IS Morning Report Tuesday, June 05, 2018

Transcription

1 # Global & Regional Benchmarks # UAE Trading Summary Indices Close 1Day 1Mnth 3Mnth YTD 1Y (AEDm) BUY SELL NET ADX 4, % 0.4% -0.7% 4.1% 2.1% ADX DFM 3, % 2.9% -5.4% -10.0% -8.5% Local 75% 75% -1% TASI 8, % 2.8% 13.1% 15.3% 19.7% Foreign 25% 25% 1% KWSEI 1, % 0.1% -7.9% -5.0% -4.6% EGX 16, % -8.0% 4.4% 9.2% 21.3% Dow Jones 24, % 2.3% -0.2% 0.4% 17.1% S&P 500 2, % 3.1% 1.0% 2.7% 12.8% Nasdaq 7, % 5.5% 3.8% 10.2% 20.8% FTSE 100 7, % 2.3% 8.8% 0.7% 2.9% DAX 12, % -0.4% 5.6% -1.1% -0.4% CAC40 5, % -0.8% 5.9% 3.0% 3.1% Nikkei225 22, % 0.1% 6.9% -1.2% 11.5% HIS 31, % 3.7% 3.9% 3.8% 20.0% Institutional 78% 79% -1% Retail 22% 21% 1% DFM Local 49% 67% -18% Foreign 51% 33% 18% Institutional 55% 43% 12% Retail 45% 57% -12% Total Local 59% 71% -11% Foreign 41% 29% 11% # Upcoming Corporate Actions & Events Date Company Event 6-June Amanat Board Meeting 21-June Dana Gas AGM # Key Stories UAE private-sector growth continues recovering in May Emirates sees oil, dollar 'double whammy', but demand strong Emirates Clark Says Any Etihad Merger Plan Is Up to Shareholders Dana Gas Seeks Shareholders Nod For Special Sukuk Issue of Upto $560 Mln Abraaj expects deal on secured debt, Kuwaiti creditor holds out

2 Dubai attracted Dh27.3 billion ($7.4bn) of inward foreign direct investment (FDI) in 2017 Saudi Aramco restructures non-oil assets ahead of IPO sources Saudi Petrochemical Producers Say Merger Talks Are Still Ongoing Gulf Air CEO to Start Hedging Fuel As Oil Price Seen Rising Kuwait Urges Its Parliament to Look Beyond Rise in Oil Prices Oman s Bank Sohar hires banks for $250 mln syndicated loan Bahrain Approves 10-Year Residency Permits for Foreign Investors Egypt net foreign reserves rise to $44.14 bln at end-may-c.bank Egypt to Boost Spending in New Budget to Meet Pay, Pension Rise # Key Global Trends // Market Clues World stocks and the U.S. dollar rose while Treasury debt prices fell on Friday as investors welcomed a strongerthan-expected American jobs report and an apparent end to a political crisis in Italy, although prospects for a fullblown global trade war limited the gains. The Federal Reserve is scheduled to hold a two-day policy meeting starting on June 12. With risk aversion ebbing in the broader markets, safe-haven government bonds were sold and their yields rose. The yield had declined to a 1-1/2-month low of percent a week ago when Italian political concerns had soured investor sentiment. Oil prices rebounded on Tuesday after falling in the previous session on expectations that inventories in the United States may decline but increasing U.S. production and concerns that OPEC may raise output continue to weigh on sentiment. Brent crude futures added 14 cents, or 0.19 percent, to $75.43 a barrel at 0301 GMT, after settling down 2 percent at $75.29 on Monday. The Organization of the Petroleum Exporting Countries (OPEC) is due to meet in Vienna on June 22 to decide whether the group and non-opec members, including Russia, will raise production to ease concerns over potential supply shortfalls from Iran and Venezuela. Over the weekend, OPEC and non-opec Arab oil ministers agreed on the need for continued cooperation to balance global supply, Kuwait's state news agency KUNA reported. # UAE Stories Growth in the United Arab Emirates' non-oil private sector continued to recover in May after a slowdown in the first three months of 2018 because of the imposition of a 5 percent value-added tax at the start of the year, a survey showed on Tuesday. The seasonally adjusted Emirates NBD UAE Purchasing Managers' Index, which covers manufacturing and services, rose to 56.5 last month, its highest level since January, from 55.1 in April. Above 50 indicates expansion and below a contraction. The president of Emirates airline said the rare combination of higher oil and a stronger dollar, which usually move in opposite directions, represented a "double whammy" in terms of their impact on costs but that passenger demand remained strong. "We have very strong summer bookings at higher prices," Tim Clark told reporters at an airlines summit in Sydney, adding Emirates was monitoring those trends for any sign higher ticket prices were hurting demand. Emirates Airline said any merger plan with Abu Dhabi s Etihad Airways PJSC is for shareholders to decide and no such development is likely any time soon. That is in the hands of the shareholders, Emirates President Tim

