Saudi Arabia Returns to Debt Market With $6 Billion Islamic Bond - Bloomberg
Saudi Arabia has sold $6 billion of Islamic bonds, just as weaker oil prices push the kingdom’s budget into a deficit.
The country’s now issued $16 billion of dollar debt this year, more than any other emerging-market sovereign, according to data compiled by Bloomberg.
The new securities, known as sukuk, have maturities of six and 10 years, each $3 billion in size. The shorter tranche was priced at 80 basis points over US Treasuries, giving it a yield of about 4.3%. The longer notes were issued at 100 basis points over Treasuries.
Qatar Plans to Boost Stock Market Float to Draw Foreigners, Like Saudi Arabia - Bloomberg
Qatar is considering plans to increase trading in local stocks in a bid to draw more foreign investor interest and deepen markets.
The Qatar Investment Authority, the Gulf state’s $450 billion sovereign wealth fund, and the General Retirement and Social Insurance Authority are examining a proposal that would involve consolidating their local stock holdings worth up to $3 billion under a separate entity, according to people familiar with the matter.
The new entity would hire third-party funds to actively manage and trade the shares, effectively boosting activity in the overall market, they said, asking not to be identified because the information isn’t public.
The hope is that more trading will raise investment returns, reduce costs and help with diversification, they added. The change may take place by the end of the year, said the people, adding that no final decisions have been made. It wasn’t immediately clear if other state firms would pool their assets. Representatives for the QIA and state pension fund didn’t immediately return a request for comment.
The strategy is designed to increase the free float of the overall market, and lead index providers, like MSCI Inc., to increase Qatar’s weighting in market benchmarks. Lower public float is a deterrent for some funds because it means the market is less liquid and more prone to volatility when executing large orders.
Qatar is following in the footsteps of Saudi Arabia, which increased overall free float in 2021 after combining $29 billion of local and foreign stocks from Public Pension Agency and the General Organization of Social Insurance.
As a result of that change and a stake sale by the kingdom’s sovereign wealth fund, Saudi Arabia received at least $815 million in flows from passive funds, according to an estimate from EFG-Hermes Holding SAE.
Dubai adds support for family business growth, succession | Reuters
A new Dubai organisation focused on family businesses, a key component of the emirate's economy, on Tuesday said it would support the growth of family firms and help them survive generational transitions.
Dubai Chambers, which represents the emirate's business community interests, has set up the Dubai Centre for Family Businesses to educate firms on leadership transition, planning and growth, it said.
Dubai, a regional trade and tourism hub, also plans to start a family business dispute centre to resolve conflicts outside of the courts, Abdul Aziz Al Ghurair, chairman of Dubai Chambers, told Reuters.
Family-owned businesses contribute 60% of the United Arab Emirates Gross Domestic Product (GDP) and 80% of its workforce, consultancy KPMG said in a report last year.
"The size of the family business in the last 50 years has changed from smaller business to become multi-billion dollar businesses ... it is becoming more critical to ensure that the transition from the founder to the next generation becomes very smooth, trouble free," said Ghurair.
Most Gulf bourses fall on lower oil prices, ahead of US debt-limit talks | Reuters
Most stock markets in the Gulf ended lower on Tuesday as traders assessed lower oil prices and concerns over the U.S. government's debt-ceiling negotiations.
Saudi Arabia's benchmark index (.TASI) dropped 0.2%, hit by a 2.1% decline in oil giant Saudi Aramco (2222.SE).
Oil futures steadied as support from a higher forecast for global demand from the International Energy Agency (IEA) was countered by weaker-than-expected Chinese economic data.
In another bullish factor, the U.S. Department of Energy on Monday said it would buy 3 million barrels of crude oil for the Strategic Petroleum Reserve for delivery in August.
Dubai's main share index (.DFMGI) retreated 0.5%, falling for a fourth consecutive session, weighed down by a 3.2% slide in Tecom Group (TECOM.DU).
The Dubai stock market extended its losses following some mitigated company earnings today and as global sentiment tilts toward caution, said Ahmed Negm, Head of Market Research MENA at XS.com.
