The private equity industry is facing a severe liquidity crunch, with firms globally sitting on a whopping 28k unsold companies valued at USD 3.2 tn, according to consultancy Bain & Co’s latest annual private equity report (pdf). Nearly half of assets have been held for four years or more, which the report says is the largest proportion since 2012.

The good and the bad: The staggering pile of assets highlights the breakneck growth of the buyout industry over the past decade, but also points to the immense challenges posed by soaring interest rates in recent years that have made exiting investments far more difficult.

Dealmaking came to a crashing halt last year as debt financing dried up: The total value of companies PE groups sold via private sales or public listings dipped 44% y-o-y in 2023 to USD 345 bn — the lowest level in a decade. The slump was even worse for portfolio companies sold to rival buyout firms, with sales tumbling 47% to USD 62 bn amid widespread pricing disagreements across the industry.

ALSO WORTH NOTING-

  • BTC once again reached a new record high, breaking the USD 72k barrier and hitting USD 72,886 before paring back gains yesterday. BTC was trading at USD 72,636 as of midnight CLT.
  • Companies have raised USD 3.2 bn through European IPOs since January — over double the amount raised during the same period last year. (Financial Times)

THE MARKETS THIS MORNING-

Asian markets are mixed this morning, with the Nikkei down 1.33% at dispatch time (setting it on course for a second day of losses). The Shanghai Composite is (just) in the red, while the Kospi and Hang Seng are in the green. Traders of Japanese equities were reacting to news that inflation in January was higher than pundits had expected, CNBC writes.

Looking ahead: Shares in Europe, on Wall Street and in Toronto look set to start the day in the green as stock futures inched up overnight. Wall Street is looking forward to the February consumer price index reading — it’s due out at 8:30am Eastern time in the US.

ADX

9,232

-0.0% (YTD: -3.6%)

DFM

4,248

-0.1% (YTD: +4.6%)

Nasdaq Dubai UAE20

3,692

-0.1% (YTD: -3.8%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

5.1% o/n

5.3% 1 yr

TASI

12,555

-0.5% (YTD: +4.9%)

EGX30

33,382

+1.4% (YTD: 34.1%)

S&P 500

5,118

-0.1% (YTD: +7.3%)

FTSE 100

7,669

+0.1% (YTD: -0.8%)

Euro Stoxx 50

4,930

-0.6% (YTD: +9.1%)

Brent crude

USD 82.21

+0.2%

Natural gas (Nymex)

USD 1.75

-0.7%

Gold

USD 2,182

0.0%

BTC

USD 72,636

+5.3% (YTD: +71.2%)

THE CLOSING BELL-

The ADX stayed flat yesterday on turnover of AED 871.9 mn. The index is down 3.6% YTD.

In the green: Gulf Medical Projects (+6.2%), Burjeel Holdings (+5.9%) and Sudatel Telecommunications Group (+4.5%).

In the red: Sharjah Cement and Industrial Development (-9.5%), Gulf Cement (-5.7%) and National Marine Dredging (-5.4%).

Over on the DFM, the index closed down 0.1% on turnover of AED 238.2 mn. Meanwhile Nasdaq Dubai fell 0.1%.

EARNINGS WATCH-

National General Ins.’s net income stood at AED 74.9 mn, up 24% y-o-y, according to the company’s financial statements (pdf).Ins. revenues rose to AED 745.8 mn, up 20% y-o-y.

CORPORATE ACTIONS-

#1- The National Bank of Fujairah has approved the payout of dividends consisting of a 10% AED 212 mn cash dividend and 5% bonus shares worth AED 106 mn, according to an ADX disclosure (pdf).

#2- The National Bank of Umm Al Qaiwain approved a dividend payout of AED 300 mn for 2023, according to an ADX disclosure (pdf).

#3-Abu Dhabi National Takaful Co proposed distributing dividends of 31.5 fils per share to shareholders for 2023,totaling AED 31.5 mn, according to an ADX disclosure (pdf).

#4- DFM-listed BMH Capital Financial Services approved distributing dividends worth AED 13.4 mn, according to a DFM disclosure (pdf).

Tags: