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Monday, 31 October 2016

More Asian investors buying Middle East bonds - StanChart | Reuters

More Asian investors buying Middle East bonds - StanChart | Reuters:

"The proportion of Middle East bond issues going to Asian investors has roughly doubled to 30 percent in the past six to nine months, say Standard Chartered executives, evidence of growing investment links between the two regions.

"We are seeing on everything from public bond issues to bank placements, up to 30 percent of the issuance is going into Asia, the majority of which would be Chinese. Normally, it would be 15 to 20 percent," said Stephen Priestley, regional head, corporate and institutional banking for Africa, Middle East and Pakistan, at Standard Chartered, adding that the rise had been over the past six to nine months.

"It's driven by increased awareness of Chinese investors around the Middle East and given that there's a surplus of capital seeking to get a return, coming into the Middle East is something they [Chinese investors] are increasingly comfortable doing.""



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UPDATE 2-Saudi Arabia appoints new minister of finance | Reuters

UPDATE 2-Saudi Arabia appoints new minister of finance | Reuters:

"Saudi Arabia appointed market regulator Mohammed al-Jadaan as its new finance minister by royal decree on Monday, replacing Ibrahim Alassaf, who had held the post since 1996.

Alassaf, 67, had been the last veteran member of cabinet to remain in a key post through a series of government reshuffles after King Salman assumed power last year, including one in May that replaced the long-standing oil minister.

He has been made minister of state and will remain a member of the Council of Ministers, as the Saudi cabinet is known, according to the royal decree."



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Oil slips further amid production cut jitters

Oil slips further amid production cut jitters:

"Oil prices slipped further on Monday after a meeting by members of Opec failed to convince investors that the group can agree on a production cut at its November meeting.


Brent crude fell 3.2 per cent to a fresh one-month low of $48.1 a barrel, while the West Texas Intermediate similarly dropped 3.3 per cent to $47.1 per barrel. Prices have fallen in five of the last six sessions.

Technical representatives of Opec and non-Opec members met in Vienna on Saturday but failed to reach any specific terms, and merely agreed to meet again before Opec’s official meeting on November 30."



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MIDEAST STOCKS-Region rises as Saudi gains for ninth day on easing liquidity | Reuters

MIDEAST STOCKS-Region rises as Saudi gains for ninth day on easing liquidity | Reuters:

"Major stock markets in the Middle East rose slightly on Monday, outperforming sluggish bourses in Asia and Europe, as Saudi banks continued rebounding on the back of October's huge international bond issue by their government.

The bond issue has allowed the government to suspend, at least temporarily, domestic bond sales and, in conjunction with other steps, this has started to ease a liquidity crunch in the banking system due to low oil prices. Short-term Saudi money rates have fallen in the last two days.

That has sustained a rally in the stock market, where the main index climbed for a ninth straight trading day on Monday, gaining 0.6 percent in active trade. It has surged 10.1 percent during the nine-day period, although it is still 10.3 percent below its July peak."



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Improve the world and make a profit - YouTube

Improve the world and make a profit - YouTube: ""



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Strong rental income propels Emirates Reit numbers | GulfNews.com

Strong rental income propels Emirates Reit numbers | GulfNews.com:

"Higher rental income from its portfolio is starting to add clout to Emirates Reit’s bottom-line numbers, going by the unaudited financial results for the nine months ending September 30. Total portfolio value came to $742 million, a year-over-year gain of 13 per cent, while property income generated $36.3 million from a 22 per cent increase.
Specific to the third quarter, rental income was higher by 19.7 per cent to $11.4 million (against Q3-15’s $9.5 million). As of September 30, occupancy rate across the Emirates Reit portfolio was a robust 80 per cent.
“Emirates Reit continues to record strong growth in cashflow, which should persist as occupancy increases and the portfolio grows,” said Sylvain Vieujot, Chairman of Equitativa and CEO of Emirates REIT Management, in a statement."



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Mideast funds more bullish on Saudi Arabia after mammoth bond issue | GulfNews.com

Mideast funds more bullish on Saudi Arabia after mammoth bond issue | GulfNews.com:

"Middle Eastern funds have become more positive towards Saudi Arabian equities after the kingdom’s mammoth international bond sale earlier in October, while they are losing confidence in Egypt, a monthly Reuters poll found.
The poll of 14 leading fund managers, conducted over the past week, found 36 percent expect to increase their allocations to Saudi equities over the next three months, and 14 percent to reduce them. (Poll findings ) That is the most bullish balance for Saudi Arabia since July, and compares to ratios of 14 per cent and 29 per cent in September’s survey.
The $17.5 billion (Dh64.2 billion) bond issue, a record for an emerging market economy, drew huge demand and was priced more tightly than expected. By itself, the proceeds will not make much difference to the economy, but fund managers said Riyadh’s success in opening another overseas funding channel was a positive signal."



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MIDEAST STOCKS-Gulf consolidates in early trade, Saudi banks lose steam | Reuters

MIDEAST STOCKS-Gulf consolidates in early trade, Saudi banks lose steam | Reuters:

"Gulf stock markets consolidated in early trade on Monday as Saudi banks, which had led the local bourse up for eight days after Riyadh's sovereign bond sale eased concern about tight liquidity in the economy, lost steam.

The main Saudi stock index, which had gained 9.5 percent during the eight-day rally, edged down 0.03 percent in the first half-hour as the banking sector index fell 0.02 percent.

The biggest lender, National Commercial Bank, continued climbing, however, adding 1.4 percent. On Sunday, it was by far the sector's top gainer, surging 7.7 percent in its heaviest trade since July 2015."



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Sunday, 30 October 2016

Mashreqbank CEO Sees U.A.E. Bad Loan Provisions Peaking in 2016 - Bloomberg

Mashreqbank CEO Sees U.A.E. Bad Loan Provisions Peaking in 2016 - Bloomberg:

"Bad loan provisions by United Arab Emirates’ banks will peak this year as the industry increasingly works more with businesses to renegotiate terms instead of calling defaults, according to Abdul Aziz Al Ghurair, chairman of the nation’s Banks Federation.
About 7 billion dirhams ($1.9 billion) of loans to companies are being renegotiated under restructuring guidelines outlined by the federation earlier this year in the absence of a bankruptcy law, said Al Ghurair, also chief executive officer of Mashreqbank PSC. Problem loans have slowed “dramatically” in recent months, he said."



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Dubai Financial Market Q3 net profit drops 22 pct | Reuters

Dubai Financial Market Q3 net profit drops 22 pct | Reuters:

"Dubai Financial Market (DFM), the Gulf's only listed stock exchange, reported a 22 percent fall in third-quarter net profit on Sunday.

* Net profit of 35.4 million dirhams ($9.6 million) in the three months to Sept. 30, down from 45.4 million dirhams a year earlier, it said in a statement.

* During the first nine months of the year, value of trades on DFM was 91.2 billion dirhams, down 31 percent from the same period of last year.

"



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Construction costs tumbling in Saudi Arabia, executive says | Reuters

Construction costs tumbling in Saudi Arabia, executive says | Reuters:

"One of Saudi Arabia's biggest urban development projects is paying as much as 15 percent less towards construction costs as cuts in state spending reduce pressure on supplies of building materials and labor in the kingdom.

Fahd Al Rasheed, group chief executive of Emaar the Economic City (EEC), said construction firms' pricing had become more competitive, leading to a drop in costs of 10 percent to 15 percent per square meter.

"Local production levels for all building materials - as well as imports - were set for a time of boom in contracting," which has caused oversupply, Rasheed said in an interview in Dubai."



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REUTERS SUMMIT-Qatar's Abu Issa Holding to enter Iran retail market in 2017 | Reuters

REUTERS SUMMIT-Qatar's Abu Issa Holding to enter Iran retail market in 2017 | Reuters:

"Abu Issa Holding, one of the largest retail and luxury goods firms in the Middle East, plans to expand into Iran next year and open stores in Tehran selling watches and confectionery as the market opens up after sanctions.

The family-run Qatari firm is an example of a Gulf Arab business that could benefit from the lifting last January of nuclear-related sanctions that largely closed Iran off for years.

Diplomatic tensions between Gulf Arab states and Iran over conflicts in Syria and Yemen are continuing to deter some investors. Another big obstacle to investment is that major international banks remain reluctant to do business with Iran."



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MIDEAST STOCKS-Banks boost Saudi for eighth straight day | Reuters

MIDEAST STOCKS-Banks boost Saudi for eighth straight day | Reuters:

"Strong banking shares boosted Saudi Arabia's stock market for an eighth straight day on Sunday but the rest of the region was sluggish in response to soft oil prices and global bourses, while Qatari equities fell sharply.

Saudi banks have been rallying since Riyadh's mammoth international bond sale this month partly eased worries about the government's access to finance and its ability to cope with an era of low oil prices.

The Saudi stock index climbed 0.7 percent in active trade on Sunday, bringing its gains since the rally began to 9.5 percent - although it is still 10.8 percent below its July peak."



