Solely aggregation of news articles, with no opinions expressed by this service since 2009 launch on this platform.
Copyright to all articles remains with the original publisher and HEADLINES ARE CLICKABLE to access the whole article at source.
(Subscription by email is recommended,with real-time updates on LinkedIn and Twitter.)
Benchmark U.S. crude oil for August delivery fell 43 cents to settle at $39.27 a barrel Tuesday. Brent crude oil for August delivery fell 56 cents to $41.15 a barrel.
Wholesale gasoline for July delivery rose 2 cents to $1.20 a gallon. July heating oil rose 1 cent to $1.18 a gallon. August natural gas rose 4 cents to $1.75 per 1,000 cubic feet.
Gold for August delivery rose $19.30 to $1,800.50 an ounce, silver for September delivery rose 57 cents to $18.64 an ounce and September copper rose 4 cents to $2.73 a pound.
Dubai World has made a final $8.2bn payment to creditors, ending the most complicated and highest-profile restructuring to stem from the debt crisis that almost overwhelmed the Gulf emirate a decade ago.
Dubai was forced to raise $20bn in emergency loans in 2009 to cope with the credit crunch and to prevent a default by Dubai World’s main real estate arm that was heavily exposed to the then collapsing property market.
The final repayment, made two years early, is to 47 creditors, including asset managers Pimco and Ashmore, as well as Abu Dhabi Commercial Bank and Dubai’s department of finance, according to people familiar with the matter.
After posting its worst quarter on record, oil’s now headed for its best three months in 30 years as it bounces back from this year’s historic crash. Yet the rebound remains tenuous.
Futures in New York have almost doubled in value this quarter, buoyed by OPEC+ production cuts and rebounding oil consumption in post-lockdown China. The market’s climb from negative territory in April has been swift but bumpy, with the U.S. benchmark struggling to hold above $40 a barrel amid a stubborn supply glut and a resurgence of Covid-19 cases that’s darkened the demand outlook.
“It’s not going to jump back up to $60 overnight, but to get to where we are now from where we were at is an incredible story,” said Phil Flynn, an analyst at Price Futures Group Inc. How quickly the market can complete its recovery is an open question. “Coming out of the rut will have to happen one day at a time,” he said.
The chairman of DAMAC Properties DAMAC.DU, owner of the only Trump-branded golf club in the Middle East, is weighing buying out minority shareholders and taking the $1.1 billion Dubai-listed company private, three sources familiar with the talks said.
Hussain Sajwani, who founded the company nearly two decades ago, has been exploring the deal since late 2019 after DAMAC’s share price plunged over the past two years, one of the sources told Reuters on Tuesday.
Sajwani, who through his private investment company bought Italian fashion house Roberto Cavalli last year, currently owns 72.2% of DAMAC, according to Refinitiv data.
He is in talks with banks to finance the deal, the same source added.
Qatari lenders al Khaliji KCBK.QA and Masraf Al Rayan MARK.QA said on Tuesday they had started negotiating a potential merger that could create a combined entity with more than 164 billion riyals ($45.04 billion) in total assets.
The merger is subject to regulatory approval from authorities including the Qatar Central Bank, the Qatar Financial Markets Authority, and the Ministry of Commerce, and the approval of the two banks’ shareholders, the banks said in a filing.
Masraf Al Rayan, an Islamic lender, was previously in merger talks with Qatari lenders Barwa Bank and IBQ in 2016. The bank broke away from the talks, leading to a tie up between Barwa and IBQ in 2018.
Vacant religious sites. Abandoned pilgrim tents. Lifeless hotels. A stunning emptiness - and fears of economic ruin - haunt the usually bustling city of Makkah after Saudi authorities curtailed the hajj pilgrimage over coronavirus.
Islam's holiest city usually hosts millions of pilgrims for the annual rite, but the kingdom has barred overseas visitors from this year's event, scheduled for late July.
The hajj and the lesser umrah pilgrimage together rake in some $12 billion, keeping the economy humming in Makkah, home to two million people and marble-bedecked skyscrapers towering over Islam's most sacred sites.
The administrators of hospital operator NMC Health have selected Perella Weinberg Partners to advise on the sale of its international fertility business, two sources familiar with the matter said on Monday.
NMC bought a controlling stake in Spain-based fertility business Clínica Eugin in 2015 for an enterprise value of 143 million euros ($161 million). It also has operations in Italy, Portugal, Sweden, Brazil and Columbia.
NMC administrators Alvarez & Marsal have hired Perella Weinberg Partners, said the two sources, who declining to be identified as the matter is not public, in a deal that could be worth more that $500 million.
Dubai’s real gross domestic product shrank by 3.5% year-on-year in the first quarter, the government’s media office said in a statement on Tuesday, as the Middle East’s business and tourism hub feels the impact of the coronavirus crisis.
Citing data from the emirate’s statistics centre, the government said some sectors such as real estate and finance had however kept momentum despite the pandemic.
“Dubai’s economy witnessed healthy levels of growth in 2019. It was expected that in the first quarter of 2020, the economy will experience a decline due to the global impact of the COVID-19 pandemic,” said Arif Al Muhairi, executive director of Dubai Statistics Center.
Gulf Cooperation Council (GCC) countries will see their economies shrink by 7.6% this year, an International Monetary Fund official said on Tuesday, revising downwards April forecasts of nearly 3%.
The six GCC nations are, with varying degrees, facing steep economic declines as the slowdown in business activity due to the coronavirus pandemic is amplified by a price drop in hydrocarbons, which are their main source of revenue.
The IMF last week said Saudi Arabia’s economy - the largest in the Arab world - faces a 6.8% contraction this year, sharper than the 2.3% the Washington-based lender had forecast in April.
