Bearish Oil Bets Slide After Saudis Tell Shorts to ‘Watch Out’ - Bloomberg

Bearish Oil Bets Slide After Saudis Tell Shorts to ‘Watch Out’ - Bloomberg

Saudi Arabia’s top energy official told short sellers to “watch out” last week. Traders of global benchmark Brent oil were listening.

Money managers boosted their net-long holdings in Brent by more than 30,000 contracts last week, the biggest increase in almost two months. The move was driven by a pullback in bearish bets and the addition of fresh bullish ones.

 

 

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said at a forum that speculators should “watch out,” echoing previous warnings that those who bet against the oil market will be left “ouching”. The OPEC+ coalition is scheduled to meet June 3-4 to discuss its output policy.

The producer group surprised the market in April by announcing an unexpected round of production cuts, but since then traders had been steadily ramping up fresh bearish bets on oil.

Speculators also slashed bets against Europe’s diesel benchmark — which had one of the largest concentrations of short positions across the oil market — by the most since August 2021.

Mideast Stocks: Most Gulf markets end higher on US debt deal hopes; #Qatar falls

Mideast Stocks: Most Gulf markets end higher on US debt deal hopes; Qatar falls

Most Gulf stock markets ended higher on Tuesday, as investors cheered the prospect of the world's largest economy averting a major debt default.

A weekend deal to lift the $31.4 trillion debt limit announced by the White House and House Republicans would avert a catastrophic U.S. default and boost overall appetite for risk. Dubai's main share index advanced 0.7%, with blue-chip developer Emaar Properties climbing 2.7% and toll-operator Salik Co closing 2% higher. The Abu Dhabi index concluded 0.8% higher. Saudi Arabi's benchmark index ended unchanged.

Oil prices - a key catalyst for the Gulf's financial markets - fell by about 3% as concerns about the U.S. debt ceiling pact cooled the market's risk-on sentiment and mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend.

The Qatari benchmark, however, bucked the trend and fell 0.6%, with most of the stocks on the index ending lower including Masraf Al Rayan, which was down 3%.

The Qatari stock market remained under pressure, while natural gas prices recorded more volatility and could return to the downside, said George Pavel, general manager at Capex.com. "Local stocks were seeing mitigated performances, increasing uncertainty around the market's direction."

Outside the Gulf, Egypt's blue-chip index jumped 1.9%, with top lender Commercial International Bank gaining 1.5%. The Egyptian stock market continued to recover, supported by the buying volumes from local investors while international ones remained on a selling spree, Pavel said.

#Saudi Aramco's $2 Trillion Valuation Is an Illusion - Bloomberg

Saudi Aramco's $2 Trillion Valuation Is an Illusion - Bloomberg

Oil giant Saudi Aramco shares a couple of traits with Apple Inc. and Microsoft Corp.: a market capitalization measured in the trillions of dollars, and a stratospheric price-to-earnings ratio. Unlike those tech behemoths, though, Aramco’s valuation relies more on smoke and mirrors than the market’s collective wisdom.

That matters because the Saudi government, which directly and indirectly still controls 98% of the company’s equity after its 2019 initial public offering, is now mulling whether to sell more shares.

Technically, there’s nothing unreasonable about Aramco’s valuation, currently sitting just above $2 trillion and making it the world’s third-largest publicly traded company. After all, willing buyers and sellers set the price transparently on the stock market. That’s how companies are valued in a capitalist system.

The problem is the quality and breadth of that price discovery. The liquidity in Aramco shares is abysmal: a daily average of just $51 million worth of stock changed hands over the past year, according to data compiled by Bloomberg. Compare that with nearly $2 billion for Exxon Mobil Corp. For Apple and Microsoft, the figures are $11.2 billion and $7.5 billion, respectively.

