Investors Unloaded Saudi Arabian Bonds After Surprise OPEC+ Move - Bloomberg
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Investors have been unloading bonds from Saudi Arabia and other Gulf states since a surprise OPEC+ production cut on the weekend sent the price of oil surging, an unusual move that traders say reflects how expensive the region’s debt has become.
Dollar bonds issued by governments in the region were among the biggest losers in emerging markets Monday, even amid sharp gains in oil. Most of the securities remained under pressure on Tuesday, with Saudi Arabia’s note due in 2025 the biggest loser in emerging markets and headed for a record decline.
It was unclear who was selling or why. Increases in the price of oil would typically be expected to boost demand for energy exporters’ debt.
But bonds from Saudi Arabia accounted for three of the top 10 losers in the developing world when markets opened on Monday, while notes from the United Arab Emirates and Qatar also fell. Saudi Arabia’s bond due 2027 fell by a record, with the yield rising 1.6 percentage points to 4.2% at the close.
Saudi bourse gains on higher oil prices | Reuters
Saudi Arabia's stock market ended higher on Tuesday on rising oil prices, while the Egyptian bourse eased after four sessions of gains.
Crude prices - a catalyst for the Gulf's financial markets - rose after OPEC+ plans to cut more production jolted markets on Monday, with investor attention shifting to demand trends and the impact of higher prices on the global economy.
The OPEC+ production curbs led many analysts to raise their Brent oil price forecasts to around $100 per barrel by year-end. Goldman Sachs lifted its forecast for Brent to $95 a barrel by the end of this year, and to $100 for 2024.
Saudi Arabia's benchmark index (.TASI) advanced 1.3%, buoyed by a 2% rise in Al Rajhi Bank (1120.SE) and a 2.7% leap in Saudi National Bank (1180.SE).
The kingdom's non-oil business activity continued to expand at a strong rate in March, a monthly survey showed, boosted by an increase in new orders, although the pace of growth slowed from the previous month.
The Saudi stock market continued to show strong gains supported by oil price increases and positive local fundamentals, said Farah Mourad, Senior Market Analyst of XTB MENA.
Outside the Gulf, Egypt's blue-chip index (.EGX30) eased 0.3%, ending four sessions of gains.
Mourad said changing global sentiment could affect prices on the Egyptian market after a strong performance last month.
"At the same time, traders reacted to data on the difficulties that the local economy is facing. Inflation remains a negative factor. As a result, international investors could continue to leave the market."
Dubai's main share index (.DFMGI) gained 0.5%.
In Qatar, the index (.QSI) climbed 0.9%, extending gains from the previous session, with Qatar Islamic Bank (QISB.QA) closing 2.1% higher.
Edmond de Rothschild, EnTrust Global, Nomura, The Family Office join DIFC | Banking – Gulf News
Edmond de Rothschild, EnTrust Global, Nomura Singapore Limited and The Family Office Company recently joined the Dubai International Financial Centre (DIFC), the authority said on Tuesday.
Edmond de Rothschild had its official office opening last month and already has strong relationships throughout the Middle East.
EnTrust Global manages $18.1 billion in assets for more than 500 institutional investors.
Nomura Singapore provides a full range of services to both institutional and private clients, while The Family Office Company is an independent wealth management firm.
The DIFC is now home to over 300 wealth and asset management companies.
Saudi Arabia Wealth Fund PIF Details Ties to Global Venture, Buyout Firms - Bloomberg
The venture arm of Saudi Arabia’s sovereign wealth fund has disclosed its ties to more than 50 venture capital and private equity firms including Blackstone Inc. and KKR & Co., in one of the first public disclosures of its investments.
The website of Sanabil Investments, wholly owned by the Public Investment Fund, says it commits around $2 billion a year into “venture, growth and small buyout assets worldwide.” Other firms it names include Andreessen Horowitz, General Atlantic, Hellman & Friedman and Platinum Equity.
CVC and Apollo are also listed among buyout funds it invests in. Sanabil’s website notes half of its assets are allocated to venture capital, 30% to private equity and a fifth to a “liquid portfolio.”
The disclosure offers the most comprehensive accounting yet of the links some of the world’s biggest investment firms have to Saudi Arabia. The site also details Sanabil’s direct investments in companies like the scooter rental app Bird and Caffeine, a social media platform.
Sanabil, which is controlled by the more than $600 billion PIF, doesn’t disclose its assets under under management.
The Information reported the disclosure earlier.
UAE's Top Oil Executive Has a Plan to Fix COP28 - Bloomberg
In the months before the signing of the Paris Agreement, the then-crown prince of oil-rich Abu Dhabi wondered aloud about the fate of his sheikhdom at the end of the fossil fuel era. “After we have loaded this last barrel of oil, are we going to feel sad?” Sheikh Mohammed bin Zayed Al Nahyan asked attendees at the 2015 Government Summit in the United Arab Emirates. “If our investment today is right, I think—dear brothers and sisters—we will celebrate that moment.”
