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Four Chinese airlines buy 292 planes from airbus for total of $37 bln

Four Chinese airlines will buy a total of 292 planes from Airbus in a $37 billion windfall for the aviation giant, the carriers said in separate statements Friday.

China Eastern said it had agreed to purchase 100 A320neo jets and China Southern said on the same day that it would buy 96 of the same model.

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Air China and its subsidiary Shenzhen Airlines also confirmed the purchase of a combined 96 A320neo planes, according to separate filings.

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Adani Group saga enters third week as officials step in to calm market nerves

Indian policy makers and regulators stepped in over the weekend to calm frayed nerves over concerns the turmoil surrounding billionaire Gautam Adani’s conglomerate would spill over into the local economy and affect global investor sentiment toward the coun-try.

Ministers from Prime Minister Narendra Modi’s government said Indian regulators were independent and competent to deal with the fallout, while the Securities and Exchange Board of India said it was committed to ensure market integrity. The central bank has assured that banks are within limits on their exposure to the Adani group.

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The market value of Adani’s companies have slumped by almost half since the release of a scathing report by US-based short-seller Hindenburg Research on January 24, accusing it of stock manipulation and accounting fraud. The group has repeatedly de-nied Hindenburg’s allegations of corporate wrongdoing and threatened legal action.

The tumult has become a national issue, with lawmakers disrupt-ing parliament to demand answers as Adani’s interests often inter-twine with the India’s growth plans. The main opposition party ramped up the pressure on Modi over his silence and planned a nationwide protest on Monday to highlight the risk to small inves-tors.

Bankers and industrialists also shared their view on the impact on India. Asia’s wealthiest financier Uday Kotak said while he doesn’t see systemic risks to India’s financial system from “recent events, the country’s large corporates rely on global sources for debt and equity financing, and local underwriting and capacity building needs to improve.”
Billionaire businessman Anand Mahindra said “never, ever bet against India” amid questions if current challenges in the business sector will trip the nation’s ambitions to be a global economic force.

As the saga enters its third week, investors are bracing for further volatility and the focus is increasingly turning to how the Adani Group will manage to finance its debt obligations.

The rout in company shares has cost India its place among the world’s five biggest stock markets, while the rupee is the worst performing emerging Asian currency this year. Foreigners have pulled out $3.8 billion from the nation’s equities in 2023, the most among emerging Asian markets.

New Delhi is rushing to limit the blow.

Indian regulators “will do their job in dealing with the allegations against the Adani Group,” Finance Minister Nirmala Sitharaman said on Saturday. The recent market turbulence won’t impact the nation’s economic fundamentals, she said.
Trade Minister Piyush Goyal echoed similar sentiment, sayingIndian financial markets were among the most-respected and well-regulated in the world.

Fund-raising focus

Concerns over how the Adani Group will manage its various debt obligations have increased after Adani Enterprises Ltd. pulled the plug on a record $2.5 billion follow-on share sale, citing the need to protect its investors’ interests.

It has also shelved a plan to raise as much as 10 billion rupees ($122 million) via its first-ever public sale of bonds, Bloomberg News reported on Saturday, citing people familiar with the matter.

Separately, the Economic Times newspaper reported the group was likely to suspend a $500 million overseas bond sales plan and will look into other ways to refinance the first tranche of the $4.5 billion debt it used to buy ACC Ltd. and Ambuja Cements Ltd.

S&P Global Ratings cut its outlook on Adani Ports and SEZ Ltd. and Adani Electricity Mumbai Ltd. to negative. “There is a risk that investor concerns about the group’s governance disclosures are larger than what we have currently factored into ratings,” the rat-ings company said in a statement.

There are also risks that new investigations and negative market sentiment may lead to increased cost of capital and reduce fund-ing access for rated entities, it said.

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Saudi business confidence hits two-year high as boom in non-oil sector continues

Confidence among businesses in Saudi Arabia’s non-oil sector rose to a two-year high in January, as firms reported strong new order growth and started to see improvements in supply chains and softening inflation.

New order growth rose compared to December and was the sec-ond highest level in the past 16 months, according to a survey of purchasing managers compiled by S&P Global. Foreign demand also increased rapidly and to a greater degree than at the end of 2022.

