Sunday 6 June 2021

#Dubai Reit faces fight ahead of Islamic bond restructuring vote | Financial Times

Dubai Reit faces fight ahead of Islamic bond restructuring vote | Financial Times

A group of international lenders is battling for greater transparency and governance changes at a major Dubai real estate investment trust ahead of a crunch vote on its restructuring plans on Monday, marking a rare case of investor activism in the Gulf. 

Emirates REIT, the largest sharia-compliant Reit in the United Arab Emirates, faces resistance from a group of debtholders as it seeks to restructure a $400m Islamic bond, or sukuk, maturing in December 2022. A $10.2m payment is due later this month. 

The dispute poses another challenge for the Gulf’s commercial hub as the UAE seeks to clear its reputation in the wake of several financial scandals, including the collapse of UK-listed, Abu Dhabi-based hospital operator NMC and the Dubai-based emerging markets private equity firm Abraaj. 

Emirates REIT has described the restructuring as “a straightforward and voluntary amend and extend transaction . . . designed with the interests of sukuk holders in mind”. The vehicle, which is listed on Nasdaq Dubai, has said it is confident of securing the consent of the 75 per cent of bondholders required by June 7. 

But a group of investors, referring to themselves as the “Ad Hoc Group”, is calling for better governance at the Reit’s manager, Equitativa, as one condition for agreeing to the restructuring. Equitativa is owned by Sylvain Vieujot and his wife, Magali Mouquet, who are chief executive and executive director of Emirates REIT, respectively. 

Members of Ad Hoc include international asset managers such as Scotland’s Aberdeen Standard Investments and Vontobel of Switzerland, people familiar with the group said. Both of those asset managers declined to comment. 

The group, which says its members hold 40 per cent of the debt, is calling for the manager to reduce what they argue are “excessive” management fees and to offer investors a better financial package for the restructuring.

#Oman Is Said to Plan Second Debt Sale in 2021 With Dollar Sukuk - Bloomberg

Oman Is Said to Plan Second Debt Sale in 2021 With Dollar Sukuk - Bloomberg

Oman has started talks with banks for a potential Islamic bond sale this year, according to people familiar with the matter.

The Gulf nation’s discussions are still preliminary, the people said, asking not to be identified because the plans are private. Oman last tapped the international debt market in January, when it raised $3.25 billion. The country’s debt is rated junk by all three major credit assessors.

A spokesperson at the Finance Ministry didn’t respond to emailed requests for comment.

Oman’s public finances, long among the weakest in the Gulf Arab region, remain vulnerable to oil-price swings and disruptions from the global pandemic. The Finance Ministry has said that as of end-March it was more than halfway to meeting its total funding needs of 4.2 billion rials ($10.9 billion) for this year, thanks to borrowing and drawdowns from the country’s wealth fund.

Since taking power in January 2020 following the death of his long-time predecessor, Sultan Haitham bin Tariq has embarked on dramatic measures to bolster Oman’s coffers. The effort has included cutting subsidies, introducing a value-added tax and even planning an income tax -- which would be a first for an Arab Gulf state -- as part of a medium-term plan to overhaul the economy.

But Oman’s drive to cut spending by weaning thousands of state employees off government jobs may be in peril after days of rare protests. Last month, security forces clashed with dozens of Omani demonstrators, who gathered in the industrial city of Sohar to complain about record unemployment and worsening economic conditions.

Fitch Ratings forecasts Oman will run a deficit of 6.1% of gross domestic product this year and 5% in 2022, compared with over 18% in 2020, as higher oil prices and fiscal measures by the government bring in more revenue. In the first quarter, Oman’s deficit widened to 751.4 million rials, from 26.3 million rials in the same period last year.

Fiscal deficits and external debt maturities will total $9 billion to $10 billion per year -- or about 13% of GDP -- in 2021-2022, according to Fitch.

World’s Top Oil Trader Vitol Sees OPEC+ Controlling Crude Market - Bloomberg

World’s Top Oil Trader Vitol Sees OPEC+ Controlling Crude Market - Bloomberg

OPEC+ appears in control of crude prices as U.S. production is lagging pre-pandemic levels, according to a senior executive at the world’s biggest independent oil trader, Vitol Group.

