UBS in talks to buy embattled Swiss rival Credit Suisse, FT says

UBS in talks to buy embattled Swiss rival Credit Suisse, FT says
Switzerland's national flag flies above a logo of Swiss bank Credit Suisse in front of a branch office in Bern, Switzerland.m (Reuters)
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Updated 18 March 2023

UBS in talks to buy embattled Swiss rival Credit Suisse, FT says

UBS in talks to buy embattled Swiss rival Credit Suisse, FT says

UBS Group AG is in discussions to take over all or part of Credit Suisse, the Financial Times reported on Friday, after an emergency funding lifeline failed to restore investor confidence in the smaller Swiss bank.
The boards of Switzerland’s two biggest lenders are set to meet separately over the weekend to discuss a deal, the FT said, citing multiple people briefed on the talks.
A source with knowledge of the matter said that Swiss regulators are encouraging UBS and Credit Suisse to merge, but that both banks do not want to do so. The regulators do not have the power to force the merger, the person said.
Credit Suisse shares jumped 9 percent in after-market trading following the FT report. Credit Suisse and UBS declined to comment on the report.
Credit Suisse, a 167-year-old bank, is the biggest name ensnared by market turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week, forcing it to tap $54 billion in central bank funding.
Credit Suisse executives were due to hold meetings over the weekend to chart a path forward for the ailing Swiss bank, people familiar with the matter have previously said.
In the latest sign of its mounting troubles, at least four major banks including Societe Generale SA and Deutsche Bank AG have put restrictions on their trades involving the Swiss lender or its securities, according to five sources with direct knowledge of the matter.
“Credit Suisse is a very special case,” said Frédérique Carrier, head of investment strategy at RBC Wealth Management. “The Swiss central bank stepping in was a necessary step to calm the flames, but it might not be sufficient to restore confidence in Credit Suisse, so there’s talk about more measures.”
The frantic efforts to shore up Credit Suisse come as policymakers including the European Central Bank and US President Joe Biden have sought to reassure investors and depositors that the global banking system is safe. But fears of broader troubles in the sector persist.
Already this week, big US banks had to swoop in with a $30 billion lifeline for smaller lender First Republic, while US banks altogether sought a record $153 billion in emergency liquidity from the Federal Reserve in recent days.
That surpassed a previous high set during the most acute phase of the financial crisis some 15 years ago.
This reflected “funding and liquidity strains on banks, driven by weakening depositor confidence,” said ratings agency Moody’s, which this week downgraded its outlook on the US banking system to negative.
In Washington, focus turned to greater oversight to ensure that banks — and their executives — are held accountable.
Biden — who earlier this week promised Americans that their deposits are safe — on Friday called on Congress to give regulators greater power over the banking sector, including leveraging higher fines, clawing back funds and barring officials from failed banks, a White House statement said.
A group of Democratic US lawmakers also asked regulators and the Justice Department for a probe into the role of Goldman Sachs in the collapse of SVB, the office of US Representative Adam Schiff said on Friday.
Banking stocks globally have been battered since Silicon Valley Bank collapsed, raising questions about other weaknesses in the wider financial system.
Shares in Credit Suisse, Switzerland’s second-largest bank, closed down 8 percent on Friday, with Morningstar Direct saying Credit Suisse had seen more than $450 million in net outflows from its US and European managed funds from March 13 to 15.
Analysts, investors and bankers think the loan facility from the Swiss central bank — which made it the first major global bank to take up an emergency lifeline since the 2008 financial crisis — only bought it time to work out what to do next.
US regional bank shares were fell sharply on Friday and the S&P Banks index tumbled 4.6 percent, bringing its decline over the past two weeks to 21.5 percent, its worst two-week calendar loss since the COVID-19 pandemic shook markets in March 2020.
First Republic Bank ended Friday down 32.8 percent, bringing its loss over the last 10 sessions to more than 80 percent.
While support from some of the biggest names in US banking prevented its collapse this week, investors were startled by First Republic’s late disclosures on its cash position and just how much emergency liquidity it needed.
“It appears that maybe the damage has been done to the brand reputation of First Republic. (It) is a shame because it was a high quality, well run bank,” said John Petrides, portfolio manager at Tocqueville Asset Management.
Earlier on Friday, SVB Financial Group said it had filed for a court-supervised reorganization, days after its former banking unit SVB was taken over by US regulators.
Regulators have asked banks interested in buying SVB and Signature Bank to submit bids by Friday, people familiar with the matter have said. US regulators are willing to consider having the government backstop losses at SVB and Signature Bank if it helps push through a sale, the Financial Times reported on Friday, citing people briefed on the matter.
Authorities have repeatedly tried to emphasize that the current turmoil is different than the global financial crisis 15 years ago as banks are better capitalized and funds more easily available — but their assurances have often fallen on deaf ears.
In an unusual move, the ECB held an ad hoc supervisory board meeting, its second this week, to discuss the stresses and volatility in the banking sector.
The supervisors were told deposits were stable across the euro zone and exposure to Credit Suisse was immaterial, a source familiar with the meeting’s content told Reuters.
An ECB spokesperson declined to comment.