“We expect the GCC economies to contract by 7.6% this year, the contraction will be across all sectors, oil and non-oil,” Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said on Tuesday at a virtual economic forum.
Most major Gulf stock markets fell on
Tuesday, with Saudi leading losses on the back of declines in
financial shares.
Saudi Arabia's benchmark index dropped 0.9%, with Al
Rajhi Bank down 1.1% while Samba Financial Group
fell 2.7%, ending three sessions of gains spurred by
an initial merger agreement with National Commercial Bank (NCB)
.
NCB, the kingdom's biggest lender, was down 0.3%.
A senior International Monetary Fund official said on
Tuesday that Gulf Cooperation Council (GCC) countries will see
their economies shrink by 7.6% this year amid low oil prices and
the new coronavirus crisis.
Dubai's main share index fell 0.7%, with most of
its constituents lower. Blue-chip developer Emaar Properties
declined 2.2%, while sharia-compliant lender Dubai
Islamic Bank was down 1%.
Oil prices slipped on Tuesday as investors worried that rising COVID-19 cases would hurt demand while supply could rise with a potential resurgence of Libyan oil production, which has slowed to a trickle since the start of the year.
The more-active September contract for Brent LCOc2 was down 5 cents at $41.80 a barrel by 1:31 p.m. EST (1731 GMT), after gaining 92 cents in the previous session. The August contract LCOc1, which expires on Tuesday, fell 52 cents, or 1.2%, to $41.19. The contract has gained 16.5% this month so far, and 81% on the quarter.
U.S. crude CLc1 was up 25 cents, or 0.6%, at $39.95 a barrel. U.S. crude has risen 12.4% in the past month, up about 95% in the quarter, reflecting its recovery from late March.
State conglomerate Dubai World, at the centre of Dubai’s debt crisis a decade ago, said on Tuesday it had made a final payment of $8.2 billion to creditors.
The payment, made ahead of its September 2022 maturity, was an “important milestone” for the company and Dubai, Dubai World Chairman Sheikh Ahmed bin Saeed al-Maktoum said in a statement.
“Once more ... our action underscores Dubai’s commitment to always meet its obligations,” said Sheikh Ahmed, who is also a member of Dubai’s ruling family.
The company made the payment using funds from a new $3 billion loan from Dubai Islamic Bank (DISB.DU), asset sales and dividend payments, it said.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Oil prices slipped on Tuesday amid rising COVID-19 cases and a possible return of Libyan oil production, which has been down to a trickle since the start of the year.
The more-active September contract for Brent LCOc2 fell 22 cents, or 0.5%, to $41.63 a barrel by 0832 GMT, paring Monday’s 92 cent gain. The August contract LCOc1, which expires on Tuesday, fell 26 cents to $41.45.
U.S. crude CLc1 was down 27 cents, or 0.7%, at $39.43 a barrel.
“Attempts to push prices higher are capped by growing concerns about the second cycle of the coronavirus or the inability to contain the current one,” Tamas Varga of oil brokerage PVM said.
Saudi Arabia’s stock market rose on Tuesday led by banking shares, as the kingdom is set to triple value-added tax (VAT) starting from July 1, while other major regional markets were mixed.
Saudi Arabia’s benchmark index gained 0.5%, with Al Rajhi Bank rising 0.5% and petrochemical firm Saudi Basic Industries adding 0.8%.
The kingdom will triple value-added tax to 15% from 5% as of July 1, seeking to shore up finances hit by low oil prices as the coronavirus outbreak pummels global demand for its lifeline export.
Samba Financial Group, however, slipped 0.4%, after three straight sessions of gains spurred by an initial merger agreement with National Commercial Bank (NCB), the kingdom’s biggest lender, to create a combined entity with almost $214 billion in assets.
California-based electric vehicle gave up Lucid Motors transferred majority ownership to Saudi Arabia’s Public Investment Fund in exchange for the $1.3 billion investment the PIF made in 2019, according to documents included in a lawsuit filed by the firm’s former head of finance.
The lawsuit was filed by Doug Coates, whose lawyers are arguing that he was entitled to a number of severance benefits because of a ‘change in control’ clause in his contract that was triggered as a result of the PIF deal.
While Lucid Motors has disputed the severance pay issue, a company statement cited by The Verge said that it “does not dispute that the financing transaction that closed on or about April 2, 2019 would appear to constitute a change of control.”
OPEC has cut oil output in June by 1.25 million barrels per day (bpd) from May levels as it works to implement a supply restraint agreement with Russia and other allies, according to estimates from tanker-tracking company Petro-Logistics.
OPEC and its allies, a group known as OPEC+, agreed to cut supply by a record 9.7 million bpd from May 1 to offset an oil price and demand slump triggered by the coronavirus crisis. OPEC’s share of the cut is 6.084 million bpd.
“Excluding Iran, Libya and Venezuela, which are not part of the curtailment agreement, OPEC-10 supply remains about 1.55 million bpd away from full compliance,” Petro-Logistics said in an email.
Oil prices rose about $1 a barrel on Monday, after bullish data from Asia and Europe, but investors are wary about sharp spikes in new coronavirus infections around the world.
Brent crude LCOc1 gained 69 cents, or 1.7%, to settle at $41.71 a barrel. U.S. crude CLc1 rose $1.21, or 3.1%, to settle at $39.70 a barrel.
The recovery of economic sentiment in the euro zone intensified in June with improvements across all sectors, European Commission data showed on Monday. Overall sentiment rose to 75.7 points in June from 67.5 in May, though still short of expectations.
