Boeing (BA) To Apply for a License to Establish Saudi Arabia Headquarters - Bloomberg
Boeing Co. applied for a license to establish its Middle Eastern headquarters in Riyadh as the Saudi government increasingly pressures businesses to boost their local presence.
The US commercial aircraft manufacturer lodged its formal application “a few days ago” and is working with the Ministry of Investment for approval, Asaad Aljomoai, president of Boeing Saudi Arabia, said at the World Defense Show in Riyadh.
Global firms had until Jan. 1 to shift regional headquarters to Saudi Arabia from other parts of the Middle East or risk being cut off from contracts with the government and missing out on lucrative deals with the kingdom.
It’s unclear how officials are going about enforcing the new rules since the deadline passed or whether the government has started limiting contracts for those not in compliance. Companies that have received licenses for a regional hub in Saudi Arabia in recent months include Airbus SE, Oracle Corp. and Pfizer Inc.
Tuesday, 6 February 2024
#Bahrain to Enter Eurobond (EUR BHD) Market With First Deal Since August - Bloomberg
Bahrain to Enter Eurobond (EUR BHD) Market With First Deal Since August - Bloomberg
Bahrain’s sale of $2 billion of debt was met by strong investor demand, allowing the country to tighten the pricing.
Pricing on a seven-year Islamic notes has decreased to 6% from the initial talk for the profit rate of around 6.625%, according to a person familiar with the matter. It’s also issuing 12-year conventional debt with final yield 7.5% versus guidance in range of 7.625%-7.75% down from around 8%. The size of each tranche is fixed at $1 billion.
The $14 billion orderbooks, which exclude joint lead manages interest, are skewed to the Islamic bond, the person said. Pricing is expected later on Tuesday.
Bahrain is following the likes of Mexico, Brazil and neighboring Saudi Arabia, which issued a $12 billion bond last month, taking advantage of a drop in US yields since October and to help fund fiscal deficits.
Bahrain’s sale of $2 billion of debt was met by strong investor demand, allowing the country to tighten the pricing.
Pricing on a seven-year Islamic notes has decreased to 6% from the initial talk for the profit rate of around 6.625%, according to a person familiar with the matter. It’s also issuing 12-year conventional debt with final yield 7.5% versus guidance in range of 7.625%-7.75% down from around 8%. The size of each tranche is fixed at $1 billion.
The $14 billion orderbooks, which exclude joint lead manages interest, are skewed to the Islamic bond, the person said. Pricing is expected later on Tuesday.
Bahrain is following the likes of Mexico, Brazil and neighboring Saudi Arabia, which issued a $12 billion bond last month, taking advantage of a drop in US yields since October and to help fund fiscal deficits.
Mideast Stocks: Most Gulf markets fall on geopolitical tensions; #Saudi gains
Mideast Stocks: Most Gulf markets fall on geopolitical tensions; Saudi gains
Most stock markets in the Gulf ended lower on Tuesday amid rising tensions in the region, although the Saudi index reversed early losses to finish higher.
Most stock markets in the Gulf ended lower on Tuesday amid rising tensions in the region, although the Saudi index reversed early losses to finish higher.
Israeli forces killed at least 14 Palestinians in airstrikes as they pressed their onslaught in Gaza's main southern city Khan Younis on Tuesday, while the top U.S. diplomat pursued a quest to broker a ceasefire in the four-month-old war.
The United States continued its campaign against Iran-backed Houthis in Yemen, whose attacks on shipping vessels have disrupted global oil trading routes.
The United States continued its campaign against Iran-backed Houthis in Yemen, whose attacks on shipping vessels have disrupted global oil trading routes.
Dubai's main share index declined 1.8%, dragged down by a 4.4% slide in Emirates Central Cooling Systems and a 9.9% decline in Gulf Navigation Holding.
The Dubai stock market recorded a stronger decline compared to other markets in the region, affected by the concerns around geopolitical tensions in particular as the market remained on an uptrend overall, said Joseph Dahrieh, Managing Principal at Tickmill.
