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Futures rose 3.9% in New York on Monday with added support from a weaker dollar, which makes commodities priced in the currency more attractive, and a rally in U.S. equities. Iran said there are still differences around the timing of when countries will return to compliance with the original 2015 nuclear agreement, allaying some concern about a rapid ramp-up in the Persian Gulf nation’s output. While the market is anticipating the Islamic Republic’s supply will pick up again by late summer, the demand recovery will be strong enough to absorb it, Goldman Sachs Group Inc. said. The bank expects Brent futures to hit $80 a barrel in the next few months. “Seasonally we’re coming into a strong demand period, overwhelming concerns on supply,” said Peter McNally, global head for industrials, materials and energy at Third Bridge. With the U.S. continuing to reopen, air travel picking up and Europe lifting pandemic-driven lockdowns, “it’s more than likely those barrels can get absorbed.”  |
Monday, 24 May 2021
Oil Surges With Iran Saying Differences Remain on Sanctions Deal - Bloomberg
Oil Surges With Iran Saying Differences Remain on Sanctions Deal - Bloomberg
#Dubai's DMCC makes a case for new bank to support diamond trading in UAE | Markets – Gulf News
Dubai's DMCC makes a case for new bank to support diamond trading in UAE | Markets – Gulf News
Dubai’s DMCC could set up a bank or financial tool to provide financing to the diamond trading industry in the next 10 to 30 months.
Ahmed Bin Sulayem, DMCC’s Executive Chairman and CEO, said that it was “too early” talk about the matter but added that it was the “missing puzzle” in Dubai as it is hard to get finances. “It’s not for profit that we are pushing to support this and if need be even invest ourselves in a bank," he said. "It is really to make sure that the diamond industry and traders do not have an excuse to look outside Dubai or DMCC. It’s going to happen one way or the other.”
DMCC's Dubai Diamond Exchange oversaw Dh91.8 billion worth of transactions in rough diamonds last year. The commodities cluster hosted 19 rough diamonds tenders... and its first one for emeralds. Last year, there was also the UAE’s largest ever rough diamond tender, which took place on the DDE floor, with 379,912 carats of rough diamonds sold, valued at Dh321.29 million.
“As much as it's a market opportunity, it's about the business. Bankers have also done a few studies on the diamond industry and that's within reach today,” said Sulayem. It “is not as mysterious as it used to be before; so I expect to see this, if not, maybe somebody from the crypto world will provide finance. But it's going to happen.”
Dubai’s DMCC could set up a bank or financial tool to provide financing to the diamond trading industry in the next 10 to 30 months.
Ahmed Bin Sulayem, DMCC’s Executive Chairman and CEO, said that it was “too early” talk about the matter but added that it was the “missing puzzle” in Dubai as it is hard to get finances. “It’s not for profit that we are pushing to support this and if need be even invest ourselves in a bank," he said. "It is really to make sure that the diamond industry and traders do not have an excuse to look outside Dubai or DMCC. It’s going to happen one way or the other.”
DMCC's Dubai Diamond Exchange oversaw Dh91.8 billion worth of transactions in rough diamonds last year. The commodities cluster hosted 19 rough diamonds tenders... and its first one for emeralds. Last year, there was also the UAE’s largest ever rough diamond tender, which took place on the DDE floor, with 379,912 carats of rough diamonds sold, valued at Dh321.29 million.
“As much as it's a market opportunity, it's about the business. Bankers have also done a few studies on the diamond industry and that's within reach today,” said Sulayem. It “is not as mysterious as it used to be before; so I expect to see this, if not, maybe somebody from the crypto world will provide finance. But it's going to happen.”
#SaudiArabia hopes to raise $55bn through privatisation | Financial Times
Saudi Arabia hopes to raise $55bn through privatisation | Financial Times
Saudi Arabia hopes to raise about $55bn over the next four years as it plans to step up its nascent privatisation programme with the government seeking to boost revenue and narrow its yawning budget deficit.