In China, profits at industrial firms rose for the first time in six months in May, suggesting the country’s economic recovery is gaining traction.
U.S. stock indexes, which broadly rose on Monday, also added support for oil prices, which at times track with equities.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Zeina Rizk, executive director of fixed income at Arqaam Capital Ltd., discusses Saudi Arabia’s net foreign assets and her outlook for the economy. She speaks on “Bloomberg Daybreak: Middle East.” (Source: Bloomberg)
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Major bourses in the Gulf fell in early trade on Monday, with banking shares weighing on the Saudi index a day after it advanced after two lenders in the sector said they signed an initial merger agreement.
The benchmark index of Saudi Arabia, which has reported the highest number of new coronavirus infections in the six countries of the Gulf Cooperation Council (GCC), slipped 0.3%.
National Commercial Bank (NCB), which closed up 5% in the last session, declined 3.2% and Riyad Bank was down 2.2%.
NCB, the kingdom's biggest lender, said on Thursday it had signed an initial agreement with smaller lender Samba Financial Group to create a combined entity with almost $214 billion in assets.
But Samba jumped 6.1% to 27.9 riyals in early trade following a nearly 10% surge in the previous session.
Oil prices slid on Monday as sharp spikes in new coronavirus infections around the world forced some countries to resume partial lockdowns, raising concerns about the pace of economic recovery and fuel demand.
Brent crude LCOc1 dropped 84 cents, or 2%, to $40.18 a barrel by 0833 GMT, and U.S. crude CLc1 fell 72 cents, or 1.8%, to $37.77.
“Both contracts are coming under stronger pressure this morning as the spectre of lockdowns returns,” said JBC Energy.
The death toll from COVID-19 surpassed half a million people on Sunday, according to a Reuters tally.
Dubai’s Union Properties is in the final stages of a comprehensive debt restructuring process, the company said in a statement to the Dubai Financial Market.
Debt restructuring negotiations with banks began during 2020.
“This move will support the company to improve its overall financial position,” the real estate developer said.
“The restructuring agreements are expected to include various types of solutions such as tenor date extension and reduction of interest rates,” the company said.
Earlier this month, Union Properties elected Khalifa Hassan Ali Saleh Al Hammadi as the chairman of the board.
Saudi Arabia's stock market ended higher on Sunday buoyed by National Commercial Bank and Samba Financial Group after they signed an initial merger agreement, while Egypt's index extended losses.
The benchmark index in Saudi Arabia gained 0.8%, with Samba Financial Group rising 9.9% for its biggest intraday gain since June 2017, while National Commercial Bank (National Commercial Bank6) was up 5%.
NCB, the kingdom's biggest lender, said on Thursday it had signed an initial agreement with smaller lender Samba to create a combined entity with almost $214 billion in assets.
The offer would value each Samba share at 27.42 to 29.32 riyals ($7.82), giving it a maximum market value of $15.63 billion, 27.5% above its market value of nearly $12.3 billion based on Wednesday's closing price.
The two banks intend to conclude a reciprocal due diligence process and sign definitive agreements in relation to the proposed transaction within four months.
The combination of National Commercial Bank and rival Samba Financial Group would create the third-largest lender in the Gulf Cooperation Council and a national champion to compete with regional players.
In what’s set to become the biggest banking takeover this year, Saudi Arabia’s largest lender by assets proposed to pay as much as $15.6 billion to acquire rival Samba.
The merged lender would have total assets of about $210 billion, making it the region’s largest behind Qatar National Bank QPSC and First Abu Dhabi Bank PJSC, according to data compiled by Bloomberg.
Saudi Arabia has almost 30 lenders catering to over 30 million people, compared with only about a dozen listed banks in the U.K. -- a country of about 65 million people. The kingdom has been taking steps to shore up its banking sector from the double whammy of the coronavirus shock and lower oil prices.
Chesapeake Energy Corp., the archetype for America’s extraordinary shale-gas fortunes, filed for bankruptcy, becoming one of the biggest victims of a spectacular collapse in energy demand from the virus-induced global lockdown.
The Oklahoma City-based company filed for Chapter 11 protection from creditors in U.S. Bankruptcy Court in the Southern District of Texas on Sunday, listing assets and liabilities in the range of $10 billion and $50 billion, and more than 100,000 creditors.
The company also entered into an agreement to eliminate about $7 billion in debt and secure $925 million in debtor-in-possession financing.
“We are fundamentally resetting Chesapeake’s capital structure and business to address our legacy financial weaknesses and capitalize on our substantial operational strengths,” Chief Executive Officer Doug Lawler said in a statement.
Saudi Arabia’s net foreign assets rose in May, reversing three months of declines.
The stockpile climbed by about 3 billion riyals ($800 million) to reach $445 billion, according to a monthly report from the Saudi Arabian Monetary Authority on Sunday.
Officials have said a cumulative decline of more than $47 billion in March and April was mainly due to a $40 billion transfer from the central bank to the sovereign wealth fund, intended to support investments abroad to take advantage of market turmoil during the coronavirus pandemic.
With reserves at the lowest in almost a decade, the world’s largest oil exporter has tried to rein in spending at home as it faces a double crisis from the outbreak and a major decline in energy revenue. The government, which counted on crude for over 60% of its income this year, is now contending with oil output cuts and prices well below its break-even level.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
A merger between Saudi Arabia’s National Commercial Bank and Samba Financial Group would create the biggest lender in the kingdom "by some way", with a 30 per cent share of the market, according to EFG Hermes.
NCB is already the kingdom’s biggest bank in terms of assets, with a 21 per cent share of the market. Samba is the fourth-biggest, with an 11 per cent share.
