#SaudiArabia’s Jump in Debt Exceeds Even Era of Negative Oil - Bloomberg

Saudi Arabia’s Jump in Debt Exceeds Even Era of Negative Oil - Bloomberg

Saudi Arabia’s debt levels jumped the most on record in the first quarter after the government revealed more borrowing in the private markets.

The country’s net indebtedness rose by about $30 billion, according to a statement from the Ministry of Finance. That’s even more than at the height of the coronavirus pandemic in 2020, when oil prices briefly turned negative.

Domestic borrowing increased by $16 billion, with about $13 billion coming from private placements that had not formerly been announced. On top of that, more than $14 billion was raised from international debt sales.

Private debt deals help the finance ministry manage supply in the market, expand its investor base and take advantage of market opportunities, a spokesperson for the National Debt Management Center said in a statement.

The spokesperson didn’t give details on who the investors were.

Saudi Arabia’s rising debt levels come at a critical time for the kingdom, with Crown Prince Mohammed bin Salman due to host US President Donald Trump next week. The American leader will be seeking $1 trillion of investment from Riyadh — a task that appears increasingly complicated given Saudi Arabia’s growing budget deficit and indebtedness.

Governments around the world often issue debt in both public and private bond markets. Deals of the latter type tend to be quicker to issue, though they’re usually sold to just a few investors and thus can be smaller than public bonds.

Saudi Arabia has ramped up borrowing in the past three years as oil prices have fallen and the government maintains high spending to fund the crown prince’s mega projects, including the new city of Neom. In the first quarter, the kingdom posted its highest fiscal deficit since 2021.

Still, Saudi Arabia’s total debt stands at $354 billion, only around 30% of gross domestic product and low by the standards of most other governments. In addition, the government’s borrowing jumped as it refrained from tapping its more than $400 billion of foreign reserves. Those are crucial to the kingdom’s ability to defend the riyal’s peg to the dollar.

Previously, the highest quarterly jump in debt levels was in the second quarter of 2020, when borrowing rose by about $26 billion.

With oil prices having slumped around 20% since the end of March, the government may have to continue borrowing heavily over the rest of the year.

The increase in debt in the first quarter “more than finances the budgeted annual deficit,” said Justin Alexander, director of Khalij Economics and an analyst for consultant GlobalSource Partners. “But, in reality, a similar amount of net issuance will likely be needed during the remainder of the year.”

#Oman sovereign wealth fund in preliminary pact with #Algeria for investment fund

Oman sovereign wealth fund in preliminary pact with Algeria for investment fund

The Oman Investment Authority signed a preliminary agreement with Algeria's Finance Ministry to establish an investment fund worth 115 million Omani riyals ($298.79 million).

The fund announced by the sultanate's sovereign wealth fund will focus on mining, food security and pharmaceutical industries, according to a statement by the OIA.

The agreement was signed on the sidelines of an official visit by Oman's Sultan Haitham bin Tariq al-Said to the North African country.

Several agreements were signed during the visit, including a term sheet between Algeria's state oil and gas firm Sonatrach and Oman's oil and gas drilling services firm Abraj Energy Services to evaluate setting up a joint venture for oil services.

The term sheet outlines the technical, legal and economic and commercial conditions to evaluate establishing an oil services joint venture company in Algeria between the two companies, Sonatrach said in a statement on Monday.

The joint venture will focus on drilling, well services and management of integrated projects in the Algerian market, according to the statement.

#SaudiArabia’s Flynas Considers Seeking About $1 Billion in IPO - Bloomberg

Saudi Arabia’s Flynas Considers Seeking About $1 Billion in IPO - Bloomberg

Saudi Arabia’s Flynas, backed by billionaire Prince Alwaleed bin Talal, is considering seeking about $1 billion from its initial public offering, according to people familiar with the matter.

The low-cost carrier announced plans earlier this week to sell 51.26 million shares, representing 30% of its share capital. The IPO on the Riyadh exchange will include both newly issued shares and stock offered by existing shareholders — Alwaleed’s Kingdom Holding Co. and National Flight Services Co.

Discussions on the price range are ongoing and no final decisions have been made, the people said, requesting anonymity to discuss private information. The bookbuilding period is scheduled to run from May 12 to May 18.

Representatives for the airline declined to comment.

Flynas is among a small group of Middle Eastern firms pushing ahead with regional listings despite market volatility. Paper manufacturer United Carton Industries Co. is set to raise as much as $160 million, while hospital operator Specialized Medical Co. has also announced plans to go public.

