Gulf bourses end mixed on regional tensions, Q3 earnings | Reuters

Gulf bourses end mixed on regional tensions, Q3 earnings | Reuters

Stock markets in the Gulf were mixed on Monday amid rising geopolitical tensions in the region, while investors await more companies to report quarterly results.

Hundreds of Beirut residents fled their homes late on Sunday, as Israel prepared to attack sites linked to the financial operations of Lebanon's Hezbollah group.

Saudi Arabia's benchmark index (.TASI), opens new tab advanced 1.1%, led by a 2.8% rise in Al Rajhi Bank (1120.SE), opens new tab and a 0.4% increase in aluminium products manufacturer Al Taiseer Group (4143.SE), opens new tab.

Oil giant Saudi Aramco (2222.SE), opens new tab added 0.2%.

Oil prices - a catalyst for the Gulf's financial markets - rose, recouping some of last week's more than 7% decline on worries about demand in China, the world's top oil importer, and easing concerns about potential supply disruptions in the Middle East.

Dubai's main share index (.DFMGI), opens new tab finished 0.2% higher, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab gaining 2.3%.

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

Separately, Lulu Retail Holdings, which runs one of the Middle East's biggest hypermarket chains, kicked off an initial public offering on Monday that bankers say could be the UAE's largest this year.

In Qatar, the index (.QSI), opens new tab eased 0.1%, with Qatar Islamic Bank (QISB.QA), opens new tab losing 1.9%.

Meanwhile, the Gulf state is finding it hard to agree new deals to supply liquefied natural gas (LNG) to Japan and South Korea as rising competition from the U.S. and elsewhere with more flexible contract terms challenges Doha's decades-old dominance of the market.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab jumped 3.1%, snapping three sessions of losses, as almost all the stocks on the index were in positive territory including Commercial International Bank (COMI.CA), opens new tab, which was up 3.9%.

Luxury Villas Coming Soon to #Dubai’s Vacant Palm-Shaped Island - Bloomberg

Luxury Villas Coming Soon to Dubai’s Vacant Palm-Shaped Island - Bloomberg

The second of Dubai’s iconic palm tree-shaped islands will soon be home to hundreds of luxury villas after the archipelago’s developer gave three contractors the greenlight to begin construction on the homes.

The state-owned developer Nakheel PJSC awarded three contracts worth 5 billion dirhams ($1.36 billion) to build 723 villas on Palm Jebel Ali, the largest of Dubai’s artificial islands, according to a statement. The work is set for completion by the end of 2026.

The contracts allow Ginco General Contracting, Shapoorji Pallonji Mideast and United Engineering Construction Company to begin construction on the villas. The homes will range from 8,000 to 15,000 square feet and roughly one quarter of them will offer seven bedrooms.

Palm Jebel Ali was among hundreds of projects canceled or delayed when Dubai’s property market suffered in the aftermath of the 2008 financial crisis. But work has resumed on the development as the market has rebounded after the pandemic, with real estate prices and rents soaring amid an influx of newcomers to the city.

The island is nearly twice the size of Palm Jumeirah, Dubai’s other palm-shaped island. Last year, hundreds of buyers queued in 100°F (38°C) heat to snap up Palm Jebel Ali’s luxury homes even as hundreds of the island’s original buyers remained in limbo.

The contracts are another sign of Dubai’s booming property markets. They come just months after Nakheel was absorbed by Dubai Holding, a sprawling investment conglomerate owned by the emirate’s ruler.

By bringing both Nakheel and another developer Meydan “under the umbrella” of Dubai Holding, the emirate’s ruler Sheikh Mohammed bin Rashid Al Maktoum is hoping to create a “more financially efficient entity,” he said earlier this year.

The firm is also considering setting up a real estate investment trust to capitalize on the city’s property market. Setting up a REIT would allow investors to gain exposure to a number of prime income-generating assets overseen by one of the city’s biggest developers.

In total, Palm Jebel Ali includes 16 fronds. The contracts awarded Wednesday allow developers to begin building on the island’s first six fronds, according to the statement.

The emirate’s master plan for the island now includes 80 hotels and resorts and will add more than 90 kilometers to Dubai’s coastline. Officials hope the project will house as many as 35,000 families and that roughly a third of its public facilities will be powered by renewable energy.

“It is set to contribute significantly to the emirate’s economic development, attracting investment and tourism for years to come,” Khalid Al Malik, chief executive officer of Dubai Holding Real Estate, said in the statement.

#AbuDhabi Seeks Billions in Food Investment to Turn Net Exporter - Bloomberg #UAE

Abu Dhabi Seeks Billions in Food Investment to Turn Net Exporter - Bloomberg

Abu Dhabi is seeking to attract billions of dollars in investments from agrifood companies as supply chain disruptions around the world are spurring a quest for greater self-sufficiency.

The United Arab Emirates’ capital that imports most of its food, is seeking 128 billion dirhams ($34.9 billion) of investments in the sector by 2045, according to the Abu Dhabi Investment Office. It will offer subsidies to domestic and international firms to attract production of anything from livestock and fish farming to alternative protein and seaweed, said Fatima Al Dhaheri, head of the office’s food and water group.