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Saudi Stocks Extend Winning Streak as Cash Crunch Concern Eases - Bloomberg

Saudi Stocks Extend Winning Streak as Cash Crunch Concern Eases - Bloomberg:

"Saudi Arabian stocks rose the most among Gulf equities, poised to extend their longest winning streak in more than two years on investor optimism the outlook for the kingdom’s banks is improving.
Four of the five biggest contributors to an increase in the Tadawul All Share Index were lenders, as the main gauge added 0.7 percent at 1:15 p.m. in Riyadh. The measure has increased 9.5 percent in eight days, the longest string of gains since 2014, as Saudi Arabia sold the largest international sovereign bond in emerging-market history and said it would boost payments to contractors."



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Opec impasse prevents oil production deal in Vienna | The National

Opec impasse prevents oil production deal in Vienna | The National:

"Opec’s internal disagreements over how to implement oil-supply cuts agreed on last month prevented a deal to secure the cooperation of other major suppliers.

More than 18 hours of talks over two days in Vienna yielded little more than a promise that the world’s largest oil producers would keep on talking. Discussions will continue in late November, just days before the producer group is supposed to finalise the accord that lifted oil prices to one-year highs.


Non-Opec nations ended talks with the group on Saturday without making any supply commitments, Brazil’s oil and gas secretary Marcio Felix said after the meeting. The outcome of the process hinges on Iran and Iraq, two nations that are more interested in increasing production than reducing it, said Azerbaijan’s energy minister Natiq Aliyev."



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Saudi banks face growing challenges from contracting and construction sector | GulfNews.com

Saudi banks face growing challenges from contracting and construction sector | GulfNews.com:

"Saudi banks faced with shrinking liquidity, rising cost of funds and pressure on profitability are expected to face deterioration in asset quality, according to banking sector analysts.
Rising challenges in the Saudi construction sector is expected to result in a spike in non-performing loans (NPLs) and higher provisioning costs for the country’s banks, according to rating agencies.
“The Saudi construction sector has been negatively affected over the last two years by slowing economic activity and fiscal consolidation measures, stemming from a lower oil prices environment. We expect the pressures to continue as the Saudi government aims to reduce its large fiscal deficit,” said Olivier Panis, a Vice President — Senior Credit Officer, at Moody’s.
"



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MIDEAST STOCKS-Gulf markets consolidate but Saudi banks continue rebound | Reuters

MIDEAST STOCKS-Gulf markets consolidate but Saudi banks continue rebound | Reuters:

"Gulf stock markets consolidated in early trade on Sunday because of a lack of positive factors and sluggish global bourses, but Saudi Arabian banks continued to rally.

Saudi Arabia's index edged up 0.3 percent in the first 30 minutes as banks, which have led the market up for seven straight days in response to Riyadh's mammoth international bond sale, gained 0.6 percent.

The biggest lender, National Commercial Bank, surged 3.2 percent. Late on Thursday, the central bank announced fresh steps to ease a liquidity crunch caused by low oil prices, lowering the maximum volume for its Treasury bill issues and introducing a new 90-day repurchase instrument to inject funds into the money market when needed."



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Friday, 28 October 2016

UAE bank deposits up by Dh30b | GulfNews.com

UAE bank deposits up by Dh30b | GulfNews.com:

"Total bank deposits in the UAE increased by Dh30.2 billion in September 2016 due to an Dh11.4 billion increase in resident deposits and an Dh18.8 billion increase in non-resident deposits, the Central Bank of the UAE said.
Banks in the UAE have been reporting slower growth in deposits over the past few quarters amid tighter liquidity conditions and lower government deposits due to falling oil prices.
First Gulf Bank (FGB), for example, on Wednesday reported flat deposits in the first nine months of 2016, while National Bank of Abu Dhabi recorded a 3.3 per cent increase in customer accounts and other deposits."



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Longest Rally in Two Years for Saudi Stocks Buoyed by Bond Sale - Bloomberg

Longest Rally in Two Years for Saudi Stocks Buoyed by Bond Sale - Bloomberg:

"Saudi Arabian stocks extended the longest winning streak in more than two years on bets the government’s record bond sale would help it repay contractors and ease pressure on the kingdom’s finances.
Start your day with what’s moving markets.

The Tadawul All Share Index rose 0.9 percent in Riyadh on Thursday, ending the week 5 percent higher, the steepest increase in nine months. The gauge rose above its 50-day moving average for the first time since July. Banks led the advance, with all but one of the Tadawul All Share Bank Index’s 12 members posting gains. Lending costs between financial institutions declined for the first trading week in 14."



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Saudis, Mideast producers vie for China's teapot crude imports | Reuters

Saudis, Mideast producers vie for China's teapot crude imports | Reuters:

"Top global oil exporter Saudi Arabia is looking at new ways to sell crude to China, offering more cargoes at spot prices and more lenient payment terms after losing ground in the world's fastest-growing oil import market to Angola, Russia and others.

Independent refiners, known as teapots, have shaken up China's oil industry this year, accounting for most of its crude import growth since receiving import licenses for the first time near the end of 2015.

Most of this new demand is for high quality low-sulfur crude from non-OPEC producers, or for high-sulfur grades that sell at heavy discounts to Saudi prices, making it tough for state-owned Saudi Aramco to maintain market share."



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Winners and losers emerge from the oil price slump

Winners and losers emerge from the oil price slump:

"Opec’s decision to push for production cuts last month has led many to declare the US shale oil industry as the biggest winner from a two-year price war.

The wildcatters of the US shale patch successfully cut costs and consolidated operations to weather the storm of $40 oil, leaving behind a leaner more resilient industry that should benefit as prices recover.

Opec members have come under severe financial duress, including the cartel’s largest producer and de facto leader, Saudi Arabia. Riyadh has conceded that a higher price is necessary, with the market downturn far more severe and longer lasting than anticipated."



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Thursday, 27 October 2016

WRAPUP 1-Saudis take new steps to ease bank liquidity crunch | Reuters

WRAPUP 1-Saudis take new steps to ease bank liquidity crunch | Reuters:

"Saudi Arabian authorities have taken fresh steps to ease a liquidity crunch caused by low oil prices, suspending the government's local currency bond issues and introducing a new instrument to inject funds into the money market.

The steps could, temporarily at least, ease upward pressure on Saudi money market rates, which have been rising sharply - threatening economic growth - as government debt sales soak up funds from the banking system.

But some bankers said the upward trend in rates was unlikely to end unless the government succeeded in slashing its budget deficit, allowing money to flow back to the private sector."



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MIDEAST STOCKS-Banks boost Gulf markets in weak global environment | Reuters

MIDEAST STOCKS-Banks boost Gulf markets in weak global environment | Reuters:

"Banking shares that were beaten down earlier this month by fears of slowing economic growth in the region boosted several Gulf stock markets on Thursday, despite weakness in Asian bourses and oil prices.

The Saudi bank sector has been strong since last week's big international bond sale by the government partly eased fears of a liquidity drought in the economy.

On Thursday, the sector index climbed 1.5 percent in its seventh straight day of gains. It has risen 13.3 percent in that period. This helped the overall Saudi stock market index gain 0.9 percent on Thursday, although trading volume was modest and fell from Wednesday, a negative technical sign."



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Abu Dhabi's sovereign wealth fund eyes Asia deals from new Hong Kong base | The National

Abu Dhabi's sovereign wealth fund eyes Asia deals from new Hong Kong base | The National:

"The Abu Dhabi Investment Authority (Adia) has opened its first office in Hong Kong as the sovereign wealth fund moves beyond its traditional investment hunting grounds such as the UK.

Adia said this morning that it had opened Adia Hong Kong to act as a springboard to look for further investment opportunities in mainland China and other key Asian markets.

The fund has appointed Dong-Sinh Ngo as its chief representative, Asia Pacific, who will head the Hong Kong office. In a statement released this morning Adia said that the new office opening would "assist in identifying new avenues for cooperation and growth in one of the fastest developing regions in the world"."



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Iran accuses Europe of not fully supporting nuclear deal

Iran accuses Europe of not fully supporting nuclear deal:

"A senior Iranian official has accused European governments of not being fully committed to implementation of a nuclear deal with Iran, blaming them for stymieing investment into the Islamic republic.

Asghar Fakhrieh Kashan, deputy transport minister, told the Financial Times that European financing agencies were failing to support businesses keen to invest in the oil-rich country. Export credit agencies were demanding premiums on insurance that made banks insist on putting “unacceptable” terms in contracts related to political risk, he said.

“Iran will not accept any clauses in trade agreements which insert political risks alongside commercial risks,” said Mr Kashan, who is involved in Iran’s negotiations over multibillion-dollar deals with Boeing and Airbus. “This is where European countries are failing to be committed to the nuclear agreement. One of the main reasons the signing of contracts in various sectors has been delayed is this issue.”"



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Statoil makes further spending cuts as it reports $432m Q3 loss

Statoil makes further spending cuts as it reports $432m Q3 loss:

"Statoil has made another cut to capital expenditure after announcing a net loss for the third quarter in a further sign of the pressure on oil producers from weak prices.