Over in the United Arab Emirates, Dubai Holding intends to list a residential property portfolio as a real estate investment trust.

If successful, Flynas would become the first Gulf airline to go public in nearly two decades. The listing would also come ahead of a possible $1 billion offering from Etihad Airways PJSC.

The Saudi airline reported revenue of $2 billion in 2024, with a net profit of about $116 million. Goldman Sachs Group Inc., Morgan Stanley and BSF Capital are joint global coordinators on the share sale. Al Rajhi Capital, ANB Capital, Citigroup and Emirates NBD are joint bookrunners.

Exclusive: ADNOC set to gain unconditional EU antitrust nod for Covestro deal, sources say | Reuters

Exclusive: ADNOC set to gain unconditional EU antitrust nod for Covestro deal, sources say | Reuters

Abu Dhabi state oil giant ADNOC is set to secure unconditional EU antitrust approval for its 14.7 billion euro ($16.6 billion) takeover of German chemicals company Covestro (1COVG.DE), opens new tab, two people with direct knowledge of the matter said.

The deal, ADNOC's biggest ever, underscores Middle East countries' plans to diversify their investments and reduce dependence on oil amid the global transition to cleaner energy.

The European Commission does not see any competition issues because there are no overlaps between the two companies, the people said.

The EU competition watchdog, which is scheduled to decide on the deal by May 12, declined to comment. ADNOC, which expects to close the deal in the second half of this year, could not be immediately reached for comment.

Covestro, which earlier on Tuesday cut its 2025 core profit expectations, said it does not speculate about regulatory proceedings.

"XRG and Covestro are working constructively with all relevant authorities on the FSR, FDI and Merger Control filings. We are confident that all outstanding approvals can be obtained within the long-stop date (02.12.2025)," the company said in an email.

Once the deal is completed, XRG - the international investment arm of ADNOC - will become the new majority shareholder in Covestro, which makes plastics and chemicals for the automotive, construction, and engineering sectors.

The South African and Indian competition watchdogs have already cleared the deal without demanding remedies.

The acquisition is also subject to the EU's Foreign Subsidies Regulation (FSR), where the focus is on unfair foreign aid for companies. The rules aim to rein in unfair competition from non-EU companies subsidised by their governments.

ADNOC has yet to seek FSR clearance for the deal. It secured unconditional EU approval last year under the FSR for its acquisition of fertiliser firm Fertiglobe.

Most Gulf markets gain on oil ahead of Fed policy meet | Reuters

Most Gulf markets gain on oil ahead of Fed policy meet | Reuters

Most stock markets in the Gulf ended higher on Tuesday helped by a rebound in oil prices while investors awaited the Federal Reserve's monetary policy meeting.

Oil - a catalyst for the Gulf's financial markets - gained more than $1 per barrel, rebounding on technical factors and bargain hunting after a decision by OPEC+ to boost output sent prices down the previous session, although concerns about a market surplus persisted.

Saudi Arabia's benchmark index (.TASI), opens new tab edged 0.1% higher, Al Rajhi Bank (1120.SE), opens new tab and the country's biggest lender Saudi National Bank (1180.SE), opens new tab rising 0.9% each.

The Saudi stock market exhibited another muted performance today, with sectors showing mixed results as investors displayed uncertainty while awaiting further earnings announcements from major companies, said Milad Azar Market analyst at XTB MENA.

Separately, the kingdom's budget airline flynas, backed by billionaire Prince Alwaleed Bin Talal, is planning to start a public share offering later this month, it said on Monday, in the first IPO of a Gulf airline in nearly two decades.

Dubai's main share index (.DFMGI), opens new tab added 0.2%, supported by a 2.6% rise in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.

In Abu Dhabi, the index (.FTFADGI), opens new tab finished 0.6% higher.

The Fed's interest rate decision on Wednesday and Chair Jerome Powell's comments will be closely watched for clues into the central bank's rate trajectory. The Fed has held its policy rate in the 4.25%-4.50% range since last December.

The Fed's decisions impact monetary policy in the Gulf, where most currencies, including the riyal, are pegged to the U.S. dollar.

The Qatari index (.QSI), opens new tab gained 0.3%, with the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab rising 1.1%.

Investor attention remains on the possibility of easing trade tensions between the U.S. and China after Beijing last week said it was evaluating an offer from Washington to hold talks over tariffs.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab concluded 0.3% higher.