Mideast Stocks-Major markets log weekly gains on vaccine hopes | ZAWYA MENA Edition
Abu Dhabi shares ended lower on Thursday but all major Gulf markets managed weekly gains, riding on a rally fuelled by optimism around COVID-19 vaccine developments.
Financial markets globally have gained in most sessions over the past couple of weeks as U.S. drugmakers Pfizer Inc and Moderna Inc, and British firm AstraZeneca released positive data on the effectiveness of their vaccine candidates.
Investors are optimistic that progress made on the vaccine front would help economies recover at a faster pace than expected.
Oil slipped from seven-month highs as signs of growing supplies helped to halt a rally driven by hopes that the progress in the fight against COVID-19 pandemic will revive fuel demand.
The Abu Dhabi index closed down 0.3%, but managed a weekly rise of 1.2%, marking a ninth successive week of gains.
First Abu Dhabi Bank and telecom major Emirates Telecom were the major decliners in the session, shedding 0.5% and 1%, respectively.
Dubai's main share index closed higher for a fifth session in a row, climbing 0.3%, with Dubai Islamic Bank gaining 0.7%.
Emirates Integrated Telecommunications Co added nearly 2%, while Air Arabia finished up 2.5%.
The Dubai index rose 4.5% for the week, its third straight weekly gain.
Saudi Arabia's benchmark index closed up 0.1% to cap a five-session winning run and a fourth straight weekly gain.
Dr Sulaiman Al-Habib Medical Services Group was the top gainer on the index, jumping 7.5%, while National Commercial Bank led the decliners, shedding nearly a percent on the day.
In Qatar, the index edged down 0.1%, with Qatar Commercial Bank losing nearly a percent. Qatar's blue-chip index eked out a 1.8% weekly gain.
Thursday 26 November 2020
BP to Invest More in Middle East’s ‘World-Leading’ Oil Fields - Bloomberg
BP to Invest More in Middle East’s ‘World-Leading’ Oil Fields - Bloomberg
BP Plc said it will invest more money in Middle Eastern oil and natural-gas fields even as it transitions to renewable energy and tries to lower emissions.
The company is a major producer in countries such as Iraq, where it operates the world’s third-largest oil field of Rumaila, the United Arab Emirates and Oman. It’s focusing on their low-cost oil, while also boosting output of gas, according to Stephen Willis, BP’s senior vice president for the Middle East.
“We will continue to invest in these,” Willis said in a video interview from Oman, without specifying how much BP planned to spend. Deposits in Iraq, the UAE emirate of Abu Dhabi and Oman have “world-leading operating cost, capital cost and production efficiency performance.”
European oil majors are seeking greener sources of energy to combat climate change. BP, which is selling assets and cutting its dividend in response to oil’s coronavirus-triggered crash this year, is targeting a 40% decline in hydrocarbon production by 2030 and won’t explore for crude in any new countries.
In the Middle East, several countries are beginning to exploit renewable energy resources and focus more on gas, the production and burning of which emits less carbon than oil or coal.
BP Plc said it will invest more money in Middle Eastern oil and natural-gas fields even as it transitions to renewable energy and tries to lower emissions.
The company is a major producer in countries such as Iraq, where it operates the world’s third-largest oil field of Rumaila, the United Arab Emirates and Oman. It’s focusing on their low-cost oil, while also boosting output of gas, according to Stephen Willis, BP’s senior vice president for the Middle East.
“We will continue to invest in these,” Willis said in a video interview from Oman, without specifying how much BP planned to spend. Deposits in Iraq, the UAE emirate of Abu Dhabi and Oman have “world-leading operating cost, capital cost and production efficiency performance.”
European oil majors are seeking greener sources of energy to combat climate change. BP, which is selling assets and cutting its dividend in response to oil’s coronavirus-triggered crash this year, is targeting a 40% decline in hydrocarbon production by 2030 and won’t explore for crude in any new countries.
In the Middle East, several countries are beginning to exploit renewable energy resources and focus more on gas, the production and burning of which emits less carbon than oil or coal.