Capital expenditure for the full year is now expected to be $11bn – $1bn lower than previously planned. Exploration expenditure was expected to be $1.5bn, down from $1.8bn. These were the latest in a succession of spending cuts by Statoil and other oil majors as the industry has scrambled to adapt to low prices, writes Andrew Ward.

There have been recent signs of stabilisation in the market as Opec producers edge closer to agreement on curbing output but the relief did not come soon enough to prevent Statoil reporting a net loss of $432m for the three months to September 30. This was a deterioration from the net loss of $307m in the same period last year and worse than the $197m net profit forecast by analysts."



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MIDEAST STOCKS-Banks boost Gulf markets despite weak global environment | Reuters

MIDEAST STOCKS-Banks boost Gulf markets despite weak global environment | Reuters:

"Banking shares that had been beaten down earlier this month by fears of slowing global economic growth headed for a seventh day of gains on Thursday, boosting Gulf stock markets despite weakness in Asian bourses and oil prices.

The Saudi bank sector has been strong since last week's big international bond sale by the government partially eased fears about a liquidity drought in the economy, and on Thursday morning the sector index was up 1.4 percent.

This helped the overall Saudi stock market index climb 0.8 percent. Most petrochemical shares underperformed but PetroRabigh added 4.4 percent after saying it remained committed to executing a rights issue.

"



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Wednesday, 26 October 2016

Earnings at NBAD hold steady as FGB profits in third quarter | The National

Earnings at NBAD hold steady as FGB profits in third quarter | The National:

"National Bank of Abu Dhabi (NBAD) and FGB, set to complete a merger by next year, both revealed in third-quarter earnings yesterday that their core business of lending remained steady despite the slowdown in economic growth gripping the country.

While FGB reported a 31 per cent gain in profit for the quarter on the back of strong revenue from non-core businesses, NBAD said its profit was unchanged as a gain in fees and commissions was outweighed by a slight drop in income from loans.


"We achieved this performance during a period of seasonal slowdown and ongoing challenging market conditions, while we continued to maintain expense discipline along with strong capital and liquidity positions," said Abhijit Choudhury, the bank’s acting chief executive."



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Saudi Arabian Bank Rates Decline in Sign Cash Squeeze Is Easing - Bloomberg

Saudi Arabian Bank Rates Decline in Sign Cash Squeeze Is Easing - Bloomberg:

"Saudi Arabian bank-lending costs declined in a sign the kingdom’s cash squeeze may be easing after the government pledged to inject $5.3 billion into its financial institutions.
The three-month Saudi Interbank Offered Rate, the price banks pay each other for loans, fell for a second day Wednesday, the first back-to-back decline since June. It had been unchanged since last week, when the kingdom sold its first-ever international bond."



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UPDATE 1-UAE's Etisalat misses estimates for third-quarter net profit | Reuters

UPDATE 1-UAE's Etisalat misses estimates for third-quarter net profit | Reuters:

"United Arab Emirates-based telecoms operator Etisalat missed analyst forecasts on Wednesday as it posted a small fall in third-quarter net profit, according to Reuters calculations.

Etisalat, which directly and indirectly operates in about 18 countries across the Middle East, Africa and Asia, made a net profit after royalty payment - or tax - of 1.9 billion dirhams ($517.4 million) in the three months to Sept. 30, it said in a statement on Wednesday.

It did not provide a comparative profit figure. Its financial statement for the corresponding period of last year stated earnings of 1.95 billion dirhams."



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Dubai billionaire Alabbar plans messaging app for Middle East | Reuters

Dubai billionaire Alabbar plans messaging app for Middle East | Reuters:

"Billionaire Mohamed Alabbar, one of Dubai's most prominent businessmen, plans a phone messaging service for the Middle East that aims to compete with services such as WhatsApp.

Alabbar, who made his fortune as the chairman of Dubai's largest listed property developer, Emaar Properties EMAR.DU, has been moving into other areas, in particular technology.

Asked on the sidelines of a conference in Dubai on Tuesday if he was considering launching a messaging app akin to WhatsApp, Alabbar replied:

"Yes, soon," adding "it's regional" when asked if the service would be designed for an Arabic-speaking audience."



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UPDATE 1-Kuwait's Equate could include 30-year bond in debt issue due Thurs | Reuters

UPDATE 1-Kuwait's Equate could include 30-year bond in debt issue due Thurs | Reuters:

"Kuwait's Equate Petrochemical is considering expanding its imminent U.S. dollar debt issue to include a 30-year bond, according to a document from the lead arrangers, following the success of Saudi Arabia's offering.

Equate is expected to sell five-year and 10-year U.S. dollar-denominated debt on Thursday.

A source familiar with the matter said the petrochemical company had been encouraged by strong U.S. investor appetite for the 30-year tranche of Saudi Arabia's mammoth $17.5 billion bond issue last Thursday."



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MIDEAST STOCKS-Gulf markets weighed by low oil prices, weak earnings | Reuters

MIDEAST STOCKS-Gulf markets weighed by low oil prices, weak earnings | Reuters:

"Gulf stock markets saw lacklustre trade on Wednesday as low oil prices and weak earnings weighed on investor sentiment.

Crude prices declined for a third day, hovering near $50 a barrel for the first time in three weeks, amid doubts that OPEC members will agree to a cut output.

"Investor sentiment appears to be weak in general on low earnings visibility," said Vijay Harpalani, fund manager at Dubai-based Al Mal Capital."



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Oil buckles as investors cast doubt on an OPEC output deal | Reuters

Oil buckles as investors cast doubt on an OPEC output deal | Reuters:

"Oil fell for a third day on Wednesday, nearing $50 a barrel for the first time in three weeks, as investors grew increasingly doubtful that OPEC members will agree to cut output and as U.S. inventories staged a surprisingly large increase.

Iraq, the second-largest member of OPEC, does not want to join in with a proposed production cut that the group has said it will approve at a regular meeting in Vienna next month.

With Iran, Nigeria and Libya already expected to be excluded, along with potentially Venezuela and Indonesia, whose state oil producer said on Tuesday it was targeting a 42-percent increase in output next year, traders and investors are growing less confident in the chances for an effective deal."



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MIDEAST STOCKS-Gulf pulls back, mild profit-taking in Saudi | Reuters

MIDEAST STOCKS-Gulf pulls back, mild profit-taking in Saudi | Reuters:

"Most stock markets in the Gulf fell in early trade on Wednesday, with Saudi Arabia edging down after five straight days of gains, following declines in global bourses and oil prices.

The Saudi index was down 0.3 percent after 30 minutes of trade, but selling was light, suggesting the market's rebound might soon resume.

The Saudi market has been recovering since last week's huge international bond sale by0 the government improved sentiment and encouraged buying-back of many beaten-down stocks that had suffered double digit declines this year."



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Tuesday, 25 October 2016

Saudi Bond Coup Seen Strengthening Banks Seeking Aramco IPO Role - Bloomberg

Saudi Bond Coup Seen Strengthening Banks Seeking Aramco IPO Role - Bloomberg:

"Banks that helped Saudi Arabia raise a record $17.5 billion last week will next turn to an even bigger prize: landing a role on the potential $100 billion initial public offering of Saudi Arabian Oil Co.
HSBC Holdings Plc, Citigroup Inc. and JPMorgan Chase & Co. were joint global coordinators on last week’s bond sale, which attracted $67 billion worth of orders from mainly U.S. and European investors. Analysts say the bond’s success puts those banks and other lenders that worked on the deal in a prime position to land significant roles on the IPO as soon as next year.
The bond sale is “definitely a big plus for the banks that were involved," said Murad Ansari, a Riyadh-based analyst at investment bank EFG-Hermes. “Given the size of Aramco’s IPO, I would expect quite a number of international banks to be involved in the consortium.""



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OPEC is back in business, and the market is skeptical: Kemp | Reuters

OPEC is back in business, and the market is skeptical: Kemp | Reuters:

"OPEC's output accord in Algiers last month was initially greeted with enthusiasm by oil market bulls but much of that euphoria is now dissipating as traders question whether it will make an actual difference.

The agreement, coming after many observers had written off the possibility of a deal, initially pushed crude prices sharply higher ("Saudi Arabia squeezes hedge funds with bearish bets on oil", Reuters, Oct. 10).

Flat prices and timespreads firmed as traders concluded the accord would accelerate the rebalancing of supply and demand ("Healthier oil market conditions at hand", Energy Intelligence, Oct. 19)."



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UAE's Pacific Controls in talks to sell data centre to Etisalat -sources | Reuters

UAE's Pacific Controls in talks to sell data centre to Etisalat -sources | Reuters:

"Dubai technology company Pacific Controls, which is seeking one of the biggest debt restructuring deals in the Gulf since the economic slowdown, is in talks to sell its data centre in the emirate to telecoms company Etisalat , four sources said.

Pacific Controls, which needs to raise cash in its effort to restructure 1.4 billion dirhams ($381 million) in debt, is also facing legal action from Emirates NBD, one of its creditors, concerning non-payment of some of its debt, said two of the sources familiar with the situation.

