Oil dips on profit-taking after logging 2-year high on OPEC+ curbs | Reuters
Oil prices pulled back on Monday after touching two-year highs on expectations of improved demand and OPEC producers keeping supply curbs in place.
Prices retreated from session highs early, and analysts cited pressure from Chinese data showed crude oil imports fell to a year's low in May.
"That took away some of the enthusiasm that the oil bulls had seen," said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Brent crude settled at $71.49 a barrel, falling 40 cents after hitting $72.27 a barrel, its highest since May 2019.
U.S. West Texas Intermediate settled at $69.23 a barrel after touching $70 for the first time since October 2018.
Investors may have sold some contracts to take profits when WTI hit the round number of $70, said Jim Ritterbusch of Ritterbusch and Associates.
"Regardless, fresh highs suggest sustainability of this bull move with some higher values likely lying ahead," Ritterbusch said.
Monday 7 June 2021
#AbuDhabi plans $6bn culture spending to diversify from oil | Financial Times
Abu Dhabi plans $6bn culture spending to diversify from oil | Financial Times
Abu Dhabi is pledging to invest $6bn in the cultural and creative industries as the Gulf emirate seeks to increase its post-coronavirus stimulus spending and diversify away from oil.
Having already committed $2.3bn to projects in the sector, the government will over the next five years plough another $6bn into building museums, as well as making investments in sectors ranging from media, gaming and music to cultural heritage, architecture and the arts.
“In terms of growth, we know creative industries are going to be a major contributor to GDP here in Abu Dhabi,” said Mohamed Al Mubarak, chair of the emirate’s department of culture and tourism, in an interview.
The oil-rich capital of the United Arab Emirates launched a separate $13.6bn stimulus package in 2019 to prepare the emirate for a post-oil future. It is accelerating diversification plans as it emerges from the coronavirus pandemic with a renewed focus on economic development.
A “substantial portion” of these new funds is earmarked for building cultural institutions on Abu Dhabi’s Saadiyat Island, already home to an outpost of the Louvre, a big tourist attraction.
The Zayed National Museum, showcasing the life of founding father Sheikh Zayed, is under construction. Preparatory work for the much-anticipated, long-delayed Guggenheim Abu Dhabi had been awarded, said Mubarak, with the main contract for the Frank Gehry-designed museum expected “soon”. Two other new museums are planned.
The cultural district is expected to be largely completed by 2025. It will include the Abrahamic Family House, a facility for interfaith dialogue comprising a mosque, church and synagogue.
With 20,000 people already employed in the creative and cultural sector, Abu Dhabi hopes that its investment in infrastructure and partnerships will create another 15,000 jobs over the next four years. At Yas Creative Hub, a new media zone with tenants such as CNN, there are plans to welcome 8,000 workers by the end of the year.
Expanding the creative sector, while aiming to create jobs for nationals, will also require overseas talent. Abu Dhabi, along with other emirates, has launched a special visa to facilitate the entry of skilled workers.
Residents of Middle Eastern countries often complain about the difficulty in securing visas to the security-conscious UAE. But Mubarak said the authorities were liaising to work on a “seamless” process with rapid checks, as well as considering grants and other incentives to assist “every single income demographic” thrive in the expensive city. “If you are an artist, you will have the opportunity to flourish in the most economically effective way,” he said.
During the pandemic, the emirate invested $200m in film production, he said. About 1,000 people were involved in the filming of Mission Impossible 7 in the emirate earlier this year.
The oil-rich capital competes directly with Dubai, the country’s traditional hub for the creative industries. The capital has previously launched its own financial centre and technology start-up hub in competition with its oil-poor neighbour. But Mubarak said the creative industry “pie” was big enough for both cities.
He also shrugged off concerns about the impact of UAE’s tight restrictions on freedom of expression. He pointed to broader reforms including the granting of long-term visas and even nationality to some expatriates.
“We are an evolving state that is evolving with our times,” he said. “We have already this year seen massive policy changes, so you can see how forward thinking we are becoming.”
#AbuDhabi hospital operator NMC sees lenders take control of turnaround plans | Markets – Gulf News
Abu Dhabi hospital operator NMC sees lenders take control of turnaround plans | Markets – Gulf News
Creditors have taken control of NMC Healthcare as direct stakeholders in the latest turnaround point for the UAE’s largest private hospital operator. What this means is that creditors have swapped their debt exposure for direct equity in the company.
This will likely mean that they will see the company through the next two to three years rather than go in for any immediate sale, according to market sources. So, what this means is that the company set up by Dr. B.R. Shetty in the mid-1970’s and then built up as the largest private healthcare company in the UAE – and in the region – is finally seeing a change in shareholders. These shareholders have had exposures of over $4 billion in the company and faced a stark choice – try and sell the company immediately and get whatever they could.
Or hold on until the current administration saw the company through the next year or two and improve its chances with a new buyer. So, these creditors turned shareholders will work with NMC's current management to come up with a plan to see the company emerge stronger - which will be through a sale of its UAE and Oman operations.
"This conversion buys time for the entire process - it shows NMC creditors believe in the ongoing turnaround story" said a banker. "And they are prepared to wait for a return on their past lending to the company."
