#Dubai Shares Gain Most in Gulf as Real Estate Rallies: Inside EM - Bloomberg

Dubai Shares Gain Most in Gulf as Real Estate Rallies: Inside EM - Bloomberg

MIDDLE EASTERN MARKETS:

• Saudi Arabia’s Tadawul All Share Index ends little changed
• Saudi Marketing 1Q Profit 4.26M Riyals Vs. 8.12M Riyals Y/y
• Dar Al Arkan 1Q Profit 28.5M Riyals Vs. 12.4M Riyals Y/y
• AlKhorayef 1Q Profit 26.9M Riyals
• Stock falls 5.4%, down most since March

• The Dubai Financial Market General Index climbs 1.3% to the highest level since Jan. 20
• Emaar Properties +2.7%; Dubai Islamic Bank +1.9%; Dubai Investments +3.1%
• CI Capital prefers Emaar Properties over its subsidiaries at current valuation as it offers “the most diversified exposure into all segments, including development, retail, and hospitality” as well as “the preferred play on the merger with Malls,” Sara Boutros and Marlene Milad write in a note

• In Abu Dhabi, the ADX General Index trades 0.4% higher, up to a fresh high
• First Abu Dhabi Bank +0.6%; Aldar +1.1%; Adnoc Distribution +1.9%

• Kuwait’s Premier Market ends 0.2% higher after falling for the past three sessions
• Agility Public Warehousing pushes index up most, rising 1.4%

• ElSewedy rises as much as 9.2% in Cairo, the second biggest gainer by points among members of the EGX 30
• Company managed to increase its backlog slightly to Q1, and its gross profit surged 56% in the period, Prime Group’s analyst Dina Abdelbadie writes in a note
• “Thus, gross profit margin improved to 15.2% from 11.1%, thanks to higher volumes and prices in the wire & cable segment and higher prices of meters and transformers,” Abdelbadie (overweight) says, adding that the broker is positive on the stock

Commodity ‘Supercycle’ a Cue for #Saudi State Miner to Cut Debt - Bloomberg

Commodity ‘Supercycle’ a Cue for Saudi State Miner to Cut Debt - Bloomberg

Saudi Arabia’s state miner will use a windfall from the recent boom in commodity prices to pay off debt, as it seeks to strengthen its balance sheet before embarking on international acquisitions.

The new chief executive officer of Saudi Arabia Mining Co., known as Maaden, said he plans to halve the ratio of debt to earnings before interest, tax, depreciation and amortization over the next five years. Net debt was equivalent to 6.5 times Ebitda in March, according to data compiled by Bloomberg.

The focus will be on “sweating our assets” and ensuring Maaden is “one of the biggest winners” from the commodities rally, Abdulaziz Al Harbi, who was appointed last month, said in an interview. “We are capitalizing on the supercycle.”

Raw materials from metals to oil and crops have soared this year as major economies reopen and recover from the coronavirus pandemic. The frenzy has upended global supply chains and led to warnings of faster inflation.

Maaden digs up minerals including bauxite, a feedstock for aluminum smelters, and phosphates, which it uses to make fertilizers. Fertilizers have benefited from the steep rise in food prices, Al Harbi said.

Al Harbi, Maaden’s third CEO in the past 18 months, said the company needed to prioritize debt reduction after it invested almost $40 billion in Saudi projects in the past several years.

“The decision at the moment is not to pay dividends,” he said.

Mining is a key part of Saudi Arabia’s plan to diversify the economy from oil. Maaden is listed in Riyadh, the capital, but controlled by the kingdom’s sovereign wealth fund, which has helped it de-leverage by swapping some loans into equity.

Maaden’s profit increased to 761 million riyals ($203 million) in the first three months of 2021, the highest quarterly figure since 2013. The company’s shares have gained 42% this year to 57.40 riyals, giving it a market capitalization of $19 billion.

Still, Al Harbi said he was “cautious” on the outlook for commodity prices. A rise in virus cases in India and South America could reduce global demand, while some miners will look to capitalize on the boom by boosting supplies, he said.

