Sunday 16 May 2021

Conflict rattles Israeli rapprochement with Arab states | Financial Times

Conflict rattles Israeli rapprochement with Arab states | Financial Times


When the United Arab Emirates shocked the Arab world by normalising relations with Israel it said the move would help ease the protracted Arab-Israeli conflict. But nine months later, the wealthy Gulf state finds itself in a difficult position as its newest ally bombards the impoverished Palestinian territory of Gaza. 

Israeli warplanes and artillery have been pounding Gaza while Hamas, the group that controls the territory, has fired rockets into Israel. On Sunday, the death toll in Gaza stood at 192, including 92 women and children, local health officials said. 

Ten people have died inside Israel, including two children, local medics have said. 

While almost a third of Arab countries have relations with Israel, this week’s bloodshed shows that diplomatic ties ushered in by last year’s so-called Abraham Accords have given them little leverage and done nothing to ease the root cause of the protracted crisis — the Jewish state’s conflict with the Palestinians.

Amanat 1Q Net Income 31.5M Dirhams - Bloomberg video

Amanat 1Q Net Income 31.5M Dirhams - Bloomberg


Mohamed Hamade, CEO of Amanat, the Gulf Cooperation Council's largest healthcare and education investment company, discusses his company's reported first quarter net profit that more than quadrupled to 31.5 million dirhams. He says that profits rose on the back of a turnaround of its healthcare business. He speaks with Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

#AbuDhabi Shares at Record, Shrug Off Mideast Tension: Inside EM - Bloomberg

Abu Dhabi Shares at Record, Shrug Off Mideast Tension: Inside EM - Bloomberg



#Iran to Award $1.8 Billion Gas Field Contract to Local Company - Bloomberg

Iran to Award $1.8 Billion Gas Field Contract to Local Company - Bloomberg

Iran’s Petropars Ltd. will be awarded a $1.78 billion contract by the National Iranian Oil Co. to develop the giant Farzad-B gas field that was previously intended to be tapped by a group of Indian companies.

Petropars will produce 28 million cubic meters of gas a day from the offshore deposit within five years, according to the agreement, the Iranian oil ministry’s official Shana news service reported, with the contract to be signed on Monday. Farzad-B is estimated to hold reserves of around 500 billion cubic meters.

An Indian consortium led by ONGC Videsh Ltd. was engaged in talks with Iran to develop the field but disagreements over investment volume and gas prices delayed progress and negotiations stalled completely after the U.S. reimposed sanctions on Iran in 2018.

Prior to those penalties, Iran had intended to jointly develop several major oil and gas projects with foreign energy companies as part of a push to modernize its industry and improve expertise and know-how.

Farzad-B is the latest major energy project awarded to Petropars following the exodus of foreign companies from the Islamic Republic’s oil and gas industry. Last year, it took over the development of an offshore phase of Iran’s South Pars field after its partners Total SA and China National Petroleum Corp. quit the $5 billion project because of sanctions.

Iran is priming its oil fields -- and customer relationships -- so it can increase production and exports as it inches closer to an agreement with the U.S. that could lift sanctions on its economy and revive the 2015 nuclear deal.

#Saudi banks will maintain high deposit levels, strong liquidity despite COVID-19: S&P | ZAWYA MENA Edition

Saudi banks will maintain high deposit levels, strong liquidity despite COVID-19: S&P | ZAWYA MENA Edition

Banks in Saudi Arabia will maintain high deposit levels and enjoy strong liquidity despite the current environment, S&P said in a report on Sunday.

The global ratings agency also sees economic risk in the kingdom as stable despite a budget deficit and public debt accumulated over the past years.

“We think the country still has sufficient fiscal and external buffers to weather periods of low oil prices… We expect banks will maintain high levels of core deposits in their funding bases and their strong liquidity metrics will remain intact,” S&P said.

Saudi’s banking sector is classified as A-/Stable/A-2 and belongs to group ‘4’ under S&P’s Banking Industry Country Risk Assessment (BICRA). Other countries in the same group include Ireland, Kuwait, Malaysia, New Zealand, Poland, Slovenia, Spain and Taiwan.

The kingdom’s banking sector is experiencing an “expansionary phase” after posting low growth for years, according to S&P. 

Low oil, property prices

However, it said that the current growth of mortgage portfolios and increasing leverage are being offset by low prices in the property market and a “developing legal framework”.

“Although we expect the lower-for-longer interest rate environment will put pressure on banks’ margins, it should remain high and allow banks to continue to outperform their regional peers in terms of profitability,” S&P said.

It said the banking sector’s strengths include strong funding profile dominated by deposits, protected customer franchise, as well as material yet gradually eroding fiscal buffers that enable the state to survive low oil prices.

