Friday, 14 March 2025

#Kuwait Paves Way for Bond Sales as Cabinet Approves Debt Law - Bloomberg

Kuwait Paves Way for Bond Sales as Cabinet Approves Debt Law - Bloomberg


Kuwait’s cabinet approved a draft decree that paves the way for the OPEC-member Gulf state to sell international debt for the first time in eight years.

The Council of Ministers approved a law on “financing and liquidity,” according to a statement released after Thursday’s meeting, in reference to a public debt law. There were no details provided.

The long-awaited decree, presented to the government by Finance Minister Noura Al-Fassam, has been referred to Kuwait’s ruler, Sheikh Mishaal Al-Ahmed Al-Sabah, who has to approve all laws.

The original draft law stipulated enabling as much as 20 billion dinars ($65 billion) to be raised over 50 years, people familiar with the matter told Bloomberg in January. The debt cap could be raised in the final draft since previous proposals had suggested a limit of 30 billion dinars, the people said at the time.

“Better late than never,” said Bader Al Saif, an assistant professor at Kuwait University and an associate fellow at Chatham House. “Kuwait’s potential is real and immense. But in the absence of a bold and urgent set of actions, the country’s potential will soon dissipate.”

A public debt bill has been held up for years by political wrangling, making it impossible for successive governments to borrow. That’s forced them to rely on the General Reserve Fund, or treasury. Kuwait would tap international markets mainly to fund key development projects, and to help plug its fiscal deficit if needed.

The Gulf nation is a key US ally in the Middle East, one of the world’s biggest oil exporters and home to a sovereign wealth fund valued at around $1 trillion. The country’s last issuance was an $8 billion five- and 10-year deal in March 2017, just days before the previous debt law expired

The longer notes, maturing in 2027, trade with a yield of around 4.75%, roughly in line with the likes of neighboring oil-rich governments Abu Dhabi, Qatar and Saudi Arabia, and 200 basis points below the average for emerging-market sovereign debt.

“I expect there to be strong demand for Kuwait’s return to the Eurobond market after an eight year absence,” said Fady Gendy, a fixed-income portfolio manager at Arqaam Capital Ltd. in Dubai.

Kuwait has little external debt and is rated A1 by S&P Global Ratings, in line with China and Japan.

Kuwait’s emir suspended parliament for four years in May, effectively clearing the way for the government — headed and appointed by the ruling Al-Sabah family — to pass key bills. It has the Gulf Cooperation Council’s only elected parliament, creating a pluralism that presented its own challenges.

Political dysfunction has plagued the country and stymied development for years, deterring foreign investment, thwarting fiscal reform and hindering efforts to diversify the oil-reliant economy.

Once enacted, the new law would allow Kuwait to issue both conventional bonds and Islamic Sukuk, according to the people, who also said Kuwait would tap bond markets only when required.

#AbuDhabi’s Adnoc Is Said to Mull Buying Mubadala Energy Assets - Bloomberg

Abu Dhabi’s Adnoc Is Said to Mull Buying Mubadala Energy Assets - Bloomberg

Abu Dhabi’s state oil firm is weighing plans to buy the energy assets of sovereign wealth fund Mubadala Investment Co., according to people with knowledge of the matter.

Abu Dhabi National Oil Co. started negotiations with Mubadala late last year, though talks stalled in recent months amid disagreements over valuation, the people said, asking not to be named because the information is private. At the time, the firms were discussing a deal worth about $10 billion, according to one of the people.

Talks are likely to resume soon, potentially after Ramadan ends in March, some of the people said. Executives at Adnoc and Mubadala, along with leaders in Abu Dhabi, are keen to pursue a deal, they said.

No final decisions have been made, and a transaction ultimately may not materialize. Mubadala declined to comment, while representatives for Adnoc didn’t immediately respond to requests for comment.

The fund owns gas fields in Thailand and Indonesia, projects in Malaysia and an oil joint venture in Oman. It’s also a majority shareholder in Dolphin Energy Ltd., which processes gas from a massive field in Qatar and transports it by pipeline to the UAE.

Ownership of the assets would stay within Abu Dhabi after any deal as the emirate tries to reorder state holdings and give entities specific industry focus. During the past year, the city — capital of OPEC member the United Arab Emirates — set up new vehicles to deploy capital across sectors ranging from artificial intelligence to energy.

As part of that push, Mubadala, which manages $330 billion in assets, has been looking to offload some of the energy portfolio acquired during the past decade as it shifts focus to health care, finance and technology.

A successful deal would cement Adnoc’s strategy around oil and gas. The firm manages the UAE’s vast fields at home and is pushing into related sectors overseas. It also created an overseas investment firm called XRG PJS, and has been transferring its global assets into that.

Adnoc recently announced a $13.4 billion deal to buy Nova Chemicals from Mubadala as part of a larger transaction to merge two chemical units that will give the energy firm greater presence in North America, including production facilities on the US Gulf Coast.

Last year, the company agreed to the $13 billion purchase of German chemical maker Covestro AG, which will be the biggest acquisition of a European company by a Middle Eastern firm when completed. The oil producer has also taken stakes in a liquefied natural gas export facility in the US along with supply contracts for the fuel.

#Dubai declines over new tariff threats, oil holds #AbuDhabi | Reuters

Dubai declines over new tariff threats, oil holds Abu Dhabi | Reuters


Dubai's index declined on Friday, driven by losses in heavyweight real estate sector stocks as U.S. President Donald Trump's latest tariff threats made investors nervous, while Abu Dhabi bucked the trend to close higher.

In the latest in a long list of tariff threats, Trump said he would hit European beverage imports with duties of 200% if the EU does not remove U.S. whiskey surcharges.

Dubai's main index (.DFMGI), opens new tab fell 0.9% after two sessions of gains, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab and its construction arm Emaar Development (EMAARDEV.DU), opens new tab falling 2.2% and 2.8% respectively.

Among the losers, Commercial Bank of Dubai (CBD.DU), opens new tab slid 6.1% as the stock went ex-dividend.

However, Dubai Investments (DINV.DU), opens new tab jumped 4.4% after the firm raised its full-year dividend by 44% to 18 fils a share.

Abu Dhabi's benchmark index (.FTFADGI), opens new tab edged up 0.1%, supported by a 1.1% rise in largest lender First Abu Dhabi Bank (FAB.AD), opens new tab and a 1.4% hike in Emirates Telecommunication Group (know as E& Group) (EAND.AD), opens new tab.

On Thursday, Gulf Cement (GCEM.AD), opens new tab received an offer from TC Mena Holdings to acquire up to 100% stake in the company at AED 0.56 per share.

Gulf cement stock closed 1.8% higher.

Oil prices - a key catalyst for Gulf's financial market - rebounded on Friday due to the diminishing prospects of a quick end to the Ukraine war that could bring back more Russian energy supplies to Western markets.

Brent crude was up 1% at $70.57 a barrel by 1130 GMT.

Oil prices continue to play a crucial role in the potential ongoing recovery of the Abu Dhabi market, having reached and paused at key support levels, said Hani Abuagla Senior Market Analyst at XTB MENA.

He further said that any rebound in oil prices could provide positive momentum for the market.

Dubai and Abu Dhabi indexes recorded their fourth consecutive week of losses, declining 1.6% and 0.3% respectively, according to LSEG.