UAE In-Focus – Abu Dhabi’s Presight AI raises $496m in IPO  

UAE In-Focus – Abu Dhabi’s Presight AI raises $496m in IPO  
Updated 11 sec ago

UAE In-Focus – Abu Dhabi’s Presight AI raises $496m in IPO  

UAE In-Focus – Abu Dhabi’s Presight AI raises $496m in IPO  

RIYADH: Presight AI, a data analytics firm owned by Abu Dhabi’s G42 Group, has listed and started trading its shares on the First Market of the Abu Dhabi Stock Exchange.  

The initial public offering, which raised roughly 1.822 billion dirhams ($496 million) in proceeds, witnessed strong demand from retail and professional investors.  

The IPO was oversubscribed by 136 times, excluding the commitment from the company’s cornerstone investor, International Holding Corporation.  

Presight’s shares are also certified to be Shariah compliant, according to an announcement by the Shariah Board of Dubai Islamic Bank, the IPO’s lead manager.

“We are delighted to have completed Presight’s IPO, and to begin our next chapter as only the second technology company to be listed on the ADX, reinforcing our position as a pioneer in the industry,” Mansoor Al Mansoori, chairman of Presight, said.  

Presight’s IPO now gives investors the opportunity to own a share of the data analytics company powered by AI, hence enabling positive societal impact. The company’s products are used in three major industries with significant impact and market development potential including public services, finance and sports.  

Al Ansari completes IPO  

UAE-based exchange house Al Ansari Financial Services announced that the final offer price for its IPO has been set at 1.03 dirhams per share, which is at the top of the previously indicated price range from 1.00 dirhams per share.  

The statement comes after the book-building and subscription processes for its IPO on March 24, have been completed. Al Ansari raised 773 million dirhams with its IPO.  

Last week, the company expanded the size of its retail offering from 5 percent of the share capital to 7.5 percent in response to strong investor demand.  

The dividend yield will be at least 7.8 percent at the listing price, and the market value of the group will be 7.73 billion dirhams.  

Following the completion of the IPO, Al Ansari Holding will continue to own 90 percent of the group’s issued share capital.  

Saudi Electricity Co. plans capital expenditure increase to $9.3bn for 2023

Saudi Electricity Co. plans capital expenditure increase to $9.3bn for 2023
Updated 4 min 40 sec ago

Saudi Electricity Co. plans capital expenditure increase to $9.3bn for 2023

Saudi Electricity Co. plans capital expenditure increase to $9.3bn for 2023

RIYADH: State-owned Saudi Electricity Co. has announced that it intends to allocate between SR30 billion ($8 billion) and SR35 billion for its 2023 capital expenditure, according to the company’s 2022 financial presentation. 

This is at least 10 percent higher than the electric power distribution firm’s 2022 capex which stood at SR27.4 billion. 

Even though SEC did not provide a clear breakdown of the allocated amount, it is projected that expenditure in transmission and distribution infrastructure will be a priority considering that they dominated the firm’s capital expenditure for the past three years.  

In addition to this, SEC shed light on plans to further grow and expand its fleet, develop its distribution as well as transmission pipelines, and potentially achieve 23 percent automation within its distribution grid.  

Between 2021 and 2022, the firm experienced a 0.6 percent surge in generation capacity from 83,036 MW to 83,539 MW.  

Similarly, total load also rose 1.8 percent in the same period to reach 65,301 MW in 2022, up from 64,161 in 2021.  

On the other hand, the energy produced increased 2.6 percent to hit 191,964 GW in 2022, up from 168,985 GW a year earlier.  

Meanwhile, SEC’s fuel consumption hit 348 million barrels of oil equivalent, or mmboe, per day in 2022, reflecting an 8.1 percent boost compared to 2021’s 332 mmboe a day. 

As for the total number of substations, they rose to reach 1,209 in 2022 in comparison to the 1,190 reported back in 2021. Consequently, this accounted for a 2.8 percent increase in transformers’ capacity.  

With regard to the number of registered customers, the company registered a 4 percent jump to reach 10.9 million in 2022, up from 10.5 million in 2021.  

Established in 2000, SEC has monopolized generation, transmission and distribution of electric power in the Kingdom through 45 power generation plants in the country. 

The firm’s vision revolves around achieving integration of the environment, economy and social issues into the firm’s corporate cultural and economic values in order to accomplish the greater objectives of sustainable development. 

New law allowing foreigners to buy all kind of properties in KSA soon: Top official

New law allowing foreigners to buy all kind of properties in KSA soon: Top official
Updated 19 min 39 sec ago

New law allowing foreigners to buy all kind of properties in KSA soon: Top official

New law allowing foreigners to buy all kind of properties in KSA soon: Top official

RIYADH: Saudi Arabia is planning to relax its property ownership laws for foreigners as the Kingdom eyes attracting investments into the real estate sector as part of its strategy to diversify its economy. 

The new law that will allow foreigners to buy all kinds of real estate properties is “in its final stages and will be made public in a short period,” revealed the Kingdom’s Real Estate General Authority chief Abdullah Alhammad. 