Creditors have taken control of NMC Healthcare as direct stakeholders in the latest turnaround point for the UAE’s largest private hospital operator. What this means is that creditors have swapped their debt exposure for direct equity in the company.
This will likely mean that they will see the company through the next two to three years rather than go in for any immediate sale, according to market sources. So, what this means is that the company set up by Dr. B.R. Shetty in the mid-1970’s and then built up as the largest private healthcare company in the UAE – and in the region – is finally seeing a change in shareholders. These shareholders have had exposures of over $4 billion in the company and faced a stark choice – try and sell the company immediately and get whatever they could.
Or hold on until the current administration saw the company through the next year or two and improve its chances with a new buyer. So, these creditors turned shareholders will work with NMC's current management to come up with a plan to see the company emerge stronger - which will be through a sale of its UAE and Oman operations.
"This conversion buys time for the entire process - it shows NMC creditors believe in the ongoing turnaround story" said a banker. "And they are prepared to wait for a return on their past lending to the company."
Creditors agree to restructure NMC Health | The National
Creditors agree to restructure NMC Health | The National
Creditors owed more than $6.4 billion by UAE healthcare group NMC Health agreed to a restructuring of the business.
Joint administrators Alvarez & Marsal said it received enough firm commitments from creditors to embark on a restructuring, which will lead to billions of dollars worth of debt being expunged in return for equity instruments under a legal process known as Deeds of Company Arrangement. It will now begin a formal voting process to complete the restructuring.
“The resounding level of support from creditors reflects the positive sentiment towards the collective approach we have taken throughout this process to ensure the group optimises value for creditors," joint administrator Richard Fleming said. "This is a hugely significant moment in the restructuring process of the group and provides another layer of stability as we move onto the next chapter for NMC.”
NMC Health grew from a single clinic into the UAE's biggest healthcare provider, but after a report by short seller Muddy Waters in December 2019 accused the company of inflating its assets and understating its debt, an independent investigation uncovered more than $4.4bn of previously unreported debt, leading to the company being placed into administration in April last year.
Administrators urged lenders to vote for the DOCA plan, which will bring the group's debt pile down to a more manageable $2.25bn, with a mechanism allowing for them to benefit from an eventual exit that generates more than that amount.In an update to lenders in April this year, Alvarez & Marsal said it had received about $6.4bn of creditor claims to date, including about $6.3bn from a group of 136 financial creditors. Administrators had also identified a further $650m of potential claims from another 10 financial creditors.
In a presentation to lenders, administrators argued that such a restructuring would be preferable to a distressed sale or liquidation.
A distressed sale was "likely to yield a significantly lower recovery than a restructuring", administrators said in the document, while liquidation of the business would lead to "little or no recovery" for the bulk of the company's creditors.
Administrators are continuing to pursue claims against the company's former auditor, EY, and its former directors and shareholders in a bid to recoup some of the missing sums from the business. In a report last month, they said more than 19 million records of information from the group and third parties have been added to its investigation database and "millions" of accounting entries continue to be analysed.
Creditors owed more than $6.4 billion by UAE healthcare group NMC Health agreed to a restructuring of the business.
Joint administrators Alvarez & Marsal said it received enough firm commitments from creditors to embark on a restructuring, which will lead to billions of dollars worth of debt being expunged in return for equity instruments under a legal process known as Deeds of Company Arrangement. It will now begin a formal voting process to complete the restructuring.
“The resounding level of support from creditors reflects the positive sentiment towards the collective approach we have taken throughout this process to ensure the group optimises value for creditors," joint administrator Richard Fleming said. "This is a hugely significant moment in the restructuring process of the group and provides another layer of stability as we move onto the next chapter for NMC.”
NMC Health grew from a single clinic into the UAE's biggest healthcare provider, but after a report by short seller Muddy Waters in December 2019 accused the company of inflating its assets and understating its debt, an independent investigation uncovered more than $4.4bn of previously unreported debt, leading to the company being placed into administration in April last year.
Administrators urged lenders to vote for the DOCA plan, which will bring the group's debt pile down to a more manageable $2.25bn, with a mechanism allowing for them to benefit from an eventual exit that generates more than that amount.In an update to lenders in April this year, Alvarez & Marsal said it had received about $6.4bn of creditor claims to date, including about $6.3bn from a group of 136 financial creditors. Administrators had also identified a further $650m of potential claims from another 10 financial creditors.
In a presentation to lenders, administrators argued that such a restructuring would be preferable to a distressed sale or liquidation.
A distressed sale was "likely to yield a significantly lower recovery than a restructuring", administrators said in the document, while liquidation of the business would lead to "little or no recovery" for the bulk of the company's creditors.
Administrators are continuing to pursue claims against the company's former auditor, EY, and its former directors and shareholders in a bid to recoup some of the missing sums from the business. In a report last month, they said more than 19 million records of information from the group and third parties have been added to its investigation database and "millions" of accounting entries continue to be analysed.
Oil Market: Prices Near 2018 High as Investors Assess Demand Outlook - Bloomberg
Oil Market: Prices Near 2018 High as Investors Assess Demand Outlook - Bloomberg
PRICES
Oil declined alongside a broader market sell-off, with prices losing some momentum after hitting $70 a barrel in New York for the first time in over two years.