“We want to make Abu Dhabi a net exporter in the future,” Al Dhaheri said in an interview last week.

The Covid-19 pandemic, war in Ukraine, shipping snarls and extreme weather have shaken up food supply chains in the past few years, leading many nations to rethink how they feed themselves. The UAE, which buys 80% of its food from overseas, has redoubled efforts to bolster domestic production and build its reserves. But boosting food output in the hot and arid desert region is challenging.

Even so, its plan to become a net exporter “is very feasible” said Christian Henderson, a lecturer on Middle East studies at Leiden University in the Netherlands. “They’ve already been very proactive in terms of having greater control and scaling up supply chains.”

The Abu Dhabi Investment Office, which injects funds on behalf of the region’s government, founded the AgriFood Growth and Water Abundance cluster that Al Dhaheri heads in June this year. It will work with firms on using technologies that facilitate food production such as desalination, Al Dhaheri said.

The group’s focus will include the development of new foods such as alternative proteins and algae, she said. It has signed preliminary agreements with Switzerland’s NUOS and Israel’s Believer Meats to set up operations in Abu Dhabi. Food demand has risen as the emirate’s population increased to 3.8 million in 2023 from 2.1 million in 2011.

Cash support will be determined on a case-by-case basis, while the government also has the capacity to invest directly in companies, Al Dhaheri said. Firms can set up anywhere in Abu Dhabi, including in freezones that often offer other perks.
GDP Boost

Besides food security, Abu Dhabi is seeking to bolster its economy by 90 billion dirhams of incremental GDP from the sector by 2045. It wants to create more than 60,000 additional jobs, Al Dhaheri said.

The emirate is not alone in trying to drive investments into food. Dubai is building an 18 million square feet development for high-technology production and processing. Neighboring Saudi Arabia’s Vision 2030 program includes a plan to reinforce supply chains and boost local food production.

Rising investment in food technologies in the Middle East is mimicking that of financial technology, Noor Sweid, founder and managing director of venture capital firm Global Ventures, said on Bloomberg TV this month.

“We’ve seen an increase in equity investment in vertical farming across the agritech space,” she said. “Five years from now, supply-chain tech and agritech might be where fintech is today.”

Exclusive: #Qatar LNG sales to key Asian markets confronted by US, #UAE rivalry | Reuters

Exclusive: Qatar LNG sales to key Asian markets confronted by US, UAE rivalry | Reuters

Qatar is finding it hard to agree new deals to supply liquefied natural gas (LNG) to Japan and South Korea as rising competition from the U.S. and elsewhere with more flexible contract terms challenges Doha's decades-old dominance of the market.

Qatar was once the top LNG supplier to Japan and South Korea, but buyers are showing preference for supplies from the United States, the United Arab Emirates and Oman. These suppliers all offer shorter-term contracts and unlike Qatar do not restrict the cargoes' final destination.

This gives buyers flexibility to sell cargoes elsewhere in the future if they no longer need the cargoes.

Negotiations between Japanese and South Korean buyers and Qatar have stalled over Qatar's insistence on destination clauses, the sources said.

"The Qataris try to achieve a lot in how they sell their LNG, in terms of retaining control over the market, whereas (others such as) the UAE's ADNOC and Oman are kind of happy to just get a good price," a senior trading source said.

"ADNOC has taken advantage of the current situation, which is that people want diversification of supply," the source added.

If state-owned QatarEnergy (QE) does not sign new agreements with Japan and South Korea - the world's second and third largest LNG importers after China - Qatar's role would be further diminished. It was knocked off the top spot as global LNG supplier by the United States in 2023.

Qatar's major 4.92 million tons-per-year deal to supply Korea Gas Corp (KOGAS) expires this year. Another 2.1 mtpa supply deal expires in 2026, official data showed.
QatarEnergy said it does not comment on market speculation.

Japan's LNG demand is falling due to nuclear reactor restarts, more renewable energy and a slowing economy. Imports fell to 66 million metric tons in 2023, from 83 tons in 2018, Japan customs data shows.

Qatar's market share in Japan fell to 4% in 2023 from 12% in 2018. Meanwhile, the United States' share in Japan rose to 8% from 3% during the same period.

Qatar's share of South Korea's market fell to 19% in 2023 from 32% in 2018, with Australia's share rising to 24% from 19% and Malaysia's growing to 13% from 8% in the same period, data from consultancy Energy Aspects showed.

Russia, #UAE Trade Tripled During Last Three Years, Putin Says - Bloomberg

Russia, UAE Trade Tripled During Last Three Years, Putin Says - Bloomberg

Trade between Russia and the United Arab Emirates tripled over the last three years, said President Vladimir Putin as he hosted UAE ruler Sheikh Mohammed Bin Zayed Al Nahyan in Moscow ahead of official talks on Monday.

