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Friday, 20 January 2017

Can Saudi Arabia Survive With Oil Below $60? | OilPrice.com

Can Saudi Arabia Survive With Oil Below $60? | OilPrice.com:

"With the OPEC production deal holding, at least for the moment, questions have now arisen over how prospects look for the cartel’s biggest producer. It’s been a strange few years for the Kingdom of Saudi Arabia, as its endured budget deficits for the first time in its modern history, stagnation in oil prices and rising competition from other OPEC members and the American shale boom. Recently, talk has centered on the Saudi monarchy’s glimpse of the future: the Vision 2030 plan, whereby it hopes to diversify its economy and end its dependence on the mercurial oil and gas market. But can the world’s biggest oil producer and OPEC’s de facto leader pull it off? In the short term, Riyadh will continue to feel the pain of lower-than-normal oil prices. The growth outlook for Saudi Arabia has been slashed, as the International Monetary Fund (IMF) announced on January 16 that the world’s largest oil producer would see its GDP grow by only 0.4 percent in 2017. The estimate comes on the basis of the continued low price of oil, but more importantly on the country’s slashed oil production: as a result of the recent OPEC production deal, Saudi Arabia has agreed to keep its production level at or below 10 million bpd. This has resulted in a cut in its growth outlook, down from 2 percent in October, according to Bloomberg. This comes after anemic growth in 2016, where GDP expanded by only 1.4 percent. If oil prices stabilize, and the country’s economic forecast improves, GDP will likely expand by 2.3 percent in 2018."



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Swing to small cap stocks on UAE bourses, for now | GulfNews.com

Swing to small cap stocks on UAE bourses, for now | GulfNews.com:

"Investors will have to learn to play to swings of small cap stocks in the UAE stock markets, before blue chip shares stage a comeback again. The smaller stocks like Gulf Finance House, Shuaa Capital, Gulf Navigation, HITS Telecom and Union Properties listed on the Dubai Financial Market have gained 167 per cent on an average in 2016, compared to a 12 per cent gains on Dubai index. “If we were to take a 30,000 feet view of our recent market performance, it is apparent that both the Dubai and Abu Dhabi index to a less extent, have undergone bouts of sentiment-swings led by the small caps,” said Farid Samji, head of asset management with Daman Investments."



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Kuwait’s World-Beating Stock Rally May Just Be Getting Started - Bloomberg

Kuwait’s World-Beating Stock Rally May Just Be Getting Started - Bloomberg:

"Kuwaiti stocks have started the year with a charge, performing better than any other market in the world in January. Investors expect the positive momentum to continue. The Kuwait Stock Exchange Index has risen 12 percent this year, more than double the advance in the MSCI Frontier Emerging Markets Index. There could be a further 20 percent to climb, according to Ali Adou, a money manager at the National Investor in Abu Dhabi, who oversees the firm’s $20 million fund focused on the Middle East and North Africa."



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UPDATE 1-Bad loans, other costs hobble Q4 earnings for Saudi banks | Reuters

UPDATE 1-Bad loans, other costs hobble Q4 earnings for Saudi banks | Reuters:

"Rising bad loans dragged down the fourth-quarter results of several Saudi Arabian banks on Thursday, underlining the tougher conditions lenders in the Arab World's largest economy face after lower oil revenues curbed spending and business activity. Alawwal Bank, Saudi Arabia's oldest lender, swung to a net loss of 249.3 million riyals ($66.5 million) in the three months to Dec. 31, down from a net profit of 451.3 million riyals in the same quarter of 2015, according to a statement. Alistithmar Capital and EFG Hermes had forecast it would make a quarterly profit of 330.5 million riyals and 438.0 million riyals respectively."



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