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Sunday, 21 February 2016

Sovereign wealth funds pull at least $46.5b from asset managers |

Sovereign wealth funds pull at least $46.5b from asset managers |

"Asset managers suffered record outflows from sovereign wealth funds in 2015 and have been warned to expect even greater redemptions this year as the oil price collapse drives governments to raid their state-owned investment vehicles.

State funds pulled at least $46.5 billion from asset managers in 2015 - far greater than the sovereign outflows recorded at the height of the financial crisis - in a bid to prop up their economies, according to figures given exclusively to FTfm by eVestment, the data provider.

The outflows have dented profitability at many of the world’s largest investment companies, including BlackRock, Aberdeen Asset Management, State Street and Franklin Templeton."

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OPEC's Path From Oil Freeze to Output Cuts Is Far From Clear - Bloomberg Business

OPEC's Path From Oil Freeze to Output Cuts Is Far From Clear - Bloomberg Business:

"Saudi Arabia said its accord with Russia to cap oil production was “the beginning of a process,” but the path from a freeze to the output cuts needed to eliminate a global surplus is far from clear.
When Saudi Oil Minister Ali al-Naimi suggested that the agreement in Doha was a prelude to “other steps,” he fanned hopes that the kingdom’s resistance to production cuts was finally weakening. Oil’s recovery from a 12-year low last month was fueled by speculation that major producers were finally building a coalition that could work to end the glut.
The problem with using a production freeze as the bedrock for deeper cooperation is that none of the parties involved have to make any effort to comply."

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Abu Dhabi’s Biggest Bank Says U.S. Oil Prices May Drop to $20 - Bloomberg Business

Abu Dhabi’s Biggest Bank Says U.S. Oil Prices May Drop to $20 - Bloomberg Business:

"Oil prices may drop to near $20 a barrel this year as the global glut of crude persists into 2017, Abu Dhabi’s largest lender said.
U.S. benchmark West Texas Intermediate crude should trade in a range between $25 a barrel and $45 a barrel for the rest of the year, “although a very brief spike down towards $20 is possible,” the National Bank of Abu Dhabi PJSC wrote in its Global Investment Outlook 2016 report on Sunday. Prices at the lower end of the range will stimulate demand growth, it said.
“For at least the next few years there do appear to be solid fundamental reasons why oil prices are likely to remain in a trading range,” NBAD analysts wrote in the report. Producers have sold less of their crude this year through forward transactions than in past years, and forward-selling would likely accelerate if prices rallied much above $40 a barrel, the bank said.

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Mideast Defense Spending Seen Flat on Cheap Oil by IHS Jane's - Bloomberg Business

Mideast Defense Spending Seen Flat on Cheap Oil by IHS Jane's - Bloomberg Business:

"The oil price slump means that defense spending in the Middle East will flatten despite an increase in tensions as Gulf Arab states wage war in Yemen and conflicts deepen in Syria and Iraq, IHS Jane’s said in a report.
After growing swiftly between 2012 and 2014, defense spending in the region is expected to be little changed at $170 billion over the next two years as budgetary pressures come up against security concerns, Craig Caffrey, principal analyst at IHS Jane’s, said in a report Sunday.
"2015 saw the first defense budget cuts for a decade as oil prices crashed," Caffrey said. "We saw the first marginal cuts in 2015, but, those cuts are now expected to deepen in 2016 as states are forced into pursuing fiscal consolidation with more vigor.""

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MIDEAST STOCKS-Gulf loses steam as optimism over oil producer deal fades | Reuters

MIDEAST STOCKS-Gulf loses steam as optimism over oil producer deal fades | Reuters:

"Most Gulf stock markets edged down on Sunday after oil prices pulled back on Friday, as optimism faded over a proposed deal among crude producers to cap output. A rise in shares of Commercial International Bank buoyed Egypt's bourse.

Officials in some oil producing nations are still talking up the deal. Russia's energy minister said on Saturday consultations should be concluded by March 1, so there could be further surges in oil and equities prices before that date.

However, Brent crude pulled back 3.7 percent on Friday to $33.01 a barrel, showing expectations among many traders that the deal - if it goes ahead - will do little or nothing to reduce massive oil supplies already in the market."

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Iran Weekly Market Report - 18 February 2016 - - Gmail

Iran Weekly Market Report - 18 February 2016:

"Investors saw slower growth this week due to mixed performances by various sectors on the Tehran Stock Exchange. The TSE All-Share Index recorded its lowest increase in six weeks and closed at 77,888. This point is only 0.5% higher than last week’s closing mark. The latest gain is in contrast to the average weekly return of the main index since the start of January 2016, which has been +3.7%. The top three performers among the sec­tors were IT, Automotive and Metallic Products which recorded 17.6%, 13.5% and 12.5% weekly increases respectively. The IT sector in particular experienced higher growth this week as its average weekly return in the first six weeks of 2016 has been 3.4%. Automo­tive and Metallic Products sectors maintained their recent performance as top sectors. Oil Products, Industrial Conglomerates and Base Metals recorded the weakest returns among the major sectors as they declined by 7.5%, 3.6% and 2.4% respectively. The Oil Products sector fell after four weeks of continuous growth. The sector’s average weekly return during the first six weeks of 2016 has been +7.3%. Bandar Abbas Oil Refinery Co. (PNBA -9.5%) and Esfahan Oil Refinery Co. (PNES -9.2%) have played significant roles in pulling the sector’s index down.  On Monday, PNES released its Q3 report showing a 26% drop in projected net earnings, coming down to IRR 6210 billion (approx. USD 179 million). Share prices in the Oil Products sector have moved in contrast to crude oil prices in global markets. This week the prices of WTI Crude Oil, OPEC Basket Price and Brent Crude went up by 15%, 8.6% and 4.9% respectively.
By Technical Analysis perspective, the All-Share Index’s performance during the third week of February was not strong enough to push the market benchmark above the minor resistance at 78,500. At the same time, the index managed to stay above 76,500 as the market did not experience a significant sell off. On Sunday, the TSE’s main index dropped to 76,594 but quickly bounced back to the 77,000 level over the next few days. The 50 day EMA is still lower than the index by 11%, confirming the index’s uptrend in the midterm. This can be converted to a longer term uptrend by breaking through 78,500 and moving forward to 89,500. However, in the short term the index may experience sluggish growth, before rocketing up to its all-time high of 89,500.
The TSE30, the index of the thirty largest companies by market capitalization, slipped by 0.24% to close at 3,274. This is the first negative return of the top 30s in 2016. The poor performances of Oil Products, Base Metals and Banking shares affected the TSE30 in­dex the most. Eghtesad Novin Bank (NOVN +26.2%), Iran Khodro (IKCO +20.0%) and Informatics Services Corp. (INFO +18.4%) recorded the highest growth among the top 30s this week."