The decline in U.S. drilling and output leaves little competition to efforts by the producers’ group to manage markets, Mike Muller, Vitol’s head of Asia, said during an online conference on Sunday. Brent crude closed above $70 a barrel last week for the first time in two years, as buyers demand more oil than producers are pumping.

U.S. oil producers are still employing only half the rigs they used before the coronavirus struck. Meanwhile OPEC+, as the group led by Saudi Arabia and Russia is known, is easing barrels back on to the market as demand recovers.

“There’s a perception in the market that control is with OPEC+,” Muller said at the event hosted by the consultancy Gulf Intelligence. “It will take a long time for U.S. oil to come back” to production levels seen before the coronavirus outbreak, he said.


The Organization of Petroleum Exporting Countries and partners agreed last week to continue easing production restraints in July but left markets guessing about what it will do for the rest of the year. After cutting production by some 10 million barrels a day, or a tenth of daily global demand, the group still has about 6 million barrels a day of idle capacity.

China’s economy will continue to grow, helping bolster oil demand and bringing down crude stockpiles, Muller said. Economic expansion and regulatory changes there will likely cause domestic refineries to process more crude, he said. “It doesn’t pay to hold inventory at all,” Muller said. “De-stocking must continue from a purely commercial perspective.”

More Iranian crude oil is likely to hit markets this year after an expected deal to limit the country’s nuclear program in return for the U.S. easing sanctions. Iran is limited in how quickly it can bring oil back to the market since a lot of its stored barrels are condensate, a light and sulfurous liquid which may be harder to sell, he said.

Given delays in negotiations last week, Muller said it’s less likely more Iranian barrels will hit the market before the fourth quarter.

Emaar’s January-May Property Sales Surge on #Dubai Rebound - Bloomberg

Emaar’s January-May Property Sales Surge on Dubai Rebound - Bloomberg

Emaar Properties PJSC’s five-month sales surged as Dubai’s real-estate market bounced back from the impact of the coronavirus pandemic.

The company put total property sales at 10.5 billion dirhams ($2.9 billion) compared with 3 billion dirhams year ago.

“I am confident that the Dubai property market is once again a growth story for developers, in light of the UAE’s wise policies, with Emaar perfectly positioned to capitalize on this,” founder Mohamed Alabbar said in a statement.

Business activity in Dubai, the Middle East’s main financial hub, has risen to the highest level since late 2019 because of a rebound in tourism and a fast distribution of coronavirus vaccines. The United Arab Emirates, a federation of seven sheikdoms including Dubai, has one of the highest inoculation rates globally.

MIDEAST STOCKS Major Gulf markets end mixed, Egypt snaps losing streak | Reuters

MIDEAST STOCKS Major Gulf markets end mixed, Egypt snaps losing streak | Reuters



Major stock markets in the Gulf ended mixed on Sunday, with property shares weighing on the Dubai index, while Egypt snapped a three-session losing streak to close 0.7% higher.

Saudi Arabia's benchmark index (.TASI) closed 0.1% lower, snapping eight straight sessions of gains, with Saudi Telecommunications (7030.SE) and Riyad Bank (1010.SE) dropping 1.3%.

The Abu Dhabi index (.ADI) closed 0.3% higher, as telecoms operator Emirates Telecommunications Group (ETISALAT.AD) gained 0.7% and Developer Aldar Properties (ALDAR.AD) jumped 1.9%.

The United Arab Emirates' non-oil private sector expanded for a sixth consecutive month in May, though at a slightly slower pace than in April, data showed on Thursday, while employment shrank for the fourth straight month. read more

Dubai's index (.DFMGI) fell 0.1%, led by an 8.6% slump in developer Damac Properties (DAMAC.DU) and a 1.1% drop in Dubai's largest lender Emirates NBD Bank (ENBD.DU).

However, blue-chip developer Emaar Properties (EMAR.DU) gained 0.3% after reporting a 250% surge in property sales in Dubai in the first five months of 2021.