Maaden is unlikely to buy any foreign companies or mines in the next 12 to 18 months, Al Harbi said. The Saudi firm made its first international acquisition in 2019, when it took over Mauritius-based fertilizer distributor Meridian.

Bondholders hire Rothschild to help oppose #Dubai fund revamp -sources | Reuters

Bondholders hire Rothschild to help oppose Dubai fund revamp -sources | Reuters

A group of creditors has hired financial adviser Rothschild and law firm Clifford Chance to help oppose the terms of a proposal by Dubai-listed Emirates REIT to exchange $400 million in Islamic bonds for new instruments, sources said.

Emirates REIT, a sharia-compliant real estate investment trust, last week offered to exchange unsecured Islamic bonds, or sukuk, for secured ones to bolster its balance sheet.

A group of bondholders including local and international funds, as well as regional banks, and representing around 40% of the sukuk holders, met on Sunday to appoint advisers and prepare a counter offer, three sources familiar with the matter said.

The bondholders will revert to the company in the coming days to communicate their concerns and a committee of creditors plans to negotiate a better deal, one of the sources said, speaking anonymously due to commercial sensitivities.

Rothschild declined to comment and Clifford Chance did not immediately respond.

REITs manage real estate assets that regularly generate profits, which are distributed to shareholders as dividends.

Emirates REIT’s business suffered after years of sluggish performance by Dubai’s real estate sector, which was exacerbated by the coronavirus outbreak. Last year, it appointed Houlihan Lokey to advise it on a strategic review.

It plans to extend the existing bonds’ maturity to 2024 from 2022, as well as defer coupon payments for a year.

Bondholders may instead try to re-set Emirates REIT’s management fees to improve cash flows, the three sources said.

Emirates REIT is also asking bondholders to waive any past or ongoing dissolution events and breaches of transaction documents, without disclosing which, according to the sources and a copy of Emirates REIT’s consent solicitation request, which was seen by Reuters.

Representatives of Equitativa, which manages Emirates REIT, and Houlihan Lokey reiterated on Sunday that the exchange offer was “investor-friendly” and that the new instruments would generate more market interest.

Mideast Stock: Real estate helps #Dubai outperform big Gulf bourses | ZAWYA MENA Edition

Mideast Stock: Real estate helps Dubai outperform big Gulf bourses | ZAWYA MENA Edition

The Dubai stock market closed higher on Sunday, buoyed by gains in property shares, while strong first-quarter earnings from Commercial International Bank led gains in Egypt.

Dubai's main share index ended up 1.3%, extending gains for a fifth consecutive session, boosted by a 2.7% rise in Emaar Properties.

House prices in Dubai are expected to rise for the first time in six years in 2021, supported by a swift vaccine rollout that has lifted hopes for economic recovery, a Reuters poll of property analysts showed.

DAMAC Properties jumped 3.7%.

Egypt's blue-chip index gained 0.7%, with its top lender Commercial International Bank (COMI) up 2.8% after posting net income of 2.87 billion Egyptian pound ($184 million) for the first-qaurter, a 20% rise year-on-year.

Saudi Arabia's benchmark index closed flat, as gains in property and petrochemicals were offset by declines in banks.

Elsewhere, Alkhorayef Water and Power Technologies fell more than 5% after a quarterly net profit drop.

In Abu Dhabi, the index added 0.4%, with the country's largest lender First Abu Dhabi Bank rising 0.6%, while Abu Dhabi National Oil Company For Distribution advanced 1.9%.

ADNOC Distribution named Bader Al Lamki as its new chief executive on Thursday, effective May 27.

The Qatari benchmark fell 0.4%, hit by a 1% fall in Qatar Islamic Bank and a 1.9% decline in Qatar International Islamic Bank .

New business ownership rule to open floodgates of FDI into #UAE | Editorials – Gulf News

New business ownership rule to open floodgates of FDI into UAE | Editorials – Gulf News

The much anticipated amendment to the Federal Commercial Companies Law No. 2 of 2015 announced late last year will be implemented in letter and spirit from June 1, 2021, marking a revolutionary change in business ownership rules in the country.

