Saudi wealth fund PIF first to test bond markets since Israel conflict escalation | Reuters
Saudi Arabia's sovereign wealth fund started taking orders for its debut dual-tranche Islamic dollar bond on Wednesday, in the first major test for Middle East markets since the sharp escalation of the Israel-Hamas conflict.
The Saudi Public Investment Fund (PIF) gave initial price guidance for the bonds of 150 basis points over U.S. Treasuries for its five-year tranche and 170 bps over the same benchmark for the 10-year tranche, banking documents showed.
PIF's Islamic bonds drew over $20 billion in demand, excluding interest from lead managers, a separate bank document showed.
"They’re looking pretty attractive from an investor’s point of view. For PIF, they probably are looking at higher costs given the current conditions," a fixed-income analyst said, taking into account that final pricing is often less generous.
Mideast Stocks: Gulf stocks fall as Gaza hospital blast heightens fears of wider conflict
Stock markets in the Gulf ended lower on Wednesday as tensions escalated in the region following a Gaza hospital explosion, sparking fears of a widening Middle East conflict.
Hundreds of Palestinians were killed in the blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other and that prompted protests across the Middle East. Jordan's foreign minister, Ayman Safadi, cancelled a summit his country was to host in Amman with U.S. President Joe Biden and the Egyptian and Palestinian leaders.
Saudi Arabia's benchmark index dropped 0.2%, with Saudi Telecom Company losing 2.4%, while Sahara International Petrochemical Co tumbled 6.7%. The petrochemical maker reported a quarterly net profit of 233.1 million riyals ($62.15 million), down from 774.4 million riyals year ago.
Dubai's main share index declined 1.4%, falling for a fifth consecutive session, dragged down by a 3.5% slide in Emaar Properties and a 2.5% decline in top lender Emirates NBD.
The Dubai bourse recorded another round of price corrections in reaction to the increased geopolitical risks in the Middle East, said Milad Azar, Market Analyst at XTB MENA. "However, caution could dominate and the main index could continue to see downside risks."
In Abu Dhabi, the index retreated 0.7%. Oil prices - which support the Gulf region's economy - traded at around two-week highs, driven by concerns over the Middle East and data showing a fall in crude stocks. OPEC+ is not planning to take any immediate action after Iran's foreign minister called on OPEC to impose an oil embargo and other sanctions on Israel, Reuters reported on Wednesday, citing two sources from the producer group. The Qatari benchmark finished 0.8% lower, hit by a 2.7% fall in Qatar Islamic Bank.
Outside the Gulf, Egyt's blue-chip index edged up 0.2% to close at a record high, helped by 2.6% gain in E-finance For Digital and Financial Investments.
ChatGPT Creator OpenAI Partners With Abu Dhabi’s G42 in Middle East AI Push - Bloomberg
OpenAI, the creator of ChatGPT, is teaming up with Abu Dhabi’s leading artificial intelligence firm as part of an expansion within the United Arab Emirates and the broader region.
The partnership with G42, which is chaired by the UAE’s influential national security adviser Sheikh Tahnoon bin Zayed Al Nahyan, will focus on delivering OpenAI’s generative AI models across sectors spanning financial services to energy and healthcare.
“Leveraging G42’s industry expertise, we aim to empower businesses and communities with effective solutions that resonate with the nuances of the region,” said Sam Altman, co-founder and chief executive officer of San Francisco-based OpenAI.
The partnership is a “convergence of value and vision,” G42 CEO Peng Xiao said. The companies didn’t disclose financial details of their collaboration.
The Abu Dhabi firm has been at the forefront of the UAE’s push into AI. It’s partnering with Cerebras Systems Inc., which recently built the first of nine AI supercomputers as an alternative to systems using Nvidia Corp. technology. Last year, G42 also set up the multi-billion dollar 42XFund to invest in tech companies across emerging markets.
Middle East Bonds Fall as War Heaps Pressure on Emerging Markets - Bloomberg
Emerging markets stayed under heavy pressure Wednesday, as soaring oil prices and the conflict in the Middle East overshadowed any optimism generated by forecast-beating Chinese growth data.
