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Monday, 3 March 2014

Gazprom: In the pipeline - YouTube #EuroMaidan

Gazprom: In the pipeline - YouTube: ""

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Reaction to Russia's 'silent invasion' - YouTube #EuroMaidan

Reaction to Russia's 'silent invasion' - YouTube: ""

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Ukraine in crisis: weighing up the damage | beyondbrics - #EuroMaidan

Ukraine in crisis: weighing up the damage | beyondbrics:

"Just as things were starting to look up for many economies in central and eastern Europe, along comes the crisis in Ukraine. How severe will the impact be?

The answer, of course, depends on how the crisis develops. Says Simon Quijano-Evans of Commerzbank: “If we’re talking about the secession of any region of Ukraine, then we have to go on to the next step, which is about relations breaking down not between Russia and CEE but between Russia and the EU. The only way the EU and the US can react is through economic and financial sanctions.”

Even if the situation remains more or less contained, the potential for damage is clear. Poland, which turned in an unexpectedly strong performance last year, is among the countries whose trade is most exposed to disruption in the CIS former Soviet states.

Source: Eurostat, Commerzbank

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Ukraine and Russia: should the EU worry about a ‘gas war’? | beyondbrics #EuroMaidan

Ukraine and Russia: should the EU worry about a ‘gas war’? | beyondbrics:

As beyondbrics foresaw last week, Russia has turned to Gazprom, its state-controlled natural gas monopoly, to put pressure on the new Ukrainian government. Over the weekend, Gazprom warned that Kiev may lose the discount agreed by ousted president Viktor Yanukovich from the second quarter of 2014. The big question now is, should the European Union worry that an escalating gas row between Russian and Ukraine would lead to cuts in Gazprom’s gas exports to Europe?

Gazprom said its price could be increased in view of Ukraine’s debt for previous deliveries, estimated at $1.55bn.

Andrei Kruglov, Gazprom’s deputy chief executive, said during a meeting with investors in London on Monday: “The situation with payments is worrying. Ukraine is paying, but not as well as we would like it to… We are still thinking whether to extend the pricing contract into the next quarter based on current prices.”

On Saturday, Sergei Kupriyanov, a Gazprom spokesman, told Reuters that “it seems that with these gas payments overdue and its obligations unfulfilled, Ukraine may not keep its current gas discount… The gas discount agreement assumed full and timely payment.”

Also on Saturday, an official at Russia’s energy ministry told the Interfax news agency that it would be “stupid and wrong” to extend Ukraine’s gas discount into the second quarter, considering Kiev’s debt. “If this continues to happen, is there any point in continuing the existing agreement to supply gas at discounted prices? No,” the unnamed official said.
Yanukovich agreed a $20bn support package with the Kremlin after he refused at the eleventh hour to sign a trade agreement with the EU in November. As part of the deal, Gazprom cut its price to Ukraine by a third, to $268.50 per thousand cubic metres of gas. The agreement calls for quarterly reviews.

The situation is complicated by the fact that Russia has frozen the second tranche of its support package, after buying an initial $3bn in newly-issued Ukrainian eurobonds. The possibility of alternative aid from the west remains unclear. Oleksandr Shlapak, Ukraine’s financial minister, said on Saturday that Kiev expected to receive a stand-by loan from the International Monetary Fund “not earlier than April, in the best-case scenario.”

A previous dispute over gas prices between Russia and Ukraine in 2009 led to cuts in exports to Ukraine, resulting in shortages in the EU. This happened in winter, when consumption was at its peak.

Might a similar crisis erupt again? It certainly could. However, the EU states currently have significant gas stocks, thanks to a mild winter. According to Gas Infrastructure Europe, most central European countries, which rely heavily on Russian gas, had inventories of between 37 and 70 per cent of capacity on Sunday.

Source: Gas Infrastructure Europe

Hungary had stocks of about 22 per cent of capacity but, according to Reuters, “because its inventory facilities are larger in volume, its reserves are still enough to meet almost two months’ worth of demand.”

Meanwhile, Ukraine has doubled gas imports from Russia over the last few days. According to Ukrtransgaz, gas transit monopoly, it imported 45m cubic metres of gas on March 1, compared with 20m on the same date in 2013. Some analysts believe that Kiev is trying to get as much gas as possible at the discounted price.