The legal action is complicating efforts to seal a conciliatory agreement with creditors in the absence of a modern bankruptcy law, the sources said."



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UPDATE 1-Saudi central bank asks banks to reschedule property loans as austerity bites | Reuters

UPDATE 1-Saudi central bank asks banks to reschedule property loans as austerity bites | Reuters:

"Saudi Arabia's central bank said on Tuesday it had asked local banks to reschedule the property loans of citizens whose incomes had been reduced by government austerity measures.

Last month, the government said it would cut allowances for employees in the public sector, where about two-thirds of Saudis work, to save money as low oil prices strain state finances.

Economists estimated the cuts might reduce the income of many people by about 20 percent, making it harder for them to service their property and consumer loans."



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MIDEAST STOCKS-Banking shares buoy Saudi, EFG Hermes gains on U.S. expansion | Reuters

MIDEAST STOCKS-Banking shares buoy Saudi, EFG Hermes gains on U.S. expansion | Reuters:

"Banking shares boosted Saudi Arabia's stock market on Tuesday while the majority of other Gulf markets sagged on uninspiring quarterly results.

Egypt recovered sightly, but investors remain anxious over dollar shortage woes.

The Saudi stock market index gained 1.5 percent, its fifth consecutive session of gains as all 12 of the listed lenders advanced. Bank Aljazira was the top performer amongst its peers, jumping 6.5 percent. National Commercial Bank, the second largest by market value, gained 4.6 percent."



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Sheikh Khalifa decrees bankruptcy law | The National

Sheikh Khalifa decrees bankruptcy law | The National:

"Sheikh Khalifa, the President, on Monday issued the long-awaited new federal bankruptcy law by decree, according to the state news agency Wam.

The law, which contains elements of bankruptcy protection laws from jurisdictions including France, Germany and the Netherlands, provides, for the first time, a comprehensive legal framework to help distressed companies avoid bankruptcy and liquidation.

Under the terms of the federal constitution, the new law will come into effect three months from its publication in the country’s official legal gazette."



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Saudi Bond Sale Spurs Gulf Borrowing to Record With More to Come - Bloomberg

Saudi Bond Sale Spurs Gulf Borrowing to Record With More to Come - Bloomberg:

"Gulf borrowers have raised a record amount in the public debt markets in 2016, and they’re not finished yet.
Saudi Arabia’s $17.5 billion international bond sale, the largest ever from an emerging market, boosted the amount raised through loans and bonds in the six-nation Gulf Cooperation Council to $151 billion, according to data compiled by Bloomberg, eclipsing the full-year record of $142 billion set in 2007. That’s before Equate Petrochemical Co.’s planned sale of five- and 10-year bonds this week, an offering that may raise as much as $3 billion, according to two people familiar with the deal."



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Gulf Banks Feel the Pain as Investors Wonder What Will Come Next - Bloomberg

Gulf Banks Feel the Pain as Investors Wonder What Will Come Next - Bloomberg:

"Banks from Saudi Arabia to Dubai are feeling the pain of the Middle East’s slowdown.
Many of the region’s largest banks missed analysts’ earnings estimates in the third quarter as lenders provisioned for higher bad loans and funding costs increased. National Commercial Bank, Saudi Arabia’s largest lender, said profit fell 1.5 percent to 1.96 billion riyals after impairment charges increased. Emirates NBD PJSC, the United Arab Emirates’ biggest bank, posted a profit of 1.66 billion dirhams, missing analyst estimates for earnings of 1.83 billion, after provisions increased at its Islamic unit.
The slump in crude prices has sparked a wave of budget cuts across the oil-rich Gulf region, prompting economic growth to slow and liquidity problems for banks accustomed to relying on countries’ excess energy receipts for funding. Government delays in paying contractors in Saudi Arabia and defaults among small and medium-sized enterprises in the U.A.E. are contributing to rising provisions, while funding costs in Saudi Arabia are at a 7-year high."



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MIDEAST STOCKS-Saudi notches higher, rest of Gulf weighed down by bank shares | Reuters

MIDEAST STOCKS-Saudi notches higher, rest of Gulf weighed down by bank shares | Reuters:

"Advances in several shares focused on domestic demand supported Saudi Arabia's stock market index in early trade on Tuesday, while other Gulf markets dipped, weighed down by the banking sector.

The Saudi stock market index notched up 0.4 percent after half an hour of trade, heading for its fifth consecutive session of gains.

Electronics and bookstore chain Jarir Marketing added 2.2 percent, building on Monday's 3.2-percent gain after Chairman Muhammad Alagil told Reuters that the retail sector's slump might be close to ending.

"



'via Blog this'

Monday, 24 October 2016

How politics can hit a portfolio | FT Markets - YouTube

How politics can hit a portfolio | FT Markets - YouTube: ""



'via Blog this'

Iran: Inside the battle to succeed supreme leader Khamenei

Iran: Inside the battle to succeed supreme leader Khamenei:

"The final judgment may rest with God. But there is a lot of manoeuvring in Tehran to influence the decision on who will be Iran’s next supreme leader. There is no public succession plan for the most powerful position in the Islamic republic, which has been entrusted since 1989 to Ayatollah Ali Khamenei. Discussion of the subject is all but forbidden while the 77-year-old remains active, delivering speeches and attending military parades.

Nevertheless Iran’s landmark deal with the US and other major powers to scrap its nuclear programme — triggering a lifting of nuclear-related sanctions imposed on the country since 2011— is being interpreted by many in terms of what it may mean for a post-Khamenei Iran and who might run the country.

Reformists want to build on the progress they believe has been made by the centrist Hassan Rouhani, president since 2013, and are pushing for a moderate candidate. Hardliners are determined to do all in their power to stop them. A large number of other interests, from the Revolutionary Guards to the clerics in the holy cities of Qom and Mashhad, will have a say. Some are even privately suggesting that the position, introduced after the 1979 Islamic revolution to have a senior cleric in charge of the country, may no longer be necessary — raising questions over the future of the theocratic state.

"



'via Blog this'

Kuwait still looking to issue $9.9 bln international bonds, official says | Reuters

Kuwait still looking to issue $9.9 bln international bonds, official says | Reuters:

"Kuwait is still considering the issuance of international bonds worth around 3 billion dinars ($9.90 billion), a finance ministry official told Al Arabiya TV on Monday.

Like other Gulf Arab states, Kuwait is turning to debt capital markets to raise money as oil prices remain at less than half their levels two years ago. Qatar in May sold $9 billion of Eurobonds, while Saudi Arabia completed a record-breaking $17.5 billion debut offering last week.

However, sources told Reuters earlier this month Kuwait's planned bond had been postponed until 2017 after authorities decided it was in no rush to raise funds overseas."



'via Blog this'

MIDEAST STOCKS-Saudi shares bounce as investors hunt for bargains; Egypt dips | Reuters

MIDEAST STOCKS-Saudi shares bounce as investors hunt for bargains; Egypt dips | Reuters:

"Saudi Arabia's stock market closed higher for a fourth straight session on Monday after last week's mega international bond sale by the government boosted sentiment, but Egyptian shares dropped further as a chronic dollar shortage weighed on sentiment.

Riyadh's stock index rose 1.0 percent, taking its gains over the last four sessions to 6.2 percent.

It underperformed the region earlier this year as low oil prices and government austerity measures hit the economy hard, so it may now have more room to snap back."



'via Blog this'

Tata Group announces surprise departure of chairman Cyrus Mistry | Business | The Guardian

Tata Group announces surprise departure of chairman Cyrus Mistry | Business | The Guardian:

"Tata Group, the Indian conglomerate that owns significant British industrial interests through Jaguar Land Rover and Tata Steel, has turned back to its founding family for leadership after removing its chairman.

Cyrus Mistry will be replaced by his predecessor, Ratan Tata, who will serve as interim chairman while the conglomerate looks for a permanent replacement.

The 148-year-old company gave no reason for the surprise departure of Mistry after four years in charge. Tata, whose other UK businesses include Tetley Tea, said its board made the decision on Monday and that a committee would aim to find a new chairman within four months."



'via Blog this'

Oman to cover two-thirds of budget deficit with foreign debt | The National

Oman to cover two-thirds of budget deficit with foreign debt | The National:

"Oman’s government is covering between 60 and 70 per cent of this year’s budget deficit via international borrowing such as eurobond issues, direct placements of debt and other instruments, the central bank’s executive president said.

The rest of the deficit will be financed locally by drawing down financial reserves, such as money held by the State General Reserve Fund, a sovereign fund, and issues of bonds, Hamood Sangour Al Zadjali told an economic conference on Monday.


The reliance on international financing is a big shift for Oman, which has seen its state finances severely damaged by low oil prices. Earlier this year, the government returned to the international bond market for the first time in two decades."



'via Blog this'

Eid-Oakden: Across Arab World Public Sectors Are Bloated - Bloomberg

Eid-Oakden: Across Arab World Public Sectors Are Bloated - Bloomberg:

"Florence Eid-Oakden, founder, chief executive officer and chief economist at Arabia Monitor, discusses Saudi Arabia's public sector, the outlook for the Saudi economy and the record Saudi bond sale. She speaks to Tracy Alloway on "Bloomberg Markets: Middle East.""