The Dubai stock market recorded a stronger decline compared to other markets in the region, affected by the concerns around geopolitical tensions in particular as the market remained on an uptrend overall, said Joseph Dahrieh, Managing Principal at Tickmill.
"The market could remain exposed to the downside if tensions in the region flare up, although solid local fundamentals could help the market climb otherwise," Dahrieh added.
In Abu Dhabi, the index dropped 1%, hit by a 1% fall in the country's biggest lender First Abu Dhabi Bank .
In Abu Dhabi, the index dropped 1%, hit by a 1% fall in the country's biggest lender First Abu Dhabi Bank .
Saudi Arabia's benchmark index gained 0.4%, helped by a 1.8% rise in oil giant Saudi Aramco and a 3.4% increase in Dr Sulaiman Al Habib Medical Services Group.
Oil prices - a catalyst for the Gulf's financial markets - held broadly steady as investors waited to see whether a Middle East trip by top U.S. diplomat Antony Blinken will bring a halt to the Gaza war, which has raised concerns about supplies from the major producing region.
Outside the Gulf, Egypt's blue-chip index concluded 1.4% higher, weighed down by a 5% decline in top lender Commercial International Bank.
Oil prices - a catalyst for the Gulf's financial markets - held broadly steady as investors waited to see whether a Middle East trip by top U.S. diplomat Antony Blinken will bring a halt to the Gaza war, which has raised concerns about supplies from the major producing region.
Outside the Gulf, Egypt's blue-chip index concluded 1.4% higher, weighed down by a 5% decline in top lender Commercial International Bank.
Non-oil private sector activity in Egypt shrank for a 38th month in January as inflation pressure and the conflict in Gaza continued to weigh on demand, a survey showed on Monday.
Aldar to invest $1.4 bln to build commercial, hospitality properties in #AbuDhabi | Reuters
Aldar to invest $1.4 bln to build commercial, hospitality properties in Abu Dhabi | Reuters
The new properties, including a 12-storey office tower on Yas Island, a business park on Saadiyat Island, and a second commercial tower on Al Maryah Island, will be completed in phases between 2025 and 2027.
Upon completion, they will be part of the Aldar Investment Properties' portfolio, which counts U.S. private equity firm Apollo as a minority shareholder, the company said.
Abu Dhabi's biggest developer Aldar Properties said on Tuesday it will invest 5 billion dirhams ($1.36 billion) to build new office, retail and hospitality facilities in the state by 2027.
The properties will be located in Al Maryah Island, Abu Dhabi's financial district, as well as in Yas Island and Saadiyat Island, to address "strong corporate demand for Grade A office space," Aldar said in a bourse statement.
Shares in the developer were up about 2% by around 0730 GMT, outperforming a 0.5% rise in Abu Dhabi's main index (.FTFADGI).
Shares in the developer were up about 2% by around 0730 GMT, outperforming a 0.5% rise in Abu Dhabi's main index (.FTFADGI).
The new properties, including a 12-storey office tower on Yas Island, a business park on Saadiyat Island, and a second commercial tower on Al Maryah Island, will be completed in phases between 2025 and 2027.
Upon completion, they will be part of the Aldar Investment Properties' portfolio, which counts U.S. private equity firm Apollo as a minority shareholder, the company said.
#SaudiArabia Oil Needs Go Up as Fitch Says Budget Balances at Over $90 - Bloomberg
Saudi Arabia Oil Needs Go Up as Fitch Says Budget Balances at Over $90 - Bloomberg
Saudi Arabia will need oil prices to average more than $90 a barrel this year to balance its budget, according to Fitch Ratings, which affirmed the kingdom at the fifth-highest investment grade but warned over its reliance on energy.
The government’s fiscal breakeven price “has risen in recent years and we forecast it will remain above $90 per barrel in 2024 before falling to $85 per barrel in 2025,” Fitch analysts including Toby Iles said in a report Monday,
Saudi Arabia’s dependence on energy prices remains a weakness to its overall creditworthiness, they said. Still, the company left Saudi Arabia’s sovereign rating at A+, keeping its outlook stable.