The new amendments to the law that allows 100 per cent foreign ownership of onshore [mainland] companies in the UAE is expected to open floodgates of investment opportunities for foreign investors.

Right to ownership lies at the core of capitalism where individuals determine where to invest, what to produce or sell, and at which prices to exchange goods and services.

While laissez-faire or the unfettered market capitalism remains utopian, modern nation states have been pursuing the core principles of capitalism that is rooted in right to property and freedom to own while protecting the socioeconomic interests of the nation at large.

The UAE government’s decision to allow 100 per cent foreign ownership of onshore businesses has come as a major boost to the country’s economy that has been actively pursuing foreign direct investment (FDI) in recent years.

The UAE recorded a 44.2 per cent ($20 billion) jump in foreign direct investment (FDI) in 2020 when global foreign FDI flows collapsed, falling 42 per cent from $1.5 trillion in 2019 to an estimated $859 billion, according to UNCTAD data.

Clearly, the country emerged as an attractive FDI destination and the clarity in ownership is going to bring in more investors into the country.

While several free zones within the country had already been allowing full business ownership to foreigners, onshore it has been restricted to certain categories of businesses with gradual easing happening during the last two years.

Keeping foreign investor as a minority shareholder legally has been a major impediment in attracting investors onshore in manufacturing and in several new generation businesses, such as, software development, financial technologies, and artificial intelligence.

By scrapping the system of having mandatory UAE national partners across the board for onshore businesses, with the exception of a few strategic areas, the government has opened up the country to the world for investment opportunities.

The UAE has been on a steady rise in the Global Competitiveness Index of the World Economic Forum. In the latest Index, the country is ranked 25th globally, improving by two positions from last year’s report and is leading Arab region.

The country has been pursuing a strategy to improve and develop performance in all competitiveness indicators. Clearly, the approach is rooted in open economic policies, modernisation and updating of legislations and streamlining of procedures as well as the adoption of innovation to move up on the scale of global competitiveness.

While the effects of the pandemic on global investment flows are expected to linger for longer with investors likely to remain cautious in committing capital to new overseas assets, the UAE’s legal reforms are sure to give it an edge in attracting foreign capital.

Many bondholders at #Dubai's Emirates REIT oppose $400m Sukuk conversion plan | Property – Gulf News

Many bondholders at Dubai's Emirates REIT oppose $400m Sukuk conversion plan | Property – Gulf News

Dubai-based real estate fund operator Emirate REIT’s plans to issue a new debt offering is meeting “significant resistance” from a “majority” of its existing bondholders, highly placed sources have told ‘Gulf News’.

These bondholders have called a virtual meeting later today to discuss the options available to them, including legal means, these sources add. “We believe that there is a widely recognized view that the company (Emirates REIT) proposal, in its current form, largely fails to address the long-standing concerns regarding other core issues,” said a source at one bondholder holding exposure in a $400 million, five-year Sukuk issued in late 2017.

These bondholders represent some of the biggest names in the global and local institutional investment space.

WHAT BONDHOLDERS WANT 

Want more clarity on "risk/reward compensation" as well as sufficient downside protection to Sukuk certificate holders from the conversion plan.

More transparency and information reporting on "key matters such as valuation (and its underlying assumptions and methodology), individual historical and present performance and prospects of each of the assets within the Emirates REIT portfolio".

The bondholders say they also want some disclosures on the allegations leading up to the investigations by DFSA.

El Adou on Oil Price Volatility and #Iran - Bloomberg

El Adou on Oil Price Volatility and Iran - Bloomberg

Ali El Adou, head of asset management at Daman Investments, discusses the oil market impact. Oil benchmarks just suffered their worst week in more than a month as the market considered the consequences of a potential nuclear deal that could lift U.S. sanctions against Iranian crude. He speaks with Manus Cranny on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

#Dubai Shares Gain Most in Gulf as Real Estate Rallies: Inside EM - Bloomberg

Dubai Shares Gain Most in Gulf as Real Estate Rallies: Inside EM - Bloomberg

Dubai’s benchmark stock index advanced the most among Gulf peers as real estate shares extended gains.