The combined bank will have a total asset base of 800bn Saudi riyals, ($214bn/Dh783bn). "It will be just shy of [the] UAE’s FAB [First Abu Dhabi Bank] in terms of assets,” EFG Hermes’ analysts said.
On Thursday, the two lenders said they were working on a merger, in which NCB would be the merging bank and Samba Financial the merged lender. The terms agreed will see Samba shareholders receive between 0.736 and 0.787 newly-issued shares of NCB in exchange for each Samba share they hold.
The main equities index in Israel dropped the most in the Middle East as investors catch up with a decline in Wall Street last week amid a resurgence in coronavirus infections in different parts of the U.S.
The TA-35 declined 2% as of 11:45 a.m. in Tel Aviv, with Teva Pharmaceutical Industries pressuring the index the most. Israel’s stock market is highly correlated to the U.S., where many Israeli shares are cross-listed. The S&P 500 dropped 2.4% on Friday as Texas and Florida halted drinking at bars and Arizona reported a surge in infections.
Elsewhere in the region, Saudi Arabia’s Tadawul All Share Index rose as much as 0.9% boosted by Samba Financial Group and National Commercial Bank. The banks are in talks for a merger that could create the third biggest lender in the Middle East. Shares in the United Arab Emirates rose while those in Kuwait and Qatar fell.
The $75 billion that Saudi Aramco doles out in dividends every year dwarfs what any other listed company gives to shareholders. It’s roughly equivalent to the payouts from Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., BP Plc, Total SA, PetroChina Co., Eni SpA, Petroleo Brasiliero SA and China Petroleum & Chemical Corp. or Sinopec — put together.
That makes Chief Executive Officer Amin Nasser’s promise to continue that level of returns for the next five years an extraordinary vote of confidence in an oil market awash with uncertainties. Saudi Aramco will be prepared to borrow money to ensure that it meets its commitment this year despite oil prices heading into negative territory, he said this month.
An oil trade that made its way into Donald Trump’s press briefings -- and earned big profits for commodity merchants and tanker owners alike -- is fading away with every dollar that the price of crude rallies.
When oil demand cratered earlier this year because of the coronavirus and a flood of cargoes, the U.S. president talked about “oil all over the oceans.” It was a reference to the tens of millions of barrels of unwanted crude that traders were hoarding on ships at profit. Tanker owners including Frontline Ltd. and Euronav NV also reaped windfalls as a frenzy to book the ships on storage charters drove up rates.
Those days are done. The big financial incentive to store, known in trader jargon as contango, has all but vanished. Worse still for tanker owners: it’s disappeared partly because the OPEC+ oil-producer alliance has drastically curtailed the supply of cargoes. In other words, no incentive to store and fewer shipments.
“For now, this play is largely over,” said Richard Matthews, an analyst who monitors the trade at E.A. Gibson Shipbrokers Ltd. “Quite simply the contango is no longer there, so it does not make any economic sense to enter into a new floating storage trade, unless the deal was locked in when the contango was sufficient to cover freight costs.”
I know what you’re thinking: How can the founder of the Middle East’s largest hospital operator be entirely clueless as to billions in undisclosed debt and fraud in the company he spent decades building?
But hear me out.
Say you’re BR Shetty: a 77-year-old who made his billions in the UAE by setting up successful businesses in healthcare, financial services, hospitality, F&B, pharmaceutical manufacturing and real estate as early as the 1970s. You were given at least a dozen awards including the highest civilian award in Abu Dhabi by the Crown Prince himself, and the Padma Shri by the President of India. You wear the latter gold medal at every possible occasion: private dinners, corporate ceremonies, media interviews, you name it. Your reputation matters to you. Your reputation means the world to you. Your reputation precedes you. You’re one of India’s richest billionaires rubbing shoulders with world leaders. You own two floors in the world’s tallest tower, lavish villas on a man-made island and more money than you could care to count.
Why throw it all away to steal from your own company? It just doesn’t add up.
Saudi Arabia’s stock market rose on Sunday, boosted by National Commercial Bank and Samba Financial Group Bank after they signed an initial merger agreement, while Qatar’s index retreated in early trade.
The benchmark index in Saudi Arabia rose 0.9%, with Samba Financial Group jumping 9.9% and National commercial Bank (NCB) up 5.2%.
NCB, the kingdom’s biggest lender, said on Thursday it had signed an initial agreement with smaller lender Samba Financial Group to create a combined entity with almost $214 billion in assets.
The offer would value each Samba share at 27.42 to 29.32 riyals ($7.82), giving it a maximum market value of $15.63 billion, 27.5% above its market value of nearly $12.3 billion based on Wednesday’s closing price.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Samba Financial Group jumped in Saudi Arabia after rival National Commercial Bank, the kingdom’s largest lender by assets, offered to acquire it for as much as $15.6 billion.
The shares advanced 9.9% to 26.30 riyals as of 10:16 a.m. in Riyadh, while National Commercial Bank rose 7.3%. National Commercial Bank proposed paying as much as 29.32 riyals per share for Samba, a premium of about 27.5% to its closing price on Wednesday.
Saudi Arabia has been taking steps to shore up its banking sector from the double whammy of the coronavirus shock and lower oil prices. Lenders in the world’s largest oil exporter are expected to be hit hard as lockdown measures and lower spending impact earnings.
Saudi Arabia’s Public Investment Fund is the major shareholder of both lenders, with a 44.3% stake in National Commercial Bank and 22.9% of Samba. The combined bank would have assets of about $210 billion, making it the third-largest in the Middle East behind Qatar National Bank QPSC and First Abu Dhabi Bank PJSC, according to data compiled by Bloomberg.