Fitch’s breakeven estimate is far higher than the International Monetary Fund’s forecast of slightly less than $80 for this year, according to its October regional outlook. If counting domestic spending by the kingdom’s wealth fund, Saudi Arabia requires oil at $108, according to Bloomberg Economics.
The assessment explains why the world’s largest oil exporter is having to maintain curbs on its crude output, an approach that’s sacrificed sales volumes for what’s so far been a minimal reward in terms of higher prices. Global benchmark Brent crude hasn’t been at $90 since last October and traded at just over $77 in London on Monday.
Saudi Arabia will need oil prices to average more than $90 a barrel this year to balance its budget, according to Fitch Ratings, which affirmed the kingdom at the fifth-highest investment grade but warned over its reliance on energy.
The government’s fiscal breakeven price “has risen in recent years and we forecast it will remain above $90 per barrel in 2024 before falling to $85 per barrel in 2025,” Fitch analysts including Toby Iles said in a report Monday,
Saudi Arabia’s dependence on energy prices remains a weakness to its overall creditworthiness, they said. Still, the company left Saudi Arabia’s sovereign rating at A+, keeping its outlook stable.
Fitch’s breakeven estimate is far higher than the International Monetary Fund’s forecast of slightly less than $80 for this year, according to its October regional outlook. If counting domestic spending by the kingdom’s wealth fund, Saudi Arabia requires oil at $108, according to Bloomberg Economics.
The assessment explains why the world’s largest oil exporter is having to maintain curbs on its crude output, an approach that’s sacrificed sales volumes for what’s so far been a minimal reward in terms of higher prices. Global benchmark Brent crude hasn’t been at $90 since last October and traded at just over $77 in London on Monday.
India Energy Week: #Qatar Targets Major LNG Growth Market India With Sales Blitz - Bloomberg
India Energy Week: Qatar Targets Major LNG Growth Market India With Sales Blitz - Bloomberg
Qatar is pushing to sell more liquefied natural gas to India, where imports of the super-chilled fuel are expected to double by the end of the decade.
The Persian Gulf producer will hold high-level talks with Gail India Ltd. and Indian Oil Corp. during India Energy Week in Goa, according to traders with knowledge of the discussions.
Qatar will also extend a long-term supply contract with Petronet LNG Ltd., set to expire in 2028, on Tuesday, said officials aware of the development. The renewal will be for 7.5 million tons of LNG a year and will have Qatar cover shipping costs, a term not included in the current contract, they said.
Indian buyers are demanding rates that are below previous deals that Qatar has signed in the last few years, the traders said. Saad Sherida Al-Kaabi, Qatar’s energy minister, is scheduled to attend negotiations for contracts that could last decades, they said.
Qatar, the world’s third-biggest LNG exporter, and India are under pressure to sign long-term deals. The Middle Eastern nation’s massive gas expansion project — which will lift exports by about two-thirds through 2027 — is in need of customers, with only about half sold so far, according to BloombergNEF.
Qatar is pushing to sell more liquefied natural gas to India, where imports of the super-chilled fuel are expected to double by the end of the decade.
The Persian Gulf producer will hold high-level talks with Gail India Ltd. and Indian Oil Corp. during India Energy Week in Goa, according to traders with knowledge of the discussions.
Qatar will also extend a long-term supply contract with Petronet LNG Ltd., set to expire in 2028, on Tuesday, said officials aware of the development. The renewal will be for 7.5 million tons of LNG a year and will have Qatar cover shipping costs, a term not included in the current contract, they said.
Indian buyers are demanding rates that are below previous deals that Qatar has signed in the last few years, the traders said. Saad Sherida Al-Kaabi, Qatar’s energy minister, is scheduled to attend negotiations for contracts that could last decades, they said.
Qatar, the world’s third-biggest LNG exporter, and India are under pressure to sign long-term deals. The Middle Eastern nation’s massive gas expansion project — which will lift exports by about two-thirds through 2027 — is in need of customers, with only about half sold so far, according to BloombergNEF.