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Russian Retailers Hammered on London Exchange as Metro Mulls Delaying IPO | The Moscow Times #EuroMaidan

Russian Retailers Hammered on London Exchange as Metro Mulls Delaying IPO | The Moscow Times:

"German retailer Metro is monitoring market conditions, including the turmoil in Ukraine, as it proceeds with plans to list a stake in its Russian wholesale business.

Meanwhile, share in Russian hypermarket chain Lenta, which made its stock market debut in London on Friday, fell 8.9 percent as the Market opened on Monday.

Metro has made good progress in preparing for an initial public offering, although market conditions need to be favorable and it is assessing the situation in Ukraine, a spokesman for the company said Monday. 

Shares in Metro fell 5.2 percent in early trade, making them the biggest decliners among European retail stocks, on concern that turmoil in Ukraine could scupper the listing plan.

The company was hoping to raise at least 1 billion euros ($1.38 billion) by selling a quarter of its Russia cash-and-carry unit in a London listing, organized by Goldman Sachs and Sberbank."

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Ruble and Stocks Tumble on Ukraine Turmoil | The Moscow Times #EuroMaidan

Ruble and Stocks Tumble on Ukraine Turmoil | The Moscow Times:

"Both the ruble-denominated MICEX exchange and the dollar-denominated RTS index began to plummet after they opened. By 8 p.m. Moscow time, the MICEX was down 10.8 percent and the RTS had tumbled 12 percent.

Shares in state-run VTB bank, the country's second-largest lender, were down 18 percent, while No. 1 Sberbank lost 15 percent of its share value.

Coal miner and steelmaker Mechel temporarily halted trading after its stock price fell 27.6 percent. 

State-run oil giant Gazprom also saw its share price tumble 13.5 percent, though the company struck a positive note in its annual meeting with investors in London on Monday, predicting that European dependence on Russian gas would only rise, Reuters reported.

Deputy Economic Development Minister Andrei Klepach said Monday that he expects the "hysteria" on the markets to abate, but that he does not know when this will happen."

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MIDEAST STOCKS-Markets tumble as retail players sell on Ukraine tensions | Reuters

MIDEAST STOCKS-Markets tumble as retail players sell on Ukraine tensions | Reuters:

"* Profit-taking after big run-ups in recent months

* But oil price rise would probably benefit Gulf

* Chairman of Kuwait's Ahli Bank fined over alleged insider trading

* Kuwait stock index closes below technical support 

* Qatar's Mesaieed plunges 10 pct for a second day

By Nadia Saleem

DUBAI, March 3 (Reuters) - Middle East stock markets slid on Monday as a heightened threat of armed conflict between Ukraine and Russia triggered widespread selling, despite the benefit of higher oil prices to Gulf energy exporters.

Brent crude oil jumped almost $3 to $111.98 per barrel but Asian and European stock markets fell roughly 2 percent or more, prompting retail investors in the Gulf, who have bid their markets up sharply in recent months, to take profits.

Cairo's benchmark index slid 2.7 percent, down for a second straight session from last week's 65-month high to trim its 2014 gains to 15.9 percent.

Saudi Arabia's bourse, whose heavyweight petrochemical firms stand to benefit the most from any surge in oil prices, slipped 0.8 percent. The petrochemical sector's index lost 1.0 percent."

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Global Equities Tumble Over Ukraine Fear | Zero Hedge #EuroMaidan

Global Equities Tumble Over Ukraine Fear | Zero Hedge:

"We were perhaps even more amused than our readers by our Friday headline "Stocks Close At New Record High On Russian Invasion, GDP Decline And Pending Home Sales Miss." It appears that today the market forgot to take its lithium, and is finally focusing on the Ukraine part of the headline, at least until 3:30 pm again when everything should once again be back to market ramp normal. As expected, the PMI data from China and Europe in February, was promptly ignored and it was all about Ukraine again, where Russia sternly refuses to yield to Western demands, forcing the shocked market to retreat lower, and sending Russian stocks lower by over 11%. This is happening even as Ukraine is sending Russian gas to European consumers as normal, gas transport monopoly Ukrtransgas said on Monday. "Ukrtransgas is carrying out all its obligations, fulfilling all agreements with Gazprom. The transit (via Ukraine to Europe) totalled 200 million cubic meters as of March 1," Ukrtransgas spokesman Maksim Belyavsky said. In other words, it can easily get worse should Russia indeed use its trump card."

