United Arab Emirates

Emirates NBD’s Turkish deal riskier than it looks

22 May 2018

The Dubai-based lender is paying Russia’s Sberbank $3.2 bln for Denizbank, Turkey’s fifth-largest bank by assets. NBD is buying a high-return asset near book value, and gets to diversify its top line. Yet Turkey’s rising risks reduce the extent to which this is a bargain.

OPEC’s widened tent would still be built on sand

16 February 2018

Oil-exporting countries are working to expand their alliance with Russia and others longer term, the UAE oil minister says. That’s just as production numbers show U.S. drillers are set to pump more oil this year. OPEC’s tent can widen, but it will still face a production gale.

Bill Gates and buyout baron create negative impact

5 February 2018

The billionaire’s Gates Foundation is at odds with Abraaj, a buyout group, over a $1 bln fund to provide healthcare in emerging markets. The dispute underscores the tension in combining charitable and financial goals. The fallout will only fuel skepticism of impact investing.

Sberbank’s homeward pivot is a no-brainer

30 January 2018

The Russian bank is in talks to offload its majority stake in Denizbank. Sanctions had already taken the shine off Sberbank’s expansion abroad. But selling the Turkish lender at its $3.2 bln book value would bolster capital and help it become even more dominant in Russia.

Dubai demonstrates the distance ahead of Saudi

1 November 2017

The UAE’s most populous emirate has become a global financial hub thanks to a diversified economy and tolerance of Western culture. Now Dubai is pushing a green agenda. The kingdom can learn much from its smaller neighbor, including its imperfections, as it tries to catch up.

Etihad’s airlines fail, but odd CDO remains aloft

17 August 2017

Air Berlin and Alitalia are insolvent. Their debt is probably worthless, except for an unusual collateralised debt obligation that part-owner Etihad used to fund them. It is trading at a price that suggests Etihad might bail it out. Fuzzy guarantees often end badly.

Cox: Qatar kerfuffle could tip Aramco to New York

15 August 2017

As the Saudi oil leviathan considers where to IPO, its skirmish alongside regional allies with its Gulf neighbor may play a role. Abu Dhabi punished banks in which Qatar is a big investor. For the LSE, Qatari capital may now be a source of anxiety rather than stability.

Saudi oil cut would be a hit-and-hope strategy

24 July 2017

The kingdom’s pact with OPEC to damp output is crumbling and has failed to drain inventories, or boost prices, fast enough. One suggestion is to reduce its own exports by as much as a seventh to shock markets into submission. If that fails, though, Saudi would look impotent.

Dubai is weakest link in anti-Qatar stand-off

11 July 2017

Keeping its doors open while neighbours kept theirs closed has been a winning strategy for the Middle Eastern trading enclave. The blockade of Qatar will leave a mark on Dubai’s vital real estate sector and trade flows – and could leave its investor-friendly reputation dented.

Qatar’s squabbles turn its gas sour for investors

4 July 2017

The world’s largest exporter of liquefied natural gas has revealed plans to increase output by almost a third. World demand for the fuel is growing but so are supplies. Doha’s dispute with its Gulf neighbours makes its new expansion projects less appealing for risk-shy capitalists.

Qatar standoff spells end of Gulf cooperation

3 July 2017

Saudi Arabia has granted the sheikhdom two more days to comply with its demands. Failure to reach a deal could escalate the dispute, hitting regional economies and investors in equal measure. But even if both sides back down, plans for greater economic collaboration are on hold.

Oil markets too calm over Qatar ultimatum

23 June 2017

Doha’s Gulf neighbours have imposed a 10-day deadline to comply with demands including reparations, closing Al Jazeera and regular inspections. Markets have assumed the standoff won’t turn violent and impact oil supply from the region. That assumption is looking less secure.

Dana Gas is the tip of Islamic bond iceberg

15 June 2017

The Abu Dhabi-listed company wants to restructure $700 mln of Sharia-compliant bonds, claiming they no longer conform to Islamic law. Creditors have a slim chance of recovering their cash. The arbitrary change exposes the hidden risks in this rapidly growing corner of finance.

Qatar quarrel shows limit of its sovereign wealth

6 June 2017

The emirate’s $300 bln-plus fund has snapped up landmark buildings and stakes in companies like Barclays and Rosneft. The spree was meant to generate returns and diplomatic clout. But Qatar’s largesse has produced few allies to help it face down its more powerful neighbours.

Only Russia can make OPEC great again

23 May 2017

Moscow is giving the cartel more pricing clout. A mooted deal to extend output cuts and drain global crude stockpiles can only succeed with the continued support of the world’s biggest crude producer. With U.S. drillers recovering, it may be time to make the alliance permanent.

Abu Dhabi cure has limits for Mediclinic investors

27 April 2017

The emirate has thrown a sop to citizens by agreeing to pay more of their healthcare costs. That's good for local hospital operators like UK-listed Mediclinic. But a near-20 percent jump in its share price looks exuberant. Abu Dhabi may try to recoup its money in other ways.

Dubai mall owner throws sand in Amazon’s face

27 March 2017

Emaar Malls has challenged the U.S. retailer with an $800 mln counterbid for Souq.com. Amazon has technical expertise and deep pockets. But the owner of Dubai’s largest retail park has local knowledge, powerful allies and, most importantly, an existing business model to defend.

Britain needn’t fear SoftBank’s pass-the-parcel

8 March 2017

The Japanese tech group may shift part of its stake in British chip designer ARM to a $100 bln fund forged with Saudi Arabia. If SoftBank and ARM's board retain control, commitments over UK jobs should be upheld. A more international shareholder base may extend ARM's clout.

Etihad and Lufthansa far apart on merger carousel

17 January 2017

The idea of a tie-up between the two airlines pushed up the German carrier's shares. Yet its main problems, like high labour costs and low-cost competition, aren't easily fixed even by its Abu Dhabi rival's ample cash. Lufthansa would do best to fly on past.

Millennial princes snatch at power in Gulf

3 January 2017

Ageing monarchs may hand greater powers to a younger, more progressive generation in 2017. Falling oil revenues and ballooning budget deficits are forcing sheikhdoms to make overdue economic and social reforms or risk financial meltdown. Millennial thinking could help.