Israel-Hamas War Impact: IMF Is Downbeat on Mideast With Funding Need at $186 Billion - Bloomberg

Israel-Hamas War Impact: IMF Sees Mideast Funding Needs at $186 Billion - Bloomberg

The International Monetary Fund said shockwaves from the Israel-Hamas war could long reverberate through Middle Eastern economies and have already contributed to a $30 billion rise in their financing needs this year.

Total funding requirements over 2024 now amount to $186 billion for emerging market and middle-income economies in the Middle East and North Africa, according to the IMF, up from $156 billion in 2023. Relative to the fund’s projections in October, that’s an increase equal to about 6 percentage points of their fiscal revenues, which it said is mostly attributable to Egypt and Tunisia.

The burden is growing as a result of “the deterioration in the current-account situation” and reflects spillovers from the war in Gaza, according to Jihad Azour, the IMF director for the Middle East, North Africa and Central Asia. “It’s more that impact than anything else,” he said in interview Wednesday.

#SaudiArabia Eyes Reviving Massive New Aramco Share Sale - Bloomberg

Saudi Arabia Eyes Reviving Massive New Aramco Share Sale - Bloomberg

Saudi Arabia is considering plans to revive a follow-on offering in Aramco as soon as February, in a multibillion-dollar deal that’s likely to rank among the biggest share sales in recent years, according to people familiar with the matter.

The kingdom is working with a group of advisers and is seeking to potentially raise at least 40 billion riyals ($10 billion) from the share sale on the Saudi stock exchange, the people said, asking not to be identified because the information is private. A successful deal would bring in funds for Crown Prince Mohammed bin Salman’s ambitious push to diversify the economy.

Plans for the new sale comes four years after Saudi Arabia raised about $30 billion in Aramco’s initial public offering, which was the world’s largest ever stock sale. MBS, as the crown prince is called, has increased his spending ambitions since as he pumps huge amounts of money into the new development Neom, tourism, sports and other projects.

There’s no final decision on the timing of the sale and the deal could still be delayed. The Saudi government referred requests for comment to Aramco, which declined to comment.

Shares in Aramco fell 2.2% Wednesday in Riyadh, the most since Mar. 15.

Mideast Stocks: Most Gulf markets fall on geopolitical tensions, caution before Fed

Mideast Stocks: Most Gulf markets fall on geopolitical tensions, caution before Fed

Most stock markets in the Gulf closed lower on Wednesday, on escalating geopolitical friction in the region, and as investors remained cautious ahead of U.S. Federal Reserve's decision. Yemen's Iran-aligned Houthi group said on Wednesday it would keep up attacks on U.S. and British warships in the Red Sea in what it called acts of self defence, stoking fears of long-term disruptions to world trade.

The Houthis, who control the most populous parts of Yemen, have been attacking ships in and around the Red Sea, saying they are acting in solidarity with Palestinians in the Gaza war.

Saudi Arabia's benchmark index retreated 1.6%, dragged down by a 4.7% fall in Al Rajhi Bank and a 3.6% decline in the country's biggest lender Saudi National Bank. Among other losers, oil giant Saudi Aramco was down 2.2%. The kingdom is considering reviving plans for a follow-on share offering in Aramco to raise at least 40 billion riyals ($10.67 billion) as early as February, Bloomberg News reported on Wednesday, citing people familiar with the matter.

Saudi Arabia's government on Tuesday ordered Aramco to halt its oil expansion plan and to target a maximum sustained production capacity of 12 million barrels per day (bpd), 1 million bpd below a target announced in 2020. 

In Abu Dhabi, the index eased 0.1%. 

Dubai's main share index gave up early gains to finish flat.

The Qatari benchmark lost 0.2%, hit by a 1.2% retreat in the Gulf's biggest lender Qatar National Bank. Oil prices - a catalyst for the Gulf's financial markets - fell, pressured by lacklustre economic activity in leading crude importer China, but a first monthly gain since September remained in sight as flaring tensions in the Middle East heightened supply concerns.

Outside the Gulf, Egypt's blue-chip index slid 6.8%, retreating from record highs, as all its constituents were in negative territory, including Talaat Mostafa Holding , which was down 15.3%. The International Monetary Fund said on Wednesday it was continuing to engage with Egypt on the policy and financing package that could support moving forward with programme reviews under its $3 billion loan with the country.

#Kuwait Sees Deficit Narrowing 13.5% to $19.1 Billion Next Year - Bloomberg

Kuwait Sees Deficit Narrowing 13.5% to $19.1 Billion Next Year - Bloomberg

Kuwait unveiled budget proposals that forecast a 5.89 billion dinar ($19.1 billion) deficit for the fiscal year starting April 1.

The Gulf nation is projecting revenue of 18.66 billion dinars, down 4.1% from the current year’s estimate, the Ministry of Finance said Tuesday. Non-oil revenue is forecast to rise 5.7% to 2.42 billion dinars.

Projected outlays in 2024-25 are seen at 24.55 billion dinars, down 6.6% on the current year’s budget.

OPEC member Kuwait posted a surplus of 6.4 billion dinars in the 2022-23 fiscal year, ending nine straight years of budget deficits as a boom in oil revenue and more controlled spending delivered a boost for one of the Middle East’s biggest crude producers.

The projected deficit for the next fiscal year is 13.5% lower than that forecast in the current year.