Saudi Arabia hopes to raise about $55bn over the next four years as it plans to step up its nascent privatisation programme with the government seeking to boost revenue and narrow its yawning budget deficit.
Mohammed al-Jadaan, the finance minister, told the Financial Times that Riyadh had identified a pipeline of 160 projects across 16 sectors, including asset sales and public-private partnerships, through to 2025.
Riyadh’s aim is to outsource the management and financing of health infrastructure and services to the private sector, as well as city transportation networks, school buildings, airport services and water desalination and sewage treatment plants. Asset sales will include television broadcasting towers, government-owned hotels and district cooling and desalination plants.
The programme is part of Crown Prince Mohammed bin Salman’s drive to overhaul the state-dominated, oil-addicted economy and modernise the kingdom.
“It’s not a choice any more, but a requirement by the central government that these services or these utilities will no longer be run by the government,” Jadaan said. “It’s taking it [privatisation] to the next stage.”
He said the goal was to raise revenue in Riyadh, which is grappling with a budget deficit that hit $79bn last year, equivalent to 12 per cent of gross domestic product, and improve state services.
The minister hopes to secure $38bn through asset sales and $16.5bn through public-private partnerships.
Jadaan has set the ambitious target of reducing its fiscal deficit to 4.9 per cent of GDP in 2021 as the kingdom looks to recover from last year’s twin shocks of the coronavirus pandemic and the slump in oil prices.
The privatisation programme does not include entities owned by the Public Investment Fund, the sovereign wealth fund that has become the dominant force in the economy under Prince Mohammed’s leadership, or further asset sales by Saudi Aramco, the state oil company.
#Dubai Investment Firm FIM Partners Said to Consider Raising SPAC - Bloomberg
Dubai Investment Firm FIM Partners Said to Consider Raising SPAC - Bloomberg
FIM Partners, the frontier and emerging markets asset manager backed by EFG Hermes, is considering listing a special purpose acquisition company in the U.S., people familiar with the matter said.
The Dubai-based investment firm could seek about $250 million for the blank-check company, the people said, asking not to be identified because the information is private. JPMorgan Chase & Co. is advising on the potential deal, they said.
FIM Partners hasn’t set a timeline for any listing, and it could decide to wait before proceeding with a deal given the turmoil in the SPAC market, the people said.
Blank-check company listings in the U.S. have slowed to a trickle in recent weeks after raising $181 billion in the last five quarters, according to data compiled by Bloomberg. Even as overall activity slows, the SPAC market has become more international, with firms from Asia to Europe seeking to raise funds for dealmaking.
FIM Partners is led by Chief Executive Officer Hedi Ben Mlouka, a former Merrill Lynch banker who previously ran Duet Group’s frontier markets investing arm. The firm has offices in the United Arab Emirates, Saudi Arabia and the U.K., according to its website. EFG Hermes agreed to buy a stake in FIM Partners in 2017.
Discussions are ongoing, and there’s no certainty they will lead to a transaction, the people said. A representative for FIM Partners didn’t have any immediate comment. A spokesperson for JPMorgan declined to comment.
FIM Partners, the frontier and emerging markets asset manager backed by EFG Hermes, is considering listing a special purpose acquisition company in the U.S., people familiar with the matter said.
The Dubai-based investment firm could seek about $250 million for the blank-check company, the people said, asking not to be identified because the information is private. JPMorgan Chase & Co. is advising on the potential deal, they said.
FIM Partners hasn’t set a timeline for any listing, and it could decide to wait before proceeding with a deal given the turmoil in the SPAC market, the people said.
Blank-check company listings in the U.S. have slowed to a trickle in recent weeks after raising $181 billion in the last five quarters, according to data compiled by Bloomberg. Even as overall activity slows, the SPAC market has become more international, with firms from Asia to Europe seeking to raise funds for dealmaking.