The Dubai Financial Market General Index rose as much as 1.3%, up for a fifth day in its longest winning streak since March. The sub-index tracking Dubai-based real estate shares climbed as much as 2.4% on Sunday, touching the highest level since November 2019. Those shares are trading higher amid a residential property price rally Morgan Stanley sees lasting for years.

Vaccinations are “helping a lot the reopening theme from an investment case perspective,” particularly in the United Arab Emirates and Saudi Arabia, Ali El Adou, head of asset management at Daman Investments in Dubai, said in an interview with Bloomberg TV. The UAE, a federation of seven sheikdoms including Dubai, has one of the highest inoculation rates globally.

“We’re still bullish, in terms of that theme, especially when we’re now talking about malls, real estate, airlines, logistics, so we’re still focusing on that,” he said.

Meanwhile, gauges in Abu Dhabi, Kuwait and Israel notched gains while those in Saudi Arabia, Bahrain and Qatar were little changed. Omani shares declined.

MIDDLE EASTERN MARKETS:

• Saudi Arabia’s Tadawul All Share Index trades flat as of 10:17 a.m. in Riyadh
• Saudi Marketing 1Q Profit 4.26M Riyals Vs. 8.12M Riyals Y/y
• Dar Al Arkan 1Q Profit 28.5M Riyals Vs. 12.4M Riyals Y/y
• AlKhorayef 1Q Profit 26.9M Riyals
• Stock falls 4%, most since April 13
• The Dubai Financial Market General Index climbs 1% to the highest level since Jan. 21 at 11:18 a.m. local time
• Dubai Islamic Bank +1.7%; Emaar Properties +1.5%; Emirates NBD +0.4%
• In Abu Dhabi, the ADX General Index trades 0.5% higher, up to a fresh high
• First Abu Dhabi Bank +0.7%; IHC +1%; Aldar +0.8% at 11:21 a.m. local time
• Kuwait’s Premier Market rises after falling for the past three sessions
• Agility Public Warehousing pushes index up most, rising 1.6% at 10:23 a.m.

MIDEAST STOCKS Major Gulf indexes mixed in early trade | Reuters

MIDEAST STOCKS Major Gulf indexes mixed in early trade | Reuters

Major Gulf stocks were mixed early on Sunday, with the Dubai index on track to extend gains for a fifth consecutive session, buoyed by property companies.

The main Dubai share index (.DFMGI) gained 0.9%, with blue-chip developer Emaar Properties (EMAR.DU) rising 1.5% while its shopping malls unit Emaar Malls (EMAA.DU) gained 1%.

Dubai house prices are expected to rise for the first time in six years this year, supported by a swift vaccine rollout that has lifted hopes for economic recovery, a Reuters poll of property analysts showed.

Among others, Emirates NBD Bank (ENBD.DU) added 0.4%. The lender sold $750 million in Additional Tier 1 bonds on Thursday after receiving more than $1.75 billion in orders for them, a document showed.

ENBD's issuance will be non-callable for six years.

Saudi Arabia's benchmark index (.TASI) fell 0.2%, with Al Rajhi Bank (1120.SE) and Saudi National Bank (1180.SE), the kingdom's biggest lender, both losing 0.6%.

Elsewhere, Alkhorayef Water and Power Technologies (2081.SE) retreated by more than 5% after a drop in quaterly net profit.

The Abu Dhabi index (.ADI) added 0.4%, led by a 0.4% gain for the country's largest lender First Abu Dhabi Bank (FAB.AD) and a 0.8% rise for aquaculture firm International Holding (IHC.AD).

In Qatar, the benchmark index (.QSI) eased by 0.1% as shares in Qatar International Islamic Bank (QIIB.QA) lost 1.1%.