Oil drops 5% with resolution to Libyan dispute in sight | Reuters

Oil drops 5% with resolution to Libyan dispute in sight | Reuters

Oil prices dropped 5% on Tuesday to their lowest levels in nearly nine months on signs of a deal to resolve a dispute that has halted Libyan production and exports.

Brent crude futures were down $3.8, or 4.9%, to $73.71 a barrel at 1:17 p.m. EDT (1717 GMT), the lowest level since December. West Texas Intermediate crude futures, which did not settle on Monday because of the U.S. Labor Day holiday, were down $3.25, or 4.2%, at $70.3 - their lowest price since January.

#Dubai IPO: Delivery Hero Hires Morgan Stanley, JPMorgan For Talabat Listing - Bloomberg

Dubai IPO: Delivery Hero Hires Morgan Stanley, JPMorgan For Talabat Listing - Bloomberg

Delivery Hero SE has hired banks to work on the listing of its Talabat unit in Dubai, preparing to cash in on a flood of initial public offerings in the Gulf.

The German food delivery company has lined up Emirates NBD Bank PJSC, Morgan Stanley and JPMorgan Chase & Co. for the deal, people familiar with the matter said, asking not to be named discussing confidential information. The share sale could raise about $1 billion, they said.

No final decisions have been made on valuation, and more banks could be added, the people said. Representatives for Emirates NBD, Morgan Stanley, JPMorgan, Delivery Hero and Talabat declined to comment.

Delivery Hero has said it’s planning to list Talabat on Dubai’s bourse in the fourth quarter. That came amid a pickup in Gulf initial public offerings after a quiet summer.

Last week saw a flurry of announcements from firms ranging from a perfume maker and flour miller to an oil services provider and a food delivery company. Many of the deals were oversubscribed within hours.

Talabat is estimated to have an enterprise value of more than €5.4 billion ($6 billion), according to Bloomberg Intelligence. RBC Capital Markets, meanwhile, pegs Delivery Hero’s Middle East and North Africa business at €5 billion, implying a valuation of 1.3 times enterprise value-to-sales.

The highly profitable Middle Eastern unit could help Delivery Hero unlock cash upfront and bolster liquidity, but “long-term reduced ownership means leaking the vital cash flow to Talabat’s new shareholders,” Bloomberg Intelligence analysts Tatiana Lisitsina and Diana Gomes wrote.

European, Middle Eastern & African Stocks - Bloomberg #Qatar #SaudiArabia #Israel #Kuwait #UAE - #Dubai #AbuDhabi

European, Middle Eastern & African Stocks - Bloomberg

#SaudiArabia’s non-oil sector marks growth in August, but still below 2022 average

Saudi Arabia’s non-oil sector marks growth in August, but still below 2022 average

Improved business conditions and employment growth resulted in a strengthening of Saudi Arabia’s non-oil private sector in August, but the Purchasing Manager’s Index (PMI) continued to remain at one of its lowest levels since the beginning of 2022.

The Riyad Bank PMI rose to 54.8 in August, up from July’s 54.4, and was still above 50.0 neutral mark, signalling a soft improvement in operating conditions across the Saudi Arabian non-oil private sector.

However, the index was still below its long-run average of 56.9, largely due to non-oil private sector output increasing at one of the weakest rates since the beginning of 2022.

According to the survey, job creation has been the driving factor in strengthen business conditions, with employment numbers rising at one of the sharpest rates in a decade. Historic data reveals that apart from a peak observed in October 2023, employment grew at the sharpest pace since early 2015 in August.

Business activity levels also indicated a level of robustness, with new orders and increased government investment driving momentum. Companies also reported an uplift in foreign sales.

Yet, despite this new drive, new business growth remained subdued in August, compared to the rates observed over the past couple of years. This partly reflected difficulties at some firms to improve sales as markets become more competitive.

In order to maintain demand strength, non-oil companies reduced selling prices for the second consecutive month in August, albeit to a slightly lesser degree than in the prior survey period. August survey data signalled that non-oil firms were more upbeat about future activity, with expectations for the year rising to their strongest since March.

“Saudi Arabia’s non-oil sector continues to demonstrate economic resilience, underscored by a robust 4.4% increase in non-oil GDP in Q2 2024, reflecting the ongoing success of the kingdom’s diversification efforts,” said Naif Al-Ghaith PhD, Chief Economist at Riyad Bank.