FIM Partners is led by Chief Executive Officer Hedi Ben Mlouka, a former Merrill Lynch banker who previously ran Duet Group’s frontier markets investing arm. The firm has offices in the United Arab Emirates, Saudi Arabia and the U.K., according to its website. EFG Hermes agreed to buy a stake in FIM Partners in 2017.
Discussions are ongoing, and there’s no certainty they will lead to a transaction, the people said. A representative for FIM Partners didn’t have any immediate comment. A spokesperson for JPMorgan declined to comment.
MIDEAST STOCKS #Qatar falls on broad-based losses; #AbuDhabi gains | Reuters
MIDEAST STOCKS Qatar falls on broad-based losses; Abu Dhabi gains | Reuters
Broad-based losses pulled Qatari shares lower on Monday, with all stocks on the index except one in negative territory, while the Abu Dhabi index was buoyed by its top lender.
The Qatari benchmark (.QSI) retreated 1.3%, falling for a fourth consecutive session. Petrochemical maker Industries Qatar (IQCD.QA) slid 3.8%, the biggest decline on the index.
"Qatar is still facing lockdowns and slower vaccination rates than other countries in the region. Moreover, industrials are finding high raw material prices and supply disruptions adding pressure to their business models," said Daniel Takieddine, head of sales at FXPRIMUS.
Earlier in May, the Gulf state decided to gradually lift coronavirus-related measures in four phases, starting on May 28 and ending on July 30. read more
In Abu Dhabi, the index (.ADI) advanced 1.1%, boosted by a 2.9% rise in top lender First Abu Dhabi Bank (FAB.AD) and a 1.7% increase in Aldar Properties (ALDAR.AD).
The rise is due to optimism about economic recovery owing to high vaccination rates and low COVID-19 cases in the United Arab Emirates, said Takieddine. "Investors are looking into cyclicals that have a huge potential after the unprecedented 2020 bad performance"
Saudi Arabia's benchmark index (.TASI) dropped 0.3%, hit by a 0.4% fall in Al Rajhi Bank (1120.SE) and a 0.7% decrease in Saudi National Bank (1180.SE).
Etihad Etisalat (7020.SE) fell 0.8% as the telecoms firm traded ex-dividend.
Dubai's main share index (.DFMGI) closed flat as gains in financial stocks were offset by declines in property shares.
In the last five sessions, real estate stocks have buoyed the index. 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.
Outside the Gulf, Egypt's blue-chip index (.EGX30) fell 0.5%, hit by a 0.5% fall in its top lender Commercial International Bank (COMI.CA).
The Qatari benchmark (.QSI) retreated 1.3%, falling for a fourth consecutive session. Petrochemical maker Industries Qatar (IQCD.QA) slid 3.8%, the biggest decline on the index.
"Qatar is still facing lockdowns and slower vaccination rates than other countries in the region. Moreover, industrials are finding high raw material prices and supply disruptions adding pressure to their business models," said Daniel Takieddine, head of sales at FXPRIMUS.
Earlier in May, the Gulf state decided to gradually lift coronavirus-related measures in four phases, starting on May 28 and ending on July 30. read more
In Abu Dhabi, the index (.ADI) advanced 1.1%, boosted by a 2.9% rise in top lender First Abu Dhabi Bank (FAB.AD) and a 1.7% increase in Aldar Properties (ALDAR.AD).
The rise is due to optimism about economic recovery owing to high vaccination rates and low COVID-19 cases in the United Arab Emirates, said Takieddine. "Investors are looking into cyclicals that have a huge potential after the unprecedented 2020 bad performance"
Saudi Arabia's benchmark index (.TASI) dropped 0.3%, hit by a 0.4% fall in Al Rajhi Bank (1120.SE) and a 0.7% decrease in Saudi National Bank (1180.SE).
Etihad Etisalat (7020.SE) fell 0.8% as the telecoms firm traded ex-dividend.