#Qatar Inks Deal for Minority Stake in Turkish Stock Exchange - Bloomberg
Qatar Inks Deal for Minority Stake in Turkish Stock Exchange - Bloomberg
Qatar announced on Thursday a series of high-profile investments in Turkey, its biggest ally in a years-long rift with Gulf heavyweights Saudi Arabia and the United Arab Emirates, including the purchase of a stake in the country’s main bourse.
Doha-based sovereign wealth fund Qatar Investment Authority signed a memorandum of understanding with its Turkish counterpart known as TWF to purchase a 10% stake in Borsa Istanbul AS.
The agreement for a minority stake in the company that runs the main Turkish stock exchange, for an undisclosed amount, was unveiled at a ceremony at the presidential palace in Turkey’s capital Ankara. It was overseen by Turkish President Recep Tayyip Erdogan and Qatari Emir Sheikh Tamim bin Hamad Al Thani.
The Gulf state also signed another preliminary deal to invest in a multibillion dollar port project in Istanbul and finalized an earlier agreement to buy a stake in Istinye Park, one of Istanbul’s largest shopping malls that’s popular among tourists from the Middle East.
Qatar announced on Thursday a series of high-profile investments in Turkey, its biggest ally in a years-long rift with Gulf heavyweights Saudi Arabia and the United Arab Emirates, including the purchase of a stake in the country’s main bourse.
Doha-based sovereign wealth fund Qatar Investment Authority signed a memorandum of understanding with its Turkish counterpart known as TWF to purchase a 10% stake in Borsa Istanbul AS.
The agreement for a minority stake in the company that runs the main Turkish stock exchange, for an undisclosed amount, was unveiled at a ceremony at the presidential palace in Turkey’s capital Ankara. It was overseen by Turkish President Recep Tayyip Erdogan and Qatari Emir Sheikh Tamim bin Hamad Al Thani.
The Gulf state also signed another preliminary deal to invest in a multibillion dollar port project in Istanbul and finalized an earlier agreement to buy a stake in Istinye Park, one of Istanbul’s largest shopping malls that’s popular among tourists from the Middle East.
Oil rally stalls on signs of more supply, demand doubts | Reuters
Oil rally stalls on signs of more supply, demand doubts | Reuters
Oil slipped from seven-month highs on Thursday as signs of growing supplies helped to halt a rally driven by optimism that COVID-19 vaccines will revive fuel demand.
Brent futures had risen to nearly $50 a barrel this week after three major pharmaceutical companies announced progress on vaccines that could start to be rolled out before the end of the year.
But Brent was down 74 cents, or 1.5%, at $47.87 a barrel by 1650 GMT on Thursday, having dropped as much as $1. The contract gained about 1.6% in the previous session.
West Texas Intermediate (WTI) crude fell 66 cents, or 1.4%, to $45.05 after gaining 1.8% on Wednesday.
“Despite a number of strong fundamentals rallying the markets, especially vaccine development supporting oil, bearish concerns remain,” said Avtar Sandu, senior commodities manager at Phillip Futures.
Oil slipped from seven-month highs on Thursday as signs of growing supplies helped to halt a rally driven by optimism that COVID-19 vaccines will revive fuel demand.
Brent futures had risen to nearly $50 a barrel this week after three major pharmaceutical companies announced progress on vaccines that could start to be rolled out before the end of the year.
But Brent was down 74 cents, or 1.5%, at $47.87 a barrel by 1650 GMT on Thursday, having dropped as much as $1. The contract gained about 1.6% in the previous session.
West Texas Intermediate (WTI) crude fell 66 cents, or 1.4%, to $45.05 after gaining 1.8% on Wednesday.
“Despite a number of strong fundamentals rallying the markets, especially vaccine development supporting oil, bearish concerns remain,” said Avtar Sandu, senior commodities manager at Phillip Futures.
#Saudi, #AbuDhabi Wealth Funds Team Up on Egyptian Drugmaker Deal - Bloomberg
Saudi, Abu Dhabi Wealth Funds Team Up on Egyptian Drugmaker Deal - Bloomberg
Two of the biggest sovereign wealth funds in the Middle East are exploring a joint bid for an Egyptian pharmaceutical company, a deal that could mark the beginning of wider co-investment plans between the two state-controlled firms, people familiar with the matter said.
Saudi Arabia’s Public Investment Fund and ADQ, formerly known as Abu Dhabi Development Holding Co., are weighing the purchase of Bausch Health Cos.’s Cairo-based drug unit, the people said, asking not to be identified because negotiations are private. In addition, the two funds have held talks to work closely on other transactions in areas such as food security, health care and industrials, the people said.
A representative for ADQ wasn’t available to comment. The PIF and Bausch declined to comment. A spokesperson for Amoun didn’t answer two calls, or respond to a text message seeking comment.
Fearing global supply disruptions, Gulf states have been buying overseas farmlands and investing in agricultural technology. Abu Dhabi, mostly through ADQ, intensified efforts during the coronavirus pandemic by acquiring a stake in agricultural trader Louis Dreyfus Co. and investing in Lulu Hypermarket Group’s expansion into Egypt. The PIF is said to be weighing an investment into the same supermarket chain operator.
ADQ has been holding talks to acquire Bausch’s Egyptian business, known as Amoun Pharmaceutical Co., which could be valued at around $700 million, Bloomberg reported last month. Talks are ongoing and there’s no certainty the deliberations will lead to a transaction involving one or both of the funds, the people said.
Two of the biggest sovereign wealth funds in the Middle East are exploring a joint bid for an Egyptian pharmaceutical company, a deal that could mark the beginning of wider co-investment plans between the two state-controlled firms, people familiar with the matter said.
Saudi Arabia’s Public Investment Fund and ADQ, formerly known as Abu Dhabi Development Holding Co., are weighing the purchase of Bausch Health Cos.’s Cairo-based drug unit, the people said, asking not to be identified because negotiations are private. In addition, the two funds have held talks to work closely on other transactions in areas such as food security, health care and industrials, the people said.
A representative for ADQ wasn’t available to comment. The PIF and Bausch declined to comment. A spokesperson for Amoun didn’t answer two calls, or respond to a text message seeking comment.
Fearing global supply disruptions, Gulf states have been buying overseas farmlands and investing in agricultural technology. Abu Dhabi, mostly through ADQ, intensified efforts during the coronavirus pandemic by acquiring a stake in agricultural trader Louis Dreyfus Co. and investing in Lulu Hypermarket Group’s expansion into Egypt. The PIF is said to be weighing an investment into the same supermarket chain operator.
ADQ has been holding talks to acquire Bausch’s Egyptian business, known as Amoun Pharmaceutical Co., which could be valued at around $700 million, Bloomberg reported last month. Talks are ongoing and there’s no certainty the deliberations will lead to a transaction involving one or both of the funds, the people said.
#UAE's flydubai starts Dubai-Tel Aviv services after detente | Reuters
UAE's flydubai starts Dubai-Tel Aviv services after detente | Reuters
United Arab Emirates airline flydubai started direct passenger flights to Israel on Thursday after the two countries normalised ties in a Washington-brokered deal.
Israel and the UAE agreed in August to establish diplomatic relations, paving the way for economic cooperation. Bahrain and Sudan have also agreed to forge formal ties with Israel in deals brokered by the Trump administration and promoted as a strategic Middle East shift that isolates Iran.
Dubai state-owned flydubai will operate twice-daily fights between the UAE’s and Israel’s financial capitals - Dubai and Tel Aviv - the airline said this month.
Dubai’s Emirates, the UAE’s biggest airline, will sell tickets on the flydubai service through a codeshare agreement between the carriers, an Emirates spokeswoman said.
United Arab Emirates airline flydubai started direct passenger flights to Israel on Thursday after the two countries normalised ties in a Washington-brokered deal.
Israel and the UAE agreed in August to establish diplomatic relations, paving the way for economic cooperation. Bahrain and Sudan have also agreed to forge formal ties with Israel in deals brokered by the Trump administration and promoted as a strategic Middle East shift that isolates Iran.
Dubai state-owned flydubai will operate twice-daily fights between the UAE’s and Israel’s financial capitals - Dubai and Tel Aviv - the airline said this month.
Dubai’s Emirates, the UAE’s biggest airline, will sell tickets on the flydubai service through a codeshare agreement between the carriers, an Emirates spokeswoman said.
