Gulf markets subdued on oil, ahead of earnings | Reuters

Gulf markets subdued on oil, ahead of earnings | Reuters

Stock markets in the Gulf ended subdued on Wednesday in the run up to quarterly earning season as oil prices declined, although growing bets of imminent U.S. rate cuts improved sentiment.

Saudi Arabia's benchmark index (.TASI), opens new tab closed flat, following four sessions of gains.

The Saudi bourse market experienced limited movements today, remaining relatively flat as the market continues its uncertain trajectory within a price range, said Joseph Dahrieh, Managing Principal at Tickmill.

Saudi Aramco (2222.SE), opens new tab has begun a three-part bond sale, news service IFR reported on Wednesday, which could raise at least $3 billion, a source with knowledge of the matter previously told Reuters.

Shares of the oil giant Aramco were down 0.2%.

Dubai's main share index (.DFMGI), opens new tab gained 0.1%, helped by a 1.3% rise in Emirates Central Cooling Systems Corp (EMPOWER.DU), opens new tab.

Fed Chair Jerome Powell said in remarks to Congress that the U.S. is "no longer an overheated economy" with a job market that has cooled from its pandemic-era extremes and is, in many ways, back where it was before the health crisis, suggesting that the case for interest rate cuts is becoming stronger.

In Abu Dhabi, the index (.FTFADGI), opens new tab closed flat.

According to Dahrieh, some uncertainty has persisted in Abu Dhabi over the last three sessions, influenced by a decline in oil market prices, limiting the possibility of a rebound in the Saudi market.

Crude prices - a catalyst for the Gulf's financial markets - steadied as the Organization of the Petroleum Exporting Countries (OPEC) kept its growth forecast for oil demand unchanged for this year and next. Meanwhile, U.S. crude and gasoline inventories likely fell last week.

Brent futures were down 11 cents, or 0.1%, at $84.55 a barrel at 1212 GMT, after falling 1.3% in the previous session.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab slipped 0.6%, hit by a 1% fall in Talaat Mostafa Holding (TMGH.CA), opens new tab.

#SaudiArabia Haul From Aramco Share Sale Finalized at $12.35 Billion - Bloomberg

Saudi Arabia Haul From Aramco Share Sale Finalized at $12.35 Billion - Bloomberg

Saudi Arabia raised $1 billion more than previously expected from the sale of a stake in oil producer Aramco after a so-called stabilization period of the company’s shares ended.

The government netted a total of $12.35 billion from the secondary offering, according to a statement. It sold a 0.64% stake in Aramco at 27.25 riyals a share last month, with an additional 154 million shares available for stabilizing manager Merrill Lynch to buy back and return to the state if the stock dropped below the offer price.

The stabilization period lasted for 30 days after the end of the share sale without any stabilization trades taking place. Aramco previously said the offering raised a minimum of $11.2 billion, with the final size dependent on whether Merrill Lynch bought back any stock during the stabilization period.

While a much smaller scale than Aramco’s nearly $30 billion initial public offering in 2019, the deal was still a key source of revenue for the government. It’s stepped up borrowing this year and is forecasting budget deficits out to at least 2026 as it embarks on a massive spending plan intended to create jobs and develop entirely new cities and kickstart new industries.

Aramco is looking to raise at least $3 billion from its first bond sale in three years, Bloomberg News reported on Tuesday, adding to the kingdom’s debt spree.

Big Oil Invests in Adnoc LNG Plant in Bet on Future Demand - Bloomberg

Big Oil Invests in Adnoc LNG Plant in Bet on Future Demand - Bloomberg

Four international companies signed up to invest in Abu Dhabi National Oil Co.’s next liquefied natural gas export project on a bet that demand for the fuel will continue to climb.

Shell Plc, TotalEnergies SE, BP Plc and Mitsui & Co. will each take a 10% stake in the Ruwais LNG plant, Adnoc said in a statement. Two of the firms will also receive shipments from the facility.

The United Arab Emirates is among countries — including neighboring Qatar — adding LNG production capacity on the expectation demand will grow even as the energy shift accelerates. State-controlled Adnoc decided to proceed with the Ruwais project last month and signed a $5.5 billion contract for its construction.