"The main index veered away from its uptrend direction and could be exposed to more price corrections if traders continue to sell."
In Abu Dhabi, the index (.FTFADGI) bucked the trend to close 0.1% higher.
The Qatari benchmark (.QSI) eased 0.1%.
U.S. President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy on Monday prepared for critical debt-ceiling talks, with a little more than two weeks to go before the U.S. government could run short of money to pay its bills.
A first-ever U.S. default would plunge the country into recession and inject chaos into global financial markets, economists said, and the standoff has started to worry investors and consumers.
Outside the Gulf, Egypt's blue-chip index (.EGX30) finished 0.6% higher, with Abu Qir Fertilizers (ABUK.CA) losing 2.5%.
According to Negm, the Egyptian bourse continued to decline as risk appetite dries up with international investors monitoring the developments in the U.S. The deteriorating sentiment globally could fuel the current selling trend among global traders.
Saudi Arabia's Wealth Fund Staffs NY Unit With Goldman, Point72 Hires - Bloomberg
The US subsidiary of Saudi Arabia’s $730 billion sovereign wealth fund is hiring from Wall Street firms and top hedge funds to manage its growing portfolio of investments in the country.
In January, former Point72 Asset Management executive Jason Chung joined as head of the New York office of USSA International, the fund’s US arm, after spending almost 13 years at billionaire Steve Cohen’s hedge fund, according to LinkedIn. That month, Meredith Wood Doherty joined from investment firm Baillie Gifford as USSA International’s head of compliance and governance, her LinkedIn profile shows.
The Public Investment Fund unit also recruited former Goldman Sachs Group Inc. alumni Mark Cranley and Vesa Helin as a senior economist and head of risk, according to LinkedIn.
A representative for the PIF declined to comment.
The PIF opened USSA in New York last year and aimed to hire about 50 employees for roles including investment research, legal and compliance, and a chief of staff, Bloomberg reported. It also had plans to build a team for equity trading. The fund manages a roughly $35 billion portfolio of US equities, including stakes in BlackRock Inc., JPMorgan Chase & Co., and Uber Technologies Inc, according to a recent filing.
Saudi Arabia Moves Closer to Another Aramco Stock Offering - Bloomberg
Saudi Arabia’s plans for another multibillion-dollar offering of Aramco stock are gaining fresh momentum, with any deal set to be one of world’s largest share sales in recent years, people with knowledge of the matter said.
The kingdom has been working with several advisers to study the feasibility of a follow-on offering on the Riyadh exchange, according to the people, who asked not to be identified because the information is private. It could make a decision as soon as the coming weeks about whether to proceed, they said.
Saudi Arabia’s de-facto ruler, Crown Prince Mohammed bin Salman, said in January 2021 that the government would look to sell more shares in the state oil giant in the future, with proceeds transferred to the kingdom’s sovereign wealth fund. The Aramco offering may take place as soon as this year if the government goes ahead, though no precise timeline has been set, the people said.
Even a 1% offering would raise more than $20 billion for the kingdom as it embarks on an ambitious investment plan to diversify its local economy. The Saudi government directly owns about 90% of Aramco, with a further 8% held by its sovereign wealth fund.
Aramco fell as much as 4.7% on Tuesday. The stock was down 2.4% at 2:43 p.m. in Riyadh, giving the world’s largest energy company a market value of roughly $2.1 trillion. It shares have outperformed Western oil giants such as Exxon Mobil Corp. this year.
Dubai’s luxury residential market forecast to grow 13.5% in 2023 amid higher demand
Dubai's luxury residential market is projected to record the highest growth rate for any prime market globally, at 13.5 per cent in 2023, driven by a demand-supply imbalance and positive economic growth.
“Prime values are being fuelled by Dubai’s safe-haven status, an exceptionally diverse range of international ultra-high-net-worth people in search of luxury second homes, combined of course with the government’s … response to the pandemic, which has spurred business confidence,” Knight Frank said in a report on Monday.