The coronavirus crisis hit the Gulf state hard last year, both via the shock of low oil prices and the huge toll it took on vital non-oil economic sectors such as tourism.

Qatar's index (.QSI) also lost 0.1%, with Industries Qatar (IQCD.QA) falling 0.8% and Sharia lender Qatar Islamic Bank (QISB.QA) shedding 0.6%.

Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 0.7% higher, snapping a three-session losing streak, as Elsewedy Electric (SWDY.CA) climbed 4.3% and EFG Hermes Holdings (HRHO.CA) rose 2.7%.

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

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







World’s Third-Biggest Wealth Fund Grows Quant Team With New Hire - Bloomberg

World’s Third-Biggest Wealth Fund Grows Quant Team With New Hire - Bloomberg

The Abu Dhabi Investment Authority added another senior hire to its in-house data analysis and artificial intelligence team, set up by the sovereign fund to develop new investment strategies.

The world’s third-biggest wealth fund, known as ADIA, hired Alexander Davidovich, a veteran software developer who previously worked for Goldman Sachs Group Inc., Morgan Stanley and JPMorgan & Chase Co., according to a spokesman for ADIA.

Davidovich will start in his new role in the quantitative research & development department this week and build a technology platform from scratch for ADIA. The rainy-day fund has amassed just under $700 billion in assets, according to estimates from Global SWF and the SWF Institute, with a mandate to funnel the government’s oil surplus into foreign holdings.


Data scientists are increasingly in demand from state investors including Singapore’s GIC Pte and Canada Pension Plan Investment Board, as developments in areas such as machine learning hold out the promise of finding patterns at a much larger scale to hone trading expertise. Norway’s wealth fund is meanwhile looking into hiring forensic linguists after bringing in sports psychologists on board to gain an edge.

In ADIA’s case, the creation of what the fund calls its “science lab” was a response to the advent of big data and the transformation of global financial markets by advances in technology. It falls under the fund’s strategy & planning department and currently has about two dozen employees.

ADIA Lab

Abu Dhabi’s largest sovereign fund has in the past year been building a internal laboratory comprised of quants and scientists whose primary role is to develop methods to digest large amounts of data, according to the spokesman.

Its other hires include Cornell University professor Marcos Lopez de Prado, Anders Svennesen -- who previously worked at Danske Bank Asset Management and Danica Pension -- and Stephen Malinak, former chief data and analytics officer at Truvalue Labs.

The team’s principal aim is to research, test and eventually implement fresh investment approaches for the fund. In the future, its research may be used to improve other aspects of ADIA’s investment management process and possibly influence the decision-making around the fund’s long-term strategies.

As part of its push to adopt a more science-driven approach, ADIA is increasingly targeting people from outside the financial world with backgrounds in science, technology, engineering and mathematics. The fund is exploring partnerships with academic institutions, the spokesman said.

#Saudi Business Activity Expands at Fastest Pace Since 2017 - Bloomberg video

Saudi Business Activity Expands at Fastest Pace Since 2017 - Bloomberg


Head of Macroeconomics at Nasser Saidi & Associates, Aathira Prasad, discusses Saudi Arabia's PMI data, which rose to 56.4 in May from 55.2 in April--the highest since January. She speaks with Manus Cranny and Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

#UAE Federal Bank Is Said to Plan Second-Ever Sale of Dollar Debt - Bloomberg

UAE Federal Bank Is Said to Plan Second-Ever Sale of Dollar Debt - Bloomberg

A lender wholly owned by the federal government of the United Arab Emirates is planning to sell its second-ever international bonds as soon as this month, according to people with knowledge of the matter.

Emirates Development Bank, which started operations in 2015 and provides financing to citizens and small- and medium-sized enterprises, could raise $750 million or more, the people said, asking not to be identified because the information is private.

The money would go toward supporting companies in sectors considered a priority for the economy, the people said. The bank’s debt is assigned the fourth-highest investment grade from Fitch Ratings, the same as the sovereign.

A spokesperson for EDB declined to comment.

The UAE passed a law in October 2018 allowing the federal government to issue sovereign debt for the first time, enabling its seven emirates to benefit from a higher credit rating and lower borrowing costs.

