Asian Banks Fuel More Than $2 Billion Loan Boom in Middle East - Bloomberg
Middle East borrowers are ramping up loans that are being syndicated in Asia Pacific as they look to diversify fundraising beyond global bond and domestic markets.
More than $2 billion of Middle East deals targeting Asian bank liquidity have launched in recent weeks, including Saudi Electricity’s $1 billion loan, Banque Saudi Fransi’s $750 million facility and a $500 million financing for Al Ahli Bank of Kuwait.
The growing need for Middle East borrowers, primarily those from the Gulf States, to look beyond domestic capital markets comes as many regional economies press ahead with expensive diversification plans, in an environment where low oil prices are seen challenging growth and finances.
Saudi Arabia is running a fiscal deficit, with oil prices being far below the level of $92 a barrel the International Monetary Fund says it needs to balance its budget. That’s led to the government and Saudi companies ramping up borrowing to fund Crown Prince Mohammed bin Salman’s $2 trillion transformation program. Meanwhile, Qatar, Kuwait and the United Arab Emirates are among others that have agendas that will require heavy investment over several years to diversify revenues away from traditional energy sources.
“Middle Eastern borrowers, given the significant borrowing requirements, have been much more open to diversifying their lending relationships and willing to tap into the demand from Asia,” said Amit Lakhwani, global head of loan syndicate at Standard Chartered Plc. Asia also offers opportunities to borrow in new currencies or tenors versus what is available to them in the Middle East market, he added.
The volume of loans raised by Middle East borrowers in Asia Pacific touched a six-year high of $5.2 billion in 2024, according to Bloomberg-compiled data. The flurry of recent deals follow the closing of Qatar National Bank’s $2 billion borrowing in March that drew nearly 30 lenders, largely comprising Chinese, Japanese and Taiwanese banks, the data showed. Saudi Arabia’s Al Rajhi Bank more recently signed an around $2.3 billion five-year loan, which also attracted some Asian lenders.
Such deals have historically done well in Asia. There’s a huge demand from Asian banks to join the loans of Middle Eastern borrowers given the dearth of transactions back home. The volume of syndicated facilities — denominated in the US dollar, euro and Japanese yen — slumped 30% to $53 billion so far this year in Asia Pacific ex-Japan, according to Bloomberg-compiled data. That’s the lowest tally in at least a decade.
Moreover, not only do companies from the Middle East often have better credit ratings, but such deals are able to offer higher returns versus similarly-rated Asian entities, said Aaron Chow, managing director for loan capital markets, Asia Pacific at Sumitomo Mitsui Banking Corp.
The recent five-year loan of Saudi Electricity, which is rated A+ by Fitch, pays an interest margin of around 85 basis points over the benchmark Secured Overnight Financing Rate. In contrast, the recent nearly five-year borrowing of South Korea’s Shinhan Card, which is rated A by Fitch, offers margin of 80 basis points over SOFR.
Still, some of these deals could experience some headwinds given that banks have internal limits on how much capital can be deployed into a specific country and sector.
Monday, 30 June 2025
#Saudi PE Firm Jadwa Invests $45 Million in PetroApp Ahead of IPO - Bloomberg
Saudi PE Firm Jadwa Invests $45 Million in PetroApp Ahead of IPO - Bloomberg
Saudi private equity firm Jadwa Investment has committed $45 million to Saudi fuel and fleet management firm PetroApp, with a view toward taking the company public by 2028.
The funding is part of a $50 million round for PetroApp that also includes Abu Dhabi-based Bunat Ventures, according to a statement. Jadwa is investing through its flagship blind pool fund and said it expects to finalize another deal with a healthcare company before the end of 2025.
Jadwa has completed a number of deals in recent weeks as part of a broader strategy to scale regional businesses and capitalize on public offering momentum. It aims to raise another $104 million for its blind pool fund before year-end and is also said to be looking to divest its stake in Saudi firm UniPharma at valuation of $267 million.
