#Saudi Wealth Fund Plans to Buy Binladin Stake Amid Building Boom - Bloomberg

Saudi Wealth Fund Plans to Buy Binladin Stake Amid Building Boom - Bloomberg

Saudi Arabia’s sovereign wealth fund is seeking to acquire a stake in the kingdom’s biggest construction conglomerate as it leans on local firms to build key mega-projects and infrastructure needed to host showcase events such as the World Expo.

The Public Investment Fund is working with Morgan Stanley on a potential deal to buy into Saudi Binladin Group, according to people with knowledge of the matter.

The PIF, as the $700 billion wealth fund is known, is considering acquiring part or all of the 36% stake owned by the ministry of finance, the people said, asking not to be identified because the discussions are private.

Spokespeople for Morgan Stanley and the PIF declined to comment. Representatives for Binladin couldn’t be reached for comment.

A deal with the PIF would come as Binladin seeks to recover from years of losses and reduce a debt pile of billions of dollars. Houlihan Lokey Inc. is advising on the restructuring of the firm and the kingdom is hoping to turn the company into a national champion again capable of building the projects that are key to Crown Prince Mohamed Bin Salman’s ambitious economic reform plans.

Giga-Projects

The PIF is playing an increasingly outsized role to help Saudi Arabia transition away from oil and is overseeing several giga-projects such as the $500 billion futuristic city of Neom, and a luxury tourism development on the the Red Sea. Last year, the PIF spent $1.3 billion to acquire stakes in four local construction companies to bolster the kingdom’s domestic construction industry.

Binladin’s history has been intertwined with the kingdom’s since the country was founded in 1932. The company has played a key role in modernizing the country by building highways, airports and economic freezones, and is also known for its work in the Islamic holy cities of Mecca and Medina.

Binladin could now be key to the kingdom’s plans to host events such as the World Expo exhibition in 2030 and the 2034 FIFA World Cup football, which will require huge infrastructure investments and the help of experienced builders.

Adnoc Said to Proceed in Covestro Talks Before Possible Bump - Bloomberg

Adnoc Said to Proceed in Covestro Talks Before Possible Bump - Bloomberg

Abu Dhabi National Oil Co. is inching toward an improved bid for Covestro AG after finding a potential way to resolve the impasse over its €11.3 billion ($12.1 billion) pursuit of the German chemical maker, people familiar with the matter said.

Adnoc is working with a consulting firm that’s sent dozens of questions to Covestro about the details of its operations, according to the people. The responses could give the Abu Dhabi-based energy giant enough information to improve its bid to slightly more than €60 per share, the people said, asking not to be identified because the information is private.

Shares of Covestro jumped as much as 8.1% in late Frankfurt trading Thursday. They were up 4.8% at 5:35 p.m. in Germany, giving the company a market value of about €9.4 billion.

In December, Adnoc improved its non-binding offer to €60 per share, up from previous proposals of €57 and €55, Bloomberg News has reported. The latest increase wasn’t enough to win over some parts of Covestro’s supervisory board, which thus hasn’t granted Adnoc full access to its data room, the people said.

While Adnoc executives were struggling to justify another bump without access to proper due diligence, Covestro’s responses to the latest questions may help bridge the gap, the people said. It’s still unclear how much Adnoc may be willing to increase its bid and whether it will be enough to win over Covestro.

Deliberations are ongoing, and there’s no certainty they will lead to a deal. Representatives for Adnoc and Covestro declined to comment.

Adnoc has been pursuing Covestro since the middle of last year, part of the Abu Dhabi company’s push to diversify internationally. Its overtures come as the European chemical industry struggles with the region’s anemic growth and a weaker-than-expected rebound in China.

Producers including Lanxess AG and BASF SE warned of disappointing earnings last year. Covestro will announce its full-year results on Feb. 29, when investors also expect it to provide an outlook for the current year and beyond.