As OPEC and its allies make their deepest cuts yet to crude production, Norway’s giant Johan Sverdrup oil field is exporting more than ever before.
Crude loadings from the field are set at a record 4.4 million barrels, or 465,000 barrels a day, in August, according to a loading program seen by Bloomberg. That’s compared with 429,000 barrels a day expected in July.
Norway’s state-controlled energy company Equinor ASA pledged to slash production from the Johan Sverdrup field by 20% in June, as the country moved ahead with historic oil-output cuts in cooperation with the Organization of Petroleum Exporting Countries and its allies. The curbs are aimed at rebalancing the oil market and eliminating a glut.
The processing, drilling and production platforms stand on the Johan Sverdup oil field off the coast of Norway.
Oil posted its second weekly loss for the month, as a surge in U.S. coronavirus cases clouds the demand outlook and casts doubts on the market’s recovery.
Futures in New York slipped 3.2% this week. The price slump comes just days after oil closed above $40 for the first time since early March, and following a run of weekly gains that lifted oil from its historic plunge below zero in April. Texas -- the center of the American oil industry -- halted its reopening as virus infections jumped, and Houston’s intensive-care wards reached capacity. Bars in Texas and Florida were ordered to shut, and Arizona reported a surge in infections.
“This week the market pushed through a 3 1/2 month high, and then all the sudden reporting about new cases seemed to break the back of the rally,” said Gene McGillian, vice president of research at Tradition Energy. “We have record amounts of oil and fuel in storage and still uncertainty about demand going forward.”
Abu Dhabi's Mubadala Investment Company placed a binding offer for Petroleo Brasileiro SA's refinery in the northeastern Brazilian state of Bahia on Thursday, two people with knowledge of the matter said on Friday.
The 330,000 barrel-a-day refinery, known as RLAM, is the first of a group of eight such units the state-controlled oil producer plans to sell to cut debt and open one of the world's largest fuel markets to private investors.
It is still unclear whether other players, such as China's Sinopec and Indian conglomerate Essar Group, also made offers. Petrobras and Mubadala declined to comment.
A New York court has sent subpoenas to Etihad and ratings agency Fitch this week seeking a document at the centre of a battle over $1.2 billion in debt issued by the Abu Dhabi carrier and airlines it partly owned, according to legal documents reviewed by Reuters.
Investors, including fixed-income specialist BlueBay Asset Management, are seeking access to a “debt assumption agreement” signed by Etihad and Alitalia, the Italian carrier, in 2016, before Alitalia went bankrupt.
Etihad issued bonds in 2015 and 2016 through an Amsterdam-based special purpose vehicle, EA Partners (EAP), which then distributed the money to Etihad and other airlines, including Alitalia.
According to EAP filings with the London stock exchange and a Fitch report in May 2017, Etihad agreed to cover the debt owed by Alitalia under the debt assumption agreement.
It’s been a busy week for dealmaking in the Middle East.
In a matter of days, about $25 billion in deals have been struck in the oil-rich region, including the year’s biggest infrastructure and banking transactions even as the coronavirus pandemic cripples overall dealmaking.
The blitz is quite rare for a region often known for political unrest and its influence on energy markets. It is also welcome relief for investment bankers looking to salvage what could be a difficult year for mergers and acquisitions.
M&A activity in the Middle East is reviving as governments take measures to diversify their economies away from oil. They’re also seeking to create more efficiencies through consolidation or by bringing in overseas investors. Sovereign wealth funds including Saudi Arabia’s Public Investment Fund are deploying billions of dollars to buy stakes in companies ranging from Facebook Inc. to Citigroup Inc. to take advantage of a downturn in prices.
Oil prices settled lower on Friday as new coronavirus cases spiked in the United States and China, and on growing concerns about rising U.S. output ticking up while crude stockpiles sat at record highs.
Brent crude futures settled down 3 cents at $40.91, falling 1% on the week. U.S. West Texas Intermediate (WTI) crude futures fell 23 cents to $38.49, down 1.6% on the week.
Earlier gains, supported by optimism over rising road traffic boosting fuel demand, were erased in U.S. trading on fears that spiking COVID-19 infections in large gasoline-consuming U.S. states could stall the demand recovery. Cases have risen sharply in California, Texas and Florida, the three most populous U.S. states.
Friday morning, Texas Governor Greg Abbott reversed the state’s reopening plan, ordering most bars to close due to the surge in cases.
Oil prices fell so much in April that even with record volumes of exports, Saudi Arabia’s earnings from crude plunged 65% from a year earlier. Brent has risen almost 60% since the beginning of May to around $40 a barrel, but that’s in large part because the kingdom and other major producers such as Russia have cut supplies. That means Saudi finances are unlikely to get a major boost soon.
Famed for snapping up glitzy real estate and stakes in troubled international banks during the global financial crisis, sovereign wealth funds are investing more at home, a trend set to accelerate in the wake of the economic carnage wrought by COVID-19.
Some of these state-owned entities, such as Singapore’s Temasek Holdings, already acted more as development funds aimed at supporting their countries’ economies, but many of them are considered “rainy day” funds - meaning they will have a big role in helping governments to manage the fallout from the pandemic.
There has been a flurry of recent domestic deals, such as Turkey’s fund injecting 21 billion lira ($3.1 billion) into three state banks and Temasek supporting a $1.5 billion rights issue by Sembcorp Marine.
That’s in addition to withdrawals from the Nigerian and Norwegian funds to help their governments deal with the economic impact of the virus.
Oil prices inched up on Friday as the bullish impetus from signs of fuel demand recovery was kept in check by a rising number of new coronavirus cases in the United States and China and tentative expecations of U.S. output ticking up.