Founded in 2018, PetroApp seeks to improve cost control for corporates and governments by offering digital fuel payment and fleet management solutions. It operates across a network of more than 5,000 fuel stations in Saudi Arabia, Egypt, Thailand and Nigeria, and is preparing to launch retail offerings in the kingdom.
Jadwa remains one of Saudi Arabia’s most active investment managers, overseeing about $30 billion in client assets.
Saudi private equity firm Jadwa Investment has committed $45 million to Saudi fuel and fleet management firm PetroApp, with a view toward taking the company public by 2028.
The funding is part of a $50 million round for PetroApp that also includes Abu Dhabi-based Bunat Ventures, according to a statement. Jadwa is investing through its flagship blind pool fund and said it expects to finalize another deal with a healthcare company before the end of 2025.
Jadwa has completed a number of deals in recent weeks as part of a broader strategy to scale regional businesses and capitalize on public offering momentum. It aims to raise another $104 million for its blind pool fund before year-end and is also said to be looking to divest its stake in Saudi firm UniPharma at valuation of $267 million.
Founded in 2018, PetroApp seeks to improve cost control for corporates and governments by offering digital fuel payment and fleet management solutions. It operates across a network of more than 5,000 fuel stations in Saudi Arabia, Egypt, Thailand and Nigeria, and is preparing to launch retail offerings in the kingdom.
Jadwa remains one of Saudi Arabia’s most active investment managers, overseeing about $30 billion in client assets.
Oil Traders Expect a Fourth Bumper OPEC+ Oil Supply Increase - Bloomberg
Oil Traders Expect a Fourth Bumper OPEC+ Oil Supply Increase - Bloomberg
Oil traders expect OPEC+ will agree a fourth bumper oil supply increase this weekend as group leader Saudi Arabia continues its bid to reclaim market share.
Eight key OPEC+ nations are preparing to discuss another hike of 411,000 barrels a day, due to take effect in August, delegates said last week. They’ll likely approve the move when they hold a video conference on Sunday, according to a survey of 32 traders and analysts.
The Organization of the Petroleum Exporting Countries and its allies have been reviving halted output at triple the initially-scheduled rate during the past three months, despite faltering fuel demand and signs of global oversupply.
The unexpected strategy pivot has heaped pressure on crude prices, which slid last week after a truce between Israel and Iran soothed fears over risks to Middle East exports. Brent futures are trading near $68 a barrel, down more than 9% since the start of the year.
OPEC’s choice will shape the trajectory for oil prices in the months ahead. Opening the taps stands to swell an impending global surplus, deepening a price slide that has tempered inflation but slashed revenues for producing nations.
Delegates have pointed to a range of reasons for the cartel’s shift. Those include meeting rising demand, as well as Saudi Arabia’s efforts to discipline overproducing members, appease President Donald Trump and regain market share.
Riyadh wants to revive idled oil output as quickly as possible, having grown frustrated with ceding sales volumes to US shale drillers and other rivals, people familiar with the matter said earlier this month.
“As the dust settles after the 12-day war, OPEC+ is expected to press ahead with the swift rollback,” said Jorge Leon, an analyst at research firm Rystad Energy A/S who previously worked at the OPEC secretariat. “There’s ample space for the alliance to recapture market share, while still keeping prices comfortably above $60.”
Thirty of the 32 survey respondents predicted that OPEC+ will ratify a boost of 411,000 barrels a day on Sunday, extending the run of similar-sized additions agreed for May, June and July. The other two forecast hikes of a smaller or unspecified size.
Russia, which led a short-lived opposition to the last super-sized increase, appears to have softened its position, signaling it will accept another boost if that’s the group’s consensus.
OPEC+ has so far agreed to restore roughly two-thirds of a 2.2 million-barrel cutback it implemented in 2023 in an effort to shore up oil prices. Another couple of hikes would complete the process, leaving the group to consider unwinding a further layer of supply restraints.
