Several major retailers are currently in talks to sell to investment firms and companies after US President Donald Trump’s trade war wreaked havoc on their valuations, writes Reuters. The rapidly-changing tariff announcements left retailers in a limbo and unable to provide earnings guidance amid trade policy instability. Investment bankers think that we could soon see more retailers aggressively pursuing private deals if Trump does not lock down a clear trade policy soon.

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Going private is becoming an increasingly attractive option for retailers, as they will become more immune to the unpredictable fluctuations in the market. They can also shield their earnings because they will no longer have to answer to financial reporting requests and other regulatory restrictions.

Public retailers are not overplaying the impact of market turmoil. Shoe company Skechers, acquired earlier this month by 3G Capital, saw its market value dip to USD 7.4 bn in late April, down from USD 11.85 bn in January, one day before Trump announced tariffs against China. Like Sketchers, many retailers manufacture their goods overseas, making them more prone to downsides of tariff announcements.

Some retailers may find going private easier than others because a company structure drastically influences the signing of these agreements. Companies with a single investor or family companies like Skechers don’t need a broad shareholder approval, meaning that public companies with a similar structure in the retail sector could go private sooner than we think.

US tensions with China flared up again shortly after they cooled things off during recent talks in Geneva that led to monetary calming of global markets. The two countries struck a fragile truce to roll back tariffs for an initial period of 90 days. The US’ repeated warnings to its companies to avoid using AI chips manufactured by China’s Huawei provoked the ire of the Chinese who said that such warnings “undermine” the Geneva talks, casting doubts on whether the 90-day truce will continue its full course.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning. Japan’s Nikkei is looking at gains of 0.5% and the Kospi is up 1.8%. Meanwhile, both the Shanghai Composite and the Hang Seng are in the red, down 0.1% and 0.3%, respectively.

TASI

10,925

-1.4% (YTD: -9.2%)

MSCI Tadawul 30

1,399

-1.3% (YTD: -7.3%)

NomuC

26,592

-0.7% (YTD: -15.5%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

32,397

+1.5% (YTD: +8.9%)

ADX

9,674

+0.2% (YTD: +2.7%)

DFM

5,505

+0.4% (YTD: +6.7%)

S&P 500

5,922

+2.1% (YTD: +0.7%)

FTSE 100

8,778

+0.7% (YTD: +7.4%)

Euro Stoxx 50

5,415

+0.4% (YTD: +10.6%)

Brent crude

USD 64.29

-0.7%

Natural gas (Nymex)

USD 3.40

+1.9%

Gold

USD 3,328

-2.0%

BTC

USD 109,158

0.0% (YTD: +16.4%)

Sukuk/bond market index

913.7

+0.1% (YTD: +1.3%)

S&P MENA bond & sukuk

143

+0.1% (YTD: +2.2%)

VIX (Fear gauge)

18.96

-7.8% (YTD: -9.3%)

THE CLOSING BELL: TADAWUL-

The TASI fell 1.4% yesterday on turnover of SAR 5.1 bn. The index is down 9.2% YTD.

In the green: UCA (+3.2%), Bonyan Reit (+1.6%) and Jahez (+1.3%).

In the red: Almoosa (-6.9%), Miahona (-5.3%) and Sarco(-5.1%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.7% yesterday on turnover of SAR 28.2 mn. The index is down 15.5% YTD.

In the green: Dar Almarkabah (+10.3%), Alrazi (+8.1%) and Knowledgenet (+6.7%).

In the red: Paper Home (-8.7%), Naas Petrol (-8.7%) and Taqat (-8.1%).

CORPORATE ACTIONS-

Basic Chemical Industries approved a SAR 27.5 mn dividend distribution for FY 2024 at SAR 1 per share, it said in a disclosure to Tadawul. The distribution date is yet to be disclosed.

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