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Monday, 16 May 2016

Abu Dhabi to ease budget spending cuts, says ratings agency Moody’s | The National

Abu Dhabi to ease budget spending cuts, says ratings agency Moody’s | The National:

"Abu Dhabi will slow the pace of spending cuts in its 2016 budget, ratings agency Moody’s expects.

“We expect Abu Dhabi government’s fiscal consolidation effort to slow because of the need to balance the two objectives of supporting growth and curbing the budget deficit," said Math­ias Angonin, a Dubai-based sovereign analyst at Moody’s. “We [expect] that in 2016 there will be a lower decrease in spending that the 20 per cent achieved in 2015."

The emirate cut public spending by about 20 per cent in 2015 after the hit to oil prices led Abu Dhabi to run a fiscal deficit of 13.2 per cent of GDP that year, according to estimates from Fitch. Moody’s expects that the deficit will narrow to 9 per cent of GDP this year."



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Full Show: Bloomberg Markets Middle East (05/16) - Bloomberg

Full Show: Bloomberg Markets Middle East (05/16) - Bloomberg:

"Bloomberg Markets Middle East hosted by Manus Cranny. Guests include Mathias Angonin, analyst at Moody's Investor Services, and Hedi Ben Mlouka, chief executive officer at Duet. (Source: Bloomberg)"



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Domestic focus may limit clout of $2 trillion Saudi fund | Reuters

Domestic focus may limit clout of $2 trillion Saudi fund | Reuters:

"Saudi Arabia aims to create the world's biggest sovereign wealth fund, a $2 trillion behemoth that can throw its weight around global markets, but the fund's growth abroad is likely to be slowed by its responsibility for aiding the economy at home.

Building the Public Investment Fund (PIF) into "the largest fund in the world by far" is a cornerstone of radical economic reforms announced by Deputy Crown Prince Mohammed bin Salman last month to cut the kingdom's reliance on oil.

The PIF, founded in 1971 to finance development projects in Saudi Arabia and until now little known abroad, is to grow from 600 billion riyals ($160 billion) to over 7 trillion riyals, helping make Riyadh a global "investment power", he said. The biggest sovereign fund so far is Norway's, worth $852 billion."



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U.S. Discloses Saudi Holdings of Treasuries for First Time - Bloomberg

U.S. Discloses Saudi Holdings of Treasuries for First Time - Bloomberg:

"The Treasury Department released a breakdown of Saudi Arabia’s holdings of U.S. debt, after keeping the figures secret for more than four decades.

The stockpile of the world’s biggest oil exporter stood at $116.8 billion as of March, down almost 6 percent from a record in January, according to data the Treasury disclosed Monday in response to a Freedom-of-Information Act request submitted by Bloomberg News. The tally ranks Saudi Arabia among the top dozen foreign nations in terms of holdings of U.S. debt, and compares with China’s $1.3 trillion trove, and $1.1 trillion for Japan.
“The politics has always been secretive, so have their finances,” said David Ottaway, a Middle East Fellow at the Woodrow Wilson International Center, a research institute in Washington. “It does answer the question of how much they own, which is surprisingly not that much.”"



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MIDEAST STOCKS-Gulf mixed, strong oil fails to boost markets | Reuters

MIDEAST STOCKS-Gulf mixed, strong oil fails to boost markets | Reuters:

"Gulf stock markets ended mixed on Monday, with a strong oil price failing to give much of a boost to shares as investors focused on the blow to corporate earnings expected later this year from governments' austerity policies.

Brent crude futures climbed more than 2 percent to as high as $49.08 a barrel on Monday, their highest level this year, after long-time bear Goldman Sachs said the oil market had ended almost two years of oversupply and flipped to a deficit.

This buoyed some Saudi petrochemical shares, with Saudi Kayan rising 0.7 percent and Sahara Petrochemical gaining 1.3 percent.

