Mideast Stocks Head Warily Into May After April Gains: Inside EM - Bloomberg
Middle East stock markets were mixed as investors looked for direction on the first trading day of the month following gains in April.
The main indexes in Kuwait, Oman and Dubai each rose 0.7% on Sunday, while the gauge in Abu Dhabi added 0.5%. Saudi Arabia’s Tadawul All Share Index led losses with a 0.5% retreat. Qatari and Israeli markets were little changed. Trading in Bahrain and Egypt was closed for holidays.
Though oil, a key source of revenue in the Gulf, dropped on Friday, it finished April 5.8% higher amid signs of a revival in global fuel demand. OPEC and its allies see world consumption rebounding by 6 million barrels a day this year, a potential boost to shares in Saudi Arabia, the world’s biggest crude exporter.
A recent rally in Saudi financial stocks was driven mostly by “enormous growth” both for the fourth quarter and the first three months of 2021, said Jaap Meijer, the head of equity research at Arqaam Capital in Dubai.
Two-thirds of growth is coming from retail mortgages and consumer credit, he said, adding that Riyadh-based Al Rajhi Bank is taking 50% of the mortgage market growth “as well as 80%” of consumer loans.
Shares in Al Rajhi were little changed Sunday.- Saudi Arabia will provide up to SAR2b ($533.4m) to fund 113 tourism projects this year, as the oil-rich nation aims to expand the sector under Crown Prince Mohammed bin Salman’s plan to diversify the economy
- Jabal Omar Development and cement makers including Qassim Cement, Arabian Cement and Eastern Province Cement rose as much as 1.9%
- Dubai’s DFM General Index climbs 0.7%
- Dubai Islamic Bank falls 0.2%, extending a decline of 1.6% last week after posting 1Q numbers described as “weak” by analysts at CI Capital
- Qatar’s QE Index extends drop to a third session to retreat 0.1%, the most in the Gulf, with Industries Qatar down 0.2% and dragging the index down the most
Schlumberger-Backed Arabian Drilling Said to Plan Saudi IPO - Bloomberg
Arabian Drilling Co., a Saudi oilfield-services company partly held by Schlumberger NV, is preparing an initial public offering that could give it a valuation of around $2 billion, according to people familiar with the matter.
The firm, also owned by Saudi Arabia’s Industrialization & Energy Services Company, known as Taqa, has asked banks to pitch for a role on the potential share sale, the people said, asking not to be identified as the information is private.
Arabian Drilling may complete a deal on Riyadh’s stock exchange before the end of the year, they said. No decisions have been finalized and the owners may decide against an IPO, the people said.
The company was founded in 1964 and counts Saudi Aramco, the kingdom’s state energy producer, among its main customers. Arabian Drilling didn’t respond to requests to comment.
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The discussions about a deal comes as Aramco and other national oil firms in the Middle East step up plans to raise billions of dollars from foreign investors, including through asset sales and IPOs. Abu Dhabi National Oil Co. is considering a listing of its drilling business, which could raise more than $1 billion if it goes ahead.
Riyadh has been the busiest IPO market in the Middle East over the past two years. That trend looks set to continue with a fresh wave of offerings planned, thanks in part to the country’s economic recovery following last year’s coronavirus lockdowns and crash in oil prices.
Saudi Basic Industries Corp. is planning to list its specialty chemicals business, and Saudi Telecom Co. may sell a stake in its internet-services unit. The company running the stock exchange, Saudi Tadawul Group, is also planning an IPO later this year.
UAE's flydubai reports $194 mln loss for 2020 | Reuters
United Arab Emirates carrier flydubai swung to a loss of 712.6 million dirhams ($194 million) last year, hit by a plunge in passenger traffic as a result of the coronavirus pandemic, it said on Sunday.
The loss compared with a 198.2 million dirham profit in 2019, when the airline reached a compensation deal with Boeing (BA.N).
Revenue contracted 53.7% to 2.8 billion dirhams.
Flydubai said the pandemic had impacted the airline more than any other crisis, with passenger traffic falling 67% to 3.2 million in 2020 while the number of flights it operated fell 63% to 27,450.
Flydubai, which lacks a domestic market to cushion against international closures imposed because of the pandemic, said 1,092 employees had taken unpaid leave or were on voluntary leave - about 29% of its current workforce of 3,796 staff.
It said 126 employees had left the company.
The airline's operations were significantly reduced last year for several weeks when the UAE closed its borders to international arrivals in March. After initially reopening for foreign residents, Dubai once again allowed foreign visitors to enter from July.
Flydubai's fleet shrank by eight jets to 51 Boeing 737's, it said.
Mideast Stocks: Major Gulf markets end mixed; Dubai index outshines | ZAWYA MENA Edition
Stock markets in the Gulf ended mixed on Sunday, with property shares driving the Dubai index higher while the Saudi bourse was hit by declines in financials.
