MIDEAST STOCKS Banking shares bolster most Gulf markets | Reuters
Major stock markets in the Gulf ended higher on Sunday, largely driven by gains in financial companies and led by Saudi Arabia.
Saudi Arabia's benchmark index (.TASI) rose 0.3%, with Al Rajhi Bank (1120.SE) and petrochemical maker Saudi Basic Industries Corp (2010.SE) both gaining 0.7%.
Shares of financial and energy companies in the Gulf have both benefited from recent gains in oil prices.
Elsewhere, Saudi Arabian supermarket group BinDawood Holding (4161.SE) finished 0.4% higher despite an almost 50% decline in second-quarter net profit and on expectations that the decline in profit will be temporary.
In the second quarter of last year the company "benefited enormously from pantry-buying in response to lockdowns and in the lead-up to the VAT (value-added tax) hike which came into effect from 1 July 2020," the company's CEO said in a statement.
Dubai's main share index (.DFMGI) reversed early losses to close 0.1% higher, supported by a 5.5% jump in Amanat Holding (AMANT.DU) after the investment firm posted a net profit of 203.8 million dirhams ($55.49 million) compared to a loss of 5.2 million dirhams a year ago.
Among other gainers, DAMAC Properties (DAMAC.DU) rose 0.8% after narrowing second-quarter net losses.
However, the index's gains were limited by losses at National Central Cooling Co (TABR.DU), which retreated 3.1%.
Last week, the firm reported second-quarter net profit of 135.1 million dirhams, down from 142.4 million dirhams a year ago.
In Abu Dhabi, the index (.ADI) edged up 0.1%, with the country's largest lender First Abu Dhabi Bank (FAB.AD) rising 0.4%.
Meanwhile, Israel and the United Arab Emirates, which normalised relations a year ago, are looking to Dubai's Expo world fair in October to boost bilateral trade, which now stands at around $712 million. read more
The Qatari benchmark (.QSI) added 0.1%, with Commercial Bank (COMB.QA) rising 1.4%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) advanced 1.3%, led by a 3.1% leap in top lender Commercial International Bank (COMI.CA).
Egypt received a new batch of about 1.7 million AstraZeneca COVID-19 vaccine doses through the global COVAX initiative, the health ministry said late on Friday. read more
Egypt has also received shipments of the Sputnik, Sinopharm, Sinovac and Johnson & Johnson shots. It also recently began locally producing Sinovac's COVID-19 vaccines.
Hydrogen is the Middle East's next black gold | The National
Middle Eastern oil producers are making a big bet on hydrogen, the clean fuel that has been generating a lot of interest across the globe since the onset of the Covid-19 pandemic.
Hydrogen's rise as a favoured energy source in the Middle East comes on the heels of a wider global switch to a low-carbon economy. Oil exporters are preparing for a world where crude is no longer the dominant energy source and are trying to form new economies and relationships centred around cleaner fuels.
Hydrogen, the most abundant element in the universe, has rapidly become a tool for decarbonisation.
Saudi Arabia, the world's largest exporter of oil, has pledged to become the world's top exporter of hydrogen. The UAE, Opec's third-largest oil producer, is drawing up a hydrogen road map and is looking to add the fuel to its clean energy mix by 2050.
But can the region, with its abundant natural resources, recreate the economies of scale that helped to level the costs for solar energy projects globally and reap the industrial benefits of clean fuel?
Rasmala Investment Bank's Bitcon on OPEC+, Inflation, Dubai Real Estate - Bloomberg
Rasmala Investment Bank Head of Credit Strategies, Doug Bitcon, discusses Biden's recent request to OPEC+ to increase output, his view that higher inflation numbers will persist due to reopening taking longer than expected, and Dubai real estate, including DAMAC Properties. He speaks with Manus Cranny on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)
Palestine Monetary Authority Expects GDP Growth of 4% in 2021 - Bloomberg
The Palestinian economy is expected to grow 4% this year after taking a battering in 2020 from the pandemic and a drop in foreign aid.
