Monday 12 October 2015

Qatar disposes of Hochtief stake; what next for the sovereign wealth fund?

The Qataris sold a slug of French construction company Vinci last week.

Tonight, the gulf state's sovereign wealth fund decided to offload 7 million shares in Hochtief, the German construction company.

Here is what one chatty broker thinks of the most recent disposal by the Qatar Investment Authority:

MS sole books on 7m shares of Hochtief tonight on behalf of the Qatar Investment Authority (a 10.1% stake). If you have been following my output of late, you will no doubt be aware of the thread was opened post Qatar's decision to sell a stake in Vinci last week. As we learned after the fact, it seems that Qatar Holdings did participate in Glencore's recent cash call - providing a clear rationale for its decision to raise funds via the Vinci placing. Another moving part out in the market over the last few days (that is very relevant to Qatar) is the upcoming Credit Suisse rights issue. As we flagged earlier today, estimates for the CS equity raise have ranged from as low as CHF 4bn a few weeks ago to as high as CHF 8bn in the weekend press. If the cap raise comes at the top end of that range, then Qatar Holdings' 5% pro-rata would imply a CHF 500m (c.$416m) capital commitment. Without applying any discounts, 7m shares of Hochtief equates to about $650m worth of stock, so Qatar's decision to sell its holding seems like a prudent way of covering that cash call. What do Vinci and Hochtief have in common? Point (i) is that they are obviously both construction companies, but point (ii) (more relevant) is the fact that they have been amongst the fund's best performing holdings this year (Hochtief isn't quite big enough to be a top 10 holding for Qatar, hence its omission from our analysis last week). The statement released with tonight's placing confirms that the sale is part of a 'routine portfolio management' decision, which seems to confirm this theory. In terms of pricing this trade, I'm not really sure where Morgan Stanley will start. 7m shares of Hochtief represents 34 days volume, but the thin nature of its shareholder register (ACS owns 60.7%) implies the need for some new institutional demand to emerge. As of tonight's close, the stock is less than 2% away from the average analyst price target (€83.21) so it feels like the kind of trade that needs to come at a reasonably deep discount to provide a proper margin of safety.

What I'm wondering, though, is what Qatar plans to sell - or buy, even - next?


  1. A broken marriage can be one of the most painful things to heal from and can take a very long time to heal. During these times it can feel like the whole world could light up in flames and it still couldn't compare to the pain inside. My name is Nicole Cottrell form UK, I have been in great bondage for almost 2 years suffering in the hands of a cheating husband, we were happy and leaving well until he meant his old time girl friend and he started dating her outside our marriage before you knew it he stopped caring and taking care of his own family to the extent that he was planning to get married to her and divorce me, i cried and reported him to his family but he never listened to any one but to cut my story short i came in search for a real spell caster who could destroy their relationship and make him come back to me and our 2 kids on my search i saw people making testimony on how their marriage where restored by Chief Nwaluta Mallam Zack i pick his email and i narrated my story to him and he agreed to help me and after performing a spell on the second day both of them had a quarrel and he beat his girlfriend up and he came home begging for me and our little kids to forgive him that his eyes are clear now that he will never do any thing that will hurt his family again and promise to be a caring father and never cheat again. I am so happy that i did not loose him to the girl. all appreciation goes to Chief Nwaluta Mallam Zack for he is a Great spell caster and to whom this may concern if you have a cheating husband or wife or you need your ex lover back again. you can as well email him on { }, this man is a professional,Thank you Sir, i will always be testifying about your good work

  2. Hello Everybody,
    My name is Mrs Sharon Sim. I live in Singapore and i am a happy woman today? and i told my self that any lender that rescue my family from our poor situation, i will refer any person that is looking for loan to him, he gave me happiness to me and my family, i was in need of a loan of S$250,000.00 to start my life all over as i am a single mother with 3 kids I met this honest and GOD fearing man loan lender that help me with a loan of S$250,000.00 SG. Dollar, he is a GOD fearing man, if you are in need of loan and you will pay back the loan please contact him tell him that is Mrs Sharon, that refer you to him. contact Dr Purva Pius,via email:( Thank you.