— Biden’s Approval Rating Hits Record Low; Saudi Developer Red Sea Plans IPO; Brookfield to Sell Telecom Stake; Cheung Kei Chairman’s Hong Kong Assets Liquidated; Chinese Bank Stocks Soar to Multi-Year High; Brooklyn Property Investment Halved; Saudi Government Falls Into Budget Deficit
1. Biden’s Approval Rating Hits Record Low
According to the latest poll by ABC News, U.S. President Joe Biden’s approval rating has dropped to 36%, 1 percentage point lower than the previous record low in early 2022.
The poll also shows that 56% of respondents believe Biden is unfit for office, and 68% believe the 80-year-old president is too old to run for re-election. By comparison, only 44% believe 76-year-old Donald Trump should not run, indicating more concern about Biden’s age.
The survey was conducted between April 28 and May 3, with responses from a random sample of 1,006 U.S. adults.
Respondents view Trump as comparatively more physically and mentally fit for the presidency.
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2. Saudi Developer Red Sea Plans IPO
Saudi Arabia’s prominent developer Red Sea Global plans to launch an IPO as early as 2026.
CEO John Pagano said in an interview in Dubai that the company may opt for an IPO or the creation of a real estate investment trust (REIT).
Currently, Red Sea is in discussions with investment banks and shareholders. The company intends to accumulate two more years of hotel operating history to improve cash flow and margins before going public in 2026 or 2027 at a higher valuation.
Pagano believes traditional listed real estate firms have faded from the spotlight, giving way to REITs that benefit from favorable tax policies and a broader investor base.
Saudi Arabia has invested tens of billions of dollars to build a new airline and airport, aiming to diversify its economy through tourism development.
Red Sea plans to build the St. Regis resort on the Red Sea coast, spanning 28,000 square kilometers.
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3. Brookfield to Sell Telecom Stake
Brookfield Infrastructure Partners plans to sell at least a 10% minority stake in an Indian telecom tower company.
The Canadian investment firm acquired Summit DigiTel in 2020 for $3.4 billion. The company’s portfolio includes 151,000 telecom assets, making it one of India’s largest digital infrastructure operators.
Reliance Jio is the company’s largest tenant, with lease terms of nearly 30 years.
The sale will also help Brookfield meet regulatory requirements for infrastructure investment trusts (InvITs).
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4. Cheung Kei Chairman’s Hong Kong Assets Liquidated
Hong Kong-based investment firm Cheung Kei Group is facing short-term liquidity issues, and chairman Chen Hongtian’s commercial properties in Hong Kong have been listed for sale by creditors, with Savills Plc handling the transactions.
The portfolio includes an office tower and two floors of retail space, valued at approximately $892 million last year.
In addition to the commercial properties, Chen has also lost ownership of his luxury villa and apartment in Hong Kong.
An increasing number of Chinese developers are putting Hong Kong assets on the market. In March, Shimao Group listed its airport-adjacent hotel, and China Evergrande’s headquarters building—seized by creditors—remains unsold.
Cheung Kei Group’s liquidity crisis has resulted in the seizure and liquidation of its chairman’s personal assets.
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5. Chinese Bank Stocks Soar to Multi-Year High
Today, the CSI 300 Financial Index, which tracks major Chinese bank stocks, rose for a fifth consecutive day and reached its highest level since April 2022, adding more than $166 billion in total market value.
Citic and Bank of China both hit the 10% daily limit, a first since July 2015.
Investors believe that the government’s increased capital support for state-owned enterprises, along with recent interest rate cuts by major banks, has boosted bank profitability.
According to Forsyth Barr Asia’s senior analyst, many investors are bullish on bank stocks due to their low valuations and high dividend yields. The rally has been driven largely by investor sentiment rather than fundamentals.
Buoyed by optimism, the CSI 300 Financial Index has reached a new high for the first time in over a year.
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6. Brooklyn Property Investment Halved
A new report from brokerage TerraCRG shows that in Q1, total property investment in Brooklyn fell 49% year-over-year to $1.05 billion and 47% quarter-over-quarter, amid high interest rates and inflation.
CEO Ofer Cohen noted that most of the decline came from multifamily properties, where high borrowing costs were reflected in the data.
In March, the average rent for a Brooklyn apartment rose to $4,175, but monthly maintenance and loan payments have significantly eroded investor returns.
Industrial property investment also dropped 65% year-over-year to $80.98 million due to slower leasing activity.
Declines in property investment were driven by leasing headwinds and surging ownership costs.
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7. Saudi Government Falls Into Budget Deficit
According to data released Sunday by the Saudi Ministry of Finance, the government ran a $770 million fiscal deficit in Q1, driven by rising payroll expenses and diversification investments.
While non-oil revenue rose 9%, expenditures jumped 30%. Non-oil revenue growth was led by a 75% increase in wage-related and capital gains taxes. Oil revenue fell 3% due to lower crude prices.
The government is placing more focus on non-oil income to avoid the cyclical volatility of oil dependency.
Although Saudi officials project a full-year surplus, most analysts are skeptical about that target.
Last year, Saudi Arabia was the fastest-growing economy among G20 countries, but GDP growth slowed from 5.5% in Q4 to 3.9%.
Heavy investments in tourism, combined with falling oil prices, have pushed the government into a budget deficit.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.