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Oman's largest lender eyes $1.3bn Islamic bond - Banking & Finance -

Oman's largest lender eyes $1.3bn Islamic bond - Banking & Finance -

"Bank Muscat, Oman's largest lender, plans to establish a OR500 million ($1.3 billion) Islamic bond programme this year, and expects to conduct the first sukuk issue by an Omani bank in September, a bank official was quoted as saying.

The bank will seek shareholder approval for its sukuk programme at a meeting on March 19 and regulatory approval thereafter, the Times of Oman quoted Sulaiman Al Harthy, group general manager of Islamic banking, as saying.

Sukuk tranches will be of varying maturities and currencies; some will be issued in international markets, and both public subscriptions and private placements will be used, Harthy told the newspaper. The sukuk will help to avert any mismatches between assets and liabilities at the bank, he added."

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Oman hands down more sentences in oil corruption case |

Oman hands down more sentences in oil corruption case |

"The Primary Court of Muscat on Sunday issued more jail sentences in the high-profile case known in local media as the ‘oil sector corruption case’.

The court has sentenced Adel Al Kindi, former member of the appointed State Council and the chief executive officer of the Oman Oil Refineries and Petroleum Industries Company, Orpic, to three years in jail and slapped him with a fine of OMR1 million (Dh954,000), and ordered his dismissal from government service for 30 years on charges of accepting a bribe and abuse of government office.

The court also sentenced Qasim Al Shizawi, the Director General of Ports at the Ministry of Transport and Telecommunications to a three-year jail term and fined him OMR750,000 as well as dismissal from the service."

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MENA sovereigns' commercial borrowing to increase to US$56 billion, says S&P -

MENA sovereigns' commercial borrowing to increase to US$56 billion, says S&P - Business Intelligence Middle East - - News, analysis, reports:

"Standard & Poor's Ratings Services projects that the 12 sovereigns that it rates in the Middle East and North Africa will borrow an equivalent of $56 billion from long-term commercial sources in 2014.

This would be a 27% increase in long-term commercial debt issuance compared with 2013. About 67%, or $38 billion of the sovereigns' gross commercial borrowing will be to refinance maturing long-term commercial debt, compared with $25 billion in 2013, resulting in an estimated net commercial borrowing of $18 billion.

Consequently, we project that rated MENA sovereigns' commercial debt stock will reach an equivalent of $462 billion by the end of 2014, up by $17 billion, or 4% from 2013. Adding in bilateral and multilateral debt, the total stock will reach $504 billion, a year-on-year increase of $15 billion, or 3%. We expect that outstanding short-term commercial debt will reach $145 billion at year-end 2014."

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Could Ukrainian Radicals Turn off Gas Flow to Europe - #EuroMaidan

Could Ukrainian Radicals Turn off Gas Flow to Europe:


For many years, Gazprom executives were talking about the elimination of gas transit through Ukraine. Their dreams may turn into reality any day now. This is too early, as there are no pipelines to replace the Ukrainian ones yet.

Crimean conflict has increased the risk of interruption of transit flows of Russian gas through Ukraine to Europe. Ukrainian radicals may be tempted to punish Vladimir Putin by breaking into regional offices of Ukrtransgaz and turning off the taps.

Last year, about 55 percent of European gas exports of Russia were shipped through Ukraine. In case of emergency, Gazprom and the EU can quickly reduce the Ukrainian share to one-third by fully loading the Nord Stream pipeline. However, without Ukrainian transit, Russian gas export monopolist would be able to fulfill just about two-thirds of its contractual obligations."

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UAE's Etihad Posts Biggest Annual Profit Yet : NPR

UAE's Etihad Posts Biggest Annual Profit Yet : NPR:

"DUBAI, United Arab Emirates (AP) — Gulf-based carrier Etihad Airways has posted its largest annual profit yet with $62 million in net earnings last year.

The national carrier of the United Arab Emirates says profits were up 48 percent and revenue rose 27 percent to $6.1 billion.

The 10-year-old Etihad is among the world's fastest growing airlines. It has aggressively expanded its fleet of aircraft and owns stakes in Air Berlin, Air Seychelles, Virgin Australia, Aer Lingus and Jet Airways."