The economy in the West Bank and Gaza contracted by 11.5% last year, hurt also in part by a temporary freeze of tax transfers from Israel, the Palestine Monetary Authority said in a report on Sunday. Israel collects tax revenues on behalf of the Palestinian Authority, an arrangement that was frozen for a few months last year in protest of an Israeli plan to annex chunks of the West Bank, where Palestinians see the heart of their future state.
The Palestine Monetary Authority warned that losing control over the pandemic and further political crises with Israel pose risks to its 2021 forecast. New coronavirus cases started to rise last week although at a much slower rate than the previous peak in April.
Palestinians have been grappling with the economic effects of the Covid-19 pandemic, which has left more than 3,600 people dead across the West Bank and Gaza, according to the Palestinian Ministry of Health. The slowdown in consumer and investment activity last year led to a 0.7% decline in prices and pushed up unemployment to 25.9%, with nearly 50% jobless in the Gaza Strip.
Analysis: Taliban gains give investors cause for concern beyond Afghanistan | Reuters
The Taliban's rapid advance towards Kabul is not only causing concern about Afghanistan's future but also about the impact on other countries in the region and their economies.
Iran and then Iraq lie to the west of Afghanistan. Tajikistan, Turkmenistan and Uzbekistan are to the north. But the immediate focus for financial markets and investors is Pakistan to the east.
Pakistan has a large public debt, a sizeable equity market (.KSE) and is dependent on a $6-billion IMF programme. The prospect of years of violence and waves of refugees will add pressure to its fiscal repair plans.
"It is a very troubling situation and unfortunately has set the region back many years," said Shamaila Khan, head of emerging market debt at AllianceBernstein. "I think the neighbouring countries will have to deal with an influx of refugees in the coming months/years".
Israel's Oil Refineries moves to Q2 profit, plans renewable energy shift | Reuters
Israel's Oil Refineries (ORL) (ORL.TA) swung to a profit in the second quarter as it continued to recover from coronavirus fallout, and said it would undergo a gradual transformation into renewable energy.
ORL, Israel's largest refining and petrochemicals group, said on Sunday it earned $68.5 million in the April-June period compared with a $10.8 million net loss a year earlier. Revenue jumped 122% to $1.57 billion.
Its adjusted refining margin was $4.6 a barrel in the second quarter, compared with $6.5 a year earlier but above Reuters' quoted Mediterranean Ural Cracking Margin of $0.3.
The margin, ORL said, would have reached $6.0 a barrel if not for a malfunction at one of its production facilities.
ORL said its strategy for the next decade was to transition to renewable energy for transportation, with an emphasis on green hydrogen and advanced polymers, alongside the firm's existing fuels and polymers.
Chairman Moshe Kaplinsky said that the plan, based on international standards, sets a goal for production of 15% green polymers by 2025 and 30% by 2030. It also set a target of producing hydrogen without CO2 emissions in the next two years.
Egypt Readies What May Be Its Biggest IPO as New Capital Emerges - Bloomberg
Egypt plans to take the first steps early next year toward selling a stake in the state company behind its new capital city, in what could be the North African nation’s biggest-ever initial public offering.
The Administrative Capital for Urban Development, a joint venture between the military and the Housing Ministry created to oversee the the multi-billion dollar project, has “very very big assets and a big portfolio of land and projects,” said the company’s head, Ahmed Zaki Abdeen.
“We are in the planning stage now and can start the procedures of choosing advisers and deciding the size of the offering early next year,” he said in a phone interview. “We hope this IPO will be the largest in Egypt’s history.”
The offering will take place on the Egyptian exchange and “very possibly in another international market as well,” Abdeen said. “We are studying this option.”
Mideast Stocks Gain as Egypt Extends Winning Streak: Inside EM - Bloomberg
Stocks listed in Egypt led gains in the Middle East on Sunday as they catch up with regional and global markets. The benchmark EGX 30 Index extended its longest winning streak since January as earnings fueled optimism.
