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Wednesday, 30 November 2016

GCC debt deluge: big-ticket issues, even by international standards | The National

GCC debt deluge: big-ticket issues, even by international standards | The National:
"The GCC is raining debt issuances. From almost nothing a few years ago, all we hear and read these days is the jumbo-sized bond issuances from Saudi Arabia, Qatar, Kuwait, Bahrain, Abu Dhabi etc. The Saudis just closed a successful US$17.5 billion issue that was oversubscribed by more than four times, while Qatar raised $9bn in May, followed by a $5bn sale by Abu Dhabi. Even by international standards, these are big-ticket issues.


Why such a sudden rush to issue bonds overseas?

The straight answer should be the growing fiscal deficit or budgetary gap between income and expenses."

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RPT-UAE's Gulf Capital may sell some investments late next year | Reuters

RPT-UAE's Gulf Capital may sell some investments late next year | Reuters:
"Private equity firm Gulf Capital plans to sell some of its investments towards the end of 2017 and early 2018 as market sentiment and the regional economy improve, its chief executive told Reuters.

Karim El Solh declined to say which stakes the Abu Dhabi-based company, one of the biggest private equity firms in the region, was considering offloading but said that they would be appealing to global strategic buyers.

Sources familiar with the situation said Gulf Capital's stake in Egyptian medical firm TechnoScan and its remaining stake in utility business Metito Holdings were both for sale."

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Bloomberg

Bloomberg:
"Saudi Arabia is faced with making a meaningless OPEC deal or just walking away from the bargaining table, says Gareth Lewis, Senior Emerging Commodity Strategist at BNP Paribas. Either way, he tells Bloomberg Daybreak’s Guy Johnson, the Gulf nation’s long-term vision wins as prices head lower, thus making it more difficult for non-OPEC nations to produce."

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Leaner and meaner: U.S. shale greater threat to OPEC after oil price war | Reuters

Leaner and meaner: U.S. shale greater threat to OPEC after oil price war | Reuters:
"In a corner of the prolific Bakken shale play in North Dakota, oil companies can now pump crude at a price almost as low as that enjoyed by OPEC giants Iran and Iraq.

Until a few years ago it was unprofitable to produce oil from shale in the United States. The steep slide in costs could encourage more U.S. shale output if OPEC members cut supplies, undermining the producer group's ability to boost prices. OPEC ministers meet Wednesday to weigh output cuts to end a two-year glut that has pressured global oil prices."

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OPEC in first joint oil cut with Russia since 2001, Saudis take big hit | Reuters

OPEC in first joint oil cut with Russia since 2001, Saudis take big hit | Reuters:
"OPEC agreed on Wednesday its first oil output cuts since 2008 after Saudi Arabia accepted "a big hit" on its production and dropped its demand on arch-rival Iran to slash output.

Non-OPEC Russia will also join output reductions for the first time in 15 years to help the Organization of the Petroleum Exporting Countries prop up oil prices.

Brent crude jumped over 9 percent to more than $50 a barrel as Riyadh reached a compromise with Iran and after fast-growing producer Iraq also agreed to curtail its booming output."

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MIDEAST STOCKS-Oil boosts Gulf, Saudi hits year-high; Egypt up on foreign buys | Reuters

MIDEAST STOCKS-Oil boosts Gulf, Saudi hits year-high; Egypt up on foreign buys | Reuters:
"An 8 percent leap in oil prices due to hopes for OPEC output cuts boosted Gulf stock markets on Wednesday with Saudi Arabia climbing to its highest level this year, while foreign buying lifted Egypt's bourse again.

The Saudi index climbed 1.5 percent to 7,000 points in heavy trade, confirming a break of major technical resistance on its April peak of 6,876 points. That triggers a double bottom formed by this year's lows and pointing up to around 8,400 points in the long term.

The index has soared over 25 percent from October's multi-year low since a $17.5 billion international bond issue by the government eased fears about its ability to cope with an era of cheap oil, and helped it begin making delayed payments to settle its debts to private companies."

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Oil up over 6% as Saudi Arabia and Iran point to Opec supply deal

Oil up over 6% as Saudi Arabia and Iran point to Opec supply deal:
"Oil rose sharply on Wednesday after two of Opec’s most powerful members said they were hopeful of reaching the first deal to cut supplies since prices started to plummeted two years ago.

Saudi Arabia’s energy minister Khalid al-Falih said the group, which controls around a third of the world’s oil production, was getting “close” to a deal and signalled that it was prepared to give some ground to its fierce regional rival Iran.

But he again hinted that Saudi Arabia could walk away from a deal if its conditions were not met, saying that waiting for the market to recover on its own was not a “bad outcome.”"

