Oil rises, euro drops to six-week low

Updated 22 February 2013

Oil rises, euro drops to six-week low

NEW YORK: Major stock markets rose yesterday, recovering some of the previous session’s sharp losses, but the euro hit a six-week low on news that banks repaid less than expected of their crisis loans from the European Central Bank.
Oil prices rose as evidence of improving business morale in Germany helped bolster sentiment after two days of heavy losses.
Brent crude for April rose $ 1.26 per barrel to a high of $ 114.79 before easing back to around $ 114.00. US crude was at $ 92.90, up 6 cents, after hitting a six-week low in the previous session.
Wall Street also rebounded following two days of decline, led by gains in technology stocks after better-than-expected earnings from Hewlett-Packard. H-P shares jumped 10 percent to $ 18.83 by midday trade in New York.
Risk-associated assets have been rattled this week by suggestions the US Federal Reserve could scale back its monetary support sooner than expected and by weak euro zone data that has dashed hopes of an early recovery by the recession-hit region.
The S&P 500 had dropped 1.9 percent over the prior two sessions, its worst two-day drop since early November, putting the benchmark index on pace for its first weekly decline of the year. Still, the index is up nearly 6 percent for the year and managed to hold the 1,500 support level despite the recent declines.
In a sign that some euro zone banks may still need support, the ECB said just over 61 billion euros ($ 81 billion) of the 530 billion it lent at the height of the bloc’s crisis last year will be repaid when banks get the first opportunity next week.
That was well below the 130 billion euros expected by traders and means there remains more than enough cash in the banking system to keep downward pressure on money market rates.
The euro dropped to a six-week low against the dollar.
“This means that the confidence is still not there and that’s a negative for the euro,” said Sebastien Galy, currency strategist at Societe Generale in New York. “I don’t think euro zone banks are confident that they can get cheaper loans elsewhere.”
A report from the European Commission that forecast the euro zone economy will contract again in 2013 and caution ahead of an Italian election also weighed on the euro, which fell for a third straight session. But stocks fared better in Europe as investors looked to take advantage of the previous session’s sharp sell-off, though traders cited some caution given weekend elections in Italy.
The FTSEurofirst 300 closed up 1.2 percent at 1,165.43, having sunk 1.5 percent on Thursday.
The Dow Jones industrial average was up 62.57 points, or 0.45 percent, at 13,943.19. The Standard & Poor’s 500 Index was up 6.90 points, or 0.46 percent, at 1,509.32. The Nasdaq Composite Index was up 16.71 points, or 0.53 percent, at 3,148.20. MSCI’s world share index was up 0.4 percent.
The euro fell as low as $ 1.3156, its lowest since Jan. 10, retreating from a session high of $ 1.3244 touched after a better-than-forecast German Ifo survey suggested a brighter outlook for the euro zone’s largest economy.
The currency was on pace to close lower for a third straight week. Some strategists said they expected the euro to grind lower ahead of the Italian election, although it should find support around $ 1.3040, near the Jan. 10 low of $ 1.3037.

Investors were wary about the risk of a fragmented Italian parliament, which could hinder the euro zone’s third-largest economy from fighting its longest recession in 20 years.
Market participants in general are taking a more defensive position — betting on the euro’s downside — in case of an adverse outcome in Italy. The result of the vote is not expected until next week.
Bob Lynch, chief currency strategist at HSBC in New York, said he expects a weaker euro due to numerous technical factors.
“The downward shift in momentum indicators, the break below the July 2012 uptrend, and the further shift in relative yield spreads against the euro suggest to us that the risks remain on the downside in the near-term,” said Lynch.
The euro and the dollar rose against the yen, although strategists said the Japanese currency’s three-month decline was showing signs of losing momentum.
Expectations the new Japanese government will take aggressive easing steps in an attempt to revive the economy have helped the yen fall steeply across the board since November.
Like equities, commodities rebounded from Thursday’s big sell-off, which was driven by fears that the Fed may be edging closer to ending its ultra-loose monetary policy, which has flooded the markets with liquidity.
Gold added about 0.3 percent to around $ 1,575.20 an ounce but is on course for a weekly decline of almost 2 percent, its second week in the red.
In US Treasuries trading, 10-year notes were trading 2/32 higher in price to yield 1.9653 percent, down slightly from 1.97 percent late Thursday.

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.