'via Blog this'

Dubai Islamic Bank Q3 net profit falls 9.9 pct, meets estimates | Reuters

Dubai Islamic Bank Q3 net profit falls 9.9 pct, meets estimates | Reuters:

"Dubai Islamic Bank (DIB), the United Arab Emirates' largest sharia-compliant lender, on Monday posted a 9.9 percent drop in third-quarter net profit, in line with analysts' forecasts.

The bank made 876.3 million dirhams ($238.6 million) in the three months to Sept. 30, it said in a statement. This compares with a profit of 972.1 million dirhams in the corresponding period of 2015.

DIB's earnings growth had generally outperformed most of its local rivals in recent quarters, even as operating conditions across the UAE banking sector hardened because of rising credit costs and sluggish loan growth. But the latest results has brought that trend to a halt, at least for now.

"



'via Blog this'

Fitch: Strongest Saudi Banks Defy Tough Operating Environment | Reuters

Fitch: Strongest Saudi Banks Defy Tough Operating Environment | Reuters:

"Saudi Banks: Peer Review here LONDON, October 24 (Fitch) Five Saudi Arabian banks stand out, demonstrating particular strengths in the face of the country's increasingly tough operating environment, Fitch Ratings says. These banks achieve 'a-' standalone Viability Ratings (VR), which are higher than the 'bbb+' score we assign to the country's operating environment. The remaining six Saudi Arabian banks rated by us all have VRs either at or below 'bbb+'. National Commercial Bank (NCB) is the country's leading corporate bank and second largest in retail. The strength of its franchise delivers earnings metrics that are among the strongest in the sector and a strong retail franchise also supports a low-cost funding base and strong liquidity. Banque Saudi Fransi's low risk appetite, with its conservative underwriting standards, supports the bank's strong asset quality indicators. We expect the operating environment to eventually weigh on these ratios but, in our opinion, any deterioration should be less pronounced than for peers, reflecting the bank's conservative approach to risk. As a result, its capital buffers should hold up better. "



'via Blog this'

MIDEAST STOCKS-Saudi continues rebound, rest of Gulf soft | Reuters

MIDEAST STOCKS-Saudi continues rebound, rest of Gulf soft | Reuters:

"Saudi Arabia's stock market continued rallying early on Monday after last week's big international bond sale by the government boosted sentiment, but other Gulf markets were soft after some weak third-quarter earnings.

The Saudi stock index rose 0.8 percent in the first hour. It underperformed the region earlier this year as low oil prices and government austerity measures hit the economy hard, so may now have more room to snap back.

Petrochemical and industrial firm Alujain jumped 6.1 percent after it said it would distribute a 0.5 riyal per share dividend for 2016 - its first dividend since 1998."



'via Blog this'

Sunday, 23 October 2016

Iraq Balks at Joining OPEC Cuts, Making Oil Output Deal Harder - Bloomberg

Iraq Balks at Joining OPEC Cuts, Making Oil Output Deal Harder - Bloomberg:

"OPEC’s second-largest producer threw an obstacle in the group’s path toward a final deal to stabilize oil markets when Iraq balked at joining efforts to trim output to prop up crude prices.
Iraq should be exempted from cutting production because it’s embroiled in a war with Islamic militants, Oil Minister Jabber Al-Luaibi said Sunday at a news conference in Baghdad. The country currently produces more than 4.7 million barrels a day it pumped in September, and Iraq’s output could rise higher still as the government urges international companies to boost production at its fields, he said. The minister disputed Organization of Petroleum Exporting Countries figures that peg Iraqi output at less than 4.2 million barrels daily.
“We are with OPEC policy and OPEC unity,” Al-Luaibi said. “But this should not be at our expense.” A meeting in Algeria last month of the group’s 14 members stretched to seven hours as Iraq argued over the level of production that should be used as a baseline for setting quotas."



'via Blog this'

Dubai's Mashreq Q3 net profit falls 24.8 pct as bad loans weigh | Reuters

Dubai's Mashreq Q3 net profit falls 24.8 pct as bad loans weigh | Reuters:

"Mashreq continued its earnings slump on Sunday as Dubai's third-biggest lender by assets posted a 24.8 percent fall in third-quarter net profit, weighed by putting aside more cash to cover for bad loans.

The lender made a net profit of 414.95 million dirhams ($112.98 million) in the three months to Sept. 30, it said in a statement, a decrease on the 551.44 million dirhams recorded for the corresponding period of 2015.

Mashreq, which had reported falling profits in the preceding four quarters, suffered in the latest quarter as allowances for impairments jumped by 82 percent over the period to reach 470 million dirhams."



'via Blog this'

Saudi Arabia looks to Russia to boost non-OPEC cooperation | Reuters

Saudi Arabia looks to Russia to boost non-OPEC cooperation | Reuters:

"Saudi Arabia's Energy Minister Khalid al-Falih said on Sunday he had invited his Russian counterpart Alexander Novak to meet Gulf Arab energy ministers in Riyadh as part of efforts to cooperate with non-OPEC members to stabilize the oil market.

"Russia is one of the world's biggest oil producers ... and is one of the influential parties in the stability of the oil market," Falih said at the opening session of the six-member Gulf Cooperation Council (GCC).

Falih said Novak had welcomed the invitation, "as a clear indication of sincere desire to continue cooperation and coordination with the oil producing and exporting countries for more stability in the market.""



'via Blog this'

Saudi retailer Jarir says retail slump may be near ending | Reuters

Saudi retailer Jarir says retail slump may be near ending | Reuters:

"The slump in Saudi Arabia's retail sector may be close to ending as consumption starts to stabilize after shrinking because of low oil prices and government austerity policies, the chairman of one of the kingdom's biggest retail chains said.

"We think the sharp decline is fundamentally over, or will be over by the end of this year," said Muhammad Alagil, chairman of Jarir Marketing Co 4190.SE, which focuses on selling consumer electronics, books and office supplies.

Next year, the company may be able to grow both profit and sales at rates in the high single digits or low double digits, he added - though much of that growth would come from opening new stores rather than increasing business at existing outlets."



'via Blog this'

MIDEAST STOCKS-Buoyant investor sentiment lifts Saudi, Egypt cools | Reuters

MIDEAST STOCKS-Buoyant investor sentiment lifts Saudi, Egypt cools | Reuters:

"Major stock markets in the Gulf rose on Sunday with Saudi Arabia outperforming it peers, continuing to climb on the back of upbeat investor sentiment following the mammoth international bond sale at the end of last week. Egypt's index slipped on profit taking.

Riyadh's index added a further 1.6 percent, taking its gains since Wednesday to 5.1 percent as a little over 80 percent of the traded shares rose.

Banks continued their climb with Saudi Hollandi Bank gaining 3.4 percent. At the end of last week bank shares rallied after the kingdom conducted a $17.5 billion international bond sale with success."



'via Blog this'

'We're Doomed To Bankruptcy Unless Changes Made,' Says Saudi Official

'We're Doomed To Bankruptcy Unless Changes Made,' Says Saudi Official:

"It’s common knowledge for anybody that follows international news that the more than two year long roil in global oil markets has caused pain across the oil sector, with little immunity offered.

Oil majors have lost billions, globally over 350,000 layoffs in the oil sector have ensued – while oil producing nations, ranging from U.S. shale oil producers, to various OPEC members, to the world’s largest oil producer Russia – have felt the pain.

Saudi Arabia, once thought immune to any prolonged downturn in oil prices, has also felt the pinch as prices have trended downward from $115 per barrel in mid-2014, to dipping into the $20s-range in January and now hovering in the high $40s to low $50s range."



'via Blog this'

Asset quality in Saudi, Qatar and the UAE most resilient to oil shock | GulfNews.com

Asset quality in Saudi, Qatar and the UAE most resilient to oil shock | GulfNews.com:

"Banks in Saudi Arabia, Qatar and the UAE are better placed than other Gulf Cooperation Council (GCC) peers to cope with an eventual deterioration in asset quality brought about by a prolonged period of weak oil prices, according to rating agencies.
“We examined the impact of lower for longer oil prices on asset quality across the region and concluded that loss-absorption capacity in the Saudi banking sector ranks highest among GCC countries and that both Saudi Arabia and Qatar would continue to offer the soundest lending opportunities under that scenario, suggesting impaired loan ratios should increase more slowly in these countries than their peers,” Analysts with Fitch ratings wrote in a recent note.
While the operating environment for banks is expected to soften, Moody’s expect the UAE banks’ solid profitability and capitalisation levels are expected to provide protection against rising problem loans, while sufficient liquidity will cushion against reduced flows of government deposits into the banking system as lower oil prices impact government revenues, according to Moody’s."