Still, the actual additions have so far been less than the promised amounts, in part because some members — such as Iraq and Russia — have forgone permitted increases to compensate for earlier overproduction. In May, the eight countries added just 154,000 of the possible 411,000 barrels.
Kazakhstan, the most egregious of the cheats, continues to flout its production limit by several hundred thousand barrels a day — a source of frustration for the Saudis. The country has limited ability to rein in the international firms expanding its production capacity, and has made little effort to do so.
Further OPEC+ increases are expected to pile more downward pressure on prices, and add to the strain on members’ finances. JPMorgan Chase & Co. projects that Brent futures will decline to the low $60s later this year, and fall further in 2026.
Nonetheless, with the organization’s quota-violators showing such limited signs of penance, Riyadh may resolve to press on with further additions.
“OPEC+ has adopted a market share strategy,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “The cat’s out of the bag, and they will not attempt to put it back in.”
Oil traders expect OPEC+ will agree a fourth bumper oil supply increase this weekend as group leader Saudi Arabia continues its bid to reclaim market share.
Eight key OPEC+ nations are preparing to discuss another hike of 411,000 barrels a day, due to take effect in August, delegates said last week. They’ll likely approve the move when they hold a video conference on Sunday, according to a survey of 32 traders and analysts.
The Organization of the Petroleum Exporting Countries and its allies have been reviving halted output at triple the initially-scheduled rate during the past three months, despite faltering fuel demand and signs of global oversupply.
The unexpected strategy pivot has heaped pressure on crude prices, which slid last week after a truce between Israel and Iran soothed fears over risks to Middle East exports. Brent futures are trading near $68 a barrel, down more than 9% since the start of the year.
OPEC’s choice will shape the trajectory for oil prices in the months ahead. Opening the taps stands to swell an impending global surplus, deepening a price slide that has tempered inflation but slashed revenues for producing nations.
Delegates have pointed to a range of reasons for the cartel’s shift. Those include meeting rising demand, as well as Saudi Arabia’s efforts to discipline overproducing members, appease President Donald Trump and regain market share.
Riyadh wants to revive idled oil output as quickly as possible, having grown frustrated with ceding sales volumes to US shale drillers and other rivals, people familiar with the matter said earlier this month.
“As the dust settles after the 12-day war, OPEC+ is expected to press ahead with the swift rollback,” said Jorge Leon, an analyst at research firm Rystad Energy A/S who previously worked at the OPEC secretariat. “There’s ample space for the alliance to recapture market share, while still keeping prices comfortably above $60.”
Thirty of the 32 survey respondents predicted that OPEC+ will ratify a boost of 411,000 barrels a day on Sunday, extending the run of similar-sized additions agreed for May, June and July. The other two forecast hikes of a smaller or unspecified size.
Russia, which led a short-lived opposition to the last super-sized increase, appears to have softened its position, signaling it will accept another boost if that’s the group’s consensus.
OPEC+ has so far agreed to restore roughly two-thirds of a 2.2 million-barrel cutback it implemented in 2023 in an effort to shore up oil prices. Another couple of hikes would complete the process, leaving the group to consider unwinding a further layer of supply restraints.
Still, the actual additions have so far been less than the promised amounts, in part because some members — such as Iraq and Russia — have forgone permitted increases to compensate for earlier overproduction. In May, the eight countries added just 154,000 of the possible 411,000 barrels.
Kazakhstan, the most egregious of the cheats, continues to flout its production limit by several hundred thousand barrels a day — a source of frustration for the Saudis. The country has limited ability to rein in the international firms expanding its production capacity, and has made little effort to do so.
Further OPEC+ increases are expected to pile more downward pressure on prices, and add to the strain on members’ finances. JPMorgan Chase & Co. projects that Brent futures will decline to the low $60s later this year, and fall further in 2026.