“Employment growth has been a key driver of this momentum in August, signalling those businesses are increasingly confident in their expansion plans. The uptick in new orders illustrates the sector’s capacity to meet growing market needs. These positive indicators, coupled with a significant rise in future output expectations, highlight strong business optimism within the private sector,” he added.

Al-Ghaith also stressed that new export orders, although slower than the overall growth, is indicative of Saudi firms finding opportunities abroad, despite facing tough competition in international markets.

“The competitive nature of the market is exerting pressure on firms to reduce prices in an effort to stimulate sales, indicating that while the sector is growing, businesses must remain agile and responsive to maintain their market position,” he said.

ADIA-backed Premier Energies share price doubles on Indian market debut

ADIA-backed Premier Energies share price doubles on Indian market debut

The share price of Premier Energies more than doubled on debut on the Bombay Stock Exchange on Tuesday. UAE sovereign fund Abu Dhabi Investment Authority (ADIA) is an anchor investor in the company.

The shares listed at INR 991 ($11.81), surged 120% over the IPO issue price of Rs 450 per share.

The INR 28.30-billion ($337 million) IPO was oversubscribed 74 times.

The Indian manufacturer of integrated solar cells and panels raised 8.46 billion rupees ($100.8 million) ahead of its flotation, with ADIA Stable being one of its lead investors, picking up a 4.5% stake for INR 379.5 million.

ADIA’s investment accounted for 843,282 shares in Premier Energies at INR 450 per share.

Other lead investors with a similar stake to ADIA include the Nomura Funds Ireland – India Equity Fund and the Government Pension Fund Global.

#Saudi Wealth Fund (PIF) to Tap Bond Markets for Fourth Time This Year - Bloomberg

Saudi Wealth Fund (PIF) to Tap Bond Markets for Fourth Time This Year - Bloomberg

Saudi Arabia’s sovereign wealth fund is preparing to tap bond investors for a fourth time this year as it looks to finance its huge domestic investment plans.

The Public Investment Fund is marketing a three-year sukuk of a benchmark size, which typically means at least $500 million, according to people familiar with the matter. The initial target for the spread is around 110 basis points above US Treasuries.

The PIF, as the fund is known, is also looking to raise a benchmark 2032 green bond at a targeted spread of around 135 basis points above US Treasuries, the people said, asking not to be identified as the information is private.

Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan Chase & Co. are among the bookrunners.

The wealth fund’s latest fundraising marks a busy period of borrowing as it juggles a commitment to ramp up domestic investments with how to finance those plans. It has already raised $7 billion from two dollar bond sales this year, plus an additional £650 million ($850 million) from a sterling denominated issue in June. Subsequently, the PIF refinanced a $15 billion loan.

Earlier this year, the fund received an additional $164 billion stake in oil giant Saudi Aramco to help boost its finances.

The PIF, chaired by Crown Prince Mohammed Bin Salman, is a key part of his plans to reshape the Saudi economy. The fund was likely to accelerate debt sales and seek new bank loans as part of plans to raise cash, Bloomberg reported in March.

The wealth fund’s 2024 financing needs stand at $22 billion, Morgan Stanley strategist Pascal Bode wrote in a research report on Tuesday. That’s less than half of what has been raised through bond sales this year. “Debt is likely to feature even more prominently going forward absent higher FDI or oil prices,” he said.

Aramco still pursuing deals while keeping Renault-Geely engine jv stake at 10%, executive says | Reuters

Aramco still pursuing deals while keeping Renault-Geely engine jv stake at 10%, executive says | Reuters

State-controlled oil company Saudi Aramco (2223.SE), opens new tab does not plan to increase its 10% stake in fuel-based engines joint venture Horse Powertrain while it continues to pursue more deals to expand its downstream presence, a senior executive told Reuters.

Aramco in June agreed to buy a 10% stake in Horse Powertrain, valuing the venture with Renault (RENA.PA), opens new tab and Geely (GEELY.UL) at around 7.40 billion euros ($8.2 billion), as part of its growing interest in the automotive industry, including in the development of so called e-fuels.

"The 10% stake hits all of the boxes that we have for our financial and strategic objectives for this company," Yasser Mufti, Aramco's executive vice president for products and customers, said in an interview in Milan, where he was to follow Formula 1 Grand Prix in Monza at the weekend.