MIDEAST STOCKS Top lender FAB boosts #AbuDhabi; #Dubai retreats | Reuters

MIDEAST STOCKS Top lender FAB boosts Abu Dhabi; Dubai retreats | Reuters

The Abu Dhabi stock market ended higher on Sunday, buoyed by a surge in its top lender First Abu Dhabi Bank (FAB) (FAB.AD) on expectations that an upcoming review by MSCI of its emerging markets index will increase the bank's index weighting and spur foreign fund flows into its shares.

The benchmark index (.ADI) jumped 3.5%, its biggest intraday gain since mid-January, with First Abu Dhabi bank surging more than 10%.

"The bank has gained significant interest, ever since it completed the takeover of Bank Audi Egypt," said Mohamad Ibrahim, regional director at Exness.

With the bank now reporting promising numbers across the board and looking to expand its business footprint beyond just locally, investor sentiment appears to be positive across the board, added Ibrahim.

MSCI announced on Thursday that it would review the MSCI Emerging Markets index some time this month. Analysts expect First Abu Dhabi Bank's weighting in the index could be increased given its recent strong performance and expansion plans.

Dubai's main share index (.DFMGI), however, retreated 1.2%, ending four sessions of gains. Emirates NBD Bank (ENBD.DU) dropped 2%, while blue-chip developer Emaar Properties (EMAR.DU) declined 2.5%.

In Oman, the index (.MSX30) edged up 0.2%, helped by a 0.5% gain in Bank Muscat (BKMB.OM).

** Other major Middle Eastern Markets including Saudi Arabia remained closed for the Eid-ul-Fitr holidays.

FDI to the #UAE surges 44.2 per cent in 2020, backed by billion-dollar infrastructure investments | The National

FDI to the UAE surges 44.2 per cent in 2020, backed by billion-dollar infrastructure investments | The National

Foreign direct investment to the UAE surged 44 per cent to reach nearly $20 billion (Dh73.45bn) in 2020, the government said on Saturday.

"Despite the UN's estimates that global foreign direct investment flows decreased by 42 per cent in 2020 over Covid-19, the UAE witnessed 44 per cent growth in FDI flows in 2020, compared to 2019, to reach Dh73bn," Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said in a tweet.

"Good crisis management is a guaranteed investment," he added.

The UAE's significant inflows of FDI last year in the middle of the pandemic were largely due to Adnoc monetising some of its non-core assets.

Last year, Adnoc helped attract Dh62bn ($16.8bn) in foreign direct investment to the UAE, mainly through various multibillion-dollar transactions signed in the midstream and infrastructure segments.

Over the past four years, the state-owned company helped drive Dh237bn in FDI flows to the UAE.

The national oil company opened up partnership opportunities across its midstream and real estate sectors to allow foreign private equity and pension funds to pool in capital.

#UAE attracts foreign investments of $20 billion in 2020 | Reuters

UAE attracts foreign investments of $20 billion in 2020 | Reuters

Foreign direct investment (FDI) into the United Arab Emirates rose to $19.88 billion in 2020, up 44.2% from the previous year, the government said on Saturday.

Contributing to this figure were large deals carried out by the state-run Abu Dhabi National Oil Co (ADNOC), state news agency WAM said, without giving any further details.

Economy minister Abdullah al-Marri said the UAE would move forward with initiatives to increase the efficiency of the business environment, strengthen investor confidence, increase opportunities in priority sectors, and unify efforts to improve competitiveness at local and federal levels.

#AbuDhabi Shares at Record, Shrug Off Mideast Tension: Inside EM - Bloomberg

Abu Dhabi Shares at Record, Shrug Off Mideast Tension: Inside EM - Bloomberg

Abu Dhabi’s main stock index rose to a record, even amid heightened tensions in the region, as the benchmark’s biggest member surged on hopes of foreign inflows.

The ADX General Index climbed as much as 2.1% Sunday, boosted by gains for First Abu Dhabi Bank PJSC, the biggest lender in the United Arab Emirates. The stock surged as much as 5.8% after MSCI Inc. last week announced a quarterly review that could trigger about $500 million in flows from abroad. Shares in Oman also gained while those in Dubai slid. Stock markets in Saudi Arabia, Qatar, Kuwait, Bahrain, Egypt and Israel were closed for holidays.



The rally in Abu Dhabi came despite rising tensions in the Middle East as clashes between Israelis and Palestinians escalated. Israel’s benchmark TA-35 index fell 0.5% last week and the broader TA-125 declined 0.6%, the first weekly retreat since March 25.