U.S. benchmark crude futures were largely weaker on Monday after failing to sustain a move beyond the psychological $70-a-barrel level. Chinese oil imports, a major reason behind this year’s rally, fell to a five-month low in May as private refiners held back on purchases amid scrutiny of government-issued purchases quotas. Adding pressure on prices, U.S. equities declined with investors weighing inflation risks.
Still, prices have risen more than 40% this year with support from a robust economic rebound in the U.S., China and Europe. Europe’s cities are as congested as they were in 2019, and the number of passengers passing through airport security checkpoints in the U.S. continues to climb. Those are the latest signs of an oil demand recovery in the Western world, and overall consumption should remain strong according to BP Plc.
“We’re likely bound in this current trading range,” and likely seeing “some risk-off trading today after reaching $70,” said Bart Melek, head of commodity strategy at TD Securities. Meanwhile, “there continues to be some concern regarding demand globally, but that’s likely temporary.”
| PRICES |
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PRICES
Oil declined alongside a broader market sell-off, with prices losing some momentum after hitting $70 a barrel in New York for the first time in over two years.
U.S. benchmark crude futures were largely weaker on Monday after failing to sustain a move beyond the psychological $70-a-barrel level. Chinese oil imports, a major reason behind this year’s rally, fell to a five-month low in May as private refiners held back on purchases amid scrutiny of government-issued purchases quotas. Adding pressure on prices, U.S. equities declined with investors weighing inflation risks.
Still, prices have risen more than 40% this year with support from a robust economic rebound in the U.S., China and Europe. Europe’s cities are as congested as they were in 2019, and the number of passengers passing through airport security checkpoints in the U.S. continues to climb. Those are the latest signs of an oil demand recovery in the Western world, and overall consumption should remain strong according to BP Plc.
“We’re likely bound in this current trading range,” and likely seeing “some risk-off trading today after reaching $70,” said Bart Melek, head of commodity strategy at TD Securities. Meanwhile, “there continues to be some concern regarding demand globally, but that’s likely temporary.”
MIDEAST STOCKS Emaar lifts #Dubai; Egypt declines on banks | Reuters
MIDEAST STOCKS Emaar lifts Dubai; Egypt declines on banks | Reuters
Dubai's stock market closed higher on Monday after blue-chip developer Emaar Properties reported strong property sales, while the Egypt index was weighed down by a drop in its biggest lender Commercial International Bank.
The main share index in Dubai (.DFMGI) rose 0.7%, boosted by a 1.5% rise in Emaar Properties (EMAR.DU) after the company posted a more than three-fold jump in property sales for the first five months of 2021.
In Abu Dhabi, the index (.ADI) was up 0.3%, as telecom operator Emirates Telecommunications Group (ETISALAT.AD) rose 0.5% and market heavyweight First Abu Dhabi Bank (FAB.AD) gained 0.2%.
Saudi Arabia's benchmark index (.TASI) closed 0.3% higher, supported by a 1.7% rise in Dr. Sulaiman Al-Habib Medical Services Group (4013.SE).
Saudi Aramco (2222.SE) was up 0.1% after news that the oil giant has hired banks to arrange its inaugural issuance of U.S. dollar-denominated sukuk, as it seeks cash to fulfil large commitments to its major shareholder, the Saudi government. read more
Qatar's index (.QSI) lost 0.3% to record its third straight session of losses, as the Gulf's largest lender, Qatar National Bank (QNBK.QA), dropped 0.6% and petrochemical maker Industries Qatar (IQCD.QA) ended 0.6% lower.
QNB on Friday signed an agreement with Moscow-based asset manager VTB Capital Investments to launch funds to attract foreign capital into Russia and Qatar and build offerings for international investors. read more
Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 0.2% lower as the country's largest lender, Commercial International Bank (COMI.CA), declined 3% and Fawry For Banking Technology and Electronic Payment (FWRY.CA) fell 3.5%.
Dubai's stock market closed higher on Monday after blue-chip developer Emaar Properties reported strong property sales, while the Egypt index was weighed down by a drop in its biggest lender Commercial International Bank.
The main share index in Dubai (.DFMGI) rose 0.7%, boosted by a 1.5% rise in Emaar Properties (EMAR.DU) after the company posted a more than three-fold jump in property sales for the first five months of 2021.
In Abu Dhabi, the index (.ADI) was up 0.3%, as telecom operator Emirates Telecommunications Group (ETISALAT.AD) rose 0.5% and market heavyweight First Abu Dhabi Bank (FAB.AD) gained 0.2%.
Saudi Arabia's benchmark index (.TASI) closed 0.3% higher, supported by a 1.7% rise in Dr. Sulaiman Al-Habib Medical Services Group (4013.SE).
Saudi Aramco (2222.SE) was up 0.1% after news that the oil giant has hired banks to arrange its inaugural issuance of U.S. dollar-denominated sukuk, as it seeks cash to fulfil large commitments to its major shareholder, the Saudi government. read more
Qatar's index (.QSI) lost 0.3% to record its third straight session of losses, as the Gulf's largest lender, Qatar National Bank (QNBK.QA), dropped 0.6% and petrochemical maker Industries Qatar (IQCD.QA) ended 0.6% lower.