#SaudiArabia First Milling's IPO Pulls in $18 Billion of Orders - Bloomberg

Saudi Arabia First Milling's IPO Pulls in $18 Billion of Orders - Bloomberg

Saudi Arabia’s First Milling Co. set the price for its initial public offering at the top of the marketed range after being swamped by institutional orders, the latest sign of a revival in the kingdom’s IPO market.

Big investors placed orders worth 68.8 billion riyals ($18 billion), almost 69 times more than was available to them, according to a statement.

At a price of 60 riyals a share, the IPO will raise raise 999 million riyals for selling shareholders, valuing the company at 3.33 billion riyals. First Milling will take orders from retail buyers from June 6 to June 7.

The IPO is set to be the second biggest in Saudi Arabia this year, after generic drugmaker Jamjoom Pharmaceuticals Factory Co.’s $336 million offering. That deal also priced at the top of the range last week and got institutional investor orders for 67 times the shares on offer.

Saudi IPOs are returning to life after their slowest start since 2014 amid concerns over falling oil prices and a global economic slowdown. The benchmark Tadawul All Share Index has rebounded about 12% from a March low, helping boost investor sentiment.

Just $72 million worth of IPOs have started trading in the kingdom so far this year, a sharp drop from the almost $4 billion seen a year ago, according to data compiled by Bloomberg.

SNB Capital is acting as financial advisor, lead manager and bookrunner on First Milling’s IPO. SNB Capital and GIB Capital are the underwriters.

#Saudi crown prince turns to ‘state capitalism’ after change in the guard | Financial Times

Saudi crown prince turns to ‘state capitalism’ after change in the guard | Financial Times

As Saudi Arabia enjoyed an unprecedented oil boom in the 1970s, the monarchy turned to a handful of merchant family companies to build the nation’s infrastructure. 

But almost 50 years and another oil windfall later, many have been sidelined by a rising cadre of businesses that have one thing in common: the state Public Investment Fund has taken a stake in each. 

The growing dominance of the $650bn sovereign wealth fund, chaired by Crown Prince Mohammed bin Salman, underscores the extent to which the country’s day-to-day ruler has upended the old order as he robustly asserts his control over the economy and seeks to diversify it away from oil revenues. 

“There’s definitely a change in the guard,” said Monica Malik, chief economist at the Abu Dhabi Commercial Bank and author of a book on the Saudi private sector. “Development is being driven by government-led entities, it’s very much more a centralised and public sector-led growth.”

Boards of Sohar International, HSBC Bank #Oman agree merger deal

Boards of Sohar International, HSBC Bank Oman agree merger deal

The boards of directors of Oman's Sohar International Bank and HSBC Bank Oman have approved their proposed merger on the terms and conditions approved in November 2022.

In separate statements to the Muscat Stock Exchange on Tuesday, the lenders said they will both continue to function as independent entities until the merger is completed. They have also each approved calling for an extraordinary general meeting of shareholders to consider the deal.

The merger is subject to regulatory approval, they added.

In November they agreed that HSBC Oman will be dissolved, and its shares cancelled. Its shareholders will be offered a consideration valuing HSBC Oman at 1.0X book value, and either Sohar International shares or a consideration in cash, not exceeding 70% of the total consideration.

Sohar shares that form a part of the consideration to HSBC Oman will be valued at 1.0X book value, which will be calculated for both lenders later.

Olam Group Faces Delay in IPO of Agri Unit in #SaudiArabia - Bloomberg

Olam Group Faces Delay in IPO of Agri Unit in Saudi Arabia - Bloomberg

Olam Group’s shares sank more than 7% after the agricultural commodities trader said the listing of its unit in Saudi Arabia won’t be completed in the first half of the year as planned.

The company hasn’t received all the regulatory approvals needed for its concurrent dual listing of Olam Agri in Saudi Arabia and Singapore, Olam said in a statement. It will continue to pursue the initial public offering of Olam Agri in the next practical window, it said.

Olam’s shares dropped as much as 7.5% in Singapore to S$1.35, the biggest loss since March 2022. The stock pared some of those losses but is still set for the lowest close since December.