Nonetheless, with the organization’s quota-violators showing such limited signs of penance, Riyadh may resolve to press on with further additions.
“OPEC+ has adopted a market share strategy,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “The cat’s out of the bag, and they will not attempt to put it back in.”
CVC, Tabreed enter partnership to buy #UAE district cooling business | Reuters
CVC, Tabreed enter partnership to buy UAE district cooling business | Reuters
United Arab Emirates' Tabreed (TABR.DU), opens new tab and private equity firm CVC's (CVC.AS), opens new tab infrastructure strategy arm, CVC DIF, plan to acquire Abu Dhabi-based Multiply Group's (MULTIPLY.AD), opens new tab district cooling business, according to a statement on Monday.
CVC DIF and Tabreed have entered into a partnership to acquire PAL Cooling Holding at an equity value of about 3.8 billion dirhams ($1.03 billion), CVC DIF, Tabreed and Multiply Group said in a joint statement.
The deal is subject to customary regulatory approvals.
Multiply Group was advised by Standard Chartered and Clifford Chance, according to the statement, while Tabreed and CVC DIF were advised by Citi, Synergy Consulting and White & Case.
Reuters reported on May 30 that CVC and Tabreed were in exclusive talks to buy PAL Cooling Holding.
The interest in PAL Cooling Holding highlights how international buyout groups are increasingly looking to invest in the Gulf region as governments there strive to diversify their economies from oil.
District cooling plants, which deliver chilled water via insulated pipes to cool offices, industrial and residential buildings, have been developed as a more economical and environmentally friendly alternative to air conditioning.
They are popular in the United Arab Emirates and elsewhere in the Arabian Peninsula, where summer air temperatures can soar above 50 degrees Celsius (122 degrees Fahrenheit).
United Arab Emirates' Tabreed (TABR.DU), opens new tab and private equity firm CVC's (CVC.AS), opens new tab infrastructure strategy arm, CVC DIF, plan to acquire Abu Dhabi-based Multiply Group's (MULTIPLY.AD), opens new tab district cooling business, according to a statement on Monday.
CVC DIF and Tabreed have entered into a partnership to acquire PAL Cooling Holding at an equity value of about 3.8 billion dirhams ($1.03 billion), CVC DIF, Tabreed and Multiply Group said in a joint statement.
The deal is subject to customary regulatory approvals.
Multiply Group was advised by Standard Chartered and Clifford Chance, according to the statement, while Tabreed and CVC DIF were advised by Citi, Synergy Consulting and White & Case.
Reuters reported on May 30 that CVC and Tabreed were in exclusive talks to buy PAL Cooling Holding.
The interest in PAL Cooling Holding highlights how international buyout groups are increasingly looking to invest in the Gulf region as governments there strive to diversify their economies from oil.
District cooling plants, which deliver chilled water via insulated pipes to cool offices, industrial and residential buildings, have been developed as a more economical and environmentally friendly alternative to air conditioning.
They are popular in the United Arab Emirates and elsewhere in the Arabian Peninsula, where summer air temperatures can soar above 50 degrees Celsius (122 degrees Fahrenheit).
#Saudi wealth fund annual profit tumbles 60% as high rates, inflation bite | Reuters
Saudi wealth fund annual profit tumbles 60% as high rates, inflation bite | Reuters
Saudi Arabia's sovereign wealth fund's assets exceeded $1 trillion in 2024, but its net profit slumped 60% from a year earlier, it reported on Monday, hurt by high interest rates and inflation as well as impairments on some projects.
The Public Investment Fund's net profit fell to 25.8 billion riyals ($6.9 billion), it said in a statement, adding that impairments primarily related to changes to operational plans and increases in budgeted costs.
The PIF is steering Saudi Arabia's ambitious economic agenda aimed at weaning the Gulf country's economy off oil.