"



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A solution to the mediocrity of banks in the UAE | The National

A solution to the mediocrity of banks in the UAE | The National:

"In my previous article I suggested, using scenes from the film A Beautiful Mind that game the­ory could explain why more than 50 banks exist in an economy too small to commercially need such business. The idea is bas­ically that banks choose to be mediocre because competition would harm them to the benefit of customers.

The feedback was tremendous, and I would like to expand on some of the points made. The first is the concern that I might antagonise people in the banking system. I believe that transparency and open dialogue fosters a healthy commercial environment and that most people will listen if your intent is positive. The few people who have a closed mind might react negatively to new or open ideas. One just needs to accept that this exists and hope that the greater good outweighs any personal backlash.

The second point raised is that the simpler explanation for bank behaviour is incompetence. Although possible, I find it hard to believe. First, incompetence leads to bad service, not mediocre service. Second is that I have dealt with a large number of executives and most seem quite competent to me. This seems to be more of a strategy, albeit a possibly unconscious one."



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Alarm bells ring for luxury sector in the UAE | GulfNews.com

Alarm bells ring for luxury sector in the UAE | GulfNews.com:

"Luxury brand retailers in the UAE have had the toughest four months in recent history, with some saying that sales are even lower than what they were in 2009. According to some estimates, the year-to-date percentage sales decline would be in the “mid-teens” while that for the overall retail sector would be about 5 per cent from 2015 numbers.

“Things are difficult because luxury retailers now have more mono-brand outlets open than was the case in 2009-10,” said an industry source. “And not just in Dubai, with some of the recent store openings being in Abu Dhabi. With more stores open and demand weak, average sales per outlet are lower than in 2009.

“Keep in mind that The Dubai Mall had just opened and the high-end boutique malls in Abu Dhabi were still some years away from their launch. High-end retail has changed dramatically between 2009 and 2016, especially in the sheer number of mono-brand flagship outlets that have opened. No brand would think of nothing less than a stand-alone store at the destination malls in Dubai and Abu Dhabi.”"



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Reasons Behind Moody's Saudi Ratings Downgrade - Bloomberg

Reasons Behind Moody's Saudi Ratings Downgrade - Bloomberg:

"Mathias Angonin, analyst at Moody's Investor Services, discusses the recent ratings downgrade for Saudi Arabia and his outlook for the Saudi Arabia economy. He speaks to Manus Cranny on "Bloomberg Markets Middle East." (Source: Bloomberg)"



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DP World Said to Hire Banks for Dollar Sukuk Sale - Bloomberg

DP World Said to Hire Banks for Dollar Sukuk Sale - Bloomberg:

"More companies in the Middle East are tapping the dollar bond market, trying to shore up their finances. Dubai ports operator, DP World, is said to have already selected 15 lenders for an Islamic bond sale. Bloomberg's Sam Potter reports on "Bloomberg Markets Middle East." (Source: Bloomberg)"



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Oil Advances as Goldman Forecasts a Deficit - Bloomberg

Oil Advances as Goldman Forecasts a Deficit - Bloomberg:

"Oil is gaining as Goldman Sachs says the market has moved into a deficit earlier than expected. Bloomberg's Ben Sharples reports on "Bloomberg Markets Middle East." (Source: Bloomberg)"



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MIDEAST STOCKS-Saudi petchems rise, markets mostly quiet | Reuters

MIDEAST STOCKS-Saudi petchems rise, markets mostly quiet | Reuters:

"Saudi Arabian petrochemical shares rose in early trade on Monday after oil prices surged overnight, but most stocks in the region moved little in modest trading volumes.

Brent crude futures climbed more than 1 percent to as high as $48.66 a barrel on Monday, their highest level this year, after long-time bear Goldman Sachs said the market had ended almost two years of oversupply and flipped to a deficit.

In Riyadh, Saudi Kayan gained 0.7 percent and Sahara Petrochemical was up 1.3 percent. The Saudi stock index rose 0.4 percent in the first half-hour."



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