Brent crude LCOc1 futures were 38 cents higher at $41.43 at 0829 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 futures were up 29 cents at $39.01.
Both contracts are on track for a weekly fall of around 1.7% after record U.S. crude inventory data dragged prices down on Wednesday.
Analysts said satellite data showing a strong pick-up in traffic in China, Europe and across the United States pointed to an improvement in fuel demand.
ASGC Group, one of Dubai’s largest builders, cut almost 15% of its workforce as fallout from the coronavirus pandemic takes its toll on the Middle East’s construction industry.
Almost 2,300 employees, including engineers and project managers, were dismissed this month, according to people with direct knowledge of the matter, who asked not to be identified because the matter is sensitive. The company was forced to reduce staff after revenue declined during the second quarter and some projects were delayed or halted, they said.
The contractor has worked on some of the biggest developments in the emirate, including Bluewaters Island, a residential complex with the world’s biggest ferriswheel, and Waldorf Astoria Hotel. In Saudi Arabia, Saudi Binladin Group missed some salary payments in April and May, people famliar with that matter said.
Developers in Dubai such as Emaar Properties PJSC have halted projects and cut salaries as they seek to reduce costs. Lower crude prices and slower economic growth as a result of lockdowns to curb the spread of Covid-19 are aggravating a property slump in Dubai, where oversupply and economic uncertainty have pushed down prices for years.
Mohammed bin Salman wants a banking champion that’s worthy of his grand visions. Saudi Arabian retail investors may not care much about the crown prince’s dreams. That means National Commercial Bank, the government’s would-be vehicle for building a financial powerhouse, will have to pay up for Samba Financial.
The two banks on Thursday took the unusual step of announcing that they had arrived at a “framework agreement” for an all-share merger. Odder still, $30 billion NCB set out a range for the deal rather than an agreed price. The country’s largest lender will offer between 0.736 and 0.787 of its own shares for Samba. Using NCB’s undisturbed price, that implies an equity value of between $14.6 billion and $15.6 billion, and a premium of 19% to 27%.
There’s a reason for the unconventional announcement. NCB last year failed in its pursuit of $14 billion Riyad Bank, a deal which was also supposed to create a lender big enough to finance MbS’s megaprojects. Already-tense price negotiations were not helped by the fact that Riyad’s share price kept jumping around. NCB and its advisers may hope that having a range rather than a fixed price gives them more flexibility, for example if the constantly fluctuating oil price radically changes the market values of either group.
More likely, Samba’s minority investors will just expect to get the very top end of the range, since they hold the decisive vote. The Saudi Public Investment Fund, effectively a wing of the state, and other government agencies own roughly two-fifths of Samba. But MbS and co need 75% support to get the deal through. The rest of the shareholder base is dominated by retail investors, who typically pass the shares down through their families and enjoy the dividends. Unlike Samba’s government shareholders, they’re financially motivated.
Oil prices rose about 2% in a volatile session on Thursday, buoyed by signs of a marginal improvement in the U.S. economy and a tepid rise in fuel demand, but price gains were limited by rising cases of COVID-19 in some U.S. states.
Brent crude rose 74 cents, or 1.8%, to settle at $41.05 a barrel. U.S. West Texas Intermediate (WTI) crude ended the session up 71 cents, or 1.9%, at $38.72.
Road traffic in some of the world’s major cities in June had returned to 2019 levels, data provided to Reuters by location technology company TomTom showed.
Oil prices fell early, then found support as data showed fewer Americans filed for unemployment benefits last week and orders for key capital goods rebounded in May.
National Commercial Bank (1180.SE), Saudi Arabia’s biggest lender, said on Thursday it had signed an initial agreement with smaller lender Samba Financial Group (1090.SE) to create a combined entity with almost $214 billion in assets.
NCB’s offer would value each Samba share at 27.42 to 29.32 riyals ($7.82), giving it a maximum market value of $15.63 billion, 27.5% above its market value of nearly $12.3 billion based on Wednesday’s closing price.
Low oil prices and weak economic growth are pushing bank consolidation across the Gulf and if completed the merger would create one of the region’s largest lenders by assets, ranking third after Qatar National Bank (QNB) and UAE’s First Abu Dhabi Bank (FAB.AD).
In a bourse filing, NCB said it had signed a framework agreement for a potential merger with Samba, confirming an earlier Reuters story on the merger talks.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Abu Dhabi-based KBBO Group, once one of NMC Health Plc’s biggest shareholders, is set to hire PwC and Trussbridge Advisory Ltd. to advise on its debt restructuring, people familiar with the matter said.
KBBO, a privately-held investment firm with assets in healthcare and finance sectors, also plans to appoint a chief restructuring officer in the next few weeks to help coordinate the process, the people said, asking not to be identified because the matter is private.
Creditors to the company have set up separate steering committees for both the healthcare and consumer side of the business and will also appoint advisers, the people said. The reorganization is being supervised by the United Arab Emirates’ Financial Restructuring Committee, people familiar with the matter said in April.
A senior United Arab Emirates official (UAE) said Lebanon was paying the price of deteriorating ties with wealthy Gulf Arab states as it struggles to cope with a deep economic crisis.
Gulf states have long channelled funds into Lebanon’s fragile economy but they are alarmed by the rising influence of Hezbollah, a powerful group backed by their arch-rival Iran, and appear loath to help ease Beirut’s worst financial crisis in decades.
Emirati minister of state for foreign affairs, Anwar Gargash, told broadcaster CNBC on Wednesday that Lebanon’s “economic meltdown is very worrying” but that the UAE would only consider offering financial support in concert with other states.
