Spain to buy 10% share in Telefónica in response to #Saudi stakebuilding

Spain to buy 10% share in Telefónica in response to Saudi stakebuilding

Spain is to buy a stake of up to 10 per cent in Telefónica in a bold response to a move by Saudi Arabia’s STC Group to acquire 9.9 per cent of the telecommunications company. 

Spain’s decision raises the intensity of a battle for influence at Telefónica, a national champion with businesses in security and defence. It has been targeted by STC — majority-owned by Riyadh’s sovereign wealth fund — as the Saudi group seeks to expand its investments in Europe. 

The Spanish cabinet issued the order for the stake to be acquired with the aim of giving Telefónica “shareholding stability”, according to a filing made by the government holding company that will buy the shares. The stake would be worth about €2.1bn at today’s valuation.

Nadia Calviño, Spain’s outgoing deputy prime minister, said on Tuesday that the move was “in line with other large European countries, such as France and Germany, which have and are increasing their shareholdings in big and strategic telecommunications operators”. She did not comment on STC. 

Spain’s move came more than three months after STC shocked the Spanish establishment by announcing that it had spent €2.1bn in acquiring a 4.9 per cent stake in Telefónica and derivatives that gave it an economic interest in a further 5 per cent.

Most Gulf markets gain as oil steadies; Egypt falls | Reuters

Most Gulf markets gain as oil steadies; Egypt falls | Reuters

Most stock markets in the Gulf reversed early losses to close higher on Tuesday as oil prices steadied, although the gains were limited following cautious comments from the U.S. Federal Reserve officials.

Oil - a catalyst for the Gulf's financial markets - steadied as investors considered the potential impact of maritime trade disruptions in the Red Sea after attacks by Yemen's Iran-aligned Houthi militants.

The United States on Tuesday announced the creation of a multinational operation to safeguard Red Sea commerce. The United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain are among the nations involved.

Saudi Arabia's benchmark index (.TASI) added 0.3%, helped by a 1.6% rise in the shares of auto rental firm Lumi (4262.SE).

In Abu Dhabi, the index (.FTFADGI) was up 0.2%.

Dubai's main share index (.DFMGI) finished 0.2% higher, pushed by a 1.1% gain in blue-chip developer Emaar Properties' (EMAR.DU) stock.

Investor expectations for U.S. interest rate cuts took a step backwards after Fed officials, including Chicago Fed President Austan Goolsbee and Federal Reserve Bank of New York President John Williams, said they did not see rate cuts coming any time soon.

The Qatari benchmark (.QSI), which traded after a two-session break, ended 2.2% higher, with most of its constituents in positive territory, including Qatar Islamic Bank (QISB.QA), which was up 3.3%.

Outside the Gulf, Egypt's blue-chip index (.EGX30) retreated 1%, weighed down by a 2.5% fall in Commercial International Bank (COMI.CA).

Abdel Fattah al-Sisi swept on Monday to a third term as Egypt's president in an election where he faced no serious challengers, calling the vote a rejection of the "inhumane war" in neighbouring Gaza.

** Kuwait bourse was closed

#AbuDhabi's Bayanat and Yahsat agree potential $4 bln merger | Reuters

Abu Dhabi's Bayanat and Yahsat agree potential $4 bln merger | Reuters

Abu Dhabi satellite operator Yahsat (YAHSAT.AD) and geographic data and analytics provider Bayanat (BAYANAT.AD) have agreed an all-share merger to create the region's first AI-powered space technology company, they said on Tuesday.

The implied valuation of the combined entity is 15 billion dirhams ($4.1 billion) based on Monday's closing share prices, with the proposed deal leaving Bayanat as the legal entity and its shareholders owning about 54% of the merged business and Yahsat shareholders holding the rest.

"This merger will unite two leading home-grown companies to create the MENA region's first AI-powered space technology company," Bayanat Chairman Tareq Al Hosani said in a statement.

The combined business would be a strategic solutions provider to the UAE government and its agencies while expanding globally, he added.

The Yahsat and Bayanat boards have recommended the deal to their shareholders, the companies' jont statement said.

The combined entity would be about 42% owned by G42, 29% by sovereign wealth fund Mubadala Investment Company and 8% by International Holding Company.

G42 and IHC are both part of a sprawling business empire controlled by Sheikh Tahnoun bin Zayed Al Nahyan, one of the most powerful members of Abu Dhabi's royal family.

Houlihan Lokey advised Bayanat and FTI Capital Advisors advised Yahsat.

The merger is subject to regulatory and shareholder approvals and is expected to close in the second half of 2024, the statement said.

Most major Gulf bourses ease on volatile oil | Reuters

Most major Gulf bourses ease on volatile oil | Reuters

Major stock markets in the Gulf fell in early trade on Tuesday on volatile oil prices, while the global rally in anticipation of U.S. rate cuts began to run out of puff.

Oil prices - a catalyst for the Gulf's financial markets - were little changed as investors eyed the impact on oil supply after attacks on ships in the Red Sea by Yemen's Iran-aligned Houthi militants disrupted maritime trade and forced companies to reroute vessels.

Saudi Arabia's benchmark index (.TASI) fell 0.2%, hit by a 2.1% slide in Etihad Atheeb Telecommunication (7040.SE) and a 0.6% decrease in Al Rajhi Bank (1120.SE).

However, oil behemoth Saudi Aramco (2222.SE) edged 0.2% higher.

The kingdom's crude oil exports in October hit their highest level in four months, data from the Joint Organizations Data Initiative (JODI) showed on Monday.

Dubai's main share index (.DFMGI) dropped 0.3%, with blue-chip developer Emaar Properties (EMAR.DU) losing 0.5% and toll operator Salik Co (SALIK.DU) retreating 0.6%.

Oil major BP (BP.L) temporarily paused all transits through the Red Sea and oil tanker group Frontline (FRO.OL) said on Monday its vessels would avoid passage through the waterway, signs the crisis was broadening to include energy shipments.

About 15% of world shipping traffic transits via the Suez Canal, which connects the Red Sea to the Mediterranean Sea, offering the shortest shipping route between Europe and Asia.

In Abu Dhabi, the index (.FTFADGI) eased 0.1%.

The Qatari benchmark (.QSI), which traded after a two session break, advanced 2.1%, as most of its constituents were in positive territory including petrochemical maker Industries Qatar (IQCD.QA), which gained 3%.