#SaudiArabia Banks Embark on Record Bond Binge for Mega-Projects - Bloomberg

Saudi Arabia Banks Embark on Record Bond Binge for Mega-Projects - Bloomberg

Saudi Arabia’s banks could raise a record amount of debt this year as a liquidity squeeze strains Crown Prince Mohammed bin Salman’s multi-trillion dollar economic transformation agenda.

Lenders may need to issue at least $11.5 billion in bonds in local and foreign currencies, according to Bloomberg Intelligence, to raise funds for Vision 2030, a plan aimed at transforming Saudi Arabia from an oil-reliant economy to one generating income from everything from tourism to technology. That would be a new high, surpassing the $10 billion raised in 2022.

The sheer size of the required investment, coupled with slower deposit growth at the kingdom’s banks and a lack of foreign investment into Saudi Arabia, means lenders will need to lean heavily on borrowing to come up with funds for mega projects such as urban development Neom and entertainment city Qiddiya, according to Riyadh-based Jadwa Investment Co.

“The one issue which I think is the most troubling for the whole Vision 2030 project is the lack of capital,” said James Reeve, the former chief economist at Jadwa who has since been hired by Saudi Arabia’s sovereign wealth fund. “The Saudi banking system is kind of tapped out.”

Saudi Arabia’s lenders have been grappling with tighter liquidity as loan growth has outstripped deposits to support a domestic economy that contracted last year. The country will require $640 billion in construction spending over the next five years based on the current pipeline of projects, according to data compiled by Dubai-based analysis firm MEED Projects. That suggests banks may need to come up with almost $384 billion over that period if they fund 60% of the pipeline, using a mix of more deposits and debt.

#Qatar Airways Mulls Up to 150 Widebody Order From Boeing (BA), Airbus (AIR) - Bloomberg

Qatar Airways Mulls Up to 150 Widebody Order From Boeing (BA), Airbus (AIR) - Bloomberg

Qatar Airways is in early talks with Boeing Co. and Airbus SE to order as many as 150 widebody jets and renew its fleet of aging long-distance aircraft, according to people familiar with the matter.

The national carrier is looking to purchase 100 to 150 twin-aisle aircraft to modernize and expand its fleet, said the people, asking not to be identified discussing private negotiations. The order will most likely be for the Airbus A350 or Boeing 777X models, the people said, though the mix between the two manufacturers hasn’t been decided.

Qatar Airways has solicited bids from both plane makers for a major order, Chief Executive Officer Badr Al Meer told CNBC in an interview, without specifying the size of a potential purchase, or the models sought. Al Meer, who succeeded Akbar Al Baker in October as CEO, previously ran Doha Hamad International Airport.

An order of that magnitude would follow major purchases by regional rival Emirates, which is also expanding its fleet with more of the Boeing 777X aircraft. Riyadh Air in Saudi Arabia, meanwhile, is seeking to establish itself as a new force in the Middle East, putting pressure on the likes of Qatar Airways to maintain its growth path and keep the fleet fresh.

The volume of the deal would depend on factors like upgrades, replacements and new-jet needs, and the airline aims to complete talks in the coming months, the people said. Qatar still operates some older Airbus A330 jets, as well as the out-of-production double-decker A380. The company also has the Boeing 777, the current version of the US company’s popular twin-engine jet. The next iteration, called the 777 9, is delayed for several years and has not yet entered commercial service.

The airline could not be reached for comment. Boeing deferred to Qatar Airways, while Airbus said it’s “always in talks with our customers about their current and future fleet requirements. The content of those talks are confidential.”

A new order from Airbus would mark a fresh chapter for the European manufacturer’s relationship with one of its most important customers, following a bruising court battle that Al Meer’s predecessor waged over peeling paint on the carrier’s A350s. That dispute was settled in early 2023 and Airbus reinstated Qatar’s orders for new planes.

The Gulf carrier has seen traffic surge in the first two months of the year as it expands its network with more frequencies and adds new destinations, benefitting from a travel boom that’s pushing global and regional airlines to record profit.

#UAE bourses track global equities lower | Reuters

UAE bourses track global equities lower | Reuters

Stock markets in United Arab Emirates declined on Friday, in line with global equities after a bigger-than-expected hike in U.S. inflation dashed hopes of early rate cut.

MSCI'S global equity index (.MIWD00000PUS), opens new tab was down 0.2%, while Hong Kong's Hang Seng Index (.HSI), opens new tab slid 1.4%.

The mood turned cautious after a bigger-than-expected rise in producer prices in U.S. data on Thursday added to a hot consumer inflation reading earlier in the week.

Monetary policy in the six-member Gulf Cooperation Council is usually guided by Fed policy since most regional currencies are pegged to the U.S. dollar.

Abu Dhabi's benchmark index (.FTFADGI), opens new tab dropped 0.4%, breaking two sessions' gains, weighed down a 6.5% decline in UAE's third largest lender Abu Dhabi Commercial Bank (ADCB.AD), opens new tab, while IHC-owned investment firm Multiply Group (MULTIPLY.AD), opens new tab lost 2.2%.

However, National Corp For Tourism And Hotels (NCTH.AD), opens new tab jumped 2.8% after the firm offered to acquire entire stake held by Alpha Dhabi Holding's subsidiaries in ADH Hospitality, Murban (BVI) Holding And Hill View Resorts (Seychelles).

Alpha Dhabi Holding (ALPHADHABI.AD), opens new tab shares closed 0.4% up.
Oil price - a key catalyst for Gulf's financial markets - was 0.4% down to $85.06 a barrel by 1116 GMT

Dubai's main index (.DFMGI), opens new tab settled 0.7% lower, snapping three sessions of a rally, dragged down by a 1.9% decrease in Dubai Islamic Bank (DISB.DU), opens new tab and a 5.6% drop in Emaar Development (EMAARDEV.DU), opens new tab. 

However, Union Properties (UPRO.DU), opens new tab surged 10.3%, hitting over 5-months high after Dubai Financial Market transferred company's listing to first category from second category.

Separately, Dubai's Parkin, which oversees public parking operations in the Emirates, has raised 1.57 billion dirhams ($427.5 million) after pricing its IPO at the top of its range at 2.1 dirhams per share on Thursday. Parkin is expected to start trading on March 21.

#AbuDhabi in talks to invest in OpenAI chip venture

Abu Dhabi in talks to invest in OpenAI chip venture

A new Abu Dhabi investment company is in talks to back OpenAI’s ambitious chip venture, in the latest effort by the United Arab Emirates to become a global powerbroker in the development of artificial intelligence. 

State-funded MGX is in early stage discussions over a funding deal with OpenAI, according to two people with knowledge of the discussions. The US start-up’s chief executive Sam Altman is seeking to launch a semiconductor business to reduce its dependence on cutting-edge chips made by Nvidia. 

Estimates from Altman and others of the cost of building out AI infrastructure have varied from hundreds of billions of dollars to as high as $7tn over the coming years. 

Such figures price out traditional technology venture capitalists, leading the group to approach nation-states. The Financial Times this month reported that OpenAI was also holding talks with Singapore-backed Temasek over a funding deal. 

MGX, an AI-focused fund that launched this week, is chaired by the UAE’s powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan. The nation is betting its wealth, abundant energy resources and the political backing of the autocratic state’s leadership give it a head start in the race to become a global AI hub.