#GCC and #MiddleEast Finance News: 19 Apr 2021

Monday 19 April 2021

Bankers Return Downtown Just in Time for Brookfield #Dubai Tower - Bloomberg

Bankers Return Downtown Just in Time for Brookfield Dubai Tower - Bloomberg

ICD-Brookfield Place tower in Dubai. Source: ICD-Brookfield

ICD-Brookfield has had to ride Dubai’s economic roller-coaster since opening the largest standalone office tower in the city last September when the worst of the coronavirus outbreak appeared over.

More than half a year and another spike in infections later, regular office life remains a way off. Even without the pandemic casting a shadow over commercial real estate, the $1.5 billion high-rise arrived at a time when about a quarter of all offices stood vacant despite rental prices dropping by over 35% in the past six years.

After initially halting lease negotiations, many multinationals are now coming back and looking to conclude deals, according to Rob Devereux, chief executive officer of ICD-Brookfield.

Seven firms finalized contracts in the first quarter of this year, following agreements with 11 companies including UBS Group AG in the previous three months. Julius Baer, Natixis and EY signed before the tower opened. The building’s occupancy rate is approaching 55% in terms of signed leases, Devereux said.

For Devereux, who leads a venture equally owned by Brookfield Asset Management Inc. and Dubai’s sovereign wealth fund, the outlook is upbeat as firms look to rebuild their work culture, with the vaccination rates suggesting the city could be near herd immunity. Companies in Dubai will likely start bringing workers back to offices en masse in the second half of this year, Devereux said.

Tosyali in Talks to Buy Stake in BMC Sanayi With Businessman Ethem Sancak - Bloomberg

Tosyali in Talks to Buy Stake in BMC Sanayi With Businessman Ethem Sancak - Bloomberg

Tosyali Holding is in talks to buy a stake in a Turkish truck and armored vehicle producer that’s half-owned by Qatar, according to people with knowledge of the matter.

The Turkish steelmaker is negotiating the purchase of shares in BMC Sanayi ve Ticaret AS with businessman Ethem Sancak, who controls 25% of the company, said the people, asking not to be named because the deliberations are confidential.

Qatar Armed Forces Industry Committee holds 49.9% in a special purpose vehicle, Es Mali Yatirim, which controls BMC. The Ozturk family owns the remaining 25.1%.

Tosyali and Sancak declined to comment.

Oil climbs as dollar slumps; gains capped by pandemic surge | Reuters

Oil climbs as dollar slumps; gains capped by pandemic surge | Reuters

Oil prices edged higher on Monday, supported by a weaker U.S. dollar but gains were capped by concerns about the impact on demand from rising coronavirus cases in India.

Brent crude settled up 28 cents, or 0.4%, at $67.05 a barrel, after rising 6% last week. West Texas Intermediate (WTI) U.S. oil ended the session up 25 cents, or 0.4%, at $63.38 a barrel, having gained 6.4% last week.

The U.S. dollar traded at a six-week low versus major peers on Monday, with Treasury yields hovering near their weakest in five weeks.

A weaker dollar makes oil cheaper for holders of other currencies. However, COVID-19 cases have surged in India, the world’s third biggest oil importer and consumer, dampening optimism for a sustained global recovery in demand.

“If today’s broad-based weakness in the U.S. dollar is sustained, the energy complex should be able to maintain the bulk of last week’s gains,” said Jim Ritterbusch, president of Ritterbusch and Associates.

Mideast News: #SaudiArabia Red Sea Tourism Plan Near $3.7 Billion Green Loan - Bloomberg

Mideast News: Saudi Arabia Red Sea Tourism Plan Near $3.7 Billion Green Loan - Bloomberg

Saudi Arabia could be weeks away from clinching the first significant funding package for a key part of Crown Prince Mohammed bin Salman’s program to diversify the kingdom’s economy.

The Red Sea Development Co.’s 14 billion-riyal ($3.7 billion) loan is set to close with a small group of local banks including Saudi National Bank, Banque Saudi Fransi, Riyad Bank and Saudi British Bank, according to people familiar with the matter.

The deal to help fund the first phase of the development will be a so-called green loan, with the proceeds used to finance environmentally sustainable investment, the people said, asking not to be identified as the information is private. It will have a tenor of 15 years and an interest rate of about 1% above the Saudi interbank offered rate, they said.

The Red Sea Development declined to comment. The company first started approaching banks for the loan in mid-2019.