MIDDLE EASTERN MARKETS:
- The EGX 30 rises as much as 1.6%, trading at the highest since March 18 before triming gains to 1.3% at closing
- Commercial International Bank +3%; Egypt Kuwait Holding Co +4.4%; EFG Hermes +2.1%; Fawry +0.7%
- “Egyptian stocks, until a few weeks back were significantly underperforming compared to other regional and global indices,” Naeem Brokerage’s director of research Allen Sandeep wrote in an email. “What we are seeing right now is the narrowing of that spread amid good incoming 2Q results across the board”
- Saudi Arabia’s benchmark Tadawul All Share index fluctuated between gains and losses before closing 0.3% higher
- Among companies which reported earnings: Bindawood +0.4%; Saudi Ground Services -3.1%; Saudi Chemical -3.4%; Saudi Pharmaceutical Industries -1.1%
- Ataa Educational +9.9%
- Abu Dhabi’s ADX General closes +0.1%
- International Holding leads gains, rising as much as 4% and closing little changed
- Dubai’s DFMGI index closes almost unchanged
- Damac rises 0.8% after reporting that 2Q loss narrowed
- “Damac currently trades at 60% premium to what we consider to be its floor valuation,” CI Capital’s analysts Sara Boutros and Marlene Milad wrote in a note
- CI Capital continues to prefer Emaar Development over Damac on “superior market positioning and offering,” triggered by a better play on Dubai’s property market recovery
- Emaar Development trims gains to close 1.6% higher
Kuwait's Agility reports $128mln net profit | ZAWYA MENA Edition
Kuwaiti logistics firm Agility posted a net profit of 38.6 million dinars ($128 million) for the second quarter of 2021, up by 503.7 percent over a year ago.
With the surge in Q2 earnings, the company’s net profit went up to 51.2 million for the first six months of the year, representing a 215.9 percent increase from the same period in 2020.
The positive performance was achieved after all of Agility’s largest assets posted strong profitability levels that were at or above pre-pandemic levels in 2019.
“We’re proud of how we’ve been able to respond and recover from the challenges of the COVID-19 pandemic,” said Tarek Sultan, Agility vice chairman and CEO.
The company also noted that it is working to wrap up the sale of its Global Integrated Logistics (GIL) business to DSV Panalpina A/S (DSV) for 19.3 million shares. The deal it expected to further boost the company’s growth.
“We see this transaction as a catalyst for Agility’s future growth. Agility will continue to grow its high-value business in emerging markets and continue to invest in companies and technologies reshaping global supply chains,” Sultan said.
Last April, DSV Panalpina signed an agreement to acquire GIL, Agility’s global logistics division, in an all-share transaction by issuing more than 19.3 million shares to the Kuwaiti firm.
For 2020, GIL posted a revenue of $4 billion, of which around 80 percent is related to air and ocean freight, according to a previous statement.
MIDEAST STOCKS Abu Dhabi leads most Gulf markets higher | Reuters
Most major Gulf stock markets rose in early trade on Sunday, with the Abu Dhabi index registering the biggest gains while Dubai bucked the trend to trade lower.
Saudi Arabia's benchmark index (.TASI) edged up 0.2%, helped by a 1.5% rise for Saudi Basic Industries Corp (2010.SE).
The petrochemicals giant this month swung to a $2 billion quarterly profit and said it expects to perform strongly in the second half the year, backed by healthy demand and rising oil prices. read more
Elsewhere, Saudi Arabian supermarket group BinDawood Holding (4161.SE) rose 0.9% despite an almost 50% decline in second-quarter net profit. The sharp year-on-year drop was largely attributable to lockdown-driven buying and hoarding in the same period last year.
In Abu Dhabi, the index (.ADI) gained 0.6%, with International Holding (IHC.AD) advancing 3.4% to extend gains for a fifth session after strong first-half numbers.
The company's market capitalisation hit 201.7 billion dirhams in late June, making it Abu Dhabi's most valuable listed company. read more
Dubai's main share index (.DFMGI) eased 0.2%, with blue-chip developer Emaar Properties (EMAR.DU) losing 0.7% and sharia-compliant lender Dubai Islamic Bank (DISB.DU) shedding 0.4%.
