S&P Sees Dubai Debt Dropping Due to Economic Growth - Bloomberg
Dubai’s government could see its debt load drop this year, according to S&P Global Ratings, as a booming economy eases the burden that’s still high when the emirate’s non-financial public sector liabilities are taken into account.
Debt repayments that included $2.9 billion in bonds from 2020 to the first quarter of this year and reduced loans from Emirates NBD Bank PJSC will leave the government owing a forecast $66 billion by end-2023 — equivalent to 51% of gross domestic product and down from a “cyclical high” of 78% in 2020, S&P analysts led by Juili Pargaonkar said in a report published Monday.
Should the government continue to reduce nominal debt, the stock could decline quicker, according to S&P. It put broader public sector debt, which counts liabilities from non-financial government-related entities, at about 100% of GDP.
Adnoc Boosts Size of Logistics Unit IPO Amid Strong Demand - Bloomberg
Abu Dhabi’s main energy company boosted the size of its maritime logistics unit’s initial public offering by more than a quarter to as much as $769 million, indicating appetite for Gulf listings remains healthy despite weaker market conditions.
Abu Dhabi National Oil Co. will now sell 1.41 billion shares in Adnoc Logistics & Services, or a 19% stake, up from 1.11 billion previously, according to a statement on Monday. Order books for the IPO were covered minutes after the sale opened last week.
At the top of the 1.99 dirhams ($0.54) to 2.01 dirhams price range, the IPO could raise as much as $769 million. It’s set to be the second-biggest listing in the Middle East so far this year, after the $2.5 billion IPO of Adnoc’s gas business in March.
The subscription period for the retail and professional investor offerings remains unchanged and the final price is expected to be announced on May 25.
Abu Dhabi's Mubadala to buy majority stake in Fortress Investment from SoftBank | Reuters
Abu Dhabi's Mubadala Investment Co will acquire a majority stake in U.S. asset manager Fortress Investment Group from Japan's SoftBank Group Corp (9984.T).
Financial terms of the deal were not disclosed, Mubadala and Fortress Investment said in a joint statement on Monday.
SoftBank, which acquired Fortress in 2017 for $3.3 billion, had been offloading assets to shore up its balance sheet as the value of its tech portfolio falters.
The Japanese tech conglomerate, which posted a $7.18 billion net loss for the year ended March 31, has sold assets including its stake in Chinese e-commerce giant Alibaba Group Holding Ltd (9988.HK).
After the completion of the deal, Fortress' management will own a 30% stake in the company, while Mubadala Capital will hold the rest, according to the statement. Mubadala already owns 10% of Fortress. Fortress management will hold a class of equity that entails it to appoint a majority of seats on the board.
Fortress will appoint Drew McKnight and Joshua Pack as co-CEOs and Pete Briger as chairman, the companies said.
Mideast Stocks: Gulf stock markets end mixed ahead of US debt talks
Gulf stock markets ended mixed on Monday as investors remained cautious ahead of U.S. debt ceiling talks, with UAE indexes closing higher, while Saudi Arabia's benchmark index fell for a second day weighed down in part by volatile energy prices.
U.S. President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling later in the day.
Overall stock markets in the Gulf Cooperation Council (GCC) were seeing some volatility in reaction to local and global developments such as energy prices volatility and weak company earnings in some markets, Daniel Takieddine, CEO MENA at BDSwiss, said.
Saudi Arabia's benchmark stock index fell 0.1%, with healthcare and material stocks leading losses. Saudi Arabian Mining Co (Ma'aden), the largest miner in the Gulf, fell more than 2% after reporting a more than 80% slump in its first-quarter net profit to 419.4 million riyals ($111.84 million) year-on-year. State oil giant and index heavyweight Saudi Aramco was down 0.5%.
Among other stocks, Scientific and Medical Equipment House Co fell more than 4%, its biggest intraday loss in nearly seven months, after posting a 63% year-on-year decline in first-quarter net profit to 6.3 million riyals.
Dubai's main share index edged up 0.1%, following two consecutive sessions of losses, helped by a 2.3% increase in Emirates Central Cooling Systems Corp and a 1.4% gain in Dubai Investments.
In Abu Dhabi, the benchmark index rose 0.5%, boosted by a 5.4% surge in Alpha Dhabi Holding and a 3.7 jump in Emirates Telecommunications Group .
The benchmark stock index in Qatar fell 0.1%, led by losses in its financial and industrial stocks, with Qatar Islamic Bank losing 0.8%, while chemical makers Industries Qatar was down 0.5%.