The Palestine Stock Exchange Al Quds Index declined as much as 0.7% Sunday, paring this year’s gain to 3.4%. The market was closed for most of last week due to a holiday, when clashes increased.

Positive earnings that have beaten expectations for some companies in the UAE are offsetting geopolitical risk for now, according to Joice Mathew, the head of equity research at United Securities in Muscat.

“Geopolitics risk is back into the regional markets,” he said, adding that markets should reflect that as trading resumes this week.

MIDDLE EASTERN MARKETS:
  • Dubai’s DFM General Index falls 0.9% as of 11:44 a.m. local time
    • Emaar Properties -3%; Emirates NBD -0.8%; Emaar Malls -4%
    • Damac Properties drops 3.2%, most in about a month after reporting results
      • While contracted sales recover, “the reported numbers were weak, with revenue hitting its all-time low, likely a reflection of weak construction activity, as most projects approach completion,” CI Capital analysts Sara Boutros and Marlene Milad write in a note
  • Oman’s MSM 30 Index rises 0.1%
  • Last week, the U.S.-listed BlueStar Israel Technology ETF lost 4.9%, down for the third consecutive week, and the iShares MSCI Israel ETF retreated 3.6%.

Iran Gears Up for Return to Oil Market as U.S. Talks Advance - Bloomberg

Iran Gears Up for Return to Oil Market as U.S. Talks Advance - Bloomberg

Iran is preparing to ramp up global oil sales as talks to lift sanctions show signs of progress. But even if a deal is struck, the flow of additional crude into the market may be gradual.

State-controlled National Iranian Oil Co. has been priming oil fields -- and customer relationships -- so it can increase exports if an accord is clinched, officials said. In the most optimistic estimates, the country could return to pre-sanctions production levels of almost 4 million barrels a day in as little as three months. It could also tap a flotilla’s worth of oil that’s hoarded away in storage.

But there are still many hurdles to overcome before than can happen. Any agreement must fully dismantle the gamut of U.S. barriers on trade, shipping and insurance involving Iranian entities. Even then buyers may still be reluctant, according to Mohammad Ali Khatibi, a former official at NIOC.



#UAE's GGICO to focus on business continuity as losses hit $459mln | ZAWYA MENA Edition

UAE's GGICO to focus on business continuity as losses hit $459mln | ZAWYA MENA Edition

Dubai-listed Gulf General Investments Company (GGICO) is looking into business continuity, as accumulated losses hit 1.687 billion dirhams ($459 million) during the first three months of the year.

In a bourse filing to the Dubai Financial Market (DFM), the company with investments in property, manufacturing, hospitality, retail and financial services sectors, said the losses incurred were a result of impairment of assets due to the “challenging market situation” in the country.

“The board of directors is discussing the continuity of the company,” stated the filing published on Sunday.

The company had been incurring net losses prior to the coronavirus pandemic. Last year, it was looking for measures to settle some of its debts against bank guarantees.

The current losses represent 94.19 percent of the company’s share capital.

“The board of directors has taken several measures such as to reschedule all its debts with banks, get rid of some non-profit investments on the company and some non-profitable companies [and] focus on profit-making investments,” the latest statement said.

#Dubai's DAMAC Properties lifts sales but first-quarter loss widens | Reuters

Dubai's DAMAC Properties lifts sales but first-quarter loss widens | Reuters

Dubai developer DAMAC Properties’ on Sunday posted a first-quarter net loss of 189.6 million dirhams ($51.6 million), widening from 106.1 million dirhams a year earlier despite a pick-up in sales.

The owner of the Middle East’s only Trump-branded golf course, located in Dubai, said this was mainly because it had yet to account for revenue from projects about to be completed.

Gross profit fell to 139 million dirhams from 312 million dirhams a year earlier.

“The compressed gross margins were due to revenue-mix and higher selling and general administration expenses resulting from higher booked sales reported during the quarter,” DAMAC said in a results presentation on its website.

Booked sales amounted to 1.1 billion dirhams in the first three months of the year against 733 million dirhams in the same period last year.

The COVID-19 pandemic has added pressure on the Dubai property sector, where supply has outpaced demand for new houses and apartments in a market where most of the population is foreigners.

Dubai’s economy is heavily reliant on sectors directly affected by the pandemic, such as tourism, transportation and retail shopping. Such sectors took a battering last year, though travel and tourism have rebounded in recent months as lockdowns and curfews have been lifted.

DAMAC’s bourse filing on Sunday said it had suffered a short-term hit from the COVID-19 pandemic but it expects to have adequate resources to continue to operate for the foreseeable future.

European, Middle Eastern & African Stocks - Bloomberg #UAE mid-session

European, Middle Eastern & African Stocks - Bloomberg #UAE mid-session