MIDDLE EAST & TURKEY
Qatar may look to boost investment into LNG import growth markets in a bid to boost domestic exports of gas and create new opportunities for Qatari companies, according to a report recently published by BMI Research, a subsidiary of Fitch. “With Indian LNG import demand set for rapid growth over the next 10 years, it is likely to be a major target area for LNG infrastructure investment,” the report's authors explain.
Oman’s Electricity Holding Co. has reportedly hired JP Morgan and Bank Muscat to advise on the company's capital raising plans, according to Bloomberg. The company may look to raise as much as US$2bn this year through a combination of bank loans and bonds. The move comes as the sovereign looks to raise up to US$1.5bn through sukuk and conventional bonds in the international capital markets this year.
Saudi Aramco is said to be preparing to issue up to US$10bn in bonds ahead of a planned IPO later this year, with Alinma Investments, HSBC, NCB Capital and Riyad Capital mandated as leads on the deal. Aramco is expected to yield up to US$100bn when it goes public.
Kuwaiti real estate developer National Real Estate Company (NREC) signed a KD31mn (US$101.5mn) 5-year convertible loan with Agility Investment Holding, which will be put towards new projects. The loan includes the option to convert the proceeds into ordinary shares of an equivalent value, the companies said.
Kuwait will hold roadshows in London, New York, Boston and Los Angeles next month ahead of a planned bond sale that could net the GCC sovereign up to US$9.5bn. Citi, HSBC and JP Morgan are leading the transaction, with Deutsche Bank, NBK Capital and Standard Chartered advising on the deal.
A proposal put forward by the Accounting and Auditing organisation for Islamic Financial Institutions (AAOIFI) to create a centralised Sharia board at the national level has gained the backing of S&P, a rating agency that has long argued a lack of standardisation is holding back sukuk issuers. The AAOIFI proposal sets out a format for setting up such a Sharia board, including member appointee procedures, remuneration, decision making procedures, and the like.
Egypt's core inflation has soared to its highest level in more than a decade, hitting 30.86% in January as the effects of a currency float and IMF-endorsed austerity measures ripple through an economy undergoing painful reforms. Prices have risen sharply since Egypt abandoned its currency peg, as the pound roughly halved in value. Urban consumer price inflation reached 28.1% in January year-on-year from 13.6% in October.
Trade Bank of Iraq (TBI) is working with Citi, Deutsche Bank and JP Morgan on a second US$1bn sovereign bond. In January Iraq successfully closed a US$1bn 5-year issuance, guaranteed by the USA, which had a coupon of 2.15%. Now reports in local media suggest another US$1bn issuance is likely to arrive before the end of the first quarter of 2017.
AFRICA
South Africa's unemployment rate fell slightly to 26.5% of the labour force in the fourth quarter of 2016, from 27.1% in the third quarter, data from the statistics office showed on Tuesday.
Mozambique's Central Bank left its benchmark standing facility rate at 23.25%, saying inflation is continuing to trend downward and may reach a projected 14% by the end of the year while economic growth will remain modest in coming months as the country continues to feel the impact of last year's suspension of foreign aid. Meanwhile, the Central bank also announced plans to introduce a prime lending rate in two months and immediately removed a curb on how much citizens can spend overseas using their bank cards.
Ghana's Cocobod is reportedly in talks with international banks for a syndicated loan to cover cocoa purchases in the 2017/18 season, the regulator's head told Reuters this week. Joseph Boahen Aidoo, head of Cocobod, said the regulator would likely need less than the US$1.8bn it raised from a syndicate of lenders to finance the last season. In September 2016 it signed the US$1.8bn loan facility with Deutsche Bank, Natixis, Cooperative Rabobank, Bank of Tokyo Mitsubishi, Nedbank, Societe Generale, Standard Chartered Bank, Ghana International Bank and DZ Bank.
AMERICAS
The Inter-American Development Bank (IDB) is prepping a US$400mn loan to Mexico, which will go towards supporting the country's renewable energy sector, multiple reports suggest.
Brazilian energy transmission firm Energisa plans to raise between BRL320mn and BRL430mn in local market non-convertible debentures this month, issued in up to two series, according to a note from the company. Proceeds from the sale will be used to refinance existing liabilities.
Brazil's capital markets have rebounded slightly from 2015, according to figures recently released by ANBIMA, the Brazilian capital markets association. Brazilian companies excluding leasing organisations raised BRL178.5bn in 2016, a 27.5% increase on 2015. Debentures continued to lead domestic market offerings, with BRL57bn but were down 11.6% from the previous year. However, issuance of real estate and agribusiness‐backed securities, CRI and CRA, increase 72.7% and 193% respectively, and combined these instruments now account for over a quarter of all debt financing in Brazil.
Any company found guilty of involvement in the Odebrecht bribery scandal in Peru will have to seek government approval to sell any of its assets in the country, President Pedro Pablo Kuczynski announced on Tuesday in a nationally televised address. Kuczynski laid out a series of steps his government has taken, following Odebrecht's admission that it paid more than US$800mn in bribes across Latin America including US$29mn in Peru. Earlier the ongoing corruption scandal, which ensnared a number of Latin-American countries, lead to Peru issuing an extradition request from the US for the country’s former President Alejandro Toledo.
ASIA
China’s CPI increased 2.5% year on year in January, slightly higher than analysts expected. PPI rose 6.9% year on year, indicating some positive momentum for the country’s economy. But the country's credit market continued to expand rapidly last month. Data from the PBOC show aggregate financing, a broad measure of credit growth, increased CNY3.74tn (approx US$545bn) in January.
Indonesia's Ministry of Finance sold INR18.43tn (US$1.38bn) of bonds at auction on Tuesday, close to INR3.5tn more than originally planned. The bonds were split between tranches maturing in May 2017, Feb 2018, May 2027, Aug 2032, and May 2036.
India's Power Finance Corporation (PFC) raised Rs2,551 crore in a private placement on the Bombay Stock Exchange's bond platform this week. It last hit the market in August 2016, when it raised Rs4,335 crore in a private placement.
One of Taiwan's largest state-owned financial holding companies, Hua Nan Financial Holdings Co Ltd., said this week that it plans to issue up to TWD6bn (US$194mn) in subordinated bonds this year, according to a report in Reuters.
One of China's oldest banks, Bank of Communications (BoCom), issued US$850mn in bonds maturing in 2020 carrying a coupon of LIBOR+77.5bp and priced at par. Bank of Communications, Bank of China, CICC, Citigroup, HSBC, JP Morgan, KGI Securities, Mitsubishi UFJ Financial Group, Standard Chartered Bank, and SPDB International Holdings Limited were bookrunners on the trade. The bank most recently secured approval from the PBOC to issued up to RMB20bn in Tier 2 bonds.
Chinese toll road operator and developer Road King Infrastructure raised US$300mn in perpetual bonds this week. The bonds carry a coupon of 7.95% and were priced at par. DBS Bank, HSBC, and JP Morgan led the sale.
ICBC Asia sold US$900mn in bonds to international investors on Tuesday. The bonds mature in 2022 and priced at 99.594% with a coupon of 2.875% to yield 2.887%. Bank of China, Bank of America Merrill Lynch, HSBC, ICBC, JP Morgan, Mizuho Financial Group, Standard Chartered Bank, UBS, and Wells Fargo led the sale.
Antonio Moncupa, the current president of East West Bank and head of the Philippines' ruling party policy think tank, is set to become the country's Central Bank governor when the current chief steps down in July. Senator Aquilino Pimentel, president of the ruling PDP-Laban party, announced the party’s support for Moncupa on its website. Moncupa will replace Amando Maglalang Tetangco, a career central banker and the first Bangko Sentral ng Pilipinas (BSP) governor to sit two terms.
RUSSIA, CIS & EUROPE
Fitch has upgraded its outlook on the Russian banking sector, citing improved asset quality as a leading driver for the move. "Most loans issued from 2010 to 2013, when rapid growth in lending amid intense competition led to severe deterioration of asset quality and a sharp increase in credit losses, have been repaid or written off. Portfolios now mainly comprise loans of better quality, issued under stricter approval criteria from 2014," the agency said in a research note.
Russian tycoon Mikhail Prokhorov has offloaded some of his Rusal stake in the open market after talks to sell his holding in the Russian aluminium giant to fellow businessman Viktor Vekselberg stalled. Prokhorov's Onexim Group, which manages his assets, sold 3.3% of Rusal via an accelerated book build for US$240mn on Monday, Reuters reported on Tuesday.
Russia’s ailing Peresvet Bank is preparing to issue a RUB125bn 15-year subordinated bond in a closed auction. The bank, linked to the Russian Orthodox Church and the Russian Chamber of Trade and Commerce, has been placed under administration by the CBR after it uncovered a RUB35bn budget “hole”, with some local media estimates indicating the gap could be twice as large.
Bank of Greece Governor Yannis Stournaras has warned Greece could once again tumble into a 2015-style recession if the country fails to come to an agreement with creditors. The country beat its 2016 fiscal targets and ended the year with a 2.4% surplus, above its initial target of 0.5%, but the IMF said the country will not be able to achieve a surplus above 1.5% without more severe cuts, creating concerns that further austerity measures could tumble to Southern European country into another crisis. Germany and the Netherlands have threatened to end the EU's Greek debt programme if a forthcoming debt deal doesn't include the IMF.
Kazakhstan is mulling whether to raise up to US$6.5bn through the country's sovereign wealth fund in a bid to support the country's banking sector. The country's Economy Minister Timur Suleimenov said the government hopes to raise the new funding for the Central Bank's Problem Loan Fund. In a related move, the country's Central Bank authorised a US$655mn loan for Kazkommertsbank, Khazakstan's largest private bank, in a bid to help recapitalise the struggling lender – which is still in talks with Kazakh Halyk over a possible merger.