Dubai's main share index (.DFMGI) closed flat as gains in financial stocks were offset by declines in property shares.
In the last five sessions, real estate stocks have buoyed the index. 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.
Outside the Gulf, Egypt's blue-chip index (.EGX30) fell 0.5%, hit by a 0.5% fall in its top lender Commercial International Bank (COMI.CA).
Kingdom Holding turns profitable in Q1 | ZAWYA MENA Edition
Kingdom Holding turns profitable in Q1 | ZAWYA MENA Edition
Kingdom Holding Company achieved a net profit after Zakat and tax worth SAR 91.06 million during the first quarter (Q1) of 2021, against a net loss of SAR 50.11 million in the same period a year ago.
Earnings per share stood at SAR 0.02 in Q1-21, versus a loss per share of SAR 0.01 in Q1-20, according to the initial financial results.
Revenues shrank by 56% to SAR 174.88 million during the January-March 2021 period, from SAR 397.92 million in Q1-20.
On a quarterly basis, the net profit in Q1-21 was against a net loss of SAR 97.2 million in Q4-20.
The revenues in the first three months of 2021 were higher by almost 50% compared to SAR 116.68 million in Q4-20.
Earnings per share stood at SAR 0.02 in Q1-21, versus a loss per share of SAR 0.01 in Q1-20, according to the initial financial results.
Revenues shrank by 56% to SAR 174.88 million during the January-March 2021 period, from SAR 397.92 million in Q1-20.
On a quarterly basis, the net profit in Q1-21 was against a net loss of SAR 97.2 million in Q4-20.
The revenues in the first three months of 2021 were higher by almost 50% compared to SAR 116.68 million in Q4-20.
#Dubai's Emirates airline to play waiting game with its Airbus A380 aircraft, says Tim Clark | Aviation – Gulf News
Dubai's Emirates airline to play waiting game with its Airbus A380 aircraft, says Tim Clark | Aviation – Gulf News
Emirates Group President Tim Clark has said it is not easy for the Dubai-based airline to fly its A380s given the current condition of the aviation market.
“We keep about 15 or 20 flying every week as best we can - it's not particularly easy given the conditionality that we face with regard to access to most of the markets,” said Clark during the virtually held Arabian Travel Market conference.
Clark said the carrier was getting the Airbus-made jumbo-jets into a “state of readiness” for when demand shows some kind of recovery in the summer or autumn of this year. “The crews have gradually returned and the aircraft have been prepared by our engineering groups to go into action as soon as we get the green light.”
Flydubai partnership
Emirates and flydubai are expected to have a combined network of 168 destinations by the end of May - speeding up Dubai's full-fledged return as a travel and tourism hub. Since the revival of the airlines' codeshare partnership in September 2020, close to 500,000 passengers have flown on the combined network, the airlines said in a statement. Top destinations booked through the codeshare include Kabul, Kathmandu, Kyiv, the Maldives and Zanzibar.
“The brands will remain separate, but going forward the airlines will operate far more at the hip then perhaps was done in the past,” said Clark. “When we look at what the 737 family can do, and we look at what the ERs can do and the 350s... you have an extraordinary number (of) tools in your toolbox.”
With their combined network, the airlines can serve up to 400 destinations, said Clark. “I don't know many international hubs in the world that can get anywhere near that.”
Emirates Group President Tim Clark has said it is not easy for the Dubai-based airline to fly its A380s given the current condition of the aviation market.
“We keep about 15 or 20 flying every week as best we can - it's not particularly easy given the conditionality that we face with regard to access to most of the markets,” said Clark during the virtually held Arabian Travel Market conference.
Clark said the carrier was getting the Airbus-made jumbo-jets into a “state of readiness” for when demand shows some kind of recovery in the summer or autumn of this year. “The crews have gradually returned and the aircraft have been prepared by our engineering groups to go into action as soon as we get the green light.”
