HSBC Joins Morgan Stanley With Bullish Call on Dubai Real Estate - Bloomberg
HSBC Holdings Plc said a growing demand for larger homes during the pandemic would further boost Dubai’s property market, echoing analysts at Morgan Stanley who expect the rally to last for “several years.”
“The reported sales rebound in Dubai year-to-date has been remarkable,” HSBC’s Stephen Bramley-Jackson and Alok Baid wrote. Despite supply concerns and negative population growth, “the globally synched post-pandemic migration to larger homes is also reigniting Dubai’s residential property market,” they said.
HSBC raised its recommendation on Dubai’s top developer Emaar Properties PJSC to buy from hold, saying the stock offered more than 90% correlation to property prices. Emaar, which reported a threefold increase in five-month sales, represents the “best means” of capturing the trend for the migration to larger homes, the analysts said.
Business activity in Dubai has been picking up alongside a rebound in tourism and a fast distribution of coronavirus vaccines. The city has remained relatively open during the pandemic, and buying real estate is also one of the fastest ways for foreigners to get a residency permit.
For properties worth at least 10 million dirhams ($2.7 million), a record 84 changed hands in March alone, according to data from real estate consultant Property Monitor.
Oil steadies after hitting 2-yr high as demand hopes face supply growth | Reuters
Oil prices ended mostly unchanged on Monday, after hitting their highest levels in more than two years, as growing U.S. crude production and Britain's delayed COVID-19 reopening dampened expectations for fuel demand growth and tighter supplies.
The market reacted negatively to a U.S. Energy Information Administration (EIA) forecast that shale oil output, which accounts for more than two-thirds of U.S. production, was expected to rise by about 38,000 barrels per day (bpd) in July to about 7.8 million bpd. read more
"We started off strong on expectations that the demand situation was building momentum as COVID vaccinations were high," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "Then the EIA report took the winds out of the sail."
Brent settled up 17 cents at $72.86 a barrel. Earlier in the session, it reached $73.64 a barrel, its highest since April 2019.
U.S. West Texas Intermediate fell 3 cents to settle at $70.88 a barrel, after earlier touching $71.78 a barrel, its highest since October 2018.
Dubai Conglomerate’s Venture Said to Buy Palm’s Cooling Provider - Bloomberg
Dubai state developer Nakheel sold its business that supplies chilled air to such local landmarks as artificial palm-shaped islands, according to people familiar with the matter.
Emirates Central Cooling Systems Corp, a joint venture between a unit of Dubai Holding and a state-owned utility, has acquired Nakheel’s cooling operations, the people said. The assets are worth around 1 billion dirhams ($272 million), they said, asking not to to be identified because the information is private.
Nakheel’s spokesperson declined to comment. Nobody at Empower was immediately available to comment
Coming off years of declines in property prices, some developers in the United Arab Emirates have looked to offload their cooling operations, especially after the coronavirus pandemic further upended the local economy.
The district cooling industry has meanwhile been consolidating, with Abu Dhabi’s Tabreed paying 963 million dirhams to buy two district cooling plants from Aldar Properties PJSC last year. In 2019, Tabreed also bought an 80% stake in a district cooling facility from Emaar Properties PJSC.
Dubai was seeking a buyer for the cooling system operations of its biggest airport, people familiar with the matter told Bloomberg in November.
Palm Builder
Nakheel, the developer of palm islands off the coast of Dubai, was at the center of the emirate’s debt crisis in 2009 that pushed it to the brink of a default. After receiving support from the government, the builder now has billions of dirhams of projects and infrastructure development underway.
Established almost two decades ago, Empower is a venture between Dubai Electricity and Water Authority and TECOM Group, a part of Dubai Holding -- the conglomerate owned by the emirate’s ruler. The company says it’s the world’s largest district cooling services provider, serving more than 140,000 corporate and individual consumers and controlling a market share of more than 76% in Dubai’s district cooling sector.
District cooling is the preferred and most sustainable method in the Gulf region to combat temperatures that often soar above 110 degrees Fahrenheit (43 Celsius) during the summer. Plants generate chilled water, which is then sent through pipes to cool the air of buildings ranging from Dubai’s many skyscrapers and villas to its metro line and theme parks.