Other Budget Highlights:

• Planned capex accounts for 9.3% of total spending
• Oil calculations are based on a daily production rate of 2.7 million barrels per day; Kuwait’s breakeven point is $90.7/bbl
• Wages and subsidies account for 79.4% of the budget

#SaudiArabia GDP: Economy Shrinks Again After Kingdom’s Oil Cuts - Bloomberg

Saudi Arabia GDP: Economy Shrinks Again After Kingdom’s Oil Cuts - Bloomberg

Saudi Arabia’s economy contracted at a slower pace in the fourth quarter, as the world’s biggest crude exporter extended its oil output cuts in an attempt to push up prices.

Gross domestic product shrank 3.7% compared with a year earlier, after a decline of 4.4% in the previous quarter, according to preliminary data released Wednesday by the kingdom’s statistics agency. For 2023 as a whole, the economy shrank 0.9%, its first full-year drop since the global pandemic.

A slump that started with output reductions remains largely confined to the energy industry, with oil activities dropping by 16% in the fourth quarter. Growth in non-oil activities, the engine of job creation, reached 4.3%.

#Saudi Al Rajhi Bank FY 2023 net profit slips 3% as operating income falls

Saudi Al Rajhi Bank FY 2023 net profit slips 3% as operating income falls

Al Rajhi Bank, Saudi Arabia's second-biggest lender, reported a 3% fall in full-year net profit to 16.62 billion riyals ($4.4 billion), as operating income fell offsetting lower provisioning for expected credit losses.

The net profit was a shade below analysts’ mean estimate of SAR16.2 billion, according to LSEG data.

Net financing and investment income fell by 4.1%, the bank said in a regulatory filing on Riyadh's Tadawul exchange on Wednesday.

Mashreq Bank’s 2023 profits skyrocket 130.5%; operating income hit $2.94bln

Mashreq Bank’s 2023 profits skyrocket 130.5%; operating income hit $2.94bln

Mashreq Bank achieved net profits attributable to the shareholders worth AED 8.58 billion ($2.33 billion) in 2023, up 130.30% from AED 3.72 billion ($1.01 billion) in January-December 2022.

The UAE lender posted operating income amounting to AED 10.80 billion ($2.94 billion) as of 31 December 2023, an annual hike of 47.90% from AED 7.30 billion ($1.98 billion), according to the financial results.

Earnings per share (EPS) reached AED 42.82 ($11.66) last year, higher by 130.30% year-on-year (YoY) than AED 18.59 ($5.06).

Total assets increased by 21.70% YoY to AED 239.98 billion ($65.33 billion) in 2023 from AED 197.24 billion ($53.70 billion). Meanwhile, the customer’s deposits rose by 28.50% YoY to AED 132.60 billion ($36.10 billion) from AED 98.82 billion ($26.90 billion).

#SaudiArabia's Q4 GDP shrinks 3.7% y/y -govt data | Reuters

Saudi Arabia's Q4 GDP shrinks 3.7% y/y -govt data | Reuters

Saudi Arabia's real gross domestic product (GDP) shrunk 3.7% in the fourth quarter, government data showed on Wednesday, marking a second consecutive quarter of contraction, as a decline in oil activities weighed.

The kingdom's GDP shrunk 4.4% in the third quarter of 2023, its first quarterly contraction since the COVID-19 pandemic, hurt by cuts to oil production and lower crude prices.

Saudi Arabia, the world's largest oil exporter, is pumping around 9 million barrels per day (bpd), well below its around 12 million bpd capacity after it cut production as part of an agreement with OPEC and other oil producers.

Major Gulf markets rise in early trade; #Saudi extends loss | Reuters

Major Gulf markets rise in early trade; Saudi extends loss | Reuters

Major stock markets in the Gulf edged higher in early trade on Wednesday, on course to claw back some of its losses from the previous session, although the Saudi index bucked the trend to trade lower.

Saudi Arabia's benchmark index (.TASI) dropped 0.4%, hit by a 2.6% fall in the country's biggest lender Saudi National Bank (1180.SE) and a 1.5% decline in Al Rajhi Bank (1120.SE). The index had fallen more than 2% on Tuesday.

The International Monetary Fund lowered its 2024 forecast for economic growth in Saudi Arabia to 2.7% on Tuesday, projecting a slower recovery amid lower oil production, but said non-oil growth this year was expected to remain "robust".

Saudi Arabia's government on Tuesday ordered state oil company Aramco (2222.SE) to halt its oil expansion plan and to target a maximum sustained production capacity of 12 million barrels per day (bpd), 1 million bpd below a target announced in 2020.

Shares of Aramco were down 0.2%.

Oil prices - a catalyst for the Gulf's financial markets - fell as lacklustre economic activity in China, the world's biggest crude importer, weighed on sentiment, but prices were set for their first monthly gain since September as broadening Middle East conflicts raised supply concerns.

Dubai's main share index (.DFMGI) added 0.2%, helped by a 1.1% rise in blue-chip developer Emaar Properties (EMAR.DU), while Tecom Group (TECOM.DU) advanced 2.2% following a sharp rise in annual profit.

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

The Qatari benchmark (.QSI) gained 0.5%, with Qatar Islamic Bank (QISB.QA) rising 1.1%.

On Tuesday, Hamas said it had received and was studying a new proposal for a ceasefire and release of hostages in Gaza, presented by mediators after talks with Israel, in what appeared to be the most serious peace initiative for months.