Egyptian Pound Gains on Black Market, Dollar Bonds Jump Most on Record - Bloomberg

Egyptian Pound Gains on Black Market, Dollar Bonds Jump Most on Record - Bloomberg

Egypt’s dollar bonds surged and its pound strengthened in street trading, as a landmark $35 billion investment deal with the United Arab Emirates stoked optimism that the cash-strapped nation will ride out its economic crisis.

Egyptian debt due in 2032 and 2033 each rose more than 5 cents on the dollar — their biggest-ever jump — after the agreement raised the likelihood that a much-awaited currency devaluation is imminent and will be less dramatic than recent black-market rates suggested. The country’s notes had the largest gains among emerging-market and frontier debt worldwide on Monday.

On the parallel market, the pound has gained around 20% to about 50 per dollar, according to multiple traders and importers Bloomberg spoke with. That’s narrowed the gap but is still considerably weaker than the official one, which has held steady at about 30.9 per dollar for the past year as Egypt wrestles with a dire shortage of foreign currency.

The worst crisis in decades appeared to reach a turning point last week, when authorities signed a massive pact for the UAE to develop Ras El-Hekma, a prime area on Egypt’s Mediterranean coast. The government described it as the biggest investment in the country’s history.

The potential infusion of funds would give Egypt’s central bank the financial fire-power it needs to enact what would be its fourth devaluation since early 2022.

That move in turn would help Egypt seal a deal to increase its current $3 billion loan with the International Monetary Fund — little of which has been distributed — to a package of more than $10 billion that may bring in other partners.

While some of the UAE funds are expected in the coming weeks, not all of the monarchy’s previous investment pledges are proceeding according to plan.

Mideast Stocks: Gulf markets end mixed ahead of inflation tests

Mideast Stocks: Gulf markets end mixed ahead of inflation tests

MIDDLE EASTMARKETSUAEQATARSAUDI ARABIABAHRAINOMANKUWAITEQUITIES

Stock markets in the Gulf ended mixed on Monday on market views that higher-than-expected inflation could delay cuts to high interest rates.

The U.S. Federal Reserve's favoured measure of inflation - the core personal consumption expenditures (PCE) price index - is due on Thursday, with a Reuters poll expecting a rise of 0.4%, up from 0.2% in December. 

Markets have pushed out the likely timing of a first Fed easing to June, from May. Futures imply a little more than three quarter-point cuts this year, compared with five at the start of the month.

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. 

Saudi Arabia's benchmark index dropped 0.6%, hit by a 5.4% fall in media giant MBC Group and a 0.3% decrease in Al Rajhi Bank.

Oil prices fell on Monday, extending losses on market views that higher-than-expected inflation could delay cuts to interest rates that have been capping growth in global fuel demand.

In Abu Dhabi, the index was down 0.2%. 

Dubai's main share index eased 0.1%, hit by a 1.2% fall in toll operator Salik Co. However, the index's losses were limited by a 6.9% jump in Union Properties after announcing a sale of land worth over 500 million dirhams ($136.14 million). The developer is also studying additional offers on its assets, worth more than 12 billion dirhams, in cash sale.

The Qatari benchmark added 0.4%, with Qatar Islamic Bank gaining 1.2% and telco Ooredoo advancing 3.6%. 

QatarEnergy Chief Saad al-Kaabi announced on Sunday a new expansion of the company's LNG production that will add 16 million tonnes per annum (mtpa) to existing expansion plans, bringing total capacity to 142 mtpa. 

Outside the Gulf, Egypt's blue-chip index bounced 3.9%, with Talaat Mostafa Holding advancing 10.2%, extending gains from the previous session, Talaat Mostafa Holding signed an agreement with ADQ and Modon Properties to collaborate on the development of the Ras El-Hekma project along Egypt's Mediterranean coast.

Chinese EV maker Nio announces tech licensing deal with Forseven | Reuters

Chinese EV maker Nio announces tech licensing deal with Forseven | Reuters

Chinese electric vehicle maker Nio Inc's (9866.HK), opens new tab subsidiary NIO Technology (Anhui) Co has entered into a technology licensing deal with Forseven Ltd, a unit of Abu Dhabi-based CYVN Holdings, Nio said in a Hong Kong stock exchange filing on Monday.

The agreement will give electric car startup Forseven a global license to use Nio's technical information and software for the research and development, manufacturing, and distribution of its vehicles, the filing said.

The Nio subsidiary will receive technology licence fees based on the future sales of licensed products by Forseven, the filing added.