“If we see some of our friends, major powers interested in Lebanon, working in a plan, we will consider that. But up to now, what we are really seeing here, is a deterioration of Lebanon’s Arab relations and Gulf relations over the past 10 years. Lebanon is partly paying the price for that right now.”
Major Gulf stock markets traded lower on Thursday, with Saudi Arabian shares hit by an International Monetary Fund (IMF) forecast of a deeper than anticipated recession in the country.
Saudi Arabia’s benchmark index dropped 0.8%, with Al Rajhi Bank falling 0.7% and petrochemical company Saudi Basic Industries down 1.5%.
The Saudi economy will shrink by 6.8% this year, the IMF said on Wednesday, a sharper decline than a 2.3% contraction estimated in April, as low oil prices and the coronavirus pandemic hit hard.
Virus containment measures have crippled burgeoning areas of the country’s non-oil economy such as tourism and entertainment, and lower oil prices have hit state revenues.
In Dubai, the index declined 1%, with its largest bank Emirates NBD declining 1.7% and Emaar Properties down 0.7%.
Ashraf Abu Issa, chairman of Abu Issa Holding, a Doha-based conglomerate that owns 100 retail stores and employs more than 3,000 people in Qatar and beyond, discusses how the potential exodus of expatriates from the region might affect his businesses. He speaks with Bloomberg's Simone Foxman. (Source: Bloomberg)
Rania Nashar, chief executive officer of Samba Financial Group, a Riyadh-based lender, talks about the state of the kingdom’s banks and the economy. She also discusses the need to empower women. She speaks with Bloomber's Yousef Gamal El-Din. (Source: Bloomberg)
The value of Saudi Arabia’s oil exports dropped by 65.4% in April when compared to the same month a year earlier, or a fall of about $12 billion, official data showed on Thursday.
Compared to March, total exports - including non-oil exports of goods such as chemicals and plastics - decreased by 23.5%, or about $3 billion, the General Authority for Statistics said.
Amid a drop in demand and oil prices, in the first quarter the value of Saudi Arabia’s oil exports plunged by 21.9% year on year to $40 billion, corresponding to a decline of about $11 billion, official data showed earlier this month.
Samba Financial Group expects the kingdom’s economy to have a slow U-shaped recovery after being hit by the “triple jeopardy” of low oil prices, reduced interest rates and the coronavirus pandemic.
Recovery from the coronavirus shutdown is already underway, and “we see a full recovery toward the end of 2021,” Chief Executive Officer Rania Nashar said in an interview with Bloomberg TV on Thursday.
In response to the crisis, Samba booked higher provisions in the first quarter to “build our reserves so we’re ready for any surprises” later in the year, she said. The bank is also reviewing SMEs to see if more stimulus measures are needed from the Saudi regulator.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Oil prices slipped further on Thursday after tumbling more than 5% in the previous session, as a record build in U.S. crude inventories and a rapid resurgence in COVID-19 cases cast doubts on a recovery in fuel demand.
U.S. West Texas Intermediate (WTI) crude futures fell 26 cents, or 0.7%, to $37.75 per barrel at 0640 GMT, after dropping $2.36 on Wednesday.
Brent crude futures fell 31 cents, or 0.8%, to $40.00 per barrel after falling $2.32 on Wednesday. A day earlier, the benchmark contract hit its highest price since early March, just before pandemic lockdowns and a Saudi-Russian price war slammed markets.
“Prices retreated after the EIA data signalled an inventory build much higher than expected,” said Avtar Sandu, senior commodities manager at Singapore-based brokerage Phillip Futures.
Oil prices tumbled over 5%, or more than $2 a barrel on Wednesday, after U.S. crude storage hit another record and coronavirus cases rebounded in countries like Germany and surged in heavily populated areas of the United States.
The United States had its second-largest rise in infections since the pandemic began. Mounting infections there as well as in China, Latin America and India have unnerved investors and pressured oil prices.
“The market is signalling that if it doesn’t get constant reassurance that we are emerging from the breakdown in demand that happened because of the pandemic, then higher oil prices really don’t make sense,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
Brent crude settled at $40.31 a barrel, down $2.32, or 5.4%. On Tuesday, Brent hit its highest price since early March, just before the pandemic and Saudi-Russia price war roiled markets.
U.S. West Texas Intermediate (WTI) crude settled at $38.01 a barrel, losing $2.36, or 5.8%.
Billionaire Mukesh Ambani has said that after the recent fund raising activity, which he refers to as an unprecedented event in Indian corporate history, the company is now moving towards closing its deal with Saudi Aramco.
RelianceNSE 0.40 % Industries (RIL) raised Rs 168,818 crore in two months through the country’s largest ever rights issue and series of stake sale deals in its arm Jio Platforms, delivering on a promise given to shareholders in August last year. The company is now working on delivering another promise-- stake sale in its oil-to-chemicals business to Saudi Aramco.
“In the energy businesses, Reliance is working to complete the contours of a strategic partnership with Saudi Aramco. The partnership gives our refineries access to a wide portfolio of value-accretive crude grades and enhanced feedstock security for a higher oil-to-chemicals conversion,” Ambani said in the company’s annual report for 2019-20.
The administrators of hospital operator NMC Health are weighing the sale of the company’s international fertility business, which could be worth more that $500 million, sources familiar with the matter said on Wednesday.
Administrators from Alvarez & Marsal were appointed in April to oversee NMC Health after months of turmoil over its finances.
NMC, founded by Indian entrepreneur B.R. Shetty, is the largest private sector healthcare provider in the UAE.
The administrators have held early talks with banks about the potential sale ahead of a formal launch of the sale process, two sources said.
