IS Morning Report Tuesday, July 03, 2018

Transcription

1 # Global & Regional Benchmarks # UAE Trading Summary Indices Close 1Day Change 1Mnth 3Mnth YTD 1Y Change Change Change Change (AEDm) BUY SELL NET ADX 4, % 0.2% -0.2% 4.1% 3.7% ADX DFM 2, % -5.3% -8.7% -16.1% -17.4% Local 33% 35% -2% TASI 8, % -0.7% 6.1% 14.5% 10.4% Foreign 67% 65% 2% KWSEI 1, % 3.5% 1.5% -1.7% -0.5% EGX 16, % -1.9% -6.5% 8.9% 21.8% Dow Jones 24, % -1.3% 1.1% -1.7% 13.2% S&P 500 2, % -0.3% 4.3% 2.0% 12.3% Nasdaq 7, % 0.2% 9.0% 9.6% 23.9% FTSE 100 7, % -2.0% 7.4% -1.8% 2.3% DAX 12, % -3.8% 2.0% -5.3% -1.9% CAC40 5, % -3.5% 2.4% -0.7% 1.6% Nikkei225 21, % -2.5% 1.5% -5.1% 7.7% HIS 28, % -7.6% -6.4% -5.9% 9.3% Institutional 86% 69% 17% Retail 14% 31% -17% DFM Local 44% 44% 0% Foreign 56% 56% 0% Institutional 33% 29% 4% Retail 67% 71% -4% Total Local 41% 41% -1% Foreign 59% 59% 1% # Upcoming Corporate Actions & Events Date Company Event 3-July CBI Board Meeting 4-July DIN Board Meeting 29-July ORDS Board Meeting 7-Aug KHCB Board Meeting 12-Aug ITHMR Board Meeting # Key Stories UAE private sector growth hits highest level this year -PMI Abu Dhabi s hotels report 4.9% rise in guest numbers

2 Drake and Scull to declare value of claims from previous management 'in due course' Etihad-linked bonds face restructuring amid Abu Dhabi silence Etihad Airways to retain 49% stake in Air Serbia Trade in Marka shares to remain suspended until September GGICO obtains regulatory nod for capital reduction Adnoc 's Yasat awards offshore contract to Abu Dhabi's NPCC UAE bank lending to commercial, industrial sectors rises 3.4% in 2018 Six firms in running to manage $1bln Abraaj healthcare fund Amanat agrees to buy Middlesex University's Dubai campus Ajman ruler issues decree to reduce tourism tax Saudi private sector growth starting to rebound from slump -PMI Saudi wealth fund PIF to take 15 pct stake in ACWA Power Saudi Crude Exports Jump in June as OPEC Oil-Cuts Deal Fades BlackRock Gets Saudi Securities' Arranging, Advising Licenses IMF urges Egypt to maintain tight monetary policy to ward off inflation Jordan Seeks to Renegotiate Terms of $700 Million IMF Loan # Key Global Trends // Market Clues Asian shares dropped in tentative morning trade on Tuesday as sentiment remained fragile in the face of tense trade relations between the United States and major economies, with investors braced for another potentially rocky day for Chinese markets. Investors, worried the trade row could derail a rare period of synchronized global growth, have pulled out of riskier assets in the past month or so. The Asia Pacific MSCI index ex-japan dropped 0.66 percent on early Tuesday trade. Oil prices climbed on Tuesday after Libya declared force majeure on some of its supplies, although an overall rise in OPEC output and an emerging slowdown in demand held back markets. Brent crude oil futures were at $77.71 per barrel at 0217 GMT, up 41 cents, or 0.5 percent, from their last close. President Donald Trump lashed out at OPEC with a warning to stop manipulating oil markets and piled pressure on U.S. ally Saudi Arabia to raise supplies to compensate for lower exports from Iran. Trump said in a tweet on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later walked back the president's comments, saying the king had said his country could raise oil production if needed. # UAE Stories Growth in the United Arab Emirates' non-oil private sector accelerated in June to its fastest rate this year but employment growth was sluggish, a survey showed on Tuesday. The seasonally adjusted Emirates NBD UAE Purchasing Managers' Index, which covers manufacturing and services, rose to 57.1 last month from 56.5 in May. A reading above 50 indicates expansion and below a contraction.the figures suggested the economy was continuing