The agreement follows a deal struck by Nio's rival Xpeng last year under which the Chinese company will receive technology service revenue from Volkswagen from 2024 onwards, overturning a four-decade-old model of foreign automakers charging their Chinese partners for technology licensing.

Goldman Strikes $1 Billion Private Credit Pact With Mubadala for Asia Deals - Bloomberg

Goldman Strikes $1 Billion Private Credit Pact With Mubadala for Asia Deals - Bloomberg

Goldman Sachs Group Inc. has clinched $1 billion from Mubadala Investment Co. to scour for more private credit deals in Asia.

The Abu Dhabi sovereign wealth fund and Goldman’s asset-management arm struck a partnership to invest alongside each other in the Asia-Pacific region, with a particular focus on India. The pact follows a similar mandate the New York-based firm received from the Ontario Municipal Employees Retirement System in September.

“Some of the investors might be underpenetrated across private credit in general and they are looking at getting more exposure across this asset class,” James Reynolds, the head of direct lending at Goldman’s money management unit, said in an interview. “That’s where partnering with these powerful institutions creates a win-win.”

The $1.7 trillion private credit market has more than doubled in size over the past five years as investors flocked to the asset class seeking higher returns. It’s quickly established itself as a permanent investment bucket for pension funds, endowments and sovereign wealth funds and become a major source of funding for companies and private equity firms.

For years, investors across the Middle East showed little interest in private debt: the asset class offered yields that were too low for their return targets. Yet higher interest rates and the market’s overall growth have recently led to a shift in sentiment.

Institutions like Mubadala and the Abu Dhabi Investment Authority have struck partnerships to strengthen their presence in the market and managers including Blue Owl Capital Inc. and Hayfin Capital Management have expanded their presence in the region to drum up business.

#Saudi Ma'aden FY 2023 net profit plummets as product prices fall

Saudi Ma'aden FY 2023 net profit plummets as product prices fall

Saudi Arabian Mining Co. (Ma’aden) has posted an 83% year-on-year (YoY) drop in its full-year 2023 net profit attributable to shareholders to 1.58 billion riyals ($421 billion) on lower prices for most of its products.

The effort, however, came in ahead of analysts’ mean estimate of SAR 1.32 billion, according to LSEG data.

The net profit was also impacted by higher finance cost due to increased borrowing rates and lower share of profit from joint ventures on the back of lower commodity market prices, Ma'aden said in a regulatory disclosure on Riyadh's Tadawul exchange on Monday.

Sales revenue fell 27% to SAR 29.3 billion, the miner said. This decrease in sales was partially offset by higher sales volumes of ammonia phosphate fertilizer, alumina and gold.

CEO Bob Wilt said the company expects to "aggressively" expand exploration activity in 2024.

Most Gulf markets ease ahead of inflation tests | Reuters

Most Gulf markets ease ahead of inflation tests | Reuters

Most major stock markets in the Gulf fell in early trade on Monday on market concerns that higher-than-expected inflation could delay cuts to high U.S. interest rates.

The Federal Reserve's favoured measure of inflation, the core personal consumption expenditures (PCE) price index, is due on Thursday and forecasts are for a rise of 0.4%.

Markets have already pushed the likely timing of the first Fed easing from May to June, which is currently priced at around a 70% probability. Futures imply a little more than three quarter-point cuts this year, compared to five at the start of the month.

Saudi Arabia's benchmark index (.TASI), opens new tab eased 0.1%, on course to extend losses from the previous session, with Saudi Telecom Company (7010.SE), opens new tab dropping 1.2%.

Among other losers, oil giant Saudi Aramco (2222.SE), opens new tab was down 0.3%.

Oil prices - a catalyst for the Gulf's financial markets - have drifted lower as concerns about demand, particularly from China, have outweighed risks to supply from the Middle East.

Dubai's main share index (.DFMGI), opens new tab fell 0.2%, hit by a 2% fall in toll operator Salik Company (SALIK.DU), opens new tab.

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.

Union Properties (UPRO.DU), opens new tab advanced more than 5% after announcing a sale of land worth over 500 million dirhams ($136.15 million). The developer is also studying additional offers on its assets, worth more than 12 billion dirhams, in cash sale.

The index was flat in Abu Dhabi (.FTFADGI), opens new tab, while the Qatari benchmark (.QSI), opens new tab eased 0.1%, a day after advancing 1% as the Gulf state plans to further expand gas production.