MIDEAST DEBT-Gulf bonds likely to set new record in 2021 amid budget squeeze | Reuters
MIDEAST DEBT-Gulf bonds likely to set new record in 2021 amid budget squeeze | Reuters
International debt sales from the six-member Gulf Cooperation Council are likely to notch another record year in 2021 as governments need to fill wider deficits and corporates look to grab money on the cheap amid low rates.
The oil-rich region saw a second consecutive year of record international bonds, topping $100 billion, as issuers’ finances were battered by the COVID-19 pandemic along with low oil prices, with a few issues still possible before year-end.
“I think overall, the market will grow. We can easily add $7-10 billion more to 2020 total issuance,” said Khalid Rashid, head of debt capital markets for the Middle East and North Africa at Deutsche Bank.
S&P Global Ratings said in July GCC government balance sheets are expected to continue to deteriorate up until 2023.
International debt sales from the six-member Gulf Cooperation Council are likely to notch another record year in 2021 as governments need to fill wider deficits and corporates look to grab money on the cheap amid low rates.
The oil-rich region saw a second consecutive year of record international bonds, topping $100 billion, as issuers’ finances were battered by the COVID-19 pandemic along with low oil prices, with a few issues still possible before year-end.
“I think overall, the market will grow. We can easily add $7-10 billion more to 2020 total issuance,” said Khalid Rashid, head of debt capital markets for the Middle East and North Africa at Deutsche Bank.
S&P Global Ratings said in July GCC government balance sheets are expected to continue to deteriorate up until 2023.
MIDEAST STOCKS- #Saudi leads losses in morning trade | Nasdaq
MIDEAST STOCKS-Saudi leads losses in morning trade | Nasdaq
Most major Gulf markets struggled in the final trading session of the week on Thursday, as a rally fuelled by optimism around COVID-19 vaccine developments lost steam.
Financial markets globally have gained in most sessions over the past couple of weeks as U.S. drugmakers Pfizer Inc PFE.N and Moderna Inc MRNA.O, and British firm AstraZeneca AZN.L released positive data on the effectiveness of their vaccine candidates.
Investors are optimistic that progress made on the vaccine front would help economies worldwide recover at a faster pace than expected.
Saudi Arabia's benchmark index .TASI fell about 0.6% after a four-session winning run but was on track to eke out a fourth straight weekly gain.
Financial stocks dragged down the index with the top three losers belonging to that sector.
Al-Rajhi Bank 1120.SE and National Commercial Bank 1180.SE declined 0.4% and 1%, respectively.
Dubai's main share index .DFMGI retreated 0.4%, with top lender Emirates NBD ENBD.DU and real estate stock Emaar Properties EMAR.DU declining 0.9% and 1.5%, respectively.
The Dubai benchmark has gained for the past four sessions in a row.
The Abu Dhabi index .ADI eased 0.4%, with First Abu Dhabi Bank FAB.AD and telecom major Emirates Telecom ETISALAT.AD shedding 0.5% and 0.4%, respectively.
In Qatar, the index .QSI edged down 0.1%, with Industries Qatar IQCD.QA shedding 1.4%.
Most major Gulf markets struggled in the final trading session of the week on Thursday, as a rally fuelled by optimism around COVID-19 vaccine developments lost steam.
Financial markets globally have gained in most sessions over the past couple of weeks as U.S. drugmakers Pfizer Inc PFE.N and Moderna Inc MRNA.O, and British firm AstraZeneca AZN.L released positive data on the effectiveness of their vaccine candidates.
Investors are optimistic that progress made on the vaccine front would help economies worldwide recover at a faster pace than expected.
Saudi Arabia's benchmark index .TASI fell about 0.6% after a four-session winning run but was on track to eke out a fourth straight weekly gain.
Financial stocks dragged down the index with the top three losers belonging to that sector.
Al-Rajhi Bank 1120.SE and National Commercial Bank 1180.SE declined 0.4% and 1%, respectively.
Dubai's main share index .DFMGI retreated 0.4%, with top lender Emirates NBD ENBD.DU and real estate stock Emaar Properties EMAR.DU declining 0.9% and 1.5%, respectively.
The Dubai benchmark has gained for the past four sessions in a row.