Under the plan, dubbed "Vision 2030", the kingdom has poured hundreds of billions of dollars through the PIF into projects including NEOM, a massive urban and industrial development project nearly the size of Belgium to be built along the Red Sea coast.
"The prioritisation of some projects and the extension in the timelines of some giga projects could have been a factor for the impairments," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
"The rising cost of projects has also been a key challenge, and a factor behind the recalibration of the investment programme," she added.
Total assets under management rose 18% to 4.321 trillion riyals from 3.664 trillion riyals a year earlier, it said.
With a portfolio of investments ranging from date farms to multinational conglomerates, the PIF's sources of income include dividends from key portfolio companies including oil giant Saudi Aramco (2223.SE), opens new tab and the country's biggest lender Saudi National Bank (1180.SE), opens new tab.
It reported net profit of 64.4 billion riyals for 2023 in its consolidated statement on Monday.
However, its comprehensive income statement showed that the 138.1 billion riyals reported for 2023 in July last year had swung to a loss of 140 billion riyals this year. A comprehensive income statement includes items such as unrealised gains and losses as well as the change in value of some of a company's assets.
It said cash remained steady at 316 billion riyals, while group loans and borrowing increased slightly to 570 billion riyals.
Saudi Arabia's sovereign wealth fund's assets exceeded $1 trillion in 2024, but its net profit slumped 60% from a year earlier, it reported on Monday, hurt by high interest rates and inflation as well as impairments on some projects.
The Public Investment Fund's net profit fell to 25.8 billion riyals ($6.9 billion), it said in a statement, adding that impairments primarily related to changes to operational plans and increases in budgeted costs.
The PIF is steering Saudi Arabia's ambitious economic agenda aimed at weaning the Gulf country's economy off oil.
Under the plan, dubbed "Vision 2030", the kingdom has poured hundreds of billions of dollars through the PIF into projects including NEOM, a massive urban and industrial development project nearly the size of Belgium to be built along the Red Sea coast.
"The prioritisation of some projects and the extension in the timelines of some giga projects could have been a factor for the impairments," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
"The rising cost of projects has also been a key challenge, and a factor behind the recalibration of the investment programme," she added.
Total assets under management rose 18% to 4.321 trillion riyals from 3.664 trillion riyals a year earlier, it said.
With a portfolio of investments ranging from date farms to multinational conglomerates, the PIF's sources of income include dividends from key portfolio companies including oil giant Saudi Aramco (2223.SE), opens new tab and the country's biggest lender Saudi National Bank (1180.SE), opens new tab.
It reported net profit of 64.4 billion riyals for 2023 in its consolidated statement on Monday.
However, its comprehensive income statement showed that the 138.1 billion riyals reported for 2023 in July last year had swung to a loss of 140 billion riyals this year. A comprehensive income statement includes items such as unrealised gains and losses as well as the change in value of some of a company's assets.
It said cash remained steady at 316 billion riyals, while group loans and borrowing increased slightly to 570 billion riyals.
Gulf bourses end mixed; #Dubai at 17-year high | Reuters
Gulf bourses end mixed; Dubai at 17-year high | Reuters
Stock markets in the Gulf ended mixed on Monday with some including the Saudi index hit by profit-taking, while those in the United Arab Emirates continued their rebound following Iran-Israel ceasefire and Dubai reached a 17-year high.
Dubai's main share index (.DFMGI), opens new tab rose for sixth consecutive session to close 0.4% higher, at its highest since June 2008, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab rising 1.1%.
In other sectors, National Central Cooling Co (Tabreed) (TABR.DU), opens new tab advanced 1.8%.
Tabreed and private equity firm CVC's (CVC.AS), opens new tab infrastructure strategy arm, CVC DIF, plan to acquire Abu Dhabi-based Multiply Group's (MULTIPLY.AD), opens new tab district cooling business.
CVC DIF and Tabreed have entered into a partnership to acquire PAL Cooling Holding at an equity value of about 3.8 billion dirhams ($1.03 billion).