LuLu Seeks Pitches for $1 Billion IPO in Second Half of 2024 - Bloomberg
LuLu Seeks Pitches for $1 Billion IPO in Second Half of 2024 - Bloomberg
LuLu Group International, which operates one of the Middle East’s largest hypermarket chains, has invited banks to pitch for roles on a potential initial public offering that could raise at least $1 billion, people familiar with the matter said.
The conglomerate is considering plans for a dual listing in Riyadh and Abu Dhabi, the people said, asking not to be identified discussing confidential information.
The IPO could take place in the second half and would likely involve LuLu’s core business in the Gulf Cooperation Council, though the exact scope of the operations to be included in the listing hasn’t been finalized, they said. A representative for LuLu declined to comment.
Abu Dhabi-based LuLu raised 10 billion dirhams ($2.5 billion) to refinance debt ahead of a possible IPO, Bloomberg News reported in August.
Dual listings are relatively rare in the region. In 2022, Americana Group — the operator of KFC and Pizza Hut restaurants across the Middle East and North Africa — was the first firm to pull off such a deal in Saudi Arabia and the United Arab Emirates.
LuLu was valued at more than $5 billion in 2020 when an investment firm backed by a member of Abu Dhabi’s royal family bought a 20% stake worth just over $1 billion in the group.
Indian entrepreneur Yusuff Ali founded LuLu in the early 1990s during a years-long oil boom in the Gulf region. It had annual revenue of about $8 billion and employs more than 70,000 people, operating in 26 countries across the Middle East, Asia, the US, and Europe, according to its website.
LuLu sought pitches from investment banks about a listing in 2022 before delaying those plans.
LuLu Group International, which operates one of the Middle East’s largest hypermarket chains, has invited banks to pitch for roles on a potential initial public offering that could raise at least $1 billion, people familiar with the matter said.
The conglomerate is considering plans for a dual listing in Riyadh and Abu Dhabi, the people said, asking not to be identified discussing confidential information.
The IPO could take place in the second half and would likely involve LuLu’s core business in the Gulf Cooperation Council, though the exact scope of the operations to be included in the listing hasn’t been finalized, they said. A representative for LuLu declined to comment.
Abu Dhabi-based LuLu raised 10 billion dirhams ($2.5 billion) to refinance debt ahead of a possible IPO, Bloomberg News reported in August.
Dual listings are relatively rare in the region. In 2022, Americana Group — the operator of KFC and Pizza Hut restaurants across the Middle East and North Africa — was the first firm to pull off such a deal in Saudi Arabia and the United Arab Emirates.
LuLu was valued at more than $5 billion in 2020 when an investment firm backed by a member of Abu Dhabi’s royal family bought a 20% stake worth just over $1 billion in the group.
Indian entrepreneur Yusuff Ali founded LuLu in the early 1990s during a years-long oil boom in the Gulf region. It had annual revenue of about $8 billion and employs more than 70,000 people, operating in 26 countries across the Middle East, Asia, the US, and Europe, according to its website.
LuLu sought pitches from investment banks about a listing in 2022 before delaying those plans.
#AbuDhabi Wealth Fund ADIA Considers Stake in Wanda Mall Unit - Bloomberg
Abu Dhabi Wealth Fund ADIA Considers Stake in Wanda Mall Unit - Bloomberg
Abu Dhabi Investment Authority is considering buying a minority stake in Dalian Wanda Group Co.’s mall operator, people familiar with the matter said, as the unit revamps its shareholding structure.
ADIA, as the Abu Dhabi wealth fund is known, has held initial discussions over the potential stake purchase in Zhuhai Wanda Commercial Management Group Co., the people said. ADIA may buy shares from existing holders, said the people, who asked not to be identified as the information is private.
An ADIA investment would come after billionaire Wang Jianlin gave up control in Zhuhai Wanda in December as part of a landmark agreement to avoid repaying pre-IPO investors. Under the terms of the original investments, Wanda agreed to repay investors 30 billion yuan ($4.2 billion) plus interest if Zhuhai Wanda could not get its initial public offering done by the end of 2023.