3 to recover from the shock of the introduction of 5 percent value-added tax at the start of this year. Output growth climbed to 64.0 in June from 62.1 while growth in new orders rose to 63.0 from Hotels in Abu Dhabi saw a 4.9 per cent increase in guest numbers in the first five months of 2018, driven largely by growing number of visitors from India and China. Drake and Scull is continuing an investigation into violations by its previous management and declared them to UAE authorities, the company has said in a statement to the Dubai Financial Market (DFM). The statement follows a similar one made on June 6."We would like to reiterate that the company completed the investigation and has delivered all the violations of the previous management to the designated authorities in the UAE," the statement noted. "The violations are currently under consideration and investigation, and the company will subsequently declare the value of the required claims from the previous management in due course. The issuer of $500 million in bonds directly linked to Etihad Airways is looking at restructuring options as Abu Dhabi, which owns the carrier, has not intervened to avoid a default. An Amsterdam-based special purpose vehicle called SPV Equity Alliance Partners (EAP) issued a $700 million bond in 2015 and $500 million bond in 2016 for Etihad and other airlines it partially owned at the time, including Alitalia and Air Berlin. The bonds have been trading at a discount of over 25 points since last year, when Alitalia entered special administration and Air Berlin filed for bankruptcy, but the notes kept afloat because of market expectations of financial backing by Etihad, the borrower of reference under the special purpose vehicle, or by other Abu Dhabi entities. Etihad Airways confirmed on Monday it plans to retain its 49 per cent stake in Air Serbia, though it is not expected to renew its management contract expiring in late Marka, the Dubai-listed retail operator, confirmed on Monday that trading of its shares will be suspended until at least September 4. Trade on Marka has been suspended since April 30. The suspension comes after shareholders unanimously agreed in late April to postpone any discussions of Marka s restructuring plan until another general assembly meeting in September. Gulf General Investment Co. (GGICO), a Dubai-listed investment firm, said it has obtained regulatory approval for its capital restructuring programme. The regulatory nod follows approval from shareholders in late April, and will see the company cut its capital to Dh586.7 million from Dh1.79 billion on July 15. Abu Dhabi National Oil Company awarded local firm National Petroleum Construction Company, a contract to double the production capacity of its offshore Bu Haseer field by 2020, the firm said on Monday. Adnoc subsidiary Al Yasat Company for Petroleum Operations, which manages the Bu Haseer field, awarded the engineering, procurement and construction contract to Abu Dhabi-based NPCC to raise the output of the offshore asset from 8,000 barrels per day (bpd) to 16,000 bpd over the next two years. The total value of loans provided by banks operating in the UAE to the commercial and industrial sectors rose 3.4%, or AED 25.6 billion, to AED billion by the end of May, compared to AED billion in December The credit facilities of the commercial and industrial activities represented about 48% of the total bank lending to all sectors by the end of the fifth month of this year. Colony Capital, TPG and Cerberus Capital Management are among at least six firms vying to run Abraaj's $1 billion healthcare fund, three sources familiar with the matter said. Deloitte, the provisional liquidators of Abraaj, and investors in its healthcare funds are weighing these inquiries, which could pave the way for the healthcare fund to separate from the rest of Abraaj. United Arab Emirates (UAE) education and healthcare investment firm Amanat Holdings said on Monday that it has agreed to acquire Middlesex University's campus in Dubai, which is partly owned by embattled private equity

4 company Abraaj. Amanat entered into a share purchase agreement on an "arm's length basis" on June 8 to acquire the university's owner and operator, Middlesex Associates, from Mocha Education Holdings Limited. Sheikh Humaid bin Rashid Al Nuaimi, Ruler of Ajman, on Monday issued a decree to reduce the tourism tax paid by hotels and tourism companies in the emirate. The reduction of the fee from 10 to seven percent aims to promote tourism and improve the emirate's investment environment. # GCC/ MENA Growth in Saudi Arabia's non-oil private sector accelerated in June to its fastest rate this year as the economy showed signs of emerging from a severe slump triggered by government austerity policies, a survey of companies showed on Tuesday. The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index rose to last month from 53.2 in May. A level above 50 indicates expansion. In April, the PMI dropped to its lowest level since the survey was launched in 2009 as private businesses were hit by the introduction of 5 percent value-added tax and domestic fuel price hikes at the start of this year. Saudi Arabia's Public Investment Fund is taking a 15 percent direct stake in ACWA Power worth 2 billion riyals ($533 million). Crude oil exports from Saudi Arabia surged to a 15-month high in June as the kingdom ramped up production and helped to convince OPEC to boost its overall supply. Observed shipments from the world s largest oil exporter jumped to 7.47 million barrels a day last month, compared with 7.15 million barrels a day in May, according to Bloomberg preliminary calculations from vessel-tracking and ship-fixture data. BlackRock Gets Saudi Securities' Arranging, Advising Licenses. The Capital Market Authority authorizes BlackRock Saudi Arabia to conduct arranging and advising activities in the securities business in the kingdom, according to a statement. Egypt should maintain tight monetary policy to contain the risk of inflation as a result of fuel and electricity subsidy cuts, the International Monetary Fund said on Monday, in a statement that praised progress on reforms tied to a new $2 billion loan. The IMF's remark comes days after Egypt's central bank decided to keep interest rates steady, citing inflationary risks, and after the IMF executive board announced Egypt had made sufficient progress on economic reforms to receive its next loan disbursal. Jordan Seeks to Renegotiate Terms of $700 Million IMF Loan. Jordan wants to renegotiate the terms of a $700 millioninternational Monetary Fund loan because of the kingdom s difficult economic conditions, Deputy Prime Minister Rajai Muasher said. (Source: ADX, DFM, Bloomberg, Reuters, Gulf News, The National, Arabian Business)

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