3 Clark said in a Bloomberg Television interview Tuesday in Sydney. On the short-term, medium-term horizon, I would say no. Dana Gas Seeks Shareholders Nod For Special Sukuk Issue of Upto $560 Mln. Seeks shareholders nod for special Sukuk issue to holders of existing Sukuk of up to $560 million for 3 years with 4 percent profit margin per annum says new Sukuk to replace the existing Sukuk, issued in May Private equity firm Abraaj said on Monday it hopes to reach a deal with its secured creditors, although sources said that a Kuwaiti unsecured creditor was holding out, potentially stalling the sale of its investment management business. Dubai-based Abraaj Holdings is trying to push through a sale of Abraaj Investment Management to New York-based Cerberus Capital Management as it tries to stem the fallout from allegations it misused investor money in a $1 billion healthcare fund. Dubai attracted Dh27.3 billion ($7.4bn) of inward foreign direct investment (FDI) last year, a 7.1 per cent increase from the previous year bolstered by investment projects from the US, Europe and Saudi Arabia, according to official statistics. # GCC/ MENA Saudi Aramco has created a subsidiary to house its multibillion-dollar pension fund and could spin off its aviation division, sources said, as it restructures some assets not related to oil and gas ahead of its planned initial public offering (IPO). The move is designed to streamline Aramco's operations and could make it easier to value since its business risk would be clearer and that may help it achieve a higher price for its shares, financial and industry sources told Reuters. Sahara Petrochemical Co. and Saudi International Petrochemical Co. said talks are still ongoing on a potential merger. Negotiations on the conditions and its structure, including the valuation of the two companies to determine the share-swap ratio, are under study, the companies said in response to media speculation. Sahara and Saudi International Petrochemical, also known as Sipchem, resumed talks earlier in 2018 about a potential merger, four years after a tie-up was put on hold. Gulf Air to start hedging 25% of fuel requirements as oil prices climb, CEO Krešimir Kučko says in interview in Sydney at the annual IATA meeting. Sees revenue gaining 12% to 15% this year on higher capacity, better pricing control. Declines to give outlook for when Gulf Air will post profit, adding that 1H performance was better than expected. Kuwait s finance minister is trying again to win swift parliamentary support for an economic and fiscal reform program, saying that a critical state fund would remain a concern even if oil prices were to jump to $100 a barrel. The General Reserve Fund, where all revenue is deposited, is under pressure due to growing budget expenditure and a low oil-price environment in recent years, Nayef Al-Hajraf told lawmakers in a closed meeting on Sunday. Bank Sohar, Oman s fourth largest bank by assets, is seeking to raise $250 million through a syndicated loan after recently completing a $300 million debt facility, banking sources said. The bank has hired Bank ABC ABCB.BH and Emirates NBD ENBD.DU to lead the new transaction, which has a three-year maturity and offers a margin of 190 basis points over the London Interbank Offered Rate (Libor), said the sources. Bahrain Approves 10-Year Residency Permits for Foreign Investors. Cabinet approves an interior ministry draft law to grant foreign investors renewable 10-year residency permits, state-run Bahrain News Agency reports. Residency visa extended from two years. Fees for visas: Two-year residency at 200 dinars, five-year at 400 dinars, 10-year at 600 dinars.

4 Egypt's net foreign reserves rose to $44.14 billion at the end of May from $ billion at the end of April, the central bank said on Monday. Egypt's foreign reserves have been climbing since it secured a $12 billion, three-year International Monetary Fund loan programme in 2016 as part of efforts to woo foreign investors and revive its ailing economy. The government plans to boost spending in fiscal year by 60 billion Egyptian pounds ($3.35b), as it looks to boost salaries for administrative sector employees and adjust for a 15% increase in pensions, the Cabinet says in an ed statement. Increases come as the government looks to offset the impact of broad economic reforms on the public. Increase in pensions will affect around 9 million people; pay rise to benefit around 6 million workers. (Source: ADX, DFM, Bloomberg, Reuters, Gulf News, The National, Arabian Business)

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