Private equity firm PAG and other investors hold a combined 60% in Zhuhai Wanda, while Wang holds the remaining 40% via another company. PAG invested about $2.8 billion in Zhuhai Wanda in a 2021 funding round. The mall operator is valued at below 100 billion yuan in the December deal, less than half of what the unit fetched in the fundraising three years ago.
Abu Dhabi Investment Authority is considering buying a minority stake in Dalian Wanda Group Co.’s mall operator, people familiar with the matter said, as the unit revamps its shareholding structure.
ADIA, as the Abu Dhabi wealth fund is known, has held initial discussions over the potential stake purchase in Zhuhai Wanda Commercial Management Group Co., the people said. ADIA may buy shares from existing holders, said the people, who asked not to be identified as the information is private.
An ADIA investment would come after billionaire Wang Jianlin gave up control in Zhuhai Wanda in December as part of a landmark agreement to avoid repaying pre-IPO investors. Under the terms of the original investments, Wanda agreed to repay investors 30 billion yuan ($4.2 billion) plus interest if Zhuhai Wanda could not get its initial public offering done by the end of 2023.
Private equity firm PAG and other investors hold a combined 60% in Zhuhai Wanda, while Wang holds the remaining 40% via another company. PAG invested about $2.8 billion in Zhuhai Wanda in a 2021 funding round. The mall operator is valued at below 100 billion yuan in the December deal, less than half of what the unit fetched in the fundraising three years ago.
Fitch affirms #SaudiArabia 'A+' rating on strong balance sheet, fiscal buffers
Fitch affirms Saudi Arabia 'A+' rating on strong balance sheet, fiscal buffers
Fitch Ratings has affirmed Saudi Arabia’s long-term foreign-currency issuer default rating (IDR) at ‘A+’ with a ‘stable’ outlook.
The ratings reflect the country’s strong fiscal and external balance sheets, with government debt/GDP and sovereign net foreign assets (SNFA) considerably stronger than both the ‘A’ and ‘AA’ medians.
In addition, the Kingdom has significant fiscal buffers in the form of deposits and other public sector assets.
However, oil dependence, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses.
Saudi Arabia has one of the highest reserve coverage ratios among Fitch-rated sovereigns at 16.5 months of current external payments.
Fitch forecasts a budget deficit of 2.3% of GDP in 2024, similar to 2023 and slightly ahead of the 1.9% of GDP budget plan.
“We expect spending 3.5% above budget, at SAR 1.3 trillion on higher capex and procurement. We also assume revenue to be higher than budgeted and higher than in 2023, despite our assumption that average oil production and prices will be lower.”
Revenue will be supported by performance-related dividends from Saudi Aramco. However, the rating agency expects a wider budget deficit of 2.8% of GDP in 2025, given that spending aligns with budget plans, lower oil prices and higher oil production at 10 million barrels per day).
However, oil dependence remains a rating weakness. Oil revenue will account for around 60% of total budget revenue in 2024-2025 (down from 90% 10 years ago) and oil GDP 30% of total nominal GDP.
“Saudi Arabia’s fiscal break-even oil price for the budget has risen in recent years and we forecast it will remain above $90 per barrel in 2024 before falling to $85 per barrel in 2025,” the rating agency said.
Fitch Ratings has affirmed Saudi Arabia’s long-term foreign-currency issuer default rating (IDR) at ‘A+’ with a ‘stable’ outlook.
The ratings reflect the country’s strong fiscal and external balance sheets, with government debt/GDP and sovereign net foreign assets (SNFA) considerably stronger than both the ‘A’ and ‘AA’ medians.
In addition, the Kingdom has significant fiscal buffers in the form of deposits and other public sector assets.
However, oil dependence, low World Bank governance indicators and vulnerability to geopolitical shocks remain relative weaknesses.