Bloomberg was first to report the four companies’ investment plans last week. Financial terms haven’t been disclosed.

The plant is slated to come online in 2028, Shell said separately. The oil major will receive 1 million tons of LNG a year from Ruwais, while Mitsui will take 600,000 tons a year, Adnoc’s statement shows. The UAE company previously signed a 600,000-ton deal with Germany’s EnBW Energie Baden-Württemberg AG.

Adnoc now has buyers lined up for 70% of the plant’s 9.6 million-ton annual production capacity, it said, without specifying whether the agreements are binding.

The firm has ambitions to expand in the global LNG market, recently signing deals to invest in similar projects in the US and Mozambique. Gas is one of several areas it’s focusing on as part of a deal-making spree.

Yes Bank’s $5 Billion Stake Said to Attract Lenders From the Middle East, Japan - Bloomberg

Yes Bank’s $5 Billion Stake Said to Attract Lenders From the Middle East, Japan - Bloomberg

First Abu Dhabi Bank PJSC is among potential suitors for a roughly $5 billion stake in India’s Yes Bank Ltd., according to people with knowledge of the matter.

The Middle Eastern lender is weighing a bid for as much as a 51% stake in Yes Bank, the people said, asking not to be identified as the deliberations are private. The stake sale has also drawn preliminary interest from Japan, including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., although it remains unclear how strong their appetite for a deal is and whether they will proceed, the people said.

Yes Bank shares have gained 16% this year, valuing the Mumbai-based lender at about $9.4 billion.

Considerations are ongoing and the potential size of the stake sale could change, the people said. The banks may also decide against pursuing a deal or some could consider other investment options, the people said.

Representatives for FAB, MUFG, and SMFG declined to comment. A representative for Yes Bank didn’t immediately respond to a request seeking comment.

Yes Bank said this week it hasn’t received any in-principle approval from the Reserve Bank of India for a 51% stake sale.

State Bank of India has pared its holding in Yes Bank after rescuing the lender four years ago when it was inundated with bad loans. It remains its biggest shareholder with a 24% stake. SBI’s chairman Dinesh Khara’s tenure is due to end in August, potentially delaying a deal involving Yes Bank. A government-appointed panel has recommended he be replaced by Challa Sreenivasulu Setty.

Share sales, mergers and acquisitions and other dealmaking is on the rise in India as global investors seek to tap into the country’s rapid economic growth.

Middle Eastern banks like FAB are casting overseas for expansion opportunities, with lenders in Turkey and Egypt among its targets, as well Standard Chartered Plc.

Japan’s biggest lenders have been scouring for deals to boost their lending revenues and build out their investment banking operations. MUFG has been eyeing a minority stake in HDFC Bank Ltd.’s consumer lending unit, Bloomberg News has reported.

DME rebrands to Gulf Mercantile Exchange

DME rebrands to Gulf Mercantile Exchange

Dubai Mercantile Exchange (DME) has announced that it will officially change its name to Gulf Mercantile Exchange (GME) effective September 2, 2024.

This strategic rebranding follows the recent addition of Saudi Tadawul Group (STG) as a new strategic shareholder, marking a significant milestone in the Exchange’s growth and regional yet global expansion.

The new brand, Gulf Mercantile Exchange, better reflects the Exchange’s broadened vision and commitment to serving the entire Gulf region's energy and commodities markets. This rebranding aligns with the company’s mission to enhance market access and provide diverse trading opportunities for customers around the globe.

“We are excited to announce our new name, Gulf Mercantile Exchange, which signifies our dedication to broadening our reach and impact across the Gulf region,” said Raid Al-Salami, Managing director, Dubai Mercantile Exchange.

“The addition of Saudi Tadawul Group as a strategic shareholder strengthens our position and supports our vision for future growth and innovation.”

Beijing eyes more investments from #Saudi sovereign wealth fund | Reuters

Beijing eyes more investments from Saudi sovereign wealth fund | Reuters

The mayor of Beijing has told the governor of Saudi Arabia's sovereign wealth fund he hoped the fund would further expand its business in the Chinese capital, state media said on Wednesday.