Emirates Development Bank was the first entity to take advantage of the debt law by selling its first debt in 2019. The government has yet to issue a federal bond for the first time.

The price of global oil benchmark Brent crude has almost doubled since October to over $70 a barrel as major economies vaccinate their citizens and businesses reopen -- a boon for the UAE, OPEC’s third-largest producer.

Favorable financing conditions thanks to ultra-low borrowing costs are meanwhile prompting emerging-market sovereigns and state firms to address any funding needs for later this year.

Bahrain, Saudi Aramco and Qatar Petroleum are among issuers from the Gulf region that are wading back into debt markets. Abu Dhabi sold $2 billion of dollar bonds in late May, followed by the emirate’s sovereign wealth fund Mubadala Investment Co.

#Dubai Financial Market suspends trading in DXBE shares | Markets – Gulf News

Dubai Financial Market suspends trading in DXBE shares | Markets – Gulf News

Dubai Financial Market suspended trading in shares of DXB Entertainments PJSC (DXBE) on Sunday following the mandatory acquisition of its shares by Meraas Leisure and Entertainment (Meraas).

All remaining DXBE shares not already held by Meraas or Meraas Holding will be re-registered in the name of Meraas in DXBE’s share register.

Meraas will settle any cash consideration due to those remaining DXBE shareholders through the relevant payment method as registered with Dubai CSD at by such DXBE shareholders.

General Assembly meeting of DXBE shareholders held on March 9 approved the proposal by Meraas Leisure and Entertainment LLC (Meraas) to acquire the 100 per cent share in DXBE.

A special resolution at the shareholders' meeting approved the conversion of the senior bank debt of the company acquired from Emirates NBD and Dubai Islamic Bank by Meraas as at 28 February 2021 with an outstanding balance as at 28 February 2021.

The balance including principal and accrued interest outstanding of Dh4.27 billion will be converted into 53,391,475,304 new ordinary shares of par value Dh1 each in the share capital of the company at a conversion price of Dh0.08 per share.

Deyaar board approves Dh500m settlement offer from Limitless | The National

Deyaar board approves Dh500m settlement offer from Limitless | The National

The board of Dubai developer Deyaar approved a Dh500 million ($136m) settlement offer from Limitless related to a dispute over the purchase of land.

The settlement offer includes both cash and land, Deyaar said in a statement to the Dubai Financial Market, where its shares trade.

Deyaar’s board “agreed on the settlement, taking into account that any proposed land [has] the necessary infrastructure and master plan approvals from the relevant authorities and that such land [is] to be valued by independent external valuers appointed jointly by the two parties,” the company said.

In 2019, a UAE court ordered Limitless, a Dubai-based developer, to pay Dh411.9m to Deyaar in a dispute related to the purchase of land. The court also ordered Limitless to pay fees as well as compensation of Dh61.1m to Deyaar.

Omani Shares Lead Mideast Gains on Rare Bank Tie-Up: Inside EM - Bloomberg

Omani Shares Lead Mideast Gains on Rare Bank Tie-Up: Inside EM - Bloomberg

Oman’s main equities index led Middle-East gains as a rare cross-Gulf bank tie-up propelled the National Bank of Oman’s shares higher.

The company was the biggest gainer on Oman’s benchmark index on Sunday, after Commercial Bank of Qatar QSC said it was looking to build a controlling stake in the firm. Qatari banks are expanding across the region, spurred on by the normalization of ties between Doha and neighboring Gulf states in January.


“We believe that the National Bank of Oman has taken aggressive provisions in 2020 and the earnings are likely to be on the growth track,” Joice Mathew and Majid Lawati at United Securities in Muscat wrote in a client note. Given Oman’s improving macroeconomic outlook and NBO’s growth profile, the analysts said CBQ’s offer significantly underrates NBO’s future growth prospects.

Meanwhile, benchmark stock indexes in Saudi Arabia, Dubai, Abu Dhabi and Israel also gained, while those in Kuwait, Qatar and Bahrain were little changed.