DAMAC Properties (DAMAC.DU), meanwhile, rose 0.8% after narrowing second-quarter net losses.
The Qatari benchmark (.QSI) added 0.1%, with Islamic lender Masraf Al Rayan (MARK.QA) rising 0.3%. However, real estate company Ezdan Holding (ERES.QA) declined 1.3% after reporting flat first-half net profit.
Dubai Expo in focus as UAE racks up $700 mln of trade with Israel since normalisation | Reuters
Israel and the United Arab Emirates, which normalised relations a year ago, are looking to Dubai's Expo world fair in October to boost bilateral trade, which now stands at around $712 million.
While the figure, contained in Israeli data, is tiny compared to UAE exports of $24 billion in 2019 to its top destination Saudi Arabia, the Israeli government sees trade with the UAE rising to $1 billion by year-end.
Israel is aiming for $3 billion in three years, it said this week on its Arabic-language Twitter account.
The UAE, which in a seismic move last August became the first Gulf state to normalise ties with Israel, promoted the accord's economic benefits.
In September, the UAE and Bahrain both inked U.S.-brokered deals to establish ties with Israel, followed by Sudan and Morocco.
Abu Dhabi’s Agthia Seeks Food Deals in Egypt and Saudi Arabia - Bloomberg
Abu Dhabi-based Agthia Group PJSC is pursuing a strategy to grow through acquisitions and investment in its food and beverage business as its chief executive sees continued economic growth.
“We expect to see our growth coming from the consumer business,” Agthia Chief Executive Officer Alan Smith said in an interview with Bloomberg Television. “We’re going to continue to look for the right opportunities” for acquisitions with a focus on Saudi Arabia and Egypt, he said.
Global food suppliers seeking a post-pandemic recovery are facing higher commodity and shipping costs, forcing them to raise prices or narrow margins. Commodities surged in the first half of the year on booming demand, fueled by trillions of dollars in government stimulus. That’s feeding concern that rising inflation may crimp consumer spending.
Agthia’s Smith said he’s cautiously optimistic on the global economy. While freight rates are set to remain high for the next 18 months, Smith said doesn’t expect them to rise further.
Saudi retailer BinDawood Holding says Q2 net profit down almost 50% | Reuters
Saudi Arabian supermarket retailer BinDawood Holding said profits in the second quarter were down almost 50%, as last year's figures were higher because of a boost in sales amid COVID-19 lockdown panic-buying and hoarding.
The retail supermarket said net profit in the quarter ended June 30 was 95 million riyals ($25.33 million), compared with 185.4 million riyals in the same period last year.
"I believe a comparison of the financial performance of H1 2021 with H1 2020 is not very meaningful because of the extenuating circumstances and unprecedented disruption to business caused by the pandemic," chief executive Ahmad BinDawood, said in a statement on Sunday.
The second quarter of last year "benefited enormously from pantry-buying in response to lockdowns and in the lead-up to the VAT [value-added tax] hike which came into effect from 1 July 2020."
Saudi Aramco joins PIF's $906mln renewable energy project | ZAWYA MENA Edition
Saudi Arabia’s utility developer ACWA Power said Saudi Aramco Power Co. (SAPCO), a fully owned subsidiary of Aramco, has joined the consortium to develop Sudair Solar plant, a key project under the kingdom’s sovereign wealth fund Public Investment Fund’s (PIF) renewable energy program.
ACWA Power, which builds power and desalinated water plants, also announced the financial close for the 3.4 billion riyals ($906 million) solar plant.
SAPCO joins the consortium alongside ACWA Power and Badeel and will hold a 30 percent stake in the special purpose vehicle, Sudair One Renewable Energy Company, which was incorporated for the project.
ACWA Power and Badeel will each own 35 percent, the utility company said in a statement on Sunday.
ACWA Power is 50 percent owned by PIF while Badeel is fully owned by PIF.
