Saudi sukuk market gains momentum in 2nd quarter

Updated 12 July 2013

Saudi sukuk market gains momentum in 2nd quarter

Depressed initial public offering (IPO) activity in the Gulf Cooperation Council (GCC) continued into the second quarter (Q2) of 2013 with three new listings raising a total of only $ 48 million. This compared to two IPOs in Q1, 2013 raising an aggregate of $ 337 million, representing an 86 percent decrease in total value raised.
The average offering value dropped 94 percent this quarter compared to the same quarter last year where four IPOs were witnessed raising a total of $ 1.1 billion. The total value raised in Q2, 2012 was the result of a stronger performance in the Saudi market, where out of the total four IPOs, three were Saudi-based. While the value of offerings significantly dropped this quarter, the number of offerings remained relatively stable at 3 IPOs.
The Muscat Securities Market (MSM) witnessed its first listing of the year with the $ 6 million IPO of Sharqiyah Desalination Company which, with a small offering in value terms, received a strong response in the aftermarket. The other IPOs in Q2, 2013 comprised two Saudi-based insurance companies namely Aljazira Takaful Taawuni Company and AIG-ANB Cooperative Insurance Company, both listed on the Tadawul with offering values of $ 28 million and $ 14 million, respectively.
The most prominent share offering during the quarter was that of the Abu Dhabi-based Al Noor Hospitals Group, which listed 33 percent of its equity on the premium segment of the London Stock Exchange (LSE), raising total proceeds of $ 342 million. Al Noor is the second health care service provider in Abu Dhabi to have opted for an international listing after NMC Health Plc, which raised $ 187 million in an IPO on the LSE in 2012.
Steve Drake, head of PwC’s Capital Markets business in the Middle East region, said: "Concerns looming over the economic slowdown in certain global markets and the elevated political instability in Egypt and other countries in the Middle East would appear to have dampened investor appetite and contributed to the low offering values we have seen this quarter. Until volatility in global equity markets and the political situation stabilizes, regional equity markets are likely to remain subdued. However, we continue to see interest in companies looking to list within the next 12 to 18 months."
In contrast, Europe’s IPO markets have continued to gain momentum in Q2, building on the successful start to the year, with $ 6.8 billion being raised, a 58 percent increase on the $ 4.3 billion raised in the first quarter of 2013. Over 81 percent of proceeds raised in Q2 was generated from the top 10 deals.
Of note is the IPO of bpost, Belgium’s national postal service on Euronext and Platform Acquisition Holdings, the first major special purpose acquisition company to IPO in London since Vallares in Q2 2011.
The post IPO performance of the PE-backed IPOs in 2013 has been encouraging, particularly in London where they have achieved significant gains on the IPO price since listing and have also outperformed the FTSE index over the period since IPO. Elsewhere in Europe, with the exception of Moleskine and Evonik, which are trading below their respective IPO prices, the majority of PE-backed IPOs have held their IPO price since listing and remain generally in line with the market.
The GCC bond market, similar to the previous quarter, saw significant issuances from the Kuwait central bank, which raised a total of $ 6.7 billion from issuances of its treasury bills and long-term government bonds.
The banking sector continued to dominate the corporate bond market with noteworthy issuances by both the UAE- and Qatar-based banks. These included Emirates NBD’s $ 1 billion Tier one capital issue, another $ 1 billion issue by Qatar National Bank under its Euro Medium Term Note (EMTN) program and issuances by National Bank of Abu Dhabi and Commercial Bank of Dubai, which raised $ 465 million and $ 500 million each respectively.
After a quiet first quarter, the Saudi sukuk market was seen to be one of the most active in Q2, 2013 with sizable sukuk issuances on both the corporate and sovereign front. These included sukuk issued by Islamic Development Bank raising total proceeds of $ 1 billion, Saudi Electricity Company and Sadara Chemicals Company each raising $ 2 billion.
Another notable issuance during the quarter is Dana Gas PJSC’s sukuk, which raised $ 850 million and which was issued to refinance its existing debt.
Drake said: "The start of the quarter proved stronger for debt issuances where we saw most of the money being raised. However, toward the end of the quarter, market sentiment declined as the interest rate environment hardened causing some issuers to postpone their issuances."

