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Monday, 11 July 2016

Greying Saudi Arabia could multiply government’s debt burden | GulfNews.com

Greying Saudi Arabia could multiply government’s debt burden | GulfNews.com:

"Saudi Arabia’s growing elderly population could put pressure on public finances and government debt over the next three decades in the absence of government reforms to contain the cost of age-related spending, according to Standard & Poor’s ‘Global Ageing Report 2016: 58 Shades Of Gray’.

S&P has forecast the Saudi Arabian population will expand rapidly from 32 million to 46 million between 2015 and 2050. Over the same period, the proportion of elderly people will rise to 15 per cent of total inhabitants from 3 per cent today.

“Age-related government expenditure on pensions and health care would rise to 14 per cent of GDP by 2050 from 6 per cent today. This could lead to a rapid increase in Saudi Arabia’s net debt ratio to 340 per cent of GDP by 2050 if governments were to take no further policy action,” said S&P Global Ratings analyst Trevor Cullinan."



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Qatar Airways reports $445m profit | GulfNews.com

Qatar Airways reports $445m profit | GulfNews.com:

"Qatar Airways Group, the parent company of the Doha-airline, reported a 1.6 billion Qatari riyal ($445 million) profit on Monday that appeared to be largely due to a significant drop in fuel costs.

The Qatar government-owned group’s fuel bill fell by almost 3 billion Qatari riyals — or 28 per cent — in the fiscal year to March 31, according to financial documents released on Monday. Its profit in the previous fiscal was 374 million Qatari riyal. Group revenue grew by 3.8 per cent to 35.1 billion riyals, up from 33.8 billion riyal, according to the documents. It is the first time Qatar Airways has released financial results.

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Temasek’s goals are bold for a low-yield world

Temasek’s goals are bold for a low-yield world:

"In a low-yield world, Temasek’s goals look increasingly aggressive. The $180 billion Singaporean state investor has just suffered its first down year since the financial crisis. The bigger issue is that return targets still look pretty punchy.

Temasek’s portfolio was worth S$242 billion ($180 billion) at the end of March, down from $266 billion a year earlier: a total shareholder return of minus 9 percent, the first drop since 2008-09.

Despite a big push into unlisted investments, three-fifths of Temasek’s worth is still tied up in listed securities, and weakness there was a serious drag. Top holdings such as Singapore Telecom, DBS and China Construction Bank – which together account for more than one-fifth of the total portfolio – produced negative returns of 9, 22 and 19 percent respectively in the year to the end of March, Datastream shows."



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MIDEAST STOCKS-Egypt devaluation surge ends, Qatar breaches mark ahead of QNB earnings | Reuters

MIDEAST STOCKS-Egypt devaluation surge ends, Qatar breaches mark ahead of QNB earnings | Reuters:

"Egypt's stock market pared its advance on Monday after two sessions of strong gains on the back of speculation that the North African nation would need to devalue its currency during the current fiscal year.

Having risen as much as 1.7 percent earlier in the day, Egypt's main measure closed 0.2 percent lower, with most stocks ending in the red.

The index had surged 7.7 percent in the two sessions straddling the Eid al-Fitr holiday, following comments from the central bank governor that the Egyptian pound should be a market-based currency where demand and supply set the price."



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Moody’s Says Merger of NBAD and First Gulf Bank Credit Positive - Bloomberg

Moody’s Says Merger of NBAD and First Gulf Bank Credit Positive - Bloomberg:

"The merger of National Bank of Abu Dhabi and First Gulf Bank to create the Middle East’s largest bank by assets is credit positive for both, according to Moody’s Investors Service Inc.

The combined entity will have a pro-forma net interest margin of about 2.1 percent, up from approximately 1.8 percent in the first quarter, Moody’s said in a note to investors on Monday. Profit in the next three years will also benefit from “revenue synergies through cross-selling opportunities, pricing optimization, and cost efficiencies stemming from economies of scale and the consolidation of the branch networks of the two banks,” Moody’s said.

Abu Dhabi is combining its largest banks to better compete in size with regional rivals such as Qatar National Bank SAQ and bolster its ability to lend and secure funding as it grapples with a more than 50 percent drop in oil prices over the past two years. The combined bank will operate under the NBAD name and FGB’s shares will be delisted.
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