Bilateral investments between Russia and the UAE have reached $7 billion, he said in remarks published on the Kremlin’s website Sunday. Trade fell slightly in the first seven months of this year, Putin said, adding that the two leaders will discuss the matter in their negotiations.

They will also discuss Ukraine and the situation in the Middle East, which Putin called “very complicated.” He thanked the UAE ruler for the mediation of a prisoners exchange between Russia and Ukraine.

Trade relations between Russia and the UAE have blossomed after Moscow’s invasion of Ukraine. Putin on Sunday hosted Sheikh Mohammed at his residence for an informal dinner. The UAE leader will join the BRICS summit that is scheduled to begin on Tuesday in Kazan.

Sheikh Mohammed said the UAE will develop and strengthen its bilateral ties with Russia, according to the Kremlin’s statement.

Major Gulf markets mixed on regional conflict, rate cuts | Reuters

Major Gulf markets mixed on regional conflict, rate cuts | Reuters

Major stock markets in the Gulf were mixed in early trade on Monday amid simmering tensions in the region and weakening oil prices.

Hundreds of Beirut residents fled their homes late on Sunday with multiple explosions heard across the Lebanese capital, as Israel prepared to attack sites linked to the financial operations of Lebanon's Hezbollah group and told people to leave those areas immediately.

Israel's military response in Gaza has left more than 42,500 people dead and has made most of Gaza's 2.3 million people homeless, Palestinian officials say.

Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.7%, on course to snap two sessions of losses, with Al Rajhi Bank (1120.SE), opens new tab rising 1.3% and the country's biggest lender Saudi National Bank (1180.SE), opens new tab was up 1.2%.

Dubai's main share index (.DFMGI), opens new tab eased 0.1%, hit by a 0.5% fall in top lender Emirates NBD (ENBD.DU), opens new tab and a 1.1% slide in budget airliner Air Arabia (AIRA.DU), opens new tab.

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

Separately, United Arab Emirates' Lulu Group International, which runs one of the Middle East's biggest hypermarket chains, plans to sell a 25% stake in its Abu Dhabi initial public offering, Khaleej Times reported on Monday, citing a prospectus.

The Qatari benchmark (.QSI), opens new tab lost 0.3%, with Qatar Islamic Bank (QISB.QA), opens new tab falling 0.6%.

Oil prices - a catalyst for the Gulf's financial markets - edged up in Asian trading, following a more-than-7% drop last week on worries about demand in China, the world's top oil importer, and an easing of concerns about potential supply disruptions in the Middle East.

Lulu Retail kicks off one of #UAE's biggest IPOs this year | Reuters

Lulu Retail kicks off one of UAE's biggest IPOs this year | Reuters

Lulu Retail Holdings, which runs one of the Middle East's biggest hypermarket chains, kicked off an initial public offering on Monday that bankers say could be the UAE's largest this year.

The offering by the conglomerate that runs more than 240 stores in the six countries belonging to the Gulf Co-operation Council comes during a retail spending boom in the region that is spurring domestic listings by companies in the sector.

The listing, set to run from Oct. 28 to Nov. 5, will offer more than 2.582 billion shares, which are expected to start trading on the Abu Dhabi Securities Exchange on Nov. 14, Lulu's IPO document showed.

Two sources involved in the transaction said the offering could raise between $1.7 billion-$1.8 billion for the 25% stake. Lulu declined to comment on the value of the deal.

Founded in 1974 by Indian businessman Yusuff Ali, Lulu joins other grocery firms that have listed, such as UAE-based Spinneys this year, and Saudi grocery retailer BinDawood Holding in 2020.

"We are confident that Lulu will continue to be where the world comes to shop," Chief Executive Saifee Rupawala was quoted in the IPO document as saying, as he pointed to a $100-billion market opportunity presented by GCC retail over the next five years.

The firm's business in Saudi Arabia was also primed for further growth, he said.

Many consumers in the Middle East have switched towards local and regional brands, with companies such as Alokozay coming up as an alternative to Coca Cola and Pepsi and some Western brands like Starbucks hit by grassroots boycott campaigns over Israel's offensive in the Gaza Strip.

In February, Saudi Arabia's Savola Group said it planned to list its grocery subsidiary Panda Retail, while the kingdom's wealth fund last year acquired a 30% stake in Tamimi Markets ahead of the supermarket chain's planned IPO.

In 2022, Reuters reported that Lulu was looking at an IPO and had hired investment bank Moelis & Co as an adviser.

Lulu said in the IPO document that it aimed to maintain a total dividend payout ratio of 75% of annual distributable profits after tax, and to make the payout twice a year, subject to relevant parameters.

Its first-half revenue of $3.9 billion this year was up 5.6% on the year, while full-year revenue in 2023 rose 5.6% to $7.3 billion.

The annual increase in revenue was primarily driven by sales growth from existing stores and further expansion of the group’s store network, as well as growth from its online channel.

Core earnings in the first half of 2024 stood at $391 million, up 4.3% on the year. Annual core earnings in 2023 rose 7.2% to $753 million.