Outside the Gulf, Egypt's blue-chip index fell 0.6%, with almost all the sectors in negative territory. The country's lone cigarette maker Eastern Co dropped 2.4% and Abu Qir Fertilizers and Chemical Industries fell nearly 2%.
UAE's Majid Al Futtaim picks banks for 10-yr USD green sukuk | Reuters
Emirati retail conglomerate Majid Al Futtaim (MAF) has mandated banks for a possible 10-year benchmark-sized green Islamic bond, an indicative term sheet seen by Reuters on Monday showed.
Proceeds from the sukuk sale will go towards funding or refinancing eligible green projects under the company's green finance framework of 2019.
Benchmark-sized is typically understood to mean at least $500 million.
Citigroup, HSBC and Standard Chartered are joint global coordinators on the deal; they are joined as lead managers by Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank and First Abu Dhabi Bank.
Dubai's debt burden set to decline in 2023 on robust economic growth
S&P Global Ratings expects Dubai's government debt burden as a share of GDP will decline to about 51% of GDP in 2023 from a cyclical high of 78% in 2020 amid robust economic growth.
In a report issued on Monday titled, “Dubai's Debt Reduction Strengthens Government Balance Sheet”, the ratings agency said the government's debt stock could fall even faster if the reduction in nominal debt, which occurred in 2021 and to a more significant extent in 2022, continues over the coming years.
"Nevertheless, broader public sector debt will remain high at about 100% of GDP, when considering liabilities from nonfinancial government-related entities (GREs) of about 48% of GDP," analysts Juili Pargaonkar and others wrote in the report.
This year, S&P expects Dubai's real GDP to expand about 3%, slowing from an estimated 5.0% in 2022 and 6.2% in 2021.
"In our view, this year will be more reflective of regular economic activity in the emirate compared with the post-pandemic recovery years. We expect continued strong momentum in the hospitality, real estate, trade, and financial services sectors to support growth."
Moreover, local and UAE-wide structural and social reforms and programs should support longer-term growth.
Abu Dhabi identifies $2 billion in investment opportunities in South Korea | Reuters
Abu Dhabi organisations have identified about $2 billion of investment opportunities in South Korea after the two sides agreed to expand business ties in January, a joint statement said on Monday.
The United Arab Emirates (UAE) pledged during South Korean President Yoon Suk Yeol's visit to Abu Dhabi in January to invest up to $30 billion in the Asian country in sectors including energy and information technology.
"To date, Abu Dhabi organisations have helped identify approximately $2 billion of potential investment opportunities in Korea," read the statement on Monday from Korea Development Bank and Mubadala Investment Company.
It did not elaborate on the potential investments.
The two agencies have been exploring follow-up investment since the summit.
Most Gulf markets rise; Saudi extends losses as oil prices slump | Reuters
Most major Gulf stock markets opened higher on Monday, while Saudi Arabia's benchmark index extended its losses as lower oil prices and concerns over U.S. debt ceiling negotiations dampened investor sentiment.
Oil prices — a key catalyst for Gulf's financial markets — slipped on Monday as concerns about demand recovery in China offset support from lower supplies from Canada and OPEC+ producers, with Brent crude futures falling 73 cents, or 0.97%, to $74.85 a barrel by 0634 GMT.
U.S. President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling later in the day, less than two weeks before the June 1 deadline after which Treasury expects the federal government will struggle to pay its debts.
Saudi Arabia's benchmark stock index (.TASI) fell 0.2%, as almost all the sectors slipped, with material and energy stocks leading the losses.
Saudi Arabian Mining Co (Ma'aden) (1211.SE), the largest miner in the Gulf, fell nearly 3% after reporting over 80% slump in its first-quarter net profit to 419.4 million riyals ($111.84 million) year-on-year.
The state oil giant and index heavyweight Saudi Aramco (2222.SE) was down 0.3%.
Dubai's main share index (.DFMGI) edged 0.1% higher, following two consecutive sessions of losses, supported by a 1.7% rise in Emirates Central Cooling Systems Corporation (EMPOWER.DU) and a 0.4% gain in Dubai's largest lender Emirates NBD Bank (ENBD.DU).
In Abu Dhabi, the benchmark index (.FTFADGI) rose 0.1%, boosted by a 2.1% jump in Alpha Dhabi Holding (ALPHADHABI.AD) and a 0.1% gain in First Abu Dhabi Bank (FAB.AD), UAE's largest lender.
The benchmark stock index (.QSI) in Qatar edged up 0.2%, its second session of gains, as almost all the sectors in the index gained, with Qatar Gas Transport Nakilat (QGTS.QA) climbing 1.1% and heavyweight Commercial Bank (COMB.QA) advancing 0.3%.
.jpg)
