India In-Focus — Indian shares rise; RBI to raise rates again in June; Adani to become second-biggest Indian cement maker with $10.5bn deal

India In-Focus — Indian shares rise; RBI to raise rates again in June; Adani to become second-biggest Indian cement maker with $10.5bn deal
The Reserve Bank of India will follow its surprise May rate rise with another hike at its meeting next month. (Shutterstock)
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Updated 16 May 2022

India In-Focus — Indian shares rise; RBI to raise rates again in June; Adani to become second-biggest Indian cement maker with $10.5bn deal

India In-Focus — Indian shares rise; RBI to raise rates again in June; Adani to become second-biggest Indian cement maker with $10.5bn deal

MUMBAI: Indian shares jumped on Monday after five consecutive weeks of losses, with Ambuja Cements and unit ACC up as conglomerate Adani Group said it would buy Holcim AG’s controlling stake in the companies.

The NSE Nifty 50 index gained 0.96 percent to 15,934.40 by 0510 GMT and the S&P BSE Sensex advanced 0.85 percent to 53,240.26, even as broader Asia struggled to sustain a minor rally after shockingly weak data from China. 

On Friday, both the Sensex and the Nifty marked their longest weekly losing streak since 2020.

RBI to raise rates again in June: Reuters poll

The Reserve Bank of India will follow its surprise May rate rise with another hike at its meeting next month, according to a majority of analysts polled by Reuters who were exceptionally split on the size of the move.

India’s retail inflation accelerated to an eight-year high in April, remaining above the central bank’s tolerance limit for the fourth month in a row, and is likely to stay elevated.

The sudden change in views on surging inflation and how to tame it means the RBI will likely take the repo rate, currently at 4.40 percent, back to at least its pre-pandemic level next quarter and not in 2023 as previously thought.

In the latest Reuters poll, over a quarter of economists, 14 of 53, expected the RBI to hike by 35 basis points to 4.75 percent next month, while 20 expected a larger move ranging from 40-75 basis points, including ten who forecast a 50 basis point hike.

Twelve respondents forecast a modest rate rise (10 to 25 basis points) while seven saw no move at the June 6-8 meeting.

Adani to become India's second-biggest cement maker




Asia’s richest person Gautam Adani’s conglomerate acquired 63.19 percent of Ambuja Cements Ltd. and its subsidiary ACC. (AFP)

India’s Adani Group acquired a controlling stake in Holcim AG’s cement businesses in India in a $10.5 billion deal to become the second-biggest cement producer in the country, Adani Group said in a statement on Sunday.

Asia’s richest person Gautam Adani’s conglomerate acquired 63.19 percent of Ambuja Cements Ltd. and its subsidiary ACC in fierce bidding with local companies.

Ambuja and ACC have a combined capacity to produce at least 70 million tons of cement annually, second to UltraTech Cement which has 120 million tons capacity.

The Adani family, through an offshore special purpose vehicle, had entered into definitive agreements for the acquisition of Holcim Ltd’s entire stake in Ambuja and ACC, the Adani Group said in a statement.

Holcim said in a statement it had signed a binding agreement for the Adani Group to acquire Holcim’s business in India, comprising its stake in Ambuja Cement, which owns a 50.05 percent interest in ACC, as well as its 4.48 percent direct stake in ACC. Holcim would receive nearly $6.4 billion for the stakes.

The Adani Group said it would acquire more shares through an open offer.

The transaction is expected to close in the second half of 2022, Holcim said.

(With input from Reuters) 


Volatile rouble slumps to 10-day low; Gazprom shares extend losses

Volatile rouble slumps to 10-day low; Gazprom shares extend losses
Updated 11 sec ago

Volatile rouble slumps to 10-day low; Gazprom shares extend losses

Volatile rouble slumps to 10-day low; Gazprom shares extend losses

MOSCOW: The Russian rouble plunged more than 6 percent against the dollar on Friday to its weakest level in 10 days, while shares in Gazprom extended losses after the gas giant canceled dividend payments, pressuring Russian stock indexes, according to Reuters.