Saudi Arabia's benchmark index dropped 0.5%, with Saudi National Bank 1180.SE , the kingdom's largest lender, losing 2.1%, while Riyad Bank retreated 2.8% after it reported a fall in quarterly earnings.
On Wednesday, the Saudi index gained sharply after Crown Prince Mohammed bin Salman said that the kingdom had no plans to introduce income tax and that a decision last July to triple value-added tax (VAT) to 15% was temporary.
The country tripled VAT to offset the impact of lower oil revenue on state finances, a move that shocked the public and businesses who had been expecting more support from the government during the COVID-19 pandemic.
In Dubai, the main share index concluded 0.7% higher, ending three sessions of losses.
Emaar Properties, the Dubai's largest developer, advanced 3%, while its unit Emaar Malls added 3.3%.
The United Arab Emirates' economy shrank 6.1% last year, the country's statistics centre said on Sunday, citing preliminary data, as the coronavirus crisis hit several key sectors.
The economy is expected to grow 2.5% this year, the central bank said last month.
Among others, Dubai Investments, the diversified investment group, climbed 1.3% after the company reported a net profit of 123.8 million dirhams ($34 million) compared to a loss of 6.8 million dirhams a year earlier.
The Abu Dhabi index added 0.5%, with First Abu Dhabi Bank, the country's largest lender, rising 0.8%, while telecoms firm Etisalat gained 0.9% following an increase in first-quarter net profit.
The telecoms operator is also considering refinancing a 1.2 billion euro bond note ($1.44 billion) maturing in June.
New issuance would improve the Etisalat group's financial flexibility and will be used for the repayment of the maturing bond, issued under Etisalat's global medium term note "GMTN" programme.
In Qatar, the benchmark index eased 0.1%, hit by a 0.2% fall in petrochemical maker Industries Qatar.
Israeli Gold, Commodities Traders Can Now Trade on Dubai’s DGCX - Bloomberg
Israeli gold traders are to be allowed to use the Dubai Gold & Commodities Exchange for the first time.
The exchange said in a statement it has received a permit from the Israel Securities Authority, enabling Israeli corporations to become members of the DGCX, and to use its trading services and platforms. Israeli members will also be able to act as market makers.
The announcement follows the Abraham Accords signed last year between the United Arab Emirates and Israel, normalizing relations between the two Middle East countries.
JLL's Salbak on Luxury Home Sales Boom in Dubai - Bloomberg
Head of MENA Research at JLL, Dana Salbak, discusses her firm's latest report, which says that newly announced regulatory measures, the vaccine rollout and the upcoming Expo 2020 are all opportunities to revive the United Arab Emirates' real estate market. The wealthiest home buyers fleeing virus lockdowns for Dubai are still finding bargains aplenty, turning March into the busiest month ever for the UAE’s top-end residential properties. She speaks with Manus Cranny and Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)
UPDATE 1-Russian oil output rises 2% in April following OPEC+ deal | Reuters
Russian oil and gas condensate output rose 2% to 10.46 million barrels per day (bpd) in April, from 10.25 million bpd in March, according to Reuters calculations based on an Interfax report on Sunday citing energy ministry data.
Under a deal agreed by the OPEC+ group of leading oil producers in March, Russia’s production quota was allowed to increase by 130,000 bpd from April 1 to 9.379 million bpd, excluding the output of gas condensate, a light oil.
Russia’s oil and gas condensate production totalled 42.81 million tonnes in April, in comparison with 43.34 million tonnes in March, which was a day longer, the news agency reported.
The energy ministry has not revealed production of crude oil alone. Russia typically produces around 700,000 bpd-800,000 bpd of gas condensate.
Interfax also said that Russian crude oil exports fell 20.5% in January-April from a year earlier to 66.65 million tonnes. The OPEC+ group, the alliance of the Organization of the Petroleum Exporting Countries and other leading oil producers including Russia, decided last week to stick to its previously approved action plan to ease output curbs further from May.
OPEC oil output rose in April as higher supply from Iran countered involuntary cuts and agreed reductions by other members under the pact with allies, a Reuters survey found, adding to signs of a 2021 recovery in Iran’s exports.
MIDEAST STOCKS Gulf bourses mixed in early trade | Reuters
Stock markets in the Gulf were mixed early on Sunday, with bourses in the United Arab Emirates supported by corporate earnings reports.
Saudi Arabia's benchmark index (.TASI) was down 0.4%, extending losses from the previous session.
Saudi National Bank (1180.SE), the kingdom's largest lender, and petrochemical firm Saudi Basic Industries Corp (2010.SE) were both down 1.4%.
On Wednesday, the Saudi index registered sharp gains after Crown Prince Mohammed bin Salman said the kingdom had no plans to introduce income tax and a decision last July to triple value-added tax (VAT) to 15% was temporary. read more
The country tripled VAT to offset the impact of lower oil revenue on state finances, a move that shocked citizens and businesses expecting more support from the government during the COVID-19 pandemic.
Elsewhere, Riyad Bank (1010.SE) declined 1.5% following a drop in quarterly earnings.
