Global shares rally after US fiscal cliff deal

Updated 03 January 2013

Global shares rally after US fiscal cliff deal

LONDON: World stock markets surged on Wednesday for a roaring start to 2013 after US lawmakers clinched a deal to avert a feared "fiscal cliff" of drastic tax rises and automatic spending cuts.
Investors welcomed news that the US Congress had finally approved an agreement to avert measures which could have sent the world's biggest economy spinning back into recession, with global repercussions.
The agreement was seen as a step, albeit a temporary one, toward correcting US public finances, which are suffering from a huge annual deficit and accumulated mountain of debt.
When European markets closed for the day, London's benchmark FTSE 100 index of top companies had leapt by 2.20 percent to 6,027.37 points, Frankfurt's DAX 30 index had surged 2.19 percent to 7,778.78 points and the Paris CAC-40 had jumped 2.55 percent to 3,733.93 points.
Markets in key peripheral euro zone countries posted even stronger gains, with Madrid's Ibex-35 index soaring by 3.43 percent to 8,447.6 points and Milan's FTSE Mib gaining 3.81 percent to 16,893 points.
"The resolution of the fiscal cliff is clearly the big driver here, but critically we need to try and sustain this rally," said Mike McCudden, head of derivatives at the online broker Interactive Investor.
In New York, US stocks joined the mood, with the Dow Jones Industrial Average up 1.73 percent in midday trading, while the broad-market S&P 500 had gained 1.74 percent and the tech-rich Nasdaq Composite added 2.28 percent.
Among Asian exchanges, the Hong Kong market was the biggest riser earlier in the day, soaring by 2.89 percent in value, with sentiment also lifted by positive Chinese manufacturing data.
Sydney gained 1.23 percent, and Seoul added 1.71 percent. Financial markets in Japan and mainland China were closed for a public holiday.
"It may have come at the last minute, but US lawmakers finally managed to find some common ground by voting through a package of policies designed to avoid the immediate fiscal cliff," noted ETX Capital trader Joe Rundle.
The euro hit a two-week high of $ 1.3300 in Asian deals as investor appetite for risk increased there, but later fell back to 1.3199 as European trading wound down, compared with 1.3193 on Monday before markets closed for the New Years holiday.
The price of gold advanced to $ 1,693.75 an ounce on the London Bullion Market from $ 1,664.0 meanwhile. World oil prices also rose, with New York crude climbing back to $ 92.93 per barrel.
Late on Tuesday, the US House of Representatives passed a deal between the White House and Republicans to raise taxes on the rich and delay for two months automatic budget cuts of $ 109 billion, lifting the clouds of immediate crisis.
The outcome of negotiations had hung in the balance for hours as House conservatives sought to add spending reductions to a version passed by the Senate in the early hours of 2013 which would probably have killed the compromise.
"The fiscal cliff had dominated the agenda for both markets and US lawmakers in the run up to Christmas but with this now seemingly averted, equities are poised to break higher as the 2013 trading year gets underway," noted analyst Fawad Razaqzada at trading group GFT Markets.
Washington's budget and fiscal deadline haunted financial markets throughout December amid concerns that the lack of a compromise would drag the global economy into another lengthy downturn.
ETX Capital analyst Ishaq Siddiqi cautioned that "the US economy did not fall off the cliff but it certainly is standing on the edge still."

NMC Health’s $450 million bond to boost Saudi expansion

Updated 23 April 2018

NMC Health’s $450 million bond to boost Saudi expansion

  • The new capital structure — which will feature a mixture of unsecured bank and bond financing — will aid the company’s continued growth into Saudi Arabia.
  • The company first secured a foothold in the Kingdom in 2016 after acquiring a 70 percent stake in As Salama Hospital in Al-Khobar.

LONDON: The UAE-based private health care operator NMC Health has launched a $450 million senior unsecured guaranteed bond to help pay off an existing $1 billion bridge facility and support its expansion plans into Saudi Arabia.

The earlier bridging loan was part of the $2 billion capital structure refinancing put in place at the start of the year, the company said.

The bond is due in 2025 and is convertible into ordinary shares. JP Morgan is the sole bookrunner on the issuance. Bonds will have a fixed coupon rate of 1.875 percent, paid semi-annually.

The new capital structure — which will feature a mixture of unsecured bank and bond financing — will aid the company’s continued growth into Saudi Arabia, with NMC having been one of the first private health care providers to capitalize on the Saudi government’s health care privatization plans.

The company first secured a foothold in the Kingdom in 2016 after acquiring a 70 percent stake in As Salama Hospital in Al-Khobar.

Since then, NMC won regulatory approval last September for a new long-term care facility, the Chronic Care Specialty Medical Center, in Jeddah. It is though to be the first greenfield medical facility in the Kingdom to be set up by a non-Saudi company.

Earlier this year, NMC said it acquired an 80 percent stake in the Riyadh-based Al-Salam Medical Group.

NMC’s acquisition-led expansion strategy aims to ensure the company retains its recently-won place on London’s FTSE 100 index. It was one of the first Middle Eastern companies to join the index when it qualified last September. It first listed on the London Stock Exchange in 2012.

The company posted strong growth in the last year, reporting $209.3 million in net profit for 2017, an increase of 38.2 percent on the previous year. The company paid out a total of $641 million in acquisitions last year.

“2017 proved to be a year of tremendous achievements for NMC,” said the firm’s chief executive Prasanth Manghat, in a statement in March.

NMC also secured secured its first public ratings of BB+ with a stable outlook from S&P on April 20, while Moody’s gave the firm rating of Ba1 with a stable outlook on April 20, 2018. The bonds are not expected to be rated.

“The company continues to strive to meet self-imposed standards that are higher when compared to what is expected of it by various regulators. This approach supports in turn its resilient business model, loyal customer base, strong brand recognition and market leading position,” according to a statement from Moody’s Investors Service.

Investors are so far reacting favorably to NMC’s strategy, with the company closing at a record high on April 20, according to Bloomberg reports, with a market value of $10.8 billion.

The company is now one of 24 equities in the region to have achieved a market capitalization of more than $10 billion, the report said.

Healthcare is seen as a lucrative sector in the Gulf due to its relatively wealthy population becoming increasingly at risk of problems related to obesity and diseases such as type 2 diabetes.