Covestro indicated in November it’s on track to generate about €1.4 billion in earnings before interest, taxes, depreciation and amortization in 2024, well below the €2.8 billion it said it could achieve under average market conditions.

#SaudiArabia’s Sovereign Wealth Fund (PIF) to Deploy $70 Billion a Year - Bloomberg

Saudi Arabia’s Sovereign Wealth Fund (PIF) to Deploy $70 Billion a Year - Bloomberg

Saudi Arabia’s sovereign wealth fund is set to increase its annual deployment of capital to $70 billion a year after 2025.

The Public Investment Fund, or PIF, currently puts $40 billion to $50 billion of capital to work on an annual basis, and that’s set to increase after 2025, the fund’s governor, Yasir Bin Othman Al-Rumayyan, said Thursday at the FII Priority conference in Miami.

PIF, which manages more than $700 billion, allocates more than 70% of its investments in Saudi Arabia. It’s targeting an allocation of 20% to 25% for international investments, with the absolute number increasing over time, Al-Rumayyan said during the event.

The fund invested about $100 billion in the US between 2017 and 2023 — creating more than 103,000 jobs there, he said.

PIF has invested heavily in golf, and in June the PGA Tour proposed a merger with Saudi-backed LIV Golf.

#Dubai Property Frenzy Sees Buyers Queue for Million-Dollar Homes - Bloomberg

Dubai Property Frenzy Sees Buyers Queue for Million-Dollar Homes - Bloomberg

Hundreds of buyers queued overnight outside a Dubai-based developer’s office for a chance to snap up luxury waterfront homes, in the latest sign of the frenzy gripping one of the world’s hottest property markets.

Government-backed Nakheel PJSC sold all houses on offer in the first two phases at the Bay Villas development within hours. In all, the project on Dubai Islands will feature more than 500 homes, with prices starting at $1.2 million apiece. The most expensive properties will cost upwards of $4 million.

Dubai has seen a surge in demand for property over the past couple years, aided by an influx of people from around the world. That’s helped the city reverse a years-long slump — prices are closing in on records, despite mortgage rates hovering at the highest levels in two decades.

The sustained strength is reflected in new launches, some of which have sold out rapidly. Nakheel, best known as the developer of Dubai’s artificial palm-shaped islands, last year launched a project that saw buyers queue up in 100° Fahrenheit (38° Celsius) heat for $5 million homes.

The surge in demand caps a turnaround for Nakheel, which was at the center of a property crash in 2009 that nearly bankrupted Dubai, but has since consolidated operations and cut costs.

For Nakheel’s latest project, the long line of brokers and investors outside its sales office started to form overnight, prompting police to step in and patrol cars were stationed in the area. Only brokers who received tokens were allowed to return in the morning.

Flydubai 2023 profit soars 75% to $572mln on rising passenger numbers

Flydubai 2023 profit soars 75% to $572mln on rising passenger numbers

Dubai-based carrier Flydubai said profit reached a record high of 2.1 billion UAE dirhams ($572 million) in 2023, rising 75% year-on-year, as passenger numbers surged 31% annually to 13.8 million.

Annual revenue rose 23% to AED 11.2 billion last year from AED 9.1 billion in 2022, the budget airline said in a statement on Thursday.

Due to elevated prices, fuel remains the single highest operating cost, accounting for 32% of total annual operating costs. The airline hedged 12% of its fuel requirement last year.

Flydubai launched 17 routes, ending 2023 with a network of 122 destinations in 52 countries. The airline took delivery of 13 new aircraft, as fleet size reached 84 by the end of 2023.

The airline workforce reached 5,545, with over 1,000 new colleagues joining various departments last year.

Flydubai will take delivery of 12 Boeing 737 MAX aircraft in 2024, CEO Ghaith Al Ghaith said, adding it will increase capacity on existing routes as demand for travel across its network returns to pre-pandemic levels.