Dubai's main share index (.DFMGI) gained 0.3%, with sharia-compliant lender Dubai Islamic Bank (DISB.DU) adding 0.7%, while budget airline Air Arabia (AIRA.DU), which resumed flights to Moscow on May 1, rose 2.3%.
Among others, Dubai Investments (DINV.DU), the diversified investment group, climbed 1.3% after the company reported a net profit of 123.8 million dirhams ($33.71 million) compared to a loss of 6.8 million dirhams a year earlier.
In Abu Dhabi, the index (.ADI) edged up 0.2%, helped by a 0.8% rise in telecoms firm Etisalat (ETISALAT.AD) which reported an increase in first-quarter net profit.
The telecoms operator is also considering refinancing a 1.2 billion euro bond note ($1.44 billion) maturing in June.
New issuance would improve the Etisalat group's financial flexibility and will be used for the repayment of the maturing bond, issued under Etisalat's global medium term note "GMTN" programme.
The Qatari benchmark (.QSI) fell 0.4%, hit by a 1.5% fall in petrochemical marker Industries Qatar (IQCD.QA).
Abu Dhabi's Taqa raises $1.5bn through bond sale to fund growth | The National
Abu Dhabi National Energy Company, or Taqa, raised $1.5 billion through a dual-tranche bond issue to fund its low-carbon growth plans and buy back some of its outstanding corporate bonds.
The company raised debt through two $750 million tranches. A seven-year note has an interest rate of 2 per cent, the lowest Taqa has achieved on its bond sales, the company said in a statement on Sunday to the Abu Dhabi Securities Exchange. A longer 30-year tranche has a coupon rate of 3.4 per cent and is Taqa’s first Formosa bond, listed jointly in Taipei and London to tap demand from Taiwanese investors.
“The strong demand from global credit markets and investors from around the world is a … vote of confidence in Taqa’s strengthened financial profile as well as the company’s strategy to become a low-carbon power and water champion in the UAE and beyond,” Jasim Husain Thabet, Taqa’s group chief executive, said.
“I am confident that we will continue to go from strength to strength, demonstrating why Taqa, and the utilities sector in the UAE, is a compelling opportunity for investors.”
UAE’s Non-Oil Economy Contracted First Since 2011 Last Year - Bloomberg
The United Arab Emirates’ non-oil economy shrank 6.2% last year on lower oil prices and the coronavirus pandemic, the first contraction since 2011 at least, according to preliminary government data.
Overall gross domestic product in the Arab world’s second-largest economy is estimated to have contracted 6.1% in 2020, according to data cited in a statement by the Ministry of Economy. That’s slightly more than initial projections of a 6% contraction. Non-oil GDP is seen rebounding to grow 3.6% this year.
“The UAE economy performed better than expected in 2020 despite the current global challenges brought about by the Covid-19 pandemic,” said Abdulla Bin Touq Al Marri, the country’s economy minister. “This is a comparatively low decline” compared to major global economies, he added.
The International Monetary Fund forecast a 6% contraction in the UAE economy, and expects GDP to recover partially this year.
The Ministry of Economy and other government entities are working to double the economy over the next decade, to 3 trillion dirhams ($816.8 billion) from about 1.4 trillion dirhams now, he said.
More from the statement:
- Government spending increased by about 1.2 billion dirhams.
- Accommodation and food services fell around 24% last year while wholesale and retail operations declined 13%. Financial and insurance activities dropped 3% and manufacturing industries increased marginally.
Qatari emir meets with Saudi minister, seeks to boost bilateral ties | ZAWYA MENA Edition
Qatar’s Emir Sheikh Tamim Bin Hamad met on Thursday with Saudi Arabia’s Minister of State Prince Turki Bin Mohammed Bin Fahd, who is also a member of the Cabinet, in his office at the Sea Palace here.
At the outset of the meeting, Prince Turki Bin Mohammed conveyed to the Qatari emir greetings of Custodian of the Two Holy Mosques King Salman and Crown Prince Muhammed Bin Salman and their wishes for the emir and the people of Qatar continued progress and prosperity.
For his part, Sheikh Tamim Bin Hamad extended his greetings and appreciation to the Custodian of the Two Holy Mosques and the Crown Prince and his wishes for their good health and the people of the Kingdom continued progress and prosperity.
During the meeting, issues of common interest were reviewed, the Saudi Press Agency reported.
They also discussed ways of enhancing and developing bilateral relations in various fields.
The meeting was attended by Qatar’s Deputy Prime Minister and Foreign Minister Sheikh Muhammad Bin Abdulrahman and head of the Emiri Diwan Sheikh Saud Bin Abdulrahman.
Earlier in the day, Prince Turki Bin Mohammed and his accompanying delegation were received at the Doha airport by the Qatari foreign minister and Acting Chargé d'Affairs at Saudi Arabia’s Embassy in Qatar Ali Bin Saad Al-Qahtani.