As of 1019 GMT, the rouble was 5.9 percent weaker against the dollar at 54.50, earlier hitting its weakest point since June 21 at 54.9250. The currency scaled its highest level in more than seven years on Wednesday.

The unit lost 5.9 percent to trade at 56.85 versus the euro .

The likelihood of the rouble strengthening past 50 to the dollar has eased, said Dmitry Polevoy, head of investment at Locko Invest, although high commodity prices were supporting the Russian currency.

The rouble has become the world’s best-performing currency this year, boosted by measures taken to shield Russia’s financial system from Western sanctions imposed after Moscow sent troops into Ukraine on Feb. 24.

The measures have included restrictions on Russian households withdrawing foreign currency savings.

The rouble’s strength has raised concerns among officials and export-focused companies because it dents Russia’s income from selling commodities and other goods abroad for dollars and euros.

Expectations that Russian authorities could resort to foreign currency interventions were putting pressure on the rouble, Polevoy said.

Dividend Fallout 

Shares in Russian energy giants Rosneft and Gazprom followed divergent courses as investors responded to the two companies’ opposing dividend decisions.

Gazprom’s shares were down 5.5 percent, extending heavy losses from the previous session after the gas giant decided not to pay dividends on last year’s results for the first time in more than two decades.

Meanwhile, shares in oil major Rosneft, which approved 2021 dividend payments after Thursday’s closing bell, were gaining ground, up 4.5 percent.

“There are few reasons for optimism in the Russian market,” said Otkritie Research in a note.

The commodity sectors of the market will be under pressure and the rouble may lose some ground before the weekend, Otkritie said.

Russian stock indexes were mixed, with the dollar-denominated RTS index shedding 4.3 percent to 1,286.8 points, hitting its lowest mark since mid-June.

The rouble-based MOEX Russian index was 1 percent higher at 2,225.8 points.

 


Saudi Arabia licences 79 factories with $266.5m investments in May: Ministry

Saudi Arabia licences 79 factories with $266.5m investments in May: Ministry
Updated 1 min 20 sec ago

Saudi Arabia licences 79 factories with $266.5m investments in May: Ministry

Saudi Arabia licences 79 factories with $266.5m investments in May: Ministry

RIYADH: The Ministry of Industry and Mineral Resources licensed 79 new factories in May, with investments exceeding SR1 billion ($266.5 million), reaching 411 as total number of licenses since the beginning of the year.

The number of industrial facilities across the Kingdom reached 10,638, led by non-metallic minerals with over 2,056 factories, Saudi Press Agency reported.

Rubber and plastics factories followed with 1,346, while food factories reached 1,268.

Making food products accounted for the largest proportion of the total new licenses with 16 licenses, a report by the ministry’s National Industrial Information Center showed.

Small establishments acquired the vast majority of the new industrial licenses during May, with a rate of 92.4 percent, followed by medium enterprises with 6.3 percent. 

Large enterprises consisted of 1.3 percent of the new licenses, while national factories acquired new licenses by type of investment by 77 percent, followed by foreign enterprises with 13 percent, and joint investment enterprises with 10 percent.

The ministry's report showed that 62 industrial facilities began actual production in May, with investments of SR1.3 billion.

As many as 32 new industrial licenses were issued in the Saudi capital Riyadh, while 19 were issued in the Eastern region, and 11 in Makkah, the report said.

The eastern region occupied the largest number of factories that started production with 17 factories, followed by Riyadh with 16, and the Asir region with 10 factories.

Number of jobs created by the industrial sector during May reached 2,516, all of them citizens, while more than 19,000 expatriate workers left the sector during the same month, the ministry said.


