US corporate borrowers are fast tracking their financing plans ahead of anticipated election volatility

US companies rush to secure financing ahead of elections: Companies in the US have issued USD 606 bn worth of corporate bonds since the start of the year — the highest total since 1990, as companies look to meet their financing needs ahead of any market volatility that could come about during the final stretch of the US election, the Financial Times reports. The possibility of a close election has caused companies to accelerate their financing plans to avoid the risk of running into pricier markets later this year, the salmon-colored paper wrote.

“I think what most companies are thinking — particularly frequent issuers — is — ‘let’s get the majority of our funding done in the first half of 2024’,” Morgan Stanley’s David Hodgson told FT. “[Then] if we go through the election, and the market response is positive for whatever reason, we’ll use the back end of the year to get a head start on 2025,” he added.

Meanwhile, investors continue to pour into corporate bonds: The US corporate bonds market has seen a record inflows since the start of the year, as investors look to cash in on high yields ahead of anticipated rate cuts. Inflows into corporate bond funds have recorded almost USD 23 bn so far this year.

THE MARKET THIS MORNING-

Benchmarks in Hong Kong, Shanghai and Seoul are in the green this morning, while Japan’s Nikkei is down 1.2% at dispatch time. Stock markets are closed across France, Germany and Italy and the London Stock Exchange is also closed today. Trading floors at the New York Stock Exchange and Nasdaq will reopen after a three-day weekend. US stock futures were up slightly overnight, with futures for the Dow, Nasdaq, and S&P 500 all up a bit more than 0.3%.

US markets start 2Q after a strong start to the year: The S&P was up 10.2% in the first quarter, while the Nasdaq Composite added 9.1% and the Dow 5.6%.

THE CLOSING BELL: TADAWUL-

The TASI fell 1.3% yesterday on turnover of SAR 5.9 bn. The index is up 3.6% YTD.

In the green: Red Sea Intl (+9.9%), Tasnee (+5.1%) and Alinma Retail REIT (+5%).

In the red: Zamil Industrial (-10%), Saudi Research and Media Group (-10%) and Saudi German Health (-10%).

THE CLOSING BELL: NOMU-

The NomuC fell 2.2% yesterday on turnover of SAR 81.3 mn. The index is up 6.1% YTD.

In the green: Riyadh Steel (+19.1%), Al Mohafza (+9.4%) and Munawla (+9%).

In the red: Amwaj (-13.9%), Ladun (-9.6%) and Atlas Elevators (-6%)

CORPORATE ACTIONS-

#1- Saudi Cable has submitted its financial restructuring proposal to Jeddah’s Commercial Court, it said in a disclosure to Tadawul. The proposal’s submission and related paperwork caused a delay in the company disclosing financial results for FY 2023, it said in a separate disclosure. It said results will be published no later than 21 April.

#2- Tadawul-listed IT services and consulting firm Perfect Presentation for Commercial Services Co (P2P)’s BoD has recommended doubling its capital to SAR 300 mn via a bonus shares issuance, it said in a disclosure to Tadawul.

#3- Alkhabeer REIT wrapped up the sale of its B&Q property — formerly known as Homeworks Center — at a selling price of SAR 87.6 mn, its fund manager Alkhabeer Capital said in a disclosure (pdf) to Tadawul. Proceeds from the sale will be used to pay off a part of outstanding debt, fund the acquisition of other real estate assets, and develop other properties. The name of the buyer was not disclosed.

#4- Aramco’s base oil subsidiary Luberef’s shareholders have approved a dividend payout of SAR 841.3 mn at SAR 5 apiece for the second half of the year, it said in a statement (pdf). The dividend distribution is set for Thursday 18 April.

#5- Tadawul-listed Tabuk Cement Company’s BoD has recommended a dividend payout of SAR 22.5 mn at SAR 0.25 per share for 2023, it said in a disclosure to Tadawul.

#6- Tadawul-listed L’azurde for Jewelry’s BoD has recommended a dividend payout of SAR 17.3 mn at SAR 0.3 a share for 2023, it said in a disclosure to Tadawul.