QNB on Friday signed an agreement with Moscow-based asset manager VTB Capital Investments to launch funds to attract foreign capital into Russia and Qatar and build offerings for international investors. read more
Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 0.2% lower as the country's largest lender, Commercial International Bank (COMI.CA), declined 3% and Fawry For Banking Technology and Electronic Payment (FWRY.CA) fell 3.5%.
OPEC chief, in upbeat oil outlook, sees oil stocks falling further | Reuters
OPEC chief, in upbeat oil outlook, sees oil stocks falling further | Reuters
OPEC and its allies expect oil inventories to fall further in the coming months, OPEC's secretary general said on Monday, suggesting efforts by the producers to support the market are succeeding.
Oil stocks in the developed world nations fell by 6.9 million barrels in April, Mohammad Barkindo said in a virtual appearance at the Nigeria International Petroleum Summit, 160 million barrels lower than the same time one year ago, making the figure public for the first time.
"We expect to see further drawdowns in the months ahead," he said.
OPEC and its allies expect oil inventories to fall further in the coming months, OPEC's secretary general said on Monday, suggesting efforts by the producers to support the market are succeeding.
Oil stocks in the developed world nations fell by 6.9 million barrels in April, Mohammad Barkindo said in a virtual appearance at the Nigeria International Petroleum Summit, 160 million barrels lower than the same time one year ago, making the figure public for the first time.
"We expect to see further drawdowns in the months ahead," he said.
Big Oil’s political clout wanes as governments embrace green energy | Financial Times
Big Oil’s political clout wanes as governments embrace green energy | Financial Times
The handshake between then UK prime minister Tony Blair and Muammer Gaddafi in the desert in 2007 was not just the moment the Libyan leader cemented ties with an old foe. It was also a stark symbol of the role “Big Oil” played in foreign policy.
BP sealed a significant exploration deal on the same trip, which capped its efforts to nudge the UK government to re-establish ties with the late North African dictator while opening access to huge hydrocarbon resources on Europe’s doorstep.
The struggle for fossil fuel resources has influenced geopolitics for decades, from generating conflict and shaping relations between the west and Middle East to today’s controversy over the Nordstream 2 pipeline from Russia to western Europe.
But now the relationship between western oil companies and their governments is undergoing a dramatic shift as governments commit to going green and fossil fuels fall out of favour — a move that gathered pace in April when US president Joe Biden convened an international climate summit to put pressure on countries to cut emissions.
“There has always been the notion that geopolitical power writ large was tied to oil access,” said Greg Priddy, a former energy analyst for the US government. “Even as late as the Obama administration in the US there was a sense that major producers overseas were strategically important. But all that is changing.”
Meijer: Emaar Development is the Perfect Beta Play - Bloomberg video
Meijer: Emaar Development is the Perfect Beta Play - Bloomberg
Managing Director and Head of Equities Research at Arqaam Capital, Jaap Meijer, discusses the pickup in Dubai’s real-estate market, which took a hit due to the coronavirus pandemic. He speaks with Manus Cranny and Yousef Gamal El-Din on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)
Flipkart Is in Talks to Raise $3 Billion From SoftBank, Sovereign Wealth Funds - Bloomberg
Flipkart Is in Talks to Raise $3 Billion From SoftBank, Sovereign Wealth Funds - Bloomberg
Flipkart, the Indian e-commerce giant controlled by Walmart Inc., is in talks to raise at least $3 billion from investors including SoftBank Group Corp. and several sovereign wealth funds, according to people familiar with the matter.
The startup is targeting a valuation of about $40 billion and is in discussions with Singapore’s GIC Pte., Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority, said the people, asking not to be named because the discussions are private. Japan’s SoftBank, which had previously backed Flipkart before selling its stake to Walmart, could invest $300 million to $500 million of the total through its Vision Fund II, one of the people said.
Flipkart plans to raise the additional capital ahead of an initial public offering, now planned for next year, the people said. The company had targeted an IPO as soon as the fourth quarter of this year, but those plans have been delayed by the coronavirus resurgence in India.
The fundraising discussions are not yet finalized and could still change, the people said.
SoftBank and GIC declined to comment, while Flipkart did not immediately respond to requests for comment.
Flipkart, the Indian e-commerce giant controlled by Walmart Inc., is in talks to raise at least $3 billion from investors including SoftBank Group Corp. and several sovereign wealth funds, according to people familiar with the matter.
The startup is targeting a valuation of about $40 billion and is in discussions with Singapore’s GIC Pte., Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority, said the people, asking not to be named because the discussions are private. Japan’s SoftBank, which had previously backed Flipkart before selling its stake to Walmart, could invest $300 million to $500 million of the total through its Vision Fund II, one of the people said.
Flipkart plans to raise the additional capital ahead of an initial public offering, now planned for next year, the people said. The company had targeted an IPO as soon as the fourth quarter of this year, but those plans have been delayed by the coronavirus resurgence in India.
The fundraising discussions are not yet finalized and could still change, the people said.
SoftBank and GIC declined to comment, while Flipkart did not immediately respond to requests for comment.
#Saudi Wealth Fund, Early Alibaba Investor Back Jordanian Startup - Bloomberg
Saudi Wealth Fund, Early Alibaba Investor Back Jordanian Startup - Bloomberg
A unit of Saudi Arabia’s $400 billion Public Investment Fund has led a new financing round for OpenSooq.com, a Jordan-based online classifieds business that’s looking to triple its headcount across the Middle East.
The Saudi Jordanian Investment Fund, a $3 billion entity created by the Saudi wealth fund and a group of Jordanian banks, is backing OpenSooq along with existing investors iMENA Group and FJLabs -- founded by Fabrice Grinda, who was an early investor in Alibaba Group Holding Ltd.
OpenSooq, whose biggest markets are Jordan and Saudi Arabia, said it raised $24 million. The company’s chairman, Khaldoon Tabaza, declined to comment on OpenSooq’s valuation.
Founded in 2008 by Libyan American entrepreneur Salah Al Sharif, OpenSooq is involved in the sale of about $30 billion of goods a year, with an item sold through the company every 13 seconds. After iMENA invested in 2012, the company moved its headquarters to Jordan and began expanding into new countries. It’s now in 19 countries across the Middle East, from the Levant to the tip of the Arabian Peninsula.
“OpenSooq has touched and improved the lives of more people in its key markets that any other mobile application, bringing real utility to every day needs,” Tabaza said.
A unit of Saudi Arabia’s $400 billion Public Investment Fund has led a new financing round for OpenSooq.com, a Jordan-based online classifieds business that’s looking to triple its headcount across the Middle East.
The Saudi Jordanian Investment Fund, a $3 billion entity created by the Saudi wealth fund and a group of Jordanian banks, is backing OpenSooq along with existing investors iMENA Group and FJLabs -- founded by Fabrice Grinda, who was an early investor in Alibaba Group Holding Ltd.
OpenSooq, whose biggest markets are Jordan and Saudi Arabia, said it raised $24 million. The company’s chairman, Khaldoon Tabaza, declined to comment on OpenSooq’s valuation.
Founded in 2008 by Libyan American entrepreneur Salah Al Sharif, OpenSooq is involved in the sale of about $30 billion of goods a year, with an item sold through the company every 13 seconds. After iMENA invested in 2012, the company moved its headquarters to Jordan and began expanding into new countries. It’s now in 19 countries across the Middle East, from the Levant to the tip of the Arabian Peninsula.
“OpenSooq has touched and improved the lives of more people in its key markets that any other mobile application, bringing real utility to every day needs,” Tabaza said.
#Kuwait's Ahli United Bank hires banks to arrange AT1 dollar sukuk - document | Reuters
Kuwait's Ahli United Bank hires banks to arrange AT1 dollar sukuk - document | Reuters
Kuwait's Ahli United Bank (BKME.KW) has hired banks to arrange the issuance of Additional Tier 1 U.S. dollar-denominated sukuk that will be non-callable for 5-1/2 years, a document seen by Reuters showed on Monday.
Kuwait's Ahli United, nearly three-quarters owned by Bahrain's Ahli United Bank (AUBB.BH), hired Citi (C.N), HSBC (HSBA.L) and Standard Chartered (STAN.L) to lead the deal, according to one of the banks on the deal showed. Abu Dhabi Islamic Bank (ADIB.AD), Kamco Invest (KAMC.KW), KFH Capital (KFH.KW) and Kuwait International Bank (KIBK.KW) will join them to arrange investor calls starting on Monday, which will be followed by an issuance, subject to market conditions.
The lender is also offering to tender existing AT1 certificates for cash, subject to conditions including the issuance of the new AT1 sukuk. The deadline for the offer is June 14.
Kuwait's Ahli United Bank (BKME.KW) has hired banks to arrange the issuance of Additional Tier 1 U.S. dollar-denominated sukuk that will be non-callable for 5-1/2 years, a document seen by Reuters showed on Monday.
Kuwait's Ahli United, nearly three-quarters owned by Bahrain's Ahli United Bank (AUBB.BH), hired Citi (C.N), HSBC (HSBA.L) and Standard Chartered (STAN.L) to lead the deal, according to one of the banks on the deal showed. Abu Dhabi Islamic Bank (ADIB.AD), Kamco Invest (KAMC.KW), KFH Capital (KFH.KW) and Kuwait International Bank (KIBK.KW) will join them to arrange investor calls starting on Monday, which will be followed by an issuance, subject to market conditions.
The lender is also offering to tender existing AT1 certificates for cash, subject to conditions including the issuance of the new AT1 sukuk. The deadline for the offer is June 14.
MIDEAST STOCKS Most Gulf markets rise in early trade; #Qatar flat | Reuters
MIDEAST STOCKS Most Gulf markets rise in early trade; Qatar flat | Reuters
Most stock markets in the Gulf region rose in early trade on Monday, with property and financial shares leading gains, although Qatar traded flat.
Saudi Arabia's benchmark index (.TASI) was up 0.1%, with Saudi Telecom Company (7010.SE) rising 1.7% and Al Rajhi Bank (1120.SE) up 0.2%.
However, Saudi Aramco (2222.SE) was down 0.1%. The oil giant has hired banks to arrange its inaugural issuance of U.S. dollar-denominated sukuk, as it seeks cash to fulfil large commitments to its major shareholder, the Saudi government.
In Dubai, the main share index (.DFMGI) rose 0.4%, supported by a 6.3% surge in developer Damac Properties (DAMAC.DU) and a 1% jump in blue-chip developer Emaar Properties (EMAR.DU) after reporting a 250% surge in property sales in the first five months of 2021.