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Dubai needs to slow down on the upturn |

Dubai needs to slow down on the upturn |

"Dubai is at such an interesting juncture that it lends itself to analyst opinions that are mutually challenging. There are enough silver lines on the horizon for those who tend to approach issues with a sense of optimism. But for those who are inclined to look the other way, there is an uneasy déjà vu setting in.

As the local stock market gets ready to bask under the glow of “emerging markets” status in about two months’ time, a milestone development that has already played out twice over in terms of its excitement, there are increasing threats of funds going out in favour of other GCC markets where assets are more realistically priced. So, the timing of the benchmark index’s inclusion in the upgraded category looks somewhat out of context."

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EXCLUSIVE: Chief economist at Deutsche Börse-owned firm argues what reforms Russia needs |

EXCLUSIVE: Chief economist at Deutsche Börse-owned firm argues what reforms Russia needs |

"In this interview with, Philip Uglow, chief economist at MNI Indicators, a Deutsche Börse-owned research firm, explains what he believes Russia needs to do to achieve sustainable growth. 

You have said Russia needs structural changes to its growth model. Could you outline what specifically such changes should be? 

Russia’s weak business climate remains a key obstacle to investment and growth. Russia needs to gravitate from its consumption-led growth model towards a model which involves greater investment by the private sector.

Key structural changes:

- Investment is needed to modernise oil and gas production which increasing competition from offshore shale gas and the improving political situation in the Middle East.
A rule of law and policy framework conducive to attract capital is critical (further cutting of red tape, reduction of corruption and removal of other bureaucratic obstacles). Corporate governance should be strengthened to increase transparency and improve the investment climate."

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UAE share rally to come under pressure as May switch to emerging markets and IPOs could backfire « ArabianMoney

UAE share rally to come under pressure as May switch to emerging markets and IPOs could backfire « ArabianMoney:

"With the Dubai Financial Market up 25 per cent since the start of the year and the Abu Dhabi Securities Exchange by 16 per cent investors are nervous that the steep rally could come under pressure with the approach of the May deadline for the switch from frontier to emerging market status in the MSCI indices and new share issues. Ukraine could also prove a ‘black swan’ event for global financial markets.

No stock market can head upwards in a straight line forever and the DFM clocked an amazing 113 per cent increase in value last year. That was a rebound from a very low base. However, it also reflected a preference amongst global investors last year for frontier rather than emerging market stocks. 

Frontier exit

This May the three UAE bourses will be upgraded from frontier status to the MSCI emerging market index. Frontier funds will therefore have to sell their UAE stocks and emerging market funds load up on them. The transfer may not be smooth, especially as emerging markets have been relatively out of favour."

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Ruble Dives to Historic Low, Stocks Crash on Ukraine Fears | World | RIA Novosti

Ruble Dives to Historic Low, Stocks Crash on Ukraine Fears | World | RIA Novosti:

"MOSCOW, March 3 (RIA Novosti) – Russia’s currency fell to a historic low on Monday as stock markets in Moscow lost more than 9 percent of their value within minutes of the opening of trading.

Such a crash was widely predicted by experts after Russia approved the use of military force in Ukraine on Saturday, prompting widespread condemnation from the international community.

Responding to what it described as “risks to financial stability,” Russia’s central bank increased interest rates by 1.5 percent Monday. The regulator has left interest rates unchanged for the last 18 months.

The dollar rose over 50 kopecks to 36.35 rubles and the euro climbed 55 kopecks to 51.2 rubles in morning trading, according to data from the Moscow Exchange.

The declines brought Russian currency plunging to levels outside the trading corridor mandated by the central bank, causing the regulator to announce that it was widening the target band by 20 kopeks."

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UAE budget carriers flydubai and Air Arabia continue Ukraine flights despite political tension | The National

UAE budget carriers flydubai and Air Arabia continue Ukraine flights despite political tension | The National:

"UAE budget carriers said on Sunday that their flights continue to operate normally to Ukraine, despite the rising political tension in the country.

“Air Arabia’s non-stop services from our Sharjah hub to four airports in Ukraine are currently operating as usual,” Air Arabia said in a statement to The National.

