Citigroup targets rapid Middle East, Africa growth in 2018

The investment bank expects bond sales, mergers and acquisitions and public share sales to pick-up. (Reuters)
Updated 08 February 2018
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Citigroup targets rapid Middle East, Africa growth in 2018

ABU DHABI: Citigroup expects 2018 to be its best year for investment banking in the Middle East and Africa in at least a decade, likely led by Saudi Arabia, a senior executive at the US bank said.
Nigeria, Egypt and the United Arab Emirates would also be the main growth drivers as bond sales, mergers and acquisitions and public share sales pick-up, Miguel Azevedo, Citigroup’s head of investment banking, Middle East and Africa, said.
“The pipeline in the Middle East and Africa is as good as we have seen since the global financial crisis of 2008,” he told Reuters in an interview, adding that emerging markets represented a larger weight of Citi’s earnings than for others.
“GDP growth for advanced economies this year is between 2.5 and 3 percent, while for emerging markets it is between 4.5 and 5 percent. For investment banking, the growth should maybe be even more,” Azevedo said.
In the Middle East and Africa, getting deals done would depend on market stability, but swings in global stocks in recent days represented a correction and were not “enough to put any of these transactions off.”
Citigroup said last month it had won formal approval from Saudi Arabia’s Capital Market Authority to begin an investment banking business there, enabling its return after an absence of almost 13 years.
Several international lenders are seeking to build a Saudi presence as opportunities emerge from reforms to wean the economy off a reliance on oil revenues. Those include privatizations such as the planned listing up to 5 percent of Saudi Aramco.
Citi was among those invited to pitch for a role in the stock market listing, sources told Reuters last month and the bank has already hired former Saudi Fransi Capital executive Majed Al-Hassoun to head its Saudi investment banking business, which it is developing with further hires.
“There is a very significant privatization push ... this could create the opportunity for investors to deploy capital to develop the industrial base and infrastructure,” he said.
The bank also expects significant opportunities in Nigeria, which has low debt levels and was expected to return to the bond markets in 2018, while Nigerian companies were also forecast to issue bonds and launch initial public offerings, Azevedo added.
Nigeria issued a $3 billion two-part international bond in November, a deal managed by Citigroup and Standard Chartered.
Egypt’s outlook was also positive after the 2016 currency devaluation and IPOs were slated in sectors such as industrial and manufacturing and financial services and consumer, he said.


Philippines set to import 1.2 million tons of rice as caps removed

Updated 49 min 49 sec ago
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Philippines set to import 1.2 million tons of rice as caps removed

  • President Rodrigo Duterte in October ordered the ‘unimpeded’ importation of rice after the country’s inflation shot u
  • Lawmakers have approved the bill removing the import cap on rice imports and replacing it with tariffs

MANILA: Rice traders in the Philippines are set to import about 1.2 million tons of the staple food, a state grains agency spokeswoman told Reuters on Tuesday, as the Southeast Asian country lifts a two-decade-old cap on purchases.
Bigger rice purchases by the Philippines, already one of the world’s top importers and consumers of the grain, could underpin export prices in Vietnam and Thailand, traditionally its key suppliers.
Prices in Vietnam fell last week ahead of the country’s largest harvest this month, while the Thai market is likely to see additional supply toward the end of January from the seasonal harvest.
President Rodrigo Duterte in October ordered the “unimpeded” importation of rice after the country’s inflation shot up to 6.7 percent in September and October, the highest in nearly a decade, partly due to food prices.
The National Food Authority (NFA) has approved initial applications from 180 rice traders for permits to import a total of 1.186 million tons of either 5-percent or 25-percent broken white, the NFA spokeswoman said.
“We have not set any deadline for accepting applications to import rice. There’s no more limit,” she said.
Importers are allowed to bring in rice from any country, but grains from Southeast Asian suppliers will be charged a tariff of 35 percent while those from elsewhere will face a 50-percent charge.
Lawmakers have approved the bill removing the import cap on rice imports and replacing it with tariffs. Duterte will “most likely” sign it into law “soon,” presidential spokesman Salvador Panelo said on Tuesday.
Philippine inflation eased in November and December, and the rice tariffication law could help curb it this year by as much as 0.7 percentage point, the central bank has said. Rice is the biggest food item in the country’s consumer price index.