"I saw a lot of speculation about that but we were always targeting a 10% stake," he said, in the first public comments by a senior Aramco executive on the company's plans for the Horse Powertrain joint-venture.

Geely and Renault will each own 45% of the venture, which will supply gasoline engines, hybrid systems and gearboxes for internal combustion engine vehicles.

Aramco, the world's top oil exporter, is expected to finalise the stake purchase later this year.

Horse Powertrain aims to become a global supplier for automakers, which can buy "off-the-shelf" engines compatible with advanced fuels, Mufti said. "By 2050, half the (global auto) fleet will still be conventional combustion engines or hybrids".

More M&A deals will come for Aramco, after those it closed in the past 12 months, which include the purchases of Chilean fuel retailer Esmax and of stakes in Gas & Oil Pakistan and U.S.-based MidOcean, its first LNG investment abroad.
"We're very busy in this space," Mufti said.

"The downstream business is where we have M&A opportunities and now LNG (liquefied natural gas) as well. We have targets and markets and we work with these opportunities as they come."

Downstream refers to refining, and sales and marketing of oil and gas products.

Last year, Aramco spent around $9 billion on acquisitions, up from $4.2 billion in 2022, according to LSEG data, and is now discussing more deals, including acquiring stakes in China's Shandong Yulong Petrolchemical and Hengli Petrochemical(600346.SS), opens new tab.

Aramco on Tuesday also announced it was broadening its partnership with the Aston Martin (AML.L), opens new tab Formula 1 team, ahead of the 2026 implementation of new Formula 1 regulations, including requirements for sustainable fuels.

Mufti said Aramco was investing "hundreds of millions" to build two demonstration facilities with partners in Saudi Arabia and Spain, to develop e-fuels, that can be used in internal combustion engine vehicles and help reduce carbon footprint.

Made by synthesizing captured CO2 emissions and hydrogen produced using renewable or CO2-free electricity, e-fuels are not cheap. Their estimated cost is of 2 euros per litre, opens new tab if produced at scale, four times the typical wholesale price for petrol made from oil.

The two facilities would be "excellent starting points" to help Aramco understand how to scale up e-fuels production and bring costs down, Mufti said. "I can be 100% confident that the current cost structure will be improved on dramatically".
Costs of making e-fuels could fall to between 0.70-1.33 euros per litre in 2050, according to lobby group eFuel Alliance.

Major Gulf markets mixed ahead of US economic data | Reuters

Major Gulf markets mixed ahead of US economic data | Reuters

Major stock markets in the Gulf were mixed in early trade on Tuesday ahead of a raft of U.S. economic data that could determine how deeply the Federal Reserve will cut interest rates later this month.

The U.S. ISM manufacturing survey, due later in the day, and particularly jobs data on Friday will be crucial to gauge whether the Fed reduces rates by 25 basis points or 50 at its Sept. 18 meeting.

Economists forecast the ISM survey improving but remaining in contractionary territory at 47.5 in August. On Friday, analysts will look out for a rise of 160,000 in non-farm payrolls (NFP) and a dip in the unemployment rate to 4.2%.

Monetary policy in the six-member Gulf Cooperation Council (GCC), including Saudi Arabia, is usually guided by the Fed's decisions, as most regional currencies are pegged to the U.S. dollar.

Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.1%, helped by a 0.7% rise in Al Rajhi Bank (1120.SE), opens new tab and a 4.9% increase in Savola Group (2050.SE), opens new tab.

The pace of growth in Saudi Arabia's non-oil sector recovered slightly in August from the previous month's more than two-year low, a survey showed on Tuesday, supported by a pickup in new orders and jobs.

Dubai's main share index (.DFMGI), opens new tab rose 0.2%, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab gaining 1.4%.

In Abu Dhabi, the index (.FTFADGI), opens new tab eased 0.1%.

The Qatari benchmark (.QSI), opens new tab dropped 0.1%, with Qatar National Bank (QNBK.QA), opens new tab, the Gulf's biggest lender, losing 0.6%.

Oil prices - a catalyst for the Gulf's financial markets - fell as sluggish economic growth in China, the world's biggest crude importer, increased worries about demand that overshadowed the impact of the halt of production and exports from Libya.