High sheep prices make buyers ‘ma’ad’

Updated 18 October 2012

High sheep prices make buyers ‘ma’ad’

JEDDAH: Livestock buyers say there should be a body in place to monitor fluctuations in prices, as lately there has been a rise in the price of sheep in the Kingdom due to upcoming Haj.
“The price of goats soared unexpectedly in the past few weeks and I think it is inappropriate for traders to implement such price hikes,” says Amjedain Sana, a regular buyer of goats and sheep at the livestock market in Jeddah.
“Livestock traders increase their prices as they see fit, which is wrong. There needs to be a body in place to monitor the sudden price hikes by each trader. Just as one trader raises the price of his sheep, another raises his even higher,” said Sana.
With Haj days away, Saudi Arabia’s livestock markets are packed with buyers and sellers trying to negotiate.
Hamdan Al-Badr, another buyer at the livestock market, disagrees with the new high prices. “The prices are too high when one considers buying more than one goat,” said Al-Badr. “Negotiating with the traders is not easy. They don’t easily agree to bring down the prices,” he said.
Sheep prices have risen up to SR 2,050, and are expected to reach as high as SR 3,000 just two days before the approaching Eid Al-Adha festival.
The boycott of poultry products and the high price of livestock fodder are some of the reasons sheep traders cite for the high prices of livestock this year.
According to Fahd Balghunaim, agriculture minister, the rising cost of poultry was the result of a major shortage in production, with local suppliers able to meet only 45 percent of the demand in the kingdom. He also blamed a 30 to 40 percent increase in the price of animal feed.
“There is a greater demand for domestic goats centered around the time of the festival,” said Abdullah Al-Ghait, a sheep trader.
According to most livestock traders, the greater demand for domestic goats means they can be offered at higher prices ranging from SR 2,000 to SR 3,000, while most imported goats sell for less.
Al-Ghait said that maintaining a livestock farm carries with it great expenses, and the purpose of increasing prices is to balance the expenses of these farms.

Cathay Pacific shelves US dollar bond plans amid Hong Kong unrest

Updated 43 min 54 sec ago

Cathay Pacific shelves US dollar bond plans amid Hong Kong unrest

SINGAPORE: Cathay Pacific Airways has shelved plans for its first US dollar debt deal in 23 years, the airline said on Friday, after sources told Reuters that global investors had questioned the pricing due to civil unrest in Hong Kong.

The airline, the biggest corporate casualty of widespread anti-government protests in the Asian financial hub, on Friday lowered its second-half profit expectations, citing “incredibly challenging” conditions in its home market.

Cathay had started meeting investors in Hong Kong and Singapore on Sept. 24 after it mandated four banks to explore carrying out a US dollar denominated bond, according to a term sheet issued at the time, seen by Reuters.

It would have been the first US dollar debt deal for Cathay since 1996 and had been touted as a landmark transaction for the airline given all of its debt is denominated in Hong Kong dollars.

The issuance was to be unrated, and two sources with knowledge of the matter said that Cathay was willing to pay 200 basis points over the US Treasuries rate to secure three-year or five-year funding, with the size and term of the placement dependent on demand.



Cathay has only carried out 12 bond transactions in the past decade and all were priced in Hong Kong dollars.

However, investors demanded a higher price of at least 300 basis points over US Treasuries, which made the deal more expensive for Cathay, said the sources, who were not authorized to speak publicly about the matter. Cathay’s term sheet had said the transaction would be reliant on market conditions. A Cathay spokesman on Friday said the Hong Kong dollar private placement market was providing more funding opportunities and a debt issuance in that market was completed last month. “We will continue to monitor the US dollar bond market in future,” he said in a statement.

Dealogic data showed that Cathay raised $102 million in October and $64 million in May through Hong Kong dollar denominated deals.

The airline has only carried out 12 bond transactions in the past decade and all were priced in Hong Kong dollars.

Cathay had mandated Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank and HSBC to work on the shelved US dollar bond deal.