Emirates NBD plans share capital hike ahead of possible acquisition

Emirates NBD said in January it had started initial strategic talks with Sberbank about a possible purchase of the Russian lender’s stake in Turkey’s Denizbank. (Reuters)
Updated 11 March 2018
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Emirates NBD plans share capital hike ahead of possible acquisition

DUBAI : Emirates NBD plans to raise its share capital by up to 7.35 billion dirhams ($2 billion) through the issuance of new shares, as Dubai’s largest lender prepares to bid for Turkey’s Denizbank.
The bank said in January it had started initial strategic talks with Sberbank about a possible purchase of the Russian lender’s stake in Turkey’s Denizbank.
The share hike, announced on Sunday, was expected to ensure the lender’s common equity tier 1 ratio did not drop below the regulated 11 percent threshold with the acquisition, said Chiradeep Ghosh, banking analyst at SICO Bahrain.
Plans for the move helped send Emirates NBD’s stock surging 12.5 percent in early trading on Sunday.
Emirates NBD currently has 5.56 billion authorized shares, according to Thomson Reuters data. The bank said it planned to issue new shares with a nominal value of 1 dirhams for a subscription price per share at no less than 10 percent discount to the prevailing market price.
It is the latest Gulf bank seeking to raise its capital in recent weeks. National Commercial Bank, Saudi Arabia’s largest lender, and Dubai Islamic Bank have both announced similar moves.
Emirates NBD’s capital increase will be discussed at a general meeting of shareholders on March 27.
The bank said is was also seeking shareholder approval for a $12.5 billion medium term note program, a $1 billion structured note program and a 1.5 billion Australian dollars debt issuance program.


‘Get prices down’ Trump tells OPEC

Updated 46 min 11 sec ago
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‘Get prices down’ Trump tells OPEC

  • Trump highlights US security role in region
  • Comments come ahead of oil producers meeting in Algeria

LONDON: US president Donald Trump urged OPEC to lower crude prices on Thursday while reminding Mideast oil exporters of US security support.
He made his remarks on Twitter ahead of a keenly awaited meeting of OPEC countries and its allies in Algiers this weekend as pressure mounts on them to prevent a spike in prices caused by the reimposition of oil sanctions on Iran.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” he tweeted.
“We will remember. The OPEC monopoly must get prices down now!”
Despite the threat, the group and its allies are unlikely to agree to an official increase in output, Reuters reported on Thursday, citing OPEC sources.
In June they agreed to increase production by about one million barrels per day (bpd). That decision was was spurred by a recovery in oil prices, in part caused by OPEC and its partners agreeing to lower production since 2017.
Known as OPEC+, the group of oil producers which includes Russia are due to meet on Sunday in Algiers to look at how to allocate the additional one million bpd within its quote a framework.
OPEC sources told Reuters that there was no immediate plan for any official action as such a move would require OPEC to hold what it calls an extraordinary meeting, which is not on the table.
Oil prices slipped after Trumps remarks, with Brent crude shedding 40 cents to $79 a barrel in early afternoon trade in London while US light crude was unchanged at about $71.12.
Brent had been trading at around $80 on expectations that global supplies would come under pressure from the introduction of US sanctions on Iranian crude exports on Nov. 4.
Some countries has already started to halt imports from Tehran ahead of that deadline, leading analysts to speculate about how much spare capacity there is in the Middle East to compensate for the loss of Iranian exports as well as how much of that spare capacity can be easily brought online after years of under-investment in the industry.
Analysts expect oil to trend higher and through the $80 barrier as the deadline for US sanctions approaches.
“Brent is definitely fighting the $80 line, wanting to break above,” said SEB Markets chief commodities analyst Bjarne Schieldrop, Reuters reported. “But this is likely going to break very soon.”