World Cup football fakes keep Dubai’s ‘Dolce & Karama’ traders busy

Updated 22 June 2018

World Cup football fakes keep Dubai’s ‘Dolce & Karama’ traders busy

  • Dubai's “Dolce and Karama” is the emirate's copycat capital
  • Neymar Jr shirts are proving especially popular with local shoppers

DUBAI: Tucked away in an old residential district and far from Dubai’s glitzy air-conditioned malls, the Karama area of the city is doing a roaring trade in selling World Cup football shirts.

But if you’re looking for the genuine article, you may have come to the wrong place.

Karama is Dubai's copycat capital where the knockoff imitations of the world's most famous fashion brands are sold for a fraction of the genuine price.

Known to some locals jokingly by the epithet “Dolce and Karama,” a play on the Dolce & Gabbana Italian fashion house, this is a place where if you have to ask the price, you probably can afford it.

With three weeks to go until football’s new world champions are crowned, the world’s biggest sporting tournament is keeping the tills chiming on the street that has become notorious for selling everything from fake Luis Vuitton bags to knockoff Ray-Ban sunglasses.

However since the tournament kicked off just over a week ago, it’s been football not fashion, that has put a smile on the face of traders.

Retailing for a fraction of their high-street cost, the copycat shirts — especially those bearing the name of Brazilian superstar Neymar — are flying off the stalls less than week into the tournament, as UAE-based fans who want to don the colors of their favorite team or player, look for bargains.

Mohammad Ashraf has been trading in Dubai’s Karama Shopping Complex for 15 years.

At his store, Mina Fashion, Ashraf said the World Cup has brought a booming trade.

When asked how many shirts he would sell prior to the Fifa World Cup, he shrugged.

“Maybe one, two — maximum five a day,” he said.

But the Indian trader has quadrupled his business since last week’s kick-off.

“Now, we have been very busy,” he said. “We sell at least 20 pieces a day — maybe more,” he said.

His football shirts are a fraction of the cost of the genuine article on sale in Dubai malls where retailers are feeling the pressure from the growth of online rivals, the introduction of VAT and the strong dollar to which the UAE dirham is pegged — that is hitting tourist spending hard.

Karama football shirts sell for about 65 dirhams ($18) in adult size and 55 dirhams for children. But the real deal costs three or four times as much a few miles down the road in the Dubai Mall, the city’s biggest tourist draw.

In Karama, the football shirts of the Brazil, Argentina and Germany teams have been among the biggest sellers.

And the most popular player?

Ashraf said shirts bearing the name of Brazilian footballer Neymar da Sila Santos Junior have been flying off the shelves.

Abdulla Javid, runs Nujoom Al Maleb in the Karama shopping district — a shop selling a variety of knock-off sportswear — including World Cup shirts for men, youths and children.

“They are not real, not branded — branded ones are very expensive,” he said.

“We have shirts for Germany, for Argentina, for Portugal, for Sweden, for Brazil and for Belgium,” he said, pointing to racks of multi-colored football shirts.

Mens shirts retail for about 45 dirhams for adult sizes in his shop and 40 dirhams for youths. For young children, he sells shirts and shorts for a combined price of 30 dirhams.

The World Cup has also been a welcome boom for business.

“Before we sell maybe between five to 10 (shirts) a day,” he said. “Now, at least 20 to 30 pieces a day. It has been very busy. This time is a good time for us.”

Also at Karama Shopping Complex is Zico Sports.

Ahmed Jaber, a 53-year-old trader, said there are good deals to be found in at the shop he has worked in since the 1980s.

He sells football shirts that are both “branded” and “non-branded” — in other words the genuine article and cheaper knock-offs.

He said customers have been happy to shell out for the genuine football shirts for the adult sizes — which he sells for 379 dirhams, but for children, shoppers prefer to buy the fake football shirts, which he sells for about 30 dirhams.

The most popular shirts since the start of World Cup have been for Brazil, Argentina and France, he said, but his shops have an abundance of kit for all competing countries.

When he asked how the 2018 World Cup had been for business, he laughed.

“Not bad at all!,” he said.