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Opec supply deal talks — 5 things to watch

Opec supply deal talks — 5 things to watch:
"Opec oil ministers from the 14-member producer group start their official meeting around 10am (GMT) on Wednesday in Vienna as they attempt to secure the first supply deal in eight years. Meetings traditionally last for between two and eight hours, but trying to predict the duration of such a gathering is near impossible. Oil traders will be glued to their screens throughout, with billions of dollars riding on the outcome. 

Opec ministers are holding a pre-meeting early Wednesday morning to try and smooth some remaining differences and set the tone for the rest of the day.

A news conference, known for its largely uncontrolled nature, will also give ministers a chance to voice their positions publicly to hordes of journalists before the formal discussions get under way."

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Brent crude leaps to $49 as Opec meetings begin

Brent crude leaps to $49 as Opec meetings begin:
"Oil prices rose sharply on Wednesday as Opec gathered in Vienna to try and clinch the first supply deal since crude prices plummeted two years ago.

Ministers from the 14-member cartel held pre-meeting talks at the Park Hyatt hotel this morning a final attempt to bridge their differences.

Iran’s oil minister Bijan Zanganeh said he was “optimistic” when asked by reporters if there would be an agreement later today."

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MIDEAST DEBT-Saudi's ACWA expected to offer sizeable spread on $1 bln project-linked bond | Reuters

MIDEAST DEBT-Saudi's ACWA expected to offer sizeable spread on $1 bln project-linked bond | Reuters:
"Saudi Arabia's ACWA Power (IPO-ACWA.SE) is expected to offer a hefty spread on its planned $1 billion bond offer, partly because of market volatility since the U.S. elections and a narrowing issuance window, bankers and investors said.

ACWA, in which Saudi sovereign entities hold a combined 16.3 percent stake, is set to be the first international bond from the kingdom since the government's mammoth $17.5 billion debt sale in October, Riyadh's first issue.

The huge success of the sovereign issue showed there is strong demand for Saudi debt, especially from Asian and U.S. investors. But market volatility, and the complexity and long maturity of ACWA's proposed bond structure, mean it may not issue cheaply."

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OPEC Deadlocked as Iran, Saudis Harden Positions on Oil Deal - Bloomberg

OPEC Deadlocked as Iran, Saudis Harden Positions on Oil Deal - Bloomberg:
"An OPEC deal to curtail oil production and prop up global prices appeared in jeopardy as Iran said it won’t make cuts while Saudi Arabia insisted Tehran must be willing to play a meaningful role in any agreement.

Ministers gathering in Vienna before Wednesday’s crucial OPEC meeting attempted to resolve differences obstructing an accord. Iranian Oil Minister Bijan Namdar Zanganeh laid out his country’s position following talks with his Algerian and Venezuelan counterparts. Under an Algerian proposal Tuesday, the 14 members of OPEC would cut production to 32.5 million barrels per day from their October level of 33.6 million, according to two delegates familiar with the talks. "

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Saudi Arabia Transfers $27 Billion to Wealth Fund for Deals - Bloomberg

Saudi Arabia Transfers $27 Billion to Wealth Fund for Deals - Bloomberg:
"Saudi Arabia is transferring 100 billion riyals ($27 billion) to the sovereign wealth fund to boost investments and diversify from oil.

The funds will be allocated to the Public Investment Fund from the kingdom’s reserves, according to a statement on the state-run Saudi Press Agency on Wednesday. The PIF, as it’s known, will focus on international and domestic deals including some “high yield opportunities in the local market that support the private sector,” it said. The new funding represents an increase of about 17 percent to the PIF’s existing 600 billion riyals of assets.

Saudi Arabia is planning to transform the PIF from a domestically focused investment firm into a $2 trillion sovereign wealth fund as the OPEC member seeks to boost non-oil income. The fund made some of its highest-profile deals this year, including a $3.5 billion investment in taxi-hailing app Uber Technologies Inc. and plans to put as much as $45 billion into a $100 billion global technology fund formed by Japan’s SoftBank Group Corp."

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MIDEAST STOCKS-Gulf mixed in early trade before OPEC decision | Reuters

MIDEAST STOCKS-Gulf mixed in early trade before OPEC decision | Reuters:
"Saudi Arabia's stock market edged up in early trade on Wednesday while other Gulf bourses were mixed ahead of an OPEC decision expected late in the day on proposed oil production cuts to prop up prices.

Most analysts believe the Organization of the Petroleum Exporting Countries will cobble together a deal to reduce some production at its meeting on Wednesday in Vienna, which starts at 1000 GMT.

But there is a lot of uncertainty on the terms of the deal and whether it will have much long-term effect on the oil market, and in this environment, many institutional funds have been cutting back activity, leaving Gulf stock markets to focus on short-term trade by retail investors."

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