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Tuesday, 2 December 2014

Opec's non-event was a big event - YouTube

Opec's non-event was a big event - YouTube: ""

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Draw me like one of your rouble charts | FT Alphaville

Draw me like one of your rouble charts | FT Alphaville:

"Excuse, courtesy of Deutsche’s Jim Reid…

Briefly back to the Oil theme, the effect of the recent slump continues to have a negative impact on the Russian Rouble. The currency was down as much as 6.6% yesterday versus the dollar before paring back some of those intra-day losses to close around 4.5% lower on the day (at 51.65). The currency has now declined 30% since the end of September. Russia’s 5yr CDS widened a further 26bps yesterday to 344bps whilst the 10y government bond yield finished 15bps higher at 10.76%. The moves also come on the back of an announcement by the Finance Minister Siluanov last week that capital flight may reach $130bn in 2014 – the most since 2009. 

Meet the real reason for this post, from a Russian corner of the internet, via Katie Martin:


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Abu Dhabi’s upstream oil sector shifts gears subtly « The Barrel Blog

Abu Dhabi’s upstream oil sector shifts gears subtly « The Barrel Blog:

"The 2014 edition of the Abu Dhabi International Petroleum Exhibition and Conference, held in the UAE capital last month, was the largest yet for the upstream oil and gas gathering, drawing more than 70,000 visitors in a testament to the continued importance of the Persian Gulf region to global oil supply.

Yet, with crude prices falling, change was in the wind, suffusing the gathering with a palpable air of uncertainty.

Abu Dhabi, the emirate that produces more than 95% of the UAE’s crude, has stood out as one of the few jurisdictions in the Gulf region to have maintained partnerships with international oil companies throughout the decades since oil was first discovered in the neighborhood. That is a large part of the reason why the region’s largest regular upstream petroleum sector gathering is held in Abu Dhabi, rather than, say, in Dhahran."

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The Economist explains: Why the Ukrainian economy is in deep trouble | The Economist

The Economist explains: Why the Ukrainian economy is in deep trouble | The Economist:

"IN RECENT months Ukraine’s problems have mainly been political. But in addition to the annexation of Crimea and fighting in the east of the country, Ukraine’s economy may be entering a full-blown depression. This year its currency, the hryvnia, has lost half its value against the dollar. Inflation is at nearly 20%. Ukrainians are panic-buying food and other essentials. Economists worry that by the end of this year, the country may have no money left to pay its debts. What has gone so wrong?

Ukraine’s problems were a long time in the making. Botched privatisations after the collapse of the Soviet Union created an oligarchic class that sucked up most of the country’s wealth. In Kiev, battered Soviet-era cars and tractors can be seen on the roads alongside Ferraris. According to a report by Credit Suisse, a bank, Ukraine has the world’s most uneven distribution of wealth. Even before the crisis began, the average Ukrainian was a tenth poorer than at the end of the Soviet era. 

Russia’s meddling has done two things to the Ukrainian economy. First, it has inflicted serious damage on Ukraine’s industrial heartland in the east of the country. Luhansk and Donetsk normally account for 16% of Ukraine’s GDP, supply 95% of its coal and produce a big chunk of exports. In September industrial production in Luhansk fell by 85% year-on-year; in Donetsk it fell by 60%. Second, the crisis has made investors reluctant to have their money anywhere near Ukraine. A recent investors’ conference in Kiev was a dour affair. That has had terrible knock-on effects. As investors have pulled money out of Ukraine, the hryvnia has tumbled. That makes imports more expensive. Agriculture is suffering because farmers cannot afford to buy inputs from abroad. Ukraine has depleted its foreign-exchange reserves in a desperate attempt to prop up the hryvnia: they have fallen from $18 billion to $12 billion in a matter of months. Worst of all, a weak hryvnia makes it more difficult for Ukraine to repay the $14 billion-worth of foreign debt due before the end of 2016."

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Ukraine Revolution Fails Business as Graft Envelops Bureaucracy - Bloomberg

Ukraine Revolution Fails Business as Graft Envelops Bureaucracy - Bloomberg:

"Thirteen floors above a snow-covered complex on the outskirts of Kiev, in a half-built high-rise, Egor Popov wondered aloud when the warren of dusty rooms would be ready for move-in: maybe next year, probably not.

Presales on the 1,210-unit Sun Gate’s fourth wing, still a concrete-and-brick skeleton accessible only by a shaky open-air elevator, may be delayed, he said. Not because of a lack of financing or demand for flats. The issue is the nine layers of red tape and graft requests that are part of finishing the project, said Popov, a spokesman for TMM Real Estate Development Plc (TR61), Ukraine’s only publicly listed developer.