Adding to the city’s appeal is its relative “affordability”, with prime homes selling for around $800 per square foot, “making Dubai one of the most ‘affordable’ luxury residential markets in the world,” it said.
A limited supply of new property is also expected to support the growth of the luxury property market in the emirate.
Moody's upgrades Oman, maintains positive outlook
Moody's Investors Service has upgraded Oman's ratings and maintained the positive outlook on the improvement in the country's fiscal surplus as well as its spending restraint.
It upgraded the Government of Oman's issuer and long-term senior unsecured ratings to Ba2 from Ba3 and upgraded the government's senior unsecured medium-term note program rating to (P)Ba2 from (P)Ba3.
"The upgrade reflects the improvements in Oman's debt burden and debt affordability metrics during 2022, mainly as a result of the large oil and gas revenue windfall, which increase the sovereign's resilience to potential future shocks," Moody's said in a report on Monday.
Importantly, the strengthening of the fiscal metrics was supported by the government's spending restraint and its decision to use the fiscal surplus and previously accumulated fiscal buffers to pay down debt, which in Moody's view demonstrates an improving track record of fiscal policy effectiveness and governance strength.
Adnoc Unit’s $607 Million Abu Dhabi IPO Sells Out in Minutes - Bloomberg
The initial public offering of Adnoc Logistics & Services got enough orders to cover all shares within minutes, showing continued strong demand for listings in the Middle East.
Abu Dhabi National Oil Co. is selling about 1.11 billion shares in its maritime logistics unit at 1.99 dirhams ($0.54) to 2.01 dirhams each, valuing the company at as much as $4.05 billion, according to a statement Tuesday.
Order books for the IPO, which could raise as much as $607 million at the top end, were covered throughout the range and indicated demand exceeded deal size, according to a message to investors seen by Bloomberg News.
Al Seer Marine Supplies & Equipment Co PJSC, National Marine Dredging Co PJSC, Alpha Oryx Ltd. — ultimately owned by Abu Dhabi wealth fund ADQ — and Abu Dhabi Pension Fund have committed to become cornerstone investors and subscribed for about $180 million combined.
The deal is the second listing of a unit by state-owned Adnoc this year, after it raised $2.5 billion in the IPO of its gas business in March. It’s also set to be the second-biggest IPO in the Middle East so far this year.
Saudi bourse gains, Dubai extends losses ahead of U.S. debt-limit talks | Reuters
Saudi Arabia's benchmark index rose on Tuesday, while the Dubai bourse fell and was on course to extend losses for a fourth session as traders assessed lower oil prices and concerns over the U.S. government's debt-ceiling negotiations.
Oil futures traded sideways after mostly weaker-than-expected data from China muddied the outlook for demand from the world's top crude importer while U.S. plans to refill its Strategic Petroleum Reserve (SPR) underpinned prices.
However, an 18.9% rise in China's oil refinery throughput in April to the second highest on record helped keep a floor under crude prices.
Saudi Arabia's benchmark index (.TASI) gained 0.6%, with Dr Sulaiman Al-Habib Medical Services (4013.SE) rising 1.7% and Al Rajhi Bank (1120.SE) adding 0.8%.
Saudi Pharmaceutical Industries and Medical Appliances Corp (2070.SE) jumped almost 10% following a surge in first-quarter earnings.
Dubai's main share index (.DFMGI) dropped 0.4%, hit by a 1.3% fall in blue-chip developer Emaar Properties (EMAR.DU) and a 1.6% decline in Dubai Electricity and Water Authority (DEWAA.DU).
In Abu Dhabi, the index was down 0.2%.
U.S. President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy on Monday prepared for critical debt-ceiling talks, with a little more than two weeks to go before the U.S. government could run short of money to pay its bills.
A first-ever U.S. default would plunge the country into recession and inject chaos into global financial markets, economists said, and the standoff has started to worry investors and consumers.
The Qatari benchmark (.QSI) edged 0.1% higher in a choppy trade, with Islamic lender Masraf Al Rayan (MARK.QA) climbing 0.8%.