 

 

The Singapore-based trader announced its IPO plan for Olam Agri in January, saying it would be the first listing of a global company in Saudi Arabia. It was targeting $600 million to $700 million in primary proceeds, and about $300 million to $400 million in secondary proceeds, it said in March.

BRICS Bank to Expand Membership as #SaudiArabia Looks to Join - Bloomberg

BRICS Bank to Expand Membership as Saudi Arabia Looks to Join - Bloomberg

The New Development Bank, the lender created by the BRICS group of nations, will widen its membership as it seeks to boost its capital and counter the influence of Western-dominated multilateral banks.

The lender — formed by Brazil, Russia, India, China and South Africa — will look at increasing the diversity of its members in terms of geography, development stages and on the size of the countries, Dilma Rousseff, the bank’s president, said at its annual meeting in Shanghai on Tuesday.

Saudi Arabia is the latest to discuss joining the bank, the Financial Times has reported, a move that would give the lender more financial muscle. The bank was created in 2014 as a counterweight to the International Monetary Fund and the World Bank.

The bank’s membership is open to any country within the United Nations. Bangladesh and the United Arab Emirates became members in 2021, while Egypt joined in February. Uruguay is a prospective member, according to the NDB’s website.

Canary Wharf Debt Downgrade Is Latest Sign of Real Estate Woes - Bloomberg

Canary Wharf Debt Downgrade Is Latest Sign of Real Estate Woes - Bloomberg

Moody’s has downgraded debt issued by owner of London’s Canary Wharf neighborhood, the latest sign of the difficulties facing real estate globally.

The financial district in the east of the capital, owned by Brookfield Asset Management Inc. and Qatar’s sovereign wealth fund, has more than £1.4 billion of debt coming due in 2024 and 2025. The company would probably be highly reliant on asset sales, and potentially shareholder support, to help it de-leverage and refinance, Moody’s said.

The ratings firm downgraded Canary Wharf Group Investment Holdings Plc to Ba3 from Ba1 previously, according to Tuesday’s statement, citing the “difficult operating and funding environment for real estate companies” that it expects to persist for at least the next year.

The landlord did not immediately reply to a request for comment. Its £300m bond due for repayment in 2028 is currently being quoted at 68.7 pence in the pound.

Major Gulf markets gain as US debt deal spurs optimism | Reuters

Major Gulf markets gain as US debt deal spurs optimism | Reuters

Major stock markets in the Gulf rose in early trade on Tuesday as investors cheered the prospect of the world's largest economy averting a major debt default.

A weekend deal to lift the $31.4 trillion debt limit announced by the White House and House Republicans would avert a catastrophic U.S. default and boost overall appetite for risk.

Saudi Arabia's benchmark index (.TASI) gained 0.6%, with Dr Sulaiman Al-Habib Medical Services (4013.SE) climbing 1.2% and Riyad Bank (1010.SE) advancing 1.5%.

Separately, Saudi Arabia's First Milling Company said on Tuesday it aimed to raise 999 million riyals ($266.39 million) from its initial public offering after it set the share price at the top end of a previously announced range.

The company was the first of several flour milling privatizations in Saudi Arabia, sold to Raha AlSafi consortium for $540 million in 2020.

Dubai's main share index (.DFMGI) added 0.2%, helped by a 2.1% rise in blue-chip developer Emaar Properties (EMAR.DU) and a 1.7% increase in toll-operator Salik Co (SALIK.DU).

In Abu Dhabi, the index (.FTFADGI) rose 0.7%.

The Qatari benchmark (.QSI) edged 0.1% higher in a choppy trade, with Vodafone Qatar (VFQS.QA) adding 0.1%.

Meanwhile, crude - a key catalyst for the Gulf's financial markets - fell, giving up earlier gains as concerns about the viability of the U.S. debt ceiling pact cooled investors' risk-on sentiment and mixed messages from major producers clouded the supply outlook ahead of their meeting this weekend.