Flydubai partnership
Emirates and flydubai are expected to have a combined network of 168 destinations by the end of May - speeding up Dubai's full-fledged return as a travel and tourism hub. Since the revival of the airlines' codeshare partnership in September 2020, close to 500,000 passengers have flown on the combined network, the airlines said in a statement. Top destinations booked through the codeshare include Kabul, Kathmandu, Kyiv, the Maldives and Zanzibar.
“The brands will remain separate, but going forward the airlines will operate far more at the hip then perhaps was done in the past,” said Clark. “When we look at what the 737 family can do, and we look at what the ERs can do and the 350s... you have an extraordinary number (of) tools in your toolbox.”
With their combined network, the airlines can serve up to 400 destinations, said Clark. “I don't know many international hubs in the world that can get anywhere near that.”
Franklin Templeton's Eid on Oil & Credit Spreads - Bloomberg video
Franklin Templeton's Eid on Oil & Credit Spreads - Bloomberg
Sharif Eid, Portfolio Manager, Global Sukuk and MENA Fixed Income, joins the Daybreak Middle East show. He discusses how a revival of the Iranian nuclear deal will lead to an increase in global supply. (Source: Bloomberg)
Emirates warns Boeing it will refuse 777x jets if they don't meet commitments | Reuters
Emirates warns Boeing it will refuse 777x jets if they don't meet commitments | Reuters
The head of Emirates airline, one of Boeing's biggest customers, has warned the U.S. planemaker that it would refuse delivery of 777x jets if they fall short of contractual performance commitments.
In an interview broadcast on Monday, President Tim Clark said he had not received any performance details of the jet's engines so far even though test flights began in 2020.
The influential industry veteran has raised concerns that Boeing had a recent history of over-promising on performance of new jets, including the in service 737 MAX and 787 Dreamliner.
"We will not accept an aeroplane unless it is performing 100% to contract," Clark told aviation consultant John Strickland in a pre-recorded online interview for Dubai's Arabian Travel Market trade show.
The head of Emirates airline, one of Boeing's biggest customers, has warned the U.S. planemaker that it would refuse delivery of 777x jets if they fall short of contractual performance commitments.
In an interview broadcast on Monday, President Tim Clark said he had not received any performance details of the jet's engines so far even though test flights began in 2020.
The influential industry veteran has raised concerns that Boeing had a recent history of over-promising on performance of new jets, including the in service 737 MAX and 787 Dreamliner.
"We will not accept an aeroplane unless it is performing 100% to contract," Clark told aviation consultant John Strickland in a pre-recorded online interview for Dubai's Arabian Travel Market trade show.
MIDEAST STOCKS Most major Gulf markets gain; #Qatar eases | Reuters
MIDEAST STOCKS Most major Gulf markets gain; Qatar eases | Reuters
Major stock markets in the Gulf rose in early trade on Monday, with Dubai on course to extend gains for a sixth session, although Qatar bucked the trend to trade lower.
In Abu Dhabi, the index (.ADI) advanced 1.2%, buoyed by a 2.8% rise in the country's biggest lender First Abu Dhabi Bank (FAB.AD).
Saudi Arabia's benchmark index (.TASI) edged up 0.1%, helped by a 0.3% increase in petrochemical firm Saudi Basic Industries (2010.SE).
Among others, Fawaz AbdulAziz Alhokair (4240.SE) jumped about 6% following franchise agreements with Alo Yoga and Flying Tiger Copenhagen.
However, Etihad Etisalat (7020.SE) fell 0.8%, as the telecoms firm traded ex-dividend.
Dubai's main share index (.DFMGI) added 0.1%, with its top lender Emirates NBD (ENBD.DU) advancing 0.8%, while sharia-compliant lender Dubai Islamic Bank (DISB.DU) gained 0.4%.
Emirates NBD sold $750 million in Additional Tier 1 bonds on Thursday after receiving more than $1.75 billion in orders for them, a document showed.
