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Monday, 11 January 2016

U.S. Oil Prices Flirt With $31 a Barrel - WSJ

U.S. Oil Prices Flirt With $31 a Barrel - WSJ:

"Oil prices fell toward $30 a barrel Monday as a persistent global glut of crude continues to weigh on the market.

Oil prices have plunged since mid-2014 and are down more than 10% already this year. The energy rout has roiled global markets, as energy-producing companies and countries have struggled to cut costs amid lower revenue. Energy stocks slumped Monday, helping drag down broader indices. Energy stocks slumped Monday, helping drag down broader indices.

Drivers are enjoying the cheapest gasoline prices in years, with the U.S. prices at the pump averaging $1.965 a gallon Monday."



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Bahrain raises oil prices | GulfNews.com

Bahrain raises oil prices | GulfNews.com:

"Bahrain has increased the price of gasoline, linking the decision to “the unprecedented drop in global oil prices.”

“As part of the Kingdom of Bahrain’s comprehensive economic and fiscal reform programme, the Cabinet today approved an amended price of gasoline sales,” a statement carried by Bahrain News Agency (BNA) said. “The decision follows recommendations from the Executive Committee, as outlined in a memorandum submitted to Cabinet by the National Oil and Gas Authority.” 
The price of 95 Octane, will be set at 160 fils per litre, and the price of 91 octane will be set at 125 fils per litre. The new prices come into effect on Tuesday.

Energy Minister Dr Abdulhussain Mirza, said that the Cabinet’s decision “forms part of the government’s wide-ranging programme of structural economic and fiscal reforms that will further strengthen the country’s long-term development.”"



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A wave of sovereign debt crises can come sweeping | GulfNews.com

A wave of sovereign debt crises can come sweeping | GulfNews.com:

"When it comes to sovereign debt, the term “default” is often misunderstood. It almost never entails the complete and permanent repudiation of the entire stock of debt; indeed, even some Czarist-era Russian bonds were eventually (if only partly) repaid after the 1917 revolution.

Rather, non-payment – a “default”, according to credit-rating agencies, when it involves private creditors — typically spurs a conversation about debt restructuring, which can involve maturity extensions, coupon-payment cuts, grace periods, or face-value reductions (so-called “haircuts”). If history is a guide, such conversations may be happening a lot in 2016.

Like so many other features of the global economy, debt accumulation and default tends to occur in cycles. Since 1800, the global economy has endured several such cycles, with the share of independent countries undergoing restructuring during any given year oscillating between zero and 50 per cent."



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Banks scramble for a piece of Saudi Aramco IPO - FT.com

Banks scramble for a piece of Saudi Aramco IPO - FT.com:

"The world’s biggest investment banks are pulling out the stops to win part of the listing of Saudi Arabia’s national oil company, but industry insiders admit the financial rewards will be far lower than Saudi Aramco’s potential valuation suggests.
Analysts value the entire company as high as $10tn, so it is easy to see why the deal has whetted the appetite of investment banks who saw their industry’s fees fall 8 per cent last year despite the mergers and acquisitions boom."



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Morgan Stanley warns further slide in oil price - FT.com

Morgan Stanley warns further slide in oil price - FT.com:

"Oil could fall towards $20 a barrel if China tries to swiftly depreciate its currency, Morgan Stanley said on Monday, adding to a growing number of voices warning of a further drop in crude prices this year.
A slowdown in China, whose growth led the rise in global oil demand over the past decade, in recent weeks has added fears of slowing consumption to massive oversupply, even after a 70 per cent price drop over the past 18 months."



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MIDEAST STOCKS-Petchem, small-caps boost Saudi market; banks weigh on Abu Dhabi | Reuters

MIDEAST STOCKS-Petchem, small-caps boost Saudi market; banks weigh on Abu Dhabi | Reuters:

"Petrochemical and small-cap stocks turned around Saudi Arabia's index after early declines on Monday while blue-chip companies dragged other Middle Eastern bourses lower.

The Saudi benchmark swung in volatile trade, dipping below the critical 6,000 level but then gaining momentum mid-session as petrochemical and speculative stock were heavily bought, lifting the index 1.4 percent to settle at 6,177 points.

"The swing factor in the stock market were the petrochemical shares," said a Riyadh-based trader. "Further dips in the market will make those stocks relatively more attractive from a valuation perspective.""



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Why investors should think twice over Saudi Aramco bet - FT.com

Why investors should think twice over Saudi Aramco bet - FT.com:

"Imagine for a moment that the Saudi Arabian government followed through on its vaguely expressed idea of floating a stake in Saudi Aramco, the world’s biggest oil producer. What exactly would investors be getting for their cash?
It certainly would not be a share in a straightforward profitmaking enterprise. National oil companies tend to be unconventional beasts at the best of times. And that is especially true in Aramco’s case. So much so, that it is often hard to see where the state stops and the company begins.
Its myriad duties go far beyond extracting oil from the ground. Aramco runs a university, a hospital system capable of treating 360,000 people and is responsible for the flood defence network around Jeddah, Saudi’s commercial centre."



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Saudi affirms commitment to currency peg

Saudi affirms commitment to currency peg:

"The Saudi Arabian Monetary Authority has a message for anyone taking a punt on the kingdom binning its currency’s peg with the dollar: Don’t bother.