'via Blog this'

Worst Is Over for Dubai Property as Buyers Return, Nakheel Says - Bloomberg

Worst Is Over for Dubai Property as Buyers Return, Nakheel Says - Bloomberg:

"Dubai’s property market is bottoming out as buyers return to the market and the emirate offers an alternative to investors worried about the U.K.’s Brexit vote, according to Nakheel PJSC Chairman Ali Rashid Lootah.
“I think the worst is over,” he said in an interview in Singapore. “Dubai is growing, we are seeing signs of more inquiries -- serious inquiries -- and I think that’s a sign of recovery. The market is maturing, we are seeing more serious, cautious investors, not speculators.”
Real estate sales in the emirate fell almost 30 percent by value in the first seven months of the year, according to data from the Dubai Land Department, as a slump in oil prices led to an economic slowdown in Gulf countries. Real estate analysts see either a flat market or a further slowdown in 2017 with Jesse Downs, managing director at real estate consultant Phidar Advisory predicting a 10 percent drop in values after a 7 percent slide this year."



'via Blog this'

MIDEAST STOCKS-Gulf firms with Saudi outperforming on continued optimism | Reuters

MIDEAST STOCKS-Gulf firms with Saudi outperforming on continued optimism | Reuters:

"Stock markets in the Gulf firmed in early trade on Sunday with one of the main property developers in Saudi Arabia jumping on strong quarterly results and banking shares continuing their climb.

Riyadh's index added a further 0.7 percent in the first half an hour as Dar Al Arkan jumped 6.5 percent in the first 15 minutes of trade after it reported a 21.4 percent rise in third-quarter net profit to 112.5 million riyals ($30.0 million), double the forecast by analysts at NCB Capital.

The company attributed the rise to higher revenues from property sales and lower operating expenses, such as payroll and consultancy fees."



'via Blog this'

Saturday, 22 October 2016

Brexit politicians are putting us on a fast track to financial jeopardy | Anthony Browne | Opinion | The Guardian

Brexit politicians are putting us on a fast track to financial jeopardy | Anthony Browne | Opinion | The Guardian:

"How do you take your Brexit? Soft or hard? Quick or slow? It might all seem semantics but for the UK and Europe it is the £1.1tn question. That is the amount banks based in the UK are lending to the companies and governments of the EU27, keeping the continent afloat financially. The free trade in financial services that crosses the Channel each year, helping customers and boosting the economies in the UK and Europe, is worth more than £20bn.

Brexit means Brexit and we are all Brexiters now. But if we get it wrong, that £20bn trade in financial services is at risk and the public and political debate is taking us in the wrong direction. At the banking industry’s annual conference last week, the atmosphere was, as one of the panellists, Lord Mandelson, noted, “gloomy”. The government, and in particular the chancellor, Philip Hammond, and the Brexit secretary, David Davis, are making the right noises. The golden rule of negotiations is start big and never ask for less than you want. But we are in danger of talking ourselves into defeat before negotiations have even begun.

There is a consensus that the EU’s integrated financial market is one of its great success stories. It makes it easier and cheaper for French farmers, German manufacturers and Italian fashion designers to secure funding. It helps EU citizens get better returns for their savings. And it also creates jobs, not least in the UK, where financial services as a whole employs more than a million people, two-thirds of them outside London."



'via Blog this'

UAE markets show signs of hitting a bottom | GulfNews.com

UAE markets show signs of hitting a bottom | GulfNews.com:

"The Dubai Financial Market General Index (DFMGI) was essentially flat last week, rising only 5.55 or 0.17 per cent to close at 3,340.49. That’s not bad given that the index was down as much as 2.5 per cent earlier in the week. There were 12 advancing issues and 26 declining, while volume improved to a three-week high.
The index continued its decline earlier in the week as it fell below the prior week’s low before finding support at 3,253.21 on Monday and then bouncing into the week’s end. At the low the DFMGI was 10.5 per cent off its 2016 high of 3,623.70 reached only nine weeks ago.
In addition to the bullish reaction off the week’s low there is a bullish weekly candlestick formation that usually signals a reversal. It’s called a hammer and it reflects the switch from sellers being dominant to buyers dominating price action. This strength now needs to be confirmed by a daily close above last week’s high of 3,354.68."



'via Blog this'

Al-Falih, the man entrusted to explain the Saudi strategic shift

Al-Falih, the man entrusted to explain the Saudi strategic shift:

"As a young executive at Saudi Aramco, Khalid al-Falih was responsible for negotiating with some of the world’s biggest energy companies over joint ventures in the kingdom’s gas sector.

While those talks resulted in only limited foreign participation, Mr Falih — now Saudi Arabia’s energy minister — gained credit for juggling conflicting interests, and helping to break the public sector’s grip on vital industries.

His ability to deftly manage the process goes some way to explaining why he is now a trusted confidant and adviser to deputy crown prince Mohammed bin Salman, and the kingdom’s interlocutor with the world on energy policy. It also explains why the world took notice when, earlier this week, he called an end to the “considerable downturn” in the oil market."



'via Blog this'

Prospect of oil trading in a tight band for years is far-fetched

Prospect of oil trading in a tight band for years is far-fetched:

"Oil executives could be forgiven for feeling like they’ve been mauled by bears over the past two years, with the crude price collapse shredding their balance sheets and devouring their share prices.

At a major industry conference in London this week, however, talk of angry grizzlies was on the back burner. Instead, many were prepared to bet the market is about to experience a Goldilocks moment, with prices not too hot, not too cold, but — finally — just right.

The overarching view was that oil is preparing to settle into a $50-$60 a barrel range. BP chief executive Bob Dudley picked that band when asked where he saw oil trading in 2017, while the heads of independent oil traders such as Vitol, Mercuria and Gunvor all predicted prices would trade between $55 to $58 a barrel this time next year."



'via Blog this'

Friday, 21 October 2016

Saudi Arabia’s $17.5bn bond sale has lessons for debt market

Saudi Arabia’s $17.5bn bond sale has lessons for debt market:

"Saudi Arabia’s ambitious plan to chart a course away from oil dependence and towards a more diversified economy is off to a flying start — with a blockbuster $17.5bn debut sovereign bond sale.

Investors shrugged off concerns about the prospect of the sustained oil slump translating into years of anaemic growth, aggravating social concerns and a backdrop of regional tensions.

The lure of investing in a large economy with little debt that has never before issued a dollar-denominated bond, piqued global interest. Investor orders reached $67bn, enabling Saudi Arabia to borrow more — and more cheaply — than initially suggested."



'via Blog this'

Oil producers optimistic that the slump is over

Oil producers optimistic that the slump is over:

"As several of the world’s top oil executives rolled up at a Mayfair hotel in London this week for an industry summit, Brent crude, their benchmark product, was trading at $52 per barrel — exactly same the level as a year ago.

This might not seem like a cause for celebration. But, after the brutal retrenchment since prices collapsed from above $100 per barrel in mid-2014, the near 12-month highs of recent days have added to confidence that the worst is over for oil producers.

“We are at the end of a considerable downturn,” said Khalid al-Falih, Saudi Arabia’s energy minister and chairman of Saudi Aramco, the state-controlled oil company, at the annual Oil & Money conference. “The fundamentals are improving and the market is rebalancing.”"



'via Blog this'

Frozen Dreams: Russia's Arctic obsession - YouTube

Frozen Dreams: Russia's Arctic obsession - YouTube: ""



'via Blog this'

Thursday, 20 October 2016

UAE's nuclear power project achieves $24.4 bln financing close | Reuters

UAE's nuclear power project achieves $24.4 bln financing close | Reuters:

"The United Arab Emirates' nuclear energy project has completed a $24.4 billion financing for its first plant with most of the cash coming from state sources, the developers said on Thursday.

In 2009, Korea Electric Power Corporation (Kepco)-led consortium won a contract to build four 1,400 megawatt nuclear reactors that are being constructed at the Barakah plant to meet the UAE's surging demand for electricity.

Emirates Nuclear Energy Corp (ENEC) and Kepco jointly own the Barakah nuclear energy plant project."



'via Blog this'

Bond Markets Stir Across Middle East After Historic Saudi Sale - Bloomberg

Bond Markets Stir Across Middle East After Historic Saudi Sale - Bloomberg:

"Saudi Arabia’s record debut international bond sale is shifting the ground across Middle East debt markets, fueling price gains and stoking speculation of more borrowers to come.
The bonds of Qatar, Bahrain and Dubai are rallying in the wake of the kingdom’s $17.5 billion transaction that was completed yesterday. The offering, the biggest by an emerging-market nation, is being hailed as a likely spur to other Saudi companies in coming weeks and months."



'via Blog this'

MIDEAST STOCKS-Mammoth bond issue boosts Saudi, Egypt rebounds | Reuters

MIDEAST STOCKS-Mammoth bond issue boosts Saudi, Egypt rebounds | Reuters:

"Saudi Arabia's stock market rose sharply on Thursday as banks rallied after the kingdom's mammoth international bond sale, which could help to unclog liquidity bottlenecks in the economy. Egypt bounced as investors bought into recent dips.

The Saudi index gained 2.3 percent in sharply higher turnover as all but one of the banks advanced, with Samba Financial, which earlier this week had reported a drop in third-quarter net income, jumping 5.2 percent.

The kingdom conducted the world's largest emerging market bond sale on Wednesday, selling $17.5 billion of debt in the government's first international offer while attracting investor orders totalling almost four times that amount.