The Abu Dhabi index .ADI eased 0.4%, with First Abu Dhabi Bank FAB.AD and telecom major Emirates Telecom ETISALAT.AD shedding 0.5% and 0.4%, respectively.
In Qatar, the index .QSI edged down 0.1%, with Industries Qatar IQCD.QA shedding 1.4%.
#Dubai real estate fund ENBD REIT faces 'significant pressure'; asset value falls | ZAWYA MENA Edition
Dubai real estate fund ENBD REIT faces 'significant pressure'; asset value falls | ZAWYA MENA Edition
Dubai’s ENBD REIT, a Shariah-compliant real estate investment trust, managed by the asset-management arm of Emirates NBD, has seen a further deterioration in the value of its portfolio due to the slowdown triggered by the coronavirus.
Its net asset value (NAV) as of September 30, 2020 stood at $198 million, down by $32 million from the $230 million recorded in March 31. The fund’s property portfolio was also lowered from $410 million to $377 million due to the slowdown in the property market.
ENBD REIT has a diversified portfolio of residential, office and alternative assets in the UAE.
The property market in the UAE has been impacted by the coronavirus pandemic, with rental values, sale prices and occupancy levels posting monthly declines amid a slump in demand.
The latest data showed that occupancy levels in ENBD REIT’s portfolio have indeed softened in recent months, averaging at 76 percent in September 2020, down from 82 percent in March 2020. Lower uptake has been observed in residential properties like the Binghatti Terraces and Arabian Oryx House.
Dubai’s ENBD REIT, a Shariah-compliant real estate investment trust, managed by the asset-management arm of Emirates NBD, has seen a further deterioration in the value of its portfolio due to the slowdown triggered by the coronavirus.
Its net asset value (NAV) as of September 30, 2020 stood at $198 million, down by $32 million from the $230 million recorded in March 31. The fund’s property portfolio was also lowered from $410 million to $377 million due to the slowdown in the property market.
ENBD REIT has a diversified portfolio of residential, office and alternative assets in the UAE.
The property market in the UAE has been impacted by the coronavirus pandemic, with rental values, sale prices and occupancy levels posting monthly declines amid a slump in demand.
The latest data showed that occupancy levels in ENBD REIT’s portfolio have indeed softened in recent months, averaging at 76 percent in September 2020, down from 82 percent in March 2020. Lower uptake has been observed in residential properties like the Binghatti Terraces and Arabian Oryx House.
#UAE's Agthia makes 'strategic' move into Kuwait market | ZAWYA MENA Edition
UAE's Agthia makes 'strategic' move into Kuwait market | ZAWYA MENA Edition
UAE’s food and beverages giant Agthia Group announced on Thursday a strategic acquisition to expand its footprint in the Gulf Cooperation Council (GCC) region.
Part of the state-owned holding company ADQ, Agthia has signed a sales purchase agreement to acquire a homegrown Kuwaiti brand, Al Faysal Bakery and Sweets, which has an annual turnover of more than $25 million.
“[The move will] build our regional F&B footprint, adding significant scale to our existing operations in Kuwait and further diversifying our portfolio,” said Alan Smith, chief executive officer of Agthia Group.
Agthia Group chairman and chief investment officer Khalifa Sultan Al Suwaidi said the company remains committed to grow across several categories and have identified Kuwait as an important market.
“The acquisition… underscores our priorities to deliver value to our shareholders,” Al Suwaidi said.
UAE’s food and beverages giant Agthia Group announced on Thursday a strategic acquisition to expand its footprint in the Gulf Cooperation Council (GCC) region.
Part of the state-owned holding company ADQ, Agthia has signed a sales purchase agreement to acquire a homegrown Kuwaiti brand, Al Faysal Bakery and Sweets, which has an annual turnover of more than $25 million.
“[The move will] build our regional F&B footprint, adding significant scale to our existing operations in Kuwait and further diversifying our portfolio,” said Alan Smith, chief executive officer of Agthia Group.
Agthia Group chairman and chief investment officer Khalifa Sultan Al Suwaidi said the company remains committed to grow across several categories and have identified Kuwait as an important market.
“The acquisition… underscores our priorities to deliver value to our shareholders,” Al Suwaidi said.