UPDATE 1- #Saudi crude exports drop to eight-month low in February | Reuters

UPDATE 1-Saudi crude exports drop to eight-month low in February | Reuters

Saudi Arabia’s crude oil exports fell to their lowest in eight months in February, the Joint Organisations Data Initiative (JODI) said on Monday, as the world’s biggest oil exporter voluntarily capped output to support oil prices.

Crude exports fell to 5.625 million barrels per day (bpd), their lowest since June 2020 in February, from 6.582 million bpd in the prior month.

Exports had risen for a seventh straight month, to their highest since April 2020, in January.

Crude output for February also dropped to its lowest since June last year at 8.147 million bpd, from 9.103 million bpd in January.

Why Emirates Development Bank CEO has confidence in 'ambitious' $8.2bn strategy - Arabianbusiness

Why Emirates Development Bank CEO has confidence in 'ambitious' $8.2bn strategy - Arabianbusiness

The CEO of Emirates Development Bank (EDB) has admitted its AED30 billion ($8.2 billion) strategy is “ambitious” but Faisal Al Bastaki told Arabian Business he is confident they will deliver and play a pivotal role in the UAE’s post-pandemic recovery.

The strategy, which was launched to support the recently announced Operation 300bn, is aimed at supporting businesses and start-ups across the country.

Operation 300bn was launched earlier this year as a 10-year comprehensive strategy to more than double the industrial sector's contribution to the country's GDP, positioning the UAE as a global industrial hub by 2031.

The bank has allocated a portfolio of AED30 billion to support priority industrial sectors over a five-year period, which will contribute to financing more than 13,500 SMEs, creating 25,000 jobs.

Oil Flips Between Gains and Losses in Wake of India Virus Surge - Bloomberg

West Texas Intermediate for May settlement, which expires Tuesday, slipped 2 cents to $63.11 a barrel at 10:44 a.m. in New York

The more-active June contract increased fell 2 cents to $63.17 a barrel

Brent for June delivery slid 11 cents to $66.66 a barrel

Oil seesawed between small gains and losses with a weaker dollar and the spread of Covid-19 in key importers such as India acting as opposing forces.

Futures in New York traded in a tight $1 range on Monday. Global Covid-19 cases hit a weekly record, and in India, a key refiner slashed oil processing rates with the virus rapidly spreading and lockdowns crimping fuel use in the country. The Bloomberg Dollar Spot Index weakened, boosting the appeal of commodities priced in the currency.

“The dollar is down for a sixth day in a row, providing a tailwind,” said Bob Yawger, head of the futures division at Mizuho Securities. “Demand construction in the U.S. provides reason to be optimistic,” but the virus situation elsewhere continues to raise concern.

MIDEAST STOCKS Mixed close for Major Gulf bourses | Reuters

Major stock markets in the Gulf had a mixed session on Monday, with property shares weighing on the Dubai index but few fresh factors to trade on.

Saudi Arabia's benchmark index (.TASI) gained 0.5%, with petrochemical firm Saudi Basic Industries (2010.SE) rising 2.1%, and Yanbu National Petrochemicals Company (2290.SE) up 2.8% after reporting a sharp surge in quarterly profit.

In Dubai, the main share index (.DFMGI) eased 0.1%, hit by a 1.8% fall in Emaar Properties (EMAR.DU), the emirate's largest listed real estate developer, which will go ex-dividend on Tuesday, and a 2.1% drop in its unit Emaar Malls (EMAA.DU).

However, gains at Emirates NBD Bank (ENBD.DU), which finished 2.1% higher, cushioned the index's fall.

On Sunday, the lender and Etihad Credit Insurance signed an agreement to ease the bank's businesses access to trade finance.

The Abu Dhabi index (.ADI) lost 0.4%, pressured by a 1.3% decline in telecoms giant Etisalat (ETISALAT.AD).

In Qatar, the benchmark (.QSI) rebounded 1.5%, with most of its stocks gaining, including market heavyweight Industries Qatar (IQCD.QA), which rose 4.7%.

The Qatari cabinet last week approved a bill that will allow non-Qatari investors to own up to 100% of the capital of companies listed on the Qatar stock exchange.

It also decided to keep central bank liquidity support for local banks based on need, as the country faces a second wave of the coronavirus pandemic.

European, Middle Eastern & African Stocks - Bloomberg #UAE #Kuwait #Israel #SaudiArabia #Qatar close

Covid: Oil Markets Are a Long Way From Back to Normal - Bloomberg

We’re all pinning our hopes on vaccines to free us to meet friends and family, travel and return to something like our normal lives. Oil market forecasters, too, are finally getting a little more optimistic about the recovery in demand that should accompany that return. But a closer look shows we’re just not there yet.