Dollar bonds issued by Middle Eastern sovereigns were among the worst performers, with Dubai’s notes maturing in 2043 sliding 3 cents on the dollar to 84.3, the lowest in 11 months. Saudi and Bahraini dollar issues also slid further, down more than a cent so far this week.
Israel’s bonds due 2043 slid for a fifth consecutive day.
US crude futures rose 3% to $93 a barrel after a massive bombing at a Gaza City hospital killed at least 500 people and led to Israel and Hamas trading blame for the attack, just as US President Joe Biden arrived in Israel. Oil jumped again after the Iranian Foreign Minister called for a boycott against Israel.
“Oil prices will surge further, impacting the global economy and investors, if US President Joe Biden fails to cool rising tensions in the Middle East during his visit to the region,” said Nigel Green, chief executive officer of deVere Group. “Developing economies are particularly vulnerable to oil price spikes.”
MSCI Inc.’s gauge of emerging-market stocks fell 0.7%.
Oil spikes as Middle East strife heightens supply concerns | Reuters
Global oil benchmark Brent hit $93 a barrel on Wednesday as the risk of escalating conflict in the Middle East threatened to disrupt oil supplies from the region, with Iran calling for an oil embargo to be imposed on Israel.
Brent crude futures were up $1.33, or about 1.5%, to $91.23 a barrel at 1231 GMT. West Texas Intermediate crude (WTI) futures were up $1.28, or roughly 1.5%, at $87.94 a barrel.
Both benchmarks gained more than $3 to touch their highest levels in two weeks earlier in the session.
Markets factored in risk premiums after hundreds of Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.
QatarEnergy, Shell agree 27-year LNG supply | Reuters
Qatar has further expanded its long-term gas supply to Europe, reaching a supply deal with the Netherlands to provide 3.5 million metric tons of liquefied natural gas (LNG) a year for 27 years.
Two LNG sale and purchase agreements were signed between affiliates of QatarEnergy and Shell (SHEL.L), QatarEnergy said on Wednesday, in a deal that mirrors one reached with TotalEnergies last week.
Qatari LNG from the massive North Field LNG production expansion project will be delivered to Gate LNG terminal at the Port of Rotterdam beginning in 2026.
"The LNG volumes will be sourced from the two joint ventures between QatarEnergy and Shell that hold interests in Qatar's North Field East (NFE) and North Field South (NFS) expansion projects," QatarEnergy said in a statement.
Shell holds a 6.25% stake in the North Field East project and a 9.375% share in the North Field South project.
Most Gulf markets fall after Gaza hospital strike | Reuters
Most major stock markets in the Gulf fell in early trade on Wednesday as tension escalated in the region after a strike on a Gaza hospital killed hundreds of Palestinians, sparking fears of a widening Middle East conflict .
The strike on the Gaza hospital has raised the stakes for U.S. President Joe Biden as he flies to Israel on Wednesday to signal support for its war against Hamas.
Jordan has cancelled a summit it was to host in Amman on Wednesday with Biden and the Egyptian and Palestinian leaders to discuss Gaza.
Russia and the United Arab Emirates have requested an urgent meeting of the United Nations Security Council on Oct. 18 after the strike on a hospital in Gaza City, Russia's Deputy U.N. Ambassador Dmitry Polyanskiy said.
Saudi Arabia's benchmark index (.TASI) eased 0.1%, weighed down by a 4.9% fall in Sahara International Petrochemical Co (2310.SE), after the company reported a sharp fall in quarterly profit.
Separately, the kingdom's sovereign wealth fund started taking orders for its debut dual-tranche Islamic bond sale, a document showed on Wednesday, the first high-profile debt issue from the region since last week's Israel-Hamas conflict unsettled regional markets.
Dubai's main share index (.DFMGI) declined 1.1%, with blue-chip developer Emaar Properties (EMAR.DU) down 2.4% and a 1.9% decline in toll operator Salik (SALIK.DU).
In Abu Dhabi, the index (.FTFADGI) was down 0.5%.
The Qatari benchmark (.QSI) fell 0.4%, hit by a 1% fall in Qatar Islamic Bank (QISB.QA) and a 0.7% decrease in petrochemical maker Industries Qatar (IQCD.QA).
Qatar's foreign ministry issued a statement on Tuesday strongly condemning an Israeli air strike on a hospital in Gaza that killed hundreds of civilians.