Most Gulf markets in red after Fed minutes signal caution on rates | Reuters

Most Gulf markets in red after Fed minutes signal caution on rates | Reuters

Most stock markets in the Gulf ended lower on Thursday a day after minutes from the last Federal Open Market Committee meeting bolstered the view that interest rate cuts will now be slower in coming than previously expected.

The bulk of policymakers at the Federal Reserve's last meeting were concerned about the risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level, according to the minutes of the Jan. 30-31 session.

Dubai's main share index (.DFMGI), opens new tab fell 0.6%, extending losses from the previous session when it snapped a nine-day winning streak, hit by a 1.5% fall in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.

A slim majority of economists polled by Reuters now expects the Fed to start cutting rates in June, farther out than market expectations last month of a first cut in March.

Most Gulf currencies are pegged to the dollar and any monetary policy change in the United States is usually mimicked by Qatar, the United Arab Emirates and Saudi Arabia.

In Abu Dhabi, the index (.FTFADGI), opens new tab declined 0.8%.

The Abu Dhabi market saw a fall among its major stocks with geopolitical tensions and uncertainty over energy prices weighing on expectations, said Milad Azar, Market Analyst at XTB MENA.

Two missiles were fired at a vessel off the southeast coast of Yemen on Thursday, causing a fire onboard, British maritime agencies said, as Houthis keep up attacks on shipping to show support for the Palestinians in the Gaza war.

The Qatari benchmark (.QSI), opens new tab closed 0.6% lower, weighed down by a 2.7% fall in Qatar Islamic Bank (QISB.QA), opens new tab.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab edged up 0.1%.

** Saudi Arabian stock market was closed for a public holiday

#AbuDhabi Mubadala Investment, other investors to buy remaining stake in US insurer

Abu Dhabi Mubadala Investment, other investors to buy remaining stake in US insurer

Mubadala Investment Co., Abu Dhabi’s sovereign investor, has partnered with primary investors and private equity firms, including Stone Point Capital and Clayton and Dubilier & Ross, to purchase the remaining stake in an insurance brokerage business from US-based Truist Financial Corporation.

This investment follows Mubadala’s purchase in 2023 of a 20% stake in Truist Insurance Holdings (TIH), alongside Stone Point Capital and other co-investors, for $1.95 billion, the sovereign investor said in a statement on Thursday.

The all-cash transaction values TIH at $15.5 billion, or approximately 18x TIH's 2023 core EBITDA.

The transaction is expected to be completed during the second quarter of 2024, subject to certain regulatory reviews and approvals and the satisfaction of other customary closing conditions.

Based in Charlotte, North Carolina, Truist Insurance Holdings is the fifth largest insurance broker in the United States and operates more than 200 offices through its portfolio of wholesale, retail, and insurance services businesses.

Its parent Truist is the seventh largest bank in the US with more than $535 billion in assets. It reported a loss in the fourth quarter, hurt by a raft of one-time charges tied to regulatory and restructuring activities, and a fall in net interest income, according to Reuters.

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 trade on Thursday as minutes from the U.S. Federal Reserve's last policy meeting cemented bets the central bank will not cut interest rates soon.

The bulk of Fed policymakers at the January meeting were concerned about the risks of cutting rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level, minutes released on Wednesday showed.

Most Gulf currencies are pegged to the dollar and any monetary policy change in the United States is usually mimicked by Qatar, the United Arab Emirates and Saudi Arabia.

The Qatari benchmark index declined 0.7%, weighed down by losses in most sectors. Qatar Islamic Bank fell 3.8% and the region's largest lender Qatar National Bank shed 0.5%.

Dubai's benchmark stock index retreated 0.2%, with almost all sectors in the negative territory.

Emaar Properties slid 1.1% and Dubai Islamic Bank slipped 0.6%.

In Abu Dhabi, the benchmark stock index fell 0.2%, dragged by a 0.5% loss in Abu Dhabi Islamic Bank and 0.3% dip in Abu Dhabi Commercial Bank.