In their latest monthly reports, the International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries all raised their oil demand estimates for 2021. It’s the first time since they began publishing such forecasts that they’ve all been more optimistic than they were a month earlier.

As you look a little deeper into the forecasts, one thing becomes abundantly clear. All three agencies are a lot more optimistic about the second half of the year than they are about the first half. That’s not surprising, but it does raise some yellow flags for caution.

#Dubai's DGCX launches Pakistan rupee futures contract | ZAWYA MENA Edition

Dubai's DGCX launches Pakistan rupee futures contract | ZAWYA MENA Edition

The Dubai Gold & Commodities Exchange (DGCX) has launched a Pakistani Rupee (PKR) Futures Contract, which is now available for trading.

The first-of-its-kind on any regulated exchange in the world, the contract will provide members and their clients with the ability to hedge exposure to the Pakistani Rupee.

It will also provide trading opportunities against the wide range of existing foreign exchange currency products that DGCX makes available for trading, the exchange said in a statement.

The contract size is 2,000,000 of base currently (PKR) and will be traded and cash settled in US dollars (USD) based on publicly available reference prices displayed on the last trading day.

Bad loans at #UAE banks likely to increase once relief measures are over - S&P | ZAWYA MENA Edition

Bad loans at UAE banks likely to increase once relief measures are over - S&P | ZAWYA MENA Edition

Problem loans at banks in the UAE are likely to increase further once borrower support measures are lifted, S&P Global Ratings said on Sunday.

The ratings agency has also given the local banks a group “5” classification under its latest Banking Industry Country Risk Assessment (BICRA), similar to other countries like Qatar, Mexico, Philippines, Italy, Panama, Peru, Malta, Iceland, Hungary and Bermuda.

In its latest report, S&P said the trend in the UAE’s economic risk is stable. However, it said that the local banking system has weakening asset quality and significant exposure to risky factors, while profitability “will remain lower for longer”.

The country’s real estate is also expected to remain under pressure for at least another 12 months due to oversupply, while the tourism, hospitality, aviation and some trading sectors will continue to be hampered by low demand.

“The COVID-19 pandemic, lower oil prices and continued pressure on the real estate sector have increased risks for UAE banks, and we expect banking sector’s problem loans to increase further once the regulatory forbearance measures are lifted and banks start to account for the impact of the economic shock,” S&P said.

Oil Near $67 With Dollar Dipping and India Virus Cases Surging - Bloomberg

Brent for June settlement traded down 0.2% at $66.65 a barrel as of 10:07 a.m. in London
West Texas Intermediate for May was little changed at $63.05

Oil steadied near $67 a barrel as the benefits of a weaker dollar were offset by the sweep of the coronavirus pandemic across key importer India.

Brent futures traded little changed, paring an earlier decline as the dollar slipped, making commodities priced in the currency more attractive. Yet India reported record Covid-19 infections on Monday in a further blow to fuel demand.

Last week, crude futures were boosted by a wave of positive economic data from the U.S. and China, a drawdown in stockpiles, and optimistic assessments of the prospects for consumption over 2021 from both the Organization of Petroleum Exporting Countries and the International Energy Agency.

#UAE Firm Led by Key Royal Sets Up Data JV With Israel’s Rafael - Bloomberg

UAE Firm Led by Key Royal Sets Up Data JV With Israel’s Rafael - Bloomberg

An Abu Dhabi firm led by the United Arab Emirates’ national security adviser has set up a venture with Israel’s Rafael Advanced Defense Systems Ltd. to develop Artificial Intelligence and big data analysis for sectors including health and public safety.

Group 42 signed an agreement with Rafael to form Presight.AI and plans to establish a research and development center in Israel, it said on Monday. Israel and the UAE agreed to normalize ties last year and the collaboration on data will likely deepen the Middle Eastern nations’ relationship into the security sphere.

G42, which describes itself as an artificial intelligence and cloud computing firm, was the first UAE company to set up an office in Israel. Sheikh Tahnoun bin Zayed Al Nahyan, the UAE’s national security adviser and brother to Abu Dhabi’s crown prince, is the company’s chairman.

AI companies globally have been developing new types of processing software to manage big data that are large and complex. But the collection and use of such information has been a source of political tension, especially between China and the United States and feeds into debates over data privacy that also affect global companies.