MIDEAST STOCKS Rising oil prices, economic recovery lift Gulf stocks | Reuters
Major stock markets in the Gulf ended higher on Monday, as investors eye economic recovery and rising oil prices which gained on an improved outlook for worldwide fuel demand.Brent was up 64 cents, or 0.9%, at $73.34 a barrel by 1246 GMT, its highest since May 2019."GCC economies tend to heavily depend on oil price movements and should see solid support thanks to rising crude prices. This effect will be observable in stock market prices throughout the coming weeks," Daniel Takieddine, market analyst at FXPrimus, said.Saudi Arabia's benchmark index (.TASI) added 0.2%, with Al Rajhi Bank (1120.SE) gaining 3.1%."GCC financial markets should remain in the positive territory thanks to the subduing economic impact of the pandemic and the economic revival," said Takieddine. "Some remaining restrictions could slow the recovery a little, but not in a significant manner".Dubai's main share index (.DFMGI) climbed 0.9%, with its largest lender Emirates NBD Bank (ENBD.DU) rising 1.9%.In Abu Dhabi, the United Arab Emirates' (UAE) second-most populous emirate, the stock index (.ADI) rose 0.5%, driven by a 0.7% increase in the country's largest lender First Abu Dhabi Bank (FAB.AD).Abu Dhabi will from Tuesday limit entry to shopping centres, restaurants, cafes and other public places to those who have been vaccinated against COVID-19 or recently tested negative for the coronavirus. read moreThe Qatari benchmark (.QSI) finished 0.7% higher, buoyed by a 2% gain in petrochemical firm Industries Qatar (IQCD.QA).Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 0.5% higher, ending two sessions of losses, supported by its top lender Commercial International Bank (COMI.CA).on Sunday, France said it would provide Egypt with some 1.8 billion euros ($2.2 billion) in financing for projects including the Cairo metro, power generation and water management, in what officials called a major boost to bilateral cooperation.
Wealth Fund ADIA Reviews Real Estate Strategy as Pandemic Bites - Bloomberg
The Abu Dhabi Investment Authority, one of the world’s biggest property investors, is considering changes to its real estate strategy after some of its major holdings suffered during the coronavirus pandemic, people with knowledge of the matter said.
The sovereign wealth fund is reviewing the performance of its property assets following weakness in a number of the shopping malls and office buildings in its portfolio, according to the people, who asked not to be identified because the information is private. ADIA may consider cutting its exposure to some troubled investments, the people said.
ADIA has shifted in recent years to making more direct property investments and relying less on external managers. The state-owned investor has amassed just under $700 billion in assets, according to estimates from data provider Global SWF, and ADIA has said real estate traditionally accounts for about 5% to 10% of that overall portfolio.
While ADIA will continue to be a major player in property, it could shift its focus for future deals and increase exposure to areas like warehouses, life sciences properties, technology hubs and affordable housing, one of the people said.
EXCLUSIVE Energy majors bid for Qatar LNG project despite lower returns | Reuters
Six top western energy firms are vying to partner in the vast expansion of Qatar’s liquefied natural gas output, industry sources said, helping the Gulf state cement its position as the leading LNG producer while several large projects around the world recently stalled.
Exxon Mobil, Royal Dutch Shell, TotalEnergies and ConocoPhillips, which are part of Qatar's existing LNG production were joined by new entrants Chevron and Italy's Eni in submitting bids on May 24 for the expansion project, industry sources told Reuters.
The bids show energy giants continue to have appetite for investing in competitive oil and gas projects despite growing government, investor and activist pressure on the sector to tackle greenhouse gas emissions.
Unlike Qatar's early LNG projects in the 1990s and 2000s when the country relied heavily on international oil companies' technical expertise and deep pockets, the country's national oil company Qatar Petroleum (QP) has gone ahead alone with the development of the nearly $30 billion North Field expansion project.
Saudi first quarter GDP shrinks 3%, hit by oil sector decline | Reuters
Saudi Arabia’s gross domestic product fell 3% in the first quarter, slightly less than official estimates and compared with a 1% contraction last year, as a sharp fall in the oil sector pulled back the economy, data showed.
The kingdom’s economy has been hit hard by the twin shock of last year’s historic oil price crash and the COVID-19 pandemic.