“We continue to closely monitor the situation in the country, and we have drawn up contingency plans which will be implemented should the need arise, ensuring that our passengers remain unaffected.”

Air Arabia operates seven flights a week to Kiev, the Ukrainian capital, and two flights a week to Donetsk, Kharkiv and Odessa."

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Dubai property market can absorb up to 25,000 new homes yearly without risking oversupply | The National

Dubai property market can absorb up to 25,000 new homes yearly without risking oversupply | The National:

"Property developers in Dubai can build as many as 25,000 new homes a year without risking the sort of oversupply reached during the financial crisis, according to a new report.

With the population of the emirate rising by about 7 per cent a year, Citibank estimates that current levels of construction are in line with market fundamentals – meaning that the Dubai real estate market can absorb the extra flats and villas while still maintaining current vacancy rates."

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GCC and Levant banks warned against complacency on capital requirements ahead of Basel III | The National

GCC and Levant banks warned against complacency on capital requirements ahead of Basel III | The National:

"GCC and Levant banks could face massive capital shortfalls because of tighter capital requirements if they do not manage their books more astutely, according to Booz & Company.

Despite a turnaround for banks in countries including the UAE in 2013 amid lower non-performing loans and provisions for bad debt, Booz warned that the banking industry in the GCC should not become complacent.

In a study of 64 GCC and Levant banks, the consultancy found that banks by 2017 could have a capital shortfall of US$27 billion in the worst-case scenario and $12bn in the best case. Such a deficit, which stood at about $11bn in 2012, would seriously hinder the banks’ growth prospects, Booz said."

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Ukraine Tension Seen Stoking Oil, Gas Prices on Supply Risk - Bloomberg

Ukraine Tension Seen Stoking Oil, Gas Prices on Supply Risk - Bloomberg:

"Oil and natural gas rose amid investor concern that escalating geopolitical tension over Ukraine could curb energy supplies.

Brent crude advanced as much as 2 percent to $111.24 a barrel on the ICE Futures Europe exchange in London today. Gas futures jumped as much as 2.8 percent to $4.736 per million British thermal units in electronic trading on the New York Mercantile Exchange, after sliding 25 percent last week.

“The market will be incredibly nervous, and that caution should push prices higher,” Ole Hansen, a Copenhagen-based strategist at Saxo Bank A/S, said yesterday by phone before the resumption of trading today."

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Bank Rossii Raises Key Rate 150 Basis Points on Stability Risks - Bloomberg

Bank Rossii Raises Key Rate 150 Basis Points on Stability Risks - Bloomberg:

"Russia’s central bank unexpectedly raised its key interest rate to 7 percent to fight inflation risks and boost financial stability.

The one-week auction rate, the benchmark introduced in September, was increased 150 basis points from 5.5 percent, the Bank Rossii said on its website today. It has been left unchanged for the past 17 months. 

“The move is clearly an effort to provide more affirmative support to the currency, which is clearly facing strong pressure today on political factors,” Vladimir Osakovskiy, an economist at Bank of America Corp. in Moscow, said in e-mailed comment.

Russian assets fell today after President Vladimir Putin gained approval to send troops into Ukraine, and pro-Russian forces took control of the neighboring country’s Crimea region."

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Asia Stocks Drop as Havens Sought on Crimea; Wheat Surges - Bloomberg

Asia Stocks Drop as Havens Sought on Crimea; Wheat Surges - Bloomberg:

"Asian stocks and U.S. equity-index futures tumbled with emerging-market currencies while the yen, gold and Treasuries gained as tensions over Ukraine intensified. Russia’s central bank unexpectedly boosted its key interest rate 150 basis points as shares in Moscow plunged the most in five years while wheat surged on supply concerns.

The MSCI Asia Pacific Index dropped 0.7 percent by 3:36 p.m. in Tokyo and Standard & Poor’s 500 Index futures fell the most in a month as U.S. Secretary of State John Kerry flies to Kiev today. Russia’s Micex index (INDEXCF) fell 8 percent and the ruble slipped to a record versus the dollar, which strengthened against most emerging currencies. The yen added 0.4 percent. Gold climbed 1.3 percent and Brent crude jumped as much as 1.9 percent. Ten-year Treasury yields slipped to an almost one-month low. Wheat surged as much as 4.5 percent and corn rose to a five-month high."

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