TASI down from record high to 2nd biggest monthly decline in 2022: Monthly Recap

TASI down from record high to 2nd biggest monthly decline in 2022: Monthly Recap
Updated 01 July 2022

TASI down from record high to 2nd biggest monthly decline in 2022: Monthly Recap

TASI down from record high to 2nd biggest monthly decline in 2022: Monthly Recap

RIYADH: The Saudi main index, TASI, sank to its second-largest monthly decline in 2022 in the final session of June, led by fears of interest rate hikes hitting investors’ optimism.

TASI ended June losing 11 percent, to reach 11,523 at the closing bell of Thursday’s session.  

During June, the Tadawul All Share Index suffered its worst decline in six months to reach 11,299.

This was led by a 5.43 percent fall in oil giant Saudi Aramco, and 15.47 percent decrease in the Kingdom’s largest valued bank, Al Rajhi.

Saudi Industrial Export Co. topped the fallers list despite being the top gainer last month, down 63.87 percent.

Also adding to this was a weak performance from all listed sectors as they ended June in the red.

Another factor contributing to the performance was the ongoing Russia-Ukraine conflict, which sent oil prices on a rollercoaster, creating instability and shaking the market.

It would be pertinent to mention that despite global economic shocks, TASI managed to cross 13,000 points for the first time since 2006 in March, and maintained the level during April as it closed at 13,733.


Saudi crude supplied a third of Japan’s oil needs in May

Saudi crude supplied a third of Japan’s oil needs in May
Updated 01 July 2022

Saudi crude supplied a third of Japan’s oil needs in May

Saudi crude supplied a third of Japan’s oil needs in May

TOKYO: Japan’s imports of Saudi crude oil in May amounted to 27.10 million barrels, or 33.5 percent of the total in that month, according to the Agency for Natural Resources and Energy of the Ministry of Economy, Trade and Industry.

In April, Japan’s imports of Saudi crude oil were 38.49 million barrels — 43.9 percent of the total.

During May, Japan imported 80.81 million barrels, which was a record high of 94.5 percent, some 76.38 million barrels, provided by five Arab countries: the UAE, Saudi Arabia, Qatar, Kuwait and Oman, according to the data.

Russia remained on the list of Japan’s suppliers of crude oil, with the Japanese government exempting the energy sector from sanctions, but Japanese company imports decreased to 651,848 barrels — 0.8 percent — of the total.

Japan imported 36.21 million barrels from the UAE – 44.8 percent of the total imported in May. Qatar provided 5.559 million barrels (6.9 percent), Kuwait 5.556 million barrels (6.9 percent) and Oman supplied about 1.5 million barrels (1.9 percent).

The remaining imports came from Central and South America (3.8 percent), Southeast Asia (0.3 percent), and Oceania (0.6 percent).

The figures cited represent the quantities of oil that arrived at refineries, tanks and warehouses in ports in Japan during May 2022. Japan uses oil to generate about a third of its energy needs. 

 


Saudi Alamar fast food chain franchiser sets final offer price at $30.64 

Saudi Alamar fast food chain franchiser sets final offer price at $30.64 
Updated 01 July 2022

Saudi Alamar fast food chain franchiser sets final offer price at $30.64 

Saudi Alamar fast food chain franchiser sets final offer price at $30.64 

RIYADH: Alamar Foods has set the top range of its initial public offering prices at SR115 ($30.64) per share, with a 47.5 percent oversubscription, after completing its pricing and book building process for institutional investors.

The final offer price gives the fast food chain franchiser an implied market capitalization at listing of SR2.933 billion.

Alamar Foods is developer and operator of two global household brands: Domino’s, which operates across the Middle East, North Africa, and Pakistan region, and Dunkin’, which operates in Egypt and Morocco.

“This IPO stands as a testament to the milestones achieved towards becoming a leading QSR player across the MENAP region,” Filippo Sgattoni, CEO at Alamar Foods, said.

The individual investor subscription period is scheduled to start on July 20 and to close on July 21. 

The Capital Market Authority approved on June 7 Alamar’s application to offer 10.63 million shares, or 41.7 percent of the company’s capital, to the public.

Alamar’s capital stands at SR255 million.