Global growth hopes keep shares near record high

While rising global COVID-19 cases and geopolitical tensions ensured it was by no means a fairytale, markets certainly had a Goldilocks feel again. (File photo)
While rising global COVID-19 cases and geopolitical tensions ensured it was by no means a fairytale, markets certainly had a Goldilocks feel again. (File photo)
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Updated 08 April 2021

Global growth hopes keep shares near record high

Global growth hopes keep shares near record high
  • IMF raises its global growth forecast to 6% this year from 5.5%

LONDON: World stocks took a well-earned rest near record highs on Wednesday, as an International Monetary Fund (IMF) forecast of the strongest global growth since the 1970s this year and steady bond and FX markets kept risk appetite buoyant.

While rising global coronavirus disease (COVID-19) cases and geopolitical tensions between China and Taiwan and between Russia and Ukraine ensured it was by no means a fairytale, markets certainly had a Goldilocks feel again.

Europe’s STOXX 600 perched just below the first record high it had hit in over a year on Tuesday. MSCI’s 50-country world index was grinding out a sixth day of gains and Wall Street futures were pointing higher too.

In the bond markets, there was little sign that the benchmark government yields that drive global borrowing costs were gearing up to shoot higher again. The dollar was sitting quietly at a two-week low.

The IMF raised its global growth forecast to 6 percent this year from 5.5 percent on Tuesday, reflecting a rapidly brightening outlook for the US economy.

If realized, that would be the fastest the world economy has grown since 1976, albeit after the steepest annual downturn of the post-war era last year when the pandemic brought commerce to a near standstill at times. “Even with high uncertainty about the path of this pandemic, a way out of this health economic crisis is increasingly visible,” IMF Chief Economist Gita Gopinath said.

HIGHLIGHTS

urope’s STOXX 600 perched just below the first record high it had hit in over a year.

Wall Street futures pointed to a 0.1 percent rise for the S&P 500, Dow Jones Industrial and Nasdaq.

Overnight, MSCI’s broadest index of Asia-Pacific shares had started on a firm footing, going as high as 208.46 points.

Overnight, MSCI’s broadest index of Asia-Pacific shares had started on a firm footing, going as high as 208.46 points, a level last seen on March 18.

However, it succumbed to selling pressure and ended flat as China’s blue-chip CSI300 index dipped 1 percent and Hong Kong eased 0.9 percent.

Other Asian markets managed to stay positive. Japan’s Nikkei closed higher; Australian shares rose 0.6 percent and South Korea’s KOSPI added 0.3 percent.

Wall Street futures pointed to a 0.1 percent rise for the S&P 500, Dow Jones Industrial and Nasdaq. The S&P 500 and the Dow had hit record levels on Monday, driven by a stronger-than-expected jobs report last Friday and data showing a dramatic rebound in US services industry figures.

The upcoming earnings season is expected to show S&P profit growth of 24.2 percent from a year earlier, according to Refinitiv data, and investors will be watching to see whether corporate results further confirm recent positive economic data.

All eyes will also be on minutes of the US Federal Reserve’s March policy meeting when they are published later. Ten-year and five-year Treasury yields were down at 1.6455 percent and 0.874 percent respectively in Europe from as high as 1.776 percent on the 10-year on March 30.

The five-year Treasury yield especially is seen as a major barometer of the faith investors have in the Fed’s message that it does not expect to raise US interest rates until 2024. Europe’s bond yields also eased, with southern European debt markets stabilizing after a selloff the previous session as traded braced for a 50-year bond from Italy.

The European Central Bank, meanwhile, will release monthly data on its conventional asset purchases and a bi-monthly breakdown of its PEPP pandemic emergency bond purchases which it has vowed to increase to keep borrowing costs low.

The dollar circled a two-week low of 92.246 against a basket of world currencies.

The euro was flat at $1.1871, sterling was weaker at $1.3795. The Japanese yen was a touch lower at 109.92.

In commodities, Brent crude futures were nudging lower at $62.67 a barrel. US crude was up at $59.51 and both gold and copper were off at $1,736.4 an ounce and 8,980 a ton respectively.

 


Saudi sovereign fund PIF boosts US equities exposure to over $15 billion

Saudi sovereign fund PIF boosts US equities exposure to over $15 billion
Updated 27 min 12 sec ago

Saudi sovereign fund PIF boosts US equities exposure to over $15 billion

Saudi sovereign fund PIF boosts US equities exposure to over $15 billion
  • Fund increased its US stock holdings to $15.4 billion in the first quarter

DUBAI : Saudi Arabia’s sovereign wealth fund has increased its US stock holdings to $15.4 billion in the first quarter from nearly $12.8 billion at the end of 2020, according to a US regulatory filing on Monday.
The Public Investment Fund (PIF) bought 2.9 million class A shares in SoftBank Group Corp-backed Coupang Inc, equivalent to $141 million, and dissolved its share stake in Suncor Energy, according to a Securities and Exchange Commission filing.
It more than doubled its position in Activision Blizzard to 33.4 million shares from 15 million shares at the end of the fourth quarter, which led it to a $3.1 billion exposure from $1.4 billion.
The fund increased its shares in Electronic Arts Inc. to 14.2 million, equivalent to $1.9 billion, from a $1.1 billion position at the end of the previous quarter.
PIF, which did not immediately respond to a comment request on the filing, is at the center of Saudi Arabia’s plans to transform the economy by creating new sectors and diversifying revenues away from oil.
The $400 billion fund is expected to inject at least $40 billion annually in the local economy until 2025, and increase its assets to $1 trillion by that date, which would make it one of the world’s biggest sovereign wealth funds.
“PIF would have wanted to take advantage of the bullish sentiment in equity markets in Q1 to make opportunistic investments and add to its portfolio,” said Rachna Uppal, director of research at Azure Strategy.
“In line with domestic efforts to achieve the objectives of Vision 2030, the Saudis also appear to be favoring investments into sectors such as technology, mobility, and especially future mobility, tourism and entertainment,” she said.
At the start of last year PIF piled up minority stakes in companies worldwide, taking advantage of market weakness caused by the coronavirus crisis.
Monday’s filing showed the value of its biggest US stock holding, Uber Technologies, rose to nearly $4 billion in the first quarter, from $3.7 billion as of Dec. 31, as the ride-hailing company’s shares gained value during the period.
PIF was an early investor in Uber, taking a $3.5 billion stake in 2016, three years before its listing in 2019.


Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid

Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid
Updated 32 min 57 sec ago

Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid

Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid
  • QIA will buy shares worth $740 million and Iberdorla, the largest shareholder in Avangrid

RIYADH: Renewable energy provider Avangrid said it would sell shares worth a total of $4 billion to both the Qatar Investment Authority (QIA) and Spanish Iberdrola Group for $ 51.40 a share.
QIA will buy shares worth $740 million and Iberdorla, the largest shareholder in Avangrid (based in Orange County, Connecticut, US), will purchase approximately $3.26 billion of stock, Asharq Business reported.
The deal is expected to close on Tuesday.
The Qatar Investment Authority last March also acquired 16 percent of the 53 million shares offered by Siemens Healthineers, through a private placement of $2.8 billion.
The fund is targeting deals in Asia, in an attempt to diversify its investment portfolio, which has a great focus and weight in America. Northern and Europe, Chairman Sheikh Mohammed bin Abdulrahman Al-Thani said in a previous interview with Bloomberg.

 


Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round

Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round
Updated 44 min 55 sec ago

Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round

Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round
  • It was the first investment for the American venture capital firm in the Middle East and North Africa

DUBAI: Telda, a Cairo-based digital banking application, has raised $5 million during its pre-seed funding round organized by US firm Sequoia Capital.
It was the first investment for the American venture capital firm in the Middle East and North Africa.
Global Founders capital and Class 5 Global also participated in the round.
The app recently announced it has received license from Egypt’s central bank to issue cards and on-board customers to its platform.
It has received 30,000 sign ups since it started its operations, it said.
The funding comes as digital-only banks rise in popularity across the region, where 60 percent of the population is estimated to be under the age of 25.
“Egypt boasts of a large, young, talented and tech savvy population with a strong appetite to innovate,” Sequoia partner George Robson said.
Egypt is among the top 10 countries most reliant on cash and with the highest rate of unbanked people, according to Merchant Machine.
“Today’s funding milestone promotes the digital transformation of the Egyptian economy and allows Telda to provide everyone with access to important financial services so they can fully participate in the economy,” Telda chief technology officer Youssef Sholqamy said.
Sholqamy, who was a former senior engineer in Uber’s infrastructure team, co-founded the startup with Ahmed Sabbah, who also founded the Egyptian bus-hailing service Swvl.


Europe slaps anti-dumping duties on MEG Saudi petchems product

Europe slaps anti-dumping duties on MEG Saudi petchems product
Updated 54 min 1 sec ago

Europe slaps anti-dumping duties on MEG Saudi petchems product

Europe slaps anti-dumping duties on MEG Saudi petchems product
  • The anti-dumping duties on MEG imports from Saudi Arabia are estimated at 11.1 percent

DUBAI: The European Commission (EC) announced proposed anti-dumping duties on monoethylene glycol (MEG) imports from Saudi Arabia and the US, Argaam reported.
The anti-dumping duties on MEG imports from Saudi Arabia are estimated at 11.1 percent, the financial news site reported, citing a document.
The companies affected by the new levy include Yanbu National Petrochemical Co. (Yansab), Saudi Kayan Petrochemical Co. (Saudi Kayan), Eastern Petrochemical Co. (Sharq), Saudi Yanbu Petrochemical Co. (Yanpet), Arabian Petrochemical Co. (Petrokemya), and Jubail United Petrochemical Co. (JUPC).
The original anti-dumping probe into Saudi and US MEG exports began in October 2020, Argaam said. It followed a petition from European ethylene glycol producers, which represent a quarter of total producers.
In December 2019, India also started an anti-dumping probe into imports of MEG from Saudi Arabia, Kuwait, Oman, the UAE, and Singapore, Argaam said.
Monoethylene glycol is used to make polyester fibers and film as well as engine coolant.


Jabal Omar losses widen on hotel closures in Makkah

Jabal Omar losses widen on hotel closures in Makkah
Updated 18 May 2021

Jabal Omar losses widen on hotel closures in Makkah

Jabal Omar losses widen on hotel closures in Makkah
  • Construction work extends across two square kilometers where some 40 towers are at various stages of development.

DUBAI: Jabal Omar Development Co. reported a widening first-quarter loss as hotels in Makkah were forced to close amid the pandemic.
The developer that is spearheading the vast redevelopment of land around the Grand Mosque in the holy city, said losses widened by 45 percent to SR345.3 million ($92 million). Sales fell 89 percent to SR21.6 million, it said in a stock exchange filing on Tuesday.
It blamed the performance on the “significant decline in revenues due to the decrease in the occupancy rate of hotels and commercial malls.”
At the same time its financial charges rose due to the non-capitalization of borrowing costs, it said in the filing.
Saudi Arabia is investing billions of dollars to develop hotels, malls and other real estate in Makkah to accommodate the expected surge in pilgrims.
Current construction work extends across two square kilometers where some 40 towers are at various stages of development.
They are expected to accommodate some 4,000 guests on any normal day, and up to 100,000 visitors on any given day during the Hajj and Umrah seasons.