Most Gulf markets gain ahead of earnings | Reuters

Most Gulf markets gain ahead of earnings | Reuters

Most Gulf stock markets ended higher on Tuesday as investors shifted their attention to corporate earnings, while also weighing U.S.-Iran tensions.

Iran and the U.S. are expected to restart nuclear talks on Friday in Turkey, officials from both sides told Reuters on Monday. Trump also warned that with large U.S. warships moving toward Iran, "bad things could happen" if the sides fail to reach a deal.

Saudi Arabia's benchmark index (.TASI), opens new tab edged 0.1% higher, helped by a 2.2% rise in Saudi Arabian Mining Company (1211.SE), opens new tab.

The kingdom's economy grew 4.9% year-on-year in the fourth quarter, according to government estimates, bolstered by strong growth in non-oil activities and increased oil production.

Oil-related growth surged in the quarter, up 10.4% as output ramped up in the latter half of the year.

Saudi stocks turned choppy after a rebound, but sentiment may improve after the CMA said it is reviewing foreign-ownership limits to further open the market, Milad Azar, market analyst at XTB MENA, said. The market still has upside potential on generally solid fourth-quarter earnings, though oil-price volatility remains a key risk, Azar added.

Dubai's main share index (.DFMGI), opens new tab gained 0.6%, with toll operator Salik Company (SALIK.DU), opens new tab rising 2.6%.

In Abu Dhabi, the index (.FTFADGI), opens new tab advanced 1.3%, with ADNOC Distribution (ADNOCDIST.AD), opens new tab closing 0.9% higher, following a sharp rise in fourth-quarter net profit.

According to Azar, the Abu Dhabi market has the potential for further growth as corporate fundamentals remain positive, although volatility in oil markets could still weigh on overall sentiment.

The Qatari index (.QSI), opens new tab added 0.1%, with Qatar National Bank (QNBK.QA), opens new tab, the Gulf's biggest lender by assets, rising 0.5%.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab jumped 2.9%, hitting a new record high, with most of its constituents closing in positive territory.

Egypt's non-oil private sector output grew for the third consecutive month in January, marking the longest period of expansion since late 2020, S&P Global reported on Tuesday, but demand conditions eased.

#Saudi National Bank Explores Foray into Booming SRT Market - Bloomberg

Saudi National Bank Explores Foray into Booming SRT Market - Bloomberg

Saudi National Bank is considering a foray into the rapidly-growing market for significant risk transfers as it seeks fresh ways to maximize its capacity to bankroll the kingdom’s $2 trillion Vision 2030 agenda.

Saudi Arabia’s largest bank by assets has held preliminary talks with experts on the benefits of SRT transactions, which can help banks unlock capital tied up against existing loans, according to people familiar with the matter. Discussions are at an early stage and no specific deals have been shared with prospective investors, said the people, who asked not to be named because the matter is private.

A decision on any such deal would likely come following approval by bank supervisors, one of the people said. A representative for SNB did not respond to multiple requests for comment.

Though historically seen as strong lenders with ample liquidity, more onerous capital demands and slower growth in deposits at some Saudi banks have challenged their ability to finance a raft of expensive development projects across the country. The sector’s loan-to-deposit ratio rose to a record 108% as of November, according to an index compiled by the Saudi Central Bank.

Saudi Arabia has ordered sweeping reviews of its project pipeline, which originally included the Asian Winter Games in 2029 and the FIFA World Cup in 2034. Though home to a $1 trillion sovereign wealth fund and 35 million people mostly under the age of 35, the country has been in fiscal shortfall since 2022 as revenues trail spending.

SNB recently raised $1 billion by issuing perpetual securities, data compiled by Bloomberg show. The notes, which are eligible for the lender’s Additional Tier 1 buffers, were priced at a yield of 6.15% on Jan. 15, following earlier discussions with investors at around 6.625%, people familiar with the matter said at the time. The Riyadh-based bank last month posted full-year profit of 25.01 billion riyals ($6.7 billion), beating the analyst consensus compiled by Bloomberg, helped by higher net fee income from banking services and a rise in investment income.

SRTs enable banks to insure a portfolio of loans against default. The privately-structured deals typically allow banks to buy protection for between 5% and 15% of the loan’s value and can help free up capital they would otherwise need to stockpile against those exposures. That cash can then be used in new lending, acquisitions or to boost shareholder payouts.

The SRT market is set to double in size over the next five years, driven by banks in Europe and the US, according to Man Group estimates. BNP Paribas SA is helping Abu Dhabi Commercial Bank PJSC lay groundwork for a potential SRT deal, while Singapore’s DBS Group Holdings Ltd. is also considering its entry into the rapidly-growing global market, people briefed on the lenders’ plans said last month.

In Europe, several big banks including Deutsche Bank AG and ING Groep NV have said they will expand their use of such instruments, while BBVA SA, UniCredit SpA, HSBC Holdings Plc are among those in discussions about new potential deals, Bloomberg has previously reported.

#AbuDhabi Builds a New Deal Machine Around its Crown Prince - Bloomberg

Abu Dhabi Builds a New Deal Machine Around its Crown Prince - Bloomberg

Donald Trump’s whirlwind tour of the Middle East last year included breakfast with Sheikh Khaled bin Mohammed, Abu Dhabi’s crown prince. The US president was seeking billions of dollars in investment, and the Emirati royal is now in pole position to deliver.

“We are not as big as the United States Mr. President, but we punch above our weight,” the crown prince told Trump at the time. That comment spotlighted the city’s ambitions and Sheikh Khaled’s heft, which has ballooned in recent days.