Saudi Arabia has one of the highest reserve coverage ratios among Fitch-rated sovereigns at 16.5 months of current external payments.
Fitch forecasts a budget deficit of 2.3% of GDP in 2024, similar to 2023 and slightly ahead of the 1.9% of GDP budget plan.
“We expect spending 3.5% above budget, at SAR 1.3 trillion on higher capex and procurement. We also assume revenue to be higher than budgeted and higher than in 2023, despite our assumption that average oil production and prices will be lower.”
Revenue will be supported by performance-related dividends from Saudi Aramco. However, the rating agency expects a wider budget deficit of 2.8% of GDP in 2025, given that spending aligns with budget plans, lower oil prices and higher oil production at 10 million barrels per day).
However, oil dependence remains a rating weakness. Oil revenue will account for around 60% of total budget revenue in 2024-2025 (down from 90% 10 years ago) and oil GDP 30% of total nominal GDP.
“Saudi Arabia’s fiscal break-even oil price for the budget has risen in recent years and we forecast it will remain above $90 per barrel in 2024 before falling to $85 per barrel in 2025,” the rating agency said.
Mideast Stocks: Major Gulf markets fall in early trade
Mideast Stocks: Major Gulf markets fall in early trade
Major stock markets in the Gulf dropped in early Tuesday trade amid muted moves in oil prices, while investors assessed a visit to the Middle East by U.S. Secretary of State Antony Blinken to discuss a ceasefire offer in the region.
The top U.S. diplomat met Saudi Arabia's de-facto ruler on Monday during the Middle East visit Palestinians hope will clinch a truce before a threatened Israeli assault on Rafah, a border city where about half the Gaza Strip population is sheltering.
Oil prices, a key catalyst for the Gulf's financial markets, were little changed, with Brent trading at $78.16 a barrel by 0730 GMT.
In Abu Dhabi, the benchmark stock index dropped 0.9%, with conglomerate Alpha Dhabi down 2.9% and Multiply Group shedding 3.2%.
Aldar Properties rose 1.2% as the developer said it would spend 5 billion dirhams ($1.4 billion) more to develop a range of income-generating assets across three key destinations in Abu Dhabi.
Dubai's benchmark stock index retreated 0.7%, weighed down by a 10% drop in Gulf Navigation and a 9.8% fall in Ajman Bank.
The Qatari benchmark index was down 0.3%, weighed down by a 1.7% fall in Qatar Gas Transport and a 1.2% drop in Qatar Electricity and Water.
Saudi Arabia's benchmark stock index was down 0.2%, with largest lender Saudi National Bank dropping 1.1% and Banque Saudi Fransi declining 4%.
Major stock markets in the Gulf dropped in early Tuesday trade amid muted moves in oil prices, while investors assessed a visit to the Middle East by U.S. Secretary of State Antony Blinken to discuss a ceasefire offer in the region.
The top U.S. diplomat met Saudi Arabia's de-facto ruler on Monday during the Middle East visit Palestinians hope will clinch a truce before a threatened Israeli assault on Rafah, a border city where about half the Gaza Strip population is sheltering.
Oil prices, a key catalyst for the Gulf's financial markets, were little changed, with Brent trading at $78.16 a barrel by 0730 GMT.
In Abu Dhabi, the benchmark stock index dropped 0.9%, with conglomerate Alpha Dhabi down 2.9% and Multiply Group shedding 3.2%.
Aldar Properties rose 1.2% as the developer said it would spend 5 billion dirhams ($1.4 billion) more to develop a range of income-generating assets across three key destinations in Abu Dhabi.
Dubai's benchmark stock index retreated 0.7%, weighed down by a 10% drop in Gulf Navigation and a 9.8% fall in Ajman Bank.
The Qatari benchmark index was down 0.3%, weighed down by a 1.7% fall in Qatar Gas Transport and a 1.2% drop in Qatar Electricity and Water.
Saudi Arabia's benchmark stock index was down 0.2%, with largest lender Saudi National Bank dropping 1.1% and Banque Saudi Fransi declining 4%.