The non-oil sector grew 2.9%, from 1.6% growth a year earlier, while the oil sector declined by 11.7% which was a much sharper fall than the 4.6% contraction a year earlier, the General Authority for Statistics said in a statement on Monday.
In flash estimates in May the authority said the economy shrank 3.3% in the first quarter and the non-oil sector grew for the first since the first quarter of 2020.
The non-oil and private sectors are at the centre of Vision 2030, de facto ruler Crown Prince Mohammed bin Salman’s transformation plan to wean the Saudi economy off oil.
Dubai plane leasing firm DAE adds more banks to bond deal | Reuters
Dubai Aerospace Enterprise (DAE), one of the world's biggest aircraft leasing companies, has added more banks to its planned sale of U.S. dollar-denominated bonds that would be its second this year, an investor presentation seen by Reuters showed.
DAE, owned by the Dubai government's main investment arm the Investment Corporation of Dubai, will issue bonds in tranches of three- and/or seven years to exercise a call option on bonds due next year and 2024, the presentation showed on Monday.
It will also use the proceeds from the new bonds for general corporate purposes. The bonds will be of benchmark size, which generally means at least $500 million.
A document from one of the banks on the deal seen by Reuters on Friday did not specify a tenor and said DAE hired BNP Paribas (BNPP.PA), Credit Agricole (CAGR.PA), Emirates NBD Capital (ENBD.DU), JPMorgan (JPM.N) and Trust Securities (TFC.N) to organise fixed income investor calls on Monday.
MIDEAST STOCKS Gulf markets make gains on oil, economic recovery | Reuters
Major Gulf stock markets rose on Monday, lifted by optimism about economic recovery and oil prices which gained on an improved outlook for worldwide fuel demand.
Oil prices are a key catalyst for the Gulf region's financial markets and Brent crude was up 76 cents, or 1.1%, at $73.43 a barrel at 0734 GMT, its highest level since May 2019. .
Saudi Arabia's benchmark index (.TASI) gained 0.6%, with Al Rajhi Bank (1120.SE) rising 2.7% and petrochemical maker Saudi Basic Industries (2010.SE) up 0.6%.
The kingdom will bar people from shopping malls unless they have been vaccinated against COVID-19, state TV reported on Sunday, citing a decision by the trade ministry. read more
"GCC financial markets should remain in the positive territory thanks to the subduing economic impact of the pandemic and the economic revival," Daniel Takieddine, market analyst at FXPrimus, said.
Some remaining restrictions could slow the recovery a little, but not in a significant manner, Takieddine added.
Dubai's main share index (.DFMGI) rose 0.6%, led by a 1.2% gain in blue-chip developer Emaar Properties (EMAR.DU) and a 0.4% increase in Emirates NBD Bank (ENBD.DU).
In Abu Dhabi, the United Arab Emirates' (UAE) second-most populous emirate, the stock index (.ADI) rose 0.3%.
Abu Dhabi will from Tuesday limit entry to shopping centres, restaurants, cafes and other public places to those who have been vaccinated against COVID-19 or recently tested negative for the coronavirus. read more
The Qatari benchmark (.QSI) was up 0.8%, as most of the stocks on the index were in positive territory including petrochemical firm Industries Qatar (IQCD.QA).
Oil prices climb as demand outlook improves, supplies tighten | Reuters
Oil prices rose on Monday, extending three weeks of gains that have been underpinned by an improved outlook for fuel demand as increased COVID-19 vaccinations help lift travel curbs, along with tightness in supply.
Brent crude was up 51 cents, or 0.7%, at $73.20 a barrel by 0644GMT, the highest since May 2019. U.S. West Texas Intermediate gained 47 cents, or 0.7%, to $71.38 a barrel, the highest since October 2018.
Motor vehicle traffic is returning to pre-pandemic levels in North America and much of Europe, and more planes are in the air as anti-coronavirus lockdowns and other restrictions are being eased, driving three weeks of increases for the oil benchmarks.
"In the short term the oil market may be volatile with frequent pull-backs as crude prices are beginning to struggle as demand in Europe and India faces headwinds," said Avtar Sandu, senior manager commodities at Phillip Futures in Singapore.