This comes after Saudi Arabia issued a directive in 2021 allowing non-Saudis, legal residents of the country to buy a single property with some conditions.  

But the REGA CEO pointed out that the new law will be “broader and more comprehensive than the current law” for real estate ownership, as foreigners will be able to buy any kind of property including commercial, residential, and agricultural in accordance with the regulations. 

The earlier law had prohibited foreigners from buying properties in holy cities, but Alhammad said, “the initial reading of the law shows that it allows foreigners to own property everywhere in the Kingdom, including Makkah and Madinah.” 

He clarified that any concerns about the negative effects of foreign ownership of the property were monitored in advance while solutions were developed for all problems and unacceptable practices. 

Saudi Arabia is looking to transform its real estate sector by bringing in new laws while making the sector attractive to foreign investors as the Kingdom eyes to improve the sector’s contribution to the national gross domestic product.  

The Kingdom’s latest move can open up new investment destinations for expats and global investors looking for green pastures, away from traditional markets, including the UAE.  

Amid rising urbanization, Saudi Arabia’s major cities including Riyadh and Jeddah have been chronically under-supplied – something that industry reports suggest is driving property prices high, making it unaffordable to many.  

Saudi Arabia’s Real Estate General Authority acknowledged that real estate prices in Saudi Arabia are high on a supply-demand imbalance. 

Expressing concern about the rising property prices, the REGF chief said high prices negatively impact the real estate sector. 

He pointed out that the majority of people looking for real estate today lack the means to buy and the price of the property today is more than the purchasing power, making it challenging to find a suitable property. 

“The investors were also affected by the high prices of the real estate,” noted Alhammad. 

He explained that the landowners are unable to make easier transactions due to the high prices of the land. "When the landowner wants to sell, he reduces prices to be able to sell it.”  

According to Alhammad, the real estate market is an open market subject to supply and demand. 

The authority’s chief also noted that the initiative to impose taxes on white lands was taken in 2017.  

White land is basically vacant land that is allocated for residential, or commercial residential use, and located within the urban boundary limits in the Kingdom. 

In 2016, Saudi Arabia decided to capitalize on undeveloped land in urban areas, which makes up 30 percent of those areas. The government decided to impose a 2.5 percent tax, based on land value, on landowners who had purchased plots but left them undeveloped. 

By way of imposing the White Land Tax, the government wants to increase the volume of plots available for development in urban areas.  

REGA chief added that the Ministry of Municipal and Rural Affairs started working on plans to boost or raise the efficiency of fees by an additional 10 percent. 

China emerges as Saudi Arabia’s top export destination in January

China emerges as Saudi Arabia’s top export destination in January
Updated 42 min 53 sec ago

China emerges as Saudi Arabia’s top export destination in January

China emerges as Saudi Arabia’s top export destination in January

RIYADH: China emerged as the top global export destination for Saudi Arabia in January 2023 accounting for 14.8 percent of total Saudi exports valued at SR15.6 billion. It was followed by Japan and India with exports valued at SR11.7 billion (11.2 percent of total exports) and SR10.8 billion (10.2 percent) respectively, data released by the General Authority for Statistics showed on Monday.

PIF’s SEVEN appoints Egis to manage entertainment destinations  

PIF’s SEVEN appoints Egis to manage entertainment destinations  
Updated 27 March 2023

PIF’s SEVEN appoints Egis to manage entertainment destinations  

PIF’s SEVEN appoints Egis to manage entertainment destinations  

RIYADH: SEVEN, the investment and entertainment execution arm of the Public Investment Fund, has appointed global consulting firm Egis as the project management company for destinations in Northwestern and Southern Provinces, including a recently announced development in Tabuk.  

Egis will oversee the design of these destinations and overlook all development stages, including the identification of potential specialist partnerships required as well as the construction and project management services needed.  

“Our commitment to Saudi Vision 2030 is ongoing with our projects, presence and people in the Kingdom. We are excited to further emphasize this with our involvement on the project with SEVEN, which is set to change the entertainment industry across the country,” Alaa AbuSiam, CEO of Egis in the Middle East and South Asia, said.  

Egis has been operating in Saudi Arabia for almost 30 years and is currently working on more than 25 projects spread across the Kingdom including Riyadh Metro, Green Riyadh, AlUla development, Riyadh Airport and NEOM.  

“We are delighted to be working with Egis, who are leaders in their field with a strong track record of delivering projects to the highest of standards. We will work together to achieve our shared vision of elevating the quality of life for the people of Saudi Arabia by providing unrivaled experiences at our world-class entertainment destinations across the Kingdom,” Abdullah AlDawood, chairman of SEVEN, said.  

SEVEN is one of the main players in Saudi Arabia’s entertainment industry having made significant efforts directed at developing the ecosystem in line with Vision 2030.  

“SEVEN will bring world-class entertainment which will contribute to the improvement of the sector and the quality of life of the Kingdom’s population; an objective both Egis and SEVEN have in common,” AbuSiam added.  

Founded in 2017, SEVEN is planning to invest more than $13.3 billion to build 21 entertainment destinations across the Kingdom. Its most recent project is a $266 million attraction in Tabuk that was announced in January.