Saudi Arabian shares ended lower on
Wednesday, following the kingdom's decision to bar visitors from
abroad from the annual haj pilgrimage due to the coronavirus,
while the Egyptian bourse advanced with broad-based gains among
its constituents.
Saudi Arabia's benchmark index was down 0.7%, hurt
by a 1.9% fall in Al Rajhi Bank and a 1.4% decline in
petrochemical firm Saudi Basic Industries.
The kingdom is to limit the number of domestic haj pilgrims
to around 1,000 to prevent the spread of the coronavirus, after
barring Muslims abroad from the rite for the first year in
modern times.
Official data showed that Saudi Arabia earns around $12
billion a year from haj and the year-round pilgrimage umrah.
As oil prices tick up to $40 a barrel following a pandemic-induced plunge, there’s a sense the shale industry is snapping back to life with Continental Resources Inc., EOG Resources Inc. and Parsley Energy Inc. all saying they’re restarting closed wells.
But top industry forecasters are painting a far darker picture. The reopenings, they say, will do little to bring new growth to an industry being increasingly starved of cash by Wall Street after a decade of excess. Even before the pandemic, investors were demanding companies spend no more than they earn. Now, that’s become a major barrier to future growth.
Looking out 18 months, U.S. output will still be around 16% below its peak in February, according to the average of five major forecasters surveyed by Bloomberg. It will probably be at least 2023 before the U.S. again hits its record close to 13 million barrels a day.
Kuwait’s Boutiqaat hired Citigroup Inc. to explore strategic options for the online retailer of luxury goods and cosmetics, according to people with knowledge of the matter.
The U.S. bank is working with the company on possibilities including a partial sale of the business and fund raising, the people said, asking not to be identified as the discussions are private.
Boutiqaat is seeking a valuation of about $700 million, two of the people said, while another person familiar with the company’s plans said it’s targeting around $1 billion. The company was valued at about $500 million in a 2019 funding round, they said.
Morgan Stanley Capital International (MSCI) will implement the reclassification of the MSCI Kuwait Indexes from frontier market status to Emerging Market in November 2020.
The step will coincide with the November 2020 semi-annual index review, Kuwait Capital Market Authority said in a tweet.
On April 9, CMA said though Kuwait has met the requirements of the reclassification, the MSCI put off the move until November due to the massive fallout of COVID-19 on global economy and investment patterns.
The health precautions and preventive measures implemented by countries and companies around the globe to stem the tide of the pandemic hindered the operational ability of investors and hampered their accessibility to the firms listed on Kuwait stock market in last May, CMA noted.
Dubai-based port operator DP World started marketing U.S. dollar denominated perpetual sukuk, or Islamic bonds, with an initial price guidance of around 6.625%, a document showed on Wednesday.
Perpetual bonds are similar to an equity instrument in that they have no maturity date.
The perpetual sukuk DP Worlds is offering are non-callable for 5-1/2 years.
Saudi Arabia’s economy will shrink by 6.8% this year, the International Monetary Fund (IMF) said on Wednesday, a sharper decline than the 2.3% contraction estimated in April, as low oil prices and the coronavirus pandemic hit the kingdom hard.
In an update of its April World Economic Outlook forecast, the IMF said it now expects a deeper global recession in 2020 and a slower recovery in 2021, as the coronavirus crisis intensifies in many emerging and developing countries.
In Saudi Arabia, the world’s largest oil exporter and the Gulf’s largest economy, virus containment measures have crippled nascent sectors of the non-oil economy such as tourism and entertainment, and lower oil prices have slashed state revenues.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Oil prices fell on Wednesday, reversing the previous session’s surge, as record high inventories and worries about a second wave of the coronavirus pandemic outweighed support from a gradual reopening of global economies.
Brent crude was down 81 cents, or 1.9%, to $41.82 a barrel by 1148 GMT a day after hitting its highest level since a price plunge began in March.
The benchmark crude has climbed from below $16 in April but remains a third lower than its level at the end of 2019.
U.S. West Texas Intermediate (WTI) crude fell 91 cents, or 2.2%, to $39.46 a barrel.
A rising number of coronavirus cases in the United States, China, Latin America and India has unnerved investors.
Oman’s sovereign rating was cut for a second time this year by Moody’s Investors Service as a lower crude price environment will likely slash the Gulf nation’s oil revenue.
The rating company downgraded the sovereign a notch lower to Ba3 -- three levels into its non-investment grade scale, and changed its outlook to negative, according to a statement Tuesday. In March, Moody’s put Oman on review for the downgrade, saying the country’s low fiscal strength will likely place pressure on its finances. Its assessment is now on par with S&P Global Ratings and one level below that of Fitch Ratings.
“The downgrade reflects the conclusion that in a lower oil price environment, which Moody’s now assumes will persist into the medium term, the government will unlikely be able to significantly offset the oil revenue loss and avoid a large and durable deterioration in its debt and debt affordability metrics or erosion of its fiscal and foreign currency buffers,” according to the statement.
Attorneys for Arif Naqvi, the embattled founder of collapsed private equity firm Abraaj Group, are arguing in court that the UK should refuse American requests to extradite him to the US to face fraud charges.
Naqvi is one of six people facing US charges that the firm defrauded a number of investors, including the Bill & Melinda Gates Foundation.
In court, Naqvi’s lawyers are arguing that London was the hub of Abraaj’s operations before its collapse in 2018, in addition to family ties to the city.
“If the group had a beating heart it was in Dubai, but its mind and control was wherever Arif was, which was often in London, which is where the main investor coverage operation was,” former Abraaj general counsel was quoted as saying in the defence’s skeleton argument.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