Soon the sheikh handed the job of running the Abu Dhabi National Oil Co., the world’s 12th-largest producer of oil and gas, to an Emirati renewables executive named Sultan Al Jaber. The move seemed to signal a shift in a country sitting atop about $9 trillion in untapped oil. The extraordinary wealth generated by Adnoc has filled a sparsely populated desert with gleaming cityscapes, lush golf courses and giant airports over just a few decades. It was to be entrusted to someone who’d spent much of his career making investments in renewable energy and trying without success to build a zero-carbon city in the desert. The mission: Figuring out how to sell energy indefinitely, even if that means doing so—at some point—without planet-warming emissions.
Now Al Jaber has been picked again to solve a similarly vexing puzzle. The Adnoc chief is organizing COP28, the crucial United Nations climate summit, which will bring heads of state, diplomats, activists and business leaders from each of the world’s nearly 200 nations to Dubai at the end of November. It will fall to him to guide hostile factions to consensus.
Abu Dhabi's AD Ports signs $2 bln syndicated bank facility | Reuters
Abu Dhabi-listed AD Ports Group (ADPORTS.AD) has signed a $2 billion financing agreement with a syndicate of 13 banks, it said in a bourse statement on Tuesday.
The multi-currency general corporate facility agreement consists of three tranches of $620 million, 600 million euros ($655.32 million) and 2.86 billion dirhams ($778.87 million), all equivalent to about $2 billion, and for a period of up to two-and-a-half years, the company said.
"The success in raising the $2 billion facility reflects... the confidence that the banking sector has in our organisation's robust long-term financial performance," said Mohamed Juma Al Shamisi, group CEO and managing director.
AD Ports Group is part of Abu Dhabi investment and holding company ADQ, which is chaired by Sheikh Tahnoun bin Zayed Al Nahyan, brother of the UAE president, who oversees a vast business empire.
Goldman sees elevated OPEC pricing power, $100 per barrel by April 2024 after supply cut | Reuters
Goldman Sachs says crude oil production cuts by OPEC could result in a significantly larger deficit in the market, driving a rally in prices to $100 per barrel by April 2024, and raising the group's pricing power.
OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, agreed on Sunday to widen oil supply cuts to 3.66 million barrels per day (bpd), which helped push up prices above $86 per barrel.
Goldman said it sees "elevated OPEC pricing power - the ability to raise prices without significantly hurting its demand - as the key economic driver", and estimates that the production cut will raise OPEC+ revenues as the boost to prices more than offsets the drop in volumes.
Brent crude futures were trading at $85.31 a barrel on Tuesday.
Saudi non-oil business growth eases in March but output remains strong-PMI | Reuters
Saudi Arabia's non-oil business activity continued to expand at a strong rate in March, a monthly survey showed, boosted by an increase in new orders, although the pace of growth softened from the previous month.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index eased to 58.7 in March, firmly over the 50 mark which separates growth from contraction, but down from 59.8 in February, the highest reading in almost eight years.
The New Orders sub-index eased to 66.4 in March after surging to 68.7 the previous month but signals continued strong demand, with demand from foreign firms particularly strong.
"Business conditions remain strongly positive at the end of the first quarter of 2023 as improving market conditions and increased development spending helped to boost demand in the non-oil private sector," said Naif Al-Ghaith, Riyad Bank's chief economist.
Mideast Stocks: Most Gulf markets gain but economic woes cap gains; Dubai flat
Most Gulf stock markets rose in early trade on Tuesday amid rising oil prices, although renewed economic concerns after subdued U.S. manufacturing activity data capped gains.
Crude prices - a key catalyst for the Gulf's financial markets - rose after OPEC+ plans to cut more production jolted markets on Monday, with investor attention shifting to demand trends and the impact of higher prices on the global economy.
Saudi Arabia's benchmark index gained 0.6%, with Retal Urban Development Co advancing 1% and Al Rajhi Bank rising 0.9%.
U.S. manufacturing activity slumped in March to the lowest level in nearly three years as new orders plunged, and analysts said activity could decline further due to tighter credit conditions.
Market watchers have been trying to gauge how much longer the Federal Reserve might need to keep raising interest rates to cool inflation and whether the U.S. economy might be headed for recession.
Most Gulf Cooperation Council countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the U.S. dollar and follow the Fed's policy moves closely, exposing the region to a direct impact from monetary tightening in the world's largest economy.
Separately, Saudi Arabian auto rental firm Lumi has hired Saudi Fransi Capital and EFG Hermes to arrange the sale of 30% of its shares in a planned initial public offering (IPO), Reuters reported on Monday, citing two sources.
In Abu Dhabi, the index added 0.2%.
The Qatari benchmark climbed 0.8%, as most of the constituents on the index were in positive territory including Qatar Islamic Bank, which was up 1.2%.
Dubai's main share index, however, was flat in early trading.
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