He now oversees the emirate’s newest wealth fund, created by folding the $263 billion sovereign investor ADQ into an entity called L’imad Holding Co. This firm is likely to be positioned as the first point of contact for international investors and more of the emirate’s surplus oil revenue may be funneled into L’imad in coming years, people familiar with the matter said.

Signs of the push behind the new fund are also present in the people handpicked to run it. L’imad — support or pillar in Arabic — counts Jassem Al Zaabi as its chief executive officer, a man described by some as among the country’s most influential non-royals.

ADQ had until now been helmed by the prince’s uncle, Sheikh Tahnoon bin Zayed, who also oversees the $1 trillion Abu Dhabi Investment Authority, the city’s main artificial intelligence firms, and its biggest lender. The sparse release laying out Abu Dhabi’s reshaping of its $2 trillion sovereign fund landscape didn’t mention the senior royal, also the United Arab Emirates’ national security advisor, who helped negotiate a $1.4 trillion investment commitment with Trump.

This account is based on conversations with people familiar the matter, who declined to be identified discussing sensitive information. Some said the recent changes offered a glimpse into the evolving power structures in Abu Dhabi, which bankers and investors the world over have increasingly tapped to bankroll deals. The moves will now train the spotlight on Al Zaabi and the 44-year-old crown prince, they said.

Abu Dhabi’s ministry of foreign affairs didn’t respond to a request for comment.

The crown prince is “acquiring ever more important portfolios in national security and cyber security but also now getting more power and influence in the realm of geo-economics, which is the backbone of Abu Dhabi’s power,” said Andreas Krieg, a lecturer in Middle Eastern security issues at King’s College in London.

This marks a generational shift beyond the Bani Fatima, he said, referring to a group of six brothers, all sons of UAE founder Sheikh Zayed bin Sultan Al Nahyan from his third and most prominent wife. That includes ruler Sheikh Mohammed bin Zayed, Sheikh Tahnoon, and Sheikh Mansour bin Zayed, chairman of Mubadala Investment Co.

For titans of finance, the moves mean they’ll now have to contend with a more complex power structure in Abu Dhabi. For his part, on his trips to the emirate, BlackRock Inc. CEO Larry Fink attempts to first meet Sheikh Mohammed, followed by Sheikh Tahnoon and Sheikh Khaled, one person familiar with the matter said.

BlackRock declined to comment.

The Money Men
Sheikh Khaled was named crown prince in 2023. At the time, the ruler also promoted his own siblings, expanding their responsibilities and portfolios in a careful division of power.

That led to Sheikh Tahnoon playing an outsize role in the business of Abu Dhabi, while the crown prince focused on the political and social aspects of running the country. Now, Sheikh Khaled has oversight of some of the emirate’s most important companies in his role atop a fund that’s already shown signs of global ambition.

Late last year, it joined established Gulf wealth funds and Trump’s son-in-law Jared Kushner in attempting to back Paramount Skydance Corp.’s hostile bid for Warner Bros. Discovery Inc.

By the crown prince’s side will be Al Zaabi.

As chairman of Abu Dhabi’s Department of Finance, he has been instrumental in ensuring coordination among all major Abu Dhabi entities, people familiar with the matter said. That makes him key to decision-making when it comes to deciding which sovereign entities get assigned Abu Dhabi’s oil money.

He wears other hats, including secretary general of Abu Dhabi’s Supreme Council for Financial and Economic Affairs and is a member of the Abu Dhabi Executive Council. Crucially, he’s said to be close to both Sheikh Mohammed and Sheikh Tahnoon, making him unusually well-positioned to coordinate across all the emirate’s spheres of influence.

In addition to Al Zaabi, Mubadala’s globally-influential CEO Khaldoon Al Mubarak is also on the board on L’imad. Unlike the latter who has celebrity status in the UAE, Al Zaabi cuts a more discreet profile on the global stage. But to the bankers, asset managers and corporates looking to navigate Abu Dhabi’s trillions, he’s every bit as essential.

The new fund’s dealmaking is likely to be shaped at least in part by the duo, in conjunction with other longtime advisers of Abu Dhabi’s ruler, some people familiar with the matter said.

Wall Street Visits
Discussions on establishing L’imad began well before it was unveiled to the world, with some personnel from the Abu Dhabi Department of Finance helping to lead its creation, people familiar with the matter said. Despite making headlines for backing Paramount, the fund is still being built from the ground up and is operating without a website.

The creation of another sovereign entity in Abu Dhabi raises questions over whether the emirate needs to have so many different pockets of state-owned capital while ensuring they don’t compete for the same deals.

Bankers and executives describe L’imad’s chairman, the crown prince, as a newer figure within dealmaking in Abu Dhabi and few have clear impressions yet on how he will deal with the world of finance. In recent months, many have ramped up their efforts to form a relationship.

Abu Dhabi’s official social media accounts have highlighted a series of meetings between the crown prince and executives ranging from the CEO of Cisco Systems Inc. to the head of State Street Corp. and even the prime minister of Singapore.

That follows a period where the emirate has steadily elevated the prince on the international scene. The royal took Trump on a visit to an Abu Dhabi mosque last year, and before that attended Pope Francis’s funeral in Rome. In January, the prince was present as his father met with Kushner and other delegates participating in talks about Ukraine held in Abu Dhabi.

His new role at L’imad elevates him on the global business scene as well.

“It’s looking like SWF governance is a training ground for running a country,” said Jim Krane, a research fellow at Rice University’s Baker Institute. “In the UAE, which likens itself to a big corporation, this strategy makes sense.”