In a statement, SAMA’s governor says:

 I would like to reiterate our official position that Saudi Arabian Monetary Agency will uphold its mandate of maintaining the peg at SAR 3.7500 per USD, backed up by the full range of monetary policy instruments including its foreign exchange reserves.

"


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Dubai private sector growth falls to five-and-a-half year low | The National

Dubai private sector growth falls to five-and-a-half year low | The National:

"Dubai’s private sector recorded its weakest growth in five-and-a-half years last month amid the strong US dollar and regional and global economic uncertainty.

The Emirates NBD Dubai Economy Tracker Index posted at 51.8 in December, down from 53.4 in November. A score higher than 50 marks expansion.

The reading was the lowest since July 2010, as slower increases in business activity, new orders and employment all weighed on the index."



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Saudi Aramco listing presents challenge for investors - FT.com

Saudi Aramco listing presents challenge for investors - FT.com:

"A joke among Riyadh businessmen is that Saudi Arabia’s ministry of planning has become the ministry of McKinsey.
The management consultancy has emerged as an influential force among other key advisers to the kingdom’s powerbroker deputy crown prince, Mohammed bin Salman, who is driving through a sweeping economic reform programme to counter the oil slump."



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MIDEAST STOCKS-Saudi sinks to four-year low; Egypt mixed | Reuters

MIDEAST STOCKS-Saudi sinks to four-year low; Egypt mixed | Reuters:

"Saudi Arabia's stock market extended losses on Monday to reach a new four-year low as investors sold off ahead of earnings season, while Egypt's market was mixed in thin trade.

Saudi's bourse was down 1.2 percent at 6,020 points as of 0900 GMT after briefly breaching the critical 6,000 level. It has fallen 12.8 percent this year and hit its lowest level since October 2011 in early trade.

"Technical indicators show the index is oversold but remains in a downtrend, a break below 6,000 could trigger further declines" said a note by Saudi's Riyad Capital."



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MIDEAST STOCKS-Saudi sinks to four-year low; Egypt mixed | Reuters

MIDEAST STOCKS-Saudi sinks to four-year low; Egypt mixed | Reuters:

"Saudi Arabia's stock market extended losses on Monday to reach a new four-year low as investors sold off ahead of earnings season, while Egypt's market was mixed in thin trade.

Saudi's bourse was down 1.2 percent at 6,020 points as of 0900 GMT after briefly breaching the critical 6,000 level. It has fallen 12.8 percent this year and hit its lowest level since October 2011 in early trade.

"Technical indicators show the index is oversold but remains in a downtrend, a break below 6,000 could trigger further declines" said a note by Saudi's Riyad Capital."



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MIDEAST STOCKS-Gulf weak as China worries sets tone for risk-averse trade | Reuters

MIDEAST STOCKS-Gulf weak as China worries sets tone for risk-averse trade | Reuters:

"Gulf bourses extended losses on Monday ahead of the corporate earnings season and as fears over a China slowdown set the tone for risk-averse trading.

Asian shares sank to their lowest in over four years because of mounting doubts about Beijing's ability to manage the world's second-biggest economy. China's main indexes slumped more than 3 percent at one point.

Worries over a slowdown in Beijing soured Gulf market sentiment. Dubai's bourse slid 1.1 percent as initial gains fizzled out. Emaar Properties fell 2.3 percent."



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Reality Check Squeezes $20 Billion #Dubai Development - Bloomberg Business

Reality Check Squeezes $20 Billion Development - Bloomberg Business:

"Morgan Parker’s first job at one of Dubai’s biggest developers was to tell his bosses everything that was wrong with their $20 billion plan to build the world’s largest mall and 100 hotels to surround it.
A lot, it turned out. The former head of the Rockefeller family’s Rose Rock real estate firm took Dubai Holding LLC’s Mall of the World project back to the drawing board, pushing a scaled-down plan that doesn’t require breaking records to attract attention."



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January effect may not be seen in UAE’s equities | GulfNews.com

January effect may not be seen in UAE’s equities | GulfNews.com:

"Investors in the UAE’s equity markets waiting for the so-called “January effect” may have to hold out as challenging macroeconomic factors continue to dampen trade in the country’s markets.

The “January effect” is a hypothesis that markets see increased buying activity during the month following the drop in prices in December when investors sell shares for year-end tax harvesting.

“Look at the news flow in early 2016. We had this sell-off in China’s equity markets, falling oil prices, and the geopolitical tension in the region, so we shouldn’t expect any rallying in this environment. All lights are red,” said Sebastien Henin, head of asset management at The National Investor."



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Saudi-Iran row to impact Mideast economy | GulfNews.com

Saudi-Iran row to impact Mideast economy | GulfNews.com:

"The Saudi-Iranian tensions could impact not just the economy of Iran, but also that of the wider Middle East and Africa (MEA) region, analysts have said. It could also affect investors’ appetite for risk, “spell increased volatility” in the financial markets and create pressure on oil prices.

“[The] impact of the conflict on key sectors such as oil, tourism and trade but also on the overall economy could be felt not only by Iran but also by the already fragile MEA region,” said Kinda Chebib, senior research analyst at Euromonitor International, in her analysis sent to Gulf News.

Chebib noted that the two countries have import-export ties, with the trade exchange between them exceeding $266 million (Dh977 million) in 2014. By the end of 2014, the volume of Saudi exports to Iran reached about $102 million, while Saudi imports from Iran hit $181 million."



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