Elsewhere, DAMAC Properties (DAMAC.DU) advanced 2.1%.
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.
In Qatar, the index (.QSI) lost 0.7%, with most of its stocks in negative territory, including Industries Qatar (IQCD.QA), which fell more than 2%.
Major stock markets in the Gulf rose in early trade on Monday, with Dubai on course to extend gains for a sixth session, although Qatar bucked the trend to trade lower.
In Abu Dhabi, the index (.ADI) advanced 1.2%, buoyed by a 2.8% rise in the country's biggest lender First Abu Dhabi Bank (FAB.AD).
Saudi Arabia's benchmark index (.TASI) edged up 0.1%, helped by a 0.3% increase in petrochemical firm Saudi Basic Industries (2010.SE).
Among others, Fawaz AbdulAziz Alhokair (4240.SE) jumped about 6% following franchise agreements with Alo Yoga and Flying Tiger Copenhagen.
However, Etihad Etisalat (7020.SE) fell 0.8%, as the telecoms firm traded ex-dividend.
Dubai's main share index (.DFMGI) added 0.1%, with its top lender Emirates NBD (ENBD.DU) advancing 0.8%, while sharia-compliant lender Dubai Islamic Bank (DISB.DU) gained 0.4%.
Emirates NBD sold $750 million in Additional Tier 1 bonds on Thursday after receiving more than $1.75 billion in orders for them, a document showed.
Elsewhere, DAMAC Properties (DAMAC.DU) advanced 2.1%.
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.
In Qatar, the index (.QSI) lost 0.7%, with most of its stocks in negative territory, including Industries Qatar (IQCD.QA), which fell more than 2%.
#Qatar First Bank acquires office building in Ohio | ZAWYA MENA Edition
Qatar First Bank acquires office building in Ohio | ZAWYA MENA Edition
Qatar First Bank (QFB), a sharia-compliant bank, has announced the acquisition of phase 1 of CoverMyMedsCampus Headquarters in Ohio, USA.
In a filing to the Qatar Stock Exchage where its stock trades, the lender said it was its seventh sharia-compliant real estate investment in the United States.
The QFB-acquired building will serve as the first phase of the corporate campus for CoverMyMeds, with the second phase planned to be completed by the fourth quarter of 2022.
Alexandre Bernassau, QFB’s head of investment, said the acquisition delivered stable cash flows and providing investors and the bank with “recurring dividends and an ideal balance between risks and rewards.”
“We aim to remain the leading sharia-compliant investment partner for local and regional investors wishing to enter the flourishing international and domestic markets,” he added.
The investment opportunity is offered on a private placement basis to qualified investors meeting the investment eligibility requirements in accordance with the rules and regulatory requirements of the QFC Regulatory Authority (QFCRA), the statement added.
Qatar First Bank (QFB), a sharia-compliant bank, has announced the acquisition of phase 1 of CoverMyMedsCampus Headquarters in Ohio, USA.
In a filing to the Qatar Stock Exchage where its stock trades, the lender said it was its seventh sharia-compliant real estate investment in the United States.
The QFB-acquired building will serve as the first phase of the corporate campus for CoverMyMeds, with the second phase planned to be completed by the fourth quarter of 2022.
Alexandre Bernassau, QFB’s head of investment, said the acquisition delivered stable cash flows and providing investors and the bank with “recurring dividends and an ideal balance between risks and rewards.”
“We aim to remain the leading sharia-compliant investment partner for local and regional investors wishing to enter the flourishing international and domestic markets,” he added.
The investment opportunity is offered on a private placement basis to qualified investors meeting the investment eligibility requirements in accordance with the rules and regulatory requirements of the QFC Regulatory Authority (QFCRA), the statement added.