The builder of the world's tallest building, Dubai's Burj Khalifa, also hired banks for issuance of U.S. dollar-denominated Islamic bonds, or sukuk, two sources close to the matter said last week.
The Abu Dhabi index (.ADI) edged up 0.1%, on course to extend the gains from previous session, with the country's largest lender, First Abu Dhabi Bank (FAB.AD) gaining 0.1%, and Abu Dhabi Islamic Bank (ADIB.AD) advancing 0.4%
Separately, 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.
The pandemic hit the Gulf state hard last year, both through the shock of low oil prices and the huge toll it took on vital non-oil economic sectors such as tourism.
Qatar's benchmark index (.QSI), however, bucked the trend to trade flat, with Petrochemical maker Industries Qatar (IQCD.QA) down 0.2%.
Most stock markets in the Gulf region rose in early trade on Monday, with property and financial shares leading gains, although Qatar traded flat.
Saudi Arabia's benchmark index (.TASI) was up 0.1%, with Saudi Telecom Company (7010.SE) rising 1.7% and Al Rajhi Bank (1120.SE) up 0.2%.
However, Saudi Aramco (2222.SE) was down 0.1%. The oil giant has hired banks to arrange its inaugural issuance of U.S. dollar-denominated sukuk, as it seeks cash to fulfil large commitments to its major shareholder, the Saudi government.
In Dubai, the main share index (.DFMGI) rose 0.4%, supported by a 6.3% surge in developer Damac Properties (DAMAC.DU) and a 1% jump in blue-chip developer Emaar Properties (EMAR.DU) after reporting a 250% surge in property sales in the first five months of 2021.
The builder of the world's tallest building, Dubai's Burj Khalifa, also hired banks for issuance of U.S. dollar-denominated Islamic bonds, or sukuk, two sources close to the matter said last week.
The Abu Dhabi index (.ADI) edged up 0.1%, on course to extend the gains from previous session, with the country's largest lender, First Abu Dhabi Bank (FAB.AD) gaining 0.1%, and Abu Dhabi Islamic Bank (ADIB.AD) advancing 0.4%
Separately, 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.
The pandemic hit the Gulf state hard last year, both through the shock of low oil prices and the huge toll it took on vital non-oil economic sectors such as tourism.
Qatar's benchmark index (.QSI), however, bucked the trend to trade flat, with Petrochemical maker Industries Qatar (IQCD.QA) down 0.2%.
GCC banks: Lending growth eases in Q1, new challenges in H2 2021 | ZAWYA MENA Edition
GCC banks: Lending growth eases in Q1, new challenges in H2 2021 | ZAWYA MENA Edition
Lending growth continued for the fourth consecutive quarter in Q1 2021 for listed banks in the GCC. The sector is likely to witness new challenges in the second half of the year (H2) owing to unwinding of banking related COVID-19 relaxations.
According to a report on by Kamco Invest, gross loans (excluding Kuwaiti banks) reached $1.43 trillion at the end of Q1 this year, registering a q-o-q growth of 3.5 percent. However, aggregate net loans (including Kuwaiti banks) grew at much slower pace of 1.8 percent q-o-q to reach $1.52 trillion.
UAE was the only country in the region that reported a decline in net loans by 0.7 percent, whereas the rest of the GCC reported sequential quarter growth.
Customer deposits registered growth across the board reaching $1.89 trillion at the end of the quarter with a q-o-q growth of 2.3 percent. The faster pace of growth in customer deposits versus net loans resulted in a lower loan-to-deposit (LDR) ratio at 80.2 percent.
Total banking sector assets continued to climb for the fourth consecutive quarter reaching a new high of $2.51 trillion. Growth was seen across the board with Omani banks reporting the biggest q-o-q percentage increase in total assets at 3.2 percent, although the Sultanate remains the smallest banking industry in terms of listed bank total assets of $81 billion at the end of the current Q1.
UAE banks continued to account for the biggest share of regional banking balance sheet with total assets of $818 billion followed by Saudi Arabia at $673 billion.
Meanwhile, the stability in oil prices at over the $65/barrel level has somewhat alleviated concerns related to government revenues and estimates now point to much lower funding requirements. That said, government’s spending plans remains intact and as a result break-even oil prices are above the current oil price for all the GCC countries, barring Qatar, according to the IMF.
Sovereigns are also looking for private participation in the economic activity as seen from a number of PPP projects awarded recently. “This, according to us, would augurs well for GCC banks, especially given the unutilized lending capacity with one of the lowest loan-to-deposit ratio of 80.2 percent.”
Lending growth continued for the fourth consecutive quarter in Q1 2021 for listed banks in the GCC. The sector is likely to witness new challenges in the second half of the year (H2) owing to unwinding of banking related COVID-19 relaxations.
According to a report on by Kamco Invest, gross loans (excluding Kuwaiti banks) reached $1.43 trillion at the end of Q1 this year, registering a q-o-q growth of 3.5 percent. However, aggregate net loans (including Kuwaiti banks) grew at much slower pace of 1.8 percent q-o-q to reach $1.52 trillion.