Multiply Group shares were up 2.6%.
The market appears well-supported by strong fundamentals for a continued upward trend, said Osama Al Saifi, Managing Director for MENA at Traze.
In Abu Dhabi, the index (.FTFADGI), opens new tab gained 0.7%.
Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.4%, snapping a five-session winning streak, weighed down by a 2.5% fall in Al Rajhi Bank (1120.SE), opens new tab.
The Saudi market concluded its second quarter with losses. The next significant event could be upcoming second-quarter earnings results, which could help spur a recovery in the second half of the year, said Al Saifi.
"However, the potential for lower oil prices remains a headwind," he said.
On the other hand, oil giant Saudi Aramco (2222.SE), opens new tab added 0.1%.
Oil prices - a catalyst for the Gulf's financial markets - held steady as Middle East risks eased, while a possible OPEC+ output increase in August and uncertainty over the global demand outlook weighed on the market.
The Qatari benchmark (.QSI), opens new tab lost 0.2%, ending six consecutive sessions of gains, with petrochemical maker Industries Qatar (IQCD.QA), opens new tab declining 1%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab retreated 1.1%, with Talaat Moustafa Group Holding (TMGH.CA), opens new tab dropping 2.3%.
Meanwhile, Egypt's economy grew by 4.77% in the third quarter of its 2024/25 fiscal year, up from 2.2% in the same quarter a year earlier, as manufacturing activity recovered, the planning ministry said on Monday.
Stock markets in the Gulf ended mixed on Monday with some including the Saudi index hit by profit-taking, while those in the United Arab Emirates continued their rebound following Iran-Israel ceasefire and Dubai reached a 17-year high.
Dubai's main share index (.DFMGI), opens new tab rose for sixth consecutive session to close 0.4% higher, at its highest since June 2008, with blue-chip developer Emaar Properties (EMAR.DU), opens new tab rising 1.1%.
In other sectors, National Central Cooling Co (Tabreed) (TABR.DU), opens new tab advanced 1.8%.
Tabreed and private equity firm CVC's (CVC.AS), opens new tab infrastructure strategy arm, CVC DIF, plan to acquire Abu Dhabi-based Multiply Group's (MULTIPLY.AD), opens new tab district cooling business.
CVC DIF and Tabreed have entered into a partnership to acquire PAL Cooling Holding at an equity value of about 3.8 billion dirhams ($1.03 billion).
Multiply Group shares were up 2.6%.
The market appears well-supported by strong fundamentals for a continued upward trend, said Osama Al Saifi, Managing Director for MENA at Traze.
In Abu Dhabi, the index (.FTFADGI), opens new tab gained 0.7%.
Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.4%, snapping a five-session winning streak, weighed down by a 2.5% fall in Al Rajhi Bank (1120.SE), opens new tab.
The Saudi market concluded its second quarter with losses. The next significant event could be upcoming second-quarter earnings results, which could help spur a recovery in the second half of the year, said Al Saifi.
"However, the potential for lower oil prices remains a headwind," he said.
On the other hand, oil giant Saudi Aramco (2222.SE), opens new tab added 0.1%.
Oil prices - a catalyst for the Gulf's financial markets - held steady as Middle East risks eased, while a possible OPEC+ output increase in August and uncertainty over the global demand outlook weighed on the market.
The Qatari benchmark (.QSI), opens new tab lost 0.2%, ending six consecutive sessions of gains, with petrochemical maker Industries Qatar (IQCD.QA), opens new tab declining 1%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab retreated 1.1%, with Talaat Moustafa Group Holding (TMGH.CA), opens new tab dropping 2.3%.
Meanwhile, Egypt's economy grew by 4.77% in the third quarter of its 2024/25 fiscal year, up from 2.2% in the same quarter a year earlier, as manufacturing activity recovered, the planning ministry said on Monday.
Subscribe to:
Comments (Atom)