A year after Ukrainians rose up against the pro-Russian policies of then-President Viktor Yanukovych, business leaders still wait for an end to corruption and cronyism, promised by the revolution’s leaders. Even as war rages in the east and the deepest recession since 2009 shows no sign of lifting, the president, premier and foreign minister said in the past week that graft is the nation’s biggest threat. Ukraine ranks as Europe’s worst on Transparency International’s corruption index."

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Emirates targets US and Italy routes with quick Airbus A380 rollouts | The National

Emirates targets US and Italy routes with quick Airbus A380 rollouts | The National:

"Leading superjumbo operator Emirates has begun a blitz on western markets that will bring three more cities in as many days into the network served by the Dubai-based carrier’s Airbus A380 jets.

The airline’s first A380 service to San Francisco left Dubai at 8:50am local time on Monday and is slated to land at 12:50 pm in California. A double-decker service to Milan follows at 3:40pm, landing at 7:35pm Italian time.

The quick-fire rollout, which will also see a superjumbo deployed on the Dubai-Houston route on Wednesday, underscores the global ambitions of Emirates as it establishes Dubai as a crossroads linking all of the world’s leading economies. Already the world’s largest carrier by international traffic, or passengers carried times miles flown, the company has 85 A380s still to come beyond the 55 now in its fleet."

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UAE equity markets to see more weakness before stabilising |

UAE equity markets to see more weakness before stabilising |

"The UAE equity markets may witness some weakness before stabilising next week as margin calls unwind after the main index shed more than 7 per cent in the previous two sessions, industry participants said.

The Dubai Financial Market General Index closed 2.23 per cent lower at 4,186.11, after losing 4.74 per cent on Sunday weighed by falling crude oil.

“There could be selling pressure on Thursday. Many margin calls have been initiated in this market after the drop on Sunday and Monday. The process of margin calls to unwind will take a few sessions. Market will be able to absorb selling pressure for atleast 3-4 sessions before we can stabilise,” Mohammad Ali Yasin, managing director at NBAD Securities told Gulf News."

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UAE economy: from Dh6.5b to Dh1.4t in 43 years |

UAE economy: from Dh6.5b to Dh1.4t in 43 years |

"On December 2 each year, the palpable joy witnessed in the UAE is not limited to the National Day celebrations.

Emiratis recall their memories about all the events that happened in the country in the late 1960s during the years that preceded the announcement of the federal state by late Shaikh Zayed Bin Sultan Al Nahyan and the rulers of the other emirates.

On this day, Emiratis recall their experiences derived from oral narratives and collective memories about the red-letter day that marks the emergence of a nation state, which in a few years thereafter managed to put itself on the global map and influence the course of events in the region."

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Oil Rout Pushes RTS Index Volatility to Eight-Month High - Bloomberg

Oil Rout Pushes RTS Index Volatility to Eight-Month High - Bloomberg:

"Volatility in Russian stocks has jumped to the highest level since the peak of the Ukraine crisis as investors weigh the impact of low oil prices on an economy already weakened by international sanctions.

The Russian Volatility Index, which reflects traders’ projections for price swings in equity futures, increased 16 percent to 46.76 on Dec. 1, the highest level since March 24, about a month after President Vladimir Putin’s move to annex Crimea, which prompted sanctions by the U.S. and its allies that have pushed Russia toward a recession. The dollar-denominated RTS stock gauge fell 1.6 percent yesterday to the lowest since July 2009.

Volatility rose for a sixth day amid speculation that the cheapest stocks in emerging markets may fall further as Russia won’t be able to rely on oil to shore up its weakening economy. Brent crude is trading near a five-year low after OPEC last week said it won’t cut output to stem falling prices as global production rises. Russia, the world’s largest energy exporter, has a 75 percent probability of sinking into a recession, according to economists surveyed by Bloomberg."

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Abengoa Arranges $680 Million Funding Facility With Gulf Banks - Bloomberg

Abengoa Arranges $680 Million Funding Facility With Gulf Banks - Bloomberg:

"Abengoa SA (ABG) signed a 2.5 billion dirham ($680 million) financing facility with four Persian Gulf banks to help the Spanish renewable energy company bid for contracts in the region, said the banker who co-ordinated the transaction.

The package, which is a mix of conventional and Islamic loans, was provided by Mashreq Bank PSC and three other lenders, Artur Uluc, director of corporate finance at Mashreq Bank in Dubai, said yesterday. He declined to name the other banks.

Abengoa’s debt plunged last month after the Seville-based company said it accounted its $630 million of high-yield green bonds as non-recourse debt, which typically does not allow creditors to seek claims directly from the company in case of default. Investors had understood the notes to be recourse debt and the change raised questions about Abengoa’s leverage ratio.


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