#AbuDhabi to Expand Media Hub in Effort to Diversify Economy - Bloomberg
Abu Dhabi to Expand Media Hub in Effort to Diversify Economy - Bloomberg
Abu Dhabi’s media free zone twofour54, home to the regional headquarters of Ubisoft Entertainment SA and CNN, is aiming to triple the size of the emirate’s media industry over the next decade, as part of ongoing efforts to diversify the oil-dependent economy.
“Abu Dhabi is in the process of transforming itself from a resource-based economy to a knowledge-based economy,” twofour54’s Chief Executive Officer Michael Garin said in an interview. “They’ve identified the media and digital sector as one of the drivers of that.”
The new, government-funded Yas Creative Hub is projected to add 3.5 billion dirhams ($952.9 million) to gross domestic product by 2023 and create 11,000 new jobs by 2031 in sectors like gaming and production, Garin said.
With oil revenue diminishing, Abu Dhabi, like other Gulf energy exporters, faces pressure to diversify its economy and explore new sources of revenue. Abu Dhabi is the capital of the United Arab Emirates, which includes the business hub of Dubai.
Abu Dhabi’s media free zone twofour54, home to the regional headquarters of Ubisoft Entertainment SA and CNN, is aiming to triple the size of the emirate’s media industry over the next decade, as part of ongoing efforts to diversify the oil-dependent economy.
“Abu Dhabi is in the process of transforming itself from a resource-based economy to a knowledge-based economy,” twofour54’s Chief Executive Officer Michael Garin said in an interview. “They’ve identified the media and digital sector as one of the drivers of that.”
The new, government-funded Yas Creative Hub is projected to add 3.5 billion dirhams ($952.9 million) to gross domestic product by 2023 and create 11,000 new jobs by 2031 in sectors like gaming and production, Garin said.
With oil revenue diminishing, Abu Dhabi, like other Gulf energy exporters, faces pressure to diversify its economy and explore new sources of revenue. Abu Dhabi is the capital of the United Arab Emirates, which includes the business hub of Dubai.
OMV Owners Demand Change as Borealis Deal Brings Power Struggle - Bloomberg
OMV Owners Demand Change as Borealis Deal Brings Power Struggle - Bloomberg
OMV AG anchor investors are seeking further changes to its supervisory board to strengthen oversight of Chief Executive Officer Rainer Seele’s transformation plan, people familiar with the matter said.
A dispute about oversight and governance after OMV’s $4.7 billion purchase of chemicals producer Borealis AG has already triggered the ouster of the long-time Chairman Wolfgang Berndt. But the changes haven’t gone far enough to resolve the concerns of the company’s top shareholders, the Austrian government and Abu Dhabi’s Mubadala Investment Co., the people said, asking not to be identified as the matter is private.
The upheaval at OMV is an important issue for Austria. It’s the country’s biggest industrial company and one of its few global players, securing thousands of well-paid jobs and contributing sizeable dividends to the federal budget. The growing rancor at the top threatens to undermine OMV’s plan to move beyond fossil fuels to become a producer of low-carbon energy and chemicals.
Investors want to replace some members of the supervisory board that have little experience in oil, gas or chemicals with industry specialists who can provide a more robust testing ground for Seele’s plans, the people said.
OMV AG anchor investors are seeking further changes to its supervisory board to strengthen oversight of Chief Executive Officer Rainer Seele’s transformation plan, people familiar with the matter said.
A dispute about oversight and governance after OMV’s $4.7 billion purchase of chemicals producer Borealis AG has already triggered the ouster of the long-time Chairman Wolfgang Berndt. But the changes haven’t gone far enough to resolve the concerns of the company’s top shareholders, the Austrian government and Abu Dhabi’s Mubadala Investment Co., the people said, asking not to be identified as the matter is private.
The upheaval at OMV is an important issue for Austria. It’s the country’s biggest industrial company and one of its few global players, securing thousands of well-paid jobs and contributing sizeable dividends to the federal budget. The growing rancor at the top threatens to undermine OMV’s plan to move beyond fossil fuels to become a producer of low-carbon energy and chemicals.
Investors want to replace some members of the supervisory board that have little experience in oil, gas or chemicals with industry specialists who can provide a more robust testing ground for Seele’s plans, the people said.