UAE was the only country in the region that reported a decline in net loans by 0.7 percent, whereas the rest of the GCC reported sequential quarter growth.
Customer deposits registered growth across the board reaching $1.89 trillion at the end of the quarter with a q-o-q growth of 2.3 percent. The faster pace of growth in customer deposits versus net loans resulted in a lower loan-to-deposit (LDR) ratio at 80.2 percent.
Total banking sector assets continued to climb for the fourth consecutive quarter reaching a new high of $2.51 trillion. Growth was seen across the board with Omani banks reporting the biggest q-o-q percentage increase in total assets at 3.2 percent, although the Sultanate remains the smallest banking industry in terms of listed bank total assets of $81 billion at the end of the current Q1.
UAE banks continued to account for the biggest share of regional banking balance sheet with total assets of $818 billion followed by Saudi Arabia at $673 billion.
Meanwhile, the stability in oil prices at over the $65/barrel level has somewhat alleviated concerns related to government revenues and estimates now point to much lower funding requirements. That said, government’s spending plans remains intact and as a result break-even oil prices are above the current oil price for all the GCC countries, barring Qatar, according to the IMF.
Sovereigns are also looking for private participation in the economic activity as seen from a number of PPP projects awarded recently. “This, according to us, would augurs well for GCC banks, especially given the unutilized lending capacity with one of the lowest loan-to-deposit ratio of 80.2 percent.”
Oil retreats as investors await Iran nuclear talks this week | Reuters
Oil retreats as investors await Iran nuclear talks this week | Reuters
Oil pulled back after hitting fresh multi-year highs on Monday, as investors awaited the outcome of this week's talks between Iran and world powers over a nuclear deal that is expected to boost crude supplies.
Brent crude futures for August fell 66 cents, or 0.9%, to $71.23 a barrel by 0645 GMT, after earlier hitting $72.27, their highest since May 2019. U.S. West Texas Intermediate crude for July touched $70 for the first time since October 2018 but reversed course to be at $69.10 a barrel, down 52 cents, or 0.8%.
Investors may have sold off some contracts to take profit when WTI hit $70, said Avtar Sandu, a senior commodities manager at Phillips Futures in Singapore.
"The primary concern is about Iranian barrels coming back into the market but I don't think there will be a deal before the Iranian presidential election," he added.
Oil pulled back after hitting fresh multi-year highs on Monday, as investors awaited the outcome of this week's talks between Iran and world powers over a nuclear deal that is expected to boost crude supplies.
Brent crude futures for August fell 66 cents, or 0.9%, to $71.23 a barrel by 0645 GMT, after earlier hitting $72.27, their highest since May 2019. U.S. West Texas Intermediate crude for July touched $70 for the first time since October 2018 but reversed course to be at $69.10 a barrel, down 52 cents, or 0.8%.
Investors may have sold off some contracts to take profit when WTI hit $70, said Avtar Sandu, a senior commodities manager at Phillips Futures in Singapore.
"The primary concern is about Iranian barrels coming back into the market but I don't think there will be a deal before the Iranian presidential election," he added.
#Saudi Aramco Hires Banks for Debut Dollar Islamic Bond Sale - Bloomberg
Saudi Aramco Hires Banks for Debut Dollar Islamic Bond Sale - Bloomberg
Saudi Aramco, the world’s biggest energy company, hired advisers including Citigroup Inc. and Goldman Sachs Group Inc. for its first dollar-denominated Islamic bond sale.
The state-controlled company may offer three tranches of notes due in three, five and 10 years, according to a person familiar with the matter. Islamic bonds, or sukuk, comply with the religion’s teachings, including its ban on interest.
The firm is raising cash to help fund its commitment to pay out $75 billion in dividends, a pledge Aramco made to drum up support for its initial public offering. But with the spread of the coronavirus and widespread lockdowns curbing demand for oil last year, the price of Brent crude plunged to just below $16 a barrel at one point in 2020, the lowest since 1999.
That prompted Aramco to reduce spending, cut jobs and sell non-core assets. The price of oil, Saudi Arabia’s main source of revenue, has since climbed more than four-fold to over $70 a barrel. And while the company’s first-quarter profits soared -- thanks to the recovery in both crude and gas -- its free cash flow fell short of the $18.75 billion needed to pay the dividend for the period.
The planned sale would its first since November, when it raised $8 billion from a non-Shariah compliant offering. Its debut offering of $12 billion a little over a year earlier was also hefty by Middle Eastern corporate bond standards.
More than 10 banks have been mandated to organize investor calls from Monday, Aramco said in a statement. They are: Alinma Invest, Al Rajhi Capital, BNP Paribas, Citigroup, First Abu Dhabi Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, NCB Capital, Riyad Capital, SMBC Nikko and Standard Chartered Bank.
Saudi Aramco, the world’s biggest energy company, hired advisers including Citigroup Inc. and Goldman Sachs Group Inc. for its first dollar-denominated Islamic bond sale.
The state-controlled company may offer three tranches of notes due in three, five and 10 years, according to a person familiar with the matter. Islamic bonds, or sukuk, comply with the religion’s teachings, including its ban on interest.
The firm is raising cash to help fund its commitment to pay out $75 billion in dividends, a pledge Aramco made to drum up support for its initial public offering. But with the spread of the coronavirus and widespread lockdowns curbing demand for oil last year, the price of Brent crude plunged to just below $16 a barrel at one point in 2020, the lowest since 1999.