MIDEAST STOCKS Major Gulf indexes make mixed start, with #Qatar gaining | Reuters

MIDEAST STOCKS Major Gulf indexes make mixed start, with Qatar gaining | Reuters

Major Gulf share markets were mixed on Monday, with the Qatari index boosted by Commercial Bank (COMB.QA), while Saudi Arabia's benchmark index (.TASI) slipped 0.4%.

In the Saudi market, Al Rajhi Bank (1120.SE) fell 0.5%, while Saudi National Bank (1180.SE), the kingdom's largest lender, retreated 1.7% and Arriyadh Development (4150.SE) dropped 2.4%, as the stock went ex-dividend.

However, Yanbu National Petrochemicals Company (2290.SE) climbed by more than 2%, after it reported a sharp surge in its quarterly profit.

In Dubai, the main share index (.DFMGI) fell 0.5%, hit by a 1.5% fall in Emaar Properties (EMAR.DU), Dubai's largest listed real estate developer which will go ex-dividend on Tuesday, and a 0.9% slip in Emirates NBD Bank (ENBD.DU).

The Abu Dhabi index (.ADI) gained 0.5%, with aquaculture firm International Holding (IHC.AD) advancing 4.9%.

International Holding has gone through rapid expansion across its major business sectors, resulting in a sharp growth in its financials, positioning it for long-term growth.

In Qatar, the benchmark (.QSI) rebounded 1%, as most of the stocks on the index were in positive territory including Commercial Bank, which rose 4.9%.

The Qatari cabinet last week approved a bill that will allow non-Qatari investors to own up to 100% of the capital of companies listed on the Qatar stock exchange.

It also decided to keep central bank liquidity support for local banks based on need, as the country faces a second wave of the coronavirus pandemic.

Oil Drops After Weekly Surge as Pandemic Sweeps Through India - Bloomberg

WTI for May delivery lost 0.3% to $62.95 a barrel on the New York Mercantile Exchange at 7:19 a.m. in London.

Despite ending lower Friday, prices rose 6.4% last week, the biggest weekly gain since the period to March 5.

Brent for June settlement dropped 0.3% to $66.57 a barrel on the ICE Futures Europe exchange.

Oil headed for a back-to-back loss after posting the biggest weekly advance since March, with the pandemic sweeping key importer India and the global case count hitting a weekly record.

West Texas Intermediate dropped 0.3, while Brent shed 0.3%. Last week, crude futures were boosted by a wave of positive economic data from the U.S. and China, another drawdown in crude stockpiles, and optimistic assessments about prospects for consumption over 2021 from both the Organization of Petroleum Exporting Countries and the International Energy Agency.

#AbuDhabi's TAQA hires banks for dollar bonds - document | ZAWYA MENA Edition

Abu Dhabi's TAQA hires banks for dollar bonds - document | ZAWYA MENA Edition

Abu Dhabi National Energy Company (TAQA), owned by Abu Dhabi state-owned holding company ADQ, has hired banks to arrange a dual-tranche bond issuance comprising a seven-year tranche and 30-year Formosa paper, a document showed on Monday.

It also announced a tender offer for 3.625% notes due in 2021 and 5.875% paper also due this year, as well as 3.625% notes due in 2023, the document from one of the banks on the deal showed.

Citi and HSBC were hired as global coordinators for the new bonds. They will hold investor calls starting on Monday, along with Bank of China, First Abu Dhabi Bank, HSBC, Mashreq, Mizuho and MUFG. An bond issue will follow, subject to market conditions.

BNP, HSBC, MUFG and SMBC Nikko are arranging the tender offer.

#AbuDhabi’s Mubadala looks beyond resource roots | Financial Times

Abu Dhabi’s Mubadala looks beyond resource roots | Financial Times

Khaldoon al-Mubarak: ‘We are not going to take a pause, the momentum is there and it’s the whole point with

this shift in the portfolio’ © FT montage; Bloomberg, AM/Getty

Abu Dhabi’s most active investment fund Mubadala is turning away from its roots as it cuts its holdings in energy and other commodity-related assets while ramping up investments in technology, healthcare and disruptive industries.

Khaldoon al-Mubarak, chief executive, said the $232bn fund’s strategy shift would mean more selldowns in “legacy commodity sectors” either through market listings or private placements, including an initial public offering for Emirates Global Aluminium.

Mubadala is also planning an IPO for Yahsat, a satellite company set up 14 years ago, and is considering whether to list GlobalFoundries, the US-based chipmaker into which it has pumped billions of dollars over the past decade, and which turned its first profit in 2019.

At the same time, the fund is increasing its investments in Asia’s two powerhouses as it aims to double its assets under management by 2030.