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Dubai needs to update finance laws to compete | The National

Dubai needs to update finance laws to compete | The National:

"Dubai must overhaul its legal framework and issue more debt if it is to compete with the conventional and Islamic capital markets of its foreign rivals, according to a study from Deloitte and the Dubai Economic Council.

This is just the latest call for Dubai to issue new regulations in order to develop its capital markets.

The IMF and the industry body the Islamic Financial Services Board have both said that the UAE needs to update its regulatory environment to help the growth of its domestic Islamic finance industry."

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Gulf oil dilemma drives tax reforms to shore up deficits | The National

Gulf oil dilemma drives tax reforms to shore up deficits | The National:

"The oil price slide is driving tax reforms across the region as Arabian Gulf economies seek to shore up a potential US$700 billion deficit.

All six Arabian Gulf states are planning to introduce Value Added Tax (VAT) collectively. Various other tax reforms are also underway.

The IMF warned in October that Gulf states would have a combined fiscal deficit between 2015 and 2019 exceeding $700bn if they did not undertake reforms."

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There’s a new world order to talk about at the Davos of Energy |

There’s a new world order to talk about at the Davos of Energy |

"The Saudis may go public, Opec’s in disarray, the US is suddenly a global exporter, and shale drillers are seeking lifelines from investors as banks abandon them.

Welcome to oil’s new world order, full of stresses, strains and fractures. For leaders gathering in Houston this week at the IHS CERAWeek conference — often dubbed the Davos of the energy industry — a key question is: what will break first? Will it be the balance sheets of big US shale companies? The treasuries of Venezuela and Nigeria? The resolve of Saudi Arabia, whose recent deal with Russia to freeze output levels offered the first hint of a rethink?

After watching prices crash through floor after floor in the worst slump for a generation, the industry is eager for answers. Insiders say it’s not too hard to visualise what markets might look like after the storm — say five years down the line, when today’s cost-cutting creates a supply vacuum that will push up prices. But it’s what happens in the meantime that’s got them scratching their heads."

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UAE markets at critical juncture |

UAE markets at critical juncture |

"Last week the Dubai Financial Market General Index (DFMGI) jumped 111.41 or 3.74 per cent to close at 3,092.89. There were 29 advancing issue and only seven declining, while volume improved to a two-week high.

The high for the week was 3,106.48, right where two trend lines converge, the long-term uptrend line starting from the 2012 low and the downtrend line started from the July-2015 highs, together creating an important resistance area. That high was close to where the DFMGI closed, but still below the prior week’s high of 3,124.69, generating an inside bar or inside week. This is where the high-to-low range of the current week is contained within the range of the prior week. It represents a certain amount of indecision as there was no progress on either the upside or downside of the trend.

If the index can get above the two-week high and stay there it will then be above the two trend lines, a sign of strength, but not enough by itself to clear the road higher. What happens thereafter is of greater significance. Potential resistance of the 200-week simple moving average (sma) is at 3,162.81, followed by the December swing high at 3,188.83. That swing high needs to be exceeded on a daily closing basis before there is an indication that there could be more upside in the foreseeable future. At that point the downtrend price structure would be violated as there would no longer be a series of low swing highs and lower swing lows, the definition of a downtrend. "

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MIDEAST STOCKS-Saudi, Egyptian stocks firm in early trade | Reuters

MIDEAST STOCKS-Saudi, Egyptian stocks firm in early trade | Reuters:

"Saudi Arabian stocks were firm in early trade on Sunday as retail investors bought second-tier stocks, encouraged by last week's gains, while strength in Commercial International Bank buoyed Egypt.

The Saudi index was up 0.5 percent after an hour of trade as Middle East Paper surged 7.6 percent and Al Tayyar Travel climbed 4.0 percent.

A 1.3 percent rise in Commercial International Bank helped Egypt's stock index gain 0.8 percent, while Egyptian Iron & Steel surged 8.9 percent. However, most stocks among Egypt's 10 most actively traded barely moved."

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MIDEAST STOCKS-Gulf markets edge down in early trade | Reuters

MIDEAST STOCKS-Gulf markets edge down in early trade | Reuters:

"Gulf stock markets edged down in early trade on Sunday after oil prices pulled back on Friday, as prospects for a deal among crude producers to cap output faded.

The Dubai stock index was 0.2 percent lower after 45 minutes as Emaar Properties lost 1.1 percent.

However, construction firm Arabtec climbed 3.7 percent after it reported a net loss of 360 million dirhams ($98.02 million) for the three months to Dec. 31, compared with a loss of 94.4 million dirhams a year earlier."

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