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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."



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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."



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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."



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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."



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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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