"



'via Blog this'

MIDEAST STOCKS-Saudi equity investors cheer mega bond debut, SEC jumps on Q3 profit | Reuters

MIDEAST STOCKS-Saudi equity investors cheer mega bond debut, SEC jumps on Q3 profit | Reuters:

"Saudi Arabia's stock market rose in early trade on Thursday as the banking sector rallied following the kingdom's mammoth international bond sale, which could help to unclog liquidity bottlenecks in the economy. Other Gulf bourses were mixed.

Riyadh's stock index added 1.2 percent as all but three listed Saudi banks advanced, with Samba Financial Group , which earlier this week had reported a drop in third-quarter net income, adding 4.0 percent.

The kingdom conducted the largest emerging market bond sale on Wednesday, selling $17.5 billion of debt in the government's first international offer while attracting investor orders totalling almost four times that amount."



'via Blog this'

The World’s Biggest Oil Kingdom Reverses Course - Bloomberg

The World’s Biggest Oil Kingdom Reverses Course - Bloomberg:

"Next year will be a test of strength for Saudi Arabia, the world’s largest oil exporter, as it tries to regain control of the market and lift prices. After two years of pumping at full blast, and helping drive prices to 12-year lows in January, the Saudis now appear willing to pull back. In September, at a meeting in Algiers, the Organization of the Petroleum Exporting Countries agreed to the outlines of a plan to lower the group’s production by as much as 750,000 barrels a day. Although the details won’t be final until the cartel’s Nov. 30 meeting in Vienna, the Saudis are expected to make most of those supply cuts.

The retreat signals an end to the kingdom’s foray into free-market economics. Two years ago, with prices already falling in response to a growing supply glut, Saudi Arabia, against the wishes of its fellow OPEC members, refused to lower output. The move was a direct challenge to other oil producers. By flooding the world with its low-cost crude, the Saudis bet that they could withstand lower prices longer than other countries and oil companies and force them out of the market. The strategy worked to a degree. The Saudis are pumping and selling record amounts of oil. Output hit almost 10.7 million barrels a day in July. At the same time, other producers have had to cut back: U.S. shale production has fallen, and non-OPEC oil supplies are set to drop in 2016 by the largest amount in 30 years.

In April 2016 the powerful deputy crown prince, Mohammed bin Salman, said the kingdom no longer cared whether oil cost $60 or $20 a barrel. Rather than keeping prices high, the Saudis seemed resigned to cheap oil and made plans to use that revenue to fund other investments in a bid to diversify the kingdom’s economy and reduce its reliance on crude. But the economic consequences of cheap oil have been severe for Saudi Arabia. Riyadh is burning through foreign-exchange reserves, government contractors have gone unpaid, and civil servants, who make up two-thirds of the labor force, will get no bonus this year. The country’s fiscal deficit is more than 10 percent of gross domestic product, the highest ratio of any Group of 20 nation. The International Monetary Fund forecasts that Saudi economic growth will slow to about 1 percent next year, the worst since 2009. A few banks predict a recession."



'via Blog this'

UAE credit appetite in downtrend -central bank survey | Reuters

UAE credit appetite in downtrend -central bank survey | Reuters:

"A quarterly survey by the United Arab Emirates central bank showed a downtrend in overall credit appetite for both business and personal loans, the central bank said on Thursday.

The net balance measure for business lending - the weighted percentage of respondents reporting an increase in demand for loans minus those reporting a fall in demand - fell to minus 2.3 for the September quarter from plus 3.1 in the previous quarter.

For the December quarter, however, respondents expect the net balance measure to rebound to plus 7.9, indicating demand for business loans is projected to increase."



'via Blog this'

Oil prices fall after strong rally, but sentiment remains confident | Reuters

Oil prices fall after strong rally, but sentiment remains confident | Reuters:

"Oil prices fell on Thursday on profit-taking after markets rallied the previous day due to a draw in U.S. stocks and an expectation of an OPEC-led cut in production.

U.S. West Texas Intermediate (WTI) crude oil futures were trading at $51.26 per barrel at 0648 GMT, down 34 cents from their last close.

International Brent crude futures were trading at $52.41 per barrel, down 26 cents."



'via Blog this'

Wednesday, 19 October 2016

GCC oil revenues are projected to be lower by $400 billion in 2016 | GulfNews.com

GCC oil revenues are projected to be lower by $400 billion in 2016 | GulfNews.com:

"Despite recent improvement in oil prices and the adoption of consolidation measures, projected fiscal deficits of GCC countries remain large in both the short and medium term, according to the International Monetary Fund’s latest regional economic outlook.
Taking into account announced fiscal policy measures, all countries are expected to record fiscal deficits this year, and only Iraq, Kuwait, and the UAE are projected to post surpluses by 2021. This year’s hydrocarbon budget revenues are projected to be lower by $400 billion compared with 2014.
Cumulative fiscal deficits during 2016–21 are forecast to be about $765 billion, down from $1.1 trillion in the April 2016. The significant deficit-reduction efforts which began last year are continuing, with the 2016 non-oil fiscal deficit expected to improve by more than 5 per cent of non-oil GDP. Fiscal consolidation is particularly fast in Oman and Saudi Arabia, where non-oil deficits are projected to fall by more than 10 percentage points of non-oil GDP. In 2017, the pace of consolidation is expected to ease to about 1.5 per cent of non-oil GDP."



'via Blog this'

Tax Experts Wanted in U.A.E. as Oil Woes Prompt Hunt for Revenue - Bloomberg

Tax Experts Wanted in U.A.E. as Oil Woes Prompt Hunt for Revenue - Bloomberg:

"The United Arab Emirates is setting up a federal tax authority that will be in charge of collecting levies, as the oil-rich Gulf nation seeks to diversify its revenue base with value-added taxation.
The ministry is advertising about 30 staff positions for the tax authority on its website, including a compliance and enforcement director, auditors, analysts, accountants and administrators. Deloitte LLP is advising the Ministry of Finance on the structure and enforcement mechanism of the new government entity, according to two people familiar with the matter who spoke on condition of anonymity because the information isn’t public."



'via Blog this'

Saudi Arabia prices EM record US$17.5bn bond | Reuters

Saudi Arabia prices EM record US$17.5bn bond | Reuters:

"Saudi Arabia on Wednesday priced the largest-ever bond from an emerging markets sovereign, selling a US$17.5bn trade of five, 10 and 30-year tranches, a lead on the deal told IFR.

It sold a US$5.5bn five-year at 135bp over Treasuries with a 2.375% coupon, a US$5.5bn 10-year at plus 165bp and a coupon of 3.25%, and a US$6.5bn 30-year at plus 210bp and a 4.5% coupon.

Citi, HSBC and JP Morgan are global coordinators on the deal."



'via Blog this'

Exxon boss tells peers, Saudis their oil supply crunch bet is wrong | Reuters

Exxon boss tells peers, Saudis their oil supply crunch bet is wrong | Reuters:

"Exxon Mobil's boss Rex Tillerson told Saudi Arabia's energy minister on Wednesday that fears of a new global oil supply crunch were exaggerated as the U.S. oil industry was adapting to the low price shock and was set to resume growth.

The remarks by Tillerson, who is due to retire before March next year, about the resilience of the U.S. oil industry come as the Saudis have effectively abandoned their strategy to drive higher cost producers out of the market by ramping up cheap supplies from their own fields.

More than two years of downturn that saw oil prices halve to around $50 a barrel today after a boom in U.S. shale oil production have led to a sharp decline in investment."



'via Blog this'

MIDEAST STOCKS-SABIC profit boosts Saudi, Qatar hit by weak earnings | Reuters

MIDEAST STOCKS-SABIC profit boosts Saudi, Qatar hit by weak earnings | Reuters:

"Saudi Basic Industries (SABIC) helped lift Riyadh's stock market on Wednesday after it reported a third-quarter net profit at the top end of forecasts, but a loss at Qatar's third- largest bank dragged that market lower. Egypt slid for a fourth straight session.

Riyadh's stock index rebounded 1.1 percent, ending three days of declines and trimming its loss since Sunday to 3.0 percent.

SABIC, the Gulf's largest petrochemical producer, climbed 1.8 percent to 84.00 riyals after posting a net profit of 5.22 billion riyals ($1.39 billion) in the three months to Sept. 30, down 6.8 percent from a year ago. Analysts polled by Reuters had on average predicted 5.05 billion riyals."



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Orders for Saudi’s debut international bond thought to be north of $50bn

Orders for Saudi’s debut international bond thought to be north of $50bn:

"Saudi Arabia has closed the book for its first dollar-denominated bond, with early indications suggesting investors have put forward orders north of $50bn.

Both the price and size of the bond sale are due to announced later today, writes Elaine Moore.

Saudi’s debut issue is expected to be split in three maturities of five, 10 and 30 years. Initial price guidance set the yield on the new five-year bond at 160 basis points above US Treasuries, while the 10 and 30 year bonds were offered at a premium of 185 and 235 basis points respectively."



