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.


American Airlines ‘unaware’ of some Boeing 737 MAX functions until last week

Updated 15 November 2018
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American Airlines ‘unaware’ of some Boeing 737 MAX functions until last week

  • The FAA and Boeing are evaluating the need for software or design changes to 737 MAX jets
  • ‘Safety remains our top priority and is a core value for everyone at Boeing’

WASHINGTON: American Airlines Group Inc. said on Wednesday it was “unaware” of some functions of an anti-stall system on Boeing Co’s 737 MAX until last week.
Boeing and the US Federal Aviation Administration (FAA) issued guidance on the system last week after a Lion Air jet crashed in Indonesia on Oct. 29, killing all 189 people on board.
The FAA warned airlines last week that erroneous inputs from the system’s sensors could lead the jet to automatically pitch its nose down even when autopilot is turned off, making it difficult for pilots to control.
The system was designed to prevent the jet from stalling, according to information provided by Boeing to airlines.
“We value our partnership with Boeing, but were unaware of some of the functionality of the Maneuvering Characteristics Augmentation System (MCAS) installed on the MAX 8,” an American Airlines spokesman said.
“We must ensure that our pilots are fully trained on procedures and understand key systems on the aircraft they fly.”
Indonesian investigators said on Monday the situation the crew of a doomed Lion Air jet was believed to have faced was not contained in the aircraft’s flight manual. US pilot unions were also not aware of potential risks, pilot unions said.
The FAA and Boeing are evaluating the need for software or design changes to 737 MAX jets in the wake of the Lion Air crash, the regulator said on Tuesday.
The American Airlines spokesman said his airline was continuing to work with Boeing and the FAA and would keep pilots informed of any updates.
A Boeing spokeswoman said the manufacturer could not discuss specifics of an ongoing investigation but it had provided two updates for operators around the world that re-emphasize existing procedures to deal with situations relating to MCAS.
“We are confident in the safety of the 737 MAX,” she said. “Safety remains our top priority and is a core value for everyone at Boeing.”