Saudia to raise SR5bn in sukuk

Updated 24 January 2016

Saudia to raise SR5bn in sukuk

DUBAI: Saudi Arabian Airlines (Saudia), the Kingdom's national carrier, plans to raise as much as SR5 billion ($1.33 billion) in Islamic bonds (sukuk) in the second quarter to refinance existing debt and purchase new aircraft, an airline official said.
Saudia is in negotiations with local banks, the airline's Director-General Saleh Al-Jasser was quoted as saying in a Bloomberg interview on the sidelines of the Bahrain airshow.
A Saudia spokesman confirmed the details to Reuters.
The carrier is planning to expand its fleet to 200 aircraft by 2020 from a current fleet of 157, according to a fleet tracking website. It will receive 29 new aircraft in 2016 as it plans to increase frequency on some existing routes as well as launch new routes to the Maldives, Munich, Algiers and Ankara, the spokesman said.
It will also retire about 19 aircraft in the coming years.
Saudia placed an order for 30 A320neo planes and 20 A330-300 Regional aircraft worth around $8.2 billion at the Paris airshow last year, to be used for domestic and regional routes.
The delivery and financing of these aircraft will be done by Islamic financing in a sale and leaseback deal with Dubai-based International Airfinance Corporation (IAFC).


$8bn blow to Erdogan as investors flee Turkey

Updated 51 min 10 sec ago

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.