MIDDLE EASTERN MARKETS:
  • Muscat Securities Market Index climbs as much as 0.8%
  • Saudi Arabia’s Tadawul All Share Index rises for a ninth day, the longest rising streak since Feb. 16
    • Al Rajhi Bank +0.4%; Saudi Telecom Co +0.9%; Saudi Research & Media Group +3.7% at 10:12 a.m. in Riyadh
  • Abu Dhabi-based International Holding rises as much as 2.3%, touching a fresh record high
  • Dubai Financial Market General Index climbs 0.5% at 11:21 a.m. local time
    • Emirates NBD +0.7%; Dubai Islamic Bank +0.6%; Damac Properties +2.1%

#Qatar non-energy PMI eases slightly in May as output growth slows | ZAWYA MENA Edition

Qatar non-energy PMI eases slightly in May as output growth slows | ZAWYA MENA Edition

Business conditions in Qatar’s non-energy private sector improved in May as output rose for the eleventh consecutive month, albeit at the slowest pace.

The seasonally adjusted IHS Markit Purchasing Managers' Index (PMI) for Qatar eased to 51.5 in May from 52.1 in April. While any rise above the 50 mark indicates expansion, the output growth was the slowest in the current upturn.

Employment and backlogs both rose for the eighth month running, and sentiment regarding the 12-month outlook improved slightly as new cases of COVID-19 fell.

Qatar recently relaxed a few mobility restrictions as a part of a gradual plans to lift all curbs. Nearly 40 percent of its population has been fully vaccinated, according to Our World in Data.

Trevor Balchin, Economics Director at IHS Markit, said: “Qatar's private sector economy remained on a growth trajectory in May, according to the latest PMI data. Output, new orders and purchases all rose for the eleventh successive month, while jobs were added for the eight-straight month.”

He said however there was “a further loss of momentum” in the latest figures. New orders increased at the slowest rate in 2021 so far, leading to the weakest rise in output of the current 11-month upturn. Backlogs rose again, but also at a slower pace, he added.

Data showed that wholesale & retail performed strongest (53.2) in the three months to May followed by manufacturing (53.1) and construction (51.1), while services posted a deterioration in business conditions (48.0). Sustained growth of new orders contributed to the overall improvement in business conditions in May. The rate of expansion was robust, albeit the slowest in five months.

Output also rose more slowly than new orders for the fifth month running, resulting in a further build-up in outstanding business. Backlogs have risen continuously since October 2020.

Firms expanded workforces further in May and net job creation was maintained for a record eighth consecutive month.

“Looking ahead, the 12-month outlook for activity improved in May, partly reflecting improved confidence around falling levels of COVID-19 cases following an increase in April. That said, sentiment remains at a historically weak level,” Balchin said.

MIDEAST STOCKS Most major Gulf stock markets gain; #Qatar index eases | Reuters

MIDEAST STOCKS Most major Gulf stock markets gain; Qatar index eases | Reuters

Most major stock markets in the Gulf rose in early trade on Sunday supported mostly by banking stocks, while Qatar bucked the trend to trade lower.

In Dubai, the main share index (.DFMGI) was up 0.6%, boosted by a 1.2% rise in Islamic lender Dubai Islamic Bank (DISB.DU) and a 0.7% increase in its largest bank Emirates NBD (ENBD.DU).

Deyaar Development (DEYR.DU) also gained 1% after its board approved a settlement offer of AED 500 million ($136.14 million) in a dispute with Limitless

Saudi Arabia's benchmark index (.TASI) rose 0.3%, as Al Rajhi Bank (1120.SE) gained 0.4%, and Saudi Telecom (7010.SE) advanced 0.9%.

The Abu Dhabi index (.ADI) also edged 0.1% higher, with Abu Dhabi Commercial Bank (ADCB.AD) gaining 1.3%, while International Holding Company (IHC.AD) was up 0.8%.

In Qatar, the benchmark index (.QSI), however, edged down 0.1%, as Industries Qatar fell 0.9%, but Qatar National Bank (QNBK.QA) rose 0.1%.

QNB, the Gulf's biggest bank by assets, said on Friday it has signed an agreement with Moscow-based asset manager VTB Capital Investments, to launch funds to attract foreign capital into Russia and Qatar.