Beijing's diplomatic push to court U.S. ally Saudi Arabia comes amid its frustration over what it sees as Washington's weaponisation of economic policies, nudging it to expand ties with countries in Europe, the Middle East and Africa.

China offers many investment opportunities, the mayor, Yin Yong, told Yasir Al-Rumayyan, the chief of the Saudi Public Investment Fund, at a meeting on Tuesday, the official Beijing Daily newspaper said.

Yin said he hoped the fund would guide two-way investments by companies of both countries, deepening co-operation in areas such as industrial investment, green development, and energy transition.

Al-Rumayyan said he hoped to keep up close communication and exchanges with Beijing for co-operation on sustainable development and renewable energy, the paper added.

One of the world's largest sovereign wealth funds, the Saudi Public Investment Fund has a sprawling portfolio of investments, from date farms to multinational conglomerates.

China is seeing a surge in investment from funds in Gulf nations at a time when some Western financial firms are reining in investments in the country, deterred by concerns about its economic recovery and geopolitical risks.

Qatar's sovereign wealth fund has agreed to buy a 10% stake in China's second-largest mutual fund company, Reuters reported last month, citing sources. China also recently approved its first exchange-traded funds investing in Saudi Arabia equities.

While economic co-operation between Beijing and Riyadh remain anchored on energy interests, ties in trade, investment and security have been expanding. China is Saudi Arabia's top trading partner.

Saudi Arabia's ambitious Vision 2030 plan aims to diversify its economy away from fossil fuels to develop a vibrant private sector.

The government of the world's biggest oil exporter hopes its nascent manufacturing industry will one day turn out everything from computer chips to tyres, in a wider economic transformation.

#Saudi Aramco kicks off sale of three-part bonds, IFR reports | Reuters

Saudi Aramco kicks off sale of three-part bonds, IFR reports | Reuters

Saudi Aramco (2223.SE), opens new tab has begun a three-part bond sale, news service IFR reported on Wednesday, which could raise at least $3 billion, a source with knowledge of the matter previously told Reuters.

The sale comes after Saudi Arabia raised a total of $12.35 billion from a much-anticipated secondary share sale in Aramco, after increasing the size of the offering, a document showed.

The bond sale marked Aramco's return to debt markets after a three-year hiatus, taking advantage of favourable market conditions.

Aramco has long been a cash cow for Saudi Arabia, which is seeking funds to invest in new industries and wean its economy away from oil under its Vision 2030 plan.

The oil giant expects to pay out $124.3 billion in dividends for 2024, the majority of which goes to the government, which directly owns about 81.5% of the company.

With the latest bond sale Aramco joined top firms and governments in the Gulf rushing to markets this year to fund investments. The proceeds will be used for general corporate purposes, IFR reported.

Under the three-part bond sale on Wednesday, Aramco is selling bonds maturing in 10, 30 and 40 years. It gave an initial guidance around 140 basis points (bps) over U.S. Treasuries (UST) for the 10-year bond, 180 bps over UST for the 30-year, and 195 bps for the 40-year, IFR reported.

State-owned companies in emerging markets issued dollar-denominated bonds worth $21.4 billion in the first half of the year - up 22% from a year earlier, according to a report by investment firm Tellimer.

Saudi state-owned firms led the group with 23% of the overall issuance value, while the government raised $12 billion of dollar-denominated bonds in January and $5 billion in sukuk, or Islamic bonds, in May.

Aramco last month was awarded $25 billion worth of contracts for its gas expansion plans. It also said it would buy 10% of Renault (RENA.PA), opens new tab and Geely's (0175.HK), opens new tab thermal engines joint venture Horse Powertrain, and announced a non-binding deal with U.S. energy firm Sempra to buy liquefied natural gas.

Aramco last tapped global debt markets in 2021 when it raised $6 billion from three-tranche sukuk. It flagged in February it was likely to issue bonds this year.

Its 40-year tranche would become its second-longest dated bonds after $2.25 billion of notes due in November 2070.