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India’s Adani Group shed USD 2.4 bn, or 1%, in market value on Monday due to a heavy sell-off of its shares following a report from US short seller Hindenburg accusing the head of India’s market regulator Madhabi Puri Buch of holding investments in offshore funds that are also used by the conglomerate, Reuters reported. Both Adani and Buch denied the claims, with the conglomerate dismissing them as “red herrings thrown by a desperate entity.”
Are you having deja vu? Adani Group was hit by a wave of short-selling in January 2023 by Hindenburg Research, after the activist-investor accused the conglomerate of stock manipulation, causing a massive sell-off of Adani Group’s shares, which wiped approximately USD 72 bn off its stock market value.
Why do we care? Adani and the UAE have close ties, with Abu Dhabi Investment Authority (Adia) investing in Adani’s power distribution arm Adani Energy Solutions’ USD 1 bn secondary share sale last month. An International Holding Company (IHC) subsidiary also recently partnered with Adani Energy to expand smart metering in India, while another Adani subsidiary agreed to digitize India’s economy through AI and blockchain with a separate IHC venture. In addition, IHC raised its stake in Adani Enterprises in October to more than 5%, expressing interest in further investments in India.
ALSO- Adani Enterprises is reportedly set to launch another USD 1 bn share sale next month. Adani was forced to hold off on a planned USD 2.5 bn share offer in February 2023 in the wake of the Hindenburg ordeal.
THE MARKETS THIS MORNING-
Asian markets are mixed in early trading this morning, with the Nikkei and Kospi up and the Hang Seng and Shanghai Composite in the red. Futures for major US equities benchmarks were mostly unchanged overnight.
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ADX |
9,175 |
-0.4% (YTD: -4.2%) |
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DFM |
4,185 |
-0.4% (YTD: +3.1%) |
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Nasdaq Dubai UAE20 |
3690 |
0% (YTD: -4%) |
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USD : AED CBUAE |
Buy 3.67 |
Sell 3.67 |
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EIBOR |
+5% o/n |
+4.6% 1 yr |
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TASI |
11,797 |
+0.5% (YTD: -1.4%) |
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EGX30 |
29,331 |
-1.3% (YTD: +17.8%) |
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S&P 500 |
5,434 |
+1.7% (YTD: +13.9%) |
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FTSE 100 |
8,235 |
+0.3% (YTD: +6.5%) |
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Euro Stoxx 50 |
4,695 |
+0.5% (YTD: +3.8%) |
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Brent crude |
USD 80.69 |
-2.0% |
|
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Natural gas (Nymex) |
USD 2.15 |
+0.3% |
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Gold |
USD 2,506 |
-0.1% |
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BTC |
USD 60,985 |
+3.4% (YTD: +44.4%) |
THE CLOSING BELL-
The DFM fell 0.4% yesterday on turnover of AED 301.6 mn. The index is up 3.1% YTD.
In the green: International Financial Advisors (+11.9%), Parkin Company (+2.2%) and GFH Financial Group (+1.7%).
In the red: National International Holding Company (-9.9%), Orascom Construction (-5.7%) and Emirates Reem Investments Company (-5.5%).
Over on the ADX, fell 0.4% on turnover of 978.9 mn. Meanwhile, Nasdaq Dubai fell 0.03%.
CORPORATE ACTIONS-
The National Investor is proceeding with its plan to reduce its share capital from AED 285 mn to AED 235 mn, it said in an ADX disclosure (pdf). The AED 50 mn reduction amount will be returned to shareholders on 26 August.
REFRESHER- Last month, the company obtained shareholder approval to bring its share capital down by canceling 50 mn shares with a book value of AED 50 mn. The value of the reduction will be returned to the shareholders “because the company does not need it.”