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The Riyad Bank Saudi PMI rose to 58.2 from 56.9 in December, well above the 50-mark separating growth from contraction. Last month’s figure was the second-highest recorded since September 2021 after November’s more than seven-year high.

It’s the latest sign that last year’s economic boom is continuing even as oil prices fall from recent highs. Overall growth was an es-timated 8.7 percent last year, Saudi official projections showed, making it the fastest growing major economy.

The positive sentiment was “driven by the ongoing improvement in the business environment, private-sector employment, and in-creased foreign investment with governance and labor market re-form,” said Naif al-Ghaith, chief economist at Riyad Bank.

The Kingdom’s non-oil economy, the engine of job creation, grew an annual 6.2 percent during the fourth quarter of last year, the highest level in more than a year.

“Saudi Arabia is continuing its strong performance and outper-formed the global economic trends for activity and demand,” al-Ghaith said.

The world’s largest oil exporter has so far been mostly shielded from global economic woes as high crude prices are putting the government on track to record a second year of budget surplus.

That’s helping the government accelerate investments in new in-dustries intended to wean it off a reliance on oil sales.

The rise in output prices was the softest in nearly a year, despite the growth in new orders, the report showed. Job creation slowed from December’s near five-year high.

Read more: Saudi economy grows by 8.7 pct in 2022, as per latest statistics

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Hong Kong’s Lee in Saudi Arabia, aims to encourage Aramco to list in city

Hong Kong Chief Executive John Lee is seeking to convince oil giant Saudi Aramco and its units to consider a secondary listing in the Asian financial hub as he embarks on his first official visit to the Middle East, according to the South China Morning Post.

Lee is kicking off a campaign to attract new investment to the city following almost three years of pandemic isolation. The leader will meet top executives of Saudi Aramco and highlight what Hong Kong has to offer as an international financial center, according to the report, which quoted the leader as saying he will try his best to encourage the oil producer to list in the city.

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Hong Kong has been a popular center for sovereign funds and companies to list, the report cited Lee as saying on Sunday after arriving in Saudi Arabia’s capital, Riyadh. Aramco’s businesses are “very diversified with its different subsidiaries and the plan is to “encourage them to come to Hong Kong for participation, in-cluding listing in the city,” the South China Morning Post quoted him as saying.

Saudi Arabian Oil Co., as the $2 trillion company is formally known, listed in Saudi capital Riyadh in 2019. Prior to the compa-ny’s $29 billion share offering, the world’s largest on record, it opt-ed to shun an international listing.

Lee was welcomed at the airport by Badr AlBadr, deputy minister of Saudi Arabia’s ministry of investment; Hamad Aljebreen, con-sul-general of Saudi Arabia in Hong Kong; and Yin Lijun, deputy chief of mission of the Chinese Embassy in the country, according to the report.

He is visiting Saudi Arabia and then will head to the United Arab Emirates until February 11. During that time, he’ll meet with local political and business leaders to promote new development op-portunities and “foster Hong Kong’s exchanges and co-operation with Saudi Arabia and the UAE on all fronts,” according to a gov-ernment statement released before the trip.

The chief executive said before leaving that Saudi Arabia’s and the UAE’s development vision and needs are “exactly in line with Hong Kong’s advantages,” Radio Television Hong Kong reported.
His trip comes as local Hong Kong officials seek to promote the city and attract new investment opportunities to boost its battered economy, which contracted last year for the third time since 2019 as a prolonged exit from isolating COVID-19 curbs weighed on the city.

Since Hong Kong began reopening up last year, Hong Kong officials have sought to increase engagement with the Middle East and their Asian neighbors as relations with traditional western allies have cooled amid authorities’ crackdown on dissent.

Last October, Financial Secretary Paul Chan visited Bahrain and Saudi Arabia to develop potential business opportunities, while Lee and other government officials have since traveled to Vietnam and Thailand for similar purposes.

The financial secretary said at the time of his visit that bourse operator Hong Kong Exchanges and Clearing reached out to Saudi Aramco about a secondary listing, according to the South China Morning Post.

China has been actively pursuing investment opportunities in the Middle East amid heightened Sino-US tensions. In December Chinese President Xi Jinping visited Saudi Arabia for a summit where some $50 billion of investment agreements were signed.

Read more: Hong Kong to return as a top property investment location: Property consultancy

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