UPDATE 2-Australia's Zip snaps up 'buy now, pay later' firms in Europe, Middle East | Reuters
UPDATE 2-Australia's Zip snaps up 'buy now, pay later' firms in Europe, Middle East | Reuters
Australia’s Zip Co Ltd said on Monday it fully acquired a buy-now-pay-later (BNPL) company each in Europe and the Middle East for a total of A$160 million ($123.65 million) as it looks to expand its global presence in a rapidly growing industry.
The deals come about five months after Australia’s No.2 BNPL player raised money to buy stakes in Czech Republic-based Twisto and the United Arab Emirates-based Spotii.
A surge in online shopping during the COVID-19 pandemic and the growing appetite for instalment payments have led BNPL firms to explore newer markets to stay ahead of each other as well as traditional financial firms such as PayPal Holdings.
Zip in April raised an extra A$400 million, and announced its entry into Canada and expansion in Asia, where larger rival Afterpay is gearing up for a launch.
Zip will pay A$140 million to take full ownership of Twisto, offering the Australian fintech access to other markets in Europe.
Twisto is about one-tenth the size of Afterpay in Britain, according to RBC Capital Markets, which sees the deal as a “stepping-stone into a large European market” where some countries are “experiencing high uptake of BNPL-style products.”
The Eastern European company has had more than 1 million customers on its platform as of April and an annual sales run rate of A$230 million, Zip said.
For Spotii, Zip will spend A$21 million for the rest of the stake that it does not own in the company, which was founded last year and operates in Saudi Arabia and the UAE. The deal is expected to be completed in the third quarter.
“There is a large untapped opportunity to bring BNPL to emerging markets where cash on delivery remains a significant merchant challenge, and where the digitisation of retail accelerates,” Larry Diamond, Zip co-founder and chief executive, said.
Zip outperformed its BNPL peers that were in the red, closing 0.9% higher at A$7.1.
Australia’s Zip Co Ltd said on Monday it fully acquired a buy-now-pay-later (BNPL) company each in Europe and the Middle East for a total of A$160 million ($123.65 million) as it looks to expand its global presence in a rapidly growing industry.
The deals come about five months after Australia’s No.2 BNPL player raised money to buy stakes in Czech Republic-based Twisto and the United Arab Emirates-based Spotii.
A surge in online shopping during the COVID-19 pandemic and the growing appetite for instalment payments have led BNPL firms to explore newer markets to stay ahead of each other as well as traditional financial firms such as PayPal Holdings.
Zip in April raised an extra A$400 million, and announced its entry into Canada and expansion in Asia, where larger rival Afterpay is gearing up for a launch.
Zip will pay A$140 million to take full ownership of Twisto, offering the Australian fintech access to other markets in Europe.
Twisto is about one-tenth the size of Afterpay in Britain, according to RBC Capital Markets, which sees the deal as a “stepping-stone into a large European market” where some countries are “experiencing high uptake of BNPL-style products.”
The Eastern European company has had more than 1 million customers on its platform as of April and an annual sales run rate of A$230 million, Zip said.
For Spotii, Zip will spend A$21 million for the rest of the stake that it does not own in the company, which was founded last year and operates in Saudi Arabia and the UAE. The deal is expected to be completed in the third quarter.
“There is a large untapped opportunity to bring BNPL to emerging markets where cash on delivery remains a significant merchant challenge, and where the digitisation of retail accelerates,” Larry Diamond, Zip co-founder and chief executive, said.
Zip outperformed its BNPL peers that were in the red, closing 0.9% higher at A$7.1.
Oil Rises Above $64 as Investors Track Virus Fight, Iran Talks - Bloomberg
Oil Rises Above $64 as Investors Track Virus Fight, Iran Talks - Bloomberg
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West Texas Intermediate was 0.8% higher, after rising 2.5% on Friday. The spread of coronavirus in the U.S. has slowed further, with the country ending its first week since June with no days of infections exceeding 30,000. Death rates continue to ebb in France and Italy, boding well for energy consumption.  |