That prompted Aramco to reduce spending, cut jobs and sell non-core assets. The price of oil, Saudi Arabia’s main source of revenue, has since climbed more than four-fold to over $70 a barrel. And while the company’s first-quarter profits soared -- thanks to the recovery in both crude and gas -- its free cash flow fell short of the $18.75 billion needed to pay the dividend for the period.
The planned sale would its first since November, when it raised $8 billion from a non-Shariah compliant offering. Its debut offering of $12 billion a little over a year earlier was also hefty by Middle Eastern corporate bond standards.
More than 10 banks have been mandated to organize investor calls from Monday, Aramco said in a statement. They are: Alinma Invest, Al Rajhi Capital, BNP Paribas, Citigroup, First Abu Dhabi Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, NCB Capital, Riyad Capital, SMBC Nikko and Standard Chartered Bank.
#Dubai Property Fund Pulls Debt Offer as Bondholders Revolt - Bloomberg
Dubai Property Fund Pulls Debt Offer as Bondholders Revolt - Bloomberg
Dubai-based Emirates REIT withdrew the restructuring proposal for its $400 million Islamic bond after a group of investors successfully opposed the deal.
Emirates REIT said Monday that 57% of sukuk-holders who voted were in favor of its exchange offer. It said 79% of its bondholders cast votes, without providing further details. The outcome fell short of the 75% the fund required to push through the proposal.
As a result, it rescinded the plan but vowed to continue exploring options to improve the REIT’S sukuk and equity trading. The company also said that “there has been no event of default or any dissolution event” with its debt and that it will pay its upcoming sukuk profit distribution in June as scheduled.
Citing a property slump compounded by the global pandemic, the Shariah-compliant fund had said it needed to improve its balance sheet, offering to exchange unsecured sukuk securities for new notes and asking to defer coupon payments for a year. Fitch Ratings has said the transaction would have been viewed as a “distressed debt exchange.”
The creditors opposing the deal formed a so-called “ad-hoc group” that included local and international investors and asked Emirates REIT to amend its proposal and discuss their concerns. The dissenting shareholders said they represented about 40% of the sukuk holders.
The standoff threatened to deal another blow to Dubai’s reputation as a financial hub where a string of corporate scandals and delistings has shaken investors’ confidence. In rejecting the deal, the group of creditors said the company first had to address its “weak governance, cash leakage and continued lack of transparency.”
‘Weak Liquidity’
In a response to the voting results and in “light of the company’s weak liquidity,” the ad-hoc group said it still wants to negotiate with Emirates REIT.
“A consensual restructuring agreement could provide the company with adequate flexibility to improve governance and undertake a turnaround, whilst providing certificateholders with adequate downside protection for the incremental risk,” it said.
The REIT last year hired investment bank Houlihan Lokey Inc. as an adviser while it mulled ways to improve its balance sheet and considered a potential delisting from the Dubai stock market.
“We will continue to reflect on feedback from the market and work with the company with the aim of addressing the structural issues we observe in the sukuk and equity instruments within the capital structure,” said Arun Reddy, managing director at Houlihan.
Dubai-based Emirates REIT withdrew the restructuring proposal for its $400 million Islamic bond after a group of investors successfully opposed the deal.
Emirates REIT said Monday that 57% of sukuk-holders who voted were in favor of its exchange offer. It said 79% of its bondholders cast votes, without providing further details. The outcome fell short of the 75% the fund required to push through the proposal.
As a result, it rescinded the plan but vowed to continue exploring options to improve the REIT’S sukuk and equity trading. The company also said that “there has been no event of default or any dissolution event” with its debt and that it will pay its upcoming sukuk profit distribution in June as scheduled.
Citing a property slump compounded by the global pandemic, the Shariah-compliant fund had said it needed to improve its balance sheet, offering to exchange unsecured sukuk securities for new notes and asking to defer coupon payments for a year. Fitch Ratings has said the transaction would have been viewed as a “distressed debt exchange.”
The creditors opposing the deal formed a so-called “ad-hoc group” that included local and international investors and asked Emirates REIT to amend its proposal and discuss their concerns. The dissenting shareholders said they represented about 40% of the sukuk holders.
The standoff threatened to deal another blow to Dubai’s reputation as a financial hub where a string of corporate scandals and delistings has shaken investors’ confidence. In rejecting the deal, the group of creditors said the company first had to address its “weak governance, cash leakage and continued lack of transparency.”
‘Weak Liquidity’
In a response to the voting results and in “light of the company’s weak liquidity,” the ad-hoc group said it still wants to negotiate with Emirates REIT.
“A consensual restructuring agreement could provide the company with adequate flexibility to improve governance and undertake a turnaround, whilst providing certificateholders with adequate downside protection for the incremental risk,” it said.
The REIT last year hired investment bank Houlihan Lokey Inc. as an adviser while it mulled ways to improve its balance sheet and considered a potential delisting from the Dubai stock market.
“We will continue to reflect on feedback from the market and work with the company with the aim of addressing the structural issues we observe in the sukuk and equity instruments within the capital structure,” said Arun Reddy, managing director at Houlihan.
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