My biggest worry is that the runway is getting shorter,” Kronfol said. “The medium-term challenges and the need to create fiscal space through a voluntary debt restructuring or re-profiling remain, as does a multi-lateral backstop to provide credibility for an inevitable structural reform agenda.”
Lebanon should consider a voluntary debt restructuring to avert a financial crisis despite pledges of aid from Gulf benefactors, according to Franklin Templeton Investments, which manages $650 billion in assets worldwide.
A debt overhaul needs to be part of a reform program backed by lenders such as the International Monetary Fund, said Mohieddine Kronfol, the firm’s chief investment officer for global sukuk and Middle East and North Africa fixed income. Even better if that’s accompanied by a change in leadership at the Finance Ministry and the central bank, he said in an interview in Dubai.
“My biggest worry is that the runway is getting shorter,” Kronfol said. “The medium-term challenges and the need to create fiscal space through a voluntary debt restructuring or re-profiling remain, as does a multi-lateral backstop to provide credibility for an inevitable structural reform agenda.”
Fixed income: MENA region bond issuance forecast at $80-85bln for 2019 - report | ZAWYA MENA Edition
Fixed income: MENA region bond issuance forecast at $80-85bln for 2019 - report | ZAWYA MENA Edition:
The amount of U.S, dollar-denominated bonds and sukuk issued in the Middle East and North Africa (MENA) is likely to reach $80-$85 billion in 2019 - similar to the $84 billion of issuance recorded last year, according to a new study, but there is potential for this figure to climb higher if Saudi Aramco embarks on its anticipated journey into debt capital markets with a maiden $10 billion bond issuance.
Speaking at the launch of a white paper on the MENA fixed income market, Parth Kikani, director of fixed income at Emirates NBD Asset Management, said that the $84 billion of hard currency issuance which took place last year was a decline on the $100 billion issued a year earlier, but the market still witnessed some "jumbo" issuances, including a $12 billion, multi-tranche issuance by the State of Qatar in April and an $11 billion, multi-tranche sovereign issuance by Saudi Arabia in the same month.
“Sovereign issuance has been the dominant factor in 2018. While there was so much issuance, the deals were well-covered - on an average 2-2.5 times oversubscribed,” Kikani said.
The amount of U.S, dollar-denominated bonds and sukuk issued in the Middle East and North Africa (MENA) is likely to reach $80-$85 billion in 2019 - similar to the $84 billion of issuance recorded last year, according to a new study, but there is potential for this figure to climb higher if Saudi Aramco embarks on its anticipated journey into debt capital markets with a maiden $10 billion bond issuance.
Speaking at the launch of a white paper on the MENA fixed income market, Parth Kikani, director of fixed income at Emirates NBD Asset Management, said that the $84 billion of hard currency issuance which took place last year was a decline on the $100 billion issued a year earlier, but the market still witnessed some "jumbo" issuances, including a $12 billion, multi-tranche issuance by the State of Qatar in April and an $11 billion, multi-tranche sovereign issuance by Saudi Arabia in the same month.
“Sovereign issuance has been the dominant factor in 2018. While there was so much issuance, the deals were well-covered - on an average 2-2.5 times oversubscribed,” Kikani said.
Aramco's rating ambitions face #Saudi economic curb | Reuters
Aramco's rating ambitions face Saudi economic curb | Reuters:
Saudi Aramco is pushing for a top credit rating ahead of its first international bond sale, but Saudi Arabia’s sluggish economy may curb the state-owned oil firm’s ambitions.
Aramco intends to issue its first U.S. dollar-denominated bonds, expected to be at least $10 billion, in the second quarter to help finance the acquisition of a stake in SABIC, the world’s fourth-largest petrochemicals maker.
Chief Executive Amin Nasser said last week that Aramco was talking to credit rating agencies ahead of its debut on the international capital markets, which comes after it last year pulled what would have been the biggest ever stock flotation.
Saudi Aramco is pushing for a top credit rating ahead of its first international bond sale, but Saudi Arabia’s sluggish economy may curb the state-owned oil firm’s ambitions.
Aramco intends to issue its first U.S. dollar-denominated bonds, expected to be at least $10 billion, in the second quarter to help finance the acquisition of a stake in SABIC, the world’s fourth-largest petrochemicals maker.
Chief Executive Amin Nasser said last week that Aramco was talking to credit rating agencies ahead of its debut on the international capital markets, which comes after it last year pulled what would have been the biggest ever stock flotation.
MIDEAST STOCKS-Banks pull #Saudi down, financials drag most Gulf markets | Reuters
MIDEAST STOCKS-Banks pull Saudi down, financials drag most Gulf markets | Reuters:
Saudi Arabia’s stock market fell on Tuesday weighed down by its banks, while all major Gulf bourses slipped, pressured by financial stocks as the markets took a breather after two days of gains.
Sentiment was also hurt by weak global markets, as prospects for a long-awaited Sino-U.S. trade deal were dealt another blow after the United States levelled sweeping criminal charges against China’s telecom giant Huawei.
Saudi Arabia’s index fell 0.5 percent with Al Rajhi Bank dropping 0.6 percent and Samba Financial Group slipping 1.6 percent. Al Khodari lost 0.4 percent after the Capital Market Authority said it would impose a fine of 40,000 riyals following its failure to disclose financial results within the specified time frame.
Saudi Arabia’s stock market fell on Tuesday weighed down by its banks, while all major Gulf bourses slipped, pressured by financial stocks as the markets took a breather after two days of gains.
Sentiment was also hurt by weak global markets, as prospects for a long-awaited Sino-U.S. trade deal were dealt another blow after the United States levelled sweeping criminal charges against China’s telecom giant Huawei.
Saudi Arabia’s index fell 0.5 percent with Al Rajhi Bank dropping 0.6 percent and Samba Financial Group slipping 1.6 percent. Al Khodari lost 0.4 percent after the Capital Market Authority said it would impose a fine of 40,000 riyals following its failure to disclose financial results within the specified time frame.
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