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Saudi Arabia takes orders for first international bond sale

Saudi Arabia takes orders for first international bond sale:

"Saudi Arabia has begun taking orders for its first international bond sale, as the kingdom turns to debt markets to help ease a fiscal squeeze from the two-year slump in oil prices.

Initial price guidance for the dollar-denominated bonds — one of the most keenly awaited issues this year — splits the sale into three maturities, with a new five-year bond offered at a yield 160 basis points above equivalent US government bonds, while the benchmark 10-year bond comes with a 185 basis point premium. Longer-dated 30-year debt is being offered with a yield 235 basis points above US Treasuries.

The rates put the country’s benchmark borrowing rate at about 3.6 per cent — 50 basis points above rates in neighbouring Qatar, which has a higher credit rating — and tallies with investor expectations."



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IMF cuts Saudi Arabia 2016 growth forecast as oil price stays low

IMF cuts Saudi Arabia 2016 growth forecast as oil price stays low:

"The International Monetary Fund has cut its economic growth forecast for Saudi Arabia’s non-oil sector this year to 0.3 per cent, underlining the depth of the slowdown in the oil-dependent kingdom following a two-year slump in crude prices.

In its latest regional outlook, the IMF forecast the Gulf state’s overall gross domestic product would expand by 1.2 per cent, its lowest level since the financial crisis of 2009, compared with 3.5 per cent last year.

The IMF had predicted in May that non-oil GDP would grow by 1.6 per cent but cut its projection to 0.3 per cent as government spending curbs continue to sap business confidence."



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Dubai’s Nakheel reports 22 per cent rise in profit for third quarter | The National

Dubai’s Nakheel reports 22 per cent rise in profit for third quarter | The National:

"The Dubai-based property developer Nakheel said that its profit rose 22 per cent during the third quarter, reflecting what it described as "stable market conditions."

Net income for the three months to the end of September hit Dh955m, compared with Dh781m in the same period last year, but down from Dh1.4 billion in the second quarter of this year.

Nakheel did not provide revenue figures for the third quarter or a detailed breakdown of costs and how its profit was achieved."



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UAE economy projected to grow 2.3 per cent in 2016 | GulfNews.com

UAE economy projected to grow 2.3 per cent in 2016 | GulfNews.com:

"The UAE economy is projected grow 2.3 per cent this year compared to 4 per cent last year according to the International Monetary Fund’s (IMF) latest Regional Economic Outlook.
“The growth slowdown is going to be more pronounced in Abu Dhabi while Dubai is coping well with the overall regional economic slowdown. In relative terms, the UAE as a whole is better diversified than the regional economies,” said Masood Ahmad, Director, Middle East and Central Asia Department of the IMF.
Abu Dhabi’s GDP is projected to grow 1.5 per cent this year compared to 4.3 per cent last year. The economic forecast for next year places the GDP growth at 1.7 per cent."



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Pricing for Saudi Arabia’s First International Bond Sale - Bloomberg

Pricing for Saudi Arabia’s First International Bond Sale - Bloomberg:

"Richard Segal, senior analyst at Manulife Asset Management, discusses Saudi Arabia’s first international bond sale and economic outlook for the country overall. He speaks with Guy Johnson and Caroline Hyde on “Bloomberg Markets: European Open.”"



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BRIEF-Moody's maintains stable outlook on UAE banking system | Reuters

BRIEF-Moody's maintains stable outlook on UAE banking system | Reuters:

"* Moody's maintains stable outlook on the United Arab Emirates banking system

* Moody's on UAE - Expects real GDP growth of around 2.5% and 1.9% for 2016 and 2017, down from 3.2% in 2015.

* Moody's- Expect problem loans to increase modestly to around 5.5% of total loans by mid-2017 following a period of strong recovery"



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MIDEAST STOCKS-SABIC lifts Saudi, CBQ weighs on Qatar | Reuters

MIDEAST STOCKS-SABIC lifts Saudi, CBQ weighs on Qatar | Reuters:

"Saudi Basic Industries helped lift Riyadh's stock market early on Wednesday after it reported a third-quarter net profit at the top end of forecasts, but a loss at Qatar's third- largest bank dragged that market lower.

Riyadh's stock index was up 0.4 percent after half an hour of trade.

SABIC, the Gulf's largest petrochemical producer, climbed 1.5 percent after posting a net profit of 5.22 billion riyals ($1.39 billion) in the three months to Sept. 30, down 6.8 percent from a year ago. Analysts polled by Reuters had on average predicted 5.05 billion riyals."



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Tuesday, 18 October 2016

Oman to introduce a third telecom provider | GulfNews.com

Oman to introduce a third telecom provider | GulfNews.com:

"Oman’s Telecom Regulatory Authority (TRA) has decided to finish all the procedures for a third telecom provider in the country to enhance the competition in the telecommunications sector, the telecom regulator said in a statement on Monday. The TRA didn’t give further details or the name of the new telecom provider.
The regulator issued a decision on Sunday urging telecom companies to speed up network, quality enhancement and bring down prices of telecom services. TRA also urged the telecom firms to conduct a survey of the various areas in the country to find out the extent of coverage and follow up on the performance of telecom companies.
The body directed telecom firms to provide within two weeks from the date of the decision, a plan for next three years."



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MIDEAST STOCKS-Saudi hit by weak Q3 results at major companies, UAE rebounds | Reuters

MIDEAST STOCKS-Saudi hit by weak Q3 results at major companies, UAE rebounds | Reuters:

"Several disappointing third-quarter results from large Saudi Arabian companies dragged on the kingdom's stock index on Tuesday, while most other Gulf markets edged up in modest trade. Egypt pulled back in falling volumes.

Riyadh's index fell 1.9 percent, with selling momentum intensifying in the final hour. Saudi Arabian Mining Co (Ma'aden) fell 1.8 percent after it posted a 4.6 percent rise in third-quarter net profit to 83.6 million riyals ($22.3 million), below analysts' average forecast of 122.7 million riyals.

National Industrialization Co (Tasnee) swung to a net profit of 122.2 million riyals from a loss of 296.3 million riyals in the prior-year period. But NCB Capital said the result was 18 percent below its expectation and the stock slumped by its daily limit of 10 percent."



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Norway’s oil fund urged to invest billions more in equities

Norway’s oil fund urged to invest billions more in equities:

"Norway’s $880bn oil fund is being urged to invest billions of dollars more in equities and take on more risk in what would be a big shift in its asset allocation away from bonds.

The world’s largest sovereign wealth fund should invest 70 per cent of its assets in shares, up from today’s 60 per cent, at the expense of bonds, according to a government-commissioned report on Tuesday.

The move is highly significant for global markets as the oil fund owns on average 1.3 per cent of every single listed company in the world and 2.5 per cent in Europe."



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2016 a ‘tough’ year says Emirates’ Tim Clark as Europe and Africa weigh on Dubai carrier | The National

2016 a ‘tough’ year says Emirates’ Tim Clark as Europe and Africa weigh on Dubai carrier | The National:

"Emirates is feeling the effects of a global slowdown and this year will prove to be a particularly challenging one, according to its president.

"It’s tough [compared to last year]. We are working on it," said Tim Clark at an International Air Transport Association (Iata) event in Dubai.

Air traffic demand "is all about consumer demand. It’s not there yet"."



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GCC governments’ financing needs to cross $560b by 2019 | GulfNews.com

GCC governments’ financing needs to cross $560b by 2019 | GulfNews.com:

"The Gulf Cooperation Council (GCC) region’s funding requirement has been mounting since 2015, when the drop in oil-related revenue turned fiscal surpluses into deficits. Although the level of deficits differs among the sovereigns in scale and duration, these could result in substantial debt issuance according to S&P Global Ratings.
The rating agency estimates that the financing needs of Gulf governments between 2015 and 2019 could reach $560 billion. According to S&P estimates, in nominal terms, GCC sovereigns’ combined fiscal deficit will reach $150 billion (12.8 per cent of combined GDP) in 2016 alone.
“As a proportion of GDP, we expect that in 2016-2019 these deficits will average around 10 per cent per year in Bahrain, Oman, Kuwait, and Saudi Arabia, and 4 per cent on average in Abu Dhabi and Qatar,” said Benjamin J Young, an analyst with S&P."



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As OPEC Waits on Russia, Naimi Memoir Offers Cautionary History - Bloomberg

As OPEC Waits on Russia, Naimi Memoir Offers Cautionary History - Bloomberg:

"Ali Al-Naimi, the former Saudi oil minister and architect of the 2014 pump-at-will OPEC policy that’s roiled markets since, drew the conclusion during his final years in office that there was "zero" chance of countries outside the group joining in production cuts.
The comments, made in his forthcoming autobiography ‘Out of the Desert: My Journey from Nomadic Bedouin to the Heart of Global Oil,’ provide a cautionary history as OPEC waits on a pledge this month by Russian President Vladimir Putin to freeze or cut production.
Al-Naimi writes in the book that one of his aides asked him in November 2014 what was the chance of leading non-OPEC countries Russia, Mexico, Kazakhstan and Norway cutting oil production."



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