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Monday, 29 December 2014

Russian Economy Shrinks for First Time Since 2009 | News | The Moscow Times

Russian Economy Shrinks for First Time Since 2009 | News | The Moscow Times:



"Russia's economy shrank sharply in November and the ruble resumed its slide on Monday as Western sanctions and a slump in oil prices combined to inflict the first contraction in GDP since the global financial crisis.



The Economic Development Ministry said gross domestic product shrank 0.5 percent last month, the first drop since October 2009. With oil exports forming the backbone of the economy, analysts said the contraction is likely to worsen. 




The slide on the oil market accelerated this month after the exporters' group OPEC refused to cut output, and prices are down almost 50 percent from a peak in June. On top of this, the sanctions imposed over Moscow's role in the Ukraine crisis have deterred foreign investment and led to over $100 billion flooding out of the Russian economy this year."



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UPDATE 2-MIDEAST STOCKS-Gulf markets mixed, Saudi petchems rise as oil edges up | Reuters

UPDATE 2-MIDEAST STOCKS-Gulf markets mixed, Saudi petchems rise as oil edges up | Reuters:



"Gulf stock markets were mixed in early trade on Monday after gaining strongly in the two previous sessions on the back of Saudi Arabia's 2015 budget, which maintained government spending at a high level.



Brent crude edged up early on Monday because of supply disruptions in Libya and traded just above $60.00 per barrel.



Although confidence in heavy state spending has made Gulf equities less exposed to moves in oil over the past week, the oil price remains important for the petrochemicals sector, whose products are often priced in relation to crude."



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Putin’s Rate Wish Echoed by Market Stirs Skeptics: Russia Credit - Bloomberg

Putin’s Rate Wish Echoed by Market Stirs Skeptics: Russia Credit - Bloomberg:



"Some Russian traders are already betting on a reduction in the biggest interest-rate increase in 16 years.



While there are plenty of obstacles to lowering rates with inflation at a 3 1/2-year high and the ruble set for the biggest drop since 1998, derivatives used to predict future borrowing costs signal cuts are in store in the first quarter. Central bank Governor Elvira Nabiullina unexpectedly raised the benchmark to 17 percent from 10.5 percent two weeks ago, putting the economy at risk of a deeper recession to prop up the ruble.



“The rate increase was a stopgap measure to stabilize the situation on the FX market,” Dmitriy Gritskevich, an OAO Promsvyazbank analyst in Moscow, said by e-mail on Dec. 26. “We expect the central bank to start lowering rates as soon as the next three to six months.”"



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Middle Eastern oil-producing countries need to avoid unwanted consortia | The National

Middle Eastern oil-producing countries need to avoid unwanted consortia | The National:



"In the 1970s, the president of Egypt, Anwar El Sadat, launched his “Infitah” – opening – to foreign investment. The 1990s brought Venezuela’s similarly-named Apertura in its petroleum sector. And during 1998’s price slump, all the oil exporting countries in the Middle East made plans to bring in foreign investment. Now, with the return of lower oil prices, the region should again seek international partners to meet the economic challenge.



There are four reasons a country might open up to foreign investment in its oil sector – to raise capital, find new resources, improve efficiency and gain value from linked investments. Qatar’s late 1990s opening succeeded because it had a clear idea of what it wanted – the world’s biggest liquefied natural gas industry – and allowed its foreign investors attractive returns in the process. Many other countries had either no clear objectives, or too many.



The UAE and Iran have made some progress, but deals in Kuwait and Saudi Arabia never got off the ground. Just as the bureaucratic machinery geared up, prices began to recover, and the incumbent national oil companies resisted. The bidding systems were apparently designed to be as convoluted as possible."



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In 2015, Middle East to see rising interest in Exchange Traded Products | GulfNews.com

In 2015, Middle East to see rising interest in Exchange Traded Products | GulfNews.com:



"The Middle East market would witness growing interest in structured products like Exchange Traded products (ETP) in 2015, Standard & Poor’s Dow Jones Indices told Gulf News.



Currently there are about 6 ETP’s in the Middle East traded in the United States, and Blackrock, the world’s biggest money manager, plans to start an ETP for Saudi Arabian shares. The fund plans to hold 25 per cent or more of its total assets in a particular industry or group of industries to approximately the same extent that the underlying index is concentrated.



“In 2015, we expect the growing interest in ETPs to continue globally and notably in Latin America, Middle East and Africa. In terms of the types of ETPs investors are likely to be interested in, we continue to see a trend of people seeking yield, dividends, low volatility and factor-based passive funds,” John Davis, Global Head of ETP Licensing at S & P Dow Jones indices told Gulf News."



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U.A.E. Regulator Said to Plan New Rules for Startup IPOs - Bloomberg

U.A.E. Regulator Said to Plan New Rules for Startup IPOs - Bloomberg:



"The United Arab Emirates’ stock market regulator is working on rules that would make it harder for startup companies to sell shares, according to four people with knowledge of the matter.



The regulator will only approve listing applications from startups if they intend to operate in an industry not represented on the U.A.E.’s stock exchanges and in an area of strategic importance to the economy, three of the people said, asking not to be identified as the plans are private. 




The proposed regulations follow several so-called greenfield IPOs in the U.A.E. this year, where companies with no operating track record raise